WESTWOOD GROUP INC - 10-K Annual Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

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

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 0-1590
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THE WESTWOOD GROUP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 04-1983910
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

190 V.F.W. PARKWAY
REVERE, MA 02151
(Address of principal executive offices, including zip code)
781-284-2600
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF CLASS
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COMMON STOCK-$.01 PAR VALUE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (sec. 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of the
Form 10-K or any amendment of this Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-24 of the Act). Yes [ ] No [X]

The aggregate market value of the voting stock held by non-affiliates of
the registrant as of June 20, 2003 was:

(1) Reflects the price of shares of Common Stock, par value $0.01 per share,
traded on June 20, 2003, which is the last date the stock was traded prior
to the end of the most recently completed second fiscal quarter. The
registrant's Common Stock was removed from quotation through the NASDAQ
system on July 29, 1988. There is no established trading market for the
registrant's Common Stock.

(2) Excludes shares held by Executive Officers and Directors of the registrant,
without admitting that any such Executive Officer or Director is an
affiliate of the registrant.

The number of shares outstanding of each of the registrant's classes of
common stock, as of March 31, 2004 was as follows:

Common Stock, $.01 par value: 351,210
Class B Common Stock, $.01 par value: 912,015
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THE WESTWOOD GROUP, INC.

ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003 10-K

TABLE OF CONTENTS

EXHIBIT INDEX
Exhibit 23.1 Consent of Independent Certified Public Accountants
Exhibit 31.1 Certification by Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
Exhibit 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

1

FORWARD LOOKING STATEMENTS

The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto included elsewhere in this
Annual Report on Form 10-K. Certain statements contained throughout this Annual
Report constitute "forward-looking statements" as that term is defined under the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the Westwood Group,
or industry results, to be materially different from those contemplated or
projected, forecasted, estimated or budgeted in or expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
general economic and business conditions; industry trends, changes in business
strategy or development plans; availability and quality of management; and
availability, terms and deployment of capital.

References to "we," "us," "our," the "Company," "Westwood" or the "Westwood
Group" refer to The Westwood Group, Inc., and in some cases, its subsidiaries,
as well as all predecessor entities. Our principal executive offices are located
at 190 V.F.W. Parkway, Revere, Massachusetts, 02151, and our telephone number is
(781) 284-2600.

PART I

ITEM 1. BUSINESS

(a) GENERAL

The Westwood Group, Inc. was incorporated in Delaware in 1984 as the
successor to racing and restaurant operations which commenced in 1935 and 1968,
respectively. It operates Wonderland Greyhound Park ("Wonderland" or "Wonderland
Park"), a pari-mutuel greyhound racing facility located in Revere,
Massachusetts.

(b) BUSINESS SEGMENTS

The Westwood Group operates solely in the pari-mutuel greyhound racing
industry.

(c) DESCRIPTION OF BUSINESS

The Westwood Group's wholly-owned subsidiary, Wonderland Greyhound Park,
Inc., operates a greyhound racetrack, located in the City of Revere,
Massachusetts. Revere adjoins the City of Boston. Wonderland Park is
approximately five miles north of downtown Boston and is served directly by
major transportation routes and the Massachusetts Bay Transportation Authority
rail line. The racetrack is approximately two miles from Boston's Logan
International Airport.

In addition to the racetrack, the Westwood Group maintains and operates 2
full service restaurants, a sports bar and other concession facilities at the
racetrack to serve patrons of Wonderland Park. The racetrack facility can
accommodate 10,000 patrons. The average attendance per day in 2003 was
approximately 628 persons. The total attendance for the year was approximately
226,000 persons. The complex encompasses a total of approximately 35 acres,
including paved and lighted parking which has capacity for approximately 2,300
cars.

Wonderland was originally opened in 1935 and has operated continuously from
the same location since that time. Wonderland is authorized to conduct up to 520
live matinee and evening performances during any calendar year. In addition to
conducting 267 live racing performances during 2003, Wonderland provided its
patrons with simulcast wagering from 52 various greyhound, thoroughbred and
harness tracks throughout the country. Wonderland also broadcasts its simulcast
signal to 90 locations throughout the country. The Westwood Group is continuing
its efforts to penetrate new markets into which it can broadcast its signal and
to develop new ways to provide quality racing entertainment to its on-track
patrons. See "Government Regulation" below for a discussion of simulcast
legislation.

2

The Westwood Group's annual revenues are mainly derived from the
commissions that it receives from wagers made by patrons during its racing
performances and from admission and concession charges at such performances.
Wagers at Wonderland are placed under the pari-mutuel wagering system, pursuant
to which the winning bettors in each race divide the total amount bet on the
race in proportion to the sums they wagered individually, after deducting
certain percentages governed by state law including amounts which are reserved
for The Commonwealth of Massachusetts, the owners of the winning greyhounds and
the racetrack.

The pari-mutuel commission is regulated by the state regulatory commission
in the jurisdiction of the individual race track. In addition, the net
pari-mutuel commission varies based upon the type of wager. Finally, the
Westwood Group generates commission revenue from other tracks for all amounts
wagered on its product at their facilities. These commissions vary based upon
contractual arrangements.

The average gross pari-mutuel commission on live racing at Wonderland was
approximately 24% of each $1.00 wagered on track during each of 2003, 2002 and
2001. Approximately 6% of this amount is distributed to kennel operators as
purses paid, 5% is paid to The Commonwealth of Massachusetts in the form of
pari-mutuel tax and 0.5% is deposited into each of the Greyhound Adoption Trust
Fund and Promotional Trust Fund.

The Commissioners of The Commonwealth of Massachusetts State Racing
Commission, as individuals, are the trustees and Wonderland is the beneficiary
of the Greyhound Capital Improvements and Promotional Trust Funds which have
been established in accordance with Massachusetts law and are dedicated to
reimbursement of capital improvements and promotional expenses.

During July 1997, the Westwood Group's harness racing subsidiary, Foxboro
Park, Inc., was evicted from the Foxboro Raceway. As such, its operating results
are reflected as discontinued operations.

In February 1998, the Westwood Group executed an Assignment for the Benefit
of Creditors for Foxboro Park, Inc., Foxboro Harness, Inc. and Foxboro
Thoroughbred, Inc. The assignment was executed to provide a mechanism for the
liquidation of its assets and the distribution of proceeds to its creditors.

(d) COMPETITION AND MARKETING

The Westwood Group is trying to adapt and survive in a dramatically
changing environment, one in which it and the racing industry nationally have
experienced significant declines in on-site attendance and dollars wagered. The
Westwood Group continues to be negatively impacted by a strong Massachusetts
state lottery, two Indian Casinos in Connecticut and slot machines at the
Lincoln, Rhode Island greyhound track. The casinos and track are in close
proximity to the Massachusetts border and therefore rely upon their ability to
attract Massachusetts patrons.

Furthermore, Wonderland is at a competitive disadvantage when compared with
other New England greyhound racetracks in that the simulcast legislation only
permits Wonderland to offer a very limited amount of simulcasting from
thoroughbred racetracks due to its proximity to the Suffolk Downs thoroughbred
racetrack.

In August 2000, animal rights activists were able to obtain the necessary
number of signatures in order to place a binding initiative petition to ban all
wagering on greyhound racing within Massachusetts effective June 1, 2001 on the
November 2000 Massachusetts ballot. If the initiative had passed, it would have
prohibited both live and simulcast wagering at The Westwood Group's Wonderland
racetrack facility, thus, in all likelihood, shutting down its principal
business. The campaign to defeat the ballot initiative was conducted jointly
with the dogtrack in Raynham, Massachusetts through a Ballot Question Committee
established in accordance with the campaign finance laws of Massachusetts.
Richard P. Dalton, The Westwood Group's President and Chief Executive Officer,
served as the chairman of the committee. This initiative was narrowly defeated
in the November 7, 2000 election. Despite the defeat of the initiative, the
animal rights activists remain active in their attempts to cause the Wonderland
racetrack to be permanently closed. Moreover, the advertising campaign directed
at banning greyhound racing has negatively affected the image of greyhound
racing.
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(e) GOVERNMENT REGULATION

Wonderland operates under an annual license granted after application to,
and public hearings by, the Massachusetts State Racing Commission. Wonderland
received its first license in 1935 and has had its license renewed annually
since that date. The Racing Commission has certain regulatory powers with
respect to the dates and the number of performances granted to its licensees and
various other aspects of racetrack operations. In addition, the Massachusetts
State Racing Commission licenses certain key officials employed by Wonderland.
The failure to receive or retain the annual racing license would have a material
adverse effect on our business.

Alcoholic beverage control regulations require Wonderland to apply to a
state and local authority for a license or permit to sell alcoholic beverages on
the premises. The licenses must be renewed annually and may be revoked or
suspended for cause at any time. Alcoholic beverage control regulations relate
to numerous aspects of the daily operations of the restaurants and bars,
including minimum age of patrons and employees, hours of operation, advertising,
wholesale purchasing, inventory control and handling, and storage and dispensing
of alcoholic beverages. The failure to receive or retain, or a delay in
obtaining, a liquor license could adversely affect the Westwood Group's ability
to operate the restaurant facilities. The Westwood Group has not encountered any
material problems relating to alcoholic beverage licenses to date.

Various federal and state labor laws govern the Westwood Group's
relationship with its employees, including such matters as minimum wage
requirements, overtime and other working conditions. Significant additional
government-imposed increases in minimum wages, paid leaves of absence, mandated
health benefits or increased tax payment requirements in respect to employees
who receive gratuities could have a material adverse effect on the Westwood
Group's results of operations.

During 2001, the Westwood Group and the owners of other area racetracks
worked to enact legislation which would permit the Westwood Group and the other
greyhound track to continue to provide simulcast broadcasting of thoroughbred
racing on a much more frequent basis, as well as providing for a decrease in the
pari-mutuel taxes paid to the Commonwealth and that the funds available from the
pari-mutuel tax decrease be made available for increases in purses and the
Greyhound Capital Improvement and Promotional Trust Funds as well as the
establishment of a Greyhound Adoption Fund and the implementation of an
off-track betting system.

On November 17, 2001, the "Act Providing for Improvements to the Horse and
Greyhound Racing Industry in the Commonwealth and the Regulation Thereof" was
signed into law by the then acting governor of Massachusetts. Under this
statute, the Westwood Group and the other area racetracks are permitted to
continue to provide simulcast broadcasting of thoroughbred racing to their
patrons until December 2005. The new legislation also provides that the Westwood
Group is required to pay premiums for the right to simulcast out-of-state
thoroughbred and harness racing ranging from 3% to 7% for the benefit of the
purse accounts at the Commonwealth's two commercial horse racetracks. In
addition to the extension and expansion of simulcast broadcasting, this statute
provides for a "purse pool," which will be funded by taxes, fees and assessments
with a minimum of $400,000 being credited to the purse accounts of each
racetrack with any remaining portion being apportioned among the racetracks
pursuant to a formula to be devised by the State Racing Commission. All
unclaimed simulcast wagers collected at each racetrack are to be deposited with
the Massachusetts State Racing Commission for payment to the purse accounts of
the individual racetracks responsible for such unclaimed wagers. During 2001,
the Westwood Group received a one-time grant of $300,035 from the Commonwealth
for the purpose of funding capital improvements and repairs to its facility and
equipment. Finally, the statute authorizes account wagering at each of the
individual racetracks and establishes a nine member special commission to study
the feasibility of an off-track betting program in Massachusetts.

Despite the enactment of this legislation and the potential for increase in
cash flow from such legislation, management does not believe that this
legislation in its current state has or will materially benefit the Westwood
Group's overall racing operations.

4

Management has worked diligently over the past decade in attempting to
convince the governors and the Massachusetts state legislature of the need to
allow the Commonwealth's commercial racetracks to offer their patrons expanded
gaming opportunities. While various legislation has been introduced, the
Massachusetts state legislature took no action to expand legalized gaming in
2003.

On October 3, 2002, the then Governor of Massachusetts issued an executive
order establishing a special commission to study and report on the potential
impact, both positive and negative, of the potential expansion of legalized
gaming in Massachusetts. This commission held public hearings in four locations
throughout the Commonwealth and reported its findings to the Governor on
December 31, 2002. This commission's report did not recommend that the Governor
and/or the state legislature enact legislation that would expand gaming, but
instead focused on the various social, financial and economic ways that the
expansion of legalized gaming could possibly impact, both negatively and
positively, the Commonwealth and its citizens. Management is unable to predict
what, if any, impact this report has had or will have on the overall prospects
for the enactment of legislation in Massachusetts to expand legalized gaming.
There is no assurance that the release of this report will prompt or thwart the
introduction or enactment of such legislation. This is not the first time a
commission of this type has been formed. Over the past decade, when similar
commissions have proposed the introduction of gaming legislation, numerous bills
have been introduced, but legislation has never been enacted despite being
supported of by the then Governor of The Commonwealth of Massachusetts and
certain state legislators.

