SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): MARCH 7, 1997
Atlantic International Entertainment, Ltd.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-27256 13-3858917
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2200 Corporate Boulevard, Suite 317, Boca Raton, Florida 33431
- --------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (561) 995-2190
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) The Registrant hereby amends Item 7 of this Form 8-K by including
the required Financial Statements of Eminet Domain, Inc. ("Eminet").
(b) The Registrant hereby amends Item 7 of this Form 8-K by including
the requisite pro forma financial information of the Eminet acquisition.
(c) Exhibits:
2 Agreement for Purchase and Sale of Stock
dated as of January 31, 1997 by and among
the Registrant, EmiNet, and the Sellers
(previously filed on this Report on Form
8-K).
99.1 Audited Financial Statements of Eminet
Domain Inc.
99.2 Pro forma financial information.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATLANTIC INTERNATIONAL
ENTERTAINMENT, LTD.
Dated: September 9, 1997 By: /s/ Richard Iamunno
------------------------
Name: Richard Iamunno
Title: President
-3-
THE EMINET DOMAIN, INC.
FINANCIAL STATEMENTS
For the Period from Inception (April 6, 1995) to December 31, 1995
and for the Year Ended December 31, 1996
<PAGE>
THE EMINET DOMAIN, INC.
FINANCIAL STATEMENTS
For the Period from Inception (April 6, 1995) to December 31, 1995
and for the Year Ended December 31, 1996
CONTENTS
Page
Report of Certified Public Accountants.............................2
Financial Statements:
Balance Sheet....................................................3
Statements of Income and Retained Earnings.......................4
Statements of Cash Flows.........................................5
Notes to Financial Statements....................................6-9
-1-
<PAGE>
To the Shareholders
The Eminet Domain, Inc.
Boca Raton, Florida
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of The Eminet Domain, Inc. as of
December 31, 1996 and the related statements of income and retained earnings,
and cash flows for the period from inception (April 6, 1995) to December 31,
1995 and for the year ended December 31, 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in 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 financial position of The Eminet Domain, Inc. as of
December 31, 1996, and the results of its operations and its cash flows for the
period from inception (April 6, 1995) to December 31, 1995 and for the year
ended December 31, 1996, in conformity with generally accepted accounting
principles.
/s/ Millward & Co.
- ------------------------
Millward & Co. CPAs
Fort Lauderdale, Florida
August 7, 1997
-2-
<PAGE>
THE EMINET DOMAIN, INC.
BALANCE SHEET
December 31, 1996
ASSETS
CURRENT ASSETS:
Cash $ 14,964
Accounts Receivable 23,742
Prepaid Expenses 141
--------
Total Current Assets 38,847
--------
Property and Equipment, at Cost - Net of Accumulated
Depreciation and Amortization of $22,269 85,251
--------
OTHER ASSETS:
Other Assets 3,201
--------
Total Assets $127,299
========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank Line of Credit $ 4,190
Accounts Payable and Accrued Expenses 8,339
Current Maturities of Notes Payable 6,000
Current Maturities of Capital Lease Obligations 8,731
--------
Total Current Liabilities 27,260
--------
LONG-TERM DEBT:
Note Payable, Net of Current Maturities 10,500
Capital Lease Obligations, Net of Current Maturities 8,712
--------
Total Long-Term Debt 19,212
--------
SHAREHOLDERS' EQUITY:
Common Stock - No Par Value, 1,000 Shares Authorized;
1,000 Shares Issued and Outstanding 21,506
Retained Earnings 59,321
--------
Total Shareholders' Equity 80,827
--------
Total Liabilities and Shareholders' Equity $127,299
========
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
THE EMINET DOMAIN, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
For the Period
For the Year from Inception
Ended (April 6, 1995)
December 31, to December 31,
1996 1995
----------- ------------
NET SALES $423,441 $117,143
COST OF SALES 160,133 53,822
----------- ------------
GROSS PROFIT 263,308 63,321
----------- ------------
OPERATING EXPENSES:
Selling 34,900 1,664
General and Administrative 45,058 10,071
Depreciation 17,656 4,613
----------- ------------
Total Operating Expenses 97,614 16,348
----------- ------------
INCOME FROM OPERATIONS 165,694 46,973
OTHER (EXPENSE):
Interest Expense (4,296) (796)
------------ -----------
NET INCOME 161,398 46,177
RETAINED EARNINGS - BEGINNING OF YEAR 30,177 -
DISTRIBUTION TO SHAREHOLDERS' (132,254) (16,000)
------------ -----------
RETAINED EARNINGS - END OF YEAR $ 59,321 $ 30,177
============ ===========
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
THE EMINET DOMAIN, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Period
For the Year from Inception
Ended (April 6, 1995)
December 31, to December 31,
1996 1995
------------ ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 161,398 $ 46,177
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 17,656 4,613
(Increase) Decrease in:
