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, 2003.

                                       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 ENTERTAINMENT INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)


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

 680 Branch Avenue
 P.O. Box 8699    Red Bank, New Jersey                          07701
 -------------------------------------                       ----------
(Address of Principal Executive Offices)                     (Zip Code)

                                 (732) 842-5553
                           ---------------------------
                           (Issuer's telephone number)

<PAGE>

      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)

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, 2003 WAS $2,433,224.

As of December  31, 2003,  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.

<PAGE>




                          INDEX TO FINANCIAL STATEMENTS



Independent Auditor's Report                                                F-2

Financial Statements:

Balance Sheets as of December 31, 2003 and 2002                             F-3

Statements of Operations for the Year ended December 31, 2003 and 2002      F-4

Statement of Changes in Shareholders' Equity for the Year ended
December 31, 2003 and 2002                                                  F-5

Statement of Cash Flows for the Year ended December 31, 2003 and 2002       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 ENTERTAINMENT INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 and DECEMBER 31, 2002

Assets                                                     2003           2002
                                                    -----------    -----------
Current
  Cash                                              $        71    $       193
  Accounts receivable                                      --
                                                    -----------    -----------
                                                            193            193
                                                    -----------    -----------
Property and equipment:
  Computer equipment                                    314,744        314,744
  Furniture and fixtures                                 48,845         48,845
                                                    -----------    -----------
                                                        363,589        363,589

Less accumulated depreciation                          (334,140)      (334,811)
                                                    -----------    -----------
                                                         15,449         28,778
                                                    -----------    -----------
                                                    $    15,520    $    28,971
                                                    ===========    ===========
Liabilities

Current
  Accounts payable and accrued liabilities          $   155,964    $   163,258
  Deferred compensation                               1,325,450      1,182,949
  Due to directors and stockholders                     521,771        454,561
                                                    -----------    -----------
                                                      2,003,185      1,800.768
                                                    -----------    -----------
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, 2002 and 2003        58,388         58,388
  Additional paid-in capital                          2,684,695      2,684,695
  Accumulated deficit                                (4,730,748)    (4,514,880)
                                                     -----------   -----------
                                                                    (1,987,665)
                                                                    (1,771,797)
                                                   -----------     -----------
                                                    $    15,520              $
                                                                        28,971
                                                    ===========    ===========

                                       F-3

<PAGE>
<TABLE>
<CAPTION>



TOTAL ENTERTAINMENT INC.
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                                 2003           2002
                                                            -----------    -----------
<S>                                                        <C>             <C>
Revenues:
  Gaming revenues (Note 3 (a) (i))                                  -0-    $   914,399
  Less: Charge backs                                               - 0-        (34,302)
      Complimentary and bonus                                                      -0-
                                                               (122,423)          --
                                                                           -----------
  Gaming revenues, net                                              -0-        757,674
  Royalty fees (Note3 (a))                                          -0-         84,750
                                                            -----------    -----------
                                                                   --          842,424
                                                            -----------    -----------
Expenses:
  Cost of operations                                                -0-        151,798
  Selling, general and administrative                           202,539        918,919
  Depreciation and amortization                                  13,329         64,405
                                                            -----------    -----------
                                                                215,868      1,135,113
                                                            -----------    -----------
Loss from operations                                           (215,868)      (292,689)
Gain on settlement of note receivable                            21,201
Gain on sale of assets                                          129,985
                                                            -----------    -----------
Income (loss) before provision for income taxes (215,868)      (141,503)
                                                            -----------    -----------
  Provision for income taxes                                       --             --
NET INCOME (LOSS)                                           $  (215,868)   $  (141,503)
                                                            ===========    ===========
Basic and diluted income (loss) per common share            $      (.00)   $      (.00)
                                                            ===========    ===========
</TABLE>


                                       F-4

<PAGE>
<TABLE>



TOTAL ENTERTAINMENT INC.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                      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


TOTAL ENTERTAINMENT INC.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                         2003         2002
                                                      ---------    ---------
Operating:

Net income (loss)                                     $(215,868)   $(141,503)
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
     Depreciation and amortization                       13,329       64,405
     Deferred compensation                              142,501      121,899
     Gain on sale of assests (net)                         --          6,245
    Increase (decrease) in cash from changes
    in operating assets and
    liabilities:
      Accounts receivable                                  --        232,527
      Accounts payable and accrued liabilities           (7,294)    (184,746)
      Customer account deposits                            --       (373,381)
                                                      ---------    ---------
                                                        (67,332)    (274,554)
                                                      ---------    ---------
Investing:
Payments received on Note Receivable                    124,717         --
Other assets                                               --         41,282
Payment received on (increase in) note receivable          --        124,717
                                                      ---------    ---------

Net cash provided by (used in) investing activities     124,717      165,999
Financing:                                                 --           --

Principal payments on capital leases                       --        (11,264)
Advances from directors and stockholders                 67,272       99,596
                                                      ---------    ---------
                                                         67,272       88,332
                                                      ---------    ---------

Net (Decrease) Increase in cash                            (122)     (20,223)

