U. S. Securities and Exchange Commission
                           Washington, D. C. 20549

                                 FORM 10-QSB

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

         For the quarterly period ended March 31, 2005


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

         For the transition period from _____ to _____

                          Commission File No. 0-33145

                     HEADLINERS ENTERTAINMENT GROUP, INC.
                (Name of Small Business Issuer in its Charter)

              Delaware                                84-1195628
  -------------------------------------------------------------------------
 (State or Other Jurisdiction o               (I.R.S. Employer I.D. No.)
  incorporation or organization)

                  501 Bloomfield Avenue, Montclair, NJ 07042
                  ------------------------------------------
                   (Address of Principal Executive Offices)

                   Issuer's Telephone Number: (973) 223-1233

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports),  and (2) has been subject to such filing requirements for the
past 90 days.     Yes  [X]     No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:  Indicate the number of shares
outstanding of each of the Registrant's classes of common stock, as of
the latest practicable date:
                            May 13, 2005
                            Common Voting Stock: 13,330,977

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

<PAGE>


PART 1.   FINANCIAL INFORMATION

           Headliners Entertainment Group, Inc. and Subsidiaries
                     Condensed Consolidated Balance Sheet
                               March 31, 2005
                                (Unaudited)

Assets

Current Assets
 Cash                                $    373,266
 Prepaid acquisition costs              3,675,000
 Other assets                               8,244
 Assets to be disposed of                 125,000
                                        ---------
 Total Current Assets                   4,181,510

Property and equipment, net             1,201,529
Construction in progress                  692,667

Other Assets
 Note receivable                          400,000
 Security deposits                         15,155
                                        ---------
 Total Assets                           6,490,861
                                        =========

Liabilities and Stockholders' Deficit

Current Liabilities
 Accounts payable and accrued expenses  1,523,652
 Promissory note                        3,613,654
 Current portion of long-term debt        606,452
 Notes payable                            902,615
                                        ---------
 Total Current Liabilities              6,646,373

Long-term debt, net of current portion  1,893,548
                                        ---------
 Total Liabilities                      8,539,921

Stockholders' Deficit
 Common stock, authorized 500,000,000
  shares, $.001 par value, 12,980,978
  shares issued and outstanding            12,211
 Additional paid-in capital            53,003,271
 Accumulated deficit                  (55,064,542)
                                       ----------
 Total Stockholders' Deficit           (2,049,060)
                                       ----------
 Total Liabilities and Stockholders'
  Deficit                            $  6,490,861
                                       ==========


See notes to the unaudited condensed consolidated financial statements.

                                    -1-
<PAGE>

        Headliners Entertainment Group, Inc. and Subsidiaries
           Condensed Consolidated Statements of Operations
                             (Unaudited)

                                                Three Months Ended March 31,
                                                -----------------------------
                                                                  As Restated
                                                       2005           2004
                                                  -------------   -----------
Net Sales                                       $     446,703      $   34,551
Cost of sales                                         152,690          18,184
                                                   ----------       ---------
Gross Profit                                          294,013          16,367

General and Administrative expenses
 General and administrative expenses                  801,571         344,305
 Stock based compensation                          24,420,000          70,000
 Stock issued for consulting services              12,362,400         321,108
                                                   ----------       ---------
 Total General and Administrative Expenses         37,583,971         735,413
                                                   ----------       ---------
Other Expenses
 Interest expense                                     270,190           9,000
                                                   ----------       ---------
 Total Other Expense                                  270,190           9,000
                                                   ----------       ---------
Loss From Continuing Operations                   (37,560,148)       (728,046)

Discontinued Operations
 Income (loss) from discontinued operations
  (net of tax effect of $0)                                 -         (24,463)
 Gain on disposal of operations (net of tax
  effect of $0)                                             -          16,926
                                                   ----------       ---------
 (Loss) Income From Discontinued Operations                 -          (7,537)
                                                   ----------       ---------
Net Loss                                        $ (37,560,148)     $ (735,583)
                                                   ==========       =========

Earnings per share
 Earnings (Loss) Per Share From Continuing
  Operations                                    $      (25.97)     $   (62.11)
 Earnings (Loss) Per Share From Discontinued
  Operations                                    $           -      $    (0.64)

Weighted Average Number of Common Shares
 Outstanding                                        1,446,166          11,721




See notes to the unaudited condensed consolidated financial statements.

