UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-QSB



[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF
THE SECURITIES EXCHANGE ACT OF 1934



For
the quarterly period ended March 31, 2005



[
] TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934



Commission
file number 000-25415



Twin
Faces East Entertainment Corporation

(Exact
name of small business issuer as specified in its charter)



|Nevada                                                               | 94-3326901                                
|-------------------------------------------------------------------- | ------------------------------------------
|(State
      or other jurisdiction of incorporation or organization) | (I.R.S.
      Employer Identification No.)



2857
Hartwick Pines Dr.

Henderson,
Nevada 89052

(Address
of principal executive offices)



(702)
617-8832

(Issuer's
telephone number)



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



Yes X   No ____



The
number of shares of Common Stock, $0.001 par value, outstanding on March 31,
2005, was 11,702,348 shares.



Transitional
Small Business Disclosure Format (check one):



Yes
____   No X



---



PART
1 - FINANCIAL INFORMATION



Item 1.
Financial Statements.



Twin
Faces East Entertainment Corporation

(a
Development Stage Company)

Balance
Sheet





|                                                                                                                  | March
      31, 2005
      (Unaudited)
|----------------------------------------------------------------------------------------------------------------- | --------------------------------------
|Assets                                                                                                            |                                       
|                                                                                                                  |                                       
|Current
      assets:                                                                                             |                                       
|Cash and equivalents                                                                                              | $                           
      17 
|Total current assets                                                                                              | 17                                    
|                                                                                                                  |                                       
|                                                                                                                  | $                           
      17 
|                                                                                                                  |                                       
|Liabilities
      and Stockholders' Equity                                                                        |                                       
|                                                                                                                  |                                       
|Current
      liabilities:                                                                                        |                                       
|Accrued salaries and benefits                                                                                     | $               
      1,286,665      
|Other accrued expenses                                                                                            | 1,726,858                             
|Short-term note payable                                                                                           | 66,356                                
|Stockholders' advances                                                                                            | 392,393                               
|Total current liabilities                                                                                         | 3,472,272                             
|                                                                                                                  |                                       
|Long-term debt                                                                                                    | 485,900                               
|                                                                                                                  |                                       
|                                                                                                                  | 3,958,172                             
|                                                                                                                  |                                       
|Stockholders'
      (deficit):                                                                                    |                                       
|Preferred stock, $0.001 par value, authorized 5,000,000 shares, no shares
      issued and outstanding            | -                                     
|                                                                                                                  |                                       
|Common stock, $0.001 par value, authorized 20,000,000 shares; 11,702,348
      issued and outstanding at 03/31/05 | 11,702                                
|                                                                                                                  |                                       
|Additional paid-in capital                                                                                        | 1,737,843                             
|(Deficit) accumulated during development stage                                                                    | (5,707,700)                           
|                                                                                                                  | (3,958,155)                           
|                                                                                                                  |                                       
|                                                                                                                  | $                           
      17 



The
accompanying notes are an integral part of these financial statements.



2

---





Twin
Faces East Entertainment Corporation

(a
Development Stage Company)

Statements
of Operations

for
the three months ended March 31, 2005 and 2004

and
for the period December 5, 1997 (inception) to March 31, 2005



|                                                     | For
      the three months ended
      March
      31, | December
      5, 1997 (inception) to March 31,
|---------------------------------------------------- | ------------------------------------------------------ | -----------------------------------------------
|                                                     | 2005                                                   | 2004                                           
|Pre-Operating
      Revenue                          |                                                        |                                                
|Sales
      and interest income                      | $                      
      -                        | $                      
      -                
|                                                     |                                                        |                                                
|Pre-Operating
      Expenses:                        |                                                        |                                                
|Professional services                                | 19,043                                                 | 18,000                                         
|Salaries and benefits                                | 25,000                                                 | 133,750                                        
|Travel                                               | 11,431                                                 | 5,928                                          
|Automobile                                           | 9,443                                                  | 23,858                                         
|Transportation                                       | -                                                      | -                                              
|Miscellaneous                                        | 30                                                     | 154                                            
|Insurance                                            | 15,406                                                 | 12,331                                         
|Telephone                                            | 2,403                                                  | 3,120                                          
|Office and postage                                   | 11,684                                                 | 6,956                                          
|Entertainment and meals                              | -                                                      | -                                              
|Pre-production costs                                 | -                                                      | -                                              
|Advertising                                          | -                                                      | -                                              
|Depreciation and amortization                        | -                                                      | -                                              
|                                                     | 94,440                                                 | 204,097                                        
|                                                     |                                                        |                                                
|Net
      pre-operating (loss)                       | (94,440)                                               | (204,097)                                      
|                                                     |                                                        |                                                
|Other
      income (expenses):                       |                                                        |                                                
|Gain on forgiveness of debt                          | -                                                      | -                                              
|Loss on investment                                   | -                                                      | -                                              
|Interest                                             | (13,094)                                               | (17,314)                                       
|Total
      other income (expense)                   | (13,094)                                               | (17,314)                                       
|                                                     |                                                        |                                                
|Net
      (loss) before discontinued operations      | (107,534)                                              | (221,411)                                      
|                                                     |                                                        |                                                
|(Loss)
      from discontinued operations            | -                                                      | -                                              
|                                                     |                                                        |                                                
|Net
      (loss)                                     | $        
      (107,534)                              | $        
      (221,411)                      
|                                                     |                                                        |                                                
|Weighted
      average number of                     |                                                        |                                                
|common shares outstanding - basic and fully diluted  | 10,423,126                                             | 9,717,348                                      
|                                                     |                                                        |                                                
|Net
      (loss) per share - basic and fully diluted | $               
      (0.01)                          | $               
      (0.02)                  



The
accompanying notes are an integral part of these financial statements.



