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 September 30, 1997

                                       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 September 30, 1997
      -----------------------------         ------------------------------------
      Common Stock, $.001 par value                       9,465,184
<PAGE>
                                TABLE OF CONTENTS


Heading                                                                     Page


                         PART 1. - FINANCIAL INFORMATION

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

          Consolidated Balance Sheet - September 30, 1997 (Unaudited)......3-4

          Pro-Forma Consolidated Statement of Operations (Unaudited).........5

          Consolidated Statement of Changes in Stockholders' Equity
          (Unaudited) .......................................................6

          Consolidated Statement of Cash Flows - Nine months ended
          September 30, 1996 and 1997 (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

          Exhibit - 27 .....................................................16




                                        i

<PAGE>

                                     PART 1


Item 1.   Financial Statements

          The  following  unaudited  financial  Statements  for the period ended
          September  30,  1997,  have been  prepared by  Atlantic  International
          Entertainment, Ltd. (the "Company").



                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.

                             Financial Statements

                             September 30, 1997


<PAGE>
                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
                        CONSOLIDATED BALANCE SHEET AS OF
                         SEPTEMBER 30, 1997 (UNAUDITED)



                                                              September 30, 1997
                                                              ------------------
                                                                  (Unaudited)


                                     ASSETS



CURRENT ASSETS
   Cash in Bank                                                    $    1,647
   Accounts Receivable (net of $4,500 in allowance for bad debts)   3,726,296
   Advances                                                             3,548
   Prepaid Expenses                                                     7,713
                                                                   ----------

   Total Current Assets:                                            3,739,204
                                                                   ----------

   Property and Equipment, at cost - Net of Accumulated
      Depreciation and Amortization of $73,845                        424,448

Software - Net of Accumulated Amortization of $230,702              1,169,006

OTHER ASSETS
   Investment in Subsidiary:
      Customer Lists                                                1,374,687
      Goodwill                                                        162,000
                                                                   ----------
                                                                    1,536,687
      Accumulated Amortization                                         60,692
                                                                   ----------
                                                                    1,475,995

   Investments                                                         52,962
   Security Deposits                                                   23,831
   Organization Costs - (Net of Accum Amort of $806)                    2,419
   Due From Related Party                                              49,855
   Other Assets                                                         3,836
   Deferred Income Taxes                                              548,400
                                                                   ----------

      Total Other Assets                                            2,157,298
                                                                   ----------

      Total Assets                                                 $7,489,956
                                                                   ==========



                 See accompanying notes to financial statements

                                       3
<PAGE>
                  ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD LTD
                        CONSOLIDATED BALANCE SHEET AS OF
                         SEPTEMBER 30, 1997 (UNAUDITED)


                      Liabilities and Stockholders'Equity:




CURRENT LIABILITIES
   Accounts Payable                                              $  545,225
   Customer Deposits                                                 64,873
   Current Portion of Long Term Debt                                 18,086
   Other Current Liabilities                                         76,754
   Due to Officers                                                   11,946
                                                                 ----------

   Total Current Liabilities                                        716,884

OTHER LIABILITIES
   Long Term Debt Net of Current                                     57,271
   Deferred Income Taxes                                            585,405
   Notes Payable                                                    155,000
                                                                 ----------

Total Other Liabilities                                             797,676


SHAREHOLDERS'S EQUITY:
   Preferred Stock - Par Value $.001 Per Share, Authorized
   10,000,000 Shares, None Issued or Outstanding                       --

   Common Stock - Par Value $001 Per Share, Authorized
   100,000,000 Shares, Issued and Outstanding 9,465,184 Shares        9,465

   Additional Paid - in - Capital                                 3,962,919
   Retained Earnings                                              2,003,012
                                                                 ----------

   Total Stockholders' Equity                                     5,975,396
                                                                 ----------

   Total Liabilities and Stockholders' Equity                    $7,489,956
                                                                 ==========



                 See accompanying notes to financial statements.


