UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[ X ]    QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934

                      For the Quarter Ended March 31, 1999
                                       OR

[    ]   TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15 ( d ) OF THE SECURITIES
         EXCHANGE ACT OF 1934

            For the transition period from __________ to ___________.

                         Commission File Number: 0-27256

                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
        (Exact name of small business issuer as specified in its charter)

                 DELAWARE                                65-0512785
      (State or other jurisdiction of    (I.R.S. Employer Identification number)
      incorporation or organization)

        200 East Palmetto Park Road, Suite 200, Boca Raton, Florida 33432
                    (Address of principal executive offices)

Registrant's telephone no., including area code:   (561) 393-6685

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

YES         [ X  ]      NO   [    ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

            CLASS                           OUTSTANDING AS OF MAY 14, 1999
      -----------------------------         ------------------------------
      Common Stock, $.001 par value                   13,134,331


<PAGE>
                                TABLE OF CONTENTS


Heading                                                                    Page


                         PART 1. - FINANCIAL INFORMATION

Item 1.     Financial Statements .......................................    2

            Consolidated Balance Sheet - March 31, 1999 (Unaudited).....  3-4

            Consolidated Statement of  Income and Comprehensive
            Income (Unaudited) .........................................  5-6

            Consolidated Statement of Cash Flows - Three Months ended
            March 31, 1999 (Unaudited)   ...............................  7-8

            Notes to Consolidated Financial Statements (Unaudited) .....  9-11

Item 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations .................................. 12-13


                          PART II. - OTHER INFORMATION

Item 1.     Legal Proceedings...........................................    14

Item 2.     Changes In Securities.......................................    14

Item 3.     Defaults Upon Senior Securities.............................    14

Item 4.     Submission of Matters to a Vote of Securities Holders ......    14

Item 5.     Other Information ..........................................    14

Item 6.     Exhibits and Reports on Form 8-K............................    14

            Signatures .................................................    15


<PAGE>
                                     PART 1


Item 1.  Financial Statements

         The following unaudited Financial Statements for the period ended March
         31, 1999, have been prepared by Atlantic  International  Entertainment,
         Ltd. (the "Company") and Subsidiaries.



           ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES

                              Financial Statements

                                 March 31, 1999









                                       2

<PAGE>
          ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)
                              AS OF MARCH 31, 1999
<TABLE>
<CAPTION>


ASSETS:
CURRENT ASSETS:
<S>                                                                     <C>       
   Cash and Cash Equivalents                                            $    9,102
   Investments                                                           3,374,927
   Accounts Receivable [Net of Allowance for Doubtful Accounts $4,600]      17,486
   Notes Receivable                                                        927,403
   Deferred Tax Asset                                                      154,212
   Prepaid Expenses                                                         35,634
   Due from Related Parties                                                 56,068
   Other Current Assets                                                     25,700
                                                                        ----------

   TOTAL CURRENT ASSETS                                                  4,600,532
                                                                        ----------

PROPERTY AND EQUIPMENT - NET                                               395,463
                                                                        ----------

EQUIPMENT UNDER CAPITALIZED LEASE - NET                                     91,468
                                                                        ----------

SOFTWARE [NET OF ACCUMULATED AMORTIZATION OF $916,627]                   1,728,963
                                                                        ----------

OTHER ASSETS:
   Other Assets                                                            111,526
   Notes Receivable                                                      2,417,968
   Investments                                                             291,691
                                                                        ----------

   TOTAL OTHER ASSETS                                                    2,821,185
                                                                        ----------
   TOTAL ASSETS                                                         $9,637,611
                                                                        ==========
</TABLE>


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


                                       3

<PAGE>
           ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)
                              AS OF MARCH 31, 1999



LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
   Accounts Payable and Accrued Expenses                         $    833,857
   Notes Payable - Officers                                            20,000
   Current Portion of Capital Lease Obligations                        29,816
                                                                 ------------

   TOTAL CURRENT LIABILITIES                                          883,673

CAPITAL LEASE OBLIGATIONS                                              71,929
                                                                 ------------

   TOTAL LIABILITIES                                                  955,602
                                                                 ------------

STOCKHOLDERS' EQUITY:
   Convertible Preferred Stock - Par Value $.001 Per Share;
      Authorized 10,000,000 Shares, Issued and Outstanding,
      2,260 shares [Liquidation Preference $226,000]                        2

   Common Stock - Par Value $.001 Per Share;
      Authorized 100,000,000 Shares, Issued - 12,806,762 Shares        12,806

