BEACHPORT ENTERTAINMENT CORP/UT, SB-2/A, 1997-11-03

BEACHPORT ENTERTAINMENT CORP/UT
SB-2/A, 1997-11-03
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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 3, 1997

REGISTRATION NO. 333-33579

________________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM SB-2
AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

BEACHPORT ENTERTAINMENT CORPORATION
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
------------------------

<TABLE>
<S> <C> <C>
UTAH 7922 87-428148
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYMENT
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

<TABLE>
<S> <C>
517 NORTH ROBERTSON BOULEVARD 517 NORTH ROBERTSON BOULEVARD
LOS ANGELES, CALIFORNIA 90048 LOS ANGELES, CALIFORNIA 90048
(310) 278-5114 (ADDRESS OF PRINCIPAL PLACE OF BUSINESS OR INTENDED
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES) PRINCIPAL PLACE OF BUSINESS)
</TABLE>

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

BARRY MENDELSON
517 NORTH ROBERTSON BOULEVARD
LOS ANGELES, CALIFORNIA 90048
(310) 278-5114
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------

COPY OF ALL COMMUNICATIONS TO:
GERALD A. ADLER, ESQ.
MARY P. O'HARA, ESQ.
BONDY & SCHLOSS LLP
6 EAST 43RD STREET
NEW YORK, N.Y. 10017
(212) 661-3535

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

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [x]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this form is post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

________________________________________________________________________________

<PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED NOVEMBER 3, 1997

PROSPECTUS

BEACHPORT ENTERTAINMENT CORPORATION
9,182,775 SHARES OF COMMON STOCK $.002 PAR VALUE
OF WHICH 6,454,064 UNDERLY WARRANTS, OPTIONS AND
SHARES OF CONVERTIBLE PREFERRED STOCK.

This prospectus relates to 9,182,775 shares of common stock $.002 per share
of which 6,454,064 underly issued and outstanding options, warrants and shares
of Series A Convertible Preferred Stock (the 'Preferred Shares') of Beachport
Entertainment Corporation (the 'Company'). The shares being registered herewith
and the shares issuable from time to time by the Company upon the exercise of
the options and warrants and conversion of the Preferred Shares (hereinafter
collectively, the 'Shares'), when issued may be offered and sold from time to
time by the Selling Securityholders named herein (the 'Selling
Securityholders'). See 'Plan of Distribution.'

The warrants and options entitle the holder thereof to purchase shares of
common stock at varying exercise prices ranging from $.25 to $5.00 per share.

The Company's common stock is traded on the over-the-counter electronic
Bulletin Board under the symbol 'BPRT.' On October 28, 1997, the closing bid and
asked price of the common stock was $1.44 and $1.53 per share, respectively.

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

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE 'RISK FACTORS'
BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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

The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Securityholders. The Company will bear all costs relating
to the registration of the Shares, which are estimated to be approximately
$226,000. See 'Selling Securityholders.'

THE DATE OF THIS PROSPECTUS IS NOVEMBER , 1997.

<PAGE>
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING SECURITYHOLDERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT
RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE
UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION SET FORTH HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE MARKET PRICE OF THE SHARES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE AFFECTED ON THE OVER-THE-COUNTER ELECTRONIC BULLETIN BOARD
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

------------------------
The Company intends to furnish its shareholders with annual reports
containing audited financial statements of the Company, after the end of each
fiscal year, and make available such other periodic reports as the Company may
deem appropriate or as may be required by law.

<PAGE>
<PAGE>
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information, including the financial
statements and notes thereto, appearing elsewhere in this Prospectus. Each
prospective investor is therefore urged to read this prospectus in its entirety.
Unless the context otherwise requires, the term 'the Company' refers to
Beachport Entertainment Corporation, a Utah corporation and its wholly-owned
subsidiaries On Ice, Inc., a Delaware corporation and The Royal Lipizzaner
Stallions, Inc., a Nevada corporation. This Prospectus contains forward looking
statements that involve risks and uncertainties. The Company's actual results
could differ materially from those anticipated in these forward looking
statements as a result of certain factors discussed under the caption 'Risk
Factors.'

THE COMPANY

The Company is engaged in the development, production and distribution of
live family entertainment and made-for-television programs for networks and
independent television stations, cable, home video and pay television, both
domestically and internationally, predominantly in the fields of figure skating
and equestrian events.

In July 1995, the Company acquired from Barry Mendelson, the Company's
President and Chief Executive Officer, all of the issued and outstanding shares
of capital stock of On Ice, Inc. ('On Ice'), which produces family oriented ice
skating entertainment.

The Company, through On Ice, has produced and is currently producing a
number of On Ice touring shows, including the annual 'Nutcracker On Ice' based
on an adaptation of Tchaikovsky's classic ballet for theater performances,
domestic arena performances and overseas exhibition. The 'Nutcracker On Ice' has
been touring since 1993 and has been televised annually on NBC. The stars of
these shows have included Olympic champions Oksana Baiul, Viktor Petrenko and
Peggy Flemming, former U.S. national champion Nicole Bobek, world skating
champion Todd Eldredge, Linda Fratianne, Randy Gardner and Tai Babilonia.
Beginning in the fourth quarter of 1997, On Ice will commence its fall tour of
'The Memory of All That . . . Gershwin On Ice,' ('Gershwin On Ice') a tribute to
American composers George and Ira Gershwin on the centennial of their birth. See
'Business.'

On Ice with its joint venture partner P.S./Stargames LLC ('P.S./Stargames')
entered into an agreement with Capital Cities/ABC Video Publishing, Inc.
('Capital Cities/ABC') for the production, manufacture and distribution by
Capital Cities/ABC of five videos entitled 'Fairy Tales on Ice'. The first
video, 'Alice through the Looking Glass' is completed and features Olympic
Silver Medalist Nancy Kerrigan and Academy-Award Winner Geena Davis as the
narrator with music by Academy-Award Winners Marvin Hamlisch and Ron Grant and
lyrics by David Zippel. This video is anticipated to be released in the fourth
quarter of 1997. The second video, 'Sleeping Beauty' featuring the St.
Petersburg Ice Ballet, awaits final editing and is anticipated to be released in
the first quarter of 1998. On-Ice has completed negotiations with Buena Vista
Home Video, subsequent to its merger with Capital Cities/ABC, to reacquire all
rights to this project and is currently negotiating a relationship with a new
distributor. The Company is negotiating with a video distribution company to
fund the production of the remaining three videos. No assurance can be given
that the Company will produce any of the three remaining videos. See 'Business.'

Effective August 4, 1997, the Company acquired from Gary and Elizabeth
Lashinsky, through a merger with The Royal Lipizzaner Stallions, Inc. ('RLS'), a
newly formed subsidiary of the Company, the business of Entertainment
Specialists Ltd., Inc. ('ESL'), the presenter of 'The Royal Lipizzaner
Stallions,' a family arena attraction founded in 1970 featuring horses and
riders from Europe.

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<PAGE>
The shows produced by RLS are the only touring presentations of the Royal
Lipizzaner Stallions in North America and feature horses and riders that emulate
the classic Spanish Riding School of Vienna in its presentation of the
Lipizzaner Stallions, which performs the horses' famous maneuvers in a
government-owned facility in Vienna. The RLS shows maintain the classicism of
the Spanish Riding School program within an entertainment-oriented format,
adding elements such as music and costuming.

The RLS horses perform over five hundred shows per year in arenas,
coliseums, equestrian centers and state fairs throughout North America. The
shows have also played in England and Latin America. The Royal Lipizzaner
Stallions will tour Australia for the first time in the fall of 1997. See
'Business.'

On or about September 17, 1997, the Company entered into a three year Event
Production and Promotion Agreement ('Sanctioning Agreement') with Protruck
Racing Organization ('Protruck'). Protruck is an off road closed-course dirt
truck racing event ('Truck Racing') sanctioning body in the United States, whose
sanction and racing standards are universally accepted in the field. Currently,
Protruck and the Company are preparing to present a series of exclusive dirt
Truck Racing events in different stadiums west of the Mississippi River, six of
which have already been scheduled for early 1998. Each event will be comprised
of between five (5) and eight (8) races, and prize money will be awarded at each
event. Throughout the season, competitors will accumulate points, and a grand
prize will be awarded at the end of each season to the overall champion. The
Company and Protruck are also negotiating a related license agreement which
will provide merchandising rights to the Company. Despite its infancy, the
name 'Protruck' offers name recognition which enhances opportunities for
promotion and exploitation, in the form of events, television production,
merchandising, and home video sales, to name a few. Protruck also features
Ivan 'Iron Man' Stewart ('Stewart'), the recognized star of off road dirt
Truck Racing. Motor sports currently comprise the fastest growing segment of
the live entertainment industry. See 'Business.'

Through its operating division, Beachport Entertainment Digital Group
('Beachport Digital'), the Company designs and develops interactive CD-ROM
computer software, computer enhanced digital effects for feature film projects,
Internet, World Wide Web and Microsoft Network computer home page sites, and
interactive video game software for various high-tech manufacturers such as
Sega, Nintendo and Sony.

Through an agreement with Tyndale New Media, a division of Tyndale House
Publishers ('Tyndale'), Beachport Digital has designed and is producing an
interactive CD-ROM game based on the animated character 'McGee.' McGee has
starred in a series of videos called 'McGee and Me' and has sold approximately
2.5 million videos. Beachport Digital's CD-ROM game features Bible stories,
puzzles, trivia, drawing, painting and digitized video animation.

The Company's operating strategy is to (i) expand the activities of On Ice,
RLS and BEC Motor Sports by developing additional domestic and international
touring shows in 1998 and developing additional television and video
programming; (ii) expand the merchandising activities for its ice and equestrian
shows; (iii) identify and develop brand name programming such as 'Nutcracker On
Ice' that translates into touring shows, television projects and other
entertainment projects; (iv) building a library of 100% owned family
entertainment content; (v) obtain sponsors and promotional partners for its
ice shows and equestrian events; (vi) increase attendance for the equestrian
events through group sales promotions and aggressive ticket pricing; and (vii)
implement strategic acquisitions of, or enter into joint venture agreements with
other companies. The Company regularly evaluates acquisition and joint venture
possibilities. Except as otherwise described in this Prospectus, there are no
present arrangements or understandings with respect to any potential
acquisitions or joint ventures.

The Company's senior management has extensive experience in the
entertainment industry. Barry Mendelson, the Company's President and Chief
Executive Officer was a former executive vice president for Madison Square
Garden Enterprises, a managing partner of Ticket Master Associates and has had
27 years of experience in the entertainment industry. Sidney Shlenker, the
Company's Chairman of the

<PAGE>
<PAGE>
Board, was a former majority owner and chairman of the board of the NBA Denver
Nuggets, president and chief operating officer of the Houston based Astrodome
Corporation and has over 30 years experience in the entertainment industry.
Linda Azarone, Chief Operating Officer, is a former vice president of ice shows
for the Walt Disney Company's Consumer Product Division with extensive
experience in the production and promotion of ice skating shows. See
'Management.'

The Company was incorporated in November 1985. The Company's executive
offices are located at 517 North Robertson Boulevard, Los Angeles, California
90048 and its telephone number is (310) 278-5114.

THE OFFERING

Securities Offered:

9,182,775 shares of common stock of which 6,454,064 are issuable by
the Company upon the exercise of warrants, options and conversions of the
Preferred Shares which are being offered by Selling Securityholders named
herein. See 'Selling Securityholders' and 'Plan of Distribution.' The
Selling Securityholders can only sell their Shares as long as a current
registration statement is in effect and as long as they deliver a current
prospectus to the purchaser. See 'Selling Securityholders.'

Use of Proceeds:

The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Securityholders. However, the Company will receive
proceeds from the issuance of Shares of common stock upon the exercise of
warrants and options ranging from $.25 to $5.00 per share. If all of the
warrants and options are exercised, the Company would receive gross
proceeds of approximately $7,136,532.

Risk Factors:

An investment in the Shares offered hereby involves a high degree of
risk and, therefore the Shares should not be purchased by anyone who cannot
afford the loss of their entire investment. Prospective purchasers of the
Shares should carefully review and consider the factors set forth under
'Risk Factors' as well as other information contained herein, before
purchasing any of the Shares. See 'Risk Factors.'

<PAGE>
<PAGE>
SUMMARY AND PRO FORMA FINANCIAL INFORMATION

The following table sets forth summary historical financial data of
Beachport and ESL for the six months and year ended June 30, 1997 and December
31, 1996, respectively. The historical financial data for each company for the
year ended December 31, 1996 are derived from the audited financial statements
of each company. Beachport's financial statements have been audited by Malone &
Bailey, PLLC, independent certified public accountants, whose report is included
elsewhere in this registration statement. ESL's financial statements have been
audited by Van Buren & Hauke, LLC, independent certified public accountants,
whose report is also included elsewhere in this registration statement. The
summary historical financial data should be read in conjunction with the
financial statements and notes thereto of Beachport and ESL and 'Management's
Discussion and Analysis of Financial Condition and Results of Operations'
included elsewhere in this registration statement. The financial data of both
companies for the six months ended June 30, 1997 and 1996 are unaudited, but, in
the opinion of management, reflect all adjustments (consisting only of normal
recurring adjustments) necessary for a fair representation of results for all
interim periods. The operating results for the interim periods are not
necessarily indicative of results for the full fiscal year. The following table
also sets forth pro forma financial data of the Company as if (i) the
acquisition, and (ii) the lawsuit settlement, occurring in July and August 1997
had occurred June 30, 1997 for balance sheet results and lawsuit settlement
operating data, and January 1, 1996 for acquisition operating data. The pro
forma financial data was derived from the unaudited pro forma financial
statements appearing elsewhere in this registration statement. The summary pro
forma financial data should be read in conjunction with the Company's pro forma
financial statements and the notes thereto. The pro forma balance sheet data as
of June 30, 1997 and the pro forma statements of operations for the six months
and year ended June 30, 1997 and December 31, 1996, respectively, are unaudited,
but, in the opinion of management, reflect all adjustments (consisting of only
normal recurring adjustments and pro forma adjustments to reflect the
acquisition and lawsuit settlement) necessary for a fair presentation of pro
forma results of operations. The pro forma operating results are not necessarily
indicative of the Company's future results of operations.

SUMMARY HISTORICAL FINANCIAL DATA

<TABLE>
<CAPTION>
THE COMPANY ESL
--------------------------------------- ------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
JUNE 30, 1997 DECEMBER 31, 1996 JUNE 30, 1997
------------------ ----------------- ------------------
<S> <C> <C> <C>
Operating Data
Historical:
Net sales........................................ $ 493,987 $ 1,080,656 $4,288,835
Costs of performances............................ 923,378 1,165,874 2,558,244
Selling.......................................... -- -- 1,255,687
General and administrative....................... 1,172,053 2,291,752 1,054,448
Asset writeoffs.................................. -- 179,192 --
Bad debts........................................ -- 211,722 --
Depreciation and amortization.................... 47,924 94,553 20,400
Interest......................................... 219,182 1,092,357 --
Other income (expense)........................... -- -- (24,248)
Income tax benefit............................... -- 452 --
Net income (loss)................................ (1,868,550) (3,954,342) $ (624,192)
Per share data:
Net income (loss)................................ $ (0.24) $ (0.58) --
Weighted average number of shares outstanding.... 7,874,228 6,807,910 --

YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
Operating Data
Historical:
Net sales........................................ $ 5,896,018
Costs of performances............................ 3,734,553
Selling.......................................... 1,521,365
General and administrative....................... 805,758
Asset writeoffs.................................. --
Bad debts........................................ --
Depreciation and amortization.................... 37,427
Interest......................................... --
Other income (expense)........................... (23,795)
Income tax benefit............................... --
Net income (loss)................................ $ (276,880)
Per share data:
Net income (loss)................................ --
Weighted average number of shares outstanding.... --
</TABLE>

SUMMARY PRO FORMA FINANCIAL DATA

<TABLE>
<CAPTION>
SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------ -------------------
<S> <C> <C>
Pro forma operating data:
Net sales...................................................... $4,782,822 $ 6,976,674
Costs of performances.......................................... 3,481,622 4,900,427
Selling........................................................ 1,255,689 1,521,365
General and administrative..................................... 2,351,027 3,147,510
Asset writeoffs................................................ -- 179,192
Bad debts...................................................... -- 211,722
Depreciation and amortization.................................. 68,324 131,980
Interest....................................................... 219,182 1,092,357
Gain on lawsuit settlement..................................... 403,186 --
Other income (expense)......................................... (24,248) (23,795)
Income tax benefit............................................. -- 452
Net income (loss).............................................. 2,145,758 (4,231,222)
Per share data:
Net income (loss).............................................. $ (0.25) $ (0.53)
Weighted average number of shares outstanding.................. 8,483,448 8,003,616

</TABLE>

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<CAPTION>
AT JUNE 30, 1997
--------------------------------------------
ACTUAL(1) PRO FORMA(2) ADJUSTED(3)
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<S> <C> <C> <C>
Balance sheet data:
Working capital (deficit)...................................... $(4,219,867) $(4,787,028) $(3,450,200)
Total assets................................................... 3,427,086 5,075,582 6,451,740
Long-term obligations.......................................... -- -- --
Retained earnings (deficit).................................... (6,973,808) (2,048,396) (6,570,622)
Stockholders' equity (deficit)................................. (1,943,850) (681,664) 291,308

</TABLE>

- ------------
(1) Represents the Company
(2) Includes ESL, with assets revalued to fair market value
(3) Includes debt financing and lawsuit settlement

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RISK FACTORS

An investment in the Shares being offered hereby involves a high degree of
risk. Prior to making any investment decision, prospective investors should
carefully consider the following risk factors together with the other
information presented in this Prospectus including the financial statements (and
notes thereto).

SIGNIFICANT OPERATING LOSSES, ACCUMULATED DEFICIT, NO HISTORY OF COMBINED
OPERATIONS

Beachport Entertainment Corporation ('Beachport') and On Ice reported a net
loss for the year ended December 31, 1996 of $3,954,342 and net income for the
year ended December 31, 1995 of $624,429. ESL reported a net loss for the year
ended December 31, 1996 of $227,880 and net income for the year ended December
31, 1995 of $538,306. On a pro forma basis, after giving effect to the
acquisition of ESL, the Company would have had a net loss for the year ended
December 31, 1996 of $4,343,625. As of December 31, 1996, Beachport and On Ice
had an accumulated deficit in stockholders equity of $2,303,001. There can be no
assurance that the Company's operations will be profitable in the future or if
achieved, that such profitability will be sustained. The Company acquired ESL on
August 4, 1997 and prior to said date, ESL was operating as a separate
independent entity. The Company's profitability will depend upon the ability of
its management to integrate the companies into a single cohesive business entity
with a single business philosophy. There can be no assurance that the Company's
management will be successful in managing the combined operations or in
implementing the Company's business strategy. See 'Managements Discussion and
Analysis of Financial Conditions and Results of Operations.'

ADDITIONAL FINANCING

The Company has funded its operations to date primarily through equity and
debt financing. The Company may need to raise additional funds to continue to
fund operating expenses and/or implement its operating strategy. Although, in
the past, the Company has been successful in obtaining financing, there can be
no assurance that in the future, additional financing will be available or if
available will be on favorable terms. Failure to obtain such additional
financing could have a material adverse effect on the Company's business,
financial condition or results of operation. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources' and the Company's financial statements and notes thereto.

DEPENDENCE ON KEY PERSONNEL

The Company is dependent to a great extent upon the experience, abilities
and continued services of Barry Mendelson, the Company's President and Chief
Executive Officer, Sidney Shlenker, the Company's Chairman of the Board, Linda
Azarone, the Company's Chief Operating Officer, Gary Lashinsky, the Chairman and
Chief Executive Officer of RSL and Christopher Riggs, the President of the
Company's Beachport Digital division. The Company has entered into employment
agreements with Messrs. Mendelson, Shlenker and Lashinsky. The loss of services
of any one of these individuals could have a material adverse effect on the
Company's business, financial condition or results of operation. The Company
presently has $750,000 of key man life insurance on the lives of Barry Mendelson
and Sidney Shlenker. See 'Management and Management -- Significant Employees.'

POTENTIAL LIABILITY; AVAILABILITY OF INSURANCE

The Company, from time to time, is subject to lawsuits as a result of its
business and currently maintains insurance relating to personal injury in
amounts that it considers adequate and customary for the entertainment industry.
While the Company has been able to obtain such insurance in the past, no
assurances can be given that it will be able to maintain these insurance
policies in the future. In addition, any successful claim against the Company,
in an amount exceeding its insurance coverage, could have a material adverse
effect on its business, financial condition and results of operations.

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QUARTERLY FLUCTUATIONS; SEASONALITY; POSSIBLE VOLATILITY OF STOCK PRICE

The Company's operating results are subject to seasonal fluctuations.
Historically, the Company has realized its highest revenues in the fourth
quarter from its 'Nutcracker on Ice' tours which run from Thanksgiving to
Christmas. With the acquisition of ESL, the Company anticipates additional
revenues in the months of September through May. However, it will only have
limited revenues during June, July and August and will have to meet its working
capital requirements for these months from cash flow earned during such other
periods. Variations in cash flow could cause the market price of the Company's
common stock to fluctuate substantially. In addition, the stock markets in the
United States have, from time to time, experienced significant price and volume
fluctuations that are unrelated or disproportionate to the operating performance
of individual companies. Such fluctuations may adversely affect the price of the
Company's common stock.

CONTINUING CHANGES IN THE ENTERTAINMENT INDUSTRY; DEPENDENCE ON ATTRACTING
WELL-KNOWN ENTERTAINERS

The results of operations of entertainment industry businesses are affected
by, among other things, changes in consumer tastes, national, regional and local
economic conditions, demographic trends and the type, number and location of
competing entertainment shows. Since each project is an individual artistic work
and its commercial success is primarily determined by audience reaction, which
is unpredictable, there can be no assurance as to the economic success of any
entertainment property. Even if a production is an artistic success or
recognized favorably by critics, there is no assurance that it will generate
sufficient audience acceptance. In addition, the Company is highly dependent
upon its ability to attract well-known entertainers. Competition for such
persons, especially in the field of ice skating, is intense. Although the
Company has previously been successful in hiring persons having the requisite
skills and experience, there can be no assurance that such persons will be
available in the future, or if available, on terms acceptable to the Company.

COMPETITION

The entertainment industry is highly competitive. The Company competes
with, and will compete with many organizations, including major film studios and
independent production companies, individual producers and others, in all forms
of entertainment, including arena and theatrical ice skating, theatrical
productions and films and products distributed through network, syndication and
pay television and home video markets. Most of these competitors are larger,
more established and have greater financial and other resources than the
Company. Some of the Company's major ice show competitors include the
International Skating Union, United States Figure Skating Association and
Jefferson Pilot, each of which have championship competitions. Most high
quality, well known skaters prefer to compete in championships before performing
in ice skating shows and thus, the Company may find it harder to find high
quality, well-known skaters during these competitions. In addition, the Company
competes with other ice show producers including Tour of Champions, Ice Capades,
IMG Stars on Ice, Disney on Ice and Holiday On Ice. The Company also competes to
obtain creative talents, story properties, advertiser support and broadcast
rights, which are essential to the success of the Company's theatrical and
filmed entertainment.

Moreover, the entertainment industry is currently evolving into an industry
in which certain multinational, multimedia entities, including Viacom/Paramount
Pictures, The News Corporation, The Walt Disney Company/Cap Cities-ABC, Time
Warner/Turner Broadcasting and Westinghouse/CBS are anticipated to be in a
position, both financially, by virtue of their control over key film, magazine,
and/or television content, and by virtue of their control of key network and
cable outlets, to dominate certain entertainment and communication industry
activities. These competitors have numerous competitive advantages, including
the ability to acquire and attract superior properties, personnel and financing.

<PAGE>
<PAGE>
Capades and other major ice shows competitors, The Harlem Globetrotters, Sesame
Street Live, and the Barney arena show, plus many other live concerts, sporting
and entertainment events that also appeal to families. Being successful in any
one market often depends on the time of the year in which you are able to secure
dates, and RLS is competing for dates with some of the more prominent companies
in live entertainment. Moreover, many of these other properties are also touring
overseas and will be competing with the RLS shows for both audiences and dates.
Many of the RLS competitors are larger, more established and have greater
financial and other resources than the Company. These competitors, may
therefore, have numerous competitive advantages, including the ability to
acquire and attract superior properties, personnel and financing.

In addition to other live entertainment events which compete for the
consumer entertainment dollar, the Protruck Truck Racing venture has numerous
motor sports competitors. In the motor sports field alone, the Protruck Truck
Racing venture's main competitors include a company which produced events in
seventy three (73) markets in 1995, a motor sport producer of the majority of
Canadian events, another company which produced approximately 55 events in
smaller markets and venues, and other regional specialized motor sports
companies. Because it is a relatively young organization, Protruck faces the
task of finding additional venues and markets to host its events.

ADDITIONAL COMPENSATION TO CEO AND OTHER KEY EMPLOYEE

Pursuant to an agreement relating to the Company's acquisition of On Ice,
the Company is obligated to pay Barry Mendelson, its Chief Executive Officer,
50% of any fees generated by him as producer of Company related projects. Mr.
Mendelson will receive approximately $37,500 in producer's fee in 1997 which
were earned in 1996 and can be expected to earn at least the same amount in
producer fees in 1997.

Christopher Riggs, the President of the Company's Beachport Digital
division is entitled to receive 40% of the profits of said division until the
Company has received $400,000 of reimbursements for past investments in said
division at which time, the profit participation of Mr. Riggs increases to 50%.
Upon the sale or other disposition of said division, Mr. Riggs is entitled to
receive 40% of the proceeds therefrom. To date, the Beachport Digital division
has not been profitable.

The obligation to make the aforesaid payments to Messrs. Mendelson and
Riggs will reduce the amount available to the Company for operations.

SIGNIFICANT OUTSTANDING OPTIONS AND WARRANTS

As of the date of this Prospectus, there were outstanding immediately
exercisable stock options and warrants to purchase an aggregate of 6,354,064
shares of common stock at exercise prices ranging from $.25 to $5.00 per share,
and Preferred Shares that are immediately convertible into approximately 100,946
shares of common stock. To the extent that such options, warrants and Preferred
Shares are exercised or converted, dilution to the Company's shareholders will
occur. Moreover, the terms upon which the Company will be able to obtain
additional equity capital may be adversely affected, since the holders of such
options, warrants and Preferred Shares can be expected to exercise or convert
them at a time when the Company would, in all likelihood, be able to obtain any
needed capital on terms more favorable to the Company than the exercise and
conversion terms provided in such securities.

ABSENCE OF DIVIDENDS

The Company has never declared or paid any cash dividends on its common
stock. The Company intends to retain its earnings, if any, to finance the growth
and development of its business and therefore does not anticipate paying any
cash dividends on its common stock in the foreseeable future.

CURRENT PROSPECTUS AND STATE REGISTRATION REQUIRED TO EXERCISE WARRANTS AND
OPTIONS

At such time as the Shares underlying the warrants and options become
registered under the Securities Act, holders of the warrants and options will be
able to exercise the warrants and options only if (i) a current Prospectus under
the Securities Act relating to the Shares is then in effect and (ii) the Shares
are qualified for sale or exempt from qualification under the applicable
securities laws of

<PAGE>
<PAGE>
the state in which the various holders of warrants and options reside. Although
the Company has agreed to use its best efforts to maintain a current
registration covering the Shares, there can be no assurance that the Company
will be able to do so. The value of the Shares may be greatly reduced if a
registration statement covering the Shares is not kept current or if the Shares
are not qualified, or exempt from qualification, in the states in which the
holders of warrants and options reside. Persons holding warrants and options who
reside in jurisdictions in which the Shares are not qualified and in which there
is no exemption will be unable to exercise their warrants and options and would
either have to sell their warrants and options or allow them to expire
unexercised.

LACK OF TRADEMARK PROTECTION FOR ON ICE

Because of the existence of other 'on ice' performances, it is unlikely
that the Company will be able to rely upon trademark or service mark protection
for the name 'On Ice.' As a result, there is no protection against others using
the name 'On Ice' for the production of entertainment events some of which may
be of substandard quality. The Company's own ice shows could be negatively
impacted by association with any substandard productions.

PENNY STOCK RULE

Trading in the Company's securities is conducted on the NASD's Electronic
Bulletin Board or 'pink sheets.' In the absence of the common stock being quoted
on Nasdaq, or the Company having $2,000,000 in net tangible assets, trading in
the common stock would be covered by Rule 15g-9 promulgated under the Securities
Exchange Act of 1934, as amended (the 'Exchange Act') for non-Nasdaq and
non-exchange listed securities. Under such rule, broker-dealers who recommend
such securities to persons other than established customers and accredited
investors must make a special written suitability determination for the
purchaser and receive the purchaser's written agreement to a transaction prior
to sale. Securities are exempt from this rule if the market price is at least
$5.00 per share.

The Securities and Exchange Commission (the 'Commission') has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to certain exemptions.
Such exemptions include an equity security listed on Nasdaq and an equity
security issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operation for three (3) years,
(ii) net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three (3) years, or (iii) average revenue of
at least $6,000,000 for the proceeding three (3) years. Unless an exemption is
available, the regulations require the delivery, prior to any transaction
involving a penny stock, of a disclosure schedule explaining the penny stock
market and the risks associated therewith. As the Company's common stock is
presently subject to the regulations on penny stock, the market liquidity for
the common stock could be severely and adversely affected due to the limitations
on the ability of broker-dealers to sell the common stock in the public market.

SHARES ELIGIBLE FOR FUTURE SALE

The Company has outstanding 10,888,183 shares of common stock. Of these
shares, 7,662,820 are freely tradable without restriction or registration under
the Securities Act, except that any shares purchased by an 'affiliate' of the
Company (as defined in the rules and regulations promulgated under the
Securities Act) will be subject to the resale limitations under Rule 144 under
the Securities Act. The remaining 3,119,295 shares of outstanding common stock
were issued by the Company in private transactions in reliance upon exemptions
from registration under the Securities Act. Such shares may be sold only
pursuant to an effective registration statement filed by the Company or an
applicable exemption, including the exemption contained in Rule 144 promulgated
under the Securities Act. In general, under Rule 144 as currently in effect, a
shareholder, including an affiliate of the Company, may sell shares of common
stock after at least one year has elapsed since such shares were acquired from
the Company or an affiliate of the Company. The number of shares of common stock
which may be sold within any three-month period is limited to the greater of one
percent of the then outstanding common stock or the average weekly trading
volume in the common stock during the four calendar weeks

<PAGE>
<PAGE>
preceding the date on which notice of such sale was filed under Rule 144.
Certain other requirements of Rule 144 concerning availability of public
information, manner of sale and notice of sale must also be satisfied. In
addition, a shareholder who is not an affiliate of the Company (and who has not
been an affiliate of the Company for 90 days prior to the sale) and who has
beneficially owned shares acquired from the Company or an affiliate of the
Company for over two years may resell the shares without compliance with the
foregoing requirements under Rule 144.

No predictions can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the common stock prevailing from time to time. Nevertheless, sales of
substantial amounts of common stock, or the perception that such sales may
occur, could have a material adverse effect on prevailing market prices. See
'Description of Securities -- Shares Eligible for Future Sale.

AUTHORIZATION OF PREFERRED STOCK

The Company's Certificate of Incorporation authorizes the issuance of
preferred stock with such designation, rights and preferences as may be
determined from time to time by the Board of Directors. The Company has
designated a class of shares of preferred stock as Series A Cumulative
Convertible Preferred Stock (the 'Series A Preferred Stock'). As of July 31,
1997, there were 6 shares of Series A Preferred Stock outstanding. The Series A
Preferred Stock has a liquidation preference of $25,000 per share plus accrued
and unpaid dividends and is currently convertible, subject to adjustments in
certain circumstances, at the option of the holder, at a rate of 11,111 shares
of common stock for each preferred share. The rate of conversion is subject to
adjustment in the event that the price of the common stock is less than $2.25
per share on the date of conversion. The holders of the Preferred Shares have
the right to elect a majority of the Board of Directors in the event the Company
is in arrears in the payment of two consecutive quarterly dividend payments. The
Board of Directors is empowered, without shareholder approval to make additional
issuances of preferred stock with dividend, liquidation, conversion, voting or
other rights which could adversely affect the voting power or other rights of
the holder of the Company's common stock. In the event of additional issuance,
the Preferred Shares could be utilized, under certain circumstances, as a method
of discouraging, delaying or preventing a change in control of the Company.
Although the Company has no present intention to issue any additional shares of
its preferred stock, there can be no assurance that the Company will not do so
in the future. See 'Description of Securities.'

FORWARD LOOKING STATEMENTS

This Prospectus and the information incorporated herein by reference
contains various 'forward-looking statements' within the meaning of Federal and
state securities laws, including those identified or predicated by the words
'believes,' 'anticipates,' 'expects,' 'plans' or similar expressions. Such
statements are subject to a number of uncertainties that could cause the actual
results to differ materially from those projected. Such factors include, but are
not limited to, those described under 'Risk Factors.' Given these uncertainties,
prospective purchasers are cautioned not to place undue reliance upon such
statements.

USE OF PROCEEDS

The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Securityholders. However, the Company will receive
proceeds from the issuance of Shares upon the exercise of warrants and options
ranging from $0.25 to $5.00 per share. If all of the warrants and options are
exercised, the Company would receive gross proceeds of approximately $7,136,532.

<PAGE>
<PAGE>
DIVIDEND POLICY

The Company has never paid dividends on its common stock and does not
anticipate paying such dividends in the foreseeable future. The payment of
future cash dividends by the Company on its common stock will be at the
discretion of the Board of Directors and will depend on its earnings, financial
condition, cash flows, capital requirements and other considerations as the
Board of Directors may consider relevant, including any contractual prohibitions
with respect to the payment of dividends.

CAPITALIZATION

The following table sets forth the actual capitalization of Beachport and
On Ice and the 'pro forma' capitalization of the Company giving effect to the
acquisition of ESL on August 4, 1997 and the settlement of litigation in July
1997 as if such events occurred at June 30, 1997. The table should be read in
conjunction with the financial statements and notes thereto appearing elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
ACTUAL PRO FORMA
---------- ----------

<S> <C> <C>
Total current liabilities............................................................. $5,370,936 6,160,432
Long-term debt........................................................................ -- --
Shareholder's equity:
Preferred Stock, par value $1.00 per share; 1,000,000 shares authorized; 6 shares
issued and outstanding.......................................................... 6 6
Common Stock, par value $.002 per share; 50,000,000 shares authorized; 9,342,275
shares issued and outstanding................................................... 18,685 20,876
Additional paid-in capital....................................................... 5,011,267 6,841,048
Retained earnings (deficit)...................................................... (6,973,808) (6,570,622)
Total stockholders equity (deficit).............................................. (1,943,850) 291,308
---------- ----------
Total capitalization................................................... $3,427,086 6,451,740
---------- ----------
---------- ----------
</TABLE>

<PAGE>
<PAGE>
SUMMARY AND PRO FORMA FINANCIAL INFORMATION

The following table sets forth summary historical financial data of
Beachport and ESL for the six months and year ended June 30, 1997 and December
31, 1996, respectively. The historical financial data for each company for the
year ended December 31, 1996 are derived from the audited financial statements
of each company. Beachport's financial statements have been audited by Malone &
Bailey, PLLC, independent certified public accountants, whose report is included
elsewhere in this registration statement. ESL's financial statements have been
audited by Van Buren & Hauke, LLC, independent certified public accountants,
whose report is also included elsewhere in this registration statement. The
summary historical financial data should be read in conjunction with the
financial statements and notes thereto of Beachport and ESL and 'Management's
Discussion and Analysis of Financial Condition and Results of Operations'
included elsewhere in this registration statement. The financial data of both
companies for the six months ended June 30, 1997 and 1996 are unaudited, but, in
the opinion of management, reflect all adjustments (consisting only of normal
recurring adjustments) necessary for a fair representation of results for all
interim periods. The operating results for the interim periods are not
necessarily indicative of results for the full fiscal year. The following table
also sets forth pro forma financial data of the Company as if (i) the
acquisition, and (ii) the lawsuit settlement, occurring in July and August 1997
had occurred June 30, 1997 for balance sheet results and lawsuit settlement
operating data, and January 1, 1996 for acquisition operating data. The pro
forma financial data was derived from the unaudited pro forma financial
statements appearing elsewhere in this registration statement. The summary pro
forma financial data should be read in conjunction with the Company's pro forma
financial statements and the notes thereto. The pro forma balance sheet data as
of June 30, 1997 and the pro forma statements of operations for the six months
and year ended June 30, 1997 and December 31, 1996, respectively, are unaudited,
but, in the opinion of management, reflect all adjustments (consisting of only
normal recurring adjustments and pro forma adjustments to reflect the
acquisition, and lawsuit settlement) necessary for a fair presentation of pro
forma results of operations. The pro forma operating results are not necessarily
indicative of the Company's future results of operations.

