SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

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

                                   FORM 10-QSB

(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003.

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO _________.

                      Commission File Number: _____________

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

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

                680 Branch Ave. P.O. Box 8699 Red Bank, NJ 07701
                ------------------------------------------------
                    (Address of Principal Executive Offices)

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

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

         As of March 31, 2003, there were 7,603,826 shares of the issuer's
common stock outstanding.

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

                            Total Entertainment, Inc.

                                      Index

                                                                            Page
                                                                            ----

PART I.  Financial Information (Unaudited)

Condensed Consolidated Balance Sheets
  December 31, 2002 and March 31, 2003 (Unaudited) .......................    3

Condensed Consolidated Statements of Operations
  Three Months Ended March 31, 2003 and 2002 (Unaudited) .................    4

Condensed Consolidated Statements of Cash Flows
  Three Months Ended March 31, 2003 and 2002 (Unaudited) .................    5

Notes to Condensed Consolidated Financial Statements .....................    6

PART II. Other Information

Signatures ...............................................................   22


                                        2
<PAGE>

                    PART I. Financial Information (Unaudited)

                   Total Entertainment, Inc. and Subsidiaries

                           Consolidated Balance Sheet

                   as at March 31, 2003 and December 31, 2002


                                                    December 31,     March 31,
                                                        2002           2003
                                                    ------------   ------------
                                                    (unaudited)

ASSETS

Current assets
   Cash                                             $        193   $        405
                                                    ------------   ------------
      Total current assets                                   193            405

Property and equipment
   Computer equipment                                    314,744        314,744
   Other furniture and fixtures                           48,845         48,845
                                                    ------------   ------------
                                                         363,589        363,589
   Less accumulated depreciation                         334,811        341,582
                                                    ------------   ------------
                                                          28,778         22,007

                                                    $     28,971   $     22,412
                                                    ============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
   Accounts payable and accrued liabilities         $    163,258   $    155,964
   Deferred compensation                               1,182,949      1,254,200
   Due to directors and stockholders                     454,561        478,771
                                                    ------------   ------------
      Total current liabilities                        1,800,768      1,888,935

Stockholders' equity (deficiency)
   Common stock, $.001 par value; authorized,
    200,000,000 shares; issued and outstanding;
    58,388,443 shares at December 31, 2002 and
    7,603,826 shares at March 31,2003                     58,388         58,388
   Additional paid-in capital                          2,684,695      2,684,695
   Accumulated deficit                                (4,514,880)    (4,609,606)
                                                    ------------   ------------
                                                      (1,771,797)    (1,866,523)
                                                    ------------   ------------

                                                    $     28,971   $     22,412
                                                    ============   ============


                                        3
<PAGE>

                    Total Entertainment Inc. and Subsidiaries

                      Consolidated Statement of Operations

                   Three months ended March 31, 2003 and 2002
                                   (unaudited)


                                                    March 31,        March 31,
                                                      2002             2003
                                                  ------------     ------------
Income
   Gaming revenues                                $    533,766     $         --
   Less: Chargebacks                                    12,482               --
      Complimentary and bonus                          120,826               --
                                                  ------------     ------------
Gaming Revenues, net                                   400,458               --

Costs and expenses
   Cost of operations                                  108,529               --
   Selling, general and administrative                 411,709           87,955
   Depreciation and amortization                        17,661            6,771
                                                  ------------     ------------
                                                       537,899           94,726
                                                  ------------     ------------
NET INCOME (LOSS) FOR THE PERIOD                  $   (137,441)         (94,726)
                                                  ============     ============
Income (loss) per common share
   Basic                                          $       (.00)    $       (.00)
   Diluted                                        $       (.00)    $       (.00)

Weighted-average shares outstanding used
   in computing income (loss) per common
   share

      Basic                                         58,388,443        7,603,826
                                                  ============     ============
      Diluted                                       58,388,443        7,603,826
                                                  ============     ============


                                        4
<PAGE>

                    Total Entertainment Inc. and Subsidiaries

                      Consolidated Statement of Cash Flows

                   three months ended March 31, 2003 and 2002
                                   (unaudited)


                                                          March 31,    March 31,
                                                            2002         2003
                                                          --------     --------
Cash flows from operating activities
   Net income (loss)                                      (137,441)     (94,426)
   Adjustments to reconcile net income (loss) to
    net cash provided by (used in) operating
    activities
      Depreciation and amortization                         17,661        6,771
      Increase (decrease) in cash from changes in
       operating assets and liabilities
         Accounts receivable                                73,291           --
         Accounts payable and accrued liabilities          (74,033)      (7,294)
         Customer account deposits                         (39,577)          --
         Deferred compensation                              17,500      (71,251)
                                                          --------     --------
            Net cash provided by (used in)
             operating activities                         (142,599)     (23,998)

Cash flows from investing activities
   Payments received on Note Receivable                     73,894           --
                                                          --------     --------
            Net cash provided by (used in)
             investing activities                           73,894           --

Cash flows from financing activities
   Principal payments on capital leases                     (5,019)          --
   Advances from (repayments to) directors and
    stockholders, net                                       56,790       24,210
                                                          --------     --------
      Net cash provided by (used in) financing
       activities                                           51,771       24,210
                                                          --------     --------

      NET INCREASE (DECREASE) IN CASH                      (16,934)         212

Cash at beginning of period                                 20,416          193
                                                          --------     --------

Cash at end of period                                        3,482          405
                                                          ========     ========


                                        5
<PAGE>

                            TOTAL ENTERTAINMENT, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Item 1.  SUMMARY OF ACCOUNTING POLICIES

         The unaudited interim financial statements of Total Entertainment, Inc.
         and Subsidiaries (the "Company") have been prepared in accordance with
         accounting principles generally accepted in the United States of
         America and rules and regulations of the Securities and Exchange
         Commission for interim financial information. Accordingly, they do not
         include all of the information and footnotes required by generally
         accepted accounting principles of complete financial statements.

