LAHAINA ACQUISITIONS INC, 10-Q/A, 1999-10-29

LAHAINA ACQUISITIONS INC
10-Q/A, 1999-10-29
REAL ESTATE

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended Commission File Number
June 30, 1999 #0-27480

LAHAINA ACQUISITIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

COLORADO 84-1325695
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)

5895 Windward Parkway, Suite 220
Alpharetta, Georgia 30005
------------------------------------------------
(Address, Including Zip Code, of Principal Executive Offices)

Registrant's Telephone Number, Including Area Code (770) 754-6140

NOT APPLICABLE
--------------
(Former Name, Former Address, and Former Fiscal Year If Changed
since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act or 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes x No
--- ---

Indicate the number of shares of each of the issuer's classes of common stock,
as of the latest practical date.

Class of Common Stock Outstanding at August 18, 1999
no par value 2,906,343 shares issued & outstanding
4,756,500 shares fully diluted

<PAGE> 2

LAHAINA ACQUISITIONS, INC. AND SUBSIDIARY
INDEX TO FORM 10-Q

<TABLE>
<CAPTION>
PART I -- FINANCIAL INFORMATION PAGE

<S> <C> <C> <C>
ITEM 1 Financial Statements

Consolidated Balance Sheets for June 30, 1999 3
and for December 7, 1998

Consolidated Statements of Operations for the 4
Three Months Ended June 30, 1999 and for the
Period from Inception to June 30, 1999

Consolidated Statements of Changes in Shareholders' 5
Equity for the Period from Inception to June 30,
1999

Consolidated Statements of Cash Flows for the 6
Period from Inception to June 30, 1999

Notes to Consolidated Financial Statements for the 7
Period from Inception to June 30, 1999

ITEM 2 Management's Discussion and Analysis of Financial 14
Condition and Results of Operations

PART II -- OTHER INFORMATION

ITEM 6 Exhibits and Reports on Form 8-K 17

SIGNATURES
</TABLE>

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<PAGE> 3

LAHAINA ACQUISITIONS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
JUNE 30, 1999
(UNAUDITED) DECEMBER 7, 1998
---------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash ............................................... $ 60,261 $ --
Accounts Receivable ................................ 10,000 --
Prepaid Expenses ................................... -- 17,281
Note Receivable .................................... -- --
Escrow Funds ....................................... 31,000 30,000
---------- ----------
Total Current Assets .................................. 101,261 47,281

Fixed Assets
Land ............................................... 400,000 400,000
Buildings .......................................... 2,434,289 2,403,623
Equipment .......................................... 150,279 143,738
Accumulated Depreciation ........................... (82,769) (24,389)
---------- ----------
Total Fixed Assets .................................... 2,901,799 2,922,972

Other Assets
Offering Costs & Reserve ........................... 139,251 --
Notes Receivable ................................... 62,000 --
Other .............................................. -- --
---------- ----------
201,251 --

TOTAL ASSETS ............................................ $3,204,311 $2,970,253
========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Accounts Payable ................................... 540,294 4,250
Notes Payable - Shareholder ........................ -- --
Notes Payable - Others ............................. -- 180,000
Accrued Interest Payable ........................... -- --
Other Current Liabilities .......................... -- --
Security Deposits Payable .......................... 9,000 9,000
---------- ----------
Total Current Liabilities ............................. 549,294 193,250

Long-term Debt
Note Payable - Mortgage ............................... 1,550,000 1,550,000
Note Payable - Convertible Debenture .................. 775,000 --
---------- ----------
Total Long-term Debt .................................... 2,325,000 1,550,000
---------- ----------

TOTAL LIABILITIES ....................................... 2,874,294 1,743,250

SHAREHOLDERS' EQUITY
Preferred Series A Convertible Stock, 10,000,000 Shares
Authorized, 1,910,000 Shares Issued and
Outstanding at June 30, 1999 (Unaudited) and
December 7, 1998 .................................... -- --
Common Stock, $1.00 Par Value, 500 Shares Authorized,
500 Shares Issued and Outstanding
at December 7, 1998 ................................. -- 500
Common Stock, No Par Value, 800,000 Shares Authorized,
2,493,833 Shares Issued and Outstanding at
June 30, 1999 (Unaudited) ........................... 1,093,171 --

Additional Paid-in Capital - Common Stock ............. -- 1,247,069
Retained Deficit ...................................... (763,154) (20,566)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY .............................. 330,017 1,227,003
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .............. $3,204,311 $2,970,253
========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

-3-
<PAGE> 4

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

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FROM INCEPTION
FOR THE THREE (SEPTEMBER 25,
MONTHS ENDED 1998) THROUGH
JUNE 30, 1999 JUNE 30, 1999
(UNAUDITED) (UNAUDITED)
----------------------------------------
<S> <C> <C>
REVENUE: .................. $ 62,158 $ 143,713
Operating Expenses ...... 347,119 702,221
---------- ----------
Operating Loss .......... (284,961) (558,508)
Interest Expense ........ (78,406) (204,646)
---------- ----------
Net Loss................. $ (363,367) $ (763,154)
---------- ----------
INCOME (LOSS) PER SHARE:
Basic ................... $ (0.15) $ (0.31)
Shares for Basic......... 2,433,833 2,433,833
Diluted.................. $ (0.15) $ (0.31)
Shares for Diluted....... 6,251,500 6,251,500

</TABLE>

See accompanying Notes to the Consolidated Financial Statements.

-4-
<PAGE> 5

LAHAINA ACQUISITIONS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
SERIES A
PREFERRED STOCK -- COMMON STOCK --
NO PAR VALUE NO PAR VALUE ADDITIONAL TOTAL
-------------------- -------------------- PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT EQUITY
--------- -------- --------- -------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 24, 1998 (date of
inception)............................ -- $ -- -- $ -- $ -- $ -- $ --
Issuance of common stock................ -- -- 500 500 -- -- 500
Non-cash capital contributions.......... -- -- -- -- 1,247,069 -- 1,247,069
Net Loss................................ -- -- -- -- -- (20,566) (20,566)
--------- -------- --------- -------- ---------- --------- ----------
Balance at December 7, 1998............. -- -- 500 500 1,247,069 (20,566) 1,227,003
Adjustment for Merger................... -- -- -- (500) 500 -- --
--------- -------- --------- -------- ---------- --------- ----------
Balance at December 7, 1998, as
adjusted.............................. -- -- 500 -- 1,247,569 (20,566) 1,227,003
Cash Distribution....................... -- -- -- -- (667,500) -- (667,500)
Issuance of common preferred stock for
acquired company...................... 1,910,000 -- 2,246,000 -- (7,065) -- (7,065)
Net Loss................................ -- -- -- -- -- (182,543) (182,543)
--------- -------- --------- -------- ---------- --------- ----------
Balance at December 31, 1998
(Unaudited)........................... 1,910,000 -- 2,246,500 -- 573,004 (203,109) 369,895
Issuance of common stock................ -- -- 75,000 -- 30,000 -- 30,000
Net Loss................................ -- -- -- -- -- (196,678) (196,678)
--------- -------- --------- -------- ---------- --------- ----------
Balance at March 31, 1999 (Unaudited)... 1,910,000 -- 2,321,500 -- 603,004 (399,787) 203,217
Issuance of common stock................ -- -- 232,333 -- 577,867 -- 577,867
Repurchase and retirement of treasury
stock................................. -- -- (60,000) -- (87,700) -- (87,700)
Net Loss................................ -- -- -- -- -- (363,367) (363,367)
--------- -------- --------- -------- ---------- --------- ----------
Balance at June 30, 1999 (Unaudited).... 1,910,000 $ -- 2,493,833 $ -- $1,093,171 $(763,154) $ 330,017
========= ======== ========= ======== ========== ========= ==========
</TABLE>

