UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549

                                  Form 10-KSB
                 [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                         THE SECURITIES EXCHANGE ACT OF 1934
                                   [FEE REQUIRED]

                           For the Fiscal Year ended:

                             December 31, 1996

                                      OR

               [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                         OF THE SECURITIES EXCHANGE ACT OF 1934
                                  [NO FEE REQUIRED]
                              Commission File No. 0-15435

                              FIRST ENTERTAINMENT, INC.
         (Name of Small Business Issuer as Specified in its Charter)

  Colorado                                          84-0974303
 (State or Other Jurisdiction of              (I.R.S. Employer Incorporation 
or Organization)                               Identification Number)

                       1380 Lawrence Street, Suite 1400
                            Denver, Colorado 80204
         (Address of Principal Executive Offices, Including Zip Code)

Registrant's telephone number, including area code:  (303) 592-1235

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

Securities registered pursuant to Section 12(g) of the Act:

                           Common Stock, $.008 Par Value
                                  (Title of Class)

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 are no disclosure of delinquent filers in response to Items 
405 of Regulation S-B 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 n Part III of this Form 10-KSB or any 
amendments to this Form 10-KSB.  [   ]

State issuer's revenues for its most recent fiscal year. $2,139,451

As of February 28, 1997, there were 5,799,713 shares of common stock (the 
Registrant's only class of voting stock) outstanding.  The aggregate market 
value of the 5,147,797 shares of common stock of the Registrant held by 
nonaffiliates on February 28, 1997 was approximately $5,791,272 (based on 
the mean of the closing bid and asked prices).  

Documents incorporated by reference:  None
INDEX TO FORM 10-KSB

PART I

  Item 1	      Description of Business

  Item 2	      Description of Property

  Item 3	      Legal Proceedings

  Item 4          Submission of Matters to a Vote of Security Holders

PART II

  Item 5	      Market for Common Equity and Related Stockholder Matters

  Item 6	      Management's Discussion and Analysis or Plan of Operation

  Item 7	      Financial Statements

  Item 8	      Changes in and Disagreements with Accountants on Accounting 
and Financial Disclosure

PART III

  Item 9	      Directors, Executive Officers, Promoters and Control 
Persons

  Item 10     Executive Compensation

  Item 11     Security Ownership of Certain Beneficial Owners and 
              Management

  Item 12     Certain Relationships and Related Transactions

PART IV

  Item 13     Exhibits, Lists and Reports on Form 8K
                    A)   Exhibits
                    B)   Reports on Form 8-K

PART I

Item 1.  Description of Business

First Entertainment, Inc. (the "Company" or "FTET") was incorporated 
under the laws of Colorado on January 17, 1985.  Currently, the Company 
is a multi-media entertainment conglomerate, holding controlling 
interests in five distinct segments, four active and one inactive.  The 
four active segments, which are overviewed by the parent company, FTET, 
are known as "Video," "Radio,"  "Live Entertainment, and Retail.  The 
inactive segment is known as Film.  In November 1995, the Company 
determined to discontinue the operations of its copyrighted properties 
segment, which it acquired in 1994.  Initially, the Company's business 
consisted of the production of pre-recorded travel guides and special 
interest videos.  In 1987, the Company entered the radio broadcasting 
business by acquiring Quality Communications, Inc., a Wyoming corporation 
pursuant to which the Company operates the radio segment of its business.  
In 1992, the Company acquired a controlling interest in First Films, Inc. 
(FFI), a publicly held Colorado corporation, under which its film and 
live entertainment operations are undertaken.  In December 1996, the 
Company commenced operations of selling infomercial products in free 
standing unmanned kiosks in major retail malls including U.S. Military 
bases.  This segment is known as the retail segment.

Video

Initially, the Company entered the pre-recorded videocassette product 
market through the design, production and distribution of pre-recorded 
videocassette travel guides and later expanded into production and 
distribution of special interest videocassette productions.  In June 
1986, the Company entered into a trademark licensing agreement with Rand 
McNally, providing the Company the right to use the Rand McNally name 
worldwide for its Video Trip product.  

In 1993, the Company negotiated the termination of its relationship with 
Rand McNally.  In July 1993, the Company entered into a new agreement, 
entitling it to use the KODAK  trademark of Eastman Kodak Company for 
video through its exclusive U.S. distributor, Woodknapp and Company, Inc.  
This agreement allowed Woodknapp and Company, Inc. to become the 
exclusive domestic distributor for the Company's Video Trip product and 
allowed the Company to receive sponsorship assistance from Eastman Kodak 
Company.  This agreement allowed the Company to pass through some of the 
costs of packaging, marketing and distribution to Woodknapp, who is one 
of the largest distributors of special interest video in the United 
States.  The Company bore the expense of editing the Rand McNally 
trademarks from the programs.  This editing was completed in December 
1993 and shortly thereafter, Woodknapp released, domestically, the first 
of five release groups created from the Video Trip library.  In January 
1995, the Company was informed that Woodknapp and Company, Inc. had 
ceased operations and would not be able to honor its contract as the 
Company's exclusive U.S. distributor of Video Trips.  The Company feels 
that because of cash flow problems of Woodknapp they were not able to 
effectively market their Video Trips in 1994.

In 1995, the Company signed a three year distribution agreement with Fox 
Lorber, whereby Fox Lorber would test the distribution of 12 video trip 
titles in North America.  Fox Lorber has the right to acquire the 
remaining 28 video trip titles and extend the term of the agreement from 
three years to seven years with an additional advance royalty payment of 
$58,000.  During 1996, the Company sold all its foreign distribution 
rights to Fox Lorber for $50,000.

Radio

In October 1987, the Company entered the radio broadcasting business 
through the acquisition of Quality Communications, Inc. ("Quality 
Communications"), a Wyoming corporation.  At that time, Quality 
Communications owned and operated three radio stations, which serve 
markets in Northeast Wyoming and central Iowa.  In August 1989, the 
Company sold two radio stations in Boone, Iowa.  

The Company, through Quality Communications, operates a radio station, 
100.7, The Fox, located in Gillette, Wyoming.

In November 1993, the Company changed the music format of the radio 
station formerly known as KGWY, or Y-100, from a top-40 station to a 
format known as the "Heart of Rock."  In February, 1995 the format was 
changed again to contemporary country.  The changes have had a positive 
effect on its market share and gross revenues.  Independent market 
surveys show the radio station has approximately 44% of the market in 
Gillette, Wyoming.  In 1996, the radio station started promoting concerts 
using up and coming country and western singers.  The radio station was a 
venue to promote the concerts and add an additional source of revenue for 
the radio station.

Live Entertainment

FFI owned and operated two comedy clubs, one located in Denver, Colorado 
and one in Tampa, Florida.  The Tampa, Florida, club was closed on 
January 29, 1995 due to less than expected attendance.  

The goal of this division is to produce first-rate shows in the theater 
environment.  Revenues are generated through both ticket sales at the 
door and beverage and food sales at tables.  Clubs are open to the public 
only for shows, which last from 1 to 2 hours each, and number as many as 
three per night.  Non-show times are devoted to preparing and producing a 
show that changes completely each week, and to promoting and marketing 
the nightclub.  

FFI acquired 100 percent of the outstanding stock of Comedy Works, Inc., 
a Colorado corporation, on September 13, 1990 in an exchange for 
200,000,000 shares of common stock.  Comedy Works was incorporated in 
1982 and has operated from its Larimer Square, Denver, Colorado location 
since that time.  Comedy Works Larimer Square typically has ten shows per 
week and has averaged over 2,000 customers per week for the past fifteen 
years.

Retail  

In December, 1996 the Company commenced operations of its retail segment.  
The segment consists of selling the most common and most popular 
informercial products in free standing un-manned kiosks in retail outlets 
throughout the United States.  The Company intends to expand operations 
to include manned kiosks in major retail malls.  Each manned kiosks will 
be approximately 250 square feet and will have approximately 35 to 50 of 
the top selling informercial products.  The Company opened its first four 
locations in December, 1996, in Pearl Harbor, Andrews Air Force Base and 
Bolling Air Force Base in Washington, D.C. and Leichmere's in Cambridge, 
Massachusetts.  The Company intends to complete a private placement of up 
to $800,000 in 1997 to fund the planned expansion of manned kiosks in 
major retail malls throughout the United States.  The Company operates 
the kiosks under the name The Best of As Seen on TV (ASOTV).

Other Business Development

Balzac

In April 1996, the Company acquired certain assets from Balzac, Inc., a 
private company which manufactures and distributes toys, including a 
product line of toy balls.  The assets and rights acquired consisted of 
the following: inventory of Balzac toys, the exclusive license of Balzac 
for Australia and various other rights. 

The exclusive license agreement for Australia was acquired for $800,000 
payable within five years based upon a formula of 60% of net profits from 
the sale of Balzac products in Australia.  The inventory and various 
other rights were acquired by issuing 1,100,000 shares of the Company's 
restricted common stock valued at $1.2 million.  In addition, the Company 
granted certain stock options to Balzac to purchase shares of common 
stock of the Company.

   During 1996, a dispute arose between the Company and Balzac where Balzac 
asserted a violation of the Purchase Agreement.  Balzac seized the 
inventory valued at $1 million, which was collateral on the fixed 
obligation due under the Australian Licensing Agreement, to satisfy the 
$800,000 obligation under the Licensing Agreement.  The Company asserted 
that Balzac had no right under the Purchase Agreement or License 
Agreement to seize the inventory and apply the proceeds against the note 
obligation under the License Agreement.

  In April 1997, Balzac and the Company entered into an agreement whereby 
Balzac will buy back the Australian Licensing Agreement for $800,000 and 
will repay the Company $200,000 which was the difference between the 
value of the seized inventory and the obligation under the licensing 
agreement.  The $1,000,000 will be paid over forty months at 8% per 
annum.

Image Marketing Group

On September 6, 1994, the Company acquired an 84 percent interest in 
Image Marketing Group, Inc. ("Image").  The Company issued 248,297 shares 
of its restricted common stock in exchange for 1,986,374 issued and 
outstanding shares of Image.  In addition, the Company issued 231,976 
shares of its Class B preferred stock in exchange for all the issued and 
outstanding preferred stock of Image and approximately $420,000 of 
related party debt.

Image had a substantial amount of working capital invested in inventory 
items that were not selling, therefore it was unable to recover its 
investment in inventory or reinvest in new images from the sale of 
existing inventory.  FTET invested approximately $700,000 in Image in an 
effort to generate sales through introduction of new images to customers.  
Image was unable to generate enough sales or liquidate its inventory to 
generate working capital to support continued operations.  Since 1993, 
Image has had losses from operations and at the time it was acquired by 
the Company was in need of working capital to finance inventory growth.  
Even with a working capital infusion of approximately $700,000, Image 
continued to incur losses as a result of declining sales.  In November, 
1995 it was determined that additional working capital would not be 
advanced to Image and that the Company would terminate operations and 
seek a buyer for Image.  The discontinuance of operations of Image 
resulted in a loss of approximately $2.2 million for the year ended 
December 31, 1995 of which $1.6 million represents the write down of 
assets to their net realizable value.

On April 24, 1996 The Company and Harvey Rosenberg, a former officer and 
director of the Company entered into a Purchase Agreement for the sale of 
Image.  Mr. Rosenberg purchased the Company's 1,986,376 shares of Image 
for $1,000 resulting in a gain of approximately $414,000.  At the time of 
the disposition of Image, Image had liabilities in excess of assets.

The results of operations of Image for the year ended December 31,1996 
and 1995 are disclosed in the accompanying statements of operations as 
discontinued operations.

Indian Licensing

In February 1995, the Company signed a series of agreements giving it 
certain licensing and merchandising rights for the Indian Motor Company, 
which required the approval of the bankruptcy court.  These rights were 
never approved by the Bankruptcy Court.

