SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549

                                FORM 10-KSB

   |X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [FEE REQUIRED] 
         THE FISCAL YEAR ENDED JUNE 30, 1997

   |_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                      Commission file number: 0-28704

                  CREATIVE RECYCLING TECHNOLOGIES, INC.
               (Name of small business issuer in its charter)

               GEORGIA                              84-1122431
    (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)             Identification No.)

             3500 PARKWAY LANE, SUITE 435, NORCROSS, GA 30092
            (Address of principal executive offices) (Zip Code)

                Issuer's telephone number: (770) 729-9010

       Securities registered under Section 12(b) of the Exchange Act: NONE

         Securities registered under Section 12(g) of the Exchange Act:
               Title of class: CLASS A COMMON STOCK, NO PAR VALUE

Check whether the issuer (1) 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 the filing requirements for the past 90 days. Yes 
__ No X

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

         Issuer's revenues for its most recent fiscal year. $2,328,729

    Aggregate market value of the voting stock held by non-affiliates of the
                registrant as of February 20, 1998: $1,150,078

                  Number of shares outstanding of registrant's
                 Class A Common Stock, no par value: 9,947,553
                  Number of shares outstanding of registrant's
                  Class B Common Stock, no par value: 200,000
                             as of February 20, 1998

                   Documents incorporated by reference: NONE
                                       
<PAGE>

                              PART I

ITEM 1. DESCRIPTION OF BUSINESS.

FORMATION AND INITIAL PUBLIC OFFERING

Classic Restaurants International, Inc. (the "Company") was incorporated 
under the laws of the State of Georgia on April 10, 1998 as a wholly-owned 
subsidiary of Classic Restaurants International, Inc. ("Classic"). Classic 
was incorporated under the laws of the State of Colorado on August 3, 1989 
under the name Regional Equities Corporation. At a special meeting of the 
shareholders of Classic held on April 13, 1998, the shareholders voted to a 
approve a merger of Classic with and into the Company for the purpose of 
changing Classic's state of incorporation. The merger became effective on 
April 14, 1998.  As of the effective date of the merger, Classic ceased to 
exist as a separate legal entity, and the Company assumed, and became the 
owner of, all of the liabilities and assets of Classic by operation of law.  
Under the Agreement and Plan of Merger, common and preferred shareholders of 
Classic received, for each share of common or preferred stock which they 
owned in Classic, one share of common or preferred stock in the Company which 
has the same rights, preferences and limitations as the shares which they 
owned in Classic immediately before the effective date of the merger.  All 
further references to the Company herein shall be deemed to be and include 
Classic.

In May 1990, the Company completed an initial public offering of units 
consisting of its Class A Common Stock and three separate classes of 
warrants. All of the warrants issued in connection with the offering expired 
without any being exercised.

Effective upon the close of trading on July 12, 1994, the Company effected a 
1-for-10,000 reverse stock split of its Class A Common Stock. Effective on 
the close of trading on November 7, 1994, the Company effected a 10-for-1 
forward stock split of its Class A and Class B Common Stock. In September 
1995, the Company declared a 50% share dividend payable to the holders of 
record of its Class A and Class B Common Stock on October 13, 1995. All per 
share amounts herein have been adjusted to reflect the effects of the stock 
splits and the share dividend.

GREAT AMERICAN RESORTS, INC.

In April 1993, the Company entered into an agreement to merge with and into 
Great American Resorts, Inc. ("GAR"). In May 1994, the boards of directors of 
GAR and the Company both voted to terminate the merger agreement.

In connection with the proposed merger with GAR, GAR paid a total of $12,763 
(the "Option Price") to obtain irrevocable options to purchase a total of 
67,260 shares of the Company's Class A Common Stock held by seven 
shareholders for a total price of $127,632 (the "Purchase Price"). Under the 
terms of the options, the Option Price was to be credited against the 
Purchase Price when the options were exercised. In early 1994, GAR exercised 
all of the options to acquire 67,260 shares of Class A Common Stock in the 
Company. In addition, GAR purchased additional shares of Class A Common Stock 
of the Company on the open market which resulted in GAR's owning 
approximately 78% of the Company's Class A Common Stock. GAR later sold some 
of its shares which it acquired on the open market. In addition, GAR acquired 
7,500,000 shares of Class A Common Stock and 150,000 shares of Class B Common 
Stock of the Company in connection with the merger of a wholly-owned 
subsidiary of GAR with and into the Company in October 1994. See "Merger with 
Casinos International, Inc." below. Immediately prior to the share exchange 
with Classic Restaurants International, Inc. in January 1996, GAR owned 
7,567,260 shares of Class A Common Stock (93.2% of the total outstanding) and 
150,000 shares of Class B Common Stock (50% of the total outstanding).

IRISH LAND TRANSACTION

On August 21, 1994, the Company entered into a contract to purchase two 
tracts of land in Ireland from Caragh Holdings, Ltd. ("Caragh"), which the 
Company intended to develop into a resort. The contract provided that one 
tract of land would be purchased on or before December 31, 1994 for 27,500 
Irish Pounds and 270,000 shares of Class A Common Stock, and the other tract 
of land would be purchased on or before December 31, 1996 for 150,000 Irish 
Pounds and 1,230,000 shares of Class A Common Stock. As an earnest money 
deposit, the Company issued all of the stock to the seller, but the seller 
was prohibited from selling the stock until the Company completed its 
purchase of the tract of land to which the stock related. In the event a 
tract of land was not purchased, the seller was obligated to return the stock 
to the Company, less 15,000 shares as liquidated damages in the event closing 
did not occur due to a default by the Company.

In October 1994, the Company purchased the first tract of land under the 
contract for $334,800, consisting of $41,723 in cash and $293,077 in Class A 
Common Stock which was valued at the appraised value of the land. Thereafter, 
the Company assigned its rights in the first tract to GAR for $384,877, which 
consisted of the purchase price originally paid by the Company plus a fee of 
$50,077 to the Company as reimbursement for the time and expense incurred to 
purchase the land. In July 1995, the Company and Caragh entered into an 
agreement to terminate the contract to purchase the second tract of land. 
Under the agreement, as amended in September 1995, Caragh agreed to return 
1,230,000 shares, of which 1,050,000 were returnable immediately while the 
remaining 180,000 shares were held by Caragh pursuant to an option to acquire 
said shares for $2.67 per share at any time until September 30, 1997. Caragh 
did not exercise any part of the option.

MERGER WITH CASINOS INTERNATIONAL, INC.

On September 13, 1994, the Company entered into an Agreement and Plan of 
Merger ("Merger Agreement") with Casinos International, Inc., a Georgia 
corporation (" Casinos"), under which Georgia Casinos agreed to merge with 
and into the Company. The Merger Agreement was approved by the shareholders 
of the Company at a shareholders meeting held on September 30, 1994, and was 
consummated in October 1994. Under the Merger Agreement, all nondissenting 
holders of Class A Common Stock of Casinos were issued 1.5 shares of the 
Company's Class A Common Stock for each share of Class A Common Stock of 
Casinos. At the time of the merger, GAR held all 5,000,000 shares of Class A 
Common Stock of Casinos which were outstanding, and therefore GAR acquired 
7,500,000 shares of the Company's Class A Common Stock in the merger. All 
nondissenting holders of Class B Common Stock of Casinos were issued 1.5 
shares of the Company's Class B Common Stock for each share of Class B Common 
Stock of Casinos. At the time of the merger, there were 200,000 shares of 
Class B Common Stock of Casinos outstanding, 100,000 of which were held by 
Edward L Bates and 100,000 of which were held by GAR. As a consequence of the 
merger, GAR and Mr. Bates each acquired 150,000 shares of the Company's Class 
B Common Stock. Mr. Bates was an officer and director of GAR at the time of 
the merger.

As part of the merger, the Company's shareholders also approved certain 
amendments to the Company's Articles of Incorporation. The amendments divided 
the Company's single class of common stock into two classes: Class A Common 
Stock, of which 1,800,000,000 shares are authorized for issuance, and Class B 
Common Stock, of which 200,000,000 shares are authorized for issuance. The 
Class A Common Stock and the Class B Common Stock have an equal right to 
receive the net assets of the Company upon dissolution and liquidation, but 
the Class A Common Stock has only one (1) vote per share, while the Class B 
Common Stock has forty (40) votes per share, on each matter voted upon by the 
shareholders, except to the extent state or federal law provides otherwise. 
In addition, to the extent there are any shares of Class B Common Stock 
outstanding, the holders thereof have the right to elect a majority of the 
board of directors of the Company. All of the Company's outstanding common 
stock before the amendment was considered Class A Common Stock after the 
amendment. The name of the Company was changed to Casinos International, Inc.

CHEERS HOTEL AND CASINO

On January 20, 1995, the Company, through a wholly-owned subsidiary (Great 
American Casinos, Inc., a Nevada corporation) purchased the Cheers Hotel and 
Casino (the "Cheers Hotel") in Reno, Nevada, from Baylocq Nevada Corp., a 
nonaffiliated entity. The Cheers Hotel is a ten-story, 113-room hotel, with a 
casino, cabaret, restaurant, and bar facilities, which is located in the 
downtown section of Reno, Nevada. The purchase price of the Cheers Hotel was 
$3,750,000 plus closing costs and prorations.

A portion of the purchase price was paid by the assumption of an existing 
first mortgage loan held by American Federal Savings Bank against the Cheers 
Hotel in the amount of $1,944,804.12. The remainder of the purchase price was 
paid $750,00 in cash and by executing a note payable to the seller in the 
amount of $1,055,195.88, secured by a second mortgage on the Cheers Hotel.

Contemporaneous with the purchase of the Cheers Hotel, the Company entered 
into a lease agreement with the seller under which the seller originally 
leased approximately 7,600 square feet of space in the Cheers Hotel for two 
years for use as a casino and cabaret. Effective July 1, 1995, the Company 
reached an agreement with the seller to eliminate the cabaret operations from 
the sublease and to reduce the monthly rent.

