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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                          -----------------------------

                                   FORM 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934 FOR THE
                       FISCAL YEAR ENDED DECEMBER 31, 2003

                         Commission File Number: 0-27006

                           MILLION DOLLAR SALOON, INC.
                 (Name of Small Business Issuer in Its Charter)

        Nevada                                            13-3428657
(State of Incorporation)                    (I.R.S. Employer Identification No.)

                             6848 Greenville Avenue
                               Dallas, Texas 75231
          (Address of Principal Executive Offices, including Zip Code)

                                 (214) 691-6757
                (Issuer's Telephone Number, Including Area Code)
                                 ---------------

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

Title of Each Class                                     Name of Each Exchange
-------------------                                      on which Registered
        N/A                                             ---------------------
                                                                 N/A

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

                                 Title of Class
                                 --------------
                          Common Stock, $.001 par value

         Check whether the issuer (i) filed all reports  required 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 issuer was required to file such reports),  and (ii) has
been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

         Check if  disclosure  of  delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of the  issuer'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  revenues for the fiscal year ended December 31, 2003 were
$3,719,315. The aggregate market value of common stock held by non-affiliates of
the  issuer at March 25,  2004,  based  upon the  closing  sale price on the OTC
Bulletin  Board on said date of $0.14 per share,  was $280,260.  As of March 24,
2004, there were 5,731,778 shares of the issuer's common stock outstanding.

                       Documents Incorporated by Reference

         No documents,  other than certain  exhibits,  have been incorporated by
reference into this report.

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

PART I                                                                         2

   ITEM 1. DESCRIPTION OF BUSINESS.............................................2
   ITEM 2. PROPERTIES..........................................................8
   ITEM 3. LEGAL PROCEEDINGS...................................................9
   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.................9

PART II                                                                        9

   ITEM 5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS AND
             SMALL BUSINESS ISSUER PURCHASE OF EQUITY SECURITIES...............9
   ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..........10
   ITEM 7. FINANCIAL STATEMENTS...............................................15
   ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
             FINANCIAL DISCLOSURE.............................................15
   ITEM 8A. CONTROLS AND PROCEDURES...........................................15

PART III                                                                      15

   ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT................15
   ITEM 10. EXECUTIVE COMPENSATION............................................16
   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
              AND RELATED SHAREHOLDER MATTERS.................................18
   ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................19
   ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K..................................20
   ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES............................22

   INDEX TO EXHIBITS.......................................................IOE-1



















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                                     PART I

                  CAUTION REGARDING FORWARD-LOOKING INFORMATION

         Certain statements contained in this annual filing, including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

         Such factors  include,  among  others,  the  following:  international,
national and local general economic and market conditions:  demographic changes;
the  ability of the  Company to sustain,  manage or  forecast  its  growth;  the
ability of the Company to successfully make and integrate acquisitions; existing
government regulations and changes in, or the failure to comply with, government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

         Given these  uncertainties,  readers of this Form 10-KSB and  investors
are cautioned not to place undue  reliance on such  forward-looking  statements.
The Company  disclaims any  obligation to update any such factors or to publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

ITEM 1. DESCRIPTION OF BUSINESS

General

         Million Dollar Saloon Inc. (the "Company") was  incorporated  under the
laws of the  State of  Nevada  on  September  28,  1987.  The  Company  provides
management support and conducts its business operations through its wholly-owned
operating  subsidiaries:   Furrh,  Inc.,  Tempo  Tamers,  Inc.,  Don,  Inc.  and
Corporation Lex. The Company owns and operates an adult cabaret in Dallas, Texas
and owns and manages two other commercial  properties located in the Dallas-Fort
Worth Metroplex.

         Furrh, Inc.  ("Furrh") was incorporated  under the laws of the State of
Texas on February 25, 1974. Furrh provides  management services to Tempo Tamers,
Inc. ("Tempo"),  its wholly-owned  subsidiary.  Tempo was incorporated under the
laws of the State of Texas on July 3, 1978.  Tempo operates the Company's  adult
entertainment lounge and restaurant facility, located in Dallas, Texas under the
registered trademark and trade name "Million Dollar Saloon(R)."

         Don, Inc. ("Don") was incorporated under the laws of the State of Texas
on November 8, 1973. Don owns and manages  commercial rental property located in
Tarrant County, Texas.

         Corporation Lex ("Lex") was incorporated under the laws of the State of
Texas on November  30, 1984.  Lex owns and manages  commercial  rental  property
located in Dallas County, Texas.

         The Company's  principal offices are located at 6848 Greenville Avenue,
Dallas,  Texas  75231,  and its  telephone  number  is  (214)  691-6757.  Unless
otherwise  indicated,   the  "Company"  refers  to  the  Company,  each  of  its
wholly-owned subsidiaries and Tempo. The Company's common stock is traded on the
OTC Bulletin Board under the symbol "MLDS".

         The Company is based in Dallas,  Texas and currently  conducts business
in two distinct areas:

         o        Owning and operating an adult cabaret.

         o        Owning and managing commercial real estate.

Purchase of Real Estate

         On February 14, 2003, the Company  purchased 6.695 acres of undeveloped
property  located  in  Dallas,  Texas.  The  purchase  price  was  approximately
$2,650,312,  including  closing expenses of approximately  $53,599.  The Company


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<PAGE>

paid $493,072 cash, which included a $140,000  unsecured,  non-interest  bearing
advance to the Company from Duncan Burch, a controlling shareholder, officer and
director  of the  Company,  and  issued  to the  seller a  one-year  note in the
principal amount of $2,156,713 with 8% annual interest.  The payment of the note
was secured with a lien  against the property  granted to the note holder by the
Company. The interest on the note was payable monthly (approximately $14,678 per
month)  beginning  April 1, 2003 with the  principal  amount due and  payable on
February 1, 2004.

         In February 2004, the Company obtained permanent long-term financing to
retire the note  payable  to the  seller.  The new  obligation  has a  principal
balance of  $2,000,000  and bears  interest  at 6.5% for the first year and then
adjusts to 1% above the published prime rate. The interest rate adjusts every 12
months  commencing  January 29, 2005.  The note requires  monthly  principal and
interest payments of $17,426. The note matures on January 29, 2019.

         The property is undeveloped and suitable for commercial development. As
a result of the  settlement  agreement  entered into between the Company and the
City of Dallas in May 2003, the Company is obligated to  discontinue  operations
of the Million  Dollar Saloon  cabaret at its current  location by July 31, 2009
unless the location again  satisfies the ordinance  requirements  of the city of
Dallas prior to said date. The undeveloped  property acquired by the Company may
be used for the purpose of relocating the Million dollar Saloon cabaret.  At the
present time,  management  continues to evaluate the best use of this  property.
The  development  of the  property  will be subject to the  Company  obtaining a
construction loan. The Company does not currently know the amount of the loan it
will  need to  develop  this  property  or  whether  it will be able to obtain a
sufficient  loan for  development  of the property or, if obtained,  whether the
terms of the loan will be favorable to the Company.

Adult Cabaret

         General. The Company, through Tempo, owns and operates an adult cabaret
under  the name "The  Million  Dollar  Saloon,"  which is its  primary  business
operation.  The  Million  Dollar  Saloon  opened  in 1982  with  the  intent  of
establishing a sophisticated  entertainment  environment focused on attracting a
professional  clientele.  To enhance the club's appeal to its target market, The
Million Dollar Saloon offers restaurant and first-class bar service conducive to
attracting  businessmen  and  out-of-town  convention  clientele.   The  Company
continues to explore the possible  expansion of the adult cabaret segment of its
business by  establishing  additional  Million  Dollar  Saloons or acquiring and
operating  similar  facilities  in  selected  cities.  Although  the  Company in
February 2003  purchased 6.6 acres of  undeveloped  land in Dallas,  Texas,  the
Company  has not  determined  whether  the land  will be  developed  as an adult
cabaret or for other  purposes.  Other than the recent  purchase  of the Dallas,
Texas property, no specific locations for additional Million Dollar Saloons have
been identified.

         Female   Entertainment.   A  performer's  ability  to  present  herself
attractively and to converse  intelligently  with customers is very important to
management.  Management insists that the performers at The Million Dollar Saloon
be  experienced  dancers.  The  performers  dance on the main  stage or on small
stages  throughout  the club.  Management  never allows full nudity in the club.

         Compliance Policies.  The Company's management has a policy of ensuring
that its  business is carried on in  conformity  with  local,  state and federal
laws. In particular,  the Company's management has a "no tolerance" policy as to
illegal  drug use in or around  the  premises.  Posters  placed  throughout  the
nightclub  reinforce  this  policy as do  periodic  unannounced  searches of the
entertainer's  lockers.  Entertainers and waitresses who arrive for work are not
allowed to leave the premises  without the  permission  of  management.  Once an
entertainer does leave the premises,  she is not allowed to return to work until
the next day.  Management  continually  monitors the  behavior of  entertainers,
waitresses  and  customers  to ensure that  proper  standards  of  behavior  are
observed.







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<PAGE>

         Management also reviews all credit card charges made by customers while
at The Million Dollar  Saloon.  Specifically,  the Company's  policy is that all
credit card charges must be pre-authorized by the card issuer before any charges
are accepted.  Management of the club is  particularly  trained to review credit
card  charges to ensure that the only credit card  charges  approved for payment
are for those incurred by the customer.

         Food and Drink.  The Company believes a key to the success of a premier
adult  cabaret  is a  quality,  first-class  bar  and  restaurant  operation  to
complement its adult entertainment. The Company's restaurant operation is a full
service  operation which provides  business lunch buffets and a full-scale lunch
and dinner menu service offering hot and cold appetizers, salads, seafood, steak
and other  entrees.  A variety of premier  wines are offered to  compliment  any
customer's lunch or dinner  selection.  The Company employs a full-time  Service
Manager who is in charge of  recruiting  and  training a  professional  waitress
staff and ensuring that each customer receives prompt and courteous service. The
Company also employs a Chef and a Bar  Manager.  The Bar Manager is  responsible
for stocking, inventory control, and scheduling of bar staff.

         Controls.  Operational  and  accounting  controls are  essential to the
successful  management  of a cash  intensive  nightclub  and bar  business.  The
Company separates management personnel from all cash handling.  The Company uses
a  combination  of the  latest in  nightclub-oriented  accounting  software  and
physical inventory control mechanisms to ensure a high level of integrity in its
accounting  practices.  Computers  play a  significant  role  in  capturing  and
analyzing a variety of information to provide  management  with the  information
necessary to efficiently monitor and control the nightclub. Management controls,
restricts and supervises  carefully all management personnel with cash handling.
Management personnel reconcile continuously each day deposits of cash and credit
card receipts to produce a detailed daily income report.  Daily computer reports
alert  management of any  variances  from  expected  financial  results based on
historical norms.

         Atmosphere.  The Million Dollar Saloon maintains an elegant  atmosphere
through its Mediterranean decor theme and other customer related amenities.  The
furniture and  furnishings in The Million Dollar Saloon create the feeling of an
upscale  restaurant.  The club offers a gourmet menu,  two cigar humidors and an
extensive champagne and fine wine list. The sound system design provides quality
high-energy  music levels that also permit easy  conversation to take place. The
Million Dollar Saloon also provides a state-of-the-art  light show and employs a
sound and light engineer to upgrade,  monitor,  and maintain its sound and light
systems.  Management  constantly  monitors the environment of The Million Dollar
Saloon  for  appropriate  music  selection,   customer   service,   and  upscale
appearance, and ambience.

         VIP Area. To provide  service for the upper-end of the business  market
segment, the Company maintains a spacious VIP mezzanine  encompassing the entire
upstairs  public area of The Million  Dollar  Saloon  facility.  The VIP area is
opened to individuals who pay an increased  daily  admission  charge or purchase
annual or lifetime  memberships.  The VIP area provides a higher level of luxury
in  its  decor  and  more  personalized  services.  The  VIP  area  consists  of
approximately  1,800 square feet for food and entertainment  purposes and has an
occupancy  of 100  persons.  Catering  to the upscale  VIP  customer,  this area
includes "The Champagne  Room"  accessible for an additional fee. The downstairs
club  and  dining  area  consists  of   approximately   4,500  square  feet  for
entertainment  purposes and can  accommodate  250 persons.  The lower level also
offers "The Blue Room",  a private  entertainment  space for  bachelor and other
large group activities.

         Advertising  and Promotion.  The Company's  marketing  philosophy is to
portray The Million Dollar Saloon as a premiere adult cabaret  providing  female
entertainment in a sophisticated,  discreet  environment for its patrons.  Hotel
publications,  local radio,  cable  television,  newspapers,  billboards,  and a
variety of other  promotional  activities  ensure that the public recognizes The
Million Dollar Saloon name.

Future Expansion

         Other than the recent purchase of the Dallas, Texas property, which may
be used to  relocate  the Million  Dollar  Saloon  cabaret,  the Company has not
determined  the  precise  locations  or nature of its future  expansion,  but it
believes,  based upon its  experience,  that  opportunities  for expansion exist
primarily in metropolitan  areas in the Southwest United States. The Company may


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<PAGE>

expand through the  acquisition of sports bars,  casual clubs and adult cabarets
that may use the trademark  "The Million Dollar  Saloon." In  determining  which
cities may be suitable  locations  for  expansion,  a variety of factors will be
considered,  including,  but not limited to, the current regulatory environment,
the availability of sites located in high traffic  commercial areas suitable for
conversion to The Million  Dollar Saloon style cabarets or sports bars or casual
clubs,  potential  competition  in  the  area,  current  market  conditions  and
profitability of other adult cabarets in the city.

Competition

         The adult  entertainment  nightclub industry is highly competitive with
respect  to  price,   service,   location,   and  the   professionalism  of  its
entertainment.  The Million Dollar Saloon competes with many locally-owned adult
cabarets in Dallas,  Texas,  certain of which may enjoy  recognition that equals
that of The  Million  Dollar  Saloon.  While  there  may be  local  governmental
restrictions on the location of a so-called "sexually oriented business",  there
are no barriers to entry into the adult cabaret  market.  There are in excess of
30 adult cabarets located in the Dallas,  Texas  metropolitan area of which five
are in direct  competition for target  customers with the Million Dollar Saloon.
Several of the competitor adult cabarets are owned by corporations controlled by
or affiliated with Nick Mehmeti and Duncan Burch,  officers and directors of the
Company.  The  Company  believes  that  the  combination  of its  existing  name
recognition and its distinctive and unique entertainment  environment will allow
the Company to effectively compete within this industry.

