CELEBRITY ENTERTAINMENT INC, 10KSB/A, 1996-06-28

CELEBRITY ENTERTAINMENT INC
10KSB/A, 1996-06-28
AMUSEMENT & RECREATION SERVICES

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------------------------

FORM 10-K SB/A #1
(mark one)
[ X ] ANNUAL REPORT UNDER SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994

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

Commission File No. 0-19196
----------------------------------

CELEBRITY ENTERTAINMENT, INC.
(Name of Small Business Issuer in its Charter)

Delaware 11-2880337
(State of or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)

214 Brazilian Avenue, Suite 400, Palm Beach, Florida 33480 407/659-3832
(Address of principal executive offices. Issuer's telephone number.)
-----------------------------------------
Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act as of December 31,
1994: Common Stock, $0.0001 par value per share.

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES [X]
NO [ ]

Check if there is disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year. $ 200,035.

The aggregate market value of the voting stock held by non-affiliates computed
by reference to the average closing bid and ask prices of such stock on February
28, 1995 was approximately $ 712,000.

The number of shares outstanding of the issuer's Common Stock, $ 0.0001 par
value, as of December 31, 1994 was 2,038,767 and the number of shares
outstanding of its Preferred Stock, $ 0.01 par value, as of December 31, 1994
was 589,000.

Traditional Small Business Disclosure Format (check one):

Yes [ ] No [ X ]

CELEBRITY ENTERTAINMENT, INC.
FORM 10-KSB
For the Year Ended December 31, 1994

INDEX
HEADING PAGE

PART I
Item 1. Description of Business 1
Item 2. Description of Property 8
Item 3. Legal Proceedings 9
Item 4. Submission of Matters to a Vote
of Security Holders 9

PART II
Item 5. Market for Common Equities
and Related Stockholder Matters 10
Item 6. Management's Discussion and Analysis
or Plan of Operation 11
Item 7. Financial Statements 16
Item 8. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 16

PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons; Compliance with
Section 16(a) of the Exchange Act 18
Item 10. Executive Compensation 20
Item 11. Security Ownership of Certain Beneficial
Owners and Management 21
Item 12. Certain Relationships and Related Transactions 22
Item 13. Exhibits and Reports on Form 8-K 23

SIGNATURES 28

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Celebrity Entertainment, Inc. (Formerly Celebrity Resorts, Inc. and
hereinafter referred to as the "Company") was organized pursuant to the laws of
the State of Delaware on July 27, 1987 under the name of Celebrity Fish Camps
and RV Parks, Inc. (previously defined and hereinafter referred to as "Celebrity
Fish Camps") for the purpose of owning, developing, marketing and operating a
destination resort community and fish camp (previously defined and hereinafter
referred to as the "Resort") on Orange Lake near Ocala, Florida. The Resort
concept was developed by its founder, Davey Johnson, with the view that it would
combine the widespread attraction of fishing, recreational vehicle use and the
concept of organized programs called Dream Weeks. The Company has previously
sponsored a few promotional Dream Weeks, but has not fully implemented its
Dream Week program and has elected to pursue the sale of memberships and the use
of Resort facilities by RV owners and outdoor sports people.

On January 28, 1988, Celebrity Fish Camps changed its name to Celebrity
Resorts, Inc. On August 22, 1990, the Company completed its Initial Public
Offering of 875,000 IPO Units, each Unit consisting of two shares of Common
Stock (the "Common Stock") and three IPO Warrants (the "IPO Warrants"). On May
7, 1991, the Board of Directors of the Company declared a two-for-one stock
split increasing the number of outstanding shares of Common Stock and entitling
the holders of record of the Common Stock on May 23, 1991 to receive two shares
of Common Stock for each share of Common Stock previously held by each of them
(the "1991 Split"). The foregoing share information is reflected as of the date
of the transaction relating to the same without giving effect to the 1991 Split
or the 1993 Reverse Split.

On March 19, 1991, the Company acquired 60% of the outstanding capital
stock of Celebrity Football, Inc. ("CFI"). CFI owned a partnership interest in
the Orlando Predators Limited Partnership (the "Predators Partnership"), which
owned a controlling interest in the Orlando Predators, a franchise team of the
Arena Football League. On July 30, 1992, CFI sold its partnership interest in
the Predators Partnership. CFI was dissolved in August 1993.

On June 9, 1993, pursuant to the terms of a certain Stock Purchase
Agreement and Plan of Reorganization, dated June 9, 1993, the Company acquired
all of the outstanding capital stock of its now wholly-owned subsidiary,
Production Services International, Inc., a development-stage Delaware
corporation ("PSI"). The Company acquired all of the issued and outstanding
capital stock of PSI in exchange for the issuance of 8,053,436 shares (pre-1993
Reverse Split, defined below, or 402,672 giving effect to the 1993 Reverse
Split) of the Company's Common Stock. Each stockholder of PSI received 7.62
shares (pre-1993 Reverse Split or .38 shares giving effect to the 1993 Reverse
Split) of the Company's Common Stock in exchange for each share of capital stock
of PSI surrendered by such stockholder. PSI was organized on December 10, 1991
for the purpose of performing and providing production management services and
facilities leasing to companies that are engaged in the production of filmed
entertainment projects. PSI principally is engaged in providing television and
motion picture production services. In November 1994, as a result of cost
overruns on a television series produced by PSI, production activity on the
series and development activities on PSI's other television projects were
terminated. Consequently, as of December 31, 1994 the Company has abandoned the
operations of PSI and has written off its investment in PSI. As a result of
such abandonment of its subsidiary and the lack of net income from the Company s
other operations, the Company is experiencing a liquidity problem and is unable
to meet all of its financial obligations as they become due. See "Management's
Discussion and Analysis of Financial Condition or Plan of Operation" and Note 1
to the Company's Consolidated Financial Statements included elsewhere herein.

On November 3, 1993, the Company effected the amendment of its Certificate
of Incorporation to provide for the change of its name from Celebrity Resorts,
Inc. to Celebrity Entertainment, Inc. and to provide for the 1993 Reverse Split
pursuant to which each share of the Company's outstanding and treasury stock was
reclassified and converted into one-twentieth of one share of Common Stock (the
"1993 Reverse Split").

The principal executive offices of the Company are located at 214
Brazilian Avenue, Suite 400, Palm Beach, Florida 33480 and its telephone number
is (407) 659-3832.

Business

The Resort. The Resort offers extensive outdoor recreational activities
including fishing, golfing and swimming. The Resort also hosts periodic RV
rallies, fishing tournaments and clinics. The Company believes that the Resort
successfully creates an environment where a broad base of guests can share the
Resort facilities with one another. The Company has not previously fully
implemented its Dream Week programs given management's belief that the Resort
facilities were not adequately developed to afford visitors the full experience
that the Resort's finished facilities would provide. In addition, management
believes that the Resort has not had an adequate number of Housing Units
available to house all expected participants. Also, Davey Johnson, who is the
manager of the Cincinnati Reds and the former manager of the New York Mets and
the founder of the Resort, resigned as an officer and director of the Company.
Mr. Johnson's professional associates and other retired professional athletes
have participated in Dream Week-style events at the Resort. The Dream Week
programs may be offered on a more frequent and formal basis if the Company is
able to obtain additional funding sufficient to complete a total of
approximately 20 Housing Units and if the Company is successful in entering
into contracts with celebrities to attend the Resort in order to enable visitors
to book participation in scheduled Dream Weeks activities. Until such time and
except for other specially scheduled events and promotions, celebrities who
attend the Resort are free to pursue the recreational activities of their choice
while at the Resort. Special promotions, such as celebrity fishing and golf
tournaments, outdoor music festivals, and theme-based rallies are scheduled
throughout the season to ensure continuing and periodic attendance by
celebrities at Resort events. The quality of fishing, golf and recreational
activities and the standards maintained in the operation of the Resort
facilities have been designed so that celebrity visitors will continue to attend
the Resort.

As indicated above, the Company is still in the process of completing the
Resort. The Company expects that, when fully completed, the Resort will include
sites to accommodate approximately 350 recreational vehicles ("RVs"),
approximately 50 free standing housing units ("Housing Units"), camping
facilities and a variety of ancillary amenities, including a restaurant,
swimming pool, baseball field, golf course, miniature golf course, tennis
courts, basketball and other athletic courts, outdoor game areas, hiking trails,
a clubhouse and general store and other resort facilities. The Company employs
a recreational staff to organize activities for children, adults and families,
such as barbecues, arts and crafts projects, dances, exercise classes, parties,
tournaments and a broad range of games. The Company also provides year-round
maintenance and security staff at the Resort.

At December 31, 1994, the Resort operated 108 RV sites which are fully
equipped with water, sewer and electric hook-ups (including 25 such sites which
were completed and put in service on June 8, 1994), 125 RV sites with water and
sewer hook-ups only, and 11 Housing Units. The support and athletic facilities
currently completed and available for use include: (i) a lodge with six bedrooms
and three baths; (ii) a main building with a reception area, three offices,
restrooms, an exercise/aerobics room, a small meeting room and a central
dining/social room (which has the capacity to hold up to two hundred persons)
with a commercial kitchen attached; (iii) a country store with convenience food
and automotive supplies; (iv) a gift shop; (v) a bait and tackle shop; (vi) a
marina and boat house with fishing boats; (vii) a nine-hole golf course with
driving range and putting green; (viii) horseshoe pits; (ix) picnic facilities
including an oversized gas/wood barbecue; (x) volleyball and shuffleboard
courts; and (xi) nature walk paths and bike trails. The Company plans to
complete by mid-1996 electric hook-ups to 50 of the existing 125 partially
completed RV sites, the construction and partial hook-ups (water and sewer) for
an additional 50 RV sites, an additional 9 Housing Units, and a bath house,
baseball field, tennis courts and archery range. The Company will attempt to
raise the funds to accomplish this expansion, however no assurances can be given
that the Company will be successful. See Management's Discussion and Analysis
or Plan of Operation.

The Resort is centrally located near Orange Lake, approximately 11 miles
north of Ocala, Florida, approximately 13 miles south of Gainesville, Florida,
approximately 20 miles from Silver Springs in Ocala, Florida, approximately 1
1/2 hours from Universal Studios in Orlando, Florida and approximately 1 1/2
hours from Sea World in Florida. Orange Lake covers approximately 22,000 acres
with undercover which is characteristically ideal for bass and other game fish.
It is connected to a smaller lake by a waterway, Cross Creek.

Seasonality. The Resort historically experiences seasonal use of its
facilities. Presently the principal period of active use during the year is
November through May, which period accounts for approximately 70% of all revenue
generate by the Resort. The Company's plans to expand the facilities of the
Resort include the projection that, as a result thereof, greater use will
prevail year-round so that the higher-use season would be defined as October
through July. As a result, the lower-use season would be reduced to two or
three months of the year, which months are likely to be summer months.

Resort Climate. Generally, the nature and success of a fishing and golfing-
oriented resort is dependent in considerable part upon prevailing conditions at
the resort property, including climate. To the extent that dramatic climatic
changes, such as hurricanes, or extended unseasonable weather, may adversely
affect the Resort property or the viability of fishing in Orange Lake, the
Company's ability to market memberships may be adversely affected and attendance
at the Resort may be impaired. The Resort is not located in a hurricane,
tornado or flash flood area and has not historically experienced dramatic
climatic changes. To the extent that Florida experiences hurricanes, such
storms have historically had a more material impact on coastal areas and not on
inland areas such as the area in which the Resort property is located. The
Company believes that the average temperature at the Resort property will tend
to be approximately 78 degrees in the winter (December-March), 81 degrees in the
spring (April-May), 86 degrees in the summer (June-August) and 80 degrees in the
fall (September-November). Although Orange Lake has experienced growth of
vegetation from time to time, such growth has not materially adversely affected
fishing, but has reduced the number of pleasure craft on Orange Lake. The
Company does not anticipate that any growth of vegetation would be so
substantial as to preclude or materially affect fishing or the use of pleasure
craft on Orange Lake in the future. While management does not anticipate the
occurrence of climatic events which would adversely effect the business or
operations of the Resort, there can be no assurance that such events will not
occur.

Marketing Strategy. The Company directs its marketing efforts to RV owners
and other individuals who have an active interest in family-oriented outdoor
recreational activities. The Company also targets individuals seeking to
vacation in Florida, including those persons who wish to visit such family
vacation spots as Disney World, Epcot Center, Universal Studios, Cape Canaveral,
Sea World and Silver Springs. In its marketing effort, the Company emphasizes
its proximity to these and other resort facilities, and to such central Florida
cities as Gainesville and Orlando. The Company varies its marketing strategies
in order to respond to changes in the awareness and appreciation of the Resort,
regional marketing characteristics and the economic climate.

The Company has established an on-site sales facility. Prospective
members may be invited to attend a sales presentation via the Company's direct
mail solicitations, personal referral, or other marketing methods. Prospective
members may also be invited to travel to the Resort to tour the facilities with
a salesperson. The Company is actively exploring alternative membership
programs to broaden its appeal or focus its efforts in a more concentrated
fashion on a targeted market segment once there is reasonable performance data
by segment.

The Company's on-site facilities are subject to regulation under federal
and state consumer protection and consumer credit laws and are typically subject
to review by consumer protection agencies having broad discretionary authority.
Should the Company fail to control its sales techniques, regulatory enforcement
action by the federal or state regulatory body could result. The Company
believes that it is in compliance with the applicable federal and state consumer
protection and consumer credit laws. The Company has and will continue to
structure its membership and sales practices to preclude or reduce regulation
under federal and state laws.

The principal goal of marketing is to promote the sale of memberships.
Daily/nightly reservations or facilities use is a secondary goal, since
membership sales and use of the Resort account for the majority of the revenue
generated by the Resort. The marketing effort is comprised of advertising and
sales. Advertising is implemented through the use of a combination of
billboards and signage on highways within a twenty-mile radius of the Resort,
display ads in RV and vacation publications, and direct mail solicitations to RV
owners. The goal of advertising is to present the Resort to potential members
and users. On-site efforts are directed to sale of memberships and facilities
usage and over 90% of all sales revenue results from on-site personal sales
efforts. Special incentives, such as free use of some facilities or additional
nights' use of water, sewer and electric hook-ups at no charge are used to
induce on-site visitors to continue to visit and use the Resort facilities
and/or to commit to the purchase of memberships.