                                       4


<PAGE>
                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
                 PRO-FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                   For The Three Months Ended        For The Nine Months Ended
                                                                           September 30                     September 30,
                                                                 --------------------------------------------------------------
                                                                         1996         1997             1996              1997
                                                                 ---------------------------------------------      -----------

<S>                                                              <C>              <C>              <C>              <C>      
REVENUE
   Consulting Fees                                               $    49,352      $      --        $   363,084      $      --
   Software Sales and Related Charges                                   --          2,160,000             --          3,759,272
   Support Fees                                                         --               --               --             21,000
   ISP and Website Income                                               --            146,017             --            290,168
                                                                 -----------      -----------      -----------      -----------

   Total Revenue                                                      49,352        2,306,017          363,084        4,070,440

COST OF SALES
   Installation and Hardware Costs                                      --            109,710             --            202,041
   Internic Regist. Fees / Connect  Fees                                --             36,225             --             86,265
                                                                 -----------      -----------      -----------      -----------

   Total                                                                --            145,935             --            288,306

   Gross Profit                                                       49,352        2,160,082          363,084        3,782,134

OPERATING EXPENSES
   General and Administrative                                        214,198          508,259          453,049        1,155,276
   Amortization                                                         --             77,636             --            248,430
   Depreciation                                                         --             32,225             --             67,798
                                                                 -----------      -----------      -----------      -----------

   Total Operating Expenses                                          214,198          618,120          453,049        1,471,504

   Income (Loss) From Operations                                    (164,846)       1,541,962          (89,965)       2,310,630

OTHER INCOME (EXPENSE)
   Interest Income                                                     2,314             --              2,314            3,741
   Interest Expense                                                     --             (4,072)            --             (5,441)
   Income Tax                                                         41,000             --             22,400         (119,068)
   Loss on Sale of Investments                                        (4,871)            --               --            (20,784)
   Gain on Sale of Investments                                          --               --              5,379             --
                                                                 -----------      -----------      -----------      -----------

   Total Other Income (Expense)                                       38,443           (4,072)          30,093         (141,552)

   Income From Continuing Operations                                (126,403)       1,537,890          (59,872)       2,169,078

(Loss) from Operations of Discontinued Foreign Subsidiary
                                                                        --               --               --            (69,531)
Gain on Sale of Discontinued Foreign Subsidiary
                                                                        --               --               --            120,895
                                                                 -----------      -----------      -----------      -----------

      Total Income from Discontinued Oper                               --               --               --             51,364

Net Income (Loss)                                                   (126,403)       1,537,890          (59,875)       2,220,442

Retained Earnings (Deficit) - Beginning                             (259,649)         465,122         (326,180)        (217,430)
Retained Earnings (Deficit) - Ending                             $  (386,052)     $ 2,003,012      $  (386,052)     $ 2,003,012
                                                                 ===========      ===========      ===========      ===========

(Loss) Income Per Common Share                                   $     (0.01)     $      0.16      $     (0.01)     $      0.23
                                                                 ===========      ===========      ===========      ===========

Number of Shares                                                   8,952,542        9,465,184        8,913,908        9,429,434
                                                                 ===========      ===========      ===========      ===========
</TABLE>


                 See accompanying notes to financial statements.

                                       5
<PAGE>
                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

<TABLE>
<CAPTION>
                                                      Common Stock                             Additional
                                                         Number                                Paid - In
                                                         Shares              Amount             Capital
                                                     -----------------------------------------------------


<S>                                                   <C>                      <C>              <C>      
Balance - December 31, 1996                           9,190,184          $     9,190         $  1,887,376

Sale of Common  Stock (Reg S)                            75,000                   75              524,925

Recapitalization Costs                                     --                   --               (174,750)

Asset Acquisition (EmiNet)                              200,000                  200            1,599,800

Asset Acquisition Costs                                    --                   --                   (920)

Consolidation Elimination-EmiNet                           --                   --                 14,238

Income from Continuing Operations                          --                   --                   --

Disposal of Discontinued Operations                        --                   --                 98,775

[Loss] from Discontinued Operations                        --                   --                   --
                                                     -----------------------------------------------------
Balance - June 30, 1997                               9,465,184                9,465            3,949,444

Contribution of Capital                                    --                   --                 13,475

Income - Third Quarter 1997                                --                   --                   --
                                                     -----------------------------------------------------
Balance - September 30, 1997                          9,465,184                9,465            3,962,919
                                                     =====================================================
</TABLE>



<TABLE>
<CAPTION>
                                                       Retained                                   Total
                                                       Earnings             Preferred          Stockholders'
                                                       (Deficit)              Stock               Equity

<S>                                                  <C>                   <C>                <C>        
Balance - December 31, 1996                          $ (217,430)           $     --           $ 1,679,136

Sale of Common Stock (Reg S)                              --                     --               525,000

Recapitalization Costs                                    --                     --              (174,750)