   Additional Paid-in Capital                                      12,054,008

   Treasury Stock, 533,175 Common Shares - At Cost                 (1,244,740)
   Accumulated Comprehensive Gain                                     648,385
   Accumulated [Deficit]                                             (943,452)

   Deferred Acquisition Costs                                        (400,000)
                                                                 ------------

   Total                                                           10,127,009
   Less:  Subscriptions Receivable                                 (1,445,000)
                                                                 ------------

   TOTAL STOCKHOLDERS' EQUITY                                       8,682,009
                                                                 ------------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $  9,637,611
                                                                 ============


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



                                       4

<PAGE>
           ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                              THREE MONTHS ENDED
                                                                                   MARCH 31,
                                                                           1 9 9 9       1 9 9 8
                                                                           -------       -------

<S>                                                                      <C>           <C>        
REVENUE                                                                  $    29,000   $ 1,030,540

COST OF SALES                                                                268,848       183,379
                                                                         -----------   -----------

GROSS [LOSS] PROFIT                                                         (239,848)      847,161
                                                                         -----------   -----------

OPERATING EXPENSES:
   Research and Development                                                   58,513          --
   General and Administrative                                              1,103,874       357,747
   Provision for Doubtful Accounts and Notes                                 325,335        99,153
   Depreciation and Amortization                                              31,439        57,170
                                                                         -----------   -----------

   TOTAL OPERATING EXPENSES                                                1,519,161       514,070
                                                                         -----------   -----------

   [LOSS] INCOME FROM OPERATIONS                                          (1,759,009)      333,091
                                                                         -----------   -----------

OTHER [EXPENSES] INCOME:
   Interest Income                                                             8,110         3,371
   Interest Expense                                                          (16,129)       (6,758)
   Interest Expense - Related Party                                             --          (3,508)
   Other Income [Expense]                                                  1,423,443          --
                                                                         -----------   -----------

   OTHER [EXPENSES] INCOME - NET                                           1,415,424        (6,895)
                                                                         -----------   -----------

[LOSS] INCOME FROM CONTINUING OPERATIONS BEFORE
   INCOME TAX [BENEFIT] EXPENSE                                             (343,585)      326,196

INCOME TAX [BENEFIT] EXPENSE                                                (123,691)      (27,412)
                                                                         -----------   -----------

   [LOSS] INCOME FROM CONTINUING OPERATIONS                                 (219,894)      298,784

DISCONTINUED OPERATIONS:
    [Loss] from Operations of Discontinued Business
      Segment [Net of Income Tax [Benefit] of ($30,521) and $(0),
      for the three months ended March 31, 1999 and 1998, Respectively]      (54,261)      (20,097)
                                                                         -----------   -----------

   NET [LOSS] INCOME                                                        (274,155)      278,687

COMPREHENSIVE GAIN:
   Unrealized Holding Gain arising during period                             744,243          --
                                                                         -----------   -----------

   TOTAL COMPREHENSIVE INCOME                                            $   470,088   $   278,687
                                                                         ===========   ===========
</TABLE>


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



                                       5

<PAGE>
           ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                         THREE MONTHS ENDED
                                                                              MARCH 31,
                                                                      1 9 9 9          1 9 9 8
                                                                      -------          -------

<S>                                                               <C>            <C>         
Net [Loss] Income                                                 $   (274,155)  $    278,687
         Preferred Stock Dividend in Arrears                            12,500           --
                                                                  ------------   ------------

   NET [LOSS] INCOME AVAILABLE TO COMMON STOCKHOLDERS             $   (286,655)  $    278,687
                                                                  ============   ============

[LOSS] INCOME PER COMMON SHARE:
   Continuing Operations                                          $      (0.02)  $       0.03
                                                                  ------------   ------------

   BASIC AND DILUTED NET [LOSS] INCOME PER SHARE OF COMMON STOCK  $      (0.02)  $       0.03
                                                                  ============   ============

   WEIGHED AVERAGE SHARES OF COMMON STOCK OUTSTANDING               12,559,208      9,590,184
                                                                  ============   ============
</TABLE>



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


                                       6
<PAGE>
                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                      THREE MONTHS ENDED
                                                                          MARCH 31,
                                                                   1 9 9 9        1 9 9 8
                                                                   -------        -------