SUMMARY HISTORICAL FINANCIAL DATA

<TABLE>
<CAPTION>
THE COMPANY ESL
------------------------------------- ------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
JUNE 30, 1997 DECEMBER 31, 1996 JUNE 30, 1997
---------------- ----------------- ------------------
<S> <C> <C> <C>
Operating Data
Historical:
Net sales.......................................... $ 493,987 $ 1,080,656 $4,288,835
Costs of performances.............................. 923,378 1,165,874 2,558,244
Selling............................................ -- -- 1,255,687
General and administrative......................... 1,172,053 2,291,752 1,054,448
Asset writeoffs.................................... -- 179,192 --
Bad debts.......................................... -- 211,722 --
Depreciation and amortization...................... 47,924 94,553 20,400
Interest........................................... 219,182 1,092,357 --
Other income (expense)............................. -- -- (24,298)
Income tax benefit................................. -- 452 --
Net income (loss).................................. (1,868,550) (3,954,342) (624,192)
Per share data:
Net income (loss).................................. $ (0.24) $ (0.58) --
Weighted average number of shares outstanding...... 7,874,228 6,807,910 --

YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
Operating Data
Historical:
Net sales.......................................... $ 5,896,018
Costs of performances.............................. 3,734,553
Selling............................................ 1,521,365
General and administrative......................... 805,758
Asset writeoffs.................................... --
Bad debts.......................................... --
Depreciation and amortization...................... 37,427
Interest........................................... --
Other income (expense)............................. (23,795)
Income tax benefit................................. --
Net income (loss).................................. $ (276,880)
Per share data:
Net income (loss).................................. --
Weighted average number of shares outstanding...... --
</TABLE>

SUMMARY PRO FORMA FINANCIAL DATA

</TABLE>

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

(1) Represents the Company

(2) Includes ESL, with assets revalued to fair market value

(3) Includes debt financing and lawsuit settlement

<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company was incorporated under the laws of the state of Utah on
November 18, 1985, originally under the name Mace, Inc. Effective April 14, 1994
and pursuant to a Reorganization Agreement, the Company acquired all of the
issued and outstanding shares of common and preferred stock of Beachport
Entertainment Corporation, a Texas corporation ('Beachport Texas'), in exchange
for shares of common and preferred stock of the Company. Beachport Texas became
a wholly-owned subsidiary of the Company. On April 14, 1994, the Company changed
its name to Beachport Entertainment Corporation.

The Company is engaged in the entertainment business and derives
substantially all of its revenue from either production fees earned in
connection with Company originated productions; production fees earned in
connection with productions on behalf of others and distribution fees from the
exploitation of its own products as well as products acquired from others.

The Company's operating strategy is to (i) expand the activities of On Ice,
RLS and BEC Motor Sports by developing additional domestic and international
touring shows in 1998 and developing additional television and video
programming; (ii) expand the merchandising and licensing activities for its ice,
equestrian and motor sports shows; (iii) identify and develop brand name
programming such as Nutcracker On Ice that translates into touring shows,
television projects and other entertainment projects; (iv) building a library of
owned family entertainment content; (v) obtain sponsors and promotional partners
for its ice shows equestrian and motor sports events; (vi) increase attendance
for the equestrian events through group sales promotions and aggressive ticket
pricing; and (vii) implement strategic acquisitions of, or enter into joint
venture agreements with other companies. The Company regularly evaluates
acquisition and joint venture possibilities. Except as otherwise described in
this Prospectus, there are no present arrangements or understandings with
respect to any potential acquisitions or joint ventures.

RESULTS OF OPERATIONS
BEACHPORT ENTERTAINMENT CORPORATION

The following sets forth, in tabular form, a comparison of the results of
operations for the six months ended June 30, 1997 and 1996 and the years ended
December 31, 1996 and 1995.

<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
-------------------- -------------------
1997 1996 1996 1995
------- -------- ------- -------

<S> <C> <C> <C> <C>
Revenues........................................................ 100.0 % 100.0% 100.0% 100.0%
Cost of performances............................................ 187.0 % 91.6% 107.9% 66.6%
Selling, general and administrative expense..................... 258.3 % 155.6% 248.2% 16.5%
Depreciation and amortization................................... 9.7 % 13.0% 8.7% 2.4%
Interest expense................................................ 44.4 % 130.8% 101.1% 1.1%
Net profit (loss)............................................... (378.3 %) (290.8%) (365.9%) 18.2%
</TABLE>

SIX MONTHS ENDED JUNE 30, 1997 AND 1996

Revenues. Revenues increased $134,499 to $493,987 for the six months ended
June 30, 1997 as compared to $359,488 for the six months ended June 30, 1996.
The increase was primarily due to On Ice's Tour of 'The Memory of All
That . . . Gershwin On Ice' which toured in April and May 1997, which did not
occur in 1996. During the first half of 1997, the Company had no income
generating activity and had to rely on capital generated from fund raising
activities to meet its capital requirements. In 1996, the Company produced the
England tour of the Nutcracker On Ice and entered into a producer agreement with
the Ice Capades which was cancelled in November 1996.

Cost of Performances. Cost of Performances increased $594,185 to $923,378
for the six months ended June 30, 1997 as compared to $329,193 for the six
months ended June 30, 1996. This increase was due to the costs related to
start-up expenses and actual tour costs of the Gershwin On Ice Spring Tour.

Selling, General and Administrative Expenses. Selling, general and
administrative costs increased by $612,757 to $1,172,053 for the six months
ended June 30, 1997 as compared to $559,296 for the six months ended June 30,
1996. The increase was mainly attributable to increased salaries, benefits, rent
and general overhead increases as On Ice prepared for the debut and Spring tour
of Gershwin On Ice, the addition of the Company's Chief Operating Officer in
October 1996 and other staff as the Company prepared to expand its operations
into other areas of live entertainment through acquisitions.

Depreciation, Amortization and Interest Expense. Depreciation, amortization
and interest expense decreased by $249,849 to $267,106 for the six months ended
June 30, 1997 as compared to $516,955 for the six months ended June 30, 1996.
The interest expense decreased because of the changes in the Company's short
term bridge financings and the significant interest costs associated with
raising the short term bridge financing in early 1996.

Net Profit (Loss). The net loss of the Company was $(1,868,550) for the six
months ended June 30, 1997 or $(0.24) per share as compared to a net loss of
$(1,045,504) or $(0.15) per share for the six months ended June 30, 1996. The
increased loss of $823,046 was the result of the increased Cost of Performances
for the Gershwin On Ice Spring tour, General and Administrative expenses and the
reduction of interest cost from the fund raising activities in 1997.

THE YEARS ENDED DECEMBER 31, 1996 AND 1995

Revenues. Revenues decreased $2,352,017 to $1,080,656 for the year ended
December 31, 1996 as compared to $3,432,673 for the same period in 1995. The
decrease was primarily due to the difficulty of the Company's wholly owned
subsidiary On Ice obtaining reasonable ice skating talent for an arena tour of
Nutcracker On Ice. On Ice's revenues in 1996 were generated from theater and
arena tours of the Nutcracker On Ice and the home video sales.

Cost of Performance. Cost of Performance decreased $1,165,874 to $1,118,723
for the year ended December 31, 1996 from $2,284,597 for the year ended December
31, 1995. The decrease was attributable to the reduced number of arena tour
dates of the Nutcracker On Ice in 1996. The lack of named ice skating talent and
the lack of arena dates was the reason for the reduced Arena Tour.

Selling, General and Administrative Expenses. Selling, general and
administrative costs increased $2,116,628 to $2,682,666 for the year ended
December 31, 1966 from $566,038 for the year ended December 31, 1995. This was
primarily due to the cost of raising bridge financing and the general increase
overhead expenses as the Company prepared to increase its live entertainment
products.

Depreciation, Amortization and Interest Expense. Depreciation, amortization
and interest expense increased $1,067,984 to $1,186,910 in 1996 as compared to
$118,926 in 1995. This increase was primarily due to the interest expenses
related to the short term bridge financing obtained by the Company in 1996 and
purchase of assets which increased depreciation expense.

Net Profit (Loss). The net loss of the Company was $3,954,342 for the year
ended December 31, 1996 or ($.58) per share as compared to a net profit of
$624,400 or $.17 per share for the same period in 1995. This loss was primarily
due to the cost of raising capital for the Company's expanding live
entertainment product for 1997 and the reduced revenue from its reduced 1996
Nutcracker On Ice arena tour. These are non recurring items.

<PAGE>
<PAGE>
ENTERTAINMENT SPECIALISTS LTD. INC.

The following sets forth, in tabular form, a comparison of the results of
operations for the six months ended June 30, 1997 and 1996 and the years ended
December 31, 1996 and 1995.

<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
-------------------- -------------------
1997 1996 1996 1995
------- -------- ------- -------

<S> <C> <C> <C> <C>
Revenues........................................................ 100.00 % 100.0% 100.0% 100.0%
Cost of performances............................................ 59.7 % 50.0% 54.6% 51.1%
Selling, general and administrative expense..................... 53.9 % 45.4% 48.3% 41.7%
Depreciation and amortization................................... 0.5 % 0.6% 0.4% 0.4%
Interest expense................................................ 0.5 % 0.0% 0.2% 0.1%
Net profit (loss)............................................... (14.6 %) 3.5% (3.8%) 6.2%
</TABLE>

SIX MONTHS ENDED JUNE 30, 1997 AND 1996

Revenues. Revenues increased $1,037,016 to $4,288,835 for the six months
ended June 30, 1997 as compared to $3,251,819 for the six months ended June 30,
1996. Revenues increased as a result of RLS's first performance of the Royal
Lipizzaner Stallions in Great Britain since 1995. The tour appeared in United
States cities for the three months prior to their departure for Great Britain.

Cost of Performances. Cost of performances increased $930,626 to $2,558,244
for the six months ended June 30, 1997 as compared to $1,627,618 for the six
months ended June 30, 1996. This increase was attributable to increased tour
costs for the arena and the related expenses as a result of the Great Britain
performances and the performances in three major cities in the United States
where RLS appeared in March 1997. In addition, the U.K. tour resulted in
increased costs for the transportation and lodging for the RLS's riders and
transportation for RLS's horses to and from the United Kingdom.

Selling, General and Administrative Expenses. Selling, general and
administrative costs increased $800,522 to $2,297,857 for the six months ended
June 30, 1997 as compared to $1,497,335 for the six months ended June 30, 1996.
The advertising and promotion expense increased in 1997 as a result of the Great
Britain tour and the three major city markets where performances did not occur
in 1996. The advertising costs are greater in these markets. The travel and
hotel expenses increased because of the United Kingdom tour as additional
members of the staff were required to assist with the operation of the tour.
Taxes increased because of the British Value Added Tax. Substantial costs were
incurred preparing advertising and promotional materials. However, the training
expenses decreased because of the elimination of a trainer in 1997 and the
non-repetitive expenses in 1996 relating to RLS's move to the Oviedo, Florida
property. The 1996 feed and shavings costs were high as a result of moving to
the new facility and the anticipated increase in the need for these supplies in
the new facility.

Depreciation, Amortization and Interest Expense. Depreciation, amortization
and interest expense increased $12,278 to $32,678 for the six months ended June
30, 1997 as compared to $20,400 for the six months ended June 30, 1996.
Depreciation expense increased as a result of the remodeling cost of the second
floor offices. The interest expense resulted from increased borrowings needed
for operations in late 1996 and 1997.

Net Profit (Loss). Net loss increased $739,223 to $(624,192) for the six
months ended June 30, 1997 as compared to $115,031 for the three months ended
June 30, 1996. The Great Britain tour attendance was considerably less than it
was in 1995 which generated a substantial loss.

THE YEAR ENDED DECEMBER 31, 1996 AND 1995

Revenues. Revenues decreased $2,743,857 to $5,896,018 for the year ended
December 31, 1996 as compared to $8,639,875 for the year ended December 31,
1995. The Royal Lipizzaner Stallions experienced near sell out crowds as a
result of their inaugural tour in Great Britain in 1995. RLS did not have any
major tour in 1996 which equaled the success of the Great Britain tour in 1995.
Revenue decreases also occurred in novelty sales.

<PAGE>
<PAGE>
Cost of Performance. Cost of performances decreased $1,196,191 to
$3,216,413 for the year ended December 31, 1996 as compared to $4,412,604 for
the year ended December 31, 1995. The tour cost for arena and the associated
expenses decreased from the high levels experienced during the Great Britain
performances. The single largest expense decrease was in co-promotion expenses
because RLS handles all the promotion responsibilities for most of the U.S. and
Canada tour dates. The 1996 tour increased RLS's costs for employee payroll as a
result of the increased number of performances for the riders and tour staff in
the U.S.

Selling, General and Administrative Expenses. Selling, general and
administrative costs decreased $761,169 to $2,882,690 for the year ended
December 31, 1996 as compared to $3,643,859 for the year ended December 31,
1995. The advertising and promotion expense returned to normal levels in 1997
following the Great Britain tour in 1995. The advertising cost reflected the
less expensive U.S. markets. The training expenses continued to decrease as a
result of the reduction in training staff. The supply costs increased as a
result of the new Ovieda facility and RLS expenses decreased toward the end of
the year.

Depreciation, Amortization and Interest Expense. Depreciation, amortization
and interest expense decreased $3,708 to $34,719 for the year ended December 31,
1996 as compared to $38,427 for the year ended December 31, 1995. Depreciation
expense decreased in 1996 as a result of changes in RLS's assets. The interest
expense resulted from the increased borrowings needed for operating cash flow in
late 1996.

Net Profit (Loss). Net profit decreased $765,186 to ($226,880) for the year
ended December 31, 1996 as compared to $538,306 for the year ended December 31,
1995. The success of the Great Britain tour in 1995 as compared to the standard
United States tour was responsible for a decrease in revenues and profits for
1996. Furthermore, the increased personnel cost relating to the domestic tour
contributed to RLS's operating loss.

LIQUIDITY AND CAPITAL RESOURCE

The entertainment industry is highly capital intensive. At June 30, 1997,
Beachport had approximately $1,151,069 in cash and cash equivalents, 0 in
accounts receivable and working capital deficiency of approximately $(4,219,867)
as the result of its June 1997 fund raising which consisted of debt (see
additional information in this section). At December 31, 1996 the Company had
approximately $32,355 in cash and cash equivalents, $5,552 in accounts
receivable and working capital deficiency of approximately $(3,306,709). In
comparison to approximately $145,333 in cash and cash equivalents and working
capital of approximately ($1,125,117) as of December 31, 1995. The decrease of
cash and working capital in 1996 was primarily a result of the reduced
Nutcracker on Ice arena tour and the increased cost of expanding the Company's
live entertainment products for 1997 and the Company's debt financing efforts.
Historically, Beachport and On Ice have financed its working capital
requirements by equity and debt financings. At June 30, 1997, RLS had
approximately $114,566 in cash and cash equivalents, $16,269 in accounts
receivable and working capital deficiency of approximately $(1,059,554).
Beachport had advanced RLS $368,340 prior to the close of the acquisition. At
December 31, 1996, the Company had approximately $2,114 in cash and cash
equivalents, $31,453 in accounts receivable and working capital deficiency of
approximately $(329,037). In comparison to approximately $17,899 in cash and
cash equivalents and $15,528 in accounts receivable and working capital of
approximately $(125,876) as of December 31, 1995. The decrease of cash and
working capital in 1996 was primarily a result of the reduced attendance on the
tour. Historically, RLS has financed its working capital requirements by equity
financings and short term loans.

In the first half of 1996, in order to finance the acquisition of On Ice,
the Company in off shore transactions borrowed $939,550 and sold 285,800 shares
of its common stock. The promissory notes bear interest at the rate of 12.0% per
annum are due upon the earlier of February 28, 1997, as extended from December
31, 1996 or the closing of a public offering.

In the third quarter of 1996 the Company raised gross proceeds of $900,000.
The Company issued its 12% promissory notes due upon the earlier of December 31,
1996 or the closing of a public offering and 450,000 warrants to purchase shares
of common stock exercisable at $1.50 per share. These notes

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were extended and paid off in conjunction with the June 1997 private
fundraising. The proceeds were used to fund the Company's portion of its China
Tour of Cinderella On Ice with CITIC, a Hong Kong based International
Conglomerate, pay startup expenses relating to the 1996 Nutcracker On Ice tours,
and provide working capital for the expansion of its live entertainment product
for 1997.

In August 1996, ESL entered into an agreement with Barnett Bank NA to open
an operating line of credit for ESL. In September 1996, ESL drew down on the
line of credit for $35,000 and repaid the advance in October 1996. Subsequently,
later in October 1996, ESL started drawing down on the line of credit and the
balance as of 8-12-97 is $48,500.

During December 1996 ESL borrowed $74,319 from its profit sharing account.
The current balance of the outstanding loan is $71,353.

In June 1997, the Company raised $3,789,709 net proceeds in private
financings. The proceeds were used as follows: (i) to pay $1,002,765 of
indebtedness incurred in connection with the acquisition of On Ice; (ii) to pay
approximately $650,000 in accounts payable; (iii) to fund the costs of the
Company's expansion strategy $900,000; (iv) for general corporate purposes,
including working capital requirements $1,236,944.

In June 1997, the Company completed a private placement to 'accredited
investors' of 37.25 Units to 79 of its 12% Senior Secured Original Issue
Discount Promissory Notes ('Senior Notes') in the face amount of $106,000 per
Unit and warrants to purchase 22,000 shares of common stock per unit and 10.03
Units of 12% Junior Original Issue Discount Promissory Notes ('Junior Notes') in
the face amount of $106,000 per Unit and Warrants to purchase 22,000 shares of
Common Stock per Unit. The aggregate dollar amount of Senior Notes and Junior
Notes sold in the offering was $3,725,000 and $1,002,765 respectively. The
offering was made pursuant to Rule 506 of Regulation D.

The Company anticipates that its working capital, cash flow from operations
and revenues from operations will be adequate to fund the Company's currently
proposed activities for at least the next 12 months. However, without the
exercise of the Company's outstanding warrants and options additional financing
may be needed after this 12 month period. The Company anticipates using
financing vehicles such as bank debt, leasing, and other sources of funding,
such as additional equity offerings, to fund its operations. There can be no
assurance that the Company will be successful in obtaining funds from any such
resources. If additional funds are raised by issuing equity securities, further
dilution to the Company's stockholders may result. If additional funds are not
available, the Company may be required to alter its expansion plans.

BUSINESS

THE COMPANY

The Company, through its subsidiaries On Ice, RLS, and BEC Motor Sports is
engaged in the development, production and distribution of live family
entertainment and made-for-television programs for networks and independent
television stations, cable, home video and pay television, both domestically and
internationally, predominantly in the field of ice skating, equestrian, and
motor sports events. Through its Beachport Digital Division, it designs and
develops CD-ROM computer software for entertainment and special interest
markets.

In July 1995, the Company acquired from Barry Mendelson, the Company's
President and Chief Executive Officer all of the issued and outstanding shares
of capital stock of On Ice which produces family oriented ice skating
entertainment.

In August 1997, the Company acquired from Gary and Elizabeth Lashinsky,
through a merger with RLS, a newly formed subsidiary of the Company, the
business of ESL, the presenter of 'The Royal Lipizzaner Stallions,' a family
arena attraction founded in 1970 featuring horses and riders from Europe.

'Nutcracker On Ice' that translates into touring shows, television projects and
other entertainment projects; (iv) building a library of 100% owned family
entertainment content; (v) obtain sponsors and promotional partners for its ice
shows, equestrian and motor sport events; (vi) increase attendance for the
equestrian events through group sales, bike markets promotions, and aggressive
ticket pricing; and implement strategic acquisitions of, or enter into joint
venture agreements with, other companies. The Company regularly evaluates
acquisition and joint venture possibilities. Except as otherwise described in
this Prospectus, there are no present arrangements or understandings with
respect to any potential acquisitions or joint ventures.

The Company's operating results are subject to seasonal fluctuations.
Historically, the Company has realized its highest revenues in the fourth
quarters due to the 'Nutcracker on Ice' tours which run from Thanksgiving to
Christmas. Until the acquisition of RLS the Company had no material income
generating activity for the other quarterly periods. With the acquisition of the
RLS, the Company anticipates additional revenues in the fourth through the
second quarters although it will have insufficient revenues in June, July and
August to fund operations, and therefore will be required to meet its working
capital requirements in such period from cash flow earned during the other
quarters.

The Company's senior management has extensive experience in the
entertainment industry. Barry Mendelson, the Company's President and Chief
Executive Officer was a former Executive Vice President for Madison Square
Garden Enterprises, a managing partner of Ticket Master Associates and General
Manager of the NBA's New Orleans Jazz and has had 27 years of experience in the
entertainment industry. Sidney Shlenker, the Company's Chairman of the Board,
was a former majority owner and chairman of the board of the NBA Denver Nuggets,
president and chief operating officer of the Houston based Astrodome Corporation
and has over 30 years experience in the entertainment industry. Linda Azarone,
Chief Operating Officer is a former vice president of ice shows for the Walt
Disney Company's Consumer Products Division with extensive experience in the
production and promotion of ice skating shows. See 'Management.'

ON ICE, INC.

On Ice is a leading domestic and international producer of live family ice
skating and theatrical entertainment. On Ice takes advantage of network
television, home video, merchandising and CD-ROM opportunities created from
these performances. The Company believes the artistry and beauty of figure
skating adapts well to live entertainment, television and home video markets.
The Company also believes that the elegance of figure skating coupled with
Olympic performers, exquisite costumes and sets has thrust figure skating into
the hearts and souls of audiences worldwide. On Ice will continue the
penetration of this expanding marketplace with its creative, professional and
entertaining adaptations of family-oriented entertainment from literature and
music.

The Company, through its On Ice subsidiary, has produced and is currently
producing On Ice touring shows, including the annual 'Nutcracker On Ice' based
on an adaptation of Tchaikovsky's classic ballet for theater performances,
domestic arena performances and overseas exhibition. Until July 1997, it
co-produced these shows with Magicworks Entertainment, Inc. ('Magicworks') at
which time it acquired Magicworks interest. Under the terms of its Agreement,
Magicworks will receive 5% of the net profits from the show for the next three
years. The 'Nutcracker On Ice' show has been touring since 1993 and has been
televised annually on NBC since 1994. ESPN will also televise the show in
December 1997. The 1996 tour was a nine city tour. The 1995 domestic arena tour
encompassed twenty cities including a sold-out run in Harrah's Casino in
Atlantic City, while the European tour encompassed five cities in England. The
stars of these shows have included Olympic champions Oksana Baiul, Viktor
Petrenko and Peggy Flemming, former U.S. national champion Nicole Bobek, world
skating champion Todd Eldredge, Linda Fratianne, Randy Gardner and Tai
Babilonia. On Ice will commence its 1997 tour with at least three theatrical
touring units of 'Nutcracker On Ice' in November. This tour will include 10
performances in Moscow in January 1998.

In the spring of 1997, On Ice produced 'The Memory of All
That . . . Gershwin On Ice' ('Gershwin On Ice'), a tribute to American composers
George and Ira Gershwin, on the centennial of their birth. On September 28,
1997, a two hour special of the show will be seen on the A&E Network starring
Dorothy Hamill. A home videocassette of the television special will also be
distributed in the

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fourth quarter of 1997. A six-month tour of Gershwin On Ice will commence in
October 1997 and is schedule to play in approximately 60 cities. The tour is
being booked by International Creative Management, Inc.

PRODUCTION AND DISTRIBUTION

The production of an On Ice show consists of contracting with third parties
to author, design and choreograph a performance. The Company presently produces
two types of live ice shows, one for arenas and one for theaters. The difference
between an arena performance and a theater performance consists mainly in
presentation. Arena shows are performed on large ice surfaces and have many
physical sets and props which the skaters use during the performances. The
theater tours are performed on small ice surfaces and require scenery to be
painted on curtain drops. Theater tours have fewer skaters than arena tours and
well known skaters are less likely to perform on these smaller ice surfaces.

The Company distributes its live ice productions either directly to venues
(i.e. theaters or arenas) or to promoters in the entertainment industry who are
responsible for site identification. The Company currently employs ICM for their
booking services relating to the 'Nutcracker On Ice' and 'Gershwin On Ice'
tours. ICM identifies potential show sites and/or promoters and negotiates and
executes venue and promoters contracts on the Company's behalf. Once a location
is identified, the Company determines to either sell the show to a promoter or
present the show itself. The Company receives a fixed payment for the show from
the promoter, and the promoter is responsible for all venue and promotional
expenses, including the lease expenses, staffing, advertising, ticketing,
parking, beverages and food. If the Company elects to present the show itself,
it is responsible for all such venue and promotional expenses. In either event,
the Company is responsible for tour expenses, including skater compensation,
costumes, props and hotel accommodations. Generally, the Company also receives a
percentage of revenues generated on the sale of souvenirs, such as T-shirts,
sweatshirts and other memorabilia and the site retains all revenue generated
from the sale of food and beverages and parking. Although the Company has
generally not experienced any difficulty in obtaining high quality, well-known
skaters for any of its productions, however, occasionally the Company has had
trouble obtaining a high quality skater due to the Olympics and other major
championships. The failure, in the future, to obtain such skaters may have a
materially adverse effect on the Company's business, financial condition and
results of operations. See 'Risk Factors -- Continuing Changes in the
Entertainment Industry; Dependence on Attracting Well-Known Entertainers.'

MARKETING

The marketing of a performance is the responsibility of the promotor and
the venue manager, unless the Company elects to present the show itself. In
either case marketing is generally accomplished through local television and
radio advertising and is geared toward the entire family. In addition,
newspapers and billboards provide essential information regarding ticket sales,
cost of admission, location and time of performances.

NUTCRACKER ON ICE -- PRODUCTION, DISTRIBUTION AND LICENSE AGREEMENT

On Ice entered into a video production and distribution agreement with NBC
Sports Ventures, Inc., ('NBC Sports') in January 1995 pursuant to which NBC
Sports was granted the right to distribute and sell the home videocassette
featuring highlights from the 1994 television broadcast of the 'Nutcracker on
Ice' (the 'NBC Sports Venture Agreement'). NBC Sports has created the packaging
and edited the 'Nutcracker on Ice' event into a home videocassette. Pursuant to
the terms of the agreement, On Ice will be paid 55% of all revenues after the
recoupment by NBC Sports of its costs.

On February 15, 1995, On Ice and NBC Sports, a division of the National
Broadcasting Company, Inc. pursuant to the NBC Sports Venture Agreement, entered
into a video recording rights licensing agreement with CBS/Fox Video, a division
of The CBS/Fox Company ('CBS/Fox') pursuant to which CBS/Fox was granted a
ten-year exclusive right to the wholesale and retail distribution of all
versions of On Ice's home video production of 'The Nutcracker On Ice'
(the'Program') including the right to market and sell the Program in areas where
the live performances of 'Nutcracker on Ice' are

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presented. The Company retained the non-exclusive rights to sell the 'Nutcracker
On Ice' for direct marketing on broadcast TV and cable outlets. While CBS/Fox is
not obligated to market the Program, if it withholds the Program from
distribution for two successive Christmas seasons, On Ice and NBC Sports have
the right, to regain all rights granted to CBS/FOX unless CBS/Fox distributes
the program the next Christmas. In accordance with the terms of the License,
CBS/Fox has paid NBC and On Ice an advance of $125,000 and is required to pay a
royalty of 15% of the wholesale list price as and when CBS/Fox is paid for the
licensed video recordings which percentage is subject to reduction under certain
circumstances.

PS/FAIRY TALES ON ICE JOINT VENTURE AND DISTRIBUTION AGREEMENT

On Ice entered into a joint venture agreement dated as of September 15,
1995, with P.S./StarGames ('StarGames') called FTI, LLC. ('FTI') to produce up
to five themed ice skating videos to be distributed on videotape, television, CD
ROM and any other forms of media. All budget, creative and exploitative
decisions for this joint venture are to be approved by both parties with the
budget managed and administered by On Ice. On Ice is the producer and line
producer for the products, with both parties acting as co-executive producers.
Copyrights to any product produced or any original music used in the tapes are
to be jointly owned by On Ice and StarGames.

On November 10, 1995, FTI entered into a distribution agreement with
Capital Cities/ABC Video Publishing, Inc. ('Capital Cities') for the production,
manufacture and distribution by Capital Cities of five videos based upon well
known Children's Fairy Tales entitled 'Fairy Tales on Ice.' Pursuant to the
agreement, Capital Cities was responsible for funding the productions,
manufacturing, marketing and distribution of these videos. Pursuant to the terms
of the Agreement, Capital Cities agreed to fund production of five programs and
pay a producing fee to FTI in the amount of $35,000. For all sponsorship
agreements relating to the 'Fairy Tales On Ice,' Capital Cities has agreed to
pay FTI a sum equal to 50% of the net proceeds, if any, derived from the
exploitation of the rights granted, and a sponsorship fee equal to 15% of gross
receipts received by Capital Cities from any sponsor sold and serviced by FTI.
The first video 'Alice Through the Looking Glass' is completed and features
Olympic Silver Medalist, Nancy Kerrigan, and Academy-Award Winner Geena Davis as
the narrator, with music by Academy-Award winners Marvin Hamlisch and Ron Grant
and lyrics by David Zippel. The second video, 'Sleeping Beauty,' awaits the
editing of a master video and packaging. These video releases were planned for
the fourth quarter of 1996 but were delayed by the Disney/Capital Cities Merger.
The Company is currently negotiating with Disney's Home Video Unit, Buena Vista,
to reacquire the rights to the project in order to make its own distribution
arrangements. The Company is also negotiating with P.S./Stargames to acquire its
interest in the project. No assurance can be given that the Company will be
successful in its negotiations. As a result of the foregoing, the Company's
anticipated revenues from the project may be delayed or reduced. There are no
current plans to produce the remaining three videos.

COMPETITION

The entertainment industry is highly competitive. The Company competes
with, and will compete with many organizations, including major film studios and
independent production companies, individual producers and others, in all forms
of entertainment, including theatrical productions and films and products
distributed through network, syndication and pay television and home video
markets. Many of these competitors are larger, more established and have greater
financial and other resources than the Company. Some of the Company's major Ice
Show Competitors include the International Skating Union, United States Figure
Skaters Association and Jefferson Pilot each of which have championship
competitions. Most high quality, well-known skaters prefer to compete in
championships before performing in ice skating shows and thus, the Company may
find it harder to find high quality, well known skaters during these
competitions. In addition, the Company competes with other Ice Shows as well
including Tour of Champions, IMG Stars On Ice, Ice Capades, Disney On Ice and
Holiday On Ice. The Company also competes to obtain creative talents, story
properties, advertiser support and broadcast rights, which are essential to the
success of the Company's theatrical and filmed entertainment.

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Moreover, the entertainment industry is currently evolving into an industry
in which certain multinational, multimedia entities, including, without
limitation, Viacom/Paramount Pictures, The News Corporation, The Walt Disney
Company/Cap Cities-ABC, Time Warner/Turner Broadcasting and Westinghouse/CBS are
anticipated to be in a position, both financially, by virtue of their control
over key film, magazine, and/or television content, and by virtue of their
control of key network and cable outlets, to dominate certain entertainment and
communications industries activities. These competitors, may therefore, have
numerous competitive advantages, including the ability to acquire and attract
superior properties, personnel and financing.

THE ROYAL LIPIZZANER STALLIONS, INC.

RLS is the producer of a unique family arena show featuring the
world-famous Royal Lipizzaner Stallions under various banners, including 'A
Symphony in White' and 'The Wonderful World of Horses.' RLS has been producing
these shows since 1970 and owns twenty-nine Lipizzaner, Spanish Andalusian and
Arabian horses which perform in touring units. One such unit recently completed
an extended run of five years at the Excalibur Hotel in Las Vegas. Approximately
fourteen horses perform in each show, while the non-performing horses are in
training at RLS's facility in Oveida, Florida.

The shows RLS produce are the only touring presentations of the Royal
Lipizzaner Stallions in North America and feature horses and riders that emulate
the classic Spanish Riding School of Vienna in its presentation of Lipizzaner
Stallions, which perform the horses' famous maneuvers in a government-owned
facility in Vienna. The RLS shows maintain the classicism of the Spanish Riding
School program within an entertainment-oriented format, adding elements such as
music and costuming.

1997 represents the 28th Anniversary season of 'The Wonderful World of
Horses' with a special salute to the world famous Spanish Riding School in
Vienna, entitled 'An Evening in Vienna.' All new music, choreography and
routines have been incorporated in this anniversary edition with a major
emphasis on the historical background and foundation of the Lipizzaner breed,
from its original breeding and use as a horse of war to a horse of nobility and
aristocracy to a living form of equestrian art. The Lipizzaner is a rare and
unique breed. Its history and culture are known worldwide, in part, due to the
dramatic rescue of the horses by General Patton's men during World War II from
Czechoslovakia and their return to Austria.

The show emulates the Spanish Riding School of Vienna, Austria, in its
presentation of the Lipizzaners, and maintains a traditional as well as
entertaining performance. Included in the performance is a segment called 'Airs
Above the Ground.' These are the spectacular leaps and maneuvers, once used by
riders in saddles to protect and defend themselves on the battlefield, which are
now performed as an equestrian work of art.

MARKETING

The marketing of a performance is the responsibility of the Company.
Marketing is generally accomplished through local television, radio and print
advertising and is directed towards a general family audience. In most markets
this is accomplished through the direct buying of advertising time and space as
well as through barter deals with promotional partners such as television and
radio stations. There may also be promotional deals with retailers who will
provide 'piggyback' advertising in exchange for tickets. All advertising
provides essential information regarding ticket sales, cost of

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admission, location and times of performances. Publicity also generates interest
in the show that can translate into ticket sales.

