LAHAINA ACQUISITIONS INC, S-1, 1999-03-17

LAHAINA ACQUISITIONS INC
S-1, 1999-03-17
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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 17, 1999
REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
- --------------------------------------------------------------------------------
LAHAINA ACQUISITIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

<TABLE>
<CAPTION>
COLORADO 6512 84-1325695
<S> <C> <C>
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

102 SOUTH TENTH STREET
FERNANDINA BEACH, FLORIDA 32034
(904) 277-4438
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)

RICHARD P. SMYTH, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
LAHAINA ACQUISITIONS, INC.
102 SOUTH TENTH STREET
FERNANDINA BEACH, FLORIDA 32034
(904) 277-4438
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

ELIZABETH H. NOE, ESQ.
PAUL, HASTINGS, JANOFSKY & WALKER LLP
600 PEACHTREE STREET, NE
SUITE 2400
ATLANTA, GA 30308
(404) 815-2400

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this
Registration Statement as determined by the selling shareholders.

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

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

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

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

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

<PAGE> 2

CALCULATION OF REGISTRATION FEE

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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, no par value per share......... 2,100,000 Shares $1.75 $3,675,000 $1,021.65
===================================================================================================================================
</TABLE>

(1) Estimated maximum number of shares into which the registrant's $775,000
convertible note and outstanding common stock warrants will be converted.
Approximately 915,000 additional shares are being registered to be drawn
upon in the event the Note converts into more shares than estimated.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).

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

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

2
<PAGE> 3

PROSPECTUS

LAHAINA ACQUISITIONS, INC.

Common Stock

This is a registration of up to 2,100,000 shares of Common Stock of Lahaina
Acquisitions, Inc. to be issued to and sold by holders of warrants and a
convertible note of the Company upon conversion of these securities. The initial
note and warrant holders are identified in this prospectus as the selling
shareholders. Lahaina will not receive any money from the sale of the Common
Stock.

The Common Stock may be sold by the selling shareholders in several ways. See
"Plan of Distribution" starting on page 30.

There is no fixed price for the sale of the Common Stock. The selling price will
be based on the market price of the Common Stock at the time sales are made.

The Common Stock is currently quoted on the OTC Bulletin Board under the symbol
"LAHA". Lahaina intends to apply to list the Common Stock on NASDAQ/AMEX
contemporaneously with this offering.

THE PURCHASE OF THE COMMON STOCK CARRIES WITH IT A HIGH DEGREE OF RISK, SUCH AS
LOSS OF THE ENTIRE PURCHASE PRICE. SEE "RISK FACTORS" ON PAGE 5.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Prospectus dated March 17, 1999.

<PAGE> 4

PROSPECTUS SUMMARY

The following summary may not contain all the information that is important
to you. You should carefully review the information appearing elsewhere in this
prospectus, in particular the "Risk Factors" section and the Consolidated
Financial Statements and Notes thereto. The Summary Consolidated Financial Data
is at the end of the prospectus summary. Except where noted in the text, all
information in this prospectus assumes the conversion or redemption to Common
Stock of (i) the Company's convertible note dated as of December 7, 1998 (as
amended to date, the "Note") in the aggregate principal amount of $775,000, (ii)
the Company's warrant to purchase 60,000 shares of Common Stock (the "First LKB
Warrant") dated as of December 7, 1998, (iii) the Company's Warrant to purchase
15,000 shares of Common Stock (the "Second LKB Warrant") dated as of January 19,
1999 (iv) the Company's warrant to purchase 200,000 shares of Common Stock (the
"GCA Warrant") dated as of January 19, 1999, and (v) the right to receive 25,000
shares of Common Stock granted by the Company to GCA (the "GCA Right") dated as
of November 4, 1998. Except where noted in the text, references to "Lahaina
Acquisitions, Inc." or the "Company" include Lahaina Acquisitions, Inc. and its
consolidated subsidiary.

THE COMPANY

The Company was incorporated under Colorado law in April 1989 for the
purpose of acquiring an interest in one or more business opportunities or
ventures. Until December 14, 1998, the Company was in the development stage and
did not conduct an active business. The Company's address is 102 South Tenth
Street, Fernandina Beach, Florida 32034 and its telephone number is (904)
277-4438.

On December 14, 1998, the Company purchased all of the outstanding stock of
Beachside Commons I, Inc. ("Beachside") from Mongoose Investments, LLC
("Mongoose"). The Company deemed the purchase effective as of December 7, 1998.
Beachside is the owner of a commercial real estate development located on
Fernandina Beach, Florida in the resort area of Amelia Island, Northeast
Florida.

The assets of Beachside consist of two buildings and unimproved real estate,
leases to tenants in the buildings and minimal operating capital. The Beachside
property is estimated to have a value of approximately $4,500,000. The property
is subject to (1) a first mortgage securing a loan in the amount of $1,550,000
bearing interest at 15% per annum, principal and interest payable and due
December 1, 2001, and (2) a second mortgage in favor of GCA Strategic Investment
Fund Limited ("GCA") securing repayment of the Note. The Company intends to
continue operating the developed portion of the Beachside property and intends
to initiate and complete the development of the currently undeveloped portion of
the Beachside property when appropriate financing can be obtained.

The Company has expanded operations by forming three distinct divisions,
each pursuing an independent business strategy, while supporting other Company
operations and leveraging the technology of today and tomorrow. The Company
also expects to pursue a strategy of continued investment in other real estate
related projects through its newly formed subsidiary, Resort Strategies ("RSI").
The Resort Strategies Group will focus on real estate and related businesses
within emerging resort markets; The Financial Services Group, Inc. will be
providing mortgage and other financing primarily within Sunbelt markets; The
Internet & Communications Group expects to provide advertising, marketing and
electronic commerce taking advantage of the latest internet and electronic
mediums for both affiliated and independent corporate entities. The Company
intends to continue to evaluate other acquisitions, both in the area of real
estate and in other business areas, as a method of increasing its size of
operation and value.

The Company may, from time to time, sell or spin out certain operations such
that new public companies are created over time as they mature. It is
anticipated that any spin out transaction will result in a share distribution or
dividend to existing shareholders.

<PAGE> 5

THE OFFERING

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<S> <C>
Common Stock offered.......................................... 2,100,000 Shares
Common Stock to be outstanding after the offering(1).......... 5,342,214 Shares
Use of proceeds............................................... The Common Stock will be sold by certain selling
shareholders listed in this prospectus. The Company
will receive no money from the Offering.
OTC Bulletin Board symbol .................................... "LAHA"
</TABLE>

- ----------

(1) Assumes the Note is converted into 885,714 shares of Common Stock, the First
LKB Warrant is exercised for 60,000 shares of Common Stock, the Second LKB
Warrant is exercised for 15,000 shares of stock, the GCA Warrant is
exercised for 200,000 shares of Common Stock, the GCA Right is exercised for
25,000 shares of Common Stock and the Company's Series A Preferred Stock is
converted into 1,910,000 shares of Common Stock. Approximately 915,000
additional shares are being registered as a reserve to be drawn upon in the
event the Note converts into more shares than estimated.

SUMMARY RISK FACTORS

A purchaser of Common Stock must consider the following risk factors
before purchasing Common Stock. The Common Stock is a highly speculative
investment and a purchaser could lose all of the money spent on purchasing the
Common Stock.

- The Company is a start up company with minimum capitalization and net
worth;

- The management of the Company has limited experience in acquiring,
developing and operating real estate properties in resort locations, in
providing mortgage and other financing in resort markets and in
providing advertising, marketing and internet related services;

- The management of the Company has limited experience in real estate
sales, the provision of mortgage and other financing services, and
internet advertising and commerce;

- Success of the real estate sales division and the real estate financing
division is contingent on available finance rates;

- Competition in the real estate market, particularly in resort areas, is
fierce;

- Competition in financial services and internet marketing is fierce;

- The Company's management information systems and operating systems are
PC based, may require improvements to cope with the increased business
activities of the Company and have not been tested to ensure year 2000
compliance;

- The Company's business plan requires additional financing from third
parties and that financing might not be available upon terms acceptable
to the Company, in which event the Company will not grow as expected;

- The profitability of business operations in resort areas depends upon
the number of people visiting the resort area. Rain, heat, hurricanes,
trends in resort destinations, economic downturns and lack of access to
resort areas may reduce the profitability of the Company's operations;

- Revenues from businesses in resort areas are highly seasonal and thus
the economic results for one period of time will not be indicative of
economic results for another period of time;

- Control of the Company is highly centralized and disposition of the
Company is subject to the decision of the controlling shareholder;

- Terms of additional financing may require the Company to issue
additional Common Stock or Preferred Stock or debt, any of which could
reduce the value of the shares of Common Stock;

- The number of shares available for active trading is limited and thus
the price of the Common Stock may rise or fall dramatically upon the
trading of a relatively small number of shares. A purchase of the shares
of Common Stock of the Company should not be made unless the purchaser
can afford to lose the entire amount of the purchase price.

<PAGE> 6
SUMMARY CONSOLIDATED FINANCIAL DATA

EXPENSES:
Administrative Expense............... 90,284 23,948 200 45,479 17,839 2,982
Operating Expense.................... 10,488 10,488 0 0 0 0
Total Operating Expenses......... 100,772 34,436 200 45,479 17,839 2,982
Interest Expenses................ 22,706 22,706 0 0 0 0
------------- ------------- ------------- -------- -------- --------
Net loss......................... (123,478) (57,178) (200) (45,479) (17,839) (2,982)
INCOME PER SHARE
Basic............................ (.03) (.00) (.05) (.02) (.00)
Shares for Basic................. 2,246,500 996,500 996,500 996,500 996,500
Diluted.......................... (.01) (.00)
Shares for Diluted............... 5,342,214 996,500
</TABLE>

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
SEPTEMBER 30,
FOR THE QUARTER ENDED --------------------------
DECEMBER 31, 1998 1998 1997
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<S> <C> <C> <C>
BALANCE SHEET DATA:
Total assets........................................................... $3,015,065 $ 28 $ 49,083
Deficit accumulated during the development stage....................... (110,449) (66,300) (20,821)
Total liabilities...................................................... 2,645,170 7,093 63,322
Shareholders' equity (deficiency) ..................................... 369,895 (7,065) (14,239)
Total liabilities and shareholders' equity............................. 3,015,165 28 49,083
</TABLE>

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(1) The Company was a shell company which conducted no active business until the
change of control of the Company effected in December 1998.

(2) See Note H of Notes to the Consolidated Financial Statements for an
explanation of the determination of shares used in computing pro forma net
loss per share.

4
<PAGE> 7

RISK FACTORS

A purchase of the Common Stock offered pursuant to this prospectus
involves a high degree of risk. A purchaser could lose all the purchase price.
In addition to the other information in this prospectus, a purchaser must
carefully consider the following risk factors in evaluating whether to purchase
the shares of Common Stock offered pursuant to this prospectus. This prospectus
contains forward-looking statements that address, among other things, the
Company's business strategy, plan of distribution and use of proceeds, projected
capital expenditures, liquidity, possible business relationships, possible
effects of competition and inherent risks in investment in real estate at resort
locations. These statements may be found under "Prospectus Summary," "Risk
Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" as well as in the prospectus
generally. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of any number of
factors, including risks associated with future acquisitions (such as quality of
projects acquired, financing costs and profitability of operations),
fluctuations in operating results, variations in stock prices, change in public
interest in resorts, political and economic climates, competition, weather
conditions, risks of operations, regulatory agencies' policies, financing
difficulties and difficulties in integrating newly-acquired businesses, in
addition to the risk factors set forth below and elsewhere in this prospectus.
The cautionary statements made in this prospectus should be read as being
applicable to all forward-looking statements wherever they appear in this
prospectus.

LIMITED OPERATING HISTORY; RECENT CHANGE OF CONTROL

Until the change of control of the Company effected in December 1998 as
described in this prospectus under the heading "Business," the Company was a
start up, "shell" company which did not conduct an active business. The
Company's sole activity was seeking a target to merge with or acquire. In
connection with the change of control, the Company purchased the outstanding
stock of Beachside, an operating company owning a commercial real estate
development located on Fernandina Beach, Florida. As a result of this recent
change in control and a number of small, start-up oriented acquisitions, the
Company is now a holding company whose current operations are principally
involved in real estate related activities; however, it has a limited operating
history. The operating history to date is so limited that it is not a useful
basis for predicting future performance of the Company. No assurance can be
given that the operations of the Company will be successful.

In connection with the change in control, the management group of the
Company was changed. The new management group has limited experience in
operations and strategic growth similar to the Company's current operations and
planned future operations.

Further, Mongoose, which is controlled by its Managing Member Richard
P. Smyth, acquired an approximately 89% interest in the outstanding Common Stock
of the Company, subsequently reduced to a 79% interest, and 1,910,000 shares of
convertible Preferred Stock, the conversion of which would result in Mongoose
currently owning approximately 89% of the outstanding Common Stock prior to
conversion of the Note, or exercise of the First LKB Warrant, the Second LKB
Warrant, the GCA Warrant and the GCA Right. Mr. Smyth is also the Chairman of
the Board, Chief Executive Officer and Treasurer of the Company. As a result,
control of the Company is highly centralized and many significant issues,
including the election of members of the Board of Directors and the outcome of
corporate actions requiring shareholder approval, such as mergers and other
changes of corporate control, going private transactions and other extraordinary
transactions and the terms thereof, will be subject to the approval of Mongoose
and thus of Mr. Smyth. This centralized control could have an adverse effect on
the market price of the Company's Common Stock.

FUTURE FUNDING PLANS; FINANCIAL CONSTRAINTS

The Company expects to pursue a strategy of continued investment in
other real estate related projects through its newly formed subsidiary, RSI.
Further, the Company intends to continue to evaluate other acquisitions, both in
the area of real estate and in other business areas, as a method of increasing
its size of operation and value. The Company anticipates the need for further
money, both in the next six months and thereafter, as it expands its operations
to purchase additional real estate properties or operating companies, to engage
in the design and construction of new structures and to make the payments which
may be required as a result of other funding activities, including fees,
interest or dividends. It expects to get the funds needed through borrowings or
through selling equity, from both private and public sources.

<PAGE> 8

As a result of these activities, the Company expects that additional
shares of Common Stock and Preferred Stock in the Company will be issued at
future dates, and that these activities will likely have a dilutive effect on
the Company and its shareholders. Management believes that borrowing money from
conventional sources such as banks and real estate lending sources, combined
with the sale of preferred convertible equities, or the use of Common Stock as a
form of payment, will be sufficient to fund its operations during this growth
period. Success in the implementation of the current business plan and the
profitability of the Company are contingent on the availability of such funding
sources. No assurance can be given that borrowed money will be available from
conventional sources or that the Company will be able to sell preferred
convertible equities or use its Common Stock on terms acceptable to the Company,
or at all, to fund its operations as set forth above.

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS AND SEASONALITY

As the Company has a limited operating history, it lacks sufficient
historical financial operating data on which to project expectations of future
profits.

Because the Company creates and intends to operate resort properties,
revenues will vary with the season of the year and will be adversely affected by
excess rain or heat, hurricanes or other major weather developments, changes in
vacationers' choice of where to spend their vacations, general economic
conditions and competition from competing businesses.

Because of these among other factors, the revenues and profits for one
period of time may not be indicative of the revenues and profits for another
period of time or even the same period of time in a subsequent year.

Because the management of the Company has limited experience in
operating resort properties and because many of its competitors will have
greater experience, the Company can expect to be affected more negatively than
many of its competitors as the result of the above factors.

COMPETITION

The Company expects to extend its operations on Amelia Island, Florida.
Further, the Company expects to acquire additional resort properties in Florida
and other areas. Management of the Company has no extensive experience in
operating resort properties or in acquiring and developing them.

The Company faces major competition from well-capitalized, well-managed
companies, many of which already develop and operate resort facilities. In a
competitive bid situation, these competitors will be able to purchase properties
at a price higher than the Company can afford to finance. Thus, the Company may
lose opportunities to expand.

These competitors will also operate resort properties in areas that are
expected to be competitive with the Company. Although the Company expects to
operate on a smaller scale than many of its competitors, the prestige,
sophistication and quality of competitors' resort properties may draw business
from the Company's properties and thus reduce the Company's revenues.

DEPENDENCE ON KEY PERSONNEL

The Company has new management. The staff will be small and will
initially consist of Richard P. Smyth, its Chairman, Chief Executive Officer and
Treasurer, Gerald F. Sullivan, its Vice Chairman and Secretary, a property
manager, a professional real estate analyst and a receptionist/secretary.
Financial services will be provided by outside services pending the hiring of a
Chief Financial Officer. Other staff will be added as qualified personnel are
recruited, although it is anticipated that the staff will remain small for the
near term.

If Mr. Smyth or Mr. Sullivan should die or become incapacitated, the
Company could face financial and operating difficulties pending the hiring of a
new Chief Executive Officer or Vice Chairman.

INABILITY TO MANAGE GROWTH; RISKS ASSOCIATED WITH EXPANSION

Because the Company and its management do not have extensive previous
experience in developing resort properties, providing mortgage or financing
services or internet advertising services,

<PAGE> 9

their capacity to know the business may be limited and may subject the business
of the Company to certain risks, in addition to those commonly found in a
growing company. These risks include obtaining additional financing, providing
adequate working capital to pay salaries for personnel hired to acquire and
develop properties before revenue from the properties is sufficient to pay their
salaries, the inability of management to recognize potential problems before
they become serious problems, the lack of sufficient experience in the staff to
solve problems once they are identified, and the risk from competitors.

REGULATORY UNCERTAINTIES AND GOVERNMENT REGULATION

The Company's business is subject, both directly and indirectly, to
various laws and regulations. These laws and regulations include compliance with
environmental laws, which is a particularly sensitive issue in beach and other
resort areas. Local zoning laws and regulations may impose significant barriers
to development of resort properties. In addition, the development of resort
properties in beach or mountain areas can be subject to a number of issues that
are important to activists. The Company's business or a potential acquisition
may be delayed or terminated as a result of activist activities.

