SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934.

     For the fiscal year ended December 31, 2004.

                                       OR

[_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934.

     For the transition period from __________ to _________.


                      Commission File Number: _____________


                            TOTAL LUXURY GROUP, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)


           Delaware                                               35-1504940
-------------------------------                              -------------------
(State or Other Jurisdiction of                                (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)

501 FIFTH AVENUE Suite 2001 NEW YORK, NY                            10017
----------------------------------------                         ----------
(Address of Principal Executive Offices)                         (Zip Code)

                                 (212) 682-7888
                           ---------------------------
                           (Issuer's telephone number)


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

                                                Name of Each Exchange
   Title of Each Class                           on Which Registered
------------------------------------    ----------------------------------------
         None                                          None
------------------------------------    ----------------------------------------


         Securities registered under Section 12(g) of the Exchange Act:

                     COMMON STOCK, PAR VALUE $.001 PER SHARE
                     ---------------------------------------
                                (Title of Class)


<PAGE>

Check  whether  the  issuer  (1) filed all  reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter  period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no  disclosure of  delinquent  filers  pursuant to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

The issuer's net revenues for its most recent fiscal year were $0.00.

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity,  as of December
31, 2004 WAS $2,288,478.

As of December  31, 2004,  there were  7,603,826  shares of the issuer's  common
stock outstanding.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]

Statements  contained  in the annual  report that are not  historical  facts are
forward-looking  statements  as that term is defined in the  Private  Securities
Litigation  Reform Act of 1995. Such  forward-looking  statements are subject to
risks and  uncertainties,  which could cause actual results to differ materially
from estimated  results.  Such risks and  uncertainties  are detailed in filings
with the Securities and Exchange  Commission,  including  without  limitation in
Descripition  of Business  and  Management  Discussion  and  Analysis Or Plan of
Operation.



                          INDEX TO FINANCIAL STATEMENTS



Independent Auditor's Report                                                 F-2

Financial Statements:

Balance Sheets as of December 31, 2004 and 2003                              F-3

Statements of Operations for the Year ended December 31, 2004 and 2003       F-4

Statement of Changes in Shareholders' Equity for the Year ended
December 31, 2004 and 2003                                                   F-5

Statement of Cash Flows for the Year ended December 31, 2004 and 2003        F-6

Notes to Financial Statements                                                F-7
















<PAGE>

                                AUDITOR'S REPORT


To the Shareholder's of
Total Entertainment Inc. and Subsidiaries


I have audited the consolidated  balance sheet of Total  Entertainment  Inc. (an
Indiana  corporation)  and Subsidiaries as at December 31, 2002 and 2003 and the
statements of operations,  stockholders'  equity (deficiency) and cash flows for
the  year  then  ended.   These  consolidated   financial   statements  are  the
responsibility of the Company's  management.  My responsibility is to express an
opinion on these financial statements based on my audits.

I conducted my audits in accordance with auditing  standards  generally accepted
in the United States of America. Those standards require that I 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.

In my opinion,  financial  statements  referred to above present fairly,  in all
material respects,  the consolidated  financial position of Total  Entertainment
Inc. and  Subsidiaries  as of December 31, 2003 and 2002,  and the  consolidated
results of their operations and their consolidated cash flows for the years then
ended in conformity with accounting  principles generally accepted in the United
States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the consolidated financial
statements, at December 31, 2003, the Company's current liabilities exceeded its
current assets by $2,003,185 and the Company lost $215,868 from operations for
the ended December 31, 2003. These factors, among others, as discussed in Note 6
to the financial statements, raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 3 (a). The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


North York, Ontario                              Stephen Diamond
April 1, 2004                                  Chartered Accountant


                                       F-2


<PAGE>


TOTAL LUXURY GROUP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2004 and DECEMBER 31, 2003

Assets                                                   2004           2003
                                                     -----------    -----------
Current
  Cash                                               $      --      $        71
  Accounts receivable                                       --             --
                                                     -----------    -----------
                                                            --              193
                                                     -----------    -----------
Property and equipment
  Computer equipment                                        --          314,744
  Furniture and fixtures                                    --           48,845
                                                     -----------    -----------
                                                            --          363,589

Less accumulated depreciation                               --         (334,811)
                                                     -----------    -----------
                                                            --           15,449
                                                     -----------    -----------
                                                     $      --      $    15,529
                                                     ===========    ===========
Liabilities

Current
  Accounts payable and accrued liabilities           $      --      $   155,964
  Deferred compensation                                     --        1,325,450
  Due to directors and stockholders                         --          521,771
                                                     -----------    -----------
                                                            --        2,003,185
                                                     -----------    -----------
Shareholders' Equity

Stockholders' equity (deficiency):
  Common stock, $.001 par value; authorized,
  200,000,000 shares; issued and outstanding,
  58,388,443 shares at DECEMBER 31, 2004 and 2003           --           58,388
  Additional paid-in capital                                --        2,684,695
  Accumulated deficit                                       --       (4,730,748)
                                                     -----------    -----------

                                                            --       (1,987,665)
                                                     -----------    -----------
                                                     $      --      $    15,520
                                                     ===========    ===========

                                       F-3



<PAGE>

TOTAL LUVURY GROUP, INC.
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                                            2004        2003
                                                          ---------   ---------
Revenues:
  Gaming revenues (Note 3 (a) (i))                             --     $    --
  Less: Charge backs                                           --          --
      Complimentary and bonus                                  --          --

  Gaming revenues, net                                         --          --
  Royalty fees (Note3 (a))                                     --          --
                                                          ---------   ---------
                                                          -    -          --
                                                          ---------   ---------
Expenses:
  Cost of operations                                           --          --
  Selling, general and administrative                          --       202,539
  Depreciation and amortization                                --        13,329
                                                          ---------   ---------
                                                               --       215,868
                                                          ---------   ---------
Loss from operations                                           --      (215,868)
                                                          ---------   ---------

Income (loss) before provision for income taxes                --      (215,868)
                                                          ---------   ---------
  Provision for income taxes                                   --          --
NET INCOME (LOSS)                                         $    --     $(215,868)
                                                          =========   =========
Basic and diluted income (loss) per common share          $    --     $    (.00)
                                                          =========   =========

                                       F-4



<PAGE>
<TABLE>
<CAPTION>

TOTAL LUXURY GROUP, INC.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                        Common stock
                                      $.001 par value            Additional                          Total
                                ----------------------------      Paid-in        Accumulated     Stockholders'
                                   Shares           Amount        Capital          deficit          equity
                                -------------   -------------   -------------   -------------    -------------
<S>                             <C>             <C>             <C>             <C>              <C>
Balance, December 31, 1999         57,388,443   $      57,388   $   2,460,695   $  (3,298,293)   $    (780,210)

Net income for the year ended
December 31, 2000                        --              --              --            26,264           26,264
Capital stock issued to
Northstar Advertising Inc.               --         1,000,000           1,000         224,000          225,000
                                -------------   -------------   -------------   -------------    -------------