                                    -2-
<PAGE>

            Headliners Entertainment Group, Inc. and Subsidiaries
               Condensed Consolidated Statements of Cash Flows
                                (Unaudited)

                                                Three Months Ended March 31,
                                                -----------------------------
                                                                   As Restated
                                                       2005           2004
                                                  -------------   ------------
Cash Used in Operating Activities
 Continued Operations                              $  (674,477)   $  (239,526)
 Discontinued Operations                                     -         49,003
                                                      --------       --------
 Net Cash Used in Operating Activities                (674,477)      (190,523)
                                                      --------       --------
Cash Flows from Investing Activities
 Purchase of property and equipment                    (25,024)             -
 Cash paid for acquisition                          (1,400,000)      (725,000)
 Cash paid for construction in progress               (133,791)      (544,547)
 Issuance of note receivable                          (400,000)             -
 Proceeds from sale of liquor license                        -         60,000
                                                     ----------     ---------
 Net Cash Used in Investing Activities              (1,958,815)    (1,209,547)
                                                     ---------      ---------
Cash Flows From Financing Activities
 Proceeds from long-term debt                        2,927,500              -
 Borrowings on line of credit                                -        850,000
 Proceeds from common stock issued                           -        475,000
 Proceeds from notes payable                            50,000         75,000
                                                     ---------      ---------
 Net Cash Provided by Financing Activities           2,977,500      1,400,000
                                                     ---------      ---------

Net Increase (Decrease) in Cash                        344,208            (70)
Cash at Beginning of Period                             29,058             70
                                                     ---------      ---------
Cash at End of Period                              $   373,266    $         -
                                                     =========      =========

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

During the quarter ended March 31, 2005, the Company issued a
$4,500,000 promissory  note in exchange for $427,500 in cash and
the extinguishment of an outstanding obligation of $3,025,000.
Additionally, a discount on the note of $1,047,500 was recorded.

During the quarter end March 31, 2005, the Company issued a $3,000,000
promissory note in exchange for $2,500,000 in cash and a discount of
$500,000.


See notes to the condensed consolidated financial statements.

                                    -3-
<PAGE>
           Headliners Entertainment Group, Inc. and Subsidiaries
          Notes to the Condensed Consolidated Financial Statements
              For the Three Month Period Ended March 31, 2005
                                (Unaudited)
1. BASIS OF PRESENTATION

 The accompanying unaudited condensed financial statements have been
 prepared in accordance with generally accepted accounting principles for
 interim financial information and with the instructions to Item 310 of
 Regulation S-B.  Accordingly, they do not include all of the information
 and disclosures required by generally accepted accounting principles for
 complete financial statements.  In the opinion of management, all
 adjustments (consisting of normal recurring accruals) considered necessary
 for a fair presentation have been included.  Operating results for the
 three months ended March 31, 2005 are not necessarily indicative of the
 results that may be expected for the year ended December 31, 2005.  The
 unaudited condensed financial statements should be read in conjunction
 with the consolidated financial statements and disclosures thereto
 included in the Company's annual report on Form 10-KSB for the year ended
 December 31, 2004.

2.	GOING CONCERN

The accompanying condensed consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities and commitments in the
normal course of business.  As reflected in the condensed consolidated
financial statements, the Company has incurred recurring net losses
from operations, an accumulated deficit, and recurring negative cash
flows from operations.  Further, at March 31, 2005, current
liabilities exceed current assets by $2,464,863 and total liabilities
exceed total assets by $2,049,060.  These factors all raise
substantial doubt about the ability of the Company to continue as a
going concern.

Management's plan in regard to the going concern issues is to raise
capital through the sale of the Company's stock via the equity line of
credit that has been established.  In addition, the Company is
focusing on developing a significant number of clubs to achieve an
efficient level of operations.