The accompanying notes are an integral part of these financial statements

-5-
<PAGE> 6
LAHAINA ACQUISITIONS INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
From Inception
(September 25,
1998) through
June 30, 1999
(Unaudited)
--------------
<S> <C>
Net loss $ (763,154)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 58,380
Expenses paid on behalf of the company by the majority shareholder 11,538
(Increase) decrease in:
Accounts receivable (10,000)
Prepaid expenses 18,835
Escrow funds (1,000)
Notes payable (62,000)
Offering costs (139,251)
Increase in accounts payable 533,201
--------------
Net cash used in operating activities (353,451)
--------------

CASH FLOWS USED IN OPERATING ACTIVITIES - capital expenditures (33,955)
--------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of notes payable 1,172,867
Proceeds from the issuance of common stock 30,000
Cash distribution (667,500)
Repurchase and retirement of common stock (87,700)
--------------
Net cash provided by financing activities 447,667
--------------

Net increase in cash 60,261

Cash at beginning of period --
--------------
Cash at end of period $ 60,261
==============

Supplemental disclosure of non-cash items

Non-cash capital contributions by majority stockholder 1,247,569
==============
Purchase of Lahaina Acquisitions, Inc. $ (7.065)
==============
Conversion of line of credit into common stock $ 277,500
==============
Conversion of loan to majority stockholder into additional paid-in capital $ 135,367
==============
Assumption of debt by majority stockholder $ 165,000
==============
</TABLE>

The accompanying notes are an integral part of these financial statements.

-6-

<PAGE> 7
Lahaina Acquisitions, Inc. and Subsidiary
Notes to Consolidated Financial Statements
For the Period from Inception (September 25, 1998) through June 30, 1999
(Unaudited)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As discussed further in Note M, Lahaina Acquisitions, Inc. ("Lahaina")
acquired Beachside Commons I, Inc. ("Beachside") (collectively, the "Company")
on December 7, 1998. The purchase was accounted for as a reverse acquisition,
whereby Beachside was determined to be the accounting acquiror in accordance
with Staff Accounting Bulletin No. 97 (SAB 97). The assets and liabilities of
Lahaina were recorded at the historical cost basis as it was a shell company
at December 7, 1998.

This summary of significant accounting policies is presented to assist in
understanding the Company's financial statements. The financial statements 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. All
adjustments have been made that, in the opinion of management, are necessary
for a fair statement of the results of the interim period. Other than the
acquisition of Beachside Commons I, Inc. ("Beachside") described in Note O, all
adjustments made have been of a normal and recurring nature. 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 Registrant'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.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Registrant 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.

NOTE B - ACCOUNTS RECEIVABLE

Accounts receivable includes a $10,000 advance against accrued salary to a
director.

NOTE C - NOTES RECEIVABLE

Notes receivable were reduced from the prior period as a result of the purchase
of a note due from a customer, whose balance was $87,700 at March 31, 1999 and
approximately $200,000 at June 30, 1999 which was purchased from the Company
through the Redemption of 60,000 shares of the Registrant's Common Stock. The
purchaser was Mongoose Investments, LLC. ("Mongoose"), the largest shareholder
of the Company. The managing member of Mongoose is Richard P. Smyth, who is
also the Company's Chairman and CEO. The purchase of the notes was part of the
sale of the assets of JP Concepts, Inc. ("JP Concepts") a restaurant operation
located at Beachside Commons, which was purchased by the Registrant on April 1,
1999, through the issuance of 20,000 shares of Common Stock and a note payable
from the Registrant of $10,000.

The operation was not deemed to be important to the Registrant based on the
Registrant's pending merger with The Accent Group, Inc. ("Accent"), was not
profitable, and was not expected to achieve profitability in the near term.
Included in the amounts owed to the Company by JP Concepts were amounts due
for rent at Beachside Commons through September 1999. Mongoose has agreed to
assume all responsibilities of the existing lease between JP Concepts and
Beachside. The Board of Directors of the Company has deemed this transaction
to be more favorable to the Company than any other third party transaction
which it may have considered with regard to the disposition of the JP Concepts
assets.

-7-
<PAGE> 8

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

PRINCIPLES OF 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

NOTE B - ACCOUNTS RECEIVABLE

Accounts receivable includes a $10,000 advance against accrued salary to a
director.

NOTE C - NOTES RECEIVABLE

-8-
<PAGE> 9
<TABLE>
<S> <C>
An operating loan to 1st Southern Mortgage ("1st Southern"), secured by
security interest in outstanding stock, due through December 31, 1999,
bearing interest at 10% per annum. $62,000
</TABLE>

NOTE D - OFFERING COSTS - RESERVE
Offering costs reserve consists of costs incurred in preparation of the S-1
Registration Statement filing in the amount of $139,251. Upon completion of the
S-1 Registration Statement, these costs will be charged against the equity
accounts. If the S-1 Registration Statement is abandoned, these costs will be
expensed as administrative costs. Management expects the shares involved in the
S-1 Registration Statement to be issued during the Company's fiscal fourth
quarter, at which time this reserve would be eliminated.

NOTE E - MERGER COSTS

Expenses charged against earnings during this quarter include costs associated
with the planned merger with Accent, include legal, travel and consulting costs
related to the transaction in the amount of approximately $150,000.

NOTE F - NOTES PAYABLE - CONVERSION OF LINE OF CREDIT

During the period the Company converted its working capital loan from GCA
Strategic Investment Fund Limited into shares of the Company's Common Stock.
The Company issued 146,667 shares in consideration of an outstanding balance
of approximately $300,000 or $2.05 per share, including accrued interest and
fees.