Balance December 31, 2000          58,388,443          58,388       2,684,695      (3,272,029)        (528,946)
Net loss for the year ended
December 31, 2001                        --              --              --        (1,101,348)      (1,101,348)
                                -------------   -------------   -------------   -------------    -------------
Balance December 31, 2001          58,388,443   $      58,388   $   2,684,695   $  (4,373,377)   $  (1,630,294)

Net loss for the year ended
December 31, 2002                        --              --              --          (141,503)        (141,503)
Capital stock issued in
exchange for Rock Candy
assets (Note 3(a) (ii))             4,520,000            --              --              --               --
                                -------------   -------------   -------------   -------------    -------------
Balance December 31, 2002          62,908,443   $      58,388   $   2,684,695   $  (4,514,880)   $  (1,771,797)

Net loss for the year ended
December 31, 2003                        --              --              --          (215,868)        (215,868)
Capital stock issued in
exchange for Rock Candy
assets (Note 3(a) (ii))             4,520,000            --              --              --               --
and Capital stock issued in
exchange for Directors fees,
Surrendered Options and
Employee severance
payments
(Note 3(a) (iii))                   2,454,742            --              --              --               --
                                -------------   -------------   -------------   -------------    -------------
Balance December 31, 2003           7,603,826   $      58,388   $   2,684,695   $  (4,730,748)   $  (1,987,665)
                                =============   =============   =============   =============    =============
</TABLE>






                                       F-5

<PAGE>

TOTAL LUXURY GROUP, INC.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

                                                           2004         2003
                                                         ---------    ---------
Operating:

Net income (loss)                                        $      (0)   $(215,868)
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
     Depreciation and amortization                            --         13,329
     Deferred compensation                                    --        142,501
    Increase (decrease) in cash from changes in
    operating assets and liabilities:
      Accounts receivable                                     --           --
      Accounts payable and accrued liabilities                  (0)      (7,294)
                                                         ---------    ---------
                                                                (0)     (67,332)
                                                         ---------    ---------
Net cash provided by (used in) investing activities           --        124,717
                                                         ---------    ---------


Financing:

Advances from directors and stockholders                      --         67,272
                                                         ---------    ---------
                                                              --         67,272
                                                         ---------    ---------

Net (Decrease) Increase in cash                                 (0)        (122)

Cash at beginning of period                                   --            193
                                                         ---------    ---------

Cash at end of period                                    $    --      $     193
                                                         =========    =========

                                       F-6


<PAGE>

TOTAL LUXURY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

ITEM 1. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

The  following  discussion  includes the  business of the Company,  since August
22,2002 through November ,2004 the Company had no business activities other than
administrative  costs  necessary,  for  researching an acquisition  candidate or
business plan and for remaining a publicly  reporting  entity.  In November 2004
the Company obtained a distribution  agreement with MCM, AG. .On March 17, 2004,
the Company  entered in an asset  purchase  agreement  with Beth Bender,  Inc. a
development stage enterprise.  After further due diligence,  Total Luxury Group,
Inc.  and Beth  Bender,  Inc mutually  agreed to  terminate  the asset  purchase
agreement.  Where  relevant,  all numbers  retroactively  take into  account the
operations of the Company.

BUSINESS, DESCRIPTION AND HISTORY OF COMPANY

Item 2. CORPORATE STRUCTURE BUSINESS, DESCRIPTION AND HISTORY OF COMPANY

Total Luxury  Group,  Inc.,  formerly  known as Total  Entertainment  Inc.  (the
Company),   incorporated  in  the  State  of  Indiana,  had  three  wholly-owned
subsidiaries,  Intercapital Global Fund Ltd.  (Intercapital Global), an Antiguan
company,  Intercapital Canada Ltd.  (Intercapital  Canada),  incorporated in the
Province of Quebec, and Total Entertainment  (Delaware) Inc.an inactive Delaware
company.

Intercapital Global, the operating company, owned a gaming license issued by the
Government  of Honduras and the  Dominican  Republic,  and several  Internet Web
sites. The Company used state-of-the-art  casino gaming and sports book software
under an informal  license  arrangement with Montana S.A.  (Montana),  a leading
casino software  development  company. In the fourth quarter of 2000 the Company
used this  software on a no-cost  trial basis.  In 2001 the Company began making
volume-based monthly royalty payments to Montana pursuant to an informal license
arrangement.  The Company also licensed  software for the gaming and sports book
operations from Online Gaming Systems (formerly known as Atlantic  Entertainment
International Inc. (OGS), an independent software developer, and other vendors.

Intercapital  Global  accepted  wagers via the  Internet  through an  E-commerce
credit card processing  agreement with MPACT Immedia  Transaction  Services Ltd.
(MPACT).  During  2000,  this  contract  was  transferred  by MPACT to  Surefire
Commerce Ltd.

Intercapital  Canada  provided  Intercapital  Global with technical and customer
support and administrative services.

The  company  offered   software-based  games  of  chance  and  sports  wagering
facilities   on  a   worldwide   basis   through   the   Internet   located   at
www.theonlinecasino.com, www.theonlineesportsbook.com,  www.bingoonthenet.com as
well as other sites  (collectively  the Online  Casinos).  There are significant
legislative  risks and  uncertainties  regarding  on-line gaming operations (see
Note  D-1).  The  company  launched  its  www.theonlinecasino.com  Web  site  on
September 12, 1998.

The Company on August 22, 2002 sold all of its remaining online gaming assets.

On February 10, 2003, a reverse  stock split of the  Company's  Common Stock was
effected. The reverse split was on a one hundred shares for one share basis.

Since  August  22,2002  through  November  2004  the  Company  had  no  business
activities  other  than  administrative  costs  necessary,  for  researching  an
acquisition candidate and for remaining a publicly reporting entity.

Item 3.  BASIS OF PRESENTATION

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going  concern.  The  Company has  incurred a loss from  operations
since  inception.  At  December  31,  2004 and 2003,  the  Company has a working
capital  deficiency of approximately  $-0- and $2,003,185,  respectively,  and a
stockholders' deficiency of approximately $ 000 and $1,988,000 respectively.

                                      F-7

<PAGE>

TOTAL LUXURY GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

In view of the matters described in the previous paragraph, recover ability of a
major portion of the recorded  asset amounts shown in the  accompanying  balance
sheet is dependent upon continued operations of the Company, which, in turn, are
dependent  upon the Company's  ability to meet its financing  requirements  on a
continuous  basis  and  to  succeed  in its  future  operations.  The  financial
statements do not include any  adjustments  relating to the recover  ability and
classification of recorded asset amounts or amounts of liabilities that might be
necessary should the Company be unable to continue in existence.

3(a)(i)  In August 2002 the company  concluded an agreement  whereby it sold its
         interest in Online Sports Book.com  ("Online")  including the equipment
         the domain name and any  goodwill  associated  with the  business.  The
         purchase price was satisfied by the purchaser  assuming all liabilities
         of the Online Sports  Book.com and a royalty  agreement  whereby Online
         shall pay to the seller 10% of the gross profit for 12 months following
         the date of  closing.  To  December  31,  2002 the  company  has earned
         $84,750 in royalties.

