content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D. C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
       Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
  
  
  Date of Report (Date of Earliest Date Reported) October 31, 1996
  
  
                                Sonoma International
   -----------------------------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
  
   Nevada                                      0-6683                 94-0880052
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  (State or other jurisdiction              (Commission          (I.R.S. Employer
  of incorporatin or organization)          File Number)       Identification No.)
  
  
  3930 S. Eastern Avenue, Suite 218, Las Vegas Nevada                     89109
  -------------------------------------------------------------------------------
  (Address of principal executive offices)                             (Zip Code)
  
  
                                   (702) 361-3033
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                (Registrant's telephone number, including area code)
  
  
  
                   901 Tahquitz, Ste B 201, Palm Springs, CA 92261
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           (Former name or former address, if changed since last report.)
  
  
  
  <PAGE>
  
  
  
  Item 1. Changes in Control of Registrant
  
  See Item 2. Acquisition or Disposition of Assets.
  
  Item 2.  Acquisition or Disposition of Assets
  
           As of October 31, 1996, the Company entered into an agreement (the
  "Agreement") with Key West Conch Harbor, Inc., a Florida corporation ("KWCHI")
  to acquire all of the issued and outstanding shares of KWCHI.
  
           The stockholders of KWCHI will be issued 300,000 shares of the
  Company's Common Stock, such shares to be determined following a reverse split
  previously contemplated by the Company. KWCHI owns a Marina located on the
  Northwest corner of Caroline and Grinnell Streets in the developing "Old Town"
  area of Key West, Florida. The approximately 2-acre or 82,000 square foot site
  has an estimated 251 feeet of frontage on Caroline Street and 221 feet of
  shoreline along a waterway known as the Key West Bight. KWCHI began development
  of the Marina in May, 1995 when construction of the dock and fueling facility
  began. The Marina currently has a new 450 foot dock with two 100-foot finger
  piers, a Texaco Star Port fueling dock and an on-shore fuel containment area.
  The facility derives its current revenue from fueling operations and slip
  rentals. Fueling operations began in February of 1995, and slip rentals began in
  July, 1995.
  
           Closing of the agreement is contingent upon the closing of the
  Company's previous agreement to acquire Jamestown Resort & Marina, Ltd.
  
  Item 7. Financial statements, Pro Forma Financial Information and Exhibits
  
  (a)      Financial statements of businesses acquired
  
           The Key West Conch Harbor Balance Sheets as of December 31, 1995, and
  December 31, 1994, and the related Statements of Operations, Changes in
  Partners' Deficit, and Statements of Cash Flows for the years ended December 31,
  1995 and December 31, 1994, and the report of King, Burns & Company, P.C.,
  independent certified public accountants, thereon, together with the notes
  thereto, are located immediately following this Item 7.
  
  (b)      Proforma financial information
  
           The unaudited pro forma consolidated balance sheet as of June 30, 1996,
  and the unaudited pro forma statements of operations for the years ended June
  30, 1996, and June 30, 1995, immediately follow the financial statements
  included as part of Item 7(a) herein. These proforma financial statments include
  both the Jamestown Resort & Marina, Ltd. financial statments and the KWCHI
  financial statements.
  
  
  
  
  
  
  
  
  <PAGE>
                              FINANCIAL STATEMENTS AND
                 REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  
                                SONOMA INTERNATIONAL
                               (A NEVADA CORPORATION)
  
  
                               JUNE 30, 1996 AND 1995
  
  
  
  
  <PAGE>
  
  
  
                                SONOMA INTERNATIONAL
                               (A NEVADA CORPORATION)
  
                            Index to Financial Statements
  
  
                                                                       Page
  
  Reports of Independent Certified Public Accountants                   1
  
  Financial Statements
      Balance Sheet                                                     3
      Statements of Operations                                          4
      Statements of Changes in Stockholders' Deficit                    5
      Statements of Cash Flows                                          6
      Notes to Financial Statements                                     7
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  <PAGE>
  
                 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  
  
  The Board of Directors
  Sonoma International
  Palm Springs, California
  
  We have audited the accompanying balance sheet of Sonoma International as of
  June 30, 1996, and the related statements of operations, stockholders' deficit,
  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 Sonoma International as of June
  30, 1996, and the results of its operations and its cash flows for the year then
  ended, in conformity with generally accepted accounting principles.
  
  The financial statements have been prepared assuming that the Company will
  continue as a going concern. As discussed in Note C to the financial statements,
  the Company has no assets to pay its obligations and has been inactive for a
  number of years. These factors raise substantial doubt as to the Company's
  ability to continue as a going concern. Management's plans in regard to these
  matters are also described in Note C. The financial statements do not include
  any adjustments that might result from the outcome of this uncertainty.
  
  
                                                     King, Burns & Company, P.C.
  
  
  Dallas, Texas
  September 13, 1996
  
  
  
  
  
  
  <PAGE>
  
  
  
                 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  
  
  To the Board of Directors
  Sonoma International
  Palm Springs, California
  
  We have audited the accompanying statements of operations, stockholders'
  deficit, and cash flows of Sonoma International for the year ended June 30,
  1995. 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 statements of operations, stockholders' deficit and cash
  flows referred to above present fairly, in all material respects, the results of
  its operations and its cash flows of Sonoma International for the year ended
  June 30, 1995, in conformity with generally accepted accounting principles.
  
  
  
  
  
  SKEEHAN & COMPANY
  November 1, 1995
  
  
  
  
  
  <PAGE>
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                                    Balance Sheet
                                    June 30, 1996
  
  <TABLE>
  <CAPTION>
  
                                                                                                              1996
                                                                                                         ----------------
  
  <S>                                                                                                  <C>              
  TOTAL ASSETS                                                                                         $               -
                                                                                                         ================
  
  
  LIABILITIES AND STOCKHOLDERS' DEFICIT
  
  Current liabilities
       Accrued liabilities                                                                                           275
       Accrued interest                                                                                          252,435
       Notes payable                                                                                             262,391
                                                                                                         ----------------
  
              Total current liabilities                                                                          515,101
                                                                                                         ----------------
  
              Total liabilities                                                                                  515,101
                                                                                                         ----------------
  
  Commitments and contingencies (Notes C, D, E and H)
  
  Stockholders' deficit
       Common stock, $.001 par value, authorized, issued
           and outstanding shares, 60,000,000                                                                     60,000
       Additional paid-in capital                                                                              4,274,616
       Accumulated deficit                                                                                    (4,849,717)
                                                                                                         ----------------
  
              Total Stockholders' Deficit                                                                       (515,101)
                                                                                                         ----------------
  
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                          $               -
                                                                                                         ================
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                              Statements of Operations
                     For the years ended June 30, 1996 and 1995
  
  
  <TABLE>
  <CAPTION>
  
                                                                                      1996                1995
                                                                                ----------------    ---------------
  
  
  <S>                                                                           <C>               <C>             
  Revenue                                                                       $             -   $              -
                                                                                ----------------    ---------------
  
  Expenses
       Professional fees                                                                 13,975                  -
       Consulting fees                                                                        -             75,000
       Interest                                                                          11,284             34,240
       State taxes                                                                       (4,828)               800
                                                                                ----------------    ---------------
           Total expenses                                                                20,431            110,041
  
  Gain on the reduction of obligations                                                   28,363                  -
                                                                                ----------------    ---------------
  
  Net income (loss) before extraordinary item                                             7,932           (110,041)
  
  Extraordinary item
       Gain from conversion of debt to equity net of income taxes of $-0-               418,699                  -
                                                                                ----------------    ---------------
  
  Net income (loss)                                                             $       426,631   $       (110,041)
                                                                                ================    ===============
  
  Net income (loss) per common share before extraordinary item                  $          0.00   $           0.00
                                                                                ================    ===============
  
  Net income (loss) per common share for extraordinary item                     $          0.01   $              -
                                                                                ================    ===============
  
  Net income (loss) per common share                                            $          0.01   $          (0.00)
                                                                                ================    ===============
  
  
  Weighted average shares outstanding                                                47,774,591         25,579,850
                                                                                ================    ===============
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                   Statement of Changes in Stockholders' Deficit
                         Years ended June 30, 1996 and 1995
  
  <TABLE>
  <CAPTION>
  
                                                                         Additional
                                               Number of      Common      Paid-In    Accumulated
                                                Shares         Stock      Capital      Deficit        Total
                                               ----------    --------   ----------   -----------    ----------
  
  <S>                                          <C>          <C>        <C>          <C>            <C>         
  Balance at July 1, 1994                      25,579,850   $  25,580  $ 4,252,116  $ (5,166,308)  $  (888,612)
  
  Net loss                                              -           -            -      (110,040)     (110,040)
                                               ----------    --------   ----------   -----------    ---------------
  
  Balance at June 30, 1995                     25,579,850      25,580    4,252,116    (5,276,348)     (998,652)
  
  Stock issued for debt and other obligations  34,420,150      34,420            -             -        34,420
  
  Capital contributions resulting from
       obligations settled by shareholders
       on behalf of the Company                         -           -       22,500             -         22,500
  
  Net income                                            -           -            -       426,631        426,631
                                               ----------    --------   ----------   -----------    -----------
  
  Balance at June 30, 1996                     60,000,000   $  60,000  $ 4,274,616  $ (4,849,717)  $   (515,101)
                                               ==========    ========   ==========   ===========    ===========
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                              Statements of Cash Flows
                         Years ended June 30, 1996 and 1995
  
  
  <TABLE>
  <CAPTION>
  
                                                                                        1996                1995
                                                                                  ----------------    ---------------
  
  Cash flows from operating activities:
  <S>                                                                             <C>               <C>              
       Net income (loss)                                                          $       426,631   $       (110,040)
       Gain on conversion of debt to equity                                              (418,699)                 -
       Gain on reduction of obligations                                                   (28,363)                 -
       Increase (decrease) in accounts payable and taxes                                   (4,828)               800
       Increase (decrease) in accrued interest                                             11,284                  -
       Increase (decrease) in accrued liabilities                                          13,975             34,240
       Increase in stockholder advances                                                         -             75,000
                                                                                  ----------------    ---------------
  
           Net cash provided by operations                                                      -                  -
  
           Cash at beginning of year                                                            -                  -
                                                                                  ----------------    ---------------
  
           Cash at end of year                                                    $             -   $              -
                                                                                  ================    ===============
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                          Notes to the Financial Statements
                                June 30 1996 and 1995
  
  
  NOTE A - ORGANIZATION
  
  Sonoma Quicksilver Mines, Inc. was incorporated under the laws of the State of
  Nevada on June 10, 1940. The name was subsequently changed to Sonoma
  International (the "Company" or "Sonoma"). The Company had several failed
  business operations and since 1988 its only activity has been to search for a
  company or assets to acquire.
  
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
  Income Taxes
  
  The Company accounts for income taxes in accordance with the asset and liability
  approach. Deferred income tax assets and liabilities are computed annually for
  differences between the financial statement and tax bases of assets and
  liabilities that will result in taxable or deductible amounts in the future
  based on enacted tax laws and rates applicable to the periods in which the
  differences are expected to affect taxable income. Valuation allowances are
  established when necessary to reduce deferred tax assets to the amount expected
  to be realized. Income tax expense is the tax payable or refundable for the
  period plus or minus the change during the period in deferred tax assets and
  liabilities.
  
  Income (Loss) per share
  
  Income (Lose) per share of common stock is based upon the weighted average
  number of common shares outstanding.
  
  Use of Estimates and Assumptions
  
  Management uses estimates and assumptions in preparing financial statements in
  accordance with generally accepted accounting principles. Those estimates and
  assumptions affect the reported amounts of assets and liabilities, the
  disclosure of contingent assets and liabilities, and the reported amounts of
  revenues and expenses. Actual results could vary from the estimates that were
  used.
  
  Accounting Standards Not Yet Adopted
  
  In October 1995, Statement of Financial Accounting Standards No. 123,
  "Accounting for Stock-based Compensation" ("SFAS 123"), was issued. This
  statement requires the fair value of stock options and other stock-based
  compensation issued to employees to either be included as compensation expense
  in the income statement, or the pro forma effect on net income and earnings per
  share of such compensation expense to be disclosed in the footnotes to the
  Company's financial statements commencing with the Company's 1996 fiscal year.
  The Company expects to adopt SFAS 123 on a disclosure basis only. As such,
  implementation of SFAS 123 is not expected to impact the Company's balance sheet
  or statement of operations.
  
  Reclassifications
  
  Certain prior year amounts have been reclassified to conform with the current
  year presentation.
  
  
  
  
                                          7
  
  <PAGE>
  
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                          Notes to the Financial Statements
                                June 30 1996 and 1995
  
  
  NOTE C - GOING CONCERN UNCERTAINTY
  
  Sonoma has been inactive for a number of years and its continued existence is in
  doubt. The Company has no assets to pay its current obligations or additional
  obligations arising from incidental administrative expenses and interest
  expenses.
  
  The Company plans to reduce its liabilities and acquire income producing assets
  through the issuance of additional stock and a merger with an operating
  partnership (Note H). The ability of the Company to continue in existence is
  dependent on the success of these plans.
  
  
  NOTE D - NOTES PAYABLE
  
  Notes payable consists of the following at June 30, 1996:
  <TABLE>
  <S>                                                                                                <C>     
      Notepayable dated June 12, 1991, due on demand to an individual bearing
          interest at 15% per annum; unsecured. Interest of $44,316 has been
          accrued through the settlement date. On September 27, 1996 a conditional
          settlement agreement was reached relieving Sonoma of the principal and
          accrued interest in exchange for 800,000 common shares of Sonoma. This
          settlement agreement is contingent upon Sonoma stock obtaining a market
          value and that
          the stock can be liquidated.                                                               $ 60,974
  
      Notepayable to two individuals, due on demand and unsecured. Interest of
          $15,861 has been accrued through the settlement date. On July 25, 1995,
          a conditional settlement agreement was reached releasing Sonoma of
          principal and accrued interest in exchange for 200,000 shares of the
          Company. This settlement agreement is contingent upon Sonoma stock
          obtaining a market
          value and that the stock can be liquidated.                                                  45,861
  
      Notepayable to Sunwest Bank, due on demand with interest accruing at 10.5%;
          unsecured. Interest of $42,557 has been accrued through the settlement
          date. On September 7, 1995, a conditional settlement agreement was
          reached relieving Sonoma of the outstanding principal and accrued
          interest in exchange for a nominal cash amount and the issuance of
          200,000 shares of Sonoma common stock. This settlement is conditioned
          upon Sonoma common stock being listed on the National Bulletin Board and
          having a market value
          and that the stock can be liquidated.                                                        43,556
  
      Notepayable to Garfield Bank, due on demand with interest accruing at 16%;
          unsecured. Interest of $164,997 has been accrued through the settlement
          date. On September 8, 1995, a conditional settlement agreement had been
          reached relieving Sonoma of the principal amount owed and all accrued
          interest thereon conditioned on 850,000 shares of Sonoma common stock
          being transferred into the name of Garfield Bank (from other
          shareholders)
          and Sonoma common stock having a market value that can be liquidated.                       112,000
                                                                                                      -------
  
          Total notes payable                                                                        $262,391
  </TABLE>
  
                                          8
  
  <PAGE>
  
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                          Notes to the Financial Statements
                                June 30 1996 and 1995
  
  
  NOTE E -STOCKHOLDERS' DEFICIT
  
  In 1995, the Company entered into numerous conditional settlement agreements
  with various creditors in an attempt to settle all long term debt of Sonoma.
  Many of the settlement agreements are in the form of debt relief in exchange for
  common stock of the Company and conditioned upon the Company's common stock
  being listed on the National Bulletin Board and having a market value so that
  the stock can be liquidated.
  
  On July 18, 1995, a settlement agreement was reached related to the unsecured 6%
  note payable that was in default with a former officer relieving Sonoma of the
  principal amount owed of $5,000 with $2,700 accrued interest, accounts payable
  of $22,000 with $7,335 of accrued interest by issuing 272,597 shares of Sonoma
  common stock.
  
  During the year ended June 30, 1996 Sonoma reached agreements with two
  shareholders whom were prior officers of the Company to settle amounts due to
  them approximating $444,445 through the issuance of 33,347,553 of the Company's
  common stock.
  
  During the year ended June 30, 1996, Sonoma reached agreements with two
  individuals to settle amounts due to them approximating $8,800 through the
  transfer of 40,000 of the Company's common stock (transferred from other
  shareholders).
  
  Professional fees of 13,700 were paid on behalf of Sonoma by certain
  shareholders. These expenses paid on behalf of the Company were accounted for as
  contributions to additional paid-in capital.
  
  
  NOTE F - RELATED PARTY TRANSACTIONS
  
  From 1989 through June 30, 1995, officers of the Company paid expenses and/or
  liabilities of Sonoma. Additionally, officers of Sonoma were owed consulting
  fees from the Company for current and past services rendered. During the year
  ended June 30, 1996, Sonoma and the officers have agreed to settle the
  outstanding amounts owed to them of $444,445 through the issuance of common
  stock. See Note E.
  
  
  NOTE G - INCOME TAXES
  
  The Company generated negligible taxable income and/or net operating losses
  during the years ended June 30, 1996 and 1995. Any existing available net
  operating losses at June 30, 1996 would be lost upon consummation of the
  acquisition transaction described in Note H. At June 30, 1996, the Company has a
  deferred tax asset of approximately $85,000 relating to amounts deducted for
  financial reporting losses not deducted for income tax reporting purposes. This
  asset has a valuation allowance recorded against it due to the uncertainty of
  generating future taxable income.
  There was no significant change in the valuation allowance from 1995.
  
  
  NOTE H - SUBSEQUENT EVENT
  
  As of September 12, 1996, the Company entered into an agreement (the
  "Agreement") with Clear Creek Investments, LLC, a Kentucky Limited Liability
  Company ("Clear Creek"), and holders of the limited partnership interests in
  Jamestown Resort & Marina, Ltd, a Kentucky limited partnership ("JRML"). JRML
  owns a resort and marina located on the Cumberland Lake in south central
  Kentucky.
  
  The Agreement requires the transfer and assignment to Sonoma of JRML's general
  partner and all limited partnership interests. There are several conditions to
  closing including the delivery to the Company of an appraisal which states that
  the assets of JRML as of the date of the appraisal have a fair market value of
  not less than $10,000,000. That
  
                                          9
  
  <PAGE>
  
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                          Notes to the Financial Statements
                                June 30 1996 and 1995
  
  appraisal has been delivered to the Company. In addition, the Agreement requires
  that the Company effect a one for two hundred reverse split, leaving 300,000
  shares issued and outstanding, and issue 1,700,000 shares to Clear Creek and
  affiliated and related entities or individuals for the acquisition of JRML.
  
  
  
  
                                         10
  
  <PAGE>
                                FINANCIAL STATEMENTS
               AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
                           JAMESTOWN RESORT & MARINA, LTD
                          (a Kentucky Limited Partnership)
  
                             DECEMBER 31, 1995 AND 1994
  
  
  
  
  
  
  
  <PAGE>
  
  
  
                           JAMESTOWN RESORT & MARINA, LTD
                          (a Kentucky Limited Partnership)
  
                            Index to Financial Statements
  
  
  
                                                                    Page
  
  Report of Independent Certified Public Accountants                   1
  
  Financial Statements
           Balance Sheets                                              2
           Statements of Operations                                    4
           Statements of Changes in Partners' Deficit                  5
           Statements of Cash Flows                                    6
           Notes to Financial Statements                               7
  
  
  
  
  <PAGE>
  
  
  
  
  
  
  
                 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  
  The Partners
  Jamestown Resort & Marina, Ltd.
  
  We have audited the accompanying balance sheets of Jamestown Resort & Marina,
  Ltd. (a Kentucky Limited Partnership) as of December 31, 1995 and 1994, and the
  related statements of operations, partners' deficit, and cash flows for the
  years then ended. These financial statements are the responsibility of the
  Partnership's management. Our responsibility is to express an opinion on these
  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 audits 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 audits provide 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 Jamestown Resort & Marina, Ltd.
  as of December 31, 1995 and 1994, and the results of its operations and its cash
  flows for the years then ended, in conformity with generally accepted accounting
  principles.
  
  The financial statements have been prepared assuming that the Partnership will
  continue as a going concern. As discussed in Note C to the financial statements,
  the Partnership has incurred losses since its inception and at December 31,
  1995, its current liabilities exceeded current assets by approximately
  $6,733,000. These factors raise substantial doubt as to the Company's ability to
  continue as a going concern. Management's plans in regard to these matters are
  also described in Note C. The financial statements do not include any
  adjustments that might result from the outcome of this uncertainty.
  
  
  
                                                      KING, BURNS & COMPANY, P.C.
  
