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 September 30, 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 of          (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 [ ]

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).   Yes [ ]  No [X]

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:

                           November 14, 2005
                           Common Voting Stock: 15,404,588

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
                            September 30, 2005
                                (Unaudited)

        Assets

Current Assets
 Cash                                             $   191,795
 Assets to be disposed of                             125,000
 Inventory                                            152,128
 Other current assets                                  17,683
 Prepaid expenses                                     266,276
                                                   ----------
 Total Current Assets                                 752,882
                                                   ----------

Property and equipment, net                         4,292,346
Deposit                                                15,247
Intangible assets                                   4,433,849
                                                   ----------
Total Assets                                        9,494,324
                                                   ==========

        Liabilities and Stockholders' Deficit

Current Liabilities
 Accounts payable and accrued expenses              2,180,133
 Convertible debentures                             4,000,000
 Notes payable                                      1,504,505
 Deferred income                                       38,532
 Accrued interest                                     112,441
                                                   ----------
 Total Current Liabilities                          7,835,611

 Convertible debentures, net of amortized
  discount of $458,333                              6,495,365
                                                   ----------
 Total Liabilities                                 14,330,976
                                                   ----------
Stockholders' Deficit
 Common stock, authorized 500,000,000
  shares, $.001 par value, 14,793,478
  shares issued and outstanding                        14,794
 Additional paid-in capital                        56,321,753
 Accumulated deficit                              (61,173,199)
                                                   ----------
 Total Stockholders' Deficit                       (4,836,652)
                                                   ----------
Total Liabilities and Stockholders' Deficit       $ 9,494,324
                                                   ==========



See notes to the condensed consolidated financial statements.

                                    -1-
<PAGE>

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




                                Three Months Ended         Nine Months Ended
                                   September 30,             September 30,
                             -----------------------   ------------------------
                                2005         2004         2005          2004
                             ----------   ----------   -----------  -----------
Net Sales                    $ 3,170,103  $  720,942  $  6,953,974   $  912,127

Costs and Expenses
 Cost of sales                 1,245,751     339,713     2,740,464      441,728
                              ----------  ----------    ----------   ----------
Gross Profit (Loss)            1,924,352     381,229     4,213,510      470,399
                              ----------  ----------    ----------   ----------
General and Administrative
 expenses
 General and administrative
  expenses                     3,006,171     405,942     5,947,767    2,500,486
 Stock based compensation              -      70,000    24,420,000      210,000
 Stock issued for consulting
  services                     2,735,199     498,872    15,381,900    1,310,599
                              ----------  ----------    ----------   ----------
Total General and
 Administrative Expenses       5,741,370     974,814    45,749,667    4,021,085
                              ----------  ----------    ----------   ----------

Loss From Operations          (3,817,018)   (593,585)  (41,536,157)  (3,550,686)

Other Income (Expenses)
 Interest expense             (1,371,565)     (9,000)   (2,155,878)     (27,000)
 Interest income                      44           -        13,377            -
 Other income                      9,675           -         9,675            -
                              ----------  ----------    ----------   ----------
Total Other Expense           (1,361,846)     (9,000)   (2,132,826)     (27,000)
                              ----------  ----------    ----------   ----------
Loss From Continuing
 Operations                   (5,178,864)   (602,585)  (43,668,983)  (3,577,686)
                              ----------  ----------    ----------   ----------
Discontinued Operations
 Loss from discontinued
  operations (net of tax
  effect of $0)                        -           -             -     (439,588)
 Gain on disposal of
  operations (net of tax
  effect of $0)                        -           -             -       16,926
                              ----------  ----------    ----------    ---------
Loss From Discontinued
 Operations                            -           -             -     (422,662)
                              ----------  ----------    ----------    ---------
Net Loss                     $(5,178,864) $ (602,585) $(43,668,983) $(4,000,348)
                              ==========   ==========   ==========    =========

Earnings (Loss) per share    $     (0.35) $   (27.80) $      (4.38) $    (71.26)
Earnings (Loss) Per Share
 From Continuing Operations  $     (0.35) $   (27.80) $      (4.38) $    (63.74)
Earnings (Loss) Per Share
 From Discontinued
 Operations                  $         -  $        -  $          -  $     (7.52)

Weighted Average Number of
 Common Shares Outstanding    14,793,478      21,677     9,965,921       56,135



See notes to the condensed consolidated financial statements.

