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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001297077-05-000120.txt : 20050805
<SEC-HEADER>0001297077-05-000120.hdr.sgml : 20050805
<ACCEPTANCE-DATETIME>20050805170753
ACCESSION NUMBER:		0001297077-05-000120
CONFORMED SUBMISSION TYPE:	10-Q/A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20040731
FILED AS OF DATE:		20050805
DATE AS OF CHANGE:		20050805

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHAMPIONS SPORTS INC
		CENTRAL INDEX KEY:			0000771856
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING & DRINKING PLACES [5810]
		IRS NUMBER:				521401755
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		10-Q/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-17263
		FILM NUMBER:		051003466

	BUSINESS ADDRESS:	
		STREET 1:		2500 WILSON BLVD
		STREET 2:		SUITE 305
		CITY:			ARLINGTON
		STATE:			VA
		ZIP:			22201
		BUSINESS PHONE:		703-526-04

	MAIL ADDRESS:	
		STREET 1:		1749 OLD MEADOW RD
		STREET 2:		STE 610
		CITY:			MCLEAN
		STATE:			VA
		ZIP:			22102

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INTERNATIONAL GROUP INC
		DATE OF NAME CHANGE:	19860319
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q/A
<SEQUENCE>1
<FILENAME>csi10qsb-a_073104.htm
<DESCRIPTION>CSPORTS 10-Q/A
<TEXT>
<html>
<head><meta content="text/html; charset=iso-8859-1">
<title>SECURITIES AND EXCHANGE COMMISSION</title>
</head>

<body >
<ul>
</ul>

<p align="center">
<b>SECURITIES AND EXCHANGE COMMISSION</b><p align="center">
<b>Washington, D.C.  20549</b><p align="center">
<b>FORM 10-QSB</b></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="637.333174" colspan="2" rowspan="1" >
<p>
Mark One</p>
</td>
</tr>
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
<p align="center">
[&nbsp;X&nbsp;]</p align="center">
</td>
<td width="515.999871" colspan="1" rowspan="1" >
<p>
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF</p>
</td>
</tr>
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="515.999871" colspan="1" rowspan="1" >
<p>
THE SECURITIES EXCHANGE ACT OF 1934</p>
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="515.999871" colspan="1" rowspan="1" >
<p>
<u>For the quarterly period ended         July 31, 2004    </u></p>
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="2" rowspan="1" >
<p align="center">
OR</p align="center">
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
<p align="center">
[&nbsp;&nbsp;&nbsp;&nbsp;]</p align="center">
</td>
<td width="515.999871" colspan="1" rowspan="1" >
<p>
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF</p>
</td>
</tr>
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
<p>
</p>
</td>
<td width="515.999871" colspan="1" rowspan="1" >
<p>
THE SECURITIES EXCHANGE ACT OF 1934</p>
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="515.999871" colspan="1" rowspan="1" >
<p>
For the transition period from    <u>          </u> to    <u>
</u></p>
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="515.999871" colspan="1" rowspan="1" >
<p>
Commission file number    <u>     0-17263                      </u></p>
</td>
</tr>
</table></div>
<p>
<p align="center">
<u>CHAMPIONS SPORTS, INC.</u><br>(Exact name of registrant as specified in its
charter)</p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="169.333291" colspan="1" rowspan="1" >
<p align="center">
<u>Delaware</u></p align="center">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="133.333300" colspan="1" rowspan="1" >
<p align="center">
<u>52-1401755</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="169.333291" colspan="1" rowspan="1" >
<p align="center">
(State or other jurisdiction of</p align="center">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="133.333300" colspan="1" rowspan="1" >
<p align="center">
(I.R.S. Employer</p align="center">
</td>
</tr>
<tr valign="top">
<td width="169.333291" colspan="1" rowspan="1" >
<p align="center">
organization)</p align="center">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="133.333300" colspan="1" rowspan="1" >
<p align="center">
Identification No.)</p align="center">
</td>
</tr>
</table></div>
<p>
<p align="center">
<u>Suite 214, 2420 Wilson Blvd., Arlington VA 22201</u><br>(Address of principal
executive offices)<br>(Zip code)<p align="center">
<u>(703) 526-0400</u><br>(Registrant&#8217;s telephone number, including area
code)</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="637.333174" colspan="1" rowspan="1" >
<p>
&nbsp;Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes    <u>x    </u>&nbsp;No    <u>
&nbsp;</u>&nbsp;&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="1" rowspan="1" >
<p>
&nbsp;As of September 13, 2004 the Registrant had a total of 8,824,658 shares of
common stock outstanding.</p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><p align="center">
<b>CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</b><p align="center">
<b>JULY 31, 2004 AND 2003</b></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
<p align="center">
<b>CHAMPIONS SPORTS, Inc.</b><br><b>FORM 10-QSB</b><p align="center">
<u>INDEX</u></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="3" rowspan="1" >
<p>
</p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p>
<u>Page</u></p>
</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
<p>
Part I. </p>
</td>
<td width="211.999947" colspan="2" rowspan="1" >
<p>
Financial Information</p>
</td>
<td width="374.666573" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="3" rowspan="1" >
<p>
Item 1.&nbsp;&nbsp;Financial Statements</p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="587.999853" colspan="5" rowspan="1" >
<p>
Condensed Consolidated Balance Sheets as of</p>
</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="211.999947" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;  July 31, 2004(unaudited) and</p>
</td>
<td width="374.666573" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="211.999947" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;  April 30, 2004 (audited)</p>
</td>
<td width="297.333259" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p>
4</p>
</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="587.999853" colspan="5" rowspan="1" >
<p>
Condensed Consolidated Statements of Operations:</p>
</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="211.999947" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;  Three months ended  </p>
</td>
<td width="374.666573" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="3" rowspan="1" >
<p>
&nbsp;&nbsp;  July 31, 2004, and  July 31, 2003,  (unaudited)   </p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p>
5</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="587.999853" colspan="5" rowspan="1" >
<p>
Condensed Consolidated Statements of Cash Flows:</p>
</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="587.999853" colspan="5" rowspan="1" >
<p>
&nbsp;&nbsp;  Three months ended July 31, 2004, and</p>
</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="211.999947" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;  July 31,2003 (unaudited)</p>
</td>
<td width="297.333259" colspan="1" rowspan="1" >
<p>
</p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p>
6</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="3" rowspan="1" >
<p>
Notes to Condensed Consolidated Financial Statements </p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p>
7 - 18</p>
</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="3" rowspan="1" >
<p>
Item 2.&nbsp;&nbsp;Management&#8217;s Discussions and Analysis of Financial
Condition </p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="89.333311" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="467.999883" colspan="2" rowspan="1" >
