SECURITIES AND EXCHANGE COMMISSION
 
                                             WASHINGTON, D.C. 20549

                                                   FORM 10-KSB/A

[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 [Fee Required]

For the fiscal year ended October 31, 1996

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]

For the transition period from                          to

Commission file number 0-21270

     
              LAS VEGAS ENTERTAINMENT NETWORK, INC.
                   -------------------------------------
         (Exact name of small business issuer in its charter)

 
     DELAWARE                                    94-3123854
       --------                                    ----------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)             

 
          1801 Century Park East, 23rd Floor
              Los Angeles, California                            90067
              -----------------------                            -----
        (Address of principal executive offices)               (Zip Code)


Registrant's telephone number, including area code:  (310) 551-0011
                                                     --------------

Securities registered pursuant to Section 12(b) of the Act:  None
                                                            -------

Securities registered pursuant to Section 12(g) 
   of the Act:     Common Stock, $.001 par value
                   -----------------------------

           Indicate  by check  mark  whether  the  registrant  (1) has filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.
                                                      YES   X        NO

           Check if there is no 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. [X ]

           State issuer's revenues for its most recent fiscal year: - $291,200

           The aggregate market value of the voting stock held by non-affiliates
of the registrant was  $15,016,090  computed on the basis of the average bid and
asked  prices of the Common  Stock of $0.44 per share as  reported  by NASDAQ on
January 31, 1997.

Number of common shares  outstanding of the issuer's  classes of Common Stock as
of January 31, 1997: 34,898,349
                     -----------


DOCUMENTS INCORPORATED BY REFERENCE:  NONE

                                                         1

<PAGE>



                                                      PART I

Item 1.   DESCRIPTION OF BUSINESS

General

Background and Business and Basis of Presentation
-------------------------------------------------


     Las Vegas  Entertainment  Network  ("LVEN",  "the  Company")  is engaged in
acquiring and developing media, communication  and  gaming  facilities  and
businesses. The Company's primary project to date was the renovation,  expansion
and redevelopment of the El Rancho Hotel (the "El Rancho" or the "Property"),  a
1,006 room hotel and casino  located on 20.86 acres in Las Vegas,  Nevada  which
was acquired on November 24, 1993,  and  subsequently  sold on January 22, 1996.
The  Company  is  also  developing   media  related   opportunities,   including
formulating  a  business  plan  to  develop,   produce,  market  and  distribute
television  and video  programming.  The  Company  is also  investigating  other
potential  businesses for acquisition in the gaming,  entertainment,  lodging or
communications industry.

     The Company, as formed in October 1990, developed, produced and distributed
television programming featuring entertainment in Las Vegas, Nevada. The Company
changed its focus to the gaming  industry in 1993 with the acquisition of the El
Rancho  Hotel and Casino for  $36,500,000.  However,  on January 22,  1996,  the
Company sold the El Rancho to Orion Casino Corporation  ("Orion"),  a subsidiary
of International  Thoroughbred  Breeders,  Inc. ("ITB") for $43,500,000 of cash,
notes and  assumption of debt. It is the current  intention of the new owners of
the El Rancho to develop and open the Property as an international country music
attraction called "CountryLand,  USA", a major hotel and casino destination.  As
part of the sale  agreement,  once the  Property is opened and certain  invested
amounts have been recouped by ITB and the Company, which the Company can provide
no  assurance   can  be  achieved,   the  Company  will  receive  as  additional
consideration  for  entering  into  the sale  agreement  (but not as part of the
Purchase  Price for the assets) a fifty percent  (50%)  interest in the adjusted
cumulative  cash flow (as  defined)  from the  operation  of the  Property as so
developed  for a period of six (6) years  following  the opening of the Property
and the commencement of operations,  and thereafter a twenty-five  percent (25%)
interest  in  adjusted  cash  flow  from  operations  until  such time as it has
received an aggregate of One Hundred Sixty Million Dollars  ($160,000,000),  but
only after ITB and the Company  first  receive 100% of the adjusted  cash flow
until all invested amounts have been recouped.

            In addition,  commencing with the  development of the Property,  the
Company's Las Vegas Communications  Corporation  subsidiary ("LVCC") was granted
an exclusive contract for up to twenty (20) years to provide  entertainment  at
the Property site which will provide for minimum annual fees of $800,000  plus
additional commissions.

          The Company's  current  operations  include actively  assisting ITB in
obtaining  the  financing  necessary  to  redevelop  and  renovate the El Rancho
Property;  managing the preliminary construction activities on the Property site
under an interim  entertainment  and  property  management  agreement  with ITB;
overseeing  the  collection and  realization  of certain  investments  and notes
receivables; and, the development of certain media and communication properties,
including certain limited production of television and film programming.

Casino and Gaming Operations
----------------------------

     On November 24, 1993,  the Company  acquired the El Rancho Hotel and Casino
property  in Las  Vegas,  Nevada.  The  Property  had  been  closed  before  its
acquisition by the Company and was never operated by the Company. The casino and
gaming  activities  of the Company to date had been  limited to managing  the El
Rancho property site,  developing site construction and architectural  plans for
the  renovation  and  expansion of the hotel as well as obtaining  the necessary
permits and approvals,  and arranging for potential  financing,  equity or joint
ventures to further develop and renovate the property.





                                                         2

<PAGE>



     On January 22, 1996, the Company sold the assets and  liabilities of the El
Rancho to Orion Casino Corporation,  a wholly-owned  subsidiary of International
Thoroughbred  Breeders,  Inc., for  consideration  of $43,500,000.  The Purchase
Price  was paid as  follows:  (i)  $12,500,000  paid at  closing  in cash;  (ii)
issuance  of  an 8%  unsecured  promissory  note  in  the  principal  amount  of
$6,500,000  which was paid in full on March 15,  1996;  (iii)  issuance of an 8%
promissory note in the principal  amount of $10,500,000,  co-signed by Orion and
ITB (see "Item 6 Management's Discussion and Analysis - Notes Receivable"),  and
(iv) the assumption of existing  mortgage  indebtedness  and accrued interest of
$14,000,000,  (the "Refinance  Obligation").  In addition, once the property has
been  developed,  of which the Company can provide no assurance can be achieved,
the Company will share in a percentage of the on-going adjusted  cumulative cash
flow from the operation of the property up to  $160,000,000 as defined above. In
connection with arranging the Refinance Obligation necessary for the closing the
sale, the Company issued 1,512,588 shares of its common stock to SunAmerica Life
Insurance,  the lender,  and also  issued  warrants to a third party to purchase
600,000 shares of LVEN common stock at $.10 per share.

     On January 15, 1997 ITB  announced  that they had  received a  $100,000,000
funding  proposal,  the  proceeds  of  which  will be  used,  in  part,  for the
renovation  and  opening  of the former El Rancho  Hotel and  Casino  site as an
international  country  music  attraction  called  "CountryLand  USA",  a  major
destination  hotel and casino.  The proposed funding is subject to the execution
of a definitive loan agreement  between ITB and the proposed  lender,  which the
Company  can give no  assurance  will be made.  The  proceeds  of this  loan are
anticipated  to be sufficient to renovate and reopen the Property  site, as well
as repay the Company's remaining outstanding note receivable. ITB had previously
announced  that it intended to develop the El Rancho  property under a "Starship
Orion" multiple-casino theme. It was estimated that the total cost of completion
would be  approximately  $1 Billion and that ITB intended to develop the
property  with up to as many as six  partners.  ITB had not engaged any partners
for its "Starship  Orion" theme  development, and will now develop the property
under a more modest "CountryLand, USA" theme.

     In accordance with the initial sale  agreement,  if by October 25, 1996 (i)
Orion  had not  closed on or  received  permanent  financing  and  obtained  the
required lease commitments to develop the "Starship Orion", and (ii) and had not
closed or received a firm  commitment for  alternative  financing to develop the
Property,  and if the Company had arranged for the  refinancing  and also placed
into an escrow  account  amounts  sufficient to cover the financing and carrying
costs of the  property  for  either  a six  month or year  period  (the  "option
period"),  LVEN may either (i) appoint and authorize a reputable commercial real
estate broker to sell the property at an amount,  after  expenses,  in excess of
the  underlying  mortgage and invested  amounts of both Orion and LVEN,  or (ii)
arrange on behalf of Orion, in conformity  with  prevailing  financing terms and
conditions for a major Las Vegas hotel/casino project,  alternative financing of
not less than  fifty-five  million dollars  ($55,000,000).  On October 25, 1996,
LVEN advised that it was asserting its rights  afforded during the Option Period
by arranging the prescribed  escrow account.  On October 28, 1996, ITB announced
that LVEN  forfeited its rights with respect to the purchase  agreement  because
they believed LVEN failed to satisfy  certain  contractual  preconditions.  LVEN
advised ITB that it contested its position. On February 2, 1997, the Company and
ITB announced that they had settled their disagreement.  As described above, and
with  the  assistance  of the  Company,  ITB has  announced  its  plans  for the
development of the Property as  "CountryLand,  USA", and had received a proposal
for $100 Million of financing which will be used, in part, for such development.
If the Property is not developed,  or if the expected  funding is not completed,
the  Company  believes it still  maintains  the rights  under the option  period
described above. In connection therewith,  the Company has engaged an investment
banking firm to seek  funding  necessary  to provide the  alternative  financing
described above,  and also arranged with Mr. Nunzio  DeSantis,  who subsequently
became the Chief  Operating  Officer of ITB,  to  provide a  $6,000,000  standby
funding  commitment for a portion of the replacement  financing on the El Rancho
Property  Site.  In connection  therewith,  Mr.  DeSantis was granted  1,500,000
options to acquire shares of the Company's  Common Stock at an exercise price of
$1 per share, which expire in December 1999.

     The Company is actively  seeking other  investments and acquisitions in the
gaming  and  lodging  industries,  and  currently  has  several  projects  under
consideration,  subject to further due-diligence and analysis. These investments
may include acquiring interests in casinos, hotels or other ancillary businesses
in the gaming  industry.  The  Company can give no  assurance  that any of these
contemplated  transactions will close or occur as the successful  closing of any
of the  contemplated  transactions  is  subject  to  many  variable  factors,  a
significant number of which are outside the control of the Company.


                                                         3

<PAGE>




Las Vegas Gaming Market and Marketing

     Although  there are various  segments to the Las Vegas gaming  market,  the
largest  segment  in  terms of  revenue  and the one in  which  the  hotel to be
developed on the El Rancho site will  compete is comprised of the hotel  casinos
located in the heart of Las Vegas on Las Vegas  Boulevard  South,  also known as
the Las Vegas Strip. Some of the newer hotel casinos on the Strip have attempted
to broaden  their  appeal to  families  and repeat  visitors  by  adoption  of a
theme-park atmosphere.

Competition

     The gaming industry in the United States and Canada has  experienced  rapid
growth in recent  years,  and has not been limited to the  traditional  areas of
Nevada and Atlantic City, New Jersey.  Casino gaming is currently permitted in a
number of  states,  including  Colorado,  Illinois,  Indiana,  Iowa,  Louisiana,
Mississippi,  Missouri,  Montana,  Nevada,  New  Jersey,  South  Dakota,  and in
Windsor,  Ontario,  Canada, as well as on Indian lands in certain states.  Other
jurisdictions may legalize gaming in the near future. New or expanded operations
by other  persons  can be expected to  increase  competition  for the  Company's
proposed gaming operations and could result in the saturation of gaming markets.
In particular,  casinos and other gaming businesses in Las Vegas, Nevada compete
directly  with  those in  Laughlin  and  Henderson,  Nevada,  which are  rapidly
expanding  markets.  In addition,  several  jurisdictions in various states have
received  proposals to permit  Indian  tribes to  designate  Indian land for the
purpose of building gaming facilities. As new gaming opportunities arise, new or
expanded  operations by others can be expected to increase  competition  for the
Company,  and any other  gaming  operations  which the  Company  may  develop or
acquire could result in the saturation of gaming markets. The gaming industry is
highly  fragmented and  characterized  by a high degree of  competition  among a
large  number  of  participants,  many  of  whom  may  have  greater  financial,
management and other resources than the Company.

     Broadly,  the Company will compete with all hotel  casinos in the Las Vegas
area and in other cities in Nevada for its gaming and hotel customers, including
several which have recently  opened or have  undergone or are  undergoing  major
expansions.  Competition  in the Las Vegas  hotel  casino  industry  is based on
location,  price,  ambience,  quality  of  accommodations  and  facilities,  and
ancillary attractions such as shows or amusement facilities.  As of December 31,
1996,  there  were   approximately   99,000  hotel  rooms  in  Las  Vegas,  with
approximately  11,200  rooms being  added in 1997.  The  Property's  most direct
competition will be with other major hotel casinos in Las Vegas,  namely the MGM
Grand, Treasure Island, The Mirage, The Riviera Hotel & Casino,  Caesars Palace,
Luxor,  Excalibur  Hotel & Casino,  Tropicana  Resort & Casino,  Circus  Circus,
Sahara Hotel & Casino, Frontier, Stardust Resort & Casino, Aladdin Hotel, Desert
Inn, Sands Hotel & Casino,  Flamingo Hilton Las Vegas, Bally's Casino Resort Las
Vegas,  Hacienda  Resort Hotel & Casino,  Imperial  Palace  Hotel & Casino,  and
Harrah's Las Vegas.  As compared to these hotel casinos,  the Hotel developed on
the El Rancho site will have slightly fewer rooms than the average,  and will be
more highly  leveraged and less well financed and  established  than some of its
competitors.  Several large hotel casinos have recently opened or will soon open
in Las Vegas,  and the effect of such openings and the increased number of hotel
rooms will increase competition.

Governmental Regulation - Nevada Gaming

     The  ownership  and  operation of casino  gaming  facilities  in Nevada are
subject  to the  Nevada  Gaming  Control  Act  and the  regulations  promulgated
thereunder  and  to  licensing  and  regulatory  control  by the  Nevada  Gaming
Authorities.  The laws,  regulations  and  supervisory  procedures of the Nevada
Gaming  Authorities  are based  upon  declarations  of public  policy  which are
concerned  with,  among other things,  (i) the  character of persons  having any
direct or indirect  involvement  with gaming,  (ii)  application  of appropriate
accounting practices and procedures, (iii) maintenance of effective control over
the  financial  practices  and  financial  stability  of  licensees,   including
procedures  for  internal  fiscal  affairs  and the  safeguarding  of assets and
revenues,  (iv) record  keeping and reporting to the Nevada Gaming  Authorities,
(v) fair operation of games,  and (vi) the raising of revenues  through taxation
and licensing fees.




                                                         4

<PAGE>



     The Company must register with the Nevada  Gaming  Commission  and be found
suitable and be granted all requisite licenses under the terms of the Nevada Act
to conduct a  nonrestricted  gaming  operation in Nevada.  The sale of alcoholic
beverages  and the  operation  of a gaming  establishment  by the Company in Las
Vegas is subject to licensing,  control and regulation by the  applicable  local
authorities. All licenses are revocable and not transferrable. The agencies have
the full power to limit, condition,  suspend or revoke any such license, and any
such disciplinary  action could (and revocations  would) have a material adverse
effect upon the operations of the Company.

     The  Company,  or its  subsidiaries,  and  Orion  intend  to apply  for the
necessary  governmental  licenses,  permits and  approvals for the ownership and
operation of a casino.  However,  there can be no assurances  that any licenses,
permits or approvals  that may be required will be given or that once  received,
they will not be suspended or revoked.

Media and Entertainment
-----------------------

     The Company is active in the  development  of media related  opportunities,
and is  formulating a business plan to develop,  produce,  market and distribute
television and video programming.  It is the current intention of the Company to
develop  programming  and  technology  that  will  respond  to the new  business
opportunities  resulting  from  the  current  evolution  of  electronic  program
delivery systems.  The Company has also obtained a management contract to manage
all aspects of the entertainment  activities at the proposed "CountryLand,  USA"
Hotel and Casino, and will seek to manage entertainment  activities at other Las
Vegas hotels, casinos, and venues.

Television and Video Programming

     Revolutionary  changes in program  delivery,  including fiber optic cabling
which  will  enable  telephone  and  utility   companies  to  become  television
programming  providers,  direct broadcast satellite  services,  the Internet and
world wide web,  and the  expansion of foreign  television  channels and markets
have  created an  unprecedented  demand for  programming.  The  Company  intends
specifically  to act upon this  increased  need for  television  programming  by
creating  and  packaging  new  program  services  and  developing   distribution
strategies based upon current industry  dynamics and trends. To accomplish these
objectives, the Company has assembled a group of executives with vast experience
in program origination, production, and distribution operation and technologies.

     It is the  Company's  intention  to develop  and  provide  programing  to a
targeted group of these emerging electronic delivery systems that will be unique
in its scope  and  content.  The  majority  of the  Company's  proposed  program
channels may be dedicated to pay-per-view  programming  featuring  primarily new
video movie  releases.  The Company  intends to design a unique  scheduling  and
channel  design for  pay-per-view  service that may approach  desired  "video on
demand" ("VOD") status for the most popular movie titles. The ability to offer a
selection of top video titles on almost a VOD basis is a feature  greatly valued
in the electronic  delivery  industry due to resulting  higher  buy-rates  which
translate directly into increased  revenues.  In addition to developing its near
VOD  pay-per-view  program  service,  the Company may package  existing  program
channels  and  distribution,  currently  in the  early  stages  of  development,
together  with  channels  it may create  independently  or in  partnership  with
others.

     The Company also intends to  capitalize  on the evolution of Las Vegas into
one of  the  world's  premier  entertainment  centers  by  providing  television
programming  with  fast-paced  music and  entertainment  programming,  featuring
excerpts  from  performances  in Las  Vegas,  as well as  throughout  the United
States,  interviews  with  personalities,  information  on Las Vegas  gaming and
non-gaming  attractions and related topics. This entertainment  programming will
include  segments  dedicated to the  merchandising of such goods and services as
Las Vegas travel  packages,  concert  tickets,  memorabilia  and audio and video
recordings  featuring  entertainers  that appear in the  programming  as well as
other  entertainers.  The Company intends to produce this programming  primarily
using its own creative  staff and third party crews on location in Las Vegas and
other remote  locations as well as at  production  studios.  The Company will be
required to obtain  rights to use excerpts  from Las Vegas shows and to contract
with performers  directly for their services.  No arrangements have been made to
obtain such rights or contracts with performers. The Company will also use stock
footage and segments of a program  originally  produced by LVEN for a television
show entitled "Las Vegas  Tonight." The Company  intends to use portions of this
program inventory to create certain segments. The Company intends to market to a
national audience and syndicate its programming utilizing the services

                                                         5

<PAGE>



and  contacts in the  television  industry of the  Company's  officers and other
employees. The Company ultimately plans to distribute its programming nationally
by  satellite to various  broadcast  and cable  television  outlets by providing
programming seven days per week.

