-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B+NXglDjVoK13HsK5njnN0Zr8y26suUH3fkqsqZURMfwEc/IeUjsfg4ndws7XU1C +0jFZfeTbBbEYkmuBzw3Aw== 0000921895-96-000435.txt : 19961001 0000921895-96-000435.hdr.sgml : 19961001 ACCESSION NUMBER: 0000921895-96-000435 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960716 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960930 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CEEE GROUP CORP CENTRAL INDEX KEY: 0001003739 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27256 FILM NUMBER: 96637251 BUSINESS ADDRESS: STREET 1: 51 HUDSON POINT LANE CITY: OSSINING STATE: NY ZIP: 10562 BUSINESS PHONE: 9149412863 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- Form 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): JULY 16, 1996 CEEE Group Corporation - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Colorado 0-27256 13-3858917 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 2200 Corporate Boulevard, Suite 317, Boca Raton, Florida 33431 - -------------------------------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: (407) 995-2190 - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) The Registrant hereby amends Item 7 of this Form 8-K by including the required Financial Statements of Atlantic International Capital, Ltd., a Delaware corporation ("Atlantic"). (b) The Registrant hereby amends Item 7 of this Form 8-K by including the requisite pro forma financial information of the Atlantic acquisition. (c) Exhibits: 2 Exchange of Stock Agreement and Plan of Reorganization dated as of July 16, 1996 by and among CEEE Group Corporation, Atlantic and each of the stockholders of Atlantic listed on Schedule 1 thereof (previously filed with this Report on Form 8-K). 99.1 Financial Statements of Atlantic International Capital, Ltd. 99.2 Pro forma financial information. -2- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CEEE GROUP CORPORATION Dated: September 30, 1996 By: /s/ Richard Iamunno ---------------------- Name: Richard Iamunno Title: President -3- EX-99.1 2 FINANCIAL STATEMENTS INDEX TO FINANCIAL STATEMENTS PAGE NO. -------- Atlantic International Capital, Ltd.: Independent Auditors' Report F-1 Balance Sheets as of December 31, 1995 (audited) and June 30, 1996 (unaudited) F-2 Statements of Income for the year ended December 31, 1995 (audited) and the six months ended June 30, 1995 and 1996 (unaudited) F-3 Statements of Changes in Stockholders' Equity for the year ended December 31, 1995 (audited) and the six months ended June 30, 1996 (unaudited) F-4 Statements of Cash Flows for the year ended December 31, 1995 (audited) and the six months ended June 30, 1995 and 1996 (unaudited) F-5 Notes to Financial Statements F-6 Pro Forma Financial Statements: Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 1996 F-11 Unaudited Pro Forma Condensed Combined Statement of Income for the year ended December 31, 1995 and the six months ended June 30, 1996 F-12 Notes to Unaudited Pro Forma Condensed Combined Financial Statements F-13 INDEPENDENT AUDITORS' REPORT Board of Directors Atlantic International Capital, Ltd. We have audited the accompanying balance sheet of Atlantic International Capital, Ltd. as of December 31, 1995, and the related statements of income, changes in stockholders' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Atlantic International Capital, Ltd. as of December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ KAUFMAN, ROSSIN & CO. KAUFMAN, ROSSIN & CO. May 13, 1996 Miami, Florida F-1 ATLANTIC INTERNATIONAL CAPITAL, LTD. Balance Sheets
