BEACHPORT ENTERTAINMENT CORP/UT, 424B1, 1997-12-11

BEACHPORT ENTERTAINMENT CORP/UT
424B1, 1997-12-11
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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.

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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.

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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.

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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 4, 1997.

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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.

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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.

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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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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 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

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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.'

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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
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<CAPTION>
THE COMPANY ESL
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SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
JUNE 30, 1997 DECEMBER 31, 1996 JUNE 30, 1997
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<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
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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
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<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997
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Pro forma operating data:
Net sales............................................................................ $4,782,822
Costs of performances................................................................ 3,481,622
Selling.............................................................................. 1,255,689
General and administrative........................................................... 2,351,027
Asset writeoffs...................................................................... --
Bad debts............................................................................ --
Depreciation and amortization........................................................ 68,324
Interest............................................................................. 219,182
Gain on lawsuit settlement........................................................... 403,186
Other income (expense)............................................................... (24,248)
Income tax benefit................................................................... --
Net income (loss).................................................................... 2,145,758
Per share data:
Net income (loss).................................................................... $ (0.25)
Weighted average number of shares outstanding........................................ 8,483,448

<CAPTION>
TWELVE MONTHS ENDED
DECEMBER 31, 1996
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Pro forma operating data:
Net sales............................................................................ $ 6,976,674
Costs of performances................................................................ 4,900,427
Selling.............................................................................. 1,521,365
General and administrative........................................................... 3,147,510
Asset writeoffs...................................................................... 179,192
Bad debts............................................................................ 211,722
Depreciation and amortization........................................................ 131,980
Interest............................................................................. 1,092,357
Gain on lawsuit settlement........................................................... --
Other income (expense)............................................................... (23,795)
Income tax benefit................................................................... 452
Net income (loss).................................................................... (4,231,222)
Per share data:
Net income (loss).................................................................... $ (0.53)
Weighted average number of shares outstanding........................................ 8,003,616
</TABLE>
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<CAPTION>
AT JUNE 30, 1997
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ACTUAL(1) PRO FORMA(2)
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Balance sheet data:
Working capital (deficit)............................................................. $(4,219,867) $(4,787,028)
Total assets.......................................................................... 3,427,086 5,075,582
Long-term obligations................................................................. -- --
Retained earnings (deficit)........................................................... (6,973,808) (2,048,396)
Stockholders' equity (deficit)........................................................ (1,943,850) (681,664)

ADJUSTED(3)
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Balance sheet data:
Working capital (deficit)............................................................. $(3,450,200)
Total assets.......................................................................... 6,451,740
Long-term obligations................................................................. --
Retained earnings (deficit)........................................................... (6,570,622)
Stockholders' equity (deficit)........................................................ 291,308
</TABLE>

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(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.

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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>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997
----------------
<S> <C>
Pro forma operating data:
Net sales.............................................................................. $4,782,822
Costs of performances.................................................................. 3,481,622
Selling................................................................................ 1,255,687
General and administrative............................................................. 2,351,027
Asset writeoffs........................................................................ --
Bad debts.............................................................................. --
Depreciation and amortization.......................................................... 68,324
Interest............................................................................... 219,182
Gain on lawsuit settlement............................................................. 403,186
Other income (expense)................................................................. (24,028)
Income tax benefit..................................................................... --
Net income (loss)...................................................................... (2,145,758)
Per share data:
Net income (loss)...................................................................... (0.25)
Weighted average number of shares outstanding.......................................... 8,483,448

<CAPTION>
TWELVE MONTHS ENDED
DECEMBER 31, 1996
-------------------
<S> <C>
Pro forma operating data:
Net sales.............................................................................. $ 6,976,674
Costs of performances.................................................................. 4,900,427
Selling................................................................................ 1,521,365
General and administrative............................................................. 3,147,510
Asset writeoffs........................................................................ 179,192
Bad debts.............................................................................. 211,722
Depreciation and amortization.......................................................... 131,980
Interest............................................................................... 1,092,357
Gain on lawsuit settlement............................................................. --
Other income (expense)................................................................. (23,795)
Income tax benefit..................................................................... 452
Net income (loss)...................................................................... (4,231,222)
Per share data:
Net income (loss)...................................................................... (0.53)
Weighted average number of shares outstanding.......................................... 8,003,616
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30, 1997
---------------------------
ACTUAL(1) PRO FORMA(2)
----------- ------------
<S> <C> <C>
Balance sheet data:
Working capital (deficit)............................................................. $(4,219,867) $(4,787,028)
Total assets.......................................................................... 3,427,086 5,075,585
Long-term obligations................................................................. -- --
Retained earnings (deficit)........................................................... (6,973,808) (2,048,396)
Stockholders' equity (deficit)........................................................ (1,943,850) (681,664)

ADJUSTED(3)
-----------
<S> <C>
Balance sheet data:
Working capital (deficit)............................................................. $(3,450,245)
Total assets.......................................................................... 6,451,740
Long-term obligations................................................................. --
Retained earnings (deficit)........................................................... 6,570,622
Stockholders' equity (deficit)........................................................ 291,308
</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.

<PAGE>
<PAGE>
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.

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'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)

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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 % 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 % 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 % 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>
[THIS PAGE INTENTIONALLY LEFT BLANK]

<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>
<S> <C>
Notes payable to sixteen different private entities, no collateral, interest at
8%, due December 31, 1996..................................................... $1,350,000
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>
<S> <C>
Interest on notes payable......................................................... $131,902
Wages and payroll taxes........................................................... 23,969
--------
Total........................................................................ $155,871
--------
--------
</TABLE>

NOTE 9 -- PAYABLE TO STOCKHOLDERS FOR CASH LOANS

<TABLE>
<S> <C>
Note payable to a corporation partially owned by a stockholder, due March 31,
1995, with interest at 8%, with no collateral................................... $200,000
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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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 JUNE
DECEMBER 31, 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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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) 21,542
1,210,977 2,330,535(1) 34,660 3,606,714
----------- ---------- ----------- -----------
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

<PAGE>
<PAGE>
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

<PAGE>
<PAGE>
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>
_________________________________ ________________________________

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 NOVEMBER 29, 1997 ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO
THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

BEACHPORT ENTERTAINMENT
CORPORATION
-----------------------
9,182,775 SHARES
COMMON STOCK

PROSPECTUS
NOVEMBER 4, 1997
-----------------------

_________________________________ ________________________________