                                    -2-
<PAGE>

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

                                                    Nine Months Ended
                                                       September 30,
                                               ---------------------------
                                                    2005          2004
                                               ------------   ------------
Cash Used in Operating Activities
 Continued Operations                           $(1,130,258)  $(2,504,502)
 Discontinued Operations                                  -        44,947
                                                 ----------    ----------
 Net Cash Used in Operating Activities           (1,130,258)   (2,459,555)
                                                 ----------    ----------
Cash Flows from Investing Activities
 Purchase of investment                                   -    (2,490,000)
 Purchase of fixed assets                          (217,160)   (1,416,166)
 Proceeds from sale of liquor license                     -        60,000
 Issuance of note receivable                       (400,000)            -
 Repayments of note receivable                      400,000             -
 Purchase of LLC's, net of $44,200 cash
  acquired                                       (1,325,800)            -
                                                 ----------    ----------
 Net Cash Used in Investing Activities           (1,542,960)   (3,846,166)
                                                 ----------    ----------
Cash Flows From Financing Activities
 Issuance of common stock                                 -     2,872,500
 Proceeds from promissory notes                   2,927,500             -
 Proceeds from notes payable                         50,000             -
 Repayment of notes payable                        (324,468)            -
 Proceeds from notes payable                        182,923     3,450,000
                                                 ----------    ----------
 Net Cash Provided by Financing Activities        2,835,955     6,322,500
                                                 ----------    ----------
Net Increase in Cash and Equivalents                162,737        16,779

Cash and Equivalents at Beginning of Period          29,058            70
                                                 ----------    ----------
Cash and Equivalents at End of Period           $   191,795   $    16,849
                                                 ==========    ==========


See notes to the condensed consolidated financial statements.

                                    -3-
<PAGE>


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



SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES

     During the nine months ended September 30, 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 nine months ended September 30, 2005, the Company issued a
     $3,000,000 promissory note in exchange for $2,500,000 in cash and a
     discount of $500,000.

     During the nine months ended September 30, 2005, the Company acquired
     all of the rights, title and interest in six limited liability
     companies.  In connection with the acquisition, the Company, assumed
     $337,549 of accounts payable and accrued expenses, issued notes payable
     aggregating $793,435 and issued common stock valued at $301,565.

     During the nine months ended September 30, 2005, the Company issued
     1,700,000 shares of common stock for $2,877,000 of prepaid consulting
     services.

     On June 28, 2005, the Company issued a convertible debenture in the
     amount of $3,000,000 in exchange for $2,500,000.  The debenture was
     discounted by $500,000.  The net proceeds of $2,500,000 were disbursed
     directly to a movie production company, pursuant to a subscription
     agreement dated June 28, 2005, in exchange for movie participation
     rights.

     On August 17, 2005, the Company issued a convertible debenture in the
     amount of $7,953,698 in exchange for the extinguishment of $7,500,000
     of promissory notes and accrued interest of $453,698.


























See notes to the condensed consolidated financial statements.

                                    -4-
<PAGE>

           Headliners Entertainment Group, Inc. and Subsidiaries
          Notes to the Condensed Consolidated Financial Statements
                   Nine Months Ended September 30, 2005
                               (Unaudited)


     BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated 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 footnotes 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 nine months ended September 30, 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 footnotes thereto included in the Company's annual
     report on For 10-KSB for the year ended December 31, 2004.

1.   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, and accumulated deficit, and recurring negative cash
     flows from operations.  Further, at September 30, 2005, current
     liabilities exceed current assets by $7,082,729 and total liabilities
     exceed total assets by $4,836,652.  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 and convert existing
     debt into shares of the Company's common stock.  In addition, the
     Company is focusing on developing a significant number of clubs to
     achieve an efficient level of operations.