In the spring of 2003, according to newspaper accounts, Governor Romney was
considering introducing legislation to allow the installation of video slot
machines at two to four unspecified sites in the Commonwealth which would be
determined by means of an auction with five-year licenses being awarded to the
highest bidders. In a hearing of the Government Regulations Committee of the
Massachusetts House of Representatives, Robert Pozen, Governor Romney's then
Chief of Commerce and Labor, on behalf of the Romney administration, stated that
7,200 slot machines at three unspecified sites could raise as much as $300
million annually in additional state tax revenues. At this same hearing, a
number of other gaming-related proposals were discussed.

In March, 2003, the Massachusetts House of Representatives approved a rule
that would prevent any amendments calling for the expansion of legalized gaming
from being introduced in connection with the deliberations in the House on its
version of the state budget for fiscal year 2004. In addition, on April 15,
2003, the House of Representatives debated two gaming bills related to
permitting slot machines at the Commonwealth's four racetracks and authorizing
slot machines and full-scale casinos. Both of these bills were defeated.

On November 6, 2003, a proposed amendment was filed to an omnibus economic
development package in the Massachusetts Senate that would have authorized both
the installation of up to 1,500 slot machines at each of the state's four
racetracks and the establishment of up to two casinos. In addition, this
proposed amendment contained a condition that each of the four racetracks would
be required to pay a $25 million licensing fee in order to install slot machines
at their facilities. Faced with significant opposition, the amendment was
withdrawn prior to any vote being taken.

If Governor Romney and/or the state legislature determines to introduce or
enact legislation in 2004 to expand gaming, the process to enact gaming
legislation could take a number of months, and it is impossible to predict the
nature of any such legislation and whether the Westwood Group would in fact
benefit from such legislation if ultimately enacted.

(f) EMPLOYEES

At March 31, 2004, the Westwood Group employed approximately 350 persons.

ITEM 2. DESCRIPTION OF PROPERTIES

The racetrack facilities, which are located in Revere, Massachusetts,
include a one-quarter mile oval sand track, a physical plant consisting of a
climate controlled grandstand and clubhouse and a two-story

5

administrative center. Wonderland Greyhound Park is mortgaged to secure the
indebtedness owed under a term loan to the Boston Federal Savings Bank. (See
Item 7, "Liquidity and Capital Resources," and Note 3 of Notes to Consolidated
Financial Statements).

The executive offices are owned by the Westwood Group and are located at
Wonderland Greyhound Park in Revere, Massachusetts.

ITEM 3. LEGAL PROCEEDINGS

The Westwood Group is involved in various legal proceedings that arise in
the ordinary course of its business.

On March 6, 2003, the Westwood Group received an inquiry from the
Securities Division of the Office of the Secretary of The Commonwealth of
Massachusetts. According to the Securities Division, it had received an
anonymous letter from a stockholder of the Westwood Group raising certain
allegations concerning the then proposed 1,500-to-1 reverse stock split. The
Westwood Group's counsel answered all of the Securities Division's questions and
provided the requested materials.

On March 18, 2003, which was one day prior to the scheduled meeting to
approve the then proposed 1,500-to-1 reverse stock split, the Westwood Group
received an Administrative Complaint and Ex Parte Motion for a Temporary Order
to Cease and Desist from the Securities Division. The Administrative Complaint
claimed that the Westwood Group failed to disclose certain information to the
stockholders in the prior proxy statement, which the Securities Division alleged
to be "material." Specifically, the Securities Division alleged that the
Westwood Group failed to disclose: (i) the existence of loans from the principal
of Alouette Capital to the Westwood Group and Mr. Sarkis; (ii) that Alouette
Capital was not a registered broker dealer, and (iii) the extent of the Westwood
Group's lobbying activities with respect to the passage of gaming legislation.
The stockholders' meeting scheduled for March 19, 2003 to approve the proposed
going private transaction was adjourned in order to permit the Westwood Group to
address this matter, and the stockholders' vote was never taken.

On April 1, 2003, a class action complaint was filed by a stockholder of
the Westwood Group against the Westwood Group and its Board of Directors in the
Court of Chancery in the State of Delaware seeking to enjoin the proposed
reverse stock split on the basis that is not fair to the stockholders and that
the proxy statement omits information alleged to be "material."

As a result of the Administrative Complaint filed by the Securities
Division, the proposed 1,500-to-1 reverse stock split was indefinitely
suspended. On April 8, 2003, the Westwood Group filed an answer in response to
the Securities Division's complaint, which denied each of the allegations set
forth in the complaint, and between April and June 2003, the Westwood Group and
the Securities Division negotiated a settlement.

On June 16, 2003, the Westwood Group executed an Offer of Settlement and a
Consent Order was issued. The principal elements of the settlement were as
follows:

(i) The Westwood Group would not commit any future violations of
chapter 110A of Massachusetts General Laws and the corresponding
regulations promulgated thereunder;

(ii) The Westwood Group paid the sum of $10,000 to offset the cost of
the Securities Division's investigation;

(iii) If the Westwood Group retains a fairness opinion provider as
part of any proposed going private transaction, the Westwood Group would
engage a fairness opinion provider that is independent, unaffiliated, and
free from all material conflicts of interest;

(iv) The Westwood Group would not, within the next twelve months,
enter into, effect or consummate with its then existing stockholders a
going private transaction where the common stock of Westwood Group is
valued as a per share price of less than $4.00, however, it could seek
review of

6

this provision through petition to the Director of the Securities Division
and he/she may grant such relief at his/her sole discretion, provided that
such relief shall not be unreasonably withheld;

(v) The Westwood Group would include all material facts, consistent
with the SEC's rules, considered by the Board of Directors in reaching its
fairness determination regarding any proposed going private transaction and
would present a fair and balanced representation of the potential expansion
of gaming legislation in Massachusetts consistent with all applicable SEC
rules;

(vi) The Westwood Group would make available to any fairness opinion
provider retained by the Board of Directors to determine the fairness of
any proposed going private transaction, any and all current gaming-related
reports and materials prepared for the Westwood Group by any consultant,
including any financial projections;

(vii) The Westwood Group would present to the Securities Division any
draft of an amendment to the existing February 13, 2003, Proxy Statement or
any other filing under the SEC's Regulation M-A contemporaneously with
submission of the same to the SEC for review;

(viii) The Westwood Group would require approval of any proposed going
private transaction by majority of (a) the unaffiliated stockholders of the
outstanding shares of Common Stock, and (b) the unaffiliated stockholders
of the Class B Common Stock;

(ix) The Westwood Group would value the stock based upon a range
deemed to be fair by the new fairness opinion provider; and

(x) The Westwood Group would include provisions that would pay former
stockholders whose shares have been purchased through the transaction an
additional premium, earn out, or the like, should legislation be enacted
into law, within one (1) year of the stockholders vote approving the
transaction, authorizing the Westwood Group to install slot machines at its
racetrack, with the amount of any payment to former stockholders to be
determined based upon the particular provisions of the statute, and
whether, in fact, the Westwood Group realizes increased revenues in
connection therewith.

On June 17, 2003, the Westwood Group filed a Motion to Dismiss the Court of
Chancery class action lawsuit for mootness on the grounds that the previously
proposed going private transaction was never completed. On October 23, 2003, the
same plaintiffs filed a supplemented and amended complaint with the Court of
Chancery in the State of Delaware alleging that the proposed reverse stock split
described in this proxy statement is not fair to the stockholders of the
Westwood Group and that the proxy statement omits information that the
plaintiffs allege to be "material." The plaintiffs amended the complaint to
include Joseph Cassin, as a co-defendant. The plaintiffs allege that the $4.00
pre share price valuation of the Westwood Group's Common Stock and Class B
Common Stock being paid to stockholders being redeemed in the proposed reverse
stock split is not fair and allege that the fair value of the Westwood Group's
Common Stock exceeds $5.00 per share; the Board of Directors of the Westwood
Group breached its fiduciary duties to the stockholders; and the Westwood Group
is violating Delaware corporate law by proposing to issue fractional shares to
some stockholders and paying other stockholders cash in lieu of fractional
shares. In addition, the plaintiffs allege that this proxy statement fails to
disclose all material facts regarding the description of the Westwood Group's
real estate, the RM Bradley appraisal reports, the lobbying expenses and the
reasons for the proposed 500-for-1 reverse stock split. The plaintiffs are
seeking an injunction that would prevent the Westwood Group from completing the
proposed reverse stock split and damages.

The Westwood Group disputes all of the allegations set forth in the
complaint, and on November 10, 2003, it filed a Motion to Dismiss for failure to
state a claim. The Westwood Group's opening brief in support of its Motion to
Dismiss was filed on February 3, 2004, and the plaintiffs' answering brief in
opposition to the Motion to Dismiss was filed on March 1, 2004. The Court of
Chancery has suspended briefing in this case until the proxy statement is
finalized and filed with the Securities and Exchange Commission.

7

For a description of the proposed 500-to-1 reverse stock split, (see Item
7, "Management's Discussion and Analysis of Financial Condition and Results of
Operation").

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

During the fourth quarter of 2003, there were no matters submitted to a
vote of the securities holders either through the solicitation of proxies or
otherwise.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

(a) MARKET PRICE

There is no established trading market for the Westwood Group's Common
Stock or the Westwood Group's Class B Common Stock. The Westwood Group's Common
Stock is traded on the pink sheets. The following table sets forth for the
periods indicated the high and low sales prices. Such quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions.

Fiscal year ended December 31, 2003, the sales prices per share of Common
Stock are as follows:

Fiscal year ended December 31, 2002, the sales prices per share of Common
Stock are as follows:

During the first quarter of 2004 through March 31, 2004, our common stock
traded at prices ranging from a low sales price of $3.75 to a high sales price
of $5.30.

(b) APPROXIMATE NUMBER OF RECORD HOLDERS OF COMMON STOCK AND CLASS B COMMON
STOCK:

(c) DIVIDEND HISTORY

No dividends were declared by the Westwood Group on its Common Stock during
2003, 2002, or 2001. The Westwood Group has not paid a cash dividend on its
Class B Common Stock to date. The Westwood Group does not intend to pay cash
dividends on either Common Stock or Class B Common Stock in the immediate
future.

8

(d) SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

This table provides certain information as of December 31, 2003 with
respect to our equity compensation plans:

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(1) Options for 117,500 shares of the Westwood Group's Common Stock were granted
pursuant to individual compensation agreements, which are described under
Item 11 under the caption "Stock Option Agreement." A former director of the
Westwood Group has the right to receive an estimated 21,073 shares of the
Westwood Group's Common Stock (See Item 13, "Certain Relationship and
Related Transactions").

9

ITEM 6. SELECTED FINANCIAL DATA

The following data insofar as it relates to the three fiscal years ended
December 31, 2001 through December 31, 2003 has been derived from the
Consolidated Financial Statements appearing herein, including the Consolidated
Balance Sheets as of December 31, 2003 and 2002 and the related Consolidated
Statements of Operations for each of the three years in the period ended
December 31, 2003. The data insofar as it relates to the Consolidated Balance
Sheets as of December 31, 2001, 2000 and 1999 and the Consolidated Statements of
Operations for the fiscal years ended December 31, 2000 and 1999 have been
derived from our historical financial statements of those periods.

10

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(1) Long term debt at December 31, 2003, 2002, 2001, 2000, and 1999 excludes
$114, $96, $324, $295, and $273 respectively, of long-term debt reclassified
as current obligations.

(2) The table above reflects the Westwood Group's accounting for its investment
in BackBay Restaurant Group, Inc. ("BBRG") under the equity method. Other
income net contains a loss of approximately $157,000 from the Westwood
Group's investment in BBRG for 1999.

11

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

You should read the following discussion and analysis of our financial
condition and results of operations together with "Selected Financial Data" and
our financial statements and related notes appearing elsewhere in this annual
report.