DECEMBER 31, JUNE 30, 1995 1996 ----------- ---------- (UNAUDITED) Assets Current assets: Cash $ 200,677 $ 210,189 Accounts receivable 13,250 48,500 Due from related parties - Note 5 11,096 42,096 Prepaid expenses and other receivables 25,092 13,998 --------- --------- Total current assets 250,115 314,783 Property assets - at cost, less accumulated depreciation and amortization of $285 and $5,079 - Notes 1 and 2 1,138 46,088 Other assets: Investments - Note 3 10,625 1,621 Deferred license fee - Note 4 -- 10,000 Miscellaneous -- 1,000 --------- --------- Total other assets 10,625 12,621 --------- --------- Total assets $ 261,878 $ 373,492 ========= ========= Current liabilities: Accounts payable and accrued expenses $ 12,449 $ 18,049 Income taxes payable - Note 6 90,500 91,900 Loan payable - stockholders -- 38,303 --------- --------- Total current liabilities 102,949 148,252 Commitments - Note 7 -- -- Stockholders' equity: Common stock - par value $1 authorized - 100 shares; issued and outstanding - 90 shares and 100 shares 90 100 Additional paid-in capital -- 27,491 Retained earnings 158,839 229,137 --------- --------- 158,929 256,728 Subscriptions receivable -- (31,488) --------- --------- Total stockholders' equity 158,929 225,240 --------- --------- Total liabilities and stockholders' equity $ 261,878 $ 373,492 ========= =========
See notes to financial statements. F-2 ATLANTIC INTERNATIONAL CAPITAL, LTD. Statements of Income FOR THE YEAR ENDED FOR THE SIX MONTHS DECEMBER 31, ENDED JUNE 30, --------------------- 1995 1995 1996 -------- -------- -------- (UNAUDITED)(UNAUDITED) Consulting fee income $702,307 $177,356 $316,306 -------- -------- -------- Costs and expenses: Consulting fees 103,884 20,500 10,236 Management fees - affiliate - Note 5 245,800 75,800 -- General and administrative 103,284 23,909 222,622 -------- -------- -------- Total operating expenses 452,968 120,209 232,858 -------- -------- -------- Operating income 249,339 57,147 83,448 Other income - gain on sale of investment securities - Note 3 -- -- 10,250 -------- -------- -------- Income before provision for income taxes 249,339 57,147 93,698 Provision for income taxes - Note 6 90,500 11,438 23,400 -------- -------- -------- Net income $158,839 $ 45,709 $ 70,298 ======== ======== ======== See notes to financial statements. F-3 ATLANTIC INTERNATIONAL CAPITAL, LTD. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
COMMON STOCK COST OF TREASURY SHARES ------------ ADDITIONAL ----------------------- NUMBER OF PAID-IN RETAINED NUMBER OF SHARES AMOUNT CAPITAL EARNINGS SHARES AMOUNT -------- -------- -------- -------- -------- -------- Balances, January 1, 1995 -- $ -- $ -- $ -- $ -- $ -- Sale of common shares 90 90 -- -- -- -- Net income -- -- -- 158,839 -- -- -------- -------- -------- -------- -------- -------- Balances, December 31, 1995 90 90 -- 158,839 -- -- Purchase of treasury shares -- -- -- -- 3 8,250 Sale of common shares 10 10 27,491 -- (3) (8,250) Net income -- -- -- 70,298 -- -- -------- -------- -------- -------- -------- -------- Balances, June 30, 1996 (Unaudited) 100 $ 100 $ 27,491 $229,137 $ -- $ -- ======== ======== ======== ======== ======== ========
SEE NOTES TO FINANCIAL STATEMENTS. F-4 ATLANTIC INTERNATIONAL CAPITAL, LTD. Statements of Cash Flows
FOR THE FOR THE SIX MONTHS YEAR ENDED ENDED JUNE 30, DECEMBER 31, ---------------------- 1995 1995 1996 --------- --------- --------- (UNAUDITED) (UNAUDITED) Operating activities: Net income $ 158,839 $ 45,709 $ 70,298 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 285 143 4,794 Consulting fees received in the form of investment securities (10,625) -- (1,246) Gain on sale of investments -- -- (10,250) Change in operating assets and liabilities: (Increase) decrease in assets: Accounts receivable (13,250) (10,000) (35,250) Due from related parties (11,096) -- (31,000) Prepaid expenses and other receivables (25,092) -- 11,094 Deferred license fee -- -- (10,000) Miscellaneous -- -- (1,000) Increase (decrease) in liabilities: Accounts payable and accrued expenses 12,449 23 5,600 Income taxes payable 90,500 11,438 1,400 Loan payable - stockholder -- -- 38,303 --------- --------- --------- Net cash provided by operating activities 202,010 47,313 42,743 --------- --------- --------- Investing activities: Proceeds from sale of investments -- -- 20,500 Additions to property assets (1,423) (1,423) (49,744) --------- --------- --------- Net cash used in investing activities (1,423) (1,423) (29,244) --------- --------- --------- Financing activities: Proceeds from sale of common shares 90 90 4,263 Purchase of treasury shares -- -- (8,250) --------- --------- --------- Net cash provided by (used in) financing activities 90 90 (3,987) --------- --------- --------- Net increase in cash 200,677 45,980 9,512 Cash, beginning of period -- -- 200,677 --------- --------- --------- Cash, end of period $ 200,677 $ 45,980 $ 210,189 ========= ========= ========= Supplemental cash flows information: Cash paid for interest $ -- $ -- $ -- ========= ========= ========= Cash paid for taxes $ -- $ -- $ 22,000 ========= ========= ========= Noncash financing activity: Subscriptions receivable to common stock $ 31,488 =========