  
  Dallas, Texas
  September 6, 1996
  
  
  
  
  
  
  <PAGE>
                           JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                                   Balance Sheets
                             December 31, 1995 and 1994
  
  
                                       ASSETS
  <TABLE>
  <CAPTION>
  
                                                                                                    1995               1994
                                                                                               ----------------   ----------------
  CURRENT ASSETS
  <S>                                                                                        <C>                <C>              
       Cash                                                                                  $           9,628  $           3,584
       Escrow funds                                                                                     26,673             43,262
       Receivables:
           Trade (net of allowance for doubtful accounts of $3,876 in 1996 and 1995)                    47,653             46,799
           Other                                                                                        34,199             23,111
       Inventory                                                                                        75,400             82,311
       Prepaid expenses                                                                                 46,456             71,919
                                                                                               ----------------   ----------------
                     Total current assets                                                              240,009            270,986
                                                                                               ----------------   ----------------
  
  PROPERTY AND EQUIPMENT
       Buildings and improvements                                                                    2,352,561          2,249,862
       Land improvements                                                                                79,737             73,623
       Docks and floating buildings                                                                  7,180,728          6,957,013
       Boats and improvements                                                                          782,105            717,688
       Furnishings, fixtures and equipment                                                           1,640,722          1,521,580
       Houseboats and pontoons under capital lease                                                   1,373,649          1,373,649
       Computers under capital lease                                                                   161,734            161,734
       Vehicles                                                                                         22,482             20,642
       Construction in progress                                                                        240,931            148,931
                                                                                               ----------------   ----------------
                                                                                                    13,834,649         13,224,722
  
       Less accumulated depreciation and amortization                                                3,987,745          3,403,036
                                                                                               ----------------   ----------------
  
  Net property and equipment                                                                         9,846,904          9,821,686
                                                                                               ----------------   ----------------
  
  OTHER ASSETS
        Deferred loan fees, net of accumulated amortization of
           $11,827                                                                                     106,438                  -
       Goodwill, net of accumulated amortization of
           $165,825 and $147,400                                                                       571,175            589,600
                                                                                               ----------------   ----------------
                     Total other assets                                                                677,613            589,600
                                                                                               ----------------   ----------------
  
  TOTAL ASSETS                                                                               $      10,764,526  $      10,682,272
                                                                                               ================   ================
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                           JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                             Balance Sheets - Continued
                             December 31, 1995 and 1994
  
  
                          LIABILITIES AND PARTNERS' DEFICIT
  <TABLE>
  <CAPTION>
  
                                                                                                    1995               1994
                                                                                               ----------------   ----------------
  CURRENT LIABILITIES
       Current portion of long-term debt (including $3,410,277
  <S>                                                                                        <C>                <C>              
           and $2,206,239 to related parties)                                                $       3,819,067  $      10,622,738
       Current portion of obligations under capital leases                                             198,391            203,793
       Accounts payable                                                                                188,555            274,790
       Accrued interest (including $272,272 and $53,662 to related parties)                          1,246,452            795,946
       Accrued liabilities                                                                             141,387            249,313
       Security deposits                                                                                29,074             34,458
       Deferred revenue                                                                                633,190            531,411
       Accrued management fees - related party                                                         581,301            458,006
       Accrued guarantee fees - related party                                                           60,000             40,000
       Deferred gain on sale leaseback                                                                  75,800             81,905
                                                                                               ----------------   ----------------
  
                         Total current liabilities                                                   6,973,217         13,292,360
                                                                                               ----------------   ----------------
  
  LONG-TERM LIABILITIES
       Long-term debt                                                                                7,421,234            211,577
       Long-term portion of obligations under capital leases                                           417,638            614,838
                                                                                               ----------------   ----------------
  
                         Total long-term liabilities                                                 7,838,872            826,415
                                                                                               ----------------   ----------------
  
  COMMITMENTS AND CONTINGENCIES (Notes C, D, E, F, G, H, K and L)
  
  PARTNERS' DEFICIT                                                                                 (4,047,563)        (3,436,503)
                                                                                               ----------------   ----------------
  
  TOTAL LIABILITIES AND PARTNERS' DEFICIT                                                    $      10,764,526  $      10,682,272
                                                                                               ================   ================
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                           JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                              Statements of Operations
                       Years ended December 31, 1995 and 1994
  
  <TABLE>
  <CAPTION>
  
                                                                                                    1995               1994
                                                                                               ----------------   ----------------
  REVENUES
  <S>                                                                                        <C>                <C>              
       Annual slip fees                                                                      $       1,168,041  $         997,195
       Boat rental                                                                                     748,941            753,835
       Lodge                                                                                           683,251            677,905
       Fuel                                                                                            531,120            488,485
       Convenience store and merchandise                                                               381,123            340,724
       Restaurant                                                                                      372,473            349,001
       Other                                                                                           135,073             76,662
                                                                                               ----------------   ----------------
                         Total revenues                                                              4,020,022          3,683,807
                                                                                               ----------------   ----------------
  
  COST OF REVENUES
       Annual slip                                                                                     165,634            129,395
       Boat rental                                                                                     396,916            439,154
       Lodge                                                                                           235,082            209,793
       Fuel                                                                                            351,029            310,084
       Convenience store and merchandise                                                               288,498            269,061
       Restaurant                                                                                      329,982            276,638
       Other                                                                                           109,350             79,986
                                                                                               ----------------   ----------------
                         Total cost of revenues                                                      1,876,491          1,714,111
                                                                                               ----------------   ----------------
  
  GROSS PROFIT                                                                                       2,143,531          1,969,696
  
  SELLING, GENERAL AND ADMINISTRATIVE (including related party
       amounts for management and guarantee fees of $220,540 and $205,229)                           1,278,390          1,089,981
  AMORTIZATION OF GOODWILL                                                                              30,252             18,426
  DEPRECIATION AND AMORTIZATION                                                                        578,603            617,499
                                                                                               ----------------   ----------------
  
  INCOME FROM OPERATIONS                                                                               256,286            243,790
  
  INTEREST EXPENSE (including interest to related parties
       of $260,716 and $214,724)                                                                       867,346            749,823
                                                                                               ----------------   ----------------
  
  NET LOSS                                                                                   $        (611,060) $        (506,033)
                                                                                               ================   ================
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                           JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                      Statement of Changes in Partners' Deficit
                       Years ended December 31, 1995 and 1994
  
  <TABLE>
  <CAPTION>
  
                                                                               Special
                                                            General            Limited             Limited
                                                            Partner           Partners            Partners             Total
                                                        ----------------   ----------------    ----------------   ----------------
  
  <S>                                                 <C>                <C>                 <C>                <C>               
  Deficit at January 1, 1994                          $      (2,913,099) $         (17,371)  $               -  $      (2,930,470)
  
  Net loss for the year
       ended December 31, 1994                                 (506,033)                 -                   -           (506,033)
                                                        ----------------   ----------------    ----------------   ----------------
  
  Deficit at December 31, 1994                               (3,419,132)           (17,371)                  -         (3,436,503)
  
  Net loss for the year
       ended December 31, 1995                                 (611,060)                 -                   -           (611,060)
                                                        ----------------   ----------------    ----------------   ----------------
  
  Deficit at December 31, 1995                        $      (4,030,192) $         (17,371)  $               -  $      (4,047,563)
                                                        ================   ================    ================   ================
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                           JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                              Statements of Cash Flows
                       Years ended December 31, 1995 and 1994
  
  <TABLE>
  <CAPTION>
  
                                                                                                    1995               1994
                                                                                               ----------------   ----------------
  CASH FLOWS FROM OPERATING ACTIVITIES
  <S>                                                                                        <C>                <C>               
       Net loss                                                                              $        (611,060) $        (506,033)
       Adjustments to reconcile net loss to net cash provided by
           operating activities
              Depreciation and amortization of fixed assets                                            578,603            617,499
              Amortization of goodwill                                                                  30,252             18,426
              Amortization of deferred gain on sale leaseback                                           (6,105)            (6,105)
              Changes in assets and liabilities:
                  Decrease (increase) in escrow funds                                                   16,589             41,409
                  Decrease (increase) in trade receivables                                                (854)            (3,478)
                  Decrease (increase) in other receivables                                             (11,088)            57,620
                  Decrease (increase) in inventory                                                       6,911             (7,279)
                  Decrease (increase) in prepaid expenses                                               25,463              6,950
                  Increase (decrease) in accounts payable                                              (86,235)           152,403
                  Increase (decrease) in accrued interest                                              450,506            357,236
                  Increase (decrease) in accrued liabilities                                          (107,927)            94,807
                  Increase (decrease) in security deposits                                              (5,384)            (8,447)
                  Increase (decrease) in deferred revenue                                              101,779             46,890
                  Increase (decrease) in accrued guarantee fees                                         20,000             20,000
                  Increase (decrease) in accrued management fees                                       123,295             84,943
                                                                                               ----------------   ----------------
  
              Net cash provided by operating activities                                                524,745            966,841
                                                                                               ----------------   ----------------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
       Purchases of property and equipment                                                            (603,820)          (711,802)
                                                                                               ----------------   ----------------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
       Proceeds from bank and related party loans                                                    1,250,700                  -
       Repayments of borrowings                                                                       (844,715)          (152,884)
       Repayments of obligation under capital lease                                                   (202,601)          (189,195)
       Organization and loan costs                                                                    (118,265)                 -
                                                                                               ----------------   ----------------
  
              Net cash provided by financing activities                                                 85,119           (342,079)
                                                                                               ----------------   ----------------
  
  NET INCREASE (DECREASE) IN CASH                                                                        6,044            (87,040)
  
  Cash at beginning of the year                                                                          3,584             90,624
                                                                                               ----------------   ----------------
  
  Cash at end of the year                                                                    $           9,628  $           3,584
                                                                                               ================   ================
  
  SUPPLEMENTAL DISCLOSURES:
           Cash paid during the year for interest                                            $         430,908  $         411,592
                                                                                               ================   ================
  
  SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
       AND FINANCIANG ACTIVITIES
           Assumption of debt in connection with the
              purchase of property and equipment                                             $               -  $         520,019
                                                                                               ================   ================
  </TABLE>
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
  
                           JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  NOTE A - ORGANIZATION
  
  General
  
  Jamestown Resort & Marina, Ltd. (the "Partnership") is a limited partnership
  organized under the laws of the State of Kentucky by Jamestown Resort & Marina,
  Inc. ("JRMI"), the general partner, on November 1, 1987. The Partnership owns a
  resort and marina facility near Jamestown, Kentucky on Lake Cumberland.
  
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
  Statement of Cash Flows
  
  For purposes of the statement of cash flows, cash equivalents include time
  deposits, certificates of deposits, and all highly liquid debt instruments with
  original maturities of 3 months or less when purchased.
  
  Inventory
  
  Inventory is stated at the lower of cost or market and consists of food,
  beverages, clothing, fuel and boat parts. Cost is determined on the first-in,
  first-out ("FIFO") method of accounting.
  
  Property and Equipment
  
  Property and equipment are stated at cost. The Partnership provides for
  depreciation on the straight-line method over the estimated useful lives of the
  related assets. Assets held under capital leases are amortized using the
  straight-line method over the estimated useful lives of the related assets.
  Major classes of property and equipment and their related lives are as follows:
  
                                                                        Life in
                                Major Class                              Years
  
  Docks, floating buildings and buildings on land                         31.5
  Houseboats and pontoons                                                 20.0
  Land improvements                                                       15.0
  Signage                                                                 10.0
  Furnishings                                                              7.0
  Computers under capital lease                                            5.0
  
  Maintenance and repairs are expensed as incurred.  Replacements and betterments
  are capitalized.
  
  Goodwill
  
  Goodwill relates to the original purchase of the marina and the U.S. Army Corps
  of Engineers lease and represents the excess of cost over fair value of net
  assets acquired which is being amortized using the straight-line method over 40
  years. On an on-going basis, management reviews recoverability, the valuation
  and amortization of goodwill. As part of this review, management considers the
  undiscounted value of the projected future net earnings in evaluating the value
  of goodwill. If the undiscounted value of the projected future net earnings is
  less than the stated value, the goodwill would be written down to its fair
  value. Management also considers the appraised value of the marina facility in
  evaluating the value of goodwill.
  
  
  
                                          7
  
  <PAGE>
  
  
                           JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
  
  Deferred Loan Fees
  
  Loan fees are capitalized and amortized over the life of the loan using the
  straight-line method.
  
  Revenue Recognition
  
  Annual or seasonal slip rentals received are recognized as deferred revenue and
  amortized into income over the life of the rental contract using the
  straight-line method. All other revenues are recognized at the time the rental
  occurs or the delivery of the product or service takes place.
  
  Use of Estimates and Assumptions
  
  Management uses estimates and assumptions in preparing financial statements in
  accordance with generally accepted accounting principles. Those estimates and
  assumptions affect the reported amounts of assets and liabilities, the
  disclosure of contingent assets and liabilities, and the reported amounts of
  revenues and expenses. Actual results could vary from the estimates that were
  used.
  
  Income Taxes
  
  Taxable income or loss of the Partnership is allocated to the partners in
  accordance with the provisions of the Partnership agreement. The Partnership
  qualifies as a limited partnership and as such, Federal income taxes accrue to
  the partners rather than to the Partnership. Accordingly, the accompanying
  statements of operations of the Partnership include no provision for income
  taxes.
  
  Other
  
  Advertising costs are expensed as incurred and amounted to $58,000 and $43,000
  in 1995 and 1994, respectively.
  
  
  NOTE C - GOING CONCERN UNCERTAINTY
  
  As reflected in the statements of operations, the Partnership incurred net
  losses of approximately $611,000 and $506,000 in 1995 and 1994, respectively. At
  December 31, 1995, current liabilities exceed current assets by approximately
  $6,733,000. These factors, among others, raise substantial doubt as to the
  Partnership's ability to continue as a going concern.
  
  Management has been successful in the past in negotiating delays in the payment
  of the Company's loans and was successful in refinancing the mortgage debt
  (Notes F and L) and paid off the obligations under the capital leases subsequent
  to December 31, 1995 (Note L). Management is also in the process of merging with
  a public shell (Note L), and has plans to raise sufficient additional capital in
  the public market after the merger to pay off certain of the short and long term
  debt and to provide additional liquidity to fund operations and growth.
  
  The financial statements do not include any adjustments to reflect the possible
  future effects on the recoverability and classification of assets or the amounts
  or classification of liabilities which may result from the possible inability of
  the Partnership to continue as a going concern.
  
  
  
  
                                          8
  
  <PAGE>
  
  
                           JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  NOTE D - DEVELOPMENT AGREEMENT WITH THE TRANSPORTATION CABINET OF THE
           COMMONWEALTH OF KENTUCKY
  
  The Partnership and the Transportation Cabinet of the Commonwealth of Kentucky
  ("Transportation Cabinet") are parties to an agreement for development of the
  marina facilities. The Partnership agreed to construct a new resort and marina
  and the Transportation Cabinet agreed to construct an extension of Kentucky
  Highway 92 to the island upon which the Partnership constructed its lodge.
  
  The Partnership agreed to pay the Transportation Cabinet one percent of the
  gross revenues received by the Partnership from the resort and marina facilities
  in perpetuity. The fees under the agreement totaled $40,000 in 1995 and $37,000
  in 1994.
  
  
  NOTE E - LEASE RIGHTS
  
  The Partnership leases approximately 290 acres of land and water from the U.S.
  Army Corps of Engineers. The lease has a 25-year term beginning January 1, 1988
  with an option for a 25-year extension which has been exercised. Rental amounts
  due under the lease are contingent upon a variety of factors, primarily gross
  revenues. Rent expense was $70,000 in 1995 and $64,000 in 1994.
  
  
  NOTE F - NOTES PAYABLE AND LONG-TERM DEBT
  <TABLE>
  <CAPTION>
  
                                                                                      December 31,
                                                                            ------------------------------
                                                                               1995                 1994
                                                                            ----------             ------
  
  <S>                                                                     <C>               <C>          
      Mortgage                                                            $  7,194,005      $   7,944,005
      Demand Note (related party)                                            1,852,777          1,846,239
      General Partner note                                                   1,197,500                  -
      Limited Partner notes                                                    360,000            360,000
      Paddleboat notes                                                         209,736            270,066
      Yacht Club note                                                          223,624            227,041
      Executive Boats note                                                     159,671            186,963
      Generators note                                                           42,988                  -
                                                                         -------------     --------------
                                                                            11,240,301         10,834,314
      Less current maturities                                               (3,819,067)       (10,622,738)
                                                                         -------------     --------------
      Long-term portion                                                   $  7,421,234     $      211,577
                                                                           ===========      =============
  </TABLE>
  
  
  Mortgage. On December 31, 1988 the Partnership entered into two notes with banks
  to finance the resort and marina project. The first note was for $5,625,000
  maturing on January 1, 1995. The note required monthly payments of principal in
  the amount of $53,568 and interest at a rate of 11%, adjusted to 3% above the
  weekly auction average rate of T-Securities, with a 3 year maturity on November
  1. The second note was for $2,375,000 maturing on January 1, 1995. The note
  required monthly payments of principal in the amount of $6,000 and interest at a
  rate of 1% over the Base Lending rate as defined. Both notes were secured by
  Partnership property. Thereafter, the Partnership defaulted on the notes, and
  the bank became insolvent. The loan was subsequently assumed by the Resolution
  Trust Corporation ("RTC"). The note was consolidated with several other notes
  and sold to a second bank in March, 1993.
  
  
  
  
  
                                          9
  
  <PAGE>
  
  
                           JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  NOTE F - NOTES PAYABLE AND LONG-TERM DEBT - Continued
  
  Accrued interest was $748,240 and $708,240 at December 31, 1995 and 1994,
  respectfully.
  
  On August 11, 1995, The Partnership entered into a written agreement with the
  second bank whereby the notes held could be paid off by the Partnership for
  $6,100,000, plus accrued interest of $240,000. The amount was refinanced on
  January 29, 1996 (Note L). The classification of the note payable (long-term and
  short-term portions) is based on the refinanced terms. This agreement was
  conditional on the ability of the Partnership to make an initial payment of
  $1,000,000 at the closing of the loan modification and being able to repay the
  remaining $5,100,000 by May 1, 1996. The Partnership made a payment of $750,000
  on September 1995. These funds were obtained from related parties and bear
  interest at 10%. The remaining $250,000 was rolled over into the final
  settlement. See Note L.
  
  Demand Note. The Partnership originally entered into a note agreement with a
  bank for $2,000,000 on November 16, 1989, at 1 1/2% over the prime lending rate
  which was collateralized by a second mortgage on the assets of the Partnership
  and by certain items of the Webb Family Trust, an entity related to the general
  partner. A 1 % guarantee amount based on the outstanding balance is payable to
  the Webb Family Trust as compensation for pledging its collateral (See Note H).
  The Partnership defaulted on the note several times and on January 15, 1993 the
  note was converted to a demand note. In March 1994, the Partnership again
  defaulted under the terms of the note and the Webb Family Trust collateral was
  liquidated by the bank to satisfy the note. The Partnership subsequently became
  obligated to the Webb Family Trust under the same terms as the demand note.
  
  General Partner Loans. The Webb Family Trust loaned the Partnership $477,500 at
  various dates in 1995 and $750,000 in September 1995 at 10% under a promissory
  note entered into on August 10, 1995. The note matured on May 1, 1996 and is due
  on demand.
  
  Limited Partner Loans. On March 6, 1992, loans totaling $360,000 were made by
  limited partners at 1% plus prime for operating shortfalls and capital
  improvements. The notes are payable on demand. The notes may be extended each
  year for a fee of 1% of the note balance.
  
  Paddleboat. Webb Cruise Lines, Inc. (WCL) an entity controlled by the general
  partner originally purchased the Jamestown Queen, a paddleboat, by obtaining
  financing from two banks. On April 21, 1989 WCL entered into the first note with
  a bank for $325,000. On October 30, 1994 the note was renewed for $251,303 at 2%
  plus prime maturing on April 30, 2000. The note requires monthly payments of
  $5,309 of principal and interest. The loan is collateralized by five shares
  (5.6%) of the limited Partnership units, the Paddleboat and guaranteed by the
  Webb Family Trust. On May 8, 1989, WCL entered into a 13.5% variable note with a
  second bank amounting to $75,000 with interest and principal due on June 22,
  1995. The Partnership paid a monthly rent of $7,260 to WCL for the use of the
  boat. The Partnership assumed both notes and title of the boat from WCL in May
  1994 for the balance of both notes of $282,346 which approximated the fair value
  of the Paddleboat.
  
  Yacht Club. Webb Lexington Ventures, Inc., an entity controlled by the general
  partner, entered into a 11% mortgage note with a bank for $278,000 to purchase
  the Yacht Club. The note matures on July 1, 1996 and interest is payable
  quarterly in October, January, April and July. Principal payments consist of two
  installments, $23,757 on January 1, 1996 and $200,000 on July 1, 1996. The note
  is collateralized by the property of the general partner. The Yacht Club was
  acquired by the Partnership by assuming the note, which approximated the fair
  market value of the Yacht Club.
  
  
  
                                         10
  
  <PAGE>
  
  
                           JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  NOTE F - NOTES PAYABLE AND LONG-TERM DEBT - Continued
  
  Executive Boats. On February 8, 1990, the Partnership entered into a note with a
  bank finance its executive boats and is collateralized by the two houseboats.
  The note was renewed on October 30, 1995 and provides for monthly principal
  payments of $4,000 and interest at 11% and matures on October 28, 1999.
  
  Generators. On May 26, 1995, the Partnership entered into a note with a bank for
  $53,200 at a fixed rate of 10.5% maturing on October 1, 1997. The note is
  collateralized by 12 boat generators. Interest and principal of $3,000 are paid
  monthly beginning on July 1, 1995 through October 1, 1995. Payments will resume
  each year on March 1 through October 1.
  
  Aggregate maturities of long-term debt at December 31, 1995 are as follows:
  
                             1996                                 $  3,819,067
                             1997                                      217,870
                             1998                                      217,425
                             1999                                      234,021
                             2000                                      173,393
                             Thereafter                              6,578,525
                                                                  ------------
                             Total                                $ 11,240,301
                                                                   ===========
  
  
  NOTE G - OBLIGATIONS UNDER CAPITAL LEASES
  
  The Partnership leases certain boats and computer equipment under capital
  leases. In 1991, the Partnership sold 25 houseboats and 20 pontoon boats for
  $1,374,000 to a bank and subsequently leased back the boats under a capital
  lease. In connection with this sale and lease-back transaction, the Partnership
  recorded a deferred gain of $104,000. This gain is being amortized as a offset
  to amortization expense over the term of the lease. The lease term is for six
  years and monthly payments of $30,000 are required from March through October of
  each year. The lease also has a purchase option of $202,000 at the end of the
  lease. The Partnership entered into a sale and leaseback transaction for
  computer equipment in 1990 for $161,000. The computer lease matured in 1994. The
  Partnership is required to pay future minimum payments related to these leases
  as follows:
                                                                       Amount
                                                                   -----------
                             1996                                  $   239,710
                             1997                                      443,938
                                                                   -----------
                                                                       683,648
                             Amount representing interest              (67,619)
                             Present value of net minimum
                               lease payments                          616,029
                             Current portion                           198,391
                                                                    ----------
                             Total                                 $   417,638
                                                                    ==========
  
  The weighted average interest rate on the capital leases approximates 10% at
  December 31, 1995.
  
  Accumulated amortization for leased boats and computer equipment at December 31,
  1995 and 1994 was $456,000 and $384,000 , respectively. Amortization expense,
  net of the deferred gain amortization of $6,000 each year, for the leased boats
  and computer equipment was approximately $65,000 and $95,000 during 1995 and
  1994, respectively.
  
  
  
                                         11
  
  <PAGE>
  
  
                           JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  NOTE G - OBLIGATIONS UNDER CAPITAL LEASES - Continued
  
  In connection with the boat lease, the bank requires a monthly deposit of $3,761
  into an escrow account for repairs and maintenance of the boats. This account
  has a balance of approximately $26,000 and $43,000, at December 31, 1995 and
  1994, respectively, which is included in escrow funds in the accompanying
  balance sheets.
  
  
  NOTE H - RELATED PARTY TRANSACTIONS
  
  The general partner has a management agreement with the Partnership to provide
  management services to the Partnership for a fee equal to 5% of the annual gross
  revenues. Such fee is payable to the general partner at a rate $4,000 per month,
  plus direct costs and expenses associated with its management of the
  Partnership. The remainder of the fee is accrued. Accrued management fees at
  1995 and 1994 were $581,000 and $458,000, respectively. Management fees paid in
  1995 and 1994 were $48,000 and management fee expense was $201,000 and $185,000,
  respectively.
  
  The general partner guaranteed the Demand Note (Note F) and receives as
  compensation a fee of 1% of the outstanding note balance annually. Such fee
  amounted to $20,000 during 1995 and 1994, respectively. The accrued guarantee
  fee was $60,000 and $40,000 at December 31, 1995 and 1994, respectively.
  