         The company is no longer engaged in interest gaming activities.

(ii)     In October 2002 Total  Entertainment  Canada Ltd. purchased 100% of the
         business rights,  domain names, trade marks and formulas ("the assets")
         owned by Rock Candy Cosmetics Inc.

         The purchase  price of $678,000 was  satisfied by issuance of 4,520,000
         common  shares of the  company.  Since Rock Candy is a  privately  held
         company the fair value of the assets is not readily determinable.  As a
         result,  the assets  were  recovered  at a nominal  value.  The Company
         issued  2,454,742  common  shares  of the  company,  to  directors  and
         officers.  The shares issued for the cancellation of directors options(
         dated   February  18,  1998)  and  severance   payments  to  terminated
         employees.

(b)      Obtain advances from affiliated  companies,  officers or other sources,
         as necessary, to fund operating expenses.

(c)      Defer  officers'  salaries  until  such  time the  Board  of  Directors
         determines it is appropriate to commence payment.

Item 4.  ACCOUNTING POLICIES

A summary of the significant  accounting  policies  consistently  applied in the
preparation of the accompanying consolidated financial statements follows:

(a) PRINCIPLES OF CONSOLIDATION

These consolidated  financial statements include the accounts of the Company and
its subsidiaries.  All significant  intercompany  accounts and transactions have
been eliminated.

                                       F-8

<PAGE>

TOTAL LUXURY GRUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003

(b)      FIXED ASSETS

         Computers  and  furniture  and  fixtures  are  stated  at cost  and are
         depreciated over their estimated useful lives of three to five years.

(c) FOREIGN CURRENCY TRANSLATION

         The assets and liabilities of the Company's foreign operations are
         translated at the exchange rates prevailing at year-end and income and
         expenses are translated at the average exchange rate for the year.
         Balance sheet gains and losses arising from translation are immaterial.
         Translation gains or losses, for the periods presented, have been
         included in the results of operations and are not material.

(d)      EARNINGS (LOSS) PER SHARE

         Basic loss per share for the year ended  December  31, 2004 and 2003 is
         computed by dividing  the loss for the period by the  weighted  average
         number of common shares outstanding during the period. Diluted loss per
         share is computed by dividing  the loss for the period by the  weighted
         average number of common shares adjusted for the dilutive effect of any
         potential common shares issuable during the period. The denominator for
         the basic and diluted earnings per share calculation for the year ended
         December  31,  2004 is  7,603,826.  The  denominator  for the basic and
         diluted earnings per share  calculation for the year ended December 31,
         2003 is 7,603,826.

(e)      INCOME TAXES

         Total  Entertainment is responsible for filling a United States Federal
         income tax return,  while Intercapital Canada is responsible for filing
         a Canadian  tax return.  Intercapital  Global is not required to file a
         United  States  corporate  income  tax  return  because it is a foreign
         corporation  and  has  no  U.S.  source  income  or  U.S.   operations.
         Intercapital  Global is not  required  to file an  Antiguan  tax return
         since  it is an  International  Business  Corporation  not  subject  to
         taxation.

         Financial  Accounting Standards Board Statement of Financial Accounting
         Standards No. 109 (SFAS No. 109),  Accounting for Income Taxes, require
         the  liability  approach to  accounting  for deferred  income taxes for
         financial  reporting  purposes.  Under the  provisions of SFAS No. 109,
         deferred tax assets and liabilities  are determined  based on tax rates
         expected  to be in effect when the taxes are  actually  paid or refunds
         received.

                                       F-9

<PAGE>

TOTAL ENTERTAINMENT INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

(f)      CONCENTRATION OF CREDIT OR MARKET RISK

         Statement  of  Financial  Accounting  Standards  No. 105 (SFAS No. 105)
         requires  the  disclosure  of  significant  concentration  of credit or
         market  risk,   regardless  of  the  degree  of  such  risk.  Financial
         instruments,  as defined by SFAS No. 105, which potentially subject the
         Company  and  its  subsidiaries  to  concentrations  of  risk,  consist
         principally of cash

(g)      USE OF ESTIMATES

         In preparing financial statements in conformity with generally accepted
         accounting  principles,  management  is required to make  estimates and
         assumptions  that affect the reported amounts of assets and liabilities
         and the disclosure of contingent  assets and liabilities at the date of
         the financial statements and revenues and expenses during the reporting
         period. Actual results could differ from those estimates.

(h)      VALUATION OF LONG-LIVED ASSETS

         The company has adopted Statement of Financial Accounting No. 121 (SFAS
         No.121),  Accounting  for the  Impairment of Long-Lived  Assets and for
         Long-Lived  Assets to Be Disposed of. The  statement  requires that the
         Company  recognize and measure  impairment  losses of long-lived assets
         and certain identifiable  intangibles and value long-lived assets to be
         disposed of. The carrying values of the long-lived  assets are reviewed
         if  the  facts  and  circumstances  suggest  that  such  assets  may be
         permanently  impaired.  If the expected future  undiscounted cash flows
         derived from such assets are less than the carrying  value,  such value
         would be reduced to its fair value.

(i)      RESEARCH AND DEVELOPMENT EXPENSES

         Costs associated with research and development, principally relating to
         website   development  and  e-commerce   development  are  expensed  as
         incurred.  Such costs  also  include  expenditures  for  developing  of
         certain software gaming products.

(j)      ADVERTISING EXPENSES

         Costs associated with advertising are expensed as incurred and amounted
         to $0.00  and $0.00 for the years  ended  December  31,  2004 and 2003.
         respectively.

                                      F-10

<PAGE>

TOTOTA LUXURY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003


(k)      SEGMENT AND RELATED INFORMATION

         The Company operated as one active segment,  Internet-based gaming, and
         follows the requirements of SFAS No. 131, Disclosures About Segments of
         an Enterprise and Related Information.

(l)      CASH AND CASH EQUIVALENTS

         The Company  considers all highly  liquid  investments  purchased  with
         original maturities of three months or less to be cash equivalents.

(m)      REVENUE RECOGNITION

         Gaming  revenues  are  recognized  when the  sporting  event or game of
         chance has been completed. Credit card deposits held by the Company for
         individual  customers are recorded as customer  account  deposits until
         earned by the Company or returned to the customer.  Gaming revenues are
         presented on a net basis (i.e.,  net of customer  winnings) (Note 3 (a)
         (i)).

(n)      FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying  value of cash and cash  equivalents  are assumed to be at
         fair value  because of the liquidity of the  instruments.  Accounts and
         notes  receivable and accounts  payable are assumed to be at fair value
         because of the short term nature of the instruments.