Asset Acquisition (EmiNet)                                --                     --             1,600,000

Asset Acquisition Costs                                   --                     --                  (920)

Consolidated Elimination-EmiNet                           --                     --                14,238

Income from Continuing Operations                    $  631,188                  --               631,188

Disposal of Discontinued Operations                     120,895                  --               219,670

[Loss] from Discontinued Operations                     (69,531)                 --                (69,531)
                                                     -----------------------------------------------------

Balance - June 30, 1997                                 465,122                  --             4,424,031

Contribution of Capital                                   --                     --                13,475

Income - Third Quarter 1997                          $1,537,890                  --             1,537,890
                                                     -----------------------------------------------------

Balance - September 30, 1997                         $2,003,012             $    --           $ 5,975,396
                                                     =====================================================
</TABLE>


                 See accompanying notes to financial statements

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

<TABLE>
<CAPTION>
                                                                                       For The Nine Months
                                                                                              Ended
                                                                                 --------------------------------
                                                                                 September 30,       September 30,
                                                                                     1996                1997
                                                                                 --------------------------------
<S>                                                                              <C>                <C>         
Operating Activities:
(Loss) Income From Continuing Operations                                         $  (59,872)        $ 2,169,078
                                                                                 ----------         ----------- 

Cash Flows from Operating Activities:
   Adjustments to reconcile net loss to net
      Cash provided by operating activities:
         Depreciation and amortization                                               10,461             316,228
            Consulting fees received in form of Securities                          (26,246)               --
                Expenses paid by stockholder                                            873                --
                   Gain (loss) on sale of investment                                 (5,379)            (20,784)

         Changes in operating assets and liabilities:
Decrease (increase) in:
         Trade accounts receivable                                                  (48,250)         (3,726,296)
         Prepaid expenses and other current assets                                     --                70,323
         Security Deposits                                                             --               (23,831)
         Investments                                                                   --               (52,962)
         Refundable Income Tax                                                         --                77,215
         Other assets                                                               (17,337)               (552)
         Deferred income tax                                                           --              (548,400)
Increase (decrease) in:
         Accounts payable and Accrued Expenses                                       71,252             292,280
         Income taxes payable                                                       (90,500)               --
         Customer Deposits                                                             --                64,026
         Other Current Liabilities                                                  (33,000)             76,754
         Loans payable - stockholders                                                40,600              (9,709)
         Deferred Income Taxes                                                         --               585,405
                                                                                 ----------         ----------- 

Net cash - Continuing Operations - Forward                                         (157,398)           (731,225)

Discontinued Operations:
(Loss) from Discontinued Operations                                                    --               (69,531)
Gain on Disposal of Discontinued Operations                                            --               120,895
Adjustments to reconcile Net (Loss) to Net Cash                                        --                  --
   Operations:
          Depreciation                                                                 --                 1,366
                                                                                 ----------         ----------- 

Changes in assets and liabilities:
(Increase) Decrease in:                                                                --
         Other Assets                                                                  --                   815

Increase (Decrease) in:
         Accounts Payable                                                              --               (14,808)
         Customer Deposits                                                             --               (27,648)
                                                                                 ----------         ----------- 

         Total Adjustments                                                             --               (41,641)
                                                                                 ----------         ----------- 

Net Cash - Discontinued Operations - Forward                                           --                11,089
                                                                                 ----------         ----------- 

Net Cash - Operating Activities - Forward                                          (157,398)           (720,136)
                                                                                 ----------         ----------- 

Investing Activities - Continuing Operations
         Net increase in due from related parties                                      --
         Net increase (decrease) in Other Receivable                                   --                  --
         Sale (Purchase) of Subsidiary                                                 --            (1,620,000)
         Sale (Purchase) of Investments                                              40,628             (73,746)
         Sale (Purchase) of property and equipment                                 (137,639)           (322,870)
                                                                                 ----------         ----------- 

Net cash used in investing activities - Forward                                  $ ( 97,011)        $(2,016,616)
</TABLE>


                 See accompanying notes to financial statements

                                        7


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



<TABLE>
<CAPTION>
                                                                               For the Nine Months
                                                                               Ended September 30,
                                                                       ----------------------------------
                                                                             1996               1997
                                                                       ----------------------------------

<S>                                                                    <C>                 <C>        
Investing Activities - Discontinuing Operations
         (Purchase) Disposition of property and equipment              $      --           $    11,110

Net Cash Investing Activities                                              (97,011)         (2,005,506)