         In the opinion of the Company's management, the accompanying unaudited
         financial statements contain all adjustments (consisting of normal
         recurring entries) necessary to present fairly the financial position
         as of March 31, 2003 and the results of operations for the three month
         period ended March 31, 2002 and 2003 and cash flows for the three
         months ended March 31, 2002 and 2003, respectively.

         The accounting policies followed by the Company are set forth in Note A
         of the Company's financial statements as contained in the Form 10-KSB
         for the year ended December 31, 2002 filed with the Securities and
         Exchange Commission. The Form 10-KSB contains additional data and
         information with respect to intangible assets, stock option plans,
         reserved shares, income taxes, commitments and contingencies, and other
         items and is incorporated by reference.

         The results reported for the three month period ended March 31, 2003
         are not necessarily indicative of the results of operations which may
         be expected for a full year.

                                        6
<PAGE>

                  BUSINESS, DESCRIPTION AND HISTORY OF COMPANY

Item 2.  CORPORATE STRUCTURE

         Total Entertainment Inc., formerly known as Kit Farms Inc. (the
         Company), incorporated in the state of Indiana, has three wholly-owned
         subsidiaries, Intercapital Global Fund Ltd. (Intercapital Global), an
         Antiguan company, Intercapital Canada Ltd. (Intercapital Canada),
         incorporated in the Province of Quebec, and Total Entertainment
         (Delaware) Inc. , an inactive Delaware company.

         The company offered software-based games of chance and sports wagering
         facilities on a worldwide basis through the Internet located at
         www.theonlinecasino.com, www.theonlineesportsbook.com,
         www.bingoonthenet.com as well as other sites (collectively the Online
         Casinos). There are significant legislative risks and uncertainties
         regarding on-line gaming operations (see Note D-1). The company
         launched its www.theonlinecasino.com Web site on September 12, 1998 and
         sold the online gaming assets were disposed of during the year.

         Intercapital Global, the operating company, owned a gaming license
         issued by the Government of Honduras and the Dominican Republic, and
         several Internet Web sites. The Company used state-of-the-art casino
         gaming and sports book software under an informal license arrangement
         with Montana S.A. (Montana), a leading casino software development
         company. In the fourth quarter of 2000 the Company used this software
         on a no-cost trial basis. In 2001 the Company began making volume-based
         monthly royalty payments to Montana pursuant to an informal license
         arrangement. The Company also licensed software for the gaming and
         sports book operations from Online Gaming Systems (formerly known as
         Atlantic Entertainment International Inc. (OGS), an independent
         software developer, and other vendors.

         Intercapital Global accepted wagers via the Internet through an
         E-commerce credit card processing agreement with MPACT Immedia
         Transaction Services Ltd. (MPACT). During 2000, this contract was
         transferred by MPACT to Surefire Commerce Ltd.

         Intercapital Canada provides Intercapital Global with technical and
         customer support and administrative services.

                                        7
<PAGE>

Item 3.  WWW.SLOTSVEGAS.COM TRANSACTIONS

(a)      SGL TRANSACTION. In June 1999, the Company launched an Online Casino
         geared toward slots players located at WWW.SLOTSVEGAS.COM (Slotsvegas).
         On May 5, 1999, the Company entered into an agreement with Summerhill
         Gaming Limited (SGL) to transfer a 50 % ownership interest and profit
         and loss participation in Slotsvegas. The agreement did not specify a
         fixed period and remains in effect as long as the Web site is in
         operation. In consideration for this interest, SGL paid $150,000 of
         obligations to vendors on behalf of the Company, which was recorded as
         deferred income. Such amounts are non-refundable.

         The agreement requires the Company to pay SGL 50% of the net profits
         derived from the Slotsvegas site, on a monthly or other interim basis,
         as agreed to by the Company and SGL. To the extent that the Slotsvegas
         site inccurs net losses, SGL will pay the Company 50% of such amounts.

         The agreement with SGL in substance represents the sale of future
         income and was accounted for as deferred income in accordance with
         Emerging Issues Task Force issue No. 88-18. The amount of deferred
         income to be amortized was calculated using the ratio of the amounts to
         be paid to SGL over management's estimate of the total payments
         expected to be made to SGL over four years (the management's expected
         life of the website). At such time, if ever, that the deferred income
         balance is fully amortized, any payments to SGL will be charged to
         earnings in the current period. Further, SGL will pay Company 50% of
         any net losses of the Slotsvegas website; accordingly, any future
         amounts received by the Company will be recorded as a reduction of the
         Slotsvegas site's operating expenses.