(o)      RECENT ACCOUNTING PRONOUNCEMENTS

         In January 2000, the Emerging issues Task Force (EITF) reached a
         consensus on Issue No. 99-17, Accounting for Barter Transactions, to be
         effective for transactions entered into after January 20, 2000. The
         consensus states that advertising barter transactions should be
         accounted for at fair value and that the fair value recognized is
         disclosed in the financial statements, if there is verifiable objective
         evidence provided by sufficient cash transactions received by the
         seller of the advertising or similar advertising. The Company purchased
         advertising from barter transactions in 2001. The Company records
         advertising expense with a corresponding credit to customer account
         balance as advertising is incurred.

                                      F-11

<PAGE>

TOTAL LUXURY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

         On July 20,  2002,  the  Financial  Accounting  Standards  Board (FASB)
         issued SFAS 141,  Business  Combinations,  and SFAS 142,  Goodwill  and
         Intangible  Assets (the  "Statements").  SFAS 141 is effective  for all
         business  combinations  completed  after  June  30,  2002.  SFAS 142 is
         effective for fiscal years beginning after December 15, 2002;  however,
         certain  provisions  of this  Statement  apply to  goodwill  and  other
         intangible  assets acquired between July 1, 2002 and the effective date
         of SFAS 142. Major  provisions of these  Statements and their effective
         dates for the Company are as follows:

         o        all business  combinations  initiated after June 30, 2002 must
                  use the purchase method of accounting. The pooling of interest
                  method of  accounting is  prohibited  except for  transactions
                  initiated before July 1, 2002.

         o        intangible  assets acquired in a business  combination must be
                  recorded   separately   from   goodwill  if  they  arise  from
                  contractual  or other legal rights or are  separable  from the
                  acquired entity and can be sold, transferred, licensed, rented
                  or  exchanged,  either  individually  or as part of a  related
                  contract, asset or liability.

         o        goodwill,  as well as intangible assets with indefinite lives,
                  acquired after June 30, 2002, will not be amortized. Effective
                  January  1,  2002,  all  previously  recognized  goodwill  and
                  intangible  assets  with  indefinite  lives  will no longer be
                  subject to amortization.

         o        effective  January 1, 2002 goodwill and intangible assets with
                  indefinite  lives will be tested for  impairment  annually and
                  whenever there is an impairment indicator.

         o        all acquired  goodwill must be assigned to reporting units for
                  purposes of impairment testing and segment reporting.

         Although it is still  reviewing  the  provisions  of these  Statements,
         management's  preliminary  assessment is that these Statements will not
         have a material impact on the Company's  financial  position or results
         of operations.

         In August  2002,  the FASB issued  statement  of  Financial  Accounting
         Standards No. 144 ("SFAS No. 144")  "Accounting  for the  Impairment of
         Disposal of Long-lived Assets".  This statement is effective for fiscal
         years beginning  after December 15, 2002. This supersedes  Statement of
         Financial  Accounting Standards No. 121, "Accounting for the Impairment
         of  Long-lived  Assets and for  Long-lived  Assets to Be Disposed  of,"
         while retaining many of the requirements of such statement.

(p)      RECLASSIFICATIONS

         Certain  reclassifications  to 2001 reported  amounts have been made in
         the financial statements to conform to 2002 presentation.

(q)      DEFERRED LICENSING FEES

         Up front costs incurred to obtain software  licenses are amortized over
         the term of the license agreement. As of December 31, 2002 all deferred
         licensing  fees were written off due to  uncertainty  as to realization
         (through relicensing, refund or other) of the asset.

                                      F-12


<PAGE>

TOTAL LUXURY GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004



Item 5.  CAPITAL STOCK AND STOCK OPTIONS

(a)      COMMON STOCK TRANSACTIONS


         (i)      During 2000, the Company issued 370,000 shares of common stock
                  to Online  Gaming System Ltd.  pursuant to the OGS  Agreement.
                  Upon cancellation of the OGS Agreement  effective December 31,
                  2000, the shares were returned by Online Gaming System Ltd. to
                  the Company.

         (ii)     During  2000,   the  Company   issued  500,000  shares  to  an
                  individual in exchange for investor relations  services.  This
                  agreement  was  rescinded,  and  the  shares  returned  to the
                  Company prior to the  commencement  of any investor  relations
                  activities by the individual.

         (iii)    In October 2002 Total Entertainment Canada Ltd. purchased 100%
                  of the business rights domain names,  trade marks and formulas
                  ("the assets") owned by Rock Candy Cosmetics Inc.

         The  purchase   price  of  $678,000   was   satisfied  by  issuance  of
         4,520,000common  shares of the company. Since Rock Candy is a privately
         held company the fair value of the assets is readily determinable. As a
         result, the assets were recoverable at a normal value.

         In 2003, The Company issued 2,454,742 common shares of the company,  to
         directors  and  officers.  The shares  issued for the  cancellation  of
         directors options and severance payments to terminated employees.

(b)      STOCK OPTIONS

         The company  does not have a formal stock  option  plan;  however,  the
         Company has issued stock  options  under letter  agreements  to certain
         individuals.  The options  granted had an exercise price at least equal
         to the fair value of the Company's stock, and expire after eight years.
         The options granted vest immediately.

         As  permitted  by  SFAS No 123,  the  Company  has  elected  to  follow
         Accounting  Principles  Board Opinion No. 25 (APB No. 25.),  Accounting
         for Stock Issued to Employees, method of determining compensation cost.
         Under APB No. 25, because the exercise price of the Company's  employee
         stock  options  equals or exceeds  the market  price of the  underlying
         stock on the date of grant, no  compensation  expense is recognized for
         options issued to employees or Directors.

                                      F-13

<PAGE>

TOTAL LUXURY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003

         The Company had no options  granted,  exercised or forfeited during the
         years ended December 31, 2002 and 2003. The following table  summarizes
         information  about the shares  outstanding and exercisable for options,
         including the option held by Intercapital  Asset Management  Limited at
         December 31, 2002.


                                         Weighted-average
   Remaining              Number         contractual life        Number
exercise prices        outstanding           in years          exercisable
----------------       -----------       ----------------      -----------
        $.1875          66,500,000                    5.1       66,500,000
           .15           2,750,000                   5.75        2,750,000
----------------       -----------       -----------------     -----------
                        69,250,000                              69,250,000
                       ===========                             ===========

Item 6.  COMMITMENTS AND CONTINGENCIES


(a)      OPERATING LEASES

         The  Company  signed a lease  for  office  premises  in June 1999 for a
         period of five years ending July 31, 2004 for a minimum  annual rent of
         $22,000 plus  operating  costs.  This lease has since been  terminated.
         Additionally,  the Company was committed under three  operating  leases
         for  automobiles  expiring on various dates in 2004.  These leases have
         since been terminated.


                                   ==========

         Rent  expense for the years ended  December  31, 2004 and  December 31,
         2003 was  approximately  $ 0.00 and $ 0.00,  respectively.  The Company
         received  rent free office  space at  Intercapital  Asset  Management's
         leased facility in New Jersey under an informal  agreement for the year
         ended December 31 2003.

(b)      CAPITAL LEASE OBLIGATION

         The Company leased certain equipment under various capital leases which
         expired in 2002.