OPERATING ACTIVITIES:
<S>                                                             <C>           <C>        
   [Loss] Income from Continuing Operations                     $  (219,894)  $   298,784
   Adjustments to Reconcile Net [Loss] Income to
      Net Cash [Used for] Operating Activities:
      Depreciation and Amortization                                 251,387       126,437
      Deferred Tax Asset                                           (154,212)         --
      Provision for Doubtful Accounts                               325,335        99,153
      Loss on Sale of Assets                                          3,100          --
      Realized Loss on Carrying Value of Investments                    324          --
      Gain on Sale of Subsidiary                                 (1,256,473)         --

   Changes in Assets and Liabilities:
      [Increase] Decrease in:
         Accounts Receivable                                          1,914        (7,871)
         Prepaid Expenses                                           (24,377)         --
         Notes Receivable                                            84,975      (731,359)
         Other Assets                                                76,815       (16,354)

      Increase [Decrease] in:
         Accounts Payable and Accrued Expenses                     (241,124)      (88,189)
         Income Taxes Payable                                          --          30,628
         Other Current Liabilities                                     --          28,583
         Due to Customer                                               --          54,279
                                                                -----------   -----------

      NET CASH - CONTINUING OPERATIONS                           (1,152,230)     (205,909)
                                                                -----------   -----------

DISCONTINUED OPERATIONS:
   [Loss] from Discontinued Operations                              (54,261)      (20,097)
   Adjustments to Reconcile Net [Loss] to Net Cash Operations:
      Depreciation and Amortization                                  38,220        10,315
      Provision for Doubtful Accounts                                18,915         1,423
      Changes in Net Assets and Liabilities                         260,011       (37,121)
                                                                -----------   -----------

   NET CASH - DISCONTINUED OPERATIONS                               262,885       (45,480)
                                                                -----------   -----------

   NET CASH - OPERATING ACTIVITIES - FORWARD                       (889,345)     (251,389)
                                                                -----------   -----------

INVESTING ACTIVITIES - CONTINUING OPERATIONS:
   Increase in Due from Related Parties                                (828)         (747)
   Purchase of Investments                                         (187,664)         --
   Purchase of Property, Equipment, and Capitalized Software        (42,212)     (127,115)
   Sale of Investments                                            2,566,858          --
                                                                -----------   -----------

   NET CASH - INVESTING ACTIVITIES - CONTINUING OPERATIONS -
      FORWARD                                                   $ 2,336,154   $  (127,862)
</TABLE>

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



                                       7
<PAGE>
                  ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)





<TABLE>
<CAPTION>

                                                                           THREE MONTHS ENDED
                                                                               MARCH 31,
                                                                               ---------
                                                                           1 9 9 9      1 9 9 8
                                                                           -------      -------

<S>                                                                    <C>           <C>         
   NET CASH - OPERATING ACTIVITIES - FORWARDED                         $  (889,345)  $  (251,389)
                                                                       -----------   -----------

   NET CASH - INVESTING ACTIVITIES - CONTINUING OPERATIONS -
      FORWARDED                                                          2,336,154      (127,862)
                                                                       -----------   -----------

INVESTING ACTIVITIES - DISCONTINUED OPERATIONS:
   Purchase of Property and Equipment                                      (29,715)       (8,754)
   Disposition Gain on Sale of Discontinued Operations                        --            --
                                                                       -----------   -----------

   NET CASH INVESTING ACTIVITIES - DISCONTINUED OPERATIONS                 (29,715)       (8,754)
                                                                       -----------   -----------

FINANCING ACTIVITIES - CONTINUING OPERATIONS:
   Proceeds from Conversion of Debt to Equity                                 --            --
   Proceeds from Issuance of Common Stock                                     --         299,900
   Proceeds from Issuance of Preferred Stock                                  --            --
   Purchase of Treasury Stock                                             (966,043)         --
   [Decrease] Increase in Loan Payable to Shareholder                     (130,000)       88,609
   Payment of Notes Payable                                               (100,000)         --
   Payment of Lease Payable                                                 (7,453)       (5,826)
   Decrease in Loan Receivable                                            (274,762)         --
                                                                       -----------   -----------

   NET CASH - FINANCING ACTIVITIES - CONTINUING OPERATIONS              (1,478,258)      382,683
                                                                       -----------   -----------

FINANCING ACTIVITIES - DISCONTINUED OPERATIONS:
   Proceeds from Long-Term Debt                                             50,000          --
   Payment of Note Payable                                                 (41,500)       (1,900)
   Payment of Lease Payable                                                 (5,769)      (10,326)
                                                                       -----------   -----------