Financing Activities - Continuing Operations
         Proceeds from issuance of common stock                            470,746           1,949,330
         Increase (Decrease) in loan payable to shareholder                   --                (9,709)
         Additions to paid in capital                                         --                27,713
         Increase in equipment loans                                          --                95,557
         Principal payments on capitalized lease and not borrowing            --               (10,565)
         Purchase of Treasury Shares                                        (8,250)               --
         Increase in notes payable                                            --               155,000

Net cash - Financing Activities - Continuing Operations                    462,496           2,207,326

Financing Activities - Discontinued Operations
         Additions to Additional paid in Capital                              --                98,775

Net Cash Financing Activities                                              462,496           2,306,101

Increase (Decrease) in cash and cash equivalents                           208,087            (419,541)
Cash & cash equivalents beginning of period                                200,677             421,188

Cash & cash equivalents, end of period                                 $   408,764         $     1,647
                                                                       ===========         ===========


Supplemental disclosure of cash flow information: 
         Cash paid (received) during the period for:

         Interest Expense                                              $      --           $     5,441
         Income Tax Refund (Applied)                                   $      --           $    77,215
         Income Tax                                                    $    90,500         $   119,068
</TABLE>



                 See accompanying notes to financial statements

                                       8
<PAGE>
                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
             Notes to Consolidated Financial Statements (Uunaudited)
                               September 30, 1997


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 and
                  cash flows for the nine month period ended September 30, 1997,
                  are not necessarily indicative of the results of operations or
                  cash flows to be reported  for the full year  ending  December
                  31, 1997.


Note 2 -          Business Combination
                  --------------------

                  On July 16,  1996,  the  Company  entered  into an Exchange of
                  Stock  Agreement  and  Plan  of  Reorganization  ( the  "Stock
                  Exchange  Agreement").  Under the terms of the Stock  Exchange
                  Agreement,  the Company acquired all of the shares of Atlantic
                  International  Capital, Ltd. ("Atlantic Capital"),  a Delaware
                  corporation, in exchange for an aggregate of 25,183,759 shares
                  of  its  common  stock,   of  which   7,000,000   shares  were
                  immediately  issuable and 18,153,759  shares were to be issued
                  following an increase in the Company's authorized capital. The
                  Company   plans  to  satisfy   this   obligation   by  issuing
                  approximately  6,061,253  shares of Common Stock to the former
                  Atlantic  Capital  stockholders   following  a  1-for-3  share
                  exchange upon the  consummation  of a merger with and into its
                  wholly-owned subsidiary, Atlantic International Entertainment,
                  Ltd.  which was  approved  by the  Company's  stockholders  on
                  November  18,  1996.  Upon  consummation  of the  merger,  the
                  Company's  authorized  capital  will  increase to  100,000,000
                  shares of Common Stock,  $.001 par value and 10,000,000 shares
                  of Preferred Stock,  $.001 par value. The combination has been
                  accounted  for as a  reverse  acquisition,  and  the  combined
                  entity   intends   to   operate   under   the  name   Atlantic
                  International  Entertainment,  Ltd. The  consolidated  balance
                  sheet as of March 31, 1997 does not reflect the effects of the
                  recapitalization, issuance of the additional common shares, or
                  the reverse  stock  split,  all of which were  approved by the
                  stockholders on November 18, 1996.

                  CEEE has conducted only limited  operations prior to 1984, and
                  has been substantially inactive since that time. It previously
                  considered itself to be a development stage company as defined
                  in Statement of Financial Accounting Standards No.7.


Note 3 -          Business Acquisitions
                  ---------------------

                  The business acquisition in the first quarter of 1997 has been
                  accounted  for under  the  purchase  method.  The  results  of
                  operations  of  the  acquired  business  are  included  in the
                  consolidated financial statements from the date acquisition on
                  March 26, 1997, the Company  concluded its acquisition of 100%
                  of the outstanding stock of The EmiNet Domain,  Inc.,  located
                  in  Boynton  Beach,  Florida.  EmiNet is an  Internet  Service
                  Provider  (ISP),  and developer of Internet  related  software
                  products as well as hosting  commercial Web sites. The Company
                  paid  $20,000  in  cash  and  issued  200,000  shares  of  the
                  Company's  common stock  (approximate  market value on date of
                  issue $2,000,000).  The Stock Purchase Agreement also contains
                  additional   payments   contingent  on  the  future   earnings
                  performance of EmiNet. Any additional  payments made, when the
                  contingency  is resolved,  will be accounted for as additional
                  costs of the

                                       9
<PAGE>
                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
             Notes to Consolidated Financial Statements (Continued)
                               September 30, 1997


                  acquired  assets and amortized  over the remaining life of the
                  assets. No payments were paid or accrued for the third quarter
                  1997.