     The Company has not signed any formal  agreements with television  stations
for broadcast time and the Company does not expect to air  programming  until at
least  three  months  after the  completion  of an  offering to raise the needed
capital.  The Company also has not signed any agreements for the  acquisition of
any film  rights.  Inasmuch  as the  Company  intends to  increase  its level of
activities  it  television  and video  production,  it will be  required to make
significant  expenditures in connection with production and  distribution of its
programming.  The  Company  anticipates  that it will need  additional  funds to
commence  production  of its  programming  and that losses will occur until such
time,  if ever,  as revenues  generated  are  sufficient to offset the Company's
operating  costs.  There can be no  assurance  that the Company  will be able to
raise  additional funds and/or produce and distribute its programming or achieve
significant levels of revenue or profitable  operations or that the Company will
be able to achieve any of its goals.

     The primary sources of revenue are expected to be from service subscription
fees  and  advertisements  on  and  commercial   sponsorships  of  the  intended
television  programming,  or from the sale and licensing to third parties of any
television  or  video  programming   developed.   To  date,  no  advertising  or
sponsorship commitments,  or film distribution contracts, have been obtained and
no assurances can be given that such commitments will be obtained in the future.

Live Entertainment Management

     In connection with the sale of the El Rancho, and once the project has been
developed,  completed  and opened either under the  "CountryLand,  USA" theme or
another theme,  the Company's LVCC  subsidiary has the exclusive right to manage
all aspects of ITB's entertainment activities (including "CountryLand,  USA").
This would include; (i) responsibility for management and oversight of booking
all acts,  performers, entertainers,  movies,  virtual  reality rides and other
non-gaming  attractions  of any  kind  or  nature  at the  property  site,  (ii)
arranging  all  advertising  for all of  ITB's  advertising  needs,  and (iii)
managing all other entertainment  venues for ITB. The term of the agreement is
for ten (10) years  commencing  on the date which is six (6) months prior to the
projected opening date of the property,  and LVCC shall have the option to renew
the agreement for two (2) consecutive  five year terms.  The agreement  provides
the Company  with an annual fee of $800,000  subject to annual  increases.  LVCC
will also receive an additional  (i)  twenty-five  percent (25%) of profits from
entertainment activities,  (ii) ten percent (10%) of the cost of all advertising
placed  by ITB,  and (iii)  booking  fee equal to ten  percent  (10%) of gross
compensation paid to talent. The Company has agreed with ITB that at all times
during the term of the agreement,  it will make available the services of Joseph
A. Corazzi, the Company's Chairman of the Board.

Electronic Media Delivery

     The Company  entered  into an  agreement  on January  31,  1997  whereby it
acquired a 5% equity  interest in Electric Media Co. Inc. (EMC) and a continuing
royalty in certain of its operations,  for $400,000 plus the contingent issuance
of up to 5,500,000  shares of LVEN common stock as described  below.  EMC, along
with a  joint  venture  partner/developer,  is  developing  technology  that  if
successful,  of which the Company can give no assurance,  will allow delivery of
media, Internet and telecommunication  services to customers all over the world,
utilizing  existing  power  utility  infrastructures.   Field  testing  of  this
technology will occur during 1997, and in connection therewith,  the Company has
agreed to provide a guarantee  up to  $1,500,000  for the  financing  of certain
equipment  necessary  for the field tests.  The  equipment is  returnable to the
vendor, without cost to the Company, should the test not be satisfactory. Upon a
successful  field test of this  technology,  the Company is committed to deliver
500,000  restricted  shares  of its  common  stock  to  the  developer  of  this
technology.

     If the field tests are successful,  EMC will begin  worldwide  marketing of
this  technology,  including the sale and  distribution of addressable  receiver
boxes,  that are necessary to receive the data  communication.  The Company will
receive,  in  perpetuity,  a $25 per unit royalty for each receiver box sold, if
any. Each time the sale of these units  generates  $10,000,000  of net after tax
profits, the Company will deliver the developer an additional 500,000 restricted
shares of the Company's  common stock,  up to a maximum of 5,000,000  restricted
shares. The Company may terminate the agreement at its sole discretion, and have
no further liability to EMC or the developer.

                                                         6

<PAGE>



Competition.

     Competition in the areas of television  programming and live  entertainment
is intense and the Company  will face  intense  competition  in all areas of its
media and entertainment  operations.  The Company's television  programming will
compete  not  only  against  other  television  entertainment  sources,  such as
existing  cable  channels,  but also against  other  television  programming  in
general and other forms of leisure time  entertainment,  such as  videocassette,
radio and live  entertainment.  The Company will compete with major companies in
the  television  industry as well as with  numerous  smaller  companies  for the
services of performing  artists and other  creative and technical  personnel and
creative material.

     The Company's  programming  will compete with other first run  programming,
network reruns and programs produced by local television  stations.  The Company
will face  competition  from companies that have been  acquiring,  producing and
distributing  programs  for  several  years,  and many of these  companies  have
greater  financial  resources  than those of the Company.  The Company also will
compete  with  other  companies  for  sale of  television  advertising  time and
merchandising  of goods and  services.  Should  the  Company's  programming  and
marketing efforts find wide public acceptance,  it is likely that one or more of
such competitors will seek to emulate the Company's programming.

     The Company will also face intense  competition in the  development of live
Las Vegas entertainment.  The Company will face completion from long established
hotel casinos such as Caesars,  The Mirage,  Bally's, and The MGM Grand who have
been staging  headline Las Vegas shows for years,  as well as newer casinos such
as New York, New York, the Luxor and Treasure  Island.  These casinos are large,
well financed,  known to the public as providing quality headline acts, and have
large venues.  The Company will be competing  against these casinos not only for
customers, but for headline talent, producers, and directors necessary to make a
successful show.

Employees

     The Company currently has 3 officers and 5 other full-time  secretarial and
administrative  employees involved in corporate  administration,  accounting and
marketing  and  development.  The Company also  employs  various  employees  and
consultants for gaming,  financing,  architectural  and security and maintenance
matters who are engaged to work on either a consulting  or part-time  basis.  If
the Company  develops  its  television  programming  and live  entertainment  as
described above, it intends to employ 5 additional full-time  employees,  and up
to seven  persons on a part time basis.  Additional  personnel  will be hired as
needed,  or on a project by project basis.  None of the Company's  employees are
represented by unions,  and the Company believes that its employee relations are
good.

                                                         7

<PAGE>





Item 2.   DESCRIPTION OF PROPERTY

     The  Company's  headquarters  are located at 1801 Century Park East,  Suite
2300, Los Angeles,  California 90067 and consists of 7,000 square feet of office
space, which it leases on a month-to-month  basis from an unaffiliated party for
$8,500 per month. The Company also leases,  on a month-to-month  basis,  certain
other office and storage facilities at an aggregate rental of $4,500 per month.

     The Company sold on January 22, 1996, the assets and  liabilities of the El
Rancho Hotel and Casino. The El Rancho consisted of a 1,006 room hotel, a 90,000
square foot casino and ancillary areas, a 52-lane bowling alley, a swimming pool
and a parking garage and was encumbered by a $12 million  purchase-money deed of
trust as of October 31, 1995.  The El Rancho is located in Las Vegas,  Nevada at
2755 Las Vegas  Boulevard  South  (also  known as the Las Vegas  Strip) on 20.86
acres on a quadrilateral  parcel of land bounded by Las Vegas Boulevard South on
the west, Riviera Boulevard on the south, a vacant lot on the east, and the "Wet
and Wild"  attraction  on the north.  The El Rancho  was one of the first  large
scale  hotel-casinos  built in Las Vegas, and was operated on a western theme by
its former owners.

Item 3.   LEGAL PROCEEDINGS

     On October 18, 1996, an unaffiliated  third party filed a complaint against
the company in California Superior Court, County of Los Angeles, seeking damages
of $1,800,000,  plus attorney  fees,  for breach of contract,  breach of implied
contract, and certain damages the individual claims are due him under terms of a
1992 retainer  agreement.  The Company believes there are no funds due, and that
the case is without merit.  Management intends to vigorously defend the lawsuit.
Additionally,  the Company has  commenced  action  against the owners of Patmore
Broadcasting  relating to an option to acquire a radio station in Las Vegas, and
intends to aggressively  pursue the Company's position that it still has a valid
option to purchase the radio station.

           The  Company is not  involved  in, or a party to, any other  material
legal  proceedings  at  this  time.  At  various  times,  the  Company  and  its
subsidiaries  are involved in various matters of litigation,  including  matters
involving settlement of fees and outstanding invoices,  and consider these legal
proceedings not to be material and in the ordinary course of business.

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

     No matters  were  submitted to a vote of security  holders  during the last
quarter of the year ended October 31, 1996.

                                                         8

<PAGE>




                                                      PART II


Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS

     The  Company's  Common  Stock has been traded on NASDAQ  Stock Market since
February 20, 1992 under the symbol LVEN. The following  table shows the range of
high and low bid  quotations  reported  by NASDAQ in each  fiscal  quarter  from
November 1, 1994 to December 31, 1996.

<TABLE>
<CAPTION>
<S>                                            <C>                 <C>    
Fiscal 1995
Quarter ended January 31, 1995                 $1.94               $0.97
Quarter ended April 30, 1995                   $1.81               $0.63
Quarter ended July 31, 1995                    $1.59               $0.81
Quarter ended October 31, 1995                 $1.44               $0.66

Fiscal 1996
Quarter ended January 31, 1996                 $1.25               $0.50
Quarter ended April 30, 1996                   $0.84               $0.46
Quarter ended July 31, 1996                    $0.75               $0.37
Quarter ended October 31, 1996                 $0.43               $0.21
</TABLE>


         The number of record holders of Common Stock as of January 31, 1997 was
approximately  786. On January 31,  1997,  the high and low bid asked prices for
the Common Stock were $0.47 and $0.44 respectively.

         Holders of Common  Stock are  entitled to receive  dividends  as may be
declared by the Company's Board of Directors. No contractual  restrictions exist
on the payment of dividends.  No dividends on the Common Stock have been paid by
the Company,  nor does the Company anticipate that dividends will be paid in the
foreseeable  future.  Further,  there  can be no  assurance  that  the  proposed
operations  of the Company  will  generate  the revenues and cash flow needed to
declare a cash dividend or that the Company will have legally available funds to
pay dividends.







                                                         9

<PAGE>



Item 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS

     Important Factors Relating to Forward Looking  Statements.  - In connection
with certain forward- looking statements contained in this Form 10-KSB and those
that  may be made  in the  future  by or on  behalf  of the  Company  which  are
identified as forward-looking,  the Company notes that there are various factors
that could cause actual results to differ materially form those set forth in any
such  forward-looking  statements.  The forward-looking  statements contained in
this Form 10-KSB were prepared by  management  and are qualified by, and subject
to,  significant   business,   economic,   competitive,   regulatory  and  other
uncertainties  and  contingencies,  all of which are  difficult or impossible to
predict  and many of which are beyond the control of the  Company.  Accordingly,
there can be no assurance that the forward-looking  statements contained in this
Form 10-KSB will be realized  or the actual  results  will not be  significantly
higher or lower.  These  forward  looking  statements  have not been audited by,
examined by,  compiled by or subjected to agreed-upon  procedures by independent
accountants,  and no  third-party  has  independently  verified or reviewed such
statements.  Readers  of  this  Form  10-KSB  should  consider  these  facts  in
evaluating  the  information  contained  herein.  In addition,  the business and
operations of the Company are subject to  substantial  risks which  increase the
uncertainty  inherent in the forward-looking  statements  contained in this Form
10-KSB. The inclusion for the forward-looking  statements contained in this Form
10-KSB  should not be regarded as a  representation  by the Company or any other
person that the forward-looking statements contained in this Form 10-KSB will be
achieved.  In light of the foregoing,  readers of this Form 10-KSB are cautioned
not to place undue reliance on the forward-looking statements contained herein.

General

     Background.  The Company was formed in October 1990 to develop, produce and
distribute  television  programming  utilizing Las Vegas themes. Upon receipt of
$4,657,241 of net proceeds from its initial  public  offering in February  1992,
LVEN commenced the development and production of the Las Vegas Tonight Show. The
first programming developed,  called "Las Vegas Tonight," featured excerpts from
Las Vegas shows and was sold outside the United States.  In connection  with the
development  of "Las Vegas  Tonight"  Management  became  aware that,  while the
casino  hotels  on the Las Vegas  Strip  had  adopted  various  themes,  such as
Egyptian (at the Luxor),  medieval (at the  Excalibur  Hotel & Casino) and Roman
(at Caesars  Palace),  there was no  hotel-casino  on the Las Vegas Strip with a
country  music theme.  In light of the  popularity of country music and based on
management's experience in that genre and in the Las Vegas marketplace (acquired
in connection with developing "Las Vegas Tonight"),  management  believed that a
hotel casino utilizing a country music theme could be successful.

     On November 24,  1993,  the Company  acquired  the El Rancho,  a 1,006-room
hotel  with  90,000  square  feet of casino  and  ancillary  space and a 52-lane
bowling  alley,  located on the Las Vegas Strip.  The purchase  price for the El
Rancho was $36.5 million, including cash of $21.5 million, an 8% promissory note
(the "El Rancho  Note") in the face amount of up to $12 million  purchase  money
mortgage  secured by a deed of trust on the Property,  and 2.3 million shares of
LVEN common stock valued at $3 million to a third party  finder.  On January 22,
1996, the Company sold the El Rancho to Orion Casino  Corporation,  a subsidiary
of International  Thoroughbred Breeders, Inc. for $43,500,000 of cash, notes and
assumption  of debt.  It is the  current  intention  of the new owners of the El
Rancho (the "Property") to develop and open the Property as "CountryLand,  USA",
a major hotel and casino  destination.  As part of the sale agreement,  once the
Property  is opened and  invested  amounts  have been  recouped by Orion and the
Company,  of which there can be no assurance will be achieved,  the Company will
also  receive  a  continuing  fifty  percent  (50%)  interest  in  the  adjusted
cumulative  cash  flow as  defined  from the  operation  of the  Property  as so
developed  for a period  of six (6) years  following  the  opening  of the first
casino on the Property,  and thereafter a twenty-five  percent (25%) interest in
adjusted  cash flow until such time as the Company has  received an aggregate of
$160,000,000.  In addition, commencing with the development of the Property, the
Company's  LVCC  subsidiary  was granted an exclusive  contract for up to twenty
(20) years to provide  entertainment at the Property site which will provide for
minimum annual fees of $800,000 plus additional fees ( See "Item 1 - Description
of Business - General").




                                                        10

<PAGE>




     The  Company's  current  operations  include;  actively  assisting  ITB  in
obtaining  the  financing  necessary  to  redevelop  and  renovate the El Rancho
Property;  managing the preliminary construction activities on the Property site
under an interim  entertainment  and  property  management  agreement  with ITB;
overseeing  the  collection and  realization  of certain  investments  and notes
receivables, and; the development of certain media and communication properties,
including certain limited production of television and film programming.

     Cash   Requirements.   The  Company's   current   monthly   operating  cash
requirements  are  approximately  $250,000,  composed in approximate  amounts of
salary and consulting fees of $110,000;  general and administrative  expenses of
$100,000;  professional fees of $30,000; and, interest payments on existing debt
of  $10,000.  The  Company  is also  responsible  for  managing  and  paying the
operating  costs of the Property,  but is reimbursed by Orion on a monthly basis
for these costs in amounts sufficient to cover the company's cash outlay,  which
currently approximates $60,000 per month but may increase to a greater amount as
Orion begins the renovation of this  property.  The Company may also incur other
consulting  and  professional  fees  in the  development  and  financing  of its
business  activities.  During the year ended October 31, 1996,  the Company made
$1,476,000 in advances and deposits to certain businesses, individuals or others
to secure potential acquisitions or investments. Subsequent to October 31, 1996,
the Company has made an  additional  $500,000 of such  advances.  The Company is
currently  in  the  process  of  evaluating  these  potential   acquisitions  or
investments for future  development.  The Company will continue to make deposits
or advances as it deems  necessary to secure  potential  investments or business
acquisitions.

     Subsequent to October 31, 1996, the Company's  Casino-Co  subsidiary made a
90-day secured loan of $2,900,000 to NPD Inc., an unaffiliated  third party (See
"Liquidity and Capital  Resources - Notes  Receivable").  This loan, which bears
interest at 10% per annum, is due on April 15, 1997.  Additionally subsequent to
October 31, 1996, the Company paid to Mr. Nunzio DeSantis,  who subsequently was
named the Chief Operating Officer of ITB, $110,000 of loan fees and also granted
to him options to acquire  1,500,000  shares of the Company's Common Stock at an
exercise  price of $1 per share,  as  consideration  for  providing a $6,000,000
standby  funding  commitment for a portion of the  replacement  financing on the
Property (See "Item 1. Description of Business; Casino and Gaming Operations").

     As of January 31, 1997,  the Company had  approximately  $9,200,000 in cash
and current notes  receivable and believes that its current cash and receivables
(including  funds  expected to be received by April 15, 1997 by repayment of the
NPD Note  Receivable)  will be sufficient to meet its cash  requirements for the
next 12 months, as well as the repayment of existing debt of $781,248 at January
31, 1997.  However,  these  sources of cash may not be  sufficient to enable the
Company to fund the  expansion  and  commencement  of  operations of its planned
television  programming.  The Company may obtain such funds, if required, from a
public  offering.  If a public offering is not  successful,  the Company will be
required to seek other sources of funding.  There can be no assurance such other
funding will be available on terms satisfactory to the Company or at all.