         As part of the agreement, SGL agreed to make short-term loans up to
         $500,000 to the Company for liquidity purposes. The loans bear interest
         at 7% per annum, require interest payments on a monthly basis, and
         payment of the entire principal balance three years from the date of
         issuance. Through December 31, 1999, SGL loaned the Company
         approximately $502,958. The loans were made in the form of direct
         payments of obligations to vendors on behalf of Company and cash
         advances of $305,000. On December 31, 1999, the Company converted the
         cumulative cash advances of $502,958, accrued interest of $12,868 and
         net profits from Slotsvegas of $2,258 into 1,671,235 shares of common
         stock of the Company using the quoted value of the common stock of $.31
         per share.

(b)      NETFORFUN TRANSACTION.

         In March 2000, pursuant to a Purchase Agreement dated March 1, 2000
         between Intercapital Global and Netforfun.com, Inc. a publicly held
         Canadian company (NetForFun), the Company sold its remaining 50%
         interest in the Slotsvegas site and related assets and customer
         deposits to NetForFun for $2,000,000, payable as follows:

         o    $100,000 in cash upon signing of the purchase agreement;

                                        8
<PAGE>

         o    400,000 in the form of a five-year promissory note bearing
              interest at 9% per annum and payable in equal quarterly
              installments of $24,910.02, commencing on or before July 1, 2000;
              and $1,500,000 in the form of 15,000,000 shares of NetForFun
              common stock valued by the parties at $0.10 per share.

         Given the current financial position of NetForFun, and its stock
         valuation profile, no amounts will be recognized by the Company
         relating to the sale of the website for common stock held until the
         uncertainty of realization is satisfied. The Company and NetForFun
         agreed in June 2000, that any winnings allocable to NetForFun were to
         be first applied against the principal of the note receivable.
         Approximately $35,000 in NetForFun's share of the winnings from the
         website has been applied against the note receivable. Effective June
         30, 2000, the Company assigned $240,000 of the note receivable from
         NetForFun to Intercapital Asset Management in partial satisfaction of
         amounts owed by the Company to Intercapital Asset Management. Effective
         October 31, 2000, SGL agreed to assume the obligation of NetForFun
         under the note receivable if the obligation is not satisfied. This
         guarantee was extended to October 31, 2003.

         In January 2002 NetForFun was taken over by Spectrafax. The NetForFun
         common stock was replaced by 1,800,000 shares of Spectrafax common
         stock valued at $0.10 per share. The Company received approximately
         $23,000 from the sale of 270,000 shares of Spectrafax in January and
         February 2002 which was applied against the note receivable from
         NetForFun.

         Intercapital Global has also entered into a Maintenance and Support
         Services Agreement with NetForFun pursuant to which Intercapital Global
         has agreed to provide certain maintenance and support services to
         NetForFun for the Slotsvegas software for an initial term of one year
         for a fee of $15,000 per month, subject to adjustment. The company
         received and recorded revenue of $45,000 under this agreement during
         the year ended December 31, 2000. The Company also agreed to defer
         further billing and revenue recognition under this agreement for
         monthly payments owed to us pursuant to the Maintenance and Support
         Services Agreement, from July 2000 until such time as the traffic of
         the Slotsvegas Web site becomes more significant.

Item 4.  BASIS OF PRESENTATION

         The accompanying financial statements have been prepared in conformity
         with generally accepted accounting principles, which contemplate
         continuation of the Company as a going concern. The Company has
         incurred a loss from operations since inception. At December 31, 2002
         and 2001, the Company has a working capital deficiency of approximately
         $1,800,575 and $1,896,000, respectively, and a stockholders' deficiency
         of approximately $1,772,000 and $1,630,000 respectively. The Company is
         also involved in litigation (Note 6(c)), which if the Company is
         unsuccessful in its defense, could have a material adverse effect on
         the Company. These factors raise substantial doubt about the Company's
         ability to continue as a going concern.

                                        9
<PAGE>

         In view of the matters described in the previous paragraph, recover
         ability of a major portion of the recorded asset amounts shown in the
         accompanying balance sheet is dependent upon continued operations of
         the Company, which, in turn, are dependent upon the Company's ability
         to meet its financing requirements on a continuous basis and to succeed
         in its future operations. The financial statements do not include any
         adjustments relating to the recover ability and classification of
         recorded asset amounts or amounts of liabilities that might be
         necessary should the Company be unable to continue in existence.

3(a)(i)  In August 2002 the company concluded an agreement whereby it sold its
         interest in Online Sports Book.com ("Online") including the equipment
         the domain name and any goodwill associated with the business. The
         purchase price was satisfied by the purchaser assuming all liabilities
         of the Online Sports Book.com and a royalty agreement whereby Online
         shall pay to the seller 10% of the gross profit for 12 months following
         the date of closing. To December 31, 2002 the company has earned
         $84,750 in royalties.

         The company is no longer engaged in interest gaming activities.

(ii)     In October 2002 Total Entertainment Canada Ltd. purchased 100% of the
         business rights, domain names, trade marks and formulas ("the assets")
         owned by Rock Candy Cosmetics Inc.