DEPENDENCE ON GROWTH OF RESORT CONCEPT; UNCERTAIN ACCEPTANCE OF LOCATIONS

The Company is structured as a holding company with operating companies
in wholly owned subsidiaries, all of which subsidiaries are "start-up" or
limited size ventures. Currently, the Company has operating companies in real
estate sales (Klein Real Estate Services, "KRES"), real estate financing (1st
Southern Mortgage), hospitality services (JP Concepts, Inc.) and resort real
estate (Beachside). The acquisitions of KRES, 1st Southern Mortgage and JP
Concepts, Inc. are all subject to regulatory approval. Upon completion of these
acquisitions, 60,000 shares of the Company's Common Stock will be issued as
consideration, as well as a total of $30,000 in short term debt. Beachside
consists of developed structures and two parcels of land for future development
in the oceanfront resort area of Amelia Island, Florida. The Company's plan is
to continue to acquire and develop additional properties in the northeast
Florida area, on and near Amelia Island, as well as in other sunbelt resort
markets. The Company also intends to evaluate other operations for acquisition
that may not be in the resort industry, or in the business of real estate. The
Company has entered into negotiations for the acquisition of a marketing
division which will promote the Company's business, as well as other companies'
business, through program and content development via video, film and internet
broadcasts. To the extent that its future is dependent on the resort real estate
business, the Company remains at risk from any downturn in the industry, or
other risks of that business. To the extent the Company has and will enter a
business area not related to real estate it will be subject to the risks and
needs of that business or industry. Such needs may create additional risks for
the Company simply by virtue of the complexity of multiple businesses, capital
needs or competitive factors. While the Company is currently evaluating other
business areas and when it should enter other businesses it will be at risk from
the acceptance of its resort real estate concepts by the marketplace,
competitive and business factors that exist within this, and other potential
markets, resort or otherwise.

ANTI-TAKEOVER PROVISIONS

Certain provisions of the Company's Amended and Restated Articles of
Incorporation and bylaws could make it difficult for a third party to acquire,
and could discourage a third party from attempting to acquire control of the
Company. Certain of these provisions allow the Company to issue Preferred Stock
with rights senior to those of the Common Stock without any further vote or
action by the shareholders and impose various procedural and other requirements
which could make it more difficult for shareholders to effect certain corporate
actions. Such charter provisions could limit the price that certain investors
might be willing to pay in the future for shares of the Company's Common Stock
or Preferred Stock and may have the effect of delaying or preventing a change in
control of the Company. The issuance of Preferred Stock also could decrease the
amount of earnings and assets available for distribution to the holders of
Common Stock or could adversely affect the rights and powers, including voting
rights, of the holders of the Common Stock.

PROCEEDS PAYABLE TO THE COMPANY

None of the money from the sale of the Common Stock will be paid to the
Company. Accordingly, the Company will need to raise money from profits and
other sources to fund operating losses and capital expenditures. See "Future
Funding Plans; Financial Constraints."

<PAGE> 10

RISKS ASSOCIATED WITH THE YEAR 2000

Because many computer programs have been written using two digits
rather than four to define the applicable year, date-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
"Year 2000 issue" could result in system failures or miscalculations causing
disruptions in the Company's normal business activities.

The Company does not believe that it has material exposure to the Year
2000 issue with respect to its own information systems because its existing
PC-based system correctly defines the Year 2000 with four digits. The Company
intends to conduct an analysis in 1999 to determine the extent to which its
suppliers and customers are subject to the Year 2000 issue. The Company is
currently unable to predict the extent to which the Year 2000 issue will affect
such suppliers and customers, or the extent to which it would be vulnerable to
such parties' failure to resolve any Year 2000 issues on a timely basis. The
failure of such parties subject to the Year 2000 issue to convert their systems
on a timely basis or effect a conversion that is compatible with the Company's
systems could have a material adverse effect on the Company.

PROTECTION OF INTELLECTUAL PROPERTY

The Company's success and ability to compete is not dependent upon its
proprietary systems and technology. However, the Company uses software and other
intellectual property provided by third parties and could be brought into
litigation involving the software or other intellectual property. The expense of
such litigation and an adverse judgment could have a material adverse effect on
the Company's business or financial condition.

NO PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has been no significant public market for
the Company's Common Stock although the Company's Common Stock is quoted on the
OTC Bulletin Board on an occasional trade basis. There can be no assurance that
an active trading market will develop or be sustained or that the market price
of the Common Stock will not decline. Even if an active trading market does
develop, the market price of the shares of Common Stock is likely to be highly
volatile and could be subject to wide fluctuations in response to factors such
as actual or anticipated variations in the Company's revenues, earnings and cash
flow, weather patterns, competitor developments with respect to resort
properties, changes in financial estimates by securities analysts, conditions
and trends in the resort industry, adoption of new accounting standards
affecting the resort industry, general market conditions and other factors.

Further, the stock markets, and in particular the Nasdaq National
Market, have experienced extreme price and volume fluctuations that have
particularly affected the market prices of equity securities of many small
capitalization companies and that often have been unrelated or disproportionate
to the operating performance of such companies. These broad market factors and
market fluctuations, as well as general economic, political and market
conditions such as recessions and interest rate or international currency
fluctuations, may adversely affect the market price of the Common Stock. In the
past, following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted against
such a company. Such litigation, if instituted, could result in substantial
costs and a diversion of management's attention and resources, which would have
a material adverse effect on the Company's business, results of operations and
financial condition.

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

Sale of substantial numbers of shares of Common Stock in the public
market could adversely affect the market price of the Common Stock and make it
more difficult for the Company to raise funds through equity offerings in the
future. The 2,100,000 shares offered hereby will be eligible for immediate sale
in the public market without restriction.

In addition, the Company intends to register shares of Common Stock
when required as a condition to future financings.

DILUTION

The sale of Common Stock by the holders of the Note, the First LKB
Warrant, the Second LKB Warrant, the GCA Warrant and the GCA Right will not
result in a dilution of the value of the shares of Common Stock. In fact, the
conversion of the $775,000 debt under the Note to equity will increase the value
of a share of Common Stock even though the number of shares of Common Stock will
also increase.

<PAGE> 11

On the other hand, to the extent the future funding requirements of the
Company require the issuance of convertible securities or securities or debt
having a priority to the shares of Common Stock, the shares of Common Stock may
suffer a decline in book value. See "Dilution."

ABSENCE OF DIVIDENDS

The Company intends to retain all future earnings for use in the
development of its business. The Company has never paid and does not currently
anticipate paying any cash dividends on its Common Stock in the foreseeable
future. See "Dividend Policy."

9
<PAGE> 12

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of the shares
of Common Stock offered hereby. The Company received $775,000 upon the sale of
the Note. See "Business -- Overview." The Company will require additional
financing in the future to finance continuing growth. No assurance can be given
that such financing will be available on favorable terms or at all. See
"Management's Discussion" and "Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

DIVIDEND POLICY

The Company has never declared or paid cash dividends on its Common
Stock. The Company currently intends to retain all of its future earnings, if
any, for use in its business and therefore does not anticipate paying any cash
dividends on its Common Stock in the foreseeable future.

CAPITALIZATION

The following table sets forth (i) actual capitalization of the Company
derived from its financial statements as of December 31, 1998, and (ii) an
adjusted capitalization of the Company to reflect (a) the conversion of all
outstanding shares of Series A Preferred Stock into 1,910,000 shares of Common
Stock and (b) the conversion of the Note and exercise of the First LKB Warrant,
the Second LKB Warrant, the GCA Warrant and the GCA Right into an assumed
maximum of 2,100,000 shares of Common Stock. The capitalization information set
forth in the table below is qualified by the more detailed Consolidated
Financial Statements and Notes thereto included elsewhere in this prospectus and
should be read in conjunction with such Consolidated Financial Statements and
Notes thereto.

<TABLE>
<CAPTION>
AS ADJUSTED
DECEMBER 31, DECEMBER 31,
1998 1998
----------- -----------
<S> <C> <C>
Short-term debt .................................... $ 229,151 $ 229,151

Long-term debt:
15% Note Payable - Mortgage ..................... 1,550,000 1,550,000
9% Note Payable - Convertible Debenture ......... 775,000 0

----------- -----------
Total long-term debt ...................... 2,325,000 1,550,000

Shareholders' Equity
Preferred Series A Convertible Stock,
1,910,000 shares issued and outstanding,
actual; no shares issued and outstanding, ...... 428,823 0
as adjusted
Common Stock, no par value, 800,000,000 shares
authorized, 2,246,500 shares issued and
outstanding, actual; 5,342,214 shares issued and
outstanding, as adjusted ....................... 8,593 20,339
Additional Paid-in Capital - Common Stock ....... 42,928 1,849,130
Deficit accumulated during the development ...... (110,449) (110,449)
stage
----------- -----------
Total Shareholders' equity ................ 369,895 1,759,020
----------- -----------
Total capitalization ...................... $ 2,924,046 $ 3,538,171
=========== ===========
</TABLE>

10
<PAGE> 13

TERMS OF CONVERSION; TERMS OF EXERCISE

Note

Up to 50% of the outstanding principal amount of the Note is
convertible at a price per share of Common Stock ("Conversion Price") equal to
the lesser of (i) $0.875 (the average bid of the Common Stock for the 20 days
prior to December 7, 1998) or (ii) an amount determined based on a formula
("Formula Price") F/P, where F = the principal amount of the Note being
converted plus accrued and unpaid interest thereon through the date of
conversion plus default interest, if any, on such interest, and P = the product
of 85% multiplied by the average of the five consecutive DWASP for the Common
Stock for the five trading days ending on the day prior to the date of
conversion (subject, in each case, to equitable adjustments for stock splits,
stock dividends or rights offerings by the Company relating to the Company's
securities or the securities of any subsidiary of the Company, combinations,
recapitalization, reclassifications, extraordinary distributions and similar
events). The term "DWASP" means, as of any date, the daily-weighted average
sales price on the NASDAQ Market as reported by Bloomberg or, if the NASDAQ
Market is not the principal trading market for such security, the daily-weighted
average sales price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg,
or if the foregoing do not apply, the daily-weighted average sales price of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no daily-weighted average sales
price is reported for such security by Bloomberg, then the average of the bid
prices of any market makers for such security as reported in the "pink sheets"
by the National Quotation Bureau, Inc. If the DWASP cannot be calculated for
such security on such date on any of the foregoing bases, the DWASP of such
security on such date shall be the fair market value as mutually determined by
the Company and the holder of the Note being converted for which the calculation
of the closing bid price is required in order to determine the Conversion Price
of such Note.

At the option of the Company, the balance of $387,500 principal amount
of the Note may be redeemed for cash by the Company paying a fee equal to 117%
of the outstanding principal amount plus accrued interest or by permitting
conversion of the balance of the Note at a Conversion Price of $0.875. For
purposes of this prospectus, the Company has assumed that the entire Note will
be converted to Common Stock pursuant to these provisions.

The First LKB Warrant

The First LKB Warrant may be exercised for a maximum of 60,000 shares
of Common Stock for a price of $0.91875 per share (subject to adjustment for
certain changes in the Common Stock, such as stock splits or combinations and
other corporate events). Exercise may occur in whole or in part (but not as to a
fractional share of Common Stock), at any time and from time to time after the
date of the First LKB Warrant and prior to the fifth anniversary thereof by
delivery via facsimile to the Company of a notice of exercise. Promptly
thereafter, the Holder shall surrender the First LKB Warrant to the Company at
its principal office accompanied by payment of $0.91875 per share of Common
Stock issued upon exercise of the First LKB Warrant (the "Exercise Price").

At the option of the Holder, payment of the Exercise Price shall be
made (i) by check or bank draft payable to the order of the Company, (ii) by
wire transfer to the account of the Company, (iii) in shares of Common Stock
having a market value on the date of exercise equal to the aggregate Exercise
Price or (iv) by presentation and surrender of the First LKB Warrant to the
Company for cashless exercise (a "Cashless Exercise"), surrender being deemed a
waiver of the Holder's obligation to pay all or any portion of the Exercise
Price. In the event the Holder elects a Cashless Exercise (which election shall
be irrevocable) the Holder shall exchange the First LKB Warrant for that number
of shares of Common Stock determined by multiplying the number of shares being
exercised by a fraction, the numerator of which shall be the difference between
the then current market value of the Common Stock and the Purchase Price, and
the denominator of which shall be the current Market Value of the Common Stock.

The Second LKB Warrant

The Second LKB Warrant may be exercised for a maximum of 15,000 shares
for a purchase price of $2.88 per share. The Second LKB Warrant has a term
beginning January 19, 1999.

<PAGE> 14

The GCA Warrant

The GCA Warrant may be exercised for 100,000 shares of Common Stock for
a price of $2.60 per share. The GCA Warrant may be exercised for up to an
additional 100,000 shares of Common Stock for a price calculated by averaging
the following: (i) the 30-day weighted average sales price and (ii) the 30-day
closing bid price of the Company's Common Stock listed on the OTC Bulletin Board
as reported by Bloomberg, LP, on the date of takedown. The GCA Warrant has a
term of five years beginning January 19, 1999.

The GCA Right

The GCA Right may be exercised for a maximum of 25,000 shares. The GCA
Right was issued in consideration for a portion of the Note.

DILUTION

The pro forma net tangible book value of the Company as of December 31, 1998
was approximately $370,000 or $.09 per share of Common Stock. Pro forma net
tangible book value per share is equal to the Company's total tangible assets
less its total liabilities, divided by the number of shares of Common Stock
outstanding on a pro forma basis. After giving effect to the conversion of the
Note, and the exercise of the First LKB Warrant, the Second LKB Warrant, the GCA
Warrant and the GCA Right into an assumed maximum of 1,185,714 shares of Common
Stock, the pro forma net tangible book value of the Company at December 31, 1998
would have been approximately $1,739,000, or $.33 per share. This represents an
immediate increase in pro forma net tangible book value of $.24 per share to
existing shareholders and an immediate dilution of $.84 per share to new
investors. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed public offering price per share(1) $ 1.20
Pro forma net tangible book value per share as of December 31, 1998(2) $ 0.09
Increase in net book value per share attributable to new investors 0.24
Adjusted pro forma net tangible book value after the Offering -----------
0.33
Dilution per share to new investors -------------
$ 0.87
=============
</TABLE>

(1) Using the average price per share for convertible debenture and all
warrants.

(2) Assumes that the 1,910,00 shares of Preferred Series A Convertible Stock
have been converted for 1,910,000 shares of common stock, as this stock does
not involve new investors.

The following table summarizes, on a pro forma basis as of December 31, 1998,
the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company, and the average price per share paid by
existing shareholders and to be paid by the new investors (using the average
assumed public offering price per share).

<TABLE>
<CAPTION>
TOTAL
CONSIDERATION AVERAGE
SHARES PURCHASED PAID PRICE PER SHARE
NUMBER PERCENT AMOUNT PERCENT SHARE
<S> <C> <C> <C> <C> <C>
Existing shareholders(1) 4,156,500 77.80% $ 480,344 25.69% $ 0.12
New investors 1,185,714 22.20% 1,389,125 74.31% 1.17
-----------------------------------------------------------------------------------------
Total 5,342,214 100.00% $ 1,869,460 100.00% $ 0.35
=========================================================================================
</TABLE>

(1) Assumes that the 1,910,000 shares of Preferred Series A Convertible Stock
have been converted for 1,910,000 shares of Common Stock, as this stock does
not involve new investors.

12
<PAGE> 15

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in
conjunction with the Consolidated Financial Statements and related Notes thereto
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this prospectus. The statement of operations
data for the period ending September 30, 1998 have been audited by Millward &
Co., CPAs, independent auditors and are included elsewhere in this prospectus.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

SUMMARY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
APRIL 5, 1989 FOR THE FOR THE
(INCEPTION) TO QUARTER ENDED QUARTER ENDED FOR THE YEARS ENDED SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, DECEMBER 31, --------------------------------
1998 1998 1997 1998 1997 1996
-------------- -------------- ------------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
REVENUES:............................ $ 16,555 $ 16,555 $ 0 $ 0 $ 0 $ 0
EXPENSES:
Administrative Expense............... 90,284 23,948 200 45,479 17,839 2,982
Operating Expense.................... 10,488 10,488 0 0 0 0
Total Operating Expenses......... 100,772 34,436 200 45,479 17,839 2,982
Interest Expenses................ 22,706 22,706 0 0 0 0
------------- ------------- ------------- --------- -------- ---------
Net loss......................... (123,478) (57,178) (200) (45,479) (17,839) (2,982)
INCOME PER SHARE
Basic............................ (.03) (.00) (.05) (.02) (.00)
Shares for Basic................. 2,246,500 996,500 996,500 996,500 996,500
Diluted.......................... (.01) (.00)
Shares for Diluted............... 5,342,214 996,500
</TABLE>

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
SEPTEMBER 30,
FOR THE QUARTER ENDED --------------------------
DECEMBER 31, 1998 1998 1997
--------------------- ------------ -----------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total assets....................................................... $3,015,065 $ 28 $ 49,083
Deficit accumulated during the development stage................... (110,449) (66,300) (20,821)
Total liabilities.................................................. 2,645,170 7,093 63,322
Shareholders' equity (deficiency) ................................. 369,895 (7,065) (14,239)
Total liabilities and shareholders' equity......................... 3,015,165 28 49,083
</TABLE>

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

(1) See Note H of Notes to the Consolidated Financial Statements for an
explanation of the determination of shares used in computing pro forma net
loss per share.

13
<PAGE> 16

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion of the results of operations and financial
condition of the Company should be read in conjunction with the Company's
Consolidated Financial Statements and Notes thereto included elsewhere in this
prospectus. This discussion contains forward-looking statements based on current
expectations which involve risks and uncertainties. Actual results and the
timing of certain events may differ significantly from those projected in such
forward-looking statements due to a number of factors, including those set forth
in the section entitled "Risk Factors" and elsewhere in this prospectus.