<p>
and Results of Operations</p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p>
19</p>
</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="211.999947" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="297.333259" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="3" rowspan="1" >
<p>
Item 4.&nbsp;&nbsp;Controls and Procedures</p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p>
21</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
<p>
Part II.</p>
</td>
<td width="211.999947" colspan="2" rowspan="1" >
<p>
Other Information and Signatures</p>
</td>
<td width="374.666573" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="3" rowspan="1" >
<p>
Item 4.&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders</p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p>
22</p>
</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="3" rowspan="1" >
<p>
Item 6. &nbsp;&nbsp;Exhibits and Reports on Form 8-K</p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p>
22</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="211.999947" colspan="2" rowspan="1" >
<p>
Signatures</p>
</td>
<td width="297.333259" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p>
23</p>
</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="558.666527" colspan="4" rowspan="1" >
<p>
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
</p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p>
24</p>
</td>
</tr>
<tr valign="top">
<td width="558.666527" colspan="4" rowspan="1" >
<p>
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
</p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p>
26</p>
</td>
</tr>
<tr valign="top">
<td width="558.666527" colspan="4" rowspan="1" >
<p>
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
</p>
</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p>
28</p>
</td>
</tr>
</table></div>
<p>
<p align="center">
3</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="697.333159" colspan="3" rowspan="1" >
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="697.333159" colspan="3" rowspan="1" >
<p align="center">
<b>CONDENSED CONSOLIDATED BALANCE SHEETS</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="697.333159" colspan="3" rowspan="1" >
<p align="center">
<b>JULY 31, 2004 AND APRIL 30, 2004 </b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="697.333159" colspan="3" rowspan="1" >
<p align="center">
<b>ASSETS</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center">
<b>(Restated)</b></p align="center">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="center">
<b>(Restated)</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center">
<b>July 31,</b></p align="center">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="center">
<b>April 30,</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2004</b></font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2004</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>(UNAUDITED)</b></font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>(AUDITED)</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>CURRENT ASSETS</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Cash and cash equivalents</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
$       127,131 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
$   120,116 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Accounts receivable</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,713 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Inventories</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29,323 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30,349 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Prepaid expenses</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,886
&nbsp;</font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,750 &nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>Total current assets</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;167,340 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;179,928 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Property and equipment, net</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;188,834 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;200,939 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Deposits</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,052
&nbsp;</font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,052
&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>TOTAL ASSETS</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $       367,226 &nbsp;</font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $   391,919 &nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="697.333159" colspan="3" rowspan="1" >
<p align="center">
<b>LIABILITIES AND STOCKHOLDERS&#8217; (DEFICIT)</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>CURRENT LIABILITIES</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Accounts payable </p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
$         92,248 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
$      92,758 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Dividend payable on preferred stock</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350,460 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350,460 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Other accrued expenses</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;192,309 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;146,116 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Current portion of deferred lease concession</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,746 &nbsp;</font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,836 &nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>Total current liabilities</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;636,763
&nbsp;</font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;592,170
&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>TOTAL LIABILITIES</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;636,763
&nbsp;</font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;592,170
&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>COMMITMENTS AND CONTINGENCIES</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>STOCKHOLDERS&#8217; (DEFICIT)</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Preferred stock, $10 par value; 56,075 shares authorized;</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32,450 shares issued and outstanding,
respectively</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;324,500 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;324,500 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Common stock, $.001 par value; 50,000,000 shares authorized </p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,824,658  shares issued and
outstanding, respectively</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,825 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,825 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Additional paid-in capital</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,850,349 &nbsp;</p align="right">
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right">
5,850,349 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
Accumulated deficit</p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6,453,211)</font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">   (6,383,925)</font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders&#8217;
(deficit)</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(269,537)</font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(200,251)</font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p>