In January, 1996 A.B. Goldberg, Harvey Rosenberg, a former director and 
several other unrelated parties were named as defendants in a law suit 
filed by Sterling Consulting Corporation, Receiver for Indian Motorcycle 
Manufacturing, Inc.  The Company filed a counter claim against the 
Receiver  in July, 1996.  In September 1996,  the Company and the 
Receiver commenced settlement negotiations whereby all parties would 
resolve their dispute. 

In February, 1997 the Company and the Receiver agreed to the terms of a 
settlement. The proposed Settlement Agreement calls for the Company to 
relinquish all rights or claims to the Indian Motorcycle Trademark or the 
use of the Trademark and any licensing rights.  In addition, all claims 
by the Receiver and the Company shall be released and the Company shall 
pay to the Receiver approximately $114,000.  All rights acquired from 
Scott Kajiya and Jamie Ruiz for the use of the Indian Motorcycle 
Trademark in Japan are also assigned to the Receiver.

The transactions described above relating to Indian Licensing have been 
rescinded in the accompanying financial statements effective from the 
date the transactions were entered into as if the transactions did not 
occur.

Letters of Intent

   In January, 1997, a non-binding letter of intent was signed with Enternet 
Corporation, an international marketer of infomercial products.  Enternet 
has successfully combined international wholesaling as well as the 
franchising of its retail kiosk concept under the name TV to You.  In 
addition, Enternet operates the most prominent As Seen on TV internet 
shopping site under the name As On TV, offering a complete array of 
infomercial products.  This potential acquisition fits in well with the 
development of The Best of As Seen on TV in retail locations in the 
United States, combined with Enternet International expertise and an 
internet web site.  The Company would issue 300,000 shares of common 
stock of the Company and 100,000 shares of ASOTV for 60% of Enternet.  
Consummation of the acquisition is subject to a number of conditions 
including the negotiation of definitive agreements, completion of due 
diligence and approval by the Board of Directors of both companies.  Due 
to the contingencies involved, the Company is unable to predict if or 
when the transaction will be consummated.

In March, 1997, a non-binding letter of intent was signed with ONLINE 
Casino's, Inc. (ONLINE) regarding the potential acquisition of ONLINE, 
which consists of a fully licensed operating gaming casino in the 
Caribbean, along with an internet gaming license and internet gaming 
software that controls all aspects of the system.  The purchase price of 
ONLINE is estimated to be $26 million consisting of debt and equity 
financing.  Consummation of the acquisition is subject to a number of 
conditions including the negotiation of definitive agreements, completion 
of due diligence and approval by the Directors of both Companies.  Due to 
the contingencies involved, the Company is unable to predict if or when 
the transaction will be consummated.

Competition

Video

The production and marketing of pre-recorded video cassettes is a highly 
competitive business.  The Company vies with many companies and 
individuals that have substantial experience in acquiring, producing and 
distributing such products.  Most have resources substantially greater 
than those of the Company.  These competitors include both large and 
small independent production companies, television and film studios, and 
others.  The Company knows of numerous other videocassette travel guide 
series (including International Video Network's Video Visits, Travelview, 
Laura McKenzie's Travel Guide and Fodor's Travel Video); however, the 
Company believes that the Kodak name and the quality of its programs set 
it apart from its competitors.

Radio

100.7, "The Fox" competes with seven other signals available in the area.  
Two of these radio signals originate from Gillette, Wyoming.  The Company 
presently enjoys the largest share of the market, estimated to be 44 
percent.

Live Entertainment

Competition is intense in the comedy and music night club entertainment 
industries.  On a national level, the Company competes for entertainers 
with companies that are better capitalized, highly visible and have 
longer operating histories and larger staffs in their respective 
locations.  None of the national comedy clubs have locations in Denver, 
Colorado.  Comedy Works Larimer Square has been in business in Denver, 
Colorado for 15 years and the Company believes it to be the highest 
revenue-producing comedy club in the area.  The Company believes that 
Comedy Works Larimer Square provides higher-quality acts than its local 
competitors, reflected in the fact that it charges approximately twice 
the admission price of its local competitors.  The two main competitors 
of Comedy Works Larimer Square are both individually-owned and located in 
shopping centers in the suburbs, while Comedy Works is located in the 
downtown Denver area.  

Retail

There are several companies that sell infomercial products in retail 
locations, none of which have a national presence.  Other companies are 
more experienced and are better capitalized but the Company believes it 
will distinguish itself from competition by offering only the best and 
most popular infomercial products and by having a better, more up-scale 
presentation of its products.

Licenses

The Federal Communications Commission (FCC) issues radio broadcasters a 
license to operate within their assigned frequency for seven years.  
These licenses, upon application, are renewable for additional seven year 
periods.  The FCC issued KGWY its original license on October 1, 1983, to 
operate at a frequency of 100.7 MHz, 24 hours a day, at 100,000 watts of 
effective radiated power.  It was subsequently reissued in October of 
1990.  It will be up for renewal again on October 1, 1997.  During the 
renewal process the public has an opportunity to express its opinion of 
how well the particular station is servicing its broadcast area.  Extreme 
public negativity during this period can hold up the reissuance process.  
In addition, frequent violations of FCC rules and regulations can be 
cause for the denial of the station's license renewal.

The FCC allots a certain number of frequencies for each broadcast area, 
based upon community need, population factors and the determination of 
the economic viability of another station in the designated region.  
Currently there are no other licenses available in the Gillette area.  It 
is possible  to request that the FCC reconsider opening up further 
frequencies through its rule making body, but this can be a time 
consuming process.  All sales of stations and subsequent transfers of 
licenses must be approved by the FCC.

Seasonality

Video

Although revenues are spread over the entire calendar year, historically 
the third quarter generally reflects the highest revenues for each year 
due to increase in wholesale buying for the holiday season.

Radio

Although revenues are spread over the entire calendar year, the first 
quarter generally reflects the lowest and the fourth quarter generally 
reflects the highest revenues for each year.  The increase in retail 
advertising each fall in preparation for the holiday season, combined 
with political advertising, tends to increase fourth quarter revenues.  

Retail

Historically retail is the strongest in the October through December 
months.  The Company projects a decline in sales during January through 
March and July through September with the second and fourth quarters 
showing the stronger sales.

Live Entertainment

The Company has found that its highest-revenue months are from July 15 to 
October 15 of each year.  From approximately May 15 to July 15 of each 
year, business is typically down 30 percent below average, primarily 
because customers prefer outdoor activities at that time of year.  During 
the holiday season, management has found a slight increase due to once-a-
year customers, on vacation or hosting visiting friends or relatives.  

Employees

First Entertainment, Inc. 

Currently, FTET, the Holding Company, employs one executive and one 
administrative person.  The Holding Company contracts the accounting and 
administrative function to a company owned by the former president and to 
other independent consultants.

Video

The Company does not have any video employees, but rather relies upon its 
distribution for video sales.

Radio

The Company employs approximately five full-time employees and eight 
part-time employees.  Of the full-time employees, they are engaged mainly 
in the administrative radio operations and sales.  The part-time 
employees are engaged in the on-air activities as on-air personalities.  

Live Entertainment

This division has three full-time employees and approximately 20 part-
time employees.  Full-time employees are management staff and part-time 
employees are waitresses, bartenders, and door personnel.  

Retail

Currently, this division has one full-time employee.

Item 2. Description of property

First Entertainment, Inc. 

The Company's executive offices are located at 1380 Lawrence Street, 
Suite 1400, Denver, Colorado and are leased under the terms of a 66-month 
lease, which terminates in August 1997.  Monthly rental is approximately 
$4,100.  

Video

The Company's video operation is housed in the executive offices at 1380 
Lawrence Street, Suite 1400, Denver, Colorado.  The production facilities 
for the Video Division are located in Casper, Wyoming, in the home of the 
producer.  The Company pays no rent for its production facilities.  
Radio

The Company has facilities in Gillette, Wyoming which house the radio 
station, 100.7, The Fox.  The facilities were leased under a 10-year 
lease agreement, which commenced in August 1986, with a trust whose 
trustee was the president of the Company until 1992.  Annual rent was 
approximately $21,000.  In addition, the radio station leased its FM 
tower site from a ranch owned by the former president's wife for an 
annual rent of $5,400.  In April, 1996  the Company purchased the land 
and building which houses the radio station for $300,000 and the land 
under which the FM tower sits for $125,000, by issuing preferred stock 
valued at $275,000 and a mortgage for $150,000.

Live Entertainment

The Company rents one facility.  Comedy Works Larimer Square leases its 
premises under the terms of a five-year lease, which commenced in March 
1994.  The monthly lease payments are based upon approximately six 
percent of gross revenues.  The Tampa Comedy Works which closed January 
1995 had leased its space on a month-to-month basis.

Retail

This division leases  office space at 1380 Lawrence Street, Suite 1400 
from the parent company at $750 per month and space for stand alone 
kiosks at various prices on short term leases for less than one year.

Item 3. Legal Proceedings

First Entertainment

First Entertainment knows of no litigation pending, threatened, or 
contemplated, or unsatisfied judgments against it, or any proceedings of 
which First Entertainment or any of its subsidiaries is a party, except 
as specified below.  First Entertainment knows of no legal actions 
pending or threatened, or judgment entered against any of its officers or 
directors or any of its subsidiaries in their capacities as such, except 
as specified below.  

In January, 1996 the Company, AB Goldberg, Harvey Rosenberg and several 
other related and unrelated third parties were named as defendants in a 
lawsuit filed by Sterling Consulting Corporation as Receiver for Indian 
Motorcycle Manufacturing, Inc.(IMMI)  The Complaint alleges 
interference by defendants in the business of IMMI, conflicts of interest 
of AB Goldberg, breach of fiduciary duty, unjust enrichment, and 
bankruptcy fraud.

In July 1996, The Company filed suit against the Receiver alleging 
intentional interference of contracted relationships and breach of 
licensing agreements.

In September 1996, the Company and the Receiver commenced settlement 
negotiations whereby all parties would resolve their disputes.

In February 1997, the Company agreed to terms of a Settlement Agreement 
with the Receiver whereby the Company would relinquish all rights to the 
Indian Motorcycle Trademark and pay the Receiver approximately $114,000. 
(see Item 1, Other Business Developments)

In March 1997, the company commenced legal proceedings against Image 
Marketing Group, Inc. and Harvey Rosenberg, Burt Katz and Michael Katz, 
individually, for collection of approximately $700,000 in advances to 
Image Marketing.

In addition, the Company has commenced legal proceedings against HK 
Retail Concepts for breech of contract.  The claims are for unspecified 
damages at this time.

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

There were no matters submitted to security holder vote during the fiscal 
year ended December 31, 1996.  

Item 5. Market for the Company's Common Equity and Related Stockholder 
Matters

The Company's common stock is traded on NASDAQ in the over-the-counter 
market and since October 1988, has been included in NASDAQ.  The 
following table sets forth the high and low bid quotation for the 
Company's common stock for each quarterly period in 1996 and 1995.  As of 
February 28, 1997, there were approximately 1,135 shareholders of record 
of the Company's common stock.  Holders of common stock are entitled to 
receive such dividends as they may be declared by the Company's Board of 
Directors.  No dividends are anticipated to be paid in the foreseeable 
future.  
<TABLE>
                                                     Bid Price           
                                                 High        Low     
<S>                                           <C>          <C>
   1996
    First Quarter                             $   .66      $  .44
    Second Quarter                               1.94         .50
    Third Quarter                                1.25         .63
    Fourth Quarter                               1.00         .50

   1995
    First Quarter                             $  1.90      $  .69
    Second Quarter                               2.03        1.12
    Third Quarter                                1.60        1.00
    Fourth Quarter                               1.22         .66
</TABLE>

Item 6. Management Discussion and Analysis or Plan of Operation

Fiscal 1996 as Compared to Fiscal 1995

The Company had a net loss from continuing operations of approximately 
$1.6 million in 1996 and 1995.