COMPETITION

The Royal Lipizzaner Stallions shows over the past twenty-eight years have
not had any direct competition except for a brief tour by the Spanish Riding
School of Vienna. However, since the Royal Lipizzaner show is marketed to a
general family audience the Company believes there are a number of other arena
shows that tour annually throughout North America which compete for the same
consumer dollars, including: The Ringling Bros. and Barnum & Bailey Circus, Walt
Disney's World On Ice, Ice Capades and other major ice shows competitors, The
Harlem Globetrotters, Sesame Street Live, and the Barney arena show, plus many
other live concerts, sporting and entertainment events that also appeal to
families. Being successful in any one market often depends on the time of the
year in which you are able to secure dates, and RLS is competing for dates with
some of the more prominent companies in live entertainment. Moreover, many of
these other properties are also touring overseas and will be competing with the
RLS shows for both audiences and dates. Many of the RLS competitors are larger,
more established and have greater financial and other resources than the
Company. These competitors, may therefore, have numerous competitive advantages,
including the ability to acquire and attract superior properties, personnel and
financing.

BEC MOTOR SPORTS

On or about September 17, 1997 the Company entered into a three year Event
Production and Promotion Agreement ('Sanctioning Agreement') a related license
agreement with Protruck Racing Organization ('Protruck'). Protruck, owned and
operated by Ivan 'Ironman' Stewart, is an off road closed-course truck racing
event ('Truck Racing') sanctioning body in the United States, whose sanction and
racing standards are universally accepted in the field. Ivan 'Ironman' Stewart,
personally, is a renowned figure significant celebrity in the motor sports
world. His imprimatur, involvement, and experience add substantial credibility
to any Protruck sanctioned event.

INDUSTRY

Motor sports currently comprise the fastest growing segment of the live
entertainment industry. As of late, one to four events annually are hosted in
every market, the size of the market dictating the number of events which will
occur. Also the sales of four wheel drives and other sports utility vehicles
have increased exponentially. Growth in the motor sports industry can be
attributed to its widespread appeal to both families and motor sport
aficionados, as well as the increased exposure through televised events, such as
the Indy 500, NASCAR, and CART races, and its positive portrayal in film, such
as 'Days of Thunder.' Moreover, many more stadiums are being built, and the
demand to fill these venues in their off-seasons has caused many markets to
explore the motor sports world. The industry is hungry for events to satisfy the
more than 15 million fans.

Specifically, the off-road dirt truck racing stadium events usually are
comprised of a series of truck races separated by class. The events often offer
independent attractions which are sponsored and developed by third parties. The
cost of promoting and producing a typical single stadium event ranges from
$400,000 to $600,000. In addition to Protruck, SODA and SCORE are other off-road
truck racing event sponsors.

OPERATIONS

Presently, Protruck and the Company are preparing to present a series of
exclusive new dirt Truck Racing events in different stadiums west of the
Mississippi River. Each event will be comprised of between five (5) and eight
(8) races. These events are intended to attract professional competitors from
the motor sport world, who earn points throughout the season for each win. Prize
money will be awarded at each event, culminating in a grand prize of
thirty-seven thousand dollars ($37,000.00)

awarded at the end of each season to the overall champion. The Company has
already scheduled the first dates for next year's series. The preliminary dates
and venues for the 1998 series include:

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February 28, 1998 Las Vegas, NV Sam Boyd Stadium
March 7, 1998 Phoenix, AZ Sun Devil Stadium
March 28, 1998 Los Angeles, CA Los Angeles Coliseum
April 11, 1998 Albuquerque, NM University of New Mexico Stadium
May 16, 1998 Seattle, WA Tacoma Dome
May 23, 1998 Denver, CO Mile High Stadium
</TABLE>

Ticket sales and sponsorship of these events will be the largest source of
revenue for this venture. However, Protruck and the Company currently are
engaged in negotiations of the specific terms and conditions of a license
agreement which will provide the Company with the nonexclusive right to use the
Protruck trademark, service mark, and artwork on event related merchandise
throughout North America, and exclusively west of the Mississippi. Protruck also
has granted the Company the right to use the Ivan 'Ironman' Stewart name on a
contract by contract basis.

In addition to providing a Director of Competition for each event ,
published racing rules, staffing recommendations, and expertise, Protruck will
provide the technical specifications and oversight for building the track at
each event. Despite its infancy, the name 'Protruck' offers name recognition
which enchances opportunities for promotion and exploitation, in the form of
events, television production, merchandising, and home video sales, to name a
few.

MARKETING

Agent Barnes-Dyer Marketing has contracted to jointly develop the event
series' sponsorships and to provide the marketing for each event.

COMPETITION

BEACHPORT DIGITAL ENTERTAINMENT GROUP

Beachport Digital designs and develops interactive CD-ROM computer
software, computer enhanced digital effects for feature film projects, Internet,
World Wide Web and Microsoft Network computer home page sites, and interactive
video game software for various high-tech manufacturers such as Sega, Nintendo
and Sony.

Through an Agreement with Tyndale, Beachport Digital has designed and is
producing an interactive CD-ROM game based on the animated character 'McGee.'
McGee has starred in a series of videos called 'McGee and Me' and has sold
approximately 2.5 million videos. Beachport Digital's CD-ROM game will feature
Bible stories, puzzles, trivia, drawing, painting and digitized video animation.

Beachport Digital is also developing a CD-ROM which will highlight the
religious locations in the Holy Land. Beachport Digital is using computerphoto
realistic technology and anticipates completing this project for distribution in
December 1997 subject to obtaining a distributor. No assurance can be given that
Beachport Digital will succeed in obtaining a distributor.

Pursuant to an agreement dated October 11, 1995. All net operating profits
of the Beachport Digital are to be divided between the Company and Mr. Riggs on
a 60% - 40% basis, respectively, until the Company has received $400,000 of
credit for past investments and on a 50% - 50% basis thereafter.

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Upon the sale or other disposition of Beachport Digital, Mr. Riggs would be
entitled to 40% of the proceeds thereof.

To date, the Beachport Digital division has not been profitable. The
Company is currently re-evaluating whether to continue funding Beachport Digital
beyond the current calendar year and anticipates making a determination
regarding continued funding based upon 1997 holiday season sales.

MCGEE'S NEW MEDIA KID'S BIBLE

In April 1996, Beachport Digital entered into a software production
agreement with TLC Entertainment ('TLC'). The agreement provides that Beachport
Digital perform all software design, technological, and production services
necessary to complete a fully functional interactive CD-ROM product, tentatively
entitled 'McGee's New Bible for Kid's CD-ROM' (the 'McGee Product'). Pursuant to
the terms of Agreement, Beachport Digital will provide all equipment and
supplies and be solely responsible for any and all costs and expenses incurred,
and TLC is responsible for securing distribution outlets for the McGee Product
and the McGee character and the animation necessary to complete the project.

A joint CD-ROM computer project between Beachport Digital, Tyndale and TLC
will feature the well known animated character McGee of 'McGee and Me.' Tyndale,
a division of the International Bible Society, is best known for its paraphrased
release of 'The Living Bible' which has sold over 40 million copies. TLC's
animated character, McGee, has starred in the series of 13 videos of 'McGee and
Me' and sold approximately 2.5 million individual videos. The Company
anticipates that the Beachport Digital's CD-ROM family entertainment computer
game will be released the fourth quarter of 1997. The game will include the
following features: Early Reader, Paint, Draw, Puzzle, Trivia, Digitized Video
Animation and CD-ROM sound. See ' -- Current Technology,' for explanation.

Tyndale has agreed to serve as the religious distributor of the McGee
Product. The production budget for this project is approximately $150,000 of
which Tyndale has advanced $50,000, with the balance of the remaining $100,000
to be funded by TLC and Beachport Digital. Any additional advances that are able
to be secured through new or existing distributors will be equally split with
Tyndale, and thereafter, all remaining funds will be equally divided between TLC
and Beachport Digital.

SAFE HOUSE

Beachport Digital prepared the computer enhanced digital effects for the
feature film 'Safe House' in conjunction with FilmQuest Pictures and Showtime.
Beachport Digital provided all the on-screen digital effects sequences including
the remote video surveillance scenes, Perimeter Security, Internet Access, Data
Security, Data Archiving, E-Mail, Medical Website Visuals and Global Data Bomb.
The Company received a fee of $35,000 for the project.

EMPLOYEES

As of September 1997, the Company had 52 full-time employees of whom 11 are
employed in executive positions, 30 are show performers and related personnel, 3
concession personnel and 8 are employed in general or administrative positions.
The Company has 3 part-time employees and hires part-time employees on a
contract basis to choreograph and perform in the Company's performances.

LEGAL PROCEEDINGS

The Company is not currently subject to any material legal proceedings.

In July 1997, Beachport, Stuart Benjamin Productions, Sidney Shlenker and
Stuart Benjamin entered into a settlement agreement with JB Oxford & Company,
RKS Financial Group, Inc. and JB Oxford Holdings, Inc. in which Beachport
received approximately $1,300,308 and 22,500 shares of common stock of JB Oxford
Holdings, Inc.

<PAGE>
<PAGE>
PROPERTIES

The Company's principal executive offices are located in approximately
2,100 square feet in Los Angeles, California. The Company's entered into a
sublease agreement, dated May 30, 1996. The sublease agreement terminated on May
31, 1997 and the Company is currently a month to month tenant, at an annual rent
of approximately $41,000. The Company is actively looking for new executive
offices and intends to move its office before the end of this year and
anticipates its rent increasing by 50 to 100%.

<PAGE>
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the
directors and executive officers of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------------------- --- --------------------------------------------------

<S> <C> <C>
Barry Mendelson.............................. 54 President, Chief Executive Officer, Director
Sidney Shlenker.............................. 60 Chairman of the Board
Robert L. Barland............................ 50 Vice President, Secretary, Treasurer, Chief
Financial Officer, Chief Accounting Officer
Linda Azarone................................ 40 Chief Operating Officer
Robert Wussler............................... 60 Director
Walter J. Richards........................... 49 Director
Ronald Wilson................................ 42 Director
Jeremiah J. Harris........................... 41 Director
Richard L. Tuch.............................. 43 Director
Gary Lashinsky............................... 57 Director
</TABLE>

The business experience of each of the directors and executive officers of
the Company for at least the last five years is as follows.

Sidney L. Shlenker has been a Director of the Company since January 1994
and Chairman of the Board since April 1994. From 1964 to the present, Mr.
Shlenker has created, produced, packaged and promoted an array of entertainment
events in this country and abroad, including Broadway musicals, television
specials, stadium concerts, heavy-weight championship fights, close circuit
television broadcasts, pay-per-view contests, major league baseball, and
professional basketball. Mr. Shlenker has also served on the Board of Directors
of Ringling Bros. Barnum & Bailey Circus. Mr. Shlenker was also the founding
partner of PACE Management Corporation, a large entertainment company. While
with PACE, Mr. Shlenker was appointed president and chief operating officer of
the Houston based Astrodomain Corporation. In this capacity, he was responsible
for the management and operations of Astroworld Hotels (1,000 rooms), Astrohall
(a 900,000 square foot exhibition and convention center), Astroarena (a 6,000
seat venue), Astroworld theme park, the Astrodome stadium and the Houston Astros
Baseball team. From 1981 to 1984, Mr. Shlenker was the majority owner of two
independent television stations in Houston and Dallas. From 1982 to 1985, Mr.
Shlenker was a minority owner of the Houston Rockets, an NBA basketball team. In
1985 he became majority owner of the Denver Nuggets franchise of the NBA. On May
27, 1993, Mr. Shlenker filed a bankruptcy petition in the United States
Bankruptcy Court, Southern District of Texas -- Houston Division, Case Number
93-44130-H2-7 which was discharged on September 29, 1994. The petition was filed
as a result of contingent liabilities incurred from debt associated with the
Pyramid Joint Venture project in Memphis, Tennessee, which filed bankruptcy
proceedings in July 1991. These liabilities were incurred as a result of the
Pyramid Joint Venture's removal by the City of Memphis and County of Shelby,
Tennessee, as manager of the Pyramid project and subsequent dissolution of the
Joint Venture.

Barry Mendelson has been the President and a Director of the Company since
July 1995 and Chief Executive Officer since October 1, 1996 and has been the
producer and owner of On Ice since 1991. See 'Business -- On Ice.' From 1988 to
1990, Mr. Mendelson was the executive vice president of Madison Square Garden
Enterprises, responsible for the development, direction, marketing, production
and management of over 300 events yearly in Madison Square Garden, the Felt
Forum, the Beacon Theater and other outside ventures. The events were primarily
in the music, family entertainment and sports field and included the Circus, Ice
Capades, Big East Basketball Championship, NBA All Star Game, Virginia Slims
Tennis Championships, Sesame Street, Muppets, Monster Trucks, Supercross, St
John's University Basketball, and a variety of musical concerts that alone
numbered close to 90 per year. Events also included concerts starring such
artists as Elton John, Sting, Eric Clapton, Whitney Houston and Prince. His
responsibilities also included producing events in Tokyo, Japan. Prior to 1988,
Mr. Mendelson was the managing partner and owner of Ticket Master Associates,
the computer ticket

<PAGE>
<PAGE>
operations for four Southern states, general partner of Saenger Performing Arts
Center, Inc. which owns the Saenger Theater, New Orleans, LA, an historic
landmark theater. In addition, Mr. Mendelson was also the owner and president of
Barry Mendelson Presents ('BMP'), a company which marketed and produced live
music, entertainment and sports events. BMP has produced over 600 events,
including Bruce Springsteen, Tina Turner, Harry Connick, Jr., Madonna, The
Rolling Stones, Bette Midler, Richard Pryor, Lionel Richie, Diana Ross, New Kids
on the Block, Rod Stewart, Phil Collins, Van Halen, Grand Prix Tennis,
Leonard/Hagler and Tyson/Spinks CCTV fights. Mr. Mendelson was also vice
president and then executive vice president of the NBA New Orleans Jazz
Basketball Team, responsible for marketing, advertising, public relationensing,
business affairs, promotions, and comptroller's office.

Robert L. Barland has been Vice President, Secretary, Treasurer, Chief
Financial Officer and Chief Accounting Officer of the Company since January
1994. Mr. Barland has 25 years of management experience. From 1991 to 1993, Mr.
Barland was a financial consultant for development and financial service
projects. From 1989 to 1991, Mr. Barland was employed by the Great American
Pyramid Joint Venture, a 5220 million public-private joint development project
which was formed to develop a 22,000 seat arena and theme park complex (the
'Pyramid Joint Venture'). He was responsible for the development of the
financial, computer and communication systems for the venture. In July 1991, the
Pyramid Joint Venture filed bankruptcy, as a result of its removal by the City
of Memphis and County of Shelby, Tennessee, as manager of the project. Prior to
1990, Mr. Barland was executive vice president and chief financial officer of
the National Basketball Association ('NBA') Denver Nuggets. He started with the
Denver Nuggets as its controller and his responsibilities expanded to include
financial management of Denver Nuggets and chief financial officer. Mr. Barland
was also the business manager of Denver Freightliner, Inc. a transportation
company, and general manager of Lion Truck Leasing, Inc., a truck leasing
company, in Denver, Colorado. He was a member of the Board of Directors and was
also responsible for the business operations of both companies which grew to $35
million dollars in sales annually prior to his departure. In addition, Mr.
Barland worked in the transportation leasing business for both the Hertz
Corporation -- Truck Leasing Division, a division of RCA and Ryder Truck Rental,
Inc.

Linda Azarone has been the Chief Operating Officer since October 1996. Ms
Azarone has 14 years of management experience in the entertainment industry in a
variety of capacities, including show development, marketing, advertising,
merchandising, planning and budgeting. From 1987 to 1988, Ms. Azarone was
director of finance for the Walt Disney Company's Consumer Products Division.
She was responsible for the strategic planning, budgeting, reporting, analysis
and control functions of the division. From 1988 to 1996, Ms. Azarone assumed
control of Walt Disney's relationship with the producers of Walt Disney's World
on Ice, first as director of marketing and then as vice president. In these
capacities, she supervised and supported the worldwide tours of shows attracting
audiences of close to 10 million annually.

Robert J. Wussler has been a Director and Vice Chairman of the Board of
Directors of the Company since January 1997. Mr. Wussler has been president and
chief executive officer of Affiliate Enterprises, Inc., a company owned by over
fifty media organizations which serves approximately 115 ABC television
affiliated stations covering in excess of fifty-five percent of U.S. TV
households. Since 1992, Mr. Wussler has also been the president and chief
executive officer of the Wussler Group, an international media company that
serves a broad spectrum of domestic and global media organizations. From 1989 to
1992, Mr. Wussler was president and chief executive officer of COMSAT Video
Enterprises, the largest provider of satellite delivered entertainment to the
U.S. lodging industry. From 1980 to 1989, Mr. Wussler held various positions,
including senior executive vice president and corporate executive vice president
for the Turner Broadcasting System ('TBS') and president of SuperStation WTBS.
Mr. Wussler provided broad leadership and business management to Cable News
Network (CNN), Headline News, TNT, the Atlanta Hawks, the Goodwill Games and TBS
Sports. Mr. Wussler managed all TBS staff functions. From 1978 to 1980, Mr.
Wussler was chairman and president of Pyramid Enterprises, Ltd., a television
production company producing syndicated programming for the international
marketplace, specializing in Japan, France and the former Soviet Union. From
1957 to 1978, Mr. Wussler held various positions for CBS, Inc., including
becoming the president of CBS Sports Division and CBS Television Network. He is
the 1992 recipient of the Television Arts and Sciences

<PAGE>
<PAGE>
Trustees award. He also has been presented with five national Emmy Awards, four
Awards for Cable Excellence and numerous international awards. Mr. Wussler is a
director of Command Performance Network and Command Entertainment, Inc., two
publicly traded companies in the United States and Canada.

Walter J. Richards has been a Director of the Company since October, 1994.
Since 1991, Mr. Richards has been a partner of White-Richards and Associates, a
marketing, public relations and financial consulting firm for public and private
organizations in Nashville, Tennessee. The firm also identifies areas of
opportunity for business enterprise participation and primarily services
companies in the Health Care Industry. From 1990 to 1991, Mr. Richards was chief
financial officer of the Pyramid Joint Venture. In July 1991, the Pyramid Joint
Venture filed bankruptcy, as a result of its removal by the City of Memphis and
County of Shelby, Tennessee, as manager of the project. Prior to 1990, Mr.
Richards was a minority owner of the Denver Nuggets, Inc., an NBA franchise, and
held the positions of vice chairman of the board of directors and chief
financial officer. Mr. Richards has been involved in community affairs both in
Denver, Colorado, and Memphis, Tennessee. He served on the District Attorney's
Crime Advisory Commission in Denver and on the boards of directors for the
following organization: Memphis Chamber of Commerce, Memphis Convention and
Visitors Bureau; Memphis in May; Memphis Orchestral Society; Planned Parenthood;
and Youth Villages.

Ronald Wilson has been a Director of the Company since 1994. Mr. Wilson is
presently a member of the Texas House of Representatives having been elected to
the House in 1976 at the age of twenty two. Rep. Wilson is currently in his
ninth term with the House and has served on a number of committees and as
chairman of Legislative Black Caucus. During the 72nd he served as chairman of
the Liquor Regulation Committee, was a member of the Ways & Means Committee, the
Legislative Council, the Committee on Redistricting and was Chairman of the
interim Select Committee on Rules. He has been involved in introducing
significant legislation for Texas citizens including bills establishing the
Texas Human Rights Commission. He also initially introduced, during the 68th
Legislative Session, a bill relating to the establishment and operation of a
state lottery which was subsequently reintroduced by Rep. Wilson. The lottery
measure successfully passed the House and Senate during the 72nd Legislative
First Called Special Session with a constitutional amendment being passed by
Texas citizens approving the lottery in November 1991. Rep. Wilson has taught
courses on Politics at the University of Texas and Texas Southern University. He
is also a partner of the Houston law firm of Fisher, Gallagher & Lewis.

Jeremiah J. Harris has been a Director of the Company since June 1996.
Since January 1, 1996, Mr. Harris has been chairman of Production Resource Group
('PRO'), a corporation which provides design, engineering and technical
services, production management, scenic fabrication, lighting, engineered show
action equipment and scenic motion control systems to theatrical shows, theme
parks, corporate and industrial events, retail and restaurant establishments.
Since 1982, Mr. Harris has been president and chief executive officer of PRO's
division, Harris Production Services where has was responsible for purchasing
and managing such events as Ronald Regan's Inaugural Ceremonies in 1985 and FFX
or the MOM Grand Hotel and Casino staring Michael Crawford in 1994. Since 1996,
Mr. Harris has been a director of F & D Scenery in Canada and Stage Technology
in England.

Richard L. Tuch has been a Director of the Company since February 1997.
Since 1996, Mr. Tuch has been a managing partner of Alpha Ventures, ARRT
Partners and Alpha Trading Partners, investment companies. In 1975, Mr. Tuch was
the founder and president of Leisure Time Marketing Corporation, a
manufacturer's representative company. Leisure Time was instrumental in
launching from a sales and marketing perspective, such companies as Imagic,
Nintendo, Worlds of Wonder and Yes! Entertainment. Mr. Tuch is a Board member of
African Medical Development, a Telemedicine Device Company. He is also a Board
member of the Newton Group, an assisted living development company.

Gary Lashinsky President of the Royal Lipizzaner Stallions, Inc., the
Company's wholly owned subsidiary has been a Director of the Company since July
1997. He commenced his professional career in 1960 with his father, producing
and promoting Ringling Bros. Barnum & Bailey Circus when it went from a tent to
a touring arena production. His involvement in family oriented attractions
through North America, South America, Europe and Australia includes such
presentations as the Ringling Bros.

<PAGE>
<PAGE>
Barnum & Bailey Circus, Ice Capades, Ice Follies, Holiday on Ice, Disney on
Parade, the Harlem Globetrotters, plus numerous Broadway theatrical productions,
including Yul Brynner in 'The King and I'. He has also produced concert tours of
popular recording artists, such as the Rolling Stones, The Who, Led Zepplin,
Olivia Newton-John, Elvis Presley and the Doors. In 1970, he produced his first
touring unit of the 'Wonderful World of Horses' starring the 'World Famous'
Royal Lipizanner Stallions, which has since played to millions of fans
throughout North America, South America, Puerto Rico, Mexico and the United
Kingdom. He has created two units of his Lipizanner Stallions show, one of which
will tour to approximately 140 cities in North America, the United Kingdom and
Australia during 1997 and which is currently touring North America and a second
unit which recently completed an extended engagement at the Excalibur Hotel and
Casino in Las Vegas, Nevada.

All directors hold office until the next annual meeting of shareholders or
until their successors are elected and qualified. Officers are appointed by the
Board of Directors and serve at the discretion of the Board. Messrs. Mendelson,
Barland, Shlenker and Lashinsky have employment agreements with the Company. See
'Employment Agreements.'

SIGNIFICANT EMPLOYEES

Christopher Riggs, has been president of Beachport Entertainment Digital
since 1995. He was president of Enigma Interactive, Inc., an inactive subsidiary
of the Company since its formation in 1993. From 1990 to 1993, he was President
of Radiance Software, an independent designer and developer of video games for
Sega and Nintendo Platforms. From 1989 to 1990, Mr. Riggs was director of
product development for CAPCOM USA, a company which produced Walt Disney,
MegaMan, and Streetfighter video games. Mr. Riggs, through his company Radiance
Group, Inc., has been responsible for the development of a number of video games
including, Where's Waldo, Darkwing Duck, Tail Spin, Andre Agassi-Tennis, Steven
Seagal's Final Option. Pursuant to an agreement dated October 11, 1995, Mr.
Riggs has agreed to finance the operations of Beachport Digital. All net
operating profits of the Beachport Digital are to be divided among the Company
and Riggs on a 60% - 40% basis, respectively, until the Company has received
$400,000 of credit for past investments and on a 50% - 50% basis thereafter.
Upon the sale or other disposition of Beachport Digital, Mr. Riggs would be
entitled to 40% of the proceeds thereof.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE.

The following table sets forth the annual and long-term compensation for
services in all capabilities to the Company for the three years ended December
31, 1996 of Barry Mendelson, the Company's President, Chief Executive Officer
and Chief Operating Officer. The Company did not pay any compensation exceeding
$100,000 to any other executive officers for the year ended December 31, 1996.
See 'Employment Agreements.'

<TABLE>
<CAPTION>
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- --------------------------------------------------------------------- ---- -------- -------- ------------

<S> <C> <C> <C> <C>
Barry Mendelson, President and Chief Executive Officer............... 1996 $200,000 $ -- $8,900
1995 $ 53,846 $ 22,275 $6,300
1994 $120,000 $130,000 $8,300
</TABLE>

The Company has no retirement, pension or profit sharing program for the
benefit of its directors, officers or other employees but the Board of Directors
may recommend one or more such programs for adoption in the future.

DIRECTOR COMPENSATION

Directors of the Company who are not salaried officers will receive a fee
of $500 for attending each Board meeting or meeting of a committee of the Board.
In addition, all directors will be reimbursed for their reasonable out-of-pocket
expenses incurred in connection with attending Board and committee meetings.

<PAGE>
<PAGE>
EMPLOYMENT AGREEMENTS

As of June 30, 1996, the Company entered into an employment agreement with
Barry Mendelson to serve as the Company's President and Chief Executive Officer
for a term of four years which agreement is subject to automatic one year
renewals unless earlier terminated. Pursuant to the terms of this agreement, Mr.
Mendelson is required to devote his full business time and attention to the
business of the Company. Mr. Mendelson will receive a base salary of $200,000
with subsequent increases in salary at the discretion of the Company's Board of
Directors. In addition to his base salary, Mr. Mendelson will receive 50% of the
fees generated by him as producer. Mr. Mendelson will also have the right to
participate in all benefit plans afforded or which may be afforded to other
executive officers during the term of the agreement including, without
limitation, group insurance, health, hospital, dental, major medical, life and
disability insurance, stock option plans and other similar fringe benefits. If
Mr. Mendelson dies or is unable to perform his duties on account of illness,
injury or other incapacity and the agreement is terminated, he or his legal
representative shall receive from the Company his normal monthly compensation
for a period of one year in the event of death and six additional months in the
event of illness, injury or other incapacity. Mr. Mendelson employment agreement
contains certain confidentiality and non-competition provisions. The Company has
$750,000 of key-man life insurance for the benefit of the Company on the life of
Mr. Mendelson.

In October 1996, the Company entered into an employment agreement with
Sidney Shlenker to serve as the Company's Chairman. The employment agreement is
for a five-year term and is subject to automatic one-year renewals unless
earlier terminated. Pursuant to the terms of this employment agreement, Mr.
Shlenker is required to devote his full business time and attention to fulfill
his duties and responsibilities to the Company. Mr. Shlenker's salary for the
term of his agreement will be an amount to be set by the Board of Directors of
the Company. Mr. Shlenker will also have the right to participate in all
benefits plans afforded or which may be afforded to other executive officers
during the term of the agreement including without limitation, group insurance,
health, hospital, dental, major medical, life and disability insurance, stock
option plans and other similar fringe benefits. If Mr. Shlenker dies or is
unable to perform his duties on account of illness, injury or other incapacity
and the agreement is terminated, he or his legal representative shall receive
from the Company his normal monthly compensation for a period of one year in the
event of death and six additional months in the event of illness, injuries or
other incapacity. Mr. Shlenker's employment agreement contains certain
confidentiality and non-competitive provisions. The Company has $750,000 of
key-man life insurance for the benefit of the Company on the life of Mr.
Shlenker.

In October 1996, the Company entered into an employment agreement with
Robert L. Barland to serve as the Company's Vice President, Secretary and
Treasurer. The employment agreement is for a one term and is subject to
automatic annual renewal unless earlier terminated. Pursuant to the terms of
this agreement, Mr. Barland is required to devote his full business time and
attention to fulfill his duties and responsibilities to the Company. Mr. Barland
will receive a base salary of $120,000 for the first year of the term of the
employment agreement and the Company's Board of Directors may subsequently
increase Mr. Barland's salary or pay discretionary bonuses as it deems
appropriate. Mr. Barland will also have the right to participate in all benefit
plans afforded or which may be afforded to other executive officers during the
term of the agreement including, without limitation, group insurance, health,
hospital, dental, major medical, life and disability insurance, stock option
plans and other similar fringe benefits. If Mr. Barland dies or is unable to
perform his duties on account of illness, injury or other incapacity and the
agreement is terminated, he or his legal representative shall receive from the
Company his normal monthly compensation for a period of one year in the event of
his death and six additional months in the event of illness, injury or other
incapacity. Mr. Barland's employment agreement contains certain confidentiality
and noncompetitive provisions.

As of July 1, 1997, the Company entered into an employment agreement with
Gary Lashinsky to serve as the Chairman and Chief Executive Officer of RLS. The
employment agreement is for a three year term and is subject to automatic annual
renewal unless earlier terminated. Pursuant to the terms of this agreement, Mr.
Lashinsky is required to devote his full business time and attention to fulfill
his duties and responsibilities to the Company. Mr. Lashinsky will receive a
base salary of $144,000 per annum and the Company's Board of Directors may
subsequently increase Mr. Lashinsky's salary or pay

<PAGE>
<PAGE>
discretionary bonuses as it deems appropriate. Mr. Lashinsky will also have the
right to participate in all benefit plans afforded or which may be afforded to
other executive officers during the term of the agreement including, without
limitation, group insurance, health, hospital, dental, major medical, life and
disability insurance, stock option plans and other similar fringe benefits. In
the event of Mr. Lashinsky's disability for a period of six consecutive months,
the Company is obligated to pay Mr. Lashinsky for a period of an additional six
months following delivery of a disability notice to him by the Company. In the
event of Mr. Lashinsky's death, the normal monthly compensation due him will be
payable to his estate for a period of one year. Mr. Lashinsky's employment
agreement contains certain confidentiality and noncompetitive provisions.

As of July 1, 1997, the Company entered into an employment agreement with
Elizabeth Lashinsky to serve as President of RLS. The employment agreement is
for a three year term and is subject to automatic annual renewal unless earlier
terminated. Pursuant to the terms of this agreement, Ms. Lashinsky is required
to devote her full business time and attention to fulfill her duties and
responsibilities to the Company. Ms. Lashinsky will receive a base salary of
$144,000 for per annum and the Company's Board of Directors may subsequently
increase Ms. Lashinsky's salary or pay discretionary bonuses as it deems
appropriate. Ms. Lashinsky will also have the right to participate in all
benefit plans afforded or which may be afforded to other executive officers
during the term of the agreement including, without limitation, group insurance,
health, hospital, dental, major medical, life and disability insurance, stock
option plans and other similar fringe benefits. In the event of Ms. Lashinsky's
disability for a period of six consecutive months, the Company is obligated to
pay Ms. Lashinsky for a period of an additional six months following delivery of
a disability notice to her by the Company. In the event of Ms. Lashinsky's
death, the normal monthly compensation due her will be payable to her estate for
a period of one year. Ms. Lashinsky's employment agreement contains certain
confidentiality and noncompetitive provisions.

OPTION PLAN

In June 1996, the Board of Directors adopted and the stockholders approved
the Option Plan. The Option Plan provides for the grant of incentive stock
options ('ISOs'), intended to qualify for preferential tax treatment under
Section 422 of the Internal Revenue Code of 1986, as amended, and nonstatutory
stock options ('NSOs') that do not qualify for such treatment. Only employees
(including officers and directors who are also employees) of the Company or any
of its subsidiaries are eligible to receive grants of ISOs. Employees, officers,
directors, consultants, contractors and advisers of the Company or any
subsidiary are eligible to receive grants of NSOs. The purpose of the Option
Plan is to attract and retain exemplary directors, employees, agents and
consultants. No options can be granted under the Option Plan at less than 100%
of the fair market value of the Company's securities on the date of grant.

The Option Plan provides that a maximum of 1,000,000 shares of common stock
may be issued upon the exercise of options granted under the Option Plan. If an
option granted under the Option Plan expires or terminates for any reason
without having been exercised in full, then the unpurchased shares subject to
that option will be available for additional option grants. As of the date of
this Prospectus, no options have been granted under the Option Plan.

The Option Plan is administered by the Board of Directors of the Company
which determines, in its discretion, among other things, the recipients of
grants, whether a grant will consist of ISOs or NSOs, or a combination thereof,
and the number of shares of common stock to be subject to such options. The
Board of Directors of the Company may, in its discretion, delegate its power,
duties and responsibilities under the Option Plan to a committee consisting of
two or more directors who are 'disinterested persons' within the meaning of Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended.

LIMITATIONS ON PERSONAL LIABILITY OF DIRECTORS AND OFFICERS

The Utah Revised Business Corporation Act, in general, allows corporations
to indemnify their directors and officers against expenses (including attorneys'
fees), judgments, fines and settlement

<PAGE>
<PAGE>
amounts actually and reasonably incurred by such person in connection with suits
or proceedings, if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation. In the case of a criminal action, the director or officer must have
had no reasonable cause to believe that person's conduct was unlawful. Under
current law, no indemnification may be made if in connection with a proceeding
or in the right of the corporation in which the director or officer was adjudged
to be liable to the corporation or that person derived an improper personal
benefit.

The Company's Certificate of Incorporation and By-Laws provided that the
Company shall indemnify its directors and officers to the fullest extent
permitted by Utah Law.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the common stock, as of the date of this Prospectus, by
(i) each person who is known by the Company to beneficially own more than 5% of
the common stock, (ii) each director of the Company, (iii) each of the Company's
named executive officers and (iv) all directors and executive officers of the
Company as a group.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(14)
------------------------------------------------------------------
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED BEFORE OWNED AFTER
THE OFFERING SHARES THE OFFERING
---------------------- OFFERED IN --------------------------
BENEFICIAL OWNER(14) NUMBER PERCENTAGE THE OFFERING NUMBER PERCENTAGE(15)
- ---------------------------------------------------- --------- ---------- ------------ --------- --------------

<S> <C> <C> <C> <C> <C>
Barry Mendelson(1).................................. 800,000 7.4% -- 800,000 4.7
Robert L. Barland(2)................................ 75,000 * -- 75,000 *
Linda Azarone(3).................................... 50,000 * 50,000 -- --
Walter J. Richards(4)............................... 120,000 1.1 10,000 110,000 1.0%
Sidney Shlenker(5).................................. 863,000 8.0 -- 863,000 5.0
Ronald Wilson(6).................................... 13,000 * 10,000 3,000 *
Jeremiah J. Harris(7)............................... 22,000 * 22,000 -- --
Robert Wussler(8)................................... 350,000 3.1 -- 350,000 2.0
Richard Tuch(9)..................................... 20,845 * 20,845 -- --
Gary Lashinsky(10).................................. 336,879 3.1 -- 336,879 2.0
Elizabeth Lashinsky(11)............................. 336,880 3.1 -- 336,880 2.0
Gary & Elizabeth....................................
Lashisky JTWROS(10)(11)............................. 35,461 * -- -- --
Wasserstein Perella Securities, Inc.(12)............ 600,000 5.3 600,000 -- --
Liviakis Financial Communications(13)............... 1,850,000 15.6 1,850,000 -- --
All executive officers and directors as a group (10
persons).......................................... 3,023,065 26.9 112,845 2,910,220 16.7%
</TABLE>

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

* less than one percent of the shares of Common Stock.

(1) Mr. Mendelson's business is 517 North Robertson Blvd., Suite 200, Los
Angeles, CA 90048. See 'Certain Transactions -- Transactions with Executive
Officers.'

(2) Mr. Barland's business address is 517 North Robertson Blvd., Suite 200, Los
Angeles, CA 90048.

(3) Include options to purchase 50,000 shares of common stock at $1.75 per
share. Mr. Azarone's business address is 517 North Robertson Blvd., Suite
200, Los Angeles CA 90048.

(footnotes continued on next page)

<PAGE>
<PAGE>
(footnotes continued from previous page)

(4) Include warrants to purchase to 10,000 shares of Common Stock at $.93 per
share. Mr. Richard's business address is 220 Athens Way #405, Nashville, TN
37228.