OVERVIEW

The Company was formed with the intent to actively seek, locate,
evaluate, structure and complete mergers with or acquisitions of private
companies, partnerships or sole proprietorships. The Company has formed three
distinct divisions, each pursuing a different business strategy while
supporting other Company operations. The Company intends to implement a business
strategy that will allow it to facilitate opportunistic acquisitions or
investment in real estate related operations and businesses with an emphasis on
asset oriented opportunities, such as real estate, equipment or other physical
assets. The acquisition on December 14, 1998 of Beachside, whose main activity
is real estate development and redevelopment within resort market places, is
consistent with that business strategy, as are the subsequent acquisitions of
KRES (real estate sales), 1st Southern Mortgage (real estate financing) and JP
Concepts, Inc., whose primary activity is resort-related hospitality services.
The acquisition of KRES, 1st Southern Mortgage and JP Concepts, Inc., are all
subject to regulatory approval. Upon completion of these acquisitions, 60,000
shares of the Company's Common Stock will be issued as consideration, in
addition to a total of $30,000 in short term debt.

Since inception, the Company generated no revenues until its
acquisition of Beachside on December 14, 1998.

Because the Company is in the development stage, the Company's model is
significantly different from many existing real estate development companies.
Since the Company was a holding company with limited assets until the December
14, 1998 acquisition of Beachside, the Company has only a limited operating
history upon which an evaluation of the Company and its prospects can be based.
This limited operating history makes the prediction of future operating results
difficult if not impossible. The Company has incurred losses every quarter since
inception and expects to continue to incur losses for the foreseeable future.
The Company had an accumulated deficit as of September 30, 1998 of $66,300 and
as of September 30, 1997 of $20,821. As of December 31, 1998, the accumulated
deficit was $110,449. The Company's prospects must be considered in light of the
risks, uncertainties, expenses and difficulties frequently encountered by
companies in the early stages of development, particularly companies in new and
rapidly evolving markets, such as the market for resort development. There can
be no assurance that the Company will successfully generate sufficient revenues
to achieve profitability. Although the Company has experienced revenue growth in
recent periods, historical growth rates are not sustainable and are not
indicative of future operating results, and there can be no assurance that the
Company will achieve or maintain profitability. See "Results of Operations."

RESULTS OF OPERATIONS

The following table sets forth the statement of operations data for the
Company for the three years ended September 30, 1998, for certain quarterly
periods and for the period from inception to September 30, 1998.

14
<PAGE> 17

SUMMARY CONSOLIDATED FINANCIAL DATA

EXPENSES:
Total Operating Expenses .... 100,772 34,436 200 45,479 17,839 2,982
Interest Expenses ........... 22,706 22,706 0 0 0 0
-------------- ------------- ------------- -------- -------- --------
Net loss .................... (123,478) (57,178) (200) (45,479) (17,839) (2,982)
INCOME PER SHARE
Basic........................ (.03) (.00) (.05) (.02) (.00)
Shares for Basic............. 2,246,500 996,500 996,500 996,500 996,500
Diluted...................... (.01) (.00)
Shares for Diluted............ 5,342,214 996,500
</TABLE>

The following comparisons should not be considered to be meaningful when
considering the Company's future plans of operation since the Company was a
shell seeking acquisitions and had no meaningful operations during these
periods.

YEAR ENDED SEPTEMBER 30, 1998 COMPARED TO YEAR ENDED SEPTEMBER 30, 1997

Administrative Costs. Administrative costs increased by $217,640, or 150%,
to $15,479 for the year ended September 30, 1998, compared to $17,839 for the
year ended September 30, 1997. The increase was primarily due to additional
executive, financial and legal personnel and related costs.

YEAR ENDED SEPTEMBER 30, 1997 COMPARED TO YEAR ENDED SEPTEMBER 30, 1996

Administrative Costs. Administrative costs increased by $14,857, or 498%, to
$17,839 for the year ended September 30, 1997, compared to $2,982 for the year
ended September 30, 1996. The increase was primarily due to additional executive
financial and legal personnel and related costs.

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth unaudited quarterly statement of operations
data for the seven quarters ended December 31, 1998. This unaudited quarterly
information has been derived from unaudited financial statements of the Company
and, in the opinion of management, includes all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of the
information for the periods covered. The quarterly data should be read in
conjunction with the Company's Consolidated Financial Statements and the Notes
thereto. The operating results for any quarter are not necessarily indicative of
the operating results for any future period.

Statement of Operations for the Three Months Ending
(unaudited)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
DEC. 31, MAR. 31, JUNE 30, DEC. 31, MAR. 31, JUNE 30, DEC. 31,
1996 1997 1997 1997 1998 1998(1) 1998
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $16,555
Expenses: ...............
Legal and Accounting Fees 1,260 0 45 0 7,450 3,594 0
Administrative Expenses.. 0 0 0 0 0 0 40,539
Stock Transfers.......... 0 448 1,921 0 0 0
Printing................. 0 0 537 200 0 0 0
Operating Expense........ 0 0 0 0 0 0 10,488
Net Income (Loss)........ (1,260) (448) (2,187) (200) (7,450) (3,594) (57,178)
</TABLE>

(1) Figures for the three months ending September 30, 1996, September 30, 1997
and September 30, 1998, are not presented. They correspond with the end of
the fiscal year and were not required.

(2) Figures for the period ending March 31, 1998 are for a six month period.

15
<PAGE> 18

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS AND SEASONALITY

As a result of the Company's limited operating history in resort
development and the emerging nature of the markets in which the Company
competes, the Company is unable to accurately forecast its revenues. The
Company's current and future expense levels are based predominantly on its
operating plans and estimates of future revenues and, while relevant to
management for planning purposes, should not be relied upon by potential
investors. The Company may be unable to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall. Accordingly, any significant
shortfall in revenues would likely have an immediate material adverse effect on
the Company's business, operating results and financial condition. Further, the
Company currently intends to substantially increase its operating expenses to
increase advertising, develop and offer new and expanded services, to fund
increased sales and marketing and customer service operations and to develop its
technology and systems. To the extent such expenses precede or are not
subsequently followed by increased revenues, the Company's operating results
will fluctuate and anticipated net losses in a given quarter may be greater than
expected.

The Company expects to experience significant fluctuations in its
future quarterly operating results due to a variety of other factors, many of
which are outside the Company's control. Factors that may adversely affect the
Company's quarterly operating results include, but are not limited to (i)
general economic conditions and economic conditions specific to the real estate
industry, (ii) the level of use of resort facilities as well as seasonal
fluctuation in vacationers' demands, (iii) the Company's ability to upgrade and
develop its systems and infrastructure and to attract new personnel in a timely
and effective manner, (iv) the amount and timing of operating costs and capital
expenditures relating to expansion of the Company's business, operations and
infrastructure, (v) governmental regulation, (vi) unforeseen events affecting
the industry, (vii) the stability of the market for mortgages and other consumer
or business loans, (viii) the uncertainty of new internet ventures, and (ix)
the timing associated with the start, completion and closing associated with the
land development or construction activities of the Company.

Due to the foregoing factors, quarterly revenues and operating results
are difficult to forecast, and the Company believes that period-to-period
comparisons of its operating results will not necessarily be meaningful and
should not be relied upon as an indication of future performance. It is likely
that the Company's future quarterly operating results from time to time will not
meet the expectations of security analysts or investors. In such event, the
price of the Company's Common Stock would likely be materially and adversely
affected. See "Risk Factors - Potential Fluctuations in Quarterly Results and
Seasonality."

LIQUIDITY AND CAPITAL RESOURCES

As a result of a number of transactions aimed at funding the transition
to a start-up operating company from a shell company, the Company issued
5,342,214 shares for a total of $1,200,000 in transactions occurring from
August, 1989 to January 19, 1999.

The Company has recently begun operations. As a result of this change
from a shell company into a holding company with operations it will have a need
for significant financial resources as it adds operations and grows the current
operations. At this time the Company is not currently generating profits from
its operations. Further, the Company is currently consuming cash at a rate
greater than it is generating cash, and it expected to continue in this manner
for the foreseeable future.

The Company currently has a line of credit in place with GCA, (the "GCA
Line of Credit") under which the Company can draw $180,000 from GCA, in
notational debt increments of $1,000 with the Company receiving $850 for each
$1,000 drawn. On the latter of (i) full repayment of the debt or (ii) 95 days
following closing date, the Company may draw an additional $120,000 from GCA in
$60,000 increments. Warrants to purchase 200,000 shares of Common Stock were
issued in conjunction with the above line of credit. Richard P. Smyth guarantees
payment of the line of credit.

The Company believes that its current cash and cash equivalents will be
sufficient to meet its anticipated cash needs for working capital and capital
expenditures for at least the next several months. However, the Company's
capital requirements depend on several factors, including the level of
acquisition activity and other factors. The timing and amount of such capital
requirements cannot accurately be predicted. If capital requirements vary
materially from those currently planned, the Company may require additional
financing sooner than anticipated. The Company has no commitments for any
additional financing, and there can be no assurance that any such

16
<PAGE> 19

commitments can be obtained on favorable terms, if at all. Any additional equity
financing may be dilutive to the Company's shareholders, and debt financing, if
available, may involve restrictive covenants with respect to dividends, raising
capital and other financial and operational matters which could restrict its
operations or finances. If the Company is unable to obtain additional financing
as needed, the Company may be required to reduce the scope of its operations or
its intended expansion, which could have a material adverse effect on the
Company's business, results of operations and financial condition.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income, effective for fiscal years beginning after December 15, 1997. This
statement, which must be adopted by the Company by fiscal year ended September
30, 1999, establishes standards for the reporting and display of comprehensive
income and its components in financial statements. Comprehensive income
generally represents all changes in shareholders' equity except those resulting
from investments by and distributions to owners. The Company believes this
pronouncement will not have a material affect on the Company. Currently, no
differences exist between the Company's net income or loss and comprehensive net
income or loss.

In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, Disclosures About Segments of an Enterprise and Related
Information ("SFAS No. 131"), effective for fiscal years beginning after
December 15, 1997. This statement, which must be adopted by the Company by
fiscal year ended September 30, 1999, established standards for the way that
public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report
information about operating segments in interim financial reports. SFAS No. 131
also establishes standards for related disclosures about products and services,
geographic areas and major customers.

In March 1998, the American Institute of Certified Public Accounts
("AICPA") issued Statement of Position 98-1, Accounting for the Costs of
Computer Software Developed For or Obtained For Internal Use ("SOP" No. 98-1").
SOP No. 98-1 is effective for fiscal years beginning after December 15, 1998.
SOP No. 98-1 will require the capitalization of certain costs incurred after the
date of adoption in connection with developing or obtaining software for
internal-use. The Company believes this pronouncement will not have a material
affect on the Company.

CHANGE IN ACCOUNTANTS

In January, the Company engaged Bearden & Smith ("Bearden"), an
independent accounting firm, to provide certain accounting consulting services
to the Company related to preparing historical financials for a recently
acquired subsidiary of the Company. On February 3, 1999, Millward and Co.
("Millward"), who had served as principal accountant to audit the financial
statements of the Company, after discussions with the Company regarding its
ongoing needs for auditing services, resigned from its engagement with the
Company. Following such resignation, the Board of Directors of the Company
approved the engagement of Bearden as the Company's principal accountant and
replacement for Millward. The Board approved the engagement of Bearden because
it had the resources and geographical location needed to serve the Company as
its business grows.

Millward's report on the Company's financial statements for each of the
last two years did not contain an adverse opinion or a disclaimer of opinion,
nor was it qualified or modified as to uncertainty, audit scope, or accounting
principles.

During the Company's two most recent fiscal years and the subsequent
interim period preceding the resignation of Millward, there were no
disagreements with Millward on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreement(s), if not resolved to the satisfaction of Millward, would have
caused it to make a reference to the subject matter of the disagreement(s) in
connection with its report.

Millward did not advise the Company during the Registrant's two most
recent fiscal years or during the subsequent interim period preceding Millward's
resignation:

(a) that the internal controls necessary for the Company to develop
reliable financial statements did not exist;

<PAGE> 20

(b) that information had come to its attention that had led it to no
longer be able to rely on management's representations, or that had made it
unwilling to be associated with the financial statements prepared by management;

(c) of the need to expand significantly the scope of its audit, or that
information had come to its attention during the two most recent fiscal years or
any subsequent interim period that if further investigated might (i) materially
have impacted the fairness or reliability of either: a previously issued audit
report or the underlying financial statements, or the financial statements
issued or to be issued covering the fiscal period(s) subsequent to the date of
the most recent financial statements covered by an audit report or (ii) have
caused it to be unwilling to rely on management's representations or be
associated with the Company's financial statements; or

(d) that information had come to its attention that it had concluded
materially impacts the fairness or reliability of either (i) a previously issued
audit report or the underlying financial statements, or (ii) the financial
statements issued or to be issued covering the fiscal period(s) subsequent to
the date of the most recent financial statements covered by an audit report.

Millward was authorized by the Company to respond fully to inquiries of Bearden.

Except such advice as has been provided by Bearden in connection with
consulting services related to the preparation of historical financials for the
Company's recently acquired subsidiary, during the two most recent fiscal years
and during the interim period prior to engaging Bearden, neither the Company nor
anyone on its behalf consulted Bearden regarding either: (a) the application of
accounting principles to a specified transaction, either completed or proposed;
or the type of audit opinion that might be rendered on the Company's financial
statements, and neither a written report nor oral advice was provided to the
Company that Bearden concluded was an important factor considered by the Company
in reaching a decision as to an accounting, auditing or financial reporting
issue; or (b) any matter that was the subject of either a disagreement or any
other event described above.

18
<PAGE> 21

BUSINESS

OVERVIEW

The Company was incorporated under Colorado law in April 1989 for the
purpose of acquiring an interest in one or more business opportunities or
ventures. Until December 14, 1998, the Company did not conduct an active
business. Since inception, the Company has been, and continues to be, a
development stage company.

On December 14, 1998, the Company purchased all of the outstanding
stock of Beachside from Mongoose. The purchase was deemed effective as of
December 7, 1998. Beachside is the owner of a commercial real estate development
located on Fernandina Beach, Florida in the resort area of Amelia Island,
Northeast Florida.

The Company paid the following for the Beachside stock:

- 1,250,000 newly issued shares of Common Stock of the Company;

- 1,910,000 newly issued shares of Series A of Preferred Stock, of
the Company which shares are convertible into 1,910,000 shares
of Common Stock; and

- $667,500 in cash, which was a portion of the $750,000 borrowed
in connection with this transaction by the Company under the
Note.

At the same time, Mongoose purchased 750,000 shares of Common Stock
from Paxford Investments, Ltd., ("Paxford") an existing shareholder of the
Company, for $300,000. The Stock Purchase Agreement, the Note and the related
Securities Purchase Agreement, Registration Rights Agreement, Stock Pledge
Agreement, the First LKB Warrant, Second LKB Warrant, GCA Warrant and GCA Right
are attached as Exhibits to the Form S-1 registration statement of which this
prospectus is a part.

As a result of the above transactions, a change in the control of the
Company has occurred in that Mongoose owns 1,775,000 shares of the 2,246,500
shares of Common Stock currently outstanding or approximately 89% of such
shares. Mongoose could own an additional 1,910,000 shares of Common Stock upon
conversion of its Series A Preferred Stock. It is currently estimated that the
conversion of the Note, the exercise of the First LKB Warrant, Second LKB
Warrant, GCA Warrant and GCA Right will result in an additional 1,200,000 to
2,100,000 shares of Common Stock being issued. According to current estimates,
the Note will convert into 885,714 shares of Common Stock. The First LKB Warrant
is exercisable for 60,000 shares of Common Stock, the Second LKB Warrant is
exercisable for 15,000 shares of Common Stock, the First GCA Warrant is
exercisable for up to 200,000 shares of Common Stock and the GCA Right is
exercisable for 25,000 shares of Common Stock. See "Terms of Conversion; Terms
of Exercise." Thus, after conversion of all convertible securities, it is likely
that the Company will remain in the control of Mongoose for the foreseeable
future. The Managing Member of Mongoose is Richard P. Smyth.

The assets of Beachside consist of two buildings and unimproved real
estate, leases to tenants in the buildings and minimal operating capital. The
Beachside property is estimated to have a value of approximately $4,500,000. The
property is subject to (1) a first mortgage securing a loan in the amount of
$1,550,000 bearing interest at 15% per annum, principal and interest payable and
due December 1, 2001, and (2) a second mortgage in favor of GCA securing
repayment of the Note. Once the Note is converted to Common Stock the second
mortgage will be released. The Company intends to continue operating the
developed portion of the Beachside property and intends to initiate and complete
the development of the currently undeveloped portion of the Beachside property
when appropriate financing can be obtained.

In order to enhance the Company's ability to acquire, develop,
renovate, manage and sell its properties, the Company has recently acquired a
real estate services division and a real estate mortgage operation. Gerald
Sullivan, the President of the real estate mortgage division is also a director
and officer of the Company. In addition, the Company has acquired a hospitality
services division and has entered into negotiations for the acquisition of a
marketing promotions division which will promote the Company's business, as well
as the business of other companies, through program and content development via
video, film and internet broadcasting. All of the above transactions relate to
nominal, start-up oriented operations and are subject to licensing transfers.

The Company expects to pursue a strategy of continued investment in
other real estate related projects and real estate and mortgage related
companies through its newly formed subsidiary, RSI. Further, the Company intends

19
<PAGE> 22

to continue to evaluate other acquisitions, both in the area of real estate and
in other business areas, as a method of increasing its size of operation and
value.

CHANGE IN BOARD OF DIRECTORS

In connection with the change in control of the Company, the previous
Directors of the Company resigned, but, before resigning, elected Richard P.
Smyth, Gerald F. Sullivan, Sidney E. Brown, and D. Nelson Lester as Directors of
the Company. The Directors will be paid $500 per meeting held telephonically and
$1,000 per meeting held in person. Further, each Director has been allowed to
purchase $10,000 of the Company's Common Stock, restricted and priced as of the
day of the initial transaction at $.40 per share, the price paid by Mongoose for
the Common Stock purchased from Paxford.

The Company is interviewing other persons for membership on the Board
of Directors.

The Company indemnifies the past and present Directors to the maximum
extent permitted by Colorado law.

CHANGE IN MANAGEMENT

The Company has new management. The staff will be small and will
initially consist of Richard P. Smyth, the Chairman, Chief Executive Officer and
Treasurer, Gerald F. Sullivan, the Vice Chairman and Secretary, a Property
Manager, a professional real estate analyst and a receptionist/secretary.
Financial services will be provided by outside services pending the hiring of a
Chief Financial Officer. Other staff will be added as qualified personnel are
recruited, although it is anticipated that the staff will be small for the near
term.