GENERAL

This discussion and analysis contains forward-looking statements that
involve risks, uncertainties and assumptions. Our actual results may differ
materially from those anticipated in these forward-looking statements as a
result of many factors, including, but not limited to, those set forth under
"Results of Operations" and elsewhere in this annual report. Wonderland
currently conducts live racing five (5) nights per week. Wonderland also offers
simulcast wagering afternoons and evenings throughout the year. The table below
illustrates certain key statistics for Wonderland for each of the past three (3)
years:

Wonderland was granted a license to conduct up to 258 racing performances
during 2004.

RESULTS OF OPERATIONS

During 2001, the Westwood Group and the owners of other area racetracks
worked to enact legislation which would permit the Westwood Group and the other
greyhound track to continue to provide simulcast broadcasting of thoroughbred
racing on a more frequent basis, as well as providing for a decrease in the
pari-mutuel taxes paid to the Commonwealth and that the funds available from the
pari-mutuel tax decrease be made available for increases in purses and the
Greyhound Capital Improvement and Promotional Trust Funds as well as the
establishment of a Greyhound Adoption Fund and the implementation of an
off-track betting system.

On November 17, 2001, the "Act Providing for Improvements to the Horse and
Greyhound Racing Industry in the Commonwealth and the Regulation Thereof" was
signed into law by the acting governor of Massachusetts. Under this statute, the
Westwood Group and the other area racetracks are permitted to continue to
provide simulcast broadcasting of thoroughbred racing to their patrons until
December 2005. This legislation also provides that the Westwood Group is to pay
premiums for the right to simulcast interstate thoroughbred and harness racing
ranging from 3% to 7% for the benefit of the purse accounts at the
Commonwealth's two commercial horse racetracks. In addition, to the extension
and expansion of simulcast broadcasting, this statute provides for a "purse
pool," which will be funded by taxes, fees and assessments with a minimum of
$400,000 being credited to the purse accounts of each racetrack with any
remaining portion being apportioned among the racetracks pursuant to a formula
to be devised by the State Racing Commission. All unclaimed simulcast wagers
collected at each racetrack are to be deposited with the Massachusetts State
Racing Commission for payment to the purse account of the individual racetracks
responsible for such unclaimed wagers. The Westwood Group also received a
one-time grant of $300,035 during 2001 from the Commonwealth for the purpose of
funding capital improvements and

12

repairs to its facility and equipment. Finally, the statute authorizes account
wagering at each of the individual racetracks and establishes a nine member
special commission to study the feasibility of an off-track betting program in
Massachusetts.

Despite the enactment of this legislation and the initial potential for an
increase in cash flow from such legislation, management does not believe that
this legislation has materially benefited the Westwood Group's overall racing
operations since November 2001.

The Westwood Group is still experiencing a decline in total attendance and
live-on track handle caused by a variety of factors, including a general decline
in the pari-mutuel racing industry, the negative effect of the ballot initiative
on greyhound racing's image, and strong competition for the wagered dollar from
the Massachusetts State Lottery and from the introduction of casino gambling and
slot machines in neighboring states. (See Item 1(d), "Competition and
Marketing").

Management has worked diligently over the past decade in attempting to
convince the Governors and the Massachusetts state legislature of the need to
allow the Commonwealth's commercial racetracks to offer their patrons expanded
gaming opportunities. While various legislation has been introduced, the
Massachusetts state legislature took no action to expand legalized gaming in the
years 2000, 2001, 2002 and 2003. On October 3, 2002, the then Governor of
Massachusetts issued an executive order establishing a special commission to
study and report on the potential impact, both positive and negative, of the
potential expansion of legalized gaming in Massachusetts. This commission held
public hearings in four locations throughout the Commonwealth and reported its
findings to the Governor on December 31, 2002. This commission's report did not
recommend that the Governor and/or the state legislature enact legislation that
would expand gaming, but instead focused on the various social, financial and
economic ways that the expansion of legalized gaming could possibly impact, both
negatively and positively, the Commonwealth and its citizens. Management is
unable to predict what, if any, impact this report has had or will have on the
overall prospects for the enactment of legislation in Massachusetts to expand
legalized gaming. There is no assurance that the release of this report will
prompt or thwart the introduction or enactment of such legislation. This is not
the first time a commission of this type has been formed. Over the past decade,
when similar commissions have proposed the introduction of gaming legislation,
numerous bills have been introduced, but legislation has never been enacted
despite being supported of by the then Governor of The Commonwealth of
Massachusetts and certain state legislators.

In the spring of 2003, according to newspaper accounts, Governor Romney was
considering introducing legislation to allow the installation of video slot
machines at two to four unspecified sites in the Commonwealth which would be
determined by means of an auction with five-year licenses being awarded to the
highest bidders. In a hearing of the Government Regulations Committee of the
Massachusetts House of Representatives, Robert Pozen, Governor Romney's then
Chief of Commerce and Labor, on behalf of the Romney administration, stated that
7,200 slot machines at three unspecified sites could raise as much as $300
million annually in additional state tax revenues. At this same hearing, a
number of other gaming-related proposals were discussed.

In March, 2003, the Massachusetts House of Representatives approved a rule
that would prevent any amendments calling for the expansion of legalized gaming
from being introduced in connection with the deliberations in the House on its
version of the state budget for fiscal year 2004. In addition, on April 15,
2003, the House of Representatives debated two gaming bills related to
permitting slot machines at the Commonwealth's four racetracks and authorizing
slot machines and full-scale casinos. Both of these bills were defeated.

On November 6, 2003, a proposed amendment was filed to an omnibus economic
development package in the Massachusetts Senate that would have authorized both
the installation of up to 1,500 slot machines at each of the state's four
racetracks and the establishment of up to two casinos. In addition, this
proposed amendment contained a condition that each of the four racetracks would
be required to pay a $25 million licensing fee in order to install slot machines
at their facilities. Faced with significant opposition, the amendment was
withdrawn prior to any vote being taken.

13

If Governor Romney and/or the state legislature determines to introduce or
enact legislation in 2004 to expand gaming, the process to enact gaming
legislation could take a number of months, and it is impossible to predict the
nature of any such legislation and whether the Westwood Group would in fact
benefit from such legislation if ultimately enacted.

OPERATING REVENUE FOR YEAR ENDED DECEMBER 31, 2003 COMPARED TO YEAR ENDED
DECEMBER 31, 2002

Total operating revenue including pari-mutuel commissions declined by 16%
or approximately $2.6 million to $13.2 million in 2003 as compared to $15.8
million in 2002. Total handle decreased by $15.0 million or 16% in 2003 to
approximately $80.0 million as compared to $95.0 million in 2002. Live-on track
handle decreased by approximately $4.0 million or 25% in 2003 to $12.0 million
as compared to $16.0 million in 2002, while live-simulcast handle decreased by
$6.0 million or 21% in 2003 to $24.0 million compared to $30.0 million in 2002.
Guest-simulcast handle decreased by approximately $5.0 million or 10% in 2003 to
$44.0 million compared to $49.0 million in 2002.

Wonderland had 57 fewer live racing performances in 2003 for a total of 267
live performances as compared to 324 live performances in 2002, as well as a 13%
decrease in attendance between 2003 and 2002. Concessions revenue decreased 13%
to $1.4 million in 2003 from $1.6 million in 2002. Concessions revenue consists
of food, beverage, program sales, and advertising income.

Other operating revenue declined by 35% to $911,000 in 2003 from $1.4
million in 2002. Pari-mutuel commissions for the year ended December 31, 2003
included approximately $110,000 deposited into the Greyhound Capital
Improvements Trust Fund, $60,000 into the Greyhound Adoption Fund, and $170,000
into the Greyhound Promotional Trust Fund. During same period of 2002, such
amounts were $124,000, $80,000, and $204,000, respectively. These funds are
maintained through remittance by Wonderland of a percentage of the handle that
is retained by Wonderland after payment to bettors. Reimbursement is
periodically approved by The Commonwealth of Massachusetts to the extent that
the trust fund balance equals or exceeds the reimbursements for which the
Westwood Group applied.

OPERATING REVENUE FOR YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED
DECEMBER 31, 2001

Total operating revenue including pari-mutuel commissions declined by 7% or
approximately $1.2 million to $15.8 million in 2002 as compared to $17.0 million
in 2001. Total handle decreased by 8% in 2002 to $95.0 million as compared to
$103.0 million in 2001. Live-on track handle decreased by $4.0 million or 20% in
2002 to $16.0 million as compared to $20.0 million in 2001, while live-simulcast
handle decreased by $4.0 million or 12% in 2002 to $30.0 million compared to
$34.0 million in 2001. Guest-simulcast handle remained unchanged from 2001 to
2002.

Wonderland had 9 fewer live racing performances in 2002 for a total of 324
live performances as compared to 333 live performances in 2001, with a 10%
decrease in attendance between 2002 and 2001. Concessions revenue increased 7%
to $1.6 million in 2002 from $1.5 million in 2001. Concessions revenue consists
of food, beverage, program sales, and advertising income. Other operating
revenue declined by 29% to $1.4 million in 2002 from $2.0 million in 2001.

Pari-mutuel commissions for the year ended December 31, 2002 included
approximately $124,000 deposited into the Greyhound Capital Improvements Trust
Fund, $80,000 into the Greyhound Adoption Fund, and $204,000 into the Greyhound
Promotional Trust Fund. During same period of 2001, such amounts were $244,000,
$0, and $246,000, respectively. These funds are maintained through remittance by
Wonderland of a percentage of the handle that is retained by Wonderland after
payment to bettors. Reimbursement is periodically approved by The Commonwealth
of Massachusetts to the extent that the trust fund balance equals or exceeds the
reimbursements for which the Westwood Group applied.

OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 COMPARED TO YEAR ENDED
DECEMBER 31, 2002

Total operating expenses were $15.5 million and $16.5 million in 2003 and
2002, respectively. Purse expense declined by 20% because of the decline in
on-track handle. Purse expense is determined by

14

contractual agreement with the dog owners and statutory requirements of The
Commonwealth of Massachusetts based upon on-track handle. During 2003,
administrative and operating expenses decreased by approximately $226,000 or 4%
compared to the same period in 2002. This decrease was the result of ongoing
efforts to align cost structure with the decline in revenues.

OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED
DECEMBER 31, 2001

Total operating expenses were $16.5 million and $16.4 million in 2002 and
2001, respectively. Purse expense declined by 7% because of the decline in
on-track handle. Purse expense is determined by contractual agreement with the
dog owners and statutory requirements of The Commonwealth of Massachusetts based
upon on-track handle. During 2002, administrative and operating expenses
increased by approximately $260,000 or 5% compared to the same period in 2001.
This increase was mainly the result of costs associated with our previously
proposed 1,500-to-1 reverse stock split.

INTEREST EXPENSE

Interest expense during 2003 increased by approximately $44,000 compared to
2002 as the result of increased draw downs on the Westwood Group's loan
facility. During 2002, interest expense declined by approximately $140,000 as
the result of lower average outstanding balances and advantageous refinancing of
the Westwood Group's long-term debt.

PROVISION FOR INCOME TAXES

The Westwood Group's provision for income taxes was less than the statutory
federal tax rate of 34% during 2003, 2002, and 2001 primarily due to the
utilization of available net operating loss carryforwards for which the related
deferred tax asset has been fully reserved. The provision for taxes of $61,000
in 2003, $62,000 in 2002, and $46,000 in 2001 consists of state income taxes.

DISCONTINUED OPERATIONS

Foxboro Park, Inc. ("Foxboro," which term as used herein includes its
wholly-owned subsidiaries) conducted seasonal live harness racing generally 2
evenings and 2 matinees per week, while simulcasting afternoons and evenings
through July 1997. (See Note 4 of Notes to Consolidated Financial Statements).
In 2001 and 2000, the Westwood Group recognized gains of $351,000 and $353,000
resulting from the reduction of liabilities related to discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2003, the Westwood Group had a working capital deficit of
approximately $2.1 million, and a stockholders' deficit of approximately $4.5
million. Historically, the Westwood Group's primary sources of capital to
finance its businesses have been its cash flow from operations and credit
facilities.

The Westwood Group's capital needs are primarily for maintenance and
enhancement of the racing facility at Wonderland, and for debt service
requirements. The Westwood Group's cash and cash equivalents totaled
approximately $137,000 at December 31, 2003, compared with $114,000 at December
31, 2002. The Westwood Group generated a cash deficit from operations of
approximately $1.5 million during 2003 as compared to a deficit of $520,142
during 2002. Non-cash items included in the Westwood Group's net loss in 2003
consist of depreciation and amortization expense of $662,000. Changes in working
capital accounts including restricted cash, accounts payable and other accrued
liabilities generated approximately $516,000 of cash in 2003. Net cash provided
by investing activities in 2003 of approximately $939,000 primarily represents
the decrease in officer notes receivable offset by additions to property, plant
and equipment.