The Company is expanding its marketing efforts for the 1994-1995 season by
increasing the number of promotions and events involving dealers who offer RVs
for sale and RV owners who are members of regional or national RV and camping
organizations. The Company is currently implementing a plan pursuant to which
information circulars will be distributed though an informal network of RV
dealers with the focus on such efforts concentrated on the Southeastern and
Midwestern regions of the United States. Representatives of the Company are in
the process of contacting RV dealers and organizations to assist in the planning
and promotion of RV "rallies" during which RV owners will be invited to use the
Resort during particular periods (usually one week each). Through the offer of
special price schedules and events planned during such rallies, the Company
expects that additional memberships will be sold.

The Company is also pursuing the promotion of corporate retreats at the
Resort facility, which would provide executives, managers and personnel of
companies and organizations the opportunity to visit the Resort for a scheduled
period of time to participate in and make use of golf, fishing, social
gatherings, business meetings and other activities related to their business.
The Resort marketing director has initiated contacts with a number of possible
candidates for such a program and it is anticipated that some response and
potential Resort facilities use will result from this approach beginning the
third quarter of 1995.

Membership; Membership Rights and Obligations; Fees. The Company markets
memberships which entitle members to utilize an RV site or to use Company-owned
RVs and Housing Units for a daily/nightly or weekly fee. Memberships do not
convey any ownership interest in the Company, the Resort, the Resort Property or
its facilities, nor does it entitle members to use specific RV sites or
campsites within the Resort. The Company currently offers different categories
of membership, encompassing various privileges, at different rates. Membership
fees vary depending upon the kind of membership purchased. For example, some
memberships entitle members to the use of only certain of the Resort's
facilities during restricted periods of time. Other memberships may combine the
designated facilities which a member is entitled to use and may not otherwise
restrict the periods during which such facilities may be used. All members are
required to pay annual maintenance fees or dues to offset the Resort's
operational and maintenance expenses related to such memberships. Currently
such annual dues are set at $299 per member and are subject to annual
adjustments. Memberships are not transferable during the initial two years
after purchase thereof except to a family member or by operation of law.
Thereafter, memberships may be transferred by sale, gift, or inheritance but may
not be transferred more than once. Memberships expire upon the death of the
member or such member's permitted transferee. The Company does not permit
transfers at a price higher than the purchase price paid by the original member
plus a 10% transfer charge payable to the Company. All transfers, sales,
inheritances or gifts of memberships are subject to the Company's prior consent.
Transferees are accepted as lifetime members and issued lifetime membership
cards admitting them to the Resort only after the Company has consented to the
transfers and the transferees have executed new membership contracts which
provide for annual dues at the then-current level for new memberships. The
Company does not have any present intention to repurchase memberships or locate
purchasers for member who wish to sell their memberships. Each membership
entitles the member to use an RV site or to utilize a Company owned park model
for a daily/nightly or weekly usage fee. There are no restrictions on how many
times a member may visit the Resort during any given year. However, to allow
all members reasonable access to the Resort, a member is permitted to stay at
the Resort for a maximum of up to 14 consecutive days, after which the member
may not stay at the Resort for the immediately subsequent seven days, unless
vacancy of other sites permits an extended stay. The Company intends to sell a
total of approximately 800 memberships. As of December 31, 1994, there were 243
memberships to the Resort.

The Company also offers memberships to persons who do not own their own
RVs which permit such members to use a Company-owned RV or Housing Unit on a
daily/nightly or weekly basis for a daily/nightly charge (currently
approximately $40 per Housing Unit). The Company intends to maintain a minimum
of ten permanent Housing Units for use on a daily basis.

The Company also offers other alternative membership packages, including
special memberships for limited or fixed periods of time and for periods of time
made available in conjunction with the Resort's rallies, special events
programming, fishing tournaments and clinics.

State laws governing timeshares, and other similar laws and regulations
may limit or preclude the sale of memberships in some states. The Company
believes that the Florida statutes governing timeshares are not applicable to
the Resort memberships and that current sales of its Resort memberships are not
limited thereby. Government regulations promulgated by various other states may
include provisions which, among other things, affect the manner in which the
Company may offer or sell memberships, limit the contents of offering materials,
mandate an escrow of all or a portion of the purchase price of memberships,
regulate the transferability of memberships, and/or require the licensing of
salespersons. The specific limitations on sales of memberships vary from state
to state and the Company undertakes to comply with all such regulations in force
in any state in which memberships may be offered for sale by the Company.

Specific Membership Packages. The Company currently offers five membership
packages: the Total Package, the Dual Package, the Camping Package, the Family
Package and the Golf and Fishing Package. The Total Package entitles a member
to unlimited lifetime use of the Resort facilities and provides discounts on the
use of Housing Units, golf and boating fees. The price of the membership
offered by the Total Package is currently $3995 (exclusive of annual dues of
$299). Memberships in this category may be assigned or otherwise transferred or
sold and may be bequeathed by will.

The Dual Package has been designed to function as a second membership for
someone who is currently a member of another resort and who is a participant in
the Resort Parks International network and is able to provide evidence of the
same. See "Business - Additional Membership Rights and Obligations." The Dual
Package entitles a member to unlimited use of the Resort facilities for a period
of ten years, but does not afford a member the discounts available under the
Total Package. The price of the Dual Package is $1295 (exclusive of annual dues
of $299).

The Camping Package entitles a member to unlimited use of the Resort's
camping facilities at a membership price of $995 (exclusive of annual dues of
$299). The Camping Package includes a two year trial (by paying the difference
between the price of such package and the price paid for the Camping Package)
term and permits the members to convert the membership into a Total Package or
Dual Package if elected within the first two years of membership.

The Family Package entitles a member to join with his or her family at a
membership price of $995 (exclusive of annual dues or $299). The Family Package
entitles a member and his or her family to unlimited use of the Resort
facilities. Like the Camping Package, the Family Package affords a two year
trial term; however, use of the Resort facilities under the Family Package is
restricted to April through November of each year.

The Golf and Fishing Package entitles a member to unlimited use of the
Resort facilities on a year-to-year basis at a membership price of $599 per
year. The Golf and Fishing Package includes 25 days of golf fees ($4.00 per
day) and discounts on the use of fishing boats ($9.00 to $15.00 per rental).

Membership Agreements. The Company's members are required to execute membership
agreements defining their rights and obligations with respect to use of the
Resort facilities (the "Membership Agreements"). Under the Membership
Agreements, members are required to pay annual maintenance fees, subject to
annual increases, as determined at the time of the sale of membership. Buyers
have a five day right of rescission (from the date of execution) with respect to
Membership Agreements. The Company structures its membership fees such that
members' fees and/or dues are less than the fees charged on a per-night basis to
non-members seeking to use the Resort facilities. Such fee structure is still
being negotiated and may vary depending upon the type of membership granted.

Membership Financing Arrangements. The Company sells some of its memberships
pursuant to installment sales agreements which permit a purchaser to finance
a portion of his or her membership cost over time. The installment payments
consists of principal and interest with the payment terms and the rate of
interest determined by prevailing interest rates, the size of the down payment
and the term of the financing. The Company requires that subscribers wishing to
finance their membership fees provide security for that portion of the
membership fee which is being financed. The Company may attempt to finance such
agreement by entering into agreements to sell such installment sales contracts
to one or more finance companies, lending institutions or private parties at a
discount. Such financing arrangements may require the obligations of the
Company to be secured by collateral, including real estate owned by the Company.
As of the date hereof, the Company has not entered into any such agreement with
a financing or similar company and there can be no assurance that the Company
will do so in the future.

Additional Membership Rights and Obligations. The Company has entered into an
agreement with Resort Parks International, an association of privately-owned
campgrounds and RV sites located throughout the United States, that affords its
network of members for a nominal fee (currently $40 annually) and subject to
certain limitations, the right to utilize facilities at all campgrounds and RV
sites that are members of the Resort Parks International network. Pursuant to
the terms of such agreement, members of the Resort Parks International network
of campgrounds will be entitled to utilize the Resort facilities for a nominal
fee.

Employees. The Company had a total of 9 full-time employees at December 31,
1994.

Environmental Regulation. The Company has no knowledge of any federal, state
or local environmental compliance regulations which materially affect operations
of the Resort and the Company has not been required to expend material amounts
of capital to comply with environmental protection statutes. While it is
impossible to predict the application and impact, if any, of any future
environmental regulations and laws on the operations and development of the
Resort, the Company does not anticipate that expenditures related to compliance
with any such future laws or regulations will be material. There can be no
assurance, however, that the Company will be able to comply with such laws and
regulations.

Competition. In connection with the resort business, the Company competes
with other companies who operate destination resorts and who market memberships
usable at multiple destination campground locations. The majority of such
companies are well-established in the industry and have substantially greater
financial and marketing resources and name recognition than the Company and
operate a greater number of resort campgrounds. The Company has entered into a
relationship which will permit its RV unit owners to utilize other RV locations.
The Company believes that its ability to compete successfully for membership
sales is based in part on the attractiveness and location of the Resort and its
reputation in the RV and outdoor sports community as offering premium
facilities. Although there are currently six fish camps operating on Orange
Lake, management believes that none individually offers facilities comparable to
those which the Company presently offers and will be able to offer upon
completion of the Resort facilities. The Company believes that, currently, the
largest of such other camps can accommodate a maximum of 30 RVs.

The Company also competes with other resort facilities and theme parks in
Central Florida which are far better established, are better known and have
greater financing and marketing capabilities than the Resort. Such other
facilities include, among others, Disney World, Universal Studios, Silver
Springs, Cypress Gardens and Cape Canaveral. The Company intends to increase
its efforts in marketing the Resort facilities and membership packages to
vacationers visiting such other companies resorts.

Production Services International, Inc.

PSI is a motion picture and television production company. PSI contracts,
on a project basis, with film and television producers to serve as production
supervisor for a specified project. With the increased use of on-site filming,
television and film producers have found it cost effective to used qualified
production teams at the location destinations rather than shipping and
transporting their studio personnel. As production supervisor, PSI locates and
arranges for the use of filming and taping facilities, production equipment such
as lighting, audio and video equipment, sound studios, sets, qualified technical
personnel, and other required items for production. Although the terms of each
project differ, PSI since its inception has entered into joint ventures with
producers such that it will participate in financing or arranging for financing
of part of the production cost of a project, provide the production facilities,
equipment and personnel, provide executive supervision of the projects and
assist in establishing the distribution network for the finished project in
return for which PSI will have a percentage share in the profits and ownership
of the project. PSI has produced one television series entitled "THE NEWZ" (the
"Series") which has been distributed by an international distributor and has
developed several other projects as set forth below. As of December 31, 1994,
PSI ceased operations as a result of the inability to obtain sufficient funds to
meet the ongoing obligations of producing the Series and the costs associated
with developing its other projects. Consequently, the Company has elected to
abandon the operations of PSI and its investment asset in the subsidiary. See
"Management's Discussion and Analysis of Financial Condition or Plan of
Operation" and Note 1 to the Company's Consolidated Financial Statements
included elsewhere herein.

PSI developed the concept for a television program of a half-hour, five
episodes per week, late-night comedy Series based on national and international
events entitled "THE NEWZ." On October 31, 1993, PSI completed the production
of a twenty-two minute presentation pilot at television production studios in
Orlando, Florida. On January 13, 1994, a national distributor of television
programming (the "Distributor") and PSI entered into an agreement (the
"Distributor Agreement") for the purchase by the Distributor of the exclusive
distribution and exploitation rights of the Series in exchange for which PSI
would receive 50% of the net proceeds derived by the Distributor from the
distribution and exploitation of the Series. The Distributor Agreement provided
that the Distributor would pay $100,000 to PSI by January 25, 1994 as partial
payment for the actual, direct, out-of-pocket expenses incurred by PSI in
development of the Series pilot in exchange for which the Distributor would
receive an exclusive option exercisable by April 15, 1994 to order the
production of the Series. The Distributor made the $100,000 payment on January
25, 1994, and also exercised its option on April 15, 1994 for an initial order
of ninety Series episodes. Consequently, the Distributor reimbursed to PSI the
balance of the actual costs for development of "THE NEWZ" pilot up to the
aggregate of $250,000 (including the initial $100,000 payment). PSI commenced
production of the Series and the Distributor paid to PSI a distribution advance
based on the agreed production budget of $48,000 per episode. The Distributor
retains exclusive successive annual options to order the Series at thirty-two
episodes per year. PSI produced the Series through its wholly-owned subsidiary,
The Newz Productions, Inc. The Distributor and PSI shared mutual creative
control over the Series.

PSI had completed and delivered sixty-one episodes of "THE NEWZ."
However, due to technical difficulties and other production overages that caused
substantial cost overruns, the total production funding provided by the
Distributor was not sufficient to cover the costs of production for the
completion of the initial ninety episode order. Although PSI had located
alternative sources of financing to provide the funding necessary to complete
the remaining twenty-nine episodes, PSI and the Distributor were unable to agree
on the revised terms of an arrangement for production and distribution of the
episodes. Consequently, all production activity ceased in November, 1994 and is
not expected to commence again.

Abandoned Operations. Subsequent to December 31, 1994, on March 1, 1995
the series distributor and two other creditors of PSI filed an involuntary
petition against PSI with the United States Bankruptcy Court, Middle District
of Florida, Orlando Division, requesting an order for relief under Chapter 11 of
the Bankruptcy Code. The petition asserts claims of amounts owed as a result of
the television Series which ceased production in November, 1994. Such claims
are for amounts in excess of the accounts payable and deferred revenue in the
PSI financial statements, and PSI is attempting to negotiate a settlement with
the three creditors who initiated the filing. PSI intends to provide a fund
with which to compromise claims in bankruptcy and other claims. Further, it is
expected that PSI's ownership interest in the television series will be
relinquished to the Distributor of the series as partial consideration in the
settlement with the Distributor. However, the aggregate amount of that fund and
the settlement terms and payments have not been determined and no assurances can
be given that a settlement will be reached.

The management of the Company recognized that the financial condition of
PSI at December 31, 1994 was such that the Company was not able to exercise
control over the operations of its subsidiary, PSI, and that unless immediate
financing for production of the Series were obtained under conditions acceptable
to the Distributor, bankruptcy of PSI was inevitable. On March 6, 1995, the
Company's board of directors approved a formal plan to discontinue the
operations and settle the liabilities of PSI by liquidating the assets of PSI.
As of December 31, 1994, the Company abandoned its investment in PSI and
deconsolidated the assets, liabilities and operations of the PSI subsidiary on
its financial statements. The Company will not be responsible for the payment of
obligations or claims related to the abandoned operations of PSI.