  Accrued interest due to the partners was $272,000 and $54,000 at December 31,
  1995 and 1994, respectively. Interest expense payable to related parties was
  $261,000 and $215,000 during 1995 and 1994, respectively.
  
  Accounts receivable (other) of $25,000 at December 31, 1995 and 1994, from
  related parties, are recorded as a reduction of accrued management fees and are
  primarily for reimbursable expenses.
  
  The Partnership rents a portion of land to the general partner for $441 per
  year.
  
  Also see Note F.
  
  
  NOTE I  - PARTNERSHIP AGREEMENT
  
  The general partner is required to manage the affairs of the Partnership but is
  not required to make a capital contribution for its interest in the Partnership.
  For Federal income tax purposes, the special limited partners received an
  assigned value of $200,000 (equivalent to eight units) for contributing their
  interest in the Sale and Purchase Agreement with Jamestown Dock, Inc. Eighty
  units had been sold to limited partners.
  
  The special limited and limited partners are entitled to an annual Preference
  Payment of 10% of their capital contributions to the extent that cash flow
  exceeds operating expenses, debt service and funds set aside in a working
  capital reserve. All unpaid Preference Payments accumulate and may be paid in
  future years out of available cash flow. Remaining cash flow, after the
  Preference Payment, is distributable to the limited partners and to the general
  partner in proportion to their interests in partnership profits. No cash
  distributions have been made to the partners. Accumulated but unpaid Preference
  Payments totaled $1,372,917 at December 31, 1995 and $1,152,917 at December 31,
  1994 (Note L).
  
  The net loss for the years ended December 31, 1995 and 1994 was allocated in
  accordance with the Partnership Agreement. No loss is allocated to the special
  limited partners because of their nil capital account balances. In accordance
  with the Partnership agreement, limited partners are allocated 80% of net losses
  to the extent that they have positive capital account balances, and the general
  partner is allocated the remaining loss.
  
                                         12
  
  <PAGE>
  
  
                           JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  NOTE J - FAIR VALUE OF FINANCIAL INSTRUMENTS
  
  Statement of Financial Accounting Standards No. 107, "Disclosure About Fair
  Value of Financial Instruments", requires disclosure about the fair value of all
  financial assets and liabilities for which it is practicable to estimate. Cash
  and escrow funds, accounts receivable, accounts payable and other liabilities
  are carried at amounts that reasonably approximate their fair values.
  
  The carrying amount and fair value of notes payable and long-term debt
  (excluding capital leases) are as follows:
  
                                                           December 31, 1995
                                                    ------------------------------
                                                      Carrying             Fair
                                                       amount              value
                                                    ----------          ----------
      Mortgage debt                                 $7,194,000          $5,350,000
      Demand note                                    1,853,000           1,853,000
      Variable rate debt                               570,000             570,000
      Other current debt                             1,677,000           1,677,000
  
  
  NOTE K - CONTINGENT LIABILITIES
  
  In the normal course of its business, the Partnership is subject to litigation.
  Management of the Partnership, based on discussions with its outside legal
  counsel, does not believe any claims, individually or in the aggregate, will
  have a material adverse impact on the Partnership's financial position.
  
  
  NOTE L - SUBSEQUENT EVENTS
  
  On January 29, 1996, the Partnership entered into a loan agreement for
  $6,300,000 maturing on February 1, 2001. The agreement requires monthly payments
  of principal and interest at a variable rate equal to the commercial paper rate
  plus 4.25%. Proceeds of $5,800,000 was used to settle the $5,631,000 mortgage
  note described in Note F, and $678,000 was used to settle the boat lease
  obligation (Note F) and related loan origination fees. Other short term
  borrowings were obtained to finance the difference between amounts paid and the
  $5,800,000 proceeds used from the $6,300,000 loan agreement.. On March 28, 1996
  the remaining $500,000 was drawn on the note. The balance due on the note at
  June 30, 1996 was $6,261,000.
  
  As of September 12, 1996, the Partnership, by consent of the JRMI and the
  limited partners, entered into an agreement (the "Agreement") with Sonoma
  International ("Sonoma"), a public company with no operations. The Agreement
  requires the transfer and assignment to Sonoma of all of the common stock of
  JRMI and all limited partnership interests in exchange for 1,700,000 shares of
  common stock of Sonoma. There are several conditions to closing including the
  delivery to Sonoma of an appraisal which states that the assets of the
  Partnership, as of the date of the appraisal, have a fair market value of not
  less than $10,000,000. That appraisal has been delivered to Sonoma. The
  agreement incorporates the payment of the preference payments due (Note I)
  through the issuance of shares of Sonoma.
  
  
  
  
  
                                         13
  
  <PAGE>
  
  
                                FINANCIAL STATEMENTS
               AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
                             KEYWEST CONCH HARBOR, INC.
  
                             DECEMBER 31, 1995 AND 1994
  
  
  
  
  
  
  
  <PAGE>
  
  
  
                             KEY WEST CONCH HARBOR, INC.
  
                            Index to Financial Statements
  
  
  
                                                                   Page
  
  Report of Independent Certified Public Accountants                 1
  
  Financial Statements
           Balance Sheets                                            2
           Statements of Operations                                  4
           Statements of Changes in Stockholders' Deficit            5
           Statements of Cash Flows                                  6
           Notes to Financial Statements                             7
  
  
  
  
  <PAGE>
  
  
  
  
  
  
  
                 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  
  The Stockholders
  Key West Conch Harbor, Inc.
  
  We have audited the accompanying balance sheets of Key West Conch Harbor, Inc.
  as of December 31, 1995 and 1994, and the related statements of operations,
  stockholders' deficit, and cash flows for the years then ended. These financial
  statements are the responsibility of the Company's management. Our
  responsibility is to express an opinion on these financial statements based on
  our audits.
  
  We conducted our audits in accordance with generally accepted auditing
  standards. Those standards require that we plan and perform the audits 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 audits provide 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 Key West Conch Harbor, Inc. as
  of December 31, 1995 and 1994, and the results of its operations and its cash
  flows for the years then ended, in conformity with generally accepted accounting
  principles.
  
  
  The financial statements have been prepared assuming that the Company will
  continue as a going concern. As discussed in Note C to the financial statements,
  the Company has incurred losses since its inception and at December 31, 1995,
  its current liabilities exceeded current assets by approximately $2,107,802.
  These factors raise substantial doubt as to the Company's ability to continue as
  a going concern. Management's plans in regard to these matters are also
  described in Note C. The financial statements do not include any adjustments
  that might result from the outcome of this uncertainty.
  
  
                                                  KING, BURNS & COMPANY, P.C.
  
  
  Dallas, Texas
  October 18, 1996
  
  
  
  
  
  
  
  <PAGE>
                             KEY WEST CONCH HARBOR, INC.
                                   Balance Sheets
                             December 31, 1995 and 1994
  
  
  
                                       ASSETS
  <TABLE>
  <CAPTION>
  
                                                                                                    1995               1994
                                                                                               ----------------   ----------------
  CURRENT ASSETS
  <S>                                                                                        <C>                <C>              
       Cash                                                                                  $          20,899  $           3,657
       Receivables                                                                                       6,452              8,859
       Inventory                                                                                         8,716                  -
       Prepaid expenses and other                                                                       13,859                500
                                                                                               ----------------   ----------------
                     Total current assets                                                               49,926             13,016
                                                                                               ----------------   ----------------
  
  PROPERTY AND EQUIPMENT
       Land                                                                                          1,810,818          1,786,640
       Land improvements                                                                               121,805            101,265
       Docks                                                                                           788,016            443,711
       Fuel Tanks                                                                                       72,609                  -
       Furniture, fixtures and equipment                                                                20,178                550
       Construction in progress                                                                        171,233                  -
                                                                                               ----------------   ----------------
                                                                                                     2,984,659          2,332,166
  
       Less accumulated depreciation and amortization                                                   70,717             29,719
                                                                                               ----------------   ----------------
  
                     Net property and equipment                                                      2,913,942          2,302,447
                                                                                               ----------------   ----------------
  
  OTHER ASSETS
       Deferred loan fees, net of accumulated amortization of  $5,761 and $1,002, respectively          16,712             13,545
                                                                                               ----------------   ----------------
                     Total other assets                                                                 16,712             13,545
                                                                                               ----------------   ----------------
  
  TOTAL ASSETS                                                                               $       2,980,580  $       2,329,008
                                                                                               ================   ================
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                             KEY WEST CONCH HARBOR, INC.
                             Balance Sheets - Continued
                             December 31, 1995 and 1994
  
  
  
                        LIABILITIES AND STOCKHOLDERS' DEFICIT
  
  <TABLE>
  <CAPTION>
                                                                                                    1995               1994
                                                                                               ----------------   ----------------
  CURRENT LIABILITIES
  <S>                                                                                        <C>                <C>              
       Current portion of long-term debt (including $378,584
           and $148,700 to related parties)                                                  $       1,928,584  $       1,248,700
       Accounts payable                                                                                 23,897             71,792
       Accrued interest (including $110,405 and $71,798 to related parties)                            137,354             71,798
       Accrued liabilities                                                                              48,633             55,293
       Security deposits                                                                                     -             10,000
       Deferred revenue                                                                                 19,260                  -
                                                                                               ----------------   ----------------
  
                         Total current liabilities                                                   2,157,728          1,457,583
                                                                                               ----------------   ----------------
  
  LONG-TERM LIABILITIES
       Long-term debt, net of current maturities  (including $908,711 and
           $990,800 to related parties)                                                              1,108,711            990,800
                                                                                               ----------------   ----------------
  
                         Total long-term liabilities                                                 1,108,711            990,800
                                                                                               ----------------   ----------------
  
  COMMITMENTS AND CONTINGENCIES (Notes C, D, G and H)
  
  STOCKHOLDERS' DEFICIT
       Common stock; $10 par value; 100 shares authorized,
           issued and outstanding                                                                        1,000              1,000
       Accumulated deficit                                                                            (286,859)          (120,375)
                                                                                               ----------------   ----------------
  
                         Total stockholders' deficit                                                  (285,859)          (119,375)
                                                                                               ----------------   ----------------
  
  
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                $       2,980,580  $       2,329,008
                                                                                               ================   ================
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                             KEY WEST CONCH HARBOR, INC.
                              Statements of Operations
                       Years ended December 31, 1995 and 1994
  
  
  <TABLE>
  <CAPTION>
  
                                                                                                    1995               1994
                                                                                               ----------------   ----------------
  REVENUES
  <S>                                                                                        <C>                <C>              
       Annual slip fees                                                                      $         143,442  $          73,715
       Lease income from related party                                                                       -             92,675
       Fuel                                                                                            507,914                  -
       Other                                                                                             2,557                  -
                                                                                               ----------------   ----------------
                         Total revenues                                                                653,913            166,390
                                                                                               ----------------   ----------------
  
  COST OF REVENUES
       Annual slip                                                                                      10,981             11,091
       Fuel                                                                                            372,660                  -
                                                                                               ----------------   ----------------
                         Total cost of revenues                                                        383,641             11,091
                                                                                               ----------------   ----------------
  
  GROSS PROFIT                                                                                         270,272            155,299
  
  SELLING, GENERAL AND ADMINISTRATIVE                                                                  152,007             60,478
  
  DEPRECIATION AND AMORTIZATION                                                                         45,757             30,721
                                                                                               ----------------   ----------------
  
  INCOME FROM OPERATIONS                                                                                72,508             64,100
  
  INTEREST EXPENSE (including interest to related parties
       of $94,350 and $91,800)                                                                         238,992            184,475
                                                                                               ----------------   ----------------
  
  NET LOSS                                                                                   $        (166,484) $        (120,375)
                                                                                               ================   ================
  
  Net loss per common share                                                                  $          (1,665) $          (1,204)
                                                                                               ================   ================
  
  Weighted average shares outstanding                                                                      100                100
                                                                                               ================   ================
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                             KEY WEST CONCH HARBOR, INC.
               Statements of Changes in Stockholders' Equity (Deficit)
                       Years ended December 31, 1995 and 1994
  
  
  
  <TABLE>
  <CAPTION>
  
                                                                        Common Stock             
                                                        -----------------------------------      Accumulated
                                                            Shares             Amount              Deficit             Total
                                                        ----------------   ----------------    ----------------   ----------------
  
  <S>                                                               <C>  <C>                 <C>                <C>              
  Balance at January 1, 1994                                        100  $           1,000   $               -  $           1,000
  
  Net loss for the year
       ended December 31, 1994                                                           -            (120,375)          (120,375)
                                                        ----------------   ----------------    ----------------   ----------------
  
  Balance at December 31, 1994                                      100              1,000            (120,375)          (119,375)
  
  Net loss for the year
       ended December 31, 1995                                                           -            (166,484)          (166,484)
                                                        ----------------   ----------------    ----------------   ----------------
  
  Balance at December 31, 1995                                      100  $           1,000   $        (286,859) $        (285,859)
                                                        ================   ================    ================   ================
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
                             KEY WEST CONCH HARBOR, INC.
                              Statements of Cash Flows
                       Years ended December 31, 1995 and 1994
  
  
  <TABLE>
  <CAPTION>
  
                                                                                                    1995               1994
                                                                                               ----------------   ----------------
  CASH FLOWS FROM OPERATING ACTIVITIES
  <S>                                                                                        <C>                <C>               
       Net loss                                                                              $        (166,484) $        (120,375)
       Adjustments to reconcile net loss to net cash provided (used)
           by operating activities
              Depreciation and amortization                                                             40,998             29,719
              Amortization of deferred loan fees                                                         4,759              1,002
              Changes in assets and liabilities:
                  Receivables                                                                            2,407             (8,859)
                  Inventory                                                                             (8,716)                 -
                  Prepaid expenses and other                                                           (13,359)              (500)
                  Accounts payable                                                                     (47,895)            71,792
                  Accrued interest                                                                      65,556             71,798
                  Accrued liabilities                                                                   (6,660)            55,293
                  Security deposits                                                                    (10,000)            10,000
                  Deferred revenue                                                                      19,260                  -
                                                                                               ----------------   ----------------
  
              Net cash provided (used) by operating activities                                        (120,134)           109,870
                                                                                               ----------------   ----------------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
       Purchases of property and equipment                                                            (652,493)        (2,332,166)
                                                                                               ----------------   ----------------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
       Proceeds from bank and related party loans                                                      797,795          2,239,500
       Organization and loan costs                                                                      (7,926)           (14,547)
       Proceeds from issuance of common stock                                                                -              1,000
                                                                                               ----------------   ----------------
  
              Net cash provided by financing activities                                                789,869          2,225,953
                                                                                               ----------------   ----------------
  
  NET INCREASE  IN CASH                                                                                 17,242              3,657
  
  Cash at beginning of the year                                                                          3,657                  -
                                                                                               ----------------   ----------------
  
  Cash at end of the year                                                                    $          20,899  $           3,657
                                                                                               ================   ================
  
  SUPPLEMENTAL DISCLOSURES:
           Cash paid during the year for interest                                            $         248,141  $         112,674
                                                                                               ================   ================
  
  SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
       AND FINANCIANG ACTIVITIES
           Assumption of debt in connection with the
              purchase of property and equipment                                             $         652,493  $       2,332,166
                                                                                               ================   ================
  </TABLE>
  
  
  
  
  
  
  The accompanying notes are an integral part of these financial statements.
  <PAGE>
  
  
                             KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  NOTE A - ORGANIZATION
  
  General
  
  Key West Conch Harbor, Inc. (the "Company") is a S-Corporation, incorporated in
  the State of Florida on December 23, 1993 for the purposes of acquiring,
  developing, and operating a marina facility in Key West, Florida.
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
  Statement of Cash Flows
  
  For purposes of the statement of cash flows, cash equivalents include time
  deposits, certificates of deposits, and all highly liquid debt instruments with
  original maturities of 3 months or less when purchased.
  
  Inventory
  
  Inventory is stated at the lower of cost or market and consists of fuel. Cost is
  determined on the first-in, first-out ("FIFO") method of accounting.
  
  Property and Equipment
  
  Property and equipment are stated at cost. The Company provides for depreciation
  on the straight-line method over the estimated useful lives of the related
  assets. Major classes of property and equipment and their related useful lives
  are as follows:
  
                                                                     Life in
                                Major Class                           Years
  
  Land improvements                                                     20
  Docks                                                                 20
  Furniture, fixtures and equipment                                      7
  Computer equipment                                                     5
  
  Maintenance and repairs are expensed as incurred. Replacements and betterments
  are capitalized.
  
  Deferred Loan Fees
  
  Loan fees are capitalized and amortized over the life of the loan using the
  straight-line method.
  
  Revenue Recognition
  
  Annual or seasonal slip rentals received are recognized as deferred revenue and
  amortized into income over the life of the rental contract using the
  straight-line method. All other revenues are recognized at the time the rental
  occurs or the delivery of the product or service takes place.
  
  Lease income
  
  During 1994 all fuel operations where leased to a related party who made lease
  payments of all interest on the first mortgage. Income recorded in 1994 from
  these payments was $92,675.
  
  
  
  
  
                                          7
  
  <PAGE>
  
  
                             KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
  
  Loss per share
  
  Loss per share of common stock is based upon the weighted average number of
  common shares outstanding. There is no effect on loss per share after giving
  effect to proforma income taxes as if the Company was taxed as a C-Corporation.
  
  Use of Estimates and Assumptions
  
  Management uses estimates and assumptions in preparing financial statements in
  accordance with generally accepted accounting principles. Those estimates and
  assumptions affect the reported amounts of assets and liabilities, the
  disclosure of contingent assets and liabilities, and the reported amounts of
  revenues and expenses. Actual results could vary from the estimates that were
  used.
  
  Income Taxes
  
  Taxable income or loss of the S-Corporation is allocated to the shareholders in
  accordance with the provisions of the Stockholders agreement. The Company
  qualifies as a S-Corporation and as such, Federal income taxes accrue to the
  shareholders rather than to the Company. Accordingly, the accompanying
  statements of operations of the Company include no provision for Federal income
  taxes.
  
  
  NOTE C - GOING CONCERN UNCERTAINTY
  
  As reflected in the statements of operations, the Company incurred net losses of
  $166,484 and $120,375 in 1995 and 1994, respectively. At December 31, 1995,
  current liabilities exceed current assets by $2,107,802. These factors, among
  others, raise substantial doubt as to the Company's ability to continue as a
  going concern.
  
  Management has been successful in the past in negotiating delays in the payment
  of the Company's loans and was successful in refinancing the mortgage debt
  (Notes D and H) subsequent to December 31, 1995. Management is also negotiating
  to transfer ownership and control of the Company to a public company (Note H).
  The public company has plans to raise additional capital in the public market
  after the acquisition.
  
  The financial statements do not include any adjustments to reflect the possible
  future effects on the recoverability and classification of assets or the amounts
  or classification of liabilities which may result from the possible inability of
  the Company to continue as a going concern.
  
  
  NOTE D - NOTES PAYABLE AND LONG-TERM DEBT
  <TABLE>
  <CAPTION>
                                                                                      December 31,
                                                                            ------------------------------
                                                                               1995                 1994
                                                                            ----------             ------
  <S>                                                                       <C>                <C>       
      First mortgage                                                        $1,550,000         $1,100,000
      Second mortgage - stockholder                                            500,000            500,000
      Third mortgage - related party                                           200,000            200,000
      First note - stockholder                                                 245,000            245,000
      Second note - stockholder                                                125,000            125,000
      Working capital note - stockholder                                        57,295             69,500
      First note payable                                                       200,000                  -
      Second note payable - stockholders                                       160,000                  -
                                                                            ----------          ---------
                                                                             3,037,295          2,239,500
      Less current maturities                                                1,928,584          1,248,700
                                                                             ---------          ---------
      Long-term portion                                                     $1,108,711          $ 990,800
                                                                           ============        ==========
  </TABLE>
                                          8
  <PAGE>
  
  
                             KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  
  
  NOTE D - NOTES PAYABLE AND LONG-TERM DEBT - Continued
  
  First Mortgage. On December 29, 1993 the Company entered into a note payable for
  $1,100,000 with a financial institution to purchase the marina. The note is
  collateralized by the property. The mortgage is at a variable rate of 1 1/2%
  above the banks prime rate and matures on June 29, 2010. Payments of interest
  were required from January 29, 1994 through July 29, 1995, thereafter monthly
  payment of principal and interest were required to fully amortize the note
  through the maturity date.
  
  On March 27, 1995 the Company renegotiated the variable rate note with the
  financial institution for $1,550,000 (which included unpaid interest). This note
  matures with all the principal due on October 1, 1996 and requires monthly
  interest payments beginning on May 1, 1995, at a rate of 1% over the banks
  index. (See Note H).
  
  Prepaid interest on this note was $13,359 at December 31, 1995.
  
  Second Mortgage. On December 28, 1993 the Company entered into a $500,000
  promissory note with a stockholder, at a fixed rate of 8%, collateralized by a
  second mortgage on the property. Annual payments are required for principal and
  interest totaling $50,000 commencing on January 5, 1995 and continuing until the
  maturity date of January 5, 2004. Principal and interest payments due on January
  5, 1995, were deferred. Accrued interest was $44,257 and $40,000 at December 31,
  1995 and 1994, respectfully.
  
  Third Mortgage. As part of the original purchase the Company entered into a
  $200,000 promissory note with a related party. This note had a fixed rate of 10%
  and matures on March 15, 1997. (See Note H).
  
  On January 13, 1995 the Company renewed the $200,000 promissory note,
  subordinate to the first and second mortgage, with a stockholder, at a fixed
  rate of 10%. The note matures on January 13, 1997 and requires monthly interest
  payments.
  
  First Note to Stockholder. On December 28, 1993 the Company entered into a
  $245,000 promissory note with a stockholder, at a fixed rate of 8%. Annual
  payments are required of $50,000 (principal and interest) commencing January 5,
  1995 and continuing until the maturity date of January 5, 2004.Principal and
  interest payments due on January 5, 1995, were deferred. At December 31, 1995
  and 1994 accrued interest was $39,200 and $19,600, respectively. (See Note H).
  
  Second Note to Stockholder. On December 28, 1993 the Company entered into a
  $125,000 promissory note with a stockholder, at a fixed rate of 8% with a
  maturity date in July 2001. Annual interest payments are required commencing on
  January 5, 1995 and continuing until the maturity date in July 2001. Interest
  due on January 5, 1995 was deferred. At December 31, 1995 and 1994 accrued
  interest was $20,000 and $10,000, respectively. (See Note H).
  
  Working Capital Note to Stockholder. During 1994, working capital of $69,500 was
  provide to the Company by a stockholder at a fixed rate of 8%. The timing of the
  repayment of the note payable is at the discretion of the Company and is
  classified as current maturities in the accompanying balance sheets. The balance
  outstanding at December 31, 1995 and 1994 was $57,295 and $69,500, respectively.
  At December 31, 1995 and 1994 accrued interest was $6,948 and $2,198,
  respectively.
  