2.   INTANGIBLE ASSETS

     Intangible assets at September 30, 2005 consist of the following:

     Excess purchase price of the net assets
      assumed of six LLC's acquired               $ 1,933,849
     Movie participation rights                     2,500,000
                                                    ---------
                                                  $ 4,433,849
                                                    =========

     On June 28, 2005, the Company entered into a subscription agreement
     with a movie production company.  The Company paid $2,500,000 in
     exchange for participation rights in two movies.  The participation
     rights entitle the Company to receive from the adjusted gross revenues
     of the movies the full amount of its investment plus 20%.  After that
     payment is achieved, the Company will be entitled to receive 6.8% of
     the adjusted gross revenues generated by each movie in perpetuity.  As
     the participation rights do not have a finite life, they will not be
     amortized; however, in accordance with FASB Statement No. 144,
     "Accounting for Impairment or Disposal of Long-Lived Assets", the
     Company will test the participation rights annually for impairment.

                                    -5-
<PAGE>

             Headliners Entertainment Group, Inc. and Subsidiaries
            Notes to the Condensed Consolidated Financial Statements
                      Nine Months Ended September 30, 2005
                                 (Unaudited)


3.   BUSINESS COMBINATIONS

     On March 29, 2005, the Company entered into a Consolidated Acquisition
     Agreement with Paul Butler and JHF Property Holdings, LLC ("JHF").
     Pursuant to the Consolidated Acquisition Agreement, effective March 31,
     2005,  the Company acquired all of the rights, 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, provided for the Company to acquire ownership of the sixth
     limited liability company at a future date.  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.

     In accordance with the Consolidated Acquisition Agreement, the Company
     and JHF commenced development of comedy club utilizing the Rascals
     trademark in Hampton, VA.  JHF was responsible for supervising the
     development and construction of the club for a fee and the Company
     retained all of the rights, title and interest in the club.

     The consideration paid to JHF for the acquisition of the five limited
     liability companies, the right to receive the net income of the sixth
     limited liability company and the development and construction of the
     Hampton, VA comedy club consisted of $3,675,000 in cash payments, a 0%
     convertible debenture due on March 31, 2008 in the principal amount of
     $5,000,000 and 7,000 shares of the Company's common stock.

     Additionally, the Consolidated Acquisition Agreement contained
     provisions under which, JHF would manage the seven properties.  In
     consideration for the management services, the Company 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.  Additionally, the Company agreed to
     make weekly cash payments to JHF for their management services.

     On July 22, 2005, the Company entered into a Settlement Agreement with
     JHF Property Holdings, LLC, Paul Butler, Jon B. Field and Jon H. Field
     (collectively, "JHF").  The Settlement Agreement settled a lawsuit that
     the Company had brought against JHF alleging fraud and breach of
     contract.  The Settlement Agreement contained the following provisions,
     which amended the terms under which the Company acquired the six
     limited liability companies.  The acquisition has been recorded in the
     accompanying financial statements effective, April 1, 2005, in
     accordance with these amended terms:

     1. The Company's ownership of the limited liability companies that
        own the six dance clubs has been acknowledged.

     2. The Company assigned to JHF all of its interest in the comedy
        club built in Hampton, VA.

     3. JHF surrendered the $5,000,000 convertible debenture issued to
        them pursuant to the Consolidated Acquisition Agreement.

     4. The Company's agreement with JHF to manage the clubs has been
        terminated.

     5. All of the Company's payment obligations under the Consolidated
        Acquisition Agreement have been terminated.  In lieu thereof,
        the Company agreed to pay to JHF: (a) five weekly payments of
        $74,687 (totaling $373,435), commencing on August 3, 2005; and
        (b) twenty-eight weekly payments of $15,000 (totaling $420,000)
        commencing on September 7, 2005.

     The aggregate acquisition price for the six clubs was $4,770,000, which
     included cash in the amount of $3,675,000, 777,000 shares of the
     Company's commons stock valued at $301,565 (which represents the
     proceeds realized by JHF from the sale of stock issued to them) and
     issuance of notes payable to JHF aggregating $793,435.

