UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
                                   (Mark One)

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

                   For the fiscal year ended December 31, 2003

                                       OR

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

           For the transition period_______________ to _______________

                          Commission file number 0-5474

                              NORTH AMERICAN GAMING
                          AND ENTERTAINMENT CORPORATION
                 (Name of small business issuer in its charter)

                    Delaware                               75-2571032
        (State or other jurisdiction of                 (I.R.S. Employer
         incorporation or organization)               Identification No.)

   13150 Coit Road, Suite 125, Dallas, Texas                 75240
   (Address of principal executive offices)               (Zip Code)

         Issuer's telephone number, including area code: (972) 671-1133

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

Securities  registered  pursuant to Section 12(g) of the Act: Common Stock,  par
value $.01 per share

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the issuer was required to file such reports),  and
(2) has been subject to such filing  requirements  for the past 90 days. YES [X]
NO [ ]

Indicated by check mark whether the Issuer is an  Accelerated  Filer (as defined
in Code 12b-2 of the Act). YES [ ] NO [X]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-K contained  herein,  and none will be  contained,  to the best of
registrant's   knowledge,   in  definitive   proxy  or  information   statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

At March 24, 2003, the registrant had outstanding 24,631,587 shares of par value
$.01 common stock.

THE ISSUER'S REVENUES FOR ITS MOST RECENT FISCAL YEAR WERE: $ -0-

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common  equity,  as of
the last business day of the registrant's most recently  completed fourth fiscal
quarter $1,235,273.

                       DOCUMENTS INCORPORATED BY REFERENCE

None.

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

                                        1
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<PAGE>


TABLE OF CONTENTS

ITEM 1.  DESCRIPTION OF BUSINESS                                            3
ITEM 2.  DESCRIPTION OF PROPERTY                                            5
ITEM 3.  LEGAL PROCEEDINGS                                                  5
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                5

                                   PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS           5
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION          6
ITEM 7.  FINANCIAL STATEMENTS                                               9
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE                                           9

ITEM 8a. CONTROLS AND PROCEDURES                                            9

                                  PART III

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

                                        2
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<PAGE>


               NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION

                                     PART I

ITEM 1.    DESCRIPTION OF BUSINESS

General

North  American  Gaming  and  Entertainment   Corporation  (the  "Company")  was
incorporated  under  the laws of the  State of  Delaware  in 1969.  The  Company
changed its name from Western  Natural Gas Company to North American  Gaming and
Entertainment Corporation on October 17, 1994 in connection with its merger (the
"Merger") with OM Investors, Inc. ("OM").

Operation of Video Poker Casinos

General:  Until  August 20,  2001,  the Company was engaged in the video  gaming
business  through its  partial  ownership  of three  operating  companies:  O.M.
Operating,  LLC  ("Operator"),  River Port Truck Stop, LLC ("River  Port"),  and
Ozdon  Investments,  Inc. ("Ozdon") that operate video poker machines located in
truck stops in Louisiana.  Effective August 20, 2001, the Company entered into a
definitive   Purchase,   Release,   Settlement  and  Indemnity   Agreement  (the
"Settlement  Agreement") with certain parties thereof (the "OMO Group") settling
the three pending lawsuits against the OMO Group. In addition to mutual releases
of all parties, the Settlement Agreement provided for the sale by the Company of
all of the Company's interest in the three operating Companies:  Operator, River
Port and Ozdon.  The  Company  does not intend to  liquidate  as a result of the
Settlement  Agreement  and sale of its assets.  The Company is  reviewing  other
business and acquisition opportunities. However, there can be no assurances that
other opportunities will become available on terms and conditions  acceptable to
the Company.

Future Business

The operations  and ownership  interests of the Company  described  above ceased
with the August 20, 2001  settlement,  and the Company is no longer pursuing any
business  in the  gaming  industry.  The  Company  currently  has no  sources of
revenue. See Item 6, Management's Discussion and Analysis or Plan of Operations.

The Company's  principal business currently is to locate and consummate a merger
or  acquisition  with  or  investment  with a  private  entity.  Because  of the
Company's  current status having  insubstantial  assets and no recent  operating
history,  in the event the Company  does  successfully  acquire or merge with an
operating  business  opportunity,  it  is  likely  that  the  Company's  current
shareholders will experience  dilution,  resulting in a change in control of the
Company.

The Company is obligated  to file with the  Securities  and Exchange  Commission
certain  interim and  periodic  reports  including an annual  report  containing
audited  financial  statements.  The  Company  intends to continue to file these
periodic reports under the Securities Exchange Act of 1934. The Company does not
maintain a website or otherwise post any of its reports on the Internet.

Business of Issuer.  There can be no  assurance  that the Company  will have the
ability to acquire or merge with an operating business,  business opportunity or
property  that will be of material  value to the  Company.  Management  plans to
investigate,  research and, if justified,  potentially  acquire or merge with or
make an investment in one or more businesses or business opportunities.

Sources of Business Opportunities. The Company intends to use various sources in
its search for  potential  business  opportunities  including  its  officers and
directors,  consultants,  special advisors,  securities broker-dealers,  venture
capitalists,  members of the  financial  community  and  others who may  present
management with unsolicited proposals.  To date, the Company has not engaged nor
any prospective  consultants or these  purposes.  The Company does not intend to
restrict  its search to any specific  kind of industry or business.  The Company
may investigate  and ultimately  acquire a venture that is in its preliminary or
development  stage,  is  already  in  operation,  or in  various  stages  of its
corporate existence and development.  Management cannot predict at this time the
status  or  nature  of any  venture  in which the  Company  may  participate.  A
potential  venture  might need  additional  capital or merely desire to have its
shares publicly traded.

                                        3
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<PAGE>


Evaluation.  Once the Company has identified a particular non-public entity as a
potential  acquisition or merger  candidate,  management  will seek to determine
whether  acquisition or merger is warranted or whether further  investigation is
necessary.  Such determination will generally be based on management's knowledge
and  experience,  or with the  assistance  of outside  advisors and  consultants
evaluating the preliminary  information  available to them. Management may elect
to engage outside  independent  consultants to perform  preliminary  analysis of
potential  business  opportunities.  However,  because of the Company's  limited
capital,  it may not have the  necessary  funds for a  complete  and  exhaustive
investigation  of any  particular  opportunity.  In  evaluating  such  potential
business opportunities, the Company will consider, to the extent relevant to the
specific  opportunity,  several  factors  including  potential  benefits  to the
Company  and its  shareholders;  working  capital,  financial  requirements  and
availability of additional  financing;  history of operation,  if any; nature of
present and expected competition; quality and experience of management; need for
further  research,   development  or  exploration;   potential  for  growth  and
expansion;  potential  for profits;  and other  factors  deemed  relevant to the
specific  opportunity.  Because  the Company  has not made any  agreement  for a
specific  business  opportunity  as  of  the  date  hereof,  there  are  certain
unidentified   risks  that  cannot  be   adequately   expressed   prior  to  the
identification  of a specific  business  opportunity.  There can be no assurance
following  consummation of any  acquisition or merger that the business  venture
will develop into a going concern or, if the business is already operating, that
it  will  continue  to  operate  successfully.  Many of the  potential  business
opportunities  available to the Company may involve new and  untested  products,
processes or market strategies which may not ultimately prove successful.

Form of Potential  Acquisition or Merger.  The Company cannot currently  predict
the manner in which it might participate in a prospective business  opportunity.
Each separate potential opportunity will be reviewed and, upon the basis of that
review,  a suitable legal structure or method of  participation  will be chosen.
The particular  manner in which the Company  participates in a specific business
opportunity  will depend  upon the nature of that  opportunity,  the  respective
needs and desires of the  Company and  management  of the  opportunity,  and the
relative negotiating strength of the parties involved. Actual participation in a
business venture may take the form of an asset purchase,  lease,  joint venture,
license, partnership, stock purchase,  reorganization,  merger or consolidation.
The Company may act directly or indirectly through an interest in a partnership,
corporation, or other form of organization; however, the Company does not intend
to  participate  in  opportunities   through  the  purchase  of  minority  stock
positions.

Because of the Company's  current status, it is likely that any potential merger
or acquisition with another operating business will require substantial dilution
of the Company's existing shareholders.  There could also be a change in control
of the Company,  with the incoming  owners of the targeted merger or acquisition
candidate taking over control of the Company. Management has not established any
guidelines  as to the amount of control  it will offer to  prospective  business
opportunity  candidates,  since this issue will depend to a large  degree on the
economic  strength and desirability of each candidate,  and relative  bargaining
power of the parties.  However,  management  will endeavor to negotiate the best
possible terms for the benefit of the Company's shareholders as the case arises.