3. NOTE RECEIVABLE

 In March of  2005, the Company loaned $400,000 to another publicly traded
 entity whose Chief Executive Officer is also the Chief Executive Officer
 of Headliners Entertainment Group, Inc.  The loan bears interest at the
 rate of 10% per annum.  The interest is to be paid on the first day of
 each month, commencing April 2005.  The note is to be repaid in eleven
 monthly installments of $33,333 commencing on June 1, 2006.  A final
 payment in the amount of $33,337 is due on May 1, 2007.

4. CONSTRUCTION IN PROGRESS

 Construction in progress, totaling $692,667 at March 31, 2005, include
 costs accumulated to date for the construction of a new comedy club in the
 Palisades Center in Nyack, NY, which will be depreciated upon the opening
 of the comedy club.  The comedy club is expected to open the week of May
 16, 2005.

 A summary of construction in progress is as follows:

               Leasehold Improvements            $ 458,000
               Machinery and Equipment             195,902
               Furniture and Fixtures               38,765
                                                  --------
               Total                             $ 692,667
                                                  ========

5.  PROMISSORY NOTE

  On January 25, 2005, the Company issued a promissory note in the amount
  of $4,500,000, bearing interest at 12% per annum.  In exchange for the
  promissory note, the note holder paid the Company $427,500 and surrendered
  other notes due from the Company in the principal amount of $3,025,000.
  Additionally, the Company discounted the note by $1,047,500.  The discount
  on the note is being amortized on the straight line basis, with the
  amortization being recognized as interest expense.  The unamortized
  discount on the note at March 31, 2005 was $886,346.  The note is to be
  repaid in monthly principal payments of $750,000 plus accrued interest
  commencing on August 25, 2005.  The note is secured by substantially all
  of the Company's assets.

  In the event of a default, the note holder will have the option to convert
  the principal and accrued interest into common stock of the Company.  The
  conversion rate will be the lesser of $12 or 80% of the average of the
  lowest three closing bid prices during the thirty days preceding
  conversion.
                                    -4-
<PAGE>


<PAGE>
          Headliners Entertainment Group, Inc. and Subsidiaries
         Notes to the Condensed Consolidated Financial Statements
               For the Three Month Period Ended March 31, 2005
                                (Unaudited)
6.  LONG-TERM DEBT

  On March 21, 2005, the Company issued a promissory note in the amount of
  $3,000,000, bearing interest at 12% per annum.  In exchange for the
  promissory note, the note holder paid the Company $2,500,000.  The note
  was discounted by $500,000.  The discount on the note is being amortized
  on the straight line basis, with the amortization being recognized as
  interest expense.  The unamortized discount on the note at March 31, 2005
  was $500,000.  The note is to be repaid in thirty monthly installments of
  $100,000 plus accrued interest.  As collateral for the note, the Company
  has pledged 100,000,000 shares of its common stock.  As of March 31, 2005,
  the current portion due under the note is $606,452, net of $193,548
  unamortized discount and the long-term portion due under the note is
  $1,893,548 net of $306,452 unamortized discount.

7.  JOINT MANAGEMENT AGREEMENT

  On March 7, 2005 the Company entered into a joint management agreement
  with Global Concepts, Ltd., Eduardo Rodriguez, Michael Margolies, The
  Rodriguez Family Trust and the Margolies Family Trust.  Global Concepts,
  Ltd is a publicly traded company of which Michael Margolies is the
  President.  The joint management agreement has replaced the employment
  contracts previously entered into with the Company's President and Vice
  Chairman and Secretary.

  Per the joint management agreement, the Rodriguez Family Trust and the
  Margolies Family Trust organized a limited liability company.  The Trusts,
  as well as Rodriguez and Margolies, will contribute their shares of the
  Company to the trust on August 15, 2005.  The Company will pay a fee of
  $5,000 per month to the limited liability company in compensation for the
  services of Rodriguez and Margolies.  Also, the Company entered into a
  five year employment agreement with Rodriguez and a five year advisory
  agreement with Margolies, Margolies resigned from his position as Vice
  Chairman, and Margolies and Rodriguez agreed to serve as members of the
  Company's board of directors.