3

---



Twin
Faces East Entertainment Corporation

(a
Development Stage Company)

Statement
of Cash Flows

for
the three months ended March 31, 2005 and 2004

and
for the period December 5, 1997 (inception) to March 31, 2005



|                                                                     | For
      the three months ended
      March
      31, | December
      5, 1997 (inception) to March 31,
|-------------------------------------------------------------------- | ------------------------------------------------------ | -----------------------------------------------
|                                                                     | 2005                                                   | 2004                                           
|Cash
      flows from operating activities                           |                                                        |                                                
|Net
      (loss)                                                     | $              
      (107,534)                        | $              
      (221,411)                
|Loss on investment                                                   | -                                                      | -                                              
|Adjustment
      to reconcile net (loss) to net cash                 |                                                        |                                                
|(used) by operating activities:                                      |                                                        |                                                
|Depreciation and amortization expense                                | -                                                      | -                                              
|Prior period adjustment                                              | -                                                      | -                                              
|Shares issued for consulting services                                | 18,500                                                 | -                                              
|Shares issued for commission expenses - related party                | -                                                      | -                                              
|Shares issued for employment enticement                              | -                                                      | -                                              
|Shares issued for debt enticement                                    | -                                                      | -                                              
|Shares issued for salaries- related party                            | 375,000                                                | -                                              
|Shares issued for accrued expenses                                   | 75,000                                                 | -                                              
|Changes
      in operating assets and liabilities:                   |                                                        |                                                
|Increase (decrease) in accrued salaries and benefits                 | (347,300)                                              | 141,850                                        
|Increase (decrease) in other accrued expenses                        | (13,656)                                               | 79,551                                         
|Net
      cash (used) by operating activities                        | 10                                                     | (10)                                           
|                                                                     |                                                        |                                                
|Cash
      flows from investing activities                           |                                                        |                                                
|Purchase of equipment                                                | -                                                      | -                                              
|Investment in Magellan International, Inc.                           | -                                                      | -                                              
|Net
      cash (used) by investing activities                        | -                                                      | -                                              
|                                                                     |                                                        |                                                
|Cash
      flows from financing activities                           |                                                        |                                                
|Short-term note payable                                              | -                                                      | -                                              
|Stockholders' advances                                               | -                                                      | -                                              
|Proceeds from long-term debt                                         | -                                                      | -                                              
|Issuance of common stock                                             | -                                                      | -                                              
|Net
      cash provided by investing activities                      | -                                                      | -                                              
|                                                                     |                                                        |                                                
|Net
      increase (decrease) in cash                                | 10                                                     | (10)                                           
|Cash
      and equivalents - beginning                               | 7                                                      | 5                                              
|Cash
      and equivalents - ending                                  | $                         
      17                    | $                         
      (5)           
|                                                                     |                                                        |                                                
|Supplemental
      disclosures:                                      |                                                        |                                                
|Interest paid                                                        | $                            
      -                  | $                            
      -          
|Income taxes paid                                                    | $                            
      -                  | $                            
      -          
|                                                                     |                                                        |                                                
|Non-cash
      transactions:                                         |                                                        |                                                
|Shares issued for consulting services                                | $                            
      -                  | $                            
      -          
|Number of shares issued for consulting services                      | .                                                      | .                                              
|Shares issued for salaries - related party                           | $                            
      -                  | $                            
      -          
|Number of shares issued for salaries - related party                 | .                                                      | .                                              
|Shares issued to invest in Pangaea Education Systems, Inc.           | $                            
      -                  | $                            
      -          
|Number of shares issued to invest in Pangaea Education Systems, Inc. | .                                                      | .                                              
|Shares issued for employment enticement                              | $                            
      -                  | $                            
      -          
|Number of shares issued for employment enticement                    | .                                                      | .                                              
|Shares issued for debt enticement                                    | $                            
      -                  | $                            
      -          
|Number of shares issued for debt enticement                          | .                                                      | .                                              
|Shares issued for contractual payment to acquire Magellan            | $                            
      -                  | $                            
      -          
|Number of shares issued for contractual payment to acquire Magellan  | .                                                      | .                                              
|Shares issued for commission expense                                 | $                            
      -                  | $                            
      -          
|Number of shares issued for commission expense                       | .                                                      | .                                              



The
accompanying notes are an integral part of these financial statements.



4

---



Twin
Faces East Entertainment Corporation

(a
Development Stage Company)

Notes
to Unaudited Financial Statements



Note
1 - Basis of presentation



The
condensed interim financial statements included herein, presented in accordance
with United States generally accepted accounting principles and stated in US
dollars, have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading.



These
statements reflect all adjustments, consisting of normal recurring adjustments,
which in the opinion of management are necessary for fair presentation of the
information contained therein. It is suggested that these condensed interim
financial statements be read in conjunction with the financial statements of the
Company for the year ended December 31, 2004 and notes thereto included in the
Company's 10-KSB annual report. The Company follows the same accounting policies
in the preparation of interim reports.