Governmental Regulations

         The  Company  is  subject  to  various  federal,  state and local  laws
affecting its business activities.  In Texas, the authority to issue a permit to
sell alcoholic  beverages is governed by the Texas Alcoholic Beverage Commission
("TABC").  The TABC has the authority,  in its discretion,  to issue appropriate
permits. The Company,  through a management agreement with Tempo Tamers Beverage
Company,  Inc., an affiliated  corporation,  operates its business under a Texas
Mixed Beverage Permit and Late Hours Permit (the  "Permits").  These Permits are
subject to annual renewal,  provided the Company and its affiliated  corporation
have complied with the rules and regulations governing the Permits. Renewal of a
permit is subject to protest by a law enforcement agency, governmental agency or
by a member of the public.  In case of protest,  the TABC may hold a hearing for
interested parties to express their views. The TABC has the authority after such
hearing not to issue a renewal of the protested  alcoholic  beverage permit. The
failure of the Company to obtain a renewal of its Permits  would have a material
adverse  effect upon the  financial  condition of the Company.  Other states may
have similar laws that may limit the  availability of a permit to sell alcoholic
beverages or which may provide for  suspension or revocation of a permit to sell
alcoholic  beverages in certain  circumstances.  Prior to expanding into any new
market,  the Company will take all steps necessary to ensure compliance with all
licensing and regulatory requirements.

         Various groups have  increasingly  advocated  certain  restrictions  on
"happy hour" and other promotions  involving  alcoholic  beverages.  The Company
believes its  entertainment  value,  admittance  charge  beginning  after normal
"happy  hours" and its policies of not  discounting  drink prices are  effective
tools in promoting its business.  The Company cannot predict whether  additional
restrictions  on the promotion of sales of alcoholic  beverages will be adopted,
or if adopted, the effect of such restrictions on its business.

         Beyond various regulatory  requirements affecting the sale of alcoholic
beverages,  the location of an adult cabaret is subject to  restriction  by city
ordinance.  In Dallas, the Company is subject to "The Sexually Oriented Business
Ordinance" (the "Ordinance")  which contains  prohibitions on the location of an
adult  cabaret.  The  prohibitions  deal  generally  with distance from schools,
churches,  residences and other sexually  oriented  businesses The granting of a
Sexually  Oriented  Business  Permit  ("Business  Permit")  is  not  subject  to
discretion;  the  Business  Permit  must be  granted if the  proposed  operation
satisfies the  requirements  of the  Ordinance.  The Company has held a Business
Permit since passage of the city  ordinance.  The Business Permit is valid for a
period of one year and is renewable by  application  of the permit  holder.  The
Company and other  corporations  that operate adult cabarets  within the City of
Dallas  are  contesting  the   constitutionality  of  certain  sections  of  the
Ordinance.  See "Item 3 - Legal Proceedings and Item 12 - Certain  Relationships
and Related Transactions"



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<PAGE>

Employees

         As of December 31,  2003,  the Company had  approximately  41 full-time
employees,  of which 13 were in management  positions,  including  corporate and
administrative  operations  and 28 were  engaged in food and  beverage  service,
including  bartenders  and  waitresses.  The Company also employed 127 part-time
employees who were engaged in food and beverage service.  Entertainers  numbered
approximately  97 full  and  part  time.  None of the  Company's  employees  are
represented  by a union and the Company  considers its employee  relations to be
good.

Insurance

         The Company  maintains  insurance in amounts it considers  adequate for
personal  injury and property  damage.  The Company  maintains  personal  injury
liquor  liability  insurance  because the  Company  may be exposed to  potential
liabilities  that may be imposed  pursuant to the Texas  "Dram Shop"  statute or
similar "Dram Shop" statutes or common law theories of liability in other states
where the Company may expand.  The Texas "Dram Shop"  statute  provides a person
injured  by  an  intoxicated  person  the  right  to  recover  damages  from  an
establishment  that wrongfully  served alcoholic  beverages to such person if it
was apparent to the server that the  individual  being sold,  served or provided
with an  alcoholic  beverage  was  obviously  intoxicated  to the extent that he
presented a clear danger to himself and others.

Commercial Real Estate

         The Company owns four  properties in the Dallas-Fort  Worth  Metroplex.
The  Company's  Million  Dollar  Saloon adult  cabaret is operated at a property
located on  Greenville  Avenue in Dallas,  Texas.  The property  located in Fort
Worth, Texas is leased to affiliates of Duncan Burch, an officer and director of
the Company,  for the  operation of an adult  cabaret.  One property  located on
Northwest Highway in Dallas,  Texas is a vacant  free-standing  facility,  which
previously  housed an adult cabaret  operated by  affiliates  of Mr. Burch.  The
Company is prohibited by city ordinances from operating an adult cabaret at this
location.  The fourth property  consists of 6.6 acres of undeveloped real estate
located in Dallas,  Texas,  which may be used to  relocate  the  Million  Dollar
Saloon  cabaret.   The  Company's  management  has  not  however  made  a  final
determination  as to  the  use of  this  undeveloped  property.  See  "Item  1 -
Description of Business - Purchase of Real Estate."

         The Company-operated  Million Dollar Saloon is located in Dallas, Texas
and consists of a 9,750 square foot building  located on an  approximate  25,500
square  foot  tract  of land  fronting  a major  traffic  artery.  See  Item 2 -
"Properties."

         Management  believes that all of its properties are adequately  covered
by insurance. See "Item 2 - Properties" and "Item 12 - Certain Relationships and
Related Transactions."

Risk Factors

         Certain  of the  statements  contained  in this  Annual  Report on Form
10-KSB are forward looking statements that involve risks and uncertainties. Such
statements  are subject to important  factors that could cause actual results to
differ materially, including the following risk factors:

         Adult Cabaret Operations Are Subject to Local Economic Conditions.  The
adult  entertainment,  restaurant and bar industry is a volatile  industry.  The
industry tends to be sensitive to the general local economy. When local economic
conditions are prosperous, entertainment industry revenues increase, conversely,
when local economic conditions are unfavorable,  entertainment industry revenues
decline.  Customers  who frequent  adult  cabarets  generally  follow  trends in
personal preferences. The Company continuously monitors trends in its customers'
tastes and  entertainment  preferences so that, if necessary,  it can change its
operations and services to accommodate  the changes in trends.  Any  significant
decline in general  corporate  conditions  or the economy  that affect  consumer
spending  could have a material  adverse  effect on the  Company's  business and
financial condition.

         Failure to Maintain  Adequate  Financial  Controls Could Result in Lost
Revenues.  A significant  part of the revenues earned by the Company through its
adult  nightclub  operations  will be  collected  in cash by full and  part-time
employees.  Comprehensive  financial  controls  are  required  to  minimize  the
potential  loss of revenue  through  theft or  misappropriation  of cash. To the



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<PAGE>

extent that these controls are not structured or executed properly,  significant
cash  revenues  could be lost and  profitability  of the Company  impaired.  The
Company  believes  that it has  implemented  significant  cash  controls  and is
utilizing a combination of accounting and physical  inventory control devices to
deter  theft  and to  ensure a high  level of  security  within  its  accounting
practices and procedures.

         Significant   Competition  Within  the  Industry.   The  adult  cabaret
entertainment  business is highly  competitive  with respect to price,  service,
location and the  professionalism  of  entertainment.  The Million Dollar Saloon
competes in Dallas with a number of locally-owned adult cabarets,  some of whose
names may enjoy  recognition  that equals or exceeds that of The Million  Dollar
Saloon. Although the Company believes that due to its strategic location it will
be able to compete successfully with other local adult cabarets, there can be no
assurance  that the  Company  will be able to  maintain  its high  level of name
recognition and prestige within the marketplace.  The Company's  success depends
on maintaining a high quality of female entertainers and waitresses. Competition
for female entertainers in the adult entertainment business is intense. The lack
of availability of quality, personable, attractive entertainers or the Company's
inability to attract and retain other key employees,  such as kitchen  personnel
and bartenders, could adversely affect the business of the Company.

         Company Competes with Businesses  Owned by Directors.  Nick Mehmeti and
Duncan Burch, and their affiliates, own and operate adult cabarets,  restaurants
and sports bars in the Dallas-Fort  Worth  Metroplex.  The Company is engaged in
direct  competition  with the adult cabarets owned by Messrs.  Mehmeti and Burch
for customers and employment of female  entertainers.  The Company believes that
the combination of its existing name  recognition and its distinctive and unique
entertainment  allows it to  effectively  compete  with  these  adult  cabarets.
However,  the  Company is unable to  ascertain  the  effect,  if any,  that such
competition  has had on past and future  revenues  or the  Company's  ability to
attract and retain qualified female entertainers.  Messrs. Mehmeti and Burch are
the sole directors of the Company and its principal shareholders.  See "Item 9 -
Directors,  Executive Officers,  Promoters and Control Persons;  Compliance with
Section 16(a) of the Exchange Act" and "Item 11 - Security  Ownership of Certain
Beneficial Owners and Management and Related Shareholder Matters."

         The  Company's  Commercial  Properties  Are Not  Subject  to  Long-Term
Leases;  Rental Income in the Future May Decline.  The Company currently has one
free-standing  facility located in Dallas,  Texas that is without a tenant.  The
Fort Worth,  Texas  property is leased by affiliates of Mr. Burch and is subject
to a  month-to-month  lease Although the Company is seeking lease terms that are
at least  comparable to terms for similar  properties in the geographic  area in
which the  properties  are located,  there can be no assurance  that the Company
will be able to enter into long-term leases for these properties that will be as
favorable to the  Company.  The failure of the Company to either find a suitable
tenant for its Dallas,  Texas facility or to obtain a long-term  lease agreement
for the Fort Worth,  Texas location could have a material  adverse effect on the
revenues of the Company.  See "Item 2 - Properties"  and "Item 6 -  Management's
Discussion and Analysis or Plan of Operation."

         Management   of  Growth.   For  the  Company  to  expand  its  business
operations,  it must  continue  to  improve  and  expand  the  expertise  of its
personnel and must attract, train and manage qualified managers and employees to
oversee and manage the expanded operations.  The Company may expand its existing
business  operations  by opening  or  acquiring  additional  adult  cabarets  in
metropolitan  areas located in the  Southwestern  United States.  The opening of
additional  cabarets  will subject the Company to a variety of risks  associated
with rapidly growing companies. In particular,  the Company's growth may place a
significant strain on its accounting systems,  internal controls,  and oversight
of its day-to-day  operations.  Although  management  intends to ensure that its
internal  controls remain adequate to meet the demands of further growth,  there
can be no assurance  that its systems,  controls or personnel will be sufficient
to meet these demands. Inadequacies in these areas could have a material adverse
effect on the Company's business, financial condition and results of operations.

         Permits  Relating  to the Sale of Alcohol  and  Operation  of  Sexually
Oriented Business. While the Company and its affiliate corporation have obtained
annual renewals of the TABC Permits and Dallas Business Permit,  there can be no
assurance  that the Permits will  continue to be renewed.  Other states may have
similar  laws  which may limit the  availability  of a permit to sell  alcoholic
beverages  or  operate a  sexually  oriented  business.  The  Company  and other
operators  of adult  cabarets  within  the City of  Dallas  are  contesting  the
constitutionality   of  certain  sections  of  the  Dallas  Municipal  Ordinance
regulating  sexually oriented  businesses in Dallas.  The temporary or permanent
suspension or revocations of the TABC Permits or the Dallas  Business  Permit or
the  inability  to obtain  permits in areas of  expansion  would have a material
adverse effect on the revenues, financial condition and results of operations of
the Company. See "Item 3 - Legal Proceedings."



                                       7
<PAGE>
<TABLE>
<CAPTION>

         Limitations  on Protection of Service  Marks.  Rights of the Company to
the trade name "The Million Dollar Saloon" were purchased. There is no assurance
that  the   Company   will  be  able  to   protect   its  trade  name  to  deter
misappropriation of its protected  intellectual property rights.  Litigation may
be necessary in the future to protect the  Company's  rights from  infringement,
which may be costly and time  consuming.  The loss of the right to use the trade
name "Million Dollar Saloon" would have a material adverse effect on the Company
and its business operations.

ITEM 2. PROPERTIES

         The Company maintains its corporate office at 6848 Greenville Avenue in
Dallas,  Texas. The corporate office is comprised of approximately  2,700 square
feet and is subject to a monthly rental  payment of  approximately  $3,600.  The
Company  occupies  the premises for its  corporate  offices on a  month-to-month
basis.  Based on current  local market  conditions  and  available  information,
management  is of the belief that it will be able to  relocate  to a  comparable
location at a comparable cost if necessary.

         The Million  Dollar Saloon is located in Dallas , Texas and consists of
a 9,750 square foot building located on an approximate  25,500 square foot tract
of land fronting a major traffic artery. Pursuant to its agreement with the City
of Dallas,  the Company is  obligated  to  discontinue  operation of the Million
Dollar Saloon on or before July 31, 2009 unless the location again satisfies the
Ordinace  Requirements  of the City of Dallas  prior to said  date.  Undeveloped
property has been acquired by the Company to perhaps relocate the Million dollar
Saloon cabaret, although a final decision regarding such relocation has not been
made by management.

         The Fort Worth, Texas facility is leased to affiliates of Duncan Burch,
an officer and director of the Company,  for the operation of an adult  cabaret.
The  property is a  stand-alone  structure  and is 100%  occupied  with a single
tenant.  The  property is subject to a  month-to-month  lease that  requires the
tenant to pay a weekly rental of $8,500.

         In October 2002,  Duncan Burch, Nick Mehmeti (officers and directors of
the Company) and certain of their  affiliated  businesses (the "Clubs")  entered
into a Compromise  Settlement  Agreement and Mutual  Releases  (the  "Settlement
Agreement")  with the City of Dallas to settle  pending  litigation,  claims and
disputes  between  the  parties  arising  out of the  operation  of the Clubs in
alleged  violation  of the Dallas City Code,  including  the  Sexually  Oriented
Business  Ordinance.  The  Settlement  Agreement  did not involve the  Company's
Million Dollar Saloon nor did the Settlement  Agreement affect the adult cabaret
operations of the Company.