On September 3, 2002, Wonderland Greyhound Park Realty, LLC, a subsidiary
of the Westwood Group, entered into a $6,500,000 Loan, Reimbursement and
Security Agreement with Boston Federal

15

Savings Bank. This loan is collateralized by a mortgage on all real and personal
property located at Wonderland Greyhound Park. A portion of the proceeds from
this loan transaction was used to refinance the Westwood Group's then existing
credit facility with Century Bank and Trust Company. The Westwood Group is the
guarantor of the loan from Boston Federal Savings Bank. Financing activities in
2003 generated approximately $0.6 million of cash from the Westwood Group's
ability to draw down funds under the terms of the loan agreement.

On February 13, 2003, the Westwood Group filed a Definitive Proxy Statement
and an accompanying Schedule 13E-3 with the Securities and Exchange Commission
in order to effectuate a 1,500 for 1 reverse stock split of its capital stock.
If the proposed reverse stock split had been approved by a majority of the
voting power of the Westwood Group's stockholders, then holders of less than
1,500 shares immediately prior to such meeting would have been cashed out at a
per share purchase price equal to $4.00, thereby reducing the number of its
stockholders to under 300 and, consequently, allowing the Westwood Group to
change its status from a public company to a private company. This would have
relieved the Westwood Group of the administrative burden and cost and
competitive disadvantages associated with filing reports and otherwise complying
with the requirements of registration under the Federal securities laws and to
permit small stockholders to receive liquidity for their shares without having
to pay brokerage commissions. The proposed reverse stock split would have (i)
caused the Westwood Groups to redeem shares held by approximately 400 holders of
record of Common Stock, (ii) retained record holders who hold 1,500 or more
shares of Common Stock or Class B Common Stock, (iii) reduced the number of
shares, on a pro-rata basis, held by the holders of record who hold 1,500 or
more shares of Common Stock or Class B Common Stock, and (iv) changed the
percent of outstanding Common Stock held by the remaining stockholders to 100%.
Assuming the completion of the proposed reverse stock split and change in its
status from a public company to a private company, the Westwood Group would have
promptly thereafter initiated a tender offer for additional shares of its
capital stock in order to provide those stockholders who would not have received
a cash payment in connection with the proposed reverse stock split the
opportunity to tender one post-reverse stock split share in return for $6,000,
which amount reflects the highest payment to be received by any stockholder as a
result of the consummation of the proposed reverse stock split.

The special meeting of the Westwood Group's stockholders scheduled for
March 19, 2003 was adjourned so that the Westwood Group could address
allegations raised by the Massachusetts Securities Division in an Administrative
Complaint and a lawsuit brought by a stockholder in Delaware Chancery Court (See
Item 3, "Legal Proceedings"). Accordingly, the proposed going private
transaction was not consummated.

Subsequently, on August 21, 2003, the Westwood Group filed a preliminary
proxy statement and an accompanying Schedule 13E-3, which was subsequently
amended on October 3, 2003, October 31, 2003, December 5, 2003 and December 19,
2003, with the Securities and Exchange Commission in order to effectuate a 500
for 1 reverse stock split of its capital stock. Once the preliminary proxy
statement is finalized, the Westwood Group intends to mail the definitive proxy
statement to its stockholders. If the proposed reverse stock split is approved
by the Westwood Group's stockholders at a special meeting of the stockholders on
a date to be determined, then holders of less than 500 shares immediately prior
to such meeting will be cashed out at a per share purchase price equal to $4.00,
thereby reducing the number of its stockholders to under 300 and, consequently,
allowing the Westwood Group to change its status from a public to a private
company and to relieve the Westwood Group of the administrative burden and cost
and competitive disadvantages associated with filing reports and otherwise
complying with the requirements of registration under the federal securities
laws and to permit small stockholders to receive a fair price for their shares
without having to pay brokerage commission.

In addition to receiving the cash payment of $4.00 per share, each record
holder being redeemed in connection with the proposed reverse stock split will
be entitled to receive an additional cash payment if, within one calendar year
from the date of the special meeting of the stockholders, the Massachusetts
state legislature enacts legislation that expands legalized gaming in The
Commonwealth of Massachusetts and

16

such legislation authorizes the Westwood Group to install slot machines at its
Wonderland racetrack facility.

The reverse stock split would (i) cause the Westwood Group to redeem shares
held by approximately 375 holders of record of Common Stock, (ii) not eliminate
record holders who hold 500 or more shares of Common Stock and Class B Common
Stock, (iii) reduce the number of shares, on a pro-rata basis, held by the
holders of record who hold 500 or more shares of Common Stock and Class B Common
Stock, and (iv) change the percent of Common Stock held by the remaining
stockholders to 100%.

Assuming the completion of the proposed reverse stock split and change in
its status from a public to a private company, the Westwood Group will promptly
thereafter initiate a tender offer for additional shares of its capital stock in
order to provide those stockholders who did not receive a cash payment in
connection with the proposed reverse stock split the opportunity to tender one
share in return for $2,000, which amount reflects the highest payment to be
received by any stockholder as a result of the consummation of the proposed
reverse stock split.

In March, 2004, Wonderland Greyhound Park Realty, LLC received a commitment
from a group of investors, one of whom is Charles F. Sarkis, to loan the
Westwood Group up to $2.5 million to be used for short-term working capital
purposes in consideration for a second mortgage on the real property located at
Wonderland Greyhound Park. The Westwood Group is currently negotiating the terms
of this transaction, and this transaction is expected to be consummated during
the second quarter of the 2004 fiscal year.

The Westwood Group believes that it will be able to satisfy its anticipated
obligations during 2004 with cash received from operations and the anticipated
financing described above.

RACING SUBSIDIARY

In order to meet the requirements for renewal of racing licenses in 2004,
the Westwood Group's racing subsidiary must demonstrate that among other
criteria, it is a financially stable entity, capable of disposing of its
obligations on an annual basis. Although management is optimistic that it will
be able to demonstrate sufficient financial stability in the application for a
2004 racing license, the Westwood Group cannot assure you that the Racing
Commission will continue to grant a license to conduct racing on the schedule
presently maintained at Wonderland. In the event that the Westwood Group is not
successful in obtaining a year 2004 racing license, the adverse impact on the
Westwood Group's financial results and position would be material.

IMPACT OF INFLATION AND CHANGING PRICES

Certain of the Westwood Group's operating expenses, such as wages and
benefits, equipment repair and replacement, and inventory and marketing costs,
increase with general inflation. In order for the Westwood Group to cope with
inflation, it must, to the extent permitted by competition and patron
acceptance, pass increased cost on by periodically increasing prices. The
Westwood Group is limited in its ability to offset the effects of inflation by
increasing its percentage of handle because this percentage is governed by
statute.

CRITICAL ACCOUNTING POLICIES

Our accounting policies are disclosed in the Notes to the Financial
Statements in this annual report. The more critical of these policies are
described in the following paragraphs below.

REVENUE RECOGNITION

The Westwood Group's annual revenues are mainly derived from the net
commission that it receives from wagers made by patrons during its live-on track
racing performances, live and guest-simulcast racing performances and from
admission and concession charges at such performances. Inter-track receivables
and payables are dependent on the accuracy of an independent totalisator vendor.

17

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Estimates that could impact on the Westwood
Group's results of operations include those relating to settlement of
liabilities related to discontinued operations, contractual obligations and
other accrued expenses. Actual results could differ from those estimates.

CREDIT FACILITIES, DEBT AND LEASE PAYMENT COMMITMENTS

During 2002, we repaid our outstanding debt with Century Bank and Trust
Company with the proceeds we received from a term loan with Boston Federal
Savings Bank. Under the Boston Federal Savings Bank term loan, we can borrow up
to $6,500,000. At December 31, 2003, we had drawn down a total of $6,340,000
from the Boston Federal Savings Bank loan and $160,000 was available and may be
used to assist the Westwood Group for transaction costs to become a private
company. Borrowings under the term loan bear interest at 6.5%. The term loan
requires 21 monthly payments of principal and interest of $42,910. The final
payment of $5,891,281 is due on September 1, 2005.

Totalisator equipment rent (which is primarily based on the handle per
performance) was approximately $313,000, $335,000 and $342,000 in 2003, 2002 and
2001, respectively. Future minimum lease payments are due at amounts calculated
as a percentage of our total handle amounts. We are also liable for various
operating leases for automobiles and other operating equipment. The future
minimum lease commitments relating to these noncancelable operating leases as of
December 31, 2003 are not material to the consolidated financial statements.

The following summarizes our contractual cash obligations at December 31,
2003:

NEW ACCOUNTING STANDARDS

In November 2002, the Emerging Issues Task Force ("EITF") reached consensus
on Issue No. 00-21, Revenue Arrangements with Multiple Deliverables. Revenue
arrangements with multiple deliverables include arrangements which provide for
the delivery or performance of multiple products, services and/or rights to use
assets where performance may occur at different points in time or over different
periods of time. EITF Issue No. 00-21 is effective for revenue arrangements
entered into in fiscal periods beginning after June 15, 2003. The adoption of
the guidance under this consensus did not have an impact on the Westwood Group's
financial position, results of operations or cash flows.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity, which
establishes standards for how an issuer classifies and measures 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), while many of such
instruments were previously classified as equity or "mezzanine" equity. The
statement also requires that income statement treatment be consistent with the
balance sheet classification. That is, if the instrument is classified as a
liability, payments to the holders are interest expense, not dividends, and
changes in value are recorded in earnings. The statement relates to three

18

specific categories of instruments; mandatorily redeemable shares, freestanding
written put options and forward contracts that obligate an entity to purchase
its own shares, and freestanding contracts that obligate an entity to pay with
its own shares in amounts that are either unrelated, or inversely related, to
the price of the shares. SFAS No. 150 is effective immediately for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective in the first interim period beginning after June 15, 2003. The
adoption of this statement did not have an impact on the Westwood Group's
financial position, results of operations, or cash flows.

In December 2003, the FASB issued a revision to FIN No. 46, Consolidation
of Variable Interest Entities. The revised FIN No. 46, which replaces the
original FIN No. 46 issued in January 2003, clarifies the application of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support. While this interpretation exempts certain entities from its
requirements, it also expands the definition of a variable interest entity
("VIE") to a broader group of entities than those previously considered
special-purpose entities ("SPE's") and specifies the criteria under which it is
appropriate for an investor to consolidate VIE's. Application of the revised FIN
No. 46 is required in financial statements of public entities that have interest
in structures that are commonly referred to as SPE's for periods ending after
December 15, 2003. For all other types of VIE's application of the revised FIN
No. 46 by public entities is required for periods ending after March 15, 2004.
The application of this interpretation with respect to structures commonly
referred to as SPE's did not have a material impact on the Westwood Group's
financial position, results of operations, or cash flows. The Westwood Group
currently does not expect the application of this interpretation with respect to
other types of VIE's to have a material impact on its financial position,
results of operations, or cash flows.

In December 2003, the Securities and Exchange Commission ("SEC") published
SAB No. 104, Revenue Recognition. SAB No. 104 was effective upon issuance and
supersedes SAB No. 101, Revenue Recognition in Financial Statements, and
rescinds the accounting guidance contained in SAB No. 101 related to
multiple-element revenue arrangements that was superseded by EITF Issue No. 00
21. Accordingly, SAB No. 104 rescinds portions of the interpretive guidance
included in Topic 13 of the codification of staff accounting bulletins. While
the wording of SAB No. 104 has changed to reflect the guidance of EITF 00-21,
the revenue recognition principles of SAB No. 101 have remained largely
unchanged. The adoption of SAB No. 104 did not have a material effect on the
Westwood Group's financial position, results of operations, or cash flows.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Westwood Group has no material exposure to market risk that could
affect its future results of operations and financial condition. Risks and
uncertainties, including those not presently known to us or that we currently
deem immaterial, may impair our business. The Westwood Group does not use
derivative products and does not have any material unhedged monetary assets.
(See Item 7, under the subsection "Liquidity and Capital Resources").