The loss from the discontinued operations of Image was $ 28,000 in 1996 
compared to $ 593,000 in 1995.  The 1995 loss represents a full year of 
operation, whereas the 1996 loss represents only three months of 
operations of which $60,000 had already been estimated at December 31, 
1995.

The loss on the disposal of Image of $1,609,000 in 1995 represents a 
write down of assets to their estimated net realizable value of 
$1,549,000 and an estimate of the loss through the state of disposition 
of Image of $ 60,000.  The gain on the sale of Image in 1996 results from 
the sale of Image that at the time of disposition had liabilities in 
excess of assets.

Overall revenues increased from $1.8 million in 1995 to $2.1 million in 
1996.  Live entertainment revenues increased from $ 1 million in 1995 to 
$1.25 million in 1996.  The increase is due in part to a strong economy 
which is providing more discretionary income and to increased attendance.  
The Comedy Club has been successful in bringing in highly recognized 
headliners, some of which performed special engagements during the week 
when attendance is less than weekends.  As a result of increased 
attendance, food sales and liquor sales have also increased.  Overall, 
the industry has seen a decline in attendance at comedy clubs nationwide, 
although the Denver comedy club has been able to retain attendance.  With 
the increase in live entertainment sales in 1996, cost of goods sold has 
also increased from $.9 million in 1995 to $1.1 million in 1996.  The 
largest component of cost of goods sold, live entertainment, is labor, 
including entertainers salaries which increased from $392,000 in 1995 to 
$547,000 in 1996.  Of the $155,000 increase in labor costs in 1996, 
$122,000 was attributable to entertainers. 

Radio sales have increased from $678,000 in 1995 to $713,000 in 1996 
primarily because the Company began promoting concerts for up and coming 
country performers, generating approximately $33,000 in concert revenues.  
The radio station still has the largest audience share in Gillette, 
Wyoming.  Cost of goods sold-radio has increased by $10,000 from 1995 to 
1996 primarily due to the cost of the concerts which was a new cost in 
1996.  The single largest component of cost of goods sold, radio, is 
labor which was $296,000 in 1996 and $300,000 in 1995.  The radio station 
has been successful in increasing radio revenues without adding 
additional people.  The radio station is continuing in its efforts to 
manage its costs and as such has substantially reduced its operating 
overhead.

Video sales increased from $31,000 in 1995 to $106,000 in 1996 as a 
result of the sale of foreign distribution rights for $50,000 and 
collection of foreign royalties of $53,000.

Retail revenues were $19,000 in 1996 and did not exist in 1995.  Retail 
operations commenced in December, 1996 and revenues are for only one 
month.  Retail cost of sales is high primarily due to shipping costs in 
getting products the retail outlets in time for the Christmas retail 
shopping season.  In addition, this new division had certain start up 
costs which are not expected to recur.

Other revenue decreased slightly from $55,000 in 1995 to $46,000 in 1996.

As a result of significant assets being fully depreciated at December 31, 
1995 and the acquisition of the radio station in 1996 depreciation and 
amortization decreased by $8,000 from 1995 to 1996.

Management and administrative fees, affiliate, increased from $201,000 in 
1995 to $408,000 in 1996.  The underlying agreement, which provides for 
services valued at $20,000 per month, was in effect for a partial year in 
1995 and a full year in 1996.  In addition, the 1996 fees include a bonus 
paid in common stock of the Company of $168,000.

Selling, general and administrative expenses (SG&A) increased from $1.37 
million in 1995 to $1.39 million  in 1996, an increase of approximately 
$20,000.  The Company made a concerted effort to reduce SG&A during 1996 
which resulted in significant savings.  However, there were certain 
transaction which had an adverse effect on SG&A for 1996.  Included in 
SG&A in 1996 is the accrual for stock bonus awards issued in 1997 for 
1996 services of approximately $89,600.  In addition, the Company 
incurred substantial legal fees in 1996 in connection with the Indian 
Motorcycle litigation and settlement negotiations.  The settlement 
resulted in the Company recording settlement costs of $114,200 during 
1996.  Legal fees were approximately $69,000 in 1995 compared to $195,000 
during 1996.  Compensation and consulting fees were approximately 
$568,000 for 1995 compared to $467,000 for 1996.
  
Notes payable and long term debt was $977,000 in 1995 and $1,061,000 in 
1996.  The average outstanding balance of long term debt was $1,173,000 
in 1995 as compared to $1,019,000 in 1996.  In addition, in 1995 the 
Company discharged nearly $300,000 in debt that was in default that 
accrued interest at the default rate of 21%.  The decline in interest 
expense between 1996 and 1995 is due to the above factors.

In 1995 the Company wrote off its investment in Interactive Video 
Technology thereby incurring a loss of $125,000.

In 1995 the Company was more successful in negotiating debt settlements 
with unsecured creditors such as note payable holders and accounts 
payable holders through the issuance of common stock.  These debt 
settlements resulted in a gain of $176,717 in 1995.

Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared 
assuming that the Company will continue as a going concern.  As discussed 
in Notes A and F to the consolidated financial statements, the Company has 
suffered recurring losses from operations, has a working capital 
deficiency of approximately $1.3 million, and is in default on a 
substantial portion of its debt.  These conditions raise substantial doubt 
about the Company's ability to continue as a going concern. The 
consolidated financial statements do not include any adjustments that 
might result from the outcome of these uncertainties.

Management's plans with regard to the Company's ability to continue as a 
going concern include continued raising of equity financing, restructuring 
of its debt obligations, evaluating mergers and acquisitions to improve 
market share or operational synergy's and improving efficiency of 
operations. For several years, losses from operations have resulted in 
significant cash deficiencies and have hindered the Company's ability to 
properly fund certain business segments, such as videos, to make them 
profitable or to expand current business segments.  The Company has 
current liabilities of $1.7 million and presently, the Company does not 
have the financial resources it needs to meet its existing obligations and 
fund working capital deficits.  The Company must generate additional 
revenues that must come from sources other than the existing business 
segments.  The existing business segments will  not generate significant 
increases in revenues.  Therefore new business opportunities will be 
needed for the Company to continue in the long term.  The Company  is 
always evaluating additional business opportunities but is limited due to 
its lack of working capital. 

The Company has been successful in 1996 and in 1995 in financing 
operations through issuance of common stock in settlement of accounts 
payable and in exchange for services.  This form of payment has reduced 
the cash requirements of the Company.

A significant capital infusion of up to $3 million will be necessary to 
pay down existing debt, finance capital expenditures needed by various 
business segments  to increase sales and profitability and provide working 
capital to finance business expansion.  Approximately $800,000 of 
financing is needed to expand operations of ASOTV.  This money would be 
used to finance constructing of manned kiosks in major retail malls, 
purchase inventory and furniture and equipment for each kiosk.  The 
Company is also considering opening a country nightclub in Gillette, 
Wyoming to complement the country radio station the Company currently owns 
in Gillette.  The cost of furniture and equipment is estimated to be 
approximately $125,000.  The likelihood of obtaining the necessary equity 
financing is uncertain at this time.

A valuation allowance offsetting the Company's net deferred tax asset has 
been established to reflect management's evaluation that it is more likely 
than not that all of the deferred tax assets will not be realized.

Item 7.	Financial Statements 

FIRST ENTERTAINMENT, INC. AND SUBSIDIARIES
Index to Consolidated Financial Statements



Report of Independent Certified Public Accountants

Consolidated Balance Sheets.............................

Consolidated Statements of Operations

Consolidated Statements of Stockholders' Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements


Report of Independent Certified Public Accountants

Board of Directors and Stockholders
First Entertainment, Inc.
Denver, Colorado 


We have audited the accompanying consolidated balance sheets of First 
Entertainment, Inc. and Subsidiaries as of December 31, 1996 and 1995, and 
the related consolidated statements of operations, stockholders equity 
(deficit) and cash flows for the years than ended.  These consolidated 
financial statements are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these consolidated financial 
statements based on our audits.

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 consolidated financial 
statements are free of material misstatement.  An audit includes examining, 
on a test basis, evidence supporting the amounts and disclosures in the 
consolidated financial statements.  An audit also includes assessing the 
accounting principles used and significant estimates made by management, as 
well as evaluating the overall consolidated financial statement 
presentation.  We believe that our audits provide a reasonable basis for our 
opinion.

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of First 
Entertainment, Inc. and Subsidiaries as of December 31, 1996 and 1995, and 
the results of their operations and their cash flows for the years then 
ended, in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared 
assuming that the Company will continue as a going concern.  As discussed in 
Notes A and F to the consolidated financial statements, the Company has 
suffered recurring losses from operations, has a working capital deficiency 
of approximately $1.3 million, and is in default on a substantial portion of 
its debt.  These conditions raise substantial doubt about the Company's 
ability to continue as a going concern.  Management's plans in regards to 
these matters are discussed in Note A.  The consolidated financial 
statements do not include any adjustments that might result from the outcome 
of these uncertainties.



BDO Seidman, LLP

March 3, 1997, except for Note N which is dated April 11, 1997
Denver, Colorado

<TABLE>
<CAPTION>
FIRST ENTERTAINMENT, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1996 and 1995

                                                    1996             1995

ASSETS
<S>                                             <C>               <C>
CURRENT
 Cash and cash equivalents                      $ 62,856          $ 71,488
 Trade accounts receivable, 
   net of allowance for doubtful accounts
    of  $7,483 and  $2,776                       105,357            89,203
 Accounts receivable, other                      218,010           145,778
 Notes receivable, affiliate                      10,000           100,000
 Inventories                                      51,282            22,234
 Other                                            18,176            18,911
--------------------------------------------------------------------------
                                                 465,681           447,614
--------------------------------------------------------------------------
PROPERTY AND EQUIPMENT (Notes B and F)
 Master tape library and film costs            1,600,827 	        1,600,827
 Equipment and furniture                         770,566           725,324
 Building and leasehold improvements             528,257           227,839
 Land                                            125,000 
---------------------------------------------------------------------------
                                               3,024,650         2,553,990

 Less accumulated depreciation
   and amortization                            2,399,175         2,162,103
---------------------------------------------------------------------------
                                                 625,475           391,887
---------------------------------------------------------------------------
OTHER ASSETS
 License, net of accumulated amortization
  of $420,460 and $357,941, respectively       1,629,921           	892,441
 Goodwill, net of accumulated amortization 
  of $26,932 (Note C)                            511,712 
  Other                                                                956  
---------------------------------------------------------------------------
                                               2,141,633           893,397  
---------------------------------------------------------------------------

TOTAL ASSETS                                 $ 3,232,789      	$ 1,732,898
============================================================================

<CAPTION>
See accompanying report of independent certified public accountants and 
notes to consolidated financial statements. 
</TABLE>
<TABLE>

<CAPTION>
FIRST ENTERTAINMENT, INC. AND SUBSIDIARIES 
Consolidated Balance Sheets, continued
December 31, 1996 and 1995

                                                  1996            1995
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
<S>                                            <C>             <C>
CURRENT LIABILITIES
 Accounts payable                              $ 115,701       $ 63,268
 Accrued liabilities                             166,927        122,830
 Accrued interest                                324,805        325,185
 Accrued bonuses                                 257,600
 Notes payable and current portion 
  of long-term debt (Note F)                     861,392        923,048
 Notes payable, related parties                                  13,167
 Net liabilities of discontinued
  operations (Note D)                                           297,565
-----------------------------------------------------------------------
                                               1,726,425      1,745,063
-----------------------------------------------------------------------

LONG-TERM DEBT, NET OF CURRENT
  PORTION (Note F)                               199,484        54,281
------------------------------------------------------------------------

MINORITY INTEREST (Note C)                       163,787 
------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES (Note J)