SHARE EXCHANGE WITH CLASSIC RESTAURANTS AND SPINOFF

Effective upon the close of business January 31, 1996, the Company acquired 
(the "Share Exchange") all of the issued and outstanding capital stock of 
Classic Restaurants International, Inc., a Florida corporation ("Classic- 
Florida"), in exchange for 2,173,665 restricted shares of the Company's Class 
A Common Stock and 200,000 restricted shares of the Company's Class B Common 
Stock. Classic-Florida now operates as a wholly-owned subsidiary of the 
Company.

Simultaneous with the effectiveness of the Share Exchange, the Company 
transferred all of the issued and outstanding shares of common stock of Great 
American Casinos, Inc. to GAR. Great American Casinos, Inc. was a wholly-
owned subsidiary of the Company. The sole asset of Great American Casinos, 
Inc. is the Cheers Hotel. The Company's common stock interest in Great 
American Casinos, Inc. constituted substantially all of its assets. The 
consideration for the transfer of the common stock of Great American Casinos, 
Inc. to GAR was (1) the return for cancellation by GAR and by former officers 
of the Company of all of their stock in the Company, which consisted of 
7,578,075 shares of Class A Common Stock and 300,000 shares of Class B Common 
Stock; (2) the cancellation of any indebtedness owed by the Company to GAR, 
which was approximately $1,567,389 as of December 31, 1995; and (3) the 
mutual release of any claims between GAR and the Company.

After the transfer of stock and assets described above and the Share Exchange 
(giving effect to the exercise of dissenters' rights), Classic-Florida's 
former shareholders and the Company's existing shareholders owned 2,173,665 
shares (80.1%) and 538,967 shares (19.9%) of the Company's outstanding Class 
A Common Stock, respectively, and Classic-Florida's former principle 
shareholder owned 200,000 shares (100%) of the Company's outstanding Class B 
Common Stock.

The Company filed an amendment to its Articles of Incorporation which changed 
its name to Classic Restaurants International, Inc. effective January 31, 
1996.

All of the Company's former officers and directors resigned. Officers and 
directors of Classic-Florida were appointed to fill the vacancies created by 
the resignations.

There was no relationship between the Company and Classic-Florida prior to 
the Share Exchange.

CLASSIC-FLORIDA

Classic-Florida was organized under the laws of the State of Florida on April 
7, 1992, for the purpose of developing and operating restaurants using a 
dinner theater concept. On December 1, 1992, Classic-Florida opened Musicana 
Supper Club in Boca Raton, Florida. Classic-Florida opened Musicana Dinner 
Theater in Clearwater, Florida on May 14, 1994.

Classic-Florida also provides entertainment production services for a dinner 
theater in Naples, Florida. Management hopes to increase this line of 
business and provide entertainment production services for other restaurants 
and cruise lines.

MUSICANA SUPPER CLUB OF BOCA RATON

This restaurant, which opened on December 1, 1992, seats 270 persons and 
offers dinner and live entertainment for a price ranging from $21.95 to 
$31.95, depending upon the menu item ordered. The Company uses the concept of 
employing talented young professionals to perform musical reviews 
highlighting the works of famous composers and various eras of musical 
history. These performers also serve as waiters and waitresses. By using 
young performers and sticking to the musical review format, management 
believes that it can keep its overhead costs lower, as compared to using 
equity performers and using book reviews. Because the entertainers play a 
dual role as performers/waiters, the majority of their compensation comes 
from a portion of the service charge. The restaurant aspect of the business 
involves a menu offering a wide variety of dinner selections starting from 
$21.95. There is no cover charge for the show if customers dine at the 
restaurant. If customers come for the show only, there is a $15.00 plus tax 
and gratuity cover charge. All other revenues come from food and drink 
purchases.

Musicana offers 8 performances per week. The show consists of two 40-minute 
acts, with dessert and coffee served during intermission. A live band, which 
includes piano, bass and drums, plays instrumental back-up for the shows and 
also plays before the show and during the intermission for listening and 
dancing. The performers also sing their favorite cabaret solos during the 
dinner hour and during intermission so there is entertainment happening 
throughout the entire evening. Each show is considered to be a "musical 
review" which saves the Company considerable money in royalty fees. Each show 
highlights the work of a famous composer, a Broadway show or a different era 
from the 1920's through the 1970's.  Some of the shows in the Musicana 
Library include: "The Best Times: A Salute to the Music of Jerry Herman," 
"Tin Pan Alley," "Hooray for Hollywood," "The Fabulous Forties When Radio was 
King," "An Enchanted Evening with Rodgers and Hammerstein," "Celebrate 
Broadway," "Putting on the Ritz: The Music of Irving Berlin," and "Bourbon 
Street Parade."
 
Most of the customers for Musicana are over 50 years of age. Management 
believes that it has carved a special niche in the market for this age group, 
as evidenced by the popularity of the restaurant since its opening.

MUSICANA DINNER THEATER OF CLEARWATER

This restaurant, which opened May 14, 1994, seats 370. Management believes 
that the location is easily accessible from the Tampa and St. Petersburg 
area. The operation in Clearwater is substantially the same as in Boca Raton.

AA CORP.

On February 27, 1998, the Company entered into an Agreement and Plan of Share 
Exchange with AA Corp. and its shareholders under which the Company agreed to 
acquire all of the issued and oustanding stock of AA Corp. for 500,000 shares 
of convertible preferred stock. Each share of convertible preferred stock is 
convertible into 200 shares of the Company's Class A Common Stock. In 
addition, the shareholder of AA Corp. also agreed to acquire all of the 
Company's issued and outstanding Class B Common Stock from James Robert Shaw 
for 120,000 shares of the convertible preferred stock. AA Corp. has developed 
a method for recycling used tires under which the tires would be broken down 
into carbon black and other recylceable components using microwaves. 
Effective upon execution of the Agreement, all outstanding shares of AA Corp. 
and all of the shares of convertible preferred stock to be issued under the 
Agreement were placed in escrow until certain conditions specified in the 
Agreement were satisfied or waived. Upon satisfaction or waiver of the 
conditions, the shares held in escrow will be released and the transactions 
contemplated by the Agreement consummated. The conditions which must be 
satisfied or waived before the Agreement is finally consummated include the 
condition that the Company change its name to Classic Holdings, Inc., that 
the Company implement a 1 for 20 reverse split of its common stock, that the 
Company settle its liabilities and preferred stock obligations, that the 
Company have no more than 1,000,000 shares of Class A Common Stock 
outstanding after implementing the reverse split and settling its liabilities 
and preferred stock obligations, that the shareholders of AA Corp. raise 
sufficient funds to develop a prototype recycling facility which is capable 
of recylcing tires in economically viable quantities.  In the event closing 
does not occur, all consideration held in escrow will be returned to its 
original owner, Messrs. Pringle and Silber will resign from the Board of the 
Directors of the Company and neither party shall have any obligation to the 
other. Upon execution of the Agreement, the Company's Board of Directors was 
reconstituted to include Frank Pringle and Benjamin Silber.  In addition, Mr. 
Pringle was designated chairman of the Board of Directors and co-President of 
the Company with Mr. Shaw. In the event closing occurs, Mr. Pringle will 
receive a signing bonus of 3,800,000 shares of Class B Common Stock and 
$19,000. Mr. Pringle's signing bonus and compensation are not expected to 
have a material impact on operations of the Company.

FUTURE DEVELOPMENT

While the Company has no current plans to open additional dinner theatres 
similar to the Musicana dinner theatres which it currently owns, the Company 
intends to pursue other opportunities in the restaurant industry. In 
particular, the Company is currently reviewing several acquisition 
opportunities in the restaurant industry. In addition, the Company is 
exploring the development of a proprietary Mexican themed casual dining 
concept. Finally, the Company has recently diversified into tire recycling by 
entering into an agreement to purchase AA Corp., which has developed an 
innovative process for recycling used tires.

COMPETITION

The restaurant business is highly competitive and is often affected by 
changes in the taste and eating habits of the public, local and national 
economic conditions affecting spending habits, and population and traffic 
patterns. The principal basis of competition in the industry is quality and 
price of the food products offered. Site selection, quality and speed of 
service, advertising, and the attractiveness of the facilities are also 
important. Management of the Company believes that the Company's dinner 
theater restaurant will be competitive in each of these respects.

EMPLOYEES

As of June 30, 1997 there were 62 employees of the Company of which 42 were 
full-time, including certain officers of the Company.

ITEM 2. DESCRIPTION OF PROPERTY.

The Company leases approximately 10,000 square feet of space at 2200 N.W. 2nd 
Avenue, Boca Raton, Florida pursuant to the terms of a five-year lease which 
originally expired in November 1997. The Company has signed a letter of 
intent with the landlord to renew the lease for an additional five year term 
beginning in November 1997; however, a formal lease agreement has not been 
executed and therefore the Company is occupying that space on a month to 
month basis. The monthly lease payment is $7,000. 

The Company leases approximately 12,000 square feet of space at the Bayside 
Bridge Plaza, Unit G, in Clearwater, Florida pursuant to the terms of a five-
year, six-month lease which expires August 31, 1999. Rent for the first six 
months was waived. Rent is $6,000 for each of months 7 through 18, $6,500 for 
each of months 19 through 30, and $7,000 for each of months 31 through 66.

The Company's executive offices are located at 3500 Parkway Lane, Suite 435, 
Norcross, Georgia. The Company is leasing approximately 938 square feet of 
office space for monthly rent of $1,521, pursuant to a five-year lease which 
expires October 1, 2001.

ITEM 3. LEGAL PROCEEDINGS.

In May 1997, Mark Shoom filed a lawsuit against the Company and James Robert 
Shaw to recover the principal, interest and attorney's fees due under a 
promissory note dated October 9, 1996 in the original principal amount of 
$80,000 payable by the Company and guaranteed personally by Mr. Shaw. In June 
1997, the Company entered into a Settlement Agreement with Mr. Shoom under 
which the Company agreed to issue Mr. Shoom 114,737 shares of the Company's 
Class A Common Stock under Regulation S of the Securities and Exchange 
Commission. In addition, in the event Mr. Shoom receives net proceeds from 
the sale of said shares of less than $103,300, the Company is obligated to 
issue Mr. Shoom additional shares with a value, as determined from the bid 
price of said stock, equal to the difference between $103,300 and the net 
proceeds received. To date, the Company has not performed under the 
Settlement Agreement, in that the Company has not issued Mr. Shoom the 
initial 114,737 shares of Class A Common Stock. As a result of the Company's 
breach of the Settlement Agreement, Mr. Shoom, through his attorneys, has 
recently filed a motion for entry of a default judgment. The Company and Mr. 
Shaw have filed a motion to reopen the default, as well as an answer and 
counterclaim. The court recently denied Mr. Shoom's motion and granted the 
Company's motion to reopen the default. There is a substantial chance that 
the Company will be found liable to Mr. Shoom for some amount of money, the 
exact amount of which is unknown at this time.