NOTE G - NOTES PAYABLE - REDUCTION BY SHAREHOLDER

As of June 30, 1999, for no additional consideration, the Company's largest
shareholder has agreed to assume three notes payable, whose balance at June 30,
1999 was approximately $165,000, including principal and accrued interest.
Further, the Company's largest shareholder has waived the obligations of the
Company to repay its line of credit with the Company whose balance at
June 30, 1999 was approximately $135,000. These transactions resulted in a
reduction of liabilities of approximately $300,000.

NOTE H - LONG-TERM DEBT

Long-term debt at June 30, 1999, consisted of the following:
<TABLE>
<S> <C>
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 principal is due and
payable November 11, 2003. $1,550,000
</TABLE>

-9-
<PAGE> 10
<TABLE>
<S> <C>
Note payable to GCA Strategic Investment Fund, Ltd.(1), dated December 4, 1998
(secured by a second mortgage on the Beachside Commons property), and
a $25,000 note payable to GCA Strategic Investment Fund, Ltd. dated
November 4, 1998, both at an interest rate of 9%, maturing January 31, 2001
with interest payable quarterly in arrears on the last day of March, June, $ 775,000
September and December of each year until the maturity date. See Note M -
Significant Events

----------
$2,325,000
==========
</TABLE>

(1) These notes include certain provisions, including issuance of warrants and
conversion to common stock.

Maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
Year Ending
June 30 Amount
----------- ------
<S> <C>
1999 -0-
2000 -0-
2001 775,000
2002 -0-
2003 1,550,000
</TABLE>

NOTE H - STOCKHOLDERS' EQUITY

The components of stockholders' equity are as follows:

-10-
<PAGE> 11

Preferred stock consists of 9.5% cumulative preferred stock of no par value
with a liquidation value at $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 June 30,
1999. This stock may be converted into Common Stock of the Company 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 2,493,833 shares issued and outstanding at June 30, 1999.

NOTE I - RELATED PARTY TRANSACTIONS

Included in current debt is a loan from the Company to 1st Southern for
$62,000. The Company has an option to acquire. 1st Southern, which is
currently owned by the son of the Company's Vice Chairman. The Vice Chairman
of 1st Southern is a director of the Company. Should the acquisition be
completed, the total consideration given would be the outstanding amount of
this loan.

During the quarter the Company acquired, then disposed of, the assets of JP
Concepts, a restaurant operation and tenant in the Company's Beachside
Commons project. The assets were sold to the Company's largest shareholder,
Mongoose. See Note "C".

JP Concepts was responsible for approximately 50% of the Company's revenues
during this quarter.

NOTE J - INCOME TAXES

The Company has net operating loss carry-forwards of approximately $316,000
which are available to offset future taxable income. The loss carry-forwards
expire $8,000 in 2016, $46,000 in 2017, $53,000 in 2018 and $209,000 in 2019. A
valuation has been established in the full amount of the deferred tax benefit
resulting from the net operating loss carry-forwards for each of the periods
ending June 30, 1999.

-11-

<PAGE> 12

NOTE K - LEGAL PROCEEDINGS

The Company is party from time to time to various legal proceedings. In the
opinion of management, there are no matters which might have a material impact
on the Company's financial position or results of operations.

NOTE L - RESERVE FOR DOUBTFUL ACCOUNTS

The Company has not taken any reserves for its accounts receivable or notes
receivable at this time, though it may change this policy in the future based on
its experiences with respect to collections.

NOTE M - SIGNIFICANT EVENTS

As a result of the Company's merger on December 14, 1998 the Company became a
holding company with an operating subsidiary.

Acquisition Transaction

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 Registrant; 1,910,000 newly issued shares
of Series A of Preferred Stock, of the Registrant 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 Registrant
under the Original Note, before amendment.

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.

As a result of the above transactions, a change in the control of the Company
occurred in that Mongoose owns 1,715,000 shares of the 2,493,833 shares of
Common Stock outstanding on June 30, 1999 or approximately 70% 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 convertible debenture and the exercise of the warrants will
result in an additional 1,200,000 to 2,100,000 shares of Common Stock being
issued. According to current estimates, the convertible debenture as amended
will convert into 885,714 shares of Common Stock. The warrant attached to the
line of credit is exercisable for 200,000 shares of Common Stock, the warrant
issued December 4, 1998 is exercisable for 60,000 shares of Common Stock, the
warrant attached to the convertible debenture is exercisable for 15,000 shares
of Common Stock and the 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

-12-

<PAGE> 13

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.

Bridge Funding

In order to raise the cash portion of the purchase price for the Beachside
stock, the Registrant 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.

The Company has received additional operating loans from GCA Strategic
Investment Fund, Ltd. in the form of three ninety-day convertible notes that
total $300,000. The notes include up-front charges totaling $48,000. The charges
expensed during the nine months ended June 30, 1999 totaled $52,500, including
discounted amounts. On June 1, 1999 the Company converted this Note into 146,667
shares of Common Stock. (See Note F.)

Acquisitions and Dispositions During the Period

As of March 31, 1999, the Registrant had agreements for the acquisition of three
companies: Klein Real Estate Services ("KRES"), JP Concepts and 1st Southern. On
June 30, 1999, and in other subsequent press releases the Company has announced
its plans to merge with Accent, an Atlanta, GA based Real Estate and Mortgage
Financing concern. On July 21, 1999, the Company announced it had entered into a
definitive Merger Agreement, subject to final board approval. The merger became
final on August 23, 1999.

The assets of JP Concepts were acquired on April 1, 1999 for the consideration
of 20,000 shares of the Registrant's Common Stock and a note payable to JP
Concept's shareholder in the amount of $10,000. On June 30, 1999, the same
assets, including accrued rent due to the Registrant, were sold to Mongoose for
the contribution of 60,000 shares of the Company's Common Stock.

The assets of KRES were acquired on April 1, 1999 for the consideration of
20,000 shares of the Registrant's Common Stock and a note payable to the manager
of KRES in the amount of $10,000. On June 30, 1999, based on a change of
direction in the Registrant the Registrant's entered into an agreement with the
former owner of KRES to terminate the transaction. The consideration given
included the payment of $30,000, and reimbursement of normal expenses of
approximately $5,000 and salaries due as of June 30, 1999.

-13-

<PAGE> 14

ITEM 2. 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 Registrant should be read in conjunction with the Registrant's Consolidated
Financial Statements and Notes thereto immediately preceding this section. 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, but not limited to, the
possibilities that the demand for the Registrant's services may decline as a
result of possible changes in general and industry specific economic conditions
and the effects of competitive services and pricing, required financing may not
be available upon terms acceptable to the Registrant, in which case the
Registrant will not grow as expected, and such other risks and uncertainties as
are described in reports and other documents filed by the Registrant from time
to time with the Securities and Exchange Commission.