CHANGE IN FINANCIAL AND BUSINESS POSITION

As a result of the recent change in control, there has been a change in
the financial position of the Company. Prior to December 14, 1998, the Company
had virtually no assets and no operations. The Company now has assets, primarily
in the form of the commercial real estate holdings of Beachside, the real estate
services division, real estate financing division and hospitality services
division.

BRIDGE FUNDING

In order to raise the cash portion of the purchase price for the
Beachside stock, the Company borrowed an aggregate of $1,075,000 from GCA in the
form of the Note and the GCA Line of Credit. $300,000 of the $1,075,000 was
borrowed subsequent to December 31, 1998. The costs associated with the
transaction were the payment of a $82,500 consulting fee to affiliates of the
Fund, issuance of the First LKB Warrant to purchase 60,000 shares of Common
Stock to LKB Financial, LLC in satisfaction of amounts owed to it for
broker/finder services in connection with the transaction, the issuance of the
GCA Right exercisable for 25,000 shares of Common Stock in consideration for the
Note, and the issuance of the GCA Line of Credit under which the Company can
draw $300,000 from GCA with the Company receiving $850 for each $1,000 drawn. As
of February 15, 1999, the Company has drawn $150,000 of the GCA Line of Credit.

STRATEGY

The Company's primary objective is to capitalize on the unique
attributes of the commercial and real estate market place primarily in emerging
resort areas. Management believes that by focusing on the resort market it can
create higher return, lower risk opportunities than those found in traditional
metropolitan areas. The Company intends to achieve this objective by increasing
resort property sites, expanding and improving the size of operations, and by
investing in commercial properties and renovating those properties for use as
retail or restaurant sites, motel sites or high density conventional housing or
condominium sites. The Company has formed three distinct divisions: the Resort
Strategies Group, the Financial Services Group and the Internet and
Communications Group. The Company intends to expand its operations into real
estate sales, real estate mortgage, hospitality services, marketing and other
real estate related activities through these groups.

<PAGE> 23

COMPETITION

The Company believes that the principal competitive factors affecting
the market for resort development are successful marketing, competitive pricing,
the volume and quality of established traffic patterns in the resort area,
increases in the number of permanent residents, and the ability to develop new
structures or renovate existing properties in a timely and cost-effective
manner.

The Company has many competitors, ranging from individual investors to
large scale developers. While few of the Company's competitors have addressed
renovation and redevelopment as opposed to new property development, there can
be no assurance that the Company can continue to compete successfully against
current or future competitors, many of which may have substantially more
capital, resources and access to additional financing than the Company. Nor can
there be any assurance that competitive pressures faced by the Company will not
result in increased marketing costs, decreased traffic or loss of market share
or otherwise will not materially and adversely affect its business, results of
operations and financial condition.

OPERATIONS

The Company believes that its future success is significantly dependent
upon its ability to identify and capture projects situated in desirable
locations, with good traffic patterns, where the total initial investment will
range from $200,000 to $2,000,000, and the total appraised value after
completing construction and renovation is not greater than $6,000,000. By
focusing on projects in this size range, the Company believes it will establish
itself in a niche which is beyond the capabilities of individual investors and
beneath the economic requirements of larger property management companies. The
Company's success also depends on the ability of the real estate division to
list and sell properties, the ability of the real estate mortgage division to
market funds at competitive rates, and the ability of the hospitality services
division to provide services profitably within its market.

FACILITIES

The Company's operations are principally located in a single office
building in Fernandina Beach, Florida. The Company occupies approximately 4,500
square feet, including portions which are sublet to other tenants, under a lease
expiring in January, 2000. Annual rent is $15,000 including utilities. The
Company has the option to renew the lease for three one-year periods at 105% of
the current rental value. The Company's mortgage division operates out of an
office in Gainesville, GA. The mortgage office is rented on a month-to-month
basis with a monthly rental of $1,000 per month.

GOVERNMENT REGULATION

The Company's business is subject, both directly and indirectly, to
various laws and regulations. These laws and regulations include compliance with
environmental laws which is a particularly sensitive issue in beach and other
resort type areas. The Florida Department of Environment Protection must review
and approve all ocean projects. In addition, local zoning laws and regulations
may impose significant barriers to development of resort type properties.
Further, the development of resort type properties in beach or mountain areas
can be subject to a number of issues that are important to activists. The
Company's business and potential acquisitions may be delayed or terminated as a
result of activists activities.

To date, the Company has not expended significant resources on lobbying
or related government affairs issues but may be required to do so in the future.

EMPLOYEES

As of February 15, 1999, the Company has ten employees.

<PAGE> 24

LEGAL PROCEEDINGS

The Company is party, from time to time, to various legal proceedings.
The Company currently has a claim arising out of the construction phase of the
Beachside project in the total amount of $30,000. While it expects to prevail
favorably in this proceeding, it has placed sufficient funds in escrow to
accommodate any liabilities in this matter. In the opinion of management, these
proceedings are not expected to have a material impact on the Company's
financial position or results of operations.

MARKET INFORMATION

COMMON STOCK

The Company's Common Stock has been traded over-the-counter on the
bulletin board operated by the National Association of Securities Dealers, Inc.
under the symbol "LAHA." The following table sets forth the high and low closing
bid of the Company's Common Stock for each quarter during the past two fiscal
years. The prices reflect inter-dealer quotations without retail mark-ups, mark
downs and commissions, and do not necessarily represent actual transactions. The
Company's securities began trading in August 1996. Since the foregoing date, the
high bid has been $3.250 the low bid has been $0.875.

<TABLE>
<CAPTION>
Period High Low
------- ----- -----
<S> <C> <C>
Fiscal 1997
First quarter..................................................... 0.875 0.875
Second quarter.................................................... 0.875 0.875
Third quarter..................................................... 0.875 0.875
Fourth quarter.................................................... 0.875 0.875

Fiscal 1998
First quarter...................................................... 3.250 0.875
Second quarter..................................................... 3.250 0.875
Third quarter...................................................... 3.250 0.875
Fourth quarter..................................................... 1.500 0.875

Fiscal 1999
First Quarter...................................................... 4.000 0.031
Second Quarter (through March 15, 1999)............................ 4.000 1.500
</TABLE>

On December 14, 1998, the closing bid on the Common Stock was $0.50.
On March 15, 1999, the closing bid on the Common Stock was $1.88.

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

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

<TABLE>
<CAPTION>
OFFICERS AND DIRECTORS AGE POSITION
<S> <C> <C>
Richard P. Smyth .................... 42 Chairman of the Board, Chief Executive
Officer, Treasurer and Director
Gerald F. Sullivan(1), (2) ......... 57 Vice Chairman, Secretary
and Director
D. Nelson Lester(2) ................ 59 Director
Sidney E. Brown(1) ................. 60 Director
</TABLE>

- ----------

(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

<PAGE> 25

Richard P. Smyth was elected as a director and officer of the Company
effective as of December 7, 1998. Mr. Smyth holds a B.A. from the University of
Southern Florida. He has been employed as Managing Member of Mongoose since
November, 1996 and has provided business consulting and merger and acquisition
advice through Blue Ridge Ventures, LLC since November 1995. He was employed by
Vista 2000, Inc. and its predecessors from November, 1991 until March, 1996.
Prior to that time, Mr. Smyth was involved in merger and acquisition consulting
and in business management with both public and private firms.

Gerald F. Sullivan was elected as a Director, Vice Chairman and
Secretary effective as of December 7, 1998. Mr. Sullivan holds a B.B.A. from the
University of Georgia and a M.B.A. from Georgia State University. He has been
employed as a mortgage banker with Commerce Mortgage Company since June, 1998.
He was employed as a mortgage banker with Credit Depot from June, 1991 to June,
1998.

D. Nelson Lester was elected as a director of the Company effective as
of December 7, 1998. Mr. Lester holds a B.S. from the University of Alabama. He
has been employed as the Vice President of Marketing and Sales of Porcelain
Products Company, a manufacturer of electrical porcelain, since November, 1987.

Sidney E. Brown was elected as a director of the Company effective as
of December 7, 1998. Mr. Brown holds a B.S. from Georgia Southern University and
a B.B.A., M.E.D., E.D.S. and E.D.D., from the University of Georgia. He has been
employed as the Dean of Graduate and Off-Campus Programs at Piedmont College
since April, 1998. Mr. Brown was employed as the Associate Vice President of
Academic Affairs of the University of Georgia from July, 1969 to June, 1998.

The Board of Directors has currently authorized five members of whom
one is to be elected by the holders of Series A Preferred Stock pursuant to the
Company's Amended and Restated Articles of Incorporation. Mr. Smyth is the
designee of the Series A Preferred Stock to the Board of Directors. Members of
the Board of Directors are elected each year at the Company's annual meeting of
shareholders, and serve until the following annual meeting of shareholders or
until their respective successors have been elected and qualified.

DIRECTOR COMPENSATION

The Company's non-employee Directors currently receive $1,000 per
meeting attended in person and $500 per attended telephonic meeting for service
on the Company's Board of Directors or any committee thereof. Further, each
Director has been allowed to purchase $10,000 of the Company's Common Stock,
restricted and priced as of the day of the initial transaction, at $.40 per
share, the price paid by Mongoose for the Common Stock purchased from Paxford.
Directors may also be reimbursed for certain expenses incurred in connection
with attendance at Board and committee meetings.

Officers of the Company are appointed by the Board of Directors and
serve at its discretion. The Company has amended its bylaws to provide for the
indemnification of Directors and officers to the fullest extent authorized,
permitted or allowed by law.

EXECUTIVE COMPENSATION

None of the Company's executives have received any compensation in the
last three fiscal years.

STOCK OPTIONS OR OTHER INCENTIVE COMPENSATION PLANS

The Company currently has no stock option or other incentive
compensation plans. While the Company has never issued stock options or stock
appreciation rights, it intends to make 500,000 shares available for an
incentive stock option program as soon as practicable.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No interlocking relationship exists between the Company's Board of
Directors or Compensation Committee and the Board of Directors or compensation
committee of any other company, nor has any such interlocking relationship
existed in the past. The Compensation Committee of the Board of Directors
currently consists of Gerald F. Sullivan and D. Nelson Lester.

<PAGE> 26

EMPLOYMENT AGREEMENTS

The Company has no employment agreements at this time.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The Company's Amended and Restated Articles of Incorporation limits the
liability of Directors to the maximum extent permitted by Colorado law. Colorado
law provides that a corporation's articles of incorporation may contain a
provision eliminating or limiting the personal liability of a director for
monetary damages for breach of their fiduciary duties as Directors, except for
liability (i) for any breach of their duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 7-108-403 of the Colorado Business Corporation Act or (iv) for any
transaction from which the director derived an improper personal benefit.

The Company's Amended and Restated Articles of Incorporation provides
that the Company shall pay for or reimburse the reasonable expenses incurred by
a director who is a party to a proceeding in advance of final disposition of the
proceeding, including reasonable expenses incurred by a director in connection
with the enforcement of this indemnification provision if: (i) the director
furnishes to the Company a written affirmation of the director's good faith
belief that he or she has met the standard of conduct described in Section
7-109-102 of the Colorado Business Corporation Act; (ii) the director furnishes
to the Company a written undertaking, executed personally or on the director's
behalf to repay the advance if it is ultimately determined that he or she did
not meet the standard of conduct and (iii) a determination is made that the
facts then known to those making the determination would not preclude
indemnification under Article 109 of the Colorado Business Corporation Act.

The Company's Restated bylaws provide that the Company shall indemnify
its Directors and officers and may indemnify its employees and agents to the
fullest extent permitted by law. The Company believes that indemnification under
its Restated bylaws covers at least negligence and gross negligence on the part
of indemnified parties.

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

CERTAIN TRANSACTIONS

On December 14, 1998, the Company purchased all of the outstanding
stock of Beachside from Mongoose in exchange for 1,250,000 newly issued shares
of Common Stock of the Company, 1,910,000 newly issued shares of Series A
Preferred Stock of the Company and $667,500 in cash. The purchase was effective
as of December 7, 1998. Beachside is the owner of a commercial real estate
development located on Fernandina Beach, Florida in the resort area of Amelia
Island, Northeast Florida. As a result of this transaction, Mongoose became the
Company's largest shareholder and Richard P. Smyth, the Managing Member of
Mongoose, became the Chief Executive Officer, Treasurer and a Director of the
Company. See "Risk Factors - Limited Operating History; Recent Change of
Control."

On January 24, 1999, the Company entered into an agreement to purchase
a mortgage brokerage operation and the accompanying licenses from Jerry
Sullivan, son of the Company's Vice Chairman, Gerald F. Sullivan, for a total
purchase price of 20,000 shares of restricted stock and a note in the amount of
$10,000. The transfer is contingent on the successful transfer of the associated
licenses to the Company by the issuing governmental agency.

All future transactions between the Company and interested Directors
and shareholders, if any, will be approved by the disinterested Directors or
shareholders, as appropriate in accordance with Colorado law and the Company's
Amended and Restated Articles of Incorporation and bylaws.

24
<PAGE> 27

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth the beneficial ownership of the
Company's Common Stock and the Series A Preferred Stock as of February 26, 1999,
and as adjusted to reflect the sale of the shares of Common Stock offered by the
Selling Shareholders, of (i) each person known by the Company to own
beneficially 5% or more of the Company's Common Stock, (ii) each of the
Company's directors and (iii) all of the Company's officers and directors as a
group. The number of shares that may actually be sold by each of the selling
shareholders will be determined by such shareholder and may depend upon a number
of factors, including, among other things, the market price of the Common Stock.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
COMMON
SHARES
OFFERED
SHARES BENEFICIALLY OWNED* FOR SHARES BENEFICIALLY OWNED*
PRIOR TO OFFERING SALE AFTER THE OFFERING(1)
---------------------------------------------- --------------------- --------------------
NUMBER PERCENT NUMBER PERCENT
------------------------ ------------------- --------------------- --------------------
COMMON SERIES A COMMON SERIES A COMMON SERIES A COMMON SERIES A
BENEFICIAL OWNER PREFERRED PREFERRED PREFERRED PREFERRED
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mongoose Investments, LLC 3,685,000(2) 1,910,000(2) 88.66% 100% -- 3,685,000 1,910,000 68.98% 100%
7276 Sanctuary Lane
Fernandina Beach, FL 32034
- -----------------------------------------------------------------------------------------------------------------------------------
GCA Strategic Investment 1,110,714(3) -- 33.08% -- 1,110,714 -- -- -- --
Fund Mechanics Building
12 Church Street
Hamilton HM 11 Bermuda
- -----------------------------------------------------------------------------------------------------------------------------------
LKB Financial LLC (5) 75,000(4) -- 3.23% -- 75,000 -- -- -- --
106 Colony Park Drive
Suite 900
Cumming, GA 30040
- -----------------------------------------------------------------------------------------------------------------------------------
Richard P. Smyth 3,685,000(2) 1,910,000(2) 88.66% 100% 3,685,000 1,910,000 68.98 % 100%
7276 Sanctuary Lane
Fernandina Beach, FL 32034
- -----------------------------------------------------------------------------------------------------------------------------------
Gerald F. Sullivan -- -- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Sidney E. Brown -- -- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
D. Nelson Lester -- -- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
All directors and officers 3,685,000(2) 1,910,000(2) 88.66% 100% 3,685,000 1,910,000 68.98% 100%
as a group (4 people)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- ------------------------------------
* For purposes of this table, beneficial ownership has been determined in
accordance with the provisions of Rule 13(d)-3 of the Securities Exchange Act of
1934, as amended, under which, in general, a person is deemed to be the
beneficial owner of a security if such person has or shares the power to vote or
to direct the voting of the security or the power to dispose or to direct the
disposition of the security, or if such person has the right to acquire
beneficial ownership of the security within sixty days of December 14, 1998.

(1) The shares beneficially owned after the Offering are calculated assuming the
sale of all shares offered by the Selling Shareholders pursuant to this
Offering.

(2) Includes 1,775,000 shares of Common Stock currently owned by Mongoose and
1,910,000 shares of Common Stock issuable upon the conversion of the Series
A Preferred Stock. Richard P. Smyth is the Managing Member of Mongoose and
as such is deemed the beneficial owner of all shares held by Mongoose.

(3) Represents an estimate of the number of shares of Common Stock into which
the Note will be converted, and an estimate of the number of shares of
Common Stock to be issued upon exercise of the GCA Warrant and the GCA
Right.

(4) Represents shares of Common Stock issuable upon exercise of the First and
Second LKB Warrants.

(5) The Company has engaged LKB to provide specific financial advisory services
for one year beginning January 19, 1999.

25
<PAGE> 28

For purposes of this prospectus the Company has estimated the number of
shares of Common Stock issuable upon conversion of the Note. The actual number
of shares of Common Stock issuable pursuant to the Note will be determined at
the time of conversion or exercise. See "Terms of Conversion; Terms of
Exercise."

<PAGE> 29
DESCRIPTION OF CAPITAL STOCK

As of December 14, 1998, there were 2,246,500 shares of Common Stock
outstanding held of record by approximately 173 shareholders. Upon the closing
of the Offering, the outstanding shares of Common Stock will consist of
3,432,214 shares, or calculated on a fully-diluted basis will consist of
5,342,214 shares.

COMMON STOCK

The Company is authorized to issue a total of 800,000,000 shares of no
par value per share Common Stock. Holders of Common Stock are entitled to one
vote per share in all matters to be voted on by the shareholders. Subject to the
preferences of the Preferred Stock, holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared from time to time by
the Board of Directors out of funds legally available for payment. See "Dividend
Policy." In the event of a liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities, subject to prior distribution rights of
shares of Preferred Stock then outstanding, if any. The Common Stock has no
preemptive or conversion rights or other subscription rights. There are no
redemption or sinking fund provisions applicable to the Common Stock. All
outstanding shares of Common Stock are fully paid and nonassessable, and the
shares of Common Stock to be issued in connection with the Offering will be
fully paid and non-assessable.