                                    -6-

             Headliners Entertainment Group, Inc. and Subsidiaries
            Notes to the Condensed Consolidated Financial Statements
                    Nine Months Ended September 30, 2005
                                (Unaudited)

4.   BUSINESS COMBINATIONS, Continued

     The Results of Operations for the six acquired limited liability
     companies for the period after April 1, 2005 are included in the
     Company's consolidated financial statements.  Following are pro forma
     amounts assuming that the acquisition was made on January 1, 2005:

                                               For the Nine Months Ended
                                                  September 30, 2005
                                               -------------------------
     Net Sales                                      $   9,558,293
     Net Loss                                       $ (43,762,017)
     Loss Per Share From Continuing Operations              (4.38)

     The transaction was 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 the Company 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.  The preliminary purchase price
     allocation is subject to finalization of the intangible asset.

5.   CONVERTIBLE DEBENTURE

     On June 28, 2005, the Company issued a convertible debenture in the
     principal amount of $3,000,000, bearing interest at 12% per annum.  In
     exchange for the debenture, the Company received $2,500,000.  The
     debenture was discounted by $500,000.  The discount on the debenture is
     being amortized on a straight line basis, with the amortization being
     recognized as interest expense.  The unamortized discount on the
     debenture at June 30, 2005 was $500,000.  The Company used the proceeds
     from the debenture to invest in the production and distribution of two
     movies pursuant to a subscription agreement dated June 28, 2005.  The
     subscription agreement entitles the Company to receive participation
     rights in each movie. ( See Note 3.)

     The debenture provides that the first $3,000,000 in receipts from the
     Company's participation rights pursuant to the subscription agreement
     will be paid to satisfy the debenture.  Any portion of the debenture
     that remains unpaid on December 31, 2006 will be payable by the Company
     on that date.  The debenture is secured by (a) the Company's rights
     under the subscription agreement, (b) all of the Company's assets, and
     (c) 100,000,000 shares of the Company's common stock.

     The debenture is convertible into shares of the Company's common stock
     at the option of the debenture holder at a conversion price of $0.55
     per share.

6.   NOTE RECEIVABLE/NOTE PAYABLE

     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 was 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.
     The note plus accrued interest of $13,377 was repaid during the three
     months ended September 30, 2005.  Additionally, during the three months
     ended September 30, 2005, the other publicly traded entity has advanced
     Headliners $132,923.  The loan is due on demand and is included in
     Notes Payable on the accompanying Balance Sheet.

                                    -7-
<PAGE>

            Headliners Entertainment Group, Inc. and Subsidiaries
          Notes to the Condensed Consolidated Financial Statements
                   Nine Months Ended September 30, 2005
                               (Unaudited)



7.   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 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.

     On August 17, 2005, this note was refinanced.  See Note 9.

8.   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 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.

     On August 19, 2005, this note was refinanced.  See Note 9.

9.   CONVERTIBLE DEBENTURE

     On August 19, 2005, the Company refinanced two promissory notes.  The
     notes that were discharged in the refinance transaction were (a) a
     promissory note in the principal amount of $4,500,000 dated January 25,
     2005.  On August 19, 2005, this note had an unamortized discount of
     $349,167 and unpaid interest of $317,589, and (b) a promissory note in
     the principal amount of $3,000,000.  On August 19, 2005, this note had
     an unamortized discount of $191,342 and unpaid interest of $136,109.

     The January and March notes were replaced on August 19, 2005 by a
     secured convertible debenture in the principal amount of $7,953,698,
     representing the principal amount of the earlier notes plus accrued
     interest.  The debenture accrues interest at 12% per annum.  Monthly
     payments of $400,000 plus accrued interest will commence on December 1,
     2005.  As of September 30, 2005, interest in the amount of $112,441 has
     been accrued.

     As a result of the refinance, the unamortized discounts of $540,509
     were recognized as interest expense as of September 30, 2005.

     The debenture may be converted by the debt holder into common shares of
     the Company at a conversion price of $0.20 per share.  At any time when
     the market price for the Company's common stock is less than the
     conversion price, the Company may prepay the debenture, in whole or in
     part, by paying a 10% premium.  The Company's obligation under the
     debenture is secured by a pledge of all of the Company's assets and a
     by a pledge of 100,000,000 shares of the Company's common stock.

                                    -8-
<PAGE>
            Headliners Entertainment Group, Inc. and Subsidiaries
           Notes to the Condensed Consolidated Financial Statements
                    Nine Months Ended September 30, 2005
                               (Unaudited)

10.  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.