If a private  sale of the  Company's  securities  is deemed  appropriate  in the
future, management will endeavor to acquire funds on the best terms available to
the Company. However, there can be no assurance that the Company will be able to
obtain funding when and if needed,  or that such funding,  if available,  can be
obtained on terms reasonable or acceptable to the Company.

In the event of a successful  acquisition or merger, a finder's fee, in the form
of cash or securities  of the Company,  may be paid to persons  instrumental  in
facilitating  the  transaction.  The Company has not established any criteria or
limits  for the  determination  of a  finder's  fee,  although  most  likely  an
appropriate  finder's fee will be negotiated between the parties,  including the
potential business opportunity candidate, based upon economic considerations and
reasonable  value as estimated and mutually  agreed at that time. A finder's fee
would generally be payable upon completion of the proposed acquisition or merger
in the normal case, and management does not contemplate any other arrangement at
this time. Management has not actively undertaken a search for, or retention of,
any finder's fee  arrangement  with any person.  It is possible that a potential
merger or acquisition candidate would have its own finder's fee arrangement,  or
other similar business  brokerage or investment banking  arrangement,  whereupon
the terms may be  governed by a  pre-existing  contract,  and in such case,  the
Company may be limited in its ability to affect the terms of compensation.

In March 2004, the Company signed a Convertible  Secured Promissory Note with US
Daylighting,  L.L.C.  Under  the  terms of the Note the  Company  is to  advance
$150,000  in return for  monthly  interest  of 9.0%.  The  Company can advance a
further  $150,000 within 90 days and has the option to convert the full $300,000
advance  into a 25.0%  interest  in the L.L.C.  The note is  payable  within six
months of demand  being  made by the  Company.  The note is  secured  by various
membership interests in the L.L.C.

                                        4
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<PAGE>


In February and March 2004 the Company advanced a total of $125,000 to Techlite,
Inc.,  a publicly  held  Company  located in Tulsa,  Oklahoma.  The advances are
non-interest bearing and are to be paid back in the short-term.

Competition

The  Company  will face  competition  in its desire to merge  with an  operating
company  with similar  objectives.  In recent  years,  an  increasing  number of
companies have avoided the traditional  initial public offering process in favor
of a reverse  merger with a public entity having assets and  businesses  ranging
from nothing to substantial  revenues and operations.  The Company believes that
its  history as an  operating  company,  subsequent  attempts to engage in a new
business,  and its  current  balance  sheet will  enable it to achieve a reverse
merger with fewer  regulatory  hurdles  than could be  accomplished  by a "blank
check" public company having no assets or operating history.

In March 2004, the Company signed a Convertible  Secured Promissory Note with US
Daylighting,  L.L.C.  Under  the  terms of the Note the  Company  is to  advance
$150,000  in return for  monthly  interest  of 9.0%.  The  Company can advance a
further  $150,000 within 90 days and has the option to convert the full $300,000
advance  into a 25.0%  interest  in the L.L.C.  The note is  payable  within six
months of demand  being  made by the  Company.  The note is  secured  by various
membership interests in the L.L.C.

In February and March 2004 the Company advanced a total of $125,000 to Techlite,
Inc.

Employees

As of December 31, 2003, the Company had no employees and retained one full time
and one part time worker on contract and one consultant.

ITEM 2.    PROPERTIES

The  Company's  principal  executive  office is located in  Dallas,  Texas.  The
Company  leases  approximately  860 square feet  pursuant  to a six-month  lease
(commencing  November  2002) which  provides for a rental rate of  approximately
$800.00 per month.

ITEM 3.    LEGAL PROCEEDINGS

NONE

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

NONE

PART II

ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's  Common Stock is traded  over-the-counter  and quoted from time to
time in the OTC Bulletin  Board and in the OTC "pink  sheets"  under the trading
symbol "NAGM.OB". Consequently, there is currently no established public trading
market for the Company's  Common Stock. The following table sets forth the range
of high and low bid prices as reported by the OTC Bulletin Board for the periods
indicated.  Such quotations represent inter-dealer prices without retail markup,
markdown, or commission, and may not necessarily represent actual transactions.

         CALENDAR YEARS                                     BID PRICE
                                                            ---------
                                   BY QUARTER          HIGH           LOW
                                   ----------        ---------     ---------
              2003                  First            $    0.01     $    0.01
                                    Second                0.01          0.01
                                    Third                 0.04          0.01
                                    Fourth                0.04          0.03
              2002                  First            $    0.03     $    0.03
                                    Second                0.03          0.03
                                    Third                 0.05          0.03
                                    Fourth                0.03          0.01

                                        5
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<PAGE>


At December 31, 2003, the Company had approximately 3,077 common stockholders of
record.

The  Company has not paid cash  dividends  on Common  Stock  during the last two
years and the Board of Directors of the Company does not currently intend to pay
cash dividends on Common Stock in the  foreseeable  future.  The Company may not
declare or pay  dividends  on Common Stock if there are  accumulated  and unpaid
dividends on its former  outstanding  Class A Preferred Stock.  From October 17,
1994 through May 31, 1996, the former outstanding Class A Preferred Stock bore a
dividend of $.30 per annum  (payable  monthly),  an annual  dividend of $480,000
because all  1,600,000  shares were  outstanding.  As of December 31, 2003,  the
Company is in arrears on dividends on its former  outstanding  Class A Preferred
Stock in the  amount  of  $15,003.  All  other  former  holders  of the  Class A
Preferred Stock has entered into settlement agreements with the Company pursuant
to which their accrued dividends were cancelled.

As of December 31, 2003, all but $18,297 of the subordinated  debentures  issued
by the Company in connection  with the  redemption of 313,000  shares of Class A
Preferred Stock had been redeemed by the Company pursuant to various  settlement
agreements entered into with the holders of the subordinated debentures.

There were no redemptions of the  Company's stock for the  fourth  quarter 2003.

<TABLE>
<CAPTION>
EQUITY COMPENSATION PLAN INFORMATION

--------------------------------------------------------------------------------------------
                                               (a)            (b)              (c)
--------------------------------------------------------------------------------------------
<S>                                            <C>            <C>              <C>
                                                                               Number of
                                                                               securities
                                               Number of                       remaining for
                                               securities                      future
                                               to be          Weighted-        issuance
                                               isssued        average          under equity
                                               upon           exercise         compensation
                                               exercise of    price of         plans
                                               outstanding    outstanding      (excluding
                                               options,       options,         securities
                                               warrants       warrants         reflected in
Plan Category                                  and rights.    and rights.      column (a)
--------------------------------------------------------------------------------------------
Equity compensation                            None           N/A              N/A
plans approved by
security holders
--------------------------------------------------------------------------------------------
Equity compensation                            1,000,000      $  .03125        None
plans not approved
by security holders
--------------------------------------------------------------------------------------------
TOTAL                                          1,000,000      $  .03125
--------------------------------------------------------------------------------------------
</TABLE>

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

Liquidity and Capital Resources

Sales of Assets. As described in Item  1--"Description  of Business -- Effective
August 20,  2001,  the Company  entered  into a  definitive  Purchase,  Release,
Settlement and Indemnity  Agreement (the "Settlement  Agreement") with the other
parties to the lawsuits, together with certain parties thereof (the "OMO Group")
settling  the three  pending  lawsuits.  In addition  to mutual  releases of all
parties,  the Settlement  Agreement  provides for the sale by the Company of (i)
all of the Company's  interest in Operating to Operating in redemption of all of
the Company's interest in Operating, (ii) all of the Company's interest in River
Port to River Port in redemption of all of the Company's interest in River Port,
and (iii) the Company's 50% ownership in Ozdon.  The purchase price for the sale
of these assets by the Company was $2.3  million,  payable  $800,000 in cash and
$1.5 million in the form of  promissory  notes  receivable  by the Company in 60
monthly installments of principal and interest. However, the cash portion of the
purchase  price was reduced by an amount equal to $5,000 for a $5,000 payment to
E. H. Hawes,  II, the President of the Company,  for a two year agreement not to
compete  with the OMO Group  within  four  Parishes  in  Louisiana,  and $38,125
retained by the OMO Group representing the net excess of liabilities of Ozdon in
excess of

                                        6
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<PAGE>


$125,000.  The  Settlement  Agreement also includes a  noncompetition  agreement
pursuant  to which the  Company  agreed not to compete for a period of two years
after the closing of the  Settlement  Agreement in the  ownership,  operation or
management  of truck stops in any of the four Parishes in the State of Louisiana
in which  Operating or River Port  currently  own or operate  truck stops.  As a
result of the sale of its  interests  in  Operating,  River Port and Ozdon,  the
Company recognized a pre-tax gain of approximately $1,260,000.