OVERVIEW

The Registrant 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 Registrant 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.

On December 14, 1998, the Registrant purchased all of the outstanding
shares of Beachside Commons I, Inc. ("Beachside") in a transaction accounted for
as a reverse acquisition. In accordance with the provisions of Staff Accounting
Bulletin No. 97, Beachside was deemed to be the accounting acquirer of Lahaina
as its stockholders received the largest portion of the voting rights in the
combined corporation. The acquired company, Lahaina, was recorded at its
historical cost basis, as it was a shell company prior to its acquisition of
Beachside.

The acquisition on of Beachside, whose main activity is real estate
development and redevelopment and investment in business within resort market
places, is consistent with that business strategy. Since inception, the
Registrant generated no revenues until its acquisition of Beachside.

RESULTS OF OPERATIONS

Prior to December 14, 1998, the Registrant was a shell company and did not
conduct an active business, and its historical results of operations were not
meaningful. As a result of the Company's acquisition of Beachside on December
14, 1998, which was accounted for as a reverse acquisition, the Company has now
become an operating entity.

Three Months Ended June 30, 1999

For the three months ended June 30, 1999, the Registrant recorded revenues
totaling $62,158, primarily attributable to rental revenue from its Beachside
property. Operating expenses for the three months ended June 30, 1999 totaled
$347,119, and are primarily expenses associated with operating Beachside, as
well as expenses associated with administrative costs. Net interest expense for
the three months ended June 30, 1999 totaled $78,406, principally relating to
indebtedness associated with the Beachside property as well as to other
borrowings. The Registrant recorded a net operating loss of $363,367 for the
three months ended June 30, 1999.

From Inception (September 25, 1998) through June 30, 1999

For the period from inception (September 25, 1998) through June 30, 1999,
the Registrant recorded revenues totaling $143,713, primarily attributable to
rental revenue from its Beachside property. Operating expenses for the period
from inception (September 25, 1998) through June 30, 1999 totaled $702,221, and
are primarily expenses associated with operating Beachside, as well as expenses
associated with consummation of the acquisition of Beachside and administrative
costs. Net interest expense for the period from inception (September 25, 1998)
through June 30, 1999 totaled $204,646, principally relating to indebtedness
associated with the Beachside property as well as to new borrowings. The
Registrant recorded a net operating loss of $763,154 for the period from
inception (September 25, 1998) through June 30, 1999.

-14-
<PAGE> 15

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS AND SEASONALITY

As a result of the Registrant's limited operating history in resort development
and the emerging nature of the markets in which the Registrant competes, the
Registrant is unable to accurately forecast its revenues. The Registrant'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
Registrant 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
Registrant's business, operating results and financial condition. Further, the
Registrant 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 Registrant's operating results
will fluctuate and anticipated net losses in a given quarter may be greater
than expected.

The Registrant expects to experience significant fluctuations in its future
quarterly operating results due to a variety of other factors, many of which
are outside the Registrant's control. Factors that may adversely affect the
Registrant'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 Registrant'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 Registrant's business,
operations and infrastructure, (v) governmental regulation, (vi) unforeseen
events affecting the industry, and (vii) the timing associated with the start,
completion and closing associated with the land development or construction
activities of the Registrant.

Due to the foregoing factors, quarterly revenues and operating results are
difficult to forecast, and the Registrant 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 Registrant'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 Registrant's Common Stock would likely be materially and adversely
affected.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1999, the Registrant had cash and cash equivalents totaling $60,261.
For the period from inception (September 25, 1998) through June 30, 1999, the
Registrant used $353,451 of cash in operations, principally relating to its net
loss offset somewhat by an increase in accounts payable of $533,201. An
increase in offering costs of $139,251 also contributed to cash flows used in
operations. Cash flows used in investing activities during the period from
inception (September 25, 1998) through June 30, 1999 totaled $33,955,
attributable to capital expenditures. Cash flows provided by financing
activities during the period from inception (September 25, 1998) through June
30, 1999 totaled $447,667, of which $1,172,867 was provided by an increase in
notes payable and $667,500 was used for a cash distribution relating to the
acquisition of Beachside. The increase in notes payable is primarily
attributable to the issuance of $775,000 in convertible debentures.

The Registrant is not presently generating positive cash flow, and its
operations are presently consuming cash at a rate in excess of its present
ability to generate cash. The Registrant's operations will continue to consume
cash in excess of cash generated from operations for the foreseeable future.

The Registrant believes that its current cash, cash equivalents and its debt
arrangements will be sufficient to meet its anticipated cash needs for working
capital and capital expenditures for at least the next several months. However,
the Registrant'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 Registrant may require
additional financing sooner than anticipated. The Registrant has no commitments
for any additional financing, and there can be no assurance that any such
commitments can be obtained on favorable terms, if at all. Any additional equity
financing may be dilutive to the Registrant'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 Registrant is unable to obtain additional
financing as needed, the Registrant may be required to reduce the scope of its
operations or its intended expansion, which could have a material adverse effect
on the Registrant's business, results of operations and financial condition.

-15-
<PAGE> 16
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Registrant is involved in no legal proceedings at this time. There
have been no material developments since the previous report.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(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)

3.1 Articles of Incorporation (2)

3.2 Amendment to Certificate of Incorporation (4)

3.3 Bylaws of the Registrant (2)

4.1 Securities Purchase Agreement dated December 7, 1998, by and between Lahaina Acquisitions,
Inc. and GCA Strategic Investment Fund, Ltd. (1)

4.2 9% Convertible Note of Lahaina Acquisitions, Inc. payable to GCA Strategic Investment Fund,
Ltd., 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, Ltd. (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 1, 1999, by and between Lahaina Acquisitions, Inc. and
GCA Strategic Investment, Ltd. (3)

4.7 Note Guaranty by Richard P. Smyth with respect to $300,000 of indebtedness of Lahaina
Acquisitions, Inc. (3)

4.8 Line of Credit for up to $250,000 between Lahaina Acquisitions, Inc. and Mongoose
Investments, LLC (3)

4.9 Form of Stock Certificate (2)

4.10 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)

4.11 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)

4.12 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 (3)

4.13 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)

4.14 Common Stock Purchase Warrant in the amount of 100,000 shares to be issued by Lahaina
Acquisitions, Inc. and purchased by GCA Strategic Investment Fund, Ltd., expiring on January
19, 2004 (4)

4.15 Common Stock Purchase Warrant in the amount of 15,000 shares to be issued by Lahaina
Acquisitions, Inc. and purchased by LKB Financial, LLC, expiring on January 19, 2004 (4)

10.1 Contract of Engagement dated January 19, 1999 by and between Lahaina Acquisitions, Inc. and
LKB Financial LLC (3)

10.2 Purchase and Sale Agreement, dated June 30, 1999 by and between Lahaina Acquisitions, Inc. and Mongoose
Investments, LLC.