Results
of operation for the interim period are not indicative of annual results.



Note
2 - Going concern



The
Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has not commenced its planned principal
operations. Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern.



The
Company has been in the development stage since its inception. As noted above,
the Company is in the development stage and, accordingly, has not yet generated
revenues from operations. Since its inception, the Company has been engaged
substantially in financing activities and developing its product line, setting
up its e-commerce website, and incurring substantial costs and expenses. As a
result, the Company incurred accumulated net losses from December 5, 1997
(inception) through the period ended March 31, 2005 of ($5,707,700). Capital
advances from stockholders are the Company's only current source of funds. As
such, the Company's continued existence is dependent upon obtaining sufficient
investor interest and financing in order to commence development of its
entertainment industry business, and achieving future profitable operations. The
accompanying financial statements do not include any adjustments that might be
required should the Company be unable to recover the value of its assets or
satisfy its liabilities.



Note
3 - Accrued salaries and benefits



During
the three months ended March 31, 2005, the Company reduced $375,000 in accrued
salaries and benefits and issued a total of 1,500,000 shares of its $0.001 par
value common stock to officers of the Company. Also, the Company recorded
$25,000 in salaries and benefits expense for the three months ended March 31,
2005.



As
of March 31, 2005, the Company has accrued salaries and benefits totaling
$1,286,665 due to officers of the Company.



5

---



Twin
Faces East Entertainment Corporation

(a
Development Stage Company)

Notes
to Unaudited Financial Statements



Note
4 - Accrued expenses



During
the three months ended March 31, 2005, the Company reduced $75,000 in accrued
expenses and issued 300,000 shares of its $0.001 par value common stock to a
director of the Company.



As
of March 31, 2005, the Company has accrued expenses totaling $1,726,858.



Note
5 - Notes payable



On
October 21, 2001, the Company's Board of Directors accepted three separate loan
agreements at $110,000 each funded in October 2001, November 2001, and April
2002. Each loan bears interest at 20%, and is payable in either cash of $132,000
or $154,000 worth of the Company's $0.001 par value restricted common stock on
an annual basis. Additional consideration includes 333,333 shares per note of
the Company's $0.001 par value common stock bearing the Rule 144 restriction.



The
Company has recorded $13,094 in interest expense for the three months ended
March 31, 2005.



Note
6 - Stockholder advances



The
advances are non-interest bearing and are expected to be repaid with anticipated
new funds from further equity offerings.



Note
7 - Stockholders' (deficit)



The
Company is authorized to issue 20,000,000 shares of its $0.001 par value common
stock and 5,000,000 shares of its $0.001 par value preferred stock.



On
February 28, 2005, the Company authorized the issuance of 1,500,000 shares of
its $0.001 par value common stock to officers of the Company for reduction of
accrued salaries and benefits totaling $375,000.



On
February 28, 2005, the Company authorized the issuance of 300,000 shares of its
$0.001 par value common stock to a director of the Company for reduction of
accrued expenses totaling $75,000.



On
February 28, 2005, the Company authorized the issuance of 185,000 shares of its
$0.001 par value common stock to two individuals for consulting services valued
at $18,500.



Note
8 - Stock options



The
Company has reserved for issuance an aggregate of 500,000 shares of common stock
for issuance under its 1998 Stock Option Plan and Non-Employee Directors' Plan
(the "Directors' Plan"). On January 1, 2000, the Company's Board of
Directors adopted the 2000 Stock Option Plan which provides for issuance of an
additional 600,000 shares of common stock on similar terms to its 1998 Stock
Option Plan (collectively referred to as the "Stock Option Plans"), as
described below. Generally, all options terminate ninety days after a change in
control of the Company.



6

---



Twin
Faces East Entertainment Corporation

(a
Development Stage Company)

Notes
to Unaudited Financial Statements



Stock
Option Plans

The
Stock Option Plans provide for the issuance of both qualified (incentive) and
non-qualified stock options to employees, officers, directors, consultants and
independent contractors of the Company. Qualified stock options may be granted
at an exercise price equal to the fair market value per share of the Company's
common stock on the date of grant. Non-qualified stock options may be granted at
an exercise price not less than eighty-five percent of the fair market value per
share of the Company's common stock on the date of grant. Each option granted
will be exercisable for a term not more than ten years after the date of grant,
and may be fully vested at the date of grant.