Since November 1994, the Company has pursued negotiations with
representatives of a number of unrelated companies in order to complete a
business combination which would provide additional revenues and net income to
the Company and a public offering of securities, the proceeds of which would be
used to reduce the liabilities of the Company and expand the Resort operations.
This would result in the reduction of CEI's liabilities and provide expected
income in the upcoming year of the Company's operations. However, there can be
no assurance that any proposed acquisition or financing will be effected. Any
such acquisition and public offering is subject to the acquiring entity's
acceptance of the financial statements, the state of the general securities
markets and of the specific market for the Company's securities, and any
necessary regulatory review.

Certain creditors and note holders have informed the Company that the
obligations of the Company to pay them may be exchanged for a number of the
Company's securities. If such arrangements are successfully completed, the
Company will reduce its notes payable and accounts payable obligations by
approximately $220,000.

ITEM 2. DESCRIPTION OF PROPERTY

The Land upon which the Resort is located consists of approximately 110
acres of property (the "Resort Property") owned by the Company. The Resort is
centrally located near Orange Lake, approximately 11 miles north of Ocala,
Florida, approximately 13 miles south of Gainesville, Florida, approximately 20
miles from Silver Springs in Ocala, Florida, approximately 1-1/2 hours from
Universal Studios in Orlando, Florida and approximately 1-1/2 hours from Sea
World in Florida. Orange Lake covers approximately 22,000 acres with undercover
which is characteristically ideal for bass and other game fish. It is connected
to a smaller lake by a waterway, Cross Creek. The Company purchased a portion
of approximately 35 acres of the Resort Property from Mr. Johnson and obtained
ownership of the other 75 acres of the Resort Property pursuant to an agreement
with Celebrity Fish Camps, Inc. (a Florida corporation in which Mr. Johnson
owned 50% of the outstanding capital stock) whereby Celebrity Fish Camps, Inc.
transferred its title (subject to a morgage interest) to the Resort Property to
the Company in connection with the exchange of all of the issued and outstanding
capital stock of Celebrity Fish Camps, Inc. by the holders thereof for an
aggregate of 1,000,000 shares of the Company's preferred stock issued to Mr.
Johnson, an aggregate of 100,000 share of Common Stock (pre-1993 Reverse Split)
issued to the other stockholders of Celebrity Fish Camps, Inc., and the
agreement that Mr. Johnson continue as guarantor of the outstanding mortgage on
the Resort Property which was held by Sun Bank. The Company assumed the
obligations of Celebrity Fish Camps, Inc. under certain mortgage notes relating
to the Resort Property which mortgage notes have been renegotiated into one
mortgage note (the "Resort Mortgage") held by Orange Bank.

The Company's four outstanding promissory notes with a principal balance
of $470,246 as of December 31, 1992, were refinanced with a local commercial
bank, Orange Bank, on April 13, 1993. In connection with such refinancing the
Company obtained an additional advance of approximately $123,231 and delivered a
new mortgage on the Resort Property. In connection therewith, the Company
executed a promissory note securing the repayment thereof in an aggregate
principal amount of $625,000. Such new promissory note accrues interest at
Orange Bank's prime lending rate of interest plus 1-1/2% (with a minimum rate of
8-1/2%), requires monthly payments of $8,100 and matures on April 13, 1996. In
connection with the refinancing, the Company placed $32,400 in a restricted
reserve interest account with the bank. A principal reduction of $100,000 was
payable on or before October 2, 1993 which payment was deferred by the bank
until the closing on January 27, 1994 of the Company's public offering, and in
connection therewith the company paid $57,400 to Orange Bank on January 28,
1994, and Orange Bank renewed the mortgage. Under the terms of the renewal,
which was consummated as of March 17, 1994, a note was signed by the Company for
$576,160 which matures on May 2, 1994. The Company completed a mortgage on May
2, 1994 with AmSouth Bank, the successor by merger to Orange Bank, in the
principal amount of $551,159 and bearing a fixed interest rate of 9% with
monthly payments of $5,650 and the remaining principal and interest due in May
1997 in the amount of $420,462. There are no prepayment penalties. As part of
the transaction, AmSouth extinquished the prior short-term mortgage consummated
as of March 17, 1994 and removed Mr. David A. Johnson as a guarantor of the
mortgage note. As of December 31, 1994, the amount due under the mortgage was
$485,312. Real estate taxes on the property are approximately $37,000 per year.
The Company believes the insurance maintained on the Resort property is
adequate.

ITEM 3. LEGAL PROCEEDINGS

On March 1, 1995, the series distributor and two other creditors of PSI
filed an involuntary petition against PSI with the United States Bankruptcy
Court, Middle District of Florida, Orlando Division, requesting an order
for relief under Chapter 11 of the Bankruptcy Code. The petition asserts
claims of amounts owed as a result of the television series which ceased
production in November, 1994. Such claims are for amounts in excess
of the accounts payable and deferred revenue in the accompanying
financial statements, and PSI is negotiating with the three creditors who
initiated the filing toward a settlement of their claims. PSI intends to
provide a fund with which to compromise claims in bankruptcy and other claims,
however the aggregate amount of that fund and the settlement terms and payments
have not been determined as of the date of this report. The Company will not be
responsible for the payment of obligations or claims related to the discontinued
operations of PSI.

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

None.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

The following table sets forth, for the periods indicated, the reported
high and low bid and asked price quotations for the Common Stock for the periods
indicated as reported by the NASDAQ Small-Cap Market and for the periods when
the same have been quoted on the NASD OTC Electronic Bulletin Board. Such
quotation reflect inter-dealer prices, but do not include retail mark-ups, mark-
downs, or commissions and may not necessarily represent actual transactions.

<TABLE>
Common Stock (1) IPO Warrants (1)
Bid Asked Bid Asked
Period of Quotation High Low High Low High Low High Low
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1990
Third Quarter (2) 17-1/2 15 22-1/2 16-1/4 4-3/8 3-3/4 7-1/2 5
Fourth Quarter 17-1/2 12-1/2 20 15 4-3/8 3-1/8 6-1/4 5

1991
First Quarter 22-1/2 12-1/2 25 16-1/4 6-1/4 2-1/2 8-1/8 5
Second Quarter 23-3/4 10 26-1/4 11-1/4 6-7/8 6-1/4 9-3/8 5
Third Quarter 32-1/2 12-1/2 37-1/2 16-1/4 11-1/4 2-1/2 15 4-3/8
Fourth Quarter 32-1/2 10 37-1/2 12-1/2 11-1/4 3-3/4 15 6-1/4

1992
First Quarter 18-3/4 10 22-1/2 11-1/4 5 2-1/2 7-1/2 10
Second Quarter 17-1/2 2-1/2 21-1/4 7-1/2 3-1/8 5/8 5 1-7/8
Third Quarter (3) 6-7/8 5/8 10 1-1/4 5/8 5/8 2-1/2 2-1/2
Fourth Quarter (4) 1-7/8 5/8 2-1/2 1-1/4 - - - -
Fourth Quarter (5) .40 .10 1.60 .60 - - - -

1993
First Quarter (6) 4.0 .20 6.0 .6 - - - -
Second Quarter (6) 2.4 1.0 4.4 2.4 - - - -
Third Quarter (6) 2.0 .80 3.6 1.8 - - - -
Fourth Quarter 2.7 .60 4.1 2.0 - - - -

1994
First Quarter (7) 4.2 2.0 7.2 3.2 - - - -
First Quarter (8) 4-1/4 1-3/4 5 2-1/8 - - - -
Second Quarter (8) 3-7/8 2-7/8 4-1/2 3-3/8 - - - -
Third Quarter (8) 3-3/8 2-5/8 3-5/8 2-7/8 - - - -
Fourth Quarter (8) 2-3/4 7/16 2 1/2 - - - -
</TABLE>
(1) Quotes have been restated to adjust for the 1993 Split and the 1993 Reverse
Split.
(2) Reflects quotations for the period August 14, 1990 (the date of the initial
listing of the Common Stock and IPO Warrants on NASDAQ) through September
30, 1990.
(3) Reflects quotations for the period July 1, 1992 through August 3, 1992 (the
last day of the NASDAQ listing of the IPO Warrants).
(4) Reflects quotations for the period October 1, 1992 through December 2, 1992
(the last day of the NASDAQ listing of the Common Stock), exclusive of
quotations for the period December 3, 1992 (the date of initial listing of
the Common Stock on the NASD OTC Electronic Bulletin Board) through
December 31, 1992.
(5) Reflects quotations for the period December 3, 1992 (the date of the
initial listing of the Common Stock on the NASD OTC Electronic Bulletin
Board) through December 31, 1992, as quoted (in decimals) by the National
Quotation Bureau, Inc.
(6) Reflects quotations as quoted (in decimals) by the National Quotation
Bureau, Inc.
(7) Reflects closing bid and asked quotations for the period January 1, 1994
through February 18, 1994, the last date on which the Common Stock was
quoted in the National Quotation Bureau, Inc. "pink sheets."
(8) Reflects high and low bid and asked quotations for the period February 18,
1994 (the date the Common Stock was listed for trading on NASDAQ) through
March 31, 1994, the last day of the first quarter.

As of December 31, 1994, there were 2,038,767 shares of Common Stock
outstanding. As of the same date, there were approximately 195 holders of
record of the Common Stock and 275 holders of record of the IPO Warrants.
Approximately 65% of the Shares of Common Stock outstanding are held in street
name. It is believed that there are approximately 917 beneficial owners of the
Company's Common Stock.

The Company has not paid any cash dividends on its Common Stock since its
incorporation and anticipates that, for the foreseeable future, earnings, if
any, will continue to be retained for use in the Company's business and will
continue to be utilized to fund its operations.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION

General

The Company was in the development stage until April 1992, at which time
it began operations. The Company is principally engaged in the development,
ownership, marketing and operation of a destination resort community and fish
camp located on Orange Lake near Ocala, Florida. PSI, which was acquired by the
Company in June 1993, was a development stage company which formed to provide
television and motion picture production services.

The Company's Consolidated Financial Statements for the fiscal years ended
December 31, 1994 include the accounts of its wholly-owned subsidiaries, but do
not include CFI and the Predator Partnership in which CFI owned two-thirds of a
general partnership interest. The financial statements of the Company for the
fiscal year ended December 31, 1993 includes income from CFI. CFI was dissolved
as of August 13, 1993. PSI was abandoned as of December 31, 1994 and the
Company's Consolidated Financial Statement for the fiscal year ended December
31, 1994 reflects the de-consolidation of PSI's operations and the write-off of
the Company's investment in PSI. See Note 1 to the Company's Consolidated
Financial Statements included elsewhere herein.

The Company recognizes revenues related to sales of memberships on the
date that the membership contract is paid in full. Until such time, all partial
payments received on memberships are recorded as deferred membership revenues on
the Company's balance sheet. Any receivable related to the original membershi
agreement is netted against the deferred membership revenues. Buyers have a
five day right of rescission with respect to Membership Agreements. See Summary
of Accounting Policies in the Company's Consolidated Financial Statements
included elsewhere herein.

Results of Operations

Fiscal Year Ended December 31, 1994 Compared to Fiscal Year Ended
December 31, 1993

The Company was in the development stage until April 1992, at which time
it began operations. Revenues for the fiscal year ended December 31, 1994,
amounted to $200,037 compared to $177,730 for the fiscal year ended December 31,
1993. Revenues were derived from membership sales, dues and resort operations.
The increase in revenues resulted principally from the use of additional and
expanded facilities at the resort. PSI's revenues and costs have been de-
consolidated from the Company as of December 31, 1994. See BUSINESS --
Production Services International, Inc. - Abandoned Operations.

Costs and expenses applicable to the Company's revenues were $9,184 for
the fiscal year ended December 31, 1994, compared to $16,194 recorded during the
fiscal year ended December 31, 1993. Such costs for the fiscal years ended
December 31, 1994 and 1993 consisted principally of the cost of merchandise sold
in its general store. The reduction in costs was due principally to the
elimination of several caegories of merchandise at the resort's general store.

Selling, general and administrative expenses were $977,378 for the fiscal
year ended December 31, 1994, compared to $558,265 for the fiscal year ended
December 31, 1993 as a result of operations including occupancy of Resort
facilities and maintenance of the Company's public status. The increase of
$419,113 during the fiscal year ended December 31, 1994 resulted from legal,
consulting and compliance expenses related to the Company's public status and
financing activities.

During the fiscal year ended December 31, 1994, interest expense of
$92,515 was charged to operations, compared with $101,914 during the fiscal year
ended December 31, 1993 and the decrease of $9,399 was due to interest paid on
the refinancing of the Company's long-term debt. Substantial portions of debt
relating to the Resort and PSI were paid or exchanged for stock in the Company's
public offering which closed in the first quarter of 1994.

During the fiscal year ended December 31, 1994, losses from continuing
operations increased to a loss of $868,856 from a loss of $464,659 during the
fiscal year ended December 31, 1993. This increase is primarily attributable to
selling, general and administrative expenses of $977,378.

During the fiscal year ended December 31, 1994, the Company's net loss
increased to a loss of $3,020,301 from a loss of $623,996 due to the abandonment
of the Company's investment in PSI, resulting in net liabilities of $750,773
being credited to operations and the loss from discontinued operations of PSI of
$2,902,218.

As of December 31, 1994, the Company had net operating loss carryforwards
of approximately $4,407,000 for financial reporting purposes and approximately
$1,658,000 for tax reporting purposes which are available to offset future
federal and state taxable income and which expire in the years 2005 through
2009.

Abandoned Operations

The management of the Company recognized that the financial condition of
PSI at December 31, 1994 was such that the Company was not able to exercise
control over it and that unless immediate financing for production of the THE
NEWZ Series were obtained under conditions acceptable to the Distributor,
bankruptcy of PSI was inevitable. On March 6, 1995, the Company's board of
directors approved a formal plan to discontinue the operations and settle the
liabilities of PSI by liquidating the assets of PSI. As of December 31, 1994,
the Company abandoned its investment in PSI and deconsolidated the assets,
liabilities and operations of the PSI subsidiary on its financial statements.
Consequently, the financial statements for the period ended December 31, 1994
reflect a credit to operations of the Company's net liabilities in PSI of
$750,773. PSI's operating activities have been de-consolidated from the
Company's financial statements for the period ended December 31, 1994 and the
Company will not be responsible for the payment of obligations or claims related
to the abandoned operations of PSI.