19

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

20

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of The Westwood Group, Inc. and
Subsidiaries
Revere, Massachusetts:

We have audited the accompanying consolidated balance sheets of The
Westwood Group, Inc. and subsidiaries as of December 31, 2003 and 2002 and the
related consolidated statements of operations, changes in stockholders'
deficiency and cash flows for each of the three years in the period ended
December 31, 2003. These financial statements are the responsibility of the
Westwood Group's management. Our responsibility is to express an opinion on
these 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 as to whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects the consolidated financial position of The Westwood
Group, Inc. and subsidiaries as of December 31, 2003 and 2002, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2003, in conformity with accounting
principles generally accepted in the United States of America.

/s/ BDO SEIDMAN, LLP

Boston, Massachusetts
March 5, 2004 (except for the matter
discussed in Note 14,
which is as of March 26, 2004)

21

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these consolidated financial
statements.
22

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these consolidated financial
statements.
23

THE WESTWOOD GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001

The accompanying notes are an integral part of these consolidated financial
statements.
24

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(NOTE 13)

The accompanying notes are an integral part of these consolidated financial
statements.
25

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

The Westwood Group, Inc. and subsidiaries (the "Company") operates in one
business segment through its pari-mutuel racing subsidiary. Wonderland Greyhound
Park ("Wonderland" or "Wonderland Park") is a pari-mutuel greyhound racing
facility located in Revere, Massachusetts. The Company also operated Foxboro
Park, a pari-mutuel harness racing facility located in Foxboro, Massachusetts
through the date of eviction in July, 1997. The Company's Foxboro harness racing
operations were discontinued during 1997.

The Wonderland facility includes a one-quarter mile sand track, a physical
plant consisting of a climate controlled grandstand and clubhouse and a
two-story administrative center. The Company maintains and operates two full
service restaurants, a sports bar and other concession facilities at the
racetrack. The racetrack facility can accommodate 10,000 patrons. The average
attendance per performance in 2003 was approximately 628 persons. The complex
encompasses a total of approximately 35 acres, including paved and lighted
parking providing capacity for approximately 2,300 cars.

Wonderland provides its patrons with a variety of entertainment options
including live racing and full card simulcast wagering.

In 2003, the Company filed a Proxy Statement in order to change from public
company status to private company status (see Note 10).

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of The Westwood
Group, Inc. and its wholly-owned subsidiaries. All material intercompany
transactions have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS

Cash investments with maturities of three months or less at the time of
their purchase are classified as cash equivalents.

RESTRICTED CASH

Restricted cash includes approximately $0 and $125,000 at December 31, 2003
and 2002, respectively, related to funds dedicated to payment of the Company's
liability for outstanding pari-mutuel tickets. Unclaimed winnings from
pari-mutuel wagering are held by Wonderland until they become payable to the
Commonwealth by the operation of unclaimed property statutes.

Restricted cash also includes approximately $251,000 and $125,000 at
December 31, 2003 and 2002, respectively, held as collateral for the Company's
letters of credit which secures the Company's racing bonds for 2003 and 2004.

Restricted cash includes approximately $0 and $126,000 at December 31, 2003
and 2002, respectively, which is required to be used for the purposes of the
going private transaction.

ESCROWED CASH

Escrowed cash is related to the operations of Wonderland and includes
amounts held by The Commonwealth of Massachusetts in trust funds (for capital
improvements and advertising/promotion). Wonderland funds these costs and
requests reimbursement from the trust funds. Wonderland is reimbursed upon
approval by the Commonwealth.

26

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PROPERTY, PLANT AND EQUIPMENT

Property, Plant and equipment are stated at cost and are depreciated using
the straight-line method over the following estimated useful lives:

Gains or losses are recognized upon the disposal of property, plant and
equipment, and the related accumulated depreciation and amortization are
adjusted accordingly. Losses are also recognized on buildings and improvements
in the event of a permanent impairment to their value, as determined by
Statement of Financial Accounting Standards ("SFAS") No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of." Impairment charges are recorded whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be
recoverable through the estimated undiscounted future cash flows from the use of
these assets. When any such impairment exists, the related assets are written
down to fair value. The Company believes that no such impairment exists at
December 31, 2003. Maintenance, repairs and betterments that do not enhance the
value of or increase the life of the assets are charged to operations as
incurred.

Depreciation and amortization expense (excluding amortization of deferred
charges) of approximately $562,000, $592,000 and $500,000 was recorded for the
years ended December 31, 2003, 2002 and 2001, respectively. Equipment under
capital leases had a cost and accumulated depreciation of $93,032 and $49,554 at
December 31, 2003 and $72,451 and $30,947 at December 31, 2002, respectively.

DEFERRED FINANCING COSTS

Deferred financing costs are being amortized on a straight line basis over
the term of the related debt (34 months). Amortization expense for the years
ended December 31, 2003, 2002 and 2001 was approximately $99,000, $49,000 and
$36,000, respectively.

CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to credit risk
consist of cash equivalents and accounts receivable. The Company's policy is to
limit the amount of credit exposure to any one financial institution and place
investments with financial institutions evaluated as being creditworthy.
Concentration of credit risk, with respect to accounts receivable, is limited
due to the Company's credit evaluation process. The Company does not require
collateral from its customers. The Company's accounts receivable balance is
comprised principally of amounts due from other race tracks. Historically, the
Company has not incurred any significant credit related losses.

REVENUE RECOGNITION

The Company's annual revenues are mainly derived from the net commission
that it receives from wagers made by patrons during its live-on track racing
performances, live and guest simulcast racing performances and from admission
and concession charges at such performances. Inter-track receivables and
payables are dependent on the accuracy of an independent totalisator vendor.

STOCK BASED COMPENSATION

The Company follows SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS No. 123 allows the Company to account for its stock-based
compensation plans based upon either a fair value

27

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

method or the intrinsic value method. The Company has elected to follow the
intrinsic value method of accounting for stock-based compensations plans
prescribed under Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees". Under SFAS No. 123, as amended by SFAS No. 148, the
Company is required to disclose the effects of applying the fair value method on
the net income or loss.

The grant date fair value of options granted during 2003 under the
Black-Scholes option-pricing model was $4.57. The fair value of options granted
in 2003 was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions.

INCOME (LOSS) PER COMMON SHARE

Basic net income (loss) per share is computed using the weighted average
number of common shares outstanding during the period. Diluted net income (loss)
per share is computed using the weighted average number of common shares and
potentially dilutive common shares, consisting of stock options with an exercise
price below the average market price of common shares. In 2001, the Company had
net income; however, stock options were excluded from the computation of diluted
shares because their exercise prices were above the average market price of the
common shares. The Company's stock options did not have a dilutive effect in
2003 or 2002 since the Company incurred a net loss.

INCOME TAXES

The Company uses the liability method of accounting for income taxes. Under
this method, deferred income taxes are provided based on the estimated future
tax effects of differences between financial statement carrying amounts and the
tax basis of existing assets and liabilities. The Company's policy is to record
a valuation allowance against deferred tax assets unless it is more likely than
not that such assets will be realized in future periods. The Company considers
estimated future taxable income or loss and other available evidence when
assessing the need for its deferred tax asset valuation allowance.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the

28

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting periods. Actual results could
differ from those estimates.

ADVERTISING

The Company expenses advertising costs as incurred. Advertising expense was
approximately $167,000, $216,000 and $181,000 for the years ended December 31,
2003, 2002 and 2001, respectively.

RECLASSIFICATIONS

Certain previously reported amounts have been reclassified in order to
conform to the 2003 presentation.

NEW ACCOUNTING PRONOUNCEMENTS

In November 2002, the Emerging Issues Task Force ("EITF") reached consensus
on Issue No. 00-21, Revenue Arrangements with Multiple Deliverables. Revenue
arrangements with multiple deliverables include arrangements which provide for
the delivery or performance of multiple products, services and/or rights to use
assets where performance may occur at different points in time or over different
periods of time. EITF Issue No. 00-21 is effective for revenue arrangements
entered into in fiscal periods beginning after June 15, 2003. The adoption of
the guidance under this consensus did not have an impact on the Company's
financial position, results of operations or cash flows.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity, which
establishes standards for how an issuer classifies and measures 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), while many of such
instruments were previously classified as equity or "mezzanine" equity. The
statement also requires that income statement treatment be consistent with the
balance sheet classification. That is, if the instrument is classified as a
liability, payments to the holders are interest expense, not dividends, and
changes in value are recorded in earnings. The statement relates to three
specific categories of instruments; mandatorily redeemable shares, freestanding
written put options and forward contracts that obligate an entity to purchase
its own shares, and freestanding contracts that obligate an entity to pay with
its own shares in amounts that are either unrelated, or inversely related to the
price of the shares. SFAS No. 150 is effective immediately for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective in the first interim period beginning after June 15, 2003. The
adoption of this statement did not have an impact on the Company's financial
position, results of operations, or cash flows.

In December 2003, the FASB issued a revision to FIN No. 46, Consolidation
of Variable Interest Entities. The revised FIN No. 46, which replaces the
original FIN No. 46 issued in January 2003, clarifies the application of
Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support. While this interpretation exempts certain entities from its
requirements, it also expands the definition of a variable interest entity
("VIE") to a broader group of entities than those previously considered
special-purpose entities ("SPE's") and specifies the criteria under which it is
appropriate for an investor to consolidate VIE's. Application of the revised FIN
No. 46 is required in financial statements of public entities that have interest
in structures that are commonly referred to as SPE's for periods ending after
December 15, 2003. For all other types of VIE's application of the revised FIN
No. 46 by public entities is required for periods ending after March 15, 2004.
The application of this interpretation with
29

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

respect to structures commonly referred to as SPE's did not have a material
impact on the Company's financial position, results of operations, or cash
flows. The Company currently does not expect the application of this
interpretation with respect to other types of VIE's to have a material impact on
its financial position, results of operations, or cash flows.

In December 2003, the Securities and Exchange Commission ("SEC") published
SAB No. 104, Revenue Recognition. SAB No. 104 was effective upon issuance and
supersedes SAB No. 101, Revenue Recognition in Financial Statements, and
rescinds the accounting guidance contained in SAB No. 101 related to
multiple-element revenue arrangements that was superseded by EITF Issue No. 00
21. Accordingly, SAB No. 104 rescinds portions of the interpretive guidance
included in Topic 13 of the codification of staff accounting bulletins. While
the wording of SAB No. 104 has changed to reflect the guidance of EITF 00-21,
the revenue recognition principles of SAB No. 101 have remained largely
unchanged. The adoption of SAB No. 104 did not have a material effect on the
Company's financial position, results of operations, or cash flows.

2. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities as of December 31, 2003 and 2002
consists of the following:

3. LONG-TERM DEBT

Long-term debt consists of the following:

At December 31, 2003, the Company had drawn down a total of $6,340,000 from
the Boston Federal Savings Bank loan and $160,000 was available for use. Of the
available amount, $0 may be used for working capital purposes and $160,000 may
be used to assist the Company for transaction costs to become a private company.
The Loan Reimbursement and Security Agreement, dated as of September 3, 2002, by
and between Wonderland Greyhound Park Realty, LLC and Boston Federal Savings
Bank, contains certain restrictive covenants including the maintenance of
certain financial ratios and debt coverage requirements. As of December 31,
2003, the Company was in compliance with these covenants.

30

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Maturities of long-term debt as of December 31, 2003 are as follows:

4. DISCONTINUED OPERATIONS

In 1996, litigation ensued between Foxboro Realty Associates, LLC, et al.
its subsidiary Foxboro Park, Inc., et al., and the Company, over Foxboro's right
to occupy Foxboro Raceway. The Court issued an execution pursuant to which
Foxboro was evicted from the racetrack on July 31, 1997. As a result the Company
discontinued its harness racing operations. In the fourth quarter of 2001, the
Company recognized a gain of $351,000, resulting from the reduction of
liabilities related to discontinued operations. As of December 31, 2003 and
2002, there were no remaining liabilities related to discontinued operations.

5. OTHER LONG-TERM LIABILITIES

Other long-term liabilities include approximately $365,216 and $417,216 at
December 31, 2003 and 2002, respectively, of fees owed to a law firm primarily
related to litigation in prior years. Such outstanding amounts are currently
payable at $1,000 per week. Current maturities of $52,000 are included in
accounts payable and accrued liabilities.

The remaining balance in other long-term liabilities consists of deferred
compensation and deferred pension payable of $0 and $317,666 for 2003,
respectively, and $96,524 and $452,659 for 2002, respectively, and the long-term
portion of capital lease payments (see Note 6).