Note
8 - Stock options (continued)



Directors'
Plan

Each
non-employee director will receive an option to purchase 50,000 shares of common
stock. The options of non-employee directors will be exercisable according to
the Stock Option Plans, except that options granted under the Directors' Plan
may not be exercised more than five years after the date of grant.





|                                                                               |  | Three
      months ended
      March
      31, 2005 |                                       | Three
      months ended
      March
      31, 2004
|------------------------------------------------------------------------------ |  | --------------------------------------------------- | ------------------------------------- | ---------------------------------------------------
|                                                                               |  | Shares                                              | Weighted
      Average Exercise Price |                                                    
|Outstanding
      at beginning of period                                       |  | 500,000                                             | $0.65                                 |                                                    
|Granted                                                                        |  | --                                                  | --                                    |                                                    
|Exercised                                                                      |  | --                                                  | --                                    |                                                    
|Lapsed
      or
      cancelled                                                |  | --                                                  | --                                    |                                                    
|Outstanding
      at end of period                                             |  | 500,000                                             | $0.65                                 |                                                    
|Options
      exercisable at end of period                                     |  | 500,000                                             |                                       |                                                    
|Options
      available for future grant                                       |  | 600,000                                             |                                       |                                                    
|Weighted
      average minimum fair value of options granted during the period |  | $0.517                                              |                                       |                                                    



7

---



Twin
Faces East Entertainment Corporation

(a
Development Stage Company)

Notes
to Unaudited Financial Statements



The
Company accounts for stock-based compensation using the intrinsic value method
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees", under which no compensation cost for stock
options is recognized for stock options awards granted at or above fair market
value. Had compensation expense for the Company's Stock Option Plan been
determined based upon fair values at the grant dates for awards under those
plans in accordance with Statement of Financial Accounting Standards No. 123
("SFAS 123") "Accounting for Stock-Based Compensation", the
Company's net loss available to common stockholders would have been increased to
the pro forma amounts indicated below. Additional stock option awards are
anticipated in future years.



|                                                             |  | Three
      months ended
      March
      31, 2005 |  | Three
      months ended
      March
      31, 2004
|------------------------------------------------------------ |  | --------------------------------------------------- |  | ---------------------------------------------------
|Net
      loss available
      To
      common stockholders: |  |                                                     |  |                                                    
|As
      reported                                            |  | $(107,534)                                          |  | $(221,411)                                         
|Pro
      Forma                                              |  | $(107,534)                                          |  | $(221,411)                                         



Note
8 - Stock options (continued)



The
weighted average minimum fair value of options granted during the three years in
the period ended March 31, 2005, estimated on the date of grant were determined
using the Black-Scholes option-pricing model and the following assumptions:
dividend yield of 0%, expected volatility of 109%, risk-free interest rate range
of 5.81% to 6.09% depending on the grant date, and an expected life of five
years.



The
following table presents summarized information about stock options outstanding
as of March 31, 2005.



|                               |  | Options
      Outstanding           |                                                   | Options
      Exercisable            
|------------------------------ |  | ----------------------------------- | ------------------------------------------------- | -------------------------------------
|Range
      of Exercise Prices |  | Number
      Outstanding at 3/31/05 | Weighted
      Average Remaining Contractual Life | Weighted
      Average Exercise Price
|                               |  |                                     |                                                   |                                      
|$0.25                          |  | 300,000                             | 1.50
      years                                  | $0.25                                
|                               |  |                                     |                                                   |                                      
|$1.00                          |  | 200,000                             | 1.90
      years                                  | $1.25                                



8

---



Twin
Faces East Entertainment Corporation

(a
Development Stage Company)

Notes
to Unaudited Financial Statements



Note
9 - Commitments and contingencies



The
Company has entered into employment contracts with certain officers. The
contracts are for a period of five years each. In consideration, the officers
have agreed that they would not directly or indirectly compete against the
Company for a period of one year following termination of employment.



During
the three months ended March 31, 2005, the Company estimated federal and state
payroll taxes of $35,216 related to stock issuances to officers. The Company did
not record the accrual of payroll taxes.



On
September 30, 2004, the Company entered into a "Writer Development
Agreement" with an individual whereby the individual will perform writing
services specific to a single project in exchange for $2,500 upon receipt of
funding equal to or greater than $2,000,000 from the sale of the project and a
one-time stock issuance of 10,000 shares of the Company's $.001 par value common
stock. During the three months ended March 31, 2005, the Company issued the
10,000 shares.



On
October 15, 2004, the Company entered into a distribution agreement with Lights
Up Ministries, Inc. a Connecticut not for profit corporation to distribute its
"Sunday in Manhattan" musical. Per the agreement, the Company will pay
the producer 20% of collections after all distribution costs. The terms of the
agreement commence on the date of signing and shall continue in perpetuity.



On
November 10, 2004, the Company entered into a consulting agreement with an
individual to provide consulting services valued at $100,000, related to the
promotion and sale of productions produced by the Company. Per the Agreement,
the Company has also agreed to issue 175,000 shares of its $.001 par value
restricted stock no later than January 10, 2005 to the individual. The agreement
is valid from the date of signing until the termination date of May 31, 2005.
During the three months ended March 31, 2005, the Company issued the 175,000
shares.



Note
10 -Related party transactions



The
Company does not lease or rent any property. Physical facilities are provided at
minimal charge by a director. Such costs are immaterial to the financial
statements and, accordingly, have not been reflected therein. The officers and
directors of the Company are involved in other business activities and may, in
the future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The Company
has not formulated a policy for the resolution of such conflicts.



9

---



FORWARD-LOOKING
STATEMENTS



This
document contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements other than
statements of historical fact are "forward-looking statements" for
purposes of federal and state securities laws, including, but not limited to,
any projections of earnings, revenue or other financial items; any statements of
the plans, strategies and objections of management for future operations; any
statements concerning proposed new services or developments; any statements
regarding future economic conditions or performance; any statements or belief;
and any statements of assumptions underlying any of the foregoing.