The Company does not intend to liquidate as a result of the Settlement Agreement
and sale of its assets.  The Company is reviewing other business and acquisition
opportunities. However, there can be no assurances that other opportunities will
become available on terms and conditions acceptable to the Company.

During 2001,  the Board of Directors  approved the sale of up to  $1,000,000  of
subordinated debentures.  As of December 31, 2002, the Company had sold $385,000
of  subordinated  convertible  debentures.   The  debentures  require  quarterly
interest only payments at a 10% rate. The debentures were due in full on June 1,
2003, and include  $125,000 that are  convertible  into common stock at $.05 per
share.  The  proceeds  were  used to fund the  $250,000  option  payment  on the
potential  purchase of Energy Transfer  Group,  LLC and an advance of $67,000 to
the same  entity.  During  July  2002,  the  Company  purchased  an  outstanding
debenture  from one party at less than fair value and re-sold the  debenture  to
another party, which resulted in an extraordinary gain of approximately $23,000.
As of June 1, 2003,  a debenture  was  renewed in the amount of  $75,328,  which
included the outstanding  principal  balance of $62,500 plus accrued interest of
$12,828.  In November of 2003,  the Company paid a principal  payment of $36,756
plus accrued  interest of $3,243 on the debenture.  The debenture is due in full
on June 1, 2005. As of December 30, 2003,  these  debentures have an outstanding
principal balance of $38,578.

General  Condition.  The Company ended 2003 with $263,522 in cash and $40,000 in
investments. Total liabilities were $158,368 at December 31, 2003 and consist of
accounts  payable  and  accrued  liabilities  of  $86,497,  current  portion  of
long-term  notes  payable of  $18,297,  subordinated  debentures  of $38,571 and
preferred stock dividends payable of $15,003.  The Company's current liabilities
decreased from $407,298 at December 31, 2002. This decrease was due primarily to
the payment of debentures.

<TABLE>
<CAPTION>
                                                                      PAYMENTS DUE BY PERIOD
---------------------------------------------------------------------------------------------------------------------
                                                                        LESS
                                                                        THAN          1-3         3-5       MORE THAN
CONTRACTUAL OBLIGATIONS                                 TOTAL          1 YEAR        YEARS       YEARS       5 YEARS
---------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>            <C>            <C>         <C>        <C>
(Long-Term Debt)                                       $    18,297    $  18,297
---------------------------------------------------------------------------------------------------------------------
(Capital Lease Obligations)
---------------------------------------------------------------------------------------------------------------------
(Operating Leases)
---------------------------------------------------------------------------------------------------------------------
(Purchase Obligations)
---------------------------------------------------------------------------------------------------------------------
(Other Long-Term Liabilities Reflected on the
   Registrant's Balance Sheet under GAAP)
---------------------------------------------------------------------------------------------------------------------
Total                                                  $    18,297    $  18,297
</TABLE>

Plan of Operations

Effective  August 20, 2001,  the Company sold its interests in Operating,  River
Port and Ozdon,  leaving the Company with no sources of revenue.  The  Company's
cash flow needs are dependent on the  collection of notes  receivable  resulting
from the sale of its interests in Operator, River Port and Ozdon.

Our independent accountants have expressed substantial doubt about the Company's
ability to continue as a going concern.  Management plans to continue  operating
the business  and also to pursue  various  business,  investment  and  financing
opportunities.

The Company will seek to meet its liquidity  needs  primarily  through cash flow
from  payments on the  promissory  notes from the Sale of Assets and  additional
borrowings from the Company's  traditional  lending  sources.  While the Company
believes it will be able to generate  and obtain the  necessary  capital to meet
such needs, there can be no assurance that all of such capital will be available
on terms acceptable to the Company.

                                        7
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<PAGE>


Results of Operations

OPERATING INCOME (EXPENSE)

The Company recorded a loss from operations of $328,883 during the twelve months
ended  December 31, 2003 compared to income from  operations of $450,189 for the
twelve months ended December 31, 2002.

During the twelve months ended December 31, 2003, the Company  recorded  general
and  administrative  costs of  $261,675compared  to  $472,562  during the twelve
months ended December 31, 2002. Included in general and administrative  expenses
is $100,000 related to consulting  services  provided by a related party for the
twelve months ended December 31, 2003.

INTEREST EXPENSE

The Company  recorded  interest  expense of $38,787 for the twelve  months ended
December 31, 2003,  compared to $55,491 for the twelve months ended December 31,
2002. The decrease is a result of the decrease in notes payable and debentures.

SETTLEMENT AGREEMENTS AND PURCHASES OF SHARES AND DEBENTURES

On January 1, 2001,  but to be  effective  as of December  1, 2000,  the Company
entered into a Settlement  Agreement  with the holders of all but $18,297 of the
Company's remaining subordinated  debentures issued to former shareholders of OM
(the "Remaining Debenture Holders").  Pursuant to the Settlement Agreement,  the
Remaining   Debenture   Holders   released  all  claims   against  the  Company,
International  and Hawes, and the Company,  International and Hawes released all
claims against the Remaining Debenture Holders. Additionally, the Company agreed
to pay an  aggregate of $700,000 to the  Remaining  Debenture  Holders,  payable
$150,000  in cash on January 1, 2001,  with the  remaining  balance of  $550,000
represented by a promissory  note dated December 1, 2000 bearing  interest at 9%
per  annum and  payable  in  twenty  equal  quarterly  payments.  The  Remaining
Debenture  Holders  agreed to transfer  6,056,633  shares of Common Stock of the
Company  to the  Company  for  cancellation,  to  forgive  $280,800  of  accrued
dividends on the former Class A Preferred  Stock of the Company and  transferred
subordinated  debentures  to the  Company for  cancellation  having a balance of
principal and interest owed thereunder of  $428,806.97.  On August 22, 2001, the
Company paid $247,000 to the Remaining Debenture Holders,  which represented 50%
of the outstanding  principal balance of the promissory note. As of December 31,
2003, all but $30,011 of the Company's  remaining  subordinated  debentures were
paid in full.

The other two members of Operating and River Port had purportedly voted in favor
of a merger resulting in the termination of the Company's  interest in Operating
and River  Port for a buyout  of  $375,000  and  $50,000  respectively,  and the
Company filed a lawsuit  seeking to nullify the  purported  mergers and buyouts,
among other  relief.  On August 20, 2001,  the Company  entered into  Settlement
Agreement with the OMO Group settling the three pending lawsuits. In addition to
mutual releases of all parties,  the Settlement  Agreement provides for the sale
by the Company of all of the  Company's  interest in  Operating  to Operating in
redemption of all of the Company's  interest in Operating,  all of the Company's
interest  in River  Port to River  Port in  redemption  of all of the  Company's
interest in River Port, and the Company's 50% ownership interest in Ozdon.

DEPRECIATION AND AMORTIZATION

During the years  ended  December  31, 2003 and 2002,  the  Company  recorded no
depreciation expense.

INTEREST INCOME AND OTHER INCOME (EXPENSE)

The Company  recorded  other  income of $33,589 for the year ended  December 31,
2003  compared to net other  income of $54,864 for the year ended  December  31,
2002.

EXTRAORDINARY GAIN

The Company recognized an extraordinary gain of $15,200,  net of income taxes of
$7,800,  during the twelve  months ended  December  30,  2002.  This gain is the
result of the extinguishment of debt during 2002.

                                        8
================================================================================

<PAGE>


LEASE

The Company  occupied  office  space  under a 72-month  operating  lease,  which
commenced in November 1996 and expired on October 31, 2002.  Effective  November
1, 2002,  the Company  negotiated  a  six-month  lease of 871 square feet with a
monthly rent of  approximately  $900.00.  The Company is  currently  leasing the
office space on a month-to-month basis.

CRITICAL ACCOUNTING POLICIES

We review all  long-lived  assets to be held and used in the Company's  business
for impairment,  whenever events or changes in  circumstances  indicate that the
related carrying amount may not be recoverable. When required, impairment losses
on  assets  to be held and used are  recognized  based on the fair  value of the
assets.