On December 9, 1997, Evelyn Kuntz served a writ of garnishment on the 
NationsBank, N.A. in collection of a default judgment which she had obtained 
against the Company in the amount of $46,376.31 on August 20, 1997. The writ 
of garnishment caused NationsBank to freeze the accounts of the Company and 
its wholly owned subsidiary, Classic Restaurants International, Inc., a 
Florida corporation. Mr. Kuntz's initial suit was filed to collect the 
balance due on a promissory note issued by the Company. On or about December 
19, 1997, the Company and Ms. Kuntz entered into a Stipulation for 
Dissolution of Writ of Garnishment, Settlement Agreement and Order pursuant 
to which the parties agreed that the funds held by NationsBank on behalf of 
the Company would be turned over to Ms. Kuntz in partial satisfaction of the 
judgment and the funds held by NationsBank on behalf of Classic's subsidiary 
were released to the subsidiary.  In addition, the Company agreed to make 
payments of $5,000 per month to Ms. Kuntz until the balance of the judgment 
was satisfied, and to issue Ms. Kuntz 125,000 shares of the Company's Class A 
Common Stock as collateral to secure the Company's remaining obligation to 
Mr. Kuntz. In return, Ms. Kuntz agreed to forebear from any further 
collection efforts as long as the Company was not in default under the terms 
of the Stipulation. The Company is in compliance with its monetary 
obligations under the Stipulation, and has issued the stock certificates to 
Ms. Kuntz as collateral under the Stipulation.

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

None.

                                      PART II

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

The Company's Class A Common Stock is traded on the over-the-counter market 
under the symbol "CRET". The range of high and low bid prices for each fiscal 
quarter for the last two fiscal years, as reported by the OTC Bulletin Board, 
and as adjusted to reflect all stock splits and dividends, is as follows:

<TABLE> 
<CAPTION> 
BID PRICES 
1995 FISCAL YEAR                      HIGH                  LOW

<S>                                  <C>                   <C> 
1996 FISCAL YEAR

Quarter Ending 09/30/95............. $3.67                 $3.33 
Quarter Ending 12/31/95............. $5.25                 $2.50 
Quarter Ending 03/31/96............. $4.88                 $4.00 
Quarter Ending 06/30/96............. $4.75                 $4.50

1997 FISCAL YEAR

Quarter Ending 09/30/96............. $5.62                 $2.87 
Quarter Ending 12/31/96............. $4.00                 $0.62 
Quarter Ending 03/31/97............. $1.50                 $0.75 
Quarter Ending 06/30/97............. $1.69                 $0.37

</TABLE>

The last reported high and low bid prices for the Company's Class A Common 
Stock were both $0.25 as of February 20, 1998, as reported by the OTC 
Bulletin Board. The above quotations reflect inter-dealer prices, without 
retail mark-up, mark-down, or commission and may not necessarily represent 
actual transactions.

As of February 20, 1998, there were 271 record holders of the Company's Class 
A Common Stock. During the last two fiscal years, no cash dividends have been 
declared on the Company's Common Stock. At the present time, the Company is 
prohibited from declaring dividends on its common stock under the terms of 
its Series A convertible preferred stock, Series B convertible preferred 
stock and Series C convertible preferred stock. 

During the quarter ended June 30, 1997, the Company sold the following 
securities without registration under the Securities Act of 1933 in reliance 
on the exemption contained in Section 4(2) and Regulation D promulagated 
thereunder:

(1)  On or about May 9, 1997, the Company sold 4,000 shares of Class A Common 
Stock for total consideration of $2,000 to an accredited investor.

(2)  On or about June 10, 1997, the Company sold 187,500 shares of Class A 
Common Stock for total consideration of $45,581.25 to an accredited investor. 

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

GENERAL

The Share Exchange transaction has been accounted for as a recapitalization 
of Classic-Florida and the issuance of 538,967 shares of Class A Common Stock 
for the net assets of the Company and the forgiveness of the liability due to 
the Company by Classic-Florida. This method is similar to accounting for a 
reverse acquisition, and accordingly, the financial statements presented 
prior to the date of the Share Exchange are those of Classic-Florida. No 
adjustment of assets of either company to "fair value" has been made.

Prior to the Share Exchange, the fiscal year end of Classic-Florida was 
December 31. It elected to change its fiscal year end to June 30 (that of the 
Company's). Accordingly, statements of operations and cash flows for the 
years ended December 31, 1994 and 1995 are presented, together with a 
statement for the six months ended June 30, 1996.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 1997, the Company had a working capital deficiency of 
$552,829, as compared to a working capital deficiency of $976,147 at June 30, 
1996. All of the capitalization of Classic-Florida has resulted from the sale 
of stock and loans from its principal shareholder, Crown Resources, Inc., a 
company controlled by the co-President of the Company. At present, the 
Company still remains dependent upon proceeds from the sale of stock and 
loans to provide sufficient cash to meet its needs. At June 30, 1996, 
$320,641 was owed to Crown Resources, Inc. During the year ended June 30, 
1997, the Company issued 268,509 shares of Class A Common Stock to Crown 
Resourses, Inc. in satisfaction of indebtedness of $426,141. See Item 12. 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. In addition, at June 30, 
1997, $333,614 was owed to various shareholders of the Company pursuant to 
promissory notes that either were in default or were past due. 

The Company continues to implement financial and accounting controls which 
have been successful in reducing the Company's operating losses. In addition, 
the Company is exploring alternatives for restructuring its debt and 
preferred stock obligations, which alternatives may include the exchange of 
existing debt or preferred stock for secured notes, the conversion of debt or 
preferred stock into common stock, and/or the disposition of its Clearwater 
operations. 

Due to the working capital deficiency as well as the operating losses 
described below, the notes to the financial statements express uncertainty 
about the Company's ability to continue as a going concern. See Note 2. BASIS 
OF PRESENTATION of the Notes to Consolidated Financial Statements. The 
Company proposes to obtain additional cash during the current fiscal year 
through the sale of its stock to provide sufficient liquidity for the 
Company's needs.

RESULTS OF OPERATIONS

For the year ended June 30, 1997, the Company had sales of $2,328,729, as 
compared to sales of $2,419,405 during the period from July 1, 1995 to June 
30, 1996, a decrease of 3.7%. Operating expenses as a percentage of sales 
were 81%, as compared to 90.1% for the period from July 1, 1995 to June 30, 
1996. The improvement in operating expenses is the result of restructuring 
personnel and pay schedules, and reductions in production costs. General and 
administrative expenses as a percentage of sales were 68% as compared to 35% 
for the period from July 1, 1995 to June 30, 1996 as the result of increased 
promotional expenses, consulting fees and acquisition activity of a 
nonrecurring nature. Management expects general and administrative expenses 
to be significantly lower in fiscal 1998 than in fiscal 1997.

ITEM 7. FINANCIAL STATEMENTS.

Please refer to pages beginning with page f-1.

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

On July 1, 1996, the Company and its Board of Directors approved the 
engagement of Stark Tinter & Associates, LLC, of Englewood, Colorado, to 
audit the Company's financial statements. During the Company's two most 
recent fiscal years and the subsequent interim period preceding the 
engagement of this firm, the Company did not consult this firm regarding any 
of the matters identified in Item 304(a)(2) of Regulation S-K.

Stark Tinter & Associates, LLC was selected by new management of the Company. 
As reported in the Form 8-K dated January 31, 1996, the Company experienced a 
change of control.

The former accountants were Mitchell Finley and Company, P.C. The report of 
Mitchell Finley and Company, P.C. on the financial statements for the fiscal 
year ended June 30, 1995 contained an explanatory paragraph regarding the 
Company's ability to continue as a going concern. The decision to change 
accountants was approved by the Board of Directors on May 21, 1996. During 
the Company's two most recent fiscal years and the subsequent interim period 
preceding the resignation, there were no disagreements with Mitchell Finley 
and Company, P.C. on any matter of accounting principles or practices, 
financial statement disclosure, or auditing scope or procedure, which 
disagreements, if not resolved to the satisfaction of Mitchell Finley and 
Company, P.C., would have caused it to make reference to the subject matter 
of the disagreements in connection with its report.

Effective January 1, 1996, Mitchell Finley and Company, P.C. combined its 
practice with BDO Seidman LLP. In addition, the license of Mitchell Finley 
and Company, P.C. to practice accountancy with the Colorado Board expired on 
May 31, 1996. Accordingly, the firm can no longer practice under the name 
Mitchell, Finley & Company, P.C.

                       PART III

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

The following table sets forth the names and ages of all directors and 
executive officers of the Company as of the date of this report, indicating 
all positions and offices with the Company held by each such person:

NAME                             AGE             POSITION 
James R. Shaw                     43             co-President, Treasurer,
                                                  and Director 
Frank Pringle                     54             co-President, Chairman
June Cuba                         38             Vice President, Secretary 
                                                  and Director
Ronald Lambert                    55             Director
Benjamin Silber                   54             Director

The holders of the Class B Common Stock have the right to elect a majority of 
the board of directors of the Company. Cumulative voting for directors is not 
permitted in either class of common stock. The term of office of directors of 
the Company ends at the next annual meeting of the Company's shareholders or 
when the successors are elected and qualify. The annual meeting of 
shareholders is specified in the Company's bylaws to be held on a date and at 
a time and place to be determined by resolution of the Board of Directors. 
The Company has tentatively scheduled the annual meeting for March 1998. The 
term of office of each officer of the Company ends at the next annual meeting 
of the Company's Board of Directors, expected to take place immediately after 
the next annual meeting of shareholders, or when his successor is elected and 
qualifies. Except as otherwise indicated below, no organization by which any 
officer or director previously has been employed is an affiliate, parent, or 
subsidiary of the Company.