         However, the Settlement Agreement did affect the usage of the Company's
property located at 3021 Northwest  Highway,  Dallas,  Texas. In accordance with
the  Settlement  Agreement,  the lessee  terminated  the  operation of the adult
cabaret  business  at the  Northwest  Highway  location  on July 31,  2003.  The
facility is currently  vacant.  However,  the Company may lease the premises for
any other lawful  purpose.  Management  of the Company is currently  considering
various  options  for  this  property   including  leasing  the  property  to  a
non-sexually oriented business or selling the property to a third party.

         The  following  is a summary of the  terms,  conditions  and  operating
parameters of the referenced properties:

                                                             Location/Address
                                            --------------------------------------------------
Location Address:                            3021 Northwest Highway    3601 State Highway 157
                                                  Dallas, Texas           Fort Worth, Texas
                                            ------------------------  ------------------------
Owner:                                           Corporation Lex              Don, Inc.
<S>                                                   <C>                       <C>
Square footage
   Building                                           8,550                     4,850
   Real estate tract                                 37,162                    60,398
Mortgages                                             None                      None
Lease expiration                                     Vacant                Month-to-Month
Scheduled rentals                                    Vacant)               $8,500 per week
Effective annual rental per square foot                -0-                     $91.13
   (total lease term)




                                       8
<PAGE>

                                                             Location/Address
                                            --------------------------------------------------
Location Address:                            3021 Northwest Highway    3601 State Highway 157
                                                  Dallas, Texas           Fort Worth, Texas
                                            ------------------------  ------------------------
Gross book basis (including land)                  $1,206,829                 $160,447
Net book basis (including land)                     $884,100                   $46,417
Federal income tax basis                             $16,585                   $18,982
   (excluding land)
Depreciation method and life                       SL-19 yrs.               ACRS-15 yrs.
Ad valorem tax rate per $100 of valuation           $2.88046                  $3.193877
</TABLE>


ITEM 3. LEGAL PROCEEDINGS

Case No.  3-00-CV-2500-H;  Adventure Plus, Inc.,  Millennium  Restaurant  Group,
Inc.,  D/B/A  Cabaret  Royale,  et al. v. City of Dallas,  Inc.;  United  States
District Court, Northern District of Texas, Dallas Division

         This is an action where the Company is contesting the constitutionality
of certain provisions of a Dallas Municipal  Ordinance which impacts its license
to do business as an adult  cabaret.  The Company is of the opinion that it will
prevail on its  constitutional  claims.  In August,  2001,  the City amended the
contested  provisions  of the  ordinance;  however,  there still remain  certain
constitutional infirmities, and the Company is of the opinion that the ordinance
remains subject to  constitutional  challenge and will have no adverse impact on
the  Company's  operations.  In March,  2004,  the City agreed to further  amend
pertinent  portions of the ordinance in an attempt to resolve the constitutional
infirmities raised by the Company's legal counsel. The case is not set for trial
as it has been abated for 180 days to allow the city of Dallas to  complete  its
amendment process.

         The  Company  may from time to time be a party to various  other  legal
actions  arising in the  ordinary  course of its  business.  The  Company is not
currently  involved in any such  actions  that it believes  will have a material
adverse effect on its results of operations or financial condition.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

         On December 10, 2003 the Company held its annual shareholders  meeting.
Of the  Company's  5,731,778  shares of  common  stock  entitled  to vote at the
meeting,  approximately  5,402,104  shares  were  represented  at  the  meeting,
approximately  94% of the  outstanding  shares  entitled to vote.  The following
matters were submitted to a vote of the  shareholders  through  solicitation  of
proxies or otherwise:

                                                 For       Against     Abstain
                                              ---------   ---------   ---------
         Election of Board of Directors
                  Nick Mehmeti                5,356,994      60         45,050
                  Duncan Burch                5,356,994      60         45,050

         Appointment of S.W. Hatfield, CPA as
         Auditors for 2003                    5,388,004     4,000       10,100

                                    PART II

ITEM 5.  MARKET FOR COMMON  EQUITY AND  RELATED  SHAREHOLDER  MATTERS  AND SMALL
BUSINESS ISSUER PURCHASE OF EQUITY SECURITIES

         As of December 31, 2003, the Company had  approximately  820 holders of
record of its Common Stock.  Outstanding  shares of the  Company's  Common Stock
totaled  5,731,778.   The  Company's  transfer  agent  is  Securities   Transfer
Corporation, Dallas, Texas.

         The  Company's  Common Stock began  trading on The OTC  Bulletin  Board
under symbol  "MLDS" on January 29,  1996.  The  following  table sets forth the
quarterly average high and low closing bid prices per share for the Common Stock
for the past two years:



                                       9
<PAGE>

                                   Common Stock
Fiscal Year Ended December 31,  ------------------
           2002                  High         Low
------------------------------  -----        -----
       First Quarter            $0.29        $0.15
      Second Quarter            $0.19        $0.12
       Third Quarter            $0.24        $0.12
      Fourth Quarter            $0.23        $0.10

                                    Common Stock
Fiscal Year Ended December 31,  ------------------
           2003                  High         Low
------------------------------  -----        -----
       First Quarter            $0.25        $0.11
      Second Quarter            $0.25        $0.11
       Third Quarter            $0.29        $0.12
      Fourth Quarter            $0.28        $0.12
   First Quarter -- 2004
-----------------------------
(through March 25, 2004)         $0.15        $0.12

         The source for the high and low closing bids quotations is the National
Quotation Bureau, Inc. and does not reflect inter-dealer prices, such quotations
are without retail  mark-ups,  mark-downs or commissions,  and may not represent
actual  transactions  and have not been adjusted for stock  dividends or splits.
The closing sale price of the Company's common stock on March 25, 2004 was $0.14
per share.

         The Company has not declared a dividend on its common stock since 1999.
The Company intends for the foreseeable  future to invest its available  capital
into the expansion of its business operations.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


Caution Regarding Forward-Looking Information

         Certain statements contained in this annual filing, including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

         Such factors  include,  among  others,  the  following:  international,
national and local general economic and market conditions:  demographic changes;
the  ability of the  Company to sustain,  manage or  forecast  its  growth;  the
ability of the Company to successfully make and integrate acquisitions; existing
government regulations and changes in, or the failure to comply with, government
regulations;  adverse  publicity;  competition;  fluctuations  and difficulty in
forecasting  operating  results;  changes in business  strategy  or  development
plans;  business  disruptions;  the  ability  to attract  and  retain  qualified
personnel; and other factors referenced in this and previous filings.

         Given these  uncertainties,  readers of this Form 10-KSB and  investors
are cautioned not to place undue  reliance on such  forward-looking  statements.
The Company  disclaims any  obligation to update any such factors or to publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

Results of Operations

Year ended December 31, 2003 as compared to year ended December 31, 2002
------------------------------------------------------------------------

         Bar and restaurant sales declined by approximately  $226,000 (or 6.91%)
in the year ended December 31, 2003. Bar and restaurant sales were approximately
$3,042,000  for the year ended  December  31,2003 as compared  to  approximately
$3,268,000  for the year ended  December  31,  2002.  Management  beleives  this
decrease  is  partially  attributable  to the  overall  fluctuations  in visitor
traffic to the Dallas-Ft.  Worth Metroplex While the Company's  facility holds a
valid "sexually oriented business" license issued by the City of Dallas,  Texas;





                                       10
<PAGE>

the City of  Dallas,  Texas  continues  to pursue  vigorous  enforcement  of its
Sexually Oriented Business  Ordinance.  This ordinance  restricts the method and
message of the expression  conducted at adult  cabarets  located within the city
limits of Dallas,  Texas,  which has resulted in a decrease in patron attendance
at the Company's Million Dollar Saloon establishment. These factors may continue
to contribute to further revenue deterioration in future periods.

         Management continues to direct its efforts towards customer service and
increasing sales through effective marketing and advertising methods to maintain
and increase its bar and restaurant patronage and comply with current regulatory
conditions and environment.

         The Company's  rental  income  increased by  approximately  $153,000 to
approximately  $678,000  for the year ended  December  31,  2003 as  compared to
approximately  $524,000 in the same period of fiscal 2002. All of the leases are
with  entities  controlled by Duncan  Burch,  one of the  Company's  controlling
shareholders.  On January 30, 2001, the Company's Board of Directors approved an
amendment to the lease  agreement  covering the Dallas,  Texas property owned by
Corporation  Lex, a Company  subsidiary.  The amendment  provided that effective
January 1, 2001, the base rental would be reduced from $4,750 per week to $1,000
per  week.  Additionally,  the  amended  lease  provided  that the  Company,  as
landlord,  would receive 10% of the gross  revenues  generated from the business
located at the  property,  less  State  Liquor and State  Sales  Taxes,  payable
quarterly,  with a minimum weekly  payment of $1,000 to be credited  against the
quarterly percentage rent due. During 2003 and 2002,  approximately  $31,000 and
$52,000 of lease payments were received by the Company for this property.

         In  March  2004,   the  Company   received  the   required   supporting
documentation  from the lessee to validate the  percentage  rents due for fiscal
2002 and through July 31, 2003. This previously unprovided  information caused a
significant  upward  revision  of the  Company's  estimate  for  amounts due for
percentage  rent in fiscal  2002,  which was  recognized  as a 2003 event in the
accompanying  financial  statements,  given the events  discussed in  subsequent
paragraphs. As of July 31, 2003, the lessee owed percentage rent as follows:


                  Year ended December 31,          Amount due
                           2001                    $   42,952
                           2002                        98,000
                           2003                       107,513
                                                   ----------
                                                   $  248,465
                                                   ==========

         In December 2003, the Company's Board of Directors accepted notice from
the lessee,  an entity  controlled  by Duncan  Burch,  an officer,  director and
controlling  shareholder,  that the percentage rent due to the Company would not
be  paid.  Accordingly,  the  Company  recognized  a  charge  to  operations  of
approximately  $248,465 as bad debt expense from  uncollectible  trade  accounts
receivable.  Acceptance of this notice regarding  non-receipt of percentage rent
represented  the  consideration  payable  to the lessee  for  assignment  to the
Company of the right to acquire the 6.8 acres of  undeveloped  land purchased by
the Company in February, 2003.

         At the present  time,  this property is vacant and available for lease.
Management is uncertain of the future use or ability to obtain a suitable tenant
on this property.

         Our rental real estate  located in Fort Worth,  Texas and owned by Don,
Inc. is subject to a lease with a separate entity controlled by Duncan Burch, an
officer, director and controlling shareholder of the Company. This lease expired
in August 2003 and is being  continued  on a  month-to-month  basis at the final
contractual  rental rate of approximately  $8,500 per week. The Company has been
advised  that the tenant  does not intend to renew the Fort Worth lease with the
current terms. Instead, the tenant has requested to renegotiate the lease terms.
As of the date of this filing, no formal lease has been negotiated. There can be
no  assurance  that the  Company  will be able to obtain  terms  similar  to the
current lease or that tenant will agree to the terms of a new lease.



                                       11
<PAGE>

         Although the Company is seeking  lease terms for both  properties  that
are at least comparable to terms for similar  properties in the geographic area,
there can be no assurance that the Company will be able to renew its leases with
entities  controlled by Mr. Burch or any other unaffiliated  third-party,  or if
renewed,  that the terms of the leases will be as favorable to the Company as it
could have obtained from an  unaffiliated  party.  The failure of the Company to
obtain long-term lease  agreements with Mr. Burch, or other third parties,  with
terms at  least  comparable  to the  existing  lease  arrangements  will  have a
material adverse effect on the revenues of the Company.

         Cost of sales decreased to approximately  $1,782,000 for the year ended
December 31, 2003 as compared to approximately $1,993,000 for the same period of
2002.   Gross  profit   percentages   remain   relatively   constant  at  52.09%
(approximately  $1,938,000)  for the year ended  December 31, 2003 versus 47.44%
(approximately $1,799,000) for the year ended December 31, 2002. Fluctuations in
the Company's  gross profit  percentages  react to and parallel the key areas of
management focus for cost of sales expenditure  control - principally  personnel
staffing  levels and food and beverage  costs.  These areas,  specifically  cost
controls over purchasing,  inventory  management protocols and labor management,
are continuously monitored to maintain the Company's gross profit percentages.

         General and administrative  expenses were approximately  $2,282,940 for
the year ended December 31, 2003 as compared to approximately $1,601,000 for the
comparable   period  of  2002.  The  increase  was   attributable  to  increased
professional fees for investigation of possible business acquisition targets and
increased legal expenses as a result of ongoing litigation and issues related to
the City of Dallas Sexually Oriented Business  Ordinance.  Further,  the Company
experienced increases in executive compensation during 2002 which continued into
2003. The Company anticipates relatively constant expenditure levels for general
operating expenses in future periods.

         During 2003, the Company expended  approximately  $328,200 in legal and
professional fees (approximately  $189,300 - legal and approximately  $138,900 -
auditing) for due diligence  procedures related to a proposed acquisition by the
Company of identified  businesses and properties,  certain of which are owned by
Duncan Burch and Nick Mehmeti, personally, or by entities owned or controlled by
Mr. Burch or Mr. Mehmeti.  In February 2003, the Company engaged the independent
certified public accounting firm of Whitley Penn of Dallas,  Texas to separately
conduct the audit work related to this due diligence effort. In 2004, the merger
negotiations  were  terminated.  No  further  audit  work is  anticipated  to be
completed by Whitley Penn for or on the behalf of the Company.

         Net income before  income taxes was  approximately  $(322,000)  for the
year ended December 31, 2003 versus  approximately  $$208,000 for the year ended
December 31, 2002. After-tax net income decreased by approximately $228,000 from
approximately  $9,000  for the year ended  December  31,  2002 to  approximately
$(220,000)  for fiscal  2003.  The  Company  experienced  earnings  per share of
approximately  $(0.04) and $0.00 for each of the respective years ended December
31, 2003 and 2002, respectively.

         As a general rule, the Company's  adult cabaret  operations  experience
unpredictable  fluctuations  as a result of the overall  discretionary  spending
habits  related to the U. S.  economy,  visitation  levels  related to  visitor,
convention and business travel levels and impacts related to the City of Dallas'
various  enforcement  actions and on-premises  monitoring of entertainer conduct
and the condition of the surrounding  environment as maintained and monitored by
the City of Dallas,  Texas.  Management  makes its best efforts to timely adjust
its  expenditure  levels  to these  events  as they  occur in order to  maintain
profitability.