Results of Operations

Year Ended October 31, 1996 Compared to Year Ended October 31, 1995 - Continuing
Operations

     Revenues  for the year  ended  October  31,  1996  increased  by $85,228 to
$291,200 as compared to $205,972 for the corresponding  period in 1995. Revenues
for the year ended  October 31, 1996  consisted of $225,000 of fees earned under
an interim  entertainment  and property  management  agreement  with Orion (such
agreement did not exist in 1995),  and $66,000 earned in connection with renting
out the  parking  facilities  while the  Company  owned the El Rancho  property.
Revenues  for year ended  October  31,  1995  consisted  of  $151,000  earned in
connection  with  renting  out the  parking  facilities  at the El Rancho  Hotel
property  site and  approximately  $54,000  in fees  earned  from  miscellaneous
program sources.

     Programming  costs,  which  relate  to  write-downs  made to the  Company's
television  programming  library to  reflect  management's  estimate  of its net
realizable  value,  increased  $82,561 to $805,061 during the year ended October
31, 1996 as compared to $722,500 in the corresponding period in 1995.

                                                        11

<PAGE>



     General and  Administrative  expenses  decreased  $3,642,581  to $3,202,893
during  the year  ended  October  31,  1996 as  compared  to  $6,774,448  in the
corresponding  period in 1995.  The majority of the decrease  relates in part to
legal,  accounting and professional fees previously  incurred in connection with
investigating and negotiating  various  alternatives to developing the El Rancho
and various other business opportunities during the year ended October 31, 1995.
In connection  therewith,  professional and consulting fees decreased $2,378,000
to $570,000 during the year ended October 31, 1996 as compared to $2,948,000 for
the corresponding period in 1995.  Professional  advisory and investment banking
fees also  decreased  $970,000 to $59,000 during the year ended October 31, 1996
as compared to $1,029,000 in the  corresponding  period in 1995. The majority of
the decrease  relates to 1995 fees that were incurred in  preparation of certain
intended underwritings, a proposed spin-off of the Company's LVCC subsidiary and
public  registration of its shares,  and a potential spin-off of the CountryLand
USA subsidiary.  These offerings were terminated  during 1996 and 1995 given the
sale of the El Rancho.  General  and  administrative  costs  relating  to the El
Rancho  decreased by $251,000 for the year ended October 31, 1996 as compared to
1995 due to the  cessation  of  operating  costs when the  Property  was sold on
January 22, 1996.

     Significant  general and  administrative  expenses are expected to continue
while the Company seeks new acquisitions and projects.

     Interest Income and Expense. Interest income increased $374,183 to $495,350
for the year ended  October 31, 1996 as compared to $121,167  for  corresponding
period in 1995.  The  majority  of the  increase  relates to (i) an  increase in
interest  earned on cash  balances  of  $335,00 to  $420,000  for the year ended
October  31,  1996 as  compared  to  $85,000 in the  comparable  period in 1995,
and.(ii) interest of $75,000 earned on the Company's  receivables due from Orion
during  the year  ended  October  31,  1996,  for  which  there  was none in the
comparable  period in 1995. The increase in interest  income is consistent  with
the increase in the average cash  outstanding  during the year ended October 31,
1996 as  compared  to the  corresponding  period in 1995.  Interest  expense and
finance costs decreased $144,504 to $537,081 for the year ended October 31, 1996
as compared to $681,585 for the  corresponding  period in 1995.  The majority of
decrease related to a $137,000  decrease in interest expense to $205,000 for the
year ended October 31, 1996 as compared to $343,000 for the comparable period in
1995.  The decrease in interest  expense is consistent  with the decrease in the
average  indebtedness  outstanding  during the year ended  October  31,  1996 as
compared to the corresponding  period in 1995.  Finance costs,  which consist of
loan fees and  stand-by  financing  fees,  approximated  $335,000 in each of the
years ended October 31, 1996 and 1995.

     Other  Income and  Charges - Included  in other  income and charges for the
year ending October 31, 1996 is $625,000 which  represents cash and the value of
800,000  restricted  shares of the Company's  Common Stock and 167,000 shares of
Common Stock of Satellite  Networks Inc. paid in connection with settling claims
arising  from  arranging  certain  financing  in  connection  with  the  initial
acquisition of the El Rancho  Property  site; a valuation  allowance of $450,000
relating to  advances  made to Malbec,  Inc. an  unaffiliated  third  party,  in
connection  with the  development  of certain  hotel  properties in Miami Beach,
Fla.;  $295,000  related to an adjustment to reflect the value of certain shares
of  common  stock  previously  issued  for  services;  and  $150,000  issued  in
settlement of an outstanding loan and stock purchase agreement.

     Reserve on  disposal of El Rancho  Hotel and Casino.  On January 22 , 1996,
the Company  sold the assets and certain  liabilities  of the El Rancho to Orion
Casino   Corporation  for  consideration  of  $43,500,000  of  cash,  notes  and
assumption  of existing  indebtedness.  The  Company  previously  reflected  the
effects of the above  transaction  and provided an allowance of $9,000,000 as of
October 31, 1995.  This allowance was reduced by $576,677  during the year ended
October 31,  1996 to reflect  the actual  settlement  of all  charges,  relating
mainly to  $611,000  of escrow  funds that were  returned  to the  Company  upon
Orion's  settlement of the Refinance  Obligations  (see  "Liquidity  and Capital
Resources, Refinance Obligations" )

Year Ended October 31, 1995 Compared to Year Ended October 31, 1994 - Continuing
Operations

     Revenues for 1995  represented  principally  receipts  earned in connection
with renting out the parking  facilities at the El Rancho Hotel  property  site.
There were no corresponding revenues for the year ended October 31, 1994.


                                                        12

<PAGE>



     Programming  costs,  which  relate  to  write-downs  made to the  Company's
television  programming  library to  reflect  management's  estimate  of its net
realizable value,  increased  $442,500 to $722,500 during the year ended October
31, 1995 as compared to $300,000 in the corresponding period in 1994.

     General and  Administrative  expenses  increased  $4,163,543  to $6,774,448
during  the year  ended  October  31,  1995 as  compared  to  $2,610,905  in the
corresponding period in 1994. The major reason for the increase was the expenses
related to investigating and negotiating various  alternatives to developing the
El Rancho and various other  business  opportunities.  In connection  therewith,
professional  advisory and  investment  banking  fees  increased  $2,457,000  to
$2,513,000  from  $56,000,  accounting  and legal  fees  increased  $302,000  to
$427,000  from  $125,000 and travel costs  increased  $384,000 to $408,000  from
$24,000 during the year ended October 31, 1995 as compared to the  corresponding
period in 1994. Additionally,  costs incurred in preparation of certain intended
underwritings increased $629,000 to $1,029,000 during the year ended October 31,
1995 as compared to $400,000 in the  corresponding  period in 1994. The increase
was due to legal,  accounting and professional  fees incurred in connection with
the intended  spin-off of LVCC and public  registration  of its shares,  and the
potential  spin-off  of CLND,  and also  includes a  write-off  of  $542,000  of
offering costs previously deferred as of October 31, 1994.

     Management  salaries and consulting costs increased  $851,000 to $1,513,000
during  the  year  ending  October  31,  1995 as  compared  to  $662,000  in the
corresponding  period in 1994.  The  increase is due to an increase in officers'
salary of $288,000 and consulting costs of $344,000  incurred in connection with
developing  the operations of LVCC and CLND  properties,  and for the accrual of
$115,000 in retirement benefits under a plan which did not exist in 1994.

     Interest Income and Expense. Interest income decreased $124,000 to $121,000
for the fiscal year ended  October  31, 1995 as compared to $245,000  for fiscal
year 1994. The majority of the decrease  related to the interest  accrued on the
Lake Tropicana note receivable of $1,868,463. Interest of $37,000 was accrued on
this note in 1995 as compared to $118,000 of interest which was accrued in 1994.
Interest  expense  increased  $151,000  to  $343,000  for the fiscal  year ended
October 31, 1995 as  compared  to $192,000  for fiscal year 1994.  Approximately
$100,000 of the increase was directly attributable to the increase in the amount
of outstanding  convertible debt during the period, and $44,000 was attributable
to interest  accrued on $1,500,000 note to UK Foods which did not exist in 1994.
Additionally  in  the  year  ended  October  31,  1995,  the  Company   incurred
approximately  $338,500  of loan fees and other  financing  costs as compared to
only $15,000 of such costs in 1994.

     Other Income and Charges.  Included in other charges as of October 31, 1995
is $500,000  allowance  for  reduction to market  value of  4,000,000  shares of
common stock of Sky Scientific Inc; $33,000 loss on the sale of 25,000 shares of
American Network Group, Inc. common stock ; $72,850 for an additional  allowance
against  the  Company's  investment  in  Patmore  Radio  Broadcasting;  $107,000
additional  allowance  against  existing  notes  receivable,  and  $70,000  loss
relating to investments no longer pursued.

     Reserve on  disposal of El Rancho  Hotel and Casino.  On January 22 , 1996,
the Company sold the assets and certain  liabilities  of the El Rancho Hotel and
Casino to Orion Casino  Corporation  for  consideration  of $43,500,000 of cash,
notes and  assumption  of existing  indebtedness.  The Company has reflected the
effects of the above  transaction  as if it had  occurred as of October 31, 1995
and  accordingly  provided an allowance of $9,000,000  for  accounting  purposes
reflecting an adjustment to the net realizable value of the El Rancho Property.

Liquidity and Capital Resources

     The  Company's  cash  requirements  to date have been funded from  proceeds
received in connection with the sale of shares of its common stock, warrants and
short-term borrowings. The Company's cash has been used for selling, general and
administrative expenses, and for investments and advances made to third paries.

     Issuance  of debt and  equity.  The Company  sold  3,034,294  shares of its
Common  Stock in a series  of  private  placements  made to  non-U.S.  (foreign)
purchasers,  under the exemption of Regulation S of the  Securities  Act of 1933
during the year ended  October 31, 1996 (all during the first  quarter of fiscal
1996).  The  Company  received  net  proceeds of  $1,242,500  in 1996 from these
issuances. The Company also issued 604,651 shares of its common stock to

                                                        13

<PAGE>



extinguish $252,500 of outstanding  convertible bridge notes payable and accrued
interest  during the year ended  October  31,  1996.  Also during the year ended
October 31,  1996  (during the first and second  quarters),  the Company  issued
2,752,588 shares of its Common Stock valued at $1,369,135 for services  provided
and to settle accounts payable.

     As of October 31, 1996, the Company had outstanding $1,056,444 of notes and
loans payable  which are  currently  due and payable.  Subsequent to October 31,
1996,  $275,000 of this debt has been repaid.  The Company  intends to repay the
remaining outstanding notes, along with all accrued interest, during the current
year from its current cash  balances.  Also  subsequent to year end, the Company
agreed to guarantee up to $1,500,000 of equipment  financing in connection  with
an  investment  it made  in  Electronic  Media  Corp.(See  "Item  1,  Media  and
Entertainment, Electronic Media Delivery").

     Refinance  Obligations.  In  connection  with  the sale of El  Rancho,  the
Company  refinanced the existing El Rancho  indebtedness  with a $14,000,000 13%
first mortgage note due SunAmerica Life Insurance  Company on December 20, 1996.
In connection  therewith,  the Company issued to SunAmerica  1,912,588 shares of
its Common Stock.  Orion assumed the Company's  obligations  under the refinance
note concurrent with the sale transaction (the "Refinance Obligations"). As part
of the sale agreement, the Company agreed to co-guarantee the assumed note for a
certain amount of time. The SunAmerica  note was refinanced and retired by Orion
on June 4, 1996,  and in accordance  with the  agreement,  500,000 shares of the
Company's  Common Stock have been returned,  and the co-guarantee of the note by
LVEN has been released.  In addition to the above, the Company  initially agreed
to  be  responsible  for  one-half  (1/2)  of  the  interest  on  the  Refinance
Obligations, limited to its original stated maturity of one year at 13% interest
per annum.  Such funds,  aggregating  $950,000,  were escrowed at closing of the
sale of the El Rancho. Concurrent with the refinancing of the SunAmerica loan by
Orion on June 4, 1996,  $339,000 of this escrow  amount was paid to  SunAmerica,
and the remaining $611,000 was returned to LVEN.

     Notes Receivable. In connection with the sale of the El Rancho, the Company
received  two  promissory  notes due from Orion and ITB as  co-makers  under the
notes. The first note was an 8% unsecured promissory note co-signed by Orion and
ITB in the principal amount of $6,500,000 which was paid in full March 15, 1996.
The second note is an 8% promissory note in the principal amount of $10,500,000,
secured by a subordinated  junior position in the deed of trust on the El Rancho
Hotel and  Casino  Property.  This note is due upon the  successful  raising  of
financing  to develop the Property by Orion,  or upon the  ultimate  sale of the
Property. The Company expects that this note receivable should be collected from
the proceeds from Orion's  $100,000,000  funding proposal;  however, the Company
can give no assurance the closing of such funding will actually occur ( see Item
1, General " Casino and Gaming Operations").

     If the Property is sold through  foreclosure  or other forced sale or based
upon mutual  decision of Orion and the Company,  the proceeds of such sale shall
be paid in the  following  order  of  priority:  (i)  first,  to pay in full all
principal,   interest  and  costs  owing  under  the  Refinancing  Loan  or  any
substitution or additional mortgage refinancing  thereof;  (ii) second, to repay
Orion for its investment in the property or any additions  thereto in the amount
of all cash payments comprising a part of the purchase price plus $2,000,000 and
any and all reasonable  documented costs, expenses and any additional investment
in, or debt  incurred  in  furtherance  of the  development  of,  the  Property,
together with an accrued  return thereon in the amount of eight percent (8%) per
annum; (iii) third, to pay the Company the outstanding  balance of principal and
accrued interest owing under the Note, plus an additional  $4,000,000,  together
with an accrued  return  thereon in the amount of eight  percent (8%) per annum.
Any excess will then be allocated fifty percent (50%) to Orion and fifty percent
(50%) to the Company.

     As of October 31, 1996, the Company has  outstanding two (2) separate notes
receivable of $1,868,000  ($3,736,000 in total) from MPTV, Inc. arising from the
sale of the Company's Lake Tropicana  investment.  The first note bears interest
at a rate  of 8% per  annum,  is  payable  monthly,  and is  secured  by a fifth
position  in a deed of trust on the  underlying  time-share  project.  The first
interest  payment is due one month  after the  borrower  has  completed  certain
refinancing  currently in process. The second note is unsecured and non-interest
bearing.  Principal  payments for both notes will be at a rate of $205 ($410 for
both notes) as each  time-share  interval is sold until August 1, 1998, when any
remaining   outstanding   principal  is  due  in  full.   The  notes  contain  a
cross-default  provision so that a default under one note shall also be deemed a
default on the other.  The joint venture has reorganized its debt position,  and
with such  financing,  is anticipated to have the funds to commence  development
and sale of the time share units. As a result

                                                        14

<PAGE>



of such  reorganization,  the Company's  secured note  receivable  moved up to a
second  position.  As of October 31, 1996, the Company has provided an allowance
of $2,929,511  against these notes  (including an allowance for imputed interest
on the non-interest bearing note).

     As of October  31,  1996,  the  Company  had made  advances  of $912,606 to
Malbec,  Inc.,  an  unaffiliated  company,  for the  purpose of  developing  and
operating a hotel project in Miami Beach,  Florida. The advances accrue interest
at the rate of 10% per annum,  are due July 31, 1997, and are secured by a first
security interest in a cash escrow account, after payment of all expenses (which
has a balance of $667,000 as of January 31, 1997).  The Company has re-evaluated
this  project and has decided not to pursue  development  as it believes it will
not be able to  obtain  a  favorable  purchase  price,  and/or  resolve  certain
bankruptcy proceedings involving the hotel project. The Company expects that the
escrow  account will be  liquidated  with the net amounts,  after payment of all
expenses,  to be returned to the  Company.  The Company has  provided a $450,000
allowance  against this advance,  for a net investment of $462,606 as of October
31, 1996.

     On September 4, 1996, the Company  loaned  $300,000 to Tee One Up, Inc., an
unaffiliated company developing television footage of actual golf "hole in ones"
at selected golf courses.  Principal and interest at a rate of 17% per annum are
payable in monthly installments of $14,832 until maturity,  November 1, 1998. In
connection  with making this loan, the Company  received a 3% equity interest in
the common shares of Tee One Up. The Company has given no value this  investment
for  financial  statement  purposes,   as  Tee  One  Up  Inc.  currently  has  a
shareholders' deficiency.

     On  January  15,  1997,  the  Company,  through  it's  wholly-owned  Nevada
subsidiary  Casino-Co,  made a 90-day  secured loan of  $2,900,000  to NPD, Inc,
("NPD"),  in order to enable NPD to close the  acquisition  from Robert  Brennan
("the  Seller")  of  2,904,016  shares  (the  "Shares")  of the common  stock of
International  Thoroughbred  Breeders,  Inc. ("ITB"),  representing  twenty-five
percent (25%) of the  outstanding  stock of ITB. At the closing of such purchase
and sale, the  shareholders of NPD,  Nunzio DeSantis and Anthony Coelho,  became
the Chairman of the Board and Chief Executive Officer, respectively, of ITB. The
sale of the Shares was  instrumental  to LVEN,  as it will allow ITB to (i) meet
the requirements of a $100 Million funding proposal that would be used, in part,
for the  renovation  and opening by ITB of ITB's 21-acre  Strip  property in Las
Vegas,  Nevada,  formerly  know as the El Ranch Hotel and  Casino,  in which the
Company has a continuing cash flow interest,  and (ii) meet the  requirements of
The New  Jersey  Racing  Commission  and  Division  of  Gaming  Enforcement  for
continued racing licencing at ITB's New Jersey facilities.  The Company believes
that the sale of the Shares will also  facilitate  ITB's  application for Nevada
Gaming Licencing.