JAMES R. SHAW has been the President, Treasurer, and a director of the 
Company since February 1, 1996, and the President, Treasurer, and a director 
of Classic-Florida since December 1993. Mr. Shaw also served as a director of 
Classic-Florida from its inception to July 1992. He was the executive vice 
president, co-manager, and co-franchise owner of a Schneider Securities, Inc. 
office in Atlanta, Georgia, from April 1992 to February 1994. Schneider 
Securities, Inc. is a securities broker-dealer firm. From January 1990 to 
April 1992, he was the manager and franchise owner of a Pacific Southern 
Securities office in Atlanta, Georgia. From 1986 to January 1990, Mr. Shaw 
was a stockbroker with several other broker-dealer firms. He received a 
Bachelor of Music degree from Carson-Newman College in 1979 and a Master of 
Music degree from Southern Baptist Theological Seminary in 1986.

RONALD LAMBERT has been a director of the Company since June 1997. Mr. 
Lambert is a licensed stockbroker.  Mr. Lambert has been a stockbroker with 
Great American Financial Network, Inc. since June 1994. From April 1992 to 
May 1994, Mr. Lambert was a stockbroker with Schneider Securities, Inc. Prior 
to joining Schneider Securities, Inc., Mr. Lambert was a stockbroker with 
Pacific Southern Securities, Inc.

JUNE CUBA has been the Vice President of the Company since August 18, 1997, 
the Secretary since January 28, 1998, and a director since February 27, 1998. 
Prior to joining the Company, Ms. Cuba was the office manager of Destiny 
Travel, a travel agency, from June 1994 to April 1997.  From September 1993 
to May 1994, Ms. Cuba was the accounting manager for World Technology, an 
airline reservations company where she was involved in the organization of 
its accounting department.  From July 1987 to August 1993, Ms. Cuba was the 
accounting manager for HCI Travel, a travel agency. Ms. Cuba received a B.A. 
degree in business administration from Kennesaw State University in 1983.

FRANK G. PRINGLE, co-President and Chairman of the Board of Directors of the 
Company as of February 27, 1998. Mr. Pringle has worked in the packaging 
industry since 1969 being initially employed by R.A. Jones.  From 1971 
through 1975, he was employed by Standard Knapp Packaging Machinery where his 
last position was as Regional Sales Manager.  From 1975 to 1979, Mr. Pringle 
was employed as Sales Manager for Simplimatic Engineering Corporation.  In 
1979, Mr. Pringle purchased a part interest in Ambec Systems, serving as Vice 
President of Marketing and New Machine Development.  At such time, he helped 
to developed a patented machine called "10" Conveyor.  In 1981, Mr. Pringle 
left Ambec Systems and the packaging field due to a covenant not to compete 
and became involved in the ownership of health clubs, which continued until 
1985 when he started Pringle Systems, a company that installed packaging 
equipment and manufactured conveyors and other packaging machinery.  In 1990, 
Mr. Pringle organized R & D Innovators, Inc. and has been employed by such 
company to the present time as well as by EFTEK Corp., the parent company.  
Mr. Pringle holds a number of patents in the field of engineering.

BENJAMIN SILBER has been a director of the Company since February 27, 1998. 
Mr. Silber is an attorney admitted to practice in the State of New Jersey 
since 1996.  Mr. Silber was a partner in the firm of Silber & Neef for four 
years.  Thereafter, he has maintained a law office as a sole practioner.  Mr. 
Silber is a member of the Salem County Bar Association, State of New Jersey 
Bar Association and the American Bar Association. His practice is 
concentrated in the areas of real estate, landlord/tenant and commercial 
litigation.  

The Company does not have any standing audit, nominating, or compensation 
committees of the Board of Directors.  During the fiscal year ended June 30, 
1997, there were two formal meeting of the Board of Directors.  James Robert 
Shaw and Caroline Anderson attended both meetings, and Daniel Howell did not 
attend either meeting. 

The Company currently does not provide the directors with any regular 
compensation for their services as directors.  The Company reimburses the 
directors any out-of-pocket expenses which they incur in the performance of 
their duties. 

Jerry Carter resigned as a director as of February 13, 1997.  Mr. Carter did 
not give the Company a reason for his resignation. 

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The Company's Class A Common Stock was registered under Section 12(g) of the 
Exchange Act on June 28, 1996, and thereby became subject to the reporting 
requirements of Section 16(a) on that date. Section 16(a) requires the 
Company's directors and executive officers, and holders of more than 10% of 
the Company's Common Stock, to file with the Securities and Exchange 
Commission ("SEC") intial reports of ownership and reports of changes in 
ownership of Common Stock and other equity securities of the Company.  Such 
officers, directors and 10% stockholders are required by SEC regulation to 
furnish the Company with copies of all Section 16(a) forms they file.

Based on its review of such forms it received, or written representations 
from reporting persons that no Forms 5 were required for such persons, the 
Company believes that, for fiscal 1997, all Section 16(a) filing requirements 
were satisfied on a timely basis with the exception of the following:

James Robert Shaw did not file a Form 4s reporting sales 23,000 shares of 
Class A Common Stock on January 7, 1997, and 34,988 shares of Class A Common 
Stock on June 20, 1997, or Form 5 within 45 days of the end of the Company's 
fiscal year.  On April 22, 1998, Mr. Shaw filed a Form 5 reporting the above 
sales.

Ronald Lambert and Bailey Spears did not file a Form 3 upon their appointment 
as directors of the Company in June 1997 until April 21, 1998.  Neither 
Messrs. Lambert nor Spears were required to file a Form 5 for 1997. 

June Cuba did not file a Form 3 upon her appointment as an officer of the 
Company in August 1997 until April 21, 1998. Ms. Cuba was not required to 
file a Form 5 for 1997.

Neither Caroline P. Anderson nor Daniel Howell, who both resigned as 
directors and officers in June 1997, filed a Form 5 within 45 days of the end 
of the Company's fiscal year.  However, the Company does not know if Ms. 
Anderson or Mr. Howell were required to file a Form 5. 

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth information for the current Chief Executive 
Officer ("CEO") of the Company, James R. Shaw from February 1, 1996 through 
June 30, 1997, and for a former CEO, Edward L. Bates, who served as such from 
October 1994 through January 31, 1996.  No disclosure need be provided for 
any executive officer, other than the CEO, whose total annual salary and 
bonus for the last completed fiscal year did not exceed $100,000. 
Accordingly, no other executive officers of the Company are included in the 
table.

                                SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                     Annual Compensation                    Long Term 
                                                           Compensation 
                     --------------------                  ------------
Name and                                    Other
Principal                                   Annual 
Position       Year   Salary   Bonus     Compensation 
-----------    ----   ------   --------  ------------      ---------- 
<S>            <C>    <C>      <C>       <C>               <C> 
James Shaw,    1997   $0       0         0                 0   
President      1996   $0       0         0                 0 

Edward Bates,  1996   $0       0         0                 0 
President
</TABLE>

There are no outstanding stock options.

During the year ended June 30, 1996, the Company loaned Mr. Shaw $33,893. 
During the year ended June 30, 1997, the Company loaned Mr. Shaw an 
additional $2,275.  The loan is payable on demand, is not evidenced by a 
promissory note, and does not bear interest.

There are no employment agreements with any of the Company's executive 
officers.

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

The following section sets forth information regarding ownership of the 
Company's Class A Common Stock and Class B Common Stock as of February 20, 
1998. Except as otherwise indicated in the footnotes, the Company believes 
that the beneficial owners of the securities listed in the tables, based on 
information furnished by such owners, have sole investment and voting power 
with respect to the shares of stock shown as beneficially owned by them. 

Security Ownership of Certain Beneficial Owners

The following table sets forth each person known by the Company (other than 
management) to own beneficially more than 5% of the outstanding shares of 
either the Class A Common Stock or Class B Common Stock of the Company. 

<TABLE> 
<CAPTION>

                           CLASS A COMMON STOCK         CLASS B COMMON STOCK 
                          NUMBER OF    PERCENT OF      NUMBER OF    PERCENT 
OF 
BENEFICIAL OWNER           SHARES        CLASS (1)<F1>  SHARES       CLASS 
(1)<F1>
<S>                         <C>           <C>            <C>           <C> 

Voyager Select IPO          3,400,000     25.5%          --            --
Fund, Ltd. (2)<F2>
129 Front Street 
Penthouse Suite
Hamilton, HM12
Bermuda

James Buford Salmon         1,650,923     16.6%          --            -- 
1525 Lakesite Drive 
Birmingham, AL 35285 

Ronald E. Sauve             790,000       7.9%           --            --
1605 Singletary
Albuquerque, NM 87112

H. Thomas Ferstl            648,000       6.5%           --            --
8761 State Street
Millington, MI 48746
---------------------------------------------------------------------------
<FN>
<F1>
(1) Based on 9,947,553 shares of Class A Common Stock and 200,000 shares of 
Class B Common Stock outstanding as of February 20, 1998. Where the persons 
listed on this table have the right to obtain additional shares of common 
stock within 60 days from February 20, 1998, these additional shares are 
deemed to be outstanding for the purpose of computing the percentage of class 
owned by such persons, but are not deemed to be outstanding for the purpose 
of computing the percentage of any other person. Class A Common Shares have 1 
vote per share while Class B Common Shares have 40 votes per share. In 
addition, the Class B Common Shares have the right to elect the majority of 
the Board of Directors of the Company at all times.