                                       12
<PAGE>

Year ended December 31, 2002 as compared to year ended December 31, 2001
------------------------------------------------------------------------

         Bar and restaurant sales increased by approximately  13.1% in 2002. Bar
and restaurant sales were $3,267,595 in 2002 compared to $2,888,761 in 2001. The
increase  was  attributable  to  overall  increases  in  visitor  traffic to the
Dallas-Ft.  Worth  Metroplex  and local  patronage.  The City of  Dallas,  Texas
continues  to actively  pursue  enforcement  of its Sexually  Oriented  Business
Ordinance and litigation  continues between the Company and other Dallas cabaret
operators  and the City of Dallas.  The  Sexually  Oriented  Business  Ordinance
restricts  the method and  message of  expression  activities  at the  Company's
Million Dollar Saloon,  and other local adult cabarets,  which has resulted in a
decrease in patron attendance at the Company's facilities.  Management is unable
to assess the  long-term  impact of this  continuing  litigation.  See "Item 3 -
Legal Proceedings."

         Management's  continues to direct its efforts towards  customer service
and increasing  sales through  effective  marketing and  advertising  methods to
maintain and increase its bar and  restaurant  patronage and comply with current
regulatory conditions and environment.

         The  Company's  rental  income  declined  by  approximately  $46,000 to
approximately  $524,000 in 2002 from  approximately  $571,000 in 2001.  The most
significant  factor to this  decrease  was a  renegotiated  lease with  entities
controlled by Duncan Burch, one of the Company's  controlling  shareholders.  On
January 30, 2001, the Company's Board of Directors  approved an amendment to the
lease  agreement  covering  the  property  owned by  Corporation  Lex, a Company
subsidiary.  The amendment  provided that  effective  January 1, 2001,  the base
rental would be reduced  from $4,750 per week to $1,000 per week.  Additionally,
the amended lease provided that the Company,  as landlord,  would receive 10% of
the gross revenues generated from the business located at the property,  payable
quarterly,  until termination of the lease in May 2002. As of December 31, 2002,
the Company was due approximately $68,500 in additional rents over and above the
required  weekly  payment as calculated on the gross sales of the tenant.  Since
May 2002, the lessee has been on a month-to-month basis at the same rental rate.

         Cost of sales  experienced  increases to  approximately  $1,992,947 for
2002 as compared to approximately  $1,794,000 for 2001. During 2001, the Company
began  treating all  entertainers  as  independent  contractors,  including  the
maintenance  and  issuance of Form 1099,  as required  by the  Internal  Revenue
Service  and the  Department  of Labor.  This  change in  employment  policy and
treatment created a decline in both dance revenues and entertainer  compensation
as all table dances are now negotiated  directly between the entertainer and the
Company's  patrons.  Key areas of management focus for cost of sales expenditure
control are principally food and beverage costs. Gross profit percentages remain
relatively  constant at 47.44 % ($1,799,000) for 2002 versus 48.14% ($1,665,000)
for 2001.  Cost controls over  purchasing,  inventory  management  protocols and
labor management are continuously monitored to improve gross profit percentages.

         General and administrative  expenses were approximately  $1,601,000 for
2002 as compared to  approximately  $1,473,000 in 2001. The overall increase was
directly  attributable  to  increased  legal  expenses  as a result  of  ongoing
litigation and issues related to the City of Dallas Sexually  Oriented  Business
Ordinance.  Further, the Company experienced increases in executive compensation
during the current year. The Company anticipates relatively constant expenditure
levels for general operating expenses in future.

         During  the fourth  quarter of 2002,  management,  in  connection  with
required  procedural reviews required by Sarbanes-Oxley Act of 2002,  determined
that a formula error was imbedded in a worksheet  used to calculate the deferred
income   taxes   liability   for   future   periods.    This   is   a   non-cash
expenditure/accrual.  As a  result  of  identifying  the  erroneous  calculation
method,  the Company  adjusted the deferred tax liability for future  periods in
the fourth quarter of 2002.  This resulted in a one-time charge to operations of
approximately $154,000.



                                       13
<PAGE>

         Net income  before  income  taxes was  approximately  $198,000 for 2002
versus  approximately  $221,000  for 2001.  After-tax  net income  decreased  by
approximately  $98,000 from  approximately  $107,000  for 2002 to  approximately
$9,000 for 2002.  The Company  experienced  earnings per share of  approximately
$0.00 and $0.02 per share for 2002 and 2001, respectively.

         As a general rule, the Company's  adult cabaret  operations  experience
unpredictable  fluctuations as a result of the overall  economic state of the U.
S. economy, visitation levels related to visitor, convention and business travel
levels and impacts  related to the City of Dallas' various  enforcement  actions
and on-premises  monitoring of entertainer  conduct.  Management  makes its best
efforts to timely adjust its expenditure levels to these events as they occur in
order to maintain profitability.

Liquidity

         As  of  December  31,  2003,   the  Company  had  working   capital  of
approximately  $347,000  (exclusive  of a note payable  which was  refinanced on
January 29,  2004) as compared to  approximately  $981,000 at December 31, 2002.
The  Company  achieved  positive   (negative)  cash  flows  from  operations  of
approximately   $(276,000)   for  the  year  ended   December  31,  2003  versus
approximately $313,000 for fiscal 2002.

         The  deterioration of the Company's working capital is directly related
to the cash expended to acquire land for future development and for expenditures
related to the abandoned acquisition efforts on identified  facilities,  certain
of which are owned and/or controlled by the Company's controlling  shareholders;
Duncan Burch and Nick Mehmeti.

         On January 29, 2004,  the Company  refinanced  the initial  acquisition
debt related to land held for future  development.  The new permanent  long-term
financing retired the entire initial  short-term  $2,156,713 note payable issued
at the initial  closing.  The new note is for a principal  balance of $2,000,000
and bears  interest  at 6.50% for the first year and then  adjusts to 1.0% above
the Wall Street Journal published prime rate, rounded to the nearest 0.125%. The
interest rate adjusts every 12th month,  commencing on January 29, 2005. The new
note  requires  payments  of  principal  and  accrued  interest in the amount of
approximately  $17,426  monthly,  commencing  on February 29, 2004. As this is a
variable  interest rate note, the payments may change after the twelfth  payment
and after every succeeding twelfth payment.  The new note matures on January 29,
2019. The long-term note is secured by underlying land and the separate personal
guaranty  of  each  of  the  Company's   officers,   directors  and  controlling
shareholders; Duncan Burch and Nick Mehmeti.

         The Company's  settlement  agreement  with the City of Dallas  provided
that, in the event that the city granted The Million Dollar Saloon the exclusive
right to continue  operating as an adult cabaret in a "non-conforming  location"
for a six  (6)  year  period,  Tempo  Tamers  would  pay  $500,000  to  entities
controlled  by Messrs  Mehmeti  and  Burch,  respectively,  and they  would each
discontinue the operation of sexually oriented businesses. In May 2003, the City
of Dallas agreed to allow Tempo Tamers to continue to operate The Million Dollar
Saloon  at its  current  location  until  July  2009.  The  affiliated  entities
subsequently discontinued operations of P.T.'s and The Fare as sexually oriented
business in January and March, 2004, respectively.

         Future  operating  liquidity  and  debt  service  are  expected  to  be
sustained from continuing operations. Additionally, management is of the opinion
that there is additional potential availability of incremental mortgage debt and
the opportunity  for the sale of additional  common stock through either private
placements or secondary public offerings.

Capital Resources

         On February 14, 2003, the Company  purchased 6.695 acres of undeveloped
property  located  in  Dallas,  Texas.  The  purchase  price  was  approximately
$2,650,312, including closing expenses of approximately $53,599.

         The Company paid  $493,072  cash,  inclusive of a $140,000  loan to the
Company from Duncan Burch, an officer and director of the Company, and issued to
the seller a one-year note in the principal  amount of $2,156,713 with 8% annual


                                       14
<PAGE>

interest.  The payment of the note is secured  with a lien  against the property
granted to the note holder by the  Company.  The interest on the note is payable
monthly  (approximately  $14,678  per  month)  beginning  April 1, 2003 with the
principal amount due and payable on February 1, 2004.

         The Company paid  approximately  $153,800 during fiscal 2003 to service
the initial short-term debt.

         The property is undeveloped  and suitable for  commercial  development.
Although the Company has not  determined  the usage of the land, the Company may
use a  portion  of  the  land  for an  adult  cabaret  and  sell  the  remaining
undeveloped  property to a third party.  The development of the property will be
subject to the  Company  obtaining a  construction  loan.  The Company  does not
currently  know the amount of the loan it will need to develop this  property or
whether  it will be able to  obtain a  sufficient  loan for  development  of the
property or, if obtained, whether the terms of the loan will be favorable to the
Company.

         The Company has also paid an additional sum of  approximately  $366,000
at the closing of the permanent long-term financing in January 2004.

         The Company has identified no other  significant  capital  requirements
for 2004,  other than normal  repair and  replacement  activity at the Company's
commercial rental properties and the adult  entertainment  lounge and restaurant
facility.  Liquidity  requirements  mandated by future  business  expansions  or
acquisitions,  if any are specifically identified or undertaken, are not readily
determinable  at this  time as no  substantive  plans  have been  formulated  by
management.

         The Company knows of no new accounting  releases or pronouncements that
will have any impact upon the Company's financial statements upon adoption.


ITEM 7. FINANCIAL STATEMENTS

         The required  items are presented as a separate  section of this report
beginning on Page F-1.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

         There  have been no changes  in  accountants  since 1995 nor have there
been any disagreements  with accountants on any matter of accounting  principles
or practices, financial statement disclosure, or auditing scope or procedure.

ITEM 8A. CONTROLS AND PROCEDURES

         Within 90 days prior to the filing  date of this  report,  the  Company
carried out an evaluation,  under the supervision and with the  participation of
the Company's  management,  including the Company's Chief Executive  Officer and
Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure  controls and procedures.  Based upon that evaluation,  the Company's
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure  controls  and  procedures  are  effective.  Disclosure  controls and
procedures  are  controls  and  procedures  designed to ensure that  information
required  to be  disclosed  in the  Company's  periodic  reports  to the  SEC is
recorded,  processed,  summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms.

         There have been no significant  changes in our internal  controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date we carried out this evaluation.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

         The following table sets forth certain  information about the directors
and executive officers of the Company.  All directors of the Company hold office



                                       15
<PAGE>
<TABLE>
<CAPTION>

until the next annual meeting of  shareholders  or until their  successors  have
been elected and qualified. Executive officers of the Company are elected by the
Board of Directors to hold office until their respective  successors are elected
and qualified.

             Name       Age        Position with the Company         Director Since
         ------------   ---   -------------------------------------  --------------
         <S>            <C>   <C>                                    <C>
         Nick Mehmeti    46   President, Chief Executive Officer,     January 2000
                              Chief Financial Officer and Director
         Duncan Burch    46   Executive Vice President and Director   January 2000
         Dewanna Ross    48   Secretary and Treasurer
</TABLE>

         Nick Mehmeti has served as the  Company's  President,  Chief  Executive
Officer and a director since January 2000 and as the Company's  Chief  Financial
Officer since March 2, 2001. For at least the last fifteen years Mr. Mehmeti and
his  affiliates  have owned and operated  restaurants  and adult cabarets in the
Dallas-Fort  Worth Metroplex.  Mr. Mehmeti will devote as much of his time as is
necessary to perform his duties as President,  Chief  Executive  Officer,  Chief
Financial Officer and a director of the Company.

         Duncan Burch has served as the Company's Executive Vice President and a
director  since  January  2000.  Mr.  Burch and his  affiliates  have  owned and
operated  restaurants and adult cabarets in the Dallas-Fort  Worth Metroplex for
at least the past ten years.  Mr.  Burch  will  devote as much of his time as is
necessary to perform his duties as an officer and a director of the Company.

         Dewanna  Ross has served in various  positions  with the Company  since
1995. Ms. Ross served as a director of the Company from 1995 until January 2002.
She served as  President  and Chief  Executive  Officer of the Company from July
1999 to January  2000.  She served as Vice  President  of  Operations  and Chief
Operating  Officer of the Company from January 19, 2000 to January 10, 2002. She
currently serves as  Secretary-Treasurer of the Company. Ms. Ross is responsible
for the  development  of the  corporate  procedures,  including  the  hiring and
training of  corporate  staff and the  day-to-day  operations  of the  Company's
Million Dollar Saloon.  Ms. Ross has also served as an officer and operator of a
private club and as an officer of other  businesses.  Ms. Ross has a Bachelor of
Arts degree from the University of Texas at Dallas.

         All  officers of the Company  hold office  until the annual  meeting of
directors following the annual meeting of shareholders or until their respective
successors  are duly  elected and  qualified  or their  earlier  resignation  or
removal.

Board of Directors and Committee Meetings Attendance

         During the fiscal  year ended  December  31,  2003,  the Board held one
meeting,  its annual  meeting.  The Company  does not have any  committees.  The
Company  currently  does not pay a  director  fee for  attending  scheduled  and
special meetings of the Board of Directors.  The Company pays expenses of all of
its directors in attending meetings.

Compliance with Section 16(a) of the Exchange Act

         Section  16(a) of the Exchange Act  requires the  Company's  directors,
executive  officers  and persons  who own more than ten percent of a  registered
class of the  Company's  equity  securities  ("10%  holders"),  to file with the
Securities and Exchange  Commission (the "SEC") initial reports of ownership and
reports of changes in ownership of Common Stock and other equity  securities  of
the Company. Directors,  officers and 10% holders are required by SEC regulation
to furnish the Company  with copies of all of the  Section  16(a)  reports  they
file.

         Based solely on a review of reports furnished to the Company or written
representatives  from the Company's  directors and executive officers during the
fiscal year ended  December 31,  2003,  all Section  16(a)  filing  requirements
applicable  to its  directors,  officers  and 10%  holders  for such  year  were
complied with.

Code of Ethics

         The Company  has not  formally  adopted a Code of Ethics.  The Board is
currently  developing a code and anticipates  adopting a Code of Ethics prior to
its next Annual Meeting of Shareholders.

ITEM 10. EXECUTIVE COMPENSATION

                                       16
<PAGE>


         Laird Boles, who is not an officer or director of the Company, received
$145,250  compensation  during 2003. Mr. Boles is primarily  responsible for the
management  of  the  Company's  Million  Dollar  Saloon  and  related  personnel
supervision.  The following Summary Compensation Table sets forth, for the years
indicated,  all cash  compensation  paid,  distributed  or accrued for services,
including  salary and bonus amounts,  rendered in all capacities for the Company
to its Chief  Executive  Officer and all other  executive  directors.  All other
compensation  related tables  required to be reported have been omitted as there
has been no applicable  compensation awarded to, earned by or paid to any of the
Company's executive officers in any fiscal year to be covered by such tables.