(5) Includes 777,000 shares of common stock owned by Mr. Shlenker's wife and
children for which Mr. Shlenker disclaims beneficial ownership of. Mr.
Shlenker's business address is 517 North Robertson Blvd., Suite 200, Los
Angeles, CA 90048.

(6) Includes warrants to purchase 10,000 shares of common stock exercisable at
$.93 per share and 3,000 shares of common stock owned by Mr. Wilson's
children. Mr. Wilson's business address is 24 Greenway Plaza #616, Weslayan
Tower, Houston, TX 77046.

(7) Includes options to purchase 12,000 shares of common stock at an exercise
price of $2.50 per share and options to purchase 10,000 shares of common
stock at $.93 per share. Mr. Harris's business address is 4170 W. Harmon
Avenue, Suite 6, Las Legas, Nevada.

(8) Includes options to purchase 200,000 shares of common stock at an exercise
price of $.50 per share and options to purchase 150,000 shares exercisable
at the lowest closing price for the year ended December 31, 1997 or any
date in 1997. Mr. Wussler's business address is 2 Wisconsin Circle, Chevy
Chase, MD 20815. Excludes options to purchase 150,000 of common stock
exercisable at the lowest closing price for the year ended December 31,
1998 or any date in 1998.

(9) Includes warrants to purchase 20,845 shares of Common Stock (15,000
exercisable at $1.20 and 5,845 exercisable at $1.375) Mr. Tuch's business
address is 6 Wells Avenue, Newton, MA 02159.

(10) Mr. Lashinsky's business address is 1053 Van Arsdale, Oveida FL 32765.

(11) Ms. Lashinsky's business address is 1053 Van Arsdale, Oveida FL 32765.

(12) Includes options to purchase 600,000 shares of common stock at $.25 per
share. Wasserstein Perella Securities, Inc.'s address is 31 West 52nd
Street, New York, NY 10019.

(13) Includes options to acquire 1,050,000 shares of the Company's common stock
at $1.120 per share. Liviakis Financial Communications business address is
2420 K Street, Sacramento, CA 95816-6149.

(14) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares indicated, subject to community property
laws where applicable. The number of shares of Common Stock outstanding
proir to the offering is 10,888,183. For purposes of this table, a person
or group of persons is deemed to have 'beneficial ownership' of any shares
which such person has the right to acquire within 60 days. For purposes of
computing the percentage of outstanding shares held by each person or group
of persons named above, any security which such person or group of persons
has the right to acquire within 60 days after such date is deemed to be
outstanding for the purpose of computing the percentage ownership for such
person or persons, but is not deemed to be outstanding for the purpose of
computing the percentage of ownership of any other person.

(15) Assumes all warrants and options are exercised and all shares of preferred
stock are converted.

SELLING SECURITYHOLDERS

Up to 9,182,775 Selling Securityholder's shares of common stock are being
offered by Selling Securityholders. The Company has agreed to bear all expenses
(other than underwriting or selling commissions or any fees and disbursements of
counsel to such Selling Securityholders) in connection with the registration of
their securities.

The following table sets forth certain information with respect to holders
for whom the Company is registering shares of common stock. Except as otherwise
indicated herein, none of the holders has held

<PAGE>
<PAGE>
any position or office or has had a material relationship with the Company or
any of its affiliates within the past three years. Except as set forth herein,
the Company believes that none of the holders listed below owns any other
securities of the Company.

<TABLE>
<CAPTION>
TOTAL SHARES SHARES OF
SHARES OF BENEFICIALLY COMMON STOCK SHARES BENEFICIALLY
COMMON STOCK OWNED PRIOR BEING OWNED AFTER THE
SHARES OF UNDERLYING TO OFFERING OFFERED REGISTRATION
COMMON WARRANTS/OPTIONS & ------------------- ------------ --------------------
BENEFICIAL OWNER STOCK PREFERRED STOCK(1) NUMBER PERCENT NUMBER TOTAL NUMBER %
- ----------------------------- --------- ------------------ --------- ------- ------------ ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
155964 Canada, Inc. ......... -- 17,383 17,383 * 17,383 0 --
Abramowitz Michael........... -- 11,000 11,000 * 11,000 0 --
Adler, Gerald A.(2).......... -- 200,000 200,000 1.82% 200,000 0 --
Agranoff, Gerald............. -- 11,000 11,000 * 11,000 0 --
Alex Segal Family Trust...... 100,000 -- 100,000 * 100,000 0 --
Alpha Ventures, LLC.......... -- 83,311 83,311 * 83,311 0 --
Ardinger, H. T. Jr. ......... -- 11,000 11,000 * 11,000 0 --
Arizona National Resources... -- 7,480 7,480 * 7,480 0 --
Astaire & Partners, Ltd. .... -- 552,141 552,141 4.87% 552,141 0 --
Atlanta Allergy & Asthma..... -- 22,000 22,000 * 22,000 0 --
Azaronne, Linda(3)........... -- 50,000 50,000 * 50,000 0 --
Block Michael................ -- 22,000 22,000 * 22,000 0 --
BlueStone Capital
Partners(4)................ -- 173,150 173,150 1.74% 173,150 0 --
Blum, Edis................... -- 1,100 1,100 * 1,100 0 --
Cahill, Jim.................. -- 15,000 15,000 * 15,000 0 --
Chanowski, Fred.............. 15,000 15,000 * 15,000 0 --
Chasanoff, Ted............... -- 2,750 2,750 * 2,750 0 --
Clarke Kevin, IRA............ -- 5,500 5,500 * 5,500 0 --
Cohen Murray................. -- 5,500 5,500 * 5,500 0 --
Cohen, Robert................ -- 10,000 10,000 * 10,000 0 --
Comings William/Margaret..... -- 5,500 5,500 * 5,500 0 --
Curnyn Arnold................ -- 22,000 22,000 * 22,000 0 --
Dana Investments............. -- 3,689 3,689 * 3,689 0 --
Darienzo Ralph A. ........... -- 5,500 5,500 * 5,500 0 --
Decter Irving................ -- 5,500 5,500 * 5,500 0 --
Deluca Gary.................. -- 125,000 125,000 1.15% 125,000 0 --
Dembow George F. ............ -- 7,260 7,260 * 7,260 0 --
Dembow George F. III......... -- 7,260 7,260 * 7,260 0 --
DLJ f/b/o Francis E.
Lammers.................... 19,575 15,000 34,575 * 34,575 0 --
Lowell H. Dubrow Trust....... 55,000 -- 55,000 * 55,000 0 --
Domeco Venture............... -- 5,500 5,500 * 5,500 0 --
Edelman Darryll and Kagan
Lawrence................... -- 5,500 5,500 * 5,500 0 --
Fatoullah Carol.............. -- 2,750 2,750 * 2,750 0 --
Fatoullah Elliott............ -- 2,750 2,750 * 2,750 0 --
Fedler Anthony............... -- 11,000 11,000 * 11,000 0 --
FIBI Bank (Schweiz) AG....... -- 22,000 22,000 * 22,000 0 --
Fin-Atlantic Corporation..... 218,750 -- 218,750 2.03% 218,750 0 --
Flynn Robert A. ............. 47,170 -- 47,170 * 47,170 0 --
Freundlich Kenneth........... -- 50,000 50,000 * 50,000 0 --
FYJIGIM, Inc. ............... 50,000 -- 50,000 * 50,000 0 --
Galterio Robert J. .......... 36,098 30,000 66,098 * 66,098 0 --
Goldman Harvey............... 7,375 -- 7,375 * 7,375 0 --
Goldstein Michael............ -- 5,500 5,500 * 5,500 0 --
Goodman Allen................ -- 15,000 15,000 * 15,000 0 --
Gopen Robert L. ............. -- 15,000 15,000 * 15,000 0 --
Grillo Joan.................. -- 5,500 5,500 * 5,500 0 --
Gross John IRA............... -- 2,750 2,750 * 2,750 0 --
Harris-Forbes, Inc........... 169,256 169,256 * 169,256 0 --
</TABLE>

(table continued on next page)

<PAGE>
<PAGE>
(table continued from previous page)

<TABLE>
<CAPTION>
TOTAL SHARES SHARES OF
SHARES OF BENEFICIALLY COMMON STOCK SHARES BENEFICIALLY
COMMON STOCK OWNED PRIOR BEING OWNED AFTER THE
SHARES OF UNDERLYING TO OFFERING OFFERED REGISTRATION
COMMON WARRANTS/OPTIONS & ------------------- ------------ --------------------
BENEFICIAL OWNER STOCK PREFERRED STOCK(1) NUMBER PERCENT NUMBER TOTAL NUMBER %
- ----------------------------- --------- ------------------ --------- ------- ------------ ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Harari Chaya................. -- 2,750 2,750 * 2,750 0 --
Harris Jeremiah J.(5)........ -- 22,000 22,000 * 22,000 0 --
Harrison C. Scott............ 94,340 -- 94,340 * 94,340 0 --
Hight Norton F. ............. -- 5,500 5,500 * 5,500 0 --
Hight Randall................ -- 5,500 5,500 * 5,500 0 --
Hodas Martin................. -- 11,000 11,000 * 11,000 0 --
Hoffstein Richard A. ........ -- 22,000 22,000 * 22,000 0 --
Hogan, Mike.................. -- 20,000 20,000 * 20,000 0 --
Hughes Judy C. .............. 36,000 -- 36,000 * 36,000 0 --
Jaffoni & Collins............ -- 75,000 75,000 * 75,000 0 --
Janssen Peter................ 20,000 470,000 490,000 4.44% 490,000 0 --
Karfunkel George............. -- 11,000 11,000 * 11,000 0 --
Kroning Greg................. -- 100,000 100,000 * 100,000 0 --
Kroning, Harry............... -- 40,000 40,000 * 40,000 0 --
Laidlaw Securities........... -- 40,000 40,000 * 40,000 0 --
Lammers, Tom................. -- 10,000 10,000 * 10,000 0 --
Lazar Ronald & Barbara....... -- 2,750 2,750 * 2,750 0 --
Lerman Roy................... -- 40,000 40,000 * 40,000 0 --
Levesque Gerald S. .......... -- 15,000 15,000 * 15,000 0 --
Levine Jerry................. -- 5,500 5,500 * 5,500 0 --
Levine Mark J. .............. -- 15,000 15,000 * 15,000 0 --
Levy Benton.................. -- 50,000 50,000 * 50,000 0 --
Liviakis Financial
Communications(6).......... 800,000 1,050,000 1,850,000 15.64% 1,850,000 0 --
Longmoore John T. ........... 11,000 11,000 * 11,000 0 --
Lotner Gary Z. .............. 5,500 5,500 * 5,500 0 --
Love Richard................. 100,000 100,000 * 100,000 0 --
Lowrie Management, Ltd....... 11,000 11,000 * 11,000 0 --
Lucchese Joseph.............. 8,250 8,250 * 8,250 0 --
Lulloff Rolf ................ 78,729 60,000 138,729 1.28% 78,729 0 --
Lyons Community Property..... 102,000 102,000 * 102,000 0 --
Mallory Factor............... 60,000 60,000 * 60,000 0 --
Malone Robert E. ............ 5,500 5,500 * 5,500 0 --
Marks Roger P. .............. 2,750 2,750 * 2,750 0 --
Merel Mark................... 16,500 16,500 * 16,500 0 --
Miller Gary.................. 5,500 5,500 * 5,500 0 --
Millman Paul M. ............. 2,750 2,750 * 2,750 0 --
Mosberg Robert............... 39,801 39,801 * 39,801 0 --
Moseson Rivka Perlstein...... 151,752 120,000 271,752 2.49% 271,752 0 --
O'Brien, Mike................ 10,000 10,000 * 10,000 0
Organization Services........ 11,000 11,000 * 11,000 0 --
Pamnani Sanjeev.............. 22,000 22,000 * 22,000 0 --
Parner Harriet............... 11,000 11,000 * 11,000 0 --
Parnes Alan.................. 22,000 22,000 * 22,000 0 --
Parnes Irwin................. 11,000 11,000 * 11,000 0 --
Pocisk George B. ............ 11,000 11,000 * 11,000 0 --
Polak Anthony G. ............ 5,500 5,500 * 5,500 0 --
Polak Fredrick B. ........... 5,500 5,500 * 5,500 0 --
Polak Jack, Keogh............ 5,500 5,500 * 5,500 0 --
Prag Robert B. .............. 200,000 350,000 550,000 4.94% 550,000 0 --
Re Charles, G. .............. 5,500 5,500 * 5,500 0 --
Reinartz Jchuda.............. 5,500 5,500 * 5,500 0 --
</TABLE>

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<PAGE>
<PAGE>
(table continued from previous page)

<TABLE>
<CAPTION>
TOTAL SHARES SHARES OF
SHARES OF BENEFICIALLY COMMON STOCK SHARES BENEFICIALLY
COMMON STOCK OWNED PRIOR BEING OWNED AFTER THE
SHARES OF UNDERLYING TO OFFERING OFFERED REGISTRATION
COMMON WARRANTS/OPTIONS & ------------------- ------------ --------------------
BENEFICIAL OWNER STOCK PREFERRED STOCK(1) NUMBER PERCENT NUMBER TOTAL NUMBER %
- ----------------------------- --------- ------------------ --------- ------- ------------ ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Richards Walter J.(7)........ 10,000 10,000 * 10,000 0 --
RL Capital Partners.......... 11,000 11,000 * 11,000 0 --
Roman Steve.................. -- 5,500 5,500 * 5,500 0 --
Rooney Timothy J. ........... 108,831 90,000 198,831 1.82% 198,831 0 --
Ross Alfred S. .............. -- 83,399 83,399 * 83,399 0 --
Rothschild Jonathan.......... -- 22,000 22,000 * 22,000 0 --
Sandgrain Securities,
Inc.(8).................... -- 300,000 300,000 2.71% 300,000 0 --
Santero John F. ............. -- 100,946 100,946 * 100,946 0 --
Scheinfeld Mark.............. -- 11,000 11,000 * 11,000 0 --
Schmidt Ronald............... -- 44,000 44,000 * 44,000 0 --
Serafino, Victor C........... 10,000 10,000 * 10,000 0 --
SES Family Trading........... -- 110,000 110,000 1.01% 110,000 0 --
Seybold Wayne................ 25,000 25,000 50,000 * 50,000 0 --
Shapiro Irwin................ -- 5,500 5,500 * 5,500 0 --
Silver Bruce A. ............. -- 1,100 1,100 * 1,100 0 --
Silverstein, Larry........... -- 10,000 10,000 * 10,000 0 --
Silverstein Lee H. .......... -- 11,000 11,000 * 11,000 0 --
Sitnycky Nicholas............ -- 11,000 11,000 * 11,000 0 --
Smyth Thomas D. ............. 155,855 120,000 275,855 2.53% 275,855 0 --
South Ferry II, L. P. ....... 193,179 150,000 343,179 3.14% 343,179 0 --
Spangler Dennis L. .......... -- 22,000 22,000 * 22,000 0 --
Stadtmauer Gary.............. -- 5,500 5,500 * 5,500 0 --
Stadtmauer Murry............. -- 5,500 5,500 * 5,500 0 --
Steinberg Arthur IRA......... -- 16,500 16,500 * 16,500 0 --
Szikman Michael.............. -- 5,500 5,500 * 5,500 0 --
Tarica Michele............... -- 5,500 5,500 * 5,500 0 --
Taub Israel IRA.............. -- 2,750 2,750 * 2,750 0 --
Teuma David C. .............. -- 10,000 10,000 * 10,000 0 --
Thompson Orville K. RLT...... -- 11,000 11,000 * 11,000 0 --
Tuch Family Ltd
Partnership(9)............. -- 20,845 20,845 * 20,845 0 --
Wasserman Eric............... -- 50,000 50,000 * 50,000 0 --
Wasserstein & Perella
Securities, Inc.(10)....... -- 600,000 600,000 5.27% 600,000 0 --
Waterman Daniel.............. -- 11,000 11,000 * 11,000 0 --
Weiner Myron................. -- 5,500 5,500 * 5,500 0 --
Wellington Corp.............. -- 30,000 30,000 * 30,000 0 --
Wiley Tom.................... -- 10,000 10,000 * 10,000 0 --
Wilson Ronald(11)............ -- 10,000 10,000 * 10,000 0 --
Wolfson Paul ................ -- 22,000 22,000 * 22,000 0 --
Zuck Alfred C. .............. -- 5,500 5,500 * 5,500 0 --
Zung Murry .................. -- 11,000 11,000 * 11,000 0 --
--------- ------------------ --------- ------------
2,728,711 6,454,064 9,182,775 9,182,775
</TABLE>

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

* Less than 1.0% Beneficial Ownership.

(1) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares indicated, subject to community property
laws where applicable. The number of shares of Common Stock outstanding
proir to the offering is 10,888,183. For purposes of this table, a person
or group of persons is deemed to have 'beneficial ownership' of any shares
which such person has the right to acquire within 60 days. For purposes of
computing the percentage of outstanding shares held by each person or group
of persons named above, any security which such person or group of

(footnotes continued on next page)

<PAGE>
<PAGE>
(footnotes continued from previous page)
persons has the right to acquire within 60 days after such date is deemed
to be outstanding for the purpose of computing the percentage ownership for
such person or persons, but is not deemed to be outstanding for the purpose
of computing the percentage of ownership of any other person.

(2) Mr. Adler is a partner of Bondy & Schloss LLP, counsel to the Company.

(3) Ms. Azaronne is the Chief Operating Officer of the Company and has agreed
not to sell said shares for a period of one year from the effective date.

(4) BlueStone Capital Partners acted as placement agent for the Company in
connection with the placement of the Company's June 1997 offering of senior
and junior debt and continues to provide investment banking services to the
Company.

(5) Mr. Harris is a Director of the Company.

(6) Liviakis Financial Communications provides financial public relations for
the Company.

(7) Mr. Richards is a Director of the Company.

(8) Sandgrain, Inc. is a business and financial consultant to the Company.

(9) Mr. Tuch is a Director of the Company and a partner of the Tuch Family Ltd.
Partnership.

(10) Wasserstein & Perella Securities, Inc. has acted and continues to advise
the Company in connection with potential mergers and acquisitions.

(11) Mr. Wilson is a Director of the Company.

The Selling Securityholders can only sell their Shares as long as a current
registration statement is in effect and as long as they deliver a current
Prospectus to the purchaser.

CERTAIN TRANSACTIONS

TRANSACTIONS WITH EXECUTIVE OFFICERS

In June 1995, the Company entered into an option agreement with On Ice and
Barry Mendelson, the Company's President and Chief Executive Officer, pursuant
to which the Company acquired an option to purchase, subject to the terms and
conditions contained therein, all of the issued and outstanding shares of
capital stock of On Ice for $500,000 and 800,000 shares of common stock of the
Company. Upon exercise of the option, the Company further agreed to reimburse
Mr. Mendelson the funds he advanced for On Ice's 1995 operating expenses
aggregating $552,500. All such reimbursements are to be paid out of operating
profits of On Ice. The Company entered into an option exercise agreement dated
as of July 1996 and exercised said option. Mr. Mendelson, pursuant to the terms
of the option agreement is entitled to receive 50% of any fees generated by him
as a producer of Company related projects. As of June 30, 1996, the Company
entered into an employment agreement with Barry Mendelson. See
'Management -- Employment Agreement'.

In August 1996, the Company issued Jeremiah Harris, a Director of the
Company, an option to purchase 12,000 shares of common stock at an option price
of $2.50 per share which expires on August 15, 1999, in consideration for Mr.
Harris agreeing to serve on the Board of Directors of the Company.

On October 11, 1996, the Company issued Linda Azarone, the Company's Chief
Operating Officer, to purchase 50,000 shares of common stock at an exercise
price of $1.75 per share which warrants expire on September 30, 1999, for
services rendered.

On December 27, 1996, the Company issued to Robert Wussler, a Director of
the Company, an option to purchase 500,000 shares of Common Stock of which
200,000 options are exerciseable at $.50 per share and expire on December 27,
1999, 150,000 options are exerciseable at the lowest closing bid price of the
common stock for the year ended December 31, 1997 or three years from any other
date he selects to exercise his options in 1997 and expire three years from such
date and 150,000 options are exerciseable at the lowest closing bid price of the
common stock for the year ended December 31, 1998 or three years from any other
date he selects to exercise his options in 1998 and expire three years from such
date, in consideration for his agreeing to become a Director of the Company.

<PAGE>
<PAGE>
During December 1996, ESL borrowed $74,319 from its profit sharing account.
The current balance of the outstanding loan is $71,353.

On January 17, 1997, the Company issued options to purchase 10,000 shares
of common stock at an exercise price of $.93 per share which options expire on
January 17, 2000 each to Jeremiah Harris, Ronald Wilson and Walter J. Richards,
for services rendered as members of the Company's Board of Directors.

On July 1, 1997, the Company issued 336,879 shares of common stock to Gary
Lashinsky, 336,880 shares of common stock to Elizabeth Lashinsky and 35,461
shares of common stock to Gary and Elizabeth Lashinsky, as joint tenants, all in
connection with the merger of ESL into RSL, a wholly owned subsidiary of the
Company. On October 9, 1997, 100,000 shares were returned to the Company
pursuant to a Settlement Agreement regarding the modification of the initial
Merger Agreement.

PLAN OF DISTRIBUTION

The Company will not receive any proceeds from the sale of the Shares by
the Selling Securityholders; however, the Company will receive proceeds from the
issuance of shares of common stock upon the exercise of the warrants and options
ranging from $.25 to $5.00 per share. If the warrants and options are exercised
in full, the Company will receive 7,136,532 of gross proceeds therefrom. Each of
the Selling Securityholders may sell Shares directly or through broker-dealers
who may act solely as agents, or who may acquire Shares as principals. The
Shares may be sold from time to time by the Selling Securityholders, or by
pledgees, donees, transferees or other successors in interest to the Selling
Securityholders. The distribution of the Shares may be affected in one or more
transactions that may take place through the NASD over-the-counter bulletin
board, including block trades or ordinary broker's transactions, or through
privately negotiated transactions, or through a combination of any such methods
of sale, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the Selling
Securityholders in connection with such sales.

The aggregate proceeds to the Selling Securityholders from the sale of the
Shares will be the purchase price of the Shares sold less the aggregate agents'
commissions and other expenses of issuance and distribution not borne by the
Company. The Selling Securityholders and any dealers or agents that participate
in the distribution of the Shares may be deemed to be 'underwriters' within the
meaning of the Securities Act, and any profit on the sale of the Shares by them
and any commissions received by any such dealers or agents may be deemed to be
underwriting discounts and commissions under the Securities Act.

The Selling Securityholders may effect transactions by selling the Shares
directly or through broker-dealers acting either as principal or as agent, and
such broker-dealers may receive compensation in the form of usual and customary
or specifically negotiated underwriting discounts, concessions or commissions
from the Selling Securityholders.

The Company will bear all of the expenses of registration of the Shares
under the Federal and state securities laws, including filing fees. Such
expenses payable by the Company are currently estimated to be $100,000.

Pursuant to certain agreements, the Company has agreed to indemnify the
Selling Securityholders against certain liabilities, including certain potential
liabilities under the Securities Act, or to contribute to payments the Selling
Securityholders may be required to make in respect thereof.

DESCRIPTION OF SECURITIES

The Company's authorized capital consists of 50,000,000 shares of common
stock, par value $.002 per share, and 1,000,000 shares of Preferred Stock, $1.00
par value.

COMMON STOCK

As of the date of this Prospectus, the Company had outstanding 10,888,183
shares of common stock. Each share of common stock is entitled to one vote at
all meetings of shareholders. Shareholders

<PAGE>
<PAGE>
are not permitted to cumulate votes in the election of directors. All shares of
common stock are equal to each other with respect to liquidation rights and
dividend rights. There are no preemptive rights to purchase any additional
common stock. In the event of liquidation, dissolution or winding up of the
Company, holders of the common stock will be entitled to receive on a pro rata
basis all assets of the Company remaining after satisfaction of all liabilities
and preferences of the outstanding Preferred Stock. The outstanding shares of
common stock are duly and validly issued, fully paid and nonassessable.

PREFERRED STOCK

As of September 30, 1997, the Company had outstanding 6 shares of Preferred
Stock. Additional Preferred Stock may be issued from time to time in one or more
series with such designations, voting powers, if any, preferences and relative,
participating, optional or other special rights, and such qualifications,
limitations and restrictions thereof, as are determined by resolution of the
Board of Directors. The Company has filed a statement of designation of rights
and preferences in which a series of preferred stock consisting of 240 shares
has been designated as 10% Non-Voting Cumulative Convertible Preferred Stock,
$1.00 par value.

TRANSFER AND WARRANT AGENT

The Company has retained Fidelity Transfer Company, 1800 S. West Temple,
Suite 301, Salt Lake City, Utah 84115, as Transfer Agent for its common stock.

MARKET PRICES OF COMMON STOCK

The Company's common stock is traded on the OTC Electronic Bulletin Board
and in the over-the-counter market 'pink sheets' under the symbol 'BPRT.' The
following table sets forth the range of the quarterly high and low bid prices,
as reported by the National Quotation Bureau, Incorporated.

<TABLE>
<CAPTION>
CALENDAR QUARTER HIGH LOW
- ----------------------------------------------------------------------------- ----- -----

<S> <C> <C>
First Quarter 1995........................................................... $ .38 $ .05
Second Quarter 1995.......................................................... $ .13 $ .03
Third Quarter 1995........................................................... $2.50 $ .25
Fourth Quarter 1995.......................................................... $5.38 $ .38
First Quarter 1996........................................................... $4.94 $3.25
Second Quarter 1996.......................................................... $4.30 $3.63
Third Quarter 1996........................................................... $3.63 $1.31
Fourth Quarter 1996.......................................................... $2.13 $1.00
First Quarter 1997........................................................... $1.63 $1.00
Second Quarter 1997.......................................................... $2.28 $1.03
Third Quarter 1997........................................................... $2.63 $1.63
</TABLE>

On October 28, 1997, the closing bid price of the Common Stock as reported
on the over-the-counter Electronic Bulletin Board was $1.44.

SHARES ELIGIBLE FOR FUTURE SALE

All Shares of common stock being offered hereby will be immediately
tradable without restriction or further registration under the Securities Act.
The outstanding Shares of common stock include 3,119,295 Shares of common stock
outstanding deemed to be 'restricted securities,' as that term is defined under
Rule 144 promulgated under the Securities Act, in that such Shares were
purchased or acquired by such stockholders of the Company in transactions not
involving a public offering, and, as such, may only be sold pursuant to a
registration statement under the Securities Act, in compliance with the
exemption provisions of Rule 144, or pursuant to another exemption under the
Securities Act. Substantially all of such restricted Shares of common stock are
eligible for sale under Rule 144, subject to the volume limitations prescribed
by the Rule.

<PAGE>
<PAGE>
In general, under Rule 144 as currently in effect, a shareholder, including
an affiliate of the Company, may sell shares of Common Stock after at least one
year has elapsed since such shares were acquired from the Company or an
affiliate of the Company. The number of shares of common stock which may be sold
within any three-month period is limited to the greater of one percent of the
then outstanding common stock or the average weekly trading volume in the common
stock during the four calendar weeks preceding the date on which notice of such
sale was filed under Rule 144. Certain other requirements of Rule 144 concerning
availability of public information, manner of sale and notice of sale must also
be satisfied. In addition, a shareholder who is not an affiliate of the Company
(and who has not been an affiliate of the Company for 90 days prior to the sale)
and who has beneficially owned shares acquired from the Company or an affiliate
of the Company for over two years may resell the shares of common stock without
compliance with the foregoing requirements under Rule 144.

No predictions can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the common stock prevailing from time to time. Nevertheless, sales of
substantial amounts of common stock, or the perception that such sales may
occur, could have a material adverse effect on prevailing market prices and
could impair the Company's ability to raise capital through the sale of its
equity securities.

LEGAL MATTERS

The validity of the Shares offered hereby will be passed upon for the
Company by Bondy & Schloss LLP, New York, New York. Gerald A. Adler, a partner
of Bondy & Schloss LLP has warrants to purchase 200,000 shares of Common Stock
of the Company exercisable at $.93 per share. See 'Selling Securityholders.'

EXPERTS

The audited consolidated balance sheet of the Company as of December 31,
1996, the audited consolidated income statements, cash flow and stockholders,
equity for the years ended December 31, 1996 and 1995 have been included herein
and in the Registration Statement in reliance upon the report, appearing
elsewhere herein, of Malone & Bailey, PLLC, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing. The audited balance sheet of The Royal Lipizzaner Stallions, Inc. as
at December 31, 1996 and the audited income statements, cash flow and
stockholders' equity for the years ended December 31, 1996 and 1995 have been
included herein and in the Registration Statement in reliance upon the report,
appearing elsewhere herein, of Van Buren & Hauke, LLC, independent certified
public accountant and upon the authority of said firm as experts in accounting
and auditing.

ADDITIONAL INFORMATION

The Company has filed a Registration Statement on Form SB-2 under the
Securities Act, with the Securities and Exchange Commission (the 'Commission'),
with respect to the Shares offered hereby. This Prospectus does not contain all
of the information set forth in or annexed as exhibits to the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and this Offering, reference is made to the Registration Statement,
including the financial statements, exhibits and schedules, copies of which may
be obtained at prescribed rates from the Commission at its principal office at
450 Fifth Street, N.W. Washington D.C. 20549, or at its New York regional office
at 7 World Trade Center, Suite 1300, New York, New York 10048. Electronic
registration statements made through the Electronic Data Gathering, Analysis and
Retrieval System are publicly available through the Commission's web site
(http://www.sec.gov). Statements contained in this Prospectus as to the contents
of any contract, agreement or other document filed as an exhibit to the
Registration Statement are not necessarily complete and each such description is
qualified by reference to such agreement, contract or document.

Prior to this Offering, the Company has not been a reporting company under
the Exchange Act. Reports and other information filed by the Company may be
inspected and copied at the public reference facilities of the Commission at 450
Fifth Street, N.W. Washington D.C. 20549 and at the regional offices referred to
above, and copies of such material can be obtained from the public reference
section of the Commission, Washington, D.C. 20549 at prescribed rates.

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE NO.
--------

<S> <C>
BEACHPORT ENTERTAINMENT CORPORATION
Independent Accountants' Report................................................................... F-2
Consolidated Balance Sheet as at December 31, 1996................................................ F-3
Consolidated Income Statements For the Years Ended December 31, 1996 and 1995..................... F-4
Consolidated Statements of Stockholders' Equity For the Years Ended December 31, 1996 and 1995.... F-5
Consolidated Statements of Cash Flows For the Years Ended December 31, 1996 and 1995.............. F-6
Notes to Financial Statements..................................................................... F-8
BEACHPORT ENTERTAINMENT CORPORATION (UNAUDITED)
(These interim financial statements have not been audited or reviewed by the Company's independent
accountants.)
Consolidated Balance Sheet as at June 30, 1997.................................................... F-13
Consolidated Income Statements For the Six Months Ended June 30, 1997 and 1996.................... F-14
Consolidated Statements of Stockholders' Equity For the Six Months Ended June 30, 1997 and 1996... F-15
Combined Statements of Cash Flows For the Six Months Ended June 30, 1996 and 1995................. F-16
Notes to Financial Statements..................................................................... F-17
ENTERTAINMENT SPECIALISTS LTD., INC.
Report of Independent Certified Public Accountants................................................ F-18
Balance Sheets as at December 31, 1996 and 1995 and June 30, 1997 and 1996 (Unaudited)............ F-19
Statements of Operations and Retained Earnings (Deficit) For the Year Ended December 31, 1996 and
1995 and for the Six Months Ended June 30, 1997 and 1996......................................... F-20
Statements of Cash Flows For the Year Ended December 31, 1996 and 1995 and for the Six Months
Ended June 30, 1997 and 1996 (Unaudited)......................................................... F-21
Notes to Financial Statements..................................................................... F-22
PRO FORMA FINANCIAL STATEMENTS
Pro Forma Consolidated Condensed Balance Sheet as at June 30, 1997 (Unaudited).................... F-26
Pro Forma Consolidated Statements of Income For the Year Ended December 31, 1996 and for the Six
Months Ended June 30, 1997 (Unaudited)........................................................... F-27
Notes to Pro Forma Consolidated Statements of Income and Condensed Balance Sheet.................. F-29
</TABLE>

F-1

<PAGE>
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT

May 30, 1997

To the Board of Directors and Stockholders of
BEACHPORT ENTERTAINMENT CORPORATION
Los Angeles, California

We have audited the accompanying consolidated balance sheets of Beachport
Entertainment Corporation (formerly Omni International Corporation) and
subsidiaries as of December 31, 1996 and the related consolidated statements of
income, stockholders' equity and cash flows for the two years then ended. 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Beachport
Entertainment Corporation and subsidiaries as of December 31, 1996 and 1995, and
the results of its operations and cash flows for the years then ended in
conformity with generally accepted accounting principles.

MALONE & BAILEY, PLLC

F-2

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996

<TABLE>
<S> <C>
ASSETS
Current assets
Cash.......................................................................................... $ 32,355
Accounts receivable........................................................................... 5,522
-----------
Total current assets..................................................................... 37,877
-----------
Software........................................................................................... 100,000
Touring Group Sets, net of depreciation............................................................ 120,000
Video Cassette Rights, net of amortization......................................................... 416,800
Advance to Entertainment Specialists, Ltd., Inc.................................................... 100,000
Film production costs.............................................................................. 155,888
Temecula net profits interest...................................................................... 96,820
Other -- net of depreciation....................................................................... 14,200
-----------
Total assets....................................................................................... $ 1,041,585
-----------
-----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable................................................................................. $ 2,441,550
Accounts payable.............................................................................. 505,067
Accrued interest, wages and payroll taxes..................................................... 152,098
Payable to stockholders....................................................................... 245,871
-----------
Total current liabilities................................................................ 3,344,586
-----------
Contingent liabilities
Stockholders' equity
Convertible preferred stock, $1 par, 1,000,000 shares authorized, no shares issued and
outstanding.................................................................................. 0
Common stock, $.002 par, 50,000,000 shares authorized, 7,022,820 issued and outstanding....... 14,046
Paid-in capital............................................................................... 2,788,211
Retained (deficit)............................................................................ (5,105,258)
-----------
Total stockholders' equity............................................................... (2,303,001)
-----------
Total liabilities and stockholders' equity......................................................... $ 1,041,585
-----------
-----------
</TABLE>

See notes to financial statements.

F-3

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
CONSOLIDATED INCOME STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1995
----------- ----------

<S> <C> <C>
Revenues............................................................................. $ 1,080,656 $3,432,673
Cost of performances
Performer/agent fees............................................................ 536,943 1,583,402
Production costs................................................................ 628,931 701,195
----------- ----------
Total cost of performances................................................. 1,165,874 2,284,597
----------- ----------
Gross (deficit) margin..................................................... (85,218) 1,148,076
----------- ----------
Operating expenses
Selling......................................................................... 43,601
General and administrative...................................................... 2,291,752 522,437
Asset writeoffs................................................................. 179,192
Bad debts....................................................................... 211,722
Depreciation and amortization................................................... 94,553 81,021
Interest........................................................................ 1,092,357 37,905
----------- ----------
Total operating expenses................................................... 3,869,576 684,964
----------- ----------
Income (loss) from continuing operations............................................. (3,954,794) 463,112
(Loss) from discontinued operations............................................. -- (9,000)
----------- ----------
Income (loss) before taxes and extraordinary item............................... (3,954,794) 454,112
Income taxes (benefit).......................................................... (452) 158,308
----------- ----------
Income (loss) before extraordinary item......................................... (3,954,342) 295,804
Extraordinary item -- debt forgiveness, less applicable income taxes of $0........... 328,625
----------- ----------
Net income (loss).......................................................... $(3,954,342) $ 624,429
----------- ----------
----------- ----------
Earnings (loss) per common share
Income (loss) before extraordinary item
Primary......................................................................... $ (0.58) $ 0.09
Fully diluted (n/a -- anti-dilutive)............................................ 0.09
Extraordinary item
Primary......................................................................... $ 0.09
Fully diluted................................................................... 0.09
Weighted average shares outstanding
Primary......................................................................... 6,807,910 3,487,182
Fully diluted................................................................... 11,715,070 3,717,182
</TABLE>

See notes to financial statements.