<F2>
(2) Voyager Select IPO Fund, Ltd. holds 8 shares of Series A Convertible 
Preferred Stock, each of which is convertible into shares of Class A Common 
Stock at a conversion price equal to the lesser of the bid price of the Class 
A Common Stock as of the date of the subscription agreement or 60% of the 
average closing bid price of the Class A Common Stock for the three trading 
days preceeding the date of conversion. As of February 20, 1998, the shares 
of Series A Convertible Preferred Stock held by Voyager Select were 
convertible into 1,000,000 shares of Class A Common Stock. Voyager Select IPO 
Fund, Ltd. also holds 12 shares of Series C Convertible Preferred Stock, each 
of which is convertible into shares of Class A Common Stock at a conversion 
price equal to the bid price of the Class A Common Stock as of the date of 
conversion. As of February 20, 1998, the shares of Series C Convertible 
Preferred Stock held by Voyager Select were convertible into 2,400,000 shares 
of Class A Common Stock.

</FN>
</TABLE>

Security Ownership of Management

The following table sets forth information regarding beneficial ownership of 
the Class A Common Stock and Class B Common Stock by each director, each 
executive officer, and by all directors and executive officers of the Company 
as a group.

<TABLE> 
<CAPTION>

                           CLASS A COMMON STOCK         CLASS B COMMON STOCK 
                          NUMBER OF    PERCENT OF      NUMBER OF    PERCENT 
OF 
BENEFICIAL OWNER           SHARES        CLASS (1)<F1>  SHARES       CLASS 
(1)<F1> 
<S>                         <C>           <C>            <C>           <C> 
James R. Shaw (2)<F2>       535,579       5.4%          200,000       100.0% 

June Cuba                   --            --             --            --

Ronald Lambert              1,000         0%             --            --

Frank Pringle (3)<F3>       8,045         0%             --            --

Benjamin Silber (4)<F4>     206,300       2%             --            --

Officers and Directors      746,924       7.5%           200,000       100.0% 
as a group (5 persons) 
-----------------------------------------------------------------------------
<FN>
<F1> 
(1) Based on 9,947,553 shares of Class A Common Stock and 200,000 shares of 
Class B Common Stock outstanding as of February 20, 1998. Where the persons 
listed on this table have the right to obtain additional shares of common 
stock within 60 days from February 20, 1998, these additional shares are 
deemed to be outstanding for the purpose of computing the percentage of class 
owned by such persons, but are not deemed to be outstanding for the purpose 
of computing the percentage of any other person.

<F2> 
(2) Includes 243,567 shares owned of record by Crown Resources, Inc., which 
is owned by Mr. Shaw, and 250,000 shares owned by Mr. Shaw and his wife, 
Carolyn Shaw, jointly.

<F3> 
(3) Includes 8,045 shares of Class A Common Stock owned of record by Celia 
Pringle, who is the mother of Mr. Pringle.

<F4>
(4)  Includes 4,000 shares of Class A Common Stock issuable upon conversion 
of 400 shares of Series B Convertible Preferred Stock owned by Mr. Silber.

</FN>
</TABLE>

On February 27, 1998, the Company entered into an Agreement and Plan of Share 
Exchange with AA Corp. and the Pringle Family Trust. See ITEM 1. DESCRIPTION 
OF BUSINESS - AA CORP. Under the Agreement, Frank G. Pringle and Benjamin 
Silber were appointed to the Board of Directors of the Company. In addition, 
Mr. Pringle was made Chairman and co-President of the Company. Consummation 
of the transactions contemplated by the Agreement are subject to the 
satisfaction or waiver of a number of conditions. In the event the 
transactions contemplated by the Agreement are not effectuated, then Messrs. 
Pringle and Silber are required to resign as officers and directors of the 
Company.  In the event the transactions contemplated by the Agreement are 
effectuated, the Pringle Family Trust will obtain a controlling interest in 
the Company by the issuance of Series D Convertible Preferred Stock to the 
Pringle Family Trust and the acquisition of the Class B Common Stock from Mr. 
Shaw. 

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

From time to time, Crown Resources, Inc. has loaned funds to the Company. 
Crown Resources, Inc. is owned and controlled by James R. Shaw, the 
President, director, and principal shareholder of the Company. In September 
1994, Crown Resources, Inc. was issued 93,750 shares of Class A Common Stock 
at a price of $3.20 per share as partial repayment of amounts due to Crown. 
At June 30, 1996, the Company owed Crown Resources, Inc. $320,641, which was 
unsecured and had no set interest rate or payment terms. During the year 
ended June 30, 1997, the balance due to Crown Resources, Inc. of $426,141 was 
converted into 268,509 shares of Class A Common Stock.  As of June 30, 1997, 
the Company was not indebted to Crown Resources, Inc. To comply with Internal 
Revenue Service requirements and financial accounting standards, $10,000 of 
interest was accrued and charged to operations during 1996.

At June 30, 1997, the Company owed $105,448 to stockholders pursuant to 8% 
convertible promissory notes due December 31, 1995. The notes are in default. 
Interest on the notes is due monthly and the notes are convertible at anytime 
into Class A Common Stock at $3.20 per share. Payment of the notes is 
guaranteed personally by the Company's president, James R. Shaw.

On February 2, 1996, the Company borrowed $31,000 from a shareholder of the 
Company. The promissory note was due December 31, 1996, bears interest at 
10%, and is personally guaranteed by Mr. Shaw.
 
From April 1996 through May 1996, the Company borrowed an aggregate of 
$188,500 from various shareholders of the Company. The promissory notes are 
due at various times from July 1996 to November 1996 and bear interest at 
18.25% per annum. Repayment of the notes is personally guaranteed by Mr. 
Shaw.  The balance due on the notes as of June 30, 1997 was $78,500.

During the year ended June 30, 1996, the Company loaned Mr. Shaw $33,893. 
During the year ended June 30, 1997, the Company loaned Mr. Shaw an 
additional $2,275.  The loan is unsecured and does not have a set interest 
rate or payment terms.  In addition, the Company has loaned Steven Shaw, who 
is the brother of Mr. Shaw, $3,032, and $33,603 to Crown Resources, Inc., 
which is owned by Mr. Shaw. The loans to Steven Shaw and Crown Resources, 
Inc. are unsecured and do not have a set interest rate or payment terms.

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

(a) Exhibits:

<TABLE>
<CAPTION>
REGULATION
S-B NUMBER      EXHIBIT 
<S>             <C> 
2.1             Agreement and Plan of Share Exchange among Casinos 
                International, Inc., Great American Resorts, Inc. and 
                Classic Restaurants International, Inc. dated June 30, 
                1995, as amended (1)<F1>

2.2             Agreement and Plan of Share Exchange among Classic 
                Restaurants International, Inc., James Robert Shaw, AA 
                Corp. and the Pringle Family Trust dated February 27, 
                1998 (2)<F2>

2.3             Agreement and Plan of Merger between Classic Restaurants
                International, Inc. and Creative Recycling Technologies, Inc.
                dated March 13, 1998 (3)<F3>

3.1             Articles of Incorporation (3)<F3>

3.2             Bylaws (3)<F3>

10.1            Lease for Boca Raton restaurant (4)<F4>

10.2            Lease for Clearwater restaurant (4)<F4>

10.3            Convertible promissory notes (4)<F4>

10.4            Promissory note to Carl Simpson (4)<F4>

10.5            18.25% Promissory notes (4)<F4>

10.6            Promissory Note to Voyager Select IPO Fund, Ltd.

10.7            Form of Convertible Debenture

11              Statement re: computation of per share earnings

16              Letter from Mitchell Finley and Company, P.C. re 
                change in certifying accountant (4)<F4>

21              List of Subsidiaries 

28              Financial Data Schedule 
-------------------------------------------------------------------------
<FN> 
<F1>
(1) Incorporated by reference to the Exhibits filed with the Company's 
Current Report on Form 8-K dated January 31, 1996, Commission File Number 
033-33556-D.
 
<F2>
(2) Incorporated by reference to the Exhibits filed with the Company's 
Current Report on Form 8-K dated February 28, 1998, Commission File Number 0-
28704.

<F3> 
(3) Incorporated by reference to the Exhibits filed with the Company's 
Current Report on Form 8-K dated April 14, 1998, Commission File Number 0-
28704.

<F4>
(4) Incorporated by reference to the Exhibits filed with the Company's Annual
Report on Form 10-KSB for the fiscal year ended June 30, 1996, Commission 
File Number 0-28704.

</FN> 
</TABLE>

(b) Reports on Form 8-K.

The following reports on Form 8-K were filed during the last of the period 
covered by this report: 

Report dated May 14, 1997, reporting under Item 9 of the sale of 100,000 
shares of Class A Common Stock under Regulation S for $82,000 pursuant to the 
exercise of a Common Stock Purchase Warrant.

Report dated June 17, 1997, reporting under Items 5 and 9 of the Company's 
entry into a settlement agreement under which it agreed to issue 114,737 
shares of Class A Common Stock in settlement of an obligation to a Canadian 
citizen; and under Items 5 and 6 of the resignation of Caroline P. Anderson 
and Daniel Howell from the Board of Directors and the appointment of Ronald 
Lambert and Bailey Spears to the vacant seats on the Board of Directors. 

                                  SIGNATURES

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

                                    CREATIVE RECYCLING TECHNOLOGIES, INC.



Dated: 4/13/98                      By:/s/ James R. Shaw 
                                       James R. Shaw, President

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


Dated: 4/13/98                     By:/s/ James Robert Shaw
                                       James Robert Shaw, Director and 
                                       co-President


Dated: 4/13/98                     By:/s/ June Cuba
                                       June Cuba, Vice President and
                                       Director


Dated: 4/13/98                      By:/s/ Ronald Lambert
                                       Ronald Lambert, Director



Dated: 4/13/98                      By:/s/ Benjamin Silber
                                       Benjamin Silber, Director



Dated: 4/13/98                      By:/s/ Frank G. Pringle
                                       Frank G. Pringle, Chairman and co-
                                                         President

<PAGE>


               REPORT OF INDEPENDENT AUDITORS


Shareholders and Board of Directors
Classic Restaurants International, Inc.

We have audited the accompanying balance sheets of Classic Restaurants 
International, Inc. as of June 30, 1997 and 1996, and the related statements of 
operations, stockholders' equity (deficiency), and cash flows for the year 
ended June 30, 1997 and the six months ended June 30, 1996. These financial 
statements are the responsibility of the Company's management. Our 
responsibility is to express an opinion on these financial statements based on 
our audit.