                  The  following  unaudited  pro forma  consolidated  results of
                  operations  for the years ended December 31, 1996 and 1995 are
                  presented  as if the EmiNet  acquisition  has been made at the
                  beginning of each period  presented.  The EmiNet Domain,  Inc.
                  operated as an S Corporation in 1995 and 1996. Included in the
                  expenses to arrive at Net  Earnings are  reclassifications  of
                  Shareholders' Draw to Officers Salaries and Income Tax Expense
                  in the amounts of $26,200 for the short year 1995 and $132,200
                  for  1996.   The  unaudited  pro  forma   information  is  not
                  necessarily  indicative  of either the  results of  operations
                  that would have occurred had the purchase been made during the
                  periods  presented  or the  future  results  of  the  combined
                  operations.


                                                      Years ended December 31
                                                      -----------------------
                                                       1996             1995
                  Net Sales                         $  878,097        $ 818,317
                  Net earnings (Loss)               $ (347,072)       $ 178,816
                  Earnings per common share
                    And common share equivalent     $   (.04)         $  .02



Note 4 -          Major Customers
                  ---------------

                  Income fees  derived  from major  customers  are  tabulated as
                  follow:


<TABLE>
<CAPTION>
                                                               Three Months Ended                 Nine Months Ended
                                                                   September 30,                     September 30,
                                                          ---------------------------------------------------------------
                                                              1996              1997             1996              1997
                                                          (Unaudited)       (Unaudited)      (Unaudited)      (Unaudited)

<S>                                                       <C>               <C>               <C>               <C>
                   Customer A - (Consulting)                 8,000                 -          $ 28,000                 -
                   Customer B - (Consulting)                12,000                 -            21,500                 -
                   Customer C - (Consulting)               48,5000                 -           131,000                 -
                   Customer D - (Software System)                -                 -                 -           600,000
                   Customer E - (Software System)                -                 -                 -           410,000
                   Customer F - (Software System)                -                 -                 -           450,000
                   Customer G - (Software System)                -                 -                 -           150,000
                   Customer H - (Software System)                -           375,000                 -           375,000
                   Customer I   - (Software System)              -           600,000                 -           600,000
                   Customer J  -  (Software System)              -           450,000                 -           450,000
                   Customer K - (Software System)                -           150,000                 -           150,000
                   Customer L - (Software System)                -           585,000                 -           585,000
</TABLE>

                                       10

<PAGE>
                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
                               September 30, 1997


Note 5 -          Per Share Data

                  Per share  data are based on the  weighted  average  number of
                  common  shares  outstanding  during  the  respective  periods,
                  retroactively  adjusted to reflect the common shares issued in
                  exchange  for all  outstanding  common  shares  of The  EmiNet
                  Domain, Inc., including the additional shares sold pursuant to
                  a "Reg S" offering in February, 1997.



                                       11


<PAGE>
                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
                               September 30, 1997


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


                  Recent Developments
                  -------------------


                  On February 5, 1997, the Company  entered into an agreement to
                  purchase The EmiNet  Domain,  a Boynton  Beach,  Florida based
                  Internet  Service  Provider and Developer of Internet  related
                  software  products.  The  purchase  price  of  $1,620,000  was
                  payable  in  cash  and  stock.  The  purchase  price  recorded
                  reflects a discount in relation to the approximate fair market
                  value  of  the  stock  to  take  into  consideration   certain
                  restrictions placed upon the stock when issued.

                  The purchase of The EmiNet Domain's Commercial Web-hosting and
                  ISP base will bring a  significant  benefit  to the  Company's
                  non-gaming  Internet  products,   furthermore,   the  Internet
                  software  development  capabilities of EmiNet will augment the
                  Company's on-going gaming product development activities.

                  On March 23,  1997,  the Company  entered into an Agreement to
                  sell  its  Netherland  Antilles  based  subsidiary,   Atlantic
                  International   Entertainment,   NV.  To  Australian  Advisors
                  Corporation,  a Bahamian  corporation.  Terms of the sale call
                  for  Australian  Advisors  Corporation to purchase 100% of the
                  stock and  assets of the  subsidiary,  including  its  license
                  agreement for one webSports(TM)system.