<b>TOTAL LIABILITIES AND STOCKHOLDERS&#8217; (DEFICIT)</b></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $       367,226 &nbsp;</font></p>
</td>
<td width="126.666635" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $    391,919 &nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="126.666635" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p align="center">
<p align="center">
The accompanying notes are an integral part of these condensed consolidated
financial statements.<p align="center">
4</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
</p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="686.666495" colspan="3" rowspan="1" >
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="686.666495" colspan="3" rowspan="1" >
<p align="center">
<b>Consolidated Statements of Operations</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="686.666495" colspan="3" rowspan="1" >
<p align="center">
For the three months ended</p align="center">
</td>
</tr>
<tr valign="top">
<td width="686.666495" colspan="3" rowspan="1" >
<p align="center">
July 31,  2004 and 2003 (Unaudited)</p align="center">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="263.999934" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="center">
<b>(Restated)</b></p align="center">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2004</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2003</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Revenue</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Food and beverage</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;451,712 &nbsp;</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;532,647 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Merchandise, memorabilia, and consulting fees</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,153 &nbsp;</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,163 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Other income</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,245 &nbsp;</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,385&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;457,092
&nbsp;</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;543,195
&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Costs and expenses</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Cost of food and beverage sales</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;146,115 &nbsp;</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;159,052 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Cost of merchandise and memorabilia</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,462 &nbsp;</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,562 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Restaurant payroll and related costs</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;161,988 &nbsp;</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;179,402 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Restaurant occupancy costs</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61,765 &nbsp;</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67,366 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Other restaurant costs</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;84,181 &nbsp;</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100,127 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
General and administrative
</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;58,762&nbsp;</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;64,929 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Depreciation and amortization</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,105 &nbsp;</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,105 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Interest</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   &nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;526,378
&nbsp;</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;590,543
&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Operating income (loss) before income tax expense</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(69,286)</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(47,348)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Income tax expense</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   &nbsp;</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   &nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Net loss</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(69,286)</p align="right">
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(47,348)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Less preferred stock dividends</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
- -&nbsp;</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (15,938)</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Net income (loss) available to common</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Stockholders</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(69,286)</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(63,286)</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Basic earnings (loss) per share</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.01)</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(0.01)</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
<p>
Weighted average of shares outstanding</p>
</td>
<td width="134.666633" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">8,824,658&nbsp;</font></p>
</td>
<td width="127.999968" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">8,514,459&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="422.666561" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="134.666633" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="127.999968" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p align="center">
The accompanying notes are an integral part of the consolidated financial
statements.<p align="center">
5</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
</p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="659.999835" colspan="3" rowspan="1" >
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="659.999835" colspan="3" rowspan="1" >
<p align="center">
<b>CONDENSED CONSOLIDATED STATEMETS OF CASHFLOWS </b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="659.999835" colspan="3" rowspan="1" >
<p align="center">
<b>For the three months ended July 31,  2004 and 2003
(Unaudited)</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="659.999835" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="center">
<b>(Restated)</b></p align="center">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="center">
<b>2004</b></p align="center">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center">
<b>2003</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Cash flows from operating activities:</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Net loss </p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(69,286)</p align="right">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(47,348)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Adjustments to reconcile net income to net</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