Accounts Receivable (10,313) (13,429)
Prepaid Expenses (141) -
Other Assets (2,278) (923)
Increase (Decrease) in:
Accounts Payable and Accrued Expenses 4,353 3,986
---------- ---------
Net Cash Provided by Operating Activities 170,675 40,424
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property and Equipment (44,151) (37,480)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Note Payable 22,190 -
Distributions to Shareholders (132,254) (16,000)
Principal Payments on Capital Lease Obligations (7,009) (1,437)
Principal Payments on Note Borrowings (1,500) -
Proceeds from Stock Issuance - 21,506
---------- --------
Net Cash (Used in) Provided by Financing Activities (118,573) 4,069
---------- --------
Net Increase in Cash 7,951 7,013
Cash - Beginning of Year 7,013 -
---------- ---------
Cash - End of Year $ 14,964 $ 7,013
========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid for Interest $ 4,296 $ 796
========== =========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Purchase of Equipment Under Capital Lease $ 10,125 $ 15,706
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
THE EMINET DOMAIN, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - The Eminet Domain, Inc. (the "Company") was incorporated on April
6, 1995 in the State of Florida. The Company is an internet access service
provider to individuals and businesses. It also acts as a host and developer of
individual and corporate web pages.
CASH AND CASH EQUIVALENTS - For purposes of the balance sheet and statements of
cash flows, the Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents. As of December 31,
1996, the Company did not have any cash equivalents.
FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK - Financial instruments
which potentially subject the Company to concentrations of credit risk are
primarily cash and accounts receivable.
The Company maintains its cash balances at one major financial institution.
Accounts at this institution are insured by the Federal Deposit Insurance
Corporation up to $100,000.
With respect to accounts receivable, the Company extends credit to its customers
in the normal course of business and performs ongoing credit evaluations of the
customers, maintaining allowances for potential credit losses which, when
realized, have been within management's expectations.
The Company has not experienced any losses in such accounts. The Company
believes it is not exposed to any significant credit risk on cash and accounts
receivable.
PROPERTY AND EQUIPMENT - Property and equipment are recorded at cost.
Depreciation and amortization is computed on the straight-line method over the
estimated useful lives of the assets. When property and equipment is retired or
otherwise disposed of, the related cost and accumulated depreciation are removed
from the respective accounts, and any resulting gain or loss on disposition is
reflected in operations. Repairs and maintenance are expensed as incurred;
expenditures for additions, improvements and replacements are capitalized.
INCOME TAXES - The Company, with the consent of both of its shareholders, has
elected to be taxed under the provisions of Subchapter S of the Internal Revenue
Code. Under those provisions, the Company does not provide for or pay federal
and state corporate income taxes on its taxable income. Instead, the
shareholders are liable for individual Federal income taxes on their share of
the Company's taxable income. Effective March 26, 1997, the Company, as a result
of the transaction referred to in Note 8, terminated its Subchapter S status and
shall be taxed as a taxable corporate entity.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
-6-
<PAGE>
THE EMINET DOMAIN, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1996
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment are summarized as follows:
Computer Equipment $107,520
Less: Accumulated Depreciation (22,269)
---------
$ 85,251
==========
Depreciation expense for the periods ended December 31, 1996 and 1995 amount to
$17,656 and $4,613, respectively.
NOTE 3 - CAPITAL LEASE OBLIGATIONS
The Company leases certain computer equipment under agreements which are
classified as capital leases. Cost and accumulated depreciation of such assets,
included in property and equipment, totaled $25,831 and $4,319, respectively, as
of December 31, 1996.
As of December 31, 1996, approximate future minimum lease payments under the
capital leases are as follows:
1997 $ 10,709
1998 8,377
1999 1,079
--------
Total future minimum lease payments 20,165
Less: amount representing interest 2,722
--------
Present value of future minimum lease payments 17,443
Less: current portion 8,731
--------
Long-term portion $ 8,712
========
-7-
<PAGE>
THE EMINET DOMAIN, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1996
NOTE 4 - COMMITMENTS
LEASES: The Company is party to various non-cancelable operating leases
pertaining to the computer equipment. The lease terms expire at various dates
through October 1998. The minimum lease payments may be subject to increases
because of the consumer price index and/or production levels.