<TABLE>
<CAPTION>


                                            Summary Compensation Table

                                         Annual Compensation    Long-Term Compensation
                                    -------------------------- -------------------------
                                                                         Awards             Payouts
                                                               -------------------------   ---------
                                                     Other     Restricted    Securities                   All
                                      Salary/       Annual       Stock       Underlying      LTIP        Other
      Name/Title              Year     Bonus     Compensation    Awards     Options/SARs    Payouts   Compensation
--------------------------- ------- ----------- -------------- ----------  --------------  --------- --------------
<S>                           <C>     <C>
Nick Mehmeti, President,      2003    $131,000        N/A          N/A          N/A            N/A         N/A
  Chief Executive Officer,    2002    $ 78,000        N/A          N/A          N/A            N/A         N/A
  and Chief Financial         2001    $ 84,000        N/A          N/A          N/A            N/A         N/A
  Officer

Duncan Burch, Executive       2003    $131,000        N/A          N/A          N/A            N/A         N/A
  Vice President              2002    $ 78,000     $72,000         N/A          N/A            N/A         N/A
                              2001    $ 84,000        N/A          N/A          N/A            N/A         N/A

Dewanna Ross, Secretary and   2003   $  84,000        N/A          N/A          N/A            N/A         N/A
  Treasurer                   2002   $  79,500        N/A          N/A          N/A            N/A         N/A
                              2001   $  78,100        N/A          N/A          N/A            N/A         N/A
</TABLE>


















                                       17
<PAGE>

Indebtedness of Directors and Senior Officers

         Except  as set forth in Item 12.  "Certain  Relationships  and  Related
Transactions,"  none of the  directors  or  officers  of the  Company  or  their
respective associates or affiliates is indebted to the Company.

Committees of the Board of Directors and Meeting Attendance

         There are no audit,  compensation  or other  committees of the Board of
Directors of the Company.

Option Grants In Last Fiscal Year

         There were no grants of stock options to any officer or director of the
Company during the fiscal year ended December 31, 2003.

Option Exercises And Holdings

         The Company does not have a stock  option plan.  Except as disclosed in
"Security  Ownership of Certain  Beneficial  Owners and Management," no officer,
director or employee of the Company holds any stock  options to purchase  shares
of Common Stock of the Company.

ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED SHAREHOLDER MATTERS

         The following table sets forth certain information as of March 25, 2004
relating to the beneficial  ownership (as defined by the rules of the Securities
and  Exchange  Commission  (the  "SEC"))  of shares of Common  Stock by (i) each
person who owns  beneficially  more than 5% of the outstanding  shares of Common
Stock,  (ii)  each  director  of the  Company,  (iii)  the  President  and Chief
Executive  Officer of the Company for the year ended December 31, 2002, and (iv)
all executive officers and directors of the Company as a group.




























                                       18
<PAGE>
<TABLE>
<CAPTION>





                                                                          Percentage of Common
                   Name(1)                             Number of Shares      Stock Owned(2)
----------------------------------------------------- ------------------ ----------------------
<S>                                                   <C>                <C>
Nick Mehmeti(3)......................................    2,419,787(4)           39.5%
Duncan Burch(3)......................................    2,075,787(4)           33.9%
J.M. Tibbals as Trustee for The Irrevocable Equity
   Trust No. 1(5)....................................      451,558               7.9%
Officers and Directors as a group (2 persons)........    4,495,574(6)           73.3%
--------------------
</TABLE>

*Less than 1%

(1)  Unless  otherwise  indicated,  the  persons  listed  have sole  voting  and
     investment  powers with respect to all such shares.  Under  applicable  SEC
     rules, a person is deemed the "beneficial  owner" of a security with regard
     to which the person,  directly or indirectly,  has or shares (a) the voting
     power,  which  includes  the  power to vote or  direct  the  voting  of the
     security,  or (b) the investment power, which includes the power to dispose
     or direct the disposition,  of the security,  in each case  irrespective of
     the person's  economic  interest in the  security.  Under the SEC rules,  a
     person is deemed to  beneficially  own securities  which the person has the
     right to acquire  within 60 days (x) through the  exercise of any option or
     warrant or (y) through the conversion of another security.

(2)  In  determining  the  percent  of Common  Stock  owned by a person  (a) the
     numerator is the number of shares of Common Stock beneficially owned by the
     person,  including shares the beneficial ownership of which may be acquired
     within 60 days upon the  exercise of options or warrants or  conversion  of
     convertible  securities,  and (b) the  denominator  is the total of (i) the
     5,731,778  shares in the  aggregate  of Common  Stock on March 25, 2004 and
     (ii) any shares of Common  Stock  which the person has the right to acquire
     within 60 days upon the  exercise of options or warrants or  conversion  of
     convertible securities.  Neither the numerator nor the denominator includes
     shares  which may be issued upon the exercise of any options or warrants or
     the conversion of any other convertible securities.

(3)  Mr. Mehmeti is the President,  Chief  Executive  Officer,  Chief  Financial
     Officer and a director of the Company and Mr. Burch is the  Executive  Vice
     President  and a director of the Company.  The mailing  address for Messrs.
     Mehmeti and Burch is c/o the Company,  6848 Greenville Ave., Dallas,  Texas
     75231.

(4)  Includes an option to purchase  400,000  shares of the Common  Stock of the
     Company for $440,000  ($1.10 per share)  which is jointly  owned by Messrs.
     Mehmeti  and  Burch  and may be  exercised  in whole or in part at any time
     until October 18, 2004 when the option expires.

(5)  The mailing  address  for The  Irrevocable  Equity  Trust No. 1 is c/o J.M.
     Tibbals, Arter & Hadden, 1717 Main Street, Suite 4100, Dallas, Texas 75201.

(6)  Includes  400,000  shares  which are subject to an option  jointly  held by
     Messrs.  Mehmeti and Burch which may be exercised at any time until October
     18, 2004.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Company  provides  management  support and  conducts  its  business
operations through its wholly-owned operating  subsidiaries:  Furrh, Inc., Tempo
Tamers,  Inc.  ("Tempo  Tamers"),  Don, Inc. and  Corporation  Lex ("Lex").  The
Company owns and operates an adult cabaret in Dallas, Texas and owns and manages
three other commercial properties located in the Dallas-Fort Worth Metroplex.

         Tempo  Tamers owns and  operates an adult  cabaret at 6826  Greenville,
Avenue in Dallas,  Texas operates under the registered  trademark and trade name
"The Million Dollar Saloon (R)." The 6826 Greenville Avenue location is, and has
been, a  "non-conforming  location" under the Dallas Sexually  Oriented Business
Ordinance since 1986 due to the fact that 6826 Greenville Avenue is within 1,000
feet  of  a  residentially  zoned  property.  Various  other  sexually  oriented
businesses,  including  those owned or  controlled  by entities  owned by Duncan
Burch,  Executive  Vice  President  and a director of the  Company,  and/or Nick
Mehmeti,  President,  Chief Executive  Officer,  Chief  Financial  Officer and a
Director of the Company, were likewise in "non-conforming locations." While many



                                       19
<PAGE>

of these  locations  had  previously  been  successful  in obtaining  locational
exemptions from the Dallas Sexually Oriented  Business  Ordinance so as to allow
their continued  operation as sexually oriented  businesses,  the City of Dallas
recently  proposed  legislation  to eliminate  the  possibility  of a locational
exemption.  Despite years of intensive and expensive litigation funded primarily
by entities  owned by Messrs.  Burch and  Mehmeti,  the City of Dallas is moving
toward  closure  of  all  sexually   oriented   businesses  in   "non-conforming
locations." Accordingly,  the Company, through Tempo Tamers, and other similarly
situated  operators of sexually  oriented  businesses  entered  into  settlement
negotiations with the City of Dallas.  During those negotiations,  it became the
view of the Company and  operators  of other  sexually  oriented  businesses  in
"non-conforming  locations" that the City would allow one such sexually oriented
business  to remain in  business in a  "non-conforming  location"  for a limited
period of time, if all of the other sexually  oriented  businesses  operating in
"non-conforming locations" ceased operations.

         In October,  2002,  entities  controlled  by Mr.  Burch  entered into a
settlement  agreement  with the City of Dallas which provides for the closure of
the sexually oriented  businesses known as Chicas Locas, which is operated by an
affiliate  of Mr.  Burch,  and Baby Dolls  Saloon  which is also  operated by an
affiliate  of Mr.  Burch.  Chicas  Locas was,  at that  time,  the tenant of the
Company's  property located at 3021 W. Northwest Highway in Dallas,  Texas. Nick
Mehmeti,  the Company and its subsidiary,  Corporation  Lex, the record owner of
the 3021 W.  Northwest  Highway,  signed the  settlement  agreement  for limited
purposes.  In accordance with the settlement  agreement and an agreement reached
between  Corporation Lex and Chicas Locas,  Chicas Locas agreed to terminate the
lease and the  Company  agreed not to allow the  operation  of an adult  cabaret
business at its 3021 W. Northwest  Highway property after July 31, 2003.  Chicas
Locas ended its month-to-month lease arrangements with the Company regarding the
3021 W. Northwest  Highway property and vacated the premises  effective July 31,
2003.  During  2002,  the Company  received  $52,000 in lease  payments for this
property from Chicas Locas. Chicas Locas owed approximately  $69,000 at December
31, 2002 and $137,000 at July 31, 2003 on the lease for accrued, unpaid rent for
this property.  The Company is currently considering various other uses for this
property,  including leasing the property to a non-sexually oriented business or
selling the property to a third party.

         Thereafter,  negotiations  began between  Mainstage,  Inc. d/b/a P.T.'s
("Mainstage"),   an  entity   controlled  by  Nick  Mehmeti  which   operated  a
non-conforming adult cabaret called P.T.'s,  Allen-Burch,  Inc. ("Allen Burch"),
an entity  controlled by Duncan Burch operating a  non-conforming  adult cabaret
known as The Fare,  and Tempo  Tamers  regarding  which of these  non-conforming
entities   would   continue   operating  in  a   "non-conforming   location"  or
finalized.Pursuant  to a settlement  agreement  entered into in May 2003,  Tempo
Tamers, Mainstage, and Allen Burch, Tempo Tamers was granted the exclusive right
to negotiate  with the City of Dallas to continue to operate The Million  Dollar
Saloon as a sexually  oriented  business  in a  "non-conforming  location."  The
settlement  agreement  provided  that,  in the event that the city  granted  The
Million  Dollar  Saloon the  exclusive  right to continue  operating as an adult
cabaret in a "non-conforming  location" for a six (6) year period,  Tempo Tamers
would pay  $500,000  to each of P.T.'s  and Allen  Burch,  and they  would  each
discontinue the operation of sexually oriented businesses. In May 2003, the City
of Dallas agreed to allow Tempo Tamers to continue to operate The Million Dollar
Saloon at its current location until July 2009. Mainstage and Allen Burch agreed
to discontinue operations of Main Stage and The Fare, respectively,  as sexually
oriented business in January and March, 2004.

         On February 14, 2003, the Company  purchased 6.695 acres of undeveloped
property  located  in  Dallas,  Texas.  The  purchase  price  was  approximately
$2,650,312,  including  closing expenses of approximately  $53,594.  The Company
paid $493,072  cash,  $140,000 of which was lent to the Company by Duncan Burch.
The property is located on Stemmons  Freeway in Dallas,  Texas,  and is suitable
for general commercial development. Moreover, the property as situated is one of
a small number of remaining  undeveloped  locations at which a sexually oriented
business may be legally  operated.  Although the Company has not yet  determined
the ultimate  usage of the land,  the Company knows that it will be necessary to
relocate the Million Dollar Saloon in mid-2009, and the Company may elect to use
a portion of this new land to relocate The Million Dollar Saloon and either sell
or lease the remaining  properties to third  parties.  The right to acquire this
property  was  assigned to the Company by entities  controlled  by Mr.  Burch in
consideration for the Company's agreement to forgo receipt of lease payments for
the 3021 Northwest Highway property.

ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.
         --------

         The following documents are filed as exhibits with this annual report:



                                       20
<PAGE>


         Exhibit Number                          Description
         --------------    -----------------------------------------------------
            2.1*           Stock Purchase Agreement dated August 23, 1995 by and
                           between Art Beroff and Bjorn Heyerdahl.
            2.2*           Stock Purchase Agreement dated August 23, 1995 by and
                           between Joseph MacDonald,  Goodheart Ventures,  Inc.,
                           and Bjorn Heyerdahl.
            2.3*           Stock Purchase  Agreement  dated September 7, 1995 by
                           and among  Million  Dollar  Saloon,  Inc.,  Goodheart
                           Ventures, Inc., and certain individuals.
            2.4*           Addendum and Modification to Stock Purchase Agreement
                           dated September 19, 1995, by and among Million Dollar
                           Saloon, Inc.,  Goodheart Ventures,  Inc., and certain
                           individuals.
            2.5*           Stock Exchange  Agreement  dated September 7, 1995 by
                           and among  Million  Dollar  Saloon,  Inc.,  Goodheart
                           Ventures,   Inc.,  and  J.M.  Tibbals,   Trustee  for
                           Irrevocable Equity Trust No. 1.
            2.6*           Addendum and Modification to Stock Exchange Agreement
                           dated September 19, 1995, by and among Million Dollar
                           Saloon,  Inc.,  Goodheart  Ventures,  Inc.,  and J.M.
                           Tibbals, Trustee for Irrevocable Equity Trust No. 1.
            2.7*           Agreement and Plan of Merger dated October 5, 1995 by
                           and between  Million  Dollar  Saloon,  Inc.,  a Texas
                           corporation,  and Goodheart Ventures,  Inc., a Nevada
                           corporation.
            2.8**          Addendum and Modification to Stock Purchase Agreement
                           made and entered into the 7th day of  September  1995
                           by and among Million Dollar Saloon,  Inc.,  Goodheart
                           Ventures, Inc., and certain individuals dated October
                           31, 1995.
            3(i)*          Articles of Incorporation of The Company,  as amended
                           to date.
            3(ii)*         Bylaws of the Company.
            3(iii)**       Amended and Restated Bylaws of the Company  effective
                           July 9, 1999.
            4.1*           Specimen Common Stock Certificate.
            10.1*          Leases of Properties.
            10.2*          Promissory  Note  for  $750,000  with  Abrams  Centre
                           National Bank dated September 22, 1995.
            10.3***        Modification  of Lease  Agreement  dated  January 31,
                           2001 between Corporation Lex and MD II Entertainment,
                           Inc.
            10.4+          Promissory  Note dated February 14, 2003 (the "Note")
                           in the principal amount of  $2,156,713.50  payable by
                           the Company to One Stemmons Land Limited  Partnership
                           with  interest  at 8%  per  annum,  interest  payable
                           monthly,  with a  single  principal  payment  due and
                           payable on February 1, 2004.
            10.5+          Deed of Trust, dated February 14, 2003, signed by the
                           Company granting a security  interest in 6.6 acres of
                           undeveloped  real  estate in Dallas,  Texas to secure
                           payment of the Note.
            10.6+          Special   Warranty  Deed  with  Vendor's  Lien  dated
                           February  14,  2002  relating  to 6.6  acres  of real
                           estate located in Dallas, Texas.
            10.7o          Promissory  Note,  dated  January  29,  2004,  in the
                           principal amount of $2,000,000 payable by the Company
                           to Citizens National Bank in Waxahachie, Texas.
            10.8o          Deed of Trust,  dated January 29, 2004, signed by the
                           Company granting a security  interest in 6.6 acres of
                           undeveloped  real estate in Dallas,  Texas, to secure
                           payment of the note payable to Citizens National Bank
                           in Waxahachie, Texas.
            21.1*          Subsidiaries of the Company.
            31.1o          Joint Statement of Chief Executive  Officer and Chief
                           Financial Officer  Furnished  Pursuant to Section 302
                           of the Sarbanes-Oxley Act of 2002, 18 U.S.C.  Section
                           1350.
            32.1o          Joint Statement of Chief Executive  Officer and Chief
                           Financial Officer  Furnished  Pursuant To Section 906
                           Of The Sarbanes-Oxley Act of 2002, 18 U.S.C.  Section
                           1350


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


                                       21
<PAGE>

*    Incorporated  by reference to the Company's  Form 10-SB filed  December 26,
     1995.