SEE NOTES TO FINANCIAL STATEMENTS. F-5 ATLANTIC INTERNATIONAL CAPITAL, LTD. Notes to Financial Statements (Information relating to the financial statements as of June 30, 1996 and for the six months ended June 30, 1995 and 1996 is unaudited) Note 1 - SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION AND NATURE OF OPERATIONS Atlantic International Capital, Ltd. (the "Company") was incorporated in July, 1994, under the laws of the State of Delaware, and commenced operations in January, 1995. Its business activities have included international investment banking and providing advisory services related to corporate structure and fund raising. PROPERTY ASSETS Property assets are depreciated by the straight-line method at rates calculated to amortize cost over the respective estimated useful lives which range from 5 to 7 years for furniture, fixtures, and office equipment and 5 years for computer equipment and software. Improvements to leased premises are amortized over the lesser of the term of the lease or the estimated useful life. Expenditures which extend useful lives are capitalized while the cost of incidental repairs and maintenance are charged to operations as incurred. CONCENTRATION OF CREDIT RISK From time-to-time, the Company maintains cash deposits at financial institution in excess of federally insured limits. The Company has not experienced any losses on its account. USE OF ESTIMATES The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses for the periods presented. Actual results could differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount of cash, accounts receivable and payable, accrued expenses, and other current assets and current liabilities approximates fair value because of the short maturity of those instruments. F-6 ATLANTIC INTERNATIONAL CAPITAL, LTD. Notes to Financial Statements (Continued) (Information relating to the financial statements as of June 30, 1996 and for the six months ended June 30, 1995 and 1996 is unaudited) Note 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) UNAUDITED INTERIM FINANCIAL STATEMENTS The accompanying unaudited interim financial statements include all adjustments (consisting only of those of a normal recurring nature) necessary for a fair statement of the results for the interim periods. The results of operations and cash flows for the six month period ended June 30, 1996 are not necessarily indicative of the results of operations or cash flows to be reported for the full year ending December 31, 1996. MAJOR CUSTOMERS Consulting fees derived from major customers are tabulated as follows: YEAR ENDED SIX MONTHS ENDED DECEMBER 31, JUNE 30, --------------------- 1995 1995 1996 ----------- -------- ------ (UNAUDITED) (UNAUDITED) Customer A 30% 12% - Customer B 29% 70% - Customer C 25% - 25% Customer D - - 15% Customer E - - 13% Note 2 - PROPERTY ASSETS Property assets are summarized as follows: DECEMBER 31, JUNE 30, 1995 1996 ----------- ---------- (UNAUDITED) Furniture, fixtures and office equipment $ 1,423 $ 3,746 Computer equipment and software - 38,467 Leasehold improvements - 8,954 ------- ------- 1,423 51,167 Accumulated depreciation and amortization 285 5,079 ------- ------- $ 1,138 $46,088 ======= ======= F-7 ATLANTIC INTERNATIONAL CAPITAL, LTD. Notes to Financial Statements (Continued) (Information relating to the financial statements as of June 30, 1996 and for the six months ended June 30, 1995 and 1996 is unaudited) Note 3 - INVESTMENTS Investments consist of securities received as