Liquidity and Capital Resources

The Company intends to complete the development of the Resort Property
during the 1995-96 resort seasons, at a total cost of approximately $300,000.
During the period ended December 31, 1994, the Company pursued a marketing plan
which focuses on the on-site sale of new memberships. The marketing plan was
initiated during 1993 and is being implemented during the 1994-95 resort season.
It is anticipated that revenues will increase as a result of membership sales
and facilities use, and that such increase will generate cash flow from
operations sufficient to finance approximately one-half of the completion of the
Resort. On January 27, 1994, the Company completed an underwriting for a public
offering of its securities which provided net proceeds of approximately
$1,303,000. A portion of such proceeds was used during first two quarters of
1994 to fund certain of the additional costs associated with completing the
Resort, including approximately 25 additional RV sites with facilities hook-ups
and a golf pro shop. While there can be no assurance, the Company is confident
that additional capital that may be obtained from operations and from the
planned financing activities to be initiated during 1995 will facilitate the
completion of RV sites and additional Resort facilities and amenities, which the
Company believes will provide increasing revenue growth through increased
membership sales and Resort facilities use fees.

Liquidity and capital resources are hereinafter discussed in three broad
categories: operating activities, investing activities and financing
activities.

Cash decreased $3,084 from $5,362 at December 31, 1993 to $2,278 at
December 31, 1994. Net cash used for operating activities was $2,737,366 for
the year ended December 31, 1994 compared with cash provided by operating
activities of $67,915 during the year ended December 31, 1993. The increase in
cash used for operating activities was due primarily to a net loss of $2,949,988
for the year ended December 31, 1994 compared with a net loss of $623,996 for
the year ended December 31, 1993, and an increase in accounts payable and
accrued expenses of $129,476 and notes payable to affiliates of $227,087 during
the fiscal year ended December 31, 1994.

During the year ended December 31, 1993 cash was provided by investing
activities in the amount of $1,144,031 compared to net cash used of $421,675
during the year ended December 31, 1993. The foregoing use of cash related
primarily to the decrease in production costs and the purchase of property and
equipment for Resort and corporate management operations.

During the year ended December 31, 1994 and December 31, 1993, the Company
had net cash flows provided by financing activities of $1,590,250 and $325,546
respectively, as a result of proceeds from the sale of securities.

On January 27, 1994, the Company completed a public offering of its
securities, pursuant to which the Company issued an aggregate of 345,000 units
consisting of 345,000 shares of Class A Convertible 8% Preferred Stock, par
value $.01 per share ("Class A Preferred Stock") and warrants to purchase an
aggregate of 690,000 shares of Class A Preferred Stock (the "Warrants"). Each
share of Class A Preferred Stock is convertible into two shares of the Company s
Common Stock, par value $.0001 per share (the "Common Stock") at any time after
January 19, 1995. The public offering provided net proceeds of approximately
$1,141,000 to the Company, after payment of certain expenses, which proceed
were used during the first quarter of 1994 to (i) repay principal and interest
of $425,115 in outstanding debt to a commercial bank, (ii) repay $264,033 to
certain bridge financing lenders, (iii) pay $211,000 in expenses related to the
public offering, (iv) repay $40,000 in notes to affiliates, and (v) pay $200,000
in accounts payable.

The Company's four outstanding promissory notes with a principal balance
of $470,246 as of December 31, 1992, were refinanced with a local commercial
bank, Orange Bank, on April 13, 1993. In connection with such refinancing the
Company obtained an additional advance of approximately $123,231 and delivered a
new mortgage on the Resort Property. In connection therewith, the Company
executed a promissory note securing the repayment thereof in an aggregate
principal amount of $625,000. Such new promissory note accrues interest at
Orange Bank's prime lending rate of interest plus 1-1/2% (with a minimum rate of
8-1/2%), requires monthly payments of $8,100 and matures on April 13, 1996. In
connection with the refinancing, the Company placed $32,400 in a restricted
reserve interest account with the bank. A principal reduction of $100,000 was
payable on or before October 2, 1993 which payment was deferred by the bank
until the closing on January 27, 1994 of the Company's public offering, and in
connection therewith the company paid $57,400 to Orange Bank on January 28,
1994, and Orange Bank renewed the mortgage. Under the terms of the renewal,
which was consummated as of March 17, 1994, a note was signed by the Company for
$576,160 which matures on May 2, 1994. The Company completed a mortgage on May
2, 1994 with AmSouth Bank, the successor by merger to Orange Bank, in the
principal amount of $551,159 and bearing a fixed interest rate of 9% with
monthly payments of $5,650 and the remaining principal and interest due in May
1997. As part of the transaction, AmSouth extinquished the prior short-term
mortgage consummated as of March 17, 1994 and removed Mr. David A. Johnson as a
guarantor of the mortgage note. As of December 31, 1994, the amount due under
the mortgage was $485,312.

As of December 31, 1993, the Company had promised to repay on behalf of
David A. Johnson, a Vice President and a director of the Company, approximately
$165,000 arising from loans incurred by Mr. Johnson, the proceeds of which loans
were used by the Company for operations and for Resort development. Such
indebtedness included (i) a loan in the amount of $150,000 made by Mr. Johnson
to the Company in September 1992 from the proceeds of a demand loan borrowed by
Mr. Johnson from Barnett Bank, Orlando, Florida, and (ii) a loan advance of
$15,000 made by Mr. Johnson to the Company from the proceeds of a signature loan
obtained by him through Orange Bank. Since January 1994, the Company has paid
$15,000 plus interest to Orange Bank and $150,000 plus interest to Barnett Bank.
Consequently, the borrowings incurred by Mr. Johnson on behalf of the Company
have been paid in full.

At March 31, 1994 there was outstanding a loan extended by the Company to
an officer and stockholder of the Company in the principal amount of $45,000.
Subsequent to March 31, 1994, pursuant to the terms of a three-party agreement,
JWM Productions, Inc. (a company wholly-owned by J. William Metzger, an officer,
director and stockholder of the Company) forgave $19,500 in accrued management
fees owed to it by the Company and Film Management Corp. (a company wholly-owned
by James J. McNamara, an officer, director and stockholder of the Company)
forgave $10,500 in accrued management fees in consideration for the Company s
release of Mr. McNamara's obligation to the Company in the aggregate amount of
$30,000. Consequently, Mr. McNamara and/or Film Management Corp. will be
obligated to pay JWM Productions, Inc. the amount of $19,500 in connection with
such agreement. As of December 31, 1994, an aggregate of approximately $15,000,
plus interest, was forgiven as a result of additional accrued compensation owed
to Mr. McNamara by the Company.

Since January 1994, the Company received $207,000 from the exercise of
138,000 outstanding warrants to purchase Common Stock, which was used as
follows: (i) $75,000 to reduce amounts owed under the Barnett Bank loan by
David A. Johnson (ii) $50,000 to Orange Bank for payments toward the Resort
mortgage, (iii) $25,000 to improve and complete the Resort and to fund the
Resort's operations, and (iv) the remainder of such warrant proceeds for working
capital purposes. In the nine-month period ended September 30, 1994, the
Company received $700,000 from the exercise of 242,000 outstanding warrants to
purchase Common Stock at an exercise price of $1.50 per share, the issuance of
201,923 shares of Common Stock for an aggregate sales price of $315,000, and
$22,000 from a promissory note issued by the Company payable to (ITI) Glendale,
Inc. on December 16, 1994 and convertible to shares of the Company's Common
Stock at the option of the holder at the conversion price of $1.50 per share.
Such $700,000 was used by the Company for operations at the Resort, for new
television pilot production, for payment of cost overruns on The NEWZ pilot
and series production, and for general corporate purposes.

On January 28, 1994, a $100,000 bridge loan which was outstanding as of
December 31, 1993 was converted into 200,000 shares of the Company's Class A
Preferred Stock and 200,000 Class A Preferred Stock purchase warrants. During
March, 1994, 44,000 Class A Preferred Stock purchase warrants were exercised by
the holder thereof which provided proceeds to the Company of $264,000.

The Company also borrowed $400,000 from another commercial bank, FUNB,
which is evidenced by a Promissory Note and Security Agreement payable on March
31, 1994. Outstanding principal under the note accrues interest at FUNB's prime
lending rate of interest plus one-half of one percent, with interest payable
monthly. Davey Johnson, the Vice-President of Sales and Marketing, a director
and a principal securityholder of the Company, is jointly and severally liable
under the Promissory Note and Security Agreement. In addition, Mr. Johnson
granted to FUNB a security interest in 44,000 shares of the Company's Common
Stock, subject to adjustment, owned by him to secure the obligation. In
connection with the closing of the Company's public offering on January 27,
1994, FUNB was paid $425,115 in full payment of all principal and interest due.
Consequently the Note and Security Agreement were cancelled and the 44,000
shares of the Company's Common Stock were returned to David A. Johnson.

As a result of the closing of the Company's public offering on January 27,
1994, the Company used a portion of the proceeds therefrom together with cash
flow from the Resort's operations to fund the operations of the Resort at
present levels and to continue to develop the Resort and to implement its
completion. The Company completed 25 additional fully-equipped RV sites during
the first half of 1994 and intends to complete additional facilities which will
ultimately result in approximately 250 recreational RV sites (excluding the 108
RV sites which are fully operational and including the 125 RV sites which
currently have water and sewer, but not electric, hook-ups) and approximately 39
additional self-contained Housing Units. The Company intends to use a portion
of the proceeds from the exercise, if any, of the Bridge Warrants, the
Conversion Warrants and the Common Stock Purchase Warrants related to the
Company's public offering to improve and complete the Resort facilities and to
fund the Resort's operations. There can be no assurance that completion will
occur or will be financed through operations and the proceeds from the completed
public offering and exercise, if any, of securities related thereto.

Abandonment of PSI

In June 1993, the Company acquired PSI, a Delaware corporation
headquartered in Palm Beach, Florida. The Company acquired all the issued and
outstanding capital stock of PSI in exchange for 402,672 newly-issued shares of
Common Stock of the Company with a value of $1.00 per share. Accordingly, the
total acquisition cost has been valued at $402,672, which amount has been
written off as of December 31, 1994 in connection with the abandonment of the
Company's investment in PSI's operations.

PSI has developed a number of television projects since its inception.
See Business - PSI Television Development Projects above. All of PSI s
investment in television projects has been abandoned by the Company as of
December 31, 1994. The principal project of PSI was a concept developed by PSI
for a television program of a half-hour, five episodes per week, late-night
comedy Series based on national and international events entitled "THE NEWZ."
On January 13, 1994, a national distributor of television programming (the
"Distributor") and PSI entered into an agreement (the "Distributor Agreement")
for the purchase by the Distributor of the exclusive distribution and
exploitation rights of the Series in exchange for which PSI would receive 50% of
the net proceeds derived by the Distributor from the distribution and
exploitation of the Series. The Distributor exercised its option on April 15,
1994 for an initial order of ninety Series episodes. In partial fulfillment of
the Distributor Agreement, the Distributor reimbursed to PSI a portion of the
actual costs for development of "THE NEWZ" pilot which PSI had previously funded
up to the aggregate of $250,000. PSI commenced production of the Series and the
Distributor paid to PSI a distribution advance based on the agreed production
budget of $48,000 per episode. The Distributor retains exclusive successive
annual options to order the Series at thirty-two episodes per year. PSI
produced the Series through its wholly-owned subsidiary, The Newz Productions,
Inc. The Distributor and PSI shared mutual creative control over the Series.

On March 1, 1995 certain creditors of PSI associated with the Series filed
an involuntary petition with the United States Bankruptcy Court, Middle District
of Florida, Orlando Division, requesting an order for relief under Chapter 11 of
the Bankruptcy Code. The petition asserts claims of amounts owed as a result of
the television Series which ceased production in November, 1994. Such claims
are for amounts in excess of the accounts payable and deferred revenue in PSI s
financial statements, and PSI is attempting to negotiate a settlement with the
three creditors who initiated the filing. PSI intends to provide a fund with
which to compromise claims in bankruptcy and other claims; however, the
aggregate amount of that fund and the settlement terms and payments have not
been determined as of the date of this report, and no assurances can be given
that a settlement will be reached.

Management's Plans

The Company is experiencing a liquidity problem and must obtain financing
in addition to expected revenues from operations in order to pay its past due
obligations and meet its current obligations as they come due. Management is
seeking to obtain working capital from several alternate sources, including
borrowings from lenders and/or loans based on the Resort property as collateral
and through a possible business combination with another company.

The Company believes that such financing plans, which have been formulated
to overcome its financial difficulties, have the reasonable capability of
removing the threat to the continuation of its business during the twelve month
period subsequent to December 31, 1994. Although management believes material
progress has been achieved toward acquiring additional funding, as of the date
of this filing no additional capital has been obtained nor has the Company
received any commitment therefor and, consequently, there is substantial doubt
concerning the Company's ability to continue as a going concern.

ITEM 7. FINANCIAL STATEMENTS

The following financial statements and schedules are included in this
Annual Report on Form 10-KSB following Item 13:

Index to Consolidated Financial Statements
Celebrity Entertainment, Inc.

Report of Independent Certified Public Accountants F-3
Consolidated Balance Sheet F-4
Consolidated Statement of Operations F-5
Consolidated Statement of Stockholders' Equity F-6
Consolidated Statement of Cash Flows F-7
Summary of Significant Accounting Policies F-8
Notes to Consolidated Financial Statements F-10

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

The following information is provided with respect to the Company's
changes in certifying accountants during the Company's two most recent fiscal
years as set forth in the Company's Current Reports on Form 8-K dated March 16,
1994 and March 24, 1993 which have been incorporated in their entirety herein by
reference.

On March 16, 1994, Pricher and Company, 201 South Orange Avenue, Suite
1501, Orlando, Florida, 32801, were dismissed as the independent accountants for
the Company.

The reports of Pricher and Company on the financial statement of the
Company for the past fiscal year contain no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle. The Board of Directors (which has no audit or similar
committee) approved the dismissal of Pricher and Company.

In connection with its audit for the most recent fiscal year and through
March 16, 1994, there have been no disagreements between the Company and Pricher
and Company on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of Pricher and Company would have caused Pricher
and Company to make reference thereto in its report on the Company's financial
statements for such years.