F-4

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
COMMON STOCK
---------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL (DEFICIT) TOTALS
---------- -------- ---------- ----------- -----------

<S> <C> <C> <C> <C> <C>
Balances, December 31, 1994................. 9,864,796 $ 19,730 $1,111,722 $(1,775,345) $ (643,893)
5:1 Reverse stock split..................... (7,891,775) (15,784) 15,784
Common stock issued for cash, net of
offering costs of $35,000................. 3,525,000 7,050 523,950 531,000
Common stock issued in connection with
purchase of On Ice, Inc................... 800,000 1,600 126,400 128,000
Common stock issued to employees for
services rendered......................... 294,979 590 46,606 47,196
1995 Net income............................. 624,429 624,429
---------- -------- ---------- ----------- -----------
Balances, December 31, 1995................. 6,593,000 13,186 1,824,462 (1,150,916) 686,732
Common stock issued for services and $.09
per share cash in connection with 1996
debt financing............................ 289,820 580 357,695 358,275
Common stock canceled....................... (30,000) (60) 60
Warrants for common stock issued to
consultants in connection with 1996 debt
financing................................. 340,000 340,000
Warrants for common stock issued to
consultants for services rendered......... 96,334 96,334
Common stock issued to consultants for
services rendered......................... 170,000 340 169,660 170,000
1996 Net (loss)............................. (3,954,342) (3,954,342)
---------- -------- ---------- ----------- -----------
Balances, December 31, 1996................. 7,022,820 $ 14,046 $2,788,211 $(5,105,258) $(2,303,001)
---------- -------- ---------- ----------- -----------
---------- -------- ---------- ----------- -----------
</TABLE>

See notes to financial statements.

F-5

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1995
----------- ---------

<S> <C> <C>
Cash flows from operating activities
Net income (loss)................................................................ $(3,954,342) $ 624,429
Non-cash items:
Depreciation and amortization............................................... 94,553 81,021
Costs of debt paid with issuance of 285,820 shares of stock sold at prices
below market.............................................................. 331,551
Accrued interest and amortization of debt issue discount.................... 236,813
Bad debts................................................................... 211,722
Interest and consulting expenses paid with issuance of stock and stock
warrants with exercise prices below market................................ 607,333
Officer and employee compensation paid in stock............................. 147,196
Forgiveness of debt income.................................................. (328,625)
Writedown of investments carrying value..................................... 179,192
Changes in
Accounts receivable......................................................... 503,303 (720,546)
Other current assets........................................................ 313,184 (313,184)
Accounts payable............................................................ (45,985) 283,760
Accrued interest, wages and payroll taxes................................... (2,358) 54,304
Deferred income taxes....................................................... (36,047) 36,047
----------- ---------
Cash (used for) operating activities........................................ (1,561,081) (235,598)
----------- ---------
Cash flows from investing activities
Purchase of net assets of On Ice, Inc............................................ (400,000) (100,000)
Film production costs, net of non-recourse financing by joint venture partner of
$366,978........................................................................ (155,888)
Advance to Entertainment Specialists, Ltd., Inc.................................. (100,000)
Purchase of net assets of Enigma, Inc............................................ (53,592)
Non-current investments.......................................................... (25,000)
Increase in other assets......................................................... (6,393) (7,809)
----------- ---------
Cash (used for) investing activities........................................ (662,281) (186,401)
----------- ---------
Cash flows from financing activities
Proceeds from short-term bridge loans............................................ 2,178,395 270,200
Repayment of short-term bridge loans............................................. (115,000)
Proceeds from stockholders....................................................... 38,000
Repayment of stockholder cash loans.............................................. (40,643) (210,739)
Issuance of common stock, net of issuance costs of $0 in 1996 and $35,000 in
1995............................................................................ 25,723 531,000
----------- ---------
Cash flows from financing activities........................................ 2,048,475 628,461
----------- ---------
</TABLE>

See notes to Financial statements.

F-6

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1995
--------- --------

<S> <C> <C>
Net increase (decrease) in cash.......................................................... $(174,559) $206,462
Cash at beginning of period.............................................................. 206,914 452
--------- --------
Cash at end of period.................................................................... $ 32,355 $206,914
--------- --------
--------- --------
Expenses paid in cash
Interest............................................................................ $ 183,992 $ 0
Income taxes........................................................................ 35,595 157,856
Noncash financing transactions
Offset of debt contingent upon realization of investment asset...................... $ 50,000
Acquisition of On Ice, Inc.
Note payable, net of amount paid in 1995....................................... 400,000
Assumption of accounts payable................................................. 79,975
Stock (128,000 shares valued at $.16).......................................... 128,000
</TABLE>

See notes to Financial statements.

F-7

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES

Incorporation. The Company was incorporated in Utah on November 18, 1985.
Its name was changed from Omni International Corporation ('Omni') on April 4,
1994, when it acquired Beachport Entertainment Corporation, a Texas corporation.
This transaction was accounted for as a 'reverse merger' or purchase of Omni by
Beachport. The Company became a multi-faceted entertainment company with
acquisitions planned in the entertainment industry. The Company was in the
development stage from inception until these early 1994 acquisitions.

Reverse Stock Splits. The Company enacted a 1 for 5 reverse stock split on
June 10, 1995. Total outstanding shares of 9,864,796 was reduced by 7,891,775
shares.

Consolidation of wholly-owned subsidiaries include Enigma Interactive,
Inc., and On Ice, Inc. All significant intercompany accounts and transactions
have been eliminated in consolidation.

Earnings Per Share are computed based on a weighted number of shares
outstanding during the year, including all outstanding stock options and
warrants. The June, 1995 stock split is counted as having occurred at the
beginning of 1995. Shares issued for cash, acquisitions and for services
rendered are counted as of the issue dates. Outstanding options and warrants are
included as if they were all exercised as of the first day of the year.

Cash and Cash Equivalents includes cash in bank and marketable temporary
financial instruments of a 3 month maturity or less.

Depreciation of office equipment and touring group sets is using the
straight line method over their estimated useful lives of 5 years. Video
cassette rights are being amortized using the straight line method over their
estimated significant revenue streams of 10 years. These revenue streams are
expected to remain constant, consistent with the classic Holiday season appeal
of the entertainment material.

Foreign Operations consisted only of brief tours of England, France and
Mexico during the 1995-1996 Holiday season. Foreign currency conversions were
immaterial and foreign taxes are accounted for as described in Note 8.

Estimates and assumptions by management that affect certain reported
amounts and disclosures are required in the preparation of financial statements
in conformity with generally accepted accounting principles. Accordingly, actual
results could differ from those estimates.

Concentration of Credit Risk. As the Company is in the entertainment
business, substantially all accounts receivable are from ice show venues,
television broadcasting companies and related sponsoring companies. As of
December 31, 1996, no receivable was considered significant. In accordance with
standard industry practices, no collateral or liens on revenues receivable
exist.

NOTE 2 -- SOFTWARE

The Company acquired Enigma Systems, Inc. in 1994. Enigma's sole
significant asset was a beta version of the Popeye Sega 16-bit game cartridge.
The Company invested $313,467 to complete a marketable version in 1994 and 1995
and capitalized $254,192 in these years. The Company wrote this investment down
by $154,192 in 1996 to reflect management's revised estimate as of May 30, 1997
of its net realizable value. The Company has a tentative agreement with STT
Video Partners, L.P. to market Popeye on the Sega Television Channel.

NOTE 3 -- TOURING GROUP SETS AND VIDEO CASSETTE RIGHTS

On July 1, 1995, the Company acquired On Ice, Inc., a seasonal
family-oriented ice skating entertainment production company. The Company paid
$500,000 cash plus 800,000 shares of its common stock, then representing 27% of
fully-diluted stock ownership in the Company, plus assumption of net trade
payables of $79,975, in exchange for 100% of the outstanding stock of On Ice,
Inc. The stock

F-8

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

component of the purchase was valued at $.16 per share ($128,000), which is
equal to the selling price per share of common stock at that time. $100,000 of
the cash due was paid prior to year-end, and the balance was paid in February,
1996.

The total purchase price was $707,975, and was allocated to assets acquired
based on their fair values. These are amortized using the straight-line method
over their estimated useful lives as follows:

<TABLE>
<CAPTION>
ACCUMULATED ESTIMATED
PURCHASE DEPRECIATION OR NET BOOK VALUATION
VALUATION AMORTIZATION VALUE LIFE
--------- --------------- -------- ---------

<S> <C> <C> <C> <C>
Touring Group Sets................................ $ 200,000 $ (80,000) $120,000 5 years
Video Cassette Rights............................. 507,975 (91,175) 416,800 10 years
---------
Total........................................ $ 707,975
---------
---------
</TABLE>

NOTE 4 -- ADVANCE TO ENTERTAINMENT SPECIALISTS, LTD., INC.

On December 5, 1996, the Company signed an agreement with Entertainment
Specialists, Ltd., Inc. ('ESL') whereby they paid $100,000 for the right to
negotiate a purchase of ESL. As of May 30, 1997, the Company and ESL have
tentatively agreed for the Company to purchase ESL for a total of $1,000,000 in
cash and $1,000,000 in stock. ESL owns two show companies of Royal Lipizzaner
Stallions and grossed $6 million in sales in 1996.

NOTE 5 -- FILM PRODUCTION COSTS

In 1995, the Company signed an agreement with Capital Cities/ABC Video
Publishing, Inc. ('ABCVP') whereby the Company, through a 50%-owned subsidiary,
FTI, L.L.C., agreed to produce five TV video programs in a series titled 'Fairy
Tales on Ice'. During 1995 and early 1996, ABCVP provided a total of $436,978
for two videos, and agreed to market the videos to network and/or cable TV.
$70,000 was recognized by the Company as income in 1995 for creating and
organizing the projects. An additional $155,888 in additional production costs
has been capitalized. As of May 30, 1997 the two videos were mostly completed.

In 1996, the parent company of ABCVP was acquired by Buena Vista
International. This agreement was renegotiated whereby the Company will market
the distribution rights and repay Buena Vista solely from the proceeds. The
Company expects to receive in excess of $675,000, which is required to first
repay Buena Vista and then recoup all capitalized costs.

There are no current plans to produce the remaining three videos.

NOTE 6 -- TEMECULA NET PROFITS INTEREST

An interest in a to-be-built southern California suburb entertainment
facility was acquired in early 1994 in exchange for stock and the promise to
obtain equity financing. The Company invested $147,000 in pre-construction
planning costs, but defaulted on its obligation due to a lack of additional
funding. The Company subsequently agreed to trade its interest in the project
for its previously issued stock, plus (1) a promise to repay the $147,000
invested and (2) a 10% net profits interest in the project. In 1995, the Company
netted $50,000 in related notes payable against the asset cost, because
repayment of this obligation is contingent upon realization of project
financing. The net capitalized cost is carried as an asset pending the outcome
of long-term financing efforts for the project by that suburb. As of May 30,
1997, Temecula was proceeding with project financing.

F-9

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 7 -- NOTES PAYABLE

<TABLE>
<CAPTION>
Notes payable to sixteen different private entities, no collateral, interest at
8%, due December 31, 1996..................................................... $1,350,000
<S> <C>
Notes payable to investment bankers on behalf of eight different private
entities, no collateral, interest at 12%, due February 28, 1997............... 879,550
Notes payable to investment bankers, no collateral and no interest.............. 212,000
----------
Total...................................................................... $2,441,550
----------
----------
</TABLE>

The Company is delinquent paying the above obligations, which were supposed
to have been repaid from the proceeds of a larger equity offering. See Note 15
regarding a planned 1997 offering.

Total 1996 interest of $1,092,357 includes debt financing costs of
$940,006, including $92,955 in note discounts given, $175,500 in debt
acquisition commissions paid in cash, and discounted stock and stock options
given to investment bankers valued at $671,551, which represents the difference
between the market value and the purchase or exercise price of 285,820 shares
and 500,000 options.

NOTE 8 -- ACCRUED EXPENSES

<TABLE>
<CAPTION>
Interest on notes payable......................................................... $131,902
<S> <C>
Wages and payroll taxes........................................................... 23,969
--------
Total........................................................................ $155,871
--------
--------
</TABLE>

NOTE 9 -- PAYABLE TO STOCKHOLDERS FOR CASH LOANS

<TABLE>
<CAPTION>
Note payable to a corporation partially owned by a stockholder, due March 31,
1995, with interest at 8%, with no collateral................................... $200,000
<S> <C>
Accrued interest.................................................................. 41,568
Other............................................................................. 530
--------
Total........................................................................ $242,098
--------
--------
</TABLE>

NOTE 10 -- INCOME TAXES

Income taxes are accounted for under Statement of Financial Accounting
Standards (SFAS) No. 109 'Accounting for Income Taxes.' As of December 31, 1996,
the Company had unused net operating loss carryforwards of approximately
$4,700,000, which expire in 2010. Under Internal Revenue Code Section 382, use
of these net operating losses is limited whenever Company stock ownership
turnover, as defined, exceeds 50% in any 36-month period. During 1995, such a
turnover occurred and the use of about $1 million of such losses is limited to
approximately $370,000 per year.

NOTE 11 -- EXTRAORDINARY ITEM

During late 1995, the Company negotiated debt forgiveness from various
current and former employees, lawyers and investment bankers, totaling $328,625.
No income taxes are related to this income, because it is entirely offset by
prior period net operating losses.

NOTE 12 -- COMMON STOCK OPTIONS AND WARRANTS

The Company has a qualified stock option plan for its employees. As of May
30, 1997, there has been no stock options granted to employees under this plan.

F-10

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

As of May 30, 1997, the Company has issued a total of 5,197,160 options and
warrants to various entities at exercise prices ranging from $.05 to $10.00 per
share, and summarized as follows:

<TABLE>
<CAPTION>
NUMBER OPTION PRICE
OF SHARES (RANGE PER SHARE)
--------- -----------------

<S> <C> <C> <C> <C>
Outstanding at January 1, 1995............................ 200,000 $ .05 -- $10.00
Granted................................................... 265,000 $ .10 -- $ 2.31
---------
---------
Outstanding at January 1, 1996............................ 465,000
Granted................................................... 4,792,160 $0.25 -- $ 1.37
Canceled.................................................. (80,000)
---------
Outstanding at December 31, 1996.......................... 5,197,160 $0.05 -- $10.00
---------
---------
(1) (2)
----- ---
Exercisable at December 31, 1996.......................... 1,385,000 $0.05 -- $ 0.63 $0.31 41
3,342,160 $0.93 -- $ 2.50 1.23 48
110,000 $5.00 -- $10.00 7.27 36
--------- ----- ---
4,837,160 $1.06 44
--------- ----- ---
--------- ----- ---
</TABLE>

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

(1) Weighted average exercise price as of December 31, 1996.

(2) Weighted average remaining exercise period in months as of December 31,
1996.

------------------------
During 1995, the Company issued 294,979 shares of stock to two officers and
two employees as partial compensation for services rendered. These shares were
valued at $.16, which approximates the prevailing price received for shares sold
in 1995.

No options or warrants were granted to employees during 1996.

In accordance with the disclosure requirements of SFAS 123, stock
compensation is valued for income statement expense purposes using the intrinsic
value method, whereby the related expense is the excess of the current stock
trading price over the option price. For the year ended December 31, 1996, fair
value of the 1996 options granted using the Black-Scholes option pricing
mathematical model exceeds the values recorded using the intrinsic value method
by $5,700,000 or $.84 per share.

NOTE 13 -- CONTINGENT LIABILITIES

A total of $486,978 in contingent liabilities exists, as discussed in two
different notes above, and are dependent on the success of the two investment
ventures. The Company is not obligated to repay these amounts if these ventures
do not return cash flow. See Notes 5 and 6.

The Company is involved as plaintiff in a lawsuit against a former
investment banker for a contract dispute. As of May 30, 1997, the lawsuit was
still in the discovery stage, and no outcome is being predicted by management.

On January 22, 1996, the Company entered into an agreement with Ice
Capades, Inc. ('Ice Capades'), a subsidiary of Del Wilber Associates, Inc., to
manage ice skating events produced by Ice Capades. The Company sued Del Wilber
Associates, Inc. for non-performance in late 1996. As of May 30, 1997, the
lawsuit was still in the discovery stage, and no outcome is being predicted by
management.

NOTE 14 -- SIGNIFICANT CUSTOMERS

During 1996, the Company received $360,166 from Ice Capades, Inc. and
$413,352 from Harrah's -- Atlantic City. During 1995, the Company earned
$373,210 from National Broadcasting Company for

F-11

<PAGE>
<PAGE>
BEACHPORT ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

1995 sales of its 1994 'Nutcracker On Ice' videocassette, of which $211,722 was
reported in 1996 as a bad debt. No other single source accounted for more than
10% of gross revenues during 1996 or 1995.

NOTE 15 -- 1997 STOCK AND DEBT ISSUANCE

The Company is currently conducting two private securities offerings of
debt with stock warrants and convertible preferred stock to raise up to
$5,000,000 in additional financing from accredited investors for operating
capital, debt repayment and additional entertainment-related acquisitions.

The convertible preferred stock converts at 11,111 shares of common stock
for each share of preferred. Convertible holders may convert at any time, and if
the common stock is trading at less than $2.25 per share, the conversion rate is
adjusted to 75% of the actual average trading price, with a floor of $.80. As of
May 30, 1997 none of the convertible preferred stock has been tendered for
conversion.

For 1997 through May 30, the Company has borrowed $147,000, sold common
stock for $500,000 and sold 14 shares of convertible preferred stock for
$350,000. Related costs of $41,000 will be charged against paid in capital.

NOTE 16 -- LOSS ON DISCONTINUED OPERATIONS

Due to a lack of funding in 1994, the Company negotiated dispositions of
certain investments, with net losses on dispositions totaling $175,527, of which
$9,000 was recognized in 1995.

NOTE 17 -- NET PROFITS INTEREST

The employee responsible for software development has a 40% net profits
interest in any income generated from sales of software after the Company's
total investment is recouped. This total investment amount is currently in
excess of $500,000.

F-12

BEACHPORT ENTERTAINMENT CORPORATION
CONSOLIDATED BALANCE SHEET
JUNE 30, 1997 (UNAUDITED)

<TABLE>
<S> <C>
ASSETS
Current assets
Cash.......................................................................................... $ 1,128,237
Other current assets.......................................................................... 22,832
-----------
Total current assets..................................................................... 1,151,069
-----------
Touring group sets, net of $100,000 depreciation................................................... 100,000
Video cassette rights, net of $130,250 amortization................................................ 390,750
Film production costs.............................................................................. 155,888
Software........................................................................................... 100,000
Advance to Entertainment Specialists, Ltd., Inc. .................................................. 1,023,853
Temecula net profits interest...................................................................... 96,820
Deferred debt issue costs.......................................................................... 354,581
Other -- net of $7,830 depreciation................................................................ 54,125
-----------
2,276,017
-----------
Total assets............................................................................. $ 3,427,086
-----------
-----------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Notes payable, net of discount of $930,352.................................................... $ 4,403,083
Accounts payable.............................................................................. 387,493
Accrued interest, wages and payroll taxes..................................................... 124,959
Payable to stockholders....................................................................... 455,401
-----------
Total current liabilities................................................................ 5,370,936
-----------
Contingent liabilities
Stockholders' equity (deficit)
Convertible preferred stock, $1 par, 1,000,000 shares authorized, 6 shares issued and
outstanding.................................................................................. 6
Common stock, $.002 par, 50,000,000 shares authorized, 9,342,275 shares issued and
outstanding.................................................................................. 18,685
Paid-in capital............................................................................... 5,011,267
Retained (deficit)............................................................................ (6,973,808)
-----------
Total stockholders' equity (deficit)..................................................... (1,943,850)
-----------
Total liabilities and stockholders' equity............................................... $ 3,427,086
-----------
-----------
</TABLE>

See notes to unaudited interim financial statements.

F-13

BEACHPORT ENTERTAINMENT CORPORATION
CONSOLIDATED INCOME STATEMENTS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED)

<TABLE>
<CAPTION>
1997 1996
----------- -----------

<S> <C> <C>
Revenues............................................................................ $ 493,987 $ 359,488
Cost of performances
Performer/agent fees........................................................... 465,370 195,576
Other.......................................................................... 458,008 133,617
----------- -----------
Total cost of performances................................................ 923,378 329,193
----------- -----------
Gross margin.............................................................. (429,391) 30,295
----------- -----------
Operating expenses
General and administrative..................................................... 1,172,053 559,296
Depreciation and amortization.................................................. 47,924 46,828
Interest....................................................................... 219,182 470,127
----------- -----------
Total operating expenses.................................................. 1,439,159 1,076,251
----------- -----------
(Loss) before taxes............................................................ (1,868,550) (1,045,956)
Income tax benefit............................................................. 452
----------- -----------
Net (loss)................................................................ $(1,868,550) $(1,045,504)
----------- -----------
----------- -----------
Net (loss) per common share
Primary........................................................................ $(.24) $(0.15)
Fully-diluted n/a (anti-dilutive)..............................................
Weighted average shares outstanding................................................. 7,874,228 7,064,547
----------- -----------
----------- -----------
</TABLE>

See notes to unaudited interim financial statements.

F-14

BEACHPORT ENTERTAINMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996 (UNAUDITED)

<TABLE>
<CAPTION>
1997 1996
----------- -----------

<S> <C> <C>
Cash flows from operating activities
Net loss....................................................................... $(1,868,550) $(1,045,504)
Non-cash items:
Depreciation and amortization............................................. 47,924 46,828
Debt issuance costs, representing stock issued to brokers at below-market
prices.................................................................. 331,551
Shareholder interest...................................................... 19,530
Noncash compensation...................................................... 37,170
Accretion of imputed interest............................................. 75,581
Changes in
Accounts receivable....................................................... 5,522 473,273
Receivable from officer................................................... (5,593)
Other current assets...................................................... (22,832) 74,909
Accounts payable.......................................................... (117,574) (379,087)
Accrued expenses.......................................................... (27,139) 45,102
Deferred income taxes..................................................... (36,047)
Accounts payable to stockholders.......................................... (1,012)
----------- -----------
Cash used in operating activities......................................... (1,850,368) (495,580)
----------- -----------
Cash flows from investing activities
Purchase of office equipment................................................... (3,597) (1,906)
Advance to acquisition target.................................................. (923,853)
Film production costs, net of non-recourse financing by joint venture partner
of $366,978................................................................... (396,782)
Decrease (increase) in other assets............................................ (38,202) 4,912
----------- -----------
Cash used for investing activities........................................ (965,652) (393,776)
----------- -----------
Cash flows from financing activities
Proceeds from short-term debt
From stockholders......................................................... 190,000
From third parties........................................................ 4,292,473 928,550
Repayment of a bridge loan investor....................................... (65,000)
Proceeds from stock sales, net of issuance costs of $41,000 and $15,000,
respectively.................................................................. 814,500 1,724
Payments of debt............................................................... (1,385,071) (400,000)
Advance from Capital Cities/ABC VP............................................. 362,500
----------- -----------
Cash flows from financing activities...................................... 3,911,902 827,774
----------- -----------
Net increase (decrease) in cash..................................................... 1,095,882 (61,582)
Cash at beginning of period......................................................... 32,355 206,914
----------- -----------
Cash at end of period............................................................... $ 1,128,237 $ 145,332
----------- -----------
----------- -----------
Expenses paid in cash
Interest....................................................................... $ 0 $ 0
Income taxes................................................................... 0 0
</TABLE>

See notes to unaudited interim financial statements.

F-15

BEACHPORT ENTERTAINMENT CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)

<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK
--------------- ------------------- PAID-IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL (DEFICIT) TOTAL
------ ------ --------- ------- ---------- ----------- -----------

<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1996................ 7,022,820 $14,046 $2,788,211 $(5,105,258) $(2,303,001)
Preferred stock issued for $350,000 cash
net of $41,000 offering costs............ 14 $ 14 308,986 309,000
Exercise of common stock warrants for
cash..................................... 30,000 60 5,440 5,500
Warrants for common stock issued to
investors in connection with 1997
short-term debt financing................ 701,406 701,406
Offering costs incurred during the
short-term debt financing................ (59,853) (59,853)
Common stock issued to convert bridge
financing to equity...................... 744,019 1,488 732,990 734,478
Common stock issued to convert Preferred
Stock.................................... (8) (8) 181,311 363 (355)
Common stock warrants converted through a
cashless exercise conversion............. 328,125 656 (656)
Common stock issued to employees for
services rendered 4/97................... 36,000 72 37,098 37,170
Sale of common stock for $.50 each......... 1,000,000 2,000 498,000 500,000
Net (loss)................................. (1,868,550) (1,868,550)
-- ------ --------- ------- ---------- ----------- -----------
Balance, June 30, 1997..................... 6 $ 6 9,342,275 $18,685 $5,011,267 $(6,973,808) $(1,943,850)
-- ------ --------- ------- ---------- ----------- -----------
-- ------ --------- ------- ---------- ----------- -----------
</TABLE>

See notes to unaudited interim financial statements.

F-16

BEACHPORT ENTERTAINMENT CORPORATION
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES

Interim unaudited financial statements contain all adjustments necessary to
present fairly the financial statements of the Company for the periods
presented. The accompanying financial information should be read in conjunction
with the Company's 1996 Annual Report on Securities and Exchange Commission Form
10-KSB. Footnote disclosures that substantially duplicate those in the Company's
Annual Audited Report on Form 10-KSB, including significant accounting policies,
have been omitted.

NOTE 2 -- NOTES PAYABLE

In June, 1997, the Company completed a short-term debt placement with a
face value of $5,011,434, note discounts of $283,669 and debt issue costs of
$435,291 for net cash proceeds of $4,292,473.

These notes carry an interest rate of 12%, mature December, 1997, and are
renewable for 2 three-month extensions at the option of the Company.

In connection with this debt issuance, the Company issued one warrant to
purchase one share of Company common stock at $1.375 per share for each $4.82 in
notes payable, or 1,040,109 warrants issued to debtholders, plus 81,950 warrants
issued to the placement agents. With Company stock selling at an average market
price of $2 per share, these warrants are valued at $.625 each, or $701,406,
accounted for as note discounts and a related increase in paid-in capital. In
addition, these warrants will change in both total quantity issued (by
increasing) and exercise price (by decreasing) if the Company fails to achieve
net income of $4 million during the 12 months ended June 30, 1998. These
warrants are exercisable anytime during the next 5 years. Such discounts,
totalling $930,352, are accounted for as interest expense, and are charged to
operations over the six month life of the notes.

F-17

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(VAN BUREN & HAUKE LLC)

To the Shareholders and Board of Directors of
ENTERTAINMENT SPECIALISTS LTD., INC.

We have audited the accompanying balance sheets of Entertainment
Specialists Ltd., Inc.. (A Subchapter 'S' Corporation) as of December 31, 1996
and 1995, and the related statements of operations and shareholders' equity and
cash flows for each of the two years in the period 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.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Entertainment Specialists
Ltd., Inc. as of December 31, 1996 and 1995, and the results of their operations
and their cash flows for each of two years in the period ended December 31,
1996, in conformity with generally accepted accounting principles.

Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The additional information
schedules on Pages 10 and 11 is presented for the purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

New York, New York
July 3, 1997, except for Note 9,
as to which the date is August 4, 1997

F-18

ENTERTAINMENT SPECIALISTS LTD., INC.
(A SUBCHAPTER 'S' CORPORATION)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995 (AUDITED)
AND JUNE 30, 1997 AND 1996 (UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
--------------------- ----------------------
1996 1995 1997 1996
--------- -------- ---------- --------

<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash..................................................... $ 2,114 $ 17,899 $ 114,566 $ 3,843
Accounts receivable...................................... 31,453 15,528 12,249 53,813
Inventories -- concessions............................... 16,958 9,067 11,165 7,910
Due from employees....................................... 2,576 1,899 4,020 2,117
Prepaid expenses......................................... 134,252 54,064 80,335 92,549
--------- -------- ---------- --------
187,353 98,457 222,335 160,232
Property and equipment, net................................... 273,502 231,768 260,753 286,736
Other assets
Security deposits........................................ 10,208 8,280 12,591 10,808
--------- -------- ---------- --------
Total assets........................................ $ 471,063 $338,505 $ 495,679 $457,776
--------- -------- ---------- --------
--------- -------- ---------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities
Bank overdrafts.......................................... $ 35,507 $ 37,858 $ $ 821
Accounts payable and accrued expenses.................... 279,603 176,297 684,131 277,051
Loan payable -- pension plan............................. 74,329 74,329
Payroll taxes payable.................................... 79,351 10,178 206,539 11,863
Notes payable -- current................................. 47,600 316,890
--------- -------- ---------- --------
Total current liabilities........................... 516,390 224,333 1,281,889 289,735
--------- -------- ---------- --------
Other liabilities
Due to officer........................................... 18,381 54,863
--------- -------- ---------- --------
Total liabilities................................... 534,771 224,333 1,281,889 344,598
--------- -------- ---------- --------
Shareholders' equity (deficit)
Common stock; $1.00 par value, 500 shares authorized;
issued and outstanding................................. 500 500 500 500
Additional paid in capital............................... 100,000 100,000
Retained earnings (deficit).............................. (164,208) 113,672 (886,710) 112,678
--------- -------- ---------- --------
Total shareholders' equity (deficit)................ (63,708) 114,172 (786,210) 113,178
--------- -------- ---------- --------
Total liabilities and shareholders' equity..... $ 471,063 $338,505 $ 495,679 $457,776
--------- -------- ---------- --------
--------- -------- ---------- --------
</TABLE>

See accompanying notes to financial statements.

F-19

ENTERTAINMENT SPECIALISTS LTD., INC.
(A SUBCHAPTER 'S' CORPORATION)
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (AUDITED)
AND FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED)

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
------------------------ ------------------------
1996 1995 1997 1996
---------- ---------- ---------- ----------

<S> <C> <C> <C> <C>
Revenues
Show revenues....................................... $5,058,397 $7,631,792 $3,739,267 $2,777,555
Concession revenues................................. 837,621 1,008,083 549,568 474,264
---------- ---------- ---------- ----------
Total revenues................................. 5,896,018 8,639,875 4,288,835 3,251,819
---------- ---------- ---------- ----------
Direct costs
Show expenses....................................... 640,359 1,454,234 536,076 355,098
Arena rental and expense............................ 790,415 987,462 828,820 415,855
Payroll and fringes................................. 1,126,235 863,766 460,593 541,138
Horse maintenance and supplies...................... 203,469 430,819 288,433 94,136
Travel and lodging.................................. 254,259 421,417 260,872 119,284
Concession expenses................................. 67,982 113,654 85,051 44,307
Auto and truck expenses............................. 86,661 77,017 43,138 40,855
Printing programs................................... 32,693 43,239 40,630 7,417
Wardrobe and maintenance............................ 14,340 20,996 14,631 9,528
---------- ---------- ---------- ----------
Total direct costs............................. 3,216,413 4,412,604 2,558,244 1,627,618
---------- ---------- ---------- ----------
Gross profit................................... 2,679,605 4,227,271 1,730,591 1,624,201
---------- ---------- ---------- ----------
Operating expenses
Advertising and promotion........................... 1,521,365 1,925,852 1,255,687 752,259
Oviedo barn expenses................................ 518,140 562,935 327,533 257,911
General and administrative expenses................. 843,185 1,155,072 747,315 488,165
---------- ---------- ---------- ----------
Total operating expenses....................... 2,882,690 3,643,859 2,330,535 1,498,335
---------- ---------- ---------- ----------
Total operating income......................... (203,085) 583,412 (599,944) 125,866
---------- ---------- ---------- ----------
Other income (expense)
Interest earned..................................... 1,525 19,365 62 1,057
Penalties........................................... (12,428) (26,406) (24,310)
Foreign taxes paid.................................. (31,883)
Loss on sale of assets.............................. (12,892) (6,182) (12,892)
---------- ---------- ---------- ----------
Total.......................................... (23,795) (45,106) (24,248) (11,835)
---------- ---------- ---------- ----------
Net income............................................... (227,880) 538,306 (624,192) 114,031
Retained earnings (deficit) -- beginning of period....... 113,672 30,451 (164,208) 113,672
---------- ---------- ---------- ----------
(114,208) 568,757 (788,400) 227,703
Distributions to shareholders............................ (50,000) (455,085) (98,311) (115,025)
---------- ---------- ---------- ----------
Retained earnings (deficit) -- end of period............. $ (164,208) $ 113,672 $ (886,711) $ 112,678
---------- ---------- ---------- ----------
</TABLE>

See accompanying notes to financial statements.

F-20

ENTERTAINMENT SPECIALISTS LTD., INC.
(A SUBCHAPTER 'S' CORPORATION)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (AUDITED)
AND FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED)

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
---------------------- ----------------------
1996 1995 1997 1996
--------- --------- --------- ---------

<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)....................................... $(227,880) $ 538,306 $(624,192) $ 114,031
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation............................................ 37,427 53,303 19,018 18,916
Increase (Decrease) in accounts payable................. 103,306 (9,823) 404,528 100,754
Increase (Decrease) in payroll taxes payable............ 69,173 (111,955) 127,188 1,685
Decrease in investments................................. 26,005
(Increase) Decrease in prepaid expenses................. (80,188) 49,569 53,917 (38,485)
(Increase) Decrease in accounts receivable.............. (15,925) 3,757 19,204 (38,285)
(Increase) Decrease in due from employees............... (677) 1,168 (1,444) (218)
(Increase) Decrease in inventories...................... (7,891) (4,342) 5,793 1,157
(Increase) in security deposits......................... (1,928) (1,738) (2,383) (2,528)
--------- --------- --------- ---------
Net cash provided by operating activities.................... (124,583) 544,250 1,629 157,027
--------- --------- --------- ---------
Cash flows from investing activities:
Purchase of property and equipment; net of
retirements........................................... (79,161) (9,341) (6,269) (83,884)
--------- --------- --------- ---------
Cash flows from financing activities:
Additional paid-in capital.............................. 100,000
Distribution to shareholders............................ (50,000) (455,085) (98,310) (115,025)
Increase (Decrease) in bank overdrafts.................. (2,351) (33,158) (35,507) (37,037)
Increase (Decrease) in notes payable.................... 47,600 (17,870) 269,290
Increase (Decrease) in due to officer................... 18,381 (10,897) (18,381) 64,863
--------- --------- --------- ---------
Net cash provided by financing activities.................... 113,630 (517,010) 117,092 (87,199)
--------- --------- --------- ---------
Net increase (decrease) in cash.............................. (90,114) 17,899 112,452 (14,056)
Cash at beginning of period.................................. 17,899 2,114 17,899
--------- --------- --------- ---------
Cash at end of period........................................ $ (72,215) $ 17,899 $ 114,566 $ 3,843
--------- --------- --------- ---------
--------- --------- --------- ---------
Supplemental disclosure of interest paid..................... $ 13,955 $ 4,468 $ 6,706 $ 2,059
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

See accompanying notes to financial statements.