         The purchase price of $678,000 was satisfied by issuance of 4,520,000
         common shares of the company. Since Rock Candy is a privately held
         company the fair value of the assets is not readily determinable. As a
         result, the assets were recovered at a nominal value.

(b)      Obtain advances from affiliated companies, officers or other sources,
         as necessary, to fund operating expenses.

(c)      Defer officers' salaries until such time the Board of Directors
         determines it is appropriate to commence payment.

Item 5.  ACCOUNTING POLICIES

         A summary of the significant accounting policies consistently applied
         in the preparation of the accompanying consolidated financial
         statements follows:

(a)      PRINCIPLES OF CONSOLIDATION

         These consolidated financial statements include the accounts of the
         Company and its subsidiaries. All significant intercompany accounts and
         transactions have been eliminated.

(b)      FIXED ASSETS

         Computers and furniture and fixtures are stated at cost and are
         depreciated over their estimated useful lives of three to five years.

                                       10
<PAGE>

(c)      FOREIGN CURRENCY TRANSLATION

         The assets and liabilities of the Company's foreign operations are
         translated at the exchange rates prevailing at year-end and income and
         expenses are translated at the average exchange rate for the year.
         Balance sheet gains and losses arising from translation are immaterial.
         Translation gains or losses, for the periods presented, have been
         included in the results of operations and are not material.

(d)      EARNINGS (LOSS) PER SHARE

         Basic loss per share for the year ended December 31, 2002 and 2001 is
         computed by dividing the loss for the period by the weighted average
         number of common shares outstanding during the period. Diluted loss per
         share is computed by dividing the loss for the period by the weighted
         average number of common shares adjusted for the dilutive effect of any
         potential common shares issuable during the period. The denominator for
         the basic and diluted earnings per share calculation for the year ended
         December 31, 2001 is 58,388,433. The amount of options not considered
         in the loss per share calculation for the year ended December 31, 2001
         because their effect was anti dilutive was 69,250,000 shares. No shares
         were considered at December 31, 2002 as the options expired.

(e)      INCOME TAXES

         Total Entertainment is responsible for filling a United States Federal
         income tax return, while Intercapital Canada is responsible for filing
         a Canadian tax return. Intercapital Global is not required to file a
         United States corporate income tax return because it is a foreign
         corporation and has no U.S. source income or U.S. operations.
         Intercapital Global is not required to file an Antiguan tax return
         since it is an International Business Corporation not subject to
         taxation.

         Financial Accounting Standards Board Statement of Financial Accounting
         Standards No. 109 (SFAS No. 109), Accounting for Income Taxes, require
         the liability approach to accounting for deferred income taxes for
         financial reporting purposes. Under the provisions of SFAS No. 109,
         deferred tax assets and liabilities are determined based on tax rates
         expected to be in effect when the taxes are actually paid or refunds
         received.

(f)      CONCENTRATION OF CREDIT OR MARKET RISK

         Statement of Financial Accounting Standards No. 105 (SFAS No. 105)
         requires the disclosure of significant concentration of credit or
         market risk, regardless of the degree of such risk. Financial
         instruments, as defined by SFAS No. 105, which potentially subject the
         Company and its subsidiaries to concentrations of risk, consist
         principally of cash, the note receivable from NetForFun, and accounts
         receivable. Substantially all of the accounts receivable at December
         31, 2002 are from Surefire Commerce Ltd. or other credit card
         processors.

                                       11
<PAGE>

(g)      USE OF ESTIMATES

         In preparing financial statements in conformity with generally accepted
         accounting principles, management is required to make estimates and
         assumptions that affect the reported amounts of assets and liabilities
         and the disclosure of contingent assets and liabilities at the date of
         the financial statements and revenues and expenses during the reporting
         period. Actual results could differ from those estimates.

(h)      VALUATION OF LONG-LIVED ASSETS

         The company has adopted Statement of Financial Accounting No. 121 (SFAS
         No.121), Accounting for the Impairment of Long-Lived Assets and for
         Long-Lived Assets to Be Disposed of. The statement requires that the
         Company recognize and measure impairment losses of long-lived assets
         and certain identifiable intangibles and value long-lived assets to be
         disposed of. The carrying values of the long-lived assets are reviewed
         if the facts and circumstances suggest that such assets may be
         permanently impaired. If the expected future undiscounted cash flows
         derived from such assets are less than the carrying value, such value
         would be reduced to its fair value.

(i)      RESEARCH AND DEVELOPMENT EXPENSES

         Costs associated with research and development, principally relating to
         website development and e-commerce development are expensed as
         incurred. Such costs also include expenditures for developing of
         certain software gaming products.

(j)      ADVERTISING EXPENSES

         Costs associated with advertising are expensed as incurred and amounted
         to $47,000 and $405,000 for the years ended December 31, 2002 and 2001,
         respectively.

(k)      SEGMENT AND RELATED INFORMATION

         The Company operated as one active segment, Internet-based gaming, and
         follows the requirements of SFAS No. 131, Disclosures About Segments of
         an Enterprise and Related Information.

(l)      CASH AND CASH EQUIVALENTS

         The Company considers all highly liquid investments purchased with
         original maturities of three months or less to be cash equivalents.