   NET CASH FINANCING ACTIVITIES DISCONTINUED OPERATIONS                     2,731       (12,226)
                                                                       -----------   -----------

NET INCREASE [DECREASE] IN CASH AND CASH EQUIVALENTS                       (58,433)      (17,548)

CASH AND CASH EQUIVALENTS - BEGINNING OF YEARS                              67,535        11,260
                                                                       -----------   -----------

   CASH AND CASH EQUIVALENTS - END OF YEARS                            $     9,102   $    (6,288)
                                                                       ===========   ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the years for:
      Interest                                                         $    16,128   $     6,758
      Income Taxes                                                     $      --     $      --

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
   Conversion of Preferred Stock into Common Stock                     $       396   $      --
   Purchase of Assets under Capital Lease Financing                    $     6,210   $      --
</TABLE>


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


                                       8
<PAGE>
                  ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
             Notes to Consolidated Financial Statements (Uunaudited)
                                 March 31, 1999


Note 1 -    BASIS OF PREPARATION

            The accompanying  unaudited interim financial statements include all
            adjustments  (consisting only of those of a normal recurring nature)
            necessary  for a fair  statement  of the  results  for  the  interim
            periods.  The results of operations for the three-month period ended
            March 31, 1999,  are not  necessarily  indicative  of the results of
            operations  to be  reported  for the full year ending  December  31,
            1999.

Note 2 -    SALE OF SUBSIDIARY

            On March 31, 1999 the Company sold 81% of its interest in its wholly
            owned subsidiary,  the Eminet Domain, Inc. to Centerline Associates,
            Inc., a shareholder  of the Company.  The sale price was  $2,500,000
            paid as  follows:  (i)  $10,000 at sale date,  (ii)  $90,000 in cash
            payable at the rate of  $14,000  per month  commencing  on April 15,
            1999 and (iii)  $2,400,000  by the  delivery  of a  promissory  note
            collateralized by shares of the Company's stock with interest at the
            annual  rate of six  percent  (6%) and  payable  two years  from the
            closing date.

            The sale  resulted in a gain of  $1,256,743  which is  reflected  in
            other income.  The  transaction  resulted in the Eminet Domain,  Inc
            being treated as a discontinued operation

Note 3 -    MAJOR CUSTOMERS

            Income fees derived from major customers are tabulated as follow:

                                               THREE MONTHS ENDED
                                                  MARCH 31,
                                           1999                1998
                                                  (UNAUDITED)


            Customer A (Software System)    --               250,000
            Customer B (Software System)    --               220,000
            Customer C (Software System)    --               350,000


Note 4 -    CAPITAL STOCK

            In the second quarter of 1998, the Company sold 1,250,000 shares for
            a  total  of   $4,000,000   pursuant  to   Regulation  D  to  Hosken
            Consolidated Industries

            Also in the second quarter of 1998, 9,700,000 shares of common stock
            were issued to Atlantic  International  Entertainment  Australia,  a
            wholly  owned  subsidiary  for  use in a  proposed  takeover  of the
            Australian  Company,  Coms21.  As the proposed takeover did not take
            place, the 9,700,000 shares issued were cancelled.  However,  in the
            third  quarter  of  1998,   1,217,647   shares  were  exchanged  for
            12,176,470 shares of Coms21 in a one for ten stock swap.


                                        9
<PAGE>

           ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
       Notes to Consolidated Financial Statements (Uunaudited) (Continued)
                                 March 31, 1999

Note 4 -    CAPITAL STOCK - CONTINUED

            In the  second  quarter  of 1998,  10,000  shares of 5%  Convertible
            Preferred Stock,  $.001 par value, were issued to the Shaar Fund for
            $1,000,000.00. Each share is convertible into common stock by virtue
            of a formula contained in the Purchase Agreement which is 78% of the
            three day  average  closing  bid price for the  corporations  common
            stock for the twenty five (25) trading days prior to the delivery of
            the  notice of  redemption.  The amount of such  non-cash  discounts
            which is analogous  to a dividend is $269,443.  Holders of the above
            preferred stock are entitled to; (i) quarterly  cumulative dividends
            at the  rate of 5% per  annum  of the  original  issue  price of the
            preferred stock,  (ii) a liquidation  preference equal to the sum of
            $100 for each outstanding share of the preferred stock.

            In August  1998,  5,000  shares of the  Company's  common stock were
            issued to a consultant for services performed.