  First Note payable. On August 3, 1995 the Company entered into a $200,000
  promissory note with a financial institution maturing on February 3, 1999, at a
  variable rate of 1 3/4% above the financial institutions base rate. Monthly
  interest payments are required.
  
  
  
  
  
  
                                          9
  
  <PAGE>
  
  
                             KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  
  NOTE D - NOTES PAYABLE AND LONG-TERM DEBT - Continued
  
  Second Note Payable. The following two notes were entered into by stockholders
  of the Company to provide operating funds.
  
  On October 2, 1995 the stockholders entered into a note payable for $100,000
  with the principal maturing on October 2, 1996, at a variable rate of 1% over
  prime. Monthly interest payments commencing on November 2, 1995 are required.
  
  On December 27,1995 the stockholders entered into a second note payable for
  $100,000 with the principal maturing on November 27, 1996, at a variable rate of
  2% over prime. Monthly interest payments commencing on January 27, 1995 are
  required. At December 31, 1995 $60,000 had been drawn and is outstanding under
  this note payable.
  
  Aggregate maturities of long-term debt at December 31, 1995 are as follows:
  
                          1996                                  $ 1,928,584
                          1997                                      284,752
                          1998                                       87,636
                          1999                                      290,760
                          2000                                       94,143
                          Thereafter                                351,420
                                                                -----------
                          Total                                 $ 3,037,295
                                                                 ==========
  
  
  
  NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS
  
  Statement of Financial Accounting Standards No. 107, "Disclosure About Fair
  Value of Financial Instruments", requires disclosure about the fair value of all
  financial assets and liabilities for which it is practicable to estimate. Cash,
  accounts receivable, accounts payable and other liabilities are carried at
  amounts that reasonably approximate their fair values.
  
  The carrying amount and fair value of notes payable and long-term debt are as
  follows:
  
                                                         December 31, 1995
                                                    --------------------------
                                                     Carrying          Fair
                                                      amount           value
                                                    ----------       ---------
      Variable rate debt                            $1,910,000      $1,910,000
      Fixed rate debt                                1,070,000       1,151,250
      Demand note                                       57,296          57,296
  
  
  The fair value of the Company's fixed rate debt have been estimated based upon
  relative changes in the Company's variable borrowing rates since origination of
  the fixed rate debt. Fair values of variable rate debt and demand notes are
  deemed to approximate carrying amount.
  
  
  
  
  
  
  
  
  
                                         10
  
  <PAGE>
  
  
                             KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  
  NOTE F - RELATED PARTY TRANSACTIONS
  
  The Company has a $9,381 payable to a stockholder related to commissions earned
  in conjunction with the purchase of the marina on December 28, 1993. In
  addition, the Company has a $30,000 payable to a stockholder for a finders fee
  in conjunction with the purchase of the marina.
  
  During 1995 and 1994, the Company entered into various notes payable with
  stockholders of the Company. See Note D.
  
  Accrued interest due to the stockholders was $110,405 and $71,798 at December
  31, 1995 and 1994, respectively. Interest expense in connection with notes due
  to stockholders was $94,350 and $91,800 during 1995 and 1994, respectively.
  
  Upon formation of the S Corporation, the Company purchased the Key West facility
  for approximately $2,300,000 from a stockholder. This purchase price
  approximated the fair market value of the property.
  
  
  NOTE G - CONTINGENT LIABILITIES
  
  In the normal course of its business, the Company is subject to litigation.
  Management of the Company, based on discussions with its outside legal counsel,
  does not believe any claims, individually or in the aggregate, will have a
  material adverse impact on the Company's financial position.
  
  
  NOTE H - SUBSEQUENT EVENTS
  
  On July 25, 1996 the majority stockholder sold 73.625 shares to a third party
  which resulted in a change in control of the Company in exchange for $1,700,000.
  
  On April 8 , 1996, the Company entered into a loan agreement for $2,724,185
  maturing on April 1, 2016. This agreement renewed and consolidated the first
  mortgage of $1,550,000 with an additional amount of $1,174,185 which was used to
  pay off the third mortgage, the second note payable, to provide operating funds
  and to fund expansion of the fuel system. The agreement requires twenty-four
  monthly interest payments beginning May 1, 1996 at a rate of 9% and two hundred
  and sixteen monthly principal and interest payments of $25,510 beginning May 1,
  1998 at a rate of 9% during the first 36 payments and 1% over prime thereafter.
  
  Effective of October 31, 1996, the Company, by consent of the stockholders,
  entered into an agreement (the "Agreement") with Sonoma International
  ("Sonoma"), a public company. The Agreement requires the transfer and assignment
  to Sonoma of all of the common stock of the Company in exchange for 300,000
  shares of common stock of Sonoma.
  
  
  
  
  
                                         11
  
  <PAGE>
  
  
                UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
  
  
  
  Sonoma International (a public company which has had no operations since 1988)
  ("Sonoma") was incorporated under the laws of the State of Nevada on June 10,
  1940. Since February of 1988, Sonoma has focused on finding assets and or
  operations that could be acquired by Sonoma so that Sonoma could become an
  operating entity.
  
  Jamestown Resort & Marina, Ltd. ("JRML") is a limited partnership, organized by
  Jamestown Resort & Marina, Inc., the general partner, under the laws of the
  State of Kentucky on November 1, 1987. JRML owns a resort and marina facility on
  Lake Cumberland near Jamestown, Kentucky.
  
  On September 12, 1996, Sonoma entered into a stock exchange agreement ("First
  Agreement") with JRML whereby Sonoma would be reorganized in consideration of
  acquiring all of the partnership units of JRML. Sonoma is to acquire 100% of
  JRML in exchange for an aggregate of 1,500,000 shares of its common stock.
  
  Key West Conch Harbor, Inc. ("KWCHI") is a S-Corporation which was incorporated
  in the State of Florida on December 23, 1993 for the purposes of acquiring,
  developing, and operating a marina facility in Key West, Florida.
  
  Effective October 31, 1996, Sonoma entered into a stock exchange agreement (the
  "Second Agreement") with KWCHI. The Second Agreement requires the transfer and
  assignment to Sonoma of all of the common stock of KWCHI in exchange for 300,000
  shares of common stock of Sonoma.
  
  The unaudited pro forma balance sheet of Sonoma reflects the reorganization with
  JRML and KWCHI as if it had occurred on June 30, 1996. Such pro forma
  information is based on the historical balance sheet data of Sonoma, JRML and
  KWCHI as of June 30, 1996. For accounting purposes, the merger between Sonoma
  and JRML is regarded as an acquisition by JRML of substantially all of the
  outstanding stock of Sonoma and is accounted for as a recapitalization of JRML
  with JRML as the acquirer (a reverse acquisition). The subsequent merger with
  KWCHI is accounted for using the pooling method of accounting. The unaudited pro
  forma statements of operations for the years ended June 30, 1996 and 1995
  reflect the transactions as if they had occurred on July 1, 1994.
  
  The unaudited pro forma financial information is not necessarily indicative of
  the results of operations that would have been reported had such events occurred
  on the dates specified, nor is it necessarily indicative of the future results
  of the combined entities. The unaudited pro forma financial statements should be
  read in conjunction with the historical financial statements of Sonoma, JRML and
  KWCHI.
  
  
  
  
  
  
  <PAGE>
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                  Pro Forma Consolidated Balance Sheet (unaudited)
                                    June 30, 1996
  
  
  <TABLE>
  <CAPTION>
                                                                                                                             
                                                                           Historical - Note 1                 Note 2
                                                               ------------------------------------------     Pro Forma     Pro Forma
                                                                 Sonoma          JRML            KWCHI       Adjustments     Balance
                                                               ----------    ------------   -------------    -----------   -----------
  CURRENT ASSETS
  <S>                                                        <C>           <C>              <C>              <C>           <C>        
       Cash                                                  $      -      $      16,167    $    508,155     $        -    $   524,322
       Escrow funds                                                 -             19,097               -              -         19,097
       Receivables:
           Trade, net                                               -            131,319           8,483              -        139,802
           Other                                                    -             59,055               -              -         59,055
       Inventory                                                    -            155,004          22,406              -        177,410
       Prepaid expenses and other                                   -             40,901          31,242              -         72,143
                                                               ----------   -------------    ------------    -----------   -----------
  
                 Total current assets                               -            421,543         570,286              -        991,829
  
  PROPERTY AND EQUIPMENT
       Buildings and improvements                                   -          2,197,655               -              -      2,197,655
       Land                                                         -                  -       1,816,298              -      1,816,298
       Land improvements                                            -             79,962         182,535              -        262,497
       Docks and floating buildings                                 -          7,174,566       1,094,057              -      8,268,623
       Boats and improvements                                       -          2,169,004               -              -      2,169,004
       Fuel tanks and containment building                          -                  -         155,993              -        155,993
       Furniture, fixtures and equipment                            -          1,920,713          45,538              -      1,966,251
       Vehicles                                                     -             22,482               -              -         22,482
       Construction in progress                                     -            374,963               -              -        374,963
                                                               ----------   -------------    ------------    -----------   -----------
  
                                                                    -         13,939,345       3,294,421              -     17,233,766
  
       Less accumulated depreciation and amortization               -          4,254,953          99,063              -      4,354,016
                                                               ----------   -------------    ------------    -----------   -----------
  
  Net property and equipment                                        -          9,684,392       3,195,358              -     12,879,750
  
  OTHER ASSETS
       Deferred loan fees, net                                      -            348,593          50,275              -        398,868
       Goodwill, net                                                -            561,963               -              -        561,963
                                                               ----------   -------------    ------------    -----------   -----------
  
                 Total other assets                                 -            910,556          50,275              -        960,831
                                                               ----------   -------------    ------------    -----------   -----------
  
  TOTAL ASSETS                                               $      -      $  11,016,491    $  3,815,919   $          -    $14,832,410
                                                               ==========   =============    ============    ===========   ===========
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  See accompanying notes to unaudited pro forma consolidated financial statements.
  <PAGE>
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
            Pro Forma Consolidated Balance Sheet - Continued (unaudited)
                                    June 30, 1996
  <TABLE>
  <CAPTION>
  
                                                                           Historical - Note 1                 Note 2
                                                               ------------------------------------------     Pro Forma     Pro Forma
                                                                 Sonoma          JRML            KWCHI       Adjustments     Balance
                                                               ----------   ------------   -------------    ------------   -----------
  CURRENT LIABILITIES
  <S>                                                   <C>                <C>            <C>             <C>                  <C>
       Current portion of long-term debt                $         262,391  $  3,457,920   $     299,041   $          -    $ 4,019,352
       Accounts payable                                                 -       394,769          16,594              -        411,363
       Accrued interest                                           252,435       469,681         135,728       (417,291)       440,553
       Accrued liabilities                                            275       204,254          24,568        100,000        329,097
       Security deposits                                                -       251,334          17,600              -        268,934
       Deferred revenue                                                 -       599,879          30,526              -        630,405
       Accrued management fees - related party                          -       652,679               -       (652,679)             -
       Accrued guarantee fees - related party                           -        70,000               -        (70,000)             -
                                                          ---------------   ------------   -------------    -----------     ----------
  
                 Total current liabilities                        515,101     6,100,516         524,057     (1,039,970)     6,099,704
  
  LONG-TERM DEBT                                                        -     6,964,623       3,581,648              -     10,546,271
  
  OWNERS' DEFICIT
       Partners' deficit                                                -    (2,048,648)              -      2,048,648              -
       Stockholders' deficit
           Common stock, $10 par value, authorized, issued
              and outstanding shares, 100                               -             -           1,000         (1,000)             -
           Common stock, $0.001 par value, authorized, issued
              and outstanding shares, 2,300,000                    60,000             -               -        (57,700)         2,300
           Additional paid-in capital                           4,274,616             -                     (3,551,047)       723,569
           Accumulated deficit                                 (4,849,717)            -        (290,786)     2,601,069     (2,539,434)
                                                             ------------   ------------    ------------    ----------     -----------
  
                 Total owners' deficit                           (515,101)   (2,048,648)       (289,786)     1,039,970     (1,813,565)
                                                             ------------   ------------    ------------    ----------     -----------
  
  TOTAL LIABILITIES AND OWNERS' DEFICIT                     $           -  $ 11,016,491   $   3,815,919   $          -    $ 14,832,410
                                                             ============   ============    ============    ==========     ===========
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  See accompanying notes to unaudited pro forma consolidated financial statements.
  <PAGE>
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
             Pro Forma Consolidated Statement of Operations (unaudited)
                              Year ended June 30, 1996
  <TABLE>
  <CAPTION>
  
                                                                           Historical - Note 1             Note 2
                                                               --------------------------------------    Pro Forma     Pro Forma
                                                                 Sonoma          JRML       KWCHI       Adjustments     Balance
                                                               ----------     ---------   -----------   -----------   -----------
  REVENUES
  <S>                                                         <C>          <C>            <C>           <C>           <C>        
       Annual slip fees                                       $         -  $  1,197,062   $   241,650   $        -    $ 1,438,712
       Boat rental                                                      -       743,442             -            -        743,442
       Lease                                                            -             -       (24,591)           -        (24,591)
       Lodge                                                            -       687,539             -            -        687,539
       Fuel                                                             -       545,320       825,544            -      1,370,864
       Convenience store and merchandise                                -       366,458             -            -        366,458
       Restaurant                                                       -       369,530             -            -        369,530
       Other                                                            -       113,175        19,368            -        132,543
                                                               ----------   -----------    ----------    ----------     ---------
  
              Total revenues                                            -     4,022,526     1,061,971            -      5,084,497
  
  COST OF REVENUES
       Annual slip                                                      -       136,821         3,267            -        140,088
       Boat rental                                                      -       387,696             -            -        387,696
       Lodge                                                            -       229,667             -            -        229,667
       Fuel                                                             -       351,552       649,490            -      1,001,042
       Convenience store and merchandise                                -       285,137             -            -        285,137
       Restaurant                                                       -       316,826             -            -        316,826
       Other                                                            -       103,498             -            -        103,498
                                                               ----------   -----------    ----------    ----------     ---------
  
              Total cost of revenues                                    -     1,811,197       652,757            -      2,463,954
                                                               ----------   -----------    ----------    ----------     ---------
  
  GROSS PROFIT                                                          -     2,211,329       409,214            -      2,620,543
  
  SELLING, GENERAL AND ADMINISTRATIVE                               9,147     1,295,462       186,418      100,000      1,591,027
  
  
  GAIN ON REDUCTION OF OBLIGATIONS                                 28,363             -                          -         28,363
  AMORTIZATION OF GOODWILL                                              -       (68,834)       (3,382)           -        (72,216)
  DEPRECIATION AND AMORTIZATION                                         -      (491,229)      (72,531)           -       (563,760)
                                                               ----------   -----------    ----------    ----------     ---------
  
  INCOME (LOSS) FROM OPERATIONS                                    19,216       355,804       146,883     (100,000)       421,903
  
  INTEREST EXPENSE                                                 11,284       914,562       229,637            -      1,155,483
                                                               ----------   -----------    ----------    ----------     ---------
  
  NET INCOME (LOSS)                                           $     7,932  $   (558,758)  $   (82,754)  $ (100,000)   $  (733,580)
                                                               ==========   ===========    ==========    ==========     =========
  
  
  Net income (loss) per common share                          $      0.00                 $      (828)                $     (0.32)
                                                               ==========                  ==========                   =========
  
  Weighted average shares outstanding                          47,774,591                         100                   2,300,000
                                                               ==========                  ==========                   =========
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  See accompanying notes to unaudited pro forma consolidated financial statements.
  <PAGE>
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
             Pro Forma Consolidated Statement of Operations (unaudited)
                              Year ended June 30, 1995
  <TABLE>
  <CAPTION>
  
                                                                           Historical - Note 1                 Note 3
                                                               ------------------------------------------    Pro Forma     Pro Forma
                                                                 Sonoma          JRML           KWCHI       Adjustments     Balance
                                                               ----------    ------------   -------------   -----------   -----------
  REVENUES
  <S>                                                        <C>            <C>             <C>            <C>           <C>         
       Annual slip fees                                      $         -    $   1,091,420   $    119,095   $          -  $  1,210,515
       Boat rental                                                     -          758,764              -              -       758,764
       Lodge                                                           -          694,079              -              -       694,079
       Fuel                                                            -          494,998        244,961              -       739,959
       Convenience store and merchandise                               -          352,601              -              -       352,601
       Restaurant                                                      -          368,594              -              -       368,594
       Lease revenue                                                   -                -        101,110              -       101,110
       Other                                                           -           94,093             67              -        94,160
                                                               ----------    ------------   ------------    -----------     ---------
                                                                                        -
              Total revenues                                           -        3,854,549        465,233              -     4,319,782
  
  COST OF REVENUES
       Annual slip                                                     -          162,466         16,111              -       178,577
       Boat rental                                                     -          349,613              -              -       349,613
       Lodge                                                           -          234,583              -              -       234,583
       Fuel                                                            -          325,714        190,951              -       516,665
       Convenience store and merchandise                               -          276,268              -              -       276,268
       Restaurant                                                      -          314,009              -              -       314,009
       Other                                                           -           86,183              -              -        86,183
                                                               ----------    ------------   ------------    -----------     ---------
  
              Total cost of revenues                                   -        1,748,836        207,062              -     1,955,898
                                                               ----------    ------------   ------------    -----------     ---------
  
  GROSS PROFIT                                                         -        2,105,713        258,171              -     2,363,884
  
  SELLING, GENERAL AND ADMINISTRATIVE                             75,800        1,201,898         68,628        100,000     1,446,326
  AMORTIZATION OF GOODWILL                                             -           18,426                             -        18,426
  DEPRECIATION AND AMORTIZATION                                        -          604,854         39,673              -       644,527
                                                               ----------    ------------   ------------    -----------     ---------
  
  INCOME (LOSS) FROM OPERATIONS                                  (75,800)         280,535        149,870       (100,000)      254,605
  
  INTEREST EXPENSE                                                34,240          761,645        221,031              -     1,016,916
                                                               ----------    ------------   ------------    -----------     ---------
  
  NET INCOME (LOSS)                                          $  (110,040)   $    (481,110)  $    (71,161)  $   (100,000)   $ (762,311)
                                                               ==========    ============   ============    ===========     =========
  
  Net Income (loss) per common share                         $      0.00                    $       (712)                  $    (0.33)
                                                               ==========                   ============                    =========
  
  Weighted average shares outstanding                         25,579,850                             100                    2,300,000
                                                               ==========                   ============                    =========
  </TABLE>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  See accompanying notes to unaudited pro forma consolidated financial statements.
  <PAGE>
  
  
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
          Notes to Pro Forma Consolidated Financial Statements (unaudited)
  
  
  NOTE 1 - HISTORICAL FINANCIAL STATEMENTS
  
  Reflects the historical balance sheet and statements of operations of Somona,
  JRML and KWCHI.
  
  
  NOTE 2 - PRO FORMA ADJUSTMENTS FOR JUNE 30, 1996 (See Pro Forma Adjustment
  Summary further)
  
  (a) The Agreement to acquire JRML and KWCHI requires that Sonoma effect a one
  for two hundred reverse split, leaving 300,000 shares issued and outstanding,
  and issue 2,000,000 shares (with a par value of $0.001 after the reverse split)
  for the acquisition of the JRML and KWCHI. The partners of JRML will receive
  1,500,000 shares. The shareholders of KWCHI will receive 300,000 shares. Clear
  Creek Investments, LLC which owns all of the outstanding shares of Jamestown
  Resort and Marina, Inc., the general partner for JRML will receive an additional
  200,000 shares. The following shares were issued to purchase all ownership
  interests in JRML and KWCHI.
  
           (1)      Reflects the issuance of 907,296 shares to acquire the JRML
                    partners interest.
  
           (2)      Reflects the issuance of 300,000 shares to acquire KWCHI.
  
           (3)      Reflects the issuance of 200,000 shares to Clear Creek
                    Investments, LLC which owns all of the outstanding shares of
                    Jamestown Resort and Marina, Inc., the general partner for
                    JRML, for origination services.
  
           (4)      Reflects the effect of a 1 for 200 reverse split.
  
  (b)      Reflects the issuance of 111,289 shares to a related party to relieve
           $417,291 in interest payable.
  
  (c)      Reflects the issuance of 18,683 shares to a related party to relieve
           $70,000 in guarantee fees payable.
  
  (d)      Reflects the issuance of 174,200 shares to a related party to relieve
           $652,679 in management fees payable.
  
  (e)      Reflects the issuance of 261,563 shares to a related party for
           commission and incentive fees in connection with the sale of JRML.
  
  (f)      Reflects the issuance of 26,969 shares to an incentive stock plan for
           JRML employees and creditors.
  
  (g)      Reflects the increase in professional fees to meet the filing and
           related requirements of an active public company.
  
  (h)      Reflects the elimination of the accumulated deficit in the public
           company resulting from the reverse acquisition.
  
  
  NOTE 3 - PRO FORMA ADJUSTMENTS FOR JUNE 30, 1995
  
  (a)      Reflects the increase in professional fees to meet the filing and
           related requirements of an active public company.
  
  (b)      Reflects the issuance of 26,690 shares to an incentive stock plan for
           JRML employees and creditors.
  
  
  
  
  
  <PAGE>
  
  
                                SONOMA INTERNATIONAL
                               (A Nevada Corporation)
          Notes to Pro Forma Consolidated Financial Statements (unaudited)
  
  
  NOTE 4 - EXTRAORDINARY ITEMS NOT INCLUDED IN THE UNAUDITED PRO FORMA FINANCIAL
           STATEMENTS
  
  During fiscal year 1996, Sonoma generated an extraordinary gain from conversion
  of debt to equity of $418,699. JRML also had an extraordinary gain on debt
  extinguishment of $2,518,487 during this period. These items are not reflected
  in the accompanying pro forma consolidated financial statements.
  
  
  NOTE 5 - INCOME TAXES
  
  On a consolidated basis, Sonoma, the KWCHI (S-Corporation), and JRML (the
  Partnership) incurred losses for 1996 and 1995, and the more likely than not
  criterion as to whether income will be generated in the future has not been met.
  Therefore, a 100% valuation allowance has been recorded against the tax benefit
  generated from any proforma net operating losses. Accordingly, the accompanying
  pro forma statements of operations do not reflect any income tax expense
  (benefit).
  