STOCKHOLDERS' EQUITY(DEFICIT) (Note G)
 Preferred stock, $.001 par value;
    authorized 5,000,000 shares;
  Class A preferred stock, 10,689 
   shares issued                                      10            10
  Class B preferred stock, 0 and
    231,976 shares issued                                          232
  Class C preferred stock, 125,000
    and 0 shares issued                              125
  Common stock, $.008 par value;
     authorized 6,250,000 shares;
       5,292,238 and 2,631,544
        shares issued                             42,338        21,052
 Capital in excess of par value               13,460,958   	 11,227,696
 Accumulated deficit                         (11,829,706)  (10,567,547)
 Deferred compensation                           (45,807)     (263,065)
 Treasury stock, at cost, 77,125
  shares of common stock                        (484,824)     (484,824)
------------------------------------------------------------------------
                                               1,143,093       (66,446)
------------------------------------------------------------------------

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)                             $ 3,232,789   	$ 1,732,898
========================================================================

<CAPTION>
 See accompanying report of independent certified public accountants and 
notes to consolidated financial statements. 
</TABLE>
<TABLE>

<CAPTION>
FIRST ENTERTAINMENT, INC. AND SUBSIDIARIES 
Consolidated Statements of Operations
For the Years Ended December 31, 1996 and 1995

                                                     1996          1995
<S>                                           <C>             <C>
REVENUE
 Live entertainment                           $ 1,255,735     $ 1,051,993
 Radio                                            713,322         678,685
 Video                                            105,618          31,177
 Retail                                            18,755
 Other                                             46,021          55,005
-------------------------------------------------------------------------
                                                2,139,451       1,816,860
-------------------------------------------------------------------------

COSTS AND EXPENSES
 Cost of sales, live entertainment              1,078,043         899,585
 Cost of products sold, radio                     512,299         502,438
 Cost of products sold, video                       9,483          19,913
 Cost of sales, retail                             17,540
 Depreciation and amortization                    326,522         334,164 
 Management and administrative fees,
  affiliate (Note I)                              408,000         201,000
 Selling, general and administrative            1,394,683       1,373,833
-------------------------------------------------------------------------
                                                3,746,570       3,330,933
-------------------------------------------------------------------------

OPERATING LOSS FROM CONTINUING OPERATIONS      (1,607,119)     (1,514,073)
--------------------------------------------------------------------------

OTHER INCOME (EXPENSE)
 Interest expense                                (102,791)       (196,698)
 Other, net                                        22,961          55,468  
-------------------------------------------------------------------------
                                                  (79,830)       (141,230)
-------------------------------------------------------------------------

LOSS FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST                       (1,686,949)     (1,655,303)

MINORITY INTEREST IN NET LOSS OF
   SUBSIDIARY                                      39,655   
--------------------------------------------------------------------------
LOSS FROM CONTINUING OPERATIONS                (1,647,294)     	(1,655,303)

DISCONTINUED OPERATIONS (Note D)
 Loss from operations of discontinuance
   of Image                                       (28,570)       (593,674)
 Estimated Loss on disposal of Image,
   including provision of $60,000 
    for operating losses during 
    phaseout period                                            (1,609,208)
 Gain on sale of Image                            413,704
---------------------------------------------------------------------------
NET LOSS                                      $ (1,262,160)  $ (3,858,185)
============================================================================

NET LOSS PER COMMON SHARE, CONTINUING
OPERATIONS                                    $       (.39)  $       (.70)
--------------------------------------------------------------------------

NET INCOME (LOSS) PER COMMON SHARE, 
DISCONTINUED OPERATIONS                       $        .09   $       (.93)
-------------------------------------------------------------------------

NET LOSS PER COMMON SHARE                     $       (.30)  $      (1.63)
--------------------------------------------------------------------------

WEIGHTED-AVERAGE NUMBER OF
SHARES OUTSTANDING                               4,168,661      2,363,231
--------------------------------------------------------------------------
</TABLE>
[CAPTION]

See accompanying report of independent certified public accountants and notes
 to consolidated financial statements.
<TABLE>
<CAPTION>
FIRST ENTERTAINMENT, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders Equity (Deficit)
For the Years Ended December 31, 1996 and 1995


                          Class A          	Class B           	Class C         
                      Preferred Stock  	Preferred Stock      	Preferred Stock
                        Shares  Amount     	Shares	   Amount   	Shares       	Amount
<S>                     <C>        <C>    <C>         <C>      <C>      <C>
BALANCES,
JANUARY 1, 1995          13,469    $13	    231,976    $232

Common stock issued
  for:
 Cash, net of offering
  costs
 Consulting services
 Settlement of accounts
 Exercise of stock
 Conversion of Class A 
   preferred             	(2,780)   (3)
 Conversion of
  Notes Payable
 Common stock options,
  issued for services
Return of Common
  Stock Issued
  for Polton
   Acquisition
Retirement of
 Treasury Stock
Amortizaiton of
 deferred
  compensation
Net loss

BALANCES,
DECEMBER 31,
 1995                    10,689    10    231,976    232  

Preferred stock
 issued for:
 Acquisition of
  property                    	                               275,000     275

Common stock
 issued for:
 Consulting services
 Exercise of
  stock options
 Conversion of
  Class B 
   preferred                            (231,976)   (232)
 Conversion of
  Class C
   preferred    	                                           (150,000)   (150)
 Inventory and rights
 Business combination
Common stock options,
  issued for
   services
Amortization of
  deferred
   compensation
Net loss

BALANCES,
DECEMBER 31,
  1996               10,689     $10           0       $ 0    	125,000   $125

                         Common Stock     Capital In Excess      Accumulated
                       Shares    Amount     of Par Value          Deficit
<S>                   <C>        <C>         <C>              <C>
BALANCES,
JANUARY 1,1995        1,919,872  $15,359     $8,869,076       ($6,709,362)

Common stock issued
  for:
 Cash, net of
  offering
   costs                125,000    1,000        133,400
 Consulting services    194,250    1,553        699,476
 Settlement of
  accounts payable       33,450      268        192,108
 Exercise of stock
  options               362,500    2,900        952,514
 Conversion of
  Class A 
   preferred                695        6             (3)
 Conversion of
  Notes Payable          70,777      566        258,275
 Common stock
   options,
    issued for
    services                                    440,250
Return of Common
  Stock Issued
  for Polton
   Acquisition
Retirement of
 Treasury Stock        (75,000)    (600)       (317,400)
Amortizaiton of
 deferred
  compensation
Net loss                                                        (3,858,185)
BALANCES,
DECEMBER 31,
 1995                2,631,544    21,052      11,227,696       (10,567,547)

Preferred stock
 issued for:
 Acquisition of
  property                                       274,725

Common stock
 issued for: 
 Consulting
  services             532,700     4,262         529,579
 Exercise of
  stock options         50,000       400          22,100
 Conversion of
  Class B
   preferred            57,994       464            (232)
 Conversion of
  Class C
   preferred           150,000     1,200          (1,050)   
 Inventory and
  rights             1,100,000     8,800       1,141,200
 Business 
  combination          770,000     6,160         401,940
Common stock
  options,
  issued for
   services                                       15,000
Amortization
  of deferred
   compensation
Net loss                                                         (1,262,160)

BALANCES,
DECEMBER 31,
  1996              5,292,238   $42,338      $13,460,958       ($11,829,707)

                     Deferred      Investment       Treasury
                   Compensation     in Polton       Stock       Total
<S>                 <C>            <C>              <C>          <C>
BALANCES,
JANUARY 1,1995      ($10,417)      ($318,000)       ($484,824)  $1,362,077

Common stock
 issued for:                                                         
 Cash, net of
  offering
   costs                                                           134,400
 Consulting
  services          (254,250)                                      446,779
 Settlement of
  accounts payable                                                 192,376
 Exercise of stock 
  options                                                          955,414
 Conversion of
  Class A 
   preferred                                                             0
 Conversion of
  Notes Payable                                                    258,841
 Common stock
   options,
    issued for
    services       (191,000)                                      249,250
Return of Common
  Stock Issued
  for Polton
   Acquisition                    318,000          (318,000)             0
Retirement of
 Treasury Stock                                     318,000              0
Amortizaiton of
 deferred
  compensation     192,602                                       192,602
Net loss                                                        (3,858,185)

BALANCES,
DECEMBER 31,
 1995               (263,065)                      (484,824)      (66,446)

Preferred stock
 issued for:
 Acquisition of
  property                                                        275,000

Common stock
 issued for: 
 Consulting
  services                                                        533,841
 Exercise of
  stock options                                                    22,500
 Conversion of
  Class B
   preferred    
 Conversion of
  Class C
   preferred      
 Inventory and
  rights                                                        1,000,000
 Business                        
  combination                                                     408,100
Common stock
  options, 
  issued for
   services                                                        15,000
Amortization
  of deferred
   compensation   217,258                                         217,258
Net loss                                                       (1,262,160)

BALANCES,
DECEMBER 31,
  1996          ($45,807)                            ($484,824) $1,143,093


</TABLE>
<TABLE>

<CAPTION>
FIRST ENTERTAINMENT, INC. AND SUBSIDIARIES 
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1996 and 1995

                                                      1996             1995  
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<S>                                            <C>             <C>
OPERATING ACTIVITIES
 Net loss	                                      $ (1,262,160)   $ (3,858,185)
 Adjustments to reconcile net loss
   to net cash used in operations
  Depreciation and amortization                     326,522         369,564
  Write-off of goodwill                                              13,452
  Amortization of Image inventory
   purchase valuation                                               160,000
  Loss on investments                                               125,000
  Debt settlements                                  (21,342)       (176,717)
  (Gain) loss on disposal of Image                 (413,704)	      1,609,208
  Issuance of stock for services and common
   stock options, net                               766,098         888,632
  Minority interest in net loss of subsidiary       (39,655)        (78,950)
  Changes in operating assets and liabilities:
     Receivables                                    111,614         (32,333)
     Inventories                                    (29,048)	         18,399
     Other assets                                      (221)          7,792
     Accounts payable                                52,433         (53,900)
     Accrued liabilities                            369,492         129,062
     Cash provided by (used in)
        discontinued operations                     (19,048)        131,371
---------------------------------------------------------------------------

NET CASH USED IN OPERATING ACTIVITIES              (159,019)	       (747,605)
----------------------------------------------------------------------------

<CAPTION>
See accompanying report of independent certified public accountants and 
notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>

FIRST ENTERTAINMENT, INC. AND SUBSIDIARIES 
Consolidated Statements of Cash Flows (Continued)
For the Years Ended December 31, 1996 and 1995

                                                     1996          1995    
<S>                                               <C>           <C>
INVESTING ACTIVITIES
 Capital expenditures                             (45,660)      (62,229)
 Advances to related                              (10,000)
 Repayment from related parties                   100,000
 Cash used in discontinued operations                            (4,029)
------------------------------------------------------------------------

NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES                               44,340       (66,258)
-------------------------------------------------------------------------

FINANCING ACTIVITIES
 Principal payments on debt                       (66,453)     	(132,856)
 Proceeds from issuance of stock of subsidiary    150,000
 Proceeds from issuance of common stock            22,500     1,089,814
 Checks issued against future deposits                          (40,039)
 Cash used in discontinued operations                           (93,712)
------------------------------------------------------------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES    	     106,047       	823,207
------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                               (8,632)        9,344

CASH AND CASH EQUIVALENTS, 
BEGINNING OF YEAR                                  71,488        62,144
-----------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, 
END OF YEAR                                   $    62,856    $   71,488
========================================================================

SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
 Interest paid                                $    98,054    $   72,123
-----------------------------------------------------------------------

 Income taxes paid                            $         0    $        0
-----------------------------------------------------------------------

<CAPTION>
 See accompanying report of independent certified public accountants and 
notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST ENTERTAINMENT, INC. AND SUBSIDIARIES 
Consolidated Statements of Cash Flows (Continued)
For the Years Ended December 31, 1996 and 1995

                                                  1996              1995   
<S>                                              <C>              <C>
SUPPLEMENTAL SCHEDULE OF
NONCASH INVESTING AND
FINANCING ACTIVITIES