(m)      REVENUE RECOGNITION

         Gaming revenues are recognized when the sporting event or game of
         chance has been completed. Credit card deposits held by the Company for

                                       12
<PAGE>

         individual customers are recorded as customer account deposits until
         earned by the Company or returned to the customer. Gaming revenues are
         presented on a net basis (i.e., net of customer winnings) (Note 3 (a)
         (i)).

(n)      FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying value of cash and cash equivalents are assumed to be at
         fair value because of the liquidity of the instruments. Accounts and
         notes receivable and accounts payable are assumed to be at fair value
         because of the short term nature of the instruments.

(o)      RECENT ACCOUNTING PRONOUNCEMENTS

         In January 2000, the Emerging issues Task Force (EITF) reached a
         consensus on Issue No. 99-17, Accounting for Barter Transactions, to be
         effective for transactions entered into after January 20, 2000. The
         consensus states that advertising barter transactions should be
         accounted for at fair value and that the fair value recognized is
         disclosed in the financial statements, if there is verifiable objective
         evidence provided by sufficient cash transactions received by the
         seller of the advertising or similar advertising. The Company purchased
         advertising from barter transactions in 2001. The Company records
         advertising expense with a corresponding credit to customer account
         balance as advertising is incurred.

         On July 20, 2002, the Financial Accounting Standards Board (FASB)
         issued SFAS 141, Business Combinations, and SFAS 142, Goodwill and
         Intangible Assets (the "Statements"). SFAS 141 is effective for all
         business combinations completed after June 30, 2002. SFAS 142 is
         effective for fiscal years beginning after December 15, 2002; however,
         certain provisions of this Statement apply to goodwill and other
         intangible assets acquired between July 1, 2002 and the effective date
         of SFAS 142. Major provisions of these Statements and their effective
         dates for the Company are as follows:

         o    all business combinations initiated after June 30, 2002 must use
              the purchase method of accounting. The pooling of interest method
              of accounting is prohibited except for transactions initiated
              before July 1, 2002.

         o    intangible assets acquired in a business combination must be
              recorded separately from goodwill if they arise from contractual
              or other legal rights or are separable from the acquired entity
              and can be sold, transferred, licensed, rented or exchanged,
              either individually or as part of a related contract, asset or
              liability.

         o    goodwill, as well as intangible assets with indefinite lives,
              acquired after June 30, 2002, will not be amortized. Effective
              January 1, 2002, all previously recognized goodwill and intangible
              assets with indefinite lives will no longer be subject to
              amortization.

                                       13
<PAGE>

         o    effective January 1, 2002 goodwill and intangible assets with
              indefinite lives will be tested for impairment annually and
              whenever there is an impairment indicator.

         o    all acquired goodwill must be assigned to reporting units for
              purposes of impairment testing and segment reporting.

         Although it is still reviewing the provisions of these Statements,
         management's preliminary assessment is that these Statements will not
         have a material impact on the Company's financial position or results
         of operations.

         In August 2002, the FASB issued statement of Financial Accounting
         Standards No. 144 ("SFAS No. 144") "Accounting for the Impairment of
         Disposal of Long-lived Assets". This statement is effective for fiscal
         years beginning after December 15, 2002. This supersedes Statement of
         Financial Accounting Standards No. 121, "Accounting for the Impairment
         of Long-lived Assets and for Long-lived Assets to Be Disposed of,"
         while retaining many of the requirements of such statement.

(p)      RECLASSIFICATIONS

         Certain reclassifications to 2001 reported amounts have been made in
         the financial statements to conform to 2002 presentation.

(q)      DEFERRED LICENSING FEES

         Up front costs incurred to obtain software licenses are amortized over
         the term of the license agreement. As of December 31, 2002 all deferred
         licensing fees were written off due to uncertainty as to realization
         (through relicensing, refund or other) of the asset.

Item 5.  CAPITAL STOCK AND STOCK OPTIONS

(a)      COMMON STOCK TRANSACTIONS

(i)      During 2000, the Company entered into a transaction whereby 1,000,000
         common shares were issued to Northstar Advertising Inc. in exchange for
         consulting services for Internet-based advertising through July 31,
         2001. The company recorded the value of the advertising to be received
         based upon the quoted market value of the common shares at the date of
         issuance, which amounted to $225,000. Northstar fulfilled its
         obligation pursuant to the agreement in the first quarter 2001.
         Accordingly, the balance of the prepaid advertising of approximately
         $200,000 was expensed in the first quarter 2001.

(ii)     During 2000, the Company issued 370,000 shares of common stock to
         Online Gaming System Ltd. pursuant to the OGS Agreement. Upon

                                       14
<PAGE>

         cancellation of the OGS Agreement effective December 31, 2000, the
         shares were returned by Online Gaming System Ltd. to the Company.

(iii)    During 2000, the Company issued 500,000 shares to an individual in
         exchange for investor relations services. This agreement was rescinded,
         and the shares returned to the Company prior to the commencement of any
         investor relations activities by the individual.

(iv)     In October 2002 Total Entertainment Canada Ltd. purchased 100% of the
         business rights domain names, trade marks and formulas ("the assets")
         owned by Rock Candy Cosmetics Inc.