F-21

ENTERTAINMENT SPECIALISTS LTD., INC.
(A SUBCHAPTER 'S' CORPORATION)
NOTES TO FINANCIAL STATEMENTS

1. GENERAL

Entertainment Specialists Ltd., Inc. (Company) is a corporation that was
organized under the laws of the state of Florida on March 2, 1988.

The Company is wholly-owned by two shareholders who are both executive
officers of the Company and are ultimately responsible for both the management
and the results of operations.

The Company is in the entertainment industry earning its revenues by
producing and performing live shows presenting 'Royal Lipizzaner Stallions'
throughout the world. This family-arena attraction features horses and riders
from Europe that emulate the Spanish riding school of Vienna in its presentation
of Lipizzans, thus providing a traditional as well as entertaining performance.

The Company also earns revenues from concessions at the shows selling
programs, hats, tote bags, jewelry and other accessories as souvenirs of the
show.

2. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

METHOD OF ACCOUNTING

Assets, liabilities, revenues and expenses are recognized on the accrual
method of accounting for financial statement presentation and for federal income
tax purposes.

ACCOUNTS RECEIVABLE

The accounts receivable represent revenues due from the shows and
concession sales. The Company does not provide for any allowance for
uncollectible accounts.

REVENUE RECOGNITION

Revenues and the related expenses are recognized at the time the shows are
performed. Concession revenues and the related costs are recognized when the
goods are sold.

BANK OVERDRAFT

The bank overdraft represents the amount of checks outstanding in excess of
cash in bank.

LINE OF CREDIT

The notes payable -- current represents a revolving line of credit up to
$50,000 secured by a demand note to Barnett Bank at the bank prime rate plus
2.5%. Interest on the amounts borrowed is charged against the checking account
monthly.

INCOME TAXES

The Company has elected to be taxed under the provisions of subchapter S
('S' Corporation) of the Internal Revenue Code. Under these provisions, the
Company does not pay Federal corporate income taxes on its taxable income.
Instead, the shareholders are liable for the individual Federal income tax on
the Company's taxable income. Therefore, no provision for income taxes has been
provided in the income statement.

F-22

<PAGE>
<PAGE>
ENTERTAINMENT SPECIALISTS LTD., INC.
(A SUBCHAPTER 'S' CORPORATION)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS

As of December 31, 1996 and 1995, the carrying amount of cash, accounts
receivable, bank overdrafts, accounts payable, accrued expenses, loans and notes
payable approximates fair value due to the short maturity of these instruments.

CONCENTRATION OF CREDIT RISK

The accounts receivable are all short term and the Company has no
significant off-balance sheet concentration of credit risk.

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 at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.

UNAUDITED INTERIM FINANCIAL STATEMENTS

The unaudited interim financial statements as of June 30, 1997 and 1996,
and for the six months ended June 30, 1997 and 1996, have been prepared on the
same basis as the audited financial statements included herein. In the opinion
of management, such unaudited financial statements include all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the results of such periods. The operating results for the six months ended June
30, 1997, are not necessarily indicative of the operating results to be expected
for the full fiscal year or for any future period.

PROPERTY AND EQUIPMENT

The Company's property and equipment includes the building in Oviedo,
Florida, twenty-nine (29) horses, transportation equipment, leasehold
improvements and office equipment. Expenditures for maintenance and repairs are
charged to expense and major additions to fixed assets are capitalized.

DEPRECIATION

The Company depreciates its fixed assets over their estimated useful lives
using accelerated methods (MACRS) for financial statement presentation and for
federal income tax purposes.

INVENTORIES

Inventories consist of concessions goods (clothing and accessories,
jewelry, programs, tapes -- all of which are souvenir products) held for resale
at shows and are valued at cost or market, whichever is lower. Cost was
determined by using the first-in, first-out method.

F-23

<PAGE>
<PAGE>
ENTERTAINMENT SPECIALISTS LTD., INC.
(A SUBCHAPTER 'S' CORPORATION)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. PROPERTY AND EQUIPMENT

The Company owns property and equipment which is classified as follows:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------- --------------------
1996 1995 1997 1996
-------- -------- -------- --------

<S> <C> <C> <C> <C>
Barn -- Oviedo, Fl..................................... $207,335 $207,335 $207,335 $207,335
Horses................................................. 174,501 174,501 179,501 174,500
Leasehold improvements................................. 61,407 -- 61,407 61,407
Machinery and equipment................................ 52,482 57,203 53,751 47,206
Transportation equipment............................... 19,794 19,794 19,794 19,794
-------- -------- -------- --------
515,519 458,833 521,788 510,242
Less accumulated depreciation.......................... 242,017 227,065 261,035 223,506
-------- -------- -------- --------
$273,502 $231,768 $260,753 $286,736
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>

4. PREPAID EXPENSES

Prepaid expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------- --------------------
1996 1995 1997 1996
-------- -------- -------- --------

<S> <C> <C> <C> <C>
Prepaid advertising costs $ 76,417 $ -- $21,331 $15,162
Arena deposits......................................... 15,831 14,260 37,291 21,083
Prepaid production expenses............................ 3,597 -- 4,405 --
Prepaid lease expense.................................. 8,000 4,061 -- 4,061
Prepaid insurance...................................... 30,407 35,743 17,308 52,243
-------- -------- -------- --------
$134,252 $54,064 $80,335 $92,549
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>

5. RELATED PARTY TRANSACTIONS

LEASE OBLIGATIONS

The Company incurred leases obligations with the shareholders during 1996
and 1995 as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1995
------- -------

<S> <C> <C>
Horses.................................................................. $16,500 $19,200
Barn.................................................................... 12,000 15,800
Office.................................................................. 8,000 --
Pasture................................................................. 6,000 --
Farm equipment.......................................................... 5,000 --
Transportation equipment................................................ -- 1,000
------- -------
$47,500 $36,000
------- -------
------- -------
</TABLE>

On January 1, 1997, the Company entered into a two (2) year lease agreement
with a monthly rental of $7,000 which covers the following properties:

1. Horses -- (11 Lipizzan/9 Andulusian/1 Arabian)

F-24

<PAGE>
<PAGE>
ENTERTAINMENT SPECIALISTS LTD., INC.
(A SUBCHAPTER 'S' CORPORATION)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. Property:

Barn extension -- Oviedo, Fl.

Office and warehouse -- Oviedo, Fl.

Pasture property -- 1430 Van Ardsdale Street, Oviedo, Fl.

3. John Deere Tractor.

6. NOTES PAYABLE -- CURRENT

The Company has a revolving line of credit secured by a promissory demand
note with an interest rate of 2.5% over the bank prime rate dated August 29,
1996, with a credit limit of $50,000. At December 31, 1996, there was a balance
due of $47,600. The note calls for the payment monthly of all accrued interest
on the outstanding debt.

7. LOAN PAYABLE -- PENSION PLAN

The Company borrowed $74,328 on December 4, 1996, from Entertainment
Specialists Ltd., Inc. Employee Profit Sharing Plan. The loan is secured by a
demand note with an 8% annual interest rate.

8. PENSION PLAN

In 1993, the Company instituted a defined contribution 'Profit Sharing
Plan' and 401(k) deferred compensation plan for the benefit of all its
employees. The Company contributions to these plans for 1996 and 1995 were
$34,740 and $65,512, respectively.

9. SUBSEQUENT EVENT

On June 13, 1997, the Company entered into a merger agreement with
Beachport Entertainment Corporation (BEC) whereby BEC will acquire all of the
issued and outstanding shares of the Company for a specified amount of cash, a
number of shares of the common stock of BEC determined by a formula that takes
into consideration the average closing price of BEC's common stock for the 60
day period immediately prior to closing or $3.00, whichever is lower, with
additional shares issuable over the next three years based upon an earnings
formula and the yearly average of BEC's common stock, as defined. The two
principals of the Company have entered into a three (3) year employment
agreement with BEC. The Company closed on its merger agreement on July 1, 1997,
and as of that date no longer qualified as a Subchapter 'S' Corporation. The
merger was effective on August 4, 1997, upon meeting the filing requirements of
the states of Florida and Nevada.

F-25

<PAGE>
<PAGE>
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET

The following pro forma balance sheet has been derived from the balance
sheets of the Company ('BEC') at June 30, 1997, and adjusts such information to
give effect to (1) the acquisition of Entertainment Specialists, Ltd. ('ESL'),
and (2) the settlement of major litigation in June, 1997, as if such events had
occurred at June 30, 1997. The pro forma balance sheet is presented for
informational purposes only and does not purport to be indicative of the
financial condition that actually would have resulted if the acquisition, and
lawsuit settlement had all been consummated at June 30, 1997. The pro forma
balance sheet should be read in conjunction with the notes thereto and the
financial statements of the Company and of ESL contained elsewhere in this
registration statement.

<TABLE>
<CAPTION>
ESL
BEC HISTORICAL ADJUSTMENTS PRO FORMA
----------- ---------- ----------- ----------

<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents....................... $ 1,128,237 $ 114,566(2) $ 1,300,297 $2,543,100
Accounts receivable, net........................ 12,249 12,249
Other........................................... 22,832 95,520(2) 36,486 154,838
----------- ---------- ----------- ----------
Total current assets....................... 1,151,069 222,335 1,336,783 2,710,187
Horses............................................... 31,919(1) 453,331 485,250
Other property and equipment, net.................... 11,984 228,834 240,818
Video cassette rights, net........................... 390,750 390,750
Software and film production costs................... 255,888 255,888
Goodwill............................................. (1) 1,723,339 1,723,339
Advances to acquisition targets...................... 1,023,853 (1) (1,023,853)
Other assets......................................... 593,542 12,591(2) 39,375 645,508
----------- ---------- ----------- ----------
$ 3,427,086 $ 495,679 $ 2,528,975 $6,451,740
----------- ---------- ----------- ----------
----------- ---------- ----------- ----------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable................................ $ 387,493 $ 684,131(1) $ (200,000) $ 847,771
(1) (23,853)
Notes payable................................... 4,403,083 316,890(1) (268,540) 4,451,433
Payable to stockholders......................... 455,401 455,401
Accrued expenses................................ 124,959 280,868 405,827
----------- ---------- ----------- ----------
Total current liabilities.................. 5,370,936 1,281,889 (492,393) 6,160,432
----------- ---------- ----------- ----------
Stockholders' equity
Convertible preferred stock, $1 par, 1,000,000
shares authorized, 6 shares issued and
outstanding................................... 6 6
Common stock, $.002 par, 50,000,000 shares
authorized, 9,342,275 shares issued and (1) 1,218
outstanding................................... 18,685 (2) 973 20,876
Common stock, $1 par, 500 shares authorized,
issued and outstanding........................ 500(1) (500)
Additional paid-in capital...................... 5,011,267 100,000(1) 857,782 6,841,048
(1) (100,000)
(2) 971,999
Retained earnings (deficit).......................... (6,973,808) (886,710)(1) 886,710 (6,570,622)
(X) 403,186
----------- ---------- ----------- ----------
Total stockholders' equity................. (1,943,850) (786,210) 3,021,368 291,308
----------- ---------- ----------- ----------
$ 3,427,086 $ 495,679 $ 2,528,975 $6,451,740
----------- ---------- ----------- ----------
----------- ---------- ----------- ----------
</TABLE>

F-26

PRO FORMA FINANCIAL DATA
(UNAUDITED)

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

The following unaudited pro forma statements of operations have been
derived from the statements of operations of the Company for the fiscal year
ended December 31, 1996, and the six months ended June 30, 1997, and adjusts
such information to give effect to (1) the acquisition of Entertainment
Specialists, Ltd. ('ESL'), and (2) the settlement of major litigation in July,
1997, as if such events had occurred at the beginning of the period. The pro
forma statements of operations are presented for informational purposes only and
do not purport to be indicative of the results of operations that actually would
have resulted if the acquisition and lawsuit settlement had all been consummated
at the beginning of the period. The Pro Forma Consolidated Statements of
Operations should be read in conjunction with the notes thereto and the
financial statements of the Company and of ESL contained elsewhere in this
registration statement.

FOR THE SIX MONTHS ENDED JUNE 30, 1997

<TABLE>
<CAPTION>
ESL
BEC HISTORICAL ADJUSTMENTS PRO FORMA
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales........................................... $ 493,987 $4,288,835 $ $ 4,782,822
Operating costs and expenses
Costs of sales................................. 923,378 2,558,244 3,481,622
Selling, general and administrative expenses... 1,219,977 (1) 21,542 3,606,714
2,330,535(1) 34,660
----------- ---------- ----------- -----------
Operating loss............................... (1,649,368) (599,944) (56,202) (2,305,514)
Interest expense.................................... (219,182) (219,182)
Gain on lawsuit settlement.......................... (2) 403,186 403,186
Other............................................... (24,248) (24,248)
----------- ---------- ----------- -----------
Net income (loss)......................... $(1,868,550) $ (624,192) $ 346,984 $(2,145,758)
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
(Loss) per share of common stock.................... $(.24) $(.25)
----- -----
----- -----
Weighted average number of common shares
outstanding....................................... 7,874,228 8,483,448
--------- ---------
--------- ---------
</TABLE>

F-27

FOR THE YEAR ENDED DECEMBER 31, 1996 BEC ESL

<TABLE>
<CAPTION>
HISTORICAL
-------------------------
BEC ESL
ACTUAL ACTUAL ADJUSTMENTS PRO FORMA
----------- ---------- ----------- -----------

<S> <C> <C> <C> <C>
Net sales........................................... $ 1,080,656 $5,896,018 $ $ 6,976,674
Operating costs and expenses
Cost of sales.................................. 1,165,874 3,734,553 4,900,427
43,083(1)
Selling, general and administrative expenses... 2,777,219 2,414,550 69,320(1) 5,304,172
----------- ---------- ----------- -----------
Operating income............................. (2,862,437) (253,085) (112,403) (3,227,925)
Interest expense.................................... (1,092,357) (1,092,357)
Other............................................... (23,795) (23,795)
----------- ---------- ----------- -----------
Income (loss) before income tax................ (3,954,794) (276,880) (112,403) (4,344,077)
Income tax benefit.................................. 452 452
Net (loss)................................ $(3,954,342) $ (276,880) $(112,403) $(4,343,625)
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
(Loss) per share of common stock.................... $(0.58) $(0.54)
------ ------
------ ------
Weighted average number of common shares
outstanding....................................... 6,807,910 8,003,616
--------- ---------
--------- ---------
</TABLE>

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

(1) To record purchase of Entertainment Specialists Ltd., Inc.

(2) To record J.B. Oxford settlement.

F-28

NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
AND CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)

(1) Adjustment to reflect acquisition of Entertainment Specialists, Ltd.
('ESL'), effective August, 1997. ESL was purchased for $731,460 plus 609,220
common shares of the Company, valued at current market price of $1.41 per
share. In addition, additional Company stock is payable to the selling
shareholders of ESL contingent on a comparison of ESL separate earnings
before income taxes ('EBIT') during the next 3 years with consolidated
Company EBIT for the third year alone. If ESL's EBIT equals Company EBIT
(excluding ESL), then additional Company stock equal to 12.25% of then-total
outstanding shares is due. This percentage rises rapidly if ESL makes money
and other Company operations fail to make money. A change of control would
occur if the Company (excluding ESL) loses more than half as much as ESL
makes, under this formula.

No stock is due ESL's owners during the next two years unless ESL's separate
EBIT exceeds $1 million per year.

The acquisition was recorded using the purchase method, whereby, excepting
the 29 Lipizzaner and other horses acquired with a fair market value of
$485,250, fair market value approximated cost for all other assets and
liabilities acquired. Goodwill was recorded for the difference between the
purchase price of $1,590,460 and fair value of net assets purchased of
$(132,879), or $1,723,339. Goodwill is being amortized straight-line over 40
years.

(2) On July 2, 1997, the Company agreed to an out-of-court settlement of its
two-year-old litigation against its former investment banker, J.B. Oxford
Holdings, Inc. ('Oxford'). The Company realized a net gain of $403,186,
after contingent legal fees, plus additional cash and other assets of
$972,972 from the sale of 486,486 shares of Company common stock to Oxford
valued at the current Company stock market price of $2 per share.

F-29

<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>
<PAGE>
_________________________________ ________________________________

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR
SOLICITATION OF AN OFFER TO BUY, ANY SECURITY OTHER THAN THE SECURITIES OFFERED
BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY SHARES OF COMMON STOCK IN ANY JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary............................ 3
Risk Factors.................................. 7
Use of Proceeds............................... 11
Dividend Policy............................... 12
Capitalization................................ 12
Selected Financial Data....................... 13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................. 14
Business...................................... 18
Management.................................... 27
Principal Shareholders........................ 33
Selling Securityholders....................... 34
Certain Transactions.......................... 38
Plan of Distribution.......................... 39
Description of Securities..................... 39
Market Prices of Common Stock................. 40
Shares Eligible for Future Sale............... 40
Legal Matters................................. 41
Experts....................................... 41
Additional Information........................ 41
Index to Financial Statements................. F-1
</TABLE>

Until , 1998, all dealers effecting
transactions in the registered securities, whether
or not participating in this distribution, may be
required to deliver a Prospectus.

BEACHPORT ENTERTAINMENT
CORPORATION

------------------------
9,182,775 SHARES
COMMON STOCK
PROSPECTUS
NOVEMBER , 1997

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

_________________________________ ________________________________

<PAGE>
<PAGE>
PART II

ITEM 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Utah Revised Business Corporation Act, in general, allows corporations
to indemnify their directors and officers against expenses (including attorneys'
fees), judgments, fines and settlement amounts actually and reasonably incurred
by such person in connection with suits or proceedings, if the person acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation. In the case of a criminal
action, the director or officer must have had no reasonable cause to believes
that person's conduct was unlawful. Under current law, no indemnification may be
made if in connection with a proceeding or in the right of the corporation in
which the director or officer was adjudged to be liable to the corporation or
that person derived an improper personal benefit.

The Company's Certificate of Incorporation and By-Laws provide that the
Company shall indemnify its directors and officers to the fullest extent
permitted by Utah Law.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses to be borne by the
Company (also referred to herein as the Registrant) in connection with the
issuance and distribution of the Shares pursuant to the Offering.

<TABLE>
<S> <C>
SEC registration fee.............................................................. $ 5,400
Legal fees and expenses........................................................... 100,000
Accounting fees................................................................... 35,000
Blue Sky fees and expenses........................................................ 20,000
Printing and engraving expenses................................................... 60,000
Miscellaneous..................................................................... 5,000
--------
Total fees and expenses...................................................... $225,400
--------
--------
</TABLE>

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

* To be completed by amendment

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

The following paragraphs set forth certain information with respect to all
securities sold by the Company within the past three years without registration
under the Securities Act of 1933, as amended (the 'Securities Act'). The
information includes the names of the purchasers, the date of issuance, the
title and number of securities sold and the consideration received by the
Company for the issuance of these shares.

The following securities were issued by the Company without registration
under the Securities Act by reason of the exemption from registration afforded
by the provisions of Section 4(2) thereof, as transactions by an issuer not
involving a public offering:

On November 15, 1994, the Company issued an option to Danny Katz, for
services rendered, to purchase 80,000 shares of common stock at $.10 per
share.

In July 1995, the Company issued 800,000 shares of common stock to
Barry Mendelson in partial consideration for the purchase of On Ice, Inc.

On August 1, 1995, the Company issued an option to Duane S. Jenssen
and Jeff D. Jenssen, for services rendered, to purchase 10,000 shares of
common stock at $.25 per share.

On August 7, 1995, the Company issued an option to Jaffoni & Collins,
for services rendered, to purchase 75,000 shares of common stock at $.625
per share.

On August 25, 1995, the Company issued an option to Wayne Seybold, for
services rendered, to purchase 50,000 shares of common stock at varying
prices, as follows: 20,000 at $.10 per share; 15,000 at $1.00 per share and
15,000 at $2.00 per share.

II-1

<PAGE>
<PAGE>
On October 1, 1995, the Company issued an option to Mark Adleman, for
services rendered, to purchase 5,000 shares of common stock at $2.31 per
share.

On October 1, 1995, the Company issued an option to Eric Wasserman,
for services rendered, to purchase 25,000 shares of common stock at $2.31
per share.

On August 7, 1995, the Company issued an option to Benton Levy, for
professional services rendered, to purchase 50,000 shares of common stock
at $2.31 per share.

On August 7, 1995, the Company issued an option to Kenneth Freundlich,
for professional services rendered, to purchase 50,000 shares of common
stock at $2.31 per share.

On August 15, 1996, the Company issued an option to Jeremiah J. Harris
in consideration of his agreeing to serve as a member of the Company's
Board of Directors, to purchase 12,000 shares of common stock at $2.50 per
share.

On October 10, 1996, the Company issued an option to Tom Wiley, for
professional services rendered, to purchase 10,000 shares of common stock
at $1.50 per share.

On October 11, 1996, the Company issued an option to Linda Azarone,
the Company's Chief Operating Officer, to purchase 50,000 shares of common
stock at $1.75 per share for services rendered.

On October 14, 1996 the Company issued to Liviakis Financial
Communications, Inc. an option to purchase 1,050,000 shares of common stock
at $1.12 per share for services rendered.

On October 14, 1996 the Company issued to Robert B. Prag an option to
purchase 350,000 shares of common stock at $1.12 per share for services
rendered.

On October 15, 1996, the Company issued warrants to Swan Alley
Nominees, Ltd., on behalf of its clients, to purchase 155,160 shares of
common stock at $1.25 per share in consideration of extending the due dates
of certain loans to the Company from July, August, and September 1996 to
April 30, 1997.

On October 15, 1996, the Company issued warrants to 155964 Canada
Inc., to purchase 10,000 shares of common stock at $1.25 per share in
consideration of extending the due date of its loan to the Company from
August 1996 to April 30, 1997.

On October 15, 1996, the Company issued warrants to Astaire & Partners
Ltd., to purchase 25,000 shares of common stock at $1.25 per share in
consideration of their negotiating the terms of certain loan extension
agreements with their clients.

On October 16, 1996 the Company issued an option to David C. Teuma to
purchase 10,000 shares of common stock at $1.25 per share for services
rendered.

On December 27, 1996, the Company issued to Robert Wussler, a Director
of the Company, an option to purchase 500,000 shares of common stock of
which 200,000 options are exercisable at $.50 per share, 150,000 options
are exercisable at the lowest closing bid price for the year ended December
31, 1997 or three years from any other date he selects to exercise his
options in 1997 and 150,000 options are exercisable at the lowest closing
bid price for the year ended December 31, 1998 or three years from any
other date he selects to exercise his options in 1998, in connection for
his agreeing to become a member of the Board of Directors of the Company.

On December 30, 1996 the Company issued to Gerald A. Adler an option
to purchase 200,000 shares of common stock at $.93 per share for services
rendered.

On December 30, 1996, the Company issued to Wasserstein Perella
Securities, Inc. an option to purchase 600,000 shares of common stock at
$.25 per share for services rendered.

On December 30, 1996, the Company issued option to purchase 40,000
shares of common stock at $.93 per share to Roy Lerman for services
rendered.

On December 30, 1996 the Company issued to Peter Jenssen, options to
purchase 500,000 shares of common stock at $.25 per share for services
rendered.

On December 31, 1996 the Company issued to Jim Cahill an option to
purchase 15,000 shares of common stock at $1.50 per share for services
rendered.

II-2

On December 31, 1996 the Company issued to Mike Hogan an option to
purchase 20,000 shares of common stock at $1.50 per share for services
rendered.

On December 31, 1996 the Company issued to Harry Kroning an option to
purchase 40,000 shares of common stock at $1.50 per share for services
rendered.

On December 31, 1996 the Company issued to Tom Lammers an option to
purchase 10,000 shares of common stock at $1.50 per share for services
rendered.

On December 31, 1996 the Company issued to Larry Silverstein an option
to purchase 10,000 shares of common stock at $1.50 per share for services
rendered.

On December 31, 1997 the Company issued to Laidlaw Securities, Inc. an
option to purchase 40,000 shares of common stock at $1.50 per share for
services rendered.

On January 17, 1997 the Company issued options to purchase 10,000
shares of common stock at $.93 per share each to Jeremiah Harris, Ronald
Wilson and Walter J. Richards, for services rendered at members of the
Company's Board of Directors.

On February 28, 1997, the Company issued options to Gary De Luca to
purchase 500,000 shares of common stock at $.25 per share for services
rendered.

On March 15, 1997 the Company issued to Greg Kroning an option to
purchase 100,000 shares of common stock at $1.75 per share for services
rendered.

On March 26, 1997, the Company issued an option to Eric Wasserman, for
services rendered to purchase 25,000 shares of common stock at $.93 per
share.

In April 1997, the Company issued to BlueStone Capital Partners, L.P.
an option to purchase 100,000 shares of common stock at $1.375 per share
for services rendered.

On May 1, 1997 the Company issued to Gerald Agranoff an option to
purchase 11,000 shares of common stock at $1.375 per share for services
rendered.

On June 4, 1997 the Company issued an option to Richard Love to
purchase 100,000 shares of common stock at $1.00 per share for legal
services rendered.

On July 1, 1997 the Company issued 336,879 shares of common stock to
Gary Lashinsky, 336,880 shares of common stock to Elizabeth Lashinsky and
35,461 shares of common stock to Gary and Elizabeth Lashinsky, as joint
tenants, all in connection with the merger of ESL into RSL, a wholly owned
subsidiary of the Company.

On August 8, 1997 the Company issued to DMN Capital Investment, Inc.
55,000 shares of common stock in partial settlement of loans previously
made to the Company.

On August 8, 1997 the Company issued to Sangrain Securities an option
to purchase 300,000 shares of common stock at $1.81 per share for services
rendered.

The following shares of common stock were issued by the Company
without registration under the Securities Act in accordance with Rule 506
of Regulation D of the Securities Act.

On September 30, 1996, the Company completed an offering of an
aggregate of $725,000 of its 8% non-negotiable promissory notes to 14
'accredited investors', as that term is defined by Rule 501 of Regulation
D, which notes were due on December 31, 1996. The offering was made
pursuant to Rule 506 of the Regulation D. In consideration of extending the
due dates on such notes, the Company issued to its lenders, warrants to
purchase 135,000 shares of common stock at $1.20 per share. An aggregate of
675,000 warrants exercisable at $1.20 per share were also issued to said
accredited investors.

In June 1997, the Company completed a private placement to 'accredited
investors' of 37.25 Units to 79 of its 12% Senior Secured Original Issue
Discount Promissory Notes ('Senior Notes') in the face amount of $106,000
per Unit and warrants to purchase 22,000 shares of common stock per week
and 10.03 Units of 12% Junior Original Issue Discount Promissory Notes
('Junior Notes') in the face amount of $106,000 per Unit and Warrants to
purchase 22,000 shares of Common Stock per Unit. The aggregate dollar
amount of Senior Notes and Junior Notes sold in the offering was $3,725,000
and $1,002,765 respectively. The offering was made pursuant to

II-3

Rule 506 of Regulation D. The Placement Agent, Bluestone Capital Partners
LLC was issued warrants to purchase 73,150 shares of common stock
exercisable at $1.375 per share.

The following shares of common stock were issued by the Company
without registration under the Securities Act in accordance with Rule 504
of Regulation D of the Securities Act.

1. In December 1995, the Company completed a private placement issuing
3,600,000 shares of Common Stock for $552,000 as follows:

<TABLE>
<CAPTION>
NUMBER OF PURCHASE
NAME SHARES PRICE
- ------------------------------------------------------------ --------- --------
<S> <C> <C>
Gerald A. Adler............................................. 150,000 $ 24,000
Alex Segall Family Trust.................................... 75,000 12,000
DMN Capital Investment, Inc................................. 450,000 72,000
Dover Securities, Ltd....................................... 600,000 96,000
Thomas Ebert................................................ 225,000 36,000
Christian Geiger............................................ 225,000 36,000
Isabella Hauser............................................. 225,000 36,000
Klaus P. Keuncecke.......................................... 225,000 36,000
Margaux S.A. Inc............................................ 300,000 48,000
Paris Group, Ltd............................................ 150,000 24,000
James Pristsiolas........................................... 150,000 24,000
Milfred Rau/Angelika Konig.................................. 75,000 12,000
Norbert Schulz.............................................. 225,000 36,000
Victor Squitieri............................................ 75,000 12,000
Jurgen Vanselow............................................. 225,000 36,000
Joery Widenhoff............................................. 75,000 12,000
Candice Pokross............................................. 75,000 12,000
</TABLE>

The following securities were issued by the Company without
registration under the Securities Act pursuant to Regulation S:

In January 1996, the Company issued a $125,000 12% promissory note and
50,000 shares of common stock to 3 purchasers, all of whom are non-U.S.
persons, for an aggregate of U.S. $130,000.

In February 1996, the Company issued 12% promissory notes aggregating
$589,550 and 235,820 shares of common stock to 28 purchasers, all of whom
are non-U.S. persons, for an aggregate of U.S. $613,132.

In June 1996, the Company issued 12% promissory notes aggregating
$215,000 and warrants to purchase 215,000 shares of common stock at an
exercise price of $1.20 per share to 5 purchasers, all of whom are non-U.S.
persons, for an aggregate of $215,000.

ITEM 27. EXHIBITS

<TABLE>
<C> <S>
3.1 -- Articles of Incorporation of Mace, Inc.
3.2 -- Article of Amendment to the Articles of Incorporation of Mace, Inc.
3.3 -- Articles of Amendment to the Articles of Incorporation of Mace, Inc.
3.4 -- Articles of Amendment to the Articles of Incorporation of Action Covers, Inc.
3.5 -- Articles of Amendment to the Articles Incorporation of Omni International Corporation.
3.6 -- Articles of Amendment to the Articles of Incorporation of Omni International Corporation.
3.7 -- Articles of Amendment to the Articles of Incorporation of Beachport Entertainment Corporation.
*3.8 -- By-laws.
5.1 -- Opinion and consent of Bondy & Schloss LLP.
10.1 -- Option Agreement, dated June 30, 1995, by and between Beachport Entertainment, Corporation, Barry
Mendelson and On Ice.
10.2 -- Option Exercise Agreement, dated July 28, 1995, by and between Beachport Entertainment Corporation, Barry
Mendelson and On Ice.
</TABLE>

II-4

<TABLE>
<C> <S>
10.3 -- Agreement, dated January 18, 1995, by and between On Ice and NBC Sports Ventures, Inc.
10.4 -- License Agreement, dated February 16, 1995, by and between NBC Sports, On Ice and the CBS/Fox Company.
10.5 -- Agreement, dated March 28, 1995, by and between D&F Consulting, Ltd. and On Ice.
10.6 -- Agreement, dated May 31, 1995, by and between NBC Sports and D&F Consulting Ltd.
10.7 -- Agreement, dated September 15, 1995, by and between On Ice and P.S./StarGames.
10.8 -- Agreement, dated November 10, 1995, by and between Capital Cities/ABC Video Publishing, Inc. and FTI,
Inc.
10.9 -- Agreement, dated November 15, 1995, by and between PS/StarGames On Ice and Nak, Inc.
10.10 -- Agreement, dated January 19, 1996, by and between On Ice and Bresner Management.
10.11 -- Agreement dated February 1996 among FTI, Inc., David Zippel and Marvin Hamlisch, Inc.
10.12 -- Renewal of Agreement, dated March 28, 1996, made by D&F Consulting, Ltd.
10.13 -- Agreement, dated April 3, 1996, by and between TLC Entertainment and Beachport Entertainment Digital
Group.
10.14 -- Agreement, dated April 24, 1996, by and between FTI, Inc. and Gorfine & Schwartz Agency.
10.15 -- Employment, Non-Competition and Confidentiality Agreement dated as of June 30, 1996 by and between
Beachport Entertainment Corporation and Barry Mendelson.
10.16 -- Employment, Non-Competition and Confidentiality Agreement dated October, 1996 by and between Beachport
Entertainment Corporation and Sidney Shlenker.
10.17 -- Employment, Non-Competition and Confidentiality Agreement dated October, 1996 by and between Beachport
Entertainment Corporation and Robert L. Barland.
10.18 -- Employment, Non-Competition and Confidentiality Agreement dated as of July 1, 1997 by and between
Beachport Entertainment Corporation and Elizabeth Lashinsky.
10.19 -- Employment, Non-Competition and Confidentiality Agreement by and between Beachport Entertainment
Corporation and Gary Lashinsky.
10.20 -- Agreement between Magic Promotions, Inc. and On Ice, Inc. dated November 10, 1994.
10.21 -- Settlement Agreement between On Ice, Inc. and Magicworks Entertainment Incorporated dated June 12, 1997.
10.22 -- Merger Agreement and Plan or Reorganization dated June 13, 1997 by and among Beachport Entertainment
Corporation and The Royal Lipizzaner Stallions, Inc. and Entertainment Specialists, Ltd. and Gary and
Elizabeth Lashinsky.
10.23 -- Event Production and Promotion Agreement, dated September 17, 1997, by and between Beachport
Entertainment Corporation and Protruck Racing Organization.
*10.24 -- Option plan of Beachport Entertainment Corporation.
23.1 -- Consents of Malone & Bailey, PLLC.
23.2 -- Consents of Van Buren and Hauke LLC.
23.3 -- Consent of Bondy & Schloss (included in Exhibit 5.1).
24.1 -- Power of Attorney (See page II-7).
</TABLE>

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

* Filed herewith.

ITEM 28. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to:

(i) include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate

II-5

<PAGE>
<PAGE>
offering price set forth in the 'Calculation of Registration Fee' table
in the effective registration statement.

(iii) include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.

(2) For the purpose of determining any liability under the Securities
Act of 1933, treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of the securities at
that time to be the initial bona fide offering.

(3) Registrant will remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.

(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the 'Act') may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registration the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of Prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. The Registrant further undertakes to remove from
registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the Offering.

II-6

<PAGE>
<PAGE>
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of New
York, State of New York on the 31st day of October, 1997.