The minimum lease commitment for non-cancelable operating leases is summarized
as follows:
Year Ending December 31,
1997 $ 9,282
1998 8,627
-------
$17,909
========
NOTE 5 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:
Cash, trade accounts receivable, other receivables, accounts payable: The
carrying amounts approximate fair value because of the short maturity of those
instruments.
Notes payable and long-term debt: The carrying amounts approximate fair value
due to the length of the maturities and the interest rates not being
significantly different from the current market rates available to the Company.
The estimated fair values of the Company's financial instruments as of December
31, 1996 are as follows:
NOTE 6 - LINE OF CREDIT - BANK
The Company has a credit facility with a bank consisting of a revolving line of
credit under which the Company can borrow up to a maximum of $25,000. The
Company has borrowings of $4,190 under the line of credit outstanding at
December 31, 1996. The revolving line of credit bears interest at 2.25% above
the prime rate (10.50% at December 31, 1996) and is payable on demand. The line
of credit is guaranteed by the Company's shareholders. At December 31, 1996, the
Company had $20,810 available under the line of credit.
-8-
<PAGE>
THE EMINET DOMAIN, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1996
NOTE 7 - NOTE PAYABLE
The Company has a note payable to a bank. The note with a principal balance of
$16,500 at December 31, 1996 requires monthly payments of principal amounting to
$500 plus interest payable monthly at prime plus 2.8% per annum (11.05% at
December 31, 1996).
As of December 31, 1997, future maturities of note principal are as follows:
1997 $ 6,000
1998 6,000
1999 4,500
-------
$16,500
=======
NOTE 8 - SUBSEQUENT EVENT
BUSINESS ACQUISITION
On January 31, 1997, a public company entered into an agreement to purchase all
of the shares of the Company. This transaction was consummated on March 26,
1997.
-9-
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
CONSOLIDATED PRO-FORMA BALANCE SHEET (UNAUDITED)
AS OF DECEMBER 31, 1996 AND JUNE 30, 1997
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
----------------------------------------------
CURRENT ASSETS
<S> <C> <C>
Cash in Bank $436,152 $ 20,485
Accounts Receivable 23,742 1,850,218
Refundable Income Tax 77,215 -
Prepaid Expenses 4,510 3,333
-----------------------------------------
TOTAL CURRENT ASSETS: 541,619 1,874,036
-----------------------------------------
Property and Equipment, at cost - Net of Accumulated
Depreciation and Amortization 348,638 344,796
Software - Net of Accumulated Amortization 1,159,814 1,176,016
OTHER ASSETS Investment in Subsidiary:
Customer Lists 1,374,687 1,374,687
Goodwill 162,000 162,000
-----------------------------------------
1,536,687 1,536,687
Accumulated Amortization (102,446) (41,483)
-----------------------------------------
1,434,241 1,495,204
Investments - 52,962
Security Deposits 3,201 7,252
Organization Costs - (Net of Accum Amort of $645) 2,902 2,580
Due From Related Party 48,273 49,855
Other Assets 4,866 1,301
-----------------------------------------
TOTAL OTHER ASSETS 1,493,483 1,609,154
-========================================
TOTAL ASSETS $3,543,554 5,004,002
===================== ===================
</TABLE>
(Continued)
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
CONSOLIDATED PRO-FORMA BALANCE SHEET (UNAUDITED)
AS OF DECEMBER 31, 1996 AND JUNE 30, 1997
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
CURRENT LIABILITIES
<S> <C> <C>
Accounts Payable and Accrued Expenses $ 261,284 $ 377,310
Customer Deposits 28,279 83,873
Current Portion of Long Term Debt 14,731 19,106
Taxes Payable - 37,105
Other Current Liabilities 4,190 38,837
Due to Officers 21,655 11,946
--------------------------------------
TOTAL CURRENT LIABILITIES 330,139 568,177
OTHER LIABILITIES
Long Term Debt Net of Current 19,212 11,794
---------------------------------------
TOTAL OTHER LIABILITIES 19,212 11,794
SHAREHOLDERS'S EQUITY:
Preferred Stock - Par Value $.001 Per Share, Authorized
10,000,000 Shares, None Issued or Outstanding - -0-
Common Stock - Par Value $001 Per Share, Authorized
100,000,000 Shares, Issued and Outstanding 9,465,184 Shares 9,390 9,465