         The purchase price of $678,000 was satisfied by issuance of
         4,520,000common shares of the company. Since Rock Candy is a privately
         held company the fair value of the assets is readily determinable. As a
         result, the assets were recoverable at a normal value.

(b)      STOCK OPTIONS

         The company does not have a formal stock option plan; however, the
         Company has issued stock options under letter agreements to certain
         individuals. The options granted had an exercise price at least equal
         to the fair value of the Company's stock, and expire after eight years.
         The options granted vest immediately.

         As permitted by SFAS No 123, the Company has elected to follow
         Accounting Principles Board Opinion No. 25 (APB No. 25.), Accounting
         for Stock Issued to Employees, method of determining compensation cost.
         Under APB No. 25, because the exercise price of the Company's employee
         stock options equals or exceeds the market price of the underlying
         stock on the date of grant, no compensation expense is recognized for
         options issued to employees or Directors.

Item 6.  COMMITMENTS AND CONTINGENCIES

(a)      OPERATING LEASES

         The Company signed a lease for office premises in June 1999 for a
         period of five years ending July 31, 2004 for a minimum annual rent of
         $22,000 plus operating costs. This lease has since been terminated.
         Additionally, the Company is committed under three operating leases for
         automobiles expiring on various dates in 2004. The approximate minimum
         annual rental commitments under these operating leases currently in
         effect at December 31, 2002 are as follows:

         Year ending December 31,
               2003                          112,000
               2004                           66,000
                                           ---------
         Total minimum payments            $ 178,000
                                           =========

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<PAGE>

         Rent expense for the years ended December 31, 2002 and December 31,
         2001 was approximately $ 82,460 and $157,000, respectively. The Company
         also paid for a portion of Intercapital Asset Management's leased
         facility in New Jersey under an informal agreement.

(b)      CAPITAL LEASE OBLIGATION

         The Company leases certain equipment under various capital leases which
         expired in 2002.

         Equipment recorded under capital leases was $100,427. Accumulated
         amortization of capital leases amounted to approximately $ 98,931 at
         December 31, 2001. Interest on capital leases amounted to approximately
         $4,000 and $ 4,000 for the years ended December 31, 2001 and 2002,
         respectively.

(c)      LITIGATION

         Robert W. Knoblock, Carole Knoblock and Jille Knoblock, officers,
         directors and/or principal shareholders of Kit, predecessor to the
         Company, have filed a lawsuit against the Company and certain
         affiliates. The lawsuit arises out of January 1998 reverse merger
         between Kit and Mint and restrictive legends on certain Company stock
         certificates issued to the Knoblock's in connection with this merger.
         The Knoblocks claim that they are shareholders and that the restrictive
         legends are improper as a matter of law, and that the Company and other
         defendants are liable to them, under different theories, for failure to
         remove the restrictive legends. Some defendants are defendants for
         purposes of some counts, but not others. There is another count raised
         against defendant S. Masselli only, for payment under a $175,000
         promissory note but the Company is not a defendant to that claim.
         Plaintiffs seek more than $5.5 million in damages, in addition to
         prejudgment interest, punitive damages and attorney's fees. Defendant
         Equity Transfer Services, Inc. also filed a cross-claim against the
         Company for defense costs and indemnification.

         The case has was settled September 24, 2002 under the following terms.
         Management will seek to recapitalize the company by $2,200,000 and with
         the per share price of the company averaging a minimum of $ 0.30.

         Subsequent to year and debts due to related parties were settled in
         exchange for 2,963,038 common shares as part of the recapitalization
         plan described above.

(d)      DISCOUNT CHARGE CARD LIMITED

         Discount charge Card Limited ("DCC") filed an arbitration proceeding
         against the Company and Intercapital Global in state court in Florida
         alleging breach of contract. In turn, the Company and Intercapital
         Global have filed an action, in state court in Florida, asserting that

                                       16
<PAGE>

         DCC and other parties violated agreements with the Company and
         Intercapital Global, as well as committed fraud. Both matters are
         currently pending. DCC is seeking damages of $400,000 in the
         arbitration proceeding. The damages under the Company's state court
         counter-claim have not yet been ascertained.

         In addition to the foregoing, the Company is involved from time to time
         in various claims and lawsuits in the ordinary course of business, none
         of which is expected, either singly, or in the aggregate, to have a
         material effect on the Company.

         Although the Company's management believes it has meritorious defenses,
         there can be no assurance that the Company will prevail. If the Company
         does not prevail, it may have a material adverse impact of the
         financial condition of the Company.

Item 7.  RELATED PARTY TRANSACTIONS

(a)      DEFERRED COMPENSATION

         During 1998 through 2000, the officers of the Company did not receive
         any cash compensation for their services. Two other employees including
         the brother of Mr. Masselli had similar arrangements. Such amounts
         totaled approximately $880,000 at December 31, 2000 and are deferred by
         the Company until such time as determined by the relevant officer. The
         deferred salaries shall be paid to such persons in cash or stock of the
         Company at such time as each officer may elect by written notice to the
         Company by the Board of Directors of the Company to be paid. The total
         amount of deferred officer salaries at December 31, 2002 was
         approximately $1,182,949. During the year ended December 31, 2002,
         $0.00 of officers salaries were paid in cash and $121,900 was deferred.
         (Note 6 (e))

(b)      DUE TO DIRECTORS AND STOCKHOLDERS

         From time to time, directors and stockholders of the Company have
         directly paid certain Company expenses. Such directors and stockholders
         have also supplied the Company with cash advances during 2001 and 2002.
         Such transactions have been recorded as due to directors and
         stockholders, and do not bear interest. There are no scheduled terms of
         repayment of such amounts.