  The Company's employment agreement with Rodriguez provides that he will
  serve as President for an annual compensation of $200,000 and an
  automobile allowance of $1,000 per month.  The employment agreement
  terminates on January 31, 2010.

  The Company's advisory agreement with Margolies provides that he will
  consult with the board of directors and the President on matters of
  business development, investor relations, public relations and finance.
  The Company will pay Margolies an annual fee of $25,000 for his services.
  The advisory agreement terminates on January 31, 2010.

8.  SUBSEQUENT EVENT

  On March 29, 2005 the Company and Paul Butler and JHF Properties, LLC an
  Ohio limited liability company entered into a Consolidated Acquisition
  Agreement.  The Consolidated Acquisition Agreement terminated and replaced
  all prior agreements (formal and informal) made among the Company and Paul
  Butler and JHF Properties, LLC (collectively, "JHF").

  As of the close of business on March 31, 2005, pursuant to the
  Consolidated Acquisition Agreement, the Company acquired all of the right,
  title and interest in five limited liability companies and the right to
  receive the net income of a sixth limited liability company.  The
  Consolidated Acquisition Agreement provides for the Company to acquire
  ownership of the sixth limited liability company at a second closing,
  which will occur after JHF has obtained $2,300,000 from the sale of the
  Company's common stock.  Each of the limited liability companies operates
  an entertainment complex consisting of a dance club and other facilities,
  one each in Cincinnati, Kansas City, Tucson, Jackson, Louisville and
  Omaha.
                                    -5-
<PAGE>


            Headliners Entertainment Group, Inc. and Subsidiaries
           Notes to the Condensed Consolidated Financial Statements
               For the Three Month Period Ended March 31, 2005
                                (Unaudited)

8.  SUBSEQUENT EVENT, Continued

  The consideration paid for the six limited liability companies consists
  of $2,275,000 previously paid to JHF and a 0% convertible debenture due
  on March 31, 2008 in the principal amount of $5,000,000.  The debenture
  is convertible into Headliners common stock at the option of JHF at any
  time until the note matures at a conversion price equal to the average of
  the closing bid prices of the Company's common stock for the five trading
  days immediately preceding the conversion.  At the maturity date, the
  entire principle amount that remains outstanding may be converted at the
  option of the Company.

  In accordance with the Consolidated Acquisition Agreement, the Company and
  JHF have also commenced development of a project in Hampton, VA (the
  "Virginia Project").  The Virginia Project will include a comedy club
  utilizing the Rascals trademark.  JHF will be responsible for supervising
  the development and construction of the Virginia Project.  The fee charged
  by JHF for the design and development of the Virginia Project is the sum
  of (a) $1,400,000 paid in cash on March 31, 2005 and (b) the value of the
  7,000 shares issued by Headliners to JHF in June 2004.  The value of the
  7,000 shares will be determined by the amount of the proceeds received
  upon the sale of the shares by JHF.

  Additionally, the Consolidated Acquisition Agreement contains provisions
  under which JHF will manage the seven properties and any properties
  subsequently constructed by the Company and JHF.  In consideration for the
  management services, the Company has issued common stock with a market
  value of $2,300,000 to JHF.  The Company has committed that if the
  proceeds realized by JHF from selling the shares are less than $2,300,000,
  the Company will issue additional shares until JHF realizes $2,300,000 in
  proceeds.  Additionally, JHF will receive a weekly cash fee equal to the
  net cash flow of the six limited liability companies less $32,500, but
  limited to the greater of $11,538 or 200% of the average weekly salary and
  bonus paid in cash to the Company's chief executive officer.  The Company
  will also pay $3,500 per week to reimburse JHF for its office staff and
  a monthly car allowance of $3,600.

  The transaction will be accounted for as an acquisition of the six limited
  liability companies under the purchase method of accounting in accordance
  with Statement of Financial Accounting Standards No. 141, Business
  Combinations.  Under the purchase method of accounting, the total purchase
  price is allocated to the net tangible and intangible assets acquired by
  Headliners in connection with the transaction, based on their fair values
  as of the completion of the transaction.  The excess cost over the net
  tangible and identifiable intangible assets is allocated to goodwill.