BEACHPORT ENTERTAINMENT CORPORATION
By: /S/ BARRY MENDELSON
...................................
BARRY MENDELSON, PRESIDENT

In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<S> <C> <C>
/s/ BARRY MENDELSON President, Chief Executive Officer Director October 31, 1997
.........................................
(BARRY MENDELSON)

/s/ SIDNEY SHLENKER Chairman of the Board October 31, 1997
.........................................
(SIDNEY SHLENKER)

/s/ ROBERT L. BARLAND Vice President, Secretary, Treasurer, Chief October 31, 1997
......................................... Financial Officer, Chief Accounting
(ROBERT L. BARLAND) Officer

/s/ LINDA AZARONE Chief Operating Officer October 31, 1997
.........................................
(LINDA AZARONE)

/s/ WALTER J. RICHARDS Director October 31, 1997
.........................................
(WALTER J. RICHARDS)

/s/ RONALD WILSON Director October 31, 1997
.........................................
(RONALD WILSON)

/s/ JEREMIAH J. HARRIS Director October 31, 1997
.........................................
(JEREMIAH J. HARRIS)

/s/ ROBERT WUSSLER Director October 31, 1997
.........................................
(ROBERT WUSSLER)

/s/ RICHARD L. TUCH Director October 31, 1997
.........................................
(RICHARD L. TUCH)

/s/ GARY LASHINSKY Director October 31, 1997
.........................................
(GARY LASHINSKY)
</TABLE>

II-7

<PAGE>
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
LOCATION OF EXHIBIT
EXHIBIT IN SEQUENTIAL
NUMBER DESCRIPTION OF DOCUMENT NUMBERING SYSTEM
- ------- -------------------------------------------------------------------------------------- -------------------
<S> <C> <C>
**3.1 -- Articles of Incorporation of Mace, Inc.............................................
**3.2 -- Article of Amendment to the Articles of Incororation of Mace, Inc..................
**3.3 -- Articles of Amendment to the Articles of Incorporation of Mace, Inc................
**3.4 -- Articles of Amendment to the Articles of Incorporation of Action Covers, Inc.......
**3.5 -- Articles of Amendment to the Articles Incorporation of Omni International
Corporation.........................................................................
**3.6 -- Articles of Amendment to the Articles of Incorporation of Omni International
Corporation.........................................................................
**3.7 -- Articles of Amendment to the Articles of Incorporation of Beachport Entertainment
Corporation.........................................................................
*3.8 -- By-laws............................................................................
**5.1 -- Opinion and consent of Bondy & Schloss LLP.........................................
**10.1 -- Option Agreement, dated June 30, 1995, by and between Beachport Entertainment,
Corporation, Barry Mendelson and On Ice.............................................
**10.2 -- Option Exercise Agreement, dated July 28, 1995, by and between Beachport
Entertainment Corporation, Barry Mendelson and On Ice...............................
**10.3 -- Agreement, dated January 18, 1995, by and between On Ice and NBC Sports Ventures,
Inc.................................................................................
**10.4 -- License Agreement, dated February 16, 1995, by and between NBC Sports, On Ice and
the CBS/Fox Company.................................................................
**10.5 -- Agreement, dated March 28, 1995, by and between D&F Consulting, Ltd. and On Ice....
**10.6 -- Agreement, dated May 31, 1995, by and between NBC Sports and D&F Consulting Ltd....
**10.7 -- Agreement, dated September 15, 1995, by and between On Ice and P.S./StarGames......
**10.8 -- Agreement, dated November 10, 1995, by and between Capital Cities/ABC Video
Publishing, Inc. and FTI, Inc.......................................................
**10.9 -- Agreement, dated November 15, 1995, by and between PS/StarGames On Ice and Nak,
Inc.................................................................................
**10.10 -- Agreement, dated January 19, 1996, by and between On Ice and Bresner Management....
**10.11 -- Agreement dated February 1996 among FTI, Inc., David Zippel and Marvin Hamlisch,
Inc.................................................................................
**10.12 -- Renewal of Agreement, dated March 28, 1996, made by D&F Consulting, Ltd............
**10.13 -- Agreement, dated April 3, 1996, by and between TLC Entertainment and Beachport
Entertainment Digital Group.........................................................
**10.14 -- Agreement, dated April 24, 1996, by and between FTI, Inc. and Gorfine & Schwartz
Agency..............................................................................
**10.15 -- Employment, Non-Competition and Confidentiality Agreement dated as of June 30, 1996
by and between Beachport Entertainment Corporation and Barry Mendelson..............
**10.16 -- Employment, Non-Competition and Confidentiality Agreement dated October, 1996 by
and between Beachport Entertainment Corporation and Sidney Shlenker.................
**10.17 -- Employment, Non-Competition and Confidentiality Agreement dated October, 1996 by
and between Beachport Entertainment Corporation and Robert L. Barland...............
**10.18 -- Employment, Non-Competition and Confidentiality Agreement dated as of July 1, 1997
by and between Beachport Entertainment Corporation and Elizabeth Lashinsky..........
**10.19 -- Employment, Non-Competition and Confidentiality Agreement by and between Beachport
Entertainment Corporation and Gary Lashinsky........................................
</TABLE>

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

* Filed herewith.

** Previously filed.

<PAGE>

BYLAWS
OF
BEACHPORT ENTERTAINMENT CORPORATION

ARTICLE I
OFFICES

Section 1.01 Location of Offices. The corporation may maintain such
offices within or without the State of Utah as the Board of Directors may from
time to time designate or require.

Section 1.02 Principal Office. The address of the principal office of
the corporation shall be at the address of the registered office of the
corporation as so designated in the office of the Lieutenant Governor/Secretary
of State of the state of incorporation, or at such other address as the Board of
Directors shall from time to time determine.

ARTICLE II
SHAREHOLDERS

Section 2.01 Annual Meeting. The annual meeting of the shareholders
shall be held in May of each year or at such other time designated by the Board
of Directors and as is provided for in the notice of the meeting, for the
purpose of electing directors and for the transaction of such other business as
may come before the meeting. If the election of directors shall not be held on
the day designated for the annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of the shareholders as soon thereafter as may be
convenient.

Section 2.02 Special Meetings. Special meetings of the shareholders may
be called at any time by the chairman of the board, the president, or by the
Board of Directors, or in their absence or disability, by any vice president,
and shall be called by the president or, in his or her absence or disability, by
a vice president or by the secretary on the written request of the holders of
not less than one-tenth of all the shares entitled to vote at the meeting, such
written request to state the purpose or purposes of the meeting and to be
delivered to the president, each vice-president, or secretary. In case of
failure to call such meeting within 60 days after such request, such shareholder
or shareholders may call the same.

Section 2.03 Place of Meetings. The Board of Directors may designate any
place, either within or without the state of incorporation, as the place of
meeting for any annual meeting or for any special meeting called by the Board of
Directors. A waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within or without the state of
incorporation, as the place for the holding of such meeting. If no

designation is made, or if a special meeting be otherwise called, the place of
meeting shall be at the principal office of the corporation.

Section 2.04 Notice of Meetings. The secretary or assistant secretary,
if any, shall cause notice of the time, place, and purpose or purposes of all
meetings of the shareholders (whether annual or special), to be mailed at least
ten days, but not more than 50 days, prior to the meeting, to each shareholder
of record entitled to vote.

Section 2.05 Waiver of Notice. Any shareholder may waive notice of any
meeting of shareholders (however called or noticed, whether or not called or
noticed and whether before, during, or after the meeting), by signing a written
waiver of notice or a consent to the holding of such meeting, or an approval of
the minutes thereof. Attendance at a meeting, in person or by proxy, shall
constitute waiver of all defects of call or notice regardless of whether waiver,
consent, or approval is signed or any objections are made. All such waivers,
consents, or approvals shall be made a part of the minutes of the meeting.

Section 2.06 Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any annual meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of any dividend or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the corporation may provide
that the share transfer books shall be closed, for the purpose of determining
shareholders entitled to notice of or to vote at such meeting, but not for a
period exceeding fifty (50) days. If the share transfer books are closed for the
purpose of determining shareholders entitled to notice of or to vote at such
meeting, such books shall be closed for at least ten (10) days immediately
preceding such meeting.

In lieu of closing the share transfer books, the Board of Directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than fifty (50) and, in case
of a meeting of shareholders, not less than ten (10) days prior to the date on
which the particular action requiring such determination of shareholders is to
be taken. If the share transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice of or to vote at a
meeting or to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this Section, such detemination shall apply to any adjournment thereof. Failure
to comply with this Section shall not affect the validity of any action taken at
a meeting of shareholders.

Section 2.07 Voting Lists. The officer or agent of the corporation
having charge of the share transfer books for shares of the corporation shall
make, at least ten (10) days before each meeting of shareholders, a complete
list of the shareholders entitled to vote at such meeting or any adjournment
thereof, arranged in alphabetical order, with the address of, and

the number of shares held by each, which list, for a period of ten (10) days
prior to such meeting, shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder during the
whole time of the meeting. The original share transfer book shall be prima facia
evidence as to the shareholders who are entitled to examine such list or
transfer books, or to vote at any meeting of shareholders.

Section 2.08 Quorum. One-half of the total voting power of the
outstanding shares of the corporation entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of the shareholders. If a
quorum is present, the affirmative vote of the majority of the voting power
represented by shares at the meeting and entitled to vote on the subject shall
constitute action by the shareholders, unless the vote of a greater number or
voting by classes is required by the laws of the state of incorporation of the
corporation or the Articles of Incorporation. If less than one-half of the
outstanding voting power is represented at a meeting, a majority of the voting
power represented by shares so present may adjourn the meeting from time to time
without further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed.

Section 2.09 Voting of Shares. Each outstanding share of the corporation
entitled to vote shall be entitled to one vote on each matter submitted to vote
at a meeting of shareholders, except to the extent that the voting rights of the
shares of any class or series of stock are determined and specified as greater
or lesser than one vote per share in the manner provided by the Articles of
Incorporation.

Section 2.10 Proxies. At each meeting of the shareholders, each
shareholder entitled to vote shall be entitled to vote in person or by proxy;
provided, however, that the right to vote by proxy shall exist only in case the
instrument authorizing such proxy to act shall have been executed in writing by
the registered holder or holders of such shares, as the case may be, as shown on
the share transfer of the corporation or by his or her or her attorney thereunto
duly authorized in writing. Such instrument authorizing a proxy to act shall be
delivered at the beginning of such meeting to the secretary of the corporation
or to such other officer or person who may, in the absence of the secretary, be
acting as secretary of the meeting. In the event that any such instrument shall
designate two or more persons to act as proxies, a majority of such persons
present at the meeting, or if only one be present, that one shall (unless the
instrument shall otherwise provide) have all of the powers conferred by the
instrument on all persons so designated. Persons holding stock in a fiduciary
capacity shall be entitled to vote the shares so held and the persons whose
shares are pledged shall be entitled to vote, unless in the transfer by the
pledge or on the books of the corporation he or she shall have expressly
empowered the pledgee to vote thereon, in which case the pledgee, or his or her
or her proxy, may represent such shares and vote thereon.

Section 2.11 Written Consent to Action by Shareholders. Any action
required to be taken at a meeting of the shareholders, or any other action which
may be taken at a meeting of the shareholders, may be taken without a meeting,
if a consent in writing, setting forth the

action so taken, shall be signed by all of the shareholders entitled to vote
with respect to the subject matter thereof.

ARTICLE III
DIRECTORS

Section 3.01 General Powers. The property, affairs, and business of the
corporation shall be managed by its Board of Directors. The Board of Directors
may exercise all the powers of the corporation whether derived from law or the
Articles of Incorporation, except such powers as are by statute, by the Articles
of Incorporation or by these Bylaws, vested solely in the shareholders of the
corporation.

Section 3.02 Number, Term and Qualifications. The Board of Directors
shall consist of three to nine persons. Increases or decreases to said number
may be made, within the numbers authorized by the Articles of Incorporation, as
the Board of Directors shall from time to time determine by amendment to these
Bylaws. An increase or a decrease in the number of the members of the Board of
Directors may also be had upon amendment to these Bylaws by a majority vote of
all of the shareholders, and the number of directors to be so increased or
decreased shall be fixed upon a majority vote of all of the shareholders of the
corporation. Each director shall hold office until the next annual meeting of
shareholders of the corporation and until his or her successor shall have been
elected and shall have qualified. Directors need not be residents of the state
of incorporation or shareholders of the corporation.

Section 3.03 Classification of Directors. In lieu of electing the entire
number of directors annually, the Board of Directors may provide that the
directors be divided into either two or three classes, each class to be as
nearly equal in number as possible, the term of office of the directors of the
first class to expire at the first annual meeting of shareholders after their
election, that of the second class to expire at the second annual meeting after
their election, and that of the third class, if any, to expire at the third
annual meeting after their election. At each annual meeting after such
classification, the number of directors equal to the number of the class whose
term expires at the time of such meeting shall be elected to hold office until
the second succeeding annual meeting, if there be two classes, or until the
third succeeding annual meeting, if there be three classes.

Section 3.04 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately
following, and at the same place as, the annual meeting of shareholders. The
Board of Directors may provide by resolution the time and place, either within
or without the state of incorporation, for the holding of additional regular
meetings without other notice than such resolution.

Section 3.05 Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the president, vice president,
or any two directors. The person or persons authorized to call special meetings
of the Board of Directors may fix any place,

either within or without the state of incorporation, as the place for holding
any special meeting of the Board of Directors called by them.

Section 3.06 Meetings by Telephone Conference Call. Members of the Board
of Directors may participate in a meeting of the Board of Directors or a
committee of the Board of Directors by means of conference telephone or similar
communication equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.

Section 3.07 Notice. Notice of any special meeting shall be given at
least ten (10) days prior thereto by written notice delivered personally or
mailed to each director at his or her regular business address or residence, or
by telegram. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon prepaid.
If notice be given by telegram, such notice shall be deemed to be delivered when
the telegram is delivered to the telegraph company. Any director may waive
notice of any meeting. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting
solely for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.

Section 3.08 Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, but if less than a majority is present at a meeting, a majority of
the directors present may adjourn the meeting from time to time without further
notice.

Section 3.09 Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, and the individual directors shall have no power as such.

Section 3.10 Vacancies and Newly Created Directorship. If any vacancies
shall occur in the Board of Directors by reason of death, resignation or
otherwise, or if the number of directors shall be increased, the directors then
in office shall continue to act and such vacancies or newly created
directorships shall be filled by a vote of the directors then in office, though
less than a quorum, in any way approved by the meeting. Any directorship to be
filled by reason of removal of one or more directors by the shareholders may be
filled by election by the shareholders at the meeting at which the director or
directors are removed.

Section 3.11 Compensation. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.

Section 3.12 Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be

presumed to have assented to the action taken unless his or her or her dissent
shall be entered in the minutes of the meeting, unless he or she shall file his
or her or her written dissent to such action with the person acting as the
secretary of the meeting before the adjournment thereof, or shall forward such
dissent by registered or certified mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.

Section 3.13 Resignations. A director may resign at any time by
delivering a written resignation to either the president, a vice president, the
secretary, or assistant secretary, if any. The resignation shall become
effective on its acceptance by the Board of Directors; provided, that if the
board has not acted thereon within ten days from the date presented, the
resignation shall be deemed accepted.

Section 3.14 Written Consent to Action by Directors. Any action required
to be taken at a meeting of the directors of the corporation or any other action
which may be taken at a meeting of the directors or of a committee, may be taken
without a meeting, if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors, or all of the members of the committee,
as the case may be. Such consent shall have the same legal effect as a unanimous
vote of all the directors or members of the committee.

Section 3.15 Removal. At a meeting expressly called for that purpose,
one or more directors may be removed by a vote of a majority of the shares of
outstanding stock of the corporation entitled to vote at an election of
directors.

ARTICLE IV
OFFICERS

Section 4.01 Number. The officers of the corporation shall be a
president, one or more vice-presidents, as shall be determined by resolution of
the Board of Directors, a secretary, a treasurer, and such other officers as may
be appointed by the Board of Directors. The Board of Directors may elect, but
shall not be required to elect, a chairman of the board and the Board of
Directors may appoint a general manager.

Section 4.02 Election, Term of Office, and Qualifications. The officers
shall be chosen by the Board of Directors annually at its annual meeting. In the
event of failure to choose officers at an annual meeting of the Board of
Directors, officers may be chosen at any regular or special meeting of the Board
of Directors. Each such officer (whether chosen at an annual meeting of the
Board of Directors to fill a vacancy or otherwise) shall hold his or her office
until the next ensuing annual meeting of the Board of Directors and until his or
her successor shall have been chosen and qualified, or until his or her death,
or until his or her resignation or removal in the manner provided in these
Bylaws. Any one person may hold any two or more of such offices, except that the
president shall not also be the secretary. No person holding two or more offices
shall act in or execute any instrument in the capacity of

more than one office. The chairman of the board, if any, shall be and remain a
director of the corporation during the term of his or her office. No other
officer need be a director.

Section 4.03 Subordinate Officers, Etc. The Board of Directors from time
to time may appoint such other officers or agents as it may deem advisable, each
of whom shall have such title, hold office for such period, have such authority,
and perform such duties as the Board of Directors from time to time may
determine. The Board of Directors from time to time may delegate to any officer
or agent the power to appoint any such subordinate officer or agents and to
prescribe their respective titles, terms of office, authorities, and duties.
Subordinate officers need not be shareholders or directors.

Section 4.04 Resignations. Any officer may resign at any time by
delivering a written resignation to the Board of Directors, the president, or
the secretary. Unless otherwise specified therein, such resignation shall take
effect on delivery.

Section 4.05 Removal. Any officer may be removed from office at any
special meeting of the Board of Directors called for that purpose or at a
regular meeting, by vote of a majority of the directors, with or without cause.
Any officer or agent appointed in accordance with the provisions of Section 4.03
hereof may also be removed, either with or without cause, by any officer on whom
such power of removal shall have been conferred by the Board of Directors.

Section 4.06 Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal, disqualification,
or any other cause, or if a new office shall be created, then such vacancies or
new created offices may be filled by the Board of Directors at any regular or
special meeting.

Section 4.07 The Chairman of the Board. The Chairman of the Board, if
there be such an officer, shall have the following powers and duties.

(a) He or she shall preside at all shareholders' meetings;

(b) He or she shall preside at all meetings of the Board of Directors;
and

Section 4.08 The President. The president shall have the following
powers and duties:

(a) If no general manager has been appointed, he or she shall be the
chief executive officer of the corporation, and, subject to the direction of the
Board of Directors, shall have general charge of the business, affairs, and
property of the corporation and general supervision over its officers,
employees, and agents;

(b) If no chairman of the board has been chosen, or if such officer is
absent or disabled, he or she shall preside at meetings of the shareholders and
Board of Directors;

(d) He or she shall be empowered to sign certificates representing
shares of the corporation, the issuance of which shall have been authorized by
the Board of Directors; and

(e) He or she shall have all power and shall perform all duties normally
incident to the office of a president of a corporation, and shall exercise such
other powers and perform such other duties as from time to time may be assigned
to him or her by the Board of Directors.

Section 4.09 The Vice Presidents. The Board of Directors may, from time
to time, designate and elect one or more vice presidents, one of whom may be
designated to serve as executive vice president. Each vice president shall have
such powers and perform such duties as from time to time may be assigned to him
or her by the Board of Directors or the president. At the request or in the
absence or disability of the president, the executive vice president or, in the
absence or disability of the executive vice president, the vice president
designated by the Board of Directors or (in the absence of such designation by
the Board of Directors) by the president, the senior vice president, may perform
all the duties of the president, and when so acting, shall have all the powers
of, and be subject to all the restrictions upon, the president.

Section 4.10 The Secretary. The secretary shall have the following
powers and duties:

(a) He or she shall keep or cause to be kept a record of all of the
proceedings of the meetings of the shareholders and of the board or directors in
books provided for that purpose;

(b) He or she shall cause all notices to be duly given in accordance
with the provisions of these Bylaws and as required by statute;

(c) He or she shall be the custodian of the records and of the seal of
the corporation, and shall cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the corporation prior to the
issuance thereof and to all instruments, the execution of which on behalf of the
corporation under its seal shall have been duly authorized in accordance with
these Bylaws, and when so affixed, he or she may attest the same;

(d) He or she shall assume that the books, reports, statements,
certificates, and other documents and records required by statute are properly
kept and filed;

(e) He or she shall have charge of the share books of the corporation
and cause the share transfer books to be kept in such manner as to show at any
time the amount of the

shares of the corporation of each class issued and outstanding, the manner in
which and the time when such stock was paid for, the names alphabetically
arranged and the addresses of the holders of record thereof, the number of
shares held by each holder and time when each became such holder or record; and
he or she shall exhibit at all reasonable times to any director, upon
application, the original or duplicate share register. He or she shall cause the
share book referred to in Section 6.04 hereof to be kept and exhibited at the
principal office of the corporation, or at such other place as the Board of
Directors shall determine, in the manner and for the purposes provided in such
Section;

(f) He or she shall be empowered to sign certificates representing
shares of the corporation, the issuance of which shall have been authorized by
the Board of Directors; and

(g) He or she shall perform in general all duties incident to the office
of secretary and such other duties as are given to him or her by these Bylaws or
as from time to time may be assigned to him or her by the Board of Directors or
the president.

Section 4.11 The Treasurer. The treasurer shall have the following
powers and duties:

(a) He or she shall have charge and supervision over and be responsible
for the monies, securities, receipts, and disbursements of the corporation;

(b) He or she shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the corporation in
such banks or trust companies or with such banks or other depositories as shall
be selected in accordance with Section 5.03 hereof;

(c) He or she shall cause the monies of the corporation to be disbursed
by checks or drafts (signed as provided in Section 5.04 hereof) drawn on the
authorized depositories of the corporation, and cause to be taken and preserved
property vouchers for all monies disbursed;

(d) He or she shall render to the Board of Directors or the president,
whenever requested, a statement of the financial condition of the corporation
and of all of this transactions as treasurer, and render a full financial report
at the annual meeting of the shareholders, if called upon to do so;

(e) He or she shall cause to be kept correct books of account of all the
business and transactions of the corporation and exhibit such books to any
director on request during business hours;

(f) He or she shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements given such
information as he or she may desire with respect to any and all financial
transactions of the corporation; and

(g) He or she shall perform in general all duties incident to the office
of treasurer and such other duties as are given to him or her by these Bylaws or
as from time to time may be assigned to him or her by the Board of Directors or
the president.

Section 4.12 General Manager. The Board of Directors may employ and
appoint a general manager who may, or may not, be one of the officers or
directors of the corporation. The general manager, if any shall have the
following powers and duties:

(a) He or she shall be the chief executive officer of the corporation
and, subject to the directions of the Board of Directors, shall have general
charge of the business affairs and property of the corporation and general
supervision over its officers, employees, and agents;

(b) He or she shall be charged with the exclusive management of the
business of the corporation and of all of its dealings, but at all times subject
to the control of the Board of Directors;

(c) Subject to the approval of the Board of Directors or the executive
committee, if any, he or she shall employ all employees of the corporation, or
delegate such employment to subordinate officers, and shall have authority to
discharge any person so employed; and

(d) He or she shall make a report to the president and directors as
often as required, setting forth the results of the operations under his or her
charge, together with suggestions looking toward improvement and betterment of
the condition of the corporation, and shall perform such other duties as the
Board of Directors may require.

Section 4.13 Salaries. The salaries and other compensation of the
officers of the corporation shall be fixed from time to time by the Board of
Directors, except that the Board of Directors may delegate to any person or
group of persons the power to fix the salaries or other compensation of any
subordinate officers or agents appointed in accordance with the provisions of
Section 4.03 hereof. No officer shall be prevented from receiving any such
salary or compensation by reason of the fact that he or she is also a director
of the corporation.

Section 4.14 Surety Bonds. In case the Board of Directors shall so
require, any officer or agent of the corporation shall execute to the
corporation a bond in such sums and with such surety or sureties as the Board of
Directors may direct, conditioned upon the faithful performance of his or her
duties to the corporation, including responsibility for negligence and for the
accounting of all property, monies, or securities of the corporation which may
come into his or her hands.

ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS

Section 5.01 Execution of Instruments. Subject to any limitation contained
in the Articles of Incorporation or these Bylaws, the president or any vice
president or the general manager, if any, may, in the name and on behalf of the
corporation, execute and deliver any contract or other instrument authorized in
writing by the Board of Directors. The Board of Directors may, subject to any
limitation contained in the Articles of Incorporation or in these Bylaws,
authorize in writing any officer or agent to execute and delivery any contract
or other instrument in the name and on behalf of the corporation; any such
authorization may be general or confined to specific instances.

Section 5.02 Loans. No loans or advances shall be contracted on behalf of
the corporation, no negotiable paper or other evidence of its obligation under
any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred, or conveyed
as security for the payment of any loan, advance, indebtedness, or liability of
the corporation, unless and except as authorized by the Board of Directors. Any
such authorization may be general or confined to specific instances.

Section 5.03 Deposits. All monies of the corporation not otherwise employed
shall be deposited from time to time to its credit in such banks and or trust
companies or with such bankers or other depositories as the Board of Directors
may select, or as from time to time may be selected by any officer or agent
authorized to do so by the Board of Directors.

Section 5.04 Checks. Drafts, Etc. All notes, drafts, acceptances, checks,
endorsements, and, subject to the provisions of these Bylaws, evidences of
indebtedness of the corporation, shall be signed by such officer or officers or
such agent or agents of the corporation and in such manner as the Board of
Directors from time to time may determine. Endorsements for deposit to the
credit of the corporation in any of its duly authorized depositories shall be in
such manner as the Board of Directors from time to time may determine.

Section 5.05 Bonds and Debentures. Every bond or debenture issued by the
corporation shall be evidenced by an appropriate instrument which shall be
signed by the president or a vice president and by the secretary and sealed with
the seal of the corporation. The seal may be a facsimile, engraved or printed.
Where such bond or debenture is authenticated with the manual signature of an
authorized officer of the corporation or other trustee designated by the
indenture of trust or other agreement under which such security is issued, the
signature of any of the corporation's officers named thereon may be a facsimile.
In case any officer who signed, or whose facsimile signature has been used on
any such bond or debenture, should cease to be an officer of the corporation for
any reason before the same has been delivered by the corporation, such bond or
debenture may nevertheless be adopted

by the corporation and issued and delivered as through the person who signed it
or whose facsimile signature has been used thereon had not ceased to be such
officer.

Section 5.06 Sale, Transfer, Etc. of Securities. Sales, transfers,
endorsements, and assignments of stocks, bonds, and other securities owned by or
standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to any
such sale, transfer, endorsement, or assignment, shall be effected by the
president, or by any vice president, together with the secretary, or by any
officer or agent "hereunto authorized by the Board of Directors.

Section 5.07 Proxies. Proxies to vote with respect to shares of other
corporations owned by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the president or any vice
president and the secretary or assistant secretary of the corporation, or by any
officer or agent thereunder authorized by the Board of Directors.

ARTICLE VI
CAPITAL SHARES

Section 6.01 Share Certificates. Every holder of shares in the corporation
shall be entitled to have a certificate, signed by the president or any vice
president and the secretary or assistant secretary, and sealed with the seal
(which may be a facsimile, engraved or printed) of the corporation, certifying
the number and kind, class or series of shares owned by him or her in the
corporation; provided, however, that where such a certificate is countersigned
by (a) a transfer agent or an assistant transfer agent, or (b) registered by a
registrar, the signature of any such president, vice president, secretary, or
assistant secretary may be a facsimile. In case any officer who shall have
signed, or whose facsimile signature or signatures shall have been used on any
such certificate, shall cease to be such officer of the corporation, for any
reason, before the delivery of such certificate by the corporation, such
certificate may nevertheless be adopted by the corporation and be issued and
delivered as though the person who signed it, or whose facsimile signature or
signatures shall have been used thereon, has not ceased to be such officer.
Certificates representing shares of the corporation shall be in such form as
provided by the statutes of the state of incorporation. There shall be entered
on the share books of the corporation at the time of issuance of each share, the
number of the certificate issued, the name and address of the person owning the
shares represented thereby, the number and kind, class or series of such shares,
and the date of issuance thereof. Every certificate exchanged or returned to the
corporation shall be marked 'Canceled' with the date of cancellation.

Section 6.02 Transfer of Shares. Transfers of shares of the corporation
shall be made on the books of the corporation by the holder of record thereof,
or by his or her attorney thereunto duly authorized by a power of attorney duly
executed in writing and filed with the secretary of the corporation or any of
its transfer agents, and on surrender of the certificate or certificates,
properly endorsed or accompanied by proper instruments of transfer,

representing such shares. Except as provided by law, the corporation and
transfer agents and registrars, if any, shall be entitled to treat the holder of
record of any stock as the absolute owner thereof for all purposes, and
accordingly, shall not be bound to recognize any legal, equitable, or other
claim to or interest in such shares on the part of any other person whether or
not it or they shall have express or other notice thereof.

Section 6.03 Regulations. Subject to the provisions of this Article VI and
of the Articles of Incorporation, the Board of Directors may make such rules and
regulations as they may deem expedient concerning the issuance, transfer,
redemption, and registration of certificates for shares of the corporation.

Section 6.04 Maintenance of Stock Ledger at Principal Place of Business. A
share book (or books where more than one kind, class, or series of stock is
outstanding) shall be kept at the principal place of business of the
corporation, or at such other place as the Board of Directors shall determine,
containing the names, alphabetically arranged, of original shareholders of the
corporation, their addresses, their interest, the amount paid on their shares,
and all transfers thereof and the number and class of shares held by each. Such
share books shall at all reasonable hours be subject to inspection by persons
entitled by law to inspect the same.

Section 6.05 Transfer Agents and Registrars. The Board of Directors may
appoint one or more transfer agents and one or more registrars with respect to
the certificates representing shares of the corporation, and may require all
such certificates to bear the signature of either or both. The Board of
Directors may from time to time define the respective duties of such transfer
agents and registrars. No certificate for shares shall be valid until
countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such shares, and until registered by a
registrar, if at such date the corporation had a registrar for such shares.

Section 6.06 Closing of Transfer Books and Fixing of Record Date.

(a) The Board of Directors shall have power to close the share books of the
corporation for a period of not to exceed 50 days preceding the date of any
meeting of shareholders, or the date for payment of any dividend, or the date
for the allotment of rights, or capital shares shall go into effect, or a date
in connection with obtaining the consent of shareholders for any purpose.

(b) In lieu of closing the share transfer books as aforesaid, the Board of
Directors may fix in advance a date, not exceeding 50 days preceding the date of
any meeting of shareholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion or
exchange of capital shares shall go into effect, or a date in connection with
obtaining any such consent, as a record date for the determination of the
shareholders entitled to a notice of, and to vote at, any such meeting and

any adjournment thereof, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in respect of any
such change, conversion or exchange of capital stock, or to give such consent.

(c) If the share transfer books shall be closed or a record date set for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for, or such record date
shall be, at least ten (10) days immediately preceding such meeting.

Section 6.07 Lost or Destroyed Certificates. The corporation may issue a
new certificate for shares of the corporation in place of any certificate
theretofore issued by it, alleged to have been lost or destroyed, and the Board
of Directors may, in its discretion, require the owner of the lost or destroyed
certificate or his or her legal representatives, to give the corporation a bond
in such form and amount as the Board of Directors may direct, and with such
surety or sureties as may be satisfactory to the board, to indemnify the
corporation and its transfer agents and registrars, if any, against any claims
that may be made against it or any such transfer agent or registrar on account
of the issuance of such new certificate. A new certificate may be issued without
requiring any bond when, in the judgment of the Board of Directors, it is proper
to do so.

Section 6.08 No Limitation on Voting Rights; Limitation on Dissenter's
Rights. To the extent permissible under the applicable law of any jurisdiction
to which the corporation may become subject by reason of the conduct of
business, the ownership of assets, the residence of shareholders, the location
of offices or facilities, or any other item, the corporation elects not to be
governed by the provisions of any statute that (i) limits, restricts, modified,
suspends, terminates, or otherwise affects the rights of any shareholder to cast
one vote for each share of common stock registered in the name of such
shareholder on the books of the corporation, without regard to whether such
shares were acquired directly from the corporation or from any other person and
without regard to whether such shareholder has the power to exercise or direct
the exercise of voting power over any specific fraction of the shares of common
stock of the corporation issued and outstanding or (ii) grants to any
shareholder the right to have his or her stock redeemed or purchased by the
corporation or any other shareholder on the acquisition by any person or group
of persons of shares of the corporation. In particular, to the extent permitted
under the laws of the state of incorporation, the corporation elects not to be
governed by any such provision, including the provisions of the Utah Control
Shares Acquisitions Act, Section 61-6-1 et seq., of the Utah Code Annotated, as
amended, or any statute of similar effect or tenor.

ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES

Section 7.01 How Constituted. The Board of Directors may designate an
executive committee and such other committees as the Board of Directors may deem
appropriate, each of which committees shall consist of two or more directors.
Members of the executive

committee and of any such other committees shall be designated annually at the
annual meeting of the Board of Directors; provided, however, that at any time
the Board of Directors may abolish or reconstitute the executive committee or
any other committee. Each member of the executive committee and of any other
committee shall hold office until his or her successor shall have been
designated or until his or her resignation or removal in the manner provided in
these Bylaws.

Section 7.02 Powers. During the intervals between meetings of the Board of
Directors, the executive committee shall have and may exercise all powers of the
Board of Directors in the management of the business and affairs of the
corporation, except for the power to fill vacancies in the Board of Directors or
to amend these Bylaws, and except for such powers as by law may not be delegated
by the Board of Directors to an executive committee.

Section 7.03 Proceedings. The executive committee, and such other
committees as may be designated hereunder by the Board of Directors, may fix its
own presiding and recording officer or officers, and may meet at such place or
places, at such time or times and on such notice (or without notice) as it shall
determine from time to time. It will keep a record of its proceedings and shall
report such proceedings to the Board of Directors at the meeting of the Board of
Directors next following.

Section 7.04 Quorum and Manner of Acting. At all meeting of the executive
committee, and of such other committees as may be designated hereunder by the
Board of Directors, the presence of members constituting a majority of the total
authorized membership of the committee shall be necessary and sufficient to
constitute a quorum for the transaction of business, and the act of a majority
of the members present at any meeting at which a quorum is present shall be the
act of such committee. The members of the executive committee, and of such other
committees as may be designated hereunder by the Board of Directors, shall act
only as a committee and the individual members thereof shall have no powers as
such.

Section 7.05 Resignations. Any member of the executive committee, and of
such other committees as may be designated hereunder by the Board of Directors,
may resign at any time by delivering a written resignation to either the
president, the secretary, or assistant secretary, or to the presiding officer of
the committee of which he or she is a member, if any shall have been appointed
and shall be in office. Unless otherwise specified herein, such resignation
shall take effect on delivery.

Section 7.06 Removal. The Board of Directors may at any time remove any
member of the executive committee or of any other committee designated by it
hereunder either for or without cause.

Section 7.07 Vacancies. If any vacancies shall occur in the executive
committee or of any other committee designated by the Board of Directors
hereunder, by reason of

disqualification, death, resignation, removal, or otherwise, the remaining
members shall, until the filling of such vacancy, constitute the then total
authorized membership of the committee and, provided that two or more members
are remaining, continue to act. Such vacancy may be filled at any meeting of the
Board of Directors.

Section 7.08 Compensation. The Board of Directors may allow a fixed sum and
expenses of attendance to any member of the executive committee, or of any other
committee designated by it hereunder, who is not an active salaried employee of
the corporation for attendance at each meeting of said committee.

ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND
OFFICER AND DIRECTOR CONTRACTS

Section 8.01 Indemnification: Third Party Actions. The corporation shall
have the power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action, or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he or she is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees) judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him or her in connection with any such action, suit or proceeding,
if he or she acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and
with respect to any criminal action or proceeding, he or she had reasonable
cause to believe that his or her conduct was unlawful.

Section 8.02 Indemnification: Corporate Actions. The corporation shall have
the power to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending, or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he or she is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection with the
defense or settlement of such action or suit, if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification shall be made
in respect of any claim, issue, or matter as to which such a person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his or her duty to

the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine on application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for such expenses as the
court deems proper.

Section 8.03 Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in Sections
8.01 and 8.02 hereof, or in defense of any claim, issue, or matter therein, he
or she shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith. Any
other indemnification under Sections 8.01 and 8.02 hereof, shall be made by the
corporation upon a determination that indemnification of the officer, director,
employee, or agent is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in Sections 8.01 and 8.02 hereof. Such
determination shall be made either (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit, or proceeding; or (ii) by independent legal counsel on a written opinion;
or (iii) by the shareholders by a majority vote of a quorum of shareholders at
any meeting duly called for such purpose.

Section 8.04 General Indemnification. The indemnification provided by this
Section shall not be deemed exclusive of any other indemnification granted under
any provision of any statute, in the corporation's Articles of Incorporation,
these Bylaws, agreement, vote of shareholders or disinterested directors, or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent, and shall inure to
the benefit of the heirs and legal representatives of such a person.