Additional Paid - in - Capital 3,475,546 4,006,023
Retained Earnings (Deficit) (290,733) 408,543
---------------------------------------
Total Stockholders' Equity 3,194,203 4,424,031
---------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,543,554 $ 5,004,002
================= =====================
</TABLE>
2
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
CONSOLIDATED PRO-FORMA STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
1996 1997
--------------- --------------
REVENUE
<S> <C> <C>
Consulting Fees $ 366,204 $ -
Software Sales and Related Charges 87,000 1,614,278
Support Fees - 6,000
Medical Products 1,452
ISP and Website Income 423,441 320,268
----------- ----------------
Total Revenue 878,097 1,940,546
COST OF SALES
Installation and Hardware Costs - 83,396
Internic Regist. Fees / Connect Fees 160,133 98,838
----------- ----------------
Total 160,133 182,234
GROSS PROFIT 717,964 1,758,312
OPERATING EXPENSES
General and Administrative 895,213 705,562
Amortization 102,446 166,628
Inputed Salary and Taxes - EmiNet 132,254 58,516
Depreciation 85,032 41,037
----------- ---------------
Total Operating Expenses 1,214,945 971,743
Income (Loss) From Operations (496,981) 786,569
OTHER INCOME (EXPENSE)
Interest Income 4,350 3,736
Interest Expense (8,468) (2,541)
Income Tax 77,215 (119,068)
Loss on Sale of Investments - (20,784)
Other Income (Expense) 3,556 -
----------- --------------------
Total Other Income (Expense) 76,653 (138,657)
Income From Continuing Operations (420,328) 647,912
(Loss) from Operations of Discontinued Foreign
Subsidiary (29,244) (69,531)
Gain on Sale of Discontinued Foreign Subsidiary - 120,895
------------ --------------------
Total Income from Discontinued Operation. (29,244) 51,364
NET INCOME (LOSS) $ (449,572) 699,276
Retained Earnings (Deficit) - Beginning 158,839 (290,733)
------------- ----------------
Retained Earnings (Deficit) - Ending (290,733) 408,543
============= ================
(Loss) Income Per Common Share $ (0.048) 0.074
============= ================
Number of Shares 9,390,184 9,465,184
============= ================
</TABLE>
3
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
CONSOLIDATED PRO-FORMA STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
1996 1997
---------------- --------------------
OPERATING ACTIVITIES:
<S> <C> <C>
(Loss) Income From Continuing Operations $ (420,328) $ 647,912
-------------- ------------
Cash Flows from Operating Activities:
Adjustments to reconcile net loss to net
Cash provided by operating activities:
Depreciation and amortization 187,478 207,665
Changes in operating assets and liabilities:
Decrease (increase) in:
Trade accounts receivable (74,278) (1,878,466)
Prepaid expenses and other current assets 20,582 77,436
Security Deposits - -
Investments - 56,681
Other assets (9,178) 3,231
Increase (decrease) in:
Accounts payable and Accrued Expenses 230,039 139,078
Income taxes payable (90,500) 37,105
Customer Deposits 83,242
Other Current Liabilities 631 38,836
------------ ------------
Net cash - Continuing Operations - Forward (155,554) (587,280)
Discontinued Operations:
(Loss) from Discontinued Operations (29,244) (69,531)
Gain on Disposal of Discontinued Operations - 120,895
Adjustments to reconcile Net (Loss) to Net Cash - -
Operations:
Depreciation and Amortization 1,278 1,366
------------ ------------
Changes in assets and liabilities:
(Increase) Decrease in: - -
Other Assets (815) 815
Increase (Decrease) in:
Accounts Payable 14,808 (14,808)
Customer Deposits - -
Other Current Liabilities 27,648 (27,648)
Total Adjustments - -
------------ ------------
Net Cash - Discontinued Operations - Forward 13,675 11,089
------------ ------------
Net Cash - Operating Activities - Forward (141,879) (576,191)
------------ ------------
Investing Activities - Continuing Operations
Net increase in due from related parties (37,177) (1,582)
Sale (Purchase) of Subsidiary - (1,620,000)
Sale (Purchase) of Investments 10,252 (73,746)
Sale (Purchase) of property and equipment (326,085) (226,244)
------------- ------------
Net cash used in investing activities - Forward $(353,010) $(1,921,572)
</TABLE>
(Continued)
4
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
