U.S SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549



                                   FORM 10-KSB

(Mark One)

/X/  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934 [FEE REQUIRED]

For the fiscal year ended DECEMBER 31, 1996

/ /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 [NO FEE REQUIRED]

For the transition period from          to

                         Commission file number 0-27256

                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in Its charter)

          DELAWARE                                 13- 3858917
-------------------------------         ------------------------------------
(State or Other Jurisdiction of         (I.R.S. Employer Identification No.)
 Incorporation or Organization)         

2200 Corporate Boulevard, Boca Raton, Florida          33431
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)            (Zip Code)

                                 (561) 995-2190
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

                                      None.

Securities registered under Section 12(g) of the Exchange Act:

                          COMMON STOCK, $.001 PAR VALUE
                          -----------------------------
                                (Title of Class)

         Check  whether  the issuer:  (1) has filed all  reports  required to be
filed by Section 13 or 15(d) of the  Exchange  Act during the past 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     /  /      No         /X/


                                                           (CONTINUED NEXT PAGE)

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the best of the  Registrant's  knowledge,  in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. / /

<PAGE>
         State  issuer's  revenues for its most recent fiscal year: The issuer's
revenues for the fiscal year ended December 31, 1996 were $454,656.

         The  aggregate  market  value  at  June  17,  1997  of  shares  of  the
registrant's  Common  Stock,  $.001 par value per share  (based upon the closing
price of $3.50 per share of such stock on the Nasdaq OTC Bulletin  Board on such
date), held by  non-affiliates  of the Registrant was approximately  $8,152,305.
Solely for the  purposes  of this  calculation,  shares  held by  directors  and
officers of the  Registrant  have been excluded.  Such  exclusion  should not be
deemed a determination  or an admission by the Registrant that such  individuals
are, in fact, affiliates of the Registrant.

         State the number of shares  outstanding of each of the issuer's classes
of common equity,  as of the latest  practicable  date: At June 17, 1997,  there
were outstanding  9,540,187 shares of the Registrant's  Common Stock,  $.001 par
value.

         Transitional Small Business Disclosure Format (check one):

                  Yes       /  /        No  /X/

                                       -1-
<PAGE>

                                     PART I
ITEM 1.  DESCRIPTION OF BUSINESS.

GENERAL

         Atlantic International Entertainment,  Ltd. (the "Company"), a Delaware
corporation,  develops and markets Internet-centric products and services in the
entertainment, medical, information and other industries. The Company (formerly,
Cine-Chrome  Laboratories,  Inc., Medco Health Care Services,  Inc., Cine-Chrome
Video Corp., Network 4, Inc. and CEEE Group Corporation) was incorporated in the
state of Colorado in October 1939 under the name "Pacific Gold, Inc." to explore
and  develop  gold and silver ore  prospects  and to operate  mining and milling
facilities.  The Company  conducted  limited mining  activities until operations
ceased.  The Company then sought new  business  opportunities  as a  development
stage entity.

         In 1973 the Company changed its name to Cine-Chrome Laboratories,  Inc.
and operated a film processing lab in California. From 1984 until June 1994, the
Company did not conduct any operations,  transactions or business activities. In
June 1994, the Company's  investment  banking  operations  included  acting as a
"finder" with respect to U.S. public companies and providing  advisory  services
concerning  corporate  structure  and raising  capital.  Beginning in 1996,  the
Company has concentrated its business operations primarily on the manufacturing,
marketing  and  development  of products  and  services via the Internet and the
World Wide Web (the "Web"). These products and services are focused on two major
industries which include Internet gaming and the  international  distribution of
medical products and equipment.

         Prior to July 16,  1996,  the  Company  had no  operations  other  than
searching for a business  combination.  In July 1996, the Company  consummated a
share  exchange   pursuant  to  a  Exchange  of  Stock  Agreement  and  Plan  of
Reorganization with Atlantic  International Capital Ltd., a Delaware corporation
("Atlantic Capital") and the former stockholders of Atlantic Capital (the "Stock
Exchange Agreement").  As a result of the Stock Exchange Agreement, the business
of Atlantic Capital became the business of the Company.

         On November 22, 1996, the Company merged with and into its wholly-owned
Delaware subsidiary,  Atlantic  International  Entertainment,  Ltd., whereby the
Company, among other things, (i) changed its state of incorporation to Delaware;
(ii) increased its authorized capital stock to 110,000,000  (100,000,000  shares
of common stock,  $.001 per share (the "Common Stock") and 10,000,000  shares of
preferred stock, $.001 par value per share (the "Preferred  Stock"));  and (iii)
effectuated  a 1 for 3 share  exchange.  All shares  referred to herein  (unless
specifically stated otherwise) refer to post split amounts.

         The Company  acquired the major assets of RAM Associates,  Inc. ("RAM")
pursuant to a Purchase and Sale  Agreement  dated April 15, 1996. The RAM assets
acquired by the  Company  included  COMMUNITY  CASINO and  REALSPORTS(TM)  which
formed the substantive foundation of the

<PAGE>
Company's  current gaming software  products.  Other products  acquired from RAM
included HOTEL  HOTLINKS(TM) and CLUB INTERACTIVE and the forerunner  program of
ATLANTIC INTERNATIONAL MEDICAL and THE ORIGINAL AS SEEN ON TV.

         The Company's  executive  offices are located at 2200 Corporate  Blvd.,
Suite 317, Boca Raton,  Florida  33431.  The telephone  number of the Company is
(561)  995-2190.   The  Company  maintains  a  home  page  on  the  Internet  at
http://www.aieltd.com.

PRODUCTS AND SERVICES

INTERNET GAMING AND SPORTS WAGERING PRODUCTS

INTERNET CASINO EXTENSION(TM)

         The Company is a developer and world wide  marketer of private  network
and Internet gaming and wagering  products  including its  proprietary  flagship
product,  Internet Casino Extension(TM) or "ICE(TM)." The Company licenses these
products  to  virtual  casino  operators  and  sports  book  businesses.   Trial
operations,  under the name ARUBA PALMS CASINO and SPORTSBOOK, began in October,
1996.  At the  conclusion of the trial  period,  the name of this  operation was
changed  to  EMERALD  PALMS  CASINO  and  SPORTSBOOK  and it now  serves  as the
demonstration site for marketing of ICE(TM) to Internet casinos,  hotel/casinos,
clubs    and    casino    ships.    It   is    availabLE    on   the    Web   at
http://www.emeraldpalms.com.

         The Company  has also added  bingo,  pull-tab  slots and lottery to the
base ICE(TM) produCT to create a system specifically targeted to Indian casinos.
This product package,  also called Indian Casino  Extension(TM),  can be seen at
http://www.whisperingwinds.com.   Another  variations  to  ICE(TM)  aimed  at  a
specific market includes the INTERNET CHARITY EXTENSION(TM).

         The Company has entered into three license  agreements  for the ICE(TM)
product.  In December  1996,  the Company  signed a licensing  agreement for its
ICE(TM)  product with Patroon  Agency  ("Patroon"),  an offshore  gaming company
based in Curacao.  Patroon  will  operate a casino  called  FIRSTPRIZE  CASINO &
SPORTSBOOK  which is currently  available for free contest  play.  The casino is
expected to commence  live  wagering in June 1997.  The contract  provides for a
perpetual  single user  license for  $450,000,  $30,000 of which was paid to the
Company on November  22, 1996,  and the  remainder of which is payable in either
(i) 48 equal  monthly  payments,  or (ii)  50% of the net win  from the  ICE(TM)
Internet Casino, at Patroon's option,  upon installation of the ICE(TM) product.
In addition,  the Company  will receive a fee of $2,000 per month for  technical
support and product  upgrades  until the balance of the payment is paid and then
$1,000 per month for the duration of the agreement.

         In March 1997, the Company  entered into a licensing  agreement for its
ICE(TM)  product with THIRDAGE,  the ICE(TM) based  Casablanca  extension to the
Wyndham  Aruba Beach  Resort & Casino in Aruba,  which is expected to begin live
wagering in July 1997. The contract provides for a single user perpetual license
for $450,000 payable as follows: (i) $15,000 was paid to the

                                       -2-

<PAGE>
Company on June 11, 1997 with an  additional  $15,000  payable by June 25, 1997,
(ii)  $20,000  is payable  upon  installation  of the  ICE(TM)  product  and the
commencement of the casino's  operation as a revenue producing  Internet casino,
and (iii)  $400,000 to be received  over time based on three percent (3%) of the
gross revenue of the ICE(TM)  Internet casino operated by THIRDAGE,  which shall
not exceed  $10,000  per month.  There is also an  additional  fee of $2,000 per
month for  technical  support and  upgrades.  THIRDAGE was granted the option of
becoming a value added reseller of the Company's ICE(TM) licenseS.

         The Company's  third  licensing  agreement for its ICE(TM)  product was
entered  into  with  Atlantic  International  Entertainment,   N.V.,  which  was
subsequently  acquired  by  Australian  Advisors in  December  1996.  See Recent
Developments.  This  casino is  expected  to open in Curacao  in July 1997.  The
contract  provides for a single user perpetual license for $450,000 payable at a
minimum rate of $6,000 per month  beginning 180 days after the  commencement  of
the casino's operation. Payments will commence not later than August 1, 1997 and
payment  in full is due by  November  15,  1999.  The  Company  will  receive an
additional  $2,000 per month for  technical  support and  upgrades for 48 months
beginning on August 1, 1997.

HOTEL HOTLINKS(TM):

         The Company also actively markets the Hotel  HotLinks(TM)  system which
is a variation  and  expansion of ICE(TM)  which has features  specific to hotel
guests such as in-room  services,  Internet  access and in-room  advertising  of
local goods and  services.  The product uses set top boxes and  infrared  remote
controls  to allow hotel  guests to access  gaming and the  additional  services
mentioned  above.  As of the date hereof,  the Company has not  consummated  any
sales of the Hotel HotLinks(TM) system.

         The set top boxes used in the Hotel Hotlinks(TM) product permit the use
of smart cards for identification and other purposes.  This same  hardware/smart
card  technology will be employed in other products which the Company intends to
develop throughout the year ending December 31, 1997.

WEBSPORTS(TM)

         The Company licenses the  webSports(TM)  sportsbook  software system to
virtual casino  operators and sports book  businesses.  Unlike  casinos,  sports
books require no "play value". A player simply needs to know the "line" and have
the  ability  to place the bet.  The client  needs only a standard  Web to play.
However,  the server requires  sophisticated  database,  accounting and auditing
systems.