FORWARD LOOKING STATEMENTS

Statements  that are not  historical  facts  included  in this Form  10-KSB  are
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995 that involve risks and  uncertainties  that could
cause actual results to differ from projected  results.  Such statements address
activities, events or developments that the Company expects, believes, projects,
intends or  anticipates  will or may  occur,  including  such  matters as future
capital, debt restructuring,  the possible effects of anti-gaming sentiment, the
restructuring  of Operator and River Port LLC  maintaining  or  increasing  fuel
sales, compliance with other gaming law requirements,  maintaining a competitive
position  in  the  Company's  markets,   pending  legal  proceedings,   business
strategies,  expansion  and growth of the Company's  operations,  and cash flow.
Factors  that could  cause  actual  results to differ  materially.  ("Cautionary
Disclosures") are described throughout this Form 10-KSB.  Cautionary Disclosures
include,  among others:  general economic  conditions,  the Company's ability to
find, acquire, market, develop and produce new properties or new businesses, the
strength and  financial  resources  of the  Company's  competitors,  anti-gaming
sentiment, labor relations, availability and cost of material and equipment, the
results of debt restructuring efforts,  regulatory  developments and compliance,
and pending legal proceedings.  All written and oral forward-looking  statements
attributable  to the Company are  expressly  qualified in their  entirety by the
Cautionary Disclosures. The Company disclaims any obligation to update or revise
any  forward-looking  statement  to reflect  events or  circumstances  occurring
hereafter or to reflect the occurrence of anticipated or unanticipated events.

ITEM 7.    FINANCIAL STATEMENTS

The financial statements required by this item begin at Page F-1 hereof.

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

None.

ITEM 8A.   CONTROLS AND PROCEDURES

      (a)   Within  the  90-day  period  prior  to the date of this  report,  we
            carried  out an  evaluation,  under  the  supervision  and  with the
            participation  of our  management,  including  the  Chief  Executive
            Officer and Chief Financial  Officer,  of the  effectiveness  of the
            design and  operation  of our  disclosure  controls  and  procedures
            pursuant to Rule 13a-14 of the Securities  Exchange Act of 1934 (the
            "Exchange  Act").  Based upon that  evaluation,  the Chief Executive
            officer and Chief  Financial  Officer  concluded that our disclosure
            controls and  procedures  are  effective in timely  alerting them to
            material   information   relating  to  the  Company   (including  it
            consolidated  subsidiaries)  required to be included in our Exchange
            Act filings.

      (b)   There have been no significant  changes in our internal  controls or
            in other factors, which could significantly affect internal controls
            subsequent to the date we carried out our evaluation.

                                        9
================================================================================

<PAGE>


                                    PART III

ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;

The following  table provides  information as of March 1, 2004,  with respect to
each of the Company's directors and each executive officer:

<TABLE>
<CAPTION>
                                                                                       SERVED AS
                                                                                       EXECUTIVE
                                                                                      OFFICER OR
               NAME                                  AGE           POSITION          DIRECTOR SINCE
              ------                                ----    ----------------------   --------------
        <S>                                         <C>     <C>                          <C>
               Directors and Executive Officers
        E.H. Hawes, II                               64     Director (Chairman),         1998
                                                            President and Chief
                                                            Executive Officer
        Richard P. Crane, Jr.                        64     Director and Secretary       1994
</TABLE>

E. H. Hawes,  II. Mr.  Hawes has been the Chairman of the Board,  President  and
Chief  Executive  Officer of the Company  since January 7, 1998. He has been the
Chairman of the Board of IT Financial Corporation ("ITFC"), which is the holding
company for  International  Tours, Inc.  ("International"),  since 1969, and has
been  the  Chairman  of  the  Board  of  International   since  1969.  ITFC  and
International are privately owned corporations engaged in the business of travel
agency  franchising and travel agency  training and schools.  Mr. Hawes has also
been  President  of  Glacier  Petroleum,  Inc.,  a  privately  owned oil and gas
exploration company, since 1971.

Richard  P.  Crane,  Jr.  Mr.  Crane  has  been a  partner  in the  law  firm of
Kirkpatrick and Lockhart, Los Angeles,  California,  for approximately one year,
and prior to that time was a partner  in the laws  firms of  Musick,  Peeler and
Garrett, Santa Monica,  California, for approximately five years, Crane, Rayle &
Lennemann,  Santa Monica,  California, for approximately two years, and Girardi,
Keese & Crane,  Los Angeles,  California,  for 14 years. Mr. Crane has practiced
law for over 34  years,  seven of which  were with the U.S.  Attorney  General's
Office  where  for five  years he was the  Attorney  in Charge  and Chief  Trial
Counsel of the Organized Crime and Racketeering  Section of the Western Regional
Office.  He has served as a  Director  and as  Secretary  of the  Company  since
October 1994. Mr. Crane is also a director of Service Merchandise, Inc. which is
a publicly traded company. He is a graduate of Vanderbilt University and holds a
law degree from Vanderbilt University Law School.

During 2003,  the Board of Directors  held one meeting,  and took one  corporate
action  by  unanimous  written  consent.  The  Company  does  not  have an audit
committee, a nominating committee,  or a compensation committee or any committee
performing similar functions.

The Company  reimburses  the directors  for their  expenses (if any) incurred in
connection  with their duties as  directors.  Mr.  Crane was granted  options on
January  20, 2000 to purchase  1,000,000  shares of Common  Stock at an exercise
price of $.03125 per share, the approximate fair market value on such date, with
such options  vesting  immediately and having a term of five years from the date
of grant.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5 furnished to the Company pursuant
to Rule  16a-3(e)  promulgated  under the  Securities  Exchange Act of 1934 (the
"Exchange Act"), or upon written  representations  received by the Company,  the
Company is not aware of any failure by any officer, director or beneficial owner
of more  than  10% of the  Company's  Common  Stock  to  timely  file  with  the
Securities and Exchange Commission any Form 3, 4 or 5 relating to 2002.

                                       10
================================================================================

<PAGE>


ITEM 10.  EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by the Company for services
rendered during the fiscal years ended December 31, 2003, 2002 and 2001, and the
number of options granted,  to the Chief Executive  Officer of the Company,  and
the value of the  unexercised  options held by such Chief  Executive  Officer on
December  31,  2002.  No  other  executive   officer  of  the  Company  received
remuneration in excess of $100,000 during 2003.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                                     LONG TERM
                                                                   ANNUAL           COMPENSATION-
NAME AND                                                        COMPENSATION         SECURITIES               ALL
PRINCIPAL                                                       -------------        UNDERLYING              OTHER
POSITION                                             YEAR      SALARY    BONUS   OPTIONS OR WARRANTS      COMPENSATION
---------                                            ----      ------    -----   -------------------      ------------
<S>                                                  <C>        <C>      <C>                 <C>          <C>
E. H. Hawes, II,                                     2003       $  --    $  --                --          $  100,000(1)
   Chief Executive                                   2002          --       --                --             200,000(1)
   Officer                                           2001          --       --                --             200,000(1)
</TABLE>

(1)  Represents consulting fees paid by the Company.

The Board of  Directors  has  committed  the Company to pay between $25,000  and
$100,000 in consulting payments to Mr. Hawes during 2004

                             Option/SAR Grant Table
                 (Option/Warrant/SAR Grants in Last Fiscal Year)

<TABLE>
<CAPTION>
                                          PERCENT OF
                                            TOTAL
                              NUMBER OF    OPTION/
                              SECURITIES   WARRANT
                              UNDERLYING   GRANTED
                              OPTIONS OR      TO       EXERCISE
                               WARRANTS   EMPLOYEES    OR BASE   MARKET PRICE
                               GRANTED    IN FISCAL     PRICE     ON DATE OF       EXPIRATION
NAME                              #          YEAR       ($/SH)   GRANT ($/SH)         DATE
----                          ----------  ----------   --------  ------------      ----------
<S>                                  <C>         <C>   <C>       <C>                      <C>
E. H. Hawes, II                       --          --   $     --  $         --              --
</TABLE>

              Aggregate Option/Warrant/SAR Exercises in Last Fiscal
                        Year and FY-End Option/SAR Values


<TABLE>
<CAPTION>
                                                                                  VALUE OF UNEXERCISED
                               SHARES                  NUMBER OF SECURITIES            IN-THE-MONEY
                              ACQUIRED                UNDERLYING Unexercised       OPTIONS/WARRANTS/
                                 ON                    OPTIONS/WARRANTS/SARS           SARS AT 1998
                              EXERCISE      VALUE         AT 1998 FY-END                 FY-END
NAME                             #        REALIZED              $#                         $
----                          ---------   ---------   ----------------------      --------------------
<S>                                <C>         <C>                 <C>               <C>
E. H. Hawes, II                    None        None                 --               $        --
</TABLE>