Section 8.05 Advances. Expenses incurred in defending a civil or criminal
action, suit, or proceeding as contemplated in this Section may be paid by the
corporation in advance of the final disposition of such action, suit, or
proceeding upon a majority vote of a quorum of the Board of Directors and upon
receipt of an undertaking by or on behalf of the director, officers, employee,
or agent to repay such amount or amounts unless if it is ultimately determined
that he or she is to indemnified by the corporation as authorized by this
Section.

Section 8.06 Scope of Indemnification. The indemnification authorized by
this Section shall apply to all present and future directors, officers,
employees, and agents of the corporation and shall continue as to such persons
who ceases to be directors, officers, employees, or agents of the corporation,
and shall inure to the benefit of the heirs, executors, and administrators of
all such persons and shall be in addition to all other indemnification permitted
by law.

8.07. Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another

corporation, partnership, joint venture, trust, or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against any such
liability and under the laws of the state of incorporation, as the same may
hereafter be amended or modified.

ARTICLE IX
FISCAL YEAR

The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.

ARTICLE X
DIVIDENDS

The Board of Directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and on the terms and
conditions provided by the Articles of Incorporation and these Bylaws.

ARTICLE XI
AMENDMENTS

All Bylaws of the corporation, whether adopted by the Board of Directors or
the shareholders, shall be subject to amendment, alteration, or repeal, and new
Bylaws may be made, except that:

(a) No Bylaws adopted or amended by the shareholders shall be altered or
repealed by the Board of Directors.

(b) No Bylaws shall be adopted by the Board of Directors which shall
require more than a majority of the voting shares for a quorum at a meeting of
shareholders, or more than a majority of the votes cast to constitute action by
the shareholders, except where higher percentages are required by law; provided,
however that (i) if any Bylaw regulating an impending election of directors is
adopted or amended or repealed by the Board of Directors, there shall be set
forth in the notice of the next meeting of shareholders for the election of
directors, the Bylaws so adopted or amended or repealed, together with a concise
statement of the changes made; and (ii) no amendment, alteration or repeal of
this Article XI shall be made except by the shareholders.

<PAGE>

EVENT PRODUCTION AND PROMOTION AGREEMENT

This Agreement ('Agreement') is dated as of September 17, 1997, by and
between Protruck Racing Organization, a Nevada corporation (the 'Sanctioning
Body') and Beachport Entertainment Corporation, a Utah corporation (the
'Promoter/Producer'). Sanctioning Body and Promoter/Producer sometimes are
referred to herein collectively as the 'Parties'.

RECITALS

WHEREAS, Sanctioning Body has established itself as an off road
closed-course truck racing event sanctioning body in the Western United States
and elsewhere whose sanction and racing standards universally are accepted in
the field; and

WHEREAS, Promoter/Producer is engage in the business of financing,
producing, operating and exploiting live events in the Western United States and
elsewhere; and

WHEREAS, Sanctioning Body and Promoter/Producer desire to provide for the
presentation of a series of sanctioned off road closed-course truck racing
events (the 'Events') in stadiums to ;be selected by Promoter/Producer for the
period and on the terms and conditions hereinafter set forth;

NOW THEREFORE, the parties hereto, in consideration of the promises and of
the covenants and agreements hereinafter contained, agree as follows:

1. TERM, TERRITORY. The initial term ('Initial Term') of this agreement is
three (3) years, which shall commence as of the date of this agreement.
Promoter/Producer shall have the option to extend the Initial Term for an
additional three (3) years by giving Sanctioning Body its written election to
extend by no later than 120 days prior to the expiration of the Initial Term.
Promoter/Producer reserves the right to terminate this agreement after the first
year but guarantees the presentation of the first year. The Event Territory
covered by this Agreement is all states west of the Mississippi River.
Provided, however, the licensing territory described in the separate license
agreement attached hereto and incorporated herein by reference is North America.

2. EVENTS. During the first racing season (running from February through
May of each year of the Term or any extended Term), the Parties shall sanction,
fiance, promote

and exploit a minimum of five (5) and a maximum of eight (8) Events in
accordance with the following:

a. Promoter/Producer shall function as the exclusive producer of all Events
and Sanctioning Body hereby delegates to Promoter/Producer all operating
obligations and decisions in exchange for the sanctioning fee described in this
agreement.

b. The featured class of each Event shall be composed of Protruck racing
vehicles, as the only truck class, on a stadium venue dirt track designed and
sanctioned by Sanctioning Body.

c. The Parties will mutually agree upon the addition of other classes of
competition for each Event and the appropriate sanctioning body for each such
class added to the Events.

d. The races shall be officiated by Promoter/Producer's Director of
Competition and other Promoter/Producer personnel in accordance with Sanctioning
Body's standardized, published technical ;racing rules which the Sanctioning
Body shall provide.

e. All trucks will be of the same specifications within a particular class
of racing trucks, as specified by Sanctioning Body.

f. The Events will comprise a competitive series for the Protruck class,
with prize money awarded at each venue, culminating in a grand prize for the
winner of the series.

g. Each Event will feature several races between competitors in Protruck
class and in other classes approved by the Parties.

h. Each Event shall run on a single day format.

i. The Events must not conflict with the dates for the Score Desert event
series.

3. PROMOTER/PRODUCER'S EVENT OBLIGATIONS. For each Event which is
presented, Promoter/Producer shall;

a. Act as exclusive Event Promoter/Producer in charge of the management of
all Event operations, including but not limited to all Event-related agreements,
leases and promotions.

b. Either directly or through sponsorship participation, promotional
programs, sale or license of Event rights or other forms of participation by
financiers, provide the necessary financing for each Event, including
advertising, sanctioning fees plus approved sanctioning expenses, price money,
facility expenses, rental expenses and operational expenses (including but not
limited to fuel area, pit, ticketing/credentials, entry fees, practice and

testing areas). Prize money for each Event shall be a minimum of $24,500, with a
grand prize of $37,000 awarded at the end of each racing season to the overall
champion in the Protruck class only. Sanctioning Body, Promoter/Producer and
Promoter/Producer's agent, Barnes-Dyer Marketing (the 'Agent'), will jointly
develop Event series sponsorships in accordance with a mutually-agreeable
program for sponsorship to be developed by the Agent.

c. Build and set up each Event track in accordance with the specifications for
each Event track designated by Sanctioning Body to be attached to the Agreement
and incorporated herein by reference as Exhibit 'A', when each of the individual
Event design plans becomes available, as set forth in this Agreement, at its
expense.

d. Pay to Sanctioning Body:

(i) A $10,000 sanctioning fee for each Protruck Event. Sanctioning fees
also to be paid to Sanctioning Body for additional classes of competition, which
shall be the subject of good faith negotiations between the Parties. All
sanctioning fees shall be paid in full, within ten (10) days of each Event.

(ii) Actual, reasonable sanctioning expenses incurred by Sanctioning
Body in conjunction with Events.

(iii) A sanctioning royalty of 7.5% of the net profits of each Event
derived by deducting from Gross Revenue all reasonable 'direct producing and
operating expenses' therefor. 'Gross Revenue' includes, but is not necessarily
limited to, the following: Event and series sponsorship; ticket sales/gate
receipts; entry fees; pit and paddock pass sales; food and beverage sales;
apparel and merchandising; program sales; television revenues (but only in the
third and following years of the Term and/or extended term of this Agreement);
hospitality and suite revenue; display and expo space; on track signage; home
video sales. 'Direct Producing and Operating Expenses' includes but is not
necessarily limited to the following: track construction, maintenance and
removal; facility rental; direct outside labor expenses in connection with each
separate Event, advertising and marketing; public relations; television
production cost; prize monies; Event production; and hospitality and suite
expense. The reconciliation and any net profit payment will be made within 45
days after each Event.

(iv) For all Event merchandise sold exclusively by Promoter/Producer, a
licensing royalty of 15% of the wholesale price of all such merchandise sold
under this agreement. This payment will be made within thirty (30) days after
each Event.

(v) For all licensed or sub-licensed products sold, pursuant to the
terms and conditions of the separate Licensing Agreement attached hereto as
Exhibit 'B', fifty (50%) percent of royalty payments received by
Promoter/Producer will be paid to Sanctioning

Body on a monthly basis, commending ten (10) days after Promoter/Producer's
first receipt thereof.

e. Develop and execute a marketing and promotional program for the Event series,
at its expense.

f. Provide all required insurance for the Events at its expense.
Promoter/Producer shall obtain and maintain liability insurance, with a minimum
policy of two million ($2,000,000) dollars. In addition, Sanctioning Body,
Stewart & Stewart Racing Development, Inc., Ivan Stewart, Linda Stewart and
DeAngelo, Minton & Associates, Inc. shall be named as additional insureds.

g. Provide a national television broadcast schedule on a major sports cable
network for the Events at its expense.

h. Protect and pay for all required trademarks, service marks and other
intellectual property rights for the Events and obtain and pay for all required
licenses. Upon termination of this Agreement, Promoter/Producer shall assign and
transfer to Sanctioning Body all rights, title and interest in said trademarks,
service marks, and other intellectual property rights to the Sanctioning Body at
Promoter/Producer's expense.

i. It is the intention of the parties that all expenses in connection with the
Events and/or any related matters, are to be borne by Promoter/Producer.

4. SANCTIONING BODY'S EVENT OBLIGATIONS. Sanctioning Body shall:

a. Grant to Promoter/Producer the exclusive right to finance, produce, promote
and exploit the stadium series Events west of the Mississippi river utilizing
the sanctions conferred upon the Events by Sanctioning Body hereunder and to use
the Protruck Racing Organization name and related trademarks, service marks and
artwork subject to the terms and conditions of the separate Licensing Agreement
attached hereto as Exhibit 'B'. However, Sanctioning Body will grant to
Promoter/Producer the right to use the Ivan 'Ironman' Stewart name on a
nonexclusive, contract by contract basis, subject to the approval of Ivan
Stewart. Sanctioning Body reserves the right to sanction other series events
which do not compete with Promoter/Producer's off-road course truck racing
Events in stadiums.

b. Provide design documents for Promoter/Producer to use to build a track
suitable for each stadium for which Events are scheduled. Promoter/Producer will
provide to Sanctioning Body the available measurements and configurations for
each stadium in which the Events are scheduled in a timely manner so that
Sanctioning Body may deliver a design pursuant to its obligations herein in a
timely manner. Promoter/Producer shall reimburse Sanctioning Body for a
reasonable expense incurred in preparation and testing

of said design. It is understood that Sanctioning Body will perform testing of
the design layout of each Event prior to the delivery of the design document and
will incur expenses thereby.

c. Provide Promoter/Producer with an Event rule book for use in the presentation
of the Events.

d. Provide to Promoter/Producer a list of names and a recommended individual to
oversee, manage, and provide for all operations, including but not limited to
identifying the individuals and the expenses and all necessary personnel for
timing and scoring, medical and safety staff, track maintenance, equipment and
all other related personnel and expense in a timely manner. All individuals,
persons and/or personnel set forth in this subparagraph shall be paid by
Promoter/Producer.

e. Assist Promoter/Producer and Agent in securing automotive-related and other
sponsors for the Events and Event prizes to be awarded and to cooperate and lend
its name to any reasonable advertising and promotional programs aimed at
attracting financing or ticket sales for the Events, in order to increase gross
revenue as defined herein.

f. Provide to Promoter/Producer Sanctioning Body's official Event sanction for
the Event series, along with any and all trademarks, service marks, logos and
related artwork for Promoter/Producer's use solely in connection with the Event.

g. Consult with Promoter/Producer concerning all aspects of presenting the Event
series.

5. ANCILLARY EXPLOITATION

Promoter/Producer shall engage in the ancillary exploitation of the Events,
which shall include but shall not be limited to the following areas:

a. Television --

b. Home video --

c. Event Merchandising --

d. Paddock Passes --

e. Local and National Sponsorships --

f. Parking Concession (where applicable) --

g. Food and Beverage (where applicable) --

Any ancillary exploitation by Promoter/Producer shall be subject to the terms
and conditions of this Agreement and the Licensing Agreement attached hereto as
Exhibit 'B'.

6. WAIVER. The delay or failure of either party to assert or exercise any
right, remedy or privilege hereunder, with actual or constructive notice or
knowledge of the breach of any representation, warranty, or provision herein,
shall not constitute a waiver of any such right, remedy, privilege or breach.

7. FORCE MAJEURE. If Sanctioning Body's or Promoter/Producer's obligations
contained in this Agreement are rendered impossible or infeasible by any act,
requirement or regulation of any public authority or bureau, strike or labor
difficulties, flood, fire, snow, civil tumult, effects of energy use
restrictions emergencies, act of God, absence of Power or other essential
services, failure of technical facilities or failure or delay of transportation
facilities, or any other cause beyond Sanctioning Body's or Promoter/Producer's
reasonable control, then there shall be no claim for damages by either party to
this Agreement and the term of this Agreement shall be extended to allow for all
missed Events.

8. RELATIONSHIP OF PROMOTER/PRODUCER TO SANCTIONING BODY. The relationship
of Promoter/Producer to Sanctioning Body is that of an independent contractor,
and neither Promoter/Producer nor Sanctioning Body is the agent, partner or
legal representative of the other or has the right or authority to create any
liability or responsibility whatsoever on the part of or on behalf of the other.
Promoter/Producer agrees not to represent in any manner to any guild or union
that it has any authority to represent Sanctioning Body in any labor relations
matter. Sanctioning Body has acted and is acting on its own, without the use or
benefit of an agent in negotiating and executing this Agreement, and agrees to
indemnify, defend, and hold harmless Promoter/Producer for any claims made by
any agent.

9. INDEMNIFICATION

a. Promoter/Producer shall indemnify, defend and hold Sanctioning Body
harmless from any and all loss, cost, expense and liability (including
attorneys' fees) incurred in connection with any claim or asserted claim which
may be made against Sanctioning Body which results from the acts or omissions of
Promoter/Producer, its officers, shareholders, partners, investors, servants,
employees, or agents, or any claim or asserted claim made by Promoter/Producer's
servants, employees, or agents.

b. Sanctioning Body shall indemnify, defend and hold Promoter/Producer,
harmless from any and all loss, cost, expense and liability (including
attorneys' fees) incurred in connection with any claim or asserted claim which
may be made against Promoter/Producer, which results from the acts or omissions
of Sanctioning Body, its officers, shareholders, partners, investors, servants,
employees, or agents, or any claim or asserted claim made by Sanctioning Body's
servants, employees, or agents.

10. GENERAL PROVISIONS

a. This Agreement is not assignable by either Party without the prior
written consent of the other Party.

b. This Agreement, which constitutes the entire understanding between
the Parties and supersedes all prior agreements, oral or written, between the
Parties with respect to the subject matter hereof, shall be construed according
to the laws of the State of California and cannot be altered, modified or
terminated except upon written consent of both Parties.

c. This Agreement shall be governed by the laws of the State of
California. If legal action is initiated relative to this Agreement or the
rights or obligations of any party hereunder, the Parties hereto stipulate and
agree that such action must be initiated, maintained and continued in San Diego
County, California, and the non-prevailing Parties in such action shall pay
reasonable attorneys' fees to the prevailing Parties, with the amount to be
determined by the court in said action. The Parties hereto shall comply with and
observe, and this Agreement shall be subject to, any and all relevant, present
and future laws, statutes, regulations and ordinances of all governmental
authorities with appropriate jurisdiction. If any of the provisions of this
Agreement contravene or are invalid under any applicable laws or statute, such
contravention or invalidity shall not invalidate the entire Agreement, but it
shall be construed as if not containing the particular provision or provisions
held to be invalid and any rights and obligations or Sanctioning Body and
Promoter/Producer shall be construed accordingly.

d. Either party to this Agreement shall have the right to terminate this
Agreement and to seek its appropriate legal or equitable remedies upon material
breach of this Agreement by the other party provided the party alleging material
breach notifies the other party by written notice pursuant to this Agreement of
the exact nature of the material breach and the other party fails to cure said
material breach within five (5) days of its receipt of said notice.

e. Headings are used herein for convenience only, and shall not be
referred to in the interpretation of this Agreement.

f. Each party represents that it has the full right, power and authority
to enter

into this Agreement and to effectuate the purposes and intents thereof. Each
party further represents and warrants, respectively, that it is under no
obligation or disability which would prevent it from entering into this
Agreement and fully performing all of its obligations hereunder.

g. Time is the essence of this Agreement and all of the terms, covenants
and conditions hereof.

h. This Agreement may be executed in counterparts, each of which shall
be deemed an executed original and all of which together shall constitute one
and the same instrument.

i. The Parties hereto shall take any actions necessary on or after the
date hereof which may be required to effectuate the terms of this Agreement.

11. NOTICE. Except as otherwise provided herein, any notices under this
Agreement shall be deemed given on the day when delivered in person or five (5)
business days after the date when mailed by certified, express or registered
first class mail, return receipt requested, addressed to the party receiving the
communication at the following address:

To the Promoter/Producer Beachport Entertainment Corporation
517 North South Robertson Blvd.
Suite 200
Los Angeles, CA 9048

With a copy to: Thomas J. Wiley, Esq.
Wiley and Bonda, P.C.
1870 North Vermont Ave.
Los Angeles, CA 90027

To Sanctioning Body: Protruck Racing Organization
9419 Abraham Way, Suite
Santee, CA 92071

Attention: Ivan Stewart

With a copy to: De Angelo, Minton & Associates
6090 Mahoning Ave., N.W.
Warren, OH 44481-9401

IN WITNESS WHEREOF, the Parties have caused this instrument to be executed
whether in one or more counterparts, all as of the day and year first above
written.

AGREED AND ACCEPTED:

BEACHPORT ENTERTAINMENT PROTRUCK RACING ORGANIZATION
CORPORATION

By: /s/ Barry Mendelson By: /s/ Ivan Stewart
--------------------------------- ----------------------------------
Barry Mendelson Ivan Stewart
Title: President, CEO Title: President

Sept. 24, 97

<PAGE>

BEACHPORT ENTERTAINMENT CORPORATION

OPTION PLAN

OPTION PLAN

ARTICLE I
DEFINITIONS

1.1 Affiliate means any "subsidiary corporation" or "parent corporation"
as such terms are defined in Section 424 of the Code.

1.2 Agreement means a written agreement (including any amendment or
supplement thereto) between the Corporation and a Participant specifying the
terms and conditions of an Option granted to such Participant.

1.3 Board means the Board of Directors of the Corporation

1.4 Code means the Internal Revenue Code of 1986, and any amendments
thereto.

1.5 Committee means a committee of two or more members of the Board
appointed to administer the Plan, who either are not eligible to participate in
the Plan and have not been granted existing securities under the Plan or any
other plan of the Corporation during the one year period prior to becoming a
member of the Committee, or who are otherwise deemed to be "disinterested
persons" within the meaning of Section 16 of the Securities Exchange Act of 1934
as in effect from time to time and the rules promulgated thereunder.

1.6 Common Stock means the common stock par value $.002 per share, of
the Corporation.

1.7 Corporation means Beachport Entertainment Corporation, a Utah
corporation.

1.8 Date of Exercise means, with respect to an Option, the date that the
Option price is received by the Corporation.

1.9 Employment Agreement means a written agreement (including any
amendment or supplement thereto) between the Corporation and a Participant
specifying the terms and conditions of employment with the Corporation.

1.10 Fair Market Value means, on any given date, the closing price of
the Common Stock on the principal securities exchange on which such Common Stock
is traded on the day immediately preceding the date as of which Fair Market
Value is being determined, or on the next preceding date on which such Common
Stock is traded if no Common Stock was traded on such immediately preceding day.
If the Common Stock in not traded on a securities exchange, but is reported by
the National Association of Securities Dealers Automated Quotation System and
market information is published on a regular basis in The New York Times or The
Wall Street Journal, then Fair Market Value shall be deemed to be the average of
the published high and low sales price or the published daily bid and asked
prices of the Common Stock, as so published, on the day immediately preceding
the date as of which Fair Market Value is being determined or, if not so
published, on the next preceding date on which such prices were published. If
market information is not so published on a regular basis, then Fair Market
Value shall be deemed to be the

average of the high bid and low asked prices of the Common Stool in the
over-the-counter market on the date immediately preceding the date as of which
Fair Market Value is being determined or on the next preceding date on which
such high bid and low asked prices were recorded as reported by the National
Association of Securities Dealers Automated Quotation System, or, if not so
reported, by a generally accepted reporting service. If the Common Stock is not
publicly traded, Fair Market Value shall be determined by the Committee or the
Board. In no case shall Fair Market Value be less than the par value of a share
of Common Stock.

1.11 Option means a stock option that entitles the holder to purchase
from the Corporation a stated number of shares of Common Stock at the price set
forth in an Agreement.

1.12 Participant means an employee of the Corporation or of an
Affiliate, including an employee who is a member of the Board, or any consultant
or other service provider to the Corporation or an Affiliate who is not an
employee of the Corporation or an Affiliate, who in each instance satisfies the
requirements of Article IV and is selected by the Committee to receive an
Option.

1.13 Plan means the Beachport Entertainment Corporation Option Plan.

1.14 Ten Percent Stockholder means any individual owning more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Corporation or of an Affiliate at the time any Option is granted to such
individual. An individual

shall be considered to own any voting stock owned (directly or indirectly) by or
for his brothers, sisters, spouse, ancestors or lineal descendants and shall be
considered to own proportionately any voting stock owned (directly or
indirectly) by or for a corporation, partnership, estate or trust of which such
individual is a shareholder, partner or beneficiary.

ARTICLE II

PURPOSES

The Plan is intended primarily to assist the Corporation and its
Affiliates in recruiting and retaining employees with ability and initiative by
enabling them to participate in the future success of the Corporation and its
Affiliates and to associate the interests of such employees with those of the
Corporation or its Affiliates and their stockholders. The Plan is intended to
permit the grant of both Options qualifying under Section 422 of the Code
("Incentive Stock Options" or "ISOs") and Options not so qualifying
("Non-Incentive Stock Options" or "NSOs"). No Option that is intended to be an
Incentive Stock Option shall be invalid for failure to qualify as an Incentive
Stock Option and if such Option so fails to qualify as an Incentive Stock
Option, such Option will be deemed to be a Non-Incentive Stock Option. The
proceeds received by the Corporation from the sale of Common Stock pursuant to
this Plan shall be used for general corporate purposes.

ARTICLE III

ADMINISTRATION

Except as provided herein, the Plan shall be administered by the
Committee. In the event the Board does not appoint a Committee, the Board shall
administer this Plan and, unless the context otherwise requires, any references
in this Plan to the "Committee" shall mean the "Board". The Committee shall have
authority to grant Options upon such terms (not inconsistent with the provisions
of this Plan) as the Committee may consider appropriate. Such terms may include
conditions (in addition to those contained in this Plan) on the exercisability
of all or any part of an Option. The Committee may, in its discretion,
accelerate the time at which any Option may be exercised. In addition, the
Committee shall have complete authority to interpret all provisions of this
Plan; to prescribe the form of any Agreement; to adopt, amend, and rescind rules
and regulations pertaining to the administration of the Plan; and to make all
other determinations necessary or advisable for the administration of this Plan.
The express grant in the Plan of any specific power to the Committee shall not
be construed as limiting any power or authority of the Committee. Any decision
made, or action taken, by the Committee or in connection with the administration
of this Plan shall be final and conclusive. No member of the Committee shall be
liable for any act done in good faith with respect to this Plan or any Agreement
or Option. All expenses of administering this Plan shall be borne by the

Corporation.

ARTICLE IV

ELIGIBILITY

4.1 General Any employee of the Corporation or of any Affiliate
(including any corporation that becomes an Affiliate after the adoption of the
Plan) is eligible to participate in this Plan if the Committee, in its sole
discretion, determines that such person has contributed or can be expected to
contribute to the profits or growth of the Corporation or an Affiliate. Any such
employee may be granted one or more Options. A director of the Corporation who
is an employee of the Corporation or an Affiliate may be granted Options under
this Plan, including ISOs. A member of the Committee may not participate in this
Plan during the time that his participation would prevent the Committee from
being "disinterested" for purposes of Section 16 of the Securities Exchange Act
of 1934 as in effect from time to time and the rules promulgated thereunder. Any
consultant or other service provider to the Corporation (including a Director
who is not an employee of the Corporation or an Affiliate or a member of the
Committee) is also eligible to participate in this Plan on the same conditions
as employees, but may be granted only Options that are Non-Incentive Stock
Options.

4.2 Grants The Committee will designate individuals to whom Options are
to be granted and will specify the number of shares of Common Stock subject to
each grant, provided, however, that Incentive Stock Options shall be granted
only to employees

of the Corporation or any Affiliate. All options granted under this Plan shall
be evidenced by Agreements which shall be subject to applicable provisions of
this Plan and to such other provisions as the Committee may adopt. No
Participant may be granted Incentive Stock Options (under all incentive stock
option plans of the Corporation and its Affiliates) which are first exercisable
in any calendar year for Common Stock having an aggregate Fair Market Value
(determined as of the date an option is granted) exceeding $100,000. The
preceding annual limitation shall not apply with respect to Options that are
Non-Incentive Stock Options.

ARTICLE V

STOCK SUBJECT TO PLAN

5.1 Sources of Shares Upon the exercise of any Option, the Corporation
may deliver to the Participant authorized but unissued Common Stock.

5.2 Maximum Number of Shares The maximum aggregate number of shares of
Common Stock that may be issued pursuant to the exercise of Options is ________,
subject to increases and adjustments as provided in Section 5.3 and Article IX
hereof.

5.3 Forfeitures. Etc. If an Option is terminated, in whole or in part,
or expires without being exercised, the number of shares of Common Stock
allocated to the Option or portion thereof may be reallocated to other Options
to be granted under this Plan.

ARTICLE VI

OPTION PRICE

The price per share for Common Stock purchased on the exercise of an
Option shall be determined by the Committee on the date of grant. The price per
share for Common Stock purchased on the exercise of any option under the Plan
shall not be less than the Fair Market Value on the date the option is granted;
provided, however, that the price per share shall not be less than 110% of the
Fair Market Value in the case of an Incentive Stock Option that is granted to a
Ten Percent Stockholder.

ARTICLE VII

EXERCISE OF OPTIONS

7.1 Ability to Exercise. An Option shall be exercisable commencing on
the date of grant or on any date thereafter established by the Committee prior
to the expiration period, subject to such limitations as are set forth in this
Plan or in the Agreement; provided, however, that with respect to an Option that
is an Incentive Stock Option such Option shall not be exercisable for a longer
period of time than provided under Section 422 of the Code.

7.2 Maximum Exercise Period The maximum period in which an Option may be
exercised shall be determined by the Committee on the date of grant, except that
no option that is an Incentive Stock Option shall be exercisable after the
expiration of ten years from the date such Option was granted, or after the

expiration of five years from the date such Option was granted to a Ten Percent
Stockholder. The terms of any Option may provide that it is exercisable for a
period less than such maximum period. All Options which are Incentive Stock
Options shall terminate on the date the Participant's employment with the
Corporation terminates, except as provided in the Agreement with respect to
death, disability, termination of employment by the Corporation without cause or
by the Participant with cause or a "change in ownership" (as described in any
Agreement, Employment Agreement or the Code).

7.3 Nontransferability Any Option granted under this Plan shall be
nontransferable by the optionee, either voluntarily or otherwise, except by will
or by the laws of descent and distribution. During the lifetime of the
Participant to whom the Option is granted, the Option may be exercised only by
the Participant, except with respect to a Participant who has become "disabled"
within the meaning of Section 22(e) of the Code. Any Option granted herein shall
be exercised only by the Participant or by his conservator or legal
representative in the event of death or disability. No right or interest of a
Participant in any Option shall be liable for, or subject to, any lien,
obligation or liability of such Participant.

7.4 Employee Status For purposes of determining the applicability of
Section 422 of the Code (relating to the Incentive Stock Options), or in the
event that the terms of any Option provide that it may be exercised only during
employment or

within a specified period of time after termination of employment, the
Committee, in its discretion, may determine "employee status".

ARTICLE VIII

METHOD OF EXERCISE

8.1 Exercise An Option granted under this Plan shall be deemed to have
been exercised on the Date of Exercise. Subject to the provisions of Articles
VII and X, an Option may be exercised in whole at any time or in part from time
to time at such times and in compliance with such requirements as the Committee
shall determine. An Option granted under this Plan may be exercised with respect
to any number of whole shares less than the full number of whole shares for
which the Option could be exercised. A partial exercise of an Option shall not
affect the right to exercise the Option from time to time in accordance with
this Plan and the applicable Agreement with respect to remaining share subject
to the Option.

8.2 Payment Unless otherwise provided by the Agreement, payment of the
Option Price shall be made in cash, a cash equivalent, Common Stock or any other
consideration acceptable to the Committee. If the Agreement provides, payment of
all or part of the Option price may be made by surrendering shares of Common
Stock to the Corporation, provided, however, that shares of Common Stock may be
surrendered by a Participant who is subject to the reporting and other
provisions of Section 16 of the Securities Exchange Act of 1934 as in effect
from time to time in

payment of all or part of the Option price only if the surrendered shares have
been held by the Participant for at least six months prior to the Date of
Exercise. If Common Stock is used to pay all or part of the Option price, the
shares surrendered must have a Fair Market Value (determined as of the day
preceding the Date of Exercise) that is not less than such price or part
thereof.

8.3 Loans The Corporation, in accordance with the requirements of
Regulation G of the Federal Reserve Board regulations ("Regulation G"), may lend
the Participant all or part of the Option price as determined in accordance with
Article VI hereof, provided that the maximum loan amount shall not exceed the
Fair Market Value at the time of purchase by the Participant of the shares of
Common Stock acquired with the loan proceeds. The principal amount of the loan
shall be repayable in not more than five annual installments provided, however,
that all principal and accrued interest on such loan amounts shall become
immediately due and payable upon the Participant's termination of employment
with the Corporation or any sale of the shares of Common Stock underlying the
Option. The Participant shall pay interest on the unpaid principal balance at
such rate as the Committee shall determine, which shall be no less than the
minimum rate necessary to avoid imputed interest or original issue discount
under the Code. All shares of Common Stock acquired with cash borrowed from the
Corporation shall be pledged to the Corporation as security for the repayment
thereof. In the

discretion of the Board, shares of Common Stock may be released from such pledge
proportionately as payments of the note (together with interest) are made,
provided, however, that the Corporation, in accordance with the requirements of
Regulation G, shall not release any shares of Common Stock which would cause the
amount outstanding under a loan to exceed the "maximum loan value" of the
remaining shares pledged by the Participant, determined at the time of such
release. While such shares are so pledged, and so long as there has been no
default in the installment payments, such shares shall remain registered in the
name of the participant, and he shall have the right to vote such shares and to
receive all dividends thereon.

8.4 Stockholder Rights No participant shall have any rights as a
stockholder with respect to shares subject to his Option until the Date of
Exercise of such Option.

ARTICLE IX

ADJUSTMENT UPON CHANGE IN COMMON STOCK

The maximum number and kind of shares as to which Options may be granted
under thin Plan shall be proportionately adjusted, and the terms of outstanding
Options shall be adjusted by way of increase or decrease as the Committee in the
exercise of its reasonable judgment shall determine to be equitable required, in
the event that (a) the Corporation (i) effects one or more stock dividends,
stock splits, reverse stock splits, subdivisions, consolidations or other
similar events or (ii) engages in a transaction to which Section 424 of the Code
applies or (b) there

occurs any other event which in the judgment of the Committee necessitates such
action. Any determination made under this Article IX by the Committee shall be
final and conclusive.

The issuance by the Corporation of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services rendered, either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Corporation convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, outstanding Options.

ARTICLE X

COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

No Option shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all federal and state laws and
regulations (including, without limitation, withholding tax requirements),
federal and state securities laws and regulations and the rule of all national
securities exchanges or self-regulatory organizations on which the Corporation's
shares may be listed. The Corporation shall have the right to rely upon an
opinion of its counsel as to such compliance. Any certificate issued to evidence
shares of Common Stock for which an Option is exercised may bear such legends
and statements as the Committee upon advice of counsel may deem advisable to
assure compliance with federal

and state laws and regulations. No Option shall be exercisable, no Common Stock
shall be issued, no certificate for shares shall be delivered and no payment
shall be made under this Plan until the Corporation has obtained such consent or
approval as the Committee may deem advisable from any regulatory bodies having
jurisdiction over such matter.

ARTICLE XI

GENERAL PROVISIONS

10.1 Effect on Employment Neither the adoption of this Plan, its
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Corporation or an Affiliate or in any way affect any right and power of the
Corporation or an Affiliate to terminate the employment of any employee at any
time with or without assigning a reason therefor.

10.2 Unfunded Plan The Plan, insofar as it provides for grants, shall be
unfunded, and the Corporation shall not be required to segregate any assets that
may at any time be represented by grants under this Plan. Any liability of the
Corporation to any person with respect to any grant under this Plan shall be
based solely upon any contractual obligations that may be created pursuant to
this Plan. No such obligation of the Corporation shall be deemed to be secured
by any pledge of, or other encumbrance on, any property of the Corporation.

10.3 Rules of Construction Headings are given to the articles and
sections of this Plan solely as a convenience to

facilitate reference. The reference to any statute, regulation or other
provision of law shall be construed to refer to any amendment to or successor of
such provision of law.

ARTICLE XII

AMENDMENT

The Board may amend or terminate this Plan from time to time; provided,
however, that no amendment may become effective until stockholder approval is
obtained if (i) the amendment materially increases the benefits accruing to
Participants under the Plan, (ii) the amendment materially increases the
aggregate number of shares of Common Stock that may be issued under the Plan, or
(iii) the amendment materially changes the requirements as to eligibility for
participation in the Plan. No amendment shall, without a Participant's consent,
adversely affect any rights of such Participant under any Option outstanding at
the time such amendment is made.

ARTICLE XI

DURATION OF PLAN

No option may be granted under this Plan more than ten years after the
earlier of the date that the Plan is adopted by the Board or the date that the
Plan is approved by stockholders of the Corporation as provided in Article XIV.
Options granted before that date shall remain valid in accordance with their
terms.

ARTICLE XII

EFFECTIVE DATE OF PLAN

Options may be granted under this Plan upon its adoption by the Board,
provided that no Option will be effective unless this Plan is approved by
stockholders holding a majority of the Corporation's outstanding total combined
voting power of all classes of stock of the Corporation, voting in person or by
proxy at a duly held stockholders' meeting or by written consent of said
stockholders.

<PAGE>

[MALONE & BAILEY LETTERHEAD]

Consent of Independent Certified Public Accountants

We consent to the use in Amendment No. 1 to the Registration Statement on
Form SB-2, under the Securities Act of 1933, of our report dated May 30, 1997
relating to the financial statements and schedules appearing elsewhere in this
Registration Statement.

We also consent to the reference to us under the heading "Summary Historical and
Pro Forma Financial Data" in this registration Statement.

MALONE & BAILEY, PLLC /s/ Malone & Bailey PLLC
Houston, Texas
October 30, 1997

<PAGE>

[LETTERHEAD OF VAN BUREN & HAUKE, LLC]

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use in the Registration Statement on Form SB-2, under
the Securities Act of 1933, of our report dated July 3, 1997, except for Note 9
as to which the date is August 4, 1997, on the balance sheets of Entertainment
Specialists Ltd., Inc. as of December 31, 1996 and 1995, and the related
statements of operations and retained earnings (deficit) and cash flows for each
year, and to the reference to our firm under the heading "Experts" in the
Prospectus.

/s/ VAN BUREN & HAUKE, LLC

New York, New York

October 31, 1997