         In December 1996,  the Company signed a licensing  agreement to provide
its webSports(TM) system to Carib Sportsbook Inc. ("Carib"),  an offshore gaming
company based in Antigua,  West Indies.  The agreement  provides for a perpetual
single user license  which may not be shared or used at more than one  location.
The fee for this product is $150,000 payable as follows: (i)

                                       -3-

<PAGE>

$3,000 was paid to the Company upon signing the  agreement,  (ii) an  additional
$3,000 was paid upon  installation of the  webSports(TM)  software  system,  and
(iii) the balance is payable  over time based on two  percent  (2%) of the gross
wagers  placed on the system.  Carib will  receive  technical  support  from the
Company for an additional fee of $500 per month.

         On February 27, 1997, the Company entered into a license agreement with
Grenada Management  Corporation  ("GMC"). The agreement provides for a perpetual
single user license  which may not be shared or used at more than one  location.
The fee for this  product is  $190,000  payable at a minimum  rate of $3,500 per
month beginning 30 days after the  commencement  of the commercial  operation of
the sports book.  Payments  will  commence not later than  September 1, 1997 and
payment  in full in due by  November  15,  1998.  The  Company  will  receive an
additional $500 per month for technical support and upgrades.

         The Company entered into a letter of intent with CasinoWorld  Holdings,
Ltd. ("CWH") dated March 28, 1997,  pursuant to which the Company would to grant
a license to permit CWH to integrate  webSports(TM) into its own casino software
product.  This letter of intent provides for a Non-Exclusive  Master Source Code
License for a period of ten years,  renewable for an additional five years. Upon
the execution of the  definitive  agreement,  the Company will receive a license
fee of $50,000 and will  receive an  additional  $50,000 upon the creation of an
integrated  application  suitable for CWH. For each sub-license  entered into by
CWH,  CWH will pay to the Company a fee of $100,000.  In addition,  in the first
year, CWH will pay to the Company an integration fee of $25,000.  The definitive
agreement is expected to be executed in July 1997.

INFORMATION PRODUCTS

REALSPORTS(TM)

         The  Company   offers  an   information   service  on  the  Web  called
"realSports(TM)."  This service provides real-time odds, scores and other sports
wagering  information and is free of charge to users. The Company anticipates to
generate  revenues from this service by selling  advertising  space to companies
wishing to target their  marketing to sports fans and  individuals  who wager on
sporting events.  The Company uses this service to promote visits to model sites
established for its ICE(TM),  webSports(TM) and Internet related  products.  The
Web address is http://www.realsports.com.

MEDICAL PRODUCTS

         The Atlantic  International  Medical ("AIM") division of the Company is
developing a global distribution network for medical testing devices (e.g., HIV,
pregnancy, drug abuse, hepatitis,  etc.) and other medical products. On December
8,  1996,  the  Company's  medical  division  was  certified  as  an  authorized
independent  agent of New World  Biotechnology  Consultants,  Ltd.  ("NWBC"),  a
medical products manufacturer. The Company is authorized to market all of NWBC's
products globally on the Internet until December 7, 1997. These products

                                       -4-

<PAGE>
include family planning products, HIV tests, Nitrite, Protein and Glucose urine
tests, and vision screening.

         AIM markets  distributorships  for  American  manufacturers  of medical
testing and diagnostic kits and other medical products throughout the world. AIM
acts as a broker between the manufacturer and distribution  companies located in
foreign countries. AIM does not resell products but simply collects a commission
for  taking  an order  from the  distributor  and  placing  the  order  with the
manufacturer.  This  approach  limits the risks  associated  with  inventory and
product  liability  and keeps  overhead  and direct  costs to a minimum.  AIM is
seeking additional manufacturers to represent.

CONSUMER RETAIL PRODUCTS

         THE ORIGINAL AS SEEN ON TV(TM)  markets  directly to retail many of the
products widely  marketed on television.  The Company acts as an intermediary by
marketing these products on the Web at http://www.as-seen-on-tv.com.  Any orders
placed with the Company are filled by JAD Products of West Palm Beach,  Florida.
The Company  receives a  commission  based on product  sales,  which varies from
product to product.  As of the date hereof,  commissions from the sales of these
products have been insignificant.

MARKETING/ADVERTISING SERVICES

         The Company, through Eminet Domain, Inc., offers consulting services to
other firms which  develop  private  network and  Internet-based  businesses  or
implement Internet marketing and distribution  elements for existing businesses.
Such services  offered include  technology  integration,  Web site  development,
electronic  marketing and traditional  marketing and advertising  consulting and
execution. The Web address is http://www.emi.net.com. See Recent Developments.

INDUSTRY OVERVIEW

         The Internet is a global  network of computers  connecting  millions of
individual computers and more than 70,000 business,  commercial,  government and
academic networks.  This interconnectivity  allows any one of these computers to
transmit  information to any other computer.  Management  believes that there is
tremendous  growth  potential  for  Internet  products as consumer  and business
access  becomes easier and more cost  efficient.  It is estimated that there are
already over 50 million  Internet users, and the number of users is growing at a
rate of 10% per month.

         The  commodity  pricing  of  powerful   computers  and  the  wealth  of
information  available on the Internet have all contributed to the creation of a
vast market of consumers and business  buyers.  During the last three years, the
number of internet  service  providers  ("ISPs") in the United  States has grown
from roughly  zero to over 3,000.  Management  attributes  the influx of ISPs to
several  factors which include:  (i) an increasing  demand for connection to the
Internet; (ii)

                                       -5-

<PAGE>

the  Internet  offers  significant  marketing  opportunities  for a  variety  of
products and services; and (iii) providing Internet connections requires minimum
expertise and start-up costs.

GROWTH STRATEGY

         The Company's  current plan of operations is to develop new  businesses
using the Internet to provide casino gaming and sports  booking  services and to
distribute medical products internationally. Achieving market acceptance for the
Company's services and products will require  substantial  marketing efforts and
the expenditure of significant funds to create awareness and demand.

MARKETING

         Marketing  efforts are directed by the  Company's  President  and Chief
Executive  Officer.  Sales  efforts  for its gaming and  wagering  products  are
directed primarily to casino operators and duly licensed sports books throughout
the United States and abroad.

TRADEMARKS

         The Company markets its services  utilizing  various names. The Company
is currently in the process of registering the following trademarks recognizable
in  the  United  States:  AIE(TM),   Internet  Casino  Extension(TM),   ICE(TM),
webSports(TM),  realSports(TM),  Indian Casino  Extension(TM),  Internet Charity
Extension(TM) and Hotel Hotlinks(TM). The Company has no patents or copyrights.

DEPENDENCE ON CUSTOMERS

         During the year ended  December  31,  1996 the  Company's  two  largest
customers,  Spintek Gaming  Technologies,  Inc.  ("Spintek") and Patroon Agency,
Inc., accounted for approximately 46% of the Company's revenues. During the year
ended December 31, 1996, the Company provided  investment  advisory  services to
Spintek which accounted for  approximately  27% of the Company's  revenues.  The
Company  does not  anticipate  revenues  from this  customer  in the year ending
December 31, 1997.

REGULATORY MATTERS

         The legality of gaming  through the use of the Internet is uncertain at
this point.  Since the sale of a foreign subsidiary which ran a sports book (see
Recent  Developments),  the Company does not operate virtual casinos or Internet
sports books.  However,  sales of the Company's products depend on the continued
international  growth of virtual  casinos and Internet sports books. A number of
United States federal and state  statutes could be construed to prohibit  gaming
through use of the Internet.  While the Company  focuses its sales and marketing
efforts in  jurisdictions  that allow private  network and Internet gaming which
include  Australian,  Caribbean  and American  gaming  markets,  there can be no
assurance  that  international,  federal,  state  or  local  laws or  regulatory
procedures, including those which relate to the issue of

                                       -6-

<PAGE>
jurisdiction  over  gaming on the  Internet,  which would  adversely  affect the
Company's business, financial condition, results of operations or prospects will
not be expanded or imposed.

COMPETITION

         The Company  competes with other companies  involved in the development
and  marketing of  entertainment  and medical  products  and  services  over the
Internet and the Web. The Company faces intense  competition in connection  with
its gaming operations.  The Company believes that its Internet casino and sports
book  products  currently  compete  with four (4)  companies  and that its Hotel
Hot-Links  product  currently  competes  with  two (2)  companies.  The  Company
continues   to  face   increasing   competition   from  both   established   and
newly-emerging  operations  in both the United States and  elsewhere.  There are
numerous casinos and sports books currently operating over the Internet, many of
which use software  developed for their own purposes.  The Company believes that
some of these  operators  may  decide to offer to sell their  software  to other
casino and sports book operators in the future.  The Company's  gaming  products
also compete with other forms of gaming  activities,  including  state-sponsored
lotteries  and horse racing and competes for  discretionary  spending with other
leisure time activities and alternate forms of entertainment.

         The Company's  operations involving the distribution of medical testing
and  diagnostic  devices  over the  Internet  will  compete  against much larger
pharmaceutical companies, such as Merck, Pfizer and Glaxo.

EMPLOYEES

         As of June 1, 1997 the Company had sixteen full-time employees, of whom
5 are  software  engineers.  None of the  Company's  employees  is  covered by a
collective  bargaining agreement or is a member of a union. The Company may also
employ  full-time and part-time  consultants on an as-needed  basis. The Company
considers its relationship with its employees to be satisfactory.

RECENT DEVELOPMENTS

         On  November  25,   1996,   the  Company   signed  an  agreement   with
Telecommunication  Information  Services Systems, NV, a Curacao based company to
provide  international  sports  and  entertainment   information  services.  The
agreement was terminated in February 1997 in  contemplation  of the consummation
of the Company's sale of Atlantic International, N.V., as described below.

         On December 15, 1996, the Company entered into an agreement to sell its
foreign subsidiary, known as Atlantic International, N.V. ("AIE, NV"), which ran
a sportsbook operation.  The purchase price was $850,000 payable as follows: (i)
$2,000 was paid to the Company at closing and (ii) the balance payable beginning
60 days after closing based on 40% of net win before expenses of the casino in a
minimum monthly amount of $3,000. Interest on the unpaid

                                       -7-

<PAGE>
balance  accrues at 8% per annum.  The effective  date of this  transaction  was
January 1, 1997, and the transaction closed in March 1997.

         On January 31, 1997, the Company  entered into an agreement to purchase
all of the shares of Eminet Domain, Inc. ("Eminet").  The purchase price for the
shares was $2,020,000  payable by the issuance and delivery to the  shareholders
of Eminet or their  designees of a minimum of 200,000  shares of fully-paid  and
non-assessable shares of Common Stock at the market value as of January 31, 1997
and $20,000 cash payable at March 31, 1997.  In addition,  the  shareholders  of
Eminet or their designees will receive  additional  shares at market price equal
to one time  Eminet's net profit before taxes for the years ending 1997 and 1998
up to $750,000 per annum, one and one-half times over $750,000 to $1,000,000 and
two  times  over  $1,000,000.   Eminet  provides  monthly  Internet  service  to
approximately 1,000 subscribers. The current equipment and personnel are capable
of handling up to 2,500  subscribers  without  upgrades.  As  additional  profit
centers,  Eminet hosts and programs web sites for  businesses  and  individuals,
provides  networking  design and  services  and sells  computer  and  networking
equipment.