  
  
  
  <PAGE>
                                SONOMA INTERNATIONAL
                               (A NEVADA CORPORATION)
                            Pro Forma Adjustment Summary
  
  
  
                                    Balance Sheet
                                    June 30, 1996
  
  <TABLE>
  <CAPTION>
                                                                                                                       Accumulated
                                          Accrued      Accrued                 Common   Common     Additional           deficit
                  Accrued    Accrued     management   guarantee    Partners'   Stock    Stock       paid-in              and net
                  interest  liabilities     fees        fees       deficit    $10 par  $0.001 par   capital              loss
  <S>             <C>        <C>        <C>           <C>        <C>         <C>       <C>          <C>            <C>
  Note 2(a)(1)    $          $          $             $          $2,048,648  $         $    907     $      (907)   $    (2,048,648)
  
  Note 2(a)(2)                                                                (1,000)       300             700
  
  Note 2(a)(3)                                                                              200            (200)
  
  Note 2(a)(4)                                                                          (59,700)         59,700
  
  Note 2(b)       (417,291)                                                                 111         417,180
  
  Note 2(c)                                            (70,000)                              19          69,981
  
  Note 2(d)                              (652,679)                                          174         652,505
  
  Note 2(e)                                                                                 262            (262)
  
  Note 2(f), 3(b)                                                                            27          99,973           (100,000)
  
  Note 2(g), 3(a)             100,000                                                                                     (100,000)
  
  Note 2(h)                                                                                          (4,849,717)         4,849,717
  
  
                  $(417,291) $100,000   $(652,679)    $(70,000)  $2,048,648  $(1,000)  $(57,700)    $(3,551,047)   $     2,601,069
  </TABLE>
  
  
  
  
  
  
  
  
  
      Statement of Operations          Statement of Operations
     Year ended June 30, 1996         Year ended June 30, 1995
  
  
         Selling General                   Selling General
              and                                and
         Administrative                      Administrative
  
  Note 2(g) $50,000                      Note 3(a) $ 50,000
  
  Note 2(f)  50,000                      Note 3(b)   50,000
  
  
           $100,000                         $       100,000
  <PAGE>
  
  
  
                                     SIGNATURES
  
           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 thereunto duly authorized.
  
                                                       Sonoma International
  
  November 11, 1996
  Date                                                 Harry W. Hendersen, 
                                                       President and Chief 
                                                       Accounting Officer
metadata_documents: [{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 148020}]
metadata_filer: {"company-data": {"conformed-name": "SONOMA INTERNATIONAL INC", "cik": "0000091771", "assigned-sic": "6500", "irs-number": "94880052", "state-of-incorporation": "NV", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-06683", "film-number": "96668453"}, "business-address": {"street1": "901 TAHQUITZ CANYON WAY", "street2": "SUITE B-201", "city": "PALM SPRINGS", "state": "CA", "zip": "92262", "phone": "6193203340"}, "mail-address": {"street1": "901 E TAHQUITZ CANYON WAY", "street2": "SUITE B-201", "city": "PALM SPRINGS", "state": "CA", "zip": "92262"}}
text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D. C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
       Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
  
  Date of Report (Date of Earliest Date Reported) October 31, 1996
  
                                Sonoma International
   -----------------------------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
   Nevada                                      0-6683                 94-0880052
   ------------------------------------------------------------------------------
  (State or other jurisdiction              (Commission          (I.R.S. Employer
  of incorporatin or organization)          File Number)       Identification No.)
  
  3930 S. Eastern Avenue, Suite 218, Las Vegas Nevada                     89109
  -------------------------------------------------------------------------------
  (Address of principal executive offices)                             (Zip Code)
  
                                   (702) 361-3033
  -------------------------------------------------------------------------------
                (Registrant's telephone number, including area code)
  
                   901 Tahquitz, Ste B 201, Palm Springs, CA 92261
   ------------------------------------------------------------------------------
           (Former name or former address, if changed since last report.)
  Item 1. Changes in Control of Registrant
  
  See Item 2. Acquisition or Disposition of Assets.
  
  Item 2.  Acquisition or Disposition of Assets
  
           As of October 31, 1996, the Company entered into an agreement (the
  "Agreement") with Key West Conch Harbor, Inc., a Florida corporation ("KWCHI")
  to acquire all of the issued and outstanding shares of KWCHI.
  
           The stockholders of KWCHI will be issued 300,000 shares of the
  Company's Common Stock, such shares to be determined following a reverse split
  previously contemplated by the Company. KWCHI owns a Marina located on the
  Northwest corner of Caroline and Grinnell Streets in the developing "Old Town"
  area of Key West, Florida. The approximately 2-acre or 82,000 square foot site
  has an estimated 251 feeet of frontage on Caroline Street and 221 feet of
  shoreline along a waterway known as the Key West Bight. KWCHI began development
  of the Marina in May, 1995 when construction of the dock and fueling facility
  began. The Marina currently has a new 450 foot dock with two 100-foot finger
  piers, a Texaco Star Port fueling dock and an on-shore fuel containment area.
  The facility derives its current revenue from fueling operations and slip
  rentals. Fueling operations began in February of 1995, and slip rentals began in
  July, 1995.
  
           Closing of the agreement is contingent upon the closing of the
  Company's previous agreement to acquire Jamestown Resort & Marina, Ltd.
  
  Item 7. Financial statements, Pro Forma Financial Information and Exhibits
  
  (a)      Financial statements of businesses acquired
  
           The Key West Conch Harbor Balance Sheets as of December 31, 1995, and
  December 31, 1994, and the related Statements of Operations, Changes in
  Partners' Deficit, and Statements of Cash Flows for the years ended December 31,
  1995 and December 31, 1994, and the report of King, Burns & Company, P.C.,
  independent certified public accountants, thereon, together with the notes
  thereto, are located immediately following this Item 7.
  
  (b)      Proforma financial information
  
           The unaudited pro forma consolidated balance sheet as of June 30, 1996,
  and the unaudited pro forma statements of operations for the years ended June
  30, 1996, and June 30, 1995, immediately follow the financial statements
  included as part of Item 7(a) herein. These proforma financial statments include
  both the Jamestown Resort & Marina, Ltd. financial statments and the KWCHI
  financial statements.
  FINANCIAL STATEMENTS AND
                 REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
                                SONOMA INTERNATIONAL
                               (A NEVADA CORPORATION)
  
                               JUNE 30, 1996 AND 1995
  SONOMA INTERNATIONAL
                               (A NEVADA CORPORATION)
  
                            Index to Financial Statements
  
                                                                       Page
  
  Reports of Independent Certified Public Accountants                   1
  
  Financial Statements
      Balance Sheet                                                     3
      Statements of Operations                                          4
      Statements of Changes in Stockholders' Deficit                    5
      Statements of Cash Flows                                          6
      Notes to Financial Statements                                     7
  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  The Board of Directors
  Sonoma International
  Palm Springs, California
  
  We have audited the accompanying balance sheet of Sonoma International as of
  June 30, 1996, and the related statements of operations, stockholders' deficit,
  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 Sonoma International as of June
  30, 1996, and the results of its operations and its cash flows for the year then
  ended, in conformity with generally accepted accounting principles.
  
  The financial statements have been prepared assuming that the Company will
  continue as a going concern. As discussed in Note C to the financial statements,
  the Company has no assets to pay its obligations and has been inactive for a
  number of years. These factors raise substantial doubt as to the Company's
  ability to continue as a going concern. Management's plans in regard to these
  matters are also described in Note C. The financial statements do not include
  any adjustments that might result from the outcome of this uncertainty.
  
                                                     King, Burns & Company, P.C.
  
  Dallas, Texas
  September 13, 1996
  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  To the Board of Directors
  Sonoma International
  Palm Springs, California
  
  We have audited the accompanying statements of operations, stockholders'
  deficit, and cash flows of Sonoma International for the year ended June 30,
  1995. 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 statements of operations, stockholders' deficit and cash
  flows referred to above present fairly, in all material respects, the results of
  its operations and its cash flows of Sonoma International for the year ended
  June 30, 1995, in conformity with generally accepted accounting principles.
  
  SKEEHAN & COMPANY
  November 1, 1995
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                                    Balance Sheet
                                    June 30, 1996
  1996
                                                                                                         ----------------
  TOTAL ASSETS                                                                                         $               -
                                                                                                         ================
  
  LIABILITIES AND STOCKHOLDERS' DEFICIT
  
  Current liabilities
       Accrued liabilities                                                                                           275
       Accrued interest                                                                                          252,435
       Notes payable                                                                                             262,391
                                                                                                         ----------------
  
              Total current liabilities                                                                          515,101
                                                                                                         ----------------
  
              Total liabilities                                                                                  515,101
                                                                                                         ----------------
  
  Commitments and contingencies (Notes C, D, E and H)
  
  Stockholders' deficit
       Common stock, $.001 par value, authorized, issued
           and outstanding shares, 60,000,000                                                                     60,000
       Additional paid-in capital                                                                              4,274,616
       Accumulated deficit                                                                                    (4,849,717)
                                                                                                         ----------------
  
              Total Stockholders' Deficit                                                                       (515,101)
                                                                                                         ----------------
  
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                          $               -
                                                                                                         ================
  The accompanying notes are an integral part of these financial statements.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                              Statements of Operations
                     For the years ended June 30, 1996 and 1995
  1996                1995
                                                                                ----------------    ---------------
  Revenue                                                                       $             -   $              -
                                                                                ----------------    ---------------
  
  Expenses
       Professional fees                                                                 13,975                  -
       Consulting fees                                                                        -             75,000
       Interest                                                                          11,284             34,240
       State taxes                                                                       (4,828)               800
                                                                                ----------------    ---------------
           Total expenses                                                                20,431            110,041
  
  Gain on the reduction of obligations                                                   28,363                  -
                                                                                ----------------    ---------------
  
  Net income (loss) before extraordinary item                                             7,932           (110,041)
  
  Extraordinary item
       Gain from conversion of debt to equity net of income taxes of $-0-               418,699                  -
                                                                                ----------------    ---------------
  
  Net income (loss)                                                             $       426,631   $       (110,041)
                                                                                ================    ===============
  
  Net income (loss) per common share before extraordinary item                  $          0.00   $           0.00
                                                                                ================    ===============
  
  Net income (loss) per common share for extraordinary item                     $          0.01   $              -
                                                                                ================    ===============
  
  Net income (loss) per common share                                            $          0.01   $          (0.00)
                                                                                ================    ===============
  
  Weighted average shares outstanding                                                47,774,591         25,579,850
                                                                                ================    ===============
  The accompanying notes are an integral part of these financial statements.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                   Statement of Changes in Stockholders' Deficit
                         Years ended June 30, 1996 and 1995
  Additional
                                               Number of      Common      Paid-In    Accumulated
                                                Shares         Stock      Capital      Deficit        Total
                                               ----------    --------   ----------   -----------    ----------
  Balance at July 1, 1994                      25,579,850   $  25,580  $ 4,252,116  $ (5,166,308)  $  (888,612)
  
  Net loss                                              -           -            -      (110,040)     (110,040)
                                               ----------    --------   ----------   -----------    ---------------
  
  Balance at June 30, 1995                     25,579,850      25,580    4,252,116    (5,276,348)     (998,652)
  
  Stock issued for debt and other obligations  34,420,150      34,420            -             -        34,420
  
  Capital contributions resulting from
       obligations settled by shareholders
       on behalf of the Company                         -           -       22,500             -         22,500
  
  Net income                                            -           -            -       426,631        426,631
                                               ----------    --------   ----------   -----------    -----------
  
  Balance at June 30, 1996                     60,000,000   $  60,000  $ 4,274,616  $ (4,849,717)  $   (515,101)
                                               ==========    ========   ==========   ===========    ===========
  The accompanying notes are an integral part of these financial statements.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                              Statements of Cash Flows
                         Years ended June 30, 1996 and 1995
  1996                1995
                                                                                  ----------------    ---------------
  
  Cash flows from operating activities:
  Net income (loss)                                                          $       426,631   $       (110,040)
       Gain on conversion of debt to equity                                              (418,699)                 -
       Gain on reduction of obligations                                                   (28,363)                 -
       Increase (decrease) in accounts payable and taxes                                   (4,828)               800
       Increase (decrease) in accrued interest                                             11,284                  -
       Increase (decrease) in accrued liabilities                                          13,975             34,240
       Increase in stockholder advances                                                         -             75,000
                                                                                  ----------------    ---------------
  
           Net cash provided by operations                                                      -                  -
  
           Cash at beginning of year                                                            -                  -
                                                                                  ----------------    ---------------
  
           Cash at end of year                                                    $             -   $              -
                                                                                  ================    ===============
  The accompanying notes are an integral part of these financial statements.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                          Notes to the Financial Statements
                                June 30 1996 and 1995
  
  NOTE A - ORGANIZATION
  
  Sonoma Quicksilver Mines, Inc. was incorporated under the laws of the State of
  Nevada on June 10, 1940. The name was subsequently changed to Sonoma
  International (the "Company" or "Sonoma"). The Company had several failed
  business operations and since 1988 its only activity has been to search for a
  company or assets to acquire.
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
  Income Taxes
  
  The Company accounts for income taxes in accordance with the asset and liability
  approach. Deferred income tax assets and liabilities are computed annually for
  differences between the financial statement and tax bases of assets and
  liabilities that will result in taxable or deductible amounts in the future
  based on enacted tax laws and rates applicable to the periods in which the
  differences are expected to affect taxable income. Valuation allowances are
  established when necessary to reduce deferred tax assets to the amount expected
  to be realized. Income tax expense is the tax payable or refundable for the
  period plus or minus the change during the period in deferred tax assets and
  liabilities.
  
  Income (Loss) per share
  
  Income (Lose) per share of common stock is based upon the weighted average
  number of common shares outstanding.
  
  Use of Estimates and Assumptions
  
  Management uses estimates and assumptions in preparing financial statements in
  accordance with generally accepted accounting principles. Those estimates and
  assumptions affect the reported amounts of assets and liabilities, the
  disclosure of contingent assets and liabilities, and the reported amounts of
  revenues and expenses. Actual results could vary from the estimates that were
  used.
  
  Accounting Standards Not Yet Adopted
  
  In October 1995, Statement of Financial Accounting Standards No. 123,
  "Accounting for Stock-based Compensation" ("SFAS 123"), was issued. This
  statement requires the fair value of stock options and other stock-based
  compensation issued to employees to either be included as compensation expense
  in the income statement, or the pro forma effect on net income and earnings per
  share of such compensation expense to be disclosed in the footnotes to the
  Company's financial statements commencing with the Company's 1996 fiscal year.
  The Company expects to adopt SFAS 123 on a disclosure basis only. As such,
  implementation of SFAS 123 is not expected to impact the Company's balance sheet
  or statement of operations.
  
  Reclassifications
  
  Certain prior year amounts have been reclassified to conform with the current
  year presentation.
  
                                          7
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                          Notes to the Financial Statements
                                June 30 1996 and 1995
  
  NOTE C - GOING CONCERN UNCERTAINTY
  
  Sonoma has been inactive for a number of years and its continued existence is in
  doubt. The Company has no assets to pay its current obligations or additional
  obligations arising from incidental administrative expenses and interest
  expenses.
  
  The Company plans to reduce its liabilities and acquire income producing assets
  through the issuance of additional stock and a merger with an operating
  partnership (Note H). The ability of the Company to continue in existence is
  dependent on the success of these plans.
  
  NOTE D - NOTES PAYABLE
  
  Notes payable consists of the following at June 30, 1996:
  Notepayable dated June 12, 1991, due on demand to an individual bearing
          interest at 15% per annum; unsecured. Interest of $44,316 has been
          accrued through the settlement date. On September 27, 1996 a conditional
          settlement agreement was reached relieving Sonoma of the principal and
          accrued interest in exchange for 800,000 common shares of Sonoma. This
          settlement agreement is contingent upon Sonoma stock obtaining a market
          value and that
          the stock can be liquidated.                                                               $ 60,974
  
      Notepayable to two individuals, due on demand and unsecured. Interest of
          $15,861 has been accrued through the settlement date. On July 25, 1995,
          a conditional settlement agreement was reached releasing Sonoma of
          principal and accrued interest in exchange for 200,000 shares of the
          Company. This settlement agreement is contingent upon Sonoma stock
          obtaining a market
          value and that the stock can be liquidated.                                                  45,861
  
      Notepayable to Sunwest Bank, due on demand with interest accruing at 10.5%;
          unsecured. Interest of $42,557 has been accrued through the settlement
          date. On September 7, 1995, a conditional settlement agreement was
          reached relieving Sonoma of the outstanding principal and accrued
          interest in exchange for a nominal cash amount and the issuance of
          200,000 shares of Sonoma common stock. This settlement is conditioned
          upon Sonoma common stock being listed on the National Bulletin Board and
          having a market value
          and that the stock can be liquidated.                                                        43,556
  
      Notepayable to Garfield Bank, due on demand with interest accruing at 16%;
          unsecured. Interest of $164,997 has been accrued through the settlement
          date. On September 8, 1995, a conditional settlement agreement had been
          reached relieving Sonoma of the principal amount owed and all accrued
          interest thereon conditioned on 850,000 shares of Sonoma common stock
          being transferred into the name of Garfield Bank (from other
          shareholders)
          and Sonoma common stock having a market value that can be liquidated.                       112,000
                                                                                                      -------
  
          Total notes payable                                                                        $262,391
  8
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                          Notes to the Financial Statements
                                June 30 1996 and 1995
  
  NOTE E -STOCKHOLDERS' DEFICIT
  
  In 1995, the Company entered into numerous conditional settlement agreements
  with various creditors in an attempt to settle all long term debt of Sonoma.
  Many of the settlement agreements are in the form of debt relief in exchange for
  common stock of the Company and conditioned upon the Company's common stock
  being listed on the National Bulletin Board and having a market value so that
  the stock can be liquidated.
  
  On July 18, 1995, a settlement agreement was reached related to the unsecured 6%
  note payable that was in default with a former officer relieving Sonoma of the
  principal amount owed of $5,000 with $2,700 accrued interest, accounts payable
  of $22,000 with $7,335 of accrued interest by issuing 272,597 shares of Sonoma
  common stock.
  
  During the year ended June 30, 1996 Sonoma reached agreements with two
  shareholders whom were prior officers of the Company to settle amounts due to
  them approximating $444,445 through the issuance of 33,347,553 of the Company's
  common stock.
  
  During the year ended June 30, 1996, Sonoma reached agreements with two
  individuals to settle amounts due to them approximating $8,800 through the
  transfer of 40,000 of the Company's common stock (transferred from other
  shareholders).
  
  Professional fees of 13,700 were paid on behalf of Sonoma by certain
  shareholders. These expenses paid on behalf of the Company were accounted for as
  contributions to additional paid-in capital.
  
  NOTE F - RELATED PARTY TRANSACTIONS
  
  From 1989 through June 30, 1995, officers of the Company paid expenses and/or
  liabilities of Sonoma. Additionally, officers of Sonoma were owed consulting
  fees from the Company for current and past services rendered. During the year
  ended June 30, 1996, Sonoma and the officers have agreed to settle the
  outstanding amounts owed to them of $444,445 through the issuance of common
  stock. See Note E.
  
  NOTE G - INCOME TAXES
  
  The Company generated negligible taxable income and/or net operating losses
  during the years ended June 30, 1996 and 1995. Any existing available net
  operating losses at June 30, 1996 would be lost upon consummation of the
  acquisition transaction described in Note H. At June 30, 1996, the Company has a
  deferred tax asset of approximately $85,000 relating to amounts deducted for
  financial reporting losses not deducted for income tax reporting purposes. This
  asset has a valuation allowance recorded against it due to the uncertainty of
  generating future taxable income.
  There was no significant change in the valuation allowance from 1995.
  
  NOTE H - SUBSEQUENT EVENT
  
  As of September 12, 1996, the Company entered into an agreement (the
  "Agreement") with Clear Creek Investments, LLC, a Kentucky Limited Liability
  Company ("Clear Creek"), and holders of the limited partnership interests in
  Jamestown Resort & Marina, Ltd, a Kentucky limited partnership ("JRML"). JRML
  owns a resort and marina located on the Cumberland Lake in south central
  Kentucky.
  
  The Agreement requires the transfer and assignment to Sonoma of JRML's general
  partner and all limited partnership interests. There are several conditions to
  closing including the delivery to the Company of an appraisal which states that
  the assets of JRML as of the date of the appraisal have a fair market value of
  not less than $10,000,000. That
  
                                          9
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                          Notes to the Financial Statements
                                June 30 1996 and 1995
  
  appraisal has been delivered to the Company. In addition, the Agreement requires
  that the Company effect a one for two hundred reverse split, leaving 300,000
  shares issued and outstanding, and issue 1,700,000 shares to Clear Creek and
  affiliated and related entities or individuals for the acquisition of JRML.
  
                                         10
  FINANCIAL STATEMENTS
               AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
                           JAMESTOWN RESORT & MARINA, LTD
                          (a Kentucky Limited Partnership)
  
                             DECEMBER 31, 1995 AND 1994
  JAMESTOWN RESORT & MARINA, LTD
                          (a Kentucky Limited Partnership)
  
                            Index to Financial Statements
  
                                                                    Page
  
  Report of Independent Certified Public Accountants                   1
  
  Financial Statements
           Balance Sheets                                              2
           Statements of Operations                                    4
           Statements of Changes in Partners' Deficit                  5
           Statements of Cash Flows                                    6
           Notes to Financial Statements                               7
  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  The Partners
  Jamestown Resort & Marina, Ltd.
  
  We have audited the accompanying balance sheets of Jamestown Resort & Marina,
  Ltd. (a Kentucky Limited Partnership) as of December 31, 1995 and 1994, and the
  related statements of operations, partners' deficit, and cash flows for the
  years then ended. These financial statements are the responsibility of the
  Partnership's management. Our responsibility is to express an opinion on these
  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 audits 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 audits provide 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 Jamestown Resort & Marina, Ltd.
  as of December 31, 1995 and 1994, and the results of its operations and its cash
  flows for the years then ended, in conformity with generally accepted accounting
  principles.
  
  The financial statements have been prepared assuming that the Partnership will
  continue as a going concern. As discussed in Note C to the financial statements,
  the Partnership has incurred losses since its inception and at December 31,
  1995, its current liabilities exceeded current assets by approximately
  $6,733,000. These factors raise substantial doubt as to the Company's ability to
  continue as a going concern. Management's plans in regard to these matters are
  also described in Note C. The financial statements do not include any
  adjustments that might result from the outcome of this uncertainty.
  
                                                      KING, BURNS & COMPANY, P.C.
  