On March 24, 1993, Graham & Cottrill, P.A. (formerly Forness, Graham &
Cottrill, P.A.), 350 East Pine Street, Orlando, Florida 32801 ("G&C"), were
dismissed as the independent accountants for the Company.

The reports of G&C on the financial statement of the Company for the past
two fiscal years contain no adverse opinion or disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope or accounting
principle. The Board of Directors (which has no audit or similar committee)
approved the dismissal of G&C.

In connection with its audits for the two most recent fiscal years and
through March 24, 1993, there have been no disagreements between the Company and
G&C on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of G&C would have caused G&C to make reference thereto in
its report on the Company's financial statements for such years.

During the two most recent fiscal years and through March 24, 1993, there
were no reportable events (as defined in Regulation S-K, Item 304(a)(1)(V),
except as follows: There is no authoritative pronouncement that specifically
addresses the appropriate accounting treatment for the Company's membership
agreement sales transactions. However, there are certain authoritative
pronouncements that provide limited guidance as to the appropriate accounting
treatment for such revenues. In 1992, G & C expressed to the Company certain
questions regarding whether the Company's proposed method of accounting for
sales of membership agreements conformed with generally accepted accounting
principles ("GAAP") as reflected in such authoritative pronouncements. As a
result of the change in the Company's independent accountants, G&C did not
conduct further research or otherwise pursue this matter sufficiently to reach a
conclusion as to whether the resolution of this question might have a material
impact on the fairness or reliability of future financial statements to be
issued by the Company, or cause G&C to be unwilling to rely on representations
of the Company's management or be associated with the Company's financial
statements. The revenue recognition matter described herein was inapplicable
for the fiscal periods of the Company covered by the audit reports of G&C.

Although the foregoing matter was not the subject of discussions between
G&C and the entire Board of Directors of the Company, certain executive officers
and professional advisers of the Company did engage in discussions with
representatives of G&C with respect to such matter. The Company has authorized
G&C to respond fully to the inquiries of the Company's new independent
accounting firm concerning the foregoing matter.

The Company requested that G&C furnish it with a letter addressed to the
Securities and Exchange Commission stating whether or not G&C agrees with the
above statements. A copy of such letter, dated March 30, 1993, is filed as
Exhibit No. 16 to the Company's Form 8-K dated March 24, 1993 which has been
incorporated in its entirety herein by reference.

In response to questions raised by the Commission's staff concerning the
revenue recognition of membership sales, on June 24, 1993 the Company amended
its Current Report on Form 8-K dated March 24, 1993 as filed with the Commission
on March 31, 1993, by adding its responses to such questions. A copy of the
Company's Current Report on Form 8-K, as amended, has been incorporated herein
in its entirety. In addition, G&C's letter to the Commission dated April 29,
1992 was annexed to such Form 8-K as an exhibit. As described in the April 29,
1992 letter from G&C, the Company believed that revenues related to the sales of
memberships should be recognized on the date that such membership agreements
were executed and were no longer cancelable by the buyer (a five day right of
rescission applies to such agreements). The Company performs a credit analysis
on buyers who wish to finance a portion of the purchase price. Analysis of the
buyer's financial condition, credit history and any collateral to be provided
permits the Company to assess the likelihood of loss due to uncollectability.
Based on such analysis, the Company provided an allowance for uncollectible
amounts. In the event the Company was unable to estimate, with reasonable
certainty, the collectibility of such receivables, it would use the installment
method in recognizing revenue for such receivables. The method that was adopted
by the Company to account for membership sale agreements was the same as
described or referred to herein and described in the letter provide by G&C.

On or about December 16, 1993, in response to comments received from staff
of the Commission relating to the Company's recognition of revenues generated by
membership sales, the Company changed its revenue recognition policy relating to
membership sales such that the initial payment thereof and all monthly payments
are deferred and recognized as revenues in the period when the membership fee is
paid in full. In the event of a default in the payment of monthly payments, the
member forfeits all amounts paid to date and any deferred amounts are recognized
as revenue at the time of default. Revenues from usage fees are recognized on a
daily basis as the resort facilities are used. Dues revenues are deferred and
recognized on a pro rata basis over the dues period which ranges from one month
to one year. See Note 1 to the Company's Consolidated Financial Statements
included elsewhere herein.

Decisions to change accountants were approved by the Board of Directors as
follows.

Effective March 30, 1993, the Company engaged Pricher and Company, 201
South Orange Avenue, Suite 1501, Orlando, Florida, 32801 as its new independent
accountants. During the two most recent fiscal years and through March 29,
1993, the Company has not consulted with Pricher and Company on items which (1)
were or should have been subject to SFAS 50 or (2) concerned with the subject
matter of a disagreement or reportable event with the Company's former auditor.

Effective March 16, 1994, the Company engaged BDO Seidman, 201 South
Orange Avenue, Suite 950, Orlando, Florida, 32801, as its new independent
accountants. During the two most recent fiscal years and through March 16,
1994, the Company has not consulted with BDO Seidman on items which (1) were or
should have been subject to SFAS 50 or (2) concerned with the subject matter of
a disagreement or reportable event with the Company's former auditor.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT

The directors and executive officers of the Company as of December 31,
1994 are listed below.

Name Age Position Held

James J. McNamara 45 President, Chief Executive Officer and
Director

J. William Metzger 45 Executive Vice President, Chief
Financial Officer, Secretary,
Treasurer and Director

Donald R. Hessler 50 Director

Each of the Company's directors has been elected to serve until the next
annual meeting of the stockholders of the Company and until each of their
respective successors has been elected and qualified or until death,
resignation, removal or disqualification. Vacancies in the existing Board are
filled by a majority vote of the remaining directors on the Board. The
Company's executive officers are appointed by and serve at the discretion of the
Board.

Biographies of the directors and executive officers of the Company are set
forth below:

James J. McNamara has been the President, Chief Executive Officer and a
director of the Company since June 1993, at which time the Company acquired PSI,
which was formed by Mr. McNamara in 1991. Mr. McNamara has been the President
and a director of PSI since its inception. Mr. McNamara has been involved in
the music and entertainment business since 1971. Mr. McNamara first became
involved in the motion picture business in 1979 when he assumed management of
"Hardly Working," a motion picture which had encountered severe financial and
production related problems. Largely as a result of Mr. McNamara's efforts,
"Hardly Working" was distributed by Twentieth Century-Fox and became one of the
highest grossing independently-produced pictures of 1981. From 1981 through
1985, Mr. McNamara developed various motion picture properties while maintaining
offices at Twentieth Century-Fox in Los Angeles and commencing centralization of
his operations in Palm Beach, Florida. In 1986, Mr. McNamara formed
Entertainment, Inc., a Florida corporation which became the managing general
partner of Premiere, Ltd., a limited partnership formed to develop motion
pictures and television projects. Premiere, Ltd. developed a portfolio of
projects including "Super Force," a half-hour action-adventure television series
produced in association with Viacom Enterprises, which also distributed the
series worldwide in first-run syndication. From 1988 until 1991, Mr. McNamara
created and executively produced 48 episodes of "Super-Force". Premiere, Ltd.
is no longer actively engaged in the development of motion picture and
television projects. Premiere ceased to operate as a going concern in October
1991 due to cash flow difficulties experienced by Premiere. Mr. McNamara holds
no directorships in any other companies with a class of securities registered on
a national exchange or which are required to file annual, quarterly or other
periodic reports with the Commission. Mr. McNamara is a director of
Entertainment, Inc., an inactive corporation formed to act as a corporate
managing partner of Premiere Ltd. and the sole owner of Film Management, Inc.
which provides management services to PSI. During the past five years, Mr.
McNamara has principally been involved in the creation and production of
television projects and the management of the Company.

J. William Metzger has been Executive Vice President, Chief Financial
Officer, Secretary, Treasurer and a director of the Company since June 1993 at
which time the Company acquired PSI. Mr. Metzger assisted Mr. McNamara in the
"Hardly Working" project and was chiefly responsible for the re-editing,
completion and promotion of the film. He has worked with Mr. McNamara since
that time as a development executive in the offices at Twentieth Century-Fox and
since 1986, as Executive Vice-President of Entertainment, Inc. and as a control
person of Premiere. He was also an Executive Vice-President of PSI from 1990 to
1995. Mr. Metzger holds no directorships in any other company
with a class of securities registered on a national exchange or which is
required to file annual, quarterly, or other periodic reports with the
Commission. Mr. Metzger is the sole owner of J. W. M. Productions, Inc. which
provides management services to PSI.

Donald R. Hessler has been a director of the Company since July 1994.
Over the last ten years, Mr. Hessler has worked with certain officers of the
Company in the development and production of television and movie projects. Mr.
Hessler has worked in the television and film entertainment industry for over 25
years and has won two Southern California Emmy awards and a National Award of
Excellence for his work. Mr. Hessler has produced and directed programs for
Public Television as well as for "Real People" for NBC and "Alive and Well" for
USA Cable and has assisted in the production of the "CBS Reading Project." Mr.
Hessler has been the president of Donnan Communications, Inc., one of the
principal television and film production companies in South Florida, for over
five years.

Because of personal and other business demands, Mr. Fred Van Assche
resigned from the Board of Directors as of July 11, 1994. Mr. Donald R. Hessler
was appointed to fill the vacancy created by Mr. Van Assche's departure. Mr.
Hessler will serve until the next annual meeting of stockholders or until his
successor is elected and qualified. See Current Report on Form 8-K dated July
11, 1994 and incorporated herein by reference.

As of October 10, 1994, David A. Johnson, a founder, officer and director
of the Company, resigned his positions as a director and Vice President of the
Company. Mr. Johnson's responsibilities as Vice President of the Resort will be
assumed by the resident manager of the Resort. See Current Report on Form 8-K
dated November 21, 1994 and incorporated herein by reference.

As of December 31, 1994, no committees of the Board of Directors had been
established.

Compliance with Section 16(a) of the Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than-10% shareholders are required by the Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) forms that they file.

As of December 31, 1994, the Company had not received Forms 3,4, or 5 from
its officers or directors during the fiscal year ended December 31, 1994.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth the aggregate cash compensation paid for
services rendered to the Company during the last three fiscal years by the
Company's Chief Executive Officer during the last fiscal year and the Company s
most highly compensated executive officers who served as such during fiscal 1994
whose total annual salary and bonus exceeded $100,000. The Company had one
Chief Executive Officer during fiscal 1994 and no executive officers whose
annual salary and bonus exceeded $100,000.

SUMMARY COMPENSATION TABLE
<TABLE>
Long Term Compensation
Annual Compensation Awards Payouts

All
Other Restricted Other
Name and Annual Stock Options LTIP Compen-
Principal Position Year Salary Bonus Compensation Awards SARs Payments sation
($) (1) ($) ($) ($) (#) (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>

James J. McNamara 1994 46,267 - - 250,000 - -
Chief Executive 1993 - - - - - -
Officer (1)

J. William Metzger 1994 46,267 - - 125,000 - -
Chief Financial
Officer

</TABLE>

(1) Mr. McNamara became Chief Executive Officer of the Company in June 1993.
His compensation for his services as Chief Executive Officer of the Company
commenced as of the closing of the Company's Public Offering in January 1994.

Stock Options

The following table sets forth certain information with respect to options
exercised during fiscal 1994 by the executive officers named in the Summary
Compensation Table, and with respect to unexercised option held by such
individuals at the end of fiscal 1994.

<TABLE>
Option/SAR Grants in Last Fiscal Year

Individual Grants

% of
Total
Options/
Number of SARs Potential Realizable Value at Assumed
Securities Granted Annual Rates of Stock Price Appreciation
Underlying to Exercise for Option Term (10 Years) *
Options/SARs Employees or Base 5% 10%
Granted in Price Expiration Price Aggregate Price Aggregate
Fiscal per per
Name (#) Year ($/Share) Date Share Value Share Value

James J. 250,000 66.67% $2.81 Oct-99 $ 4.61 $1,152,500 $7.37 $1,842,500
McNamara

J. William 125,000 33.33% $2.81 Oct-99 $ 4.61 $ 576,250 $7.37 $ 921,250
Metzger

</TABLE>
<TABLE>
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Values

Name Shares Value Number of Securities Value of Unexercised in
Acquired Realized Underlying Unexercised the Money Options/SARs
On Options/SARs at FY-End at FY-End ($)
exercise (#)
(#) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
James J. 0 0 250,000 0 0 0
McNamara

J. William 0 0 125000 0 0 0
Metzger
</TABLE>

Directors are not compensated for their services as members of the Board of
Directors of the Company.

Mr. McNamara and Mr. Metzger are each a party to an employment agreement
with the Company providing for their services until December 31, 1997 at a
current annual salary of $50,000 each with a 5% annual escalation.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth, as of the date hereof, certain information
with respect to the beneficial ownership of outstanding shares of the Company's
common stock by: (i) each person known by the Company to be the beneficial
owner of five percent or more of its outstanding common stock, (ii) each
director and named executive officer of the Company individually and (iii) all
executive officers and directors of the Company as a group.
<TABLE>

Name and Address of Common Percent of
Beneficial Owner Stock Common Stock
Owned
<S> <C> <C>
James J. McNamara
214 Brazilian Avenue, Suite 400
Palm Beach, FL 33480 173,500 8.5 %

J. William Metzger
214 Brazilian Avenue, Suite 400
Palm Beach, FL 33480 74,375 3.6 %

Donald R. Hessler
214 Brazilian Avenue, Suite 400
Palm Beach, FL 33480 0 0 %

All Officers and Directors
As A Group (3 persons) 247,857 12.1 %

</TABLE>

ITEM 12. CERTAIN RELATONSHIPS AND RELATED TRANSACTIONS

The Company's four outstanding promissory notes with a principal balance
of $470,246 as of December 31, 1992, were refinanced with a local commercial
bank, Orange Bank, on April 13, 1993. In connection with such refinancing the
Company obtained an additional advance of approximately $123,231 and delivered a
new mortgage on the Resort Property. In connection therewith, the Company
executed a promissory note securing the repayment thereof in an aggregate
principal amount of $625,000. Such new promissory note accrues interest at
Orange Bank's prime lending rate of interest plus 1-1/2% (with a minimum rate of
8-1/2%), requires monthly payments of $8,100 and matures on April 13, 1996. In
connection with the refinancing, the Company placed $32,400 in a restricted
reserve interest account with the bank. A principal reduction of $100,000 was
payable on or before October 2, 1993 which payment was deferred by the bank
until the closing on January 27, 1994 of the Company's public offering, and in
connection therewith the company paid $57,400 to Orange Bank on January 28,
1994, and Orange Bank renewed the mortgage. Under the terms of the renewal,
which was consummated as of March 17, 1994, a note was signed by the Company for
$576,160 which matures on May 2, 1994. The Company completed a mortgage on May
2, 1994 with AmSouth Bank, the successor by merger to Orange Bank, in the
principal amount of $551,159 and bearing a fixed interest rate of 9% with
monthly payments of $5,650 and the remaining principal and interest due in May
1997. As part of the transaction, AmSouth extinquished the prior short-term
mortgage consummated as of March 17, 1994 and removed Mr. David A. Johnson as a
guarantor of the mortgage note. As of December 31, 1994, the amount due under
the mortgage was $485,312.