         Equipment  recorded  under  capital  leases was  $100,427.  Accumulated
         amortization  of capital leases  amounted to  approximately $ 98,931 at
         December 31, 2001. Interest on capital leases amounted to approximately
         $4,000  and $ 4,000 for the years  ended  December  31,  2001 and 2002,
         respectively.


LITIGATION

         We are not a party to any pending  legal  proceedings,  our property is
not the  subject ot a pending  legal  proceeding,  and to the  knowledge  of our
management, no proceedings are presently contemplated against us by any federal,
state or local governmental agency.

         Further,  to the knowledge of our management,  no director or executive
officer is party to any action in which any has an interest adverse to us.



                                      F-14


<PAGE>

TOTAL LUXURY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

Item 7.  RELATED PARTY TRANSACTIONS

(a)      DEFERRED COMPENSATION

         Sandy  Masselli   together  with  certain  other  senior  officers  and
         employees  of the Company,  have agreed to defer their annual  salaries
         until such time as determined by the relevant officer, without interest
         and not funded.  The deferred salaries shall be paid to such persons in
         cash or stock of the  Company at such  future  time as each  person may
         elect by written  notice to the Company and  approved by the  Company's
         Board of Directors. Such totaled approximately $880,000 at December 31,
         2000 and are  deferred by the Company.  During the year ended  December
         31, 2003, $0.00 of officers salaries were paid in cash and $142,501 was
         deferred.(Note 6 (e))

(b)      DUE TO DIRECTORS AND STOCKHOLDERS

         From time to time, directors and stockholders of the Company have
         directly paid certain Company expenses. Such directors and stockholders
         have also supplied the Company with cash advances during 2003and 2004
         Such transactions have been recorded as due to directors and
         stockholders, and do not bear interest. There are no scheduled terms of
         repayment of such amounts.

(c)      HISTORY OF COMPANY

         Mr. Sandy Masselli had effective  control of Mint Energy and affiliates
         and Intercapital  Global.  Mr. Sandy Masselli has effective  control of
         Intercapital Asset Management Limited.

         Kit Farms was incorporated on April 22, 1993 and was engaged in the pet
         food business  until 1995,  when the remaining  assets and  liabilities
         were  liquidated.  From that date to January 28, 1998, Kit Farms was an
         inactive public company trading on the NASDAQ over-the-counter bulletin
         board market (bulletin boards).

         From 1996  through  1998,  Mint Energy and its  subsidiaries  had spent
         several years exploring the  possibilities  of and developing  software
         for a gaming and wagering  operation  accessible  through the Internet.
         These entities had no revenues or employees during this period. Funds

                                      F-15


<PAGE>

TOTAL LUXURY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

         used by Mint Energy and  subsidiaries  to conduct these  activities and
         develop the business were  received as advances  which are reflected as
         capital  contributions  from Sandy J.  Masselli,  Jr.,  Chairman of the
         Board (Mr. Masselli) and other shareholders of Mint Energy. At the time
         of the merger,  the shareholders of Mint and  Intercapital  Global were
         identical (the Beneficial Owners).

         On January 28, 1998 and as amended,  Kit Farms Inc.  (Kit Farms) merged
         with Mint Energy including its subsidiaries,  and the Beneficial Owners
         of Intercapital  Global contributed their shares of Intercapital Global
         to Kit  Farms.  At the  time  of the  Kit  Farms  merger,  it had  been
         purported  that 7.37  million  shares of Kit  Farms  were  outstanding.
         Subsequent  to the merger,  the Company was informed  that there may be
         additional shares outstanding, which were subsequently cancelled by the
         Company.  This matter is currently  under  arbitration  (see Note D-4).
         Notwithstanding the arbitration issue, the existing stockholders of Kit
         Farms were to  continue to hold the 7.37  million  shares of the common
         stock to the merged entity.  Intercapital  Global, in its role as agent
         the  Beneficial  Owners,  received 104.8 million shares common stock of
         Kit Farms, with an aggregate value of approximately $2 million pursuant
         to the merger of Mint Energy into Kit Farms, and the  contribution,  by
         the Beneficial  Owners,  of their shares of  Intercapital  Global.  The
         aggregate value was determined through negotiations among the Boards of
         Directors  of Kit Farms and Mint  Energy,  in the  absence of  reliable
         quoted market prices on the bulletin boards.

         In  February  1998,  the  Beneficial  Owners  voluntarily  returned  to
         treasury 57 million shares.  The shares were subsequently  cancelled by
         the Company.  On February 3, 1998,  the Company  granted an option (the
         Global Option),  to replace the returned shares,  to acquire 57 million
         shares at $1.875 per share, exercisable at any time through February 3,
         2006, to  Intercapital  Global in its role as agent for the  Beneficial
         Owners.  Intercapital  Global  subsequently  transferred  the option to
         Intercapital Asset Management Limited, an investment management company
         controlled by Mr.  Masselli,  which had the same  Beneficial  Owners as
         Mint Energy and Intercapital Global.

         Intercapital  Global,  in its role as agent for the Beneficial  Owners,
         subsequently  distributed  47.8  million  shares  of  common  stock  it
         received  to its  Beneficial  Owners,  which  together  with the Global
         Option were consideration for the merger.

         In June 1998,  the Company  issued an additional  537,000 shares to the
         former principal  shareholders and directors of Kit Farms to facilitate
         the merger.  The  acquisition  resulted in the owners and management of
         Mint Energy having effective control of the combined entity.

         Kit Farms changed its name to Total  Entertainment Inc. on February 19,
         1998.

         Under accounting  principles generally accepted in the United States of
         America,  the acquisition is considered to be a capital  transaction in
         substance, rather than a business combination. That is, the acquisition
         is  equivalent  to the  issuance  of stock by Mint  Energy  for the net
         monetary assets of Kit Farms, accompanied by a recapitalization, and is
         accounted  for as a  change  in  capital  structure.  Accordingly,  the
         accounting for the acquisition is identical to that resulting from a

                                      F-16


<PAGE>

TOTAL LUXURY GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

         reverse acquisition, except that no goodwill is recorded. Under reverse
         takeover   accounting,   the    post-reverse-acquisition    comparative
         historical  financial  statements  of the legal acquire (Kit Farms) are
         those of the  accounting  acquirer  (Mint  Energy).  Earnings per share
         (EPS) are  calculated  to  reflect  the  Company's  change  in  capital
         structure for all periods presented.

         Intercapital  Global  was  organized  in  1993 by Mr.  Masselli,  as an
         offshore  private  investment  fund,  which from time to time conducted
         certain investment activities not related to the online gaming business
         for the benefit of the Beneficial Owners. At the time, Mr. Masselli had
         voting and investment control over all of Intercapital  Global's assets
         and control  over all  outstanding  shares of capital  stock  issued by
         Intercapital  Global.  Intercapital  Global later became a wholly-owned
         subsidiary of the Company when its Beneficial Owners  contributed their
         shares to Kit Farms as part of the merger.  At the time of the transfer
         of ownership,  Intercapital  Global held no assets or liabilities other
         than the gaming license.