                                       11
================================================================================

<PAGE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table sets forth certain  information  regarding the ownership of
Common Stock as of March 24, 2004, by each  stockholder  known to the Company to
own beneficially  more than five percent of the outstanding  Common Stock,  each
current director,  and all executive officers and directors as a group, based on
information provided to the Company by such persons. Except as otherwise stated,
each such person has sole investment and voting power with respect to the shares
set forth in the table:

                    NAME AND ADDRESS
                   OF BENEFICIAL OWNER              NUMBER OF SHARES    PERCENT
                   -------------------              ----------------    -------
      International Tours, Inc.(1)                     12,886,960        52.1%
      13150 Coit Road
      Suite 125
      Dallas, Texas 75240
      Hawes Partners(1)                                13,122,620        52.2%
      Shangri-La Vista Tower
      Route 3
      Afton, Oklahoma 74331
      E.H. Hawes, II(1)                                13,124,954        53.1%
      Shangri-La Vista Tower
      Route 3
      Afton, Oklahoma 74331
      Richard P. Crane, Jr.(2)                          1,285,556         5.2%
      530 Wilshire Blvd., Ste. 400
      Santa Monica, California 90401
      All Executive Officers and                       14,410,510        58.3%
      Directors as a Group
      (2) persons)(1)(2)
      Daryl N. Snadon(3)                                2,535,673        10.2%
      15280 Addison Rd., Ste 300
      Dallas, Texas 75248
      Mike D. Case                                      3,000,000        12.1%
      4200 East Skelly Drive
      Tulsa, Oklahoma 74135

(1)   International  Tours,  Inc.  ("International")  owns 14,886,960  shares of
      Common Stock of record and  beneficially.  E. H. Hawes, II, owns of record
      and beneficially 2,334 shares of Common Stock. I.T. Financial  Corporation
      ("ITFC") owns 235,660  shares of Common Stock of record and  beneficially.
      Hawes  Partners  is a  partnership  owned 100% owned by Mr.  Hawes.  Hawes
      Partners  beneficially  owns  100% of the  outstanding  capital  stock  of
      International.  Consequently,  the 14,651,300 shares of Common Stock owned
      of  record  and  beneficially  by  International  may also be deemed to be
      beneficially  owned  by each of  Hawes  Partners  and Mr.  Hawes,  and are
      reflected  accordingly in the table above for their  respective  ownership
      positions.  Hawes Partners also beneficially owns 64.97% of ITFC and Hawes
      Partners and Mr. Hawes may also be deemed to  beneficially  own the shares
      owned by ITFC and such shares are reflected as being beneficially owned by
      each of them in the table above.

(2)   Includes vested options to acquire 1,000,000 shares.

(3)   Includes  535,666 shares  pledged  as  collateral on a note payable to Mr.
      Snadon's former wife.

                                       12
================================================================================

<PAGE>


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Consulting  Fees.  E.H.  Hawes,  II is the Chairman of the Board,  President and
Chief Executive Officer of the Company.  Mr. Hawes provides  consulting services
to the Company and was paid $100,000 in consulting fees during 2003 and $200,000
in 2002.  He does not receive a salary from the Company.  The Company has agreed
to pay Mr. Hawes a minimum of $25,000 and up to $100,000  during fiscal 2004 for
consulting services and expense reimbursements.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   The following documents  are filed as part of this  Annual  Report on Form
      10-KSB:

      1.    Financial Statements: The financial statements filed as part of this
            report are listed in the "Index to Financial Statements" on Page F-1
            hereof.

      2.    Exhibits required to be filed by Item 601 of Regulation S-B:


3.1.1       Certificate of  Incorporation of the Company,  as amended,  filed as
            Exhibit  3.1 to the  Company's  Annual  Report  on Form 10-K for the
            fiscal  year ended  December  31, 1986 (the "1986 Form  10-K"),  and
            incorporated herein by reference.

3.1.2       Certificate  of Amendment of  Certificate  of  Incorporation  of the
            Company  dated  April  18,  1994,  filed  as  Exhibit  3.1.8  to the
            Company's  Annual  Report on Form  10-K for the  fiscal  year  ended
            December 31, 1993 (the "1993 Form 10-K"), and incorporated herein by
            reference.

3.1.3       Certificate  of Amendment of  Certificate  of  Incorporation  of the
            Company effecting one-for-three reverse stock split filed as Exhibit
            3.1 to the  Company's  Current  Report on Form 8-K dated October 17,
            1994, and incorporated herein by reference.

3.1.4       Certificate  of Amendment of  Certificate  of  Incorporation  of the
            Company  effecting  name  change,  increase  of  authorized  shares,
            authorization  of  Class  A  preferred  stock  and  stock  ownership
            limitations  filed as Exhibit 3.2 to the Company's Current Report on
            Form  8-K  dated  October  17,  1994,  and  incorporated  herein  by
            reference.

3.1.5       Form of  "Certificate  of  Designation,  Preferences  and  Rights of
            Series  B  Convertible   Preferred  Stock"  creating  the  Series  B
            Preferred  Stock filed as Exhibit  10.1.4 to the  Company's  Current
            Report on Form 8-K dated June 10, 1996, and  incorporated  herein by
            reference.

3.1.6       Certificate  of Amendment of  Certificate  of  Incorporation  of the
            Company  increasing the number of authorized  shares of Common Stock
            to 100,000,000 shares filed as Exhibit 3.1.6 to the Quarterly Report
            on Form  10-QSB  for the  fiscal  quarter  ended  June 30,  1998 and
            incorporated herein by reference.

3.2         Amended and Restated  Bylaws of the Company  filed as Exhibit 3.2 to
            the Company's Quarterly Report on Form 10-QSB for the fiscal quarter
            ended September 30, 1998, and incorporated herein by reference.

10.26       Settlement  Agreement  dated  April 1, 2000  between the Company and
            various holders of subordinated debentures and common stock filed as
            Exhibit 10.26 to the Company's  Annual Report on Form 10 KSB for the
            fiscal year ended  December 31,  2000,  and  incorporated  herein by
            reference.

10.27       Settlement  Agreement  dated January 1, 2001, but to be effective as
            of  December 1, 2000,  between  the  Company and various  holders of
            subordinated  debentures  and common stock filed as Exhibit 10.27 to
            the Company's Annual Report on Form 10 KSB for the fiscal year ended
            December 31, 2000, and incorporated herein by reference.

10.28       Promissory  Note in the amount of  $550,000  dated as of December 1,
            2000 and executed in connection with the Settlement  Agreement filed
            as Exhibit 10.27, and filed as Exhibit 10.28 to the Company's Annual
            Report on Form 10 KSB for the fiscal year ended  December  31, 2000,
            and incorporated herein by reference.

10.29       Promissory  Note in the amount of  $175,000  dated April 1, 2000 and
            executed  in  connection  with  the  Settlement  Agreement  filed as
            Exhibit  10.26,  and filed as Exhibit 10.29 to the Company's  Annual
            Report on Form 10 KSB for the fiscal year ended  December  31, 2000,
            and incorporated herein by reference.

                                       13
================================================================================

<PAGE>


10.30.      Purchase,  Release,  Settlement and Indemnity Agreement dated August
            20, 2001, by and among the parties  referenced therein (exclusive of
            Exhibits,  and  Schedules  thereto)  filed  as  Exhibit  10.1 to the
            Company's  Current  Report on Form 8K dated  November  7, 2001,  and
            incorporated herein by reference.

10.31       Form of Convertible Debenture

31.1, 32    Certification pursuant to 18 U.S.C.Section 1350, as adopted pursuant
            to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)         Reports on Form 8-K

            None

ITEM 14.    PRINCIPAL ACCOUNTANT SERVICES AND FEES

The Company's  Principal  accountants are Sartain Fischbein & Company located in
Tulsa,Oklahoma. Fees for accounting and tax services for   the   past two  years
are:


                ACCOUNTING                TAX
                 SERVICES               SERVICES
                 --------               --------
  2003           $19,850                $3,500
  2002           $22,760                $3,200

                                       14
================================================================================

<PAGE>


                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934,
the  Company  has duly  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.