As of December 31, 1993, the Company had promised to repay on behalf of
David A. Johnson, a Vice President and a director of the Company until his
resignation in the fourth quarter of 1994, approximately $165,000 arising from
loans incurred by Mr. Johnson, the proceeds of which loans were used by the
Company for operations and for Resort development. Such indebtedness included
(i) a loan in the amount of $150,000 made by Mr. Johnson to the Company in
September 1992 from the proceeds of a demand loan borrowed by Mr. Johnson from
Barnett Bank, Orlando, Florida, and (ii) a loan advance of $15,000 made by Mr.
Johnson to the Company from the proceeds of a signature loan obtained by him
through Orange Bank. Since January 1994, the Company has paid $15,000 plus
interest to Orange Bank and $150,000 plus interest to Barnett Bank.
Consequently, the borrowings incurred by Mr. Johnson on behalf of the Company
have been paid in full.

At March 31, 1994 there was a loan extended by PSI to James J. McNamara,
an officer and stockholder of the Company in the principal amount of $45,000.
Subsequent to March 31, 1994, pursuant to the terms of a three-party agreement,
JWM Productions, Inc. (a company wholly-owned by J. William Metzger, an officer,
director and stockholder of the Company) forgave $19,500 in accrued management
fees owed to it by PSI and Film Management Corp. (a company wholly-owned by
James J. McNamara, an officer, director and stockholder of the Company) forgave
$10,500 in accrued management fees in consideration for PSI's release of Mr.
McNamara's obligation to PSI in the aggregate amount of $30,000. Consequently,
Mr. McNamara and/or Film Management Corp. will be obligated to pay JWM
Productions, Inc. the amount of $19,500 in connection with such agreement. As
of December 31, 1994, an aggregate of approximately $15,000, plus interest, was
offset against accrued compensation owed to Mr. McNamara by PSI.

The Company also borrowed $400,000 from another commercial bank, FUNB,
which is evidenced by a Promissory Note and Security Agreement payable on March
31, 1994. Outstanding principal under the note accrues interest at FUNB's prime
lending rate of interest plus one-half of one percent, with interest payable
monthly. David A. Johnson is jointly and severally liable under the Promissory
Note and Security Agreement. In addition, Mr. Johnson granted to FUNB a
security interest in 44,000 shares of the Company's Common Stock, subject to
adjustment, owned by him to secure the obligation. In connection with the
closing of the Company's public offering on January 27, 1994, FUNB was paid
$425,115 in full payment of all principal and interest due. Consequently the
Note and Security Agreement were cancelled and the 44,000 shares of the
Company's Common Stock were returned to David A. Johnson.

During 1994, a disagreement developed between the Company and a former
director and officer of the Company (the "Former Director") with regard to the
sale of the Former Director's securities. In July 1993, the Former Director
sold shares of the Company's Common Stock personally owned by him to an
independent third party (the "Purchaser"). The Former Director alleges that in
addition to the amount already received from the sale, $165,000 is still due and
payable. The Former Director alleges that the Company is obligated for payment
of the $165,000. The Company strongly disagrees in that the Company has
determined that problems and possible misrepresentations exist concerning the
Company's Resort property previously under such Former Director's stewardship,
that certain writings between the Company and the Former Director were never
ratified by the Company's Board of Directors, of which the Former Director was
then a member, and further that the Company is advised by the Purchaser that an
option granted to the Former Director to realize the $165,000 is still in effect
and available to the Former Director until June 1995. Over a period of ninety
days in summer and fall 1994, the Company and the Purchaser endeavored to effect
an amiable resolution of the disagreement with the Former Director, however, due
to issues relating to collateral, security interests, validity and the Former
Director's position with the Company, such negotiations were never successful.
The Company believes it has a meritorious defense to any proceeding that may be
instituted in the future by the Former Director.

ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K

Reports on Form 8-K:

Current Report on Form 8-K of date of November 10, 1994 filed November 21, 1994,
referencing resignation of David A. Johnson as a director filed by reference.

Exhibits (All Exhibits have been previously filed with the original Form 10-KSB
to which this Amendment relates unless otherwise indicated.)

Exhibit
Number Exhibit

2.1 Stock Purchase Agreement and Plan of Reorganization by and among Celebrity
Resorts, Inc., Production Services International, Inc., the shareholders
of Production Services International, Inc. And David A. Johnson, dated
June 9, 1993, filed as Exhibit 2.01 to the Company's Current Report on
Form 8-K dated June 15, 1993.

2.2 Amendment to Stock Purchase Agreement and Plan of Reorganization dated
June 10, 1993, filed as Exhibit 2.02 to the Company's Current Report on
Form 8-K dated June 15, 1993.

3.1 Certificate of Incorporation of the Company, filed as Exhibit 3.01 to the
Company's Registration Statement on Form S-1, File No. 33-40203.

3.2 Certificate of Amendment of Certificate of Incorporation of the Company
filed in the office of the Secretary of State of Delaware January 28,
1988, filed as Exhibit 3.02 to the Company's Registration Statement on
Form S-1, File No. 33-40203.

3.3 Amended and Restated By-Laws of the Company, filed as Exhibit 3.3 to the
Company's Registration Statement on Form S-2, File No. 33-69744.

3.4 Certificate of Amendment of Certificate of Incorporation of the Company
filed in the office of the Secretary of State of Delaware April 27, 1990,
filed as Exhibit 3.02 to the Company's Registration Statement on Form S-1,
File No. 33-40203.

3.5 Certificate of Amendment of Certificate of Incorporation of the Company
filed in the office of the Secretary of State of Delaware February 18,
1993, filed as Exhibit 3.5 to the Company's Registration Statement on Form
S-2, File No. 33-69744.

3.6 Certificate of Amendment of Certificate of Incorporation of the Company
filed in the office of the Secretary of State of Delaware (November 3,
1993) and filed as an exhibit to the Company's Form 10-QSB, File No. 0-
19196, filed with the Securities and Exchange Commission on November 19,
1993.

4.1 Specimen Common Stock Certificate, filed as Exhibit 4.01 to the Company's
Registration Statement on Form S-18, File No. 33-33035A.

4.2 Specimen Class A Convertible Preferred Stock Certificate.

4.3 Form of Warrant Agreement among the Company, I.A. Rabinowitz & Co., and
American Stock Transfer & Trust Company, as warrant agent.

4.4 Specimen Common Stock Purchase Warrant.

4.5 Form of Class A Preferred Stock Warrant.

4.6 Form of Representative's Unit Purchase Warrant.

4.7 Warrant of (ITI) Glendale, Inc. relating to 100,000 shares of Common
Stock, filed as Exhibit 4.7 to the Company's Registration Statement on
Form S-2, File No. 33-69744.

4.8 Warrant of David A. Johnson relating to 100,000 shares of Common Stock,
filed as Exhibit 4.8 to the Company's Registration Statement on Form S-2,
File No. 33-69744.

4.9 Related documents dated July 23, 1993 (the "July 93 Agreements") by and
among the Company, Abingdon Farms, Inc. ("AFI") and David A. Johnson
filed as Exhibit 4.9 to the Company's Registration Statement on Form S-2,
File No. 33-69744 including:

a) Agreement to Sell Securities, between AFI and David A. Johnson
relating to the sale of 100,000 Common Stock Purchase Warrants
and 94,288 shares of Common Stock;
b) Promissory Note in principal amount of $194,718 made by AFI in
favor of Mr. Johnson;
c) Letter from Mr. Johnson to First Union National Bank of Florida;
d) Letter from Mr. Johnson to the Company;
e) Two letters from the Company to Mr. Johnson;
f) Letter from the Company to Mr. Johnson; and
g) Letter from AFI to Mr. Johnson.

4.10 Letter Agreement dated August 27, 1993 by and between the Company, AFI and
David A. Johnson, transferring all of AFI's rights and obligations in the
7/23/93 Agreements to IDIICO, filed as Exhibit 4.10 to the Company's
Registration Statement on Form S-2, File No. 33-69744.

4.11 Certificate of Designation, Number, Powers, Preferences and Relative,
Participating, Optional and Other Special Rights and the Qualifications,
Limitations, Restrictions, and other Distinguishing Characteristics of
Preferred Stock of the Company, filed in the Secretary of State of
Delaware's office on July 31, 1990, filed as Exhibit 4.11 to the Company's
Registration Statement on Form S-2, File No. 33-69744.

4.12 Amended Certificate of Designation, Number, Powers, Preferences and
Relative, Participating, Optional and Other Special Rights and the
Qualifications, Limitations, Restrictions, and other Distinguishing
Characteristics of Preferred Stock of the Company, filed in the Secretary
of State of Delaware's office on February 18, 1993, filed as Exhibit 4.12
to the Company's Registration Statement on Form S-2, File No. 33-69744.

4.13 Form of Certificate of Designation Setting Forth the Preferences, Rights
and Limitations of Preferred Stock, which will designate the Class A
Preferred Stock, filed as Exhibit 4.13 to the Company's Registration
Statement on Form S-2, File No. 33-69744.

4.14 Form of New Common Stock Certificate (Post 1993 Reverse Split), filed as
Exhibit 4.14 to the Company's Registration Statement on Form S-2, File No.
33-69744.

10.1 Agreement for Transfer of Resort Property to Company Between the Company
and Celebrity Fish Camps, Inc., filed as Exhibit 10.01 to the Company's
Registration Statement on Form S-18, File No. 33-33035A.

10.2 Employment Agreement dated as of April 15, 1990, between the Company and
David A. Johnson, filed as Exhibit 10.02 to the Company's Registration
Statement on Form S-18, File No. 33-33035A.

10.3 Assignment and Assumption Agreement dated as of July 18, 1992 between
Celebrity Football, Inc. And Fifty Sports, Inc., filed as Exhibit 10.1 to
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1992 (File No. 0-19196).

10.4 Promotion Agreement dated as of July 29, 1992 by and among Fifty Sports,
Inc., Donald R. Dizney, James E. English and David A. Johnson, filed as
Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1992 (File No. 0-19196).

10.5 Commercial Promissory Note executed by David A. Johnson in favor of
Barnett Bank dated June 23, 1992 in the principal amount of $150,632.24,
filed as Exhibit 10.5 to the Company's Registration Statement on Form S-2,
File No. 33-69744

10.6 Renewal Commercial Promissory Note executed by David A. Johnson in favor
of Barnett Bank dated April 15, 1993 in the principal amount of
$135,632.24, filed as Exhibit 10.6 to the Company's Registration Statement
on Form S-2, File No. 33-69744.

10.7 Promissory Note and Security Agreement executed by the Company and David
A. Johnson, jointly, in favor of First Union National Bank of Florida,
dated April 8, 1992, relating to a term loan in the principal amount of
$400,000, filed as Exhibit 10.7 to the Company's Registration Statement on
Form S-2, File No. 33-69744.

10.8 Renewals of January 1, 1993 and April 1, 1993 of the Promissory Note and
Security Agreement of the Company and David A. Johnson, jointly, in favor
of First Union National Bank of Florida dated April 8, 1992, relating to a
term loan in the principal amount of $400,000, filed as Exhibit 10.8 to
the Company's Registration Statement on Form S-2, File No. 33-69744.

10.9 Note and Mortgage Modification, Future Advance, Assumption, Consolidation,
and Spreader Agreement dated as of April 2, 1993, by and between the
Company and Orange Bank, in principal amount of $625,000, filed as Exhibit
10.9 to the Company's Registration Statement on Form S-2, File No. 33-
69744.

10.10 Stock Pledge Agreement by and among David A. Johnson, Celebrity
Resorts, Inc., James J. McNamara and J. William Metzger, filed as Exhibit
10.05 to the Company's Current Report on Form 8-K, dated June 15, 1993.

10.11 Form of Debt Recapitalization Agreement between the Company and the
Debtholders and Schedule of Debtholders, filed as Exhibit 10.10 to the
Company's Registration Statement on Form S-2, File No. 33-69744.

10.12 Form of Non-Negotiable 12% Promissory Note, filed as Exhibit 10.12
to the Company's Registration Statement on Form S-2, File No. 33-69744.

10.13 Form of Non-Negotiable 8% Promissory Note, filed as Exhibit 10.13 to
the Company's Registration Statement on Form S-2, File No. 33-69744.

10.14 1992 Stock Option Plan of the Company, filed as Exhibit 10.14 to the
Company's Registration Statement on Form S-2, File No. 33-69744.

10.15 Agreement between the Company and Resort Parks International, Inc.,
filed as Exhibit 10.15 to the Company's Registration Statement on Form S-
2, File No. 33-69744.

10.16 Form of Celebrity Resorts, Inc. Membership Agreement, filed as
Exhibit 10.16 to the Company's Registration Statement on Form S-2, File
No. 33-69744.

10.17 Agreement dated October 24, 1993 by and among the Company,
Enquirer/Star Group, Inc. and United Television Inc., filed as Exhibit
10.17 to the Company's Registration Statement on Form S-2, File No. 33-
69744.

10.18 Financial Consulting Agreement dated July 14, 1993 between
Production Services International, Inc. and (ITI) Glendale, Inc., filed as
Exhibit 10.18 to the Company's Registration Statement on Form S-2, File
No. 33-69744.

10.19 Form of Letter Agreement between IDIICO and David A. Johnson, filed
as Exhibit 10.19 to the Company's Registration Statement on Form S-2, File
No. 33-69744.

10.20 Letter dated August 27, 1993 from Kimberly-Clark Corporation to
National Enquirer/Star, filed as Exhibit 10.20 to the Company's
Registration Statement on Form S-2, File No. 33-69744

10.21 Form of Celebrity Resorts, Inc. Promissory Note (for membership
sales), filed as Exhibit 10.21 to the Company's Registration Statement on
Form S-2, File No. 33-69744.