**   Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the fiscal year ended December 31, 1999.

***  Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the fiscal year ended December 31, 2001.

+    Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the fiscal year ended December 31, 2002.

o    Filed herewith.

(b)      Reports on Form 8-K.
         --------------------

         The Company filed a Current Report on Form 8-K with the SEC on December
19, 2003  reporting the results of the Annual  Meeting of  Shareholders  held on
December 10, 2003.

         There  were no other  reports on Form 8-K filed with the SEC during the
last quarter of fiscal year ended December 31, 2001.

ITEM 14.          PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The Company paid or accrued the following fees in each of the prior two
fiscal years to its principal accountant, S.W. Hatfield, CPA of Dallas, Texas.

<TABLE>
<CAPTION>

                                                                     Year ended     Year ended
                                                                    December 31,   December 31,
                                                                        2003           2002
                                                                    ---------------------------
<S>                                                                 <C>            <C>
(1)    Audit fees                                                   $     11,718   $     11,738
(2)    Audit-related fees                                                   --             --
(3)    Tax fees                                                             --             --
(4)    All other fees
         Consulting related to proposed merger/acquisition of
         entities owned or controlled by controlling shareholders
         of the Company                                                     --            6,353
                                                                    ------------   ------------
Totals                                                              $     11,718   $     18,091
                                                                    ============   ============
</TABLE>


         Further,  the Company engaged the certified  public  accounting firm of
Whitley Penn of Dallas,  Texas on February 17, 2003 to perform audits of certain
entities  not owned by the Company  (certain of which  entities are owned by our
controlling  shareholders,  Duncan Burch and Nick Mehmeti) related to a proposed
merger  with the  Company.  The audits  were  being  performed  to  fulfill  SEC
reporting requirements to be met if the contemplated merger was completed. These
audits were not  completed  as Nick  Mehmeti  instructed  Whitley  Penn that the
merger  discussions  had  ceased  between  the  entities.  No  further  work  is
anticipated to be completed by Whitley Penn for or on the behalf of the Company.
The Company  paid  Whitley  Penn an  aggregate  of  approximately  $138,876  for
services related to this engagement.

         The Company has no formal audit  committee.  The functions of the audit
committee are performed by the entire board of directors.

         The Company's principal accountant, S. W. Hatfield, CPA, did not engage
any other  persons or firms  other than the  principal  accountant's  full-time,
permanent employees.








                                       22
<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 13th day of
April, 2004.

                            MILLION DOLLAR SALOON, INC.


                            By:              /s/ Nick Mehmeti
                               -------------------------------------------------
                               Nick Mehmeti, President, Chief Executive Officer,
                               Chief Financial Officer and Director

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant in the capacities and on the dates indicated:

   Signature                        Title                              Date

/s/ Nick Mehmeti     President, Chief Executive Officer, Chief    April 13, 2004
-----------------    Financial Officer and Director
Nick Mehmeti

/s/ Duncan Burch     Executive Vice President and Director        April 13, 2004
-----------------
Duncan Burch





























                                       23
<PAGE>

                                INDEX TO EXHIBITS


         Exhibit Number                          Description
         --------------    -----------------------------------------------------
            2.1*           Stock Purchase Agreement dated August 23, 1995 by and
                           between Art Beroff and Bjorn Heyerdahl.
            2.2*           Stock Purchase Agreement dated August 23, 1995 by and
                           between Joseph MacDonald,  Goodheart Ventures,  Inc.,
                           and Bjorn Heyerdahl.
            2.3*           Stock Purchase  Agreement  dated September 7, 1995 by
                           and among  Million  Dollar  Saloon,  Inc.,  Goodheart
                           Ventures, Inc., and certain individuals.
            2.4*           Addendum and Modification to Stock Purchase Agreement
                           dated September 19, 1995, by and among Million Dollar
                           Saloon, Inc.,  Goodheart Ventures,  Inc., and certain
                           individuals.
            2.5*           Stock Exchange  Agreement  dated September 7, 1995 by
                           and among  Million  Dollar  Saloon,  Inc.,  Goodheart
                           Ventures,   Inc.,  and  J.M.  Tibbals,   Trustee  for
                           Irrevocable Equity Trust No. 1.
            2.6*           Addendum and Modification to Stock Exchange Agreement
                           dated September 19, 1995, by and among Million Dollar
                           Saloon,  Inc.,  Goodheart  Ventures,  Inc.,  and J.M.
                           Tibbals, Trustee for Irrevocable Equity Trust No. 1.
            2.7*           Agreement and Plan of Merger dated October 5, 1995 by
                           and between  Million  Dollar  Saloon,  Inc.,  a Texas
                           corporation,  and Goodheart Ventures,  Inc., a Nevada
                           corporation.
            2.8**          Addendum and Modification to Stock Purchase Agreement
                           made and entered into the 7th day of  September  1995
                           by and among Million Dollar Saloon,  Inc.,  Goodheart
                           Ventures, Inc., and certain individuals dated October
                           31, 1995.
            3(i)*          Articles of Incorporation of The Company,  as amended
                           to date.
            3(ii)*         Bylaws of the Company.
            3(iii)**       Amended and Restated Bylaws of the Company  effective
                           July 9, 1999.
            4.1*           Specimen Common Stock Certificate.
            10.1*          Leases of Properties.
            10.2*          Promissory  Note  for  $750,000  with  Abrams  Centre
                           National Bank dated September 22, 1995.
            10.3***        Modification  of Lease  Agreement  dated  January 31,
                           2001 between Corporation Lex and MD II Entertainment,
                           Inc.
            10.4+          Promissory  Note dated February 14, 2003 (the "Note")
                           in the principal amount of  $2,156,713.50  payable by
                           the Company to One Stemmons Land Limited  Partnership
                           with  interest  at 8%  per  annum,  interest  payable
                           monthly,  with a  single  principal  payment  due and
                           payable on February 1, 2004.
            10.5+          Deed of Trust, dated February 14, 2003, signed by the
                           Company granting a security  interest in 6.6 acres of
                           undeveloped  real  estate in Dallas,  Texas to secure
                           payment of the Note.
            10.6+          Special   Warranty  Deed  with  Vendor's  Lien  dated
                           February  14,  2002  relating  to 6.6  acres  of real
                           estate located in Dallas, Texas.
            10.7o          Promissory  Note,  dated  January  29,  2004,  in the
                           principal amount of $2,000,000 payable by the Company
                           to Citizens National Bank in Waxahachie, Texas.
            10.8o          Deed of Trust,  dated January 29, 2004, signed by the
                           Company granting a security  interest in 6.6 acres of
                           undeveloped  real estate in Dallas,  Texas, to secure
                           payment of the note payable to Citizens National Bank
                           in Waxahachie, Texas.
             21.1*         Subsidiaries of the Company.
            31.1o          Joint Statement of Chief Executive  Officer and Chief
                           Financial Officer  Furnished  Pursuant to Section 302
                           of the Sarbanes-Oxley Act of 2002, 18 U.S.C.  Section
                           1350.
            32.1o          Joint Statement of Chief Executive  Officer and Chief
                           Financial Officer  Furnished  Pursuant To Section 906
                           Of The Sarbanes-Oxley Act of 2002, 18 U.S.C.  Section
                           1350
--------------------
*    Incorporated  by reference to the Company's  Form 10-SB filed  December 26,
     1995.

**   Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the fiscal year ended December 31, 1999.

***  Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the fiscal year ended December 31, 2001.

+    Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the fiscal year ended December 31, 2002.

o    Filed herewith.




                                     IOE-1




<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants                           F-2

Consolidated Financial Statements

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

   Consolidated Statements of Income and Comprehensive Income
      for the years ended December 31, 2003 and 2002                         F-5

   Consolidated Statements of Changes in Shareholders' Equity
      for the years ended December 31, 2003 and 2002                         F-6

   Consolidated Statements of Cash Flows
      for the years ended December 31, 2003 and 2002                         F-7

   Notes to Consolidated Financial Statements                                F-8























                                                                             F-1

<PAGE>

                        Letterhead of S. W. Hatfield, CPA
                        ---------------------------------


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               --------------------------------------------------



Board of Directors and Shareholders
Million Dollar Saloon, Inc.

We have audited the consolidated  balance sheets of Million Dollar Saloon,  Inc.
and Subsidiaries (a Nevada corporation and Texas corporations,  respectively) as
of December 31, 2003 and 2002, and the related consolidated statements of income
and comprehensive  income,  changes in shareholders'  equity, and cash flows for
each of the two years then ended,  respectively.  These  consolidated  financial
statements are the responsibility of Company's management. Our responsibility is
to express an opinion on these  consolidated  financial  statements based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain  reasonable  assurance  about whether the financial
statements are free of material misstatement.  An audit also includes examining,
on a  test  basis,  evidence  supporting  the  amounts  and  disclosures  in the
financial statements. An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Million
Dollar Saloon,  Inc. and  Subsidiaries  as of December 31, 2003 and 2002 and the
results  of its  operations  and its cash  flows for each of the two years  then
ended, respectively, in conformity with generally accepted accounting principles
generally accepted in the United States of America.




                                        S. W. HATFIELD, CPA
Dallas, Texas
March 23, 2004















                                                                             F-2

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2003 and 2002

                                                   December 31,    December 31,
                                                       2003            2002
                                                   ------------    ------------
                                     ASSETS
                                     ------
Current Assets
   Cash on hand and in bank                        $    132,831    $    783,157
   Marketable securities                                389,919         367,093
   Accounts receivable - trade and other                  8,500          68,528
   Prepaid Federal income taxes receivable              145,000           1,500
   Inventory                                             25,352          48,087
   Prepaid expenses                                       3,540          43,743
                                                   ------------    ------------

     Total current assets                               705,142       1,312,108
                                                   ------------    ------------


Property and Equipment - At Cost
   Buildings and related improvements                 2,174,417       2,095,914
   Furniture and equipment                              812,646         881,710
                                                   ------------    ------------
                                                      2,987,063       2,977,624
   Less accumulated depreciation                     (2,004,640)     (1,908,244)
                                                   ------------    ------------
                                                        982,423       1,069,380
   Land                                                 741,488         741,488
                                                   ------------    ------------

     Net property and equipment                       1,723,911       1,810,868
                                                   ------------    ------------


Other Assets
   Land held for future development                   2,649,786            --
   Security deposits and other                            1,725           1,725
                                                   ------------    ------------

     Total other assets                               2,649,786           1,725
                                                   ------------    ------------


Total Assets                                       $  5,080,564    $  3,124,701
                                                   ============    ============




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                             F-3

<PAGE>
<TABLE>
<CAPTION>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2003 and 2002

                                                              December 31,   December 31,
                                                                  2003           2002
                                                              ------------   ------------
<S>                                                           <C>            <C>
                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
Current Liabilities
   Note payable                                               $  2,156,714   $       --
   Loan from officer                                               140,000           --
   Accounts payable - trade                                        106,352        109,836
   Accrued liabilities                                             105,458        205,254
   Accrued income taxes payable                                       --             --
   Deferred revenues                                                  --            9,500
   Tenant deposits                                                   6,500          6,500
                                                              ------------   ------------

     Total current liabilities                                   2,515,024        331,090
                                                              ------------   ------------

Long-Term Liabilities
   Deferred tax liability                                          281,062        288,916
                                                              ------------   ------------

     Total liabilities                                           2,796,086        620,006
                                                              ------------   ------------


Commitments and Contingencies


Shareholders' Equity
   Preferred stock - $0.001 par value
     5,000,000 shares authorized
     None issued and outstanding                                      --             --
   Common stock - $0.001 par value
     50,000,000 shares authorized
     5,731,778 shares issued and outstanding, respectively           5,732          5,732
   Retained earnings                                             2,278,746      2,498,963
                                                              ------------   ------------

     Total shareholders' equity                                  2,284,478      2,504,695
                                                              ------------   ------------


Total Liabilities and Shareholders' Equity                    $  5,080,564   $  3,124,701
                                                              ============   ============
</TABLE>



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                             F-4

<PAGE>
<TABLE>
<CAPTION>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                     Years ended December 31, 2003 and 2002


                                                       Year ended      Year ended
                                                      December 31,    December 31,
                                                          2003            2002
                                                      ------------    ------------
<S>                                                   <C>             <C>
Revenues
   Bar and restaurant sales                           $  3,041,661    $  3,267,595
   Rental income from related parties                      677,654         524,232
                                                      ------------    ------------
     Total revenues                                      3,719,315       3,791,827
                                                      ------------    ------------