  Dallas, Texas
  September 6, 1996
  JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                                   Balance Sheets
                             December 31, 1995 and 1994
  
                                       ASSETS
  1995               1994
                                                                                               ----------------   ----------------
  CURRENT ASSETS
  Cash                                                                                  $           9,628  $           3,584
       Escrow funds                                                                                     26,673             43,262
       Receivables:
           Trade (net of allowance for doubtful accounts of $3,876 in 1996 and 1995)                    47,653             46,799
           Other                                                                                        34,199             23,111
       Inventory                                                                                        75,400             82,311
       Prepaid expenses                                                                                 46,456             71,919
                                                                                               ----------------   ----------------
                     Total current assets                                                              240,009            270,986
                                                                                               ----------------   ----------------
  
  PROPERTY AND EQUIPMENT
       Buildings and improvements                                                                    2,352,561          2,249,862
       Land improvements                                                                                79,737             73,623
       Docks and floating buildings                                                                  7,180,728          6,957,013
       Boats and improvements                                                                          782,105            717,688
       Furnishings, fixtures and equipment                                                           1,640,722          1,521,580
       Houseboats and pontoons under capital lease                                                   1,373,649          1,373,649
       Computers under capital lease                                                                   161,734            161,734
       Vehicles                                                                                         22,482             20,642
       Construction in progress                                                                        240,931            148,931
                                                                                               ----------------   ----------------
                                                                                                    13,834,649         13,224,722
  
       Less accumulated depreciation and amortization                                                3,987,745          3,403,036
                                                                                               ----------------   ----------------
  
  Net property and equipment                                                                         9,846,904          9,821,686
                                                                                               ----------------   ----------------
  
  OTHER ASSETS
        Deferred loan fees, net of accumulated amortization of
           $11,827                                                                                     106,438                  -
       Goodwill, net of accumulated amortization of
           $165,825 and $147,400                                                                       571,175            589,600
                                                                                               ----------------   ----------------
                     Total other assets                                                                677,613            589,600
                                                                                               ----------------   ----------------
  
  TOTAL ASSETS                                                                               $      10,764,526  $      10,682,272
                                                                                               ================   ================
  The accompanying notes are an integral part of these financial statements.
  JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                             Balance Sheets - Continued
                             December 31, 1995 and 1994
  
                          LIABILITIES AND PARTNERS' DEFICIT
  1995               1994
                                                                                               ----------------   ----------------
  CURRENT LIABILITIES
       Current portion of long-term debt (including $3,410,277
  and $2,206,239 to related parties)                                                $       3,819,067  $      10,622,738
       Current portion of obligations under capital leases                                             198,391            203,793
       Accounts payable                                                                                188,555            274,790
       Accrued interest (including $272,272 and $53,662 to related parties)                          1,246,452            795,946
       Accrued liabilities                                                                             141,387            249,313
       Security deposits                                                                                29,074             34,458
       Deferred revenue                                                                                633,190            531,411
       Accrued management fees - related party                                                         581,301            458,006
       Accrued guarantee fees - related party                                                           60,000             40,000
       Deferred gain on sale leaseback                                                                  75,800             81,905
                                                                                               ----------------   ----------------
  
                         Total current liabilities                                                   6,973,217         13,292,360
                                                                                               ----------------   ----------------
  
  LONG-TERM LIABILITIES
       Long-term debt                                                                                7,421,234            211,577
       Long-term portion of obligations under capital leases                                           417,638            614,838
                                                                                               ----------------   ----------------
  
                         Total long-term liabilities                                                 7,838,872            826,415
                                                                                               ----------------   ----------------
  
  COMMITMENTS AND CONTINGENCIES (Notes C, D, E, F, G, H, K and L)
  
  PARTNERS' DEFICIT                                                                                 (4,047,563)        (3,436,503)
                                                                                               ----------------   ----------------
  
  TOTAL LIABILITIES AND PARTNERS' DEFICIT                                                    $      10,764,526  $      10,682,272
                                                                                               ================   ================
  The accompanying notes are an integral part of these financial statements.
  JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                              Statements of Operations
                       Years ended December 31, 1995 and 1994
  1995               1994
                                                                                               ----------------   ----------------
  REVENUES
  Annual slip fees                                                                      $       1,168,041  $         997,195
       Boat rental                                                                                     748,941            753,835
       Lodge                                                                                           683,251            677,905
       Fuel                                                                                            531,120            488,485
       Convenience store and merchandise                                                               381,123            340,724
       Restaurant                                                                                      372,473            349,001
       Other                                                                                           135,073             76,662
                                                                                               ----------------   ----------------
                         Total revenues                                                              4,020,022          3,683,807
                                                                                               ----------------   ----------------
  
  COST OF REVENUES
       Annual slip                                                                                     165,634            129,395
       Boat rental                                                                                     396,916            439,154
       Lodge                                                                                           235,082            209,793
       Fuel                                                                                            351,029            310,084
       Convenience store and merchandise                                                               288,498            269,061
       Restaurant                                                                                      329,982            276,638
       Other                                                                                           109,350             79,986
                                                                                               ----------------   ----------------
                         Total cost of revenues                                                      1,876,491          1,714,111
                                                                                               ----------------   ----------------
  
  GROSS PROFIT                                                                                       2,143,531          1,969,696
  
  SELLING, GENERAL AND ADMINISTRATIVE (including related party
       amounts for management and guarantee fees of $220,540 and $205,229)                           1,278,390          1,089,981
  AMORTIZATION OF GOODWILL                                                                              30,252             18,426
  DEPRECIATION AND AMORTIZATION                                                                        578,603            617,499
                                                                                               ----------------   ----------------
  
  INCOME FROM OPERATIONS                                                                               256,286            243,790
  
  INTEREST EXPENSE (including interest to related parties
       of $260,716 and $214,724)                                                                       867,346            749,823
                                                                                               ----------------   ----------------
  
  NET LOSS                                                                                   $        (611,060) $        (506,033)
                                                                                               ================   ================
  The accompanying notes are an integral part of these financial statements.
  JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                      Statement of Changes in Partners' Deficit
                       Years ended December 31, 1995 and 1994
  Special
                                                            General            Limited             Limited
                                                            Partner           Partners            Partners             Total
                                                        ----------------   ----------------    ----------------   ----------------
  Deficit at January 1, 1994                          $      (2,913,099) $         (17,371)  $               -  $      (2,930,470)
  
  Net loss for the year
       ended December 31, 1994                                 (506,033)                 -                   -           (506,033)
                                                        ----------------   ----------------    ----------------   ----------------
  
  Deficit at December 31, 1994                               (3,419,132)           (17,371)                  -         (3,436,503)
  
  Net loss for the year
       ended December 31, 1995                                 (611,060)                 -                   -           (611,060)
                                                        ----------------   ----------------    ----------------   ----------------
  
  Deficit at December 31, 1995                        $      (4,030,192) $         (17,371)  $               -  $      (4,047,563)
                                                        ================   ================    ================   ================
  The accompanying notes are an integral part of these financial statements.
  JAMESTOWN RESORT & MARINA, LTD.
                          (a Kentucky Limited Partnership)
                              Statements of Cash Flows
                       Years ended December 31, 1995 and 1994
  1995               1994
                                                                                               ----------------   ----------------
  CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                                              $        (611,060) $        (506,033)
       Adjustments to reconcile net loss to net cash provided by
           operating activities
              Depreciation and amortization of fixed assets                                            578,603            617,499
              Amortization of goodwill                                                                  30,252             18,426
              Amortization of deferred gain on sale leaseback                                           (6,105)            (6,105)
              Changes in assets and liabilities:
                  Decrease (increase) in escrow funds                                                   16,589             41,409
                  Decrease (increase) in trade receivables                                                (854)            (3,478)
                  Decrease (increase) in other receivables                                             (11,088)            57,620
                  Decrease (increase) in inventory                                                       6,911             (7,279)
                  Decrease (increase) in prepaid expenses                                               25,463              6,950
                  Increase (decrease) in accounts payable                                              (86,235)           152,403
                  Increase (decrease) in accrued interest                                              450,506            357,236
                  Increase (decrease) in accrued liabilities                                          (107,927)            94,807
                  Increase (decrease) in security deposits                                              (5,384)            (8,447)
                  Increase (decrease) in deferred revenue                                              101,779             46,890
                  Increase (decrease) in accrued guarantee fees                                         20,000             20,000
                  Increase (decrease) in accrued management fees                                       123,295             84,943
                                                                                               ----------------   ----------------
  
              Net cash provided by operating activities                                                524,745            966,841
                                                                                               ----------------   ----------------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
       Purchases of property and equipment                                                            (603,820)          (711,802)
                                                                                               ----------------   ----------------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
       Proceeds from bank and related party loans                                                    1,250,700                  -
       Repayments of borrowings                                                                       (844,715)          (152,884)
       Repayments of obligation under capital lease                                                   (202,601)          (189,195)
       Organization and loan costs                                                                    (118,265)                 -
                                                                                               ----------------   ----------------
  
              Net cash provided by financing activities                                                 85,119           (342,079)
                                                                                               ----------------   ----------------
  
  NET INCREASE (DECREASE) IN CASH                                                                        6,044            (87,040)
  
  Cash at beginning of the year                                                                          3,584             90,624
                                                                                               ----------------   ----------------
  
  Cash at end of the year                                                                    $           9,628  $           3,584
                                                                                               ================   ================
  
  SUPPLEMENTAL DISCLOSURES:
           Cash paid during the year for interest                                            $         430,908  $         411,592
                                                                                               ================   ================
  
  SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
       AND FINANCIANG ACTIVITIES
           Assumption of debt in connection with the
              purchase of property and equipment                                             $               -  $         520,019
                                                                                               ================   ================
  The accompanying notes are an integral part of these financial statements.
  JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE A - ORGANIZATION
  
  General
  
  Jamestown Resort & Marina, Ltd. (the "Partnership") is a limited partnership
  organized under the laws of the State of Kentucky by Jamestown Resort & Marina,
  Inc. ("JRMI"), the general partner, on November 1, 1987. The Partnership owns a
  resort and marina facility near Jamestown, Kentucky on Lake Cumberland.
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
  Statement of Cash Flows
  
  For purposes of the statement of cash flows, cash equivalents include time
  deposits, certificates of deposits, and all highly liquid debt instruments with
  original maturities of 3 months or less when purchased.
  
  Inventory
  
  Inventory is stated at the lower of cost or market and consists of food,
  beverages, clothing, fuel and boat parts. Cost is determined on the first-in,
  first-out ("FIFO") method of accounting.
  
  Property and Equipment
  
  Property and equipment are stated at cost. The Partnership provides for
  depreciation on the straight-line method over the estimated useful lives of the
  related assets. Assets held under capital leases are amortized using the
  straight-line method over the estimated useful lives of the related assets.
  Major classes of property and equipment and their related lives are as follows:
  
                                                                        Life in
                                Major Class                              Years
  
  Docks, floating buildings and buildings on land                         31.5
  Houseboats and pontoons                                                 20.0
  Land improvements                                                       15.0
  Signage                                                                 10.0
  Furnishings                                                              7.0
  Computers under capital lease                                            5.0
  
  Maintenance and repairs are expensed as incurred.  Replacements and betterments
  are capitalized.
  
  Goodwill
  
  Goodwill relates to the original purchase of the marina and the U.S. Army Corps
  of Engineers lease and represents the excess of cost over fair value of net
  assets acquired which is being amortized using the straight-line method over 40
  years. On an on-going basis, management reviews recoverability, the valuation
  and amortization of goodwill. As part of this review, management considers the
  undiscounted value of the projected future net earnings in evaluating the value
  of goodwill. If the undiscounted value of the projected future net earnings is
  less than the stated value, the goodwill would be written down to its fair
  value. Management also considers the appraised value of the marina facility in
  evaluating the value of goodwill.
  
                                          7
  JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
  
  Deferred Loan Fees
  
  Loan fees are capitalized and amortized over the life of the loan using the
  straight-line method.
  
  Revenue Recognition
  
  Annual or seasonal slip rentals received are recognized as deferred revenue and
  amortized into income over the life of the rental contract using the
  straight-line method. All other revenues are recognized at the time the rental
  occurs or the delivery of the product or service takes place.
  
  Use of Estimates and Assumptions
  
  Management uses estimates and assumptions in preparing financial statements in
  accordance with generally accepted accounting principles. Those estimates and
  assumptions affect the reported amounts of assets and liabilities, the
  disclosure of contingent assets and liabilities, and the reported amounts of
  revenues and expenses. Actual results could vary from the estimates that were
  used.
  
  Income Taxes
  
  Taxable income or loss of the Partnership is allocated to the partners in
  accordance with the provisions of the Partnership agreement. The Partnership
  qualifies as a limited partnership and as such, Federal income taxes accrue to
  the partners rather than to the Partnership. Accordingly, the accompanying
  statements of operations of the Partnership include no provision for income
  taxes.
  
  Other
  
  Advertising costs are expensed as incurred and amounted to $58,000 and $43,000
  in 1995 and 1994, respectively.
  
  NOTE C - GOING CONCERN UNCERTAINTY
  
  As reflected in the statements of operations, the Partnership incurred net
  losses of approximately $611,000 and $506,000 in 1995 and 1994, respectively. At
  December 31, 1995, current liabilities exceed current assets by approximately
  $6,733,000. These factors, among others, raise substantial doubt as to the
  Partnership's ability to continue as a going concern.
  
  Management has been successful in the past in negotiating delays in the payment
  of the Company's loans and was successful in refinancing the mortgage debt
  (Notes F and L) and paid off the obligations under the capital leases subsequent
  to December 31, 1995 (Note L). Management is also in the process of merging with
  a public shell (Note L), and has plans to raise sufficient additional capital in
  the public market after the merger to pay off certain of the short and long term
  debt and to provide additional liquidity to fund operations and growth.
  
  The financial statements do not include any adjustments to reflect the possible
  future effects on the recoverability and classification of assets or the amounts
  or classification of liabilities which may result from the possible inability of
  the Partnership to continue as a going concern.
  
                                          8
  JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE D - DEVELOPMENT AGREEMENT WITH THE TRANSPORTATION CABINET OF THE
           COMMONWEALTH OF KENTUCKY
  
  The Partnership and the Transportation Cabinet of the Commonwealth of Kentucky
  ("Transportation Cabinet") are parties to an agreement for development of the
  marina facilities. The Partnership agreed to construct a new resort and marina
  and the Transportation Cabinet agreed to construct an extension of Kentucky
  Highway 92 to the island upon which the Partnership constructed its lodge.
  
  The Partnership agreed to pay the Transportation Cabinet one percent of the
  gross revenues received by the Partnership from the resort and marina facilities
  in perpetuity. The fees under the agreement totaled $40,000 in 1995 and $37,000
  in 1994.
  
  NOTE E - LEASE RIGHTS
  
  The Partnership leases approximately 290 acres of land and water from the U.S.
  Army Corps of Engineers. The lease has a 25-year term beginning January 1, 1988
  with an option for a 25-year extension which has been exercised. Rental amounts
  due under the lease are contingent upon a variety of factors, primarily gross
  revenues. Rent expense was $70,000 in 1995 and $64,000 in 1994.
  
  NOTE F - NOTES PAYABLE AND LONG-TERM DEBT
  December 31,
                                                                            ------------------------------
                                                                               1995                 1994
                                                                            ----------             ------
  Mortgage                                                            $  7,194,005      $   7,944,005
      Demand Note (related party)                                            1,852,777          1,846,239
      General Partner note                                                   1,197,500                  -
      Limited Partner notes                                                    360,000            360,000
      Paddleboat notes                                                         209,736            270,066
      Yacht Club note                                                          223,624            227,041
      Executive Boats note                                                     159,671            186,963
      Generators note                                                           42,988                  -
                                                                         -------------     --------------
                                                                            11,240,301         10,834,314
      Less current maturities                                               (3,819,067)       (10,622,738)
                                                                         -------------     --------------
      Long-term portion                                                   $  7,421,234     $      211,577
                                                                           ===========      =============
  Mortgage. On December 31, 1988 the Partnership entered into two notes with banks
  to finance the resort and marina project. The first note was for $5,625,000
  maturing on January 1, 1995. The note required monthly payments of principal in
  the amount of $53,568 and interest at a rate of 11%, adjusted to 3% above the
  weekly auction average rate of T-Securities, with a 3 year maturity on November
  1. The second note was for $2,375,000 maturing on January 1, 1995. The note
  required monthly payments of principal in the amount of $6,000 and interest at a
  rate of 1% over the Base Lending rate as defined. Both notes were secured by
  Partnership property. Thereafter, the Partnership defaulted on the notes, and
  the bank became insolvent. The loan was subsequently assumed by the Resolution
  Trust Corporation ("RTC"). The note was consolidated with several other notes
  and sold to a second bank in March, 1993.
  
                                          9
  JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE F - NOTES PAYABLE AND LONG-TERM DEBT - Continued
  
  Accrued interest was $748,240 and $708,240 at December 31, 1995 and 1994,
  respectfully.
  
  On August 11, 1995, The Partnership entered into a written agreement with the
  second bank whereby the notes held could be paid off by the Partnership for
  $6,100,000, plus accrued interest of $240,000. The amount was refinanced on
  January 29, 1996 (Note L). The classification of the note payable (long-term and
  short-term portions) is based on the refinanced terms. This agreement was
  conditional on the ability of the Partnership to make an initial payment of
  $1,000,000 at the closing of the loan modification and being able to repay the
  remaining $5,100,000 by May 1, 1996. The Partnership made a payment of $750,000
  on September 1995. These funds were obtained from related parties and bear
  interest at 10%. The remaining $250,000 was rolled over into the final
  settlement. See Note L.
  
  Demand Note. The Partnership originally entered into a note agreement with a
  bank for $2,000,000 on November 16, 1989, at 1 1/2% over the prime lending rate
  which was collateralized by a second mortgage on the assets of the Partnership
  and by certain items of the Webb Family Trust, an entity related to the general
  partner. A 1 % guarantee amount based on the outstanding balance is payable to
  the Webb Family Trust as compensation for pledging its collateral (See Note H).
  The Partnership defaulted on the note several times and on January 15, 1993 the
  note was converted to a demand note. In March 1994, the Partnership again
  defaulted under the terms of the note and the Webb Family Trust collateral was
  liquidated by the bank to satisfy the note. The Partnership subsequently became
  obligated to the Webb Family Trust under the same terms as the demand note.
  
  General Partner Loans. The Webb Family Trust loaned the Partnership $477,500 at
  various dates in 1995 and $750,000 in September 1995 at 10% under a promissory
  note entered into on August 10, 1995. The note matured on May 1, 1996 and is due
  on demand.
  
  Limited Partner Loans. On March 6, 1992, loans totaling $360,000 were made by
  limited partners at 1% plus prime for operating shortfalls and capital
  improvements. The notes are payable on demand. The notes may be extended each
  year for a fee of 1% of the note balance.
  
  Paddleboat. Webb Cruise Lines, Inc. (WCL) an entity controlled by the general
  partner originally purchased the Jamestown Queen, a paddleboat, by obtaining
  financing from two banks. On April 21, 1989 WCL entered into the first note with
  a bank for $325,000. On October 30, 1994 the note was renewed for $251,303 at 2%
  plus prime maturing on April 30, 2000. The note requires monthly payments of
  $5,309 of principal and interest. The loan is collateralized by five shares
  (5.6%) of the limited Partnership units, the Paddleboat and guaranteed by the
  Webb Family Trust. On May 8, 1989, WCL entered into a 13.5% variable note with a
  second bank amounting to $75,000 with interest and principal due on June 22,
  1995. The Partnership paid a monthly rent of $7,260 to WCL for the use of the
  boat. The Partnership assumed both notes and title of the boat from WCL in May
  1994 for the balance of both notes of $282,346 which approximated the fair value
  of the Paddleboat.
  
  Yacht Club. Webb Lexington Ventures, Inc., an entity controlled by the general
  partner, entered into a 11% mortgage note with a bank for $278,000 to purchase
  the Yacht Club. The note matures on July 1, 1996 and interest is payable
  quarterly in October, January, April and July. Principal payments consist of two
  installments, $23,757 on January 1, 1996 and $200,000 on July 1, 1996. The note
  is collateralized by the property of the general partner. The Yacht Club was
  acquired by the Partnership by assuming the note, which approximated the fair
  market value of the Yacht Club.
  
                                         10
  JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE F - NOTES PAYABLE AND LONG-TERM DEBT - Continued
  
  Executive Boats. On February 8, 1990, the Partnership entered into a note with a
  bank finance its executive boats and is collateralized by the two houseboats.
  The note was renewed on October 30, 1995 and provides for monthly principal
  payments of $4,000 and interest at 11% and matures on October 28, 1999.
  
  Generators. On May 26, 1995, the Partnership entered into a note with a bank for
  $53,200 at a fixed rate of 10.5% maturing on October 1, 1997. The note is
  collateralized by 12 boat generators. Interest and principal of $3,000 are paid
  monthly beginning on July 1, 1995 through October 1, 1995. Payments will resume
  each year on March 1 through October 1.
  
  Aggregate maturities of long-term debt at December 31, 1995 are as follows:
  
                             1996                                 $  3,819,067
                             1997                                      217,870
                             1998                                      217,425
                             1999                                      234,021
                             2000                                      173,393
                             Thereafter                              6,578,525
                                                                  ------------
                             Total                                $ 11,240,301
                                                                   ===========
  
  NOTE G - OBLIGATIONS UNDER CAPITAL LEASES
  
  The Partnership leases certain boats and computer equipment under capital
  leases. In 1991, the Partnership sold 25 houseboats and 20 pontoon boats for
  $1,374,000 to a bank and subsequently leased back the boats under a capital
  lease. In connection with this sale and lease-back transaction, the Partnership
  recorded a deferred gain of $104,000. This gain is being amortized as a offset
  to amortization expense over the term of the lease. The lease term is for six
  years and monthly payments of $30,000 are required from March through October of
  each year. The lease also has a purchase option of $202,000 at the end of the
  lease. The Partnership entered into a sale and leaseback transaction for
  computer equipment in 1990 for $161,000. The computer lease matured in 1994. The
  Partnership is required to pay future minimum payments related to these leases
  as follows:
                                                                       Amount
                                                                   -----------
                             1996                                  $   239,710
                             1997                                      443,938
                                                                   -----------
                                                                       683,648
                             Amount representing interest              (67,619)
                             Present value of net minimum
                               lease payments                          616,029
                             Current portion                           198,391
                                                                    ----------
                             Total                                 $   417,638
                                                                    ==========
  
  The weighted average interest rate on the capital leases approximates 10% at
  December 31, 1995.
  
  Accumulated amortization for leased boats and computer equipment at December 31,
  1995 and 1994 was $456,000 and $384,000 , respectively. Amortization expense,
  net of the deferred gain amortization of $6,000 each year, for the leased boats
  and computer equipment was approximately $65,000 and $95,000 during 1995 and
  1994, respectively.
  
                                         11
  JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE G - OBLIGATIONS UNDER CAPITAL LEASES - Continued
  
  In connection with the boat lease, the bank requires a monthly deposit of $3,761
  into an escrow account for repairs and maintenance of the boats. This account
  has a balance of approximately $26,000 and $43,000, at December 31, 1995 and
  1994, respectively, which is included in escrow funds in the accompanying
  balance sheets.
  
  NOTE H - RELATED PARTY TRANSACTIONS
  
  The general partner has a management agreement with the Partnership to provide
  management services to the Partnership for a fee equal to 5% of the annual gross
  revenues. Such fee is payable to the general partner at a rate $4,000 per month,
  plus direct costs and expenses associated with its management of the
  Partnership. The remainder of the fee is accrued. Accrued management fees at
  1995 and 1994 were $581,000 and $458,000, respectively. Management fees paid in
  1995 and 1994 were $48,000 and management fee expense was $201,000 and $185,000,
  respectively.
  