10.3 Settlement and Release Agreement dated June 30, 1999 by and between Lahaina Acquisitions, Inc. and Sherry Klein.

10.4 Consulting Agreement dated as of June 1, 1999 by and between Lahaina Acquisitions, Inc. and Gator Glory, LLC.

10.5 Consulting Agreement dated as of June 1, 1999 by and between Lahaina Acquisitions, Inc. and Gerald F. Sullivan.
</TABLE>

-16-

<PAGE> 17

<TABLE>
<CAPTION>
Number Description Page
<S> <C> <C>
27 Financial Data Schedule (for SEC use only)
</TABLE>

(1) Incorporated by reference to the Registrant'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 Quarterly Statement on Form 10-Q,
filed February 24, 1999.

(4) Incorporated by reference to the Quarterly Statement on Form 10-Q,
filed May 24, 1999.

(B) REPORTS ON FORM 8-K

No reports on Form 8-K have been filed this quarter.

-17-

<PAGE> 18
SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

LAHAINA ACQUISITIONS, INC.

(Registrant)

By: /s/ L. Scott Demerau
--------------------------------------
Name: L. Scott Demerau
Title: President

October 29, 1999

-18-

<PAGE> 1
Exhibit 10.2

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT is made as of the 30th day of June,
1999, by and between LAHAINA ACQUISITIONS, INC., a Colorado corporation
("Lahaina"), and MONGOOSE INVESTMENTS, LLC, a Georgia limited liability company
("Mongoose"). Capitalized terms not defined herein shall have the meaning set
forth in that certain Purchase and Sale Agreement by and among Lahaina, Brian
Moon and JP Concepts, Inc. ("JP Concepts") dated March 1, 1999.

W I T N E S S E T H:

WHEREAS, Mongoose desires to purchase, and Lahaina desires to sell, all
of the Assets and all capital stock of JP Concepts which is held by Lahaina and
all of the capital stock of JP Concepts held by Lahaina as of the date of this
agreement;

NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. PURCHASE AND SALE. Lahaina shall sell, convey, transfer, assign and
deliver to Mongoose and Mongoose shall purchase and accept from Lahaina, upon
the terms and conditions set forth herein, the Assets and all of the issued and
outstanding capital stock of JP Concepts held by Lahaina as of the date of this
agreement (the "JP Stock"). The transfer of the Assets and the JP Stock shall be
made free and clear of all claims, liens and encumbrances.

2. PURCHASE PRICE. The total purchase price of the Assets and the JP
Stock shall be 60,000 shares of common stock of Lahaina.

3. MISCELLANEOUS. This Agreement shall be governed by the laws of the
State of Georgia. This Agreement may be executed in one or more counterparts,
each of which may be considered an original and all of which together shall
constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

<PAGE> 2

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first written above.

LAHAINA ACQUISITIONS, INC.

By: /s/ Gerald F. Sullivan
-------------------------------------
Gerald F. Sullivan
Secretary

MONGOOSE INVESTMENTS, LLC

By: /s/ Richard P. Smyth
-------------------------------------
Richard P. Smyth
Managing Member

-2-

<PAGE> 1
Exhibit 10.3

SETTLEMENT AND RELEASE AGREEMENT

THIS SETTLEMENT AND RELEASE AGREEMENT is made as of the 30th day of
June, 1999, by and between LAHAINA ACQUISITIONS, INC., a Colorado corporation
("Lahaina"), and SHERRY KLEIN, a resident of the State of Florida and the owner
and operator of the real estate brokerage doing business under the trade name
"Klein Real Estate Services" ("Klein"). Capitalized terms not defined herein
have the meanings set forth in that certain Purchase and Sale Agreement dated
March 1, 1999 by and between Lahaina, Klein and Klein Real Estate Services (the
"Purchase and Sale Agreement").

W I T N E S S E T H:

WHEREAS, Lahaina is a party to that certain Agreement and Plan of
Merger dated June __, 1999 (the "Agreement") between Lahaina, LAHA 1, Inc.
("LAHA 1"), Accent Real Estate Group, Inc. ("Accent"), Mongoose Investments, LLC
("Mongoose"), the Beneficial Owners and the Shareholders (as defined in the
Agreement) pursuant to which LAHA 1, a wholly-owned subsidiary of Lahaina, shall
merge with and into Accent;

WHEREAS, Lahaina has agreed to enter into this Settlement and Release
Agreement as a condition to closing of the Agreement;

WHEREAS, Lahaina is willing to terminate its interest in the Assets
pursuant to the Purchase and Sale Agreement, on all terms and conditions set
forth herein, so as to induce Accent to merge with Lahaina pursuant to the
Agreement and Plan of Merger;

NOW, THEREFORE, for and in consideration of the premises and covenants
and mutual agreements contained herein, the parties hereto agree as follows:

1. Klein hereby agrees to terminate the Purchase and Sale Agreement and
any and all agreements related thereto, contemplated thereof, or in connection
therewith, which hereby is of no further force and effect, and release and
discharge any claims or demands she (or any entity with which she is in any way
affiliated), now has or ever may have against Lahaina arising in connection with
the Purchase and Sale Agreement or related transactions, including, but not
limited to, any and all employment or consulting agreements or understandings
entered into with Lahaina in connection with or contemplated by the Purchase and
Sale Agreement.

2. In consideration of Klein's agreements in Section 1 above, Lahaina
agrees (a) to pay Klein $30,000 in full settlement of any and all obligations,
except

<PAGE> 2

that Lahaina shall pay any unpaid but owed prior incidental expenses incurred by
Klein through the operation of Klein Real Estate Services from April 1, 1999 to
the date of this Agreement and (b) to allow Klein to retain the 20,000 shares of
Lahaina no par value per share Common Stock issued to Klein in payment of the
Purchase Price.

3. This Agreement shall be governed by the laws of the State of Georgia
This Agreement may be executed in one or more counterparts, each of which may be
considered an original and all of which together shall constitute one and the
same instrument.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first written above.

LAHAINA ACQUISITIONS, INC.