cash provided (used) by operating activities:</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Depreciation and amortization</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,105 &nbsp;</p align="right">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,104 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Changes in assets and liabilities:</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,713 &nbsp;</p align="right">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,026 &nbsp;</p align="right">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,179)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4,136)</p align="right">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;560 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(510)</p align="right">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;317 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other accrued expenses</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;46,193&nbsp;</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,551
&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total adjustments </p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;77,391&nbsp;</p align="right">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24,353&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Net cash provided (used) by</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
operating activities</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,105 &nbsp;</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22,995)</font></p>
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Cash flows from investing activities:</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Purchases of property and equipment</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   &nbsp;</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2,930)</font></p>
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Net cash (used) by investing activities</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   &nbsp;</p align="right">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2,930)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Cash flow from financing activities:</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Principal payment on capital lease</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,090)</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,817)</font></p>
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Net increase (decrease) in cash and</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
cash equivalents</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,015 &nbsp;</p align="right">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(27,742)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Cash and cash equivalents at beginning of year</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;120,116
&nbsp;</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;195,101
&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Cash and cash equivalents at July 31</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;127,131
&nbsp;</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;167,359
&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Supplemental disclosures of cash flow information:</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
<p>
Cash paid during the year for interest</p>
</td>
<td width="179.999955" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   &nbsp;</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   &nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="318.666587" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p align="center">
The accompanying notes are an integral part of the consolidated financial
statements.<p align="center">
6</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 1-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>ORGANIZATION AND BASIS OF
PRESENTATION</u></b></p>
<p style="margin-left:80">Champions Sports, Inc., (the &#8220;Company&#8221;) a
Delaware corporation, promotes a sports theme restaurant bar concept through
Company owned and licensed operations. The Company sold the rights to the
Champions brand to Marriott International, Inc. (Marriott) and became a licensee
of Champions Sports Bar Restaurants. Substantially all memorabilia sales are to
Marriott. At July 31, 2004 and 2003, respectively, the Company through its
subsidiaries, owns and licenses, without a royalty fee, one Champions Sports Bar
Restaurant in San Antonio, Texas.</p><p>
</p>
<p style="margin-left:80">The condensed consolidated unaudited interim financial
statements included herein have been prepared, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission.  The condensed
consolidated financial statements and notes are presented as permitted on Form
10-QSB and do not contain information included in the Company&#8217;s annual
consolidated statements and notes.  Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.  The results for the three months ended July 31, 2004
may not be indicative of the results for the entire year.</p><p>
</p>
<p style="margin-left:80">These statements reflect all adjustments, consisting
of normal recurring adjustments, which in the opinion of management, are
necessary for fair presentation of the information contained herein.</p><p>
</p>
<p style="margin-left:80">The Company has amended its previously issued
condensed consolidated financial statements for the three months ended July 31,
2004.  The Company has amended these condensed consolidated financial statements
to recognize an additional $40,330 in officer&#8217;s compensation and related
payroll tax expense for the three months ended July 31, 2004.  This transaction
resulted in an increase in net loss applicable to common shares of $40,330 for
the three months ended July 31, 2004 to a net loss of $69,286 as restated, and
an increase in the accumulated deficit to $6,453,211.</p><p>
<p>
<b>NOTE 2-</b>  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES</u></b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Principles
of Consolidation</u></b></p>
<p style="margin-left:80">The condensed consolidated financial statements
include the accounts of the Company and its subsidiaries. All material
intercompany transactions have been eliminated in consolidation.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p><p>
<p align="center">
7</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 2-  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Property
and Equipment</u></b></p>
<p style="margin-left:80">Property and equipment are stated at cost.
Depreciation and amortization is computed from the date property is placed in
service using the straight-line method over estimated useful lives as
follows:<br></p><div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="253.333270" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Life</font></p>
</td>
</tr>
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="253.333270" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
<p>
Furniture and equipment</p>
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="253.333270" colspan="1" rowspan="1" >
<p align="center">
5-15 years</p align="center">
</td>
</tr>
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="253.333270" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
<p>
Leasehold improvements</p>
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="253.333270" colspan="1" rowspan="1" >
<p align="center">
Remaining term of the lease</p align="center">
</td>
</tr>
</table></div>
&nbsp;	<p>
</p>
<p style="margin-left:80">Depreciation and amortization expense was $12,105 for
the three months ended July 31, 2004 and 2003, respectively. </p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Inventories</u></b></p>
<p style="margin-left:80">Inventories consist of goods and supplies held for
sale in the ordinary course of business and are stated at the lower of cost,
determined on the first-in-first-out basis, or market. The components of