Cash at beginning of period                                 193       20,416

                                                      ---------    ---------

Cash at end of period                                 $      71    $     193
                                                      ---------    =========

                                       F-6

<PAGE>

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

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

     The following  discussion  includes the business of Company, , prior to its
     acquisition of the assets of Beth Bender,  Inc.. a Subsidiary,  acquired on
     March 17, 2004.  Otherwise the Company had no operations other than raising
     capital and searching for an acquisition  candidate (i.e., the Subsidiary).
     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  Entertainment  Inc., formerly known as Kit Farms 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  March  17,2004 the Company had no business
     activities other than  administrative  costs necessary,  for researching an
     acquisition  candidate and for remaining a publicly  reporting  entity.  On
     March 17,2004 , the Company  entered in an asset  purchase  agreement  with
     Beth Bender, Inc. a development stage enterprise.

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, 2003 and 2002, the Company has
     a working capital  deficiency of  approximately  $2,003,185 and $1,800,575,
     respectively,  and a stockholders'  deficiency of approximately  $1,988,000
     and $1,772,000 respectively.

                                       F-7
<PAGE>



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

     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 ENTERTAINMENT 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,  2003 and 2002 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, 2003
     is 7,603,826.  The denominator for the basic and diluted earnings per share
     calculation for the year ended December 31, 2002 is 62,908,443.

(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, 2003

(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, the note receivable
     from NetForFun, and accounts receivable.  Substantially all of the accounts
     receivable  at December 31, 2002 are from  Surefire  Commerce Ltd. or other
     credit card processors.

(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  $47,000  for the  years  ended  December  31,  2003  and  2002.
     respectively.

                                      F-10

<PAGE>


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

     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 ENTERTAINMENT INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002



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 ENTERTAINMENT 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, 2003 and December 31, 2002
     was  approximately $ 0.00 and $82,460,  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.  The  Company  also  paid  for  a  portion  of   Intercapital   Asset
     Management's  leased facility in New Jersey under an informal agreement for
     the year ended December 31 2002.

(b)  CAPITAL LEASE OBLIGATION

     The Company leases  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 ENTERTAINMENT INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003

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.  The total amount
of deferred officer salaries at December 31, 2003 was approximately  $1,132,949.
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   2002and  2003  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


                                      F-15
<PAGE>


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

     no revenues or employees during this period.  Funds 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


                                      F-16
<PAGE>



TOTAL ENTERTAINMENT INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

     acquisition  is identical  to that  resulting  from a 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

     Upon filing income tax returns, 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. The Company is consulting with legal council to determine a plan
     to become  compliant.  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, 2003 and 2002.

     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

     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  2003 the  Company  paid  approximately  $0 of taxes  and  $4,000 of
     interest. During 2002 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.          41        Chairman of the Board, Chief
                                          Executive Officer and President
Robert D. Bonnell               58        Director
Richard B. Davis                57        Director and Chief Financial Officer
John Masselli                   33        Director and Secretary



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. John  Masselli  has served as director of the Company
since July 2, 2001.  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. 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.


<PAGE>


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.

John J.  Masselli  has served as a Director and  Secretary of the Company  since
July 2001. From March 1998 to present, Mr. John J. Masselli has been employed by
the Company as Executive Vice President, Marketing/Development. >From March 1993
to March 1998,  Mr. John J. Masselli was employed by Merrill Lynch & Co.,  Inc.,
U.S. Private Client Services; his responsibilities included brokerage operations
and customer service. Mr. John J. Masselli holds a Bachelor of Science degree in
Communications  from The University of Miami,  Florida.  Mr. John J. Masselli is
the brother of Sandy J. Masselli,  Jr.,  Chairman of the Board,  Chief Executive
Officer and a director of the Company.

FAMILY RELATIONSHIPS

John J. Masselli, Director is the brother of Sandy Masselli, Jr. Chairman of the
Board.  There  are no other  family  relationships  among  directors,  executive
officers or other persons  nominated or chosen by the Company to become officers
or executive officers.

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.

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, 2001, 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, 2003:

<PAGE>
<TABLE>
<CAPTION>


                           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  2003 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 2003.

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.

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
P.O. 8699 Red Bank, New Jersey 07701.

<PAGE>


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

<PAGE>


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.

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.

<PAGE>

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: .........       $ 0.32     $ 0.32
    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, 2002: .........       $ 0.01     $ 0.04
    First Quarter ............................         0.08       0.03
    Second Quarter ...........................         0.04       0.03
    Third Quarter ............................         0.05       0.01
    Fourth Quarter ...........................         0.04       0.01


SECURITY HOLDERS AND DIVIDENDS

As of December  31, 2003 there were  approximately  133 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.


<PAGE>


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*

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*

    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 1, 2004

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       Director                        April 1,2004
---------------------

/s/ RICHARD B. DAVIS        Director  and                   April 1,2004
---------------------       Chief  Financial Officer

/s/ JOHN J. MASSELLI        Director                        April 1,2004
---------------------

<PAGE>