     The loan to NPD is evidenced by a 10% Secured  Promissory Note due on April
15, 1997 (the "NPD Note"). The NPD Note is secured by a security interest in and
to certain rights of NPD in and to the Shares,  subject to a purchase money lien
in favor of the Seller for the  balance of the  purchase  price  owing to him in
respect of the sale of the  Shares.  In  addition,  1,452,088  of the Shares are
subject to an  existing  purchase  option in favor of a third  party,  and would
likely  cease to provide  collateral  to the Company  upon the  exercise of such
option. The NPD Note is personally  guaranteed by Mr. DeSantis. As consideration
for Casino-Co  making the $2,910,000  loan,  NPD granted  Casino-Co an option to
acquire,  at an exercise price of $4 per share,  the Shares,  of which 1,452,088
shares are subject to an  existing  purchase  option in favor of a third  party.
Exercise of the option  must be  approved by the Seller,  as well and the United
States Bankruptcy Court, before which certain  proceedings  involving the Seller
are pending.

     Upon a default  by NPD  under  its  payment  obligations  to the  Seller in
respect of the balance of the purchase price for the Shares, the Seller would be
free to exercise certain  creditor's rights under a Pledge Agreement between the
Seller and ITB in respect of the Shares (the "Pledge  Agreement").  Such actions
could have the effect of  modifying  the  Company's  security  interest  in such
collateral, which at all times is subordinated to and secondary to the rights of
the Seller. In the event that the Seller elects to foreclose on the Shares,  the
Company will be obligated  to execute all  documents  requested by the Seller to
reflect the discharge of the Company's  security interest therein.  In the event
of a  sale  by  the  Seller  after  a  default,  the  Company's  right  in  such
circumstance  shall be limited to the right to receive  any  proceeds  from such
sale over and above the amounts due the Seller under the Pledge Agreement.  Upon
satisfaction of NPD's purchase money obligation to the Seller during the term of
the NPD Note, the Company would then have a first priority  security interest in
the Shares.

                                                        15

<PAGE>





Item 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

            The consolidated  financial statements of the Company required to be
            included  in  Item  7 are  set  forth  in  the  Index  to  Financial
            Statements..

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

            Not Applicable.

                                                     PART III

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

     The members of the Board of Directors  of the Company  serve until the next
annual meeting of stockholders, or until their successors have been elected. The
officers  serve at the pleasure of the Board of  Directors.  The  directors  and
executive officers of the Company are set forth in the table below.

 Name                     Age                             Position

 Joseph A. Corazzi       47        Chairman of the Board,President, Chief
                                   Executive Officer and Director of the 
                                   Company; proposed Chairman of the Board 
                                   of LVCC.

 Carl A. Sambus           46       Executive Vice President, Chief Financial 
                                   Officer, Chief Operating Officer, Secretary, 
                                   Treasurer and Director of the Company; 
                                   proposed Chairman of the Board, Chief 
                                   Executive Officer, Chief Financial Officer
                                   and Director of CountryLand; and Chief 
                                   Financial Officer and Director of LVCC.

 Ken Scholl               59       President, Casino-Co.

 Paul Whitford            55       Director of the Company.



         Joseph A.  Corazzi has been an  executive  officer and  director of the
Company  since  October  1990  and of LVCC  since  May  1994.  He has  extensive
experience  in the  entertainment  and marketing  industry.  In 1974, he founded
Communications  Associates,  Inc.,  which  became one of the first  suppliers of
hotel/motel  video  entertainment,  using master antenna  television  systems to
carry movies from 3/4" videotape  machines into hotel guest rooms. In connection
with this business,  Mr. Corazzi pioneered the usage of 1/2" videotape machines,
followed by the first installation of 24 hour satellite  transmission in lieu of
videotape  machines.  From 1981 to 1985,  Mr.  Corazzi was  President  and Chief
Operating  Officer,  and from 1985 to February 1989 he was  Vice-Chairman of the
Board, of Telstar  Corporation,  and an executive  officer of Telstar  Satellite
Corporation  of  America  ("Telstar"),  which was  engaged  in the  business  of
satellite programming and distribution to cable television systems and to motel,
hotel and other private cable systems.  From 1975 to 1982, Mr. Corazzi owned and
operated  several  cable   television  and  private  cable  television   systems
throughout the southwest  United States.  In 1985, Mr. Corazzi  created  Country
Music Television  ("CMT"),  the first  all-country,  all-music video programming
service. CMT is currently  distributed to more than 20 million homes nationwide.
From  January  1987 to December  1990,  Mr.  Corazzi was  Chairman of SelecTV of
California,  Inc.  ("SelecTV"),  a wireless  cable  television  operator  in Los
Angeles.  From 1989 to the  present,  Mr.  Corazzi  engages in the  business  of
advising  financially  troubled  companies with respect to their  reorganization
under the U.S.  Bankruptcy  Code.  Bankruptcy  petitions  for both  Telstar  and
SelecTV were filed under  Chapter 11 of the U.S.  Bankruptcy  Code in 1989.  The
plan of  reorganization  for  each  of  these  companies  was  confirmed  by the
bankruptcy court in November 1992. Mr. Corazzi  graduated from the University of
New Mexico and completed  course work for his master's degree in  communications
at the University of Wisconsin, Madison.


                                                        16

<PAGE>



         Carl A.  Sambus  has been an  executive  officer of the  Company  since
October 1990, and of the Company's  CountryLand  subsidiary  since November 1993
and of LVCC since May 1994. Mr. Sambus has spent most of his professional career
in the cable industry,  pay-per-view, pay television and satellite entertainment
industries in the United  States.  One year after joining  Viacom  International
("Viacom") in 1972, Mr. Sambus was placed in charge of Suffolk  Cablevision,  in
which  capacity he conducted a test for the nation's  first one-way  addressable
pay-per-view system. In late 1977, Mr. Sambus was one of the five originators of
Viacom's  adaption  of its  private  pay  television  network  into  ShowtimeTM,
pioneering the cable delivery of movie entertainment on pay television.  In that
capacity, he also helped negotiate  Showtime'sTM merger with The Movie ChannelTM
to form the  nation's  second  largest  satellite  pay  television  service.  As
Showtime/The Movie Channel's Vice President of Business Development from 1977 to
1986, Mr. Sambus was in charge of finance and planning and supervising  Viacom's
entrance into a host of ancillary  markets,  including  SMATV,  hotel and motel,
private cable and direct broadcast satellite markets. Since 1986, Mr. Sambus has
been an active  partner in CLR  Associates,  a family  investment and consulting
partnership  specializing in logistical  management and marketing services.  CLR
Associates  maintains an equity interest in various business'  interests and its
partners serve as officers and directors of several  private  corporations.  Mr.
Sambus is a graduate of Marietta College with a BA in Finance and Accounting.

     Ken Scholl has been a  President  of the  Company's  Casino-Co  Corporation
subsidiary  since January 23, 1996. Since 1984, Mr. Scholl has been President of
Stanford  Company,  in Las Vegas,  Nevada and from November 1992 until  February
1993  he  was  an  independent  contractor  with  Minami  Development,  Inc.  in
connection with the closing of the Dunes Hotel and Casino in Las Vegas,  Nevada.
From July 1990 until June 1962,  Mr.  Scholl was the  President and a Management
Consultant  for the Peabody  Hotel Group in  Memphis,  Tennessee,  and from 1986
until 1996 he was the President and a partner in the Aristocrat Hotels, Inc. and
Aristocrat  Hotels of Nevada,  Inc. which operated the Sands Hotel in Las Vegas,
Nevada.  Mr. Scholl was President and CEO of Princess Hotels  International  and
employed from November 1967 through 1978.  Mr. Scholl held a Nevada State Gaming
License,  and is a Licensed  Nevada Real  Estate  Broker.  Mr.  Scholl is also a
director of International Thoroughbred Breeders Inc.

     Paul Whitford has been a director of the Company  since March 1, 1996.  Mr.
Whitford is in private legal practice, concentrating in entertainment,  taxation
and  bankruptcy  law. He has been a member of the Bar of the State of California
since 1978. Mr. Whitford received his Bachelor of Business Administration degree
from the University of North Texas and his Juris Doctor from San Fernando Valley
College  of Law (now  University  of La  Verne).  Mr.  Whitford  has also been a
Certified Public Accountant since 1968, and is currently licensed in Texas.


Compliance with Section 16(a)

         There were no corresponding transactions.
















                                                        17

<PAGE>



Item 10. EXECUTIVE COMPENSATION

         The  following  table  sets  forth  the cash  compensation  paid by the
Company to present executive  officers and as to all persons as a group who were
executive  officers of the Company at any time during the year ended October 31,
1996.

<TABLE>
<CAPTION>
                                            SUMMARY COMPENSATION TABLE

                               ANNUAL COMPENSATION                        LONG TERM COMPENSATION(2)
                               -------------------                         -------------------------
                                                        Other
    Name and                                           Annual             Awards       Payouts  All
    Principal Position     Year    Salary(1)   Bonus  Compensation                             Other
    ------------------     ----    ---------   -----  ------------                             -----
                                                                   Restricted  Optional  LTIP    3)
                                                                      Stock     SARs(#) Payouts
                                                                      -----     ---------------
<S>                       <C>      <C>        <C>        <C>        


Joseph A. Corazzi, CEO     1996   $550,000   -0-   -0-   -0-         -0-         -0-    -0     $124,000
 President and Chairman    1995   $500,000   -0-   -0-   -0-       4,000,000     -0-    -0-    $115,000
                           1994   $267,151   -0-   -0-   -0-         130,000(4)  -0-    -0-
                                                                                                           

Carl A. Sambus,            1996     96,667   -0-   -0-   -0-            -0-      -0-   -0-       -0-
Executive Vice             1995   $ 80,000   -0-   -0-   -0-            -0-      -0-   -0-       -0- 
 President, Chief          1994   $ 73,863   -0-   -0-   -0-         250,000     -0-   -0-       -0-
 Financial Officer       
 and Secretary                                                                                                       
                           

Ken Scholl,                1996   $120,000    -0-   -0-   -0-            -0-      -0-   -0-       -0-
 President, Casino-Co      1995   $120,000    -0-   -0-   -0-            -0-      -0-   -0-       -0-   
                           1994   $100,000    -0-   -0-   -0-            -0-      -0-   -0-       -0-
                                                                                                    

All executive officers
 as a group (3 Persons     1996   $766,667   -0-    -0-  -0-             -0-      -0-   -0-     $124,000
                           1995   $700,000   -0-    -0-  -0-        4,100,000     -0-   -0-     $115,000
                           1994   $441,014   -0-    -0-  -0-          380,000     -0-   -0-       -0-
                                                                                                           
</TABLE>


    The company issued  200,000 shares of its Common Stock,  valued at $125,000,
to  James  Sargent,  a  former  director  of  its  CountryLand  Properties  Inc.
subsidiary,  for  consulting  fees during the year ended  October 31, 1996.  The
Company paid to Mr. Paul Whitford, director fees of $13,500. There were no other
directors fees (other than stated above) paid during the years ended October 31,
1996 or 1995.

    (1)  The amounts shown do not include the value of certain personal benefits
         received in addition to cash compensation.  The aggregate value of such
         personal benefits received was less than ten percent (10%) of the total
         cash compensation payable.

    (2)   The officers and directors have not participated in the Company's
          1992 Stock Option Plan and have no stock options or other long-term 
          compensation except as stated below.

    (3)  Represents  amount  accrued  on Mr.  Corazzi's  retirement  plan  which
         entitles him to an annual retirement benefit starting with the calendar
         month after his  retirement or  termination,  equal to fifty percent of
         his average annual Company salary and bonus received in the twenty-four
         (24) month period prior to his termination (the retirement plan becomes
         effective  once Mr.  Corazzi has been employed 10 years,  including any
         time pre-dating these agreements)

    (4)  Does not include options to purchase 1,500,000 shares, which options
         were canceled in fiscal 1995.


                                                        18

<PAGE>



    The  following  table  contains  information  concerning  the grant of stock
options and employment related warrants to the named executive officers:

                                    Percentage of
                                    Total Options
                                    Granted to
                         Options    Employees in   Exercise     Expiration
Name                     Granted    Fiscal Year     Price          Date
----                     -------    -----------     -----         ----
<TABLE>
<CAPTION>
<S>                       <C>       <C>             <C>          <C>    

Options Granted in Fiscal 1996
------------------------------
None

Options Granted in Fiscal 1995
------------------------------
Joseph Corazzi           4,000,000    98%          $1.00         June 1997
Dean Homayouni             100,000     2%          $1.00         June 1997(1)

</TABLE>

(1) These  options  have lapsed as a result of Mr.  Homayouni's  resignation  in
September 1995.

    The following  table contains  information  concerning the exercise of stock
options and employment  related  options and  information  in unexercised  stock
options held as of October 31, 1996 by the named executive officers:

Options Exercises and Year-end Value Table  
                                                                   Value of
                                                                 of Unexercised
                                        Number of Unexercised     In-the-Money 
                                                                   Options at
                                         Options & Warrants    October 31, 1996
                                         --------------------     --------------
                 Shares                                Non-
               Acquired On  Value     Exercisable   exercisable  Exercisable(2)
                Exercise  Realized(1) -----------   -----------  --------------
                --------  ----------
<TABLE>
<CAPTION> 
<S>             <C>           <C>       <C>            <C>              <C>  

-                      
Name            
----             

Joseph Corazzi   -0-         -0-       4,130,000       -0 -          - 0-
Carl Sambus      -0-         -0-         250,000       -0             -0-
-------------------------------------------------------------------------------

</TABLE>
(1) Market Value at time of exercise less exercise price.
(2) The average of the closing bid and ask prices of the Common Stock at October
    31,  1996 was $.40 Value  equals the  difference  between  market  value and
    exercise price.

    The Company  entered  into a one year  employment  agreement on February 20,
1992 with Joseph  Corazzi,  the Chairman of the Board of the Company,  providing
for annual salary of $80,000. The annual salary for Mr. Corazzi was increased to
$350,000 as of March 1, 1994. On March 1, 1995, the Company and its  subsidiary,
LVCC,  entered into two (2) separate five year  employment  agreements  with Mr.
Corazzi,  which  provide  for  an  annual  aggregate  salary  of  $550,000.  The
agreements  may be renewed by mutual  agreement  of the parties  for  successive
terms of one  year and are  subject  to  annual  increases  and  bonuses  at the
discretion of the Board of Directors. The agreements also entitle Mr. Corazzi to
participate  in any employee  benefit  plans which may be offered in the future,
such as group life, health,  hospitalization  and life insurance,  and prohibits
him from engaging in a business  competitive with the Company during the term of
the agreement.  Under the agreements,  Mr. Corazzi's employment  terminates upon
death or disability  and may be terminated by the Company for "cause,"  which is
defined as the willful failure to perform duties,  malfeasance,  commission of a
felony, gross negligence, or breach of the employee's covenant not to compete or
maintain  confidential certain  information.  Termination by the Company for any
other reason  entitles the employee to receive his salary for the remaining term
of the agreements.

    The employment  agreements  with Mr. Corazzi also provide for the following;
(i) a lump sum  payment of  $2,000,000  upon the  consummation  of a  definitive
agreement by the Company and any potential  purchaser  providing for a change of
control,  (ii), an annual  retirement  benefit  starting with the calender month
after his  retirement  or  termination,  equal to fifty  percent of his  average
annual LVEN salary and bonus received in the twenty-four (24) month period prior
to his termination (plan becomes effective once Mr. Corazzi has been employed 10
years, including any time pre-dating

                                                        19

<PAGE>



the  agreements),  and  (iii) an  annual  lump sum cash  payment  equal to 5% of
earnings  before  income  taxes,  depreciation  and  amortization  of  the  LVCC
subsidiary.

    The Company  entered  into a one year  employment  agreement on February 20,
1992 with Mr.  Sambus  providing  for an annual  salary of  $60,000.  The annual
salary of Mr. Sambus  increased as of March 1, 1994 to $80,000,  and $100,000 as
of January 1, 1996.  The agreement with Mr. Sambus was renewed until February 8,
1997, and may be renewed by mutual agreement of the parties for successive terms
of one year.  All the  agreements  are subject to annual  salary  increases  and
bonuses at the discretion of the Board of Directors.  The employment  agreements
also entitle these  individuals  to  participate  in any employee  benefit plans
which may be offered in the future, such as group and life insurance.

    The Company has no pension or other plans pursuant to which cash or non-cash
compensation  was paid or distributed  during the fiscal years ended October 31,
1996 or 1995 other than as described above for Mr. Corazzi.

    In connection  with the Company's  initial public offering in February 1992,
Mr.  Byron Lasky and Messrs.  Corazzi and Sambus and  Communications  Associates
Partnership ("CAP"), a partnership of which Mr. Corazzi was the general partner,
escrowed with American Stock  Transfer & Trust  Company,  New York, New York, as
depositary,  an  aggregate  of 750,000  shares of Common Stock held by them (the
"Escrow  Shares").   On  March  2,  1994,  Messrs.  Lasky,  Corazzi  and  Sambus
surrendered their rights to receive all Escrow Shares. Subsequently, the Company
issued five-year  options under the Stock Option Plan to purchase 250,000 shares
of Common  Stock  granted  to each of Messrs.  Lasky and  Sambus and  options to
purchase 130,000 shares were granted to Mr. Corazzi.  All such options are fully
vested and have an exercise  price of $1.00 per share.  A five-year  option (not
under the Stock  Option Plan) to purchase  1,500,000  shares was also granted to
Mr.  Corazzi.  On March 1, 1995, the Company  canceled Mr.  Corazzi's  option to
acquire  1,500,000  shares.  Mr.  Corazzi  was  subsequently  issued  options to
purchase  4,000,000 shares of common stock of CountryLand  Properties Inc. which
are  transferrable to any new subsidiary  formed to operate the gaming assets of
the Company,  including  Casino-Co.  The 4,000,000  CountryLand  Properties Inc.
warrants are fully  transferable  and convertible  into options to purchase LVEN
Common Stock at $1.00 per share.  These  shares are not  issuable in  connection
with the "Stock Option Plan" described below.