  As of March 31, 2005, the Company had paid an aggregate $3,675,000 towards
  the purchase price.  This amount has been recorded as prepaid acquisition
  costs in the accompanying financial statements.

  The results of operations of the six limited liability companies acquired
  will be included with the results of the Company from April 1, 2005.
  Assuming the acquisition had occurred on January 1, 2005, the Company's
  net sales, net loss and loss per share would have been $3,051,022,
  $(37,467,174) and $(25.90), respectively.



                                    -6-
<PAGE>

            Headliners Entertainment Group, Inc. and Subsidiaries
           Notes to the Condensed Consolidated Financial Statements
                For the Three Month Period Ended March 31, 2005
                               (Unaudited)

9.  RESTATEMENT OF PRIOR PERIOD RESULTS

  The Company restated its financial statements for the quarter ended March
  31, 2004.  The restated financial results corrected errors in its
  accounting procedures related to equity transactions and intangible
  assets.  Additionally, the Company's financial statements have been
  amended to reflect the closing of the West Orange, NJ and Ocean, NJ clubs
  as discontinued operations.  The impact of these adjustments on the
  Company's financial results as originally reported are summarized below:

                                      Three Months Ended March 31, 2004
                                          As Reported      As Restated
                                       ----------------  ---------------

             Assets                    $  2,760,699      $  2,859,191
             Net Sales                      238,551            34,551
             Accumulated deficit        (10,487,412)                -
             Net Loss                      (747,834)         (735,583)
             Earnings (Loss) Per Share
              From Continuing Operations     (60.00)           (62.11)
             Earnings (Loss) Per Share
              From Discontinued Operations        -             (0.64)











                                    -7-
<PAGE>

Item 2.  Management Discussion and Analysis

     Forward-looking Statements

     This Report contains certain forward-looking statements regarding
Headliners Entertainment Group, its business and financial prospects.
These statements represent Management's present intentions and its
present belief regarding the Company's future.  Nevertheless, there are
numerous risks and uncertainties that could cause our actual results to
differ from the results suggested in this Report.  A detailed
discussion of some of the risks that may cause such a difference has
been set forth in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 2004 in the section numbered "Item 6" under the
heading "Risk Factors that May Affect Future Results."  Among the more
significant factors are:

     1. We have obligations to Cornell Capital Partners in excess of
        $7,500,000, which are likely to be satisfied by our issuance
        of a large quantity of our common stock.
     2. We lack the capital necessary to expand our operations, and
        must rely on the sale of equity to obtain the necessary
        funds.
     3. We have never operated profitably for any significant period
        of time, and may continue to report net losses.

     Because these and other risks may cause Headliners' actual results
to differ from those anticipated by Management, the reader should not
place undue reliance on any forward-looking statements that appear in this
Report.  Readers should also take note that Headliners will not
necessarily make any public announcement of changes affecting these
forward-looking statements, which should be considered accurate on this
date only.

     Results of Operations

     From its founding in 1984 through 2001, Headliners' business
consisted entirely of the operation of  stand-alone restaurant/comedy
club facilities: two in New Jersey from the 1980s until 2003/2004  and
one that we operated in Miami, Florida for only a year.  In the years
since 2002 we have substantially changed the nature of our operations.
We have began to develop alternative locations for Rascals' comedy by
organizing hotel-based clubs and by granting licenses to utilize the
name "Rascals."  We also began to develop multiple channels of
distribution for the comedic entertainment produced in our clubs, such
as home video sales and pay-per-view sales.

     The most dramatic example of our expanding operations is our
acquisition at the end of March 2005 of six dance clubs.  We acquired
the clubs from JHF Properties LLC, which is the developer of a chain of
dance clubs that operate under one of the followings trade names:
"Banana Joe's,""Margarita Mama's," "Red Cheetah," "Parrot Beach" or
"Cactus Cafe."  WE purchased from JHF Properties five of the clubs
outright and purchased the rights to the net profits of a sixth.
Beginning in the second quarter of 2005, therefore, we will consolidate
the financial results of the clubs with our other operations.  This
will result in a significant increase in our revenues, as the six clubs
reported $11,353,827 in revenue for 2004, although three of the clubs
only commenced operations in Spring of that year.