 Notes payable and accrued interest
  converted into common stock                                     $  258,840
----------------------------------------------------------------------------

 Accounts payable and accrued expenses
  converted into common stock                                     $  192,376
----------------------------------------------------------------------------

 Issuance of common stock for
   inventory and other licensing rights         $ 1,000,000 
----------------------------------------------------------------------------

 Issuance of preferred stock
  for acquisitions                               $  275,000 
----------------------------------------------------------------------------	

 Treasury stock acquisition and retirements                       	$ 318,000
----------------------------------------------------------------------------

 Mortgage notes assumed or provided in 
  property acquisitions                        $    150,000       $  57,600
----------------------------------------------------------------------------

 Common stock and options issued for
   services                                    $    548,841       $1,141,280
----------------------------------------------------------------------------

 Common stock issued for investment
   in subsidiary                               $    408,100 
----------------------------------------------------------------------------

 Liabilities assumed for investment
    in subsidiary                              $    130,544 
----------------------------------------------------------------------------

 Conversion of liabilities assumed 
   for investment in subsidiary
     to minority interest                       $   100,000   
----------------------------------------------------------------------------
 Rights acquired for note payable             $    800,000
----------------------------------------------------------------------------

 Inventory seized in settlement for
   notes payable                               $    800,000
----------------------------------------------------------------------------

 Inventory seized resulting in
   accounts receivables, other                 $    200,000
----------------------------------------------------------------------------
<CAPTION>
See accompanying report of independent certified public accountants and 
notes to consolidated financial statements. 
</TABLE>

[CAPTION]
FIRST ENTERTAINMENT, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

NOTE A  NATURE OF BUSINESS AND GOING CONCERN

First Entertainment, Inc.  (the "Company") was incorporated as a Colorado 
corporation on January 17, 1985.  The Company and its subsidiaries are 
involved in entertainment through several media:  its video segment 
produces and markets travel videos; its live entertainment segment owns 
and operates a comedy club; and its radio station, 100.7 The Fox 
operates in Gillette, Wyoming.  In 1995, the Company discontinued its 
copyrights and proprietary properties division which consisted of the 
publication of books and the printing of art.

During the period from inception (January 17, 1985) to December 31, 1996, 
the Company has incurred cumulative net losses of approximately  $11.8 
million and, as of December 31, 1996, had an excess of current liabilities 
over current assets of approximately $1.3 million, and is in default on a 
significant portion of its debt.  These conditions raise substantial doubt 
about the Company's ability to continue as a going concern.  The Company 
is dependent upon obtaining additional financing, and/or extending its 
existing debt obligations, and/or obtaining additional equity capital and 
ultimately achieving profitable operations. The accompanying consolidated 
financial statements do not include any adjustments that might result from 
the outcome of these uncertainties.  

Management's plans with regard to the Company's ability to continue as a 
going concern include  continued raising of equity financing in the U.S. 
and/or international markets, completing negotiations for improved 
domestic and international distribution channels for its products, 
restructuring of its debt obligations, evaluating mergers or acquisitions 
to improve market share or operational synergies and improving efficiency 
of operations.  

NOTE B  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation   The accompanying consolidated financial 
statements include the accounts of the Company and its subsidiaries.  All 
significant intercompany accounts and transactions have been eliminated.

Use of Estimates  The preparation of financial statements in 	conformity 
with generally accepted accounting principles necessarily requires 
management to make estimates and assumptions that affect the reported 
amounts of assets and liabilities, the disclosure of contingent assets and 
liabilities at the date of the financial statements and reported amounts 
of revenues and expense during the reporting periods. Actual results could 
differ from those estimates.

   Inventories   Inventories are stated at the lower of cost or market value 
(first-in, first-out basis).  Inventories are comprised of video cassettes 
and liquor supplies.  

Property and Equipment   The Company has a library of master video tapes 
and film cost inventory related to its video product line.  Capitalized 
costs, when completed, are amortized over the estimated economic life of 
the master tape, generally not in excess of seven years.  The excess, if 
any, of the capitalized costs of master tapes over anticipated gross 
revenues is charged to expense.  As of December 31, 1996 and 1995, the 
aggregate net book value of the master tape library and film cost 
inventory was approximately $64,000 and $74,000.

Production equipment, furniture and other equipment are recorded at cost 
and depreciated using straight-line and declining balance methods over the 
estimated useful lives of the assets, ranging from three to fifteen years.

Leasehold improvements are recorded at cost and are amortized on a 
straight-line basis over their estimated useful lives, but not in excess 
of the lease term.  

The cost and related accumulated depreciation and amortization of assets 
sold or retired are removed from the appropriate asset and accumulated 
depreciation and amortization accounts and the resulting gain or loss is 
reflected in operations.  

Maintenance and repairs are charged to operations as incurred and 
expenditures for major improvements are capitalized.  

License, Goodwill and Intangibles   Broadcast licenses, goodwill and 
intangibles, consisting of copyright rights, are amortized on a straight-
line basis over a period of 10 to 20 years.

Periodically the Company reviews the recoverability of its  intangible 
assets based on estimated undiscounted future cash flows from operating 
activities compared with the carrying value of the intangible assets.  
Should the aggregate future cash flows be less than the carrying value, a 
write-down would be required measured by the difference between the 
undiscounted future cash flow and the carrying value of the intangible 
assets.

Revenue Recognition   Video cassette sales and copyrighted materials are 
generally recorded upon shipment.  Broadcast fees are recorded as revenue 
when the broadcast is aired.  Live Entertainment revenues are recognized 
at the time of the performance, generally nightly.  Retail sales are 
recognized at the time the merchandise is sold and are net of returns.

Net Loss Per Share   Net loss per share is computed on the basis of the 
weighted-average number of shares outstanding during the respective 
periods presented.  The assumed conversion of stock options, warrants, 
debentures and convertible preferred stock would be antidilutive for all 
periods presented and are not included in the computation of weighted-
average shares.  

Concentration of Risk   Financial instruments which potentially expose the 
Company to concentration of credit risk consist primarily of cash 
equivalents and accounts receivable with the Company's various customers.  
The Company establishes an allowance for doubtful accounts based on 
factors surrounding the credit risk of specific customers, historical 
trends and other information. 

The Company maintains all cash in bank deposit accounts which at times may 
exceed federally insured limits.  The Company has not experienced losses 
in such accounts.

Reclassifications   Certain balances in the 1995 consolidated financial 
statements have been reclassified in order to conform to the 1996 
presentation.  The reclassifications had no effect on financial condition 
or results of operation.

Income Taxes The Company accounts for income taxes under Statement of 
Financial Accounting Standard No. 109 (SFAS No. 109).  Temporary 
differences are differences between the tax basis of assets and 
liabilities and their reported amounts in the financial statements that 
will result in taxable or deductible amounts in future years.

Deferred Compensation   Deferred compensation results from granting stock 
options at option prices less than the fair market value of the stock on 
the date of grant, under agreements with terms extending beyond one year.  
Deferred compensation is initially charged to stockholders' equity and 
amortized to expense over the term of the related agreement.

Cash Equivalents   The Company considers all highly liquid debt 
instruments purchased with an original maturity of three months or less to 
be cash equivalents. 

Financial Instruments   The following methods and assumptions were used to 
estimate the fair value of each class of financial instruments for which 
it is practicable to estimate that value;

Notes Payable   These notes substantially bear interest at a floating rate 
of interest based upon the lending  institutions prime lending rate.  
Accordingly, the fair value approximates their reported 	carrying amount at 
December 31, 1996 and 1995.

Mortgage Notes   Estimated based upon current market borrowing rates for 
loans with similar terms and maturates.

The estimated fair values of the Company's financial instruments  for 
continuing operations are as follows:
<TABLE>

                                    December 31, 1996  December 31, 1995
<S>                             <C>         <C>         <C>       <C>
 Financial Liabilities             Carrying    Fair      Carrying   Fair
  Notes Payable                     Amount     Value     Amount     Value
   and Mortgage Notes           $1,060,876  $1,060,876  $977,329  $977,329

Stock Option Plans  The Company applies APB Opinion 25, Accounting for 
Stock Issued to Employees, and related Interpretations in accounting for 
all stock option plans.  Following the guidance of APB Opinion 25, 
compensation cost has been recognized for stock options issued to 
employees as the excess of the market price of the underlying common stock 
on the date of the grant over the exercise price of the Company's stock 
options on the date of the grant.

SFAS No. 123, Accounting for Stock-Based Compensation, requires the 
Company to provide pro forma information regarding net income as if 
compensation cost for the Company's stock option plans had been determined 
in accordance with the fair value based method prescribed in SFAS No. 123.  
To provide the required pro forma information, the Company estimates the 
fair value of each stock option at the grant date by using the Black-
Scholes option-pricing model.

NOTE C  ACQUISITIONS

  Power Media

In July, 1996, the Company issued 770,000 shares of its restricted common 
stock, valued at $408,100, in exchange for 18,000 of the 25,000 then 
issued and outstanding shares of Power Media Communications International, 
Inc. (Power Media), or 72% ownership.  Power Media was a substantially 
dormant company that had developed the concept of selling informercial 
products in kiosks primarily located in retail malls.  The Company 
purchased Power Media because it considers the concept viable and, with 
proper management and working capital, profitable

At the time of the acquisition, Power Media had net liabilities of 
approximately $130,000, as such, the total purchase price for Power Media 
was approximately $538,100.  The acquisition of Power Media was accounted 
for as a purchase and the purchase price in excess of net assets acquired 
was allocated to goodwill.  Amortization of goodwill is computed on a 
straight line basis over 10 years.  Since operations of Power Media prior 
to the Company's acquisition were not material, no proforma information 
has been provided.

In November 1996, a new entity was formed called The Best Of As Seen on 
TV, Inc. (ASOTV) for the purpose of acquiring all of the issued and 
outstanding common stock of Power Media and to provide original 
incorporators with ownership in ASOTV.  The original incorporators of 
ASOTV were issued 464,000 shares of ASOTV for par value ($.001 per share), 
which included 220,800 shares issued to NMG, LLP, an entity owned by the 
wife of the president of the Company.  ASOTV then issued 1,015,000 shares 
of common stock to the Company for their 18,000 shares of Power Media and 
issued 324,500 shares to an unrelated party for the remaining 7,000 shares 
of Power Media.  In addition, ASOTV received a stock subscription from the 
previous owner of the 7,000 shares of Power Media to purchase 
approximately 325,000 shares of common stock of ASOTV for $150,000, of 
which $100,000 was received in 1996.  As a result of the above 
transactions, ASOTV owned 100% of Power Media and the Company owned 
approximately 56 percent of ASOTV as of December 31, 1996.

The operations of Power Media and ASOTV are included in the accompanying 
statements from the date of acquisition.

Minority interest at December 31, 1996 includes $100,000 of convertible 
preferred stock of ASOTV.

Polton

On May 10, 1994, the Company acquired approximately 80% of the issued and 
outstanding common stock of the Polton Corporation ("Polton") by issuing 
75,000 shares of the Company's restricted common stock valued at $318,000.  
In addition, the Company advanced Polton $200,000 for working capital.  
Polton is primarily engaged in the manufacturing and distribution of 
compact discs and cassettes for Warner Music labels. 

Shortly after the consummation of the Polton acquisition a dispute arose 
between the Company and Polton whereby Polton refused to provide financial 
information to the Company necessary to report the consolidated results of 
operations since the date of acquisition. Because the Company did not have 
the ability to exercise significant influence over operating and financial 
policies, Polton was accounted for using the cost method.

In November, 1995, the Company reached an agreement with Mr. Gary Firth, 
president of Polton, and Polton whereby Mr. Firth will return the 75,000 
shares of the Company's common stock and repay $100,000 of the $200,000 
advanced as working capital.  The agreement resulted in a write down of 
the note receivable of $100,000 which has been reflected in the 
accompanying consolidated statement of operations in selling, general and 
administrative expenses during 1995.