    Subsequent to October 31, 1996, Mr. Nunzio DeSantis, now the Chief Operating
Officer of ITB, was granted 1,500,000 options to acquire shares of the Company's
Common  Stock at an exercise  price of $1 per share.  The options were issued as
part of the consideration for providing a $6,000,000  standby funding commitment
for  replacement  financing on the El Rancho  Property Site (See "Item 1, Casino
and Gaming  Operations").  These shares are not issuable in connection  with the
Stock Option Plan described below.

    The  Delaware  General  Corporation  Law  permits  a  corporation,   in  its
Certificate of Incorporation, to exonerate its directors from personal liability
to the corporation or its  stockholders  for monetary  damages for breach of the
duty of care as a director,  with certain  exceptions.  The  exceptions  include
breach of the director's duty of loyalty, acts or omissions not in good faith or
which  involve  intentional  misconduct or knowing  violations of law,  improper
declarations of dividends,  and transactions from which the directors derived an
improper personal benefit. The Company's Certificate of Incorporation exonerates
its directors, acting in such capacity, from monetary liability to the extent so
permitted. This limitation of liability does not eliminate a stockholder's right
to seek  non-monetary,  equitable  remedies such as an injunction or recision to
redress an action taken by directors.  However, as a practical matter, equitable
remedies may not be available in all  situations,  and there may be instances in
which no effective remedy is available.

Stock Option Plan

    The Company  adopted the 1993 Stock Option Plan in February  1993. The Stock
Option Plan enables the Company to offer an incentive based compensation  system
to key employees, officers, directors, consultants and to employees of companies
who do business with the Company.  In the discretion of a committee comprised of
non-employee directors (the "Committee"),  directors, officers and key employees
of the Company and its  Subsidiaries  or employees  of companies  with which the
Company  does  business  become  participants  in the  Stock  Option  Plan  upon
receiving  grants  of stock  options  or  awards  of  restricted  stock or stock
appreciation rights.

                                                        20

<PAGE>



    A total of 1,000,000 shares are reserved for issuance under the Stock Option
Plan,  of which  150,000  shares  are  issuable  under an option  which has been
granted to an employee  at $1.50 per share,  and 770,000  shares  under  options
granted to officers and directors (see "Item 10 - Executive Compensation"),  all
with an exercise  price of $1.00 per share.  The Company may increase the number
of shares  reserved for  issuance  under the Stock Option Plan or may make other
material  modifications to the Stock Option Plan without  shareholder  approval.
However,  no  amendment  may change the  existing  rights of any option or award
holder.  Any shares  which are subject to an option but are not used because the
terms and  conditions of the option are not met, or any shares which are used by
participants  to pay all or part of the purchase price of any option,  may again
be used for options or awards under the Stock Option Plan. However,  shares with
respect to which a stock  appreciation right has been exercised may not again be
made subject to an option or award.

    Stock  options may be granted as  non-qualified  stock  options or incentive
stock  options,  but incentive  stock options may not be granted at a price less
than 100% of the fair market value of the stock as of the date of grant (110% as
to any 10% shareholder at the time of grant) and non-qualified stock options may
not be granted at a price less than 85% of fair market  value of the stock as of
the date of grant.  Restricted  stock may not be awarded  under the Stock Option
Plan in connection  with incentive  stock options.  Incentive  stock options may
only be issued to  directors,  officers  and  employees  of the  Company.  Stock
options may be exercised  during a period of time fixed by the Committee  except
that no stock  option  may be  exercised  more than ten years  after the date of
grant or three years after death or disability of the option  holder,  whichever
is later. In the discretion of the Committee,  payment of the purchase price for
the stock  acquired  through the exercise of a stock option may be made in cash,
shares of Common Stock or delivery of recourse promissory notes or a combination
thereof.

    Stock  options  granted under the Stock Option Plan may include the right to
acquire an Accelerated Ownership Non-Qualified Stock Option ("AO"). If an option
grant  contains  the AO  feature  and if a  participant  pays all or part of the
purchase  price of the option with stock,  then upon  exercise of the option the
participant  is granted an AO to  purchase,  at the fair market  value as of the
date of the AO grant,  the  number  of  shares of stock  equal to the sum of the
number of whole shares used by the  participant in payment of the purchase price
and the number of whole shares,  if any,  withheld by the Company as payment for
withholding taxes. An AO may be exercised between the date of grant and the date
of expiration, which will be the same as the date of expiration of the option to
which the AO is related.  All of the 880,000 stock options  granted to date have
included the AO feature.

    Except as described above, stock appreciation rights and/or restricted stock
may be awarded in  conjunction  with, or may be unrelated to, stock  options.  A
stock appreciation right entitles a participant to receive a payment, in cash or
stock or a  combination  thereof,  in an amount  equal to the excess of the fair
market value of the stock at the time of exercise  over the fair market value as
of the date of grant. Stock appreciation rights may be exercised during a period
of time fixed by the  Committee  not to exceed ten years after the date of grant
or three years after  death or  disability  of the award  holder,  whichever  is
later.  Restricted  stock  requires  the  recipient to continue in service as an
officer,  director,  employee  or  consultant  for a fixed  period  of time  for
ownership  of the shares to vest.  If  restricted  shares or stock  appreciation
rights  are  issued  in  tandem  with  options,  the  restricted  stock or stock
appreciation  right is canceled  upon exercise of the option and the option will
likewise terminate upon vesting of the restricted shares.


                                                        21

<PAGE>



Item 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The following  table sets forth, as of January 31, 1997, the stock ownership
of all persons known to own  beneficially  five percent or more of the Company's
Common  Stock  and  all  directors  and  executive   officers  of  the  Company,
individually  and as a group.  Each person has sole voting and investment  power
over the shares indicated, except as noted.

<TABLE>
<CAPTION>
<S>                                           <C>              <C>  

                                        Number of Shares
                                         of Common Stock
                                           Beneficially
Names and Addresses                           Owned           Percent
-------------------                        -----              -------

Joseph A. Corazzi(1)                      4,795,872             12.3.%
505 Marquette
Albuquerque, New Mexico  87102

Carl A. Sambus(2)                           292,500                  *
88 10th Street
Garden City, NY 11530

Ken Scholl                                   12,500                  *
2805 Ashworth Circle
Las Vegas, Nevada 89107

Paul Whitford
1208 Cochise Drive
Arlington, Texas 76012                            -                  *

All Directors and Executive Officers      5,100,872              13.0%
as a Group (4 persons)(3)
</TABLE>

* Less than 1%

     (1)  Includes 665,872 shares owned by Mr. Corazzi;  130,000 shares issuable
          pursuant to an option granted to Mr. Corazzi under the Company's Stock
          Option Plan, and 4,000,000  shares  issuable under options not granted
          under the Stock Option Plan. See "Certain Transactions."

     (2)  Includes options to purchase 250,000 shares of Common Stock granted to
          Mr. Sambus.

     (3)  Includes options to purchase 250,000 shares of Common Stock granted to
          Mr. Sambus,  and options to purchase  4,130,000  shares granted to Mr.
          Corazzi.

     By virtue of their share ownership  and/or  management  positions,  Messrs.
Sambus and Corazzi may be deemed  "promoters"  and  "parents"  of the Company as
those terms are defined in the rules and regulations under the Securities Act.


                                                        22

<PAGE>




Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On March 2, 1994,  Messrs.  Lasky,  Corazzi  and Sambus  surrendered  their
rights to receive  20,000  Escrow Shares each in exchange for (i) an increase in
the annual salaries payable to them under their employment  agreements described
above,  (ii) five-year  options under the Stock Option Plan to purchase  250,000
shares of Common  Stock  granted  to each of  Messrs.  Lasky and  Sambus  and to
purchase 130,000 shares granted to Mr. Corazzi and (iii) a five-year option (not
under the  Stock  Option  Plan) to  purchase  1,500,000  shares  granted  to Mr.
Corazzi. On March 1, 1995, the Company canceled the five year option Mr. Corazzi
had to acquire the 1,500,000  shares and instead  granted Mr. Corazzi  4,000,000
options to purchase Common Stock of CountryLand Properties Inc. (transferable to
any new  subsidiary  that may be  formed to  operate  the  gaming  assets of the
Company,  including  Casino-Co.).  The  4,000,000  CountryLand  Properties  Inc.
warrants are fully  transferable  and convertible  into options to purchase LVEN
Common Stock at $1.00 per share.  These  shares are not  issuable in  connection
with the Company's Stock Option Plan. All such options are fully vested and have
an exercise price of $1.00.

     Salary and  benefits  due  Joseph A.  Corazzi  amounting  to  $645,622  and
$701,739  has been accrued as of October 31, 1996 and 1995,  respectively.  This
amount  includes an accrual for $124,00 and $115,000 for amounts due Mr. Corazzi
under his  retirement  plan as of October 31, 1996 and 1995,  respectively.  The
Company paid and reimbursed  Mr.  Corazzi  $730,177 and $283,360 for accrued and
current  salary during the years ended October 31, 1996 and 1995,  respectively.
Such sums were due Mr.  Corazzi  from  inception  of the  Company to October 31,
1996.

     The company issued 200,000 shares of its Common Stock,  valued at $125,000,
to  James  Sargent,  a  former  director  of  its  CountryLand  Properties  Inc.
subsidiary,  for  consulting  fees during the year ended  October 31, 1996.  The
Company paid to Mr. Paul Whitford, director fees of $13,500. There were no other
directors fees (other than stated above) paid during the years ended October 31,
1996 or 1995.

     On December  11,1996,  Mr. Nunzio DeSantis,  who was subseqently  named the
Chief Operating  Officer of ITB, was granted 1,500,000 options to acquire shares
of the Company's  Common Stock at an exercise price of $1 per share. The options
were issued as part of the  consideration  for  providing a  $6,000,000  standby
funding  commitment for replacement financing on the El Rancho Property.  These
shares are not  issuable in  connection  with the Stock  Option  Plan  described
below.

     Ken Scholl,  President of the Company's Casino-Co  subsidiary,  was named a
director of ITB on January 15, 1997.



                                                      23

<PAGE>



                                                    PART IV


Item 13.     EXHIBITS AND REPORTS ON FORM 8-K

        (a)  Exhibits.  The following exhibits of the Company are included
             herein.

        2.   Plan of acquisition, reorganization, arrangement, liquidation or
             succession

             2.1  Agreement of Purchase and Sale by and between BRT, Inc. and 
                  the Company for the El Rancho Hotel & Casino(9)
             2.3  Letter  Agreement,  dated as of January 22, 1996,  between the
                  Company,    CountryLand   Properties,    Inc.,   International
                  Thoroughbred  Breeders,  Inc.,  and Orion Casino  Corporation,
                  with respect to sale of El Rancho Hotel & Casino (10)

        3.   Certificate of Incorporation and Bylaws

             3.1  Certificate of Incorporation(1)
             3.2  Bylaws(1)
             3.3  Amendment to Certificate of Incorporation(5)
             3.4  Adopted Amendment to Certificate of Incorporation regarding 
                  preferred stock(9)

        4.   Instruments Defining the Rights of Security Holders

             4.1  Form of Amended Warrant Agreement(5)
             4.2  Form of Amended Unit Purchase Option(5)
             4.3  Form of Amended Stock Escrow Agreement(2)

        10.  Material Contracts

             10.1       Compensatory Plan for Directors and Officers, with 
                        schedule of details(1)
             10.2       Employment Agreement with Stan Irwin(1)
             10.4       Employment Agreement with Carl A. Sambus(1)
             10.11      1993 Stock Option Plan(7)
             10.12      Stock Compensation Plan(7)
             10.13      Employment Agreement with Joseph A. Corazzi(7)
             10.15      Form of Mergers and Acquisitions Agreement with D.H. 
                        Blair Investment Banking Corp.
                        (formerly Exhibit 4.4)(1)
             10.16      Finders Agreement with Anker Bank(9)
             10.17      Joint Venture Agreement between the Registrant, through 
                        Pacific DNS, Inc. and Consolidated Resort Enterprises,
                        Inc.(9)
             10.18      Form of Mergers and Acquisitions Agreement with D.H. 
                        Blair Investment Banking Corp.(formerly Exhibit 4.4)(1)
             10.19      Settlement  Agreement with Winner's  Entertainment,  
                        Inc.(9)
             10.20      Loan   Agreements   between   the   Company  and  BP 
                        Group, Ltd.--$375,000 loan(9)
             10.21      Loan   Agreements   between   the   Company  and  BP  
                        Group, Ltd.--$1,150,000 loan(9)
             10.22      Loan Agreements between the Company and Duneden, Ltd.(9)
             10.23      Agreement  for  Purchase and Sale of Joint  Venture 
                        between Pacific  DNS,  Inc.  (a  wholly  owned   
                        subsidiary  of  the Company),  MPTV, Inc. and 
                        Consolidated  Resort  Enterprises, Inc.(9)
             10.24      Securities  Purchase  Agreement dated as of January 22,
                        1996 between the Company, CountryLand Properties, Inc.
                        and SunAmerica Life Insurance Company, with exhibits(10
             10.25      Subordination Agreement dated as of January 22, 1996
                        between the Company, CountryLand Properties, 
                        International Thoroughbred Breeders, Inc., Orion Casino

                                                      24

<PAGE>



                        Corporation and SunAmerica Life Insurance Company(10)
             10.26      Assignment and Assumption Agreement between CountryLand
                        Properties, Inc. and Orion Casino Corporation and
                        acknowledged and agreed to by SunAmerica Life Insurance
                        Company(10)
             10.27      Loan  Agreement  between NPD and  Casino-Co  Corporation
                        dated January 15, 1997 with related  Secured  Promissory
                        Note, and Security Agreement, and Pledge Agreement.(11)
             10.28      Guaranty of Nunzio DeSantis in favor of Casino-Co 
                        Corporation.(11)
             10.29      Option of NPD, in favor of Casino-Co Corporation.(11)
             10.30      Loan Agreement between LVEN and Malbec Inc. dated
                        March 20, 1996 with related
                        Secured Promissory Note and Security Agreement. (12)
             10.31      Loan Agreement between Pacific DNS and Tee One Up Inc.
                        dated September 4, 1996 with related Secured Promissory
                        Note and Security Agreement. (12)
             10.32      Joint Venture Agreement between Electronic Media Inc.,
                        Texas Information Development
                        Commission and William Luke Stewart. (12)


        21.  Subsidiaries(10)


(1)     Filed with original filing of the Registration Statement on Form S-1, 
          File No. 33-39047 (the "1992 S-1)
(2)     Filed with Amendment No. 3 to the 1992 S-1
(3)     Filed with Amendment No. 4 to the 1992 S-1
(4)     Filed with amendment No. 5 to the 1992 S-1
(5)     Filed with Amendment No. 6 to the 1992 S-1
(6)     Incorporated by reference to the Company's annual Report on
          Form 10-KSB for the year ended October
        31, 1992
(7)     Filed with Post Effective Amendment No. 1 to the 1992 S-1, filed on 
        Form SB-2
(8)     Filed with Registration Statement on Form S-1, File No. 33-72980, filed
        on December 15, 1993
(9)     Incorporated by reference to the Company's Annual Report on Form 10-KSB 
        for the year ended October 31, 1994
(10)    Incorporated by reference to the Company's Annual Report on Form 10-KSB 
        for the year ended October 31, 1995.
(11)    Incorporated by reference to the Company's Current Report on Form 8-K
        dated January 15, 1997.
(12)    Filed herewith




                                                      25

<PAGE>



                                                  SIGNATURES


      Pursuant  to the  requirements  of Section 13 or 15 (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on April 7, 1997.


                                         LAS VEGAS ENTERTAINMENT NETWORK, INC.




                                        \s\ Joseph A. Corazzi
                                        ---------------------
                                         Joseph A. Corazzi
                                         Chairman


   Pursuant to the  requirements  of the Securities Act of 1934, this report has
been signed below by the following  persons on behalf of the  registrant  and in
the capacities indicated on February 6, 1997.


Signature                


\s\ Joseph A. Corazzi      Chairman of the Board, President, Chief
---------------------       Executive Officer and Director (principal executive
Joseph A. Corazzi           officer)



\s\ Carl A. Sambus         Executive Vice President, Chief Financial Officer,
-----------------------     Secretary and Director (principal accounting and 
Carl A. Sambus              financial officer)
                          


                                                      26

<PAGE>











                          INDEX TO FINANCIAL STATEMENTS





Report of Independent Auditors.......................................F-1
 
Consolidated Balance Sheets as of
 October 31, 1996 and
 October 31, 1995 ...................................................F-2

Consolidated Statements of Operations 
 for the Years  Ended
 October 31, 1996 and 1995.................... ......................F-3


Consolidated Statement of Stockholders'
 Equity for the Years Ended
 October 31, 1996 and 1995...........................................F-4


Consolidated Statements of Cash Flows
 for the Years Ended 
 October 31, 1996 and 1995...........................................F-5

Notes to Consolidated Financial Statements...........................F-6













                                                      

<PAGE>
















                         REPORT OF INDEPENDENT AUDITORS




To the Board of Directors and Stockholders
Las Vegas Entertainment Network, Inc.

We have  audited  the  consolidated  balance  sheets of Las Vegas  Entertainment
Network,  Inc. and Subsidiaries as of October 31, 1996 and 1995, and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
the two years then ended.  These financial  statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We  conducted  our  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
misstatements. 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  consolidated  financial  position  of  Las  Vegas
Entertainment Network, Inc. and Subsidiaries as of October 31, 1996 and 1995 and
the consolidated results of its operations,  stockholders' equity and cash flows
for the two years then ended, in conformity with generally  accepted  accounting
principles.




                            HOLLANDER, GILBERT & CO.