10.22 Agreement between Columbia Pictures Television and Production
Services International, Inc., filed as Exhibit 10.22 to the Company's
Registration Statement on Form S-2, File No. 33-69744.

10.23 Note and Mortgage Modification and Agreement Regarding Closing of
Loan dated as of May 2, 1994 by and between the Company and AmSouth Bank
of Florida.

10.24 Employment Agreement between James J. McNamara and the Company dated as
of January 27, 1994.

10.25 Employment Agreement between J. William Metzger and the Company dated as
of January 27, 1994.

10.26 Revised Agreement between Columbia Pictures Television and Production
Services International, Inc., dated as of December 28, 1992 and revised
January 12, 1994.

11.1* Statement Re: Computation of Earnings Per Share.

13.1 Annual Report of Celebrity Resorts, Inc. (now Celebrity Entertainment,
Inc.) on Form 10-K as amended by Form 10-K/A for the fiscal year ended
December 31, 1992, filed with the Commission on September 13, 1993 (File
No. 0-19196).

13.2 Quarterly Report of Celebrity Resorts, Inc. (now Celebrity Entertainment,
Inc.) on Form 10-Q for the quarter ended March 31, 1993, filed with the
Commission on May 20, 1993 (File No. 0-19196).

13.3 Quarterly Report of Celebrity Resorts, Inc. (now Celebrity Entertainment,
Inc.) on Form 10-Q for the quarter ended June 30, 1993, filed with the
Commission on August 19, 1993 (File No. 0-19196).

13.4 Quarterly Report of Celebrity Resorts, Inc. (now Celebrity Entertainment,
Inc.) on Form 10-Q for the quarter ended September 30, 1993, filed with
the Commission on November 19, 1993 (File No. 0-19196).

13.5 Current Report of Celebrity Resorts, Inc. (now Celebrity Entertainment,
Inc.) on Form 8-K dated January 27, 1993 and filed with the Commission
on February 2, 1993 (File No. 0-19196).

13.6 Current Report of Celebrity Resorts, Inc. (now Celebrity Entertainment,
Inc.) on Form 8-K dated March 24, 1993 and filed with the Commission on
March 31, 1993 (File No. 0-19196).

13.7 Amendment on Form 8-K/A amending the Current Report of Celebrity Resorts,
Inc. (now Celebrity Entertainment, Inc.) on Form 8-K dated March 24, 1993
and filed with the Commission on June 24, 1993 (File No. 0-19196).

13.8 Current Report of Celebrity Resorts, Inc. (now Celebrity Entertainment,
Inc.) on Form 8-K as amended by Form 8-K/A #1 dated June 15, 1993 and
filed with the Commission on August 30, 1993 (File No. 0-19196).

16.1 Letter to the Commission dated April 29, 1992 from Graham & Cottrill,
P.A., (now Forness, Graham & Cottrill, P.A.) former accountants to the
Company, filed as exhibit 16.01 to the Company's Annual Report on Form 10-
K for the fiscal year ended December 31, 1992 (File No. 0-09196).

16.2 Letter to the Commission dated June 22, 1993 from Graham & Cottrill, P.A.,
(now Forness, Graham & Cottrill, P.A.) former accountants to the Company,
filed as exhibit 16(c) to the Company's Current Report on Form 8 filed to
amend the Company's Current Report on Form 8-K dated March 24, 1993 (File
No. 0-09196).
________________
*Filed herewith.

SIGNATURES

In accordance with section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized, this 23d day of May, 1996.

CELEBRITY ENTERTAINMENT, INC.

By: /s/ James J. McNamara

James J. McNamara
Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.

Signature Title Date

/s/ James J. McNamara President, Chief Executive May 23, 1996
James J. McNamara Officer and Director

/s/ J. William Metzger Executive Vice President, May 23, 1996
J. William Metzger Chief Financial Officer,
Controller, Secretary,
Treasurer and Director

Celebrity Entertainment, Inc. and Subsidiary

Financial Statements
Years Ended December 31, 1994 and 1993

Report of Independent Certified
Public Accountants F-2

Financial statements
Balance sheet F-3 - F-4
Statements of operations F-5
Statements of stockholders' equity F-6
Statements of cash flows F-7
Summary of significant accounting policies F-8 - F-9
Notes to financial statements F-10 - F-19

Report of Independent Certified Public Accountants

The Board of Directors
Celebrity Entertainment, Inc.
Palm Beach, Florida

We have audited the balance sheet of Celebrity Entertainment, Inc. and
Subsidiary as of December 31, 1994 and the related statements of operations,
stockholders' equity and cash flows for the years ended December 31, 1994 and
1993. 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 audits 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 the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Celebrity Entertainment, Inc.
and Subsidiary at December 31, 1994 and the results of their operations and
their cash flows for the years ended December 31, 1994 and 1993 in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 9 to the
financial statements, the Company has experienced significant operating
losses, has an accumulated deficit and has negative working capital at
December 31, 1994. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 9. The financial statements do no
include any adjustments that might result from the outcome of this
uncertainty.

/s/ BDO Seidman, LLP
BDO Seidman, LLP
Orlando, Florida
April 12, 1995
<TABLE>

Celebrity Entertainment, Inc. and Subsidiary

Consolidated Balance Sheet

<S> <C>
December 31, 1994

Assets
Current:
Cash $ 2,278
Prepaid expenses 6,473

Total current assets 8,751

Land 670,780
Buildings and improvements 2,854,748
Equipment 146,840
Furniture and fixtures 28,949

3,701,317

Less accumulated depreciation 407,466

3,293,851

$ 3,302,602
</TABLE>

See accompanying summary of significant accounting policies and notes to
consolidated financial statements.

<TABLE>
Celebrity Entertainment, Inc. and Subsidiary

Consolidated Balance Sheet

<S> <C>
December 31, 1994

Liabilities and Stockholders' Equity

Current liabilities:
Notes payable (Note 2) $ 101,728
Accounts payable 274,779
Accrued expenses 99,076
Deferred membership revenues (Note 3) 50,406
Current maturities of long-term debt (Note 4) 27,805

Total current liabilities 553,794

Long-term debt, less current maturities (Note 4) 457,507

Total liabilities 1,011,301

Commitment and contingencies (Note 8)

Stockholders' equity (Note 5):
Preferred stock, $.01 par value; 2,000,000 shares
authorized
Designated class A convertible;
1,525,000 shares designated,
589,000 shares outstanding 5,890
Common stock, $.0001 par value; 25,000,000 shares
authorized, 2,038,767 shares outstanding 203
Additional paid-in capital 6,977,806
Accumulated deficit (4,692,598)

Total stockholders' equity 2,291,301

$ 3,302,602

See accompanying summary of significant accounting policies and notes to
consolidated financial statements.

Celebrity Entertainment, Inc. and Subsidiary

Consolidated Statements of Operations

</TABLE>
<TABLE>
<S> <C> <C>
Year ended December 31, 1994 1993

Revenues:
Resort membership sales $ 97,818 $ 57,018
Resort operations 102,217 120,712

Total revenues 200,035 177,730

Cost of sales 9,184 16,194

Gross profit 190,851 161,536

Selling, general and administrative expenses 977,378 558,265

Operating loss (786,527) (396,729)

Other income (expenses):
Interest income 10,186 17,764
Interest expense (92,515) (101,914)
Other income - 16,220

(82,329) (67,930)

Loss from continuing operations (868,856) (464,659)

Discontinued operations (Note 1):
Gain on abandonment of television
production subsidiary 750,773 -
Loss from discontinued operations of
television production subsidiary (2,902,218) (160,851)
Gain on sale of professional football
operations - 1,514

Income (loss) from discontinued operations (2,151,445) (159,337)

Net loss $ (3,020,301) $ (623,996)
<PAGE>
Loss from continuing operations per common share $ (.51) $ (.70)

Loss from discontinued operations (1.27) (.25)

Net loss per common share $ (1.78) $ (.95)

Weighted average number of
common shares outstanding 1,693,277 659,786
</TABLE>
See accompanying summary of significant accounting policies
and notes to consolidated financial statements.
<TABLE>
Celebrity Entertainment, Inc. and Subsidiary
Consolidated Statements of Stockholders' Equity

<S> <C> <C> <C> <C> <C> <C>
Additional
Preferred Stock Common Stock Paid-In Accumulated
Shares Amount Shares Amount Capital Deficit

Balance, January 1, 1993 2,000,000 $ 20,000 405,172 $ 41 $ 3,383,964 $ (1,048,301)

Contribution and cancellation
of common stock - - (6,000) (1) 1 -

Contribution and cancellation
of preferred stock (Note 5) (2,000,000) (20,000) - - 20,000 -

Issuance of common stock
to PSI stockholders (Note 1) - - 402,672 40 402,632 -

Conversion of notes payable
into common stock - - 395,058 39 592,538 -

Issuance of bridge units - - 180,000 18 269,982 -

Payment of legal fees through
issuance of common stock - - 73,744 7 110,609 -

Payment of professional fees
through issuance of
common stock - - 5,000 1 7,499 -

Payment of office rent through
issuance of common stock - - 1,198 - 1,798 -

Net loss - - - - - (623,996)

Balance, December 31, 1993 - - 1,456,844 145 4,789,023 (1,672,297)

Sale of preferred stock 345,000 3,450 - - 871,968 -

Conversion of bridge loans
into preferred stock 200,000 2,000 - - 98,000 -

Exercise of preferred stock
warrants 44,000 440 - - 263,560 -

Exercise of common stock
warrants - - 380,000 38 468,087 -

Sale of common stock - - 201,923 20 213,105 -

Issuance of common stock warrants
in payment of consulting fees
(Note 5) - - - - 70,313 -

Issuance of common stock warrants in
payment of issuance costs - - - - 203,750 -

Net loss - - - - - (3,020,301)

Balance, December 31, 1994 589,000 $ 5,890 2,038,767 $ 203 $ 6,977,806 $ (4,692,598)

See accompanying summary of significant accounting policies and notes to consolidated financial statements.
</TABLE>
<TABLE>
Celebrity Entertainment, Inc. and Subsidiary
Consolidated Statements of Cash Flows

<S> <C> <C>
Year ended December 31, 1994 1993

Cash flows from operating activities:
Net loss $ (3,020,301) $ (623,996)
Adjustments to reconcile net loss to net cash
used for operating activities:
Depreciation and amortization 128,866 174,630
Gain on abandonment of television production subsidiary (750,773) (1,514)
Stock issued as payment of consulting fees 70,313 -
Stock issued as payment of office rent - 1,798
Stock issued as payment of professional fees - 7,500
Change in current assets and liabilities:
Membership accounts receivable 3,209 1,026
Accounts receivable (23,897) -
Inventory 4,690 3,668
Prepaid expenses 1,462 11,563
Accounts payable and accrued expenses 897,781 518,305
Deferred membership revenues 9,505 20,222
Management fees payable (58,221) (45,287)

Net cash provided by (used for) operating activities (2,737,366) 67,915

Cash flows from investing activities:
Proceeds from sale of discontinued operations - 13,737
Purchase of property and equipment (57,155) (48,790)
Cash acquired in purchase of subsidiary - 51,217
Decrease (increase) in production costs 1,194,653 (433,775)
Decrease (increase) in other assets 6,533 (4,064)

Net cash provided by (used for) investing activities 1,144,031 (421,675)

Cash flows from financing activities:
Proceeds of notes payable 86,675 -
Repayments of notes payable - bank (400,000) -
Proceeds (repayments) of bridge loans (250,000) 350,000
Proceeds (repayments) of notes payable to affiliates (221,927) 218,329
Net proceeds (repayments) of long-term debt (121,248) 396,207
Decrease (increase) in note receivable - officer 45,000 (45,000)
Proceeds from the issuance of preferred stock 1,302,751 -
Proceeds from the exercise of preferred stock warrants 264,000 270,000
Proceeds from the exercise of common stock warrants 570,000 -
Proceeds from the issuance of common stock 315,000 -
Deferred public offering costs - (427,332)
Net cash provided by financing activities 1,590,251 325,546

Decrease in cash (3,084) (28,214)

Cash, beginning of year 5,362 33,576

Cash, end of year $ 2,278 $ 5,362
</TABLE>
See accompanying summary of significant accounting policies and
notes to consolidated financial statements.

Celebrity Entertainment, Inc. and Subsidiary
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Celebrity Entertainment, Inc. ("CEI" or the "Company"), a Delaware
corporation, developed and operates a destination resort community
featuring golf, fishing and recreational activities. CEI markets
memberships in the resort which entitle members to the use of resort
facilities at reduced rates. On November 3, 1993, CEI changed its
name from Celebrity Resorts, Inc. to Celebrity Entertainment, Inc.
Income from the resort is seasonal, and on an annual basis, the
Company is required to seek additional financing to pay long-term
debt obligations and the resort's on-going operations, including
payroll, creditors and taxes. Income from the resort operations is
not sufficient to sustain the Company's public filing requirements,
including required professional services or pay dividends to the
preferred or common shareholders.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed
over the estimated useful lives (5 to 31.5 years) of the assets
using the straight-line method for financial reporting and
accelerated methods for income tax purposes.

Net Loss Per Common Share

The net loss per common share is computed using the weighted average
weighted average number of common shares outstanding during each
period after giving effect to the 1-for-20 reverse stock split
described in Note 5. Common stock equivalents have not been included
since the effect would be antidilutive.

Principles of Consolidation

The accompanying consolidated financial statements include the
accounts of CEI and its wholly-owned subsidiary Production Services
International, Inc. ("PSI"), all of whose operations have been
discontinued, as more fully described in Note 1.

Revenue Recognition

Memberships sold represent the right to use the resort facilities
upon continuous payment of monthly membership installments, dues and
usage fees. Memberships generally require an initial payment of 10%
upon signing of the contract with the balance payable in monthly
installments over three to five years. The initial payment and all
monthly payments are deferred and recognized as revenues in the
period when the membership fee is paid in full. In the event of a
default in the payment of monthly payments, the member forfeits all
amounts collected by the Company at the time of default, and any
such amounts that were deferred are recognized as revenue. Revenues
from usage fees are recognized on a daily basis as the resort
facilities are used. Dues revenues are deferred and recognized on a
prorata basis over the dues period which ranges from one month to
one year.