payment for consulting services rendered by the Company. Included herein at December 31, 1995 are 212,500 shares received from a major customer (Note 1), which have been valued at an aggregate $10,625, representing their fair value at the time such services were rendered, as determined by the Company's Board of Directors. These securities are not considered marketable because they are subject to certain restrictions on sale or transfer through September 15, 1997. During the six months ended June 30, 1996, the Company sold 205,000 such shares in nonrestricted transactions, reducing its holdings at June 30, 1996 to 7,500 shares with an aggregate value of $375, and realized gains amounting to $10,250. Note 4 - DEFERRED LICENSE FEE On May 30, 1996, the Company executed a letter of intent to enter into a license agreement and related sublease with a gaming casino located in Aruba. The license agreement will permit the Company to operate and perform keno, bingo, and sports book wagering through the internet. The license fee amounts to $430,000, of which the Company has paid $10,000 as a nonrefundable deposit. The balance of the fee is subject to the casino obtaining approval for the gaming from the government of Aruba. The Company will also sublease a gaming area from the casino for a period of five years, with a five year renewal option. Monthly rentals will be equal to the greater of 4% of defined "net winnings" or $7,500. The casino has agreed to waive monthly rental payments for a period of thirty-six months or until the Company achieves net winnings of $10 million, whichever occurs first. Note 5 - RELATED PARTY TRANSACTIONS In January, 1995, the Company entered into a one-year management agreement with a company which is deemed to be an affiliate because of identical stockholder interests. Under the agreement, the Company paid monthly management fees aggregating $245,800 for the year ended December 31, 1995, representing operating expenses including rent, salaries, and other general and administrative costs. The agreement expired on December 31, 1995, at which date $10,000 was due from the affiliate. F-8 ATLANTIC INTERNATIONAL CAPITAL, LTD. Notes to Financial Statements (Continued) (Information relating to the financial statements as of June 30, 1996 and for the six months ended June 30, 1995 and 1996 is unaudited) Note 5 - RELATED PARTY TRANSACTIONS (Continued) Additionally, the Company advanced $31,000 to the affiliated company during the six months ended June 30, 1996, increasing the balance receivable to $41,000 at such date. The advances are noninterest bearing, and due on demand. See Note 7 for information as to a sublease rental agreement with the affiliated company. Note 6 - INCOME TAXES The Company is a member of a controlled group as defined by Section 1562 A(2) of the Internal Revenue Code. The full benefit of graduated corporate income tax rates has been allocated to the Company by the affiliated company. The provision for income taxes is summarized as follows: Year Ended Six Months Ended December 31, JUNE 30, --------------------- 1995 1995 1996 ------- ------- ------- (Unaudited) (Unaudited) Currently payable: Federal $76,800 $ 8,570 $18,500 State 13,700 2,868 4,900 ------- ------- ------- $90,500 $11,438 $23,400 ======= ======= ======= Note 7 - COMMITMENTS The Company subleases its general offices from an affiliated company on a month-to-month basis at a minimum rental of $3,776 per month. The underlying lease expires in October, 1997. In addition, the Company has entered into a lease for contiguous office space at a monthly rental of $698 for the period from August, 1996 through April, 1997. Rent expense for the six months ended June 30, 1996, all of which was paid to the affiliated company, amounted to $32,263. F-9 ATLANTIC INTERNATIONAL CAPITAL, LTD. Notes to Financial Statements (Continued) (Information relating to the financial statements as of June 30, 1996 and for the six months ended June 30, 1995 and 1996 is unaudited) Note 8 - SUBSEQUENT EVENT On July 16, 1996, the Company entered into an Exchange of Stock and Plan of Reorganization