By: /s/ Richard P. Smyth
--------------------------------------
Richard P. Smyth
Chief Executive Officer

Sworn to and subscribed /s/ Sherry Klein (Seal)
before me this ____ day of ------------------------------
- ------, -----. Sherry Klein

/s/ Barbara S. Johns
- ------------------------------------
Notary Public

My Commission Expires: June 30, 1999
- ------------------------------------

CONSENTED AND AGREED TO BY:

- ------------------------------------
L. Scott Demerau

-2-

<PAGE> 1
Exhibit 10.4

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT is made and entered into as of the 1st day of
June, 1999 by and between Lahaina Acquisitions, Inc., a Colorado corporation,
and its successors (hereinafter referred to as the "Company"), and Gator Glory,
LLC, hereinafter referred to as "Consultant").

WITNESSETH:

WHEREAS, Consultant possesses significant knowledge and experience in
the management of private and public corporations and has been engaged by the
Company to provide certain consulting services to it; and

WHEREAS, the Company desires to enter into this Agreement with
Consultant to set forth in detail the consulting services to be provided to the
Company, and to provide for the payment for such services by the Company, and
Consultant wishes to provide such consulting services, all upon the terms and
subject to the conditions contained herein;

NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

1. Engagement and Term. Subject to the terms and conditions of this
Agreement, the Company hereby retains Consultant to provide the consulting
services described in Section 2 below, and Consultant hereby accepts such
engagement. The term of this Agreement shall commence on the date hereof and
shall continue for a period of two years (the "Term"), provided that this
agreement may be terminated prior to the expiration of the Term upon 90 days
written notice by Consultant to the Company, except that the payment of fees
under this Agreement shall continue for a period equal to that of the engagement
of the Company by Client. If no term is indicated in any agreement, other than
this Agreement, between the Client and the Company, the term of such agreement
shall be two years from the date of the initial activity for each consulting
situation. The initial date and the term for each assignment shall be listed on
a separate form, Addendum "A", each signed copy of which shall become a part of
this Agreement.

2. Description of Services. During the term of this Agreement, as
requested from time to time by the Company, Consultant shall provide to the
Company, or other affiliates, or entities related to the Company, advice
regarding matters for either the Company or other affiliates, or entities
related to the Company, as set forth more fully below. The consulting activities
which the Consultant may provide to the Company may include advice relating to
mergers, acquisitions, strategic planning, marketing

<PAGE> 2

Page 2 of 9
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gator Glory, LLC
June 1, 1999

communications and public relations ("Communication Services"), technology
implementation and, at the request of the Company, the Consultant shall also
provide (i) advice regarding the management of the Company, (ii) financial
advice regarding the Company's operations, (iii) advice relating to corporate
governance issues and (iv) strategic planning advice (the "Management Consulting
Services", only together with Communication Services, the "Services"). The
activities for which such advice is provided shall be listed on a separate sheet
whose form and content shall be as shown in Addendum "A" of this Agreement. Upon
signature by the Company and the Consultant, each Addendum "A" shall become a
part of this Agreement.

3. Non-Exclusivity of Services. The Company acknowledges that
Consultant shall not be engaged by the Company on a full-time basis and shall
provide Services to other companies from time to time. The Company further
acknowledges that Consultant may not be available at all times to respond
promptly to requests for the provision of Services due to other business
commitments; however, Consultant shall use reasonable efforts to respond within
a reasonable time to requests for Services by the Company.

4. Place of Engagement. The Services to be performed by Consultant
pursuant to this Agreement shall be rendered primarily from the offices of the
Consultant or at one or more suitable locations designated by the Company, with
the mutual agreement of the Consultant.

5. Compensation. In consideration of Consultant's Services hereunder,
for and during the Term of this Agreement, the Company shall pay Consultant a
consulting fee equal to $10,000 per month, payable one month in advance, in
addition to a one-time payment of $30,000 for services rendered prior to June 1,
1999 and supplemental compensation which shall be paid as a fee equal to two
percent of the value of any transaction set forth on Addendum "A" of this
Agreement. The value used in computing the fee shall be equal to the gross
funding amount in the case of debt or equity transactions, or asset value in the
case of an asset sale or purchase, or in the case of a purchase or sale of a
business or operation. Fees involved shall be provided from the companies listed
on any and all forms titled Addendum "A", a copy of which form is attached to
this Agreement, and subsequently added to this Agreement during its Term. Such
fees shall include all compensation, including but not limited to cash
compensation, equity, warrants, options, consulting fees or long term incentive
options. The Company shall pay to the Consultant its portion of the fees within
48 hours of completion of the

<PAGE> 3

Page 3 of 9
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gator Glory, LLC
June 1, 1999

transaction by the Company. The Company shall provide the consultant with
medical benefits comparable to and of equal value with the medical benefits the
Company provides its senior executives.

For the equity, options, warrants and other equity-related items
referenced in this Section 5, such items shall be listed in the name, either
personal or company, provided by the Consultant and shall be registered,
transferred and available for sale under terms not less favorable than those
provided to any other individual or entity.

6. Expenses & Office Support. The Company shall reimburse the
Consultant for all expenses incurred as a result of the performance of its
duties under this Agreement within 10 days of a request by the Consultant to be
reimbursed for such expenses. The Consultant shall provide receipts and other
expense documentation in a form not different to that required by employees of
the Company. The Company shall also provide office space and
administrative/secretarial support to the Consultant, either directly or through
reimbursement to the Consultant. All travel, telephone or other related expenses
shall be reimbursed as well as other related expenses.

7. Entire Agreement. This Agreement supercedes all prior agreements
between the parties concerning its subject matter, including any prior subject
matter or dealings between the parties, and constitutes the entire agreement
between the parties with respect to matter contained herein.

8. Taxes. Any and all sales, service, income and other taxes applicable
to any payments made by the Company to Consultant under this Agreement shall be
the sole responsibility and liability of Consultant. Consultant shall indemnify
and hold harmless the Company for any liability or damages imposed upon the
Company for taxes payable by or with respect to Consultant.

9. Confidential Information. Except as permitted pursuant to this
Section 9, during Consultant's engagement with the Company and for a period of
two years thereafter, Consultant will hold in strict confidence and not disclose
to any person or entity without the express written authorization of the
Company, any confidential or secret information, financial, marketing data,
including, without limitation financial statements of the Company, technique,
process, formula, developmental or experimental work, work in progress, business
methods, trade secrets including, without limitation any

<PAGE> 4

Page 4 of 9
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gator Glory, LLC
June 1, 1999

customer lists, marketing techniques or plans, or any other secret or
confidential information relating to the Company (collectively referred to
herein as "Confidential Information"), including, without any limitation any
information relating to inquiries made by the Company or negotiations with
respect to any acquisition of or by the Company; provided, however, that
Confidential Information shall not include any of the foregoing which (i) is
available to the public generally, or (ii) has been developed by Consultant
without use of any Confidential Information, or in connection with Consultant's
engagement with the Company and not in violation of any other terms of this
Agreement, or (iii) is or has been learned by Consultant through an independent
third party who is not, and has not been, affiliated with or employed by the
Company or bound by an agreement of confidentiality or fiduciary duty to the
Company. Consultant agrees that it will not make any use, outside the scope of
Consultant's engagement of any Confidential information, and will not make any
use of any Confidential Information at any time for two years after termination
of such engagement. Notwithstanding the foregoing, this Agreement shall not
prevent Consultant from disclosing any Confidential Information to the extent
that disclosure is required by law or any order of a court or government
authority with jurisdiction over Consultant.