NOTE D  DISCONTINUED OPERATIONS

 On September 6, 1994, the Company purchased approximately 84% of the 
issued and outstanding common stock of Image Marketing Group, Inc. 
("Image").  Image, an art publisher, had expanded its business activities 
to include the development and exploitation of copyrighted properties in 
multi-media marketing formats.

In November 1995 the Board of Directors decided to discontinue the 
operations of Image.  Accordingly, the assets of Image were written down 
to their estimated net realizable value resulting in a write down of $1.6 
million.  In April, 1996, the Company sold Image to a former director for 
$1,000 resulting in a gain on the disposition of Image of approximately 
$413,000.  At the time of the disposition of Image, Image had negative 
net assets of approximately $414,000.

  The accompanying 1995 financial statements include an estimated loss on 
disposal of Image of $1,609,208, which includes a provision for 
anticipated operating losses until disposition of $60,000.

</TABLE>
<TABLE>
Summarized balance sheet data for the discontinued operations as of December 
31, 1995 is as follows:

                                                                     1995
<S>                                                             <C>
 ASSETS
 Accounts receivable                                            $ 100,000 
 Inventory                                                        350,000
 Other                                                             34,318
-------------------------------------------------------------------------
Total current assets                                              484,318
 Property, plant and equipment, net                               188,721
--------------------------------------------------------------------------
 Total                                                            673,039
--------------------------------------------------------------------------
 LIABILITIES
 Current liabilities                                              970,604
-------------------------------------------------------------------------
 Total                                                            970,604
------------------------------------------------------------------------
Net liabilities of discontinued operations                   $  	(297,565)
--------------------------------------------------------------------------
</TABLE>


NOTE E   RADIO STATION OPERATIONS

The Company operates a radio station in Gillette, Wyoming.  The assets of 
the radio station are collateral on certain bank debt.

On December 1, 1993, the Company executed notes bearing a principal 
balance of $588,257 and interest at seven percent per annum to replace 
certain past-due notes.  The notes were renegotiated during December 1996, 
extending the due date to November 20, 1997 with monthly principal and 
interest payments of $5,250 at nine percent per annum. 

In order to obtain an extension of the maturity date of the notes in 1993, 
the bank required the Company to issue 50,000 shares of its common stock 
to Quality Communications as collateral.  The Company then granted the 
bank a security interest in the 50,000 common shares such that, upon 
default or nonperformance under the terms of the notes, the bank may sell 
the 50,000 common shares.  The Company agreed to make all necessary 
filings to register the collateral to provide for its free trading by 
August 1, 1994.  Such shares have not been registered as of December 31, 
1996 but the shares are no longer restricted and are free trading.  The 
Company has recorded the issuance of the 50,000 common shares as treasury 
stock in the accompanying consolidated financial statements.  

NOTE F   NOTES PAYABLE AND LONG-TERM DEBT

The Company is not in compliance under the original terms of substantially 
all of its debt obligations.  In an effort to restructure its debt, a 
number of the terms of the original loans were rewritten and/or 
renegotiated. However, the majority of these notes are past due and due at 
various times over the next year.  Creditors may commence execution of 
judgments already obtained or commence legal proceedings to obtain 
judgments.  Substantially all of the Company's assets are pledged as 
collateral to one or more obligations.  Notes that are not in compliance 
are classified as current liabilities.

<TABLE>
                                                             December 31,  
                                                        1996            1995    
<S>                                                 <C>            <C>
 Notes payable, First National Bank
   Gillette (See Note E)                            $ 458,719      $ 479,364
 Note payable to the State of Wyoming(1)              300,000        300,000
 Mortgage note payable(2)                             149,561 
 Mortgage note payable(3)                              54,390         54,808
 Note payable, creditor(4)                             19,224         18,475
 Various notes payable individuals and
    companies(5)                                       78,982        124,682
 Discontinued Operations: 
   Notes payable bank                                                500,324
   Capital lease obligations                                          38,397	
----------------------------------------------------------------------------
                                                    1,060,876      1,516,050
  Less current portion                                861,392        923,048
  Less amount included in net assets of 
    discontinued operations                                          538,721
----------------------------------------------------------------------------
  Long-term debt                                    $ 199,484      $  54,281
----------------------------------------------------------------------------
</TABLE>
<TABLE>

 Future maturities of debt as of December 31, 1996 are as follows:
  <C>                    <C>  
  1997                   $   861,392
  1998                         4,901
  1999                         5,381
  2000                         5,906
  Thereafter                 183,296
  Total                  $ 1,060,876
</TABLE>

 (1) In February 1989, the Company borrowed $300,000 from the State of 
Wyoming for the purpose of purchasing equipment, inventory and to 
provide working capital necessary to establish a video duplicating 
facility.  As of December 31, 1996, the Company has not yet 
established an operating duplicating facility and was in violation of 
several of the compliance requirements of this note.  Although the 
note, by its original terms, is not due until March 1, 1999, the 
State of Wyoming has deemed the note to be currently due as a result 
of the violations of the compliance requirements.  The note, with 
default interest at 16.5 percent, is due in daily installments of 
$150, and is collateralized by the Company's master tape library.

 (2) Note payable, trust; interest at 9.5%; monthly principal and 
interest of $1,500; final payment due October 2012; collateralized by 
real property.

     (3) Note payable to mortgage company; interest at 8.015% per annum; 
monthly principal and interest payments of $403 for 59 months with a 
balloon payment of $53,000 due August 1, 2000;  collateralized by 
certain property and equipment.

 (4) Note payable to a trade creditor dated October 21, 1993; interest 
at 10 percent; due on May 1, 1996;  collateralized by the Company's 
master tape inventory and subordinated to previously filed liens.  

 (5) Various notes payable in default; due to various individuals and 
companies with rates ranging from 10 to 21 percent per annum.

NOTE G   STOCKHOLDERS' EQUITY

The Company has the authority to issue 5,000,000 shares of preferred 
stock and 6,250,000 shares of common stock.  The Board of Directors has 
the authority to issue such preferred shares in series and determine the 
rights and preferences of the shares.

On January 18, 1996 the Board of Directors amended the Articles of 
Incorporation creating a Class C preferred stock.  Of the 5,000,000 
shares of preferred stock authorized, 3,000,000 shall be designated as 
Class A, 1,000,000 shall be designated as Class B and 1,000,000 shall be 
designated as Class C.

On April 9, 1996, the Board of Directors approved a 4 for 1 reverse stock 
spilt.  Accordingly, all references in the consolidated financial 
statements to average number of shares outstanding and related prices, 
per share amounts, common stock purchase rights, stock option plan data 
and shares issued have been restated to reflect the reverse stock split.

The Class A shares have annual cumulative dividends of 7% per annum, 
redeemable by the Company by November 18, 1996, convertible into common 
stock on a four-for-one basis and carry a liquidation preference of 
approximately $15,000.

The Class B shares have annual cumulative dividends of 6%, payable 
quarterly if and when declared, redeemable by the Company into common 
stock at of the Company at the option of the Company upon terms and 
conditions to be established by the Corporation prior to the issuance of 
Class B preferred stock and is subordinated to Class A shares.

The Class C shares have no dividends and are convertible into common 
stock at a conversion price of Class C preferred stock equal to the 
average previous thirty day bid price of the Common Stock on the date of 
conversion.  The rights of the Class C shall be subordinate to Class A 
and Class B shares.

Common Stock Options   In June 1994, the Company adopted a Non-Qualified 
Stock Option Plan, under which the Company's Board of Directors are 
authorized to issue options to purchase up to 62,500 shares of the 
Company's common stock to qualified employees, officers and directors of 
the Company.  The option price may be changed at the discretion of the 
Board of Directors.  No options have been issued under this plan, 
therefore, no pro forma net loss or net loss per share amounts have been 
provided as set forth under provisions of SFAS No. 123.  During 1996 and 
1995, the Company has also issued other non-qualified stock options to 
non-employees under terms and at prices deemed appropriate by the Board 
of Directors.

<TABLE>
 The following is a summary of the number of shares under option:
                                             	Weighted
                                             Average
                            Non-Qualifying   Exercise            Expiration  
                             Stock Options   Price                Dates     
<S>                         <C>            <C>             <C>
Balance, January 1, 1995     241,250       $3.61           1995-1998
   Granted                   425,000         .74           1995-1996
   Exercised                (337,500)        .87
   Expired                  (233,750)       2.39
---------------------------------------------------------------------
Balance, December 31, 1995    95,000        3.49           1996-1998
   Granted                    50,000         .75                1996
   Exercised                 (50,000)        .75
   Expired
  ======================================================================
  Balance, December 31, 1996    95,000        $3.49
========================================================================
</TABLE>
<TABLE>
The following table summarized information about stock options 
outstanding and exercisable as of December 31, 1996:

                                                Weighted 
                                                Average            Weighted
      Range of           Number                 Remaining          Average
  Exercise Prices        Outstanding &          Contractual        Exercise
  From       To          Exercisable            Life in Years      Price   
<C>         <C>          <C>                    <C>                <C>
$  .40      $  .40       35,625                 0.8                $  0.40
$ 4.00      $ 6.40       57,500                 0.7                $  5.18
$10.40      $10.40        1,875                 1.8                $ 10.40
                         95,000
</TABLE>

NOTE H   INCOME TAXES

The tax effects of temporary differences and carryforward amounts that 
give rise to significant portions of the deferred tax assets and deferred 
tax liabilities as of December 31, 1996 and 1995 are:

<TABLE>
<S>                                         <C>                  <C>
  Deferred tax assets:                      1996                 1995      
   Net operating loss carryforwards         $ 4,195,000          $	3,325,000
   Property, equipment, other assets, net        42,000
   Stock bonus accrual                           95,000
   Litigation settlement                         43,000
   Discontinued operations                                          595,000
   Other                                         25,000              24,000
---------------------------------------------------------------------------
   Total gross deferred tax assets            4,400,000           	3,944,000
   Less valuation allowance                  (4,400,000)         	(3,840,000)
----------------------------------------------------------------------------
   Subtotal                                                         104,000
   Deferred tax liability:
   Property and equipment                                          (104,000)
----------------------------------------------------------------------------
  Net deferred taxes                        $       -0-          $      -0-
----------------------------------------------------------------------------
</TABLE>
A valuation allowance has been recorded equal to  the net deferred tax 
asset, as management was not able to determine if it is more likely than 
not that the deferred tax assets will not be realized.

The valuation allowance increased $560,000 in 1996 and $1,158,000 in 
1995.

The following summary reconciles the income taxes at the statutory rate 
of 34% in 1996 and 1995 with the actual taxes:
<TABLE>
                                                   1996               1995
<S>                                            <C>             <C>
 Benefit computed at the statutory
   rate-continuing operations                   $ (  560,000)  $  (563,000) 
 Discontinued operations                                          (595,000)
 Valuation allowance                                 560,000     1,158,000
--------------------------------------------------------------------------
 Provision for income taxes                     $          0   $         0
</TABLE>
As of December 31, 1996, net operating loss carryforwards were 
approximately $11.3 million.  Utilization of certain portions of this 
amount is subject to limitations under the Internal Revenue Code.  
Carryforward amounts expire at various dates through 2011.  

NOTE I  RELATED PARTY TRANSACTIONS

In July 1986, the Company entered into a ten-year operating lease 
agreement with a trust controlled by a former officer of the Company for 
an office building and land which houses the Company's radio station.  
Annual rent was $21,000.  The Company also leased land which is occupied 
by its radio tower from an entity controlled by a former officer of the 
Company.  The lease had a ten-year term beginning in 1992 with an annual 
rent of $5,400.  In April 1996, the Company acquired the office building 
and land which houses its radio station and the land occupied by its 
radio tower for $425,000.  The  Company  issued 275,000 shares of Class C 
Preferred Stock valued at $275,000 and a mortgage note in the amount of 
$150,000.  In 1996, 150,000 shares of the Class C Preferred Stock were 
converted into 150,000 shares of common stock.