            In September 1998,  26,098 shares of the Company's common stock were
            issued to adjust the  issuance of shares to certain  individuals  at
            the time of the Company's reverse merger in 1996.

            During  the  third  and  fourth  quarter  of 1998,  2,740  shares of
            convertible  preferred  stock valued at $274,000 was converted  into
            147,002  shares of common stock by virtue of a formula  contained in
            the Purchase  Agreement which relates to the average price per share
            of common stock within the conversion period.

            In  October  of 1998,  the  Company  entered  into a stock  purchase
            agreement with Axxsys International, [Seller] to purchase the assets
            of Axxsys for $400,000.  Under the agreement  200,000  shares of the
            Company's  common  stock was  delivered  and is held in escrow for a
            period of 12 months as the purchase  price is  contingent on average
            monthly revenues being achieved.

            During  the first  quarter  of 1999,  5,000  shares  of  convertible
            preferred stock valued at $500,000 was converted into 395,823 shares
            of common  stock by virtue of a formula  contained  in the  purchase
            agreement  which  results to the  average  price per share of common
            stock within the conversion period.

Note 5 -    PER SHARE DATA

            Per share data are based on the  weighted  average  number of common
            shares  outstanding during the respective  periods.  The diluted net
            income per share is based upon the options issued and outstanding as
            well  as  the  assumed   conversion  of  the  Company's  issued  and
            outstanding preferred stock.



                                       10

<PAGE>

          ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES
       Notes to Consolidated Financial Statements (Uunaudited) (Continued)
                                 March 31, 1999


Note 6 -    BUSINESS AGREEMENTS

            In February  1998,  the Company  entered into a Development  Service
            Agreement with International  Transaction System Corp. ["ITS'].  The
            Company's  responsibilities  under the agreement include engaging in
            the  development  activity  required  to host  ITS on the  Company's
            software   and   selling   debt  card   processing   [`DCP'].   ITS'
            responsibilities  include  development  activity required to develop
            the DCP test  methodology  and/or test cases so that the Company may
            validate correct operation of the DCP and provide service support.

            Under the  Agreement,  the Company paid $20,000 to acquire access to
            DCP through ITS for the purpose  and  exclusive  application  in the
            Company's  software.  Transaction  fees earned by customers  will be
            distributed  75% and 25% to the Company and ITS,  respectively.  The
            initial term of the agreement is 10 years, and automatically  renews
            in 5 year consecutive periods, unless terminated by either party.

            On  September  28, 1998,  the Company  entered into and closed on an
            agreement with  Cybergames,  Inc. for the purchase of several of the
            company's  licensees  and the  exchange  of the  company's  accounts
            receivable  from  said  licensees.  The total  purchase  price was $
            3,147,000  payable  $  227,000  in cash and  $2,920,000  in stock of
            Cybergames, Inc. (530,000 shares).

Note 7 -    SUBSEQUENT EVENTS

            On April 6, 1999 the Company  signed an  agreement  to purchase  the
            patent rights, inventions and know-how of Excel Communications, Inc.
            The  major  product  expected  to be  produced  is a  multi-function
            portable gaming device.  In consideration the Company issued seventy
            five thousand  (75,000)  shares of common stock of the Company.  The
            Company also  entered into an agreement to  compensate a third party
            for termination of an exclusive manufacturing,  licensing, marketing
            and  distribution of the invention with the seller.  The third party
            received two hundred thousand dollars ($200,000) plus a stock option
            to purchase  50,000  shares of the common stock of the  company.  In
            addition,  the Company entered into employment agreements with three
            of the key employees of Excel Communications, Inc. and granted those
            individuals options to purchase Company stock.

            In April 1999 HCI, Ltd. a South African public company exercised its
            option to  purchase  1.1  million  shares  at $2 per share  from the
            non-executive  chairman,  Norman  J.  Hoskin.  HCI is the  Company's
            largest  institutional  shareholders.  The  agreement  is subject to
            appropriate approval from the South African Reserve Bank.