11.  PREPAID CONSULTING

     During the nine months ended September 30, 2005, the Company issued
     1,700,000 fully vested, non-forfeitable shares of common stock to
     various consultants for services that extend into the future.  The
     shares were valued at $2,877,000, which represented  their fair market
     value at the date of the agreements, as there was no readily
     determinable value for the consulting services to be provided.  The
     Company accounted for the prepaid value of the consulting services in
     accordance with EITF 00-18, "Accounting Recognition for Certain
     Transactions Involving Equity Instruments Granted to Other Than
     Employees".  However, due to the factors that may lead to uncertainty
     regarding the future economic benefit of the prepaid consulting
     services, the asset has been expensed as of September 30, 2005.

                                    -9-
<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 $11,000,000.  The greater portion of that debt is 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 online distribution, 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 that operate
under one of the followings trade names: "Banana Joe's,""Margarita
Mama's," "Red Cheetah," "Parrot Beach" or "Cactus Cafe."   Commencing
on April 1, 2005 we have consolidated the financial results of the
clubs with our other operations on our financial statements.  This
has resulted 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:
                                   -10-
<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.

     Recently we have renewed our efforts to utilize the Rascals
Library of Comedy Classics as a revenue source.  The Library contains
over 300 hours of live recordings of well-known comedians when they
appeared at a Rascals Comedy Club.  At times during our history we
have broadcast portions of the Library on pay-per-view television,
sold home video recordings of shows in the Library, and made shows
available for download on the Internet.  During the second quarter of
2005 we obtained modest revenue from broadcasts of our comedy on XM
radio and Audible.com, each of which offers the Rascals Comedy
Classics in its menu of on-demand media.  In the third quarter OF
2005 we also realized revenue, albeit modest, from our position as
the exclusive stand-up comedy channel on Microsoft MSN Video, Windows
Media Entertainment, and TVNet.  Similar to our club licensing
arrangements, these media distribution channels currently provide
only limited revenue, but it is revenue obtained with almost no
marginal expense, thus flowing directly into earnings.

     In June 2005 we further expanded our entertainment assets by
investing in the production and distribution of two general
distribution movies:  "Beer League" and "TV The Movie."  Headliners
will own "participation rights" in these movies, which are being
produced by a well-established team of movie industry figures.  The
participation rights entitle Headliners to receive from the gross
revenues produced by the movies (net of certain "top line
deductions") the full amount of its investment plus 20% - i.e the
principal amount of the Debenture sold to Cornell Capital Partners to
fund our investment.  After that payment is achieved, then Headliners
will be entitled to receive approximately 6.8% of the adjusted gross
revenues generated by each movie.

     The effect of our expansion is evident in the results reported
in our Statement of Operations.  During the first quarter of 2005,
when our operations including both the Montclair restaurant and club
and the Cherry Hill club, we reported net sales of $446,703, compared
to $34,551 in the first quarter of 2004, when our only club operation
was at the Hilton in Cherry Hill.  In the second and third quarters
of 2005, when we added the six dance clubs and the Rascals at the
Palisades Center, our net sales increased to $6,507,271 for the six
months ended September 30, 2005 ($3,337,168 in the second quarter and

                                   -11-
<PAGE>

$3,170,103 in the third quarter), compared to $912,127 for the six
months ended September 30, 2004 ($191,185 in the second quarter and
$720,942 in the third quarter of 2004).  Similarly our expanded
operations produced gross profit in the nine months  ended September
30, 2005 of $4,213,510, compared to gross profit of only $470,399 in
the nine months ended September 30, 2004.  We also incurred a net
loss of $439,588 in the nine months ended September 30, 2004 from the
final months of operations of our club and restaurant in Ocean
Township NJ.  The loss realized in Ocean Township has been reported
as a "Loss from Discontinued Operations" on our Statement of
Operations for 2004.

     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.  However, this included only $801,571 in expenses that
were or will be settled in cash.  The remaining $36,782,400 in first
quarter expenses were settled by issuance of stock.  In the second
quarter of 2005 we incurred an additional $284,301 in expenses from
the issuance of stock to consultants and then another $2,735,199 in
the third quarter of 2005.  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."