                                           NORTH AMERICAN GAMING AND
                                           ENTERTAINMENT CORPORATION

April 14, 2004                        By:  /s/ E. H. HAWES, II, PRESIDENT
                                           -------------------------------------
                                           E. H. Hawes, II, President
                                           and Chief Executive Officer
                                           (Principal Executive Officer and
                                           Principal Financial and Accounting
                                           Officer)

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

April 14, 2004                             /s/ E. H. HAWES, II
                                           -------------------------------------
                                           E.H. Hawes, II
                                           Director (Chairman)

April 14, 2004                             /s/ RICHARD P. CRANE, JR.
                                           -------------------------------------
                                           Richard P. Crane, Jr.
                                           Director

                                       15
================================================================================

<PAGE>


                                  CERTIFICATION
                                      31.1

I, E. H. HAWES, II, CERTIFY THAT:

     1.  I have  reviewed  this annual  report on Form 10-KSB of North  American
         Gaming and Entertainment Corporation;

     2.  Based on my  knowledge,  this  quarterly  report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

     3.  Based on my knowledge,  the financial  statements,  and other financial
         information  included in this quarterly  report,  fairly present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this quarterly report.

     4.  The small  business  issuer's  other  certifying  officer(s)  and I are
         responsible for  establishing and maintaining  disclosure  controls and
         procedures (as defined in Exchange Act Rules and maintaining disclosure
         controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
         15d-15(e) and internal control over financial  reporting (as defined in
         Exchange  Act Rules  13a-15(f)  and  15d-15(f)  for the small  business
         issuer and have:

            (a) Designed such disclosure controls and procedures, or caused such
                disclosure  controls  and  procedures  to be designed  under our
                supervision, to ensure that material information relating to the
                small business issuer, including its consolidated  subsidiaries,
                is  made  known  to  us  by  others   within   those   entities,
                particularly  during the  period in which  this  report is being
                prepared;

            (b) Designed  such internal  control over  financial  reporting,  or
                caused such  internal  control  over  financial  reporting to be
                designed under our supervision,  to provide reasonable assurance
                regarding  the  reliability  of  financial   reporting  and  the
                preparation  of financial  statements  for external  purposes in
                accordance with generally accepted accounting principles;

            (c) Evaluated  the  effectiveness  of the  small  business  issuer's
                disclosure  controls and procedures and presented in this report
                our  conclusions  about  the  effectiveness  of  the  disclosure
                controls and procedures,  as of the end of the period covered by
                this report based on such evaluation; and

            (d) Disclosed  in this  report  any  change  in the  small  business
                issuer's internal control over financial reporting that occurred
                during the small  business  issuer's most recent fiscal  quarter
                (the small business  issuer's  fourth fiscal quarter in the case
                of  an  annual  report)  that  has  materially  affected,  or is
                reasonably  likely to  materially  affect,  the  small  business
                issuer's internal control over financial reporting; and

     5.  The small  business  issuer's  other  certifying  officer(s) and I have
         disclosed, based on our most recent evaluation of internal control over
         financial  reporting,  to the small business  issuer's auditors and the
         audit  committee of the small business  issuer's board of directors (or
         persons performing the equivalent functions):

            (a) All  significant  deficiencies  and material  weaknesses  in the
                design or operation of internal control over financial reporting
                which  are  reasonably  likely  to  adversely  affect  the small
                business  issuers  ability to  record,  process,  summarize  and
                report financial information; and

            (b) Any fraud, whether or not material,  that involves management or
                other  employees  who  have a  significant  role  in  the  small
                business issuer's internal control over financial reporting.

Date:  April 14, 2004

/S/ E.H.HAWES, II
-----------------

____________________________________________
E. H. Hawes, II, Chief Executive Officer and Chief Financial Officer

                                       16
================================================================================

<PAGE>


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

                                       32

In connection with the Annual Report of North American Gaming and  Entertainment
Corporation  (the  "Company") on Form 10-KSB for the period ending  December 31,
2003 as filed with the  Securities  and Exchange  Commission  on the date hereof
(the "Report"),  I E. H. Hawes II, Chief  Executive  Officer and Chief Financial
Officer of the Company,  certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002, that to the best of
my knowledge and belief:

      (1) The Report fully  complies with the  requirements  of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

      (2) The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and result of  operations of the
Company.


/S/ E.H.HAWES, II
-----------------

_________________________________
 E.H. HAWES, II
CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

APRIL 14, 2004

                                       17
================================================================================

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
TABLE OF CONTENTS

Financial Statements of North American Gaming and Entertainment Corporation

<TABLE>
<CAPTION>
                                                                                           PAGE
<S>                                                                                      <C>
Independent Auditors' Report                                                               F-2

Financial Statements:

     Balance Sheet - December 31, 2003                                                     F-3

     Statements Of Operations - Years Ended  December 31, 2003 and 2002                  F-4-F-5

     Statements Of Stockholders' Equity - Years Ended December 31, 2003 and 2002           F-6

     Statements Of Cash Flows - Years Ended December 31, 2003 and 2002                   F-7-F-8

     Notes To Financial Statements                                                       F-9-F-13
</TABLE>

                                       F-1

<PAGE>


Independent Auditors' Report

To  the  Board  of  Directors  and   Stockholders   North  American  Gaming  and
Entertainment Corporation

We have audited the  accompanying  balance  sheet of North  American  Gaming and
Entertainment  Corporation (a Delaware  corporation) as of December 31, 2003 and
the related  statements of operations,  stockholders'  equity and cash flows for
the years ended December 31, 2003 and 2002.  These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of North  American  Gaming and
Entertainment  Corporation  as of  December  31,  2003,  and the  results of its
operations  and its cash flows for the years ended December 31, 2003 and 2002 in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial  statements,   the  Company  sold  all  of  its  interests  in  equity
investments in August 2001, and, in 2003, the Company sold the promissory  notes
received by the Company as  consideration  of the August 2001 sale.  This leaves
the Company with no sources of revenue,  and raises  substantial doubt about the
ability to continue as a going  concern.  Management's  plans in  regarding  the
continuation of the Company as a going concern are also described in Note 1. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

                                             /s/ Sartain Fischbein & Co.

March 24, 2004
Tulsa, Oklahoma

                                       F-2

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
BALANCE SHEET

DECEMBER 31,                                                         2003
                                                                 ------------
ASSETS
Current assets:
Cash                                                             $    263,522
                                                                 ------------
Total current assets                                                  263,522
                                                                 ------------
Furniture and equipment, net of accumulated depreciation                   --
                                                                 ------------
Other assets:
Investments                                                            40,000
Total other assets                                                         --
                                                                 ------------
Total assets                                                     $    303,522
                                                                 ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of notes payable                                 $     18,297
Accounts payable and accrued liabilities                               86,497
Preferred stock dividends payable                                      15,003
Subordinated debentures                                                38,571
                                                                 ------------
Total current liabilities                                             158,368
                                                                 ------------
Commitments and contingencies
Stockholders' Equity:
Class A preferred stock, $3.00 par value, 10% annual
 cumulative dividend, 1,600,000 shares authorized, no shares
   issued and outstanding                                                  --
Preferred stock, $.01 par value, 10,000,000 shares authorized,
 8,000,000 shares designated Series "B", no shares
   issued and outstanding                                                  --
Common stock, $.01 par value, 100,000,000 shares authorized,
 41,788,552 shares issued                                             417,886
Additional paid-in capital                                            489,214
Treasury stock, 17,156,965 shares, at cost                           (489,258)
Accumulated deficit                                                  (272,688)
                                                                 ------------
To stockholders' equity                                               145,154
                                                                 ------------
Total liabilities and stockholders' equity                       $    303,522
                                                                 ============

The accompanying notes are an integral part of the financial statements.

                                       F-3

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                         2003            2002
                                                              -----------    -----------
<S>                                                           <C>            <C>
Costs and expenses:
General and administrative                                    $   261,675    $   472,562
                                                              -----------    -----------
Operating loss                                                   (261,675)      (472,562)
Interest expense                                                  (38,787)       (55,491)
Loss on sale of notes receivable                                  (62,010)            --
Other income                                                       33,589         54,864
                                                              -----------    -----------
Loss from continuing operations before provision for
 income taxes and extraordinary gain                             (328,883)      (473,189)
Benefit for income taxes                                               --          7,800
                                                              -----------    -----------
Loss from continuing operations before extraordinary gain        (328,883)      (465,389)
Extraordinary gain, net of taxes of $7,800                             --         15,200
                                                              -----------    -----------
Net Loss                                                      $  (328,883)   $  (450,189)
                                                              ===========    ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                       F-4

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
STATEMENTS OF OPERATIONS (CONTINUED)

YEARS ENDED DECEMBER 31,                                  2003       2002
                                                        --------   --------
Loss Per Share:
Basic:
Loss before extraordinary gain                          $  (0.01)  $  (0.02)
Extraordinary gain per share                                  --          *
                                                        --------   --------
Net Loss                                                $  (0.01)  $  (0.02)
                                                        --------   --------
Diluted:
Loss before extraordinary gain                          $  (0.01)  $  (0.02)
Extraordinary gain per share                                  --          *
                                                        --------   --------
Net Loss                                                $  (0.01)  $  (0.02)
                                                        --------   --------

*  Less than $.01 per share.