ITEM 2.  DESCRIPTION OF PROPERTY.

         The Company leases  approximately  4,000 square feet of office space in
Boca Raton,  Florida  pursuant to a lease  expiring on November  30, 1997 with a
monthly rent of  approximately  $5,000.  The Company  believes that its existing
facilities are adequate for its current needs and that additional  facilities in
its service area are available to meet future needs.

ITEM 3.  LEGAL PROCEEDINGS.

         The  Company  is not a party  to any  material  threatened  or  pending
litigation.

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

         On  November  18,  1996,   the  Company  held  a  Special   Meeting  of
Shareholders  to, among other things,  vote on a proposal to  reincorporate  the
Company under the laws of Delaware.  There were  7,062,238  shares voted for the
proposal,  700 shares voted against the proposal and 105 shares  abstaining from
the vote.

                                       -8-

<PAGE>
                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The  Company's  Common Stock has been quoted on the Nasdaq OTC Bulletin
Board since July 25, 1996. Prior to July 25, 1996, the Company believes that its
Common Stock last traded in a public market in approximately 1987. The Company's
current symbol is "AIEE."

         The following table sets forth, for the periods indicated,  the highest
and  lowest  bid prices for the  Common  Stock,  as  reported  by the Nasdaq OTC
Bulletin Board. The prices reported reflect inter-dealer prices,  without retail
mark-up, mark-down or commission,  and may not reflect actual transactions.  The
prices have been  adjusted to reflect a 3 for 1 reverse  split of the  Company's
Common Stock in November 1996.

CALENDAR 1996                         HIGH              LOW
-------------                         ----              ---

Third Quarter                        11.625            5.25

Fourth Quarter                       11.25             9.75

CALENDAR 1997                         HIGH              LOW
-------------                         ----              ---

First Quarter                          10               1.5

         At June 17, 1997, there were approximately 286 holders of record of the
Company's Common Stock. This number does not include an indeterminate  number of
shareholders whose shares are held by brokers in "street name."

         The Company has not paid any cash  dividends on the Common Stock in the
past and the Board of Directors does not anticipate declaring any cash dividends
on the Common Stock in the foreseeable  future. The Company currently intends to
utilize any  earnings it may achieve for the  development  of its  business  and
working capital purposes.

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

         THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION CONTAINS
FORWARD- LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.  THE COMPANY'S
ACTUAL  RESULTS  COULD  DIFFER   MATERIALLY  FROM  THOSE  ANTICIPATED  IN  THESE
FORWARD-LOOKING STATEMENTS. FACTORS THAT MAY CAUSE SUCH DIFFERENCES INCLUDE, BUT
ARE NOT LIMITED  TO, THE  COMPANY'S  EXPANSION  INTO NEW  MARKETS,  COMPETITION,
TECHNOLOGICAL ADVANCES AND AVAILABILITY OF MANAGERIAL PERSONNEL.

OVERVIEW

         During 1996,  the Company's  redirected  its business  from  investment
banking to  providing  products  and  services  built  around  new and  emerging
technologies  including  the  Internet,  intranets,  private  networks and smart
cards. The moratorium on investment banking operations

                                       -9-

<PAGE>
did not result in the obsolescence of any property,  plant or equipment  because
these assets included office and computer  equipment and office  furniture which
the Company can use in the  internet  business  activities.  No  employees  were
displaced and additional employees were hired to support the new operations.

RESULTS OF OPERATIONS

         The following is a summary of the Company's  consolidated financial and
operating data:

                                                   Year Ended December 31,
                                                   -----------------------
STATEMENTS OF OPERATIONS DATA:                      1996             1995
------------------------------                      ----             ----
Revenue                                      $454,656              $702,307
Income [Loss] from Operations                (427,975)              249,655
Net Income [Loss]                            (376,270)              158,839
Primary Income [Loss] Per Common Share          $(.04)                 $.02

BALANCE SHEET DATA:                     December 31, 1996      December 31, 1995
-------------------                     -----------------      -----------------
Working Capital                             $  199,893             $147,166
Total Assets                                 1,982,014              261,870
Total Liabilities                              302,879              102,949
Stockholders' Equity                         1,679,135              158,929

         The following is a summary of the Company's  financial data broken into
business segments:

                                                   1996               1995
                                            ---------------      ---------------

Net Sales:
         Investment Advisory Services            366,204              702,307
         Internet Software                        87,000                   --
         Medical Testing Kits                      1,452                   --
                                             -----------           ----------
                                              $  454,656           $  702,307
Operating Income:
         Investment Advisory Services            231,081              249,655
         Internet Software                      (659,056)                  --
         Medical Testing Kits                         --                   --
                                             -----------           -----------
                                              $ (427,975)          $  249,655
Total Assets:
         Investment Advisory Services              1,423                1,423
         Internet Software                     1,980,591                   --
         Medical Testing Kits                         --                   --
                                              ----------           ----------
                                              $1,982,014           $    1,423
Depreciation and Amortization:
         Investment Advisory Services                285                  285
         Internet Software                        67,091                   --
         Medical Testing Kits                         --                   --
                                              ----------           ----------
                                              $   67,376           $      285

                                      -10-
<PAGE>
                                                   1996               1995
                                            ---------------      --------------

Capital Expenditures:
         Investment Advisory Services              1,423                 1,423
         Internet Software                     1,490,395                    --
         Medical Testing Kits                         --                    --
                                              ----------           -----------
                                              $1,491,818           $     1,423

         During the year ended  December  31,  1995,  the  Company's  activities
consisted  primarily of  investment  advisory  services  which  generated  gross
revenues in the amount of $702,307.  General and administrative expenses totaled
$452,367,  or 64.40% of revenues.  Of this amount,  $245,800  represented  rent,
salaries  and  other  general  and  administrative  costs  which  was paid to an
affiliate of the Company under a management  agreement which expired on December
31, 1995.  Beginning in January  1996,  the Company paid all expenses out of its
own operating  accounts.  Depreciation  expense for 1995 totaled $285 or .04% of
revenues,  on total fixed assets of $1,423  consisting  of office  furniture and
equipment. Net income, after a $90,500 (12.89% of revenues) provision for income
taxes, totaled $158,839.

         In the first half of the year ended  December  31,  1996,  the focus of
Company's  business  activity  shifted  from  investment  advisory  services  to
supplying  Internet  related  products upon the acquisition of various  computer
software  products from RAM. During this period,  investment  advisory  services
were phased out and currently  remain an inactive  profit center of the Company.
In 1996,  expenditures  were made for both software and hardware in an aggregate
amount of $1,490,395.  Additional employees were hired in both the technical and
sales  areas.  With the further  development  of the Internet  related  software
products  and the change of  business  focus,  revenues  dropped  by 35.26%,  or
$247,651 to a total of $454,656 for 1996. Investment advisory service income for
1996 was $366,204 representing 80.55% to total revenues.  Internet related sales
totaled $88,452 or 19.45% of total revenues.  Depreciation  expense and software
amortization for 1996 totaled $68,332 or 15.03% of gross revenues.

         The operating income from the investment advisory services for the year
ended December 31, 1996 totaled $231,081.  Internet related activities generated
a net loss from  operations of ($659,056) due to the costs  associated  with the
start up of the new business  segment.  In the fourth  quarter of 1996, a wholly
owned subsidiary of the Company,  AIE(TM),  NV, opened A demonstration  site for
it's Internet gaming software in Curacao.  In the first quarter of 1997, AIE(TM)
NV and its operations  were sold as an opening  Internet casino and sports book.
The  neT  operating  loss  from  this  discontinued   business  segment  totaled
($29,244).

OUTLOOK

         The gaming  industry,  particularly  as it relates to the  Internet  is
expected to continue to grow for the foreseeable  future.  Worldwide interest in
the ICE(TM) and webSports(TM) softWare systems is high with particular attention
coming from Australia  where the government is supportive of private network and
Internet gaming. Management expects continued sales growth

                                      -11-

<PAGE>
from these products. The Company will continue to focus its efforts on marketing
these software  systems as well as the Hotel  Hotlinks(TM)  product.  Management
believes that interest in the HoteL Hotlinks(TM) product is very high especially
in Australia, Las Vegas and Atlantic City. ThE company expects significant sales
of this  product to begin in the third  quarter of 1997.  The Company  will also
continue its development of add-on  products for both ICE(TM) and  webSports(TM)
including the adaptations for Indian and Charity gaming markets.

         Management  expects  continued  growth in its credit card cash  advance
system as smart card  technology  integration  allows this system to expand into
other  financial  services.  In addition,  the Company will  continue to provide
on-line,  private network,  Web and networking  services through Eminet which is
also  expected  to  contribute  significantly  to  profits  in  1997  due to new
contracts and expanding  awareness  among area  Internet  users.  The Company is
considering expanding its portfolio of Internet and computer related services by
increasing its training capabilities.

         Management does not expect the Company's  medical and consumer products
divisions  to  significantly  contribute  to  revenues  and  profits in the near
future. The AIM division is expected to become fully active in the third quarter
of 1997 and  contribute  modestly  to profits  until the middle of 1998 at which
time  revenues are  expected to increase  substantially  based on the  Company's
commitment to dedicating additional resources to this division.

         While THE ORIGINAL AS SEEN ON TV business does not contribute currently
to either  revenues or  expenses,  consumer  response has been  significant.  In
addition,  interest in the business has been appreciable  from  manufacturers of
these types of products. The Company expects to allocate some minor resources to
this  activity  in the third  quarter of 1997,  but does not expect  significant
revenues to be realized until the first quarter, 1998.

LIQUIDITY AND CAPITAL RESOURCES

         WORKING CAPITAL. At December 31, 1995 the Company had a working capital
of $147,166. At December 31, 1996, the Company had working capital of $199,893.

         CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES. During the years ended
December  31, 1995 and 1996,  net cash used by operating  activities  was $0 and
$193,975,   respectively.   Cash  flows  from  continuing  operating  activities
decreased by $193,975 for the year ended  December 31, 1996 compared to the same
period  in 1995  primarily  due to start up  expenditures  of a new  segment  of
business which included costs  associated  with the  acquisition of Internet and
private network  products.  Initial research and development costs were expensed
as well as related costs associated with start up operations.  Additional office
space  was  acquired  and  additional   employees  were  hired  to  support  the
development of the software products.