  The general partner guaranteed the Demand Note (Note F) and receives as
  compensation a fee of 1% of the outstanding note balance annually. Such fee
  amounted to $20,000 during 1995 and 1994, respectively. The accrued guarantee
  fee was $60,000 and $40,000 at December 31, 1995 and 1994, respectively.
  
  Accrued interest due to the partners was $272,000 and $54,000 at December 31,
  1995 and 1994, respectively. Interest expense payable to related parties was
  $261,000 and $215,000 during 1995 and 1994, respectively.
  
  Accounts receivable (other) of $25,000 at December 31, 1995 and 1994, from
  related parties, are recorded as a reduction of accrued management fees and are
  primarily for reimbursable expenses.
  
  The Partnership rents a portion of land to the general partner for $441 per
  year.
  
  Also see Note F.
  
  NOTE I  - PARTNERSHIP AGREEMENT
  
  The general partner is required to manage the affairs of the Partnership but is
  not required to make a capital contribution for its interest in the Partnership.
  For Federal income tax purposes, the special limited partners received an
  assigned value of $200,000 (equivalent to eight units) for contributing their
  interest in the Sale and Purchase Agreement with Jamestown Dock, Inc. Eighty
  units had been sold to limited partners.
  
  The special limited and limited partners are entitled to an annual Preference
  Payment of 10% of their capital contributions to the extent that cash flow
  exceeds operating expenses, debt service and funds set aside in a working
  capital reserve. All unpaid Preference Payments accumulate and may be paid in
  future years out of available cash flow. Remaining cash flow, after the
  Preference Payment, is distributable to the limited partners and to the general
  partner in proportion to their interests in partnership profits. No cash
  distributions have been made to the partners. Accumulated but unpaid Preference
  Payments totaled $1,372,917 at December 31, 1995 and $1,152,917 at December 31,
  1994 (Note L).
  
  The net loss for the years ended December 31, 1995 and 1994 was allocated in
  accordance with the Partnership Agreement. No loss is allocated to the special
  limited partners because of their nil capital account balances. In accordance
  with the Partnership agreement, limited partners are allocated 80% of net losses
  to the extent that they have positive capital account balances, and the general
  partner is allocated the remaining loss.
  
                                         12
  JAMESTOWN RESORT & MARINA, LTD
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE J - FAIR VALUE OF FINANCIAL INSTRUMENTS
  
  Statement of Financial Accounting Standards No. 107, "Disclosure About Fair
  Value of Financial Instruments", requires disclosure about the fair value of all
  financial assets and liabilities for which it is practicable to estimate. Cash
  and escrow funds, accounts receivable, accounts payable and other liabilities
  are carried at amounts that reasonably approximate their fair values.
  
  The carrying amount and fair value of notes payable and long-term debt
  (excluding capital leases) are as follows:
  
                                                           December 31, 1995
                                                    ------------------------------
                                                      Carrying             Fair
                                                       amount              value
                                                    ----------          ----------
      Mortgage debt                                 $7,194,000          $5,350,000
      Demand note                                    1,853,000           1,853,000
      Variable rate debt                               570,000             570,000
      Other current debt                             1,677,000           1,677,000
  
  NOTE K - CONTINGENT LIABILITIES
  
  In the normal course of its business, the Partnership is subject to litigation.
  Management of the Partnership, based on discussions with its outside legal
  counsel, does not believe any claims, individually or in the aggregate, will
  have a material adverse impact on the Partnership's financial position.
  
  NOTE L - SUBSEQUENT EVENTS
  
  On January 29, 1996, the Partnership entered into a loan agreement for
  $6,300,000 maturing on February 1, 2001. The agreement requires monthly payments
  of principal and interest at a variable rate equal to the commercial paper rate
  plus 4.25%. Proceeds of $5,800,000 was used to settle the $5,631,000 mortgage
  note described in Note F, and $678,000 was used to settle the boat lease
  obligation (Note F) and related loan origination fees. Other short term
  borrowings were obtained to finance the difference between amounts paid and the
  $5,800,000 proceeds used from the $6,300,000 loan agreement.. On March 28, 1996
  the remaining $500,000 was drawn on the note. The balance due on the note at
  June 30, 1996 was $6,261,000.
  
  As of September 12, 1996, the Partnership, by consent of the JRMI and the
  limited partners, entered into an agreement (the "Agreement") with Sonoma
  International ("Sonoma"), a public company with no operations. The Agreement
  requires the transfer and assignment to Sonoma of all of the common stock of
  JRMI and all limited partnership interests in exchange for 1,700,000 shares of
  common stock of Sonoma. There are several conditions to closing including the
  delivery to Sonoma of an appraisal which states that the assets of the
  Partnership, as of the date of the appraisal, have a fair market value of not
  less than $10,000,000. That appraisal has been delivered to Sonoma. The
  agreement incorporates the payment of the preference payments due (Note I)
  through the issuance of shares of Sonoma.
  
                                         13
  FINANCIAL STATEMENTS
               AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
                             KEYWEST CONCH HARBOR, INC.
  
                             DECEMBER 31, 1995 AND 1994
  KEY WEST CONCH HARBOR, INC.
  
                            Index to Financial Statements
  
                                                                   Page
  
  Report of Independent Certified Public Accountants                 1
  
  Financial Statements
           Balance Sheets                                            2
           Statements of Operations                                  4
           Statements of Changes in Stockholders' Deficit            5
           Statements of Cash Flows                                  6
           Notes to Financial Statements                             7
  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
  
  The Stockholders
  Key West Conch Harbor, Inc.
  
  We have audited the accompanying balance sheets of Key West Conch Harbor, Inc.
  as of December 31, 1995 and 1994, and the related statements of operations,
  stockholders' deficit, and cash flows for the years then ended. These financial
  statements are the responsibility of the Company's management. Our
  responsibility is to express an opinion on these financial statements based on
  our audits.
  
  We conducted our audits in accordance with generally accepted auditing
  standards. Those standards require that we plan and perform the audits 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 audits provide 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 Key West Conch Harbor, Inc. as
  of December 31, 1995 and 1994, and the results of its operations and its cash
  flows for the years then ended, in conformity with generally accepted accounting
  principles.
  
  The financial statements have been prepared assuming that the Company will
  continue as a going concern. As discussed in Note C to the financial statements,
  the Company has incurred losses since its inception and at December 31, 1995,
  its current liabilities exceeded current assets by approximately $2,107,802.
  These factors raise substantial doubt as to the Company's ability to continue as
  a going concern. Management's plans in regard to these matters are also
  described in Note C. The financial statements do not include any adjustments
  that might result from the outcome of this uncertainty.
  
                                                  KING, BURNS & COMPANY, P.C.
  
  Dallas, Texas
  October 18, 1996
  KEY WEST CONCH HARBOR, INC.
                                   Balance Sheets
                             December 31, 1995 and 1994
  
                                       ASSETS
  1995               1994
                                                                                               ----------------   ----------------
  CURRENT ASSETS
  Cash                                                                                  $          20,899  $           3,657
       Receivables                                                                                       6,452              8,859
       Inventory                                                                                         8,716                  -
       Prepaid expenses and other                                                                       13,859                500
                                                                                               ----------------   ----------------
                     Total current assets                                                               49,926             13,016
                                                                                               ----------------   ----------------
  
  PROPERTY AND EQUIPMENT
       Land                                                                                          1,810,818          1,786,640
       Land improvements                                                                               121,805            101,265
       Docks                                                                                           788,016            443,711
       Fuel Tanks                                                                                       72,609                  -
       Furniture, fixtures and equipment                                                                20,178                550
       Construction in progress                                                                        171,233                  -
                                                                                               ----------------   ----------------
                                                                                                     2,984,659          2,332,166
  
       Less accumulated depreciation and amortization                                                   70,717             29,719
                                                                                               ----------------   ----------------
  
                     Net property and equipment                                                      2,913,942          2,302,447
                                                                                               ----------------   ----------------
  
  OTHER ASSETS
       Deferred loan fees, net of accumulated amortization of  $5,761 and $1,002, respectively          16,712             13,545
                                                                                               ----------------   ----------------
                     Total other assets                                                                 16,712             13,545
                                                                                               ----------------   ----------------
  
  TOTAL ASSETS                                                                               $       2,980,580  $       2,329,008
                                                                                               ================   ================
  The accompanying notes are an integral part of these financial statements.
  KEY WEST CONCH HARBOR, INC.
                             Balance Sheets - Continued
                             December 31, 1995 and 1994
  
                        LIABILITIES AND STOCKHOLDERS' DEFICIT
  1995               1994
                                                                                               ----------------   ----------------
  CURRENT LIABILITIES
  Current portion of long-term debt (including $378,584
           and $148,700 to related parties)                                                  $       1,928,584  $       1,248,700
       Accounts payable                                                                                 23,897             71,792
       Accrued interest (including $110,405 and $71,798 to related parties)                            137,354             71,798
       Accrued liabilities                                                                              48,633             55,293
       Security deposits                                                                                     -             10,000
       Deferred revenue                                                                                 19,260                  -
                                                                                               ----------------   ----------------
  
                         Total current liabilities                                                   2,157,728          1,457,583
                                                                                               ----------------   ----------------
  
  LONG-TERM LIABILITIES
       Long-term debt, net of current maturities  (including $908,711 and
           $990,800 to related parties)                                                              1,108,711            990,800
                                                                                               ----------------   ----------------
  
                         Total long-term liabilities                                                 1,108,711            990,800
                                                                                               ----------------   ----------------
  
  COMMITMENTS AND CONTINGENCIES (Notes C, D, G and H)
  
  STOCKHOLDERS' DEFICIT
       Common stock; $10 par value; 100 shares authorized,
           issued and outstanding                                                                        1,000              1,000
       Accumulated deficit                                                                            (286,859)          (120,375)
                                                                                               ----------------   ----------------
  
                         Total stockholders' deficit                                                  (285,859)          (119,375)
                                                                                               ----------------   ----------------
  
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                $       2,980,580  $       2,329,008
                                                                                               ================   ================
  The accompanying notes are an integral part of these financial statements.
  KEY WEST CONCH HARBOR, INC.
                              Statements of Operations
                       Years ended December 31, 1995 and 1994
  1995               1994
                                                                                               ----------------   ----------------
  REVENUES
  Annual slip fees                                                                      $         143,442  $          73,715
       Lease income from related party                                                                       -             92,675
       Fuel                                                                                            507,914                  -
       Other                                                                                             2,557                  -
                                                                                               ----------------   ----------------
                         Total revenues                                                                653,913            166,390
                                                                                               ----------------   ----------------
  
  COST OF REVENUES
       Annual slip                                                                                      10,981             11,091
       Fuel                                                                                            372,660                  -
                                                                                               ----------------   ----------------
                         Total cost of revenues                                                        383,641             11,091
                                                                                               ----------------   ----------------
  
  GROSS PROFIT                                                                                         270,272            155,299
  
  SELLING, GENERAL AND ADMINISTRATIVE                                                                  152,007             60,478
  
  DEPRECIATION AND AMORTIZATION                                                                         45,757             30,721
                                                                                               ----------------   ----------------
  
  INCOME FROM OPERATIONS                                                                                72,508             64,100
  
  INTEREST EXPENSE (including interest to related parties
       of $94,350 and $91,800)                                                                         238,992            184,475
                                                                                               ----------------   ----------------
  
  NET LOSS                                                                                   $        (166,484) $        (120,375)
                                                                                               ================   ================
  
  Net loss per common share                                                                  $          (1,665) $          (1,204)
                                                                                               ================   ================
  
  Weighted average shares outstanding                                                                      100                100
                                                                                               ================   ================
  The accompanying notes are an integral part of these financial statements.
  KEY WEST CONCH HARBOR, INC.
               Statements of Changes in Stockholders' Equity (Deficit)
                       Years ended December 31, 1995 and 1994
  Common Stock             
                                                        -----------------------------------      Accumulated
                                                            Shares             Amount              Deficit             Total
                                                        ----------------   ----------------    ----------------   ----------------
  Balance at January 1, 1994                                        100  $           1,000   $               -  $           1,000
  
  Net loss for the year
       ended December 31, 1994                                                           -            (120,375)          (120,375)
                                                        ----------------   ----------------    ----------------   ----------------
  
  Balance at December 31, 1994                                      100              1,000            (120,375)          (119,375)
  
  Net loss for the year
       ended December 31, 1995                                                           -            (166,484)          (166,484)
                                                        ----------------   ----------------    ----------------   ----------------
  
  Balance at December 31, 1995                                      100  $           1,000   $        (286,859) $        (285,859)
                                                        ================   ================    ================   ================
  The accompanying notes are an integral part of these financial statements.
  KEY WEST CONCH HARBOR, INC.
                              Statements of Cash Flows
                       Years ended December 31, 1995 and 1994
  1995               1994
                                                                                               ----------------   ----------------
  CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                                              $        (166,484) $        (120,375)
       Adjustments to reconcile net loss to net cash provided (used)
           by operating activities
              Depreciation and amortization                                                             40,998             29,719
              Amortization of deferred loan fees                                                         4,759              1,002
              Changes in assets and liabilities:
                  Receivables                                                                            2,407             (8,859)
                  Inventory                                                                             (8,716)                 -
                  Prepaid expenses and other                                                           (13,359)              (500)
                  Accounts payable                                                                     (47,895)            71,792
                  Accrued interest                                                                      65,556             71,798
                  Accrued liabilities                                                                   (6,660)            55,293
                  Security deposits                                                                    (10,000)            10,000
                  Deferred revenue                                                                      19,260                  -
                                                                                               ----------------   ----------------
  
              Net cash provided (used) by operating activities                                        (120,134)           109,870
                                                                                               ----------------   ----------------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
       Purchases of property and equipment                                                            (652,493)        (2,332,166)
                                                                                               ----------------   ----------------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
       Proceeds from bank and related party loans                                                      797,795          2,239,500
       Organization and loan costs                                                                      (7,926)           (14,547)
       Proceeds from issuance of common stock                                                                -              1,000
                                                                                               ----------------   ----------------
  
              Net cash provided by financing activities                                                789,869          2,225,953
                                                                                               ----------------   ----------------
  
  NET INCREASE  IN CASH                                                                                 17,242              3,657
  
  Cash at beginning of the year                                                                          3,657                  -
                                                                                               ----------------   ----------------
  
  Cash at end of the year                                                                    $          20,899  $           3,657
                                                                                               ================   ================
  
  SUPPLEMENTAL DISCLOSURES:
           Cash paid during the year for interest                                            $         248,141  $         112,674
                                                                                               ================   ================
  
  SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
       AND FINANCIANG ACTIVITIES
           Assumption of debt in connection with the
              purchase of property and equipment                                             $         652,493  $       2,332,166
                                                                                               ================   ================
  The accompanying notes are an integral part of these financial statements.
  KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE A - ORGANIZATION
  
  General
  
  Key West Conch Harbor, Inc. (the "Company") is a S-Corporation, incorporated in
  the State of Florida on December 23, 1993 for the purposes of acquiring,
  developing, and operating a marina facility in Key West, Florida.
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
  Statement of Cash Flows
  
  For purposes of the statement of cash flows, cash equivalents include time
  deposits, certificates of deposits, and all highly liquid debt instruments with
  original maturities of 3 months or less when purchased.
  
  Inventory
  
  Inventory is stated at the lower of cost or market and consists of fuel. Cost is
  determined on the first-in, first-out ("FIFO") method of accounting.
  
  Property and Equipment
  
  Property and equipment are stated at cost. The Company provides for depreciation
  on the straight-line method over the estimated useful lives of the related
  assets. Major classes of property and equipment and their related useful lives
  are as follows:
  
                                                                     Life in
                                Major Class                           Years
  
  Land improvements                                                     20
  Docks                                                                 20
  Furniture, fixtures and equipment                                      7
  Computer equipment                                                     5
  
  Maintenance and repairs are expensed as incurred. Replacements and betterments
  are capitalized.
  
  Deferred Loan Fees
  
  Loan fees are capitalized and amortized over the life of the loan using the
  straight-line method.
  
  Revenue Recognition
  
  Annual or seasonal slip rentals received are recognized as deferred revenue and
  amortized into income over the life of the rental contract using the
  straight-line method. All other revenues are recognized at the time the rental
  occurs or the delivery of the product or service takes place.
  
  Lease income
  
  During 1994 all fuel operations where leased to a related party who made lease
  payments of all interest on the first mortgage. Income recorded in 1994 from
  these payments was $92,675.
  
                                          7
  KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
  
  Loss per share
  
  Loss per share of common stock is based upon the weighted average number of
  common shares outstanding. There is no effect on loss per share after giving
  effect to proforma income taxes as if the Company was taxed as a C-Corporation.
  
  Use of Estimates and Assumptions
  
  Management uses estimates and assumptions in preparing financial statements in
  accordance with generally accepted accounting principles. Those estimates and
  assumptions affect the reported amounts of assets and liabilities, the
  disclosure of contingent assets and liabilities, and the reported amounts of
  revenues and expenses. Actual results could vary from the estimates that were
  used.
  
  Income Taxes
  
  Taxable income or loss of the S-Corporation is allocated to the shareholders in
  accordance with the provisions of the Stockholders agreement. The Company
  qualifies as a S-Corporation and as such, Federal income taxes accrue to the
  shareholders rather than to the Company. Accordingly, the accompanying
  statements of operations of the Company include no provision for Federal income
  taxes.
  
  NOTE C - GOING CONCERN UNCERTAINTY
  
  As reflected in the statements of operations, the Company incurred net losses of
  $166,484 and $120,375 in 1995 and 1994, respectively. At December 31, 1995,
  current liabilities exceed current assets by $2,107,802. These factors, among
  others, raise substantial doubt as to the Company's ability to continue as a
  going concern.
  
  Management has been successful in the past in negotiating delays in the payment
  of the Company's loans and was successful in refinancing the mortgage debt
  (Notes D and H) subsequent to December 31, 1995. Management is also negotiating
  to transfer ownership and control of the Company to a public company (Note H).
  The public company has plans to raise additional capital in the public market
  after the acquisition.
  
  The financial statements do not include any adjustments to reflect the possible
  future effects on the recoverability and classification of assets or the amounts
  or classification of liabilities which may result from the possible inability of
  the Company to continue as a going concern.
  
  NOTE D - NOTES PAYABLE AND LONG-TERM DEBT
  December 31,
                                                                            ------------------------------
                                                                               1995                 1994
                                                                            ----------             ------
  First mortgage                                                        $1,550,000         $1,100,000
      Second mortgage - stockholder                                            500,000            500,000
      Third mortgage - related party                                           200,000            200,000
      First note - stockholder                                                 245,000            245,000
      Second note - stockholder                                                125,000            125,000
      Working capital note - stockholder                                        57,295             69,500
      First note payable                                                       200,000                  -
      Second note payable - stockholders                                       160,000                  -
                                                                            ----------          ---------
                                                                             3,037,295          2,239,500
      Less current maturities                                                1,928,584          1,248,700
                                                                             ---------          ---------
      Long-term portion                                                     $1,108,711          $ 990,800
                                                                           ============        ==========
  8
  KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE D - NOTES PAYABLE AND LONG-TERM DEBT - Continued
  
  First Mortgage. On December 29, 1993 the Company entered into a note payable for
  $1,100,000 with a financial institution to purchase the marina. The note is
  collateralized by the property. The mortgage is at a variable rate of 1 1/2%
  above the banks prime rate and matures on June 29, 2010. Payments of interest
  were required from January 29, 1994 through July 29, 1995, thereafter monthly
  payment of principal and interest were required to fully amortize the note
  through the maturity date.
  
  On March 27, 1995 the Company renegotiated the variable rate note with the
  financial institution for $1,550,000 (which included unpaid interest). This note
  matures with all the principal due on October 1, 1996 and requires monthly
  interest payments beginning on May 1, 1995, at a rate of 1% over the banks
  index. (See Note H).
  
  Prepaid interest on this note was $13,359 at December 31, 1995.
  
  Second Mortgage. On December 28, 1993 the Company entered into a $500,000
  promissory note with a stockholder, at a fixed rate of 8%, collateralized by a
  second mortgage on the property. Annual payments are required for principal and
  interest totaling $50,000 commencing on January 5, 1995 and continuing until the
  maturity date of January 5, 2004. Principal and interest payments due on January
  5, 1995, were deferred. Accrued interest was $44,257 and $40,000 at December 31,
  1995 and 1994, respectfully.
  
  Third Mortgage. As part of the original purchase the Company entered into a
  $200,000 promissory note with a related party. This note had a fixed rate of 10%
  and matures on March 15, 1997. (See Note H).
  
  On January 13, 1995 the Company renewed the $200,000 promissory note,
  subordinate to the first and second mortgage, with a stockholder, at a fixed
  rate of 10%. The note matures on January 13, 1997 and requires monthly interest
  payments.
  
  First Note to Stockholder. On December 28, 1993 the Company entered into a
  $245,000 promissory note with a stockholder, at a fixed rate of 8%. Annual
  payments are required of $50,000 (principal and interest) commencing January 5,
  1995 and continuing until the maturity date of January 5, 2004.Principal and
  interest payments due on January 5, 1995, were deferred. At December 31, 1995
  and 1994 accrued interest was $39,200 and $19,600, respectively. (See Note H).
  
  Second Note to Stockholder. On December 28, 1993 the Company entered into a
  $125,000 promissory note with a stockholder, at a fixed rate of 8% with a
  maturity date in July 2001. Annual interest payments are required commencing on
  January 5, 1995 and continuing until the maturity date in July 2001. Interest
  due on January 5, 1995 was deferred. At December 31, 1995 and 1994 accrued
  interest was $20,000 and $10,000, respectively. (See Note H).
  
  Working Capital Note to Stockholder. During 1994, working capital of $69,500 was
  provide to the Company by a stockholder at a fixed rate of 8%. The timing of the
  repayment of the note payable is at the discretion of the Company and is
  classified as current maturities in the accompanying balance sheets. The balance
  outstanding at December 31, 1995 and 1994 was $57,295 and $69,500, respectively.
  At December 31, 1995 and 1994 accrued interest was $6,948 and $2,198,
  respectively.
  
  First Note payable. On August 3, 1995 the Company entered into a $200,000
  promissory note with a financial institution maturing on February 3, 1999, at a
  variable rate of 1 3/4% above the financial institutions base rate. Monthly
  interest payments are required.
  
                                          9
  KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE D - NOTES PAYABLE AND LONG-TERM DEBT - Continued
  
  Second Note Payable. The following two notes were entered into by stockholders
  of the Company to provide operating funds.
  