Forward-looking
statements may include the words "may," "could,"
"estimate," "intend," "continue,"
"believe," "expect" or "anticipate" or other
similar words. These forward-looking statements present our estimates and
assumptions only as of the date of this report. Except for our ongoing
securities laws, we do not intend, and undertake no obligation, to update any
forward-looking statement.



Although
we believe that the expectations reflected in any of our forward-looking
statements are reasonable, actual results could differ materially from those
projected or assumed in any of our forward-looking statements. Our future
financial condition and results of operations, as well as any forward-looking
statements, are subject to change and inherent risks and uncertainties. The
factors impacting these risks and uncertainties include, but are not limited to:

- our
    current lack of working capital;
- increased
    competitive pressures from existing competitors and new entrants;
- increases
    in interest rates or our cost of borrowing or a default under any material
    debt agreements;
- deterioration
    in general or regional economic conditions;
- adverse
    state or federal legislation or regulation that increases the costs of
    compliance, or adverse findings by a regulator with respect to existing
    operations;
- loss
    of customers or sales weakness;
- inability
    to achieve future sales levels or other operating results;
- the
    unavailability of funds for capital expenditures; and
- operational
    inefficiencies in distribution or other systems.

For
a detailed description of these and other factors that could cause actual
results to differ materially from those expressed in any forward-looking
statement, please see "Factors That May Affect Our Plan of Operation"
in this document.



Item
2. Plan of Operation



Overview



Twin
Faces was incorporated on December 5, 1997 under the laws of the State of
Delaware and reincorporated under the laws of the State of Nevada on June 17,
1998. We are in the development stage as an entertainment and film production
company.



We
have yet to generate revenues from operating activities and there is a
substantial going concern issue as to whether we will ever be able to produce
and market our films and generate sufficient, if any, revenues to satisfy our
working capital requirements. Since inception we have been dependent on the sale
of our equity securities and loans from affiliates to satisfy our working
capital requirements. We continue to have a working capital deficiency that
raises substantial concern regarding our ability to continue as a going concern.



10

---



Plan
of Operation



During
the next twelve months we plan to focus our efforts on our development and
production of our four primary properties, including, "Pages From A Rabbit
Journal", "The Town That Arrested Santa Claus", the
"Einstein" property, and "A Real Man".



We
have finished "The Town That Arrested Santa Claus", a fully
illustrated children's story book narrative in animation, with the assistance of
Pro Image, Inc. ("PI"), a New York corporation. We are working to have
this fully illustrated children's story in distribution for Christmas 2005.
Additionally, we are currently working on our Einstein documentary with several
distributors and hope to have a release in 2005.



Satisfaction
of our cash obligations for the next 12 months. Our plan of operation
has been stalled by our lack of cash. Under our current plan of operation we
will be required to generate at least $800,000 (minimal cash requirement) to
continue in operation for the next 12 months. We have entered into an investment
agreement and promissory note with Johnnie King, Director of Film Development of
the Company, for the investment of $8,000,000 in combination of preferred stock
and debt. We are anticipating receipt of the funds by July 2005. If and when we
receive the funds we will file a Form 8-K. We have also entered into an
investment agreement with Michael Smolanoff, President of the Company, wherein
he agreed to make a $4,000,000 equity investment in the Company upon settlement
of a lawsuit in his favor.



Going
Concern



The
consolidated financial statements included in this filing have been prepared in
conformity with generally accepted accounting principles that contemplate the
continuance of the Company as a going concern. The Company's cash position may
be inadequate to pay all of the costs associated with production and marketing.
Management intends to use borrowings and security sales to mitigate the effects
of its cash position, however no assurance can be given that debt or equity
financing, if and when required will be available. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets and classification of liabilities that might be necessary should
the Company be unable to continue existence.



Summary
of any product research and development that we will perform for the term of our
plan of operation. We do not anticipate performing any significant
product research and development under our plan of operation.



Expected
purchase or sale of plant and significant equipment. We do not
anticipate the purchase or sale of any plant or significant equipment, as such
items are not required by us at this time or in the next 12 months.



Significant
changes in the number of employees. In addition to our officers and
directors we have 2 employees and have a consulting agreement with one
individual. We are dependent upon Michael Smolanoff, President of the Company,
Stan Teeple, VP and Secretary/Treasurer, Bruce Taffet, Director, and Johnny
King, Director of Film Development. None of the employees work full time but
devote whatever time is necessary for them to assist in the operations of the
Company. Therefore, we will need to hire full time operational staff as our
operations commence.In the event we are
successful in obtaining additional debt or equity, which will provide us with
the cash to develop an entertainment product, then in that event we will be
required to hire at least 2 additional full time staff members. The consultant
who has worldwide connections and networking contacts in development and project
distribution in the family entertainment business provides us consulting
services for the development and distribution of our intellectual properties in
particular for our projects "The Town That Arrested Santa", and
"Einstein, the Real Man".



11

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Off-Balance
Sheet Arrangements



We
do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.