inventories at July 31, 2004 were as
follows:<br></p><div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="255.999936" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="1" rowspan="1" >
<p align="center">
2004</p align="center">
</td>
</tr>
<tr valign="top">
<td width="255.999936" colspan="1" rowspan="1" >
<p>
Restaurant food and beverage</p>
</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="125.333302" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,188 </p align="right">
</td>
</tr>
<tr valign="top">
<td width="255.999936" colspan="1" rowspan="1" >
<p>
Promotional merchandise for sale to</p>
</td>
<td width="50.666654" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="255.999936" colspan="1" rowspan="1" >
<p>
&nbsp;restaurant customers</p>
</td>
<td width="50.666654" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,135 </p align="right">
</td>
</tr>
<tr valign="top">
<td width="255.999936" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="125.333302" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29,323 </p align="right">
</td>
</tr>
</table></div>
&nbsp;	<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Net
(Loss) Per Share</u></b></p>
<p style="margin-left:80">Historical net (loss) per common share is computed
using the weighted average number of common shares outstanding.  Diluted
earnings per share (EPS) includes additional dilution from common stock
equivalents, such as stock issuable pursuant to the exercise of stock options
and warrants.  Common stock equivalents were not included in the computation of
diluted earnings per share when the Company reported a loss because to do so
would be antidilutive for periods presented.</p><p>
<p align="center">
8</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 2-  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Net
(Loss) Per Share (continued) </u></b></p>
<p style="margin-left:80">The following is a reconciliation of the computation
for basic and diluted EPS:</p><p>
</p>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
<p align="center">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Restated)</p align="center">
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
<p align="center">
<b>July</b></p align="center">
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="center">
<b>July</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2004</b></font></p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2003</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="73.333315" colspan="1" rowspan="1" >
<p>
Net loss</p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="119.999970" colspan="1" rowspan="1" bgcolor=>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(69,286)</font></p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(63,286)</font></p>
</td>
</tr>
<tr valign="top">
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="251.999937" colspan="3" rowspan="1" >
<p>
Weighted-average common shares</p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="2" rowspan="1" >
<p>
Outstanding (Basic)</p>
</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,824,658 &nbsp;</p align="right">
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,514,459 &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="251.999937" colspan="3" rowspan="1" >
<p>
Weighted-average common stock</p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="2" rowspan="1" >
<p>
Equivalents</p>
</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock options</p>
</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
<p align="right">
- - &nbsp;</p align="right">
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="right">
- - &nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warrants</p>
</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">- &nbsp;</font></p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">- &nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="251.999937" colspan="3" rowspan="1" >
<p>
Weighted-average common shares</p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="2" rowspan="1" >
<p>
Outstanding (Diluted)</p>
</td>
<td width="103.999974" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="119.999970" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,824,658
&nbsp;</font></p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,514,459
&nbsp;</font></p>
</td>
</tr>
</table></div>
&nbsp;	<p style="margin-left:80">Options and warrants outstanding to purchase
stock were not included in the computation of diluted EPS for July 31, 2004 and
2003 because inclusion would have been antidilutive.</p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Cash
and Cash Equivalents</u></b></p>
<p style="margin-left:80">For purposes of the condensed consolidated statements
of cash flow, the Company considers all highly liquid debt instruments purchased
with a maturity of three months or less, unless restricted as to use, to be cash
equivalents. At various times throughout the periods the Company had amounts on
deposit at financial institutions in excess of federally insured limits.</p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Income
Taxes</u></b></p>
<p style="margin-left:80">The Company has adopted the provisions of Statement of
Financial Accounting Standards No. 109 (the Statement), Accounting for Income
Taxes.  The Statement requires an asset and liability approach for financial
accounting and reporting for income taxes, and the recognition of deferred tax
assets and liabilities for the temporary differences between the financial
reporting bases and tax bases of the Company&#8217;s assets and liabilities at
enacted tax rates expected to be in effect when such amounts are realized or
settled.  </p><p>
<p align="center">
9</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Fair
Value of Financial Instruments</u></b></p>
<p style="margin-left:80">The carrying amounts of the Company&#8217;s financial
instruments, including cash and cash equivalents, accounts payable, and accrued
expenses, approximate fair values because of the short maturities of these
instruments.</p><p>
<p>
<!--<a name="OLE_LINK2"></a>-->&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Options
for Common Stock</u></b></p>
<p style="margin-left:80">The Company uses the intrinsic value method to account
for options granted to executive officers, directors and other key employees for
the purchase of common stock. No compensation expense is recognized on the grant
date, since at that date, the option price equals or is higher than the market
price of the underlying common stock. The Company discloses the pro forma effect
of accounting for stock options under the fair value method. The Company uses
the fair value method to account for options granted to advisors for the
purchase of common stock. </p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Stock-Based
Compensation</u></b></p>
<p style="margin-left:80">Employee stock awards under the Company&#8217;s
compensation plans are accounted for in accordance with Accounting Principles
Board Opinion  No. 25 (&#8220;APB 25&#8221;), &#8220;Accounting for Stock Issued
to Employees&#8221;, and related interpretations. The Company provides the
disclosure requirements of Statement of Financial Accounting Standards No. 123,
&#8220;Accounting for </p><p>
</p>
<p style="margin-left:80">Stock-Based Compensation&#8221; (&#8220;SFAS
123&#8221;), and related interpretations.  Stock-based awards to non-employees
are accounted for under the provisions of SFAS 123 and has adopted the enhanced
disclosure provisions of SFAS No. 148 &#8220;Accounting for Stock-Based
Compensation- Transition and Disclosure, an amendment of SFAS No.