The accompanying notes are an integral part of the financial statements.

                                       F-5

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                             PREFERRED                                       ACCUMULATED    RETAINED
                                CLASS A       STOCK                  ADDITIONAL                 OTHER       EARNINGS      TOTAL
                               PREFERRED      SERIES       COMMON     PAID-IN     TREASURY  COMPREHENSIVE (ACCUMULATED STOCKHOLDERS'
                                 STOCK         "B"          STOCK     CAPITAL      STOCK        INCOME      DEFICIT)      EQUITY
                               ----------   ----------   ----------  ----------  ----------   ----------   ----------   ----------
<S>                            <C>          <C>          <C>         <C>         <C>          <C>          <C>          <C>
Balance, January 1, 2002       $       --   $       --   $  417,886  $  489,214  $ (489,258)  $       --   $  506,384   $  924,226
Net loss--2002                         --           --           --          --          --           --     (450,189)    (450,189)
Other comprehensive income             --           --           --          --          --           --           --           --
                               ----------   ----------   ----------  ----------  ----------   ----------   ----------   ----------
Balance, December 31, 2002             --           --      417,886     489,214    (489,258)          --       56,195      474,037
Net loss--2003                         --           --           --          --          --           --     (328,883)    (328,883)
                               ----------   ----------   ----------  ----------  ----------   ----------   ----------   ----------
Balance, December 31, 2003     $       --   $       --   $  417,886  $  489,214  $ (489,258)  $       --   $ (272,688)  $  145,154
                               ----------   ----------   ----------  ----------  ----------   ----------   -----------  ----------
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                       F-6

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                                              2003           2002
                                                                                   -----------    -----------
<S>                                                                                <C>            <C>
Cash Flows From Operating Activities:
Net loss                                                                          $  (328,883)   $  (450,189)
   Adjustments to reconcile net income to net cash used in operating activities:
      Bad debt expense                                                                      --         67,000
      Forgiveness of note receivable in exchange for consulting services                    --        200,000
      Loss on sale of note receivable                                                  137,439             --
      Forgiveness of debenture                                                         (75,429)            --
Changes in operating assets and liabilities:
      Decrease in:
            Prepaid expenses and other                                                   2,500         24,855
      Increase (decrease) in:
            Accounts payable and accrued liabilities                                   (80,701)        26,297
                                                                                   -----------    -----------
Net Cash Used In Operating Activities                                                 (345,074)      (132,037)
                                                                                   -----------    -----------
Cash Flows From Investing Activities:
      Proceeds from sale of notes receivable                                           780,788             --
      Advances under note receivable--shareholder                                           --        (59,046)
      Repayments of notes receivable--shareholder                                        3,464          5,482
      Repayments of note receivable                                                    224,187        295,334
      Increase in investments                                                          (40,000)            --
                                                                                   -----------    -----------
Net Cash Provided By Investing Activities                                              968,439        241,770
                                                                                   -----------    -----------
Cash Flows From Financing Activities:
      Payments on borrowings                                                          (365,207)      (110,000)
                                                                                   -----------    -----------
Net Cash Used In Financing Activities                                                 (365,207)      (110,000)
                                                                                   -----------    -----------
Net Increase (Decrease) In Cash                                                        258,158           (267)
Cash, beginning of year                                                            $     5,364    $     5,631
                                                                                   -----------    -----------
Cash, end of year                                                                  $   263,522    $     5,364
                                                                                   ===========    ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                       F-7

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
YEARS ENDED DECEMBER 31, 2003 AND 2002
STATEMENTS OF CASH FLOWS (CONTINUED)

YEARS ENDED DECEMBER 31,                         2003       2002
                                               --------   --------
Cash Paid During The Year For:
      Interest                                 $ 51,459   $ 55,490
                                               ========   ========

The accompanying notes are an integral part of the financial statements.

                                       F-8

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION

YEARS ENDED DECEMBER 31, 2003 AND 2002

1.  BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

North  American  Gaming  and  Entertainment   Corporation  (the  "Company")  was
incorporated  under the laws of the State of Delaware in 1969.  Until August 20,
2001, the Company was engaged in the video gaming  business  through its partial
ownership of three operating  companies:  O.M. Operating,  LLC ("OM") River Port
Truck Stop, LLC ("River Port"), and Ozdon  Investments,  Inc.  ("Ozdon").  These
entities  operate  video poker  machines  located in truck  stops in  Louisiana.
Through August 20, 2001, the Company's  ownership  percentages were 24.5% of OM,
24.5% of River Port and 50% of Ozdon.  Effective  August 20,  2001,  the Company
sold its interests in OM, River Port and Ozdon (See Note 2).

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a going  concern.  However,  due to the  sale of the
promissory  notes  discussed in Note 2, the Company  currently has no sources of
revenue and its cash flow needs will soon exhaust the available cash. Management
plans to continue operating the business and pursue various business, investment
and financing opportunities.

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

INCOME TAXES:
The Company uses the asset and liability  method of accounting for income taxes.
Under the asset and liability  method,  deferred tax assets and  liabilities are
recognized for the future tax consequences  attributable to differences  between
the  consolidated  financial  statement  carrying amounts of existing assets and
liabilities and their respective tax consolidated basis. Deferred tax assets and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered  or settled.  The effect on deferred tax assets and  liabilities  of a
change in tax rates is  recognized  in income in the period  that  includes  the
enactment date.
FAIR VALUE OF FINANCIAL INSTRUMENTS:
The  carrying  amounts of  financial  instruments  including  cash  investments,
accounts payable and accrued expenses approximated fair value as of December 31,
2003 because of the relatively short maturity of these instruments.

The carrying amounts of debt issued  approximates  fair value as of December 31,
2003  and  December  31,  2002  because  interest  rates  on  these  instruments
approximate market interest rates.

                                       F-9

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002

2.  SALE OF EQUITY INVESTMENTS

In August 2001,  the Company,  sold all of its  interests in OM,  Riverport  and
Ozdon for approximately $2.3 million. The sales price was approximately $800,000
in  cash  and  approximately  $1.5  million  in the  form  of  promissory  notes
receivable originally due to the Company in 60 monthly installments of principal
and interest.  During 2003 the Company sold the promissory notes for $780,788 in
cash and the  forgiveness of $62,500 of subordinated  debentures,  together with
accrued  interest  of  $12,929.  The  Company  incurred a loss of  approximately
$62,000 on this sale, net of the forgiveness of debentures.

3.  EARNINGS PER SHARE

The  following  data shows the amounts  used in  computing  earnings  (loss) per
share.

<TABLE>
<CAPTION>
                                                      NET INCOME       WEIGHT         PER
                                                        (LOSS)         SHARES        SHARE
                                                     (NUMERATOR)    (DENOMINATOR)   AMOUNT
                                                    -------------   -------------   ------
<S>                                                 <C>             <C>             <C>
For the Year Ended December 31, 2002:
      Basic earnings (loss) per common share        $    (450,189)     24,705,458   $ (.02)
                                                                                    ======
      Effect of dilutive stock options                                         --
                                                                    -------------
      Diluted earnings (loss) per common share      $    (450,189)     24,705,458   $ (.02)
                                                    ==============  =============   ======
For the Year Ended December 31, 2003:
      Basic earnings (loss) per common share        $    (328,883)     24,631,587   $ (.01)
                                                                                    ======
      Effect of dilutive stock options                                         --
      Diluted earnings (loss) per common share      $    (328,883)     24,631,587   $ (.01)
                                                    =============   =============   ======
</TABLE>

Convertible debentures for 771,420 shares of common stock have not been included
in the computation of diluted earnings per share because the conversion price of
$.05 is greater  than the  average  market  price of common  shared for the year
ended December 31, 2002 and 2003.  Options for 1,000,000  shares of common stock
have not been included in the  computation of diluted  earnings per share due to
being anti-dilutive.