     Headliners incurred an "interest expense" of $2,155,878 during
the first nine months of 2005, most of which was attributable to the
notes payable to Cornell Capital Partners in the aggregate principal
amount of $10,953,698.  The notes carry a stated interest of 12% per
annum.  However, the notes were sold at an aggregate discount of
$2,047,500. As a result, $1,589,167 of the interest expense realized
in the nine months ended September 30, 2005 was attributable to
amortization of the discounts given to Cornell Capital Partners when
it purchased the notes from Headliners.  The remaining $458,333 of
the discount will be similarly expensed over the life of the note
issued in connection with Headliners' investment in two movies.  That
$3,000,000 note is scheduled to terminate on December 31, 2006.

     Our expenses remain disproportionate to our revenue, primarily
due to interest expense and consulting fees.  As a result, we
realized a net loss of $5,178,864 in the quarter ended September 30,
2005 and $43,668,983 for the nine months ended September 30, 2005.
However, the new directions in our operations bode well for the
future.  The acquisition of the six dance clubs, the opening of the
Rascals at the Palisades Center, and our new ventures in media
distribution of the Rascals Library will combine to result in a many-
fold increase in our revenue.  Our focus in 2005 will be on achieving
financial stability, which can serve as a platform for profitable
operations in 2006.  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.  In addition, in June 2005 we incurred an
additional $3,000,000 debt to Cornell Capital Partners in order to
invest in the production and distribution of two movies.  That
arrangement provides that after we fully repay Cornell Capital
Partners from our share of the net revenues of the movies, we will
retain a 6.8% interest in the net revenues.

     At December 31, 2004, we owed Cornell Capital Partners
$3,025,000.  Today the debt totals over $11,000,000 (including
accrued interest), consisting of two notes:

                                   -12-
<PAGE>
        -    One note, for $7,953,698, requires Headliners to make
             monthly payments of $400,000 plus interest, commencing on
             December 1, 2005.  Cornell Capital Partners is entitled to
             convert the note into common stock at a conversion price of
             $.20 per share.  At any time when the market price for
             Headliners common stock is less than the conversion price,
             Headliners may prepay the Debenture, in whole or in part,
             by paying a 10% premium.  The note is secured by a pledge
             of all of Headliners' assets.



        -    The second note, which we incurred in order to fund our
             investment in the two movies, provides that we will pay to
             Cornell Capital Partners all of the distributions we
             receive from the movies until it is satisfied.  Any amount
             that remains unpaid on December 31, 2006 will be payable
             from our general assets.  Cornell Capital Partners is
             entitled to convert the note into Headliners common stock
             at a conversion price of $.55 per share. Headliners
             obligation under the note is guaranteed by Ckrush
             Entertainment, Inc., the promoter of the movies.

     In order to satisfy our debt to Cornell Capital Partners we
entered into a "Standby Equity Distribution Agreement" with Cornell
Capital Partners.  The Standby Equity Distribution Agreement recites
that Headliners may demand from Cornell Capital Partners up to
$30,000,000 during its term.  We had planned to meet our debt service
obligations to Cornell Capital Partners by selling it common stock
under the terms of the Standby Equity Distribution Agreement. However
we are currently negotiating with Cornell Capital Partners the terms
of an arrangement under which the outstanding notes will be
refinanced and the Standby Equity Distribution Agreement will be
terminated.

     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 are committed to pay $270,000 over the next 18 weeks to
             settle our obligations to the prior owners of our six new
             dance clubs.

       2.    We had almost $2.2 million in accounts payable on September
             30, 2005, not including the notes payable to Cornell
             Capital Partners that totaled $10,953,698.  We do not
             expect that cash flow from operations will, in the near
             term, effect any significant reduction in our accounts
             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.

     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

     We do not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our
financial condition or results of operations.

                                   -13-
<PAGE>

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 September 30, 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 September 30,
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 third fiscal quarter that has
materially affected or is reasonably likely to materially affect
Headliners's internal control over financial reporting.

                                   -14-
<PAGE>

PART II   -   OTHER INFORMATION

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

     (c) Unregistered sales of equity securities

     None.

     (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 2005.

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: November 14, 2005     By:  /s/ Eduardo Rodriguez
                            ----------------------------------
                            Eduardo Rodriguez, Chief Executive
                             Officer & Chief Financial Officer