6. COMMITMENTS AND CONTINGENCIES

RACING LICENSE

In order to meet the requirements for renewal of racing licenses,
Wonderland must demonstrate, on an annual basis that it is a financially viable
entity, capable of disposing of its obligations on a timely basis. The racing
license has been granted for the 2004 calendar year. Although management is
optimistic that it will be able to demonstrate financial stability in their
applications for a year 2005 racing license, there can be no assurance that the
Racing Commission will continue to grant licenses to conduct racing on the
schedule presently maintained at Wonderland. In the event that the Company is
not successful in obtaining a year 2005 racing license, the adverse impact on
the Company would be material.

LEASE COMMITMENT

Totalisator equipment rent (which is primarily based on the handle per
performance) was approximately $313,000, $335,000 and $342,000 in 2003, 2002 and
2001, respectively. Future minimum payments are due at amounts calculated as a
percentage of the Company's total handle amounts. The Company is also liable for
various operating leases for automobiles and other equipment. The future minimum
lease commitments relating to noncancelable operating leases as of December 31,
2003 are immaterial. In 2003, 2002 and 2001, the Company entered into capital
leases for various operating equipment items.

31

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 2003, future minimum lease payments under capital leases
were as follows:

2004........................................................ $26,945
2005........................................................ 12,015
2006........................................................ 2,287
-------
Total maximum lease payments................................ 41,247
Amount representing interest................................ 1,620
-------
Present value of minimum lease payments..................... 39,627
Current portion of lease payments........................... 26,151
-------
Long-term portion of lease payments......................... $13,476
=======

The current portion of lease payments has been recorded in accounts payable
and other accrued liabilities, while the long-term portion of capital lease
payments has been recorded in other long-term liabilities.

LITIGATION

The Company is subject to various legal proceedings that arise in the
ordinary course of its business.

On March 6, 2003, the Company received an inquiry from the Securities
Division of the Office of the Secretary of The Commonwealth of Massachusetts.
According to the Securities Division, it had received an anonymous letter from a
stockholder of the Company raising certain allegations concerning the then
proposed 1,500-to-1 reverse stock split. The Company's counsel answered all of
the Securities Division's questions and provided the requested materials.

On March 18, 2003, which was one day prior to the scheduled meeting to
approve the proposed 1,500-to-1 reverse stock split, the Company received an
Administrative Complaint and Ex Parte Motion for a Temporary Order to Cease and
Desist from the Securities Division. The Administrative Complaint claimed that
the Company failed to disclose certain information to the stockholders in the
prior proxy statement, which the Securities Division alleged to be "material."
Specifically, the Securities Division alleged that the Company failed to
disclose: (i) the existence of loans from the principal of Alouette Capital to
the Company and Mr. Sarkis; (ii) that Alouette Capital was not a registered
broker dealer, and (iii) the extent of the Company's lobbying activities with
respect to the passage of gaming legislation. The stockholders' meeting
scheduled for March 19, 2003 to approve the proposed going private transaction
was adjourned in order to permit the Company to address this matter, and the
stockholders' vote was never taken.

On April 1, 2003, a class action complaint was filed by a stockholder of
the Company against the Company and its Board of Directors in the Court of
Chancery in the State of Delaware seeking to enjoin the proposed reverse stock
split on the basis that is not fair to the stockholders and that the proxy
statement omits information alleged to be "material."

As a result of the Administrative Complaint filed by the Securities
Division, the proposed 1,500-to-1 reverse stock split was indefinitely
suspended. On April 8, 2003, the Company filed an answer in response to the
Securities Division's complaint, which denied each of the allegations set forth
in the complaint, and between April and June 2003, the Company and the
Securities Division negotiated a settlement.

32

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On June 16, 2003, the Company executed an Offer of Settlement and a Consent
Order was issued. The principal elements of the settlement were as follows:

(i) The Company would not commit any future violations of chapter 110A
of Massachusetts General Laws and the corresponding regulations promulgated
thereunder;

(ii) The Company paid the sum of $10,000 to offset the cost of the
Securities Division's investigation;

(iii) If the Company retains a fairness opinion provider as part of
any proposed going private transaction, the Company would engage a fairness
opinion provider that is independent, unaffiliated, and free from all
material conflicts of interest;

(iv) The Company would not, within the next twelve months, enter into,
effect or consummate with its then existing stockholders a going private
transaction where the common stock of Company is valued as a per share
price of less than $4.00, however, it could seek review of this provision
through petition to the Director of the Securities Division and he/she may
grant such relief at his/her sole discretion, provided that such relief
shall not be unreasonably withheld;

(v) The Company would include all material facts, consistent with the
SEC's rules, considered by the Board of Directors in reaching its fairness
determination regarding any proposed going private transaction and would
present a fair and balanced representation of the potential expansion of
gaming legislation in Massachusetts consistent with all applicable SEC
rules;

(vi) The Company would make available to any fairness opinion provider
retained by the Board of Directors to determine the fairness of any
proposed going private transaction, any and all current gaming-related
reports and materials prepared for the Company by any consultant, including
any financial projections;

(vii) The Company would present to the Securities Division any draft
of an amendment to the existing February 13, 2003, Proxy Statement or any
other filing under the SEC's Regulation M-A contemporaneously with
submission of the same to the SEC for review;

(viii) The Company would require approval of any proposed going
private transaction by majority of (a) the unaffiliated stockholders of the
outstanding shares of Common Stock, and (b) the unaffiliated stockholders
of the Class B Common Stock;

(ix) The Company would value the stock based upon a range deemed to be
fair by the new fairness opinion provider; and

(x) The Company would include provisions that would pay former
stockholders whose shares have been purchased through the transaction an
additional premium, earn out, or the like, should legislation be enacted
into law, within one (1) year of the stockholders vote approving the
transaction, authorizing the Company to install slot machines at its
racetrack, with the amount of any payment to former stockholders to be
determined based upon the particular provisions of the statute, and
whether, in fact, the Company realizes increased revenues in connection
therewith.

On June 17, 2003, the Company filed a Motion to Dismiss the Court of
Chancery class action lawsuit for mootness on the grounds that the previously
proposed going private transaction was never completed. On October 23, 2003, the
same plaintiffs filed a supplemented and amended complaint with the Court of
Chancery in the State of Delaware alleging that the proposed reverse stock split
described in this proxy statement is not fair to the stockholders of the Company
and that the proxy statement omits information that the plaintiffs allege to be
"material." The plaintiffs amended the complaint to include Mr. Cassin, as a
co-defendant. The plaintiffs allege that the $4.00 pre share price valuation of
the Company's Common Stock and Class B Common Stock being paid to stockholders
being redeemed in the proposed reverse
33

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

stock split is not fair and allege that the fair value of the Company's Common
Stock exceeds $5.00 per share; the Board of Directors of the Company breached
its fiduciary duties to the stockholders; and the Company is violating Delaware
corporate law by proposing to issue fractional shares to some stockholders and
paying other stockholders cash in lieu of fractional shares. In addition, the
plaintiffs allege that this proxy statement fails to disclose all material facts
regarding the description of the Company's real estate, the RM Bradley appraisal
reports, the lobbying expenses and the reasons for the proposed 500-for-1 stock
split. The plaintiffs are seeking an injunction that would prevent the Company
from completing the proposed reverse stock split and damages.

The Company disputes all of the allegations set forth in the complaint, and
on November 10, 2003, it filed a Motion to Dismiss for failure to state a claim.
The Company's opening brief in support of its Motion to Dismiss was filed on
February 3, 2004, and the plaintiffs' answering brief in opposition to the
Motion to Dismiss was filed on March 1, 2004. The Court of Chancery has
suspended briefing in this case until the proxy statement is finalized and filed
with the Securities and Exchange Commission.

7. COMMON STOCK, STOCK OPTIONS, AND GRANT PLANS

The Company has two classes of common stock. The holders of Common Stock
are entitled to one vote for each share of Common Stock, while the holders of
Class B Common Stock are entitled to ten votes for each share of Class B Common
Stock. All other powers, preferences and rights are identical for the Common
Stock and the Class B Common Stock.

In October 1995, the Board of Directors approved and ratified the granting
of non-qualified stock options. These options were granted to the Directors of
the Company to purchase shares of common stock at an option price equal to the
fair market value of the Company's common stock at the date the options were
granted. The Company's stock options activity is summarized as follows:

The Company's total stock options outstanding of 117,500 at December 31,
2003 expire as follows: 50,000 in October 2005, 42,500 in November 2007 and
25,000 in July 2013. All stock options were fully vested as of December 31, 2003
(See Note 1).

8. INCOME TAXES

The Company's provision for income taxes for the years ended December 31,
2003, 2002 and 2001 represents state income taxes. The Company's effective tax
rates differ from amounts computed by

34

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

applying the statutory federal income tax rate to income (loss) from continuing
operations before income taxes, as follows:

The tax effects of the significant temporary differences which comprise the
deferred tax assets and liabilities are as follows (in thousands):

The Company has operating loss carryforwards amounting to $9.6 million
which begin expiring in December of 2008. The Company has fully reserved for all
net deferred tax assets as future realization of these assets is not presently
determinable.

9. PENSION PLANS AND RETIREMENT BENEFITS

The Company contributed $81,347, $90,868 and $93,033 in 2003, 2002 and
2001, respectively, to three multi-employer pension plans for employees covered
by collective bargaining agreements. These plans are not administered by the
Company and contributions are determined in accordance with the provisions of
negotiated labor contracts. The Company maintains a defined benefit retirement
plan for certain other union employees and one for non-union employees. The plan
provides a benefit of a flat dollar amount, determined by the collective
bargaining agreement with the union. Company contributions to this plan totaled
$134,993, $64,262 and $104,962 in 2003, 2002 and 2001, respectively. Benefits
under the plan are provided by a group annuity contract purchased from an
insurance carrier. The expense for this plan includes amortization of the cost
of providing plan benefits for past service over a period of approximately 14
years. The Company's funding policy is to contribute amounts annually to the
Plan,

35

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

subject to the Internal Revenue Service and ERISA minimum required and maximum
allowable funding limitations. The following table sets forth the plan's funded
status at December 31, 2003 and 2002:

Net periodic pension cost included the following components:

Assumptions used in accounting for the above pension information included a
discount rate of 6.25% for the year ended December 31, 2003, 6.75% for the year
ended December 31, 2002 and 7.25% for the year ended December 31, 2001, and an
expected long-term rate of return of 8.5% for all years presented. The following
tables set forth pension obligations and plan assets as of December 31, 2003 and
2002:

The Company amended the defined benefit plan in connection with the renewal
of a collective bargaining agreement. The amendment provides that as of January
31, 1998, benefit accruals under the plan will be frozen for those active
employees who accrued benefits under the plan before January 31, 1998. The
amendment further provides that on and after January 31, 1998, employees hired
by Wonderland will no longer be eligible to join the plan. The Company will make
contributions on behalf of

36

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

these employees at a fixed rate to the union 401(k) plan based upon hours
worked. These contributions commenced in 1998.

During 1997, the Company established separate 401(k) plans for union and
nonunion employees, respectively. The plans are administered by an insurance
company. The Company made contributions on behalf of certain union employees
based upon a fixed rate and performances worked. The total of these
contributions was approximately $87,000, $69,000 and $71,000, for the years
ended December 31, 2003, 2002 and 2001, respectively. The Company also has
employment contracts with certain retired employees which provide for the
payment of retirement benefits, the cost of which has been accrued during their
active employment. Total expense for all retirement plans of the Company for the
years ended December 31, 2003, 2002 and 2001 was approximately $303,000,
$224,000 and $269,000, respectively.

10. TRANSACTIONS WITH OFFICERS, EMPLOYEES AND RELATED PARTIES

On September 24, 1999, the Company entered into a Stock Purchase Agreement
with Charles F. Sarkis, pursuant to which Mr. Sarkis purchased 450,518 shares of
common stock of Back Bay Restaurant Group.

Upon the sale of Back Bay Restaurant Group common stock to Charles F.
Sarkis, the Company received a promissory note in the amount of $2,703,108. The
note bore interest of 9.5%. $500,927 was paid on November 4, 1999, $500,000 was
paid on December 16, 1999, $351,554 was paid on January 31, 2000, $338,000 was
paid on December 1, 2000, and $350,000 was paid August 17, 2001. The remaining
outstanding principal and accrued interest were to be paid in two installments
due on December 16, 2002 and December 16, 2003. In 2002, the note was amended,
and the December 16, 2002 payment was deferred until June 20, 2003. In 2003, the
Company received payments totaling $848,296 on this note. The balance
outstanding under the note was $147,238 and $932,328 at December 31, 2003 and
2002, respectively. The remaining balance of the loan was paid in full in early
2004.