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Classic Restaurants 
International, Inc. as of June 30, 1997 and 1996, and the results of its 
operations, and its cash flows for the year ended June 30, 1997 and the six 
months ended June 30, 1996 in conformity with generally accepted accounting 
principles.

The accompanying financial statements have been prepared assuming that the 
Company will continue as a going concern. As discussed in Note 2 to the 
financial statements, the Company has suffered recurring losses from operations 
and has a net capital deficiency that raise substantial doubt about the 
Company's ability to continue as a going concern. Management's plans in regard 
to these matters are also described in Note 2. The financial statements do not 
include any adjustments that might result from the outcome of this uncertainty.

As explained in Note 11 subsequent to November 25, 1997, the Company entered 
into an agreement to acquire all the outstanding stock of A.A. Corp. in a 
business combination accounted for as a pooling of interests.



                       Stark Tinter & Associates, LLC
                       Certified Public Accountants


Englewood, Colorado
November 25, 1997
Except for Note 11, dated March 4, 1998

<PAGE>

                       [Letterhead of James Moore & Co., P.L.]

                        INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of
Classic Restaurants International, Inc.:


We have audited the accompanying statement of operations, stockholders' 
equity (deficit) and cash flows of Classic Restaurants International, Inc. 
for the year ended December 31, 1995. These financial statements are the re-
sponsibility of the Company's management. Our responsibility is to express an 
opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, Classic Restaurants International, Inc.'s results of 
operations and cash flows for the year ended December 31, 1995, in conformity 
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the 
Company will continue as a going concern. As shown in the accompanying 
financial statements, the Company incurred a net loss of $1,247,695 for 1995 
and has incurred substantial net losses since inception. At December 31, 
1995, current liabilities exceed current assets by $1,415,432 and total 
liabilities exceed total assets by $804,564. These factors raise substantial 
doubt about the Company's ability to continue as a going concern. The 
financial statements do not include any adjustments relating to the 
recoverability and classification of recorded assets, or the amounts and 
classification of liabilities that might be necessary in the event the 
Company cannot continue in existence.

                                        James Moore & Co.

Gainesville, Florida
March 20, 1996

<PAGE>

             CLASSIC RESTAURANTS INTERNATIONAL, INC.
                 CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                   June 30,        June 30,
                                                     1996            1997
                                                    --------       --------
                            ASSETS
<S>                                                 <C>            <C>
Current assets:
  Cash and cash equivalents                         $  22,759      $  36,656
  Inventory                                            16,080         14,039
  Prepaid expenses                                     13,945            -
  Due from officers and 
    stockholders (Notes 4 and 10)                      52,088         91,444
  Other receivables                                     3,685          6,655
                                                    ----------     ----------
    Total current assets                              108,557        148,794

Property and equipment-net of accumulated
    Depreciation (Note 3)                             476,935        348,801

Other assets:
  Intangibles net of accumulated amortization
  Of $7,167 and $10,707                                22,833         21,501
  Deposits                                             37,418         39,119
                                                    -----------    ----------
                                                    $ 645,743      $ 558,215
                                                    -----------    ----------

               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
  Accounts payable                                  $ 187,094      $ 184,394
  Accrued expenses                                    151,019        119,169
  Notes payable (Note 4)                              338,448        333,614
  Due to stockholder                                  320,641           -
  Advance banquet deposits                             34,433         26,973
  Deferred revenue                                     19,521         13,833
  Deferred rent                                        33,548         26,640
                                                    -----------    ----------
    Total current liabilities                       1,084,704        701,623
                                                    -----------    ----------
Commitments and contingencies (Notes 5, 8, and 10)

Stockholders' equity (deficiency)(Note 7):
  Common stock, Class A no par value,
   1,800,000,000 shares authorized 3,018,592 and
   4,384,116 shares issued and outstanding          2,563,157      3,814,880
  Common stock, Class B no par value, 200,000,000
   Shares authorized, 200,000 shares issued
   And outstanding                                        200            200
  Preferred stock, Series A, convertible, stated 
   value $25,000, 20 shares authorized, 14 shares 
   issued and outstanding                                  -         350,000
  Preferred stock, Series B convertible, stated 
   value $15, 12,000 shares authorized, 
   2,918 issued and outstanding                            -          43,770
  Preferred stock, Series C, convertible, 
   stated value $50,000, 12 shares authorized, 
   no shares issued or outstanding                       -              -
  Accumulated deficit                              (3,002,318)     4,352,258)
                                                      -----------  ----------
Total stockholders' equity (deficiency)              (438,961)      (143,408)
                                                      -----------  ----------
                                                    $ 645,743      $ 558,215

</TABLE>

                 See accompanying notes to financial statements.
<PAGE>
                 CLASSIC RESTAURANTS INTERNATIONAL, INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE YEAR ENDED DECEMBER 31, 1995,
                 THE SIX MONTHS ENDED JUNE 30, 1996 AND
                      THE YEAR ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
                                  1995           1996          1997
                                -----------   ----------    -----------
<C>                            <S>            <S>           <S>
Net sales                      $ 2,632,151    $ 1,372,352   $ 2,328,729
                                -----------   ----------    -----------
Operating expenses:
  Operating and maintenance      2,497,044      1,247,567     1,894,743
  General and administrative     1,223,793        480,960     1,584,014
  Depreciation and amortization    142,291         71,711       145,229
                                -----------   ------------  ------------
   Total operating expenses      3,863,128      1,800,238     3,623,986
                                -----------   ------------  ------------
Loss from operations            (1,230,977)      (427,886)   (1,295,257)
                                -----------   ------------  ------------
Other income (expense):
  Other income                       -                300         7,945
  Interest expense                 (16,718)       (18,881)      (62,628)
                                   (16,718)       (18,581)      (54,683)
                                -----------   ------------  ------------
Net (loss)                     $(1,247,695)    $ (446,467)  $(1,349,940)
                                -----------   ------------  ------------
Per share information:

Weighted average shares
Outstanding                      2,042,036      2,799,791     3,525,714
                                -----------   ------------  ------------
                                -----------   ------------  ------------
Basic and diluted loss per share  $  (0.61)     $   (0.16)    $   (0.38)
                                -----------   ------------  ------------
</TABLE>


               See accompanying notes to financial statements.

<PAGE>

                        CLASSIC RESTAURANTS INTERNATIONAL, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                        FOR THE YEAR ENDED DECEMBER 31, 1995,
                       THE SIX MONTHS ENDED JUNE 30, 1996 AND
                              THE YEAR ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
                                           1995         1996          1997
                                       --------------------------------------
<C>                                   <S>           <S>         <S>
Cash flows from operating activities:
Net loss                              $ (1,247,695) $ (446,467) $ (1,349,940)
Adjustments to reconcile net loss
 To net cash provided by (used in)
 Operating activities:
  Depreciation and amortization            142,291      71,711       145,229
  Common stock issued for services         225,000     150,000       440,951
Changes in assets and liabilities:
(Increase) decrease in inventory             1,854        (109)        2,041
(Increase) decrease in prepaid expenses    (12,507)       (812)       13,945
(Increase) decrease in other receivables    (3,605)      3,197        (2,970)
(Increase) decrease in deposits            (11,168)     10,180        (1,701)
Increase (decrease) in accounts
 Payable and accrued expenses              230,859    (250,100)      (34,550)
Increase (decrease) in advance 
  banquet deposits                            (891)      2,842        (7,460)
Increase (decrease) in deferred revenue    (14,602)    (21,654)       (5,688)
Increase (decrease) in deferred rent          (908)     (2,454)       (9,908)
                                       --------------------------------------
  Total adjustments                        556,323     (37,199)      539,889
                                       --------------------------------------
  Net cash (used in) operating 
    activities                            (691,372)   (483,666)     (810,051)
                                       --------------------------------------

Cash flows from investing activities:
  Purchase of intangible assets              -            -           (2,208)
  Purchase of fixed assets                  (5,436)     (8,209)      (13,555)
                                       --------------------------------------
   Net cash (used in) investing 
     activities                             (5,436)     (8,209)      (15,763)

Cash flows from financing activities:
 Net proceeds from issuance of 
   common stock                             23,425     334,563       234,631
 Net proceeds from issuance of 
   preferred stock                             -          -          543,770
 Proceeds from notes payable               347,506     222,063       118,666
 Payments on notes payable                     -          -         (123,500)
 Proceeds from due to stockholder          177,483      82,200       170,000
 Repayments on due to stockholder          (15,000)   (108,470)      (64,500)
 Repayments on due from officers 
   and stockholders                             -        7,347       140,177
 Advances to due from officers and 
   stockholders                            (36,735)     (7,700)     (179,533)
 Increase (decrease) in bank overdraft      19,901     (35,035)         -
 Refund of canceled stock                   (2,000)         -           -
                                       --------------------------------------
   Net cash provided by financing 
     Activities                            714,580     494,968       839,711
                                       --------------------------------------
Net increase in cash and cash 
  equivalents                               17,772       3,093        13,897
Beginning-cash and cash equivalents          1,894      19,666        22,759

Ending-cash and cash equivalents      $     19,666    $ 22,759     $  36,656
                                       --------------------------------------
</TABLE>


                  See accompanying notes to financial statements.

<PAGE>
                CLASSIC RESTAURANTS INTERNATIONAL, INC.
          CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                FOR THE YEAR ENDED DECEMBER 31, 1995,
                THE SIX MONTHS ENDED JUNE 30, 1996 AND
                    THE YEAR ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
                                    1995            1996             1997
                               -------------   --------------    ------------
<C>                             <S>              <S>              <S>
Supplemental cash flow 
information:

  Cash paid for: Interest       $  9,506         $  8,881         $     -
                 Income taxes   $    -           $    -           $     -

Non-cash investing and 
   Financing Activities:

Common stock issued for the
  cancellation of related 
  party debt                         -           $    -           $  426,141
Common stock issued in 
  Reorganization                     -           $ 327,507        $     -
12% Series A subordinated 
  convertible redeemable 
  debenture                     $    -           $    -           $    9,666

</TABLE>

Noncash investing and financing activities in the fiscal year ended June 30, 
1997 consists of 12% Series A Senior Subordinated Convertible Redeemable 
Debentures purchased at 75% of the face amount of such Debentures, or 
$29,000.  The Holder is entitled at anytime commencing 45 days after closing 
of the sale of such Debentures to convert any amount over $25,000 of the 
principal face amount of this Debenture then outstanding into shares of 
common stock, $0.001 par value per share, of the Company at a conversion 
price for each share of common stock equal to the lower of (1) 80% of the 
average closing bid price of the common stock for the business day 
immediately preceding the date of receipt by the Company of notice of 
conversion or (2) 80% of the average of the closing bid price of the common 
stock for the 5 business days immediately preceding the date of the 
subscription as reported by NASDAQ.  The difference between the face value of 
$38,666 and the purchase price of $29,000 is accounted for as loan fee 
expense.