PREFERRED STOCK

Pursuant to the Company's Amended and Restated Articles of
Incorporation, the Board of Directors has the authority, without further action
by the shareholders, to issue up to 10,000,000 shares of Preferred Stock in one
or more series and to fix the designations, powers, preferences, privileges, and
relative participating, optional or special rights and the qualifications,
limitations or restrictions thereof, including dividend rights, conversion
rights, voting rights, terms of redemption and liquidation preferences, any or
all of which may be greater than the rights of the Common Stock. The Board of
Directors, without shareholder approval, can issue Preferred Stock with voting,
conversion or other rights that could adversely affect the voting power and
other rights of the holders of Common Stock. Preferred Stock could thus be
issued quickly with terms calculated to delay or prevent a change in control of
the Company or make removal of management more difficult. Additionally, the
issuance of Preferred Stock may have the effect of decreasing the market price
of the Common Stock, and may adversely affect the voting and other rights of the
holders of Common Stock. 1,910,000 shares of Series A Preferred Stock are
currently outstanding. Although the Company has no current plans to issue any
additional shares of the Preferred Stock, such shares may be issued in
connection with subsequent acquisitions or financings.

TERMS OF SERIES A PREFERRED STOCK

In connection with its acquisition of Beachside, the Company authorized
and issued shares of Series A Preferred Stock. The rights, preferences,
privileges, and restrictions granted to and imposed on the Series A Preferred
Stock are set forth below.

DIVIDEND PROVISIONS

Subject to the rights of any series of Preferred Stock that may from
time to time come into existence, the holders of shares of Series A Preferred
Stock are entitled to receive dividends out of any assets legally available
therefor, prior and in preference to any declaration or payment of any dividend
(payable other than in Common Stock or other securities and rights convertible
into or entitling the holder thereof to receive, directly or indirectly,
additional shares of Common Stock of the Company) on the Common Stock of this
Corporation, at the rate of $0.095 per share, per annum (as adjusted for any
stock splits, stock dividends, recapitalizations or the like), payable when, as,
and if declared by the Board of Directors. Such dividends will be cumulative.
The holders of the outstanding Series A Preferred Stock can waive any dividend
preference that such holders shall be entitled to receive upon the affirmative
vote or written consent of the holders of a majority of the Series A Preferred
Stock.

LIQUIDATION PREFERENCE

In the event of any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, subject to the rights of any series of
Preferred Stock that may from time to time come into existence, the holders of
Series A Preferred Stock are entitled to receive, prior and in preference to any
distribution of any of the assets of the

<PAGE> 30

Company to the holders of Common Stock by reason of their ownership thereof, an
amount per share equal to the sum of $1.00 for each outstanding share of Series
A Preferred Stock (the "Series A Liquidation Price"), plus declared but unpaid
dividends on such share (subject to adjustment of such fixed dollar amounts for
any stock splits, stock dividends, combinations, recapitalizations or the like).
Upon completion of this distribution all of the remaining assets of the Company
available for distribution to shareholders shall be distributed among the
holders of Series A Preferred Stock and Common Stock pro rata based on the
number of shares of Common Stock held by each holder (assuming full conversion
of all shares of Series A Preferred Stock).

Liquidation, dissolution or winding up of the Company shall be deemed
to be occasioned by, or to include (unless the holders of a majority of the
Series A Preferred Stock then outstanding shall determine otherwise), (i) the
acquisition of the Company by another entity by means of any transaction or
series of related transactions (including, without limitation, any
reorganization, merger or consolidation) that results in the transfer of fifty
percent or more of the outstanding voting power of the Company; or (ii) a sale
of all or substantially all of the assets of the Company; In any of such events,
if the consideration received by the Company is other than cash, its value will
be deemed its fair market value determined as set forth in Amended and Restated
Articles of Incorporation of the Company.

REDEMPTION

The Series A Preferred Stock is redeemable only at the election of
the Board of Directors of the Company upon 20 days notice to the holders of
Series A Preferred Stock at a price per share equal to the Series A Liquidation
Price plus accrued (whether or not declared) but unpaid dividends on each such
share.

CONVERSION

Each share of Series A Preferred Stock shall be convertible, at the
option of the holder thereof, at any time after the date of issuance of such
share, and until 5:00 p.m. Eastern Time of the day fixed for its redemption (the
"Conversion Rights"), at the office of the Company or any transfer agent for
such stock, into such number of fully paid and nonassessable shares of Common
Stock as is determined by dividing the Series A Liquidation Price by the
Conversion Price applicable to such share in effect on the date the certificate
is surrendered for conversion. The initial Conversion Price per share for shares
of Series A Preferred Stock shall be $1.00, subject to adjustment as set forth
in the Company's Amended and Restated Articles of Incorporation.

AUTOMATIC CONVERSION

Each share of Series A Preferred Stock shall automatically be converted
into shares of Common Stock at the Conversion Price at the time in effect for
such Series A Preferred Stock immediately upon the earlier of (i) the Company's
sale of its Common Stock in a firm commitment underwritten public offering
pursuant to a registration statement on Form S-l or Form SB-2 under the
Securities Act of 1933, as amended, the public offering price of which was not
less than $10.00 per share (as adjusted for any stock splits, stock dividends,
recapitalizations or the like) and $10,000,000 in the aggregate or (ii) the date
specified by written consent or agreement of the holders of a majority of the
then outstanding shares of Series A Preferred Stock.

VOTING RIGHTS

The holder of each share of Series A Preferred Stock shall have the
right to one vote for each share of Common Stock into which such Series A
Preferred Stock could then be converted, and with respect to such vote, except
as set forth in the following paragraph, such holder (i) shall have full voting
rights and powers equal to the voting rights and powers of the holders of Common
Stock, (ii) shall be entitled to notice of any shareholders' meeting in
accordance with the bylaws of the Company, and (iii) shall be entitled to vote,
together with holders of Common Stock, with respect to any question upon which
holders of Common Stock have the right to vote. Fractional votes shall not,
however, be permitted and any fractional voting rights available on an
as-converted basis shall be rounded to the nearest whole number (with one-half
being rounded upward).

The holders of shares of Series A Preferred Stock shall be entitled to
elect one director of the Company at each annual election of Directors. The
holders of Series A Preferred Stock and Common Stock (voting together as a
single class and not as separate series, and on an as-converted basis) shall be
entitled to elect any remaining Directors of the Company.

<PAGE> 31

Subject to the rights of any series of Preferred Stock that may from
time to time come into existence, so long as any shares of Series A Preferred
Stock are outstanding, the Corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of a
majority of the Series A Preferred Stock then outstanding voting together as a
single class:

(i) sell, convey, or otherwise dispose of all or substantially all of
its property or business or merge into or consolidate with any other corporation
(other than a wholly-owned subsidiary corporation) or effect any transaction or
series of related transactions in which more than fifty percent of the voting
power of the Company is disposed of;

(ii) redeem, purchase or otherwise acquire (or pay into or set aside
for a sinking fund for such purpose) any share or shares of Preferred Stock or
Common Stock; provided, however, that this restriction shall not apply to the
repurchase of shares of Common Stock from employees, officers, Directors,
consultants or other persons performing services for this Corporation or any
subsidiary pursuant to agreements under which this Corporation has the option to
repurchase such shares at cost or at cost upon the occurrence of certain events,
such as the termination of employment;

(iii) amend the Company's Articles of Incorporation or bylaws;

(iv) declare or pay any dividends on any shares of capital stock;

(v) do any act or thing which would result in taxation of the holders
of shares of the Series A Preferred Stock under Section 305 of the Internal
Revenue Code of 1986, as amended (or any comparable provision of the Internal
Revenue Code as hereafter from time to time amended); or

(vi) authorize or issue, or obligate itself to issue, any other equity
security, including any other security convertible into or exercisable for any
equity security having a preference over, or being on a parity with, the Series
A Preferred Stock with respect to dividends, liquidation or voting.

REGISTRATION RIGHTS

Pursuant to an agreement between the Company and the holder (the
"Holder") of the Note (the shares of Common Stock into which it is convertible,
the "Registrable Securities"), can be registered for sale under the Act. If the
Company proposes to register any of its securities under the Act, either for its
own account or for the account of the Holder exercising registration rights, the
Holder is entitled to notice of such registration and is entitled to include
shares of Registrable Securities therein. Additionally, the Holder is also
entitled to certain demand registration rights pursuant to which they may
require the Company to file a registration statement under the Act at the
Company's expense with respect to their shares of Registrable Securities, and
the Company is required to use its commercially reasonable best efforts to
effect such registration. All of these registration rights are subject to
certain conditions and limitations, among them the right of the underwriters of
an offering to limit the number of shares included in such registration.

LIMITATION OF DIRECTOR AND OFFICER LIABILITY

The Company's Amended and Restated Articles of Incorporation and bylaws
contain certain provisions relating to the limitation of liability and
indemnification of Directors and officers. The Company's Amended and Restated
Articles of Incorporation provide that Directors of the Company may not be held
personally liable to the Company or its shareholders for a breach of fiduciary
duty, except for liability (i) for any breach of the director's duty of loyalty
to the Company or its shareholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of the law, (iii)
under Section 7-108-403 of the Colorado Business Corporation Act, relating to
prohibited dividends, distributions and repurchases or redemptions of stock,
(iv) for any transaction from which the director derives an improper benefit. In
addition, the Company's Amended and Restated Articles of Incorporation and
bylaws provide that the Company shall indemnify Directors and officers to the
fullest extent authorized by Colorado law.

<PAGE> 32

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Company's Common Stock is
Corporate Stock Transfer Corporation, Republic Plaza, 370 17th Street, Suite
2350, Denver, Colorado, 80202. Its telephone number for such purposes is (303)
595-3300.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, the Company has an aggregate of 2,246,500 shares
of Common Stock outstanding and an additional 4,010,000 shares of Common Stock
reserved for issuance upon the conversion of the Note, the exercise of the First
LKB Warrant, the exercise of the Second LKB Warrant, the exercise of the GCA
Warrant, the exercise of the GCA Right and conversion of the Series A Preferred
Stock. Upon completion of the Offering, the Company will have outstanding an
aggregate of 3,432,214 shares of Common Stock, assuming the full conversion of
the Note and exercise of the First and Second LKB Warrants and the GCA Warrant
and the GCA Right, but excluding shares of Common Stock issuable upon conversion
of the Series A Preferred Stock. Assuming the sale of all shares of Common Stock
offered hereby, of these shares, the 2,100,000 shares sold in the Offering and
the 2,246,500 shares currently held in the public market will be freely
tradeable without restriction or further registration under the Act, except that
any shares held or purchased by "affiliates" of the Company, as that term is
defined in Rule 144 of the Securities Act ("Affiliates"), may generally only be
sold in compliance with the limitations of Rule 144 described below. Mongoose
constitutes an Affiliate of the Company, thus the 1,775,000 shares of Common
Stock it currently owns together with any shares it acquires in the future, will
be subject to these limitations.

In general, under Rule 144 as currently in effect, any holder of
securities who is an Affiliate of the issuer is entitled to sell within any
three-month period a number of shares that does not exceed the greater of: (i)
one percent of the number of shares of Common Stock then outstanding (which will
equal approximately 34,322 shares immediately after the Offering); or (ii) the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding the filing of a notice on Form 144 with respect to such sale. Sales
under Rule 144 are also subject to certain manner of sale provisions and notice
requirements and to the availability of current public information about the
Company. The above described provisions of Rule 144, together with an additional
one year holding period requirement, also apply to "restricted securities"
defined under Rule 144 as securities issued in a private offering by a publicly
traded company. Any shares of Common Stock issued upon conversion of the Note or
exercise of the warrants would constitute restricted securities under Rule 144
and must be sold in compliance with the above described limitations unless and
until sold pursuant to this prospectus in the Offering.

PLAN OF DISTRIBUTION

Sales of the shares may be made from time to time by the selling
shareholders, or, subject to applicable law, by pledgees, donees, distributees,
transferees or other successors in interest. Such sales may be made on the OTC
Bulletin Board, in another over-the-counter market, on a national securities
exchange (any of which may involve crosses and block transactions), in privately
negotiated transactions or otherwise or in a combination of such transactions at
prices and at terms then prevailing or at prices related to the then current
market price, or at privately negotiated prices. In addition, any shares covered
by this prospectus which qualify for sale pursuant to Section 4(l) of the
Securities Act or Rule 144 promulgated thereunder may be sold under such
provisions rather than pursuant to this prospectus. Without limiting the
generality of the foregoing, the shares may be sold in one or more of the
following types of transactions: (a) a block grade in which the broker-dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers, and (e) face-to-face
transactions between sellers and purchasers without a broker-dealer. In
effecting sales, brokers or dealers engaged by the selling shareholders may
arrange for other brokers or dealers to participate in the resales.

In connection with distributions of the shares or otherwise, the
selling shareholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares registered hereunder in the course of hedging the positions they
assume with selling shareholders. The selling shareholders may also sell shares
short and deliver the shares to close out such short positions. The selling
shareholders may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the shares
registered hereunder, which the broker-dealer may resell pursuant to this
prospectus. The

<PAGE> 33

selling shareholders may also pledge the shares registered hereunder to a broker
or dealer and upon a default, the broker or dealer may effect sales of the
pledged shares pursuant to this prospectus.

Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling shareholders in amounts to be
negotiated in connection with the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.

Information as to whether underwriters who may be selected by the
selling shareholders, or any other broker-dealer, is acting as principal or
agent for the selling shareholders, the compensation to be received by
underwriters who may be selected by the selling shareholders, or any
broker-dealer, acting as principal or agent for the selling shareholders and the
compensation to be received by other broker-dealers, in the event the
compensation of such other broker-dealers is in excess of usual and customary
commissions, will, to the extent required, be set forth in a supplement to this
prospectus (the "Prospectus Supplement"). Any dealer or broker participating in
any distribution of the shares may be required to deliver a copy of this
prospectus, including the Prospectus Supplement, if any, to any person who
purchases any of the shares from or through such dealer or broker.

The Company has advised the selling shareholders that during such time
as they may be engaged in a distribution of the shares included herein they are
required to comply with Regulation M promulgated under the Exchange Act. With
certain exceptions, Regulation M precludes any selling shareholders, any
affiliated purchasers and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to induce any
person to bid for or purchase any security which is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. All of the
foregoing may affect the marketability of the Common Stock.

It is anticipated that the selling shareholders will offer all of the
shares for sale. Further, because it is possible that a significant number of
shares could be sold at the same time hereunder, such sales, or the possibility
thereof, may have a depressive effect on the market price of the Company's
Common Stock.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Paul, Hastings, Janofsky & Walker LLP, Atlanta,
Georgia. Mongoose made a gift of 100,000 shares of the Company's Common Stock to
a partner of Paul, Hastings, Janofsky & Walker, LLP, effective as of December 7,
1998.

EXPERTS

The Company's consolidated financial statements as of and for the
period from inception (April 5, 1989) to September 30, 1998, as of and for the
years ended September 30, 1997 and 1998 and the Beachside financial statement as
of and for the period from inception (September 25, 1998) to December 31, 1998
appearing in this prospectus and Registration Statement have been audited by
Kenneth R. Walters, PA, independent public accountants, and are included herein
in reliance upon the authority of said firm as experts in giving said report.
The Company's consolidated financial statements as of and for the years ended
September 30, 1994, 1995 and 1996 appearing in this prospectus and Registration
Statement have been audited by Doran Peck, C.P.A., P.C., independent public
accountants and are included herein in reliance upon the authority of said firm
as experts in giving said report.

ADDITIONAL INFORMATION

A Registration Statement on Form S-1, including amendments thereto,
relating to the Common Stock offered hereby has been filed by the Company with
the Securities and Exchange Commission (the "Commission"), Washington, D.C. This
prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. Statements contained in this
prospectus as to the contents of any contract or other document referred to are
not necessarily complete and in each instance reference is made to the copy of
such contract

<PAGE> 34

or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. For further
information with respect to the Company and the Common Stock offered hereby,
reference is made to such Registration Statement, exhibits and schedules. A copy
of the Registration Statement may be inspected by anyone without charge at the
Commission's principal office, 450 Fifth Street, N.W., Washington, D.C. 20549,
the New York Regional Office located at 7 World Trade Center, 13th Floor, New
York, NY 10048, and the Chicago Regional Office located at Northwestern Atrium
Center, 500 West Madison Street, Chicago, IL 60661, and copies of all or any
part thereof, including any exhibit thereto, may be obtained from the Commission
upon the payment of certain fees prescribed by the Commission.

In addition, the Company files annual, quarterly and special reports,
proxy statements and other information with the Commission. You may read and
copy any documents the Company files at the Commissions public reference rooms
in Washington, D.C., New York, New York and Chicago, Illinois. Please call the
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. The Company's filings are also available to the public from the
Commission's website at http://www.sec.gov.

32
<PAGE> 35

LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants......................................... F-2
Consolidated Balance Sheets...................................................... F-5
Consolidated Statements of Operations............................................ F-6
Consolidated Statements of Shareholders' Equity.................................. F-7
Consolidated Statements of Cash Flows............................................ F-8
Notes to Consolidated Financial Statements....................................... F-9
</TABLE>

BEACHSIDE COMMONS I, INC.
FORMERLY A SUBSIDIARY OF MONGOOSE INVESTMENTS, LLC
INDEX TO FINANCIAL STATEMENT

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants......................................... F-16
Financial Statement of Beachside Commons I, Inc.................................. F-17
Notes to Financial Statement..................................................... F-18
</TABLE>

F-1
<PAGE> 36

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors
Lahaina Acquisitions, Inc.
(A Development Stage Company)
Fernandina Beach, FL

INDEPENDENT AUDITORS' REPORT

We have audited the accompanying balance sheet of Lahaina Acquisitions, Inc. (a
Development Stage Company) as of September 30, 1998 and the related statements
of operations, changes in stockholders' equity (deficiency), and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Lahaina Acquisitions, Inc. as
of September 30, 1998, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.

/s/ Kenneth R. Walters, P.A.
- -------------------------------
Kenneth R. Walters, P.A.
Fernandina Beach, FL
March 16, 1999

F-2
<PAGE> 37
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors
Lahaina Acquisitions, Inc.
(A Development Stage Company)
Fernandina Beach, FL

INDEPENDENT AUDITORS' REPORT

We have audited the accompanying balance sheet of Lahaina Acquisitions, Inc. (a
Development Stage Company) as of September 30, 1997 and the related statements
of operations, changes in stockholders' equity (deficiency), and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides 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 Lahaina Acquisitions, Inc. as
of September 30, 1997, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.