Item 8.  INCOME TAXES

         The  Company  could  have net  operation  losses  of  approximately  $2
         million,  which could be used to offset future  United  States  taxable
         income.  However,  net  operating  losses and other  deferred  expenses
         generated in years for which no income tax returns have been filed,  or
         are not accepted by the Internal Revenue Service, may not be available.
         Deferred  tax  assets  arising  from  these net  operating  loss  carry
         forward,  deferred compensation and certain accruals, if any, are fully
         reserved due to the uncertainty of future utilization.  The Company did
         not have any significant  taxable income in the United States or Canada
         for the years ended December 31, 2004 and 2003.

         Changes in ownership resulting from transactions among our stockholders
         and sales of common  stock by us, may limit annual  realization  of the
         tax net operating loss carry forwards that could become available under
         Section 382 of the Internal Revenue Code.

Item 9.  SUPPLEMENTARY CASH FLOW INFORMATION

(a)      NON-CASH TRANSACTION

         In 2003 the Company issued Common Stock, with a fair value of $678,000,
         for the business rights, domain names, trademarks and formulas owned by
         Rock Candy Cosmetics Inc.

(b) INTEREST AND TAXES PAID.

         During 2004 the Company paid approximately $0.00 of taxes and $ 0.00 of
         interest.  During 2003 the Company paid  approximately  $0 of taxes and
         $4,000 of interest.

                                      F-17

<PAGE>

ITEM  10.  DIRECTORS,   EXECUTIVE  OFFICERS,   PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

OFFICERS AND DIRECTORS

The Company's officers and directors are as follows:


     Name                       Age       Position(s)

Sandy J. Masselli, Jr.          42        Chairman of the Board and Chief
                                          Executive Officer
Robert D. Bonnell               59        President and Director
Richard B. Davis                58        Director and Chief Financial Officer
Samuel G.S. Huges               60        Director

TERMS OF DIRECTORS

Mr. Sandy Maselli has served as directors of the Company since January 21, 1998.
Mr.  Bonnell,  and Mr.  Davis have  served as  directors  of the  Company  since
September  30,  1998.  Mr.  Hughes has served as director  of the Company  since
January 12,  2004.  The  directors  of the Company  serve as such until the next
annual  meeting of  stockholders  and until  their  successors  are  elected and
qualified.

BUSINESS EXPERIENCE OF DIRECTORS AND EXECUTIVE OFFICERS

Sandy J. Masselli,  Jr. has served as the Chairman of the Board, Chief Executive
Officer,  President and a Director of the Company  since January 1998.  From May
1990  to  the  present,   Mr.  Masselli  has  served  as  Managing  Director  of
Intercapital  Asset Management  Company,  Inc., an investment  advisory company,
where he has been responsible for the selection and monitoring of investments as
well as merchant banking activities.  From May 1981 until May 1990, Mr. Masselli
worked as a Vice President or Senior Vice President at several major  securities
and brokerage  firms,  including  Prudential  Securities,  Inc.,  Drexel Burnham
Lambert,  Inc.,  Shearson Lehman Hutton,  Inc. and Merrill Lynch Pierce Fenner &
Smith,  Inc.  He holds a  Bachelor  of Arts  degree in  Political  Science  from
Monmouth College.

Robert D. Bonnell has served as a Director of the Company  since  September  30,
1998 and President since January 26, 2005 He has over 25 years experience in the
marketing and public relations industries. From 1992 to the present, Mr. Bonnell
has served as  Chairman  and Chief  Executive  Officer  of Skiff  Lake  Holdings
Limited,  a private holding  company with positions in real estate,  investments
and trusts.  During this period,  he also served as Chairman of  Communicer,  an
international  company  specializing in corporate  communications  and advice in
connection  with mergers and  acquisitions.  Previously,  Mr.  Bonnell worked as
Managing  Director  and in  other  senior  positions  for  Public  &  Industrial
Relations,  Canada's largest public relations firm. In addition, Mr. Bonnell has
in the past served as a director of several other companies,  including  Windsor
Investments S.A. in Luxemburg,  Tudor Deutche  International  and Windsor Energy
Corporation in Tulsa,  Oklahoma (which position he currently  holds). He holds a
Bachelor of Arts (Honors) degree in Political  Science and Economics from Ricker
College, University of New Brunswick.

Richard B. Davis has served as a Director of the  Company  since  September  30,
1998. He is a Certified Public  Accountant  licensed to practice in New York and
New Jersey. From 1976 to the present,  Mr. Davis has been engaged in the private
practice of accounting,  providing  services to many companies and  individuals.
Prior to that time,  Mr.  Davis  spent  many years  working in the tax and other
departments at several major accounting firms, including Peat Marwick,  Mitchell
& Co. and Touche Ross & Co. Mr. Davis is a member of the  American  Institute of
Certified  Public  Accountants,  the New York State Society of Certified  Public
Accountants and the New Jersey Society of Certified Public Accountants. He holds
a Bachelor of Business Administration degree from City College of New York.


INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

The Company is not aware of any material  legal  proceedings  that have occurred
within the past five years concerning any director,  director nominee,  promoter
or control  person  which  involved a criminal  conviction,  a pending  criminal
proceeding,  a pending or concluded  administrative or civil proceeding limiting
one's  participation  in the securities or banking  industries,  or a finding of
securities or commodities law violations.


<PAGE>
<TABLE>
<CAPTION>

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
officers  and  directors,  and  persons  who own  more  than  ten  percent  of a
registered  class  of the  Company's  equity  securities,  to  file  reports  of
ownership and changes in ownership with the  Securities and Exchange  Commission
(the SEC).  Officers,  directors and greater than ten percent  shareholders  are
required by SEC  regulation  to furnish  the Company  with copies of all Section
16(a) forms they file.

Based solely on the Company's review of the copies of such forms received by it,
or written  representations from certain reporting persons, the Company believes
that,  during the fiscal year ended December 31, 2004,  all filing  requirements
applicable  to the  Company's  officers,  directors and greater than ten percent
beneficial owners were complied with.

ITEM 11. EXECUTIVE COMPENSATION

The  following  table sets forth  certain  summary  information  concerning  the
aggregate compensation paid to the Company's Chief Executive Officer. There were
no other executive  officers of the Company who earned in excess of $100,000 for
the year ended December 31, 2004:

                           SUMMARY COMPENSATION TABLE

                                                                                   Long-Term
                                                                                  Compensation
                                          Annual Compensation                      Securities
Name and                                  -------------------    Other Annual      Underlying
Principal Position(s)             Year    Salary ($)    Bonus    Compensation    Options/SARs (#)
- ---------------------------     ----    ----------    -----    ------------    ----------------
<S>                               <C>     <C>           <C>      <C>             <C>
Sandy J. Masselli, Jr.(1)         2003    100,000(2)      0            0               0
Chairman of the Board             2002    100,000(2)      0            0               0
and Chief Executive Officer
</TABLE>

1.       Sandy Masselli, Jr. became Chief Executive Officer of the Company as of
         January 23, 1998 as part of the Merger.