Liquidity
and Capital Resources



Investment
Agreement and Promissory Note



On
June 20, 2003, we entered into an Investment Agreement with Johnnie King, our
Director of Film Development. On September 29, 2003, we executed a new
Investment Agreement with Mr. King to extend the funding dates that we
previously agreed on in the June 20th agreement. On November 16, 2004, we
amended that agreement to extend the funding dates until September 29, 2005.
Pursuant to the terms of the agreement, Mr. King will make a direct $4,000,000
cash investment as purchase of series C preferred stock. Within 30 days of
funding we will issue 1,000,000 shares of our series C preferred stock to Mr.
King. The stock will carry conversion rights to common on an annual basis the
first week of the funding month each year commencing the month of funding, for a
period of 4 years according to the formula below.



The
preferred stock shall be converted to common stock in the Company on the
following dates:



> One
>     year from funding date, conversion of 250,000 shares preferred stock to
>     common stock,
>     Two
>     years from funding date, conversion of 250,000 shares preferred stock to
>     common stock,
>     Three
>     years from funding date, conversion of 250,000 shares preferred stock to
>     common stock,
>     Four
>     years from funding date, conversion of 250,000 shares preferred stock to
>     common stock.

We
will issue a 5% cash dividend on the principle amount of the unconverted
preferred stock, payable in common stock as follows:



> One
>     year from funding date, $200,000 of common stock,
>     Two
>     years from funding date, $120,000 of common stock,
>     Three
>     years from funding date, $100,000 of common stock,
>     Four
>     years from funding date, $50,000 of common stock.

At
our option the preferred stock shall be converted according to either of the
following:



Option
1- Average prior 30 days closing price on current quoted exchange or
quotation service so the market value of the common stock issued is one million
five hundred thousand dollars ($1,500,000). For example, if the funding date is
March 31, 2005, and if the 30-day average quoted closing price is $1 per share
on March 31, 2006, Mr. King will receive 1,500,000 shares of common stock for
his 250,000 shares of preferred stock for a valuation conversion of 6 common
shares for each preferred share.



Option
2- The stock may be converted at a conversion ratio of 2 common shares for
each preferred share. For example, if the funding date is March 31, 2005, on
March 31, 2006 we may convert the 250,000 shares of preferred stock to 500,000
shares of common stock in the Company.



12

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On
June 20, 2003, we executed a Promissory Note with Johnnie King, our Director of
Film Development for the principal amount of $4,000,000. On September 29, 2003,
we executed a new Promissory Note to extend the funding dates under the note. On
November 16, 2004, we amended that agreement to extend the funding date until
September 29, 2005 and the due date is on or before five years from the funding
date. Pursuant to the note we promise to pay to the order of Johnnie King the
sum of $4,000,000 together with interest thereon at 10% per annum as prescribed
below. The sum and interest shall be paid in the following manner:



Interest
due one year from funding date-

Payable
    as $400,000 worth of 144 restricted stock or $400,000 cash

Interest
due two years from funding date-

Payable
    as $400,000 worth of 144 restricted stock or $400,000 cash

Interest
due three years from funding date-

Payable
    as $400,000 worth of 144 restricted stock or $400,000 cash

Interest
due four years from funding date-

Payable
    as $400,000 worth of 144 restricted stock or $400,000 cash



At
the principal due date of the note, we agree to pay to Mr. King, at our option
either $4,400,000 cash or $4,800,000 worth of 144 restricted stock.



We
may prepay the promissory note at any time, without penalty, by delivery of the
principal amount in cash and appropriate pro-rata interest as prescribed above.



As
    of the date of this filing we have not yet received any funds from Mr. King.
    Upon receipt of funds we will file a Form 8-K.



Investment
    Agreement/Preferred Stock Purchase



On
    November 11, 2003, we executed an Investment Agreement/Preferred Stock
    Purchase with Michael Smolanoff, Ph.D., our President, wherein he agreed to
    make a direct cash investment into the Company as a result of proceeds from
    his pending Bronx County New York legal action ("lawsuit"). The
    first funding date of the investment will be no later than 30 days after the
    first receipt of funds from the lawsuit and the final funding date shall be
    no later than 30 days after the final payment from the lawsuit. The amount
    of the investment is the lesser of four million dollars ($4,000,000) or
    fifty percent (50%) of the total amount received from the lawsuit. Within 30
    days of the first funding date, we will issue one million (1,000,000) shares
    of our series C preferred Stock to Dr. Smolanoff. The stock will carry
    conversion rights to common on an annual basis the first week of the funding
    month each year commencing the month of funding, for a period of 4 years.



The
    preferred stock shall be converted to common stock in the Company on the
    following dates:



One
    year from first funding date, conversion of 250,000 shares preferred stock
    to common stock,

Two
    years from first funding date, conversion of 250,000 shares preferred stock
    to common stock,

Three
    years from final funding date, conversion of 250,000 shares preferred stock
    to common stock,

Four
    years from final funding date, conversion of 250,000 shares preferred stock
    to common stock.



At
    our option the stock shall be converted according to either of the
    following:



13

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Option
    1- Average prior 30 days closing price on current quoted exchange so
    that market value of the common issued is one million five hundred thousand
    dollars. For example, if funding date is March 31, 2005, and if the 30-day
    average quoted closing price is $1 per share on March 31, 2006, Dr.
    Smolanoff would receive 1,500,000 shares of common stock for his 250,000
    shares of preferred stock for a valuation conversion of 6 common shares for
    each preferred share.



Option
    2- The stock may be converted at a conversion ratio of 2 common shares
    for each preferred share. For example, if funding date is March 31, 2005, on
    March 31, 2006 we may convert the 250,000 shares of preferred stock to
    500,000 shares of common stock.