         CASH FLOWS FROM INVESTING  ACTIVITIES.  During the years ended December
31, 1995 and 1996,  the Company  made net  capital  expenditures  of $48,144 and
$308,859, respectively,

                                      -12-

<PAGE>
primarily for purchases of property and equipment.  The amounts expended in 1996
represent   expenditures   necessary  for  the  Internet  and  private   network
development and implementation.

         CASH FLOWS FROM FINANCING  ACTIVITIES.  During the years ended December
31, 1995 and 1996,  cash flows from financing  activities were $723,425 and $90,
respectively.  For the year ended  December 31, 1996,  cash flows from financing
activities  are primarily  from the issuance of Common Stock in connection  with
private  placements of the Company's  Common Stock which raised  proceeds to the
Company of approximately $701,770.

         The  Company  believes  that cash  from  operating  activities  will be
sufficient  to fund proposed  operations  for at least the next 12 months at its
current rate of growth.

INFLATION

         In the opinion of management,  inflation has not had a material adverse
effect on its results of operations.

ITEM 7.  FINANCIAL STATEMENTS.

         [See page F-1.]

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

         On December 19, 1996,  the Board of Directors of the Company  dismissed
Jones,  Jensen & Company  ("Jones  Jensen") as  independent  accountants  to the
Company and  appointed  Buchbinder  Tunick & Company LLP as the new  independent
accountants to the Company.  Jones Jensen's accountant's report on the financial
statements of the  Registrant  for the year ended  December 31, 1995 (the period
for which Jones Jensen was engaged as independent  accountants)  did not contain
any adverse  opinion or  disclaimer  of opinion  and other than a going  concern
qualification,  was not qualified or modified as to uncertainty, audit scope, or
accounting principles.

         On January 30, 1997,  the Board of  Directors of the Company  dismissed
Buchbinder Tunick & Company LLP as independent accountants to the Company and on
March 5, 1997 appointed Moore Stephens,  P.C. as the new independent accountants
to the Company.  Buchbinder  Tunick & Company LLP has not reported on any of the
Company's  financial  statements.  Since,  December  19, 1996 (the date on which
Buchbinder was engaged as the Company's independent accountants),  there were no
disagreements  between the Company  and  Buchbinder  Tunick & Company LLP on any
matters of accounting  principles or practices,  financial statement disclosure,
or auditing  scope or  procedure,  which  disagreements,  if not resolved to the
satisfaction  of Buchbinder  Tunick & Company LLP, would have caused  Buchbinder
Tunick  &  Company  LLP  to  make  a  reference  to the  subject  matter  of the
disagreements in connection with its reports.

                                      -13-

<PAGE>
                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

         The directors and executive officers of the Company and their positions
with the Company are set forth below.

         NAME                       AGE          POSITION
         ----                       ---          --------

         Norman J. Hoskin            62          Chairman of the Board
                                                 Secretary and Treasurer
         Richard A. Iamunno          39          President, Chief Executive
                                                 Officer and Director
         Steven D. Brown             50          Director

         NORMAN J. HOSKIN has served as the Chairman of the Board, Secretary and
President since July 16, 1996 and served as Chairman of the Board, Secretary and
President of Atlantic  since its  inception in 1994.  Mr. Hoskin served a Senior
Vice President of Rentar  Industries Group from 1972 to 1982, one of the largest
transportation,  warehousing and banking conglomerates in the United States. Mr.
Hoskin was former Chairman of the Board of Tapistron International  (NASDAQ/NMS:
TAPI). He was formerly a Director and Officer of Trinitech Systems (AMEX:  TSI).
Currently  he is a Director of Aquacare  Systems  (NASDAQ:  AQCR),  Consolidated
Technologies  (NASDAQ:  COTG),  Spintek Gaming  (NASDAQ/OTC:  SPTK) and American
Artists  Corporation.  Mr.  Hoskin is also a Director and Secretary of Aqua Care
Systems.

         RICHARD  A.  IAMUNNO  has  served as a  Director,  the Chief  Executive
Officer and  President  since July 16, 1996 and served as a Director,  the Chief
Executive  Officer and President of Atlantic since its inception in 1994.  Prior
to starting the Company,  Mr. Iamunno was President of Ameristar  International,
an investment banking firm which provided  European-based  companies with merger
assistance into the U.S. public marketplace from December 1992 to June 1994. Mr.
Iamunno's business  experience incudes positions as Senior Director of Marketing
and Vice President of Western Union Corporation. Mr. Iamunno has recently served
as a Director of Tapistron International (NASDAQ/NMS: TAPI) and in the past as a
Director of Trinitech Systems,  Inc. (AMEX:TSI) among others. Mr. Iamunno earned
his Business degree from Drake University in Des Moines, Iowa.

         STEVEN D. BROWN was  appointed  a Director  of the  Company on July 16,
1996.  Mr.  Brown is the  Chairman  of  American  Artists  Film  Corporation,  A
Georgia-based  public  company.  Since  1989,  Mr.  Brown has been active in the
development  of feature film  projects,  through  Movie America  Corporation,  a
Georgia corporation which Mr. Brown helped organize and for which he

                                      -14-

<PAGE>
served as  President  and Director  until  leaving that company in 1991 to found
American Artists Film Corporation.

MEETINGS AND COMMITTEES

         The Board held no meetings  during the year ended  December  31,  1996.
From time to time during such year,  the members of the Board acted by unanimous
written consent.  The Company has no standing  compensation or audit committees.
The typical  functions of such  committees  are performed by the entire Board of
Directors.

                                      -15-

<PAGE>
ITEM 10.          EXECUTIVE COMPENSATION

         The following table sets forth the total compensation for the Company's
chief executive  officer during the year ended December 31, 1996, 1995 and 1994.
No other  executive  officer's  salary and bonus exceeded  $100,000 for services
rendered to the Company during such years.

                           SUMMARY COMPENSATION TABLE



                                                    Annual Compensation(1)
                                                  -----------------------------

                Name And
           Principal Position        Year         Salary($)        Bonus($)
           ------------------        ----         ---------        --------

Richard A. Iamunno.................  1996         $ 63,000            --
  President and Chief                1995           57,000(2)         --
  Executive Officer                  1994           20,000(2)         --


---------------------
(1)      THE   COLUMNS   FOR  "OTHER   ANNUAL   COMPENSATION"   AND   "LONG-TERM
         COMPENSATION" HAVE BEEN OMITTED AS THERE IS NO COMPENSATION REQUIRED TO
         BE REPORTED IN SUCH COLUMNS.  THE AGGREGATE  AMOUNT OF PERQUISITES  AND
         OTHER PERSONAL  BENEFITS DID NOT EXCEED THE LESSER OF $50,000 OR 10% OF
         THE TOTAL OF SALARY AND BONUS.  IN ADDITION,  THE OPTION GRANTS IN LAST
         YEAR TABLE AND  AGGREGATED  OPTION  EXERCISES IN LAST YEAR AND YEAR END
         OPTION  VALUES  TABLE HAVE BEEN  OMITTED AS THE ABOVE  NAMED  EXECUTIVE
         OFFICER WAS NOT  GRANTED  ANY OPTIONS  DURING THE LAST YEAR AND OWNS NO
         OPTIONS.

(2)      REPRESENTS  SALARY  PAID  FOR  SERVICES  RENDERED  AS AN  EXECUTIVE  OF
         ATLANTIC INTERNATIONAL CAPITAL, LTD., A WHOLLY-OWNED  SUBSIDIARY OF THE
         COMPANY.

BOARD OF DIRECTORS COMPENSATION

         The  Company  does  not  currently  compensate  directors  who are also
executive  officers  of the  Company  for  service  on the  Board of  Directors.
Directors are reimbursed for their  expenses  incurred in attending  meetings of
the Board of Directors.

LONG-TERM INCENTIVE AND PENSION PLANS

         The Company does not have any  long-term  incentive or defined  benefit
pension plans.

                                      -16-

<PAGE>
OTHER

         No director or  executive  officer is  involved in any  material  legal
proceeding  in which he is a party  adverse  to the  Company  or has a  material
interest adverse to the Company.

EMPLOYMENT AGREEMENTS

         On June 17, 1996, the Company entered into a consulting  agreement with
Wayne Newton which  expires on June 1, 1999,  pursuant to which Mr.  Newton will
serve as a spokesman of the Company.  As  compensation,  Mr. Newton will receive
5,000 shares of the Company's  Common Stock for each year of the three year term
and will receive a cash payment for each activity he  participates  in on behalf
of the Company at fees to be negotiated by the parties.

         On July 22, 1996, the Company reached an oral agreement with Centerline
Associates,  Inc.  ("Centerline")  pursuant  to which  Centerline  provides  the
Company with consulting  services in the areas of software and hardware  project
requirements and the development of business and acquisition  opportunities.  As
compensation, Centerline received base compensation of $52,000 per annum for the
year  ended  December  31,  1996 and will  receive  $72,000  per  annum  for the
remainder of the agreement which expires on December 31, 1997.

         The Company is currently negotiating employment agreements with Messrs.
Iamunno,  Hoskin and Halaburda  pursuant to which they will continue to serve as
the Company's  President  and Chief  Executive  Officer,  Chairman of the Board,
Secretary  and  Treasurer,  and Chief  Financial  Officer,  respectively.  It is
anticipated  that as  compensation  for their  services,  the  Company  will pay
Messrs.  Iamunno,  Hoskin and Halaburda base salaries of $110,000,  $110,000 and
$90,000 per annum,  respectively  which shall be subject to annual  increases of
10%. The Company  expects that each of the  agreements  will  continue for three
years will expire in the year 2000.  Other than the  aforementioned  agreements,
the Company has not entered into any other employment  agreement with any of its
officers,  directors or any other persons and no such agreements are anticipated
in the immediate future.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

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

         Each of the  following  persons  failed  to file on a timely  basis one
report for a single  transaction  required  by Section  16(a) of the  Securities
Exchange  Act of 1934,  as amended,  and the rules and  regulations  promulgated
thereunder (the "Exchange Act"), during the year ended December 31, 1996: Norman
Hoskin, Richard Iamunno and Steven D. Brown. Each of the

                                      -17-

<PAGE>

transactions for the above named individuals were  subsequently  reported to the
Commission on Form 3.

ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The  following  table  sets  forth,  as of June 17,  1997,  information
regarding the beneficial  ownership of the Company's Common Stock by each person
known by the Company to own five percent or more of the outstanding  shares,  by
each of the  directors  and  officers,  and by the  directors  and officers as a
group.  As of June 17,  1997,  there were  outstanding  9,540,187  shares of the
Common Stock of the Company.