2.       See Deferred Compensation Arrangements below.

STOCK OPTIONS

No stock  options  were  granted or  exercised  during  2004 to or by any of the
Company's named executive officers.

LONG-TERM INCENTIVE PLANS

The Company made no awards to the named  executive  officers under any long-term
incentive plan in 2004.

COMPENSATION OF DIRECTORS

Directors of the Company do not receive any stated salary or other  compensation
for their  services  as  directors  or  members  of  committees  of the Board of
Directors,  but by  resolution  of the  board,  a  fixed  fee  and  expenses  of
attendance  may be allowed for  attendance  at each  meeting.  Directors  of the
Company may also serve the Company in other  capacities as an officer,  agent or
otherwise,  and may  receive  compensation  for  their  services  in such  other
capacity.

DEFERRED COMPENSATION ARRANGEMENTS

Sandy Masselli, together with certain other senior officers and employees of the
Company,  have  agreed  to  defer  their  annual  salaries  until  such  time as
determined  by the  relevant  officer,  without  interest  and not  funded.  The
deferred  salaries shall be paid to such persons in cash or stock of the Company
at such future  time as each  person may elect by written  notice to the Company
and approved by the Company's Board of Directors.


<PAGE>

EMPLOYMENT AGREEMENTS

The Company is not a party to any  employment or consulting  agreement  with any
named executive officer.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  tables  set  forth  certain  information   regarding  beneficial
ownership of the  Company's  Common Stock by (i) each person who is known by the
Company  to  beneficially  own more than five  percent of the  Company's  Common
Stock,  (ii)  each of the  Company's  directors,  (iii)  each  of the  executive
officers  named  in the  Summary  Compensation  Table  set  forth  in Item 10 --
EXECUTIVE  COMPENSATION,  and (iv) all directors  and executive  officers of the
Company as a group. Unless otherwise  indicated,  the address of such persons is
501 Fifth Avenue, New York, New York 10017.



                                        Number of Shares
                                        of Common Stock
Name and Address of Beneficial Owner  Beneficially Owned(1)  Percent of Class(2)
- ----------------------------------- ---------------------  -------------------

Sandy J. Masselli, Jr                      72,500,000(3)             59.5
Robert D. Bonnell                           2,350,000(4)              4.0
John Masselli                                 750,000(5)              1.2
Richard B. Davis                              250,000(6)               .4
Intercapital Asset Management Limited      57,000,000(7)             49.8
  c/o The Royal Bank of Scotland
  Shirley & Charlotte Street
  Nassau, The Bahamas
All directors and executive officers       75,850,000                65.1
as a group (first 4 persons)

1.       Beneficial  ownership is determined in accordance with the rules of the
         Securities  and Exchange  Commission and generally  includes  voting or
         investment  power with  respect to  securities.  Except as indicated by
         footnotes and subject to community property laws, where applicable, the
         persons named above have sole voting and investment  power with respect
         to all shares of Common Stock shown as beneficially owned by them.

2.       With respect to option holders, the calculation of percentage ownership
         assumes the  exercise of the  relevant  option or options  beneficially
         owned by the holder but not by other option holders.

3.       This amount  consists of (i)  10,000,000  shares of Common  Stock held,
         directly or indirectly,  by Sandy Masselli's family and relatives, with
         respect to which Mr.  Masselli is in a position to exercise  voting and
         investment  power,  (ii)  3,000,000  common stock options issued to Mr.
         Masselli, (iii) 2,500,000 common stock options issued to Mr. Masselli's
         brother, Joseph H. Masselli, with respect to which Mr. Masselli is in a
         position to exercise voting and investment  power,  and (iv) 57,000,000
         common stock options (the Global  Options) held by  Intercapital  Asset
         Management  Limited,  a Bahamian  corporation (ICAM) as transferee from
         Intercapital  Global,  with  respect  to  which  Mr.  Masselli  is in a
         position to exercise voting and investment power. All of the 62,500,000
         common stock options referred to in clauses (ii), (iii), and (iv) above
         are exercisable at any time at $0.1875 per share and expire on February
         3, 2006.  ICAM is also listed in the table as an additional  beneficial
         owner of the Global Options.

4.       2,000,000 of this amount consists of common stock options issued to Mr.
         Bonnell. The options are exercisable at any time at $0.15 per share and
         expire  on  September  30,  2006.  Of  the  remaining   350,000  shares
         beneficially  owned  by Mr.  Bonnell,  170,000  are held  directly  and
         180,000 are held through a family holding  company of which Mr. Bonnell
         is the Chairman and CEO.

5.       This amount consists of 750,000 common stock options issued to Mr. John
         Masselli.  The options are exercisable at any time at $0.1875 per share
         and expire on February 3, 2006.


6.       This amount  consists of 250,000  common  stock  options  issued to Mr.
         Davis.  The options are  exercisable at any time at $0.15 per share and
         expire on September 30, 2006.

7.       This  amount  consists  of the  57,000,000  Global  Options  issued  to
         Intercapital  Global as an agent for the beneficial  owners of Mint and
         Intercapital  Global. The Global Options were subsequently  transferred
         by  Intercapital  Global to ICAM. The Global Options are exercisable at
         any time at $0.1875 per share and expire on February 3, 2006.  Sandy J.
         Masselli,  Jr. is also listed in the table as an additional  beneficial
         owner of the Global Options.


<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

FORMATION OF THE COMPANY

The Company was incorporated on April 22, 1993 in the State of Indiana under the
name Kit Farms Inc. (Kit).  From 1993 until 1995, Kit engaged in the business of
pet food  manufacturing  and  processing.  From 1995 until January 1998, Kit was
inactive.  On January 28, 1998, Mint Energy Corporation,  a Delaware corporation
(Mint),  merged with and into Kit, with Kit being the surviving corporation (the
Merger).  Concurrently,  Intercapital  Global  was  contributed  to  Kit  by its
shareholders, and became a wholly-owned subsidiary of Kit. Mint and Intercapital
Global had the same beneficial owners (the beneficial owners) at the date of the
Merger.  After the  Merger,  Kit  changed  its name to the  present  name of the
Company and in September 1998, the Company commenced its present Internet casino
business.

The Merger was effected pursuant to the terms of a Merger Agreement dated
November 17, 1997 entered into between Mint and Kit, as amended by the First
Amendment thereto dated January 15, 1998, and as further amended by certain oral
agreements in February 1998 (as amended, the Merger Agreement). Pursuant to the
Merger Agreement, the shareholders of Mint and Intercapital


Global received  approximately  104.8 million shares of Common Stock (the Merger
Shares) with a negotiated value of $2 million in consideration for entering into
the Merger. Through the Merger, the shareholders and management of Mint acquired
control over the Company as the surviving entity.

