SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 9, 1999
Atlantic International Entertainment, Ltd.
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(Exact name of registrant as specified in its charter)
Delaware 0-27256 13-3858917
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200 East Palmetto Park Road, Suite 200, Boca Raton, Florida 33431
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(Address of principal executive offices)
Registrant's telephone number, including area code: (561) 393-6685
2290 Corporate Boulevard, Suite 311, Boca Raton, Florida 33431
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER ITEMS.
The Company is making this statement in order to satisfy the "safe harbor"
provisions contained in the Private Securities Litigation Reform Act of 1995.
This Report on Form 8-K includes forward-looking statements relating to the
business of the Company. Forward-looking statements contained herein or in other
statements made by the Company are made based on Management's expectations and
beliefs concerning future events impacting the Company and are subject to
uncertainties and factors relating to the Company's operations and business
environment, all of which are difficult to predict and many of which are beyond
the control of the Company, that could cause actual results of the Company to
differ materially from those matters expressed in or implied by forward-looking
statements. The Company believes that the following factors, among others, could
affect its future performance and cause actual results of the Company to differ
materially from those expressed in or implied by forward-looking statements made
by or on behalf of the Company; (a) general economic, business and market
conditions; (b) competition; (c) the success of advertising and promotional
efforts; (d) trends within the Internet Gaming and Internet Supply Provider
industries; (e) the existence or absence of adverse publicity; (f) changes in
relationships with the Company's major customers or in the financial condition
of those customers; and (g) the adequacy of the Company's financial resources
and the availability and terms of any additional capital. Such forward-looking
statements are based on assumptions that the Company will continue to design,
market and provide successful new services, that competitive conditions will not
change materially, that demand for the Company's services will continue to grow,
that the Company will retain and add qualified personnel, that the Company's
forecasts will accurately anticipate revenue growth and the costs of producing
that growth, and that there will be no material adverse change in the Company's
business. In light of the significant uncertainties inherent in the
forward-looking information included in this Form 8-K, actual results could
differ materially from the forward-looking information contained herein.
On July 1, 1999, the Company's largest institutional stockholder, Hosken
Consolidated Industries, a South African corporation (the investment company for
the Mine Workers Union and South African Clothing Workers Union), consummated
its purchase of approximately 1,100,000 shares of the Company's common stock
from Norman J. Hoskin, the Company's Chairman of the Board of Directors, which
represents substantially all of Mr. Hoskin's holdings in the Company. Mr. Hoskin
has resigned his positions as Chairman and Secretary/Treasurer and will limit
his activities as a consultant to the Company due to his health. With its
purchase, HCI share holdings increases to 2,361,935 shares or approximately 19%
of total shares outstanding. HCI shall be able to designate another
directorship.
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On June 9, 1999, the Company was determined to be liable in a civil action by
Kelley & Kelley Advertising, Inc., the Company's advertising consultant during
the Company's initial stage in 1996. The jury trial, which extended over three
days, involved an October 23, 1996 agreement drafted and executed by a former
employee who was subsequently fired by the Company. The trial concluded in the
jury verdict of approximately $26,000.00 in compensatory damages and $350,000.00
in punitive damages. The jury verdict reflects the belief that the Company's
former employee never intended to provide additional assignments to Kelley &
Kelley. The evidence presented at trial did show that Kelley & Kelley did
receive all of the payments due under the above agreement but only received one
additional assignment. In addition, the undisputed facts at trial showed that
the Company performed all of its future advertising in-house and did not engage
a firm to replace Kelley & Kelley. Counsel for the Company has filed motions
with the trial court for a directed verdict (overturning the jury verdict) based
on Florida's "Economic Loss Rule" which precludes tort damages in a breach of
contract case. In addition, counsel for the Company has requested that the Court
reduce the punitive damages in accordance with Florida Statute 768.73 which
considers any punitive damages in excess of three times the compensatory damages
as excessive. The hearing on the above motions is set for August 20, 1999.
Counsel for the Company has advised the Company that the verdict is against the
manifest weight of the evidence and the law and if not reversed by the trial
judge, then the Company should be successful on appeal. The Company will use any
and all resources to reverse the above jury decision and will, if necessary,
vigorously prosecute its appeal rights.
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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: July 2, 1999 By: /s/ Richard Iamunno
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Name: Richard Iamunno
Title: President and Chief Executive Officer
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