                                                Amount of
                                                Beneficial
  Name and Address of Beneficial Owner(2)       Ownership       Percent of Class
----------------------------------------        ----------      ---------------

Norman J. Hoskin                                  1,115,935          11.7%

Richard A. Iamunno                                1,133,270          11.9%

Steven D. Brown                                           0            *

The AWIXA Trust                                   2,480,876          26.0%
c/o Smith, Barnard & Diel
52 Reid Street
Hamilton, Bermuda

The Kunni Lemmel Trust                            2,480,876          26.0%
c/o Smith, Barnard & Diel
52 Reid Street
Hamilton, Bermuda

All Officers and Directors as a Group             2,249,205          23.6%
(3 persons)


(1)      Beneficial  ownership has been determined in accordance with Rule 13d-3
         of the Securities Exchange Act of 1934.  Generally,  a person is deemed
         to be the beneficial owner of a security if he has the right to acquire
         voting or investment power within 60 days.

(2)      Unless otherwise  indicated,  all addresses are at the Company's office
         at 2200 Corporate Blvd., Suite 317, Boca Raton, Florida 33431.

                                      -18-
<PAGE>
ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In  January  1995,  the  Company  entered  into a one  year  management
agreement with a company which is deemed to be an affiliate because of identical
stockholder interests.  Under the agreement, the Company paid monthly management
fees  aggregating  $245,800 for the year ended  December 31, 1995,  representing
operating expenses including rent, salaries and other general and administrative
costs. The agreement expired on December 31, 1995, at which date $10,000 was due
from the  affiliate.  Additionally,  the Company made advances to the affiliated
company during the year ended December 1996,  increasing the balance  receivable
to $48,273. The advances are non-interest bearing, and due on demand.

         The Company has notes payable to two officers in the  aggregate  amount
of $21,655 at December 31, 1996.  The notes are demand notes and incur  interest
at 8% per annum.  Interest  expense  related to the  shareholders  notes totaled
$1,302 for the year ended December 31, 1996.

                                      -19-

<PAGE>
ITEM 13.  EXHIBITS, LIST AND REPORTS ON FORM 8-K.

         (a)      Exhibits:

         *3.1     --       Certificate of Incorporation of the Company.

         *3.2     --       Bylaws of the Company.

         *4.1     --       Specimen Common Stock Certificate.

         *10.1    --       Incentive Stock Option Plan for Employees, Directors,
                           Consultants and Advisers.

         *10.2    --       Exchange   of   Stock    Agreement    and   Plan   of
                           Reorganization dated July 16, 1996 by and between the
                           Company  (formerly known as CEEE Group  Corporation),
                           Edward    Cowle,    Deworth    Williams,     Atlantic
                           International  Capital,  Ltd., and each of the former
                           stockholders of Atlantic  International Capital, Ltd.
                           listed on Schedule I thereto.

         *10.3    --       Amendment  No. 1 to Exchange of Stock  Agreement  and
                           Plan of Reorganization dated September 5, 1996 by and
                           between  the  Company  (formerly  known as CEEE Group
                           Corporation),   Edward   Cowle,   Deworth   Williams,
                           Atlantic International Capital, Ltd., and each of the
                           former   stockholders   of   Atlantic   International
                           Capital, Ltd. listed on Schedule I thereto.

         *10.4    --       Agreement and Plan of Merger dated as of November 18,
                           1996, between Atlantic  International  Entertainment,
                           Ltd.,   a   Delaware   corporation   and  CEEE  Group
                           Corporation, Ltd., a Colorado corporation.

         *10.5    --       Purchase  and Sale  Agreement  dated as of April  15,
                           1996 by and between the Company,  RAM  Associates and
                           James A Dougherty.

         *10.6    --       Agreement  for Purchase and Sale of Stock dated as of
                           December   15,  1996  by  and  between  the  Company,
                           Atlantic   International   Entertainment,    NV   and
                           Australian Advisers, Ltd.

         *10.7    --       Agreement  for Purchase and Sale of Stock dated as of
                           January  31,  1997 by and  between  the  Company  and
                           Eminet Domain, Inc.

         *10.8    --       Consulting Agreement dated as of June 17, 1996 by and
                           between the Company and Wayne Newton.

         *10.9    --       License Agreement dated as of November 4, 1996 by and
                           between  the  Company  and   Atlantic   International
                           Entertainment, N.V.

                                      -20-
<PAGE>
         *10.10   --       License  Agreement  dated as of December  27, 1996 by
                           and between the Company and Patroon Agency, Inc.

         *10.11   --       License  Agreement  dated as of December  31, 1996 by
                           and between the Company and Carib Sportsbook, Inc.

         *10.12   --       License  Agreement  dated as of February  27, 1997 by
                           and  between  the  Company  and  Grenada   Management
                           Corporation.

         *10.13   --       License  Agreement  dated as of March 17, 1997 by and
                           between the Company and ThirdAge, Inc.

         *11.1    --       Statement re: computation of per share earnings.

         *27      --       Financial Data Schedule.

--------------------------
*        Included herein.

         (b)      REPORTS ON FORM 8-K

                  On December 3, 1996, the Company filed with the Commission,  a
                  report on Form 8-K dated  November  18,  1996  disclosing  the
                  reincorporation  merger with and into  Atlantic  International
                  Entertainment,  Ltd., a Delaware corporation.  No other report
                  on Form 8-K was filed  during  the three  month  period  ended
                  December 31, 1996.

                  On February 6, 1997, the Company filed two reports on Form 8-K
                  dated  December 19, 1996 and January 30,  1997,  respectively.
                  Such reports  disclosed  changes in the Company's  independent
                  accountants.

                  On April 14,  1997,  the Company  filed with the  Commission a
                  Form 8-K dated March 7, 1997  disclosing  the  acquisition  of
                  Eminet Domain, Inc.

                                      -21-
<PAGE>
                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the
Registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                        ATLANTIC INTERNATIONAL ENTERTAINMENT,
                                        LTD.

Dated:  July 3, 1997                    /s/ NORMAN HOSKIN
                                        -------------------------------------
                                        Norman J. Hoskin,
                                        Chairman of the Board

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

        Signature                      Title                          Date
        ---------                      -----                          ----

/s/ NORMAN HOSKIN               Chairman of the Board,            July 3, 1997
-----------------------------   Secretary, and Treasurer
      Norman J. Hoskin


/s/ RICHARD IAMUNNO            President, Chief Executive         July 3, 1997
-----------------------------  Officer and Director
      Richard A. Iamunno


/s/ DAVID HALABURDA            Chief Financial Officer            July 3, 1997
-----------------------------  (principal accounting officer)
      David Halaburda


/s/ STEVEN BROWN               Director                           July 3, 1997
-----------------------------
      Steven D. Brown


                                      -22-

<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
--------------------------------------------------------------------------------

INDEX TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

                                                                           PAGE
                                                                           ----


Independent Auditor's Report .............................................  F-2

Consolidated Balance Sheet as of December 31, 1996 .......................  F-3

Consolidated Statements of Operations for the years ended
December 31, 1996 and 1995................................................  F-4

Consolidated Statements of Changes in Stockholders' Equity for the
years ended December 31, 1996 and 1995....................................  F-5

Consolidated Statements of Cash Flows for the years ended
December 31, 1996 and 1995................................................  F-6

Notes to Consolidated Financial Statements ...............................  F-8





                             . . . . . . . . . . . .

                                       F-1

<PAGE>
                          INDEPENDENT AUDITOR'S REPORT


To the Stockholders and Board of Directors of
   Atlantic International Entertainment, Ltd.



                  We have audited the accompanying consolidated balance sheet of
Atlantic International  Entertainment,  Ltd. and its subsidiaries as of December
31, 1996,  and the related  consolidated  statements of  operations,  changes in
stockholders' equity, and cash flows for the year then ended. These consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  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  consolidated   financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall consolidated financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

                  In our opinion, the consolidated financial statements referred
to above present fairly, in all material  respects,  the consolidated  financial
position of Atlantic International  Entertainment,  Ltd. and its subsidiaries as
of December 31, 1996, and the consolidated results of their operations and their
cash  flows  for the year  then  ended in  conformity  with  generally  accepted
accounting principles.





                                         /s/ MOORE STEPHENS, P. C.
                                         -----------------------------
                                         MOORE STEPHENS, P. C.
                                         Certified Public Accountants.

Cranford, New Jersey
March 26, 1997
                                       F-2

<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
--------------------------------------------------------------------------------

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1996.
--------------------------------------------------------------------------------

ASSETS:
CURRENT ASSETS:
   Cash and Cash Equivalents                                        $  421,188
   Refundable Income Taxes                                              77,215
   Prepaid Expenses                                                      4,369
                                                                    ----------
   TOTAL CURRENT ASSETS                                                502,772
                                                                    ----------
FURNITURE, FIXTURES AND EQUIPMENT
   Furniture and Fixtures                                                2,901
   Computer Hardware                                                   247,894
   Equipment                                                            18,914
   Leasehold Improvements                                               13,401
                                                                    ----------

   Total - At Cost                                                     283,110
   Less:  Accumulated Depreciation and Amortization                     19,723
                                                                    ----------
   FURNITURE, FIXTURES AND EQUIPMENT - NET                             263,387
                                                                    ----------

SOFTWARE [NET OF ACCUMULATED AMORTIZATION OF $48,894]                1,159,814
                                                                    ----------
OTHER ASSETS:
   Organization Costs - [Net of Accumulated Amortization of $323]        2,902
   Due from Related Parties                                             48,273
   Other Assets                                                          4,866
                                                                    ----------

   TOTAL OTHER ASSETS                                                   56,041
                                                                    ----------
   TOTAL ASSETS                                                     $1,982,014
                                                                    ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
   Accounts Payable and Accrued Expenses                            $  252,945
   Notes Payable - Officer                                              21,655
   Due to Customers                                                     28,279
                                                                    ----------

   TOTAL CURRENT LIABILITIES                                           302,879
                                                                    ----------
STOCKHOLDERS' EQUITY:
   Preferred Stock - Par Value $.001 Per Share; Authorized
     10,000,000 Shares, None Issued or Outstanding                          --

   Common Stock - Par Value $.001 Per Share;
     Authorized 100,000,000 Shares, Issued and
     Outstanding 9,190,184 Shares                                        9,190

   Additional Paid-in Capital                                        1,887,376

   Accumulated Deficit                                                (217,431)
                                                                    ----------
   TOTAL STOCKHOLDERS' EQUITY                                        1,679,135
                                                                    ----------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $1,982,014
                                                                    ==========

The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.