/s/ KENNETH R. WALTERS, P.A.
- -------------------------------
Kenneth R. Walters, P.A.
Fernandina Beach, FL
March 16, 1999

F-3
<PAGE> 38

DORAN PECK, C.P.A., P.C.
2121 South Oneida Street, Suite 636
Denver, Colorado 80224
Bus: (303) 758-1796 Fax: (303) 758-1825

INDEPENDENT AUDITOR'S REPORT

The Board of Directors
Lahaina Acquisitions, Inc.
(A development stage Company)
5459 South Iris Street
Littleton, CO 80123

We have audited the accompanying balance sheets of Lahaina Acquisitions, Inc. as
of September 30, 1996, 1995 and 1994 and the related statements of operations
cash flows and changes in Shareholders' equity for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Lahaina Acquisitions, Inc. as
of September 30, 1996, 1995 and 1994 and the results of its operations for the
years then ended, in conformity with generally accepted accounting principles.

Doran Peck, C.P.A., P.C.

Denver, Colorado
December 12, 1996

F-4
<PAGE> 39

LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
FOR THE QUARTER SEPTEMBER 30,
ENDED -------------------------------
DECEMBER 31, 1998 1998 1997
----------------- -------- ---------
<S> <C> <C> <C>
ASSETS $ $
Current Assets
Cash ......................................... 0 28 497
Accounts Receivable .......................... 16,555 0 47,986
Prepaid Expenses ............................. 31,378 0 0
Note Receivable .............................. 21,800 0 0
Escrow Funds ................................ 30,000 0 0
Organization Costs - Non-current ............. 0 0 600
----------- -------- -------
Total Current Assets ............................ 99,733 28 49,083

Fixed Assets
Land ........................................ 400,000 0 0
Building .................................... 2,406,965 0 0
Equipment ................................... 149,127 0 0
Accumulated Depreciation .................... (40,760) 0 0
----------- -------- --------
Total Fixed Assets .............................. 2,915,332 0 0
----------- -------- --------
TOTAL ASSETS ...................................... $ 3,015,065 $ 0 $ 48,585
=========== ======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Accounts Payable ................... 59,313 7,093 63,322
Accrued Interest Payable ........... 22,706 0 0
Security Deposits Payable .......... 9,000 0 0
Note Payable - Shareholder ......... 74,151 0 0
Notes Payable - Others ............. 155,000 0 0
----------- -------- --------
Total Current Liabilities .................... 320,170 7,093 63,322

Long-term Debt
Note Payable - Mortgage ...................... 1,550,000 0 0
Note Payable - Convertible Debenture ......... 775,000 0 0
----------- -------- --------
Total long-term Debt .............................. 2,325,000 0 0
----------- -------- --------
TOTAL LIABILITIES ................................. 2,645,170 7,093 63,322

SHAREHOLDERS' EQUITY
Preferred Series A Convertible Stock,
1,910,000 shares............................ 428,823 0 0
Common stock, no par value, 800,000,000 shares
authorized, 2,246,500 shares issued and
outstanding ................................ 8,593 6,582 6,582
Additional Paid-In Capital - Common Stock .... 42,928 52,653 0
Deficit accumulated during the development
stage ...................................... (110,449) (66,300) (20,821)
----------- -------- --------
TOTAL SHAREHOLDERS' EQUITY ........................ 369,895 (7,065) (14,239)
----------- -------- --------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY .......... $ 3,015,065 $ 28 $ 49,083
=========== ======== ========
</TABLE>

See Notes to Consolidated Financial Statements.

F-5

<PAGE> 40

LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

FROM
INCEPTION FOR THE FOR THE
(APRIL 1989) TO QUARTER ENDED QUARTER ENDED FOR THE YEARS ENDED SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, DECEMBER 31, -----------------------------------------
1998 1998 1997 1998 1997 1996
------------ -------------- -------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
REVENUE: $ 16,555 $ 16,555 $ 0 $ 0 $ 0 $ 0
EXPENSES:
Administrative Expenses......... 90,284 23,948 200 45,479 17,839 2,982
Operating Expenses.............. 10,488 10,488 0 0 0 0
----------- ----------- --------- --------- --------- ---------
Total Operating Expenses........ 100,772 34,436 200 (45,479) 17,839 2,982
Interest Expenses............. 22,706 22,706 0 0 0 0
----------- ----------- --------- --------- --------- ---------

NET INCOME/(LOSS)................... $ (123,478) $ (57,178) $ (200) $ (45,479) $ (17,839) $ (2,982)
----------- ----------- ========= ========= ========= =========
INCOME PER SHARE.....................
Basic........................... (.03) (.00) (.05) (.02) (.00)
Shares for Basic................ 2,246,500 996,500 996,500 996,500 996,500
Diluted......................... (.01) (.00)
Shares for Diluted.............. 5,342,214 996,500
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements.

F-6
<PAGE> 41

LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
CLASS A ADDITIONAL DURING THE
PREFERRED STOCK PAID-IN DEVELOPMENT
NO PAR VALUE COMMON STOCK CAPITAL STAGE
SHARES AMOUNT SHARES AMOUNT TOTAL
---------------------- ----------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1995 ................... 0 $ 0 996,500 $ 600 $ 0 $ 0 $ 600
Net Loss for the Year Ended September 30, 1996 .. 0 0 0 0 0 (2,982) (2,982)
---------- --------- -------- -------- -------- --------- --------
Balance at September 30, 1996 ................... 0 0 996,500 600 0 (2,982) (2,382)
Capital Contribution ............................ 0 0 0 5,982 0 0 5,982
Net Loss for the Year Ended September 30, 1997 . 0 0 0 0 0 (17,839) (17,839)
---------- --------- -------- -------- -------- --------- --------
Balance at September 30, 1997 ................... 0 0 996,500 6,582 0 (20,821) (14,239)
Capital Contribution ............................ 0 0 0 0 52,653 0 52,653
Net Loss for the Year Ended September 30, 1998 . 0 0 0 0 0 45,479 (45,479)
--------------------------------------------------------------------------------
Balance at September 30, 1998 ................... 0 0 996,500 6,582 52,653 (66,300) (7,065)
Stock Issues .................................... 1,910,000 428,823 1,250,000 800 1,250 0 430,873
Net Loss for Quarter Ended December 31, 1998 . 0 0 0 0 0 (57,178) (57,178)
---------- --------- -------- -------- -------- --------- --------
Balance at December 31, 1998 .................... $1,910,000 $ 428,823 $ 2,246,500 $ 7,382 $ 53,903 $(123,478) $380,760
========== ========= =========== ======== ======== ========= ========

See Notes to Consolidated Financial Statements.

</TABLE>

F-7
<PAGE> 42

LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE FOR THE
APRIL 5, 1989 QUARTER QUARTER
(INCEPTION) TO ENDED ENDED FOR THE YEARS ENDED SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, DECEMBER 31, ---------------------------------
1998 1998 1997 1998 1997 1996
-------------- ----------- ------------- -------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income(Loss).................................. $ (123,478) $ (57,178) $ (4,211) $(45,479) $(17,839) $(2,982)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation ................................... 40,760 40,780 0 0 0 0
(Increase) decrease in:
Accounts Receivable ......................... (16,555) (16,555) 0 47,986 (47,986) 0
Prepaid Expenses ............................ (31,378) (31,378) 0 0 0 0
Escrow Funds ................................ (30,000) (30,000) 0 0 0 0
Organization Costs........................... 0 0 0 600 0 0
Increase (decrease) in:
Accounts Payable ............................ 59,313 55,513 0 (56,229) 63,322 0
Accrued Interest Payable .................... 22,706 22,706 (4,211) 0 0 0
Security Deposits Payable ................... 9,000 9,000 0 0 0 0
Notes Payable................................ 229,151 0 0 0 0 0
-------- --------- --------- -------- -------- ------
NET CASH USED IN OPERATING ACTIVITIES ......... 137,719 (7,132) 0 (53,122) (2,503) (2,982)

CASH FLOWS USED IN INVESTING ACTIVITIES
Notes Receivable ............................ (21,800) (21,800) 0 0 0 0
Capital Expenditures ........................ (2,950,777) (2,956,092) 0 0 0 0
---------- ---------- ---------- --------- -------- ------
NET CASH FLOWS USED IN INVESTING ACTIVITIES .. (2,950,777) (2,977,892) 0 41,678 7,193 0

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds From Borrowings(1) .................... 2,325,000 2,554,151 0 0 0 0
Proceeds From Issuance of Common stock............ 59,235 2,050 0 41,678 3,000 2,982
Proceeds From Issuance of Preferred Stock(1) ... 428,823 428,823 0 0 0 0
---------- ---------- ---------- --------- -------- ------
NET CASH FLOWS PROVIDED BY FINANCING
ACTIVITIES ............................... 2,813,058 2,985,024 0 41,678 3,000 0
---------- ---------- ---------- --------- -------- ------
NET INCREASE IN CASH ............................. 0 0 0 0 497 0
CASH AT BEGINNING OF PERIOD ...................... 0 0 0 0 0 0
---------- ---------- ---------- --------- -------- ------
CASH AT END OF PERIOD ............................ $ 0 $ 0 $ 0 $ 0 $ 497 $ 0
========== ========== ========== ========= ======== ======
SUPPLEMENTAL DISCLOSURES:
Income taxes, paid ............................. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Interest paid ................................. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

See Notes to Consolidated Financial Statements.

</TABLE>

(1) A portion of the transaction is non-cash.

F-8
<PAGE> 43

LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist
in understanding the Registrant's financial statements. The financial statements
and notes are representations of the Registrant's management, who are
responsible for their integrity and objectivity. The preparation of financial
statements, in conformity with generally accepted accounting principles,
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the period. Actual results could differ from those
estimates. These accounting policies conform to generally accepted accounting
principles and have been applied in the preparation of the financial statements.

REGISTRANT'S ACTIVITIES AND OPERATING CYCLE

Lahaina Acquisitions, Inc (the Company) is engaged in real estate
development and property management. The Company's fiscal year ends September
30. The subsidiary, Beachside Commons I, Inc. ("Beachside"), has a fiscal year
end of December 31.

The Company's financial statements have been prepared in conformity
with principles of accounting applicable to a going concern. These principles
contemplate the realization of assets and liquidation of liabilities in the
normal course of business.

DEVELOPMENT STAGE COMPANY

At December 31, 1998, the Company is considered to be in the
development stage as defined under the guidelines of Statement of Financial
Accounting Standards No. 7 (SFAS). Under SFAS No. 7, an entity is considered to
be in the development stage when substantially all of its efforts consist of
establishing a new business and, in addition, planned principal operations are
underway but have not yet generated any significant revenue.

The accompanying financial statements have been presented under SFAS
No. 7.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements included the accounts of Lahaina
Acquisitions, Inc. and its wholly owned subsidiary, Beachside. All significant
intercompany accounts and transactions have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with maturity of
three months or less to be cash equivalents for the purpose of determining cash
flows.

PROPERTY, EQUIPMENT AND DEPRECIATION

Property and equipment are stated at cost. Depreciation is provided by
straight-line methods for financial reporting and accelerated methods for income
tax purposes over estimated useful lives, which range from 5 to 39.5 years.

F-9

<PAGE> 44

LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(CONTINUED)

NOTE RECEIVABLE

Note receivable represents an operating loan to a customer, secured by
security interest and outstanding stock, due through December 31, 1999, bearing
interest at a rate of prime plus three (3) percentage points (10.75% at December
31, 1998).

DEFINED TERMS

Except where noted in the text, all information in the Consolidated
Financial Statements and Notes thereto assumes the conversion or redemption to
Common Stock of (i) the Company's convertible note dated as of December 7, 1998
(as amended to date, the "Note") in the aggregate principal amount of $775,000,
(ii) the Company's warrant to purchase 60,000 shares of Common Stock (the "First
LKB Warrant") dated as of December 7, 1998, (iii) the Company's Warrant to
purchase 15,000 shares of Common Stock (the "Second LKB Warrant") dated as of
January 19, 1999, (iv) the Company's warrant to purchase 200,000 shares of
Common Stock (the "GCA Warrant") dated as of January 19, 1999 and (v) the right
to receive 25,000 shares of Common Stock granted by the Company to GCA (the "GCA
Right") dated as of November 4, 1998.

THE COMPANY

The Company has expanded operations to include a real estate services
division, a real estate mortgage operation, a hospitality services group and is
also evaluating a number of other initiatives. The Company also expects to
pursue a strategy of continued investment in other real estate related projects
through its newly formed subsidiary, Resort Strategies ("RSI"). The Company
intends to continue to evaluate other acquisitions, both in the area of real
estate and in other business areas, as a method of increasing its size of
operation and value.

F-10
<PAGE> 45
LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(CONTINUED)

NOTE C - NOTES PAYABLE

The carrying amount of notes payable approximates fair value and is
based on the current rates available to the Registrant for debt of the same
remaining maturities with similar collateral requirements. Notes payable at
December 31, 1998, consisted of the following:

<TABLE>
<S> <C>
Note payable, stockholder, consists of a revolving line of credit,
due on demand to a related party, with a maximum borrowing
facility of $300,000.00, bearing interest at 10%, unsecured,
revolving line of credit, due on demand. $ 74,151

Notes payable, others, consists of three notes, at an interest rate
of 18% payable on demand, from individuals
in the amounts of $85,000, $50,000 and $20,000. $ 155,000

NOTE D - LONG-TERM DEBT

Long-term debt at December 31, 1998, consisted of the following:

Note payable to Pacific Coast Investment Company (secured by a
first mortgage on the Beachside Commons property), at an
interest rate of 15% payable in monthly installments of
interest only. The entire principle is due and payable
November 11, 2003. $1,550,000

Note payable to GCA Strategies Investment Fund Limited (1),
dated December 6, 1998 (secured by a second mortgage
on the Beachside Commons property), at an interest
rate of 9% maturing January 31, 2001 with interest
payable quarterly in arrears on the last day of March,
June, September and December of each year until the
maturity date. Includes note payable to Global Capital
Advisors, Ltd. (1) dated November 4, 1998, at an interest
rate of 12% maturing on May 3, 1999 (together, the "Note.")
(Note K - Significant Events)
(Note M - Subsequent Events) $ 775,000

(1) These notes include certain provisions,
including issuance of warrants and
conversion to common stock (see Form 8-K
dated 12/28/98 for details). Such shares
have been included in the computation of
the fully diluted share amounts. ----------
$2,325,000
==========
</TABLE>

F-11
<PAGE> 46
LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(CONTINUED)

Maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
Year Ending
December 31 Amount
----------- ----------
<S> <C>
1999 0
2000 0
2001 775,000
2002 0
2003 1,550,000
----------
$2,325,000
==========
</TABLE>

NOTE E - SHAREHOLDERS' EQUITY

The components of shareholders' equity are as follows:

Preferred stock consists of 9.5% cumulative preferred stock of no par
value with a liquidation value of $1.00 per share for each outstanding
share of Series A Preferred Stock. There are 10,000,000 shares of
Series A Preferred Stock authorized with 1,910,000 shares issued and
outstanding at December 31, 1998. This stock may be converted into
Common Stock of the Registrant at $1.00 per share, or 1,910,000 shares
at the option of the holder.

Common stock is voting stock with no par value. There are 800,000,000
shares authorized with 2,246,500 shares issued and outstanding at
December 31, 1998.

NOTE F - RELATED PARTY TRANSACTIONS

Included in current debt are loans to the Company from the majority
shareholder, Mongoose Investments, LLC, ("Mongoose") and parties related to
Mongoose, in the following amounts at December 31, 1998.

Mongoose $ 74,151
Other related parties 70,000

Mongoose owns 1,775,000 of the 2,246,500 shares of the Company's Common
Stock currently outstanding or approximately 79% of such shares. Mongoose has
rights to own an additional 1,910,000 shares of Common Stock upon conversion of
its Series A Preferred Stock.

NOTE G - INCOME TAXES

The Company has net operating loss carryforwards of approximately
$110,000 which are available to offset future taxable income. The loss
carryforwards expire $8,000 in 2016, $46,000 in 2017, and $56,000 in 2018. A
valuation has been established in the full amount of the deferred tax benefit
resulting from the net operating loss carryforwards for each of the periods
ending December 31, 1998.

NOTE H - EARNINGS PER SHARE

Basic earnings per share were calculated using the 2,246,500 shares
outstanding at December 31, 1998. Fully diluted shares would have been computed
as follows:

<TABLE>
<S> <C>
Shares outstanding at December 31, 1998 2,246,500
Shares assumes conversion of the outstanding 1,910,000 shares Series A
convertible
Preferred Stock 1,910,000
Assumes conversion of the $750,000 convertible note, before amendment 857,143
Assumes conversion of the $25,000 note 28,571
Assumes exercise of the GCA Warrant 200,000
Assumes exercise of the GCA Right 25,000
Assumes exercise of the First LKB Warrant 60,000
Assumes conversion of the Second LKB Warrant 15,000
---------
Fully diluted shares 5,342,214
=========
</TABLE>

F-12
<PAGE> 47
LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(CONTINUED)

NOTE I - LEGAL PROCEEDINGS

The Company is party from time to time of various legal proceedings.
The Company currently has a claim arising out of the construction phase of the
Beachside project in the total amount of $30,000. While it expects to prevail
favorably in this proceeding, it has placed sufficient funds in escrow to
accommodate any liabilities in this matter. In the opinion of management, these
proceedings are expected to have no material impact on the Company's financial
position or results of operations.

NOTE J - RESERVE FOR DOUBTFUL ACCOUNTS

The Company has not taken any reserves for its accounts receivable or
notes receivable at this time, as it is management's opinion that no reserve for
doubtful accounts was necessary as of December 31, 1998.