Commencing April 1995, the Company contracted out some administrative, 
management and accounting functions of the Company to a company owned by 
the former president and a Director of the Company.  Monthly fees for 
such services were  $15,000 for the period April 1 to July 31, 1995 and 
$20,000 thereafter.  In addition, a one time start-up fee of $25,000 was 
also paid.  Total fees for 1996 and 1995 were $240,000 and $201,000.  The 
affiliated company sub-leases office space from the Company on a month-
to-month lease for $500 per month.  In addition, the Company accrued a 
stock bonus of $168,000 due to the service company payable in common 
stock which was issued in February 1997.

NOTE J   COMMITMENTS

   Lease Commitments   The Company has long-term operating lease agreements 
for office space, building, and certain equipment. Future minimum lease 
payments required under long-term leases in effect at December 31, 1996 
are as follows:
<TABLE>
<S>      <C>      <C>
         1997     $121,649
         1998       38,349
         1999        9,950
                  $169,948
</TABLE>
Rent expense for continuing operations was $165,047 and $179,121 in 1996 
and 1995.  Rent expense for discontinued operations was $261,903 in 1995.

NOTE K   LITIGATION

  In January 1996, the Company, AB Goldberg, Harvey Rosenberg and several 
other related and unrelated parties were named as defendants in a lawsuit 
filed by Sterling Consulting Corporation as Receiver for Indian 
Motorcycle Manufacturing, Inc. (IMMI).  The complaint alleges 
interference by defendants in the business of IMMI, conflicts of interest 
of AB Goldberg, breach of fiduciary duty, unjust enrichment, and 
bankruptcy fraud.

  In July 1996, the Company filed suit against the Receiver alleging 
intentional interference of contracted relationships and breach of 
licensing agreements.

  In February 1997, the Company agreed to terms of a Settlement Agreement 
with the Receiver whereby the Company would relinquish all rights to the 
Indian Motorcycle Trademark and pay the Receiver approximately $114,000.  
Such amount has been reflected in the accompanying financial statement as 
of December 31, 1996.

NOTE L   FOURTH QUARTER ADJUSTMENTS

During the fourth quarters of 1996 and 1995, the Company recorded the 
following year-end adjustments, which it believes are material to the 
results of that quarter:
<TABLE>
                                                  1996      1995    
 Effect of Balzac dispute resolution
   (see Note N):
<S>                                       <C>             <C>
 Decrease in inventory                    $   1,000,000
 Decrease in notes payable                $     800,000
 Increase in accounts receivable          $     200,000

 Effect of Indian Motorcycle settlement
   (See Note K and M):
 Decrease in receivables                  $     143,000
 Decrease in certain rights               $     300,000
 Increase in accrued settlement           $     114,000
 Decrease in stockholders equity         $     300,000

 Decrease in amortization expense
   due to the above                       $     127,500
 Write-off of goodwill                                    $  144,793
 Write-down of assets of
   discontinuedoperations to net
    realizable value                                      $	1,609,208
</TABLE>
NOTE M SETTLEMENTS AND RESCISSIONS

  Indian Licensing

  Effective March 31, 1996,  the Company entered into a Purchase Agreement 
with certain individuals whereby the Company would acquire 55% of the 
issued and outstanding common stock of Indian Motorcycle Company Japan, a 
development stage company, and certain licensing rights in exchange for 
300,000 shares of the Company's Class C Preferred Stock valued at $1.00 
per share.  In connection with the settlement discussed in Note K, the 
Company relinquished the rights acquired and the 300,000 shares of Class 
C Preferred stock were returned to the Company.

The transactions described above relating to Indian Licensing have been 
rescinded in the accompanying financial statements effective from the 
date the transactions were entered into as if the transactions did not 
occur.

NOTE N SUBSEQUENT EVENT

Balzac, Inc.

  In April 1996, the Company acquired certain assets from Balzac, Inc., 
(Balzac) a private company which manufactures and distributes toys, 
including a product line of toy balls.  The assets and rights acquired 
consisted of: an exclusive license for Australia, inventory of Balzac 
toys and various other rights.  

  The exclusive license agreement for Australia was acquired for $800,000 
and was payable within five years based upon a formula of 60% of net 
profits from the sale of Balzac products in Australia.  The inventory and 
other assets were acquired by issuing 1,100,000 shares of the Company's 
restricted common stock valued at $1.6 million.

During 1996, a dispute arose between the Company and Balzac and Balzac 
asserted a violation of the Purchase Agreement.  Balzac seized the 
inventory valued at $1 million, which was collateral on the fixed 
obligation due under the Australian Licensing Agreement, to satisfy the 
$800,000 obligation under the Licensing Agreement.

The Company asserted that Balzac had no right under the Purchase 
Agreement or License Agreement to seize the inventory and apply the 
proceeds against the note obligation under the License Agreement.

  In April 1997, Balzac and the Company entered into an agreement whereby 
Balzac will buy back the Australian Licensing Agreement for $800,000 and 
will repay the Company $200,000 which was the difference between the 
value of the seized inventory and the obligation under the licensing 
agreement.  The $1,000,000 will be paid over forty months at 8% per 
annum.

NOTE O    SEGMENT INFORMATION

Financial information by industry segments for the years ended December 31, 
1996 and 1995 is summarized as follows: 
<TABLE>
                                                     Live
                  Radio         Video          Entertainment       Retail
<S>             <C>            <C>           <C>                <C>
FOR THE YEAR
 ENDED
DECEMBER 31,
   1996
 Revenue  
  unaffiliated   $ 713,322     $	 105,618     $  1,255,735        $ 18,753
 Revenue  
   affiliated
 Operating
   income 
   (loss),
 continuing
  operations      51,606         (110,865)          84,134          (65,628)
 Identifiable
  assets        1,383,683        1,005,280          259,776          601,247
 Depreciation
  and 
  amortization     77,549          207,000	            3,841           26,932
 Capital
  expenditures    439,193                             1,322           29,512
FOR THE YEAR
 ENDED
DECEMBER 31,
 1995
 Revenue
  unaffiliated  $ 678,685        $  31,177      $  1,051,993  
 Revenue 
  affiliated
 Operating
  income 
  (loss),
  continuing
  operations       83,474           11,264            170,939
 Identifiable
  assets        1,015,647          258,102            177,129
 Depreciation
  and
   amortization    84,325          231,020	              1,920
 Capital
  expenditures     31,855                              62,486   
</TABLE>
<TABLE>
                   Other Segments         Eliminations        Consolidated 
<S>              <C>                      <C>                 <C>
FOR THE YEAR
 ENDED
DECEMBER 31,
   1996
 Revenue  
  unaffiliated   $ 46,023                  $                   $2,139,451
 Revenue  
   affiliated     175,956                   (175,956)
 Operating
   income 
   (loss),
 continuing
  operations   (1,566,366)                                     (1,607,119)
 Identifiable
  assets        2,175,180                  (2,192,377)          3,232,789
 Depreciation
  and 
  amortization     11,200                                         326,522
 Capital
  expenditures        633                                         470,660
FOR THE YEAR
 ENDED
DECEMBER 31,
 1995
 Revenue
  unaffiliated  $  55,005               $                      $1,816,860
 Revenue 
  affiliated      293,652                   (293,652)    
 Operating
  income 
  (loss),
  continuing
  operations   (1,779,750)                                   (1,514,073)
 Identifiable
  assets        3,889,944                  (3,607,924)        1,732,898
 Depreciation
  and
   amortization    16,899                                       334,164
 Capital
  expenditures     25,488                                       119,829

Item 8. Changes in and Disagreements with Accountants on Accounting and 
Financial Disclosure

There were no disagreements with BDO Seidman, LLP with regard to matters 
of accounting principle or disclosure.


PART III

Item 9. Directors , Executive Officers , Promoters and Control Persons

Information concerning the Directors and Executive Officers of the 
Company is as follows: 

                                                 Tenure as Officer  
Name                   Age   Position            or Director      

A. B. Goldberg         49    Director            April 1993 to present
                             President and       Commencing February 1995
                             Chief Executive Officer

Dr. Theodore Jacobs    56    Director           November 1996 to present

Dr. Nick Catalano      56    Director           March 1992 to present

Burt Katz              72    Director          December  1994 to present

Cindy Jones            42   Secretary and      April 1994 to present
                            Treasurer


All of the Directors' terms expire at the next annual meeting of 
shareholders or when their successors have been elected and qualified.  
The Officers of the Company serve at the pleasure of 	the Board of 
Directors.  

The following sets forth background information concerning the above 
Directors and Executive Officers:  

Dr. Nick Catalano is presently serving in his twenty-fourth year as 
professor of English Literature, Communications and music at Pace 
University, New York City.  He is also the University's director for the 
Performing Arts.  Over the past several years, he has been a 
writer/producer for several television network shows, including The Bill 
Cosby Show, PBS documentaries, Doug Hennings' The World of Illusion, and 
TV specials for Richard Belzer on HBO.  Dr. Catalano has produced 
travelogue videos for Video Trips on Greece, the Greek Islands, Utah, St. 
Martin and is currently completing the Hamptons.  In addition, he is the 
founder of "The Big Apple Comedy Showcase" at Pace University, now in its 
18th year.  It is the oldest college comedy series in the country.  

Abraham "A.B." Goldberg has been employed by First Films as Executive 
Producer and Financial Consultant since January 1987.  Mr. Goldberg 
served as Executive Producer for "Almost Blue" and "The Amityville 
Curse."  In addition, he served as Executive Producer for "Mind Killer," 
"Night Vision" and "Lone Wolf."  Mr. Goldberg has been an independent 
consultant and has advised several film companies, beginning in 1977 with 
Innovations/ECA, which produced "The Buddy Holly Story" starring Gary 
Busey and "Under The Rainbow" starring Chevy Chase and Carrie Fisher.  He 
also advised Robert Halmi Productions, a New York-based production 
company which was merged with Hal Roach Studios and later acquired by 
Quintex Entertainment.  Mr. Goldberg served as President of Harvard 
Financial Group, an independent investment consulting firm, from November 
1976 through April 1982.  Since April 1982, Mr. Goldberg has consulted 
with a variety of businesses, including First Films.  Mr. Goldberg earned 
a Bachelor's Degree in Finance from the University of Colorado, Boulder, 
Colorado in 1969 and attended the University of Denver College of Law.  
Mr. Goldberg was elected President and Chief Executive Officer in 
February 1995.

Burton Katz.  Mr. Katz graduated from New York University and the United 
States Military Academy at West Point.  Mr. Katz has over forty years 
experience in the image publishing business.  He founded the Company's 
former wholly owned subsidiary, Bernard Picture Co., Inc., in 1951 and 
relocated the business to Stamford, Connecticut in 1979.  His extensive 
experience includes all aspects of art publishing, including printing, 
matting, silk screening and picture framing.

Dr. Theodore Jacobs, M.D.  graduated from New York Medical College in 
1955 where he was honored by achieving the highest award to a graduating 
medical student.  Dr. Jacobs was Board Certified in Internal Medicine in 
1962 and Re-Certified in 1977.  Since 1963, Dr. Jacobs has worked in 
private practice in Internal Medicine in an office in Las Vegas, Nevada.  
Dr. Jacobs has served as a member of the Nevada State Board of Medical 
Examiners, serving for fifteen years as president from 1980 to 1995.  Dr. 
Jacobs is currently a Clinical Professor of Medicine, University of 
Nevada School of Medicine and Member, Advisory Board to the Dean of the 
School of Medical Sciences, University of Nevada/Reno.  Dr. Jacobs is a 
member of the Board of Directors of Nevada Dance Theater, Las Vegas 
Symphonic and Chamber Music Society and the Nevada Opera Theater.  Dr. 
Jacobs has received numerous awards for outstanding achievement and 
contributions to his profession and community.  Dr. Jacobs was a member 
of the Board of Directors of Power Media Communications International, 
Inc.