              See accompanying notes to financial statements.

<PAGE>



<TABLE>
<CAPTION>

                                                          CLASSIC RESTAURANTS INTERNATIONAL, INC.
                                            CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIENCY)
                                                FOR THE YEAR ENDED DECEMBER 31, 1995, THE SIX MONTHS
                                                ENDED JUNE 30, 1996 AND THE YEAR ENDED JUNE 30, 1997

                                                                                Preferred         Preferred 
                               Common Stock Class A   Common Stock Class B    Stock Class A     Stock Class B 
                               --------------------   --------------------   ----------------   -------------    Accumulated
                               Shares      Amount     Shares      Amount     Shares    Amount   Shares   Amount    Deficit
                               ------      ------     ------      ------     ------    ------   ------   ------   -----------
<C>                           <S>        <S>          <S>        <S>         <S>      <S>       <S>      <S>      <S>
Balance December 31, 1994     1,810,715  $ 1,304,662  200,000    $   200        -     $   -       -      $  -     $(1,308,156)

Issuance of shares for cash     133,400      223,425     -           -          -         -       -         -         -
Issuance of shares for no
  Consideration                   5,050          -       -           -          -         -       -         -         -
Issuance of shares for 
  Services                      225,000      225,000     -           -          -         -       -         -         -
Shares canceled                    (500)      (2,000)    -           -          -         -       -         -         -
Net loss for the year              -            -        -           -          -         -       -         -     (1,247,695)
                              -----------------------------------------------------------------------------------------------
Balance December 31, 1995     2,173,665    1,751,087  200,000        200        -         -       -         -     (2,555,851)

Shares issued for services      150,000      150,000     -           -          -         -       -         -         -
Shares issued for cash          155,960      334,563     -           -          -         -       -         -         -
Shares issued for
  Reorganization (Note 9)       538,967      327,507     -           -          -         -       -         -         -
Net loss for the period            -            -        -           -          -         -       -         -       (446,467)
                              -----------------------------------------------------------------------------------------------
Balance June 30, 1996         3,018,592    2,563,157  200,000       200         -         -       -         -     (3,002,318)

Shares issued for services      561,750      440,951     -           -          -         -       -         -         -
Shares issued for cash          299,677      234,631     -           -           20    500,000   2,918    43,770      -
Shares issued in 
exchange for debt              268, 509      426,141     -           -          -         -       -         -         -
Shares issued in conversion 
  of Series A Preferred Stock   235,588      150,000     -           -           (6)  (150,000)   -         -         -
Net loss for the year              -            -        -           -          -         -       -         -     (1,349,940)
                              -----------------------------------------------------------------------------------------------
Balance June 30, 1997         4,384,116  $ 3,814,880  200,000    $  200          14   $350,000   2,918  $ 43,770  $(4,352,258)

</TABLE>
[FN]

                             See accompanying notes to financial statements

</FN>
<PAGE>




                 NOTES OF FINANCIAL STATEMENTS


1.     Summary of Significant Accounting Policies:

Organization:  Classic Restaurants International, Inc. (the Company) was 
organized under the laws of the State of Florida on April 7, 1992, for the 
purpose of developing and operating restaurants using a dinner theater concept. 
On December 1, 1992, the Company opened Musicana Supper Club in Boca Raton, 
Florida. The Company opened Musicana Dinner Theater in Clearwater, Florida on 
May 14, 1994. The financial statements include the accounts of the Company and 
its wholly owned subsidiary. All intercompany transactions have been eliminated 
in consolidation.

Certain classifications from prior year financial statements have been changed 
to conform to the current period presentation.

Property and equipment:  Property and equipment consists primarily of 
restaurant equipment and leasehold improvements which are recorded at cost.  
Depreciation on restaurant equipment is computed using the straight-line method 
over the estimated useful lives of the assets.  Leasehold improvements are 
depreciated using the straight-line method over the lesser of the term of the 
related lease or the estimated useful lives of the assets.  Depreciation 
expense charged to operations was $140,291 for the year ended December 31, 
1995, $70,878 for the six months ended June 30, 1996, and $141,689 for the year 
ended June 30, 1997.

Periodically, management evaluates the estimated useful life of its property 
and equipment to determine whether intervening economic events and 
circumstances have affected the remaining useful lives.  In light of the 
current conditions noted in Note 12, it is reasonably possible that the 
Company's estimate that it will recover the carrying amount of its property and 
equipment from future operations will change in the near term.

Intangible assets and amortization:  Intangible assets include amounts paid for 
the Musicana tradename and music library.  Amortization is computed using the 
straight-line method over fifteen years.  Amortization expense charged to 
operations was $2,000 for the year ended December 31, 1995, $1,000 for the six 
months ended June 30, 1996, and $3,540 for the year ended June 30, 1997.

Deferred rent:  The lease agreement for a restaurant building contains 
provisions for no initial monthly rent and for scheduled rent increases (see 
Note 8). The deferred rent amount represents  the difference between amounts 
paid and rental expense computed on a straight-line basis over the entire lease 
term.

Revenue recognition:  Revenues are recognized in the period when the customer 
attends the dinner theater and receives the service.  Revenues collected in 
advance are recorded as advance banquet deposits and deferred revenue.

Inventory:  Inventory is recorded at cost and consists of food and bar items.  
Cost is determined on the first-in, first-out (FIFO) method.

Advertising:  The Company expenses costs of advertising as incurred. The costs 
related to brochures and other printed materials are amortized over their 
estimated useful lives. Advertising costs charged to operations were $273,146, 
$46,904, and $76,872 during 1995, 1996, and 1997 respectively.

Estimates:  Management uses estimates and assumptions in preparing financial 
statements. These estimates and assumptions affect the reported amounts of 
assets and liabilities, the disclosure of contingent assets and liabilities, 
and the reported revenues and expenses.  Actual results could differ from those 
estimates.

2.     Basis of Presentation:

The accompanying financial statements have been prepared in conformity with 
generally accepted accounting principles, which contemplate continuation of 
the Company as a going concern. However, the Company has sustained 
substantial operating losses in recent years.  In addition, the Company has 
used substantial amounts of working capital in its operations. Further, at 
June 30, 1996 and 1997, current liabilities exceed current assets by $976,147 
and $650,738 and total liabilities exceed total assets by $440,177 and 
$241,317.

These factors create an uncertainty about the Company's ability to continue as 
a going concern. Management is planning to raise additional equity capital by 
undertaking a private offering of its common stock under Regulation D of the 
Securities Act of 1933 and raising up to $5,000,000. Management also is 
currently working on increasing revenues and reducing expenses.

In view of these matters, realization of a major portion of the assets in the 
accompanying balance sheet is dependent upon continued operations of the 
Company, which in turn is dependent upon the Company's ability to meet its 
financing requirements, and the success of its future operations. Management 
believes that actions presently being taken to raise capital and improve 
operating results provide the opportunity for the Company to continue as a 
going concern.

3.     Property and Equipment:

Property and equipment consists of the following:


                                   June 30,      June 30,
                                    1996          1997  
                                 ----------     ---------
Leasehold improvements           $ 519,946     $ 520,746
Equipment                          260,196       255,366
Furniture                           22,694        34,051
                                 ---------     ---------
                                   802,836       810,163
Less: Accumulated depreciation     325,901       461,362
                                 ---------     ---------
                                 $ 476,935     $ 348,801
 
4.     Notes Payable-affiliates:

Notes payable consist of the following:
                                   June 30,     June 30,
                                     1996         1997  
                                   --------     --------
8% convertible promissory 
notes to stockholders,
interest due monthly, 
principal due December 31,
1995.  Convertible at 
anytime into Class A common 
stock at $3.20 per share by 
the holder.  Payment of 
notes is guaranteed 
personally by the Company's 
president, unsecured (in 
default)                          $ 113,948    $ 105,448


14% promissory note due 
during December, 1996, 
guaranteed by the Company's 
president, unsecured (in 
default)                             31,000       31,000

18.25% promissory notes due 
from July 1996 to November 
1996, unsecured (in 
default)                            188,500       78,500

3% promissory note due 
November 1996, secured by 
security interest in Class 
A Common Stock (in default)            -          80,000

12% Series A Subordinated 
Convertible Redeemable 
Debenture, interest due 
quarterly, principal due 
June 30, 1998.  Convertible 
at anytime after 45 days 
after closing of the 
Offering into common stock 
at a price equal to the 
lower of 80% of the average 
closing bid price for the 
business day immediately 
preceding date of receipt 
of notice to convert or 5 
business days immediately 
preceding date of 
subscription, uncollateralized         -          38,666

Non-interest bearing loan 
from a shareholder, due on 
demand, unsecured                    5,000           -   
                                 ----------     --------- 
                                 $ 338,448      $ 333,614

The weighted average interest rate for short-term borrowings was approximately 
13% at June 30, 1996 and June 30, 1997.

During 1997, $36,083 of interest was accrued and charged to operations related 
to these notes.

5.     Concentrations of Credit Risk:

Significant concentrations of credit risk for all financial instruments owned 
by the Company as of June 30, 1996 and 1997 are as follows:

The Company's deposits are comprised of amounts held by various lessors of real 
property for security, last month's rent and utilities.  The Company has no 
policy requiring collateral or other security to support its deposits.