     We have also altered our use of the Rascals trademark over the
past several years, by expanding into new venues.  We replaced the two
restaurant-club locations that we have operated since the 1980s with a
restaurant and Rascals Comedy Club that opened in Montclair NJ in June
2004.  In addition, we have been actively pursuing opportunities to
situate Rascals Comedy Clubs in hotels and entertainment venues, where
a large, pre-existing clientele can be converted into customers of our
club. The Rascals Comedy Clubs that now operate in such venues are:

                                    -8-
<PAGE>
        -    Rascals at the Palisades Center.  We opened this club on May
             12, 2005 in the Palisades Center, the second largest retail
             mall in the United States.

        -    Rascals Cherry Hill.  We opened this club in 2002 in the
             Hilton Hotel in Cherry Hill, New Jersey.

     While we have been undertaking these capital intensive efforts to
increase the number of our clubs, we have also been offering licensing
arrangements that will increase the numbers of Rascals Comedy Clubs
with minimal capital commitment by Headliners.  Our first such
licensing arrangement permitted our licensee to open a 300-seat
"Rascals Comedy Club" in Jersey City, New Jersey during the first
quarter of 2004.  Headliners provides the group with its plans and
designs for the club, consulted with the group during the development
stage, and is providing bookings for a fee.  In return, the licensee
pays a monthly royalty to Headliners equal to five percent of its gross
receipts throughout the ten-year term of the license.  During 2004 the
Jersey City club had paid us only $12,500, and we anticipate that our
revenue from this arrangement will remain modest.  However, almost all
of the revenue flows through to our bottom line, since we have no
operational responsibility for the club, and it has been achieved with
no capital commitment.

     The discontinuance of the operations of our principal clubs in
2003 and 2004 resulted in marked differences in the results of
operations for the first quarter of 2005 compared to the results for
the first quarter of 2004.  The $446,703 in net sales and $152,690 in
cost of sales reported for the first quarter of 2005 are attributable
to the operations of both the new Montclair club and restaurant and our
club at the Cherry Hill Hilton.  The $34,551 in net sales and $18,184
in cost of sales reported for the first quarter of 2004 were
contributed by the Cherry Hill club only.  The net results of the final
months of operations of our club and restaurant in Ocean Township NJ
have been reported as a "Loss from Discontinued Operations" on our
Statement of Operations.

     The transitions in our business plan have resulted in a marked
disparity between revenues and expenses.  In the first quarter of 2005
we incurred general and administrative expenses totaling $37,583,971,
including $801,571 in expenses that were or will be settled in cash and
$36,782,400 in expenses that we settled by issuance of stock.  This
large expense for stock-based compensation arises from our efforts to
implement growth strategies for the future.  Our lack of cash requires
us to pay with stock both our executives and the network of individuals
who are assisting us in developing and implementing our business plan,
which results in a large expense for "stock issued for consulting
services."

     The new directions in our operations bode well for the
future.  The acquisition of the six dance clubs and the opening of the
Rascals at the Palisades Center will result in a many-fold increase in
our revenue.  Our focus in 2005 will be on achieving profitable
operations.  We believe that is an achievable goal.


Liquidity and Capital Resources

     In order to obtain the funds necessary to acquire our six new
dance clubs and construct our facilities in Montclair and the Palisades
Center, we have borrowed nearly $10 million from Cornell Capital
Partners.  At December 31, 2004, we owed Cornell Capital Partners
$3,025,000.  Today the debt totals $7,500,000, consisting of two notes.
One note, for $4,500,000, requires Headliners to make monthly payments

                                    -9-
<PAGE>

of $750,000 plus interest, commencing on August 25, 2005.  If
Headliners defaults in making any payment, Cornell Capital Partners
will be entitled to convert the note into common stock at a conversion
price equal to the lesser of $12.00 or 80% of the then-current bid
price.  The note is secured by a pledge of all of Headliners' assets.
The second note, for $3,000,000, provides that Headliners will make
monthly principal payments of $100,000 plus accrued interest commencing
on May 23, 2005.  Headliners' obligation is secured by a pledge of all
of its assets.  Headliners also pledged 100,000,000 shares of its
common stock to secure its obligations under the second note.