with CEEE Group Corporation, a publicly-held company whose shares are traded in the over-the-counter market. CEEE had no assets and only nominal current liabilities as of June 30, 1996. It conducted only limited operations prior to 1984, and has been substantially inactive since that time. CEEE considers itself to be a development stage company as defined in SFAS No. 7. Under the exchange agreement, the Company's stockholders will exchange all outstanding common shares for an aggregate 25,183,759 CEEE common shares, par value $.001, of which 7,000,000 shares are immediately issuable and the balance of 18,183,759 shares are to be issued upon completion of a recapitalization increasing CEEE's authorized capital to 110 million shares, of which an aggregate 26,683,792 shares will be outstanding. Thereafter, CEEE will effect a reverse stock split whereby one new share will be issued for each 3 shares previously outstanding. The combination will be accounted for as a reverse acquisition, and the combined entity will operate under the name Atlantic International Entertainment, Ltd. After giving effect to the exchange of common shares, the 1 for 3 reverse stock split, and the tax savings which would have resulted from the utilization of its net operating loss carryforward by CEEE if the combination had been continuously effective from January 1, 1995, unaudited pro forma combined results of operations are summarized as follows: Six Months Ended Year Ended JUNE 30, December 31, ------------------------- 1995 1995 1996 ---------- ---------- ---------- Consulting revenues $ 702,307 $ 177,356 $ 316,306 ========== ========== ========== Net income $ 154,489 $ 41,359 $ 66,531 ========== ========== ========== Net income per common share $ .02 $ .01 $ .01 ========== ========== ========== Weighted average number of common shares outstanding 8,055,139 8,055,139 8,306,976 ========== ========== ========== F-10 EX-99.2 3 PRO FORMA FINANCIAL INFORMATION Unaudited Pro Forma Condensed Combined Balance Sheet June 30, 1996 The following unaudited pro forma condensed combined financial statements combine the historical assets, liabilities, equity accounts, and operating results of CEEE Group Corporation and Atlantic International Capital, Ltd. pursuant to the terms of an Exchange of Stock Agreement and Plan of Reorganization dated July 16, 1996 (Note A). The combination has been accounted for as a reverse acquisition. The pro forma financial statements assume that the resultant combination has been continuously effective from January 1,1995. They should be read in conjunction with the related Notes to Unaudited Pro Forma Financial Statements included herein.
Historical Historical Atlantic CEEE Group International Pro Forma Pro Forma CORPORATION CAPITAL, LTD. ADJUSTMENTS COMBINED -------- --------- --------- --------- (Note B) Assets Current assets: Cash $ - $ 210,189 $ $ 210,189 Accounts receivable - 48,500 48,500 Due from affiliated company - 42,096 42,096 Other - 13,998 13,998 -------- --------- --------- Total current assets - 314,783 314,783 Property assets, at cost, less accumulated depreciation and amortization - 46,088 46,088 Other assets - 12,621 12,621 -------- --------- --------- Total assets $ - $ 373,492 $ 373,492 ======== ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $ 5,294 $ 18,049 $ 23,343 Income taxes payable - 91,900 (2) (5,200) 86,700 Loan payable - stockholders - 38,303 38,303 -------- --------- --------- Total current liabilities 5,294 148,252 148,346 Stockholders' equity: Common stock, par value $.001; authorized - 10,000,000 shares (historical) and 110,000,000 (pro forma); issued and outstanding - 1,500,033 shares (historical) and 26,683,792 shares (pro forma) 1,500 - (1) 25,184 26,684 Common stock, par value $1; authorized, issued and outstanding - 100 shares - 100 (1) (100) - Additional paid-in capital 484,392 27,491 (1) (25,084) 486,799 Retained earnings - 229,137 (2) 5,200 234,337 Deficit accumulated during the development stage (491,186) - (491,186) --------- --------- --------- (5,294) 256,728 - 256,634 Subscriptions receivable - (31,488) - (31,488) --------- --------- --------- Total stockholders' equity (5,294) 225,240 225,146 --------- --------- --------- Total liabilities and stockholders' equity $ - $ 373,492 - $ 373,492 ========= ========= =========