NOTE K - SIGNIFICANT EVENTS

As a result of the Company's initial transaction on December 14, 1998,
the Company has become a holding company with an operating subsidiary. This
transaction had a significant impact on the Company and created a number of
other changes in the Company. As a result of the change in control that occurred
as a result of this transaction, the value of the acquired stock was recorded at
the transfer's basis in a manner similar to a pooling of interest as described
in APB-16, Interpretation #39, the transferor's basis of the acquired stock was
based on its net historical cost, or approximately $1,200,000 as of December 7,
1998. Management believes the fair market value of the underlying asset, net of
debt, would be approximately $2,800,000. A summary of the transaction follows:

On December 14, 1998, the Company purchased all of the outstanding
stock of Beachside from Mongoose. The purchase was deemed effective as
of December 7, 1998. Beachside is the owner of a commercial real estate
development located on Fernandina Beach, Florida in the resort area of
Amelia Island, Northeast Florida.

The Company paid the following for the Beachside stock: 1,250,000 newly
issued shares of Common Stock of the Company; 1,910,000 newly issued
shares of Series A of Preferred Stock of the Company which shares are
convertible into 1,910,000 shares of common Stock; and $667,500 in
cash, which was a portion of the $750,000 borrowed in connection with
this transaction by the Company under the Note, before amendment by
Letter Agreement on January 19, 1999.

At the same time, Mongoose purchased 750,000 shares of Common stock
from Paxford Investments, Ltd., ("Paxford") an existing shareholder of
the Company, for $300,000. The Stock Purchase Agreement, the Note and
the related Securities Purchase Agreement, Registration Rights
Agreement, Stock Pledge Agreement and Warrant are attached as Exhibits
or incorporated by reference to this Registration Statement on Form
S-1.

F-13
<PAGE> 48
LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(CONTINUED)

convert into 885,714 shares of Common Stock. The First LKB Warrant is
exercisable for 60,000 shares of Common Stock, the Second LKB Warrant
is exercisable for 15,000 shares of Common Stock, the GCA Warrant is
exercisable for 200,000 shares of Common Stock and the GCA Right is
exercisable for 25,000 shares of Common Stock. Thus, after conversion
of all convertible securities, it is likely that Mongoose will remain
in the control of the Company for the foreseeable future. The Managing
Member of Mongoose is Richard P. Smyth.

The assets of Beachside consist of two buildings and unimproved real
estate, leases to tenants in the buildings and minimal operating
capital. The Beachside property is estimated to have a value of
approximately $4,500,000. The property is subject to (1) a first
mortgage securing a loan in the amount of $1,550,000 bearing interest
at 15% per annum, principle and interest payable and due December 1,
2001, and (2) a second mortgage in favor of GCA securing repayment of
the Note. Once the Note is converted to Common Stock the second
mortgage will be released. The Company intends to continue operating
the developed portion of the Beachside property and in tends to
initiate and complete the development of the currently undeveloped
portion of the Beachside property when appropriate financing can be
obtained.

Change in Board of Directors

In connection with the change in control of the Company, the previous
Directors of the Company resigned, but, before resigning, elected
Richard P. Smyth, Gerald F. Sullivan, Sidney E. Brown, and D. Nelson
Lester as directors of the Company. The Directors will be paid $500 per
meeting held telephonically and $1,000 per meeting held in person.
Further, each Director has been allowed to purchase $10,000 of the
Company's Common Stock, restricted and priced as of the day of the
initial transaction, at $.40 per share, the price paid by Mongoose for
the Common Stock purchased from Paxford.

The Company is interviewing other persons for membership on the Board
of Directors.

The Company indemnifies the past and present Directors to the maximum
extent permitted by Colorado law.

Change in Financial and Business Position

As a result of the recent change in control, there has been a change in
the financial position of the Company. Prior to December 14, 1998, the
Company had virtually no assets and no operations. The Company now has
assets, primarily in the form of commercial real estate holdings of
Beachside, and operates those holdings.

Bridge Funding

In order to raise the cash portion of the purchase price for the
Beachside stock, the Company borrowed $750,000 from GCA. The costs
associated with the transaction were the payment of an $82,500
consulting fee to affiliates of the Fund and the issuance of a Warrant
to purchase 60,000 shares of Common Stock to LKB Financial, LLC in
satisfaction of amounts owed to it for broker/finder services in
connection with the transaction.

NOTE L - RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards board
("FASB") issued Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income, effective for fiscal years beginning
after December 15, 1997. This statement, which must be adopted by the
Company

F-14
<PAGE> 49

LAHAINA ACQUISITIONS, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(CONTINUED)

by fiscal year ended September 30, 1999, establishes standards for the
reporting and display of comprehensive income and its components in
financial statements. Comprehensive income generally represents all
changes in shareholders' equity except those resulting from investments
by and distributions to owners. The Company believes it is in
compliance and this pronouncement did not have any material impact on
the Company. Currently, no differences exist between the Company's net
income or loss and comprehensive net income or loss.

In June 1997, the FASB issued Statement of Financial
Accounting Standards No. 131, Disclosure About Segments of an
Enterprise and Related Information ("SFAS No. 131"), effective for
fiscal years beginning after December 15, 1997. This statement, which
must be adopted by the Company by fiscal year ended September 30, 1999,
established standards for the way that public business enterprises
report information about operating segments in annual financial
statements and requires that those enterprises report information about
operating segments in interim financial reports. SFAS No. 131 also
establishes standards for related disclosures about products and
services, geographic areas and major customers. The Company believes it
is in compliance and this pronouncement did not have any material
impact on the Company.

In March 1998, the American Institute of Certified Public Accounts
("AICPA") issued Statement of Position 98-1, Accounting for the Costs
of Computer Software Developed For or Obtained For Internal Use ("SOP
NO. 98-1"). SOP No. 98-1 is effective for fiscal years beginning after
December 15, 1998. SO No. 98-1 will require the capitalization of
certain costs incurred after the date of adoption in connection with
developing or obtaining software for internal use. The Company believes
it is in compliance and this pronouncement did not have any material
impact on the Company.

NOTE M - SUBSEQUENT EVENTS

In January 1999, the Company reached an agreement with the
holder of its $25,000 note to convert it to the same terms as the
$750,000 convertible debenture with a maturity date of January 31,
2001. Therefore, the note was included in long-term debt. In order to
provide additional interim funding for the Company in its development
stage, the Company has entered into a lending agreement with GCA
Strategic Investment Fund, Ltd. This line provides for funding of up to
a maximum of $300,000 in accordance with certain terms and conditions.
The Fund is entitled to receive certain compensation for this line
including the issuance of up to 200,000 warrants, based on the amounts
drawn on the line, with a strike price of $2.60 per share of Common
Stock. These shares have been included in the fully diluted share
computation. As of the date of this filing, the Company has utilized
$150,000 of this line. A copy of this agreement is incorporated by
reference as an exhibit to this Registration Statement on Form S-1.

F-15
<PAGE> 50

KENNETH R. WALTERS, P.A.
P. O. Box 15361
Fernandina Beach, FL 32035

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and
Shareholders of
BEACHSIDE COMMONS I, INC.

We have audited the accompanying balance sheet of BEACHSIDE COMMONS I, INC., (a
Florida corporation) at December 7, 1998. This financial statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
of the balance sheet provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of BEACHSIDE COMMONS I. INC. at
December 7, 1998, in conformity with generally accepted accounting principles.

KENNETH R. WALTERS, P.A.

Fernandina Beach, Florida

February 26, 1999

F-16
<PAGE> 51

BEACHSIDE COMMONS I, INC.
FORMERLY A SUBSIDIARY OF MONGOOSE INVESTMENTS, LLC
BALANCE SHEET
DECEMBER 7, 1998

<TABLE>
<S> <C>
ASSETS
Current Assets
Prepaid Expenses ................................... $ 17,281
Escrow Funds ....................................... 30,000
-----------

Total Current Assets ............................... 47,281

Fixed Assets
Land .......................................... 400,000
Building ...................................... 2,403,623
Equipment ..................................... 143,738
Accumulated Depreciation ...................... (24,389)
-----------

Total Fixed Assets ................................. 2,922,972
-----------

TOTAL ASSETS ............................................ $ 2,970,253
===========

LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES
LIABILITIES
Current Liabilities
Accounts Payable .............................. 4,250
Security Deposits Payable ..................... 9,000
Note Payable .................................. 180,000
-----------
Total Current Liabilities .......................... $ 193,250

Long-Term Debt
Note Payable - Mortgage ....................... 1,550,000
-----------
Total Long-Term Debt ............................... 1,550,000
-----------

TOTAL LIABILITIES ....................................... $ 1,743,250

SHAREHOLDERS' EQUITY
Common stock, $1.00 par value, 500 shares authorized
500 shares issued and outstanding .................. 500
Additional Paid-In Equity - Common Stock ........... 1,226,503
-----------

TOTAL SHAREHOLDERS' EQUITY .............................. 1,227,003
-----------

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY ................ $ 2,970,253
===========
</TABLE>

See Notes to Financial Statements.

F-17
<PAGE> 52

BEACHSIDE COMMONS I, INC. FORMERLY
A SUBSIDIARY OF MONGOOSE INVESTMENTS, LLC
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENT
December 7, 1998

NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in
understanding the Company's financial statements. The financial statement and
notes are representations of the Company's management who are responsible for
their integrity and objectivity. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates. These
accounting policies conform to generally accepted accounting principles and have
been applied in the preparation of the financial statement.

COMPANY'S ACTIVITIES AND DEVELOPMENT STATE OPERATIONS

BEACHSIDE COMMONS I, INC. (the "Company"), was incorporated under the laws of
the State of Florida on September 25, 1998. The Company was created to own and
operate a commercial real estate development in Fernandina Beach, Florida in a
resort area of northeast Florida. The Company's year-end is December 31.

The Company's financial statement has been prepared in conformity with
principles of accounting applicable to a going concern. These principles
contemplate the realization of assets and liquidation of liabilities in the
normal course of business.

The Company is in the development state in accordance with SFAS No. 7,
Accounting and Reporting by Development State Enterprises. The Company believes
the guidelines of SFAS No. 7 to be applicable because some of its planned
operations have commenced, but there has been no significant revenue from them.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with maturity of three
months or less to be cash equivalents for the purpose of determining cash flows.

PROPERTY, EQUIPMENT AND DEPRECIATION

Property and equipment are stated at cost. Depreciation is provided using the
straight-line method at rates sufficient to allocate the costs of the applicable
assets over their estimated useful lives.

F-18
<PAGE> 53

BEACHSIDE COMMONS I, INC. FORMERLY
A SUBSIDIARY OF MONGOOSE INVESTMENTS, LLC
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENT
December 7, 1998
(continued)

ACCOUNTS PAYABLE CASH BOOK BALANCE

As of December 7, 1998, the Company had checks outstanding in excess of book
balances totaling $4,250, which have been classified as accounts payable.

NOTE B-NOTES PAYABLE

The carrying amount of notes payable approximates fair value and is based on the
current rates available to the Company for debt of the same remaining maturities
with similar collateral requirements. Notes payable at December 7, 1998,
consisted of the following:

<TABLE>
<S> <C>
Notes payable, consists of three notes, at an interest rate of 18%,
payable on demand, from individuals in the amounts of $85,000,
$50,000, and $20,000 $ 155,000
</TABLE>

NOTE C-LONG-TERM DEBT

Long-term debt at December 7, 1998, consists of the following:

<TABLE>
<S> <C>
Notes payable to Pacific Coast Investment Company, at an interest
rate of 15% Payable in monthly installments of Interest only.
The entire principle Balance is due and payable
November 11, 2003 $ 1,550,000
</TABLE>

Maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
Year Ending
December 31 Amount
----------- ------------
<S> <C>
1999 $ -0-
2000 -0-
2001 -0-
2002 -0-
2003 1,550,000
</TABLE>

F-19
<PAGE> 54

BEACHSIDE COMMONS I, INC. FORMERLY
A SUBSIDIARY OF MONGOOSE INVESTMENTS, LLC
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENT
December 7, 1998
(continued)

NOTE D-SHAREHOLDERS' EQUITY

The Company is authorized to issue 500 shares of common stock having a par value
of $1.00 per share. As of December 7, 1998, the Company has issued 500 common
shares.

NOTE E-RELATED PARTY TRANSACTIONS

Management fees payable in the amount of $240,000, interest payable in the
amount of $180,000, and reimbursement for operating expenses in the amount of
$10,873 payable to Richard P. Smyth, controlling shareholder of Mongoose
Investments, LLC, were converted to additional paid-in capital before December
7, 1998.

NOTE F-SUBSEQUENT EVENTS

On December 14, 1998, all outstanding common shares of the Company were
purchased from the former parent company, Mongoose Investments, LLC (Mongoose),
by Lahaina Acquisitions, Inc. (Lahaina) (a development stage company). The
purchase was effective as of December 7, 1998.

Lahaina paid the following for the Company's stock: 1,250,000 newly issued
shares of Common Stock of Lahaina, 1,910,000 newly issued shares of Series A
Convertible Preferred Stock of Lahaina and $667,500 in cash. At the same time,
Mongoose bought 300,000 shares of Common Stock in Lahaina from a shareholder. As
a result of these transactions, Mongoose owns 1,775,000 of the 2,246,500 shares
of Common Stock currently outstanding or approximately 79% of such shares.
Mongoose could own an additional 1,910,000 of Common Stock upon conversion of
its Series A Preferred Stock.

As a result of these transactions, the Company has become a wholly-owned
subsidiary of Lahaina. The value of the Company's stock was recorded at the
transferor's basis in a manner similar to a pooling of interest as described in
APB-16, Interpretation #39. The transferor's basis was equal to its historical
cost, or $2,970,094 as of December 7, 1998.

Selected financial data from the consolidated balance sheet of Lahaina
Acquisitions, Inc. as of December 31, 1998:

<TABLE>
<S> <C>
Current Assets $ 99,733
Fixed Assets 2,915,332
Total Assets 3,015,065
-----------
Current Liabilities 320,170
Long-term Debt 2,325,000
Total Equity 369,895
-----------
Total Liabilities and Equity $ 3,015,065
===========
</TABLE>

F-20
<PAGE> 55
===============================================================================

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................................... 2
Risk Factors......................................... 5
Use of Proceeds...................................... 10
Dividend Policy...................................... 10
Capitalization....................................... 10
Terms of Conversion; Terms of Exercise............... 11
Dilution............................................. 12
Selected Consolidated Financial Data................. 13
Management's Discussion and Analysis of
Financial Condition and Results of Operations...... 14
Change in Accountants................................ 17
Business............................................. 19
Management........................................... 22
Certain Transactions................................. 24
Principal and Selling Shareholders................... 25
Description of Capital Stock......................... 27
Shares Eligible for Future Sale...................... 30
Plan of Distribution................................. 30
Legal Matters........................................ 31
Experts.............................................. 31
Additional Information............................... 31
Index to Financial Statements........................ F-1
</TABLE>

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

UNTIL APRIL 11, 1999 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND
WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

===============================================================================

LAHAINA ACQUISITIONS, INC.

COMMON STOCK

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

PROSPECTUS

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

March 17, 1999
==============================================================================

<PAGE> 56

PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, to be paid in connection with the sale
of the Common Stock being registered, all of which will be paid by the
Registrant. All amounts are estimates except the registration fee and the NASD
filing fee.

<TABLE>
<S> <C>
Registration fee.......................................... $ 1,021.65
NASDAQ National Market listing fee........................ *
Blue Sky fees and expenses................................ 5,000
Accounting fees and expenses.............................. *
Legal fees and expenses................................... *
Transfer agent and registrar fees......................... *
Printing and engraving expenses........................... *
Miscellaneous expenses.................................... *
Total........................................... $ *
- ----------
</TABLE>

* To be completed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Sections 7-109-102 and 7-109-107 of the COLORADO Law ("Colorado Law") and
Article 7 of the Company's Amended and Restated Articles of Incorporation
provide for indemnification of the Company's Directors and officers in a variety
of circumstances which may include liabilities under the Act. Article 7 provides
that unless otherwise determined by the Board of Directors of the Company, the
Company shall indemnify to the full extent permitted by the laws of Colorado as
from time to time in effect, the persons described in Sections 7-109-102 and
7-109-107 of Colorado Law.

The general effect of the provisions in the Company's Amended and Restated
Articles of Incorporation and Colorado Law is to provide that the Company shall
indemnify its Directors and officers against all liabilities and expenses
actually and reasonably incurred in connection with the defense or settlement of
any judicial or administrative proceedings in which they have become involved by
reason of their status as corporate Directors or officers, if they acted in good
faith and in the reasonable belief that their conduct was neither unlawful (in
the case of criminal proceedings) nor inconsistent with the best interests of
the Company. With respect to legal proceedings by or in the right of the Company
in which a director or officer is adjudged liable for improper performance of
his duty to the Company or another enterprise which such person served in a
similar capacity at the request of the Company, indemnification is limited by
such provisions to that amount which is permitted by the court.

The Company intends to maintain officers' and Directors' liability insurance
which will insure against liabilities that officers and Directors of the Company
may incur in such capacities.

Reference is made to the Proposed Form of Underwriting Agreement filed as
Exhibit 1 which provides for indemnification of the Directors and officers of
the Company signing the Registration Statement and certain controlling persons
of the Company against certain liabilities, including those arising under the
Act in certain instances, of the Underwriters.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Since the Company's inception, the Company has made the following sales of
securities that were not registered under the Act:

1. As of December 7, 1998, the Company issued and sold 1,910,000 shares
of Series A Preferred Stock in a private placement for an aggregate
consideration of all the Common Stock of Beachside. In connection with such
transaction, the Company issued (i) 1,250,000 shares of Common Stock to
Mongoose, (ii) the Note convertible

II-2
<PAGE> 57

into 885,714 shares to GCA in exchange for $775,000 in cash, (iii) the GCA
Warrant exercisable for 100,000 shares of Common Stock for a purchase price of
$2.60 and 100,000 shares of Common Stock for a purchase price which is the
average of (A) the 30-day Weighted Average Sales price and (B) the Closing bid
price of the Company's Common Stock listed on the OTC Bulleting Board as
reported by Bloomberg, LP, on the draw down date, (iv) the GCA Right exercisable
for 25,000 shares of Common Stock, (v) the First LKB Warrant convertible to
60,000 shares of Common Stock in exchange for an initial purchase price of
$0.91875 per share, provided such purchase price shall be adjusted from time to
time pursuant to Article XI of the Securities Purchase Agreement by and between
Lahaina Acquisitions, Inc. and GCA Strategic Investment Fund Limited, dated
December 7, 1998 and (vi) the Second LKB Warrant convertible to 15,000 shares of
Common Stock with a purchase price equal to the average of the five closing bid
prices of the Company's Common Stock, listed on the OTC Bulletin Board as
reported by Bloomberg, LP, prior to the closing date. The term of the Second LKB
Warrant will begin at the closing date and continue through five years from the
closing date. Such Sales of Series A Preferred Stock and Common Stock were made
in reliance on the exemption from registration provided by Section 4(2) of the
Act.