CONSOLIDATED PRO-FORMA STATEMENT OF CASH FLOWS (UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
1996 1997
--------------- -----------------
Investing Activities - Discontinuing Operations
<S> <C> <C>
(Purchase) Disposition of property and equipment $ (13,755) $ 11,110
--------- -----------
Net Cash Investing Activities (366,765) (1,910,462)
--------- -----------
Financing Activities - Continuing Operations
Proceeds from issuance of common stock 701,770 1,949,330
Increase in loan payable to shareholder 21,655 (9,709)
Additions to paid in capital - 14,238
Proceeds from equipment loans 22,190 30,900
Principal Payments on capitalized lease and Note (8,509) (12,548)
--------- ------------
Net cash - Financing Activities - Continuing Operations 737,106 1,972,211
Financing Activities - Discontinued Operations
Additions to Additional paid in Capital - 98,775
--------- ------------
Net Cash Financing Activities 737,106 2,070,986
--------- ------------
Increase (Decrease) in cash and cash equivalents 228,462 (415,667)
Cash & cash equivalents beginning of Year 207,690 436,152
========= =============
Cash & cash equivalents, end of Year $ 436,152 $ 20,485
========= =============
Supplemental disclosure of cash flow information:
Cash paid (received) during the period for:
Interest Expense $ 8,468 $ 2,541
Income Tax Refund (Applied) $ - $ (77,215)
Income Tax $(77,215) $ -
</TABLE>
5
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
CONSOLIDATED PRO- FORMA STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
NUMBER PAID - IN
SHARES AMOUNT CAPITAL
------------------- ---------------- -----------------
<S> <C> <C> <C>
BALANCE - JANUARY 1, 1996 6,803,451 $ 6,803 $ (6,173)
Pro-Forma Adjustment - Eminet Acquisition 200,000 200 1,599,800
Pro-Forma Adjustment - Eminet Consolidation - - (12,170)
Equity of CEEE 1,500,033 1,500 (6,794)
Sale of Common Stock 13 13 35,749
Recapitalization Adjustment (13) (13) 13
Private Placement 886,700 887 825,994
Asset Acquisition 200,000 - 1,200,000
Recapitalization Adjustment (200,000) - -
Recapitalization Costs - - (160,873)
(Loss) From Continuing Operations - - -
(Loss) From Discontinued Foreign Subsidiary - - -
------------------------------------------------------
BALANCE - DECEMBER 31, 1996 9,390,184 $ 9,390 $3,475,546
======================================================
Sale of Common Stock (Reg S) 75,000 75 524,925
Recapitalization Costs - - (174,750)
Asset Acquisition Costs - - (920)
Consolidated Elimination-EmiNet - - 82,447
Income from Continuing Operations - - -
Disposal of Discontinued Operations - - 98,775
[Loss] from Discontinued Operations - - -
------------------------------------------------------
BALANCE - JUNE 30, 1997 $9,465,184 $ 9,465 $4,006,023
======================================================
</TABLE>
(Continued)
6
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
CONSOLIDATED PRO-FORMA STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
ACCUMULATED
(DEFICIT)/ TOTAL
RETAINED PREFERRED STOCKHOLDERS'
EARNINGS STOCK CAPITAL
------------------- ---------------- -----------------
<S> <C> <C>
BALANCE - JANUARY 1, 1996 $ 158,839 $ - $ 159,469
Pro-Forma Adjustment - Eminet Acquisition - - 1,600,000
Pro-Forma Adjustment - Eminet Consolidation - - (12,170)
Equity of CEEE - - (5,294)
Sale of Common Stock - - 35,762
Recapitalization Adjustment - - -
Private Placement - - 826,881
Asset Acquisition - - 1,200,000
Recapitalization Adjustment - - -
Recapitalization Costs - - (160,873)
(Loss) From Continuing Operations (420,328) - (420,328)
(Loss) From Discontinued Foreign Subsidiary (29,244) - (29,244)
==============================-=================
BALANCE - DECEMBER 31, 1996 (290,733) - 3,194,203
================================================
Sale of Common Stock (Reg S) - - 525,000
Recapitalization Costs - - (174,750)
Asset Acquisition Costs - - (920)
Consolidated Elimination-EmiNet - - 82,447
Income from Continuing Operations 647,912 - 647,912
Disposal of Discontinued Operations 120,895 - 219,670
[Loss] from Discontinued Operations (69,531) - (69,531)
------------------------------------------------
BALANCE - JUNE 30, 1997 $ 408,543 $ - $4,424,031
================================================
</TABLE>