123&#8221;.</p><p>
<p align="center">
10</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Stock-Based
Compensation</u></b></p>
<p style="margin-left:80">The Company measures compensation expense for its
employee stock-based compensation using the intrinsic-value method.  Under the
intrinsic-value method of accounting for stock-based compensation, when the
exercise price of options granted to employees is less than the estimated fair
value of the underlying stock on the date of grant, deferred compensation is
recognized and is amortized to compensation expense over the applicable vesting
period. In each of the periods presented, the vesting period was the period in
which the options were granted. </p><p>
</p>
<p style="margin-left:80">The Company measures compensation expense for its
non-employee stock-based compensation under the Financial Accounting Standards
Board (FASB) Emerging Issues Task Force (EITF) Issue No. 96-18,
&#8220;Accounting for Equity Instruments that are Issued to Other Than Employees
for Acquiring, or in Conjunction with Selling, Goods or Services&#8221;.  The
fair value of the option issued is used to measure the transaction, as this is
more reliable than the fair value of the services received.  The fair value is
measured at the value of the Company&#8217;s common stock on the date that the
commitment for performance by the counterparty has been reached or the
counterparty&#8217;s performance is complete. The fair value of the equity
instrument is charged directly to compensation expense and additional paid-in
capital.</p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Recent
Accounting Pronouncements</u></b></p>
<p style="margin-left:80">On October 3, 2001, the FASB issued Statement of
Financial Accounting Standards No. 144, &#8220;Accounting for the Impairment or
Disposal of Long-Lived Assets&#8221;  (&#8220;SFAS 144&#8221;), that is
applicable to financial statements issued for fiscal years beginning after
December 15, 2001.  The FASB&#8217;s new rules on asset impairment supersede
SFAS 121, &#8220;Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of,&#8221; and portions of Accounting
Principles Board Opinion 30, &#8220;Reporting the Results of Operations.&#8221;
This Standard provides a single accounting model for long-lived assets to be
disposed of and significantly changes the criteria that would have to be met to
classify an asset as held-for-sale. Classification as held-for-sale is an
important distinction since such assets are not depreciated and are stated at
the lower of fair value and carrying amount.  </p><p>
<p align="center">
11</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Recent
Accounting Pronouncements (continued)</u></b></p>
<p style="margin-left:80">This Standard also requires expected future operating
losses from discontinued operations to be displayed in the period (s) in which
the losses are incurred, rather than as of the measurement date as presently
required. The adoption of SFAS No. 144 did not have a significant impact on the
Company&#8217;s results of operations or financial position.</p><p>
</p>
<p style="margin-left:80">In April 2002, the FASB issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No.
13, and Technical Corrections.  This statement rescinds SFAS No. 4, Reporting
Gains and Losses from Extinguishment of Debt, and an amendment of that
statement, SFAS No. 44, Accounting for Intangible Assets of Motor Carriers, and
SFAS No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.
This statement amends SFAS No. 13, Accounting for Leases, to eliminate
inconsistencies between the required accounting for sales-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sales-leaseback transactions. </p><p>
</p>
<p style="margin-left:80">Also, this statement amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings, or describe their applicability under changed conditions.  Provisions
of SFAS No. 145 related to the rescissions of SFAS No. 4 were effective for the
Company on November 1, 2002 and provisions affecting SFAS No. 13 were effective
for transactions occurring after May 15, 2002.  The adoption of SFAS No. 145 did
not have a significant impact on the Company&#8217;s results of operations or
financial position.</p><p>
</p>
<p style="margin-left:80">In June 2003, the FASB issued SFAS No. 146, Accounting
for Costs Associated with Exit or Disposal Activities.  This statement covers
restructuring type activities beginning with plans initiated after December 31,
2002.  Activities covered by this standard that are entered into after that date
will be recorded in accordance with provisions of SFAS No. 146.  The adoption of
SFAS No. 146 did not have a significant impact on the Company&#8217;s results of
operations or financial position.</p><p>
<p align="center">
12</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Recent
Accounting Pronouncements</u> (Continued)</b></p>
<p style="margin-left:80">In December 2002, the FASB issued Statement No. 148,
&#8220;Accounting for Stock-Based Compensation-Transition and Disclosure, an
amendment of FASB Statement No. 123&#8221;(&#8220;SFAS 148&#8221;). SFAS 148
amends FASB Statement No. 123, &#8220;Accounting for Stock-Based
Compensation,&#8221; to provide alternative methods of transition for an entity
that voluntarily changes to the fair value based method of accounting for
stock-based employee compensation. It also amends the disclosure provisions of
that Statement to require prominent disclosure about the effects on reported net
income of an entity&#8217;s accounting policy decisions with respect to
stock-based employee compensation. Finally, this Statement amends Accounting
Principles Board (&#8220;APB&#8221;) Opinion No. 28, &#8220;Interim Financial