                  In addition to the sale of the Company's subsidiary, a license
                  agreement for one Internet Casino Extension(TM)  (ICE(TM)) was
                  also purchased for $600,000.

                  On January 16, 1997,  a Stock  Purchase  Agreement  was signed
                  with  Brindenberg  Securities,  A/S under  Regulation S of the
                  Securities  & Exchange  Commission.  A total of 75,000  shares
                  were issued under this agreement.

                  Results of Operations
                  ---------------------

                  The  Company  incurred  expenses  of $  1,155,276  in the nine
                  months ended  September 30, 1997. Such expenses were primarily
                  attributable to marketing the Company's  Internet  products as
                  well as continued development of its Internet products.

                  During the nine month period  ended  September  30, 1997,  the
                  Company  had net  income of $  2,220,442,  of which The EmiNet
                  Domain,  Inc.,  (EmiNet),   contributed  $65,156  in  profits.
                  Revenue was $ 2,306,017  for the third quarter of which EmiNet
                  contributed $ 466,285.

                  Other income  (expenses)  included the gain on the sale of its
                  Netherland Antillies based subsidiary,  Atlantic International
                  Entertainment N.V., Ltd. of $120,895. The net (Loss) generated
                  by this subsidiary for the first quarter 1997 operations until
                  sale was ($69,531).



                                       12

<PAGE>
Item 2.    

           MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND
           RESULTS OF OPERATIONS (Continued)


           RESULTS OF OPERATIONS (Continued)


           During  the  third  quarter  the  Company  continued  it's  marketing
           campaign of it's  Internet  products  and the  results of  operations
           showed four Internet Casino Extension(TM) (ICE(TM)) systems installed
           and operational as well as three  webSports(TM)  system installed and
           operational.  Support  contracts  for these  systems is  expected  to
           generate an additional  monthly income stream of $11,000 for the next
           forty-eight months.  Product development  continues to be an on-going
           process as  additional  features  are added to existing  products and
           additions are made at the customer's request. We anticipate continued
           market leadership in the systems offered and anticipate an additional
           investment  in  the  development  and  upgrades  of our  products  of
           approximately $400,000 over the next twelve months.

           Our wholly owned  subsidiary,  The EmiNet Domain,  Inc., has upgraded
           its'  hardware  and  software  in order to better  compete  with area
           Internet  service  providers  by offering the latest  technology  and
           system features. An aggressive marketing campaign began in the fourth
           quarter aimed at web page hosting,  site development,  individual and
           commercial monthly accounts.

           In looking  forward to the fourth  quarter of 1997 we continue to see
           considerable interest building in our Internet products.  The Company
           has  signed  contracts  and  is in the  process  of  installing  four
           Internet  Casino  Extension(TM)  (ICE(TM))  systems  as well as three
           webSports(TM)  systems and it is anticipated  that all  installations
           will be complete by the close of the fourth quarter. This is expected
           to  generate  sales in  excess  of  $2,000,000  for the  quarter.  In
           addition,  these  installations  are expected to generate  additional
           monthly income from support and  maintenance  agreements in excess of
           $10,000 per month over the next forty-eight months.

           The Company has  recently  entered  into a pilot  program in order to
           ascertain the viability of entering  additional markets in areas such
           as Australia.  Considerable advances have been made in the Australian
           jurisdictions  since  the  second  quarter  and  we  continue  to  be
           optomistic over the Australian and area markets.

           We continue to watch interest and enthusiasm grow in our products and
           we are  responding by adding key people in the  development,  support
           and sales areas.

                                       13

<PAGE>
                   ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
                                     PART II



Item 1.           Legal Proceedings

                  There are presently no materials  pending legal proceedings in
                  which the  Company is a party or to which any of its  property
                  is subject.

Item 2.           Changes in Securities

                  This Item is not applicable to the Company.

Item 3.           Defaults upon Senior Securities

                  This Item is no 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

                  (b)      Reports on Form 8-K

                           None


                                       14

<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: November 20, 1997              By:     /s/ Richard A. Iamunno
                                            -----------------------------
                                            (Signature)
                                            Richard A. Iamunno, President
                                            And Chief Executive Officer



Date: November  20, 1997             By:    /s/ David P. Halaburda
                                            -----------------------------
                                            (Signature)
                                            David P. Halaburda
                                            Chief Financial Officer



                                       15