We
    also agreed to issue a 5% cash dividend on the principle amount of the
    unconverted preferred stock, payable in common stock as follows:



One
    year from first funding date, cash dividend in common stock,

Two
    years from first funding dated, cash dividend in common stock,

Three
    years from final funding date, cash dividend in common stock,

Four
    years from final funding date, cash dividend in common stock.



As
    of the date of this filing we have not yet received any funds from Dr.
    Smolanoff. Upon receipt of funds we will file a Form 8-K.



A
    critical component of our operating plan impacting our continued existence
    is the ability to obtain additional capital through additional equity and/or
    debt financing. We do not anticipate enough positive internal operating cash
    flow until such time as we can generate substantial revenues from fees
    earned as a result of our documentary films of Dr. Albert Einstein and
    feature film and television scripts, which may take the next few years to
    fully realize. In the event we cannot obtain the necessary capital to pursue
    our strategic plan, we may have to cease or significantly curtail our
    operations. This would materially impact our ability to continue operations.



Our
near term cash requirements are anticipated to be offset through the receipt of
funds from private placement offerings and loans obtained through private
sources and persons affiliated with the Company. Since inception, we have
financed cash flow requirements through debt financing and issuance of common
stock for cash and services. As we expand operational activities, we may
continue to experience net negative cash flows from operations, pending receipt
of servicing or licensing fees, and will be required to obtain additional
financing to fund operations through common stock offerings and bank borrowings
to the extent necessary to provide working capital.



Over
the next twelve months we believe that existing capital and anticipated funds
from operations will not be sufficient to sustain operations and planned
expansion. Consequently, we will be required to seek additional capital in the
future to fund growth and expansion through additional equity or debt financing
or credit facilities. No assurance can be made that such financing would be
available, and if available it may take either the form of debt or equity. In
either case, the financing could have a negative impact on our financial
condition and our stockholders.



We
anticipate incurring operating losses over the next twelve months. Our lack of
operating history makes predictions of future operating results difficult to
ascertain. Our prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in their early stage of
development. Such risks include, but are not limited to, an evolving and
unpredictable business model and the management of growth. To address these
risks we must, among other things, obtain a customer base, implement and
successfully execute our business and marketing strategy, continue to develop
and produce projects, respond to competitive developments, and attract, retain
and motivate qualified personnel. There can be no assurance that we will be
successful in addressing such risks, and the failure to do so can have a
material adverse effect on our business prospects, financial condition and
results of operations.



14

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Off-Balance
Sheet Arrangements



We
do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.



FACTORS
THAT MAY AFFECT OUR PLAN OF OPERATION



Twin
Faces has historically lost money and losses may continue in the future, which
may cause us to curtail operations.



Since
our inception we have incurred a net loss of $5,737,726 and at March 31, 2005 we
had a stockholder's deficit of $3,958,155. Future losses are likely to occur, as
we are dependent on spending money to pay for our operations. No assurances can
be given that we will be successful in reaching or maintaining profitable
operations. Accordingly, we may experience liquidity and cash flow problems. If
our losses continue, our ability to operate may be severely impacted.



Twin
Faces will need to raise additional capital or debt funding to sustain
operations.



We
    will require additional capital to sustain operations and we may need access
    to additional capital or additional debt financing to establish revenues. In
    addition, to the extent that we have a working capital deficit and cannot
    offset the deficit from profitable sales we may have to raise capital to
    repay the deficit and provide more working capital to permit growth in
    revenues. We have substantially curtailed our operations in anticipation of
    receiving $8 million pursuant to an investment agreement and promissory note
    with Johnnie King, Director of Film Development. We cannot be assured that
    financing whether from external sources or related parties will be available
    if needed or on favorable terms. Our inability to obtain adequate financing
    will result in the need to reduce the pace of business operations.



Our
    independent auditors have added an explanatory paragraph to their audit
    opinions issued in connection with our financial statements for the years
    ended December 31, 2004 and December 31, 2003, which states that the
    financial statements raise substantial doubt as to our ability to continue
    as a going concern. Our ability to make operations profitable or obtain
    additional funding will determine our ability to continue as a going
    concern. Our financial statements do not include any adjustments that might
    result from the outcome of this uncertainty. We expect to be able to
    continue operations for twelve months based on funds from our operations and
    from the investment agreement and promissory note with Johnnie King for an
    investment of $8,000,000 in combination of preferred stock and debt. Also,
    from an investment agreement with Michael Smolanoff for an investment of up
    to $4,000,000 upon settlement of a lawsuit in his favor. If we do not
    receive the funds, as referred, we may not be able to continue operations
    for twelve months.



We
are subject to a working capital deficit, which means that our current assets on
December 31, 2004 and March 31, 2005 were not sufficient to satisfy our current
liabilities and, therefore, our ability to continue operations is at risk.



We
    had a working capital deficit for the year ended December 31, 2004 and for
    the quarter ended March 31, 2005, which means that our current liabilities
    exceeded our current assets on December 31, 2004 by $3,833,221 and by
    $3,472,255 on March 31, 2005. Current assets are assets that are expected to
    be converted to cash within one year and, therefore, may be used to pay
    current liabilities as they become due. Our working capital deficit means
    that our current assets on December 31, 2004 and on March 31, 2005 were not
    sufficient to satisfy all of our current liabilities on those dates. If our
    ongoing operations do not begin to provide sufficient profitability to
    offset the working capital deficit, we may have to raise capital or debt to
    fund the deficit or curtail future operations.