F-11 Unaudited Pro Forma Condensed Combined Statement Of Income
FOR THE YEAR ENDED DECEMBER 31, 1995 Historical Historical Atlantic CEEE Group International Pro Forma Pro Forma Corporation Capital, Ltd. Adjustments Combined -------- -------- --------- --------- (Note B) Consulting fee income $ - $702,307 $ 702,307 Costs and expenses 7,150 452,968 460,118 -------- -------- --------- Income (loss) before provision for income taxes (7,150) 249,339 242,189 Provision for income taxes - 90,500 (2)$ (2,800) 87,700 -------- -------- --------- Net income (loss) $ (7,150) $158,839 $ 154,489 ======== ======== ========== Net income (loss) per common share - Note C $ (.01) $ .02 ========= ========= Weighted average number of common shares outstanding - Note C 500,011 8,055,139 ======== ========= FOR THE SIX MONTHS ENDED JUNE 30, 1996 Consulting fee income $ - $316,306 $ 316,306 Costs and expenses 6,167 232,858 239,025 -------- -------- ---------- Operating income (loss) (6,167) 83,448 77,281 Other income - gain on sale of investment securities - 10,250 10,250 -------- -------- ---------- Income (loss) before provision for income taxes (6,167) 93,698 87,531 Provision for income taxes - 23,400 (2)$ (2,400) 21,000 -------- -------- ---------- Net income (loss) $ (6,167) $ 70,298 $ 66,531 ======== ======== ========== Net income (loss) per common share - Note C $ (.01) $ .01 ========= ========== Weighted average number of common shares outstanding - Note C 500,011 8,306,976 ======== ==========
F-12 Notes To Unaudited Pro Forma Condensed Combined Financial Statements Note A - THE TRANSACTION On July 16, 1996, CEEE Group Corporation and Atlantic International Capital, Ltd. entered into an Exchange of Stock and Plan of Reorganization whereby Atlantic's stockholders exchanged all of its outstanding common shares for an aggregate 25,183,759 CEEE common shares, par value $.001, of which 7,000,000 shares were immediately issuable and the balance of 18,183,759 shares are to be issued upon completion of a recapitalization increasing CEEE's authorized capital to 110 million shares. Thereafter, CEEE will effect a reverse stock split whereby one new share will be issued for each 3 shares previously outstanding. The combination will be accounted for as a reverse acquisition, and the combined entity will operate under the name Atlantic International Entertainment, Ltd. CEEE has conducted only limited operations prior to 1984, and has been substantially inactive since that time. It considers itself to be a development stage company as defined in Statement of Financial Accounting Standards No. 7. Note B - PRO FORMA ADJUSTMENTS The pro forma adjustments are summarized as follows: (1) To record the issuance of an aggregate 25,183,759 common shares, par value $.001, by CEEE Group Corporation in exchange for 100 issued and outstanding common shares, par value $1, of Atlantic International Capital, Ltd. (2) To reflect the tax savings attributable to the full utilization of a net operating loss carryforward of approximately $10,000 available to CEEE Group Corporation as of December 31, 1995, and the tax savings which would have accrued to the combined companies for the six months ended June 30, 1996. Note C - PER SHARE DATA Historical per share data for CEEE Group Corporation are based on the weighted average number of common shares outstanding during the respective periods, retroactively adjusted to reflect a reverse 1-for-3 stock split. Pro forma per share data are based on the historical weighted average number of CEEE common shares outstanding, retroactively adjusted to reflect (i) the issuance of an aggregate 25,183,759 CEEE common shares in exchange for all outstanding common shares of Atlantic International Capital, Ltd. in a combination accounted for as a reverse acquisition, and (ii) a reverse 1-for-3 stock split. F-13 -----END PRIVACY-ENHANCED MESSAGE-----