Los Angeles, California
January 26, 1997

                                       F-1

<PAGE>














             LAS VEGAS ENTERTAINMENT NETWORK, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                            OCTOBER 31, 1996 AND 1995


<TABLE>
<CAPTION>
<S>                                           <C>             <C>
                                                 1996            1995
                                              ------------    ------------

                                     ASSETS

 CURRENT ASSETS:                             
   CASH AND CASH EQUIVALENTS                  $ 10,385,292    $    789,338

                                              ------------    ------------
       TOTAL CURRENT ASSETS                     10,385,292         789,338

  HOTEL AND CASINO ASSETS, net of
       reserve - Note 2                               --        34,795,310

  NOTE RECEIVABLE, ITB - Note 3                  5,900,000

  INVESTMENTS & ADVANCES - Note 4                1,024,312         370,150

  NOTES RECEIVABLE, LAKE TROPICANA - Note 5        806,489         806,489

  PROGRAMING AND FILM COSTS,
    net of Amortization - Note 6                   180,000         805,061

   PROPERTY AND EQUIPMENT
      net of accumulated depreciation
      of $180,981 (1996) and $78,370 (1995)        171,397         260,421

  OTHER ASSETS                                      10,770          10,770
                                              ------------    ------------

                                              $ 18,478,260    $ 37,837,539
                                              ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

  CURRENT LIABILITIES:                       
    HOTEL AND CASINO LIABILITIES - Note 2      $       --     $ 14,094,895
    ACCOUNTS PAYABLE AND ACCRUED EXPENSES         144,650          638,632
    NOTES PAYABLE - Note 7                      1,056,444        3,612,968
    ACCRUED INTEREST PAYABLE                      102,346          312,833
    ACCRUED OFFICER'S SALARIES & BENEFITS -
     NOTE 9                                       645,622          701,739
    PATMORE DEPOSIT - Note 4                         --            327,150
                                             ------------      ------------
       TOTAL CURRENT LIABILITIES                1,949,062       19,688,217

  COMMITMENTS AND CONTINGENCIES - Note 10

  STOCKHOLDERS' EQUITY: - Note 8
    PREFERRED STOCK - SERIES A, AUTHORIZED
      30,000,000 SHARES,  ISSUED AND
      OUTSTANDING -  NONE
    COMMON STOCK - AUTHORIZED 50,000,000
     SHARES,  $.001 PAR VALUE; ISSUED AND
     OUTSTANDING  34,898,349 (1996) AND     
     28,506,816 (1995)                              34,895          28,503
    ADDITIONAL PAID-IN CAPITAL                  47,280,080      44,166,137
    DEFICIT                                    (30,785,777)    (26,045,318)
                                                ------------    ------------
      TOTAL STOCKHOLDERS' EQUITY                16,529,198      18,149,322
                                                ------------    ------------

                                              $ 18,478,260    $ 37,837,539
                                                ============    ============
</TABLE>

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

                                      F-2

<PAGE>


             LAS VEGAS ENTERTAINMENT NETWORK, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                      YEARS ENDED OCTOBER 31, 1996 AND 1995




<TABLE>
<CAPTION>
<S>                                                         <C>             <C>


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


 REVENUES                                          $    291,200    $    205,972

 COSTS AND EXPENSES
     Programming                                        805,061         722,500
     Selling                                                              9,585
     General & Administrative                         3,202,893       6,774,448
                                                   ------------    ------------
 TOTAL COSTS AND EXPENSES                             4,007,954       7,506,533

  LOSS BEFORE OTHER
        INCOME AND (CHARGES) AND PROVISION FOR
        DISPOSAL OF ASSETS HELD FOR SALE             (3,716,754)     (7,300,561)

 OTHER INCOME AND (CHARGES):
          Interest Income                               495,350         121,167
          Other Charges - Note 9                     (1,558,651)       (800,447)
          Interest and Finance Costs                   (537,081)       (681,585)
                                                   ------------    ------------
 TOTAL OTHER INCOME AND (CHARGES)                    (1,600,382)     (1,360,865)
                                                   ------------    ------------

 NET LOSS BEFORE PROVISION FOR DISPOSAL
     OF ASSETS HELD FOR SALE                         (5,317,136)     (8,661,426)

 GAIN ON (PROVISION FOR) DISPOSAL OF ASSETS HELD
    FOR SALE - Note 2                                   576,677      (9,000,000)
                                                   ------------    ------------

 NET LOSS                                          $ (4,740,459)   $(17,661,426)
                                                   ============    ============


 WEIGHTED AVERAGE NUMBER OF SHARES OF
 COMMON STOCK OUTSTANDING
                                                     33,238,660      21,468,037
                                                   ============    ============

 LOSS PER SHARE OF COMMON STOCK                    $      (0.14)   $      (0.82)
                                                   ============    ============



</TABLE>




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


                                       F-3
<PAGE>



             LAS VEGAS ENTERTAINMENT NETWORK, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                      YEARS ENDED OCTOBER 31, 1996 AND 1995






<TABLE>
<CAPTION>


                                 Common Stock
                                                         Additional
                                  Number                  Paid-in
                                 of Shares    Amount      Capital        Deficit     Total
                                 ---------    ------      -------        -------     -----
                        
<S>                                                     <C>             <C>             <C>           

BALANCE - November 1, 1994       18,887,600   $18,888    $ 36,872,417   $(8,383,892)   $28,507,413

Issuance of Common Stock for
 Services                         3,081,500     3,081       3,006,508                    3,009,589
Sales of Common Stock               592,858       593         399,409                      400,002
Conversion of Debt                5,944,858     5,941       3,887,803                    3,893,744    
 Ended October 31, 1995                                                 (17,661,426)  (17,661,426)
                               ------------ ---------    ------------   ------------  ------------
BALANCE - October 31, 1995       28,506,816    28,503      44,166,137   (26,045,318)   18,149,322

Issuance of Common Stock for
  Services                        2,752,588     2,753       1,366,382                   1,369,135
Sales of Common Stock             3,034,294     3,034       1,239,466                   1,242,500
Conversion of Debt                  604,651       605         251,895                     252,500
Issuance of Warrants                                          256,200                     256,200
Net Loss for the Year Ended 
 October 31, 1996                                                         (4,740,459)  (4,740,459)
                               ------------ ---------    ------------   ------------   ------------

BALANCE - October 31, 1996       34,898,349 $  34,895    $ 47,280,080   $(30,785,777) $16,529,198
                               ============ =========    ============   ============  ============
</TABLE>




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


                                      F-4

<PAGE>








             LAS VEGAS ENTERTAINMENT NETWORK, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                      YEARS ENDED OCTOBER 31, 1996 AND 1995


<TABLE>
<CAPTION>
<S>                                                   <C>             <C>
                                                        1996            1995
                                                    ------------    ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss                                           $ (4,740,459)   $(17,661,426)
(Gain) Loss on Assets Held for Sale                    (576,677)      9,000,000
Depreciation                                            102,611          40,000
Amortization of Program Inventory                       805,061         700,000
Adjustments to reconcile net loss to net
cash used in operating activities:
   (Increase) Decrease in;
     Program Inventory                                 (180,000)
     Other Assets                                                        77,975
    Increase (Decrease) in;
      Accounts Payable                                 (493,979)       (199,162)
      Accrued Officer's Salaries                        (56,117)        216,739
      Interest Payable                                 (200,489)        333,934
                                                   ------------    ------------
CASH USED IN OPERATING ACTIVITIES                    (5,340,049)     (7,491,940)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Investments & Advances                               (981,312)        (43,000)
  Issuance of Notes and Loans Receivable            (12,400,000)
  Collections on Notes and Loans Receivable           6,500,000
  Increase in El Rancho Capitalized Costs                            (3,599,858)
  Sale of Hotel and Casino Assets                    35,371,987
  Lark Landing                                                           72,850
  Proceeds from sale of Marketable securities                           151,952
  Loss on securities held for sale                                      533,048
  Acquisition of Property and  Equipment                (13,588)        (26,533)
                                                   ------------    ------------
CASH  PROVIDED BY (USED IN) INVESTING ACTIVITIES     28,477,087      (2,911,541)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of Notes Payable                             850,000       5,028,000
  Repayment of  Notes Payable                        (3,156,524)         (2,986)
  Issuances and Sales of Common Stock                 2,604,135       3,344,091
  Issuances of Warrants                                 256,200
  Decrease in Deferred Offering Costs                                   542,019
  Hotel and Casino Liabilities                      (14,094,895)      1,681,145
                                                   ------------    ------------
 CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES    (13,541,084)     10,592,269

INCREASE IN CASH                                      9,595,954         188,788

CASH BALANCE - BEGINNING                                789,338         600,550
                                                   ------------    ------------
CASH BALANCE - ENDING                              $ 10,385,292    $    789,338
                                                   ============    ============

NON-CASH TRANSACTIONS
Conversion of Notes Payable and Accrued           
 Interest to Equity                                $260,000      $3,959,244
Accrued Interest and Fees - El Rancho               695,832         413,750
Reclassification of Patmore Deposit                 327,100            
Reclassification of investment in Lake 
 Tropicana to Notes Receivable                                      403,244
Settlement of Accounts Receivable and 
 Payable - Investment                                               500,000

CASH PAID FOR
 Interest                                           $405,847        $434,601

</TABLE>


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


                                      F-6
<PAGE>

     
                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

     Background and Business and Basis of Presentation - Las Vegas Entertainment
     Network,  Inc.  ("The  Company") was  incorporated  in October 1990, and is
     engaged in acquiring,  developing and operating media and gaming facilities
     and  businesses.  In prior years,  the Company had been in the  development
     stage. The Company's primary project to date was the renovation,  expansion
     and  redevelopment  of the El Rancho Hotel & Casino (the "El Rancho" or the
     "Property"), which was acquired on November 24, 1993, and is located in Las
     Vegas,  Nevada.  On January 22,  1996,  the Company sold the El Rancho to a
     third party for $43,500,000 of cash, notes and assumption of debt, and will
     also  receive  a  continuing  interest  in the  adjusted  cash  flow  up to
     $160,000,000 from the Property once it has been developed by the new owners
     (see  Note 2).  In  connection  with the  sale,  the  Company's  Las  Vegas
     Communications Corporation subsidiary was granted the exclusive contract to
     provide  entertainment  at the Property  site, and  accordingly  will begin
     developing Las Vegas style  entertainment  shows once the Property site has
     been developed.

     The  Company is also  developing  media  related  opportunities,  including
     formulating  a business  plan to develop,  produce,  market and  distribute
     television and video programming.  The Company is also investigating  other
     potential  businesses for  acquisition in the  entertainment,  lodging,  or
     communications industry.

     Principles of Consolidation - The accompanying financial statements include
     the  accounts  of Las Vegas  Entertainment  Network  Inc.  (LVEN),  and its
     wholly-owned subsidiaries;  CountryLand Properties,  Inc. (CLND), Las Vegas
     Communications Corp. ("LVCC"), Las Vegas Development Corporation, Casino-Co
     Inc. and Pacific DNS,  Inc; and its majority  owned  subsidiary,  Satellite
     Networks Inc. (SNI). All significant intercompany transactions and balances
     have been eliminated.

     Programming  and film  costs-  Programming  and film costs  include all the
     acquisition,  production and exploitation costs incurred in the development
     of the Company's  television and video  programming,  and are stated at the
     lower of unamortized cost or estimated net realizable value. Such costs are
     amortized in the  proportion  that revenue  recognized  during the year for
     each program or film bears to estimated  total  revenue to be received from
     all  sources  in  accordance  with the  individual  film  forecast  method.
     Estimated total revenues and costs are reviewed on a periodic basis and are
     revised, if warranted,  based upon management's appraisal of current market
     conditions. When necessary,  unamortized program and film costs are written
     down to net realizable value based upon this assessment, where applicable.

     Property  and  Equipment  -  Property  and  equipment  are  stated at cost.
     Depreciation  is  provided  primarily  on a  straight  line  basis over the
     estimated useful lives of the related assets.

     Revenues - Revenues are recognized when earned,  and consist of fees earned
     under the Company's interim  entertainment  management  agreement (see Note
     2), and fees earned  from  renting  out the  parking  facilities  at the El
     Rancho Property site.

     Earnings  (Loss) Per Share - Earnings (loss) per common share is based upon
     the  weighted  average  number  of  common  and  common  equivalent  shares
     outstanding during the period.  For all periods presented,  all outstanding
     warrants,  options and other common stock  equivalents were  anti-dilutive,
     and accordingly, were not included in the per share calculation.

     Use of Estimates - The  preparation  of financial  statements in conformity
     with generally accepted  accounting  principles requires management to make
     estimates  and  assumptions   that  affect  certain  reported  amounts  and
     disclosures. Accordingly, actual results could differ from those estimates.

     Cash and  Cash  Equivalents  - The  Company  considers  all  highly  liquid
     investments  with a  maturity  date  of  three  months  or  less to be cash
     equivalents.

                                                        F-6

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     Concentrations  of  Credit  Risk  -  As  of  October  31,  1996,  financial
     instruments  which  potentially  subject the Company to  concentrations  of
     credit risk are cash and cash  equivalents,  which are mostly  comprised of
     over  night  repurchase  agreements  with  high  credit  quality  financial
     institutions. The amount of cash and cash equivalents on deposit in any one
     institution  that  exceeds  federally  insured  limits is subject to credit
     risk. At October 31, 1996,  the Company had  approximately  $10,000,000  on
     deposit in two institutions  that was subject to such risk. The Company has
     also made certain advances to unaffiliated  third parties where the company
     believes it has obtained sufficient underlying collateral.

     Accounting  for Stock Based  Compensation  - In October 1995, the Financial
     Accounting  Standards  Board (the "FASB") issued SFAS 123,  "Accounting for
     Stock Based  Compensation,"  which is effective for fiscal years  beginning
     after December 15, 1995.  Under SFAS 123,  companies can elect, but are not
     required,  to recognize  compensation expense for all stock-based awards to
     employees,  using a fair value methodology.  The Company will implement the
     disclosure only provisions of the fair value method for awards to employees
     in the fiscal year  beginning  November 1, 1996,  as permitted by SFAS 123.
     The Company will  continue to account for  stock-based  awards to employees
     under the intrinsic value method in accordance  with Accounting  Principles
     Board Opinion No. 25 "Accounting  for Stock Issued to Employees."  SFAS 123
     also  applies  to  transactions  in  which  an  entity  issues  its  equity
     instruments  to  acquire  goods  or  services  from  non-employees.   Those
     transactions  must  be  accounted  for  based  on  the  fair  value  of the
     consideration  received or the fair value of the equity instrument  issued,
     whichever is more reliably measurable.  Adoption on November 1, 1996 of the
     above is not expected to have a significant effect on the Company.

     Accounting  for  Impairment  of  Long-Lived  Assets - The  Company  adopted
     Financial  Accounting Standards ("SFAS") No. 121 "Accounting for Impairment
     of Long-Lived  Assets to be disposed of" on November 1, 1995.  SFAS No. 121
     established  accounting  standards that require that long-lived  assets and
     certain  identifiable  intangibles held and used by the Company be reviewed
     for impairment  whenever events or changes in  circumstances  indicate that
     the carrying value of such assets may not be recoverable.  Adoption of SFAS
     No.
     121 had no significant impact on the Company.

     Re-classifications  -  Certain  1995  amounts  have been  re-classified  to
     conform with 1996 presentation.


2.   HOTEL AND CASINO ASSETS AND LIABILITIES

     Hotel and Casino  Assets and  Liabilities  consist of the  following  as of
     October 31, 1995 and 1996;

<TABLE>
<CAPTION>
<S>                                   <C>                      <C> 
                                       1996           1995
                                       ----           ----

Hotel and Casino Assets;
Original Purchase Price (1,2)    $     --           $ 36,500,000
Other capitalized costs                --              3,847,450
Capitalized Interest                   --              3,447,860
                                   ---------        -------------                                      
                                                      43,795,310
Provision for loss on disposal         --             (9,000,000)
                                   ---------        -------------    
Total Hotel and Casino Assets    $     --           $ 34,795,310
                                   =========        ============= 

</TABLE>





                                                        F-7

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
<S>                                       <C>           <C>

                                         1996           1995
                                         ----           ----


     Hotel and Casino Liabilities:
     Mortgage Payable (2)              $     --     $13,350,000
     Accrued Interest                        --         413,751
     Assessment Payable (3)                  --         331,144
                                        --------    -----------
     Total Hotel and Casino 
      Liabilities                      $     --     $14,094,895
                                       =========    ===========

</TABLE>

     On January 22, 1996 the Company sold the assets and  liabilities  of the El
     Rancho  Hotel  and  Casino  to  Orion  Casino  Corporation   ("Orion"),   a
     wholly-owned   subsidiary  of  International   Thoroughbred  Breeders  Inc.
     ("ITB"),  for  consideration  of  $43,500,000.  The Company also received a
     continuing  interest  in the future  adjusted  cumulative  cash flow of the
     property  as  defined,  if any,  of up to  $160,000,000  (see Note 3).  The
     purchase  price was paid as follows:  $12,500,000  paid at closing in cash;
     (ii) an 8% unsecured  promissory note in the principal amount of $6,500,000
     which was paid in full on March 15, 1996;  (iii) an 8%  promissory  note in
     the principal  amount of $10,500,000  (see Note 3), and (iv)  assumption of
     existing mortgage  indebtedness and accrued interest of $14,000,000.  As of
     October 31,  1996,  the Company has  provided an  allowance  of  $4,600,000
     against the remaining note.

     The Company  previously  recorded an allowance of  $9,000,000 as of October
     31, 1995 to reflect  the net  realizable  value of the El Rancho  Hotel and
     Casino based on the January 22, 1996 sale.  This  allowance  was reduced by
     $576,677  during  the year ended  October  31,  1996 to reflect  the actual
     settlement  of all charges,  mostly  relating to the return of the escrowed
     interest described below.

     (1) On November  24,  1993,  the Company  acquired  the El Rancho Hotel and
     Casino,  a 1,006-room hotel with 90,000 square feet of casino and ancillary
     space and a 52-lane bowling alley,  which is located in Las Vegas,  Nevada,
     on the Las Vegas  Strip at 2755 Las Vegas  Boulevard  South.  The  purchase
     price for the El Rancho  was $36.5  million,  including  a cash  payment of
     $21.5  million,  issuance  of a  promissory  note in the face amount of $12
     million and the issuance of 2,300,000  shares of Company  common stock to a
     third party valued at $3 million.