2. [Reserved]

3. [Reserved]

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
- ------ ----------- -----
<S> <C> <C>
2.1 Stock Purchase Agreement dated December 3, 1998, by and between Lahaina Acquisitions, Inc.
and Mongoose Investments, LLC (1) .....................................................................
2.2 Common Stock Purchase Warrant in the amount of 60,000 shares to be issued by Lahaina
Acquisitions, Inc. and purchased by LKB Financial, LLC, expiring on December 20, 2003 (1)..............
3.1 Amended and Restated Articles of Incorporation (2).....................................................
3.2 Bylaws of the Company (2)..............................................................................
4.1 Securities Purchase Agreement dated December 7, 1998, by and between Lahaina Acquisitions,
Inc. and GCA Strategic Investment Fund Limited (1) ....................................................
4.2 9% Convertible Note of Lahaina Acquisitions, Inc. payable to GCA Strategic Investment Fund
Limited, in the principal amount of $750,000 (1) ......................................................
4.3 Letter Agreement dated January 19, 1999 by and between Lahaina Acquisitions, Inc. and GCA
Strategic Investment Fund, Ltd. Amending 9% Convertible Note (3).......................................
4.4 Registration Rights Agreement dated December 7, 1998, by and between Lahaina Acquisitions,
Inc. and GCA Strategic Investment Fund Limited (1).....................................................
4.5 Letter Agreement dated January 19, 1999 by and between Lahaina Acquisitions, Inc. and GCA
Strategic Investment Fund, Ltd. Confirming conversion of $25,000 Beachside Commons Note (3)............
4.6 Working Capital Line dated January 19, 1999, by and between Lahaina Acquisitions, Inc. and
GCA Strategic Investment Fund, Ltd. (3)...............................................................
4.7 Form of Stock Certificate (2)..........................................................................
4.8 Note Guaranty by Richard P. Smyth with respect to $300,000 of indebtedness of Lahaina
Acquisitions, Inc. (3).................................................................................
4.9 18% Note of Mongoose Investments, LLC payable to Elaine Oppenheimer, in the principal amount
of $85,000. This note was transferred to Lahaina Acquisitions, Inc. On December 7, 1998. (3)..........
4.10 18% Note of Mongoose Investments, LLC payable to Nancy Estroff Smyth in the principal amount
of $50,000. This note was transferred to Lahaina Acquisitions, Inc. on December 7, 1998. (3)..........
4.11 18% Note of Mongoose Investments, LLC payable to Nancy Estroff Smyth in the principal amount
of $20,000. This note was transferred to Lahaina Acquisitions, Inc. on December 7, 1998...............
4.12 Right to receive 25,000 shares of Common Stock in consideration for entering into promissory note
in the principal amount of $25,000
5.1* Opinion and Consent of Paul, Hastings, Janofsky & Walker LLP...........................................
10.1* Form of Indemnification Agreement between Lahaina Acquisitions, Inc. and its Directors and
Officers...............................................................................................
10.2 Contract of Engagement dated January 19, 1999 by and between Lahaina Acquisitions, Inc. and
LKB Financial LLC (3)..................................................................................
23.1* Consent of Paul, Hastings, Janofsky and Walker LLP (included in Exhibit 5.1)...........................
23.2 Letter of Doran Peck, C.P.A.s, P.C. ...................................................................
23.3 Letter of Kenneth R. Walters, P.A. ....................................................................
24.1 Power of Attorney (included on the signature page to this registration statement)......................

</TABLE>

II-3
<PAGE> 58
<TABLE>
<S> <C> <C>
99.1 Form of Press Release dated December 24, 1998(1).......................................................
</TABLE>

*To be filed by Amendment.
(1) Incorporated by reference to the Company's Current Report on Form 8-K,
filed December 28, 1998.
(2) Incorporated by reference to the Registration Statement on Form 10,
filed December 29, 1995.
(3) Incorporated by reference to the Company's Quarterly Report on Form
10-Q, Filed February 25, 1999.

(b) Financial Statement Schedules

ITEM 17. UNDERTAKINGS

(a) The Company hereby undertakes:

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

(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) (ss.230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;

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

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

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

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

II-4
<PAGE> 59

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, Fernandina Beach, State of
Florida, on March 2, 1999.

Lahaina Acquisitions, Inc.

By: /s/ Richard P. Smyth
----------------------------
Richard P. Smyth
Chairman

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard P. Smyth and Gerald F. Sullivan, and each
of them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and re-substitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any other regulatory authority, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as such
person might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or either of them, or their or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ Richard P. Smyth
-----------------------------------
Richard P. Smyth Chairman of the Board, Chief March 2, 1999
Executive Officer, Treasurer and
Director

/s/ Gerald F. Sullivan
-----------------------------------
Gerald F. Sullivan Vice Chairman, Secretary and March 3, 1999
Director

/s/ D. Nelson Lester
-----------------------------------
D. Nelson Lester Director March 4, 1999

/s/ Sidney E. Brown
-----------------------------------
Sidney E. Brown Director March 3, 1999
</TABLE>

<PAGE> 60

EXHIBIT INDEX

<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
<S> <C> <C>
2.1 Stock Purchase Agreement dated December 3, 1998, by and between Lahaina Acquisitions, Inc.
and Mongoose Investments, LLC (1) .....................................................................
2.2 Common Stock Purchase Warrant in the amount of 60,000 shares to be issued by Lahaina
Acquisitions, Inc. and purchased by LKB Financial, LLC, expiring on December 20, 2003 (1) .............
3.1 Amended and Restated Articles of Incorporation (2).....................................................
3.2 Bylaws of the Company (2)..............................................................................
4.1 Securities Purchase Agreement dated December 7, 1998, by and between Lahaina Acquisitions,
Inc. and GCA Strategic Investment Fund Limited (1) ....................................................
4.2 9% Convertible Note of Lahaina Acquisitions, Inc. payable to GCA Strategic Investment Fund
Limited, in the principal amount of $750,000 (1) ......................................................
4.3 Letter Agreement dated January 19, 1999 by and between Lahaina Acquisitions, Inc. and GCA
Strategic Investment Fund, Ltd. Amending 9% Convertible Note (3).......................................
4.4 Registration Rights Agreement dated December 7, 1998, by and between Lahaina Acquisitions,
Inc. and GCA Strategic Investment Fund Limited (1) ....................................................
4.5 Letter Agreement dated January 19, 1999 by and between Lahaina Acquisitions, Inc. and GCA
Strategic Investment Fund, Ltd. Confirming conversion of $25,000 Beachside Commons Note (3)............
4.6 Working Capital Line dated January 19, 1999, by and between Lahaina Acquisitions, Inc. and
GCA Strategic Investment Fund, Ltd. (3)...............................................................
4.7 Form of Stock Certificate (2)..........................................................................
4.8 Note Guaranty by Richard P. Smyth with respect to $300,000 of indebtedness of Lahaina
Acquisitions, Inc. (3).................................................................................
4.9 18% Note of Mongoose Investments, LLC payable to Elaine Oppenheimer, in the principal amount
of $85,000. This note was transferred to Lahaina Acquisitions, Inc. On December 7, 1998. (3)..........
4.10 18% Note of Mongoose Investments, LLC payable to Nancy Estroff Smyth in the principal amount
of $50,000. This note was transferred to Lahaina Acquisitions, Inc. on December 7, 1998. (3)..........
4.11 18% Note of Mongoose Investments, LLC payable to Nancy Estroff Smyth in the principal amount
of $20,000. This note was transferred to Lahaina Acquisitions, Inc. on December 7, 1998...............
4.12 Right to receive 25,000 shares of Common Stock in consideration for entering into promissory
note in the principal amount of $25,000.
5.1* Opinion and Consent of Paul, Hastings, Janofsky & Walker LLP...........................................
10.1* Form of Indemnification Agreement between Lahaina Acquisitions, Inc. and its Directors and
Officers...............................................................................................
10.2 Contract of Engagement dated January 19, 1999 by and between Lahaina Acquisitions, Inc. and
LKB Financial LLC (3)..................................................................................
23.1* Consent of Paul, Hastings, Janofsky and Walker LLP (included in Exhibit 5.1)...........................
23.2 Letter of Doran Peck, C.P.A.s, P.C. ...................................................................
23.3 Letter of Kenneth R. Walters, P.A. ....................................................................
24.1 Power of Attorney (included on the signature page to this registration statement)......................
99.1 Form of Press Release dated December 24, 1998(1).......................................................

*To be filed by Amendment.
(1) Incorporated by reference to the Company's Current Report on Form 8-K, filed December 28, 1998.
(2) Incorporated by reference to the Registration Statement on Form 10, filed December 29, 1995.
(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q, Filed February 25,
1999.
</TABLE>

<PAGE> 1

EXHIBIT 4.11

PROMISSORY NOTE
$20,000 Fernandina Beach, Florida

As of September 30, 1998

FOR VALUE RECEIVED, MONGOOSE INVESTMENTS, LLC., a Georgia Limited
Liability Registrant (hereinafter referred to as "Payer"), promises to pay to
the order of NANCY ESTROFF SMYTH, an individual (hereinafter referred to as
"Holder"), the principal sum of Twenty Thousand Dollars ($20,000). Said
principal shall bear interest at the rate of eighteen percent (18%). Interest
shall due and payable on so much of the principal as has been disbursed form
time to time and shall be calculated on the basis of a three hundred sixty
(360) day year. Principal and interest shall be at such place as Holder may
designate and shall mature and be payable on demand. Payer acknowledged and
agrees that any amounts which have been disbursed prior to the execution hereof
are covered by and included in the principle amount hereunder.

Payments shall be made in currency of the United States of America,
which at the time of payment shall be legal tender for the payment of public
and private debts.

Payer shall have the right to prepay the principle amount outstanding
in whole or in part at any time without penalty. Payer hereby waives all
presentment, demand, notice of dishonor, and protest. Payer hereby renounces
and waives all exemption rights allowed by the Constitution and law of Florida
or any other State of the United States, as against this Note or any renewal
thereof.

If Payer fails to pay any amount payable hereunder within five (5)
days of demand, Payer shall be in default hereunder. in addition, a default
shall exist hereunder upon the occurrence of any of the following events: (I)
Payer becomes insolvent as defined in the Uniform Commercial Code as in effect
at the time in Florida; (ii) Payer makes an assignment for the benefit of
creditors or riles a petition in bankruptcy; or (iii) a default shall exist
under the terms of the stock Pledge Agreement executed by the Payer on this
date.

Payer acknowledged that its obligation to pay all sums due under this
Note is absolute and unconditional and that such obligation is not subject to
any defense, counterclaim, right or setoff or recoupment.

Payer shall pay all costs of collection, including, but not limited
to, reasonable attorneys' fees if collected by and through an attorney at law.
The instrument shall be governed by and interpreted in accordance with the laws
of the State of Florida. Payer acknowledges that this Note has been entered
into and monies advanced in the State of Florida, and Payer acknowledged and
agrees that Payer is personally subject to the jurisdiction of the State of
Florida.

Payer, as used herein, shall include the undersigned and all
endorsers, guarantors, and sureties of this Note, and shall al so include the
legal representatives, successors and assigns of the Payer, all of whom shall
be jointly and severally liable hereunder. words herein importing the masculine
shall include females, and words importing persons shall include bodies
corporate, and the singular shall include the plural, and vice-versa. The
rights of Holder hereunder shall inure to the benefit of its legal
representatives, successors and assigns.

Except for any notice required under applicable law to be given in
another manner, any notice provided for in this Note shall be given in writing,
by hand delivery or by mailing such notice by certified mail, postage prepaid
to the address shown below or to such other address as either party may
designate by notice to the other as provided herein. Any notice provided for in
this Note shall be deemed to have been given to Payer or Holder when given in
the manner designated herein. Notice given as hereinabove provided shall be
deemed received by the party to whom it is addressed on the third calendar day
following the date on which said notice is deposited in the mail.

<PAGE> 2

<TABLE>

<S> <C> <C>
(a) TO HOLDER: Nancy Estroff Smyth
7276 Sanctuary Lane
Fernandina Beach, Florida 32034

(b) TO PAYOR: Mongoose Investments, LLC
7276 Sanctuary Lane
Fernandina Beach, Florida 32034
</TABLE>

The waiver of a breach of any provision, term or condition of this
Note shall not operate or be construed as a waiver of any subsequent breach,
and the acceptance of a past due payment shall not be construed as a waiver of
Holder's rights to require strict compliance with all terms and conditions
herein.

Time is of the essence of this Note.

IN WITNESS WHEREOF, the undersigned have caused this Note to be
executed this _____ day of _________, 1999.

Mongoose Investments, LLC

By:

Richard Smyth

THIS NOTE SHALL BE TRANSFERRED AND ASSIGNED TO LAHAINA ACQUISITIONS, INC., AS
OF DECEMBER 7, 1998 AS A PART OF THE ACQUISITION OF THE STOCK OF BEACHSIDE
COMMONS I, INC.

By:
Richard Smyth, Chairman, Lahaina Acquisitions, Inc.

By:
Gerald Sullivan, Vice Chairman, Lahaina Acquisitions,
Inc.

<PAGE> 1

EXHIBIT 4.12

BEACHSIDE COMMONS I, INC.
2900 Atlantic Avenue
Fernandina Beach, Florida 32034

November 4, 1998

Joe Kelly
GCA Strategic Investment Fund, Ltd.
c/o Prime Management Limited
Mechanics Building
12 Church Street
Hamilton HM 11, Bermuda

Re: Promissory Note in the Principal Amount of $25,000 (the "Note")

Dear Mr. Kelly:

In consideration for entering into the Note, Beachside Commons I, Inc.
("Beachside") hereby agrees to grant to GCA Strategic Investment Fund Limited
("GCA"), the right to receive 25,000 shares of Beachside, or any entity that
Beachside Commons acquires or merges, common stock at such time as Beachside
Commons, or its successor entity, becomes a Publicly Traded Company.

As such time as Beachside becomes a public company, the common stock
issued to GCA shall contain the following legend:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THESE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT FOR DISTRIBUTION OR RESALE. THEY MAY NOT BE MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 OR AN
OPINION OF COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER
THE ACT."

These shares of Common Stock shall have the following "piggy back"
registration rights:

"GCA, and its assigns, shall have the right to include all of the
shares of Common Stock (the "Registrable Securities") as part of any
registration of securities filed by Beachside, or its successor entity (other
than in connection with a transaction contemplated by Rule 145(a) promulgated
under the Act or pursuant to Form S-8) and GCA must be notified in writing of
such a filing. GCA and its assigns, shall have five (5) business days to notify
Beachside in writing as to whether Beachside is to include GCA and its assigns,
or not include GCA and its assigns, as part of the registration; provided,
however, that if any such registration shall be underwritten, in whole or in
part, Beachside may require that the Registrable Securities requested for
inclusion be included in the underwriting on the same terms and conditions as
the securities otherwise being sold through the underwriters. If in the good
faith judgment of the underwriter evidenced in writing of such offering only a
limited number of Registrable Securities should be included in such offering,
or no such shares should be included, GCA and its assigns, and all other
selling stockholders, shall be limited to registering such proportion of their
respective shares as shall equal the proportion that the number of shares of
selling stockholders permitted to be registered by the underwriter in such
offering bears to the total number of all shares then held by all selling
stockholders desiring to participate in such offering."

Beachside will indemnify and hold harmless GCA and its assigns, and
the respective officers, directors, employees and controlling persons of each
against all liabilities and expenses reasonably incurred in connection with and
any amount paid in settlement of any proceeding or any claim asserted to which
any of them may become subject under the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, or any other state or federal
law insofar as such liabilities and expenses arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, registration statement or prospectus or any
amendment or supplement to the registration statement or the prospectus or the
omission or alleged omission to

<PAGE> 2

state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading, all as of the date when such
registration statement or such amendment or supplement, as the case may be,
becomes effective, or filed or any untrue statement or alleged untrue statement
of a material fact contained in the prospectus (as amended or as supplemented
if Beachside shall have filed with the SEC any amendments thereof or
supplements thereto), or omission or alleged omission to state therein a
materials fact necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading, provided, however,
that the indemnity agreement contained herein shall not apply to any amounts
paid in settlement of any litigation if such settlement is effected without the
consent of Beachside, nor shall it apply to GCA or any person controlling GCA
in respect of any losses, claims, damages, liabilities or actions arising out
of, or based upon any such untrue statement or alleged untrue statement, or any
such omission or alleged omission, if such omission was made in reliance upon
information within the knowledge of GCA and furnished in writing to Beachside
by GCA specifically for use in connection with preparation of the registration
statement or the prospectus or any such amendment thereof or supplement
thereto.

Very truly yours,

Richard Smyth
Director

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the inclusion in this Registration Statement on Form
S-1 of our report dated December 12, 1996 on our audits of the financial
statements and financial statement schedules of Lahaina Acquisitions, Inc. We
also consent to the reference to our Firm under the caption "Experts."

/s/ Doran Peck, C.P.A., P.C.
----------------------------
Doran Peck, C.P.A., P.C.

Denver, Colorado
March 1, 1999

<PAGE> 1
EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the inclusion in this Registration Statement on
Form S-1 of our report dated February 26, 1999 on our audit of the financial
statement of Beachside Commons I, Inc. and of our reports dated March 16, 1999
on our audit of the financial statements of Lahaina Acquisitions, Inc. We also
consent to the reference to our firm under the caption "Experts."

/s/ Kenneth R. Walters
------------------------
Kenneth R. Walters, P.A.

Fernandina Beach, Florida
March 16, 1999