15

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Our
common stock is deemed to be a low priced "Penny Stock," which may
make it more difficult for investors to sell their shares due to suitability
requirements.



Our
common stock is deemed to be a "penny stock" as that term is defined
in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. These
requirements may reduce the potential market for our common stock by reducing
the number of potential investors. This may make it more difficult for investors
in our common stock to sell shares to third parties or to otherwise dispose of
them. This could cause our stock price to decline. Penny stocks are stock:

- With
    a price of less than $5.00 per share;
- That
    are not traded on a "recognized" national exchange;
- Whose
    prices are not quoted on the NASDAQ automated quotation system (NASDAQ
    listed stock must still have a price of not less than $5.00 per share); or
- In
    issuers with net tangible assets less than $2.0 million (if the issuer has
    been in continuous operation for at least three years) or $10.0 million (if
    in continuous operation for less than three years), or with average revenues
    of less than $6.0 million for the last three years.

Broker/dealers
dealing in penny stocks are required to provide potential investors with a
document disclosing the risks of penny stocks. Moreover, broker/dealers are
required to determine whether an investment in a penny stock is a suitable
investment for a prospective investor.



We
could fail to attract or retain key personnel, which could be detrimental to our
operations.



Our
    success largely depends on the efforts and abilities of key executives,
    including Michael Smolanoff Ph.D., our Chief Executive Officer. The loss of
    the services of Dr. Smolanoff could materially harm our business because of
    the cost and time necessary to find a successor. Such a loss would also
    divert management attention away from operational issues. We presently do
    not maintain key-man life insurance policies on Dr. Smolanoff. We also have
    other key employees who manage our operations and if we were to lose their
    services, senior management would be required to expend time and energy to
    replace and train their replacements. To the extent that we are smaller than
    our competitors and have fewer resources we may not be able to attract the
    sufficient number and quality of staff.



Item
3. Controls and Procedures.



We
maintain disclosure controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of
1934, as amended, is recorded, processed, summarized and reported within the
specified time periods. As of the end of the period covered by this Report,
Michael Smolanoff, our Chief Executive Officer, and Stanely L. Teeple, our
Principal Financial Officer, evaluated the effectiveness of our disclosure
controls and procedures. Based on the evaluation, which disclosed no significant
deficiencies or material weaknesses, Dr. Smolanoff and Mr. Teeple concluded that
our disclosure controls and procedures are effective. There were no changes in
our internal control over financial reporting that occurred during our most
recent fiscal quarter that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.



16

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PART
II - OTHER INFORMATION



Item
1. Legal Proceedings.



None.



Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.



On
March 3, 2005, we issued 1,000,000 shares of our restricted common stock to Dr.
Michael Smolanoff, the President of the Company, in exchange for a payroll
accrual reduction $250,000. We believe that the issuance and sale of the shares
was exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933 by virtue of Section 4(2).



On
March 3, 2005, we issued 500,000 shares of our restricted common stock to Frank
McEnulty, an employee of the Company, in exchange for a payroll accrual
reduction of $125,000. We believe that the issuance and sale of the shares was
exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933 by virtue of Section 4(2).



On
March 3, 2005, we issued 300,000 shares of our restricted common stock to Bruce
Taffet, a director of the Company, in exchange for an accounts payable reduction
of $75,000. We believe that the issuance and sale of the shares was exempt from
the registration and prospectus delivery requirements of the Securities Act of
1933 by virtue of Section 4(2).



On
March 3, 2005, we issued 10,000 shares of our restricted common stock to Damian
Lanfranchi pursuant to his Writer Development Agreement dated September 20,
2004. We believe that the issuance and sale of the shares was exempt from the
registration and prospectus delivery requirements of the Securities Act of 1933
by virtue of Section 4(2).



On
March 3, 2005, we issued 175,000 shares of our restricted common stock to Bart
Pellegrino pursuant to his consulting agreement dated November 11, 2004. We
believe that the issuance and sale of the shares was exempt from the
registration and prospectus delivery requirements of the Securities Act of 1933
by virtue of Section 4(2).



Item
3. Defaults Upon Senior Securities.



None.



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



None.



Item
5. Other Information.



None.



17

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Item
6. Exhibits.



|31.1 | Certification
      of Michael Smolanoff Pursuant to Section 302 of the Sarbanes-Oxley Act
|---- | ------------------------------------------------------------------------------------------
|31.2 | Certification
      of Stanley L. Teeple Pursuant to Section 302 of the Sarbanes-Oxley Act
|32.1 | Certification
      of Michael Smolanoff Pursuant to Section 906 of the Sarbanes-Oxley Act
|32.2 | Certification
      of Stanley L. Teeple Pursuant to Section 906 of the Sarbanes-Oxley Act



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.



TWIN
FACES EAST ENTERTAINMENT CORPORATION

(Registrant)



By: /s/Stanley
L. Teeple

Stanley
L. Teeple, Chief Financial Officer

(On
behalf of the registrant and as

principal
accounting officer)



Date:
May 17, 2005