     (2)  The El  Rancho  property  had  been  encumbered  by a  first  mortgage
     promissory note in the face amount of $12,000,000,  which was initially due
     November 24, 1994, and was secured by the real and personal property assets
     comprising  the El Rancho Hotel & Casino.  On January 22, 1996, the Company
     replaced  this loan with a one year,  13%,  $14,000,000  mortgage note (the
     "Refinance Obligation"),  secured by a first deed of trust on the El Rancho
     Property,  due SunAmerica Life Insurance Company. In connection  therewith,
     the Company issued to SunAmerica 1,912,588 shares of its Common Stock. This
     note was assumed by ITB as part of the El Rancho sale agreement. As part of
     the sale agreement, the Company agreed to co-guarantee the assumed note for
     a certain amount of time. The SunAmerica note was refinanced and retired by
     ITB on June 4, 1996, and in accordance  with the agreement,  500,000 shares
     of the Company's  Common Stock have been returned,  and the co-guarantee of
     the note by the Company has been  released.  In addition to the above,  the
     Company  initially  agreed  to be  responsible  for  one-half  (1/2) of the
     interest on the Refinance loan,  limited to its original stated maturity of
     one year at 13% interest per annum. Such funds,  aggregating $950,000, were
     escrowed  at  closing  of the sale of the El  Rancho.  Concurrent  with the
     refinancing of the SunAmerica loan by ITB on June 4, 1996, $339,000 of this
     escrow amount was paid to  SunAmerica,  and the  remaining  $611,000 of was
     returned to the Company.

     (3)  Assessments  payable  represent  amounts due the city of Las Vegas for
     general roadway  improvements  made during the year ended October 31, 1995.
     This assessment was assumed by ITB as part of the El Rancho sale.




                                                        F-8

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.   NOTE RECEIVABLE, ITB, AND CONTINUING INTEREST IN THE EL RANCHO PROPERTY

Note Receivable,  ITB,  represents an 8% promissory note in the principal amount
of $10,500,000 arising from the sale of the El Rancho (see Note 2), secured by a
subordinated  junior position in assets of the El Rancho Hotel and Casino (which
may be  further  subordinated  if  additional  borrowing  is  made  against  the
property),  and is due upon the  successful  raising of financing to develop the
Property  (see  "Development  Plans"  below),  or upon the ultimate  sale of the
Property.  As of October 31,  1996,  the Company has  provided an  allowance  of
$4,600,000 against this note.

Once the Property has been developed by ITB (see "Development  Plans" below), of
which there can be no assurance  will be  achieved,  the Company will receive as
additional  consideration  for entering into the sale agreement (but not as part
of the  Purchase  Price for the assets) a fifty  percent  (50%)  interest in the
adjusted cumulative cash flow (as defined) from the operation of the Property as
so developed  for a period of six (6) years  following the opening of the casino
on the Property and the commencement of operations, and thereafter a twenty-five
percent (25%) interest in adjusted cash flow from operations  until such time as
it has received an aggregate of $160,000,000, but only after ITB and the Company
first  receive 100% of the adjusted cash flow until all invested  amounts,  plus
$8,000,000,  have been  recouped,  plus any  other  additional  costs  incurred,
together with interest  thereon at the rate of eight percent (8%) per annum from
the closing date.

Additionally,  commencing  with the  development of the Property,  the Company's
LVCC subsidiary was granted an exclusive  contract to provide  entertainment  at
the Property site, subject to meeting certain profitability criteria. This would
include;  (i)  responsibility  for management and oversight of booking all acts,
performers,  entertainers,  movies,  virtual reality rides, and other non-gaming
attractions,  of any kind or nature at the property  site,  (ii)  arranging  all
advertising  for all of the  properties  needs,  and (iii),  managing  all other
entertainment  venues for ITB.  The term of the  agreement is for ten (10) years
commencing  on the date which is six (6) months prior to the opening date of the
property,  and  LVCC  shall  have the  option  to renew  the  agreement  for two
consecutive  five year terms.  The  agreement  provides LVCC with annual fees of
$800,000 subject to annual increases. LVCC will also receive an additional;  (i)
twenty- five percent (25%) of profits from  entertainment  activities,  (ii) ten
percent  (10%) of the cost of all  advertising  placed by ITB, and (iii) booking
fee equal to ten percent (10%) of gross compensation paid to talent.

Development Plans
On January 15, 1997 ITB announced that they had received a $100,000,000  funding
proposal,  the proceeds of which will be used, in part,  for the  renovation and
opening  of the  former El  Rancho  Hotel and  Casino  site as an  international
country music attraction called "CountryLand USA", a major destination hotel and
casino.  The proposed  funding is subject to the execution of a definitive  loan
agreement  between ITB and the  proposed  lender,  which the Company can give no
assurance  will be  made.  The  proceeds  of this  loan  are  anticipated  to be
sufficient  to  renovate  and reopen  the  Property  site,  as well as repay the
Company's remaining  outstanding note receivable.  ITB had previously  announced
that it  intended  to develop the El Rancho  property  under a "Starship  Orion"
multiple-casino  theme. It was estimated that the total cost of completion would
be approximately $1 Billion,  and that ITB intended to develop the property with
up to as  many  as six  partners.  ITB  had not  engaged  any  partners  for its
"Starship  Orion" theme  development,  and will now develop the property under a
more modest "CountryLand, USA" theme.

In accordance  with the initial sale  agreement,  if by October 25, 1996 (i) ITB
had not closed on or received  permanent  financing  and  obtained  the required
lease  commitments to develop the "Starship  Orion" , and (ii) has not closed or
received a firm commitment for the alternative financing, and if the Company has
arranged for the  refinancing  of the  refinance  loan and places into an escrow
account  amounts  sufficient to cover the  financing  and carrying  costs of the
refinance loan and the operating costs of the property for either a six month or
year period (the "option  period"),  LVEN may either (i) appoint and authorize a
reputable commercial real estate broker to sell the property at an amount, after
expenses,  in excess of the underlying mortgage and invested amounts of both ITB
and

                                                        F-9

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


LVEN, or (ii) arrange on behalf of ITB, in conformity with prevailing  financing
terms and  conditions  for major Las Vegas  hotel/casino  projects,  alternative
financing of not less than  $55,000,000.  On October 25, 1996, LVEN advised that
it was asserting its rights  afforded  during the Option Period by arranging the
prescribed  escrow  account.  On  October  28,  1996,  ITB  announced  that LVEN
forfeited  its  rights  with  respect to the  purchase  agreement  because  they
believed LVEN failed to satisfy certain contractual pre-conditions. LVEN advised
ITB that it contested  its  position.  On February 2, 1997,  the Company and ITB
settled their  disagreement.  As described above, and with the assistance of the
Company, ITB has announced its plans for the financing and development of the El
Rancho site as "CountryLand, USA" and had received a proposal of $100,000,000 of
financing which, if funded, will be used, in part, for such development.  If the
Property is not  developed,  or if the expected  funding is not  completed,  the
Company believes it still maintains the rights under the option period described
above. In connection  therewith,  the Company has engaged an investment  banking
firm to seek funding  necessary to provide the alternative  financing  described
above,  and also arranged with Mr. Nunzio DeSantis,  who was subsequently  named
the Chief  Operating  Officer of ITB, to provide a  $6,000,000  standby  funding
commitment for a portion of the replacement  financing on the El Rancho Property
site. In connection  therewith,  Mr. DeSantis was granted  1,500,000  options to
acquire  shares of the  Company's  Common  Stock at an exercise  price of $1 per
share, which expire in December 1999 (see Note 8).

If ITB,  with the  consent  of the  Company,  sells  the  Property  prior to the
commencement of casino operations or if the Property is sold through foreclosure
or other forced sale,  the proceeds of such sale shall be paid in the  following
order of priority:  (i) first, to pay in full all principal,  interest and costs
owing under the current $14,000,000 mortgage refinancing;  (ii) second, to repay
ITB for its investment in the property or any additions thereto in the amount of
all cash payments  comprising a part of the Purchase  price plus  $2,000,000 and
any and all reasonable  documented costs, expenses and any additional investment
in, or debt  incurred  in  furtherance  of the  development  of,  the  Property,
together with an accrued  return thereon in the amount of eight percent (8%) per
annum; (iii) third, to pay the Company the outstanding  balance of principal and
accrued  interest  owing  under the  remaining  note,  plus  $4,000,000  and any
documented costs, expenses and any additional investment in, or debt incurred in
furtherance of the development of, the Property, together with an accrued return
thereon in the amount of eight percent (8%) per annum from closing; (iv) fourth,
to pay ITB  $2,000,000  together with an accrued return thereon in the amount of
eight  percent  (8%) per annum  from  closing  and (v)  fifth,  any excess to be
divided  fifty  percent  (50%) to ITB and fifty  percent  (50%) to the  Company,
provided however,  that if the property is sold after January 25, 2001, in order
for the  Company to receive  its fifty  percent  (50%) share from and after such
date,  the  Company  must pay on an ongoing  basis  fifty  percent  (50%) of the
carrying costs of the property,  including  interest,  taxes,  maintenance,  and
insurance.


4.     INVESTMENT AND ADVANCES

     Investments  and advances  consist of the  following as of October 31, 1996
     and 1995;

 <TABLE>
<CAPTION>
<S>                                          <C>                  <C> 
                                              1996                 1995
                                             ------              ------

        (A)      Malbec, Inc.             $ 462,606            $  43,000
        (B)      Tee One Up, Inc            300,000
        (C)      Orion Inc.                 261,706
        (D)      Patmore Broadcasting            -               327,150
                                         ----------             -------- 
                                         $1,024,312             $370,150
                                         ==========             ========     


</TABLE>



                                                       F-10

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     (A) During 1996, the Company made advances of $912,606 to Malbec,  Inc., an
     unaffiliated  company,  for the purpose of developing and operating a hotel
     project in Miami Beach,  Florida.  The advances accrue interest at the rate
     of 8% per annum, are due July 31, 1997, and are secured by a first security
     interest  in a cash escrow  account  (which has a balance of $667,000 as of
     January  31,  1997).  The  Company has  re-evaluated  this  project and has
     decided  not to pursue  development  as it  believes it will not be able to
     obtain a  favorable  purchase  price,  and/or  resolve  certain  bankruptcy
     proceedings  involving the hotel  project.  The Company  expects the escrow
     account  to be  liquidated  with  the net  amounts,  after  payment  of all
     expenses,  to be  returned  to the  Company.  The  Company  has  provided a
     $450,000  allowance against this advance,  for a net investment of $462,606
     as of October 31, 1996.

     (B) On September 4, 1996, the Company loaned  $300,000 to Tee One Up, Inc.,
     an unaffiliated company developing  television footage of actual golf "hole
     in ones" at selected golf courses.  Principal and interest at a rate of 17%
     per annum are payable in monthly  installments  of $14,832 until  maturity,
     November 1, 1998. In connection with making this loan, the Company received
     a 3% equity  interest  in the common  shares of Tee One Up. The Company has
     given no value to this investment for financial  statement  purposes as Tee
     One Up Inc. currently has a shareholder's deficiency.

     (C) Advances to Orion Inc.  represent amounts currently due the Company for
     monthly   entertainment   and  property   management   fees,  and  for  the
     reimbursement  for  certain  operational  advances  made for the El  Rancho
     Property.

     (D) The Company  acquired an option to acquire  Patmore Radio  Broadcasting
     for $515,258 during the year ended October 31, 1993.  Notice of exercise of
     the option by LVEN was given in September 1993, with the closing originally
     scheduled  to occur by March 31,  1994.  Patmore  alleges that the purchase
     option expired in March 1994, and informed the Company they  considered the
     purchase option as terminated. The Company received $327,150 of unsolicited
     funds from  Patmore in 1994 in an effort by  Patmore  to  terminate  LVEN's
     right to purchase the radio station. Management reflected the $327,150 as a
     liability on the balance sheet at October 31, 1995. The Company  recorded a
     reserve of $188,108 against its investment resulting in a net investment of
     $327,150 at October 31, 1995.

     Management  became  aware that  Patmore  attempted  to sell the  Station to
     Compass  Communications  on  November  7, 1995,  and  obtained a  temporary
     restraining  order to block the sale of the station on February  23,  1996.
     However,  on March 6, 1996 the  restraining  order was dissolved,  allowing
     Patmore the ability to proceed with its sale.  As of October 31, 1996,  the
     Company has applied the $327,150  liability as an offset to its  investment
     in Patmore.  Management  still considers its purchase option as valid,  and
     continues to investigate and pursue various options.


5.     NOTES  RECEIVABLE - LAKE TROPICANA

     Notes  receivable - Lake  Tropicana  consist of the following as of October
     31, 1996 and 1995;

<TABLE>
<CAPTION>
<S>                                   <C>           <C> 
                                          1996          1995
                                         --------      ---------
        
     Lake Tropicana                     $3,736,000     $3,736,000
     Less allowances for valuation
      and imputed interest               2,929,511      2,929,511
                                        -----------    ----------

                                        $  806,489      $ 806,489
                                        ==========     ==========

</TABLE>


                                                       F-11

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



       On July 24, 1993,  the Company  acquired for $806,488 a 45% interest in a
       venture which owns a 184 unit apartment complex in Las Vegas, Nevada. The
       complex is being converted into vacation interval ownership  (time-share)
       project.  During 1994, the managing general partner of the joint venture,
       a subsidiary of MPTV, Inc.,  agreed to purchase one-half of the Company's
       interest  (22.5%) for  $1,868,643.  The  purchase  price was payable by a
       promissory note bearing interest at a rate of 8% per annum,  secured by a
       deed of trust on the property.  During 1994 the managing  general partner
       filed for bankruptcy protection,  and management recorded an allowance of
       $1,584,172 against the $1,987,417 receivable (principal of $1,868,643 and
       interest  receivable  of $118,774)  for a net  receivable  of $403,245 at
       October 31, 1994.

       During  1995,  the  project  emerged  from   bankruptcy   protection  and
       reorganized its debt with its creditors.  As part of the  reorganization,
       the Company  replaced its original  $1,868,000  principal note with a new
       note of the  same  amount  dated  March  22,  1995,  and sold to MPTV its
       remaining  22.5%  interest  in the  project  for an  additional  note  of
       $1,868,000.   Accordingly,  as  of  October  31,  1996  and  1995,  Notes
       Receivable - Lake  Tropicana  represent two (2) separate notes payable to
       the Company of $1,868,000  each.  The first note bears interest at a rate
       of 8% per annum, payable monthly, and is secured by a fifth position in a
       deed of trust.  The first  interest  payment  is due one month  after the
       borrower has  completed  certain  refinancing  currently in process.  The
       second note is unsecured and non-interest bearing. Principal payments for
       both  notes  will be at a rate of $205  ($410  for  both  notes)  as each
       time-share  interval  sold  until  August  1,  1998,  when any  remaining
       outstanding  principal is due in full. The notes contain a  cross-default
       provision so that a default under one note shall also be deemed a default
       on the other.  As of January 15, 1997, the joint venture had  reorganized
       its debt position, and with such financing,  anticipates it will have the
       funds  to  commence  development  and  sale  of  the  time  share  units.
       Concurrent  with  such   reorganization,   the  Company's   secured  note
       receivable moved up to a second position.


       6.                              PROGRAM AND FILM COSTS

     Program  and film costs  consist of the  following  as October 31, 1996 and
     1995;

<TABLE>
<CAPTION>
<S>                                 <C>                <C> 
                                      1996               1995
                                      ----               ----

       Released programs            $1,505,061          $1,505,061
       Less Amortization             1,505,061             700,000
                                    ----------          ----------                
                                             -             805,061
       In process and development      180,000                   -     
                                    ----------           ---------

       Total Program and Film Costs   $180,000            $805,061
                                     =========           =========
</TABLE>


       7.                                  NOTES  PAYABLE

       Notes payable consist of the following as of October 31, 1996 and 1995;
<TABLE>
<CAPTION>
<S>                                                     <C>      
                         <C>          <C>
                                             1996         1995
                                             ----         ----

       (A)   Convertible Bridge Loans   $1,050,249   $  778,000
       (B)   BP Group                         --      1,325,000
       (C)   UK Foods                         --      1,500,000
             Other                           6,195        9,968
                                        ----------   ----------   

             Total                      $1,056,444   $3,612,968
                                        ==========   ==========
</TABLE>

                                                       F-12

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     (A) Convertible  bridge loans consist of five (5) one-year unsecured notes.
     The notes,  which are currently due and payable,  accrue interest at a rate
     of 8% per annum until the  principal  and accrued  interest  are paid.  The
     notes and any accrued  interest are  convertible,  at the lender's  option,
     into shares of the Company's common stock at a price of $1.25 per share, or
     approximately 90% of the market price, whichever is less, at any time prior
     to the repayment by the Company.  Subsequent to October 31, 1996,  $275,000
     of these notes were repaid.

     (B) The BP Group note consisted of a $1,325,000,  8% unsecured bridge loan.
     The note and all  outstanding  interest  was repaid in full on February 20,
     1996.

     (C) The UK Foods note consisted of a $1,500,000,  8% unsecured bridge loan.
     The note and all outstanding interest was repaid on January 31, 1996.

     Consolidated  interest  expense  for the years  ended  October 31, 1996 and
     1995,  excluding  any interest  capitalized,  was  $205,352  and  $343,085,
     respectively.  Interest  expense of $2,548,351 was  capitalized  during the
     year ended October 31, 1995.


       8.   STOCKHOLDERS' EQUITY

       Description  of  securities  - The  Company's  authorized  capital  stock
       consists of  50,000,000  shares of Common  Stock,  at $.001 per share par
       value,  of which  34,898,349 and  28,506,816  shares of common stock were
       issued and outstanding as of October 31, 1996 and 1995, respectively. The
       Company has also authorized  30,000,000  shares of Preferred  Stock,  par
       value  $.001 per share,  none of which was  outstanding  during the years
       ended October 31, 1996 and 1995. The Board of Directors of the Company is
       authorized to determine the number and  designation of one or more series
       of  Preferred   Stock  and  the  voting  powers,   rights,   preferences,
       qualifications,  limitations or  restrictions  and the shares of any such
       series.