4.  RELATED PARTY TRANSACTIONS

During 2003 and 2002 the Company paid an officer of the Company  consulting fees
totaling $100,000 and $200,000 in each year, respectively.

5.  INVESTMENTS

Investments  consist of $40,000  advanced to U.S.  Daylighting,  L.L.C. in 2003.
This advance bears interest at 9%. See Note 11.

6.  INCOME TAXES

The  components of the  provision for income taxes as shown on the  accompanying
consolidated statements of operations are as follows:

                                    YEARS ENDED DECEMBER 31,
                                    -----------------------
                                        2003      2002
                                       ------   -------

       Current--Federal                $   --   $    --
       Current--State                      --        --
       Deferred                            --        --
                                       ------   -------
                                       $   --   $    --
                                       ======   =======

                                      F-10

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002

      Components  of the net  deferred  tax asset at  December  31,  2003 are as
follows:



             Deferred tax assets:
       Net operating loss carry-forwards               $   782,000
             Less--valuation allowance                    (782,000)
                                                       -----------
                                                       $        --
                                                       ===========

At  December  31,  2003,  the  Company had a net  operating  loss  carry-forward
available for Federal income tax purposes of approximately  $2,300,000.  Because
of tax rules relating to changes in corporate ownership,  the utilization by the
Company  of these  benefit  carry-forwards  in  reducing  its tax  liability  is
restricted to a cumulative  annual  utilization of  approximately  $234,000 plus
unexpired and unused limitations from prior years. The amounts of operating loss
carry-forwards expire in varying amounts through 2022. Due to the uncertainty of
realization  and the annual  restriction  discussed  above, a deferred tax asset
valuation allowance has been provided.

The  following  is a  reconciliation  of the  U.S.  statutory  tax  rate  to the
Company's effective rate for the years ended December 31, 2003 and 2002:

                                                             2003       2002
                                                            -------   -------

     Statutory rate                                            34.0%     34.0%
     Change in deferred tax asset valuation allowance         (34.0)    (34.0)
                                                            -------   -------
     Company's effective rate                                     0%        0%
                                                            =======   =======

7.  NOTES PAYABLE
                                                                DECEMBER 31,
                                                                   2003
                                                                ----------
    Notes payable to certain stockholders, interest at 9%,
     payable in 2001. The notes are
      unsecured and were in default at December 31, 2003.       $   18,297
                                                                ----------
          Total                                                 $   18,297
                                                                ==========

8.  SUBORDINATED CONVERTIBLE DEBENTURES

During 2001,  the Board of Directors  approved the sale of up to  $1,000,000  of
subordinated convertible debentures.  The debentures required quarterly interest
only  payments  at a 10% rate and  were  due in full on June 1,  2003,  of which
$125,000 were  convertible  into common stock at $0.50 per share. The debentures
are  subordinated  to notes  payable and have a principal  balance of $38,571 at
December 31, 2003.

During July 2002, the Company purchased an outstanding  debenture from one party
at less than fair  value and  re-sold  the  debenture  to another  party,  which
resulted in the recognition of an extraordinary  gain of approximately  $15,200,
net of income tax expense of $7,800 in July 2002.

9.  CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES

CASH:
The  Company's  cash  balances  with  financial  institutions  are insured up to
$100,000 for each account.

LEASE:
The  Company  occupies  office  space  under a 6  month  operating  lease  which
commenced in November 2002 and  terminated  in April 2003.  Rent expense for the
years ended December 31, 2003 and 2002 totals approximately $10,000 and $62,000,
respectively.

                                      F-11

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002

LITIGATION:
During 2000,  the Company  became  involved in  litigation  that was resolved in
August 2001.  Effective  August 20, 2001, the Company  entered into a definitive
Purchase,   Release,   Settlement  and  Indemnity   Agreement  (the  "Settlement
Agreement")  with the other  parties  to the  lawsuits,  together  with  certain
related parties thereof (the "OMO Group")  settling the three pending  lawsuits.
In addition to mutual releases of all parties, the Settlement Agreement provides
for the sale by the Company of (i) all of the Company's interest in OM, (ii) all
of the Company's  interest in River Port and,  (iii) the Company's 50% ownership
interest in Ozdon,  as described  in Note 2. The purchase  price for the sale of
these assets by the Company was $2.3 million,  payable $800,000 in cash and $1.5
million in the form of promissory  notes receivable by the Company in 60 monthly
installments  of  principal  and  interest.  However,  the cash  portion  of the
purchase  price was reduced by an amount equal to $5,000 for a $5,000 payment to
E.H.  Hawes,  II, the President of the Company,  for a two year agreement not to
compete  with the OMO Group  within  four  Parishes  in  Louisiana,  and $38,125
retained by the OMO Group representing the net excess of liabilities of Ozdon in
excess of $125,000.  The Settlement  Agreement  also includes a  non-competition
agreement  pursuant to which the  Company  agreed not to compete for a period of
two years  after the  closing  of the  Settlement  Agreement  in the  ownership,
operation or  management of truck stops in any of the four Parishes in the State
of Louisiana in which OM or River Port currently own or operate truck stops.

In the opinion of management, there are no other contingent claims or litigation
against the Company which would  materially  affect its  consolidated  financial
position.

10. STOCKHOLDERS' EQUITY

PREFERRED STOCK

The Company has authorized  10,000,000 shares of preferred stock with attributes
as determined by the Board of Directors.

The Board of Directors  designated a series of preferred stock,  Preferred Stock
Series "B". The maximum  shares  under the series is  8,000,000.  The  Preferred
Stock Series B has a par value of $.01, accrues no dividends and converts on a 1
to 1 basis into common stock.

The Company has also authorized 1,600,000 shares of Class A Preferred Stock. The
Class A Preferred Stock has a par value of $3.00,  bears a 10% annual cumulative
dividend,  payable  monthly and is  convertible  into common stock on a 6.4 to 1
basis.

STOCK OPTIONS

In January 2000, the Company granted two directors  stock options,  whereby each
may acquire  1,000,000  shares of common stock,  at an exercise price of $.03125
per share.  The shares were fully vested as of the date of grant and expire five
years from the date of grant. The Company recognized compensation expense at the
date of grant of $22,255 related to services  provided,  based on the fair value
of the  options on the  measurement  date,  which is the date a  commitment  for
performance  is reached or  performance  is complete.  In November of 2002,  one
director  resigned  as a director  of North  American  Gaming and  Entertainment
Corporation upon which time the 1,000,000 option was cancelled.

No options to purchase the Company's stock were issued during 2003.

The following is a table of options granted:

                                                                      WEIGHTED
                                           SHARES       EXERCISE      AVERAGE
                                            UNDER       PRICE PER     EXERCISE
                                           OPTION        SHARE         PRICE
                                          ----------   -----------    --------
Balance, December 31, 2001                2,000,0000           .03         .03
         Granted                                  --            --          --
         Cancellation                     (1,000,000)          .03         .03
                                          ----------   -----------    --------
Balance, December 31, 2002                 1,000,000   $       .03    $    .03
                                          ----------   -----------    --------
         Granted                                  --            --          --
         Cancellation                             --   $        --    $     --
                                          ----------   -----------    --------
Balance, December 31, 2003                 1,000,000   $       .03    $    .03
                                          ==========   ===========    ========

                                      F-12

<PAGE>


NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002

The Company has adopted the disclosure-only provisions of Statement of Financial
Accounting  Standards No. 123,  "Accounting  for Stock-Based  Compensation"  for
employee  stock  options.  There is no  proforma  effect  in 2003 or 2002 as the
Company granted no options to employees during those years.

CONTINGENCIES

The notes receivable discussed in Note 2 were sold with recourse to the Company.
The Company  retained its security  interests in certain assets that it believes
will be sufficient to cover any future  obligations that may arise from the sale
of these notes.

11. SUBSEQUENT EVENT

In March 2004, the Company signed a Convertible  Secured Promissory Note with US
Daylighting,  L.L.C.  Under  the  terms of the Note the  Company  is to  advance
$150,000  in return for  monthly  interest  of 9.0%.  The  Company can advance a
further  $150,000 within 90 days and has the option to convert the full $300,000
advance  into a 25.0%  interest  in the L.L.C.  The note is  payable  within six
months of demand  being  made by the  Company.  The note is  secured  by various
membership interests in the L.L.C.

In February and March 2004 the Company advanced a total of $125,000 to Techlite,
Inc.,  a publicly  held  Company  located in Tulsa,  Oklahoma.  The advances are
non-interest bearing and are to be paid back in the short-term.

                                      F-13