Cost of Sales - Bar and Restaurant Operations
   Direct labor                                          1,216,571       1,340,572
   Purchases                                               565,244         652,375
                                                      ------------    ------------
     Total cost of sales                                 1,781,815       1,992,947
                                                      ------------    ------------

Gross Profit                                             1,937,500       1,798,880
                                                      ------------    ------------

Operating Expenses
   Salaries, wages and related expenses                    645,019         591,531
   Consulting, legal and other professional fees           398,846         177,477
   Rental expenses, principally taxes                       56,805          59,075
   Interest expense                                        154,587           3,007
   Other operating expenses                                683,997         671,019
   Bad debt expense, related party                         248,465            --
   Depreciation and amortization                            95,221          99,013
                                                      ------------    ------------
       Total operating expenses                          2,282,940       1,601,122
                                                      ------------    ------------

Income from Operations                                    (345,440)        197,758

Other Income (Expenses)
   Interest income and other                                13,821          21,590
   Unrealized gain (loss) on marketable securities           9,940          (8,867)
   Impairment of carrying value on long-term assets           --            (2,250)
                                                      ------------    ------------

Income before Income Taxes                                (321,679)        208,231

Provision for Income Taxes
   Currently (payable) refundable                           93,608         (44,861)
   Deferred (expense) benefit                                7,854        (154,393)
                                                      ------------    ------------

Net Income                                                (220,217)          8,977

Other Comprehensive Income                                    --              --
                                                      ------------    ------------

Comprehensive Income (Loss)                           $   (220,217)   $      8,977
                                                      ============    ============

Earnings per share of common stock
   outstanding, computed on net income (loss) -
   basic and fully diluted                            $      (0.04)            nil
                                                      ============    ============

Weighted-average number of shares outstanding            5,731,778       5,731,778
                                                      ============    ============
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                             F-5

<PAGE>
<TABLE>
<CAPTION>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                     Years ended December 31, 2003 and 2002



                                      Common Stock                                  Total
                                -----------------------------      Retained      shareholders'
                                   # shares         Amount         earnings         equity
                                -------------   -------------   -------------    -------------
<S>                             <C>             <C>             <C>              <C>
Balances at January 1, 2002         5,731,778   $       5,732   $   2,489,986    $   2,495,718

Net income for the year                  --              --             8,977            8,977
                                -------------   -------------   -------------    -------------

Balances at December 31, 2002       5,731,778           5,732       2,498,963        2,504,695

Net income for the year                  --              --          (220,217)        (220,217)
                                -------------   -------------   -------------    -------------

Balances at December 31, 2003       5,731,778   $       5,732   $   2,278,746    $   2,284,478
                                =============   =============   =============    =============
</TABLE>





























The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                             F-6

<PAGE>
<TABLE>
<CAPTION>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2003 and 2002


                                                           Year ended      Year ended
                                                          December 31,    December 31,
                                                              2003            2002
                                                          ------------    ------------
<S>                                                       <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)                                      $   (220,217)   $      8,977
   Adjustments to reconcile net income to net cash
     provided by operating activities
       Depreciation and amortization                            95,221          99,013
       Bad debt expense                                        248,465            --
       Unrealized (gain) loss on marketable securities          (9,940)          8,867
       Impairment of carrying value on long-term assets           --             2,250
       Deferred income taxes                                    (7,854)        154,393
       (Increase) decrease in
         Accounts receivable - trade                          (188,437)        (11,662)
         Federal income taxes receivable                      (145,000)         (1,500)
         Inventory                                              22,735         (28,670)
         Prepaid expenses and other                             40,203         (43,743)
       Increase (decrease) in
         Accounts payable and other accrued liabilities       (103,280)        189,962
         Deferred revenues                                      (9,500)          9,500
         Accrued federal income taxes payable                    1,500         (74,000)
                                                          ------------    ------------
Net cash provided by operating activities                     (276,104)        312,987
                                                          ------------    ------------


CASH FLOWS FROM INVESTING ACTIVITIES
   Cash paid for land held for future development             (493,072)           --
   Purchase of marketable securities                           (12,886)       (375,960)
   Purchases of property and equipment                          (8,264)        (92,655)
                                                          ------------    ------------

Net cash used in investing activities                         (514,222)       (468,615)
                                                          ------------    ------------


CASH FLOWS FROM FINANCING ACTIVITIES
   Cash received on note payable to officer                    140,000            --
                                                          ------------    ------------

Net cash provided by financing activities                      140,000            --
                                                          ------------    ------------


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS              (650,326)       (155,628)

Cash and cash equivalents at beginning of year                 783,157         938,785
                                                          ------------    ------------

Cash and cash equivalents at end of year                  $    132,831    $    783,157
                                                          ============    ============

SUPPLEMENTAL DISCLOSURES OF
   INTEREST AND INCOME TAXES PAID
     Interest paid                                        $    154,587    $      3,007
                                                          ============    ============
     Income taxes paid                                    $     49,892    $    120,762
                                                          ============    ============
</TABLE>



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                             F-7

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - Background and Organization

Million Dollar Saloon,  Inc. (MDS) was incorporated  under the laws of the State
of Nevada on September 28, 1987. MDS is a holding company  providing  management
support to its operating  subsidiaries:  Furrh,  Inc., Tempo Tamers,  Inc., Don,
Inc. and Corporation Lex.

Furrh,  Inc.  (Furrh) was  incorporated  under the laws of the State of Texas on
February 25, 1974. Furrh provides  management services to Tempo Tamers, Inc, its
wholly-owned subsidiary.  Tempo Tamers, Inc. (Tempo), was incorporated under the
laws  of  the  State  of  Texas  on  July  3,  1978.  Tempo  operates  an  adult
entertainment  lounge and restaurant facility,  located in Dallas,  Texas, under
the registered trademark and trade name "Million Dollar Saloon(R)".

Don,  Inc.  (Don)  was  incorporated  under  the  laws of the  State of Texas on
November 8, 1973. Don owns and manages  commercial  rental  property  located in
Tarrant County, Texas.

Corporation Lex (Lex) was  incorporated  under the laws of the State of Texas on
November 30, 1984. Lex owns and manages  commercial  rental property  located in
Dallas County, Texas.


NOTE B - Preparation of Financial Statements

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
adopted a year-end of December 31.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented

These  financial  statements  reflect  the books and  records of Million  Dollar
Saloon, Inc., Furrh, Inc., Tempo Tamers, Inc., Corporation Lex and Don, Inc. for
the years  ended  December  31,  2003 and 2002,  respectively.  All  significant
intercompany transactions have been eliminated in combination.  The consolidated
entities are referred to as Company.




                                                                             F-8

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE C - Summary of Significant Accounting Policies

1.   Cash and Cash Equivalents
     -------------------------

     For  Statement of Cash Flows  purposes,  the Company  considers all cash on
     hand  and  in  banks,  including  accounts  in  book  overdraft  positions,
     certificates of deposit and other highly-liquid investments with maturities
     of three months or less, when purchased, to be cash and cash equivalents.

     Cash  overdraft  positions may occur from time to time due to the timing of
     making bank deposits and releasing checks, in accordance with the Company's
     cash management policies.

2.   Marketable Securities
     ---------------------

     Investments in the equity  securities of other companies,  including mutual
     fund investments, that have readily determinable fair values (as defined in
     Statement  of  Financial  Accounting  Standards  No. 115,  "Accounting  for
     Certain   Investments  in  Debt  and  Equity  Securities"  (SFAS  115)  are
     classified, at the date of acquisition, into three categories and accounted
     for as follows:

          Trading  Securities  -  Equity  securities  that are  bought  and held
          principally  for the  purpose  of  selling  them in the near  term are
          reported at fair value.  Unrealized  gains and losses are  included in
          earnings.

          Available-for-Sale  Securities - Equity  securities  not classified in
          other categories are reported at fair value, with unrealized gains and
          losses excluded from earnings and reported in a separate  component of
          shareholders' equity.

          Held-to-Maturity  Securities - Equity  securities that the Company has
          the  positive  intent and ability to hold to maturity  are reported at
          amortized cost.

     Other  investments that do not have a readily  determinable  fair value are
     recorded at amortized cost.

     The Company  evaluates  the  carrying  value of all  marketable  securities
     classified as  "held-to-maturity"  or "other investments that do not have a
     readily  determinable  fair value" on a quarterly  basis in accordance with
     Statement of Financial  Accounting  Standards No. 144,  "Accounting for the
     Impairment or Disposal of Long- Lived Assets". Any permanent impairment, if
     any, is charged to operations in the quarter in which the  determination of
     impairment is made.

     For  purposes  of  computing   realized  gains  and  losses,  the  specific
     identification method is used.

3.   Accounts Receivable and Revenue Recognition
     -------------------------------------------

     In the normal course of business,  the Company extends  unsecured credit to
     virtually  all of its tenants  related to rental  property  operations  and
     accepts  cash or  nationally  issued  bankcards  as  payment  for goods and
     services in its adult lounge and entertainment  facility.  Bankcard charges
     are normally paid by the clearing institution within three to fourteen days
     from the date of presentation by the Company.

     Since  December  31,  2000,  all  rental  property   lessors  are  entities
     controlled by a Company controlling shareholder,  officer and director. All
     lease  rental  payments are due in advance on the first day of the week for
     that week.  All revenue  sources  are  located  either in Dallas or Tarrant
     County, Texas.


                                                                             F-9

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE C - Summary of Significant Accounting Policies - Continued

3.   Accounts Receivable and Revenue Recognition - continued
     -------------------------------------------

     Because of the credit risk  involved,  management has provided an allowance
     for doubtful  accounts  which  reflects  its opinion of amounts  which will
     eventually become uncollectible. In the event of complete non- performance,
     the  maximum  exposure  to the  Company  is the  recorded  amount  of trade
     accounts   receivable   shown  on  the   balance   sheet  at  the  date  of
     non-performance.

4.   Inventory
     ---------

     Inventory  consists  of  food  and  liquor  consumables  necessary  in  the
     operation of Tempo's adult lounge and entertainment  facility.  These items
     are  valued at the lower of cost or market  using the  first-in,  first-out
     method of accounting.

5.   Property and Equipment
     ----------------------

     Property  and  equipment  is  recorded  at  cost  and is  depreciated  on a
     straight-line  basis,  over the estimated  useful lives  (generally 5 to 40
     years)  of the  respective  asset.  Major  additions  and  betterments  are
     capitalized and depreciated  over the estimated useful lives of the related
     assets. Maintenance, repairs, and minor improvements are charged to expense
     as incurred.

6.   Trademark rights
     ----------------

     Amounts  paid in  conjunction  with the  acquisition  and  retention of the
     trademark "Million Dollar Saloon(R)" have been capitalized. The life of the
     registration  is  twenty  years  from  its  affirmation  in 1988 and may be
     extended as allowed by applicable law at that point in time. This trademark
     has been  assigned  Registration  No.  1,509,636  by the U. S.  Patent  and
     Trademark Office.

     On December 31, 2002, in accordance with Statement of Financial  Accounting
     Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
     Assets",  Management  reflected  an  impairment  equivalent  to 100% of the
     unamortized  balance  (approximately  $2,250) against the carrying value of
     this asset.

7.   Income Taxes
     ------------

     The Company files a consolidated Federal Income Tax return and utilizes the
     asset and liability method of accounting for income taxes. The deferred tax
     asset and deferred tax liability accounts, as recorded when material to the
     financial statements, are entirely the result of temporary differences.  No
     valuation  allowance was provided  against  deferred tax assets.  Temporary
     differences   represent  differences  in  the  recognition  of  assets  and
     liabilities for tax and financial reporting purposes, primarily accumulated
     depreciation and amortization.


                                                                            F-10

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE C - Summary of Significant Accounting Policies - Continued

8.   Earnings per share
     ------------------

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) by the weighted-average  number of shares of common stock and common
     stock  equivalents  (primarily  outstanding  options and warrants).  Common
     stock equivalents  represent the dilutive effect of the assumed exercise of
     the  outstanding  stock  options and  warrants,  using the  treasury  stock
     method.  The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding  options and warrants at
     either the  beginning  of the  respective  period  presented or the date of
     issuance,   whichever  is  later.   As  of  December  31,  2003  and  2002,
     respectively,  the Company has no outstanding  stock  warrants,  options or
     convertible  securities  which could be considered as dilutive for purposes
     of the loss per share calculation.


NOTE D - Related Party Transactions

Since a change in  majority  shareholders  of the  Company  in 2000,  the rental
properties  of  Corporation  Lex and Don,  Inc. have been subject to leases with
entities  controlled  by Duncan  Burch,  an officer,  director  and  controlling
shareholder of the Company.  These respective  leases were in place prior to the
2000 change in control.

In October  2002,  Duncan  Burch,  Nick Mehmeti  (officers  and directors of the
Company) and certain of their affiliated businesses (the "Clubs") entered into a
Compromise Settlement Agreement and Mutual Releases (the "Settlement Agreement")
with the City of  Dallas to  settle  pending  litigation,  claims  and  disputes
between  the  parties  arising  out of the  operation  of the  Clubs in  alleged
violation  of the Dallas City Code,  including  the Sexually  Oriented  Business
Ordinance. The Settlement Agreement did not involve the Company's Million Dollar
Saloon nor did the  Settlement  Agreement  affect the  operation  of the Million
Dollar Saloon.

However, the Settlement Agreement did affect the usage of the Company's property
owned by  Corporation  Lex,  which was  subject to a  month-to-month  basis.  In
accordance  with the  Settlement  Agreement,  lessee  agreed  to  terminate  the
operation of the adult cabaret  business at the Corporation Lex property by July
31, 2003. The entity controlled by Duncan Burch concurrently  tendered notice to
the Company that the associated  lease would be terminated on July 31, 2003 as a
result of this action.

The Company and its subsidiary, Corporation Lex, signed the Settlement Agreement
for a limited  purpose.  The  Company and  Corporation  Lex are not bound by the
terms of the Settlement Agreement except that Corporation Lex has agreed it will
not  allow  the  Clubs to use the  property,  as or in  support  of, a  sexually
oriented business,  dance hall,  business featuring exotic striptease,  business
featuring  scantily clad  employees,  individuals  or  performers,  any business
featuring  individuals,   employees,   licensees,   or  independent  contractors
displaying   specified   anatomical   areas  or  engaging  in  specified  sexual
activities,  or  operation  by the  Clubs  of a  business  in any  other  manner
circumventing or frustrating, or intending to circumvent or frustrate the intent
of Chapter 41A and 51A of the Dallas City Code. The Company  and/or  Corporation
Lex may lease the premises for any other lawful purpose.