                                       11
<PAGE>

           ATLANTIC INTERNATIONAL ENTERTAIMENT, LTD. AND SUBSIDIARIES

Item 2.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND
            RESULTS OF OPERATIONS RECENT DEVELOPMENTS


            RESULT OF OPERATIONS

            THREE MONTHS ENDED MARCH 31, 1999 AND 1998

            NET REVENUES. The Company's revenues decreased  approximately 97% in
            1999 over the same period in 1998.  Revenues from  operations in the
            first  quarter 1999 were $ 29,000,  as compared with $ 1,030,540 for
            the same period in 1998.  The decrease in revenues was the result of
            the  enhancement  and upgrading of its product.  The Company stopped
            promotion of the old version and did not allocate large resources to
            sales and marketing. The Company intends to allocate large resources
            to sales and marketing for its upgraded  product in 1999 and expects
            revenues to substantially increase.

            COST OF REVENUES.  Cost of revenues  increased  47% in 1999 over the
            same period in 1998.  The  increase  resulted  from the  increase in
            amortization of capitalized  software  development  costs,  which is
            reflected in cost of revenues.  The Company expects  amortization of
            development costs to be consistent going forward.

            OPERATING  EXPENSES.  Operating  expenses  increased  by  208%  or $
            746,127 in the first quarter 1999 over the same period in 1998.  The
            increase  was  largely  due to global  expansion  efforts,  expenses
            related to product development and increased support staffing.

            PROVISION FOR DOUBTFUL ACCOUNTS.  Provision for doubtful accounts in
            the first  quarter 1999 were $ 325,335 as compared with $ 99,153 for
            the same  period in 1998.  The  increase  resulted  from  management
            taking a  conservative  approach  in  recording  its  provision  for
            doubtful accounts.  The Company currently expects that the provision
            for  doubtful  accounts  will not  increase  at the same rate  going
            forward.

            OTHER INCOME. Other income increased by approximately  $1,400,000 in
            1999  over the same  period  in 1998.  A gain on sale of  $1,256,743
            resulted from a percentage  interest  sold of the  Company's  wholly
            owned subsidiary. A $170,000 gain was recognized in a full and final
            settlement of a payable.

            LIQUIDITY AND CAPITAL RESOURCES

            Cash,  cash  equivalents  and marketable  securities,  which consist
            primarily of high risk,  priced  securities  totaled  $3,384,029  at
            March 31, 1999 compared to $8,100 at March 31, 1998. The increase in
            cash, cash  equivalents and marketable  securities was due primarily
            to cash proceeds from the sale of Common Stock ($4,000,000) pursuant
            to Registration  Statement S-8,  exchange of the Company's shares to
            an Australian listed Company for shares of the Australian company in
            a one for ten stock swap  resulting  in  ($3,351,000)  proceeds  and
            issuance of Common Stock of a public traded  company  (Purchaser) in
            lieu of certain assets sold to the purchaser ($2,137,000).



                                       12
<PAGE>

           ATLANTIC INTERNATIONAL ENTERTAIMENT, LTD. AND SUBSIDIARIES

Item 2.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND
            RESULTS OF OPERATIONS RECENT DEVELOPMENTS


            LIQUIDITY AND CAPITAL RESOURCES - Continued


            The  increase was offset by cash used for  operations,  a $2,000,000
            debenture  note issued by a foreign  corporation  and $1,200,000 for
            the purchase of treasury stock  relating to the company's  stock buy
            back plan. Management believes that existing cash, cash equivalents,
            marketable securities and anticipated cash generated from operations
            will be sufficient to satisfy the  Company's  currently  anticipated
            cash requirements.





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<PAGE>

           ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD. AND SUBSIDIARIES

                                     PART II



Item 1.  Legal Proceedings

         Litigation - The Company is party to litigation arising from the normal
         course of business. In management's'  opinion, this litigation will not
         materially  affect  the  Company's  financial   position,   results  of
         operations or cash flows.

Item 2.  Changes in Securities

         This Item is not applicable to the Company.

Item 3.  Defaults upon Senior Securities

         This Item is not applicable to the Company.

Item 4.  Submission of Matters to a Vote of Security Holders

         This Item is not applicable to the Company.

Item 5.  Other Information

         This Item is not applicable to the Company.

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

              27   Financial Data Schedule



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<PAGE>

         In accordance with the  requirements of the Securities  Exchange Act of
1934,  the  Registrant  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.


                                      Atlantic International Entertainment, Ltd.



Date: May 18, 1999                    By: /s/ Richard A. Iamunno
                                          -------------------------------------
                                          (Signature)
                                          Richard A. Iamunno, President
                                          And Chief Executive Officer



Date: May 18, 1999                    By: /s/ Trevor Klein
                                          -------------------------------------
                                          (Signature)
                                          Trevor Klein
                                          Principal Accounting Officer






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