  On October 2, 1995 the stockholders entered into a note payable for $100,000
  with the principal maturing on October 2, 1996, at a variable rate of 1% over
  prime. Monthly interest payments commencing on November 2, 1995 are required.
  
  On December 27,1995 the stockholders entered into a second note payable for
  $100,000 with the principal maturing on November 27, 1996, at a variable rate of
  2% over prime. Monthly interest payments commencing on January 27, 1995 are
  required. At December 31, 1995 $60,000 had been drawn and is outstanding under
  this note payable.
  
  Aggregate maturities of long-term debt at December 31, 1995 are as follows:
  
                          1996                                  $ 1,928,584
                          1997                                      284,752
                          1998                                       87,636
                          1999                                      290,760
                          2000                                       94,143
                          Thereafter                                351,420
                                                                -----------
                          Total                                 $ 3,037,295
                                                                 ==========
  
  NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS
  
  Statement of Financial Accounting Standards No. 107, "Disclosure About Fair
  Value of Financial Instruments", requires disclosure about the fair value of all
  financial assets and liabilities for which it is practicable to estimate. Cash,
  accounts receivable, accounts payable and other liabilities are carried at
  amounts that reasonably approximate their fair values.
  
  The carrying amount and fair value of notes payable and long-term debt are as
  follows:
  
                                                         December 31, 1995
                                                    --------------------------
                                                     Carrying          Fair
                                                      amount           value
                                                    ----------       ---------
      Variable rate debt                            $1,910,000      $1,910,000
      Fixed rate debt                                1,070,000       1,151,250
      Demand note                                       57,296          57,296
  
  The fair value of the Company's fixed rate debt have been estimated based upon
  relative changes in the Company's variable borrowing rates since origination of
  the fixed rate debt. Fair values of variable rate debt and demand notes are
  deemed to approximate carrying amount.
  
                                         10
  KEY WEST CONCH HARBOR, INC.
                            Notes to Financial Statements
                       Years ended December 31, 1995 and 1994
  
  NOTE F - RELATED PARTY TRANSACTIONS
  
  The Company has a $9,381 payable to a stockholder related to commissions earned
  in conjunction with the purchase of the marina on December 28, 1993. In
  addition, the Company has a $30,000 payable to a stockholder for a finders fee
  in conjunction with the purchase of the marina.
  
  During 1995 and 1994, the Company entered into various notes payable with
  stockholders of the Company. See Note D.
  
  Accrued interest due to the stockholders was $110,405 and $71,798 at December
  31, 1995 and 1994, respectively. Interest expense in connection with notes due
  to stockholders was $94,350 and $91,800 during 1995 and 1994, respectively.
  
  Upon formation of the S Corporation, the Company purchased the Key West facility
  for approximately $2,300,000 from a stockholder. This purchase price
  approximated the fair market value of the property.
  
  NOTE G - CONTINGENT LIABILITIES
  
  In the normal course of its business, the Company is subject to litigation.
  Management of the Company, based on discussions with its outside legal counsel,
  does not believe any claims, individually or in the aggregate, will have a
  material adverse impact on the Company's financial position.
  
  NOTE H - SUBSEQUENT EVENTS
  
  On July 25, 1996 the majority stockholder sold 73.625 shares to a third party
  which resulted in a change in control of the Company in exchange for $1,700,000.
  
  On April 8 , 1996, the Company entered into a loan agreement for $2,724,185
  maturing on April 1, 2016. This agreement renewed and consolidated the first
  mortgage of $1,550,000 with an additional amount of $1,174,185 which was used to
  pay off the third mortgage, the second note payable, to provide operating funds
  and to fund expansion of the fuel system. The agreement requires twenty-four
  monthly interest payments beginning May 1, 1996 at a rate of 9% and two hundred
  and sixteen monthly principal and interest payments of $25,510 beginning May 1,
  1998 at a rate of 9% during the first 36 payments and 1% over prime thereafter.
  
  Effective of October 31, 1996, the Company, by consent of the stockholders,
  entered into an agreement (the "Agreement") with Sonoma International
  ("Sonoma"), a public company. The Agreement requires the transfer and assignment
  to Sonoma of all of the common stock of the Company in exchange for 300,000
  shares of common stock of Sonoma.
  
                                         11
  UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
  
  Sonoma International (a public company which has had no operations since 1988)
  ("Sonoma") was incorporated under the laws of the State of Nevada on June 10,
  1940. Since February of 1988, Sonoma has focused on finding assets and or
  operations that could be acquired by Sonoma so that Sonoma could become an
  operating entity.
  
  Jamestown Resort & Marina, Ltd. ("JRML") is a limited partnership, organized by
  Jamestown Resort & Marina, Inc., the general partner, under the laws of the
  State of Kentucky on November 1, 1987. JRML owns a resort and marina facility on
  Lake Cumberland near Jamestown, Kentucky.
  
  On September 12, 1996, Sonoma entered into a stock exchange agreement ("First
  Agreement") with JRML whereby Sonoma would be reorganized in consideration of
  acquiring all of the partnership units of JRML. Sonoma is to acquire 100% of
  JRML in exchange for an aggregate of 1,500,000 shares of its common stock.
  
  Key West Conch Harbor, Inc. ("KWCHI") is a S-Corporation which was incorporated
  in the State of Florida on December 23, 1993 for the purposes of acquiring,
  developing, and operating a marina facility in Key West, Florida.
  
  Effective October 31, 1996, Sonoma entered into a stock exchange agreement (the
  "Second Agreement") with KWCHI. The Second Agreement requires the transfer and
  assignment to Sonoma of all of the common stock of KWCHI in exchange for 300,000
  shares of common stock of Sonoma.
  
  The unaudited pro forma balance sheet of Sonoma reflects the reorganization with
  JRML and KWCHI as if it had occurred on June 30, 1996. Such pro forma
  information is based on the historical balance sheet data of Sonoma, JRML and
  KWCHI as of June 30, 1996. For accounting purposes, the merger between Sonoma
  and JRML is regarded as an acquisition by JRML of substantially all of the
  outstanding stock of Sonoma and is accounted for as a recapitalization of JRML
  with JRML as the acquirer (a reverse acquisition). The subsequent merger with
  KWCHI is accounted for using the pooling method of accounting. The unaudited pro
  forma statements of operations for the years ended June 30, 1996 and 1995
  reflect the transactions as if they had occurred on July 1, 1994.
  
  The unaudited pro forma financial information is not necessarily indicative of
  the results of operations that would have been reported had such events occurred
  on the dates specified, nor is it necessarily indicative of the future results
  of the combined entities. The unaudited pro forma financial statements should be
  read in conjunction with the historical financial statements of Sonoma, JRML and
  KWCHI.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
                  Pro Forma Consolidated Balance Sheet (unaudited)
                                    June 30, 1996
  Historical - Note 1                 Note 2
                                                               ------------------------------------------     Pro Forma     Pro Forma
                                                                 Sonoma          JRML            KWCHI       Adjustments     Balance
                                                               ----------    ------------   -------------    -----------   -----------
  CURRENT ASSETS
  Cash                                                  $      -      $      16,167    $    508,155     $        -    $   524,322
       Escrow funds                                                 -             19,097               -              -         19,097
       Receivables:
           Trade, net                                               -            131,319           8,483              -        139,802
           Other                                                    -             59,055               -              -         59,055
       Inventory                                                    -            155,004          22,406              -        177,410
       Prepaid expenses and other                                   -             40,901          31,242              -         72,143
                                                               ----------   -------------    ------------    -----------   -----------
  
                 Total current assets                               -            421,543         570,286              -        991,829
  
  PROPERTY AND EQUIPMENT
       Buildings and improvements                                   -          2,197,655               -              -      2,197,655
       Land                                                         -                  -       1,816,298              -      1,816,298
       Land improvements                                            -             79,962         182,535              -        262,497
       Docks and floating buildings                                 -          7,174,566       1,094,057              -      8,268,623
       Boats and improvements                                       -          2,169,004               -              -      2,169,004
       Fuel tanks and containment building                          -                  -         155,993              -        155,993
       Furniture, fixtures and equipment                            -          1,920,713          45,538              -      1,966,251
       Vehicles                                                     -             22,482               -              -         22,482
       Construction in progress                                     -            374,963               -              -        374,963
                                                               ----------   -------------    ------------    -----------   -----------
  
                                                                    -         13,939,345       3,294,421              -     17,233,766
  
       Less accumulated depreciation and amortization               -          4,254,953          99,063              -      4,354,016
                                                               ----------   -------------    ------------    -----------   -----------
  
  Net property and equipment                                        -          9,684,392       3,195,358              -     12,879,750
  
  OTHER ASSETS
       Deferred loan fees, net                                      -            348,593          50,275              -        398,868
       Goodwill, net                                                -            561,963               -              -        561,963
                                                               ----------   -------------    ------------    -----------   -----------
  
                 Total other assets                                 -            910,556          50,275              -        960,831
                                                               ----------   -------------    ------------    -----------   -----------
  
  TOTAL ASSETS                                               $      -      $  11,016,491    $  3,815,919   $          -    $14,832,410
                                                               ==========   =============    ============    ===========   ===========
  See accompanying notes to unaudited pro forma consolidated financial statements.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
            Pro Forma Consolidated Balance Sheet - Continued (unaudited)
                                    June 30, 1996
  Historical - Note 1                 Note 2
                                                               ------------------------------------------     Pro Forma     Pro Forma
                                                                 Sonoma          JRML            KWCHI       Adjustments     Balance
                                                               ----------   ------------   -------------    ------------   -----------
  CURRENT LIABILITIES
  Current portion of long-term debt                $         262,391  $  3,457,920   $     299,041   $          -    $ 4,019,352
       Accounts payable                                                 -       394,769          16,594              -        411,363
       Accrued interest                                           252,435       469,681         135,728       (417,291)       440,553
       Accrued liabilities                                            275       204,254          24,568        100,000        329,097
       Security deposits                                                -       251,334          17,600              -        268,934
       Deferred revenue                                                 -       599,879          30,526              -        630,405
       Accrued management fees - related party                          -       652,679               -       (652,679)             -
       Accrued guarantee fees - related party                           -        70,000               -        (70,000)             -
                                                          ---------------   ------------   -------------    -----------     ----------
  
                 Total current liabilities                        515,101     6,100,516         524,057     (1,039,970)     6,099,704
  
  LONG-TERM DEBT                                                        -     6,964,623       3,581,648              -     10,546,271
  
  OWNERS' DEFICIT
       Partners' deficit                                                -    (2,048,648)              -      2,048,648              -
       Stockholders' deficit
           Common stock, $10 par value, authorized, issued
              and outstanding shares, 100                               -             -           1,000         (1,000)             -
           Common stock, $0.001 par value, authorized, issued
              and outstanding shares, 2,300,000                    60,000             -               -        (57,700)         2,300
           Additional paid-in capital                           4,274,616             -                     (3,551,047)       723,569
           Accumulated deficit                                 (4,849,717)            -        (290,786)     2,601,069     (2,539,434)
                                                             ------------   ------------    ------------    ----------     -----------
  
                 Total owners' deficit                           (515,101)   (2,048,648)       (289,786)     1,039,970     (1,813,565)
                                                             ------------   ------------    ------------    ----------     -----------
  
  TOTAL LIABILITIES AND OWNERS' DEFICIT                     $           -  $ 11,016,491   $   3,815,919   $          -    $ 14,832,410
                                                             ============   ============    ============    ==========     ===========
  See accompanying notes to unaudited pro forma consolidated financial statements.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
             Pro Forma Consolidated Statement of Operations (unaudited)
                              Year ended June 30, 1996
  Historical - Note 1             Note 2
                                                               --------------------------------------    Pro Forma     Pro Forma
                                                                 Sonoma          JRML       KWCHI       Adjustments     Balance
                                                               ----------     ---------   -----------   -----------   -----------
  REVENUES
  Annual slip fees                                       $         -  $  1,197,062   $   241,650   $        -    $ 1,438,712
       Boat rental                                                      -       743,442             -            -        743,442
       Lease                                                            -             -       (24,591)           -        (24,591)
       Lodge                                                            -       687,539             -            -        687,539
       Fuel                                                             -       545,320       825,544            -      1,370,864
       Convenience store and merchandise                                -       366,458             -            -        366,458
       Restaurant                                                       -       369,530             -            -        369,530
       Other                                                            -       113,175        19,368            -        132,543
                                                               ----------   -----------    ----------    ----------     ---------
  
              Total revenues                                            -     4,022,526     1,061,971            -      5,084,497
  
  COST OF REVENUES
       Annual slip                                                      -       136,821         3,267            -        140,088
       Boat rental                                                      -       387,696             -            -        387,696
       Lodge                                                            -       229,667             -            -        229,667
       Fuel                                                             -       351,552       649,490            -      1,001,042
       Convenience store and merchandise                                -       285,137             -            -        285,137
       Restaurant                                                       -       316,826             -            -        316,826
       Other                                                            -       103,498             -            -        103,498
                                                               ----------   -----------    ----------    ----------     ---------
  
              Total cost of revenues                                    -     1,811,197       652,757            -      2,463,954
                                                               ----------   -----------    ----------    ----------     ---------
  
  GROSS PROFIT                                                          -     2,211,329       409,214            -      2,620,543
  
  SELLING, GENERAL AND ADMINISTRATIVE                               9,147     1,295,462       186,418      100,000      1,591,027
  
  GAIN ON REDUCTION OF OBLIGATIONS                                 28,363             -                          -         28,363
  AMORTIZATION OF GOODWILL                                              -       (68,834)       (3,382)           -        (72,216)
  DEPRECIATION AND AMORTIZATION                                         -      (491,229)      (72,531)           -       (563,760)
                                                               ----------   -----------    ----------    ----------     ---------
  
  INCOME (LOSS) FROM OPERATIONS                                    19,216       355,804       146,883     (100,000)       421,903
  
  INTEREST EXPENSE                                                 11,284       914,562       229,637            -      1,155,483
                                                               ----------   -----------    ----------    ----------     ---------
  
  NET INCOME (LOSS)                                           $     7,932  $   (558,758)  $   (82,754)  $ (100,000)   $  (733,580)
                                                               ==========   ===========    ==========    ==========     =========
  
  Net income (loss) per common share                          $      0.00                 $      (828)                $     (0.32)
                                                               ==========                  ==========                   =========
  
  Weighted average shares outstanding                          47,774,591                         100                   2,300,000
                                                               ==========                  ==========                   =========
  See accompanying notes to unaudited pro forma consolidated financial statements.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
             Pro Forma Consolidated Statement of Operations (unaudited)
                              Year ended June 30, 1995
  Historical - Note 1                 Note 3
                                                               ------------------------------------------    Pro Forma     Pro Forma
                                                                 Sonoma          JRML           KWCHI       Adjustments     Balance
                                                               ----------    ------------   -------------   -----------   -----------
  REVENUES
  Annual slip fees                                      $         -    $   1,091,420   $    119,095   $          -  $  1,210,515
       Boat rental                                                     -          758,764              -              -       758,764
       Lodge                                                           -          694,079              -              -       694,079
       Fuel                                                            -          494,998        244,961              -       739,959
       Convenience store and merchandise                               -          352,601              -              -       352,601
       Restaurant                                                      -          368,594              -              -       368,594
       Lease revenue                                                   -                -        101,110              -       101,110
       Other                                                           -           94,093             67              -        94,160
                                                               ----------    ------------   ------------    -----------     ---------
                                                                                        -
              Total revenues                                           -        3,854,549        465,233              -     4,319,782
  
  COST OF REVENUES
       Annual slip                                                     -          162,466         16,111              -       178,577
       Boat rental                                                     -          349,613              -              -       349,613
       Lodge                                                           -          234,583              -              -       234,583
       Fuel                                                            -          325,714        190,951              -       516,665
       Convenience store and merchandise                               -          276,268              -              -       276,268
       Restaurant                                                      -          314,009              -              -       314,009
       Other                                                           -           86,183              -              -        86,183
                                                               ----------    ------------   ------------    -----------     ---------
  
              Total cost of revenues                                   -        1,748,836        207,062              -     1,955,898
                                                               ----------    ------------   ------------    -----------     ---------
  
  GROSS PROFIT                                                         -        2,105,713        258,171              -     2,363,884
  
  SELLING, GENERAL AND ADMINISTRATIVE                             75,800        1,201,898         68,628        100,000     1,446,326
  AMORTIZATION OF GOODWILL                                             -           18,426                             -        18,426
  DEPRECIATION AND AMORTIZATION                                        -          604,854         39,673              -       644,527
                                                               ----------    ------------   ------------    -----------     ---------
  
  INCOME (LOSS) FROM OPERATIONS                                  (75,800)         280,535        149,870       (100,000)      254,605
  
  INTEREST EXPENSE                                                34,240          761,645        221,031              -     1,016,916
                                                               ----------    ------------   ------------    -----------     ---------
  
  NET INCOME (LOSS)                                          $  (110,040)   $    (481,110)  $    (71,161)  $   (100,000)   $ (762,311)
                                                               ==========    ============   ============    ===========     =========
  
  Net Income (loss) per common share                         $      0.00                    $       (712)                  $    (0.33)
                                                               ==========                   ============                    =========
  
  Weighted average shares outstanding                         25,579,850                             100                    2,300,000
                                                               ==========                   ============                    =========
  See accompanying notes to unaudited pro forma consolidated financial statements.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
          Notes to Pro Forma Consolidated Financial Statements (unaudited)
  
  NOTE 1 - HISTORICAL FINANCIAL STATEMENTS
  
  Reflects the historical balance sheet and statements of operations of Somona,
  JRML and KWCHI.
  
  NOTE 2 - PRO FORMA ADJUSTMENTS FOR JUNE 30, 1996 (See Pro Forma Adjustment
  Summary further)
  
  (a) The Agreement to acquire JRML and KWCHI requires that Sonoma effect a one
  for two hundred reverse split, leaving 300,000 shares issued and outstanding,
  and issue 2,000,000 shares (with a par value of $0.001 after the reverse split)
  for the acquisition of the JRML and KWCHI. The partners of JRML will receive
  1,500,000 shares. The shareholders of KWCHI will receive 300,000 shares. Clear
  Creek Investments, LLC which owns all of the outstanding shares of Jamestown
  Resort and Marina, Inc., the general partner for JRML will receive an additional
  200,000 shares. The following shares were issued to purchase all ownership
  interests in JRML and KWCHI.
  
           (1)      Reflects the issuance of 907,296 shares to acquire the JRML
                    partners interest.
  
           (2)      Reflects the issuance of 300,000 shares to acquire KWCHI.
  
           (3)      Reflects the issuance of 200,000 shares to Clear Creek
                    Investments, LLC which owns all of the outstanding shares of
                    Jamestown Resort and Marina, Inc., the general partner for
                    JRML, for origination services.
  
           (4)      Reflects the effect of a 1 for 200 reverse split.
  
  (b)      Reflects the issuance of 111,289 shares to a related party to relieve
           $417,291 in interest payable.
  
  (c)      Reflects the issuance of 18,683 shares to a related party to relieve
           $70,000 in guarantee fees payable.
  
  (d)      Reflects the issuance of 174,200 shares to a related party to relieve
           $652,679 in management fees payable.
  
  (e)      Reflects the issuance of 261,563 shares to a related party for
           commission and incentive fees in connection with the sale of JRML.
  
  (f)      Reflects the issuance of 26,969 shares to an incentive stock plan for
           JRML employees and creditors.
  
  (g)      Reflects the increase in professional fees to meet the filing and
           related requirements of an active public company.
  
  (h)      Reflects the elimination of the accumulated deficit in the public
           company resulting from the reverse acquisition.
  
  NOTE 3 - PRO FORMA ADJUSTMENTS FOR JUNE 30, 1995
  
  (a)      Reflects the increase in professional fees to meet the filing and
           related requirements of an active public company.
  
  (b)      Reflects the issuance of 26,690 shares to an incentive stock plan for
           JRML employees and creditors.
  SONOMA INTERNATIONAL
                               (A Nevada Corporation)
          Notes to Pro Forma Consolidated Financial Statements (unaudited)
  
  NOTE 4 - EXTRAORDINARY ITEMS NOT INCLUDED IN THE UNAUDITED PRO FORMA FINANCIAL
           STATEMENTS
  
  During fiscal year 1996, Sonoma generated an extraordinary gain from conversion
  of debt to equity of $418,699. JRML also had an extraordinary gain on debt
  extinguishment of $2,518,487 during this period. These items are not reflected
  in the accompanying pro forma consolidated financial statements.
  
  NOTE 5 - INCOME TAXES
  
  On a consolidated basis, Sonoma, the KWCHI (S-Corporation), and JRML (the
  Partnership) incurred losses for 1996 and 1995, and the more likely than not
  criterion as to whether income will be generated in the future has not been met.
  Therefore, a 100% valuation allowance has been recorded against the tax benefit
  generated from any proforma net operating losses. Accordingly, the accompanying
  pro forma statements of operations do not reflect any income tax expense
  (benefit).
  SONOMA INTERNATIONAL
                               (A NEVADA CORPORATION)
                            Pro Forma Adjustment Summary
  
                                    Balance Sheet
                                    June 30, 1996
  Accumulated
                                          Accrued      Accrued                 Common   Common     Additional           deficit
                  Accrued    Accrued     management   guarantee    Partners'   Stock    Stock       paid-in              and net
                  interest  liabilities     fees        fees       deficit    $10 par  $0.001 par   capital              loss
  Note 2(a)(1)    $          $          $             $          $2,048,648  $         $    907     $      (907)   $    (2,048,648)
  
  Note 2(a)(2)                                                                (1,000)       300             700
  
  Note 2(a)(3)                                                                              200            (200)
  
  Note 2(a)(4)                                                                          (59,700)         59,700
  
  Note 2(b)       (417,291)                                                                 111         417,180
  
  Note 2(c)                                            (70,000)                              19          69,981
  
  Note 2(d)                              (652,679)                                          174         652,505
  
  Note 2(e)                                                                                 262            (262)
  
  Note 2(f), 3(b)                                                                            27          99,973           (100,000)
  
  Note 2(g), 3(a)             100,000                                                                                     (100,000)
  
  Note 2(h)                                                                                          (4,849,717)         4,849,717
  
                  $(417,291) $100,000   $(652,679)    $(70,000)  $2,048,648  $(1,000)  $(57,700)    $(3,551,047)   $     2,601,069
  Statement of Operations          Statement of Operations
     Year ended June 30, 1996         Year ended June 30, 1995
  
         Selling General                   Selling General
              and                                and
         Administrative                      Administrative
  
  Note 2(g) $50,000                      Note 3(a) $ 50,000
  
  Note 2(f)  50,000                      Note 3(b)   50,000
  
           $100,000                         $       100,000
  SIGNATURES
  
           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 thereunto duly authorized.
  
                                                       Sonoma International
  
  November 11, 1996
  Date                                                 Harry W. Hendersen, 
                                                       President and Chief 
                                                       Accounting Officer