                                       F-3
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
--------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                         Years Ended
                                                                         -----------
                                                                        December 31,
                                                                        ------------
                                                                    1 9 9 6             1 9 9 5
                                                                    -------             -------

<S>                                                           <C>                 <C>            
REVENUE                                                       $       454,656     $       702,307
                                                              ---------------     ---------------

GENERAL AND ADMINISTRATIVE                                            815,255             452,367

DEPRECIATION AND AMORTIZATION                                          67,376                 285
                                                              ---------------     ---------------

   TOTAL OPERATING EXPENSES                                           882,631             452,652
                                                              ---------------     ---------------

   [LOSS] INCOME FROM OPERATIONS                                     (427,975)            249,655
                                                              ---------------     ---------------

OTHER INCOME [EXPENSES]:
   Interest Income                                                      4,350                  --
   Interest Expense                                                    (2,870)                 --
   Interest Expense - Related Party                                    (1,302)                 --
   Other Income [Expense]                                               3,556                (316)
                                                              ---------------     ---------------

   OTHER INCOME [EXPENSES] - NET                                        3,734                (316)
                                                              ---------------     ---------------

   [LOSS] INCOME FROM CONTINUING OPERATIONS BEFORE
     INCOME TAX [BENEFIT] EXPENSE                                    (424,241)            249,339

INCOME TAX [BENEFIT] EXPENSE                                          (77,215)             90,500
                                                              ---------------     ---------------

   [LOSS] INCOME FROM CONTINUING OPERATIONS                          (347,026)            158,839

[LOSS] FROM OPERATIONS OF DISCONTINUED FOREIGN SUBSIDIARY             (29,244)                 --
                                                              ---------------     ---------------

   NET [LOSS] INCOME                                          $      (376,270)    $       158,839
                                                              ===============     ===============

[LOSS] INCOME PER COMMON SHARE:
   Continuing Operations                                                 (.04)                .02
   Discontinued Operations                                                 --                  --
                                                              ---------------     ---------------

   TOTAL [LOSS] INCOME PER COMMON SHARE                       $          (.04)    $           .02
                                                              ===============     ===============

   NUMBER OF SHARES                                                 8,514,537           8,303,484
                                                              ===============     ===============
</TABLE>

The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.

                                       F-4

<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                     Common Stock                 Additional
                                                                     ------------                 ----------
                                                               Number of                            Paid-in
                                                               ---------                            -------
                                                                Shares            Amount            Capital
                                                                ------            ------            -------
<S>                                                              <C>            <C>               <C>
   BALANCE - JANUARY 1, 1995                                            --      $         --      $        --

Issuance of Common Stock in Combination [1]                      6,803,451             6,803           (6,803)

Sale of Common Stock                                                    90                90               --

Recapitalization Adjustment [1]                                        (90)              (90)              90

Net Income                                                              --                --               --
                                                                ----------      ------------       ----------

   BALANCE - DECEMBER 31, 1995                                   6,803,451             6,803           (6,713)

Equity of CEEE [1]                                               1,500,033             1,500           (6,794)

Sale of Common Stock                                                    13                13           35,749

Recapitalization Adjustment [1]                                        (13)              (13)              13

Private Placement [1]                                              886,700               887          825,994

Asset Acquisition [4]                                              200,000                --        1,200,000

Recapitalization Adjustment [1]                                   (200,000)               --               --

Recapitalization Costs [1]                                              --                --         (160,873)

[Loss] from Continuing Operations                                       --                --               --

[Loss] from Discontinued Foreign Subsidiary                             --                --               --
                                                                ----------      ------------       ----------

   BALANCE - DECEMBER 31, 1996                                   9,190,184      $      9,190       $1,887,376
                                                                ==========      ============       ==========
</TABLE>
<TABLE>
<CAPTION>
                                                                                                    Total
                                                                                                    -----
                                                               Accumulated      Preferred       Stockholders'
                                                               -----------      ---------       -------------
                                                                 Deficit          Stock            Equity
                                                                 -------          -----            ------
<S>                                                         <C>               <C>               <C>      
   BALANCE - JANUARY 1, 1995                                $       --        $     --          $      --

Issuance of Common Stock in Combination [1]                         --              --                 --

Sale of Common Stock                                                --              --                 90

Recapitalization Adjustment [1]                                     --              --                 --

Net Income                                                     158,839              --            158,839
                                                            ----------        --------         ----------

   BALANCE - DECEMBER 31, 1995                                 158,839              --           158,929

Equity of CEEE [1]                                                  --              --           (5,294)

Sale of Common Stock                                                --              --           35,762

Recapitalization Adjustment [1]                                     --              --               --

Private Placement [1]                                               --              --          826,881

Asset Acquisition [4]                                               --              --        1,200,000

Recapitalization Adjustment [1]                                     --              --               --

Recapitalization Costs [1]                                          --              --         (160,873)

[Loss] from Continuing Operations                             (347,026)             --         (347,026)

[Loss] from Discontinued Foreign Subsidiary                    (29,244)             --          (29,244)
                                                            ----------       ---------      ------------

   BALANCE - DECEMBER 31, 1996                              $ (217,431)       $     --      $ 1,679,135
                                                            ==========       =========      ===========
</TABLE>

The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.

                                       F-5

<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
--------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                   Years Ended
                                                                                                   -----------
                                                                                                  December 31,
                                                                                                  ------------
                                                                                           1 9 9 6             1 9 9 5
                                                                                           -------             -------
OPERATING ACTIVITIES:
<S>                                                                                   <C>                 <C>
   [Loss] Income from Continuing Operations                                           $      (347,026)    $       158,839
   Adjustments to Reconcile Net Income [Loss] to
     Net Cash [Used for] Operating Activities:
     Depreciation and Amortization                                                             67,376                 285

   Changes in Assets and Liabilities:
     [Increase] Decrease in:
       Trade Accounts Receivable                                                              (63,965)            (13,250)
       Prepaid Expenses and Other Current Assets                                               20,723                 (92)
       Other Assets                                                                            (6,900)                 --

     Increase [Decrease] in:
       Accounts Payable and Accrued Expenses                                                  225,686              12,449
       Income Taxes Payable                                                                   (90,500)             90,500
       Other Current Liabilities                                                                  631                  --
                                                                                      ---------------     ---------------

   NET CASH - CONTINUING OPERATIONS                                                          (193,975)            248,731
                                                                                      ---------------     ---------------

DISCONTINUED OPERATIONS:
   [Loss] from Discontinued Operations                                                        (29,244)                 --
   Adjustments to Reconcile Net [loss] to Net Cash Operations:
     Depreciation                                                                               1,278                  --

   Changes in Assets and Liabilities:
     [Increase] Decrease in:
       Other Assets                                                                              (815)                 --

     Increase [Decrease] in:
       Accounts Payable                                                                        14,808                  --
       Customer Deposits                                                                       27,648                  --
                                                                                      ---------------     ---------------

   NET CASH - DISCONTINUED OPERATIONS                                                          13,675                  --
                                                                                      ---------------     ---------------

   NET CASH - OPERATING ACTIVITIES - FORWARD                                                 (180,300)            248,731
                                                                                      ---------------     ---------------

INVESTING ACTIVITIES - CONTINUING OPERATIONS:
   Increase in due from Related Parties                                                       (37,177)            (11,096)
   Increase in Other Receivable                                                                    --             (25,000)
   Sale [Purchase] of Investments                                                              10,252             (10,625)
   Purchase of Property and Equipment                                                        (281,934)             (1,423)
                                                                                      ---------------     ---------------

   NET CASH - INVESTING ACTIVITIES                                                           (308,859)            (48,144)

INVESTING ACTIVITIES - DISCONTINUED OPERATIONS:
   Purchase of Property and Equipment                                                         (13,755)                 --
                                                                                      ---------------     ---------------

   NET CASH INVESTING ACTIVITIES - FORWARD                                            $      (322,614)    $       (48,144)
</TABLE>

The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.

                                       F-6
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
--------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                   Years Ended
                                                                                                   -----------
                                                                                                  December 31,
                                                                                                  ------------
                                                                                           1 9 9 6             1 9 9 5
                                                                                           -------             -------

<S>                                                                                   <C>                 <C>            
   NET CASH - OPERATING ACTIVITIES - FORWARDED                                        $      (180,300)    $       248,731
                                                                                      ---------------     ---------------

   NET CASH - INVESTING ACTIVITIES - FORWARDED                                               (322,614)            (48,144)
                                                                                      ---------------     ---------------

FINANCING ACTIVITIES - CONTINUING OPERATIONS:
   Proceeds from Issuance of Common Stock                                                     701,770                  90
   Increase in Loan Payable to Shareholder                                                     21,655                  --
                                                                                      ---------------     ---------------

   NET CASH - FINANCING ACTIVITIES - CONTINUING OPERATIONS                                    723,425                  90
                                                                                      ---------------     ---------------

   INCREASE IN CASH AND CASH EQUIVALENTS                                                      220,511             200,677

CASH AND CASH EQUIVALENTS - BEGINNING OF YEARS                                                200,677                  --
                                                                                      ---------------     ---------------

   CASH AND CASH EQUIVALENTS - END OF YEARS                                           $       421,188     $       200,677
                                                                                      ===============     ===============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the years for:
     Interest                                                                         $         4,172     $            --
     Income Taxes                                                                     $        77,215     $            --
</TABLE>

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:


     On April 15, 1996, the Company entered into an asset acquisition agreement.
The non-cash portion of the transaction  included the issuance of 200,000 shares
of common  stock  with a fair  value of  $1,200,000  [See Note 1 for  details of
recapitalization].

The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.

                                       F-7

<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

[1] ORGANIZATION AND STOCK ACQUISITION

CORPORATE  STRUCTURE - CEEE Group, Inc. ["CEEE"] was incorporated under the laws
of the State of  Colorado  in  October of 1939 as Pacific  Gold,  Inc.  CEEE was
organized to explore,  develop,  mine and mill gold and silver  deposits of ore.
The Company conducted limited mining  activities until operations  ceased.  CEEE
was seeking new business opportunities as a development stage entity.

On  July  16,  1996,  CEEE  entered  into  an  exchange  of  stock  and  plan of
organization with Atlantic International Capital, Ltd. ["AIC"] pursuant to which
CEEE  acquired  all of the common  shares of AIC in exchange for an aggregate of
6,803,451  common shares of CEEE.  Following the share exchange and the issuance
of all shares, the shareholders of AIC own approximately 94% of CEEE.

For accounting purposes, the acquisition is being recorded as a recapitalization
of AIC, with AIC as the acquirer. The shares issued are treated as issued by AIC
for cash and are shown as  outstanding  for all  periods  presented  in the same
manner as for a stock  split.  Recapitalization  costs  totaling  $160,873  were
charged to additional paid-in capital. The consolidated  financial statements of
the Company  reflect the results of operations of CEEE and AIE from July 1, 1996
through December 31, 1996. The consolidated  financial  statements prior to July
1, 1996 reflect the results of  operations  and  financial  position of AIC. Pro
forma  information on this  transaction is not presented as, at the date of this
transaction, CEEE is considered a public shell and, accordingly, the transaction
will not be considered a business combination. CEEE changed its name to Atlantic
International Entertainment,  Ltd. ["AIE or the "Company"]. AIE was incorporated
under the laws of the State of Delaware on August 22, 1996.