(c)      HISTORY OF COMPANY

         Mr. Sandy Masselli had effective control of Mint Energy and affiliates
         and Intercapital Global. Mr. Sandy Masselli has effective control of
         Intercapital Asset Management Limited.

         Kit Farms was incorporated on April 22, 1993 and was engaged in the pet
         food business until 1995, when the remaining assets and liabilities

                                       17
<PAGE>

         were liquidated. From that date to January 28, 1998, Kit Farms was an
         inactive public company trading on the NASDAQ over-the-counter bulletin
         board market (bulletin boards).

         From 1996 through 1998, Mint Energy and its subsidiaries had spent
         several years exploring the possibilities of and developing software
         for a gaming and wagering operation accessible through the Internet.
         These entities had no revenues or employees during this period. Funds
         used by Mint Energy and subsidiaries to conduct these activities and
         develop the business were received as advances which are reflected as
         capital contributions from Sandy J. Masselli, Jr., Chairman of the
         Board (Mr. Masselli) and other shareholders of Mint Energy. At the time
         of the merger, the shareholders of Mint and Intercapital Global were
         identical (the Beneficial Owners).

         On January 28, 1998 and as amended, Kit Farms Inc. (Kit Farms) merged
         with Mint Energy including its subsidiaries, and the Beneficial Owners
         of Intercapital Global contributed their shares of Intercapital Global
         to Kit Farms. At the time of the Kit Farms merger, it had been
         purported that 7.37 million shares of Kit Farms were outstanding.
         Subsequent to the merger, the Company was informed that there may be
         additional shares outstanding, which were subsequently cancelled by the
         Company. This matter is currently under arbitration (see Note D-4).
         Notwithstanding the arbitration issue, the existing stockholders of Kit
         Farms were to continue to hold the 7.37 million shares of the common
         stock to the merged entity. Intercapital Global, in its role as agent
         the Beneficial Owners, received 104.8 million shares common stock of
         Kit Farms, with an aggregate value of approximately $2 million pursuant
         to the merger of Mint Energy into Kit Farms, and the contribution, by
         the Beneficial Owners, of their shares of Intercapital Global. The
         aggregate value was determined through negotiations among the Boards of
         Directors of Kit Farms and Mint Energy, in the absence of reliable
         quoted market prices on the bulletin boards.

         In February 1998, the Beneficial Owners voluntarily returned to
         treasury 57 million shares. The shares were subsequently cancelled by
         the Company. On February 3, 1998, the Company granted an option (the
         Global Option), to replace the returned shares, to acquire 57 million
         shares at $1.875 per share, exercisable at any time through February 3,
         2006, to Intercapital Global in its role as agent for the Beneficial
         Owners. Intercapital Global subsequently transferred the option to
         Intercapital Asset Management Limited, an investment management company
         controlled by Mr. Masselli, which had the same Beneficial Owners as
         Mint Energy and Intercapital Global.

         Intercapital Global, in its role as agent for the Beneficial Owners,
         subsequently distributed 47.8 million shares of common stock it
         received to its Beneficial Owners, which together with the Global
         Option were consideration for the merger.

         In June 1998, the Company issued an additional 537,000 shares to the
         former principal shareholders and directors of Kit Farms to facilitate
         the merger. The acquisition resulted in the owners and management of
         Mint Energy having effective control of the combined entity.

                                       18
<PAGE>

         Kit Farms changed its name to Total Entertainment Inc. on February 19,
         1998.

         Under accounting principles generally accepted in the United States of
         America, the acquisition is considered to be a capital transaction in
         substance, rather than a business combination. That is, the acquisition
         is equivalent to the issuance of stock by Mint Energy for the net
         monetary assets of Kit Farms, accompanied by a recapitalization, and is
         accounted for as a change in capital structure. Accordingly, the
         accounting for the acquisition is identical to that resulting from a
         reverse acquisition, except that no goodwill is recorded. Under reverse
         takeover accounting, the post-reverse-acquisition comparative
         historical financial statements of the legal acquire (Kit Farms) are
         those of the accounting acquirer (Mint Energy). Earnings per share
         (EPS) are calculated to reflect the Company's change in capital
         structure for all periods presented.

         Intercapital Global was organized in 1993 by Mr. Masselli, as an
         offshore private investment fund, which from time to time conducted
         certain investment activities not related to the online gaming business
         for the benefit of the Beneficial Owners. At the time, Mr. Masselli had
         voting and investment control over all of Intercapital Global's assets
         and control over all outstanding shares of capital stock issued by
         Intercapital Global. Intercapital Global later became a wholly-owned
         subsidiary of the Company when its Beneficial Owners contributed their
         shares to Kit Farms as part of the merger. At the time of the transfer
         of ownership, Intercapital Global held no assets or liabilities other
         than the gaming license.