10. Independent Contractor. Consultant's relationship to the Company
hereunder shall be that of an independent contractor, Consultant shall not be
the agent of the Company and shall have no authority to act on behalf of the
Company in any manner except in the manner and to the extent that the Company
may expressly agree in writing.

11. Indemnification
(a) Liability. Neither Consultant nor its employees shall be
liable or accountable to the Company, in damages or otherwise, for any
error of judgment, any mistake of fact of law, or any other act or
thing which it or its employees may do or refrain from doing in
connection with its duties and obligations hereunder, except in the
case of its or its employees' gross negligence or intentional
misconduct.

(b) Indemnification. The Company shall indemnify and hold
harmless Consultant with respect to any demands, judgments,
settlements, damages, payments or claims of any nature whatsoever
arising from or out of the Consultant's performance of its duties
hereunder, at law or in equity, in connection with the Consultant's or
the Company's activities, actions, operations,

<PAGE> 5

Page 5 of 9
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gator Glory, LLC
June 1, 1999

or decisions, including, but not limited to, any errors, omissions,
incidents or accidents occurring in connection with such activities,
actions, operations or decisions, or otherwise in the course or conduct
of its business, which indemnity shall continue notwithstanding the
termination at this Agreement.

12. Waiver. No failure on the part of either party hereto to exercise
and no delay by either party hereto in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy by either party hereto preclude any other
or further exercise thereof or the exercise by such party of any other right,
power or remedy. No express waiver or assent by either party hereto of any
breach of or default in any term or condition of this Agreement by the other
party shall constitute a waiver of or an assent to any succeeding breach of or
default in the same or any other term or condition hereof.

13. Severability. All rights and restrictions contained in this
Agreement may be exercised and shall be applicable and binding only to the
extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary so that they will not render this Agreement
illegal, invalid or unenforceable. If any term of this Agreement, or part not
essential to the commercial purpose of this Agreement shall be held illegal,
invalid or unenforceable by a court of competent jurisdiction, it is the
intention of the parties that the remaining terms hereof, or part thereof shall
constitute their agreement with respect to the subject manner hereof and all
such remaining terms, or parts thereof, shall remain in full force and effect.
To the extent legally permissible, any illegal, invalid or unenforceable
provision of this Agreement shall be replaced by a valid provision which will
implement the commercial purpose of the illegal, invalid or unenforceable
provision.

14. Notices. All notices, requests, demands and other communications
hereunder must be in writing and shall be deemed to have been duly given if
delivered by hand or mailed within the continental United States by first class,
registered mail, to the applicable party and addressed as follows:

COMPANY: Lahaina Acquisitions, Inc.
5895 Windward Parkway, Suite 220
Alpharetta, Georgia 30005

<PAGE> 6

Page 6 of 9
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gator Glory, LLC
June 1, 1999

CONSULTANT: Gator Glory, LLC
7276 Sanctuary Lane
Fernandina Beach, Florida 32034

Any party may change the address or facsimile number to which notices, requests,
demands or other communications to such party shall be delivered or mailed by
giving notice thereof to the other parties hereto in the manner provided herein.

15. Governing Law. Regardless of the place of execution, place of
performance or otherwise; this Agreement and all amendments, modifications or
supplements thereto, and the rights of the parties hereunder, shall be governed
by and constituted and enforced in accordance with the laws of the State of
Georgia.

16. Agreement Non-assignable. The parties acknowledge that this
Agreement has been entered into as a result of, among other things, the special
skills of Consultant, and agree that this Agreement may not be assigned or
transferred by Consultant, in whole or in part, without the prior written
consent of the Company. Further, the parties agree that this Agreement may not
be assigned or transferred by the Company, or Consultant, without the prior
written consent of the other party.

Notwithstanding the foregoing paragraph, the parties agree that this
Agreement has been entered into based on the assumption that Consultant would
transfer and assign all rights and obligations hereunder to RS & Associates,
LLC, a limited liability company to be formed under the laws of the State of
Georgia ("RS") or to such other entity as may be formed for the purpose of
assuming the rights and obligations hereunder. The Company hereby gives its
prior written consent to such assignment.

17. Headings. The headings as to the contents of particular sections
are inserted only for convenience and shall not be construed as a part of this
Agreement or as a limitation on or enlargement of the scope of any of the terms
or provisions of this Agreement.

<PAGE> 7

Page 7 of 9
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gator Glory, LLC
June 1, 1999

18. Entire Agreement. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject manor hereof and
contains the sole and entire agreement between the parties with respect to the
matters covered hereby This Agreement shall not be modified or amended except by
an instrument in writing signed by or on behalf of the parties hereto.

[SIGNATURE PAGE FOLLOWS]

<PAGE> 8

Page 8 of 9

Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gator Glory, LLC
June 1, 1999

IN WITNESS WHEREOF the Company and Consultant have caused this
Agreement to be executed as of the date first written above.

THE COMPANY: CONSULTANT:

LAHAINA ACQUISITIONS, INC. GATOR GLORY, LLC

By: /s/ Scott Demerau By: /s/ Richard P. Smyth
------------------------------- ---------------------------------
Name: Scott Demerau Name: Richard P. Smyth
----------------------------- -------------------------------
Title: President Title: Managing Member
---------------------------- ------------------------------

<PAGE> 9

Page 9 of 9
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gator Glory, LLC
June 1, 1999
ADDENDUM A-___

This form shall become a part of the agreement between Lahaina
Acquisitions, Inc., a Georgia corporation (hereinafter referred to as the
"Company"), its principals, affiliates and successors and Gator Glory, LLC, a
Georgia limited liability company, its principals, affiliates and assigns
(hereinafter referred to as "Consultant"). The purpose of this Addendum is to
list the activities for which services shall be provided by the Consultant to
the Company, and for which the Consultant shall be entitled to receive
supplemental compensation, in addition to the monthly consulting fee, as listed
in Section 5 of the Consulting Agreement dated as of June 1, 1999 between the
Company and the Consultant.

Date of this Addendum A- ____:_______________

Description of Activity: ___________________________________

Name of Company/Entity/Asset (if applicable):
________________________________________________________________________________

Date of Initial Activity: ______________________

Term of Activity: ___________ (______) Years from the date of initial activity.