       Issuances of common stock - The Company has made the following  issuances
       of common stock during the years ended October 31, 1996 and 1995;

      Shares Issued for Services - The Company  issued  2,752,588  shares of its
       Common Stock for services provided and to settle accounts payable during
       the year ended October 31, 1996 (during the first and second  quarters of
       fiscal  1996) and  3,081,500  shares  of its  Common  Stock for  services
       provided and to settle accounts payable during the year ended October 31,
       and  1995.  The  shares  were  valued  at  $1,369,135   and   $3,009,589,
       respectively,  for the years ended October 31, 1996 and 1995.  The shares
       were issued at prices ranging from $.40 to $.63 per share during 1996 and
       from $.70 to $1.50  per  share in 1995.  The  shares  were  valued at the
       average bid market  price for the shares 10 days prior to issuance or the
       estimated  selling  price.  Since  inception,   the  Company  has  issued
       5,230,885  shares  valued at  $5,860,677 at an average price ranging from
       $.40 to $5.63 per share.

     Included in the 1996  issuance of the  Company's  common  shares  described
     above were 1,412,588 shares of common stock issued to SunAmerica  Insurance
     Company in  connection  with  arranging the financing of the sale of the El
     Rancho Hotel and Casino  described in Note 2. The Company  initially issued
     1,912,588  shares to Sun America,  however in accordance with the refinance
     agreement,  500,000 of these  common  shares  were  returned to the Company
     during 1996 as the buyer subsequently prepaid this obligation.



                                                     F-13

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      Sales of Common  Stock - The Company sold  3,034,294  shares of its Common
       Stock  during  the year  ended  October  31,  1996 (all  during the first
       quarter ) and 592,858  shares of its Common  Stock  during the year ended
       October 31, 1995, respectively, in a series of private placements made to
       non-U.S. (foreign) purchasers, under the exemption of Regulation S of the
       Securities Act of 1933.  The Company  received net proceeds of $1,242,500
       in 1996 and $400,002 in 1995 from these sales. The sales prices per share
       ranged  from  $.50 to $.55 per  share in 1996,  and from $.60 to $.80 per
       share in 1995.

     Shares issued in lieu of Notes  Payable and Accrued  Interest - The Company
     issued  604,651  and  5,944,858  shares of its common  stock to  extinguish
     $252,500 and $3,893,744 of outstanding  notes payable and accrued  interest
     during the years ended October 31, 1996 and 1995, respectively.

       Outstanding  Warrants - The Company has issued and outstanding  1,600,385
       Class A warrants  and  1,263,115  Class B warrants as of October 31, 1996
       and 1995.  The holder of each Class A Warrant is entitled to purchase one
       share of  Common  Stock of the  Company  and one  Class B  Warrant  at an
       exercise  price of $4.00.  The holder of each Class B Warrant is entitled
       to purchase one share of Common Stock at an exercise price of $6.60.  The
       exercise dates of both the Class A and Class B warrants,  which initially
       were to February 20, 1997, have been extended until June 1, 1997.

       The Class A Warrants are subject to redemption commencing on February 20,
       1996,  on not  less  than  thirty  days'  notice,  at a price of $.05 per
       Warrant,  at any time after the average closing price of the Common Stock
       shall have exceeded  $4.00 per share with respect to the Class A Warrants
       and $6.60 per  share  with  respect  to the Class B  Warrants  for any 30
       consecutive  business days ending within 15 days of the date on which the
       notice of redemption is given. Holders of the Warrants will automatically
       forfeit their rights to purchase the shares of Common Stock issuable upon
       exercise of such Warrants  unless the Warrants are exercised  before they
       are  redeemed.  All of the  outstanding  Warrants of a class,  except for
       those  underlying  the Unit Purchase  Option,  must be redeemed if any of
       that  class  are  redeemed.  The  Company  shall  not be able to call the
       Warrants unless a registration statement covering the securities issuable
       upon  exercise of the Warrants is, and remains,  current  throughout  the
       period fixed for redemption.

       On January 22, 1996,  in connection  with  arranging the financing of the
       sale of the El Rancho  Hotel and Casino  described in Note 2, the Company
       issued warrants valued at $256,200,  based on the current market price at
       the date of the grant, to a third party to purchase 600,000 shares of its
       Common Stock at $.10 per share.

       Stock Options- Outstanding stock options consist of the following;

         Chairman of the Board - On March 1, 1995, Mr. Joseph Corazzi,  Chairman
       of the Board, was granted  4,000,000  options to purchase Common Stock of
       CountryLand  Properties Inc., which is transferable to any new subsidiary
       formed to operate the gaming assets of the Company,  including Casino-Co.
       The 4,000,000 CountryLand Properties Inc. warrants are fully transferable
       and  convertible  into options to purchase LVEN Common Stock at $1.00 per
       share.  These shares are not issuable in connection with the Stock Option
       Plan described below.

         Other - Subsequent to October 31, 1996,  Mr. Nunzio  DeSantis,  now the
       Chief Operating  Officer of ITB, was granted 1,500,000 options to acquire
       shares  of the  Company's  Common  Stock at an  exercise  price of $1 per
       share,  which expire in December 1999. The options were issued as part of
       the consideration for providing a $6,000,000  standby funding  commitment
       for  replacement  financing on the El Rancho  Property Site (See Note 2).
       These  shares are not issuable in  connection  with the Stock Option Plan
       described below.


                                                     F-14

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Stock  Option  Plan - The Company  adopted a Stock  Option Plan in July
       1994.  The Stock  Option Plan  enables the Company to offer an  incentive
       based  compensation  system  to  key  employees,   officers,   directors,
       consultants  and to  employees  of  companies  who do  business  with the
       Company.  A total of 1,000,000 shares are reserved for issuance under the
       Stock Option Plan,  of which  190,000  shares are issuable  under options
       which have been granted to  employees,  and 730,000  shares under options
       granted to officers and directors, all with an exercise price of $. 71 to
       $1.50 per share.  The Company may increase the number of shares  reserved
       for  issuance  under the Stock  Option  Plan or may make  other  material
       modifications  to the Stock  Option Plan  without  stockholder  approval.
       However,  no amendment  may change the  existing  rights of any option or
       award holder. The following table summarizes option transactions  through
       October 31, 1996;
<TABLE>
<CAPTION>
<S>                             <C>           <C>

                                Number of     Price Per
                                 Shares        Share
                                 ------        -----

       November 1, 1994            --             --
         Granted                880,000       $   1.00
                               --------       --------

       October 31, 1995         880,000       $   1.00
        Canceled               (100,000)      $   1.00
        Granted                  40,000       $   0.71
                               --------      ---------
       October 31, 1996         820,000    $0.71 - $1.00
                               =========    =============
</TABLE>

       9.         OTHER CHARGES

       Included in other charges for the year ended October 31, 1996 is $625,000
       which represents cash and the value of 800,000  restricted  shares of the
       Company's  Common  Stock and 167,000  shares of Common Stock of Satellite
       Networks  Inc.  paid in  connection  with  settling  claims  arising from
       arranging certain financing in connection with the initial acquisition of
       the El Rancho  Property  site;  an  allowance  of  $450,000  relating  to
       advances made to Malbec, Inc., an unaffiliated third party, in connection
       with the  development of certain hotel  properties in Miami Beach,  Fla.;
       $295,000  related to an adjustment to reflect the value of certain shares
       of common stock previously issued for services; and $150,000 to settle an
       outstanding loan and stock purchase agreement.

       Included in other charges for the year ended October 31, 1995 is $500,000
       allowance  for  reduction to market  value of 4,000,000  shares of common
       stock of Sky Scientific Inc; $33,000 loss on the sale of 25,000 shares of
       American  Network  Group,  Inc.  common stock ; $72,850 for an additional
       allowance against the Company's investment in Patmore Radio Broadcasting;
       $107,000  additional  allowance against existing note  receivables,  and;
       $70,000 loss relating to investments no longer pursued.


       10.        COMMITMENTS AND CONTINGENCIES

       Leases - The Company leases on a  month-to-month  basis 7,000 square feet
       in Los Angeles, California for $8,500 per month. The Company also leases,
       on a  month-to-month  basis,  certain  other  facilities  at an aggregate
       rental of $4,500 per month. Consolidated rent expense for the years ended
       October 31, 1996 and 1995 was $257,590 and $205,434 respectively.

       Employment  Agreements  - On  March 1,  1995,  the  Company  and its LVCC
       subsidiary entered into two (2) separate five-year employment  agreements
       with Joseph  Corazzi,  the  Chairman of the Board of the  Company,  which
       provide for an annual aggregate salary of $550,000. The agreements may be
       renewed by mutual  agreement of the parties for  successive  terms of one
       year. The employment agreements are subject to annual

                                                       F-15

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       increases and bonuses at the  discretion  of the Board of Directors.  The
       agreements  also  entitle  Mr.  Corazzi to  participate  in any  employee
       benefit  plans  which may be offered in the  future,  such as group life,
       health,  hospitalization  and  life  insurance,  and  prohibits  him from
       engaging in a business  competitive  with the Company  during the term of
       the agreement.  Under the agreements, Mr. Corazzi's employment terminates
       upon  death  or  disability  and may be  terminated  by the  Company  for
       "cause,"  which is defined  as the  willful  failure  to perform  duties,
       malfeasance,  commission of a felony, gross negligence,  or breach of the
       employee's  covenant  not to compete  or  maintain  confidential  certain
       information. Termination by the Company for any other reason entitles the
       employee to receive his salary for the remaining term of the agreements.

       The employment agreements also provide for the following;  (i) a lump sum
       payment of $2,000,000 upon the consummation of a definitive  agreement by
       the Company and  potential  purchaser  providing for a change of control,
       (ii), an annual retirement benefit starting with the calendar month after
       his  retirement  or  termination,  equal to fifty  percent of his average
       annual  LVEN  salary and bonus  received  in the  twenty-four  (24) month
       period prior to his termination  (plan becomes effective once Mr. Corazzi
       has  been  employed  10  years,   including  any  time  pre-dating  these
       agreements),  and (iii) an annual  lump sum cash  payment  equal to 5% of
       earnings before income taxes,  depreciation  and amortization of the LVCC
       subsidiary.

       The Company paid and reimbursed Mr. Corazzi  $730,177 and $283,360 during
       the years ended October 31, 1996 and 1995,  respectively  for amounts due
       him since  inception  through  October 31, 1996.  Amounts due Mr. Corazzi
       amounting to $431,739  and  $586,739  have been accrued as of October 31,
       1996 and 1995,  respectively.  The Company has also accrued  $239,000 and
       $115,000 for amounts due Mr. Corazzi under the  retirement  plan which is
       included in accrued  officers  salary and benefits as of October 31, 1996
       and 1995.

       Legal -On October 18, 1996, an unaffiliated third party filed a complaint
       against the company in California  Superior Court, County of Los Angeles,
       seeking  damages of  $1,800,000,  plus  interest and attorney  fees,  for
       breach of contract,  breach of implied contract,  and certain damages the
       individual  claims are due him under terms of a 1992 retainer  agreement.
       The Company  believes that the individual  failed to competently  perform
       all of his duties under the  agreement,  that there are no funds due, and
       that the case is without merit.  Management  intends to vigorously defend
       the lawsuit.  Additionally,  the Company has commenced action against the
       owners of Patmore  Broadcasting  relating to an option to acquire a radio
       station in Las Vegas,  and intends to  aggressively  pursue the Company's
       position that it still has a valid option to purchase the radio station.

       The Company is not involved in, or a party to, any other  material  legal
       proceedings  at  this  time.  At  various  times,  the  Company  and  its
       subsidiaries  are involved in various  matters of  litigation,  including
       matters  involving  settlement  of fees  and  outstanding  invoices,  and
       consider these legal  proceedings  not to be material and in the ordinary
       course of business.

       Other - In connection  with its investment in Electronic  Media Corp made
       subsequent to year end (See Note 12), the Company  agreed to guarantee up
       to $1,500,000 of equipment  financing,  and is also committed to issue up
       to 5,500,00  shares of the Company's  stock based on certain  performance
       levels.


       11.        INCOME TAXES

       The  Company  has  available  unused  operating  loss   carryforwards  of
       approximately  $18,900,000  at October 31, 1996 which may be used against
       future  taxable  income.  Certain  amounts  of  the  net  operating  loss
       carryforward  may be  limited  due to  changes  in  the  Company's  stock
       ownership.  The  operating  loss carry  forwards  will  expire in various
       amounts  through the years through 2011.  Generally  Accepted  Accounting
       Principles  require  the  establishment  of a deferred  tax asset for all
       deductible  temporary  differences and operating loss carryforwards.  The
       Company has not provided for any deferred tax asset due to the

                                                       F-16

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       doubtfulness of realization due to the uncertainty  that the Company will
       generate  income in the future  sufficient to fully or partially  utilize
       these  carryforwards,  and  because  of  the  more  than  50%  change  in
       ownership.


       12.        SUBSEQUENT EVENTS

       Note  Receivable  -  On  January  15,  1997,  the  Company,  through  its
       wholly-owned  Nevada subsidiary Casino- Co, made a 90-day secured loan of
       $2,900,000  to NPD,  Inc,  ("NPD"),  in order to enable  NPD to close the
       acquisition  from Robert Brennan (" the Seller") of 2,904,016 shares (the
       "Shares") of the common  stock of  International  Thoroughbred  Breeders,
       Inc. ("ITB"),  representing  twenty-five percent (25%) of the outstanding
       stock of ITB. At the closing of such purchase and sale, the  shareholders
       of NPD, Nunzio  DeSantis and Anthony  Coelho,  became the Chairman of the
       Board and Chief Executive Officer,  respectively, of ITB. The sale of the
       Shares was instrumental to the Company,  as it will allow ITB to (i) meet
       the  requirements of a $100 Million funding  proposal that would be used,
       in part,  for the  renovation  and opening by ITB of ITB's  21-acre Strip
       property in Las Vegas,  Nevada,  formerly  know as the El Ranch Hotel and
       Casino,  in which the Company has a continuing  cash flow  interest,  and
       (ii)  meet the  requirements  of The New  Jersey  Racing  Commission  and
       Division of Gaming  Enforcement for continued  racing  licencing at ITB's
       New Jersey  facilities.  The Company believes that the sale of the Shares
       will also facilitate ITB's application for Nevada Gaming Licencing.

       The loan to NPD is  evidenced  by a 10%  Secured  Promissory  Note due on
       April 15,  1997 (the "NPD  Note").  The NPD Note is secured by a security
       interest in and to certain rights of NPD in and to the Shares, subject to
       a  purchase  money  lien in favor of the  Seller  for the  balance of the
       purchase  price  owing to him in  respect of the sale of the  Shares.  In
       addition,  1,452,088  of the Shares are subject to an  existing  purchase
       option in favor of a third  party,  and  would  likely  cease to  provide
       collateral to the Company upon the exercise of such option.  The NPD Note
       is personally guaranteed by Mr. DeSantis.

       As  consideration  for Casino-Co  making the $2,910,000 loan, NPD granted
       Casino-Co an option to acquire, at an exercise price of $4 per share, the
       Shares,  of which  1,452,088  shares are subject to an existing  purchase
       option in favor of a third party. Exercise of the option must be approved
       by the Seller,  as well and the United States  Bankruptcy  Court,  before
       which certain proceedings involving the Seller are pending.

       Upon a default  by NPD under its  payment  obligations  to the  Seller in
       respect of the balance of the purchase  price for the Shares,  the Seller
       would  be free to  exercise  certain  creditor's  rights  under a  Pledge
       Agreement  between  the Seller  and ITB in  respect  of the  Shares  (the
       "Pledge Agreement").  Such actions could have the effect of modifying the
       Company's  security  interest in such  collateral,  which at all times is
       subordinated  to and secondary to the rights of the Seller.  In the event
       that the Seller  elects to foreclose  on the Shares,  the Company will be
       obligated to execute all documents requested by the Seller to reflect the
       discharge of the Company's  security interest therein.  In the event of a
       sale  by the  Seller  after  a  default,  the  Company's  right  in  such
       circumstance  shall be limited to the right to receive any proceeds  from
       such sale over and above the  amounts  due the  Seller  under the  Pledge
       Agreement.  Upon  satisfaction of NPD's purchase money  obligation to the
       Seller  during the term of the NPD Note,  the  Company  would then have a
       first priority security interest in the Shares.

       Investment in Electric Media Co. - The Company  entered into an agreement
       on January 31, 1997 whereby it acquired a 5% equity  interest in Electric
       Media  Co.  Inc.  (EMC)  and a  continuing  royalty  in  certain  of  its
       operations,  for $400,000 plus the contingent issuance of up to 5,500,000
       shares of LVEN common stock as described  below.  EMC, along with a joint
       venture  partner/developer,  is developing technology that if successful,
       of which the Company can give no assurance, will allow delivery of media,
       Internet and telecommunication  services to customers all over the world,
       utilizing existing power utility infrastructures.

                                                       F-17

<PAGE>


                      LAS VEGAS ENTERTAINMENT NETWORK INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       Field  testing  of  this  technology  will  occur  during  1997,  and  in
       connection therewith, the Company has agreed to provide a guarantee up to
       $1,500,000 for the financing of certain equipment necessary for the field
       tests.  The equipment is  returnable  to the vendor,  without cost to the
       Company,  should the test not be  satisfactory.  Upon a successful  field
       test of this  technology,  the Company is  committed  to deliver  500,000
       restricted   shares  of  its  common  stock  to  the  developer  of  this
       technology.

       If the field tests are successful,  EMC will begin worldwide marketing of
       this  technology,  including  the sale and  distribution  of  addressable
       receiver boxes that are necessary to receive the data communication. LVEN
       will receive, in perpetuity, a $25 per unit royalty for each receiver box
       sold, if any. Each time the sale of these units generates  $10,000,000 of
       net  after tax  profits,  the  Company  will  deliver  the  developer  an
       additional 500,000 restricted shares of the Company's common stock, up to
       a maximum of 5,000,000  restricted  shares. The Company may terminate the
       agreement at its sole discretion, and have no further liability to EMC or
       the developer.

       Other - Subsequent  to October 31, 1996,  Mr.  Nunzio  DeSantis,  who was
       subsequently  named the  Chief  Operating  Officer  of ITB,  was  granted
       1,500,000  options to acquire shares of the Company's  Common Stock at an
       exercise price of $1 per share,  which expire in December 1999 as part of
       consideration for providing a $6,000,000  standby funding commitment (See
       Note 8).


                                                       F-18

<PAGE>