Item 8.  INCOME TAXES

         Upon filing income tax returns, the Company could have net operation
         losses of approximately $2 million, which could be used to offset
         future United States taxable income. However, net operating losses and
         other deferred expenses generated in years for which no income tax
         returns have been filed, or are not accepted by the Internal Revenue
         Service, may not be available. The Company is consulting with legal
         council to determine a plan to become compliant. Deferred tax assets
         arising from these net operating loss carry forward, deferred
         compensation and certain accruals, if any, are fully reserved due to
         the uncertainty of future utilization. The Company did not have any
         significant taxable income in the United States or Canada for the years
         ended December 31, 2002 and 2001, and income generated in Antigua is
         not subject to income taxes.

         Changes in ownership resulting from transactions among our stockholders
         and sales of common stock by us, may limit annual realization of the
         tax net operating loss carry forwards that could become available under
         Section 382 of the Internal Revenue Code.

                                       19
<PAGE>

Item 9.  SUPPLEMENTARY CASH FLOW INFORMATION

(a)      NON-CASH TRANSACTION

         The Company issued Common Stock, with a fair value of $678,000, for the
         business rights, domain names, trademarks and formulas owned by Rock
         Candy Cosmetics Inc.

(b)      INTEREST AND TAXES PAID.

         During 2002 the Company paid approximately $0 of taxes and $4,000 of
         interest. During 2001 the Company paid approximately $0 of taxes and
         $4,000 of interest.

ITEM 10. EXHIBITS INDEX

The exhibits designated with an asterisk (*) have been previously filed with the
Commission and, pursuant to 17 C.F.R. Section 230.411, are incorporated by
reference to the document referenced in brackets following the descriptions of
such exhibits.


   3.1   Certificate of Incorporation and amendments*
   3.2   Bylaws*
  10.1   Merger Agreement dated November 17, 1997 entered into between Mint
         Energy Corporation and Kit Farms Inc., as amended by the First
         Amendment thereto dated January 15, 1998, and Plan of Merger/Exchange
         dated January 23, 1998*
  10.2   License Agreements dated April 9, 1999 and June 23, 1999 between
         Intercapital Global Fund, Ltd. and Online Gaming Systems, Ltd (f/k/a.
         Atlantic International Entertainment, Ltd.), and related Software
         Support Maintenance Agreements*
  10.3   Amended and Restated Purchase Agreement dated May 5, 1999 between
         Intercapital Global Fund, Ltd. and Summerhill Gaming Limited*
  10.4   Agreement dated August 18, 1998 between Intercapital Global Fund, Ltd.
         and MPACT Immedia Transaction Services Ltd.*
  10.5   Equipment Lease Agreement dated August 18, 1999 between Total
         Entertainment Canada, Ltd. (formerly Intercapital Canada Ltd.) and Dell
         Financial Services Canada Limited*
  10.6   Lease Agreement dated June 22, 1999 between Marine Properties Ltd., as
         Landlord, and Total Entertainment Canada, Ltd. (formerly Intercapital
         Canada Ltd.), as Tenant*
  10.7   Lease Agreement dated July 30, 1999 between Devonshire House, Ltd., as
         Landlord, and Intercapital Global Fund, Ltd., as Tenant*
  10.8   Revolving Credit Note dated May 5, 1999 payable to Summerhill Gaming
         Limited*
  10.9   Marketing and License Agreement dated January 14, 2000 between
         Intercapital Global and Online Gaming Systems, Ltd.*
  10.10  Information Services Provider Agreement dated February 1, 2000 between
         Intercapital Global and Caribbean Entertainment International, S.A.*
  10.11  Purchase Agreement dated March 1, 2000 between Intecapital Global and
         Netforfun.com Inc., and related Software Support Maintenance
         Agreement*

                                       20
<PAGE>

  10.12  Agreement with Summerhill Gaming Limited dated March 24, 2000 regarding
         debt to equity conversion*
  10.13  Form 8-K dated September 10,2002*
  10.14  Form 8-K dated November 18,2002*
  99.1   Certification of Sandy J. Masselli pursuant to 18 U.S.C. Section 1350,
         as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  99.2   Certification of Mitchell H. Brown pursuant to 18 U.S.C. Section
         1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
         2002.
  99.3   Certification of Richard B. Davis pursuant to 18 U.S.C. Section 1350,
         as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                       21
<PAGE>

                                   SIGNATURES

In accordance with Section 13 or15 (d) of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.


                                       TOTAL ENTERTAINMENT INC.


                                       By /s/ SANDY J. MASSELLI, JR.
                                          --------------------------------------
                                          Sandy J. Masselli, Jr.,
                                          Chairman of the Board, Chief Executive
                                          Officer Director


Dated July 30, 2003


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

SIGNATURE                                    TITLE                     DATE
---------                                    -----                     ----

/s/ MITCHELL BROWN                President, Chief Operating       July 30, 2003
---------------------------       Officer and Director

/s/ ROBERT D. BONNELL             Director                         July 30, 2003
---------------------------

/s/ RICHARD B. DAVIS              Director                         July 30, 2003
---------------------------       and Chief Financial Officer

/s/ JOHN J. MASSELLI              Director                         July 30, 2003
---------------------------


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