The Company received a short-term working capital advance from Charles F.
Sarkis, an officer of the Company, of $300,000 in March 2002. This funding
accrued interest at the rate of 12% and was repaid in 2002 in connection with
the loan transaction with Boston Federal Savings Bank.

At December 31, 2003 and 2002, there were loans outstanding to
officers/stockholders including interest, of $0 and $118,635. The loans were
restructured in 1999 to be payable over five years and bear interest at 8.0% per
annum. Notes receivable in the amounts of $0 at December 31, 2003 and $89,608 at
December 31, 2002 were due from Charles Sarkis. Notes receivable in the amounts
of $0 and $118,636 were due from Richard P. Dalton, the Company's President and
Chief Executive Officer at December 31, 2003 and 2002, respectively.

In August 2000, animal rights activists were able to obtain the necessary
number of signatures in order to place on the November 2000 State ballot a
binding initiative petition to ban all wagering on dog racing within
Massachusetts effective June 1, 2001. The Company expended approximately
$881,000 on the campaign to defeat the ballot initiative through December 31,
2000. The campaign to defeat the ballot initiative was conducted jointly with
the dog track in Raynham, Massachusetts through a Ballot Question Committee
established in accordance with the campaign finance laws of Massachusetts. The
Company's President and Chief Executive Officer, Richard P. Dalton, served as
the chairman of this Ballot Question Committee. These funds were used primarily
for the acquisition of media time and the development and implementation of a
media campaign to promote the industry point of view.

On February 13, 2003, the Company filed a Definitive Proxy Statement and an
accompanying Schedule 13E-3 with the Securities and Exchange Commission in order
to effectuate a 1,500 for 1 reverse stock split of its capital stock. If the
proposed reverse stock split had been approved by a majority of the voting power
of the Company's stockholders, then holders of less than 1,500 shares
immediately prior to
37

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

such meeting would have been cashed out at a per share purchase price equal to
$4.00, thereby reducing the number of its stockholders to under 300 and,
consequently, allowing the Company to change its status from a public company to
a private company. This would have relieved the Company of the administrative
burden and cost and competitive disadvantages associated with filing reports and
otherwise complying with the requirements of registration under the Federal
securities laws and to permit small stockholders to receive liquidity for their
shares without having to pay brokerage commissions. The proposed reverse stock
split would have (i) caused the Company to redeem shares held by approximately
400 holders of record of Common Stock, (ii) retained record holders who hold
1,500 or more shares of Common Stock or Class B Common Stock, (iii) reduced the
number of shares, on a pro-rata basis, held by the holders of record who hold
1,500 or more shares of Common Stock or Class B Common Stock, and (iv) changed
the percent of outstanding Common Stock held by the remaining stockholders to
100%. Assuming the completion of the proposed reverse stock split and change in
its status from a public company to a private company, the Company would have
promptly thereafter initiated a tender offer for additional shares of its
capital stock in order to provide those stockholders who would not have received
a cash payment in connection with the proposed reverse stock split the
opportunity to tender one post-reverse stock split share in return for $6,000,
which amount reflects the highest payment to be received by any stockholder as a
result of the consummation of the proposed reverse stock split.

The special meeting of the Company's stockholders scheduled for March 19,
2003 to approve the proposed reverse stock split was adjourned so that the
Company could address allegations raised by the Massachusetts Securities
Division in an Administrative Complaint and a lawsuit brought by a stockholder
in Delaware Chancery Court. Accordingly, the proposed going private transaction
was not consummated.

Subsequently, on August 21, 2003, the Company filed a preliminary proxy
statement and an accompanying Schedule 13E-3, which was subsequently amended on
October 3, 2003, October 31, 2003, December 5, 2003 and December 19, 2003 with
the Securities and Exchange Commission in order to effectuate a 500 for 1
reverse stock split of its capital stock. Once the preliminary proxy statement
is finalized, the Company intends to mail the definitive proxy statement to
stockholders. If the proposed reverse stock split is approved by the Company's
stockholders at a special meeting of the stockholders on a date to be
determined, then holders of less than 500 shares immediately prior to such
meeting will be cashed out at a per share purchase price equal to $4.00, thereby
reducing the number of its stockholders to under 300 and, consequently, allowing
the Company to change its status from a public to a private company and to
relieve the Company of the administrative burden and cost and competitive
disadvantages associated with filing reports and otherwise complying with the
requirements of registration under the federal securities laws and to permit
small stockholders to receive a fair price for their shares without having to
pay brokerage commission.

In addition to receiving the cash payment of $4.00 per share, each record
holder being redeemed in connection with the proposed reverse stock split will
be entitled to receive an additional cash payment if, within one calendar year
from the date of the special meeting of the stockholders, the Massachusetts
state legislature enacts legislation that expands legalized gaming in The
Commonwealth of Massachusetts and such legislation authorizes the Company to
install slot machines at its Wonderland racetrack facility.

The reverse stock split would (i) cause the Company to redeem shares held
by approximately 375 holders of record of Common Stock, (ii) not eliminate
record holders who hold 500 or more shares of Common Stock and Class B Common
Stock, (iii) reduce the number of shares, on a pro-rata basis, held by the
holders of record who hold 500 or more shares of Common Stock and Class B Common
Stock, and (iv) change the percent of Common Stock held by the remaining
stockholders to 100%.

Assuming the completion of the proposed reverse stock split and change in
its status from a public to a private company, the Company will promptly
thereafter initiate a tender offer for additional shares of its capital stock in
order to provide those stockholders who did not receive a cash payment in
connection with
38

THE WESTWOOD GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the proposed reverse stock split the opportunity to tender one share in return
for $2,000, which amount reflects the highest payment to be received by any
stockholder as a result of the consummation of the proposed reverse stock split.

11. CHANGE IN ACCOUNTING ESTIMATE

In the fourth quarter of 2001, the Company recognized $1,058,000 of
non-operating income as the result of a change in accounting estimate on a prior
year's long-term liability.

12. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table sets forth selected quarterly financial data for 2003
and 2002 (in thousands, except per share amounts):

13. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

The Company recorded capital lease obligations of $20,581, $8,171 and
$31,257 in 2003, 2002 and 2001, respectively.

14. SUBSEQUENT EVENTS

In March, 2004, Wonderland Greyhound Park Realty, LLC, a wholly-owned
subsidiary of the Company, received a commitment from a group of investors, one
of whom is Charles F. Sarkis, to loan the Company up to $2.5 million to be used
for short-term working capital purposes in consideration for a second mortgage
on the real property located at Wonderland Greyhound Park. The Company is
currently negotiating the terms of this transaction, and this transaction is
expected to be consummated during the second quarter of the 2004 fiscal year.

39

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a) As of the end of the period covered by this annual report, management
concluded its evaluation of the effectiveness of the design and operations of
the Westwood Group's disclosure controls and procedures. As of the end of the
period, our President, Chief Executive Officer and Principal Financial Officer
concluded that we maintain disclosure controls and procedures that are effective
in providing reasonable assurance that information required to be disclosed in
our reports under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms, and that such information is accumulated and communicated to the Westwood
Group's management, including our President and Chief Executive Officer, as
appropriate, to allow timely decisions regarding required disclosure. Management
necessarily applied its judgment in assessing the costs and benefits of such
controls and procedures, which, by their nature, can provide only reasonable
assurance regarding management's control objectives.

(b) During the evaluation referred to in Item 9A(a) above, we have
identified no change in our internal control over financial reporting that
occurred during our last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT DIRECTORS

Our directors and executive officers as of March 31, 2004 are as follows:

Charles F. Sarkis has served as Chairman of the Board of Directors since
1978. He was Chief Executive Officer more than 6 years. He also has been Chief
Executive Officer of Sarkis Management Corporation (restaurant management) for
more than 6 years.

Richard P. Dalton has served as President and Chief Executive Officer of
the Westwood Group since 1993. He served as Executive Vice President of the
Westwood Group from 1988 to 1992 and Chief Operating Officer from 1989 until
1992. He was Vice President from 1984 until 1987; Chief Financial Officer from
1988 to 1989; Treasurer from 1974 to 1989; Assistant Secretary since 1984; and
General Manager from 1981 to 1983.

Joseph M. Cassin has served on the Board of Directors since June 2003. Mr.
Cassin is a senior partner with the law form of Cassin, Cassin & Joseph LLP in
New York, New York. He has been practicing law for 36 years and founded Cassin,
Cassin & Joseph, LLP, which specializes in real estate transactions, in 1986.

Mr. Paul DiMare resigned as director of the Westwood Group on July 21, 2003
for personal reasons.

All of the directors and executive officers are citizens of the United
States. There are no arrangements or understandings between any of the directors
or executive officers of the Westwood Group and any other person pursuant to
which such director or executive officer was or will be selected as a director
or officer of the Westwood Group. Each of the executive officers of the Westwood
Group holds office at the pleasure of the Board of Directors.

40

Each of the three directors, Messrs. Sarkis, Dalton and Cassin, have been
named as defendants together with the Westwood Group in a class action law suit
filed by a stockholder of the Westwood Group in order to enjoin the Westwood
Group from completing a proposed reverse stock split for the purpose of taking
the Westwood Group private (See Item 3, "Legal Proceedings" and Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for additional information regarding the proposed reverse stock
split and the class action law suit).

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Westwood
Group's officers and directors and persons owning more than 10% of the
outstanding stock of the Westwood Group to file reports of ownership and changes
in ownership with the Securities and Exchange Commission. Officers, directors
and greater than 10% holders of stock of the Westwood Group are required by the
Securities and Exchange Commission to furnish the Westwood Group with copies of
all Section 16(a) forms they file. Based solely on the copies of such forms
furnished to the Westwood Group with respect to its most recent fiscal year, it
appears that each director, officer and 10% beneficial owner of Common Stock of
the Westwood Group complied with Section 16(a) of the Securities Exchange Act of
1934.

AUDIT COMMITTEE

The Westwood Group does not have a separately-designated audit committee,
however, the Board of Directors performs the responsibilities of an audit
committee. Mr. Dalton, who is not an independent member of the Board, qualifies
as a financial expert, as described under Item 401(h) of Regulation S-K of the
Securities Act of 1933, in part due to his experience as executive financial
officer of the Westwood Group.

CODE OF ETHICS

The Westwood Group has not adopted a Code of Ethics that applies to its
principal executive officer, principal financial officer and principal
accounting officer. In view of the Westwood Group's very small size and the
limited number of personnel who are responsible for its operations, a formal
code of ethics is not considered necessary. Our Board of Directors will,
however, revisit this issue in the future to determine if adoption of a code of
ethics is appropriate. In the meantime, our management intends to promote honest
and ethical conduct, full and fair disclosure in our reports to the SEC, and
compliance with applicable governmental laws and regulations.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table shows the cash and other remuneration paid or accrued,
in respect of services rendered to the Westwood Group and its wholly-owned
subsidiaries for the three years ended December 31, 2003, to each of the
Westwood Group's executive officers whose aggregate remuneration exceeded
$100,000.

41

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the year ended December 31, 2003, Messrs. Charles F. Sarkis and
Richard P. Dalton served as executive officers of the Westwood Group and as
members of the Board of Directors of the Westwood Group, which performs the
functions of Compensation Committee.

REMUNERATION OF DIRECTORS

The Westwood Group pays to each non-employee Director $2,000 per Board
meeting attended with an additional fee of $1,000 for each audit and
compensation committee meeting attended. Currently, the Westwood Group does not
have a separately-designated audit or compensation committee.

COMPENSATION PLAN

The Westwood Group has adopted an executive compensation plan. The
compensation plan is designed to provide an environment and opportunity for key
executives to be rewarded for individual achievement as well as for attaining
overall corporate goals. The compensation plan includes provisions for a base
salary, annual incentive and long term incentives. Base salary is determined
annually and is based upon the level and amount of responsibility in the context
of comparable companies. Additional annual incentives are to be distributed to
key executives from a bonus pool. A performance bonus equal to 10% of income
before tax will be allocated to the key executives at the discretion of the
Compensation Committee and Board of Directors. Additionally, a discretionary
bonus of up to 5% of income before income taxes will be available to reward an
employee's individual performance. Based on the Westwood Group's cash flow
condition, no bonuses were granted during the 2003 fiscal year. Finally, long
term incentives will consist of stock options granted to key executives at the
discretion of the Compensation Committee and Board of Directors. In addition, a
special transaction bonus is available in the event the Chairman initiates
and/or negotiates an extraordinary transaction to enhance shareholder value,
including a merger, sale, acquisition or joint venture. The transaction bonus is
equal to 2% of the value of any such transaction.