Since January 1, 2001, the  renegotiated  lease between  Corporation Lex and the
entity  controlled by Duncan Burch  contained a percentage  rent clause  whereby
Corporation  Lex would receive a base rental equal to 10% of the gross  revenues
generated from the business located at the property, less State Liquor and State
Sales Taxes,  payable  quarterly,  with a minimum weekly payment of $1,000 which
will be credited  against the quarterly  percentage rent due. The minimum weekly
rent  payment  shall not be less than  $1,000  per week.  During  2003 and 2002,
approximately $31,000 and $52,000 of lease payments were received by the Company
for this property.

                                                                            F-11

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE D - Related Party Transactions - Continued

In March 2004, the Company received the required  supporting  documentation from
the lessee to validate the  percentage  rents due for Calendar  2002 and through
July 31, 2003,  which caused a significant  upward  revision of our estimate for
amounts due in Calendar  2002. As of July 31, 2003,  the lessee owed  percentage
rent as follows:

                         Year ended
                        December 31,        Amount due
                        ------------        ----------
                            2001            $   42,952
                            2002                98,000
                            2003               107,513
                                            ----------
                                            $  248,465
                                            ==========

In December 31, 2003, the Company's Board of Directors  accepted notice from the
lessee,  controlled  by Duncan  Burch,  an  officer,  director  and  controlling
shareholder,  that the  percentage  rent due to the  Company  would not be paid.
Accordingly,  the Company  recognized a charge to  operations  of  approximately
$248,465 as bad debt expense from uncollectible trade accounts receivable.

The  property  owned by Don,  Inc.  is also  subject  to a lease with a separate
entity  controlled  by  Duncan  Burch,  an  officer,  director  and  controlling
shareholder  of the  Company.  This lease  expired  in August  2003 and is being
continued  on a  month-to-month  basis at the final  contractual  rental rate of
approximately  $8,500  per week.  The lessee has not  indicated  to the  Company
whether a new long-term lease will be negotiated on this property.

On February 14,  2003,  Duncan  Burch  advanced the Company  $140,000 for use in
closing the acquisition of certain  property being held for future  development.
This advance was non-interest  bearing and due upon demand. On January 29, 2004,
the Company  refinanced  the subject  property  and repaid Mr.  Burch the entire
$140,000 at closing of the refinancing.


NOTE E - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.


                                                                            F-12

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE F - Concentrations of Credit Risk

The  Company  maintains  its cash  accounts  in various  financial  institutions
subject  to  insurance   coverage  issued  by  the  Federal  Deposit   Insurance
Corporation  (FDIC).  Under FDIC rules,  the Company  and its  subsidiaries  are
entitled to aggregate  coverage of $100,000 per account type per separate  legal
entity per financial  institution.  During the years ended December 31, 2003 and
2002, respectively, the various operating companies maintained deposits in these
financial  institutions  with credit risk  exposures in excess of statutory FDIC
coverage. The Company has incurred no losses during 2003 and 2002 as a result of
any of these unsecured situations.


NOTE G - Marketable Securities

Marketable  securities  as of December 31, 2003 and 2002 consist  entirely of an
investment in a money market instrument-based mutual funds and are summarized as
follows:

                                                           Available    Held to
                                                Trading    for sale    Maturity
                                                ---------  ---------   ---------
December 31, 2003
   Aggregate fair value                         $ 389,919   $    --    $    --
   Gross unrealized holding gains               $   9,940   $    --    $    --
   Gross unrealized holding losses              $    --     $    --    $    --
   Amortized cost basis                         $ 379,979   $    --    $    --

December 31, 2002
   Aggregate fair value                         $ 367,093   $    --    $    --
   Gross unrealized holding gains               $    --     $    --    $    --
   Gross unrealized holding losses              $   8,867   $    --    $    --
   Amortized cost basis                         $ 375,960   $    --    $    --

The net unrealized  holding gains and (losses) on trading  securities which have
been  included in the  statement of  operations  were  approximately  $9,940 and
$(8,867) for the each of the respective years ended December 31, 2003 and 2002.


NOTE H - Property and Equipment

Property and equipment consists of the following at December 31, 2003 and 2002:

                                    December 31,   December 31,
                                        2003           2002       Estimated life
                                    ------------   ------------   --------------

Buildings and related improvements  $  2,174,417   $  2,095,914    15-40 years
Furniture and equipment                  812,646        881,710     5-10 years
                                    ------------   ------------
                                       2,987,063      2,977,624
Less accumulated depreciation         (2,004,640)    (1,908,244)
                                    ------------   ------------
                                         982,423      1,069,380
Land                                     741,488        741,488
                                     ------------   ------------

Net property and equipment          $  1,723,911   $  1,810,868
                                    ============   ============

Depreciation  expense  for the  years  ended  December  31,  2003  and  2002 was
approximately $95,221 and $99,013, respectively.

                                                                            F-13

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE I - Land Held for Future Development
         Note Payable
         Loan from Officer

On February 14, 2003, the Company purchased 6.695 acres of undeveloped  property
located in Dallas,  Texas.  The  purchase  price was  approximately  $2,650,312,
including closing expenses of approximately $53,599.

The Company paid $493,072 cash, inclusive of a $140,000 loan to the Company from
Duncan Burch, an officer and director of the Company, and issued to the seller a
one-year note in the principal amount of $2,156,713 with 8% annual interest. The
payment of the note is secured with a lien  against the property  granted to the
note  holder  by the  Company.  The  interest  on the  note is  payable  monthly
(approximately  $14,678 per month)  beginning  April 1, 2003 with the  principal
amount due and payable on February 1, 2004.

The Company paid  approximately  $153,800  during  Calendar 2003 to service this
debt.

The property is undeveloped  and suitable for commercial  development.  Although
the  Company  has not  determined  the usage of the land,  the Company may use a
portion  of the land for an adult  cabaret  and sell the  remaining  undeveloped
property to a third party.  The  development  of the property will be subject to
the Company  obtaining a construction  loan. The Company does not currently know
the amount of the loan it will need to develop this  property or whether it will
be able to obtain a  sufficient  loan for  development  of the  property  or, if
obtained, whether the terms of the loan will be favorable to the Company.

In February 2004, the Company obtained permanent  long-term  financing to retire
the $2,156,713 note payable issued at the initial closing. The new note is for a
principal  balance of $2,000,000  and bears interest at 6.50% for the first year
and then  adjusts to 1.0% above the Wall Street  Journal  published  prime rate,
rounded to the nearest  0.125%.  The  interest  rate  adjusts  every 12th month,
commencing on January 29, 2005. The new note requires  payments of principal and
accrued interest in the amount of approximately  $17,426 monthly,  commencing on
February 29, 2004. As this is a variable  interest  rate note,  the payments may
change after the 12th payment and after every  succeeding 12th payment.  The new
note matures on January 29,  2019.  Further,  the note is secured by  underlying
land and the  separate  personal  guaranty  of each of the  Company's  officers,
directors and controlling shareholders; Duncan Burch and Nick Mehmeti.


NOTE J - Income Taxes

The components of income tax expense  (benefit) for the years ended December 31,
2003 and 2002, respectively, are as follows:

                                                     Year ended      Year ended
                                                    December 31,    December 31,
                                                        2003            2002
                                                    ------------    ------------
     Federal:
       Current                                      $    (93,608)   $     44,861
       Deferred                                           (7,854)        154,393
                                                    ------------    ------------

                                                        (101,462)        199,254
                                                    ------------    ------------

     State:
       Current                                              --              --
       Deferred                                             --              --
                                                    ------------    ------------
                                                            --              --
                                                    ------------    ------------
       Total                                        $   (101,462)   $    199,254
                                                    ============    ============


                                                                            F-14

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE J - Income Taxes - Continued

The Company's income tax expense (benefit) for the years ended December 31, 2003
and 2002,  respectively,  differed from the statutory federal rate of 34 percent
as follows:
<TABLE>
<CAPTION>

                                                               Year ended      Year ended
                                                              December 31,    December 31,
                                                                  2003            2002
                                                              ------------    ------------
<S>                                                           <C>             <C>
     Statutory rate applied to earnings before income taxes   $   (109,370)   $     70,799
     Increase (decrease) in income taxes resulting from:
       State income taxes                                             --              --
       Deferred income taxes                                        (7,854)        154,393
       Effect of incremental tax brackets and the
         application of business tax credits                        15,762         (25,938)
                                                              ------------    ------------
     Income tax expense                                       $   (101,462)   $    199,254
                                                              ============    ============


The  deferred  current  tax asset and  non-current  deferred  tax  liability  on
December  31,  2003  and  2002,  respectively,  balance  sheet  consists  of the
following:

                                                              December 31,    December 31,
                                                                  2003            2002
                                                              ------------    ------------

     Non-current deferred tax liability                       $   (281,062)   $   (288,916)
                                                              ============    ============
</TABLE>

The  non-current  deferred  tax  liability  results  from the usage of statutory
accelerated tax depreciation and amortization methods.


NOTE K - Capital Stock Transactions

On  March  19,  1998,  the  Company  entered  into a  Stock  Purchase  Agreement
(Agreement)  with an unrelated  individual.  The  Agreement  contained a "second
closing"  clause,  as amended,  whereby the individual may acquire an additional
400,000 shares of restricted,  unregistered common stock at a price of $1.10 per
share on or before the close of business on October 18, 2004. As of December 31,
2003 and  subsequent  thereto,  no shares of common  stock  have been  issued in
accordance with the "second closing" portion of the Agreement.


NOTE L - Commitments

The rental  property  owned by Don,  Inc.  is subject to a lease with a separate
entity  controlled  by  Duncan  Burch,  an  officer,  director  and  controlling
shareholder  of the  Company.  This lease  expired  in August  2003 and is being
continued  on a  month-to-month  basis at the final  contractual  rental rate of
approximately  $8,500  per week.  The lessee has not  indicated  to the  Company
whether a new long-term lease will be negotiated on this property. The lessee is
also for normal  maintenance and repairs,  insurance and other direct  operating
expenses related to the property.



                                                                            F-15
<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE M - Segment Information

The  Company  operates  with a  centralized  management  structure  and  has two
identifiable  operating segments:  an adult entertainment  lounge and restaurant
located in Dallas, Texas and commercial rental real estate located in Dallas and
Tarrant  Counties,  Texas.  All  revenues  are  generated  operations  in  these
geographic  areas.  As of December 31, 2003 and 2002,  respectively,  all rental
revenues are derived  from  entities  controlled  by Duncan  Burch,  an officer,
director  and  controlling  shareholder.  Approximately  18.2 and 13.8% of total
revenues  for 2003 and 2002,  respectively,  were  derived  from  these  related
parties.

A summary of the Company's operating segments is as follows:
<TABLE>
<CAPTION>

                                       Restaurant          Rental         General and
                                        facility        real estate      administrative       Total
                                     --------------    --------------    --------------   --------------
<S>                                  <C>               <C>               <C>                   <C>
Year ended December 31, 2003
   Revenue from external customers   $    3,041,661    $         --      $         --          3,041,661
   Revenue from related parties                --             677,654              --            677,654
   Revenue (expenses) from/to
     intercompany sources                  (240,000)         (445,000)          685,000             --
   Interest income                             --                 900            12,921           13,821
   Interest expense                            --                --             154,587          154,587
   Depreciation and amortization             33,030            62,191              --             95,221
   Income tax expense (benefit)             (81,258)          (27,976)            7,772         (101,462)
   Segment assets                           265,954         1,768,733         3,045,877        5,080,564
   Fixed asset expenditures                   8,264              --                --              8,264

Year ended December 31, 2002
   Revenue from external customers   $    3,267,595    $         --      $         --     $    3,267,595
   Revenue from related parties                --             524,232              --            524,232
   Revenue (expenses) from/to
     intercompany sources                  (240,000)         (110,000)          130,000             --
   Interest income                              118             6,205            15,267           21,590
   Interest expense                            --                --               3,007            3,007
   Depreciation and amortization             40,004            59,009              --             99,013
   Income tax expense (benefit)             (73,334)          226,263            46,325          199,254
   Segment assets                           270,727         2,257,207           596,767        3,124,701
   Fixed asset expenditures                  92,655              --                --             92,655
</TABLE>





                (Remainder of this page left blank intentionally)



                                                                            F-16

<PAGE>
<TABLE>
<CAPTION>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE N - Selected Financial Data (Unaudited)

The following is a summary of the quarterly results of operations for the years
ended December 31, 2003 and 2002, respectively.
                              Quarter ended   Quarter ended    Quarter ended    Quarter ended      Year ended
                                March 31,       June 30,       September 30,     December 31,     December 31,
                              -------------   -------------    -------------    -------------    -------------
<S>                           <C>             <C>              <C>              <C>              <C>
Calendar 2003
   Restaurant sales           $     867,732   $     838,764    $     835,416    $     449,749    $   3,041,661
   Rental income-
     Related party            $     161,134   $     155,775    $     126,050    $     234,695    $     677,654
   Gross profit               $     476,864   $     994,539    $     454,083    $      12,014    $   1,937,500
   Net earnings after
     provision for
     income taxes             $     107,467   $     (11,384)   $     (30,992)   $    (285,308)   $    (220,217)
   Basic and fully diluted
     earnings per share       $        0.02             nil    $       (0.01)   $       (0.05)   $       (0.04)
   Weighted average
     number of shares
     issued and outstanding       5,731,788       5,731,788        5,731,788        5,731,788        5,731,788

Calendar 2002
   Restaurant sales           $     958,171   $     885,288    $     855,893    $     568,243    $   3,267,595
   Rental income-
     Related party            $     148,195   $     138,950    $     137,775    $      99,312    $     524,232
   Gross profit               $     526,702   $     491,085    $     411,713    $     369,880    $   1,798,880
   Net earnings after
     provision for
     income taxes             $     137,032   $     109,886    $         807    $    (238,748)   $       8,977
   Basic and fully diluted
     earnings per share       $        0.02   $        0.02              nil    $       (0.04)             nil
   Weighted average
     number of shares
     issued and outstanding       5,731,788       5,731,788        5,731,788        5,731,788        5,731,788

</TABLE>



                                                                            F-17