The Company has short-term receivables due from three stockholders totaling 
$52,088 and $91,444 as of June 30, 1996 and June 30, 1997. These receivables 
are non-interest bearing and not collateralized. The Company's policy of 
requiring collateral or other security on loans made to officers or 
stockholders is determined on a case-by-case basis.

6.     Income Taxes:

Deferred income taxes may arise from temporary differences resulting from 
income and expense items reported for financial accounting and tax purposes in 
different periods. Deferred taxes are classified as current or non-current, 
depending on the classifications of the assets and liabilities to which they 
relate. Deferred taxes arising from temporary differences that are not related 
to an asset or liability are classified as current or non-current depending on 
the periods in which the temporary differences are expected to reverse.

At June 30, 1997, the Company has a net operating loss carryforward totaling 
approximately $4,200,000 that may be offset against future taxable income 
through 2010. No tax benefit has been reported in the accompanying financial 
statements, because the Company believes there exists a possibility that the 
carryforward will expire unused. Accordingly, the tax benefit of the loss 
carryforward has been offset by a valuation allowance of the same amount. The 
expected tax benefit that would result from applying federal statutory tax 
rates to the pre-tax loss differs from amounts reported in the financial 
statements because of the increase in the valuation allowance.

7.     Stockholders' Equity (Deficiency):

During the fiscal year ended June 30, 1997, the Company issued 331,500 shares 
of its Class A common stock for cash of $234,831.

During the fiscal year ended June 30, 1997, the Company issued 268,509 shares 
of its Class A common stock to retire related party debt of $426,141.

During the fiscal year ended June 30, 1997, the Company issued 561,750 shares 
of its Class A common stock for services valued at $440,951.

During the fiscal year ended June 30, 1997, the Company issued 150,000 shares 
of its Class A common stock in conversion of 6 shares of its Series A 
convertible preferred stock.

At June 30, 1997, the Company has outstanding warrants to purchase 195,000 
shares of the Company's Class A common stock, at a price equal to the lesser 
of $1.70 or 60% of the closing bid price of the Company's Class A common 
stock on the date of exercise.  The warrants became exercisable in June 1997 
and expire in October 1999.

The Company's Series A convertible preferred stock has common stock voting 
rights and pays no dividends.  The Series A convertible preferred stock is 
redeemable at the option of the Company 12 months after issuance at $25,000 per 
share.  The conversion price is the lesser of the closing bid price of the 
Class A common stock on the date of the subscription agreement or 60% of the 
average closing bid price for a period of 3 trading days immediately 
preceding the date of conversion.

The Company's Series B convertible preferred stock has voting rights and pays a 
dividend at a rate of 11.5%. The Series B convertible preferred stock is not 
redeemable by the Company. The conversion price is $1.50 per share.  At June 
30, 1997, dividends in arrears on the Series B convertible preferred stock was 
$3,118.

The Company's Series C convertible preferred stock does not have common stock 
voting rights and are not entitled to receive dividends.  The Series C 
convertible preferred stock is redeemable by the Company any time after 
issuance at a price of $50,000 per share.  The conversion price is equal to the 
closing bid price on the conversion date.

8.     Leases:

The Company entered into a non-cancelable operating lease on a building in 
December 1993.  The lease expires in August, 1999, with an option to renew for 
an additional five years. The lease provides that no rent is to be paid in the 
initial six months.  Thereafter, the monthly rental amount will be $6,000, 
increasing to $6,500 and $7,000 in the nineteenth and thirty-first month of the 
lease, respectively. The Company is also responsible for its share of related 
property taxes and common area maintenance costs.

The Company entered into a non-cancelable lease on office space in October 
1996.  The lease expires in September 2001. The rent is $1,524 per month for 
the first 12 months with annual increases of $39.month.

The Company also leases certain office equipment under various operating 
leases.

Minimum future rental payments under non-cancelable operating leases having 
remaining terms in excess of one year as of June 30, 1997, for the next five 
years and thereafter are as follows:


        Year ended June 30:
                1998                $ 179,556
                1999                  118,003
                2000                   25,548
                2001                   24,316
                2002                    4,563
                                    ---------
                          Total     $ 351,986

The Company also rents two apartments in Clearwater under one year operating 
leases effective through June 1998 for total monthly rentals of $1,130, and two 
apartments in Boca Raton under one year operating leases effective through 
October 1998 for total monthly rentals of $1,460.

Rent expense was $256,922, $126,732 and $265,896 for the year ended June 30, 
1995, for the six months ended June 30, 1996, and for the year ended June 30, 
1997 respectively.

9.     Related Party Transactions:

During 1995, the Company's majority shareholder, Crown Resources, Inc., 
advanced the Company $177,483. During 1996, $31,270 was repaid, and during 1997 
the balance was repaid. The balances due this shareholder at June 30, 1996 was 
$320,641, was unsecured and had no set interest or repayment terms.  The 
balance due this shareholder $426,141 was converted into 268,509 shares of 
Class A common stock. (see Note 7).  In addition, another shareholder, Caroline 
Anderson, made a $5,000 working capital advance to the Company during 1996 (see 
Note 4).  This advance was repaid to the shareholder during 1997.

During 1996, $10,000 of interest was accrued and charged to operations related 
to these advances.

10.     Recapitalization:

In June 1995, the Board of Directors of the Company entered into an agreement 
and plan of share exchange with two unrelated corporations, Casinos 
International, Inc. (Casinos) and Great American Resorts, Inc.  The parties 
agreed that Casinos would acquire all of the issued and outstanding shares of 
common stock of the Company and the Company would become a wholly owned 
operating subsidiary of Casinos.  The effective date of the agreement was 
January 31, 1996. At the effective date, the Company became a wholly owned 
subsidiary of Casinos, and Casinos changed its name to Classic Restaurants 
International, Inc. and the existing members of the Board of Directors of 
Casinos resigned and were replaced by existing members of the Board of 
Directors of the Company.  On the effective date, Casinos issued shares of its 
Casinos common stock to all non-dissenting shareholders of the Company in 
exchange for all of the issued and outstanding Company stock at an exchange 
rate of: one share of Casino Class A common stock for each one share of Company 
Class A common stock; one share of Casino Class B common stock for each one 
share of Company Class B common stock; and one share of Casino Class A common 
stock for each one share of Company Class A preferred stock. Shareholders of 
the Company had the right to dissent from the share exchange provided in this 
agreement and to obtain payment for their shares.

Pursuant to this agreement the shareholders of the Company received 2,173,665 
shares of Class A common stock and 200,000 shares of Class B common stock in 
exchange for its issued and outstanding common and preferred shares. In 
addition, 538,967 shares of Class A common stock are held by the prior 
shareholders of Casinos. This transaction has been accounted for as a 
recapitalization of the Company and the issuance of 538,967 shares of Class A 
common stock for the net assets of Casinos and the forgiveness of the 
liability due to Casinos by the Company.

11.     Commitments and Contingencies:

In May 1997, Mark Shoom filed a lawsuit against the Company and James Robert 
Shaw to recover the principal, interest and attorney's fees due under a 
promissory note dated October 9, 1996 in the original principal amount of 
$80,000 payable by the Company and guaranteed personally by Mr. Shaw. . In 
June 1997, the Company entered into a Settlement Agreement with Mr. Shoom 
under which the Company agreed to issue Mr. Shoom 114,737 shares of the 
Company's Class A Common Stock under Regulation S of the Securities and 
Exchange Commission. In addition, in the event Mr. Shoom receives net 
proceeds from the sale of said shares of less than $103,300, the Company is 
obligated to issue Mr. Shoom additional shares with a value, as determined 
from the bid price of said stock, equal to the difference between $103,300 
and the net proceeds received. To date, the Company has not performed under 
the Settlement Agreement, in that the Company has not issued Mr. Shoom the 
initial 114,737 shares of Class A Common Stock. As a result of the Company's 
breach of the Settlement Agreement, Mr. Shoom, through his attorneys, has 
recently filed a motion for entry of a default judgment. The Company and Mr. 
Shaw have filed a motion to reopen the default, as well as an answer and 
counterclaim. The court recently denied Mr. Shoom's motion and granted the 
Company's motion to reopen the default. There is a substantial chance that 
the Company will be found liable to Mr. Shoom for some amount of money, the 
exact amount of which is unknown at this time.

12.     Subsequent events:

On February 28, 1998 the Company entered into an Agreement and Plan of Share 
Exchange with AA Corp. and its shareholders (the "Agreement") under which the 
Company agreed to acquire all the issued and outstanding stock of AA Corp. 
for 500,000 shares of the Company's convertible preferred stock.

Upon execution of the Agreement, the Company's Board of Directors was 
reconstituted to include Frank Pringle and Benjamin Silber.  In addition, Mr. 
Pringle was designated Chairman of the Board of Directors and Co-President of 
the Company with Mr. Shaw.

On December 9, 1997, Evelyn Kuntz served a writ of garnishment on the 
NationsBank, N.A. in collection of a default judgment which she had obtained 
against the Company in the amount of $46,376.31 on August 20, 1997. The writ 
of garnishment caused NationsBank to freeze the accounts of the Company and 
its wholly owned subsidiary, Classic Restaurants International, Inc., a 
Florida corporation. Mr. Kuntz's initial suit was filed to collect the 
balance due on a promissory note issued by the Company. On or about December 
19, 1997, the Company and Ms. Kuntz entered into a Stipulation for 
Dissolution of Writ of Garnishment, Settlement Agreement and Order pursuant 
to which the parties agreed that the funds held by NationsBank on behalf of 
the Company would be turned over to Ms. Kuntz in partial satisfaction of the 
judgment and the funds held by NationsBank on behalf of Classic's subsidiary 
were released to the subsidiary.  In addition, the Company agreed to make 
payments of $5,000 per month to Ms. Kuntz until the balance of the judgment 
was satisfied, and to issue Ms. Kuntz 125,000 shares of the Company's Class A 
Common Stock as collateral to secure the Company's remaining obligation to 
Mr. Kuntz. In return, Ms. Kuntz agreed to forebear from any further 
collection efforts as long as the Company was not in default under the terms 
of the Stipulation. The Company is in compliance with its monetary 
obligations under the Stipulation, and has issued Ms. Kuntz the shares of 
Class A Common Stock as collateral.