STOCK OPTION AGREEMENT

During 1997, the Westwood Group issued to those certain executives,
Directors and former Directors non-qualified stock options to purchase an
aggregate of 42,500 shares of the Westwood Group's common stock at an exercise
price of $3.00 per share. During 1995, the Westwood Group awarded those certain
executives, Directors and former Directors of the Westwood Group, non-qualified
stock options to purchase an aggregate of 50,000 shares of the Westwood Group's
Common Stock. During 2003, the Westwood Group awarded Mr. Cassin non-qualified
stock options to purchase an aggregate of 25,000 shares of the Westwood Group's
Common Stock at an exercise price of $4.00 per share upon Mr. Cassin becoming a
director.

YEAR-END OPTION VALUES

The table below shows the total number of unexercised options held by the
Company's named executive officers at December 31, 2003 and their related
year-end option values. No options were exercised in the year-ended December 31,
2003.

- ---------------

(1) In-the-money options are those where the fair market value of the underlying
securities exceeds the exercise price of the option.

42

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) Security Ownership of Certain Beneficial Owners of Common Stock

The following table sets forth certain information, as of March 31, 2004,
with respect to the beneficial ownership(1) of the Westwood Group's Common Stock
by each Director, by all Directors and officers of the Westwood Group as a group
and by persons known by the Westwood Group to own beneficially more than 5% of
the outstanding Common Stock. Unless otherwise noted, such stockholders have
full voting and investment power with respect to the shares listed as
beneficially owned by them.

- ---------------

(1) As used in this table, "beneficial ownership" means the sole or shared power
to vote, or to direct the voting of, a security, or the sole or shared
investment power with respect to a security (i.e., the power to dispose of,
or to direct the disposition of, a security). In addition, for purposes of
this table a person is deemed to have "beneficial ownership" of any security
that such person has the right to acquire within 60 days.

(2) Includes shares held by Sarkis Management Corporation, which is wholly-owned
by Mr. Sarkis. Mr. Sarkis disclaims beneficial ownership of these shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In May 1994, the Westwood Group purchased all restaurant and concession
operations at Wonderland from Back Bay Restaurant Group, Inc. for a sales price
of $770,000. Included in the term note of $970,000 were additional amounts owed
to Back Bay Restaurant Group for costs incurred under a Cross Indemnification
Agreement amounting to $200,000 and interest expense of approximately $58,000
for the years ended December 31, 1999 and 1998. On September 24, 1999, the
Westwood Group entered into a stock repurchase agreement with Back Bay
Restaurant Group, Inc., pursuant to which Back Bay Restaurant Group repurchased
222,933 shares of its common stock from the Westwood Group in exchange for the
cancellation of this promissory note.

Concurrently with entering into the stock purchase agreement with Back Bay
Restaurant Group, the Westwood Group entered into a stock purchase agreement
with Charles F. Sarkis, pursuant to which Mr. Sarkis purchased 450,518 shares of
common stock of Back Bay Restaurant Group, Inc. in return for a

44

promissory note in the amount of $2,703,108. This note bears interest of 9.5%.
$500,927 was paid on November 4, 1999, $500,000 was paid on December 16, 1999,
$351,554 was paid on January 31, 2000, $338,000 was paid on December 1, 2000,
and $350,000 was paid on August 17, 2001. In consideration of Mr. Sarkis'
prepayment of $62,000 due under this promissory note on March 22, 2002 and his
$300,000 working capital loan to the Westwood Group made in March 2002 (which
was repaid in connection with the Westwood Group's refinancing in September
2002), the Westwood Group agreed to defer payment in the amount of $466,164 due
from Mr. Saris on December 31, 2002 until June 30, 2003. Mr. Sarkis made this
deferred payment on June 30, 2003. Additionally, Mr. Sarkis prepaid $140,000 on
September 29, 2003. On December 1, 2003, Mr. Sarkis paid $218,296, and the
balance of $140,000 under this promissory note and all accrued interest thereon
was paid on February 1, 2004. There were additional loans outstanding to Charles
Sarkis and Richard P. Dalton; however, as of December 31, 2003, the loans were
paid off in full.

In October 1999, the Westwood Group received a letter of credit for working
capital purposes from the Anglo Irish Bank securitized by Mr. Charles Sarkis'
property located on Boylston Street in Boston, Massachusetts. Subsequently, Mr.
Sarkis refinanced the Boylston Street property and loaned the Westwood Group
$500,000, which amount was designated to be used for the 1998 and 1999
outstanding pari-mutual tickets due to The Commonwealth of Massachusetts. In
addition, under the terms of the loan agreement between the Westwood Group and
Mr. Sarkis, the Westwood Group offset the first payment due from Mr. Sarkis
under the promissory note issued on September 24, 1999 against this $500,000
loan.

Prior to 1995, the Westwood Group engaged a firm to assist management in
the planning and execution of a financial and operational reorganization of the
Westwood Group. As compensation for its services, the Westwood Group agreed to a
success fee, in addition to the basic fee, to grant options to acquire common
stock totaling 6% of the total of the Westwood Group's capital stock at $3.00
per share. The success fee also stipulated that Michael S. Fawcett, a principal
of that firm, who was a director of the Westwood Group at the time would be
required to return options to purchase 25,000 shares of the Westwood Group's
common stock if the success fee option is exercised. The Westwood Group has not
granted the success fee option to date.

In March, 2004, Wonderland Greyhound Park Realty, LLC received a commitment
from a group of investors, one of whom is Charles F. Sarkis, to loan the
Westwood Group up to $2.5 million to be used for short-term working capital
purposes in consideration for a second mortgage on the real property located at
Wonderland Greyhound Park. The Westwood Group is currently negotiating the terms
of this transaction, and this transaction is expected to be consummated during
the second quarter of the 2004 fiscal year.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees billed to the Westwood Group by its independent auditors for fiscal
years 2002 and 2003 were comprised of the following:

Audit Fees. BDO Seidman, LLP's fee for its audit of the Westwood Group's
annual financial statements, its review of the financial statements included in
the Westwood Group's quarterly reports on Form 10-Q, audits of statutory filings
and review of other regulatory filings for 2002 and 2003 were $118,260 and
$126,350, respectively.

Audit Related Fees. BDO Seidman, LLP billed the Westwood Group a total of
$57,111 in 2002 and $82,100 in 2003 for audit related services, including due
diligence performed in connection with the Westwood Group's proposed going
private transactions.

Tax Fees. Fees for tax services, including tax compliance, tax advice and
planning, totaled $17,250 in 2002 and $18,000 in 2003.

All Other Fees. No other fees were billed to the Westwood Group by BDO
Seidman, LLP in 2002 or 2003 for "other services."

The Board of Directors of the Westwood Group, which acts as the audit
committee, does not have pre-approval policies or procedures.

45

PART IV

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

(a)(1) Financial Statements

Included under Item 8 in Part II of this report:
Report of Independent Certified Public Accountants
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Stockholders' Deficiency
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements

(2) Financial Statement Schedules

All financial statement schedules are omitted because they are not
applicable or the required information is shown in the consolidated financial
statements or notes thereto.

(3) Exhibits

3.1 Certificate of Incorporation of the Company.(1)
3.2 Amendment, dated May 15, 1987, to the Certificate of
Incorporation of the Company.(3)
3.21 Amendment, dated November 2, 1995, to the Certificate of
Incorporation of the Company.(7)
3.3 Bylaws of the Company.(1)
4.1 Indenture, dated as of August 15, 1987, between the Company
and State Street Bank and Trust Company, as trustee,
relating to the Company's Subordinated Notes.(2).
4.2 Supplemental Indenture, dated as of March 16, 1988, between
the Company and State Street Bank and Trust company, as
trustee.(3)
10.1 Totalisator Service Agreement, dated August 30, 1991, in
connection with an exclusive service contract, together with
an amendment and extension agreement dated April 2, 1992.(4)
10.2 Contract dated November 20, 1992, in connection with
services to be provided to the Company by an entity of which
a former Director of the Company is a principal, together
with an amendment by letter agreement, dated February 2,
1993.(4)
10.3 Collective Bargaining Agreement between the Company and
United Food and Commercial Workers' Union, Local 1445
AFL-CIO, CLC, dated June 1, 1993.(5)
10.4 Collective Bargaining Agreement between the Company and
Local 25-Teamsters, effective January 1, 1993.(5)
10.5 Settlement of Litigation Agreement, dated October 12, 1994,
between Foxboro Park, Inc. and the trustee of the Creditor
Trust and Settlement Agreement, in connection with the
restructuring of the Creditor Trust and Settlement Agreement
with related promissory notes, dated July 7, 1994.(6)
10.6 Collective Bargaining Agreement between Wonderland Greyhound
Park, Inc. and Local 22 -- Laborers' International Union,
dated July 1, 1993.(6)
10.7 Collective Bargaining Agreement Extension between RFSC, Inc.
and Local 26 -- Hotel and Restaurant Workers, effective
January 1, 1994.(6)
10.8 Settlement Agreement between Wonderland Greyhound Park, Inc.
and Local 254 Service Employees International Union, dated
September 19, 1994, in connection with a successor
collective bargaining agreement.(6)
10.9 Amendment to Term Note between certain subsidiaries of the
Company and BBRG, dated March 17, 1995.(6)
10.10 Assignment for the Benefit of Creditors and Sharing
Agreement (Foxboro Harness).(8)
10.11 Assignment for the Benefit of Creditors and Sharing
Agreement (Foxboro Thoroughbred).(8)
10.12 Assignment for the Benefit of Creditors and Sharing
Agreement (Foxboro Park).(8)

46

10.13 Form of Executive Non-Qualified Stock Option Agreement.(8)
10.14 Form of Employee Non-Qualified Stock Option Agreement.(8)
10.15 Third Amendment to Term Note between certain subsidiaries of
the Company and BBRG, dated January 5, 1998.(8)
10.16 Voting and Shares Exchange Agreement, dated as of March 31,
1999.(9)
10.17 Stock Purchase Agreement, dated as of September 24, 1999,
between the Company and Charles Sarkis.(10)
10.18 Stock Repurchase Agreement dated as of September 24, 1999,
between the Company and BBRG.(10)
10.19 Term Loan Agreement between Wonderland Greyhound Park, Inc.
and Century Bank and Trust Company, dated June 30, 1998.(11)
10.20 Loan Reimbursement and Security Agreement between Wonderland
Greyhound Park, LLC and Boston Federal Savings Bank, dated
September 3, 2002.(12)
21.1 Subsidiaries of the Company.(13)
23.1 Consent of Independent Certified Public Accountants (filed
herewith).
31.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (filed herewith).
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed herewith).

- ---------------

(1) Filed with the Company's Annual Report on Form 10-K for 1984 and
incorporated herein by reference.

(2) Filed with the Company's Registration Statement on Form S-2 No. 33-15344
filed on June 25, 1987 and incorporated herein by reference.

(3) Filed with the Company's Annual Report on Form 10-K for 1987 and
incorporated herein by reference.

(4) Filed with the Company's Annual Report on Form 10-K for 1992 and
incorporated herein by reference.

(5) Filed with the Company's Annual Report on Form 10-K for 1993 and
incorporated herein by reference.

(6) Filed with the Company's Annual Report on Form 10-K for 1994 and
incorporated herein by reference.

(7) Filed with the Company's Annual Report on Form 10-K for 1995 and
incorporated herein by reference.

(8) Filed with the Company's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.

(9) Filed with the Company's Annual Report on Form 10-K for 1998 and
incorporated herein by reference.

(10) Filed as an exhibit with Form 8-K, as filed by the Company on October 12,
1999 and incorporated herein by reference.

(11) Filed with the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998 and incorporated herein by reference.

(12) Filed with the Company's Amended Quarterly Report on Form 10-Q/A for the
quarter ended September 30, 2002 and incorporated by reference.

(13) Filed with the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 and incorporated herein by reference.

(b) Reports on Form 8-K.

None.

47

SIGNATURES

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

THE WESTWOOD GROUP, INC.

Date: April 14, 2004 By: /s/ RICHARD P. DALTON
------------------------------------
Name: Richard P. Dalton
Title: President, Chief Executive
Officer and Director
(Principal Executive,
Financial and Accounting
Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.