Prior to the Merger,  Mint owned certain  Internet  casino hardware and software
through its two wholly-owned  subsidiaries,  Online  Software,  Inc., a Delaware
corporation  (OSI), and Online Casinos,  Inc. a Delaware  corporation (OCI), and
Intercapital Global owned a gaming license issued by the government of Honduras.
From  1996  through  the date of the  Merger,  the  beneficial  owners  of these
entities  advanced  approximately  $2  million  which are  reflected  as capital
contributions  to such  entities to fund  expenditures  relating to research and
development  of the online  gaming  business  and  software.  As a result of the
Merger,  OSI and OCI became  wholly-owned  subsidiaries  of the Company and were
later merged with and into the Company with the Company surviving.  Intercapital
Global was organized in October 1993 as an offshore private corporation.


Other

From time to time,  certain  officers and directors of the Company have directly
paid certain  Company  expenses.  Such  transactions  have been  recorded in the
Company's  books as due to  officers,  and do not bear  interest.  There  are no
scheduled terms of repayment of such amounts.

From 1996 to 1998,  Mint and its  subsidiaries  (predecessor of the Company) had
expenses,   principally  for  computer  programming   services,   that  included
approximately  $65,000 paid to entities  controlled  by certain  officers of the
Company.  During this period, Mint also received advances which are reflected as
capital  contributions  in the  amount  of  approximately  $2,000,000  from  the
beneficial owners.


ITEM 14. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

The Company's  Common Stock is currently traded on the OTC bulletin board market
maintained by Nasdaq under the symbol  TlEI.ob.  The following  table sets forth
the range of the high and low bid quotations for the Company's  Common Stock for
the periods  indicated  (as reported by Nasdaq).  The bid  quotations  set forth
below  reflect  inter-dealer  prices,  without  retail  mark-up,   mark-down  or
commission, and may not represent actual transactions:

                                                       High       Low
                                                       ----       ---

Fiscal Year Ended December 31, 2003:
    First Quarter ........................            $ 0.01      0.01
    Second Quarter .......................              0.01      0.01
    Third Quarter ........................              0.01      0.01
    Fourth Quarter .......................              0.10      0.49


                                                       High       Low
                                                       ----       ---

Fiscal Year Ended December 31, 2004:
    First Quarter ........................            $ 0.12      0.39
    Second Quarter .......................              0.12      0.17
    Third Quarter ....................                  0.10      0.17
    Fourth Quarter .................                    0.05      0.17

<PAGE>

SECURITY HOLDERS AND DIVIDENDS

As of December  31, 2004 there were  approximately  146 holders of record of the
Company's  Common Stock. The Company has not declared or paid any cash dividends
on its Common Stock during the past two fiscal  years.  The  Company's  board of
directors  currently  intends to retain all  earnings  for use in the  Company's
business for the foreseeable future. Any future payment of dividends will depend
upon the Company's results of operations, financial condition, cash requirements
and other factors deemed relevant by the Company's board of directors.


ITEM 15. EXHIBITS INDEX

The exhibits designated with an asterisk (*) have been previously filed with the
Commission  and,  pursuant to 17 C.F.R.  Section  230.411,  are  incorporated by
reference to the document  referenced in brackets  following the descriptions of
such exhibits.



3.1      Certificate of Incorporation and amendments*
3.2      Bylaws*
10.1     Merger  Agreement  dated  November  17, 1997  entered into between Mint
         Energy  Corporation  and  Kit  Farms  Inc.,  as  amended  by the  First
         Amendment  thereto dated January 15, 1998, and Plan of  Merger/Exchange
         dated January 23, 1998*
10.2     License  Agreements  dated  April 9,  1999 and  June 23,  1999  between
         Intercapital  Global Fund, Ltd. and Online Gaming Systems,  Ltd (f/k/a.
         Atlantic  International  Entertainment,  Ltd.),  and  related  Software
         Support Maintenance Agreements*
10.3     Amended  and  Restated  Purchase  Agreement  dated May 5, 1999  between
         Intercapital Global Fund, Ltd. and Summerhill Gaming Limited*
10.4     Agreement dated August 18, 1998 between  Intercapital Global Fund, Ltd.
         and MPACT Immedia Transaction Services Ltd.*
10.5     Equipment   Lease   Agreement  dated  August  18,  1999  between  Total
         Entertainment Canada, Ltd. (formerly Intercapital Canada Ltd.) and Dell
         Financial Services Canada Limited*
10.6     Lease Agreement dated June 22, 1999 between Marine  Properties Ltd., as
         Landlord,  and Total Entertainment Canada, Ltd. (formerly  Intercapital
         Canada Ltd.), as Tenant*
10.7     Lease Agreement dated July 30, 1999 between  Devonshire House, Ltd., as
         Landlord, and Intercapital Global Fund, Ltd., as Tenant*
10.8     Revolving  Credit Note dated May 5, 1999 payable to  Summerhill  Gaming
         Limited*
10.9     Marketing  and  License   Agreement  dated  January  14,  2000  between
         Intercapital Global and Online Gaming Systems, Ltd.*
10.10    Information  Services Provider Agreement dated February 1, 2000 between
         Intercapital Global and Caribbean Entertainment International, S.A.*
10.11    Purchase  Agreement dated March 1, 2000 between  Intecapital Global and
         Netforfun.com Inc., and related Software Support Maintenance Agreement*
10.12    Agreement with Summerhill Gaming Limited dated March 24, 2000 regarding
         debt to equity conversion*


<PAGE>

Form 8-K dated August 26,2002*
Form 8-K dated September 10,2002*
Form 8-K/A dated November 19,2002*
Form 8-K dated January 27,2004*
Form 8-K dated April 2,2004*
Form 8-K dated June 2,2004*
Form 8-K dated June 8,2004*
Form 8-K dated January 27,2005*

31.1     Certification of Sandy J. Masselli pursuant to 18 U.S.C.  Section 1350,
         as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2     Certification  of Richard B. Davis pursuant to 18 U.S.C.  Section 1350,
         as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1     Certification of Sandy J. Masselli pursuant to 18 U.S.C.  Section 1350,
         as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2     Certification  of Richard B. Davis pursuant to 18 U.S.C.  Section 1350,
         as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



SIGNATURES

In accordance  with Section 13 or15 (d) of the Securities  Exchange Act of 1934,
the  registrant  has  caused  this  report  to be  signed  on its  behalf by the
undersigned, hereunto duly authorized.


                                       TOTAL ENTERTAINMENT INC.

                                       By /s/ SANDY J. MASSELLI, JR.
                                          --------------------------------------
                                          Sandy J. Masselli, Jr.,
                                          Chairman of the Board, Chief Executive
                                          Officer Director

Dated April 20, 2005

In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

SIGNATURE                           TITLE                            DATE
---------                           -----                            ----

/s/ ROBERT D. BONNELL              President                       April 20,2005
---------------------------

/s/ RICHARD B. DAVIS               Director  and                  April 20,2005
---------------------------        Chief  Financial Officer

/s/ SAMUAL G.S. HUGES              Director                        April 20,2005
---------------------------