Upon consummation of the merger, the Company's  authorized capital was increased
to 100,000,000 shares of common stock, $.001 par value, and 10,000,000 shares of
preferred stock, $.001 par value. The combined entity operates under the name of
Atlantic International Entertainment, Ltd.

PRIVATE  PLACEMENT - On  September  18, 1996 and October 31,  1996,  the Company
issued  521,500 and 365,200  shares,  respectively  of common stock in a private
placement of its securities.  The Company received net proceeds of approximately
$826,881.

NATURE OF BUSINESS - The Company is located in Southern Florida and develops and
markets  products and  services  which are offered and operated via the Internet
and World Wide Web. The operations are focused on three industries which include
investment  advisory  services,  Internet  software  and  medical  products  and
equipment.

[2] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION - The consolidated  financial statements include the
accounts of the  Company  and its  subsidiaries.  All  significant  intercompany
accounts and transactions have been eliminated.

CASH AND CASH  EQUIVALENTS - Cash  equivalents  are comprised of certain  highly
liquid investments with a maturity of three months or less when purchased.

PROPERTY AND EQUIPMENT AND  DEPRECIATION  - Property and equipment are stated at
cost. Depreciation is computed primarily using the straight-line method over the
estimated useful lives of the assets,  which range from 5 to 7 years.  Leasehold
improvements are amortized using the straight-line method over the lesser of the
term of the related lease or the estimated useful lives of the improvements.

ORGANIZATION  COSTS - Costs incurred with the  organization  of the Company have
been  capitalized  and are being  amortized  over a period of  five-years on the
straight-line  method.  As of  December  31,  1996,  organization  costs  net of
accumulated depreciation totaled $2,902.

                                       F-8

<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #2
--------------------------------------------------------------------------------

[2] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]

REVENUE  RECOGNITION - Revenue from computer  software  licensing  agreements is
accounted for under the cost recovery method, no profit is recognized until cash
payments by the buyer exceed the seller's cost of the software  sold.  After all
costs have been  recovered,  any  additional  cash  collections  are included in
income.  Included  in general  and  administrative  expenses  is $11,200 of cost
related to  recovered  costs.  Revenue  from  investment  advisory  services  is
recognized when services are performed.

DEFERRED  INCOME  TAXES - The Company  accounts  for  deferred  income  taxes in
accordance  with Statement of Financial  Accounting  Standards  ["SFAS"] No. 109
"Accounting for Income Taxes." The statement requires that deferred income taxes
reflect the tax  consequences  on future  years of  differences  between the tax
bases of assets and liabilities and their financial reporting amounts. Temporary
differences include different tax and book bases of property and equipment.

ADVERTISING EXPENSES - The Company expenses advertising costs as incurred. Total
advertising  costs charged to expenses for the years ended December 31, 1996 and
1995 amounted to approximately $51,500 and $-0-, respectively.

LOSS PER SHARE - Loss per share of common stock is based on the weighted average
number of common shares outstanding for the periods  presented,  plus the number
of shares  issued in the reverse  merger,  as if they were  outstanding  for all
periods presented.

SOFTWARE AND  AMORTIZATION  - Costs related to the  conceptual  formulation  and
design of licensed  programs  are expensed as research  and  development.  Costs
incurred subsequent to establishment of technological feasibility to produce the
finished  product are  capitalized.  The annual  amortization of the capitalized
amounts is the greater of the ratio that  current  gross  revenues for a product
bear to the total of current and  anticipated  future  gross  revenues  for that
product or the straight-line  method over the remaining  estimated economic life
of the product including the period being reported on.  Amortization begins when
the product is available for general release to customers.  Periodic reviews are
performed  to ensure that  unamortized  program  costs remain  recoverable  from
future  revenues.  Costs to support or service  licensed  programs  are  charged
against income as incurred,  or when related  revenue is  recognized,  whichever
occurs first.

IMPAIRMENT - Certain  long-term  assets of the Company are reviewed when changes
in circumstances require as to whether their carrying value has become impaired,
pursuant to guidance  established in Statement of Financial Accounting Standards
["SFAS"] No. 121,  "Accounting  for the  Impairment of  Long-Lived  Assets to be
Disposed Of." Management  considers  assets to be impaired if the carrying value
exceeds the future  projected cash flows from related  operations  [undiscounted
and without interest charges]. If impairment is deemed to exist, the assets will
be written  down to fair value or projected  discounted  cash flows from related
operations.   Management  also  re-evaluates  the  periods  of  amortization  to
determine whether subsequent events and circumstances  warrant revised estimates
of useful lives. As of December 31, 1996,  management expects these assets to be
fully recoverable.

[3] SIGNIFICANT RISKS AND UNCERTAINTIES

[A]   CONCENTRATIONS  OF  CREDIT  RISK  -  CASH  -  The  Company  currently  has
approximately $301,000 on deposit in excess of federally insured limits.

[B] OTHER  CONCENTRATION  - The  Company  purchases  software  from one  vendor.
Management  believes  that there is no  business  vulnerability  regarding  this
concentration  of purchases  from the vendor as the  software is available  from
other sources.

                                       F-9

<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #3
--------------------------------------------------------------------------------

[3] SIGNIFICANT RISKS AND UNCERTAINTIES [CONTINUED]

[C] USE OF ESTIMATES - The  preparation  of financial  statements  in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

[D] LICENSE  RIGHTS - The  Company's  business is dependent on  maintaining  its
licensing rights to the software.

[4] ASSET ACQUISITION

On April 15, 1996, the pre-merger  Company [See Note 1] purchased certain assets
consisting  principally of computer software for Internet products and hardware.
The purchase price was $1,230,000  payable as $30,000 in cash and issued 200,000
shares of common stock with a fair value of $1,200,000.

In accordance with generally accepted accounting principles, the assets acquired
were capitalized since management  believes these assets have alternative future
uses.

[5] PROPERTY AND EQUIPMENT

The following details the composition of property and equipment:
<TABLE>
<CAPTION>

                                                                                Accumulated
                                                                                -----------
                                                                Cost           Depreciation            Net
                                                                ----           ------------            ---

<S>                                                        <C>               <C>                <C>           
Equipment, Office Fixtures and Furnishings                 $      250,795    $        17,464    $      233,331
Leasehold Improvements                                             13,401                958            12,443
Equipment                                                          18,914              1,301            17,613
                                                           --------------    ---------------    --------------

   TOTALS                                                  $      283,110    $        19,723    $      263,387
   ------                                                  ==============    ===============    ==============
</TABLE>

Depreciation expense for the years ended December 31, 1996 and 1995 was $19,438
and $285, respectively.

[6] LEASES

The Company leases and subleases  office space under  operating  leases expiring
through November 1997, and has a $3,081 security deposit with its landlord.  The
lease grants an option for renewal for an additional three years.

Minimum future rental payments under non-cancelable operating having remaining
terms in excess of one year as of December 31, 1996.

Year Ending                         Operating
-----------                         ---------
December 31,                         Leases            Subleases
------------                         ------            ---------

    1997                        $         41,973  $         2,792
                                ================  ===============

Rent  expense  for the years  ended  December  31, 1996 and 1995 was $53,427 and
$-0-, respectively. The prior year rent was included as part of a management fee
to an affiliated company [See Note 8].

                                      F-10
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #4
--------------------------------------------------------------------------------

[7] FAIR VALUE OF FINANCIAL INSTRUMENTS

Effective  December  31,  1995,  the  Company  adopted  Statement  of  Financial
Accounting Standards ["SFAS'] No. 107, "Disclosure About Fair Value of Financial
Instruments" which requires  disclosing fair value to the extent practicable for
financial instruments which are recognized or unrecognized in the balance sheet.
The fair value of the financial  instruments disclosed herein is not necessarily
representative  of the amount that could be  realized  or settled,  nor does the
fair value amount  consider the tax  consequences  of realization or settlement.
The following table summarizes financial instruments by individual balance sheet
classifications as of December 31, 1996:

                                                Carrying           Fair
                                                --------           ----
                                                Amount            Value
                                                ------            -----

Due from Related Parties                    $         48,273  $        39,146
Due to Related Officers                     $         22,286  $        22,286

In assessing the fair value of financial instruments, the Company used a variety
of methods and assumptions,  which were based on estimates of market  conditions
and risks  existing at that time.  For certain  instruments,  including cash and
cash  equivalents,  related  party and trade  payables,  it was assumed that the
carrying amount  approximated  fair value for the majority of these  instruments
because of their short maturities.

[8] RELATED PARTY TRANSACTIONS

In January 1995, the Company entered into a one year management agreement with a
company  which is deemed to be an  affiliate  because of  identical  stockholder
interests.  Under the  agreement,  the  Company  paid  monthly  management  fees
aggregating  $245,800  for  the  year  ended  December  31,  1995,  representing
operating   expenses   including   rent,   salaries,   and  other   general  and
administrative  costs. The agreement expired on December 31, 1995, at which date
$10,000 was due from the affiliate.

Additionally,  the Company made advances to the  affiliated  company  during the
year ended December  1996,  increasing  the balance  receivable to $48,273.  The
advances are non-interest bearing, and due on demand.

The Company has notes payable to two officers in the aggregate amount of $21,655
at December  31, 1996.  The notes are demand notes and incur  interest at 8% per
annum. Interest expense related to the shareholders notes totaled $1,302 for the
year ended December 31, 1996.

[9] PROVISION FOR INCOME TAXES

Income tax [benefit] expense consists of the following

                                                 December 31,
                                                 ------------
                                           1 9 9 6           1 9 9 5
                                           -------           -------
Current:
   Federal                           $        (77,215) $        76,800
   States                                          --           13,700
                                     ----------------  ---------------

   Total Current                              (77,215)          90,500
                                     ----------------  ---------------

Deferred:
   Federal                           $             --  $            --
   States                                          --               --
                                     ----------------  ---------------

   Total Deferred                                  --               --
                                     ----------------  ---------------

   TOTAL [BENEFIT] TAX               $        (77,215) $        90,500
   -------------------               ================  ===============

                                      F-11

<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #5
--------------------------------------------------------------------------------

[9] PROVISION FOR INCOME TAXES [CONTINUED]

Income tax at the federal  statutory rate reconciled to the Company's  effective
rate is as follows:

                                                   December 31,
                                                   ------------
                                             1 9 9 6           1 9 9 5
                                             -------           -------

Federal Statutory Rate                           (34.0)%         30.8%
Non-Deductible Expenses                          (13.3)            --
Benefit of Net Operating Loss                     52.8             --
State Income Taxes                                (5.5)           5.5
                                           -----------     ----------

   EFFECTIVE RATE                                   --%          36.3%
   --------------                          ===========     ==========

In 1996, the Company  recognized the benefit of $77,215 from the  utilization of
an operating loss carryback which is expected to be filed in 1997.