Reporting&#8221;, to require disclosure about those effects in interim financial
information. SFAS 148 is effective for financial statements for fiscal years
ending after December 15, 2002. The Company will continue to account for
stock-based employee compensation using the intrinsic value method of APB
Opinion No. 25, &#8220;Accounting for Stock Issued to Employees,&#8221; but has
adopted the enhanced disclosure requirements of SFAS 148.</p><p>
</p>
<p style="margin-left:80">In April 2003, the FASB issued SFAS Statement No. 149,
"Amendment of Statement 133 on Derivative Instruments and Hedging Activities",
which amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging activities
under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities.  This Statement is effective for contracts entered into or modified
after June 30, 2003, except for certain hedging relationships designated after
June 30, 2003.  Most provisions of this Statement should be applied
prospectively.  The adoption of this statement did not have a significant impact
on the Company&#8217;s results of operations or financial position.</p><p>
</p>
<p style="margin-left:80">In May 2003, the FASB issued SFAS Statement No. 150,
"Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity". This Statement establishes standards for how an issuer
classifies and measures certain financial instruments with characteristics of
both liabilities and equity.  It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances).</p><p>
<p align="center">
13</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Recent
Accounting Pronouncements</u> (Continued)</b></p>
<p style="margin-left:80">This statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003, except for
mandatorily redeemable financial instruments of nonpublic entities, if
applicable.  It is to be implemented by reporting the cumulative effect of a
change in an accounting principle for financial instruments created before the
issuance date of the Statement and still existing at the beginning of the
interim period of adoption.  The adoption of this statement did not have a
significant impact on the Company&#8217;s results of operations or financial
position.</p><p>
</p>
<p style="margin-left:80">In November 2002, the FASB issued Interpretation No.
45 ("FIN 45"), Guarantor&#8217;s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others.  FIN 45
requires a company, at the time it issues a guarantee, to recognize an initial
liability for the fair value of obligations assumed under the guarantees and
elaborates on existing disclosure requirements related to guarantees and
warranties.  The recognition requirements are effective for guarantees issued or
modified after December 31, 2002 for initial recognition and initial measurement
provisions.  The adoption of FIN 45 did not have a significant impact on the
Company&#8217;s results of operations or financial position.</p><p>
</p>
<p style="margin-left:80">In January 2003, the FASB issued FASB Interpretation
No. 46 ("FIN 46"), Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51.  FIN 46 requires certain variable interest
entities to be consolidated by the primary beneficiary of the entity if the
equity investors in the entity do not have the characteristics of a controlling
financial interest or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated financial support from
other parties.  FIN 46 is effective for all new variable interest entities
created or acquired after January 31, 2003.  For variable interest entities
created or acquired prior to February 1, 2003, the provisions of FIN 46 must be
applied for the first interim or annual period beginning after June 15, 2003.
The adoption of FIN 46 did not have a significant impact on the Company&#8217;
results of operations or financial
position.<br><br><br><br><br><br>14</p><div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Reclassifications</u></b></p>
<p style="margin-left:80">Certain amounts for the three months ended July 31,
2003 have reclassified to conform to the presentation of the July 31, 2004
amounts.  The reclassifications have no effect on net loss for the three months
ended July 31, 2003.</p><p>
<p>
<b>NOTE 3-</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>COMMITMENTS AND
CONTINGENCIES</u></b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Operating
leases&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</i></p>
<p style="margin-left:80">The Company leases, as tenant, restaurant space under
an operating lease which expires June 30, 2005. The lease escalates for
increases in the landlord&#8217;s expenses for increases in the Consumer Price
Index, and requires additional rentals based on a percentage of restaurant sales
over a defined amount. The lease grants the Company certain concessions, which
are amortized to lease expense over the term of the lease.</p><p>
</p>
<p style="margin-left:80">&nbsp;&nbsp;Rental expense charged to expense during
the three months ended July 31, 2004 and 2003 was $50,121 and $55,768,
respectively. Future minimum payments under the noncancellable restaurant lease
as of July 31, 2004 are as
follows:<br></p><div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="106.666640" colspan="1" rowspan="1" >
<p align="center">
2005</p align="center">
</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="105.333307" colspan="1" rowspan="1" >
<p align="right">
$    &nbsp;128,480</p align="right">
</td>
</tr>
</table></div>
&nbsp;	<p>
<b>NOTE 4-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>CAPITAL LEASE OBLIGATION</u></b></p>
<p style="margin-left:80">The Company leased equipment under a capital lease.
The equipment cost of $32,286 was amortized over its useful life and such
amortization was included in the depreciation and amortization expense for 2003.