     In order to satisfy our debt to Cornell Capital Partners we have
entered into a "Standby Equity Distribution Agreement" with Cornell
Capital Partners.  The Standby Equity Distribution  Agreement becomes
effective when we provide Cornell Capital Partners with a prospectus
that will permit it to resell to the public any shares it acquires from
Headliners.  During the two years after the Securities and Exchange
Commission declares that prospectus effective, Headliners may demand
that Cornell Capital Partners purchase shares of common stock from
Headliners.  Headliners may make a demand no more than once every seven
trading days.  The maximum purchase price on each demand is $500,000.
The Standby Equity Distribution Agreement recites that Headliners may
demand from Cornell Capital Partners up to $30,000,000 during its term.
The number of shares that Cornell Capital Partners will purchase after
a demand will be determined by dividing the dollar amount demanded by a
per share price.  The per share price used will be 98% of the lowest
daily volume-weighted average price during the five trading days that
follow the date a demand is made by Headliners.  Cornell Capital
Partners is required by the Agreement to pay each amount demanded by
Headliners, unless (a) there is no prospectus available for Cornell
Capital Partners to use in reselling the shares, (b) the purchase would
result in Cornell Capital Partners owning over 9.9% of Headliners
outstanding shares, or (c) the representations made by Headliners in
the Agreement prove to be untrue.

     Our plan is to sell common stock to Cornell Capital Partners in
order to meet our debt service obligations.  This will result in a
significant increase in our outstanding common stock.  At the market
price of $2.20 per share on May 13, 2005, satisfaction of our entire
debt to Cornell Capital Partners would require that we issue
approximately 3,750,000 shares.  However, the influx of shares in that
quantity into the market is likely to result in a reduction in the
market price for our common stock.  Therefore it is likely that
considerably more shares will have to be sold in order to satisfy our
obligations to Cornell Capital Partners.

     With the proceeds of our sale of notes to Cornell Capital
Partners, we have substantially alleviated our capital commitments.
Nevertheless, in addition to the ongoing expenses of operating its
business, Headliners faces the following cash commitments:

       1.       We have a management services agreement with JHF Properties
                LLC, under which JHF Properties is managing our six new dance
                clubs.  In compensation for its services, we have issued and
                will continue to issue common stock to the owner of JHF
                Properties.  The management services agreement provides that
                if JHF Properties obtains less than $2,300,000 in proceeds
                from the sale of that common stock during the next year, it
                may call upon Headliners to pay the shortfall in cash at
                certain times during the year.  If Headliners fails to do so,
                JHF Properties may terminate the arrangements under which it
                is required to transfer to Headliners the new facility in
                Hampton VA and/or the existing facility in Louisville KY.

       2.       We had over $2.4 million in accounts and notes payable on
                March 31, 2005, not including the notes payable to Cornell
                Capital Partners that totaled $7,500,000.  We do not expect
                that cash flow from operations will, in the near term, effect
                any significant reduction in our accounts and notes payable.
                Therefore we will either need to obtain extended payment
                terms from our creditors or we will have to obtain additional
                capital to pay those creditors whose debts are most pressing.

                                    -10-
<PAGE>

     Once we have passed the current period of rapid expansion, our
capital requirements will be much easier to control.  Once clubs are
established, they either operate profitably or they are closed.  So the
capital requirements of ongoing operations should not be significant.
Our plan is to continue to expand, but at a pace commensurate with
available capital and capital commitments, either from equity sources
or secured lending sources that should become available once we have a
portfolio of assets to offer as collateral.