The Company has a net operating loss carryforward of approximately  $369,000 all
of which will expire in 2011.

The major  components  of  deferred  income tax assets  and  liabilities  are as
follows:

                                                December 31,
                                                ------------
                                                   1 9 9 6
                                                   -------
Deferred Tax Liabilities
   Accelerated Depreciation                    $      (85,620)
                                               --------------

Deferred Tax Assets:
   Net Operating Loss                                 138,700

Net Deferred Tax Asset:
   Before Valuation Allowance                          53,080
   Valuation Allowance                                 53,080

   NET DEFERRED INCOME TAX ASSET               $           --
   -----------------------------               ==============

The  Company  recorded a valuation  allowance  due to the  uncertainty  that the
Company  will  generate  income in the future  sufficient  to fully or partially
utilize these carryforwards.

[10] BUSINESS SEGMENT INFORMATION

The Company's  operations  have been  classified  into three business  segments:
investment   advisory  services  Internet  software  and  medical  products  and
equipment.

                                               1 9 9 6            1 9 9 5
                                               -------            -------
Net Sales:
   Investment Advisory Services           $        366,204  $       702,307
   Internet Software Licensing                      87,000               --
   Medical Products and Equipment                    1,452               --
                                          ----------------  ---------------

                                          $        454,656  $       702,307
                                          ================  ===============
Operating Income:
   Investment Advisory Services           $        231,081  $       249,655
   Internet Software Licensing                    (659,056)              --
   Medical Products and Equipment                       --               --
                                          ----------------  ---------------

                                                  (427,975) $       249,655
                                          ================  ===============

                                      F-12

<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #6
--------------------------------------------------------------------------------

[10] BUSINESS SEGMENT INFORMATION [CONTINUED]
                                                    1 9 9 6            1 9 9 5
                                                    -------            -------
Total Assets:
   Investment Advisory Services                $          1,423  $         1,423
   Internet Software Licensing                        1,980,591               --
   Medical Products and Equipment                            --               --
                                               ----------------  ---------------

                                               $      1,982,014  $         1,423
                                               ================  ===============
Depreciation and Amortization:
   Investment Advisory Services                $            285  $           285
   Internet Software Licensing                           67,091               --
   Medical Products and Equipment                            --               --
                                               ----------------  ---------------

                                               $         67,376  $           285
                                               ================  ===============
Capital Expenditures:
   Investment Advisory Services                $          1,423  $         1,423
   Internet Software Licensing                        1,490,395               --
   Medical Products and Equipment                            --               --
                                               ----------------  ---------------

                                               $      1,491,818  $         1,423
                                               ================  ===============
[11] COMMITMENTS

[A] On June 17, 1996, the Company entered into a three year consulting agreement
with a well known personality to act as the Company's  spokesman.  The agreement
calls for the  issuance of 5,000  shares of common stock during each year of the
three  year term of the  agreement.  The  shares  are to be issued in  quarterly
installments  commencing  September 30, 1996. No shares have yet been issued but
the Company has recorded a liability of $17,364 which represents the fair market
value of the first two quarterly installments of shares to be issued.

[B] On July 22,  1996,  the  Company  entered  into an  agreement  for  business
development and acquisition  consulting  services through December 31, 1997. The
agreement provides for payments of $72,000 for the year ended December 31, 1997.

[C] On August 7,  1996,  the  Company's  medical  division  signed an  exclusive
distribution  agreement for world wide sales of medical testing devices for HIV,
hepatitis,  pregnancy, ovulation and other tests using the Internet as its means
of sales and distribution.

[D]  On  November   25,   1996,   the   Company   signed  and   agreement   with
Telecommunication  Information  Services Systems,  NV ["TISS"],  a Curacao based
company to provide international sports and entertainment  information services.
As of December 31, 1996, $11,625 was received as revenues.

The  agreement  was  terminated  in  February  1997  in   contemplation  of  the
consummation of the Company's sale of its foreign subsidiary [See Note 14].

[E] In December  1996,  the Company  signed two  licensing  agreements  totaling
approximately  $700,000 over the next year with two offshore  gaming  companies,
Patroon Agency ["Patroon"] based in Curacao and Carib Sportsbook, Inc. ["Carib"]
in Antigua,  West Indies. The Company will provide its Internet Casino Extension
system to  Patroon  and its Web Sports  system to the Carib  [See Note  13B].  A
shareholder  of the  Patroon  Agency is also a less than 1%  shareholder  of the
Company.

[12] MAJOR CUSTOMER

Two customers  account for 46% of revenues.  The customers  account for $125,500
[Investment  Advisory Services] and $87,000 [Internet  Software] of revenues for
the year ended December 31, 1996. In the year ended December 31, 1995,  three of
the Company's  customers  accounted for 84% of the Company's  revenues.  Revenue
from these customers approximated $210,000, $204,000 and $176,000, respectively.

                                      F-13

<PAGE>

ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #7
--------------------------------------------------------------------------------

[13] SUBSEQUENT EVENTS

[A]  BUSINESS  ACQUISITION  - On January 31, 1997,  the Company  entered into an
agreement to purchase all of the shares of Eminet Domain, Inc.  ["Eminet"].  The
purchase  price for the  shares  was  $2,020,000  payable  by the  issuance  and
delivery  to the  shareholders  of Eminet  or their  designees  of a minimum  of
200,000 shares of fully-paid and  non-assessable  common stock of the Company at
the market  value as of January 31, 1997 and $20,000  cash  payable at March 31,
1997. In addition,  the  shareholders  of Eminet or their designees will receive
additional  shares at market equal to one time  Eminet's net profit before taxes
for the years  ending 1997 and 1998 up to $750,000  per annum,  one and one-half
times over $750,000 to $1,000,000 and two times over $1,000,000.

[B] LICENSE AGREEMENTS - In addition to the license agreements discussed in Note
11E, the Company has also entered into various  single  license user  agreements
with fees totaling approximately $700,000 Management believes these fees will be
recognized as income by December 31, 1997.

[C] INCENTIVE STOCK OPTION PLAN

On January 1, 1997,  the  Company  adopted an  Incentive  Stock  Option Plan for
Employees,  Directors,  Consultants  and Advisors  [the  "Plan"].  The Plan will
expire  December 31, 2006 unless further  extended by appropriate  action of the
Board of  Directors.  Employees,  directors,  consultants  and  advisors  of the
Company, or any of its subsidiary  corporations,  are eligible for participation
in the  Plan.  The Plan  provides  for stock to be issued  pursuant  to  options
granted and shall be limited to 250,000 shares of Common Stock, $.001 par value.
The shares have been reserved for issuance in  accordance  with the terms of the
Plan.

[14] DISCONTINUED OPERATIONS

On December 15, 1996,  the Company  adopted a plan to  discontinue  and sell its
foreign  subsidiary,  known as Atlantic  International,  N.V. ["AIE, NV"], which
operated a Sportsbook operation. The purchase price was $850,000, $2,000 payable
at closing and beginning 60 days after closing,  40% of net win before  expenses
on a minimum  of $3,000  monthly,  until the  balance is paid.  Interest  on the
unpaid  balance  shall be accrued at 8% per annum.  The  effective  date of this
transaction  is  January  1, 1997.  The  foreign  subsidiary  is  reported  as a
discontinued  operation for the year ended  December 31, 1996. Net assets of the
discontinued  operations  at December 31, 1996  consists  primarily of property,
plant and equipment.

The closing date of the sale was March 26, 1997.  The  operations  of AIE,  N.V.
from the measurement date to the balance sheet date is deemed  immaterial.  AIE,
N.V. will be inactive from that date to the expected date of disposal.

A summary of net assets of discontinued operations is as follows:

                                                       December 31,
                                                       ------------
                                                          1 9 9 6
                                                          -------

Cash                                                 $         29,921
Furniture, Fixtures, Equipment                                 12,476
Other Assets                                                      815
                                                     ----------------

   Total Assets                                                43,212

Accounts Payable and Accrued Expenses                          14,808
Due to Customers                                               27,648

   Total Liabilities                                           42,456

   NET ASSETS OF DISCONTINUED OPERATIONS             $            756
   -------------------------------------             ================

                                      F-14

<PAGE>

ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #8
--------------------------------------------------------------------------------

[15] NEW AUTHORITATIVE ACCOUNTING PRONOUNCEMENTS

The  Financial  Accounting  Standards  Board  ["FASB"]  has issued  Statement of
Financial  Accounting  Standards ["SFAS"] No. 125, "Accounting for Transfers and
Servicing of Financial Assets and  Extinguishment of Liabilities."  SFAS No. 125
is effective for transfers and servicing of financial assets and  extinguishment
of liabilities  occurring  after December 31, 1996.  Earlier  application is not
allowed.  The  provisions  of  SFAS  No.  125  must  be  applied  prospectively;
retroactive  application  is  prohibited.  Adoption  on  January  1, 1997 is not
expected  to have a  material  impact on the  Company.  The FASB  deferred  some
provisions of SFAS No. 125, which are expected to be relevant to the Company.

The  Financial  Accounting  Standards  Board  ["FASB"]  has issued  Statement of
Financial  Accounting Standards ["SFAS"] No. 128, "Earnings per Share," and SFAS
No. 129, "Disclosure of Information about Capital Structure," in February 1997.

SFAS No. 128 simplifies the earnings per share ["EPS"] calculations  required by
Accounting Principles Board ["APB"] Opinion No. 15, and related interpretations,
by replacing the  presentation  of primary EPS with a presentation of basic EPS.
SFAS No. 128  requires  dual  presentation  of basic and diluted EPS by entities
with complex capital structures.  Basic EPS includes no dilution and is computed
by dividing  income  available to common  stockholders  by the  weighted-average
number of common  shares  outstanding  for the period.  Diluted EPS reflects the
potential  dilution of securities that could share in the earnings of an entity,
similar  to the  fully  diluted  EPS of APB  Opinion  No.  15.  SFAS No.  128 is
effective for financial  statements issued for periods ending after December 15,
1997,  including  interim periods;  earlier  application is not permitted.  When
adopted,  SFAS No. 128 will require  restatement  of all  prior-period  EPS data
presented;  however,  the Company has not sufficiently  analyzed SFAS No. 128 to
determine  what effect SFAS No. 128 will have on its  historically  reported EPS
amounts.

SFAS No. 129 does not change any previous  disclosure  requirements,  but rather
consolidates existing disclosure requirements for ease of retrieval.






                              . . . . . . . . . . .

                                      F-15