During 2003, the lease expired and the Company purchased the equipment.</p><p>
<p>
<b>NOTE 5-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>MARRIOTT LICENSE</u></b></p>
<p style="margin-left:80">The Company is an exclusive supplier of sports
memorabilia and a consultant to all new Champions Sports Bars located in
Marriott and Renaissance Hotels worldwide. </p><p>
<p align="center">
15</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 6-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>OTHER ACCRUED EXPENSES</u></b></p>
<p style="margin-left:80">This account primarily represents accrued
officer&#8217;s payroll and related payroll taxes totaling $147,877 as of July
31, 2004.</p><p>
<p>
<b>NOTE 7-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>STOCKHOLDERS&#8217; DEFICIT</u>
</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Common
Stock</u> </b></p>
<p style="margin-left:80">The Company has 50,000,000 shares authorized and
8,824,658 shares issued and outstanding at July 31, 2004.</p><p>
</p>
<p style="margin-left:80">There were no issuances of common stock during the
three months ended July 31, 2004 and 2003, respectively.</p><p>
..<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Preferred
Stock </u></b></p>
<p style="margin-left:80">The Company has 56,075 shares of preferred stock
authorized and 32,450 shares issued and outstanding at July 31, 2004. </p><p>
</p>
<p style="margin-left:80">The Series A preferred stock requires a dividend of 12
percent per annum, and the dividends are are to be accrued on the
Company&#8217;s book if not paid. The dividend may be paid in common stock of
the Company at the Company&#8217;s discretion. The number of shares comprising
the dividend paid in common stock shall be determined by dividing $1.20 by the
closing bid price for the common stock on the payment date. The Series A
preferred stock is preferred in liquidation or dissolution up to the amount of
their par value ($10 per share). The Series A preferred stock in 2004 converted
into 15 shares of the Company&#8217;s common stock. There were no conversions in
2003.</p><p>
</p>
<p style="margin-left:120">For each of the nine fiscal years ended April 30,
2004, the Company deferred payment of the annual dividend on the Series A
preferred stock. For the quarters ended July 31, 2004 and 2003, the deferral was
$0 and $15,938, respectively. Preferred stock dividends in arrears at July 31,
2004 aggregated $350,460 ($10.83 per preferred share).  Effective November 2003,
pursuant to a board resolution, the Company cancelled its payment and/or
accruing of preferred stock dividends. </p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Common
Stock Options</u></b></p>
<p style="margin-left:80">The Company in 1993 adopted a stock option plan, which
expired on August 2, 2002.  No options were exercised under the plan.  All
options granted by the Company were granted pursuant to board resolutions and
not under the stock option plan.  </p><p>
<p>
<p align="center">
16</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 8-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>STOCK AGREEMENT</u></b></p>
<p style="margin-left:80">In January 2002, the Company entered into a
subscription agreement to sell 4,000,000 shares of common stock to an unrelated
party at $0.125 per share for a total of $500,000.</p><p>
</p>
<p style="margin-left:80">The purchaser paid $20,000 at the closing of the
agreement and provided a promissory note for $480,000. The note is non-interest
bearing and requires twenty-four monthly payments of $20,000 each. The note is
secured by the stock issued and the transfer of such stock is restricted until
the note is paid off. Certain other restrictions regarding the transfer of the
stock also exist.</p><p>
</p>
<p style="margin-left:80">The purchaser paid a total of $55,000 during the year
ended April 30, 2002 and $5,000 during the year ended April 30, 2003, and has
defaulted under the payment terms of the note. The stock has not been issued,
and the agreement was cancelled.  </p><p>
<p>
<b>NOTE 9-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>GOING CONCERN</u></b></p>
<p style="margin-left:80">As shown in the accompanying condensed consolidated
financial statements, the Company has sustained net operating losses for the
three months ended July 31, 2004 and 2003, and has sustained large accumulated
deficits. In addition, the Company is in search of acquiring a business, or
finding a suitable merger candidate. </p><p>
</p>
<p style="margin-left:80">Management has restructured the Company and is
continuing to search for a more profitable company to acquire. </p><p>
</p>
<p style="margin-left:80">The Company&#8217;s future success is dependent upon
its ability to achieve profitable operations and generate cash from operating
activities, and upon additional financing. There is no guarantee that the
Company will be able to raise enough capital or generate revenues to sustain its
operations.</p><p>
</p>
<p style="margin-left:80">The condensed consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.</p><p>
<p>
<b>NOTE 10-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>PROVISION FOR INCOME
TAXES</u></b></p>
<p style="margin-left:80">Deferred income taxes will be determined using the
liability method for the temporary differences between the financial reporting
basis and income tax basis of the Company&#8217;s assets and liabilities.
Deferred income taxes will be measured based on the tax rates expected to be in
effect when the temporary differences are included in the Company&#8217;s
consolidated tax return.  Deferred tax assets and liabilities are recognized
based on anticipated future tax consequences attributable to differences between
financial statement carrying amounts of assets and liabilities and their
respective tax bases.</p><p>
</p>
<p style="margin-left:80">At July 31, 2004, deferred tax assets consist of the
following: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                       </p><p>
</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="197.333284" colspan="1" rowspan="1" >
<p>
Deferred tax asset         </p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
1,