IN WITNESS WHEREOF the Company and Consultant have caused this
Agreement to be executed as of the date first written above.

THE COMPANY: CONSULTANT:

LAHAINA ACQUISITIONS, INC. GATOR GLORY, LLC

<PAGE> 1
Exhibit 10.5

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT is made and entered into as of the 1st day of
June, 1999 by and between Lahaina Acquisitions, Inc., a Colorado corporation,
and its successors (hereinafter referred to as the "Company"), and Gerald F.
Sullivan (hereinafter referred to as "Consultant").

WITNESSETH:

1. Engagement and Term. Subject to the terms and conditions of this
Agreement, the Company hereby retains Consultant to provide the consulting
services described in Section 2 below, and Consultant hereby accepts such
engagement. The term of this Agreement shall commence on the date hereof and
shall continue for a period of two years (the "Term"), provided that this
agreement may be terminated at any time after twelve months and prior to the
expiration of the Term upon 90 days written notice of either party. If no term
is indicated in any agreement, other than this Agreement, between the Client and
the Company, the term of such agreement shall be two years from the date of the
initial activity for each consulting situation. The initial date and the term
for each assignment shall be listed on a separate form, Addendum "A", each
signed copy of which shall become a part of this Agreement.

<PAGE> 2

Page 2 of 8
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gerald F. Sullivan
June 1, 1999

implementation and, at the request of the Company, the Consultant shall also
provide (i) advice regarding the management of the Company, (ii) financial
advice regarding the Company's operations, (iii) advice relating to corporate
governance issues and (iv) strategic planning advice (the "Management Consulting
Services", only together with Communication Services, the "Services"). The
activities for which such advice is provided shall be listed on a separate sheet
whose form and content shall be as shown in Addendum "A" of this Agreement. Upon
signature by the Company and the Consultant, each Addendum "A" shall become a
part of this Agreement.

3. Non-Exclusivity of Services. The Company acknowledges that
Consultant shall be engaged by the Company on a full-time basis. The Company
further acknowledges that Consultant may not be available at all times to
respond promptly to requests for the provision of Services due to other business
commitments; however, Consultant shall use reasonable efforts to respond within
a reasonable time to requests for Services by the Company.

<PAGE> 3

Page 3 of 8
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gerald F. Sullivan
June 1, 1999

benefits comparable to and of equal value with the medical benefits the Company
provides its senior executives. The 2% fee shall be offset by annual salary.

<PAGE> 4

Page 4 of 8
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gerald F. Sullivan
June 1, 1999

information relating to the Company (collectively referred to herein as
"Confidential Information"), including, without any limitation any information
relating to inquiries made by the Company or negotiations with respect to any
acquisition of or by the Company; provided, however, that Confidential
Information shall not include any of the foregoing which (i) is available to the
public generally, or (ii) has been developed by Consultant without use of any
Confidential Information, or in connection with Consultant's engagement with the
Company and not in violation of any other terms of this Agreement, or (iii) is
or has been learned by Consultant through an independent third party who is not,
and has not been, affiliated with or employed by the Company or bound by an
agreement of confidentiality or fiduciary duty to the Company. Consultant agrees
that it will not make any use, outside the scope of Consultant's engagement of
any Confidential information, and will not make any use of any Confidential
Information at any time for two years after termination of such engagement.
Notwithstanding the foregoing, this Agreement shall not prevent Consultant from
disclosing any Confidential Information to the extent that disclosure is
required by law or any order of a court or government authority with
jurisdiction over Consultant.

<PAGE> 5

Page 5 of 8
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gerald F. Sullivan
June 1, 1999

accidents occurring in connection with such activities, actions,
operations or decisions, or otherwise in the course or conduct of its
business, which indemnity shall continue notwithstanding the
termination at this Agreement.

COMPANY: Lahaina Acquisitions, Inc.
5895 Windward Parkway, Suite 220
Alpharetta, Georgia 30005

<PAGE> 6

Page 6 of 8
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gerald F. Sullivan
June 1, 1999

CONSULTANT: Gerald F. Sullivan
5255 Porter Lane
Gainesville, GA 30506

16. Agreement Non-assignable. The parties acknowledge that this
Agreement has been entered into as a result of, among other things, the special
skills of Consultant, and agree that this Agreement may not be assigned or
transferred by Consultant, in whole or in part, without the pnor written consent
of the Company. Further, the parties agree that this Agreement may not be
assigned or transferred by the Company, or Consultant, without the prior written
consent of the other party.

[SIGNATURE PAGE FOLLOWS]

<PAGE> 7

Page 7 of 8
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gerald F. Sullivan
June 1, 1999

IN WITNESS WHEREOF the Company and Consultant have caused this
Agreement to be executed as of the date first written above.

THE COMPANY: CONSULTANT:

LAHAINA ACQUISITIONS, INC. /s/ Gerald F. Sullivan
------------------------------------
Gerald F. Sullivan

By: /s/ Scott Demerau
------------------------------------
Name: Scott Demerau
----------------------------------
Title: President
---------------------------------

<PAGE> 8

Page 8 of 8
Consulting Agreement between
Lahaina Acquisitions, Inc. and
Gerald F. Sullivan
June 1, 1999

ADDENDUM A-___

This form shall become a part of the agreement between Lahaina
Acquisitions, Inc., a Georgia corporation (hereinafter referred to as the
"Company"), its principals and affiliates and Gerald F. Sullivan (hereinafter
referred to as "Consultant"). The purpose of this Addendum is to list the
activities for which services shall be provided by the Consultant to the
Company, and for which the Consultant shall be entitled to receive supplemental
compensation, in addition to the monthly consulting fee, as listed in Section 5
of the Consulting Agreement dated June 1, 1999 between the Company and the
Consultant.

Date of this Addendum A- ____:_______________

Description of Activity: ___________________________________

Name of Company/Entity/Asset (if applicable):
________________________________________________________________________________

Date of Initial Activity: ______________________

Term of Activity: ___________ (______) Years from the date of initial activity.

IN WITNESS WHEREOF the Company and Consultant have caused this
Agreement to be executed as of the date first written above.

THE COMPANY: CONSULTANT:

LAHAINA ACQUISITIONS, INC. By:
---------------------------------
Name: Gerald F. Sullivan

By: /s/ Scott Demerau
------------------------------------
Name: Scott Demerau
----------------------------------
Title: President
---------------------------------

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FILED AUGUST 23, 1999 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH.
</LEGEND>
<RESTATED>

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> JUN-30-1999
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<SECURITIES> 0
<RECEIVABLES> 10,000
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