Change in Method of Accounting for Taxes on Income

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which
requires recognition of estimated income taxes payable or refundable
on income tax returns for the current year and for the estimated
future tax effect attributable to temporary differences and
carryforwards. Measurement of deferred income tax is based on enacted
tax laws including tax rates, with the measurement of deferred income
tax assets being reduced by the amount of tax benefits not
expected to be realized.

Reclassifications

Certain items in the financial statements of the prior year have
been reclassified to conform to the 1994 presentation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business Acquisition and Discontinued Operations

On June 15, 1993, the Company acquired the outstanding common stock
of Production Services International, Inc. (PSI) in exchange for
402,672 shares of the Company's common stock. The acquisition of
PSI was accounted for using the purchase method of accounting.
Accordingly, (a) the results of PSI's operations were included in
the consolidated statement of operations from the date of acquisition
and (b)the total acquisition cost has been allocated to the assets and
liabilities of PSI based on their relative estimated fair values at
the date of purchase. At June 15, 1993, PSI's liabilities exceeded
its assets (at their fair market value) by $150,558, and
accordingly, the excess of the purchase price over the deficiency
in the net assets acquired equaled $553,230. This goodwill amount
was being amortized over seven years.

Operations of PSI Discontinued

On March 1, 1995, certain creditors of PSI filed a petition with the
United States Bankruptcy Court in the middle district of Florida in
Orlando, requesting an order for relief under Chapter 11 of the
Bankruptcy Code. The petition asserts claims of amounts owed as a
result of a television series which ceased production in November
1994. Such claims are for amounts in excess of the accounts payable
and PSI is negotiating with the three creditors who initiated the
filing toward a settlement of their claims. PSI intends to provide
a fund with which to compromise claims in bankruptcy and other
claims; however, the aggregate amount of that fund and the settlement
terms and payments have not been determined. CEI will not be
responsible for the payment of obligations or claims related to the
discontinued operations of PSI.

On March 6, 1995, the Company's Board of Directors approved a formal plan to
discontinue the operations and settle the liabilities of PSI by liquidating the
assets of PSI.

As a result of the petition for bankruptcy against PSI and the
Company's related inability to maintain control over PSI, the
Company abandoned its investment in PSI and deconsolidated the
assets, liabilities and operations of the PSI subsidiary on its
financial statements in 1994.

Summarized results of operations of PSI were as follows:

Year ended December 31, 1994 1993

Revenues $ 4,212,961 $ -
Loss from discontinued operations $ 2,652,219 160,851

2. Notes Payable

Notes payable consist of various uncollateralized notes payable to
third parties bearing interest ranging from 7.75% to 10% and
mature on or before December 31, 1994. Notes payable aggregating
$60,500 are past due. Notes payable for $52,000 are convertible
at the election of the holder into the Company's common
stock at conversion prices ranging from $.60 to $1.50 per share.

3. Deferred Membership Revenues

Deferred membership revenues are summarized as follows:

December 31, 1994

Membership contracts sold to date which
have not been fully paid $ 119,655
Less membership notes receivable 69,249

$ 50,406

Notes receivable from the sale of new individual memberships are
collectible in monthly installments over periods of 36 to 60 months
with interest at 14%.

4. Long-Term Debt

Long-term debt consists of a mortgage note payable to a bank which
is collateralized by land in Ocala, Florida. The mortgage note bears
interest at 9% and is payable in monthly payments of $5,650,
including principal and interest.

Principal payments required to be made in future years are as
follows:

Year ending December 31, Amount

1995 $ 27,805
1996 28,381
1997 429,126

$ 485,312

5. Stockholders' Equity

Stock Options

At the Company's annual meeting of stockholders on February 27,
1992, the stockholders approved a stock option plan in which up to
1,000,000 common shares may be subject to options and/or stock
appreciation rights. These options and/or stock appreciation rights
may be granted to key employees, officers, directors and consultants
of the Company at the discretion of the Board of Directors. Changes
in options outstanding are summarized as follows:
Option Price
Shares per Share

Balance, December 31, 1993 - $ -
Granted 375,000 $ 2.81

Balance, December 31, 1994 375,000 $ 2.81

As of December 31, 1994, the Company had an outstanding stock option
to the underwriter of the Company's initial public offering
permitting the holder to purchase 3,438 units (each unit consists
of four shares of common stock and six warrants) at $96.00 per unit.
These options expire on August 14, 1995.

Common Stock Warrants

At December 31, 1994, the Company had 604,627 common stock warrants
outstanding. Information relating to these warrants is summarized
as follows:
Number of Exercise
Expiration Date Warrants Price

December 1995 275,000 $ 1.50
September 1996 322,000 4.75
April 1997 7,627 4.72

During 1994, the Company's Board of Directors approved a reduction
of the exercise price of the 322,000 warrants expiring in September
1996 from $20 per warrant to $4.75 per warrant. The new exercise price
reflected the market value of the Company's common stock at the date
of the exercise price reduction.

During 1994, the Company issued 75,000 and 200,000 common stock warrants with
exercise prices of $1.50 per share as payment of consulting expenses ad expenses
related to certain equity financings consummated by the Company during the year,
respectively. The fair market value of the Company's common stock at the date
of issuance of these warrants was $183,000 for the 75,000 warrants issued on
August 1, 1994. The total amount recorded as consulting expense and issuance
costs amounted to $70,313 and $203,750, respectively.

Preferred Stock Warrants

At December 31, 1994, the Company had 846,000 Class A preferred stock purchase
warrants outstanding. The warrants entitle each holder to purchase one share of
Class A preferred stock at an exercise price of $6 per share through January
1997.

In connection with the Company's January 27, 1994 preferred stock offering,
30,000 unit purchase warrants were issued to the underwriter of the public
offering. The unit purchase warrants are exercisable into 30,000 shares of
Class A convertible 8% preferred stock and 60,000 Class A preferred stock
purchase warrants.

Stock Split

The Company declared a 1-for-20 reverse common stock split effective
November 3, 1993. The loss-per-share calculation and all common share
information contained in these financial statements have been
retroactively adjusted to give effect to the stock split.

Preferred Stock

On January 27, 1994, the Company completed a public offering of its
securities. The offering was for 345,000 units consisting of 345,000
shares of $.01 par value class A convertible 8% preferred stock and
690,000 class A preferred stock purchase warrants. Each share of
class A preferred stock is convertible into two shares of the
Company's common stock at the election of the holder at any time
after January 27, 1995. The class A preferred stock is redeemable
(subject to certain conditions) at the discretion of the Company at
a redemption price of $7.50 per share. Beginning January 1, 1995,
each share of class A preferred stock will entitle the holder to
receive cumulative preferential dividends which will accrue and be
payable on an annual basis at 8% of the redemption price. The class
A preferred stock purchase warrants are detachable from the class A
preferred stock and entitle each holder to purchase one share of
class A preferred stock at an exercise price of $6 per share through
January 1997. The public offering generated proceeds of $1,302,751,
net of public offering expenses of approximately $422,249. A portion
of the net proceeds was used to retire $400,000 payable under a bank
line of credit, $250,000 of bridge loans payable, $40,000 of notes
payable to affiliates, $39,150 of accrued interest and $200,000 of
accounts payable. The remainder of the net proceeds were to be used
to fund the Company's continuing operations, including $360,000 to
be used for PSI's television and film production projects.

On February 18, 1993, the Company's authorized preferred shares were increased
from 1,000,000 to 2,000,000, at which time a two-for-one preferred stock split
became effective. All preferred share information contained in these financial
statements has been retroactively adjusted for the stock split. The entire
2,000,000 shares of preferred stock were contributed back to the Company in 1993
by an officer and principal stockholder of CEI related to the Company's
acquisition of PSI (see Note 1).

Bridge Loan Conversion

During 1994, $100,000 of bridge loans were converted into 200,000
units consisting of 200,000 shares of $.01 par value Class A
convertible 8% preferred stock and 200,000 Class A preferred stock
purchase warrants.

Shares Reserved

At December 31, 1994, the Company has reserved common stock for
future issuance under all of the above arrangements totaling
1,639,007 shares.

6. Income Taxes

The components of the net deferred assets consist of the following:

1995

Deferred tax assets:
Net operating loss carryforwards $ 1,658,398
Nondeductible compensation 32,305
Other 5,234

Gross deferred income tax assets 1,695,937
Valuation allowance (1,507,496)

Total deferred income tax assets 188,441

Deferred income tax liability:
Gain on abandonment of subsidiary 188,441

Net deferred income tax assets $ -

Unused net operating losses for income tax purposes, expiring in
various amounts from 2005 through 2009, of approximately $4,407,000
are available at December 31, 1994 for carry forward against future
years' taxable income. The tax benefit of these losses of approximately
$1,658,000 has been offset by a valuation allowance due to it being more likely
than not that the deferred tax assets will not be realized.

7. Supplemental Cash Flow Information

Year ended December 31, 1994 1993

Cash paid for interest $ 147,826 $ 57,414

Noncash financing and investing activities:
Offset of additional paid-in capital
for deferred offering costs 427,332 -
Conversion of bridge loans into
preferred stock 100,000 -
Conversion of notes payable to
affiliate to notes payable 15,054 -
Issuance of common stock warrants in
payment of issuance costs 203,750 -
Issuance of common stock warrants in
payment of consulting fees 70,313 -
Conversion of notes payable and accrued
interest into common stock - 592,577
Payment of legal fees through
issuance of common stock - 110,616
Payment of office rent through
issuance of common stock - 1,798
Payment of professional fees through
issuance of common stock - 7,500
Purchase of subsidiary through
issuance of common stock - 553,230

8. Commitment and Contingency

During 1994, a disagreement developed between the Company and a former director
and officer of the Company with regard to the sale of the former director's CEI
securities. In July 1993, the former director sold shares of the Company's
common stock personally owned by him to an unrelated third party (the
"purchaser"). The former director alleges that in addition to the amount
already received from the sale, $165,000 is still due and payable. In July
1993, as part of the original sale of such securities, and again in January
1994, the former director alleges that the Company is obligated for payment of
the $165,000. Management believes that the ultimate liability, if any, will not
have a material financial impact to the Company.

The Company has entered into employment agreements with certain key
executives that expire through 1997. The agreements provide
for base compensation as follows:

Year ending December 31, Amount

1995 $ 100,000
1996 100,000
1997 54,167
$ 254,167

9. Management's Plans

As shown in the accompanying financial statements, CEI has experienced
significant operating losses which have resulted in a deficit of $4,692,598.
During the year ended December 31, 1994, CEI generated revenues from resort
operations; however, it reported an operating loss from continuing operations of
$868,856.

CEI is in discussions with a representative of a privately-held company who has
provided a verbal commitment to complete merger of such company with CEI. Based
on the historical performance of the subject company's operations, such a
business combination would result in substantial annual revenues and net income
to CEI. Upon the completion of the proposed business combination, it is
anticipated that a public offering of securities would be completed, the
proceeds from which, in part, would be used to reduce the liabilities of CEI and
expand CEI's resort operations. This would result in the reduction of CEI's
liabilities and provide expected income in the upcoming year of the Company's
operations. However, there can be no assurance that any proposed acquisition
will be effected. Any such acquisition and public offering is subject to the
acquiring entity's acceptance of the financial statements, the state of the
general securities markets and of the specific market for the Company's
securities, and any necessary regulatory review of the securities to be issued
in connection with the merger.

The Company believes that such financing plans, which have been formulated to
overcome its financial difficulties, have the reasonable capability of removing
the threat to the continuation of its business during the twelve month period
subsequent to December 31, 1994. Although management believes material progress
has been achieved toward acquiring additional funding, as of the date of this
filing no additional capital has been obtained nor has the Company received any
commitment therefor and, consequently, there is substantial doubt concerning
the Company's ability to continue as a going concern.

EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<S> <C>
1. Loss from continuing operations per common share was computed as follows:

Loss from continuing operations (868,856)
divided by ----------- = (.51)
Weighted average number of common shares outstanding 1,693,277

2. Loss from discontinued operations per common share was computed as follows:

Loss from discontinued operations (2,151,445)
divided by ------------ = (1.27)
Weighted average number of common shares outstanding 1,693,277

3. Net loss per common share was computed as follows:

Net loss (3,020,301)
divided by ------------ = (1.78)
Weighted average number of common shares outstanding 1,693,277

</TABLE>
<TABLE>
4. Weighted average number of common shares outstanding was computed as follows:

No. of
No. of No. of Common No. of Weighted
Common Common & Equivalent Other No. of Primary
Shares Share Shares Dilutive Months Average
Outstanding Equivalents Outstanding Securities Outstanding Shares Outstanding
<S> <C> <C> <C> <C> <C> <C>
Balance
at 12/31/93 1,456,844 1,456,844 12 17,482,128

Shares
issued:

Exercise of
common stock
warrants:
07/22/94 30,000 30,000 5.0 150,000
09/16/94 10,000 10,000 3.5 35,000
07/28/94 10,000 10,000 5.0 50,000
05/04/94 10,000 10,000 8.0 80,000
06/09/94 5,000 5,000 6.5 32,500
06/30/94 3,000 3,000 6.0 18,000
08/08/94 2,000 2,000 4.5 9,000
07/22/94 10,000 10,000 5.5 55,000
09/15/94 80,000 80,000 3.5 280,000
04/22/94 20,000 20,000 8.5 170,000
03/28/94 50,000 50,000 9.0 450,000
04/29/94 50,000 50,000 8.0 400,000
09/27/94 100,000 100,000 3.0 300,000

Stock
purchase
8/29/94 201,923 201,923 4.0 807,692

Balance at
12/31/94 2,038,767 2,038,767 20,319,320/12

1,693,277

</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS INCLUDED IN FORM 10-KSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 2,278
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,751
<PP&E> 3,701,317
<DEPRECIATION> 407,466
<TOTAL-ASSETS> 3,302,602
<CURRENT-LIABILITIES> 553,794
<BONDS> 457,507
<COMMON> 203
0
5,890
<OTHER-SE> 6,977,806
<TOTAL-LIABILITY-AND-EQUITY> 3,302,602
<SALES> 97,818
<TOTAL-REVENUES> 200,035
<CGS> 9,184
<TOTAL-COSTS> 9,184
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 92,515
<INCOME-PRETAX> (3,020,301)
<INCOME-TAX> 0
<INCOME-CONTINUING> (868,856)
<DISCONTINUED> (2,151,445)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,020,301)
<EPS-PRIMARY> (1.78)
<EPS-DILUTED> (1.78)

</TABLE>