Off-Balance Sheet Arrangements

     At March 31, 2005, Headliners was indebted to Cornell Capital
Partners pursuant to two  promissory notes, one in the principal amount
of $4,500,000 and one in the principal amount of $3,000,000.  These
notes were recorded on our balance sheet at the purchase price paid for
them by Cornell Capital Partners.  Because Headliners sold the notes to
Cornell Capital Partners at substantial discounts from the principal
amounts of the notes, a portion of each note is accounted for as a
"discount" and does not appear on the balance sheet.  At March 31, 2005
the aggregate amount of unamortized discounts on the two notes was
$1,386,346.  This amount will be amortized over the lives of the notes,
and will be recognized as interest expense when it is amortized.

Item 3.  Controls and Procedures

     Evaluation of Disclosure Controls and Procedures.  Eduardo
Rodriguez, our Chief Executive Officer and Chief Financial Officer,
carried out an evaluation of the effectiveness of Headliners'
disclosure controls and procedures as of March 31, 2005.  Pursuant to
Rule13a-15(e) promulgated by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, "disclosure controls
and procedures" means controls and other procedures that are designed
to insure that information required to be disclosed by Headliners in
the reports that it files with the Securities and Exchange Commission
is recorded, processed, summarized and reported within the time limits
specified in the Commission's rules.  "Disclosure controls and
procedures" include, without limitation, controls and procedures
designed to insure that information Headliners is required to disclose
in the reports it files with the Commission is accumulated and
communicated to our Chief Executive Officer and Chief Financial Officer
as appropriate to allow timely decisions regarding required disclosure.
Based on his evaluation, Mr. Rodriguez concluded that Headliners'
system of disclosure controls and procedures was effective as of March
31, 2005 for the purposes described in this paragraph.

     Changes in Internal Controls.  There was no change in internal
controls over financial reporting (as defined in Rule 13a-15(f)
promulgated under the Securities Exchange Act or 1934) identified in
connection with the evaluation described in the preceding paragraph
that occurred during Headliners's first fiscal quarter that has
materially affected or is reasonably likely to materially affect
Headliners's internal control over financial reporting.

                                    -11-
<PAGE>

PART II   -   OTHER INFORMATION

Item 2.  Changes in Securities and Small Business Issuer Purchase of
Equity Securities

     (c) Unregistered sales of equity securities

     In February 2005 Headliners issued 165,000 shares of common stock
to The Rodriguez Family Trust and The Margolies Family Trust.  The
shares were issued in consideration for the management services
provided to Headliners by Eduardo Rodriguez and Michael Margolies.
The sale was exempt pursuant to Section 4(2) of the Act since the sale
was not made in a public offering and was made to entities whose
principals had access to detailed information about Headliners and
which were acquiring the shares for their own accounts.  There were no
underwriters.

     In March 2005 Headliners issued 7,600,000 shares of common stock
to G&H Management L.L.C..  The shares were issued in consideration for
the management services provided to Headliners by Eduardo Rodriguez and
Michael Margolies.    The sale was exempt pursuant to Section 4(2) of
the Act since the sale was not made in a public offering and was made
to an entity whose principals had access to detailed information about
Headliners and which was acquiring the shares for its own accounts.
There were no underwriters.

     In March 2005 Headliners issued 2,400,000 shares of common stock
to Kevin Waltzer.  The shares were issued in consideration for Mr.
Waltzer's forbearance in collecting his loans to Headliners, and for
various consulting services and business opportunities he has provided
to Headliners.  The sale was exempt pursuant to Section 4(2) of the Act
since the sale was not made in a public offering and was made to an
individual who had access to detailed information about Headliners and
was acquiring the shares for his own accounts.  There were no
underwriters.

     (e) Purchases of equity securities

     The Company did not repurchase any of its equity securities that
were registered under Section 12 of the Securities Exchange Act during
the 3rd quarter of 2004.

Item 6.

     Exhibits.

     31    Rule 13a-14(a) Certification
     32    Rule 13a-14(b) Certification




                                 SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized.

                            HEADLINERS ENTERTAINMENT GROUP, INC.


Date: May 13, 2005          By:  /s/ Eduardo Rodriguez
                                 ----------------------------------
                                 Eduardo Rodriguez, Chief Executive
                                 Officer & Chief Financial Officer