Cynthia Jones  served as the corporate controller for the Company from 
1982 to 1995.  She currently serves as corporate controller for Creative 
Business Services, Inc.

No family relationship exists between or among any of the persons named 
above.  None of the Company's Directors are directors of any other 
company that has a class of equity securities registered under, or 
required to file reports pursuant to, Section 15(d) of the Securities Act 
of 1933 or Section 12 of the Securities Exchange Act of 1934, or any 
company registered as an investment company under the Investment Company 
Act of 1940.  There are no arrangements or understandings between any of 
the named directors or officers and any other persons pursuant to which 
any director or officer was selected or nominated as a director or 
officer.  

Item 10. Executive Compensation

Only one executive officer received cash compensation in excess of 
$100,000 during the fiscal year ended December 31, 1996 and 1995.  
Compensation does not include minor business-related and other expenses 
paid by the Company for its officers during fiscal year 1996 and 1995, 
nor the personal usage of a Company automobile.  Such amounts in the 
aggregate do not exceed $10,000.  The Company's Chief Executive Officer, 
A.B. Goldberg received compensation of $96,000, $53,800 and $16,100 for 
1996, 1995 and 1994, respectively.

From time to time, the Company has granted shares of its common stock as 
additional compensation to its offices and key employees for their 
services, as determined by the Company's Board of Directors.  During 1996 
and 1995, no shares were granted to officers or key employees.

As of December 31, 1996, the Company had no group life, health, 
hospitalization, medical reimbursement or relocation plans in effect 
which discriminates, in scope, terms, or operation, in favor of officers 
or directors of the Company and that are not generally available to all 
salaried employees.  Further, the Company has no pension plans or plans 
or agreements which provide compensation on the event of termination of 
employment or change in control of the Company.  


The Company does not pay members of its board of Directors any fees for 
attendance or similar remuneration, but reimburses them for any out-of-
pocket expenses incurred by them in connection with Company business.  

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding ownership of 
the Common Stock of the Company as of February 28, 1997 by (I) each 
person known by the Company to be the beneficial owner of more than 5 
percent of the outstanding common stock of the Company; (ii) each 
director of the Company; and (iii) all executive officers and directors 
of the Company as a group.


</TABLE>
<TABLE>
Names and Addresses               Beneficial            Percent 
  of Beneficial Owner             Ownership             of Class 
<S>                                   <C>                     <C>
A. B. Goldberg(1)                     29,213                  .5%
1380 Lawrence Street, Suite 1400
Denver, CO  80204

Cindy Jones                            2,500                  .1%
1380 Lawrence Street, Suite 1400
Denver, CO  80204

Nick Catalano                          5,000                  .1%
189-32 44th Avenue 
Flushing, NY  11358

Dr. Theodore Jacobs
1380 Lawrence Street, Suite 1400      69,739                 1.2%
Denver, CO  80204

Burt Katz 
1380 Lawrence Street, Suite 1400(2)  195,089                 3.4%
Denver, CO  80204

Officers and Directors               301,541                 5.2%
as a Group (6 persons)
</TABLE>
(1) Include shares owned by Nannette Goldberg, wife of A.B. Goldberg 
Director of Company and shares owned by his mother and two children.  
There are no stock options issued or outstanding to  A. B. Goldberg.

(2) Includes shares owned by the wife and children of Burt Katz.

Item 12. Certain Relationships and Related Transactions

Commencing April 1995, the Company contracted out some administrative, 
management and accounting functions of the Company to a company owned by 
the former president and director of the Company.  Monthly fees for such 
services were $15,000 for the period April 1 to July 31, 1995 and $20,000 
thereafter.  In addition, a one time start-up fee of $25,000 was also 
paid.  Total fees for 1996 and 1995 were $240,000 and $201,000 
respectively.

PART IV


Item 13. Exhibits and Reports on Form 8-K

 (a) Exhibits.  The following exhibits are filed herewith pursuant to 
Rule 601 of Regulation S-K or are incorporated by reference to previous 
filings.  

		Exhibit  
		Table No.                                   Document     Reference

(2) 	  Plan of acquisition, reorganization, arrangement, liquidation,	None
       or succession

	(3)  Articles of Incorporation and Bylaws                           (A)

	(4)  Instruments defining the rights of security holders, including (B)
	     indentures

	(9)  Voting trust agreement                                        None

	(10)  Material contracts                                            (C)

	(13)  Annual or quarterly reports, Form 10-QSB                     None

	(16)  Letter on change in certifying accountant                     (F)

	(18)  Letter on change in accounting principles                    None

	(21)  Subsidiaries of the registrant                                (D)

	(22)  Published report regarding matters submitted to a vote of	None
      security holders

(23)  Consent of experts and counsel                               (E)

	(24)  Power of attorney                                           None

	(27)  Financial Data Schedule                                      (6)

	(28)  Information from reports furnished to state insurance       None
      regulatory authorities

(99)  Additional exhibits                                         None

(A)	A complete copy of the Company's Articles of Incorporation as currently 
in effect and all amendments thereto was filed as Exhibit 89.3.1 to the 
Registrant' Form 10-K for the fiscal year ended December 31, 1989, and a 
complete copy of the Company's Bylaws as currently in effect was filed as 
Exhibit 86-3(c) to the Company's Registration Statement on Form S-18 
(Registration No. 33-9163-D) and are incorporated herein by reference 
thereto.  

(B)	The Company hereby agrees to furnish a copy of the form of its 
convertible subordinated debentures to the Commission upon request.  

(C)	The following material contracts are filed herewith or incorporated 
herein by reference thereto:  
Document Title                           Reference       Commission Filing

 Stock Option Agreement                   86-10(a)   Registration Statement
  on Robert Beattie                                 on Form S-18 (33-9163-D)

 Host Agreement - Annette Funnicello     86-10(b)    Registration Statement
                                                    on Form S-18 (33-9163-D)

  Host Agreement - Jill St. John        86-10(c)   Registration Statement
                                                   on Form S-18 (33-9163-D)

 Host Agreement - James Farentino       86-10(d)     Registration Statement
                                                    on Form S-18 (33-9163-D)

 Host Agreement - Tony Randall           86-10(e)     Registration Statement
                                                    on Form S-18 (33-9163-D)

 Video Distribution Agreement -         86-10(f)      Registration Statement
  	Lightning Video (Vestron)                         on Form S-18 (33-9163-D)

 Trademark License Agreement -          86-10(g)      Registration Statement
  Rand McNally & Company                            on Form S-18 (33-9163-D)

 Stock Option Agreement -              86-10(h)     Registration Statement
  Peter TenEyck                                    on Form S-18 (33-9163-D)

 November 4, 1987 amendment to          87-10(a)     Registration Statement
  Vestron Distribution Agreements                   on Form S-18 (33-9163-D)

 January 29, 1988 amendment to           87-10(b)     Registration Statement
  Trademark License Agreement                       on Form S-18 (33-9163-D)

 Selluloid Agreement dated March 4, 1988   87-10(d)   Registration Statement
                                                    on Form S-18 (33-9163-D)

 Children as Teachers of Peach   87-10(e)        Registration Statement
  Agreement dated June 6, 1988                   on Form S-18 (33-9163-D)

 Eastman's Outdoor World and Western     87-10(f)    Registration Statement
  American Films, Inc. dated March 17, 1988        on Form S-18 (33-9163-D)

 Sturgis Exclusive Licensing and Use   87-10(g)     Registration Statement
  Agreement dated July 1987                         on Form S-18 (33-9163-D)

 Best Film and Video Corporation  87-10(h)       Registration Statement
  Distribution Agreement dated December   on Form S-18 (33-9163-D)
    7, 1987

 Gillette, Wyoming Office Lease Agreement  87-10(I)   Registration Statement
                                                    on Form S-18 (33-9163-D)

Document Title                         Reference        Commission Filing

 KGWY-FM Tower Lease                     87-10(j)    Registration Statement
                                                   on Form S-18 (33-9163-D)

 December 15, 1988 Atlantis Video        89-10(a)     Form 10-K for the year
  License Agreement                                  ended December 31, 1988

 Iowa Radio Stations Asset Purchase       89-10(b)   Form 10-K for the year
  Agreement dated April 18, 1989                    ended December 31, 1988

 January 31, 1989 License Agreement with   89-10(c)   Form 10-K for the year
  Adler Video Marketing, Ltd.                        ended December 31, 1988

   Stock Option Agreement - Ray Ricci    89.10.1    Form 10-K for the year
                                                    ended December 31, 1989

 Stock Option Agreement - Ray Ricci     89.10.2    Form 10-K for the year
                                                    ended December 31, 1989

 Stock Option Agreement - Keller, Wing,   89.10.3   Form 10-K for the year
  Godbolt and Polakovic                              ended December 31, 1989

 Stock Option Agreement - Dennis Dowd   89.10.4   Form 10-K for the year
                                                   ended December 31, 1989

 Rand McNally Video Trip Guide to Ohio   89.10.5  Form 10-K for the year
  Agreement, dated January 11, 1990               ended December 31, 1989

 Wyoming Radio Station Letter of Intent   89.10.6    Form 10-K for the year
  dated March 28, 1990                              ended December 31, 1989

 Settlement Agreement with Miller &  89.10.7          	Form 10-K for the year
  Weiss, P.C., dated March 30, 1990                  ended December 31, 1989

 Distributor Agreement with Adler Video  89.10.8   Form 10-K for the year
   Marketing, Ltd.                                 ended December 31, 1989

 Post-Production Services Agreement    93-10.1	      Form 10-K for the year 
                                                    ended December 31, 1993

 Settlement Agreement with DCC and         93.10.2   Form 10-K for the year
  Marshall Blonstein                                 ended December 31, 1993

 Agreement with Rand McNally and Company   93.10.3  Form 10-K for the year
                                                    ended December 31, 1993

 Promissory note with Keller, Wing & Godbolt 	93.10.4 Form 10-K for the year
                                                     ended December 31, 1993

 Distribution/licensing agreement with    93.10.5   Form 10-K for the year
  Woodknapp and Company                             ended December 31, 1993

 Amendment to Articles of Incorporation   93.10.6   Form 10-K for the year
   Name change                                      ended December 31, 1993


 Amendment to Articles of Incorporation    93.10.7   Form 10-K for the year
   increase authorized shares                        ended December 31, 1993

  Stock Option Agreement   Robert Young	    93.10.8    Form 10-K for the year
                                                     ended December 31, 1993

 Letter of Intent   Polton Corporation    	93.10.9   Form 10-K for the year
                                                     ended December 31, 1993

 Promissory note sample bridge lenders   93.10.10  Form 10-K for the year
                                                 ended December 31, 1993

 Subscription Agreement                  93.10.11   Form 10-K for the year
                                                     ended December 31, 1993

(D) Not required since the information is ascertainable from the Company's 
financial statements filed herewith.  

(E) A list of all subsidiaries of the Company was filed as Exhibit 89-22(a) 
to the Company's Form 10-K for the year ended December 31, 1988 and 
is incorporated herein by reference thereto.  

  (b) Reports on Form 8-K
      None

                                    SIGNATURES

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


                                   FIRST ENTERTAINMENT, INC.


Dated:April 14, 1997               By        ________________
                                   A. B. Goldberg, President

  Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
Company and in the capacities and on the dates indicated.  


Dated: April 14,, 1997                                __________
                                 A. B. Goldberg
                                President and Principal Executive Officer


Dated:  April 14, 1997 
                                 Cynthia M. Jones
                                 Secretary and Treasurer


Dated:  April 14, 1997 _________________________
                                 Dr. Nicholas Catalano
                                 Director


Dated:  April 14, 1997 _________________________
                                 Burt Katz
                                 Director


Dated:  April 14, 1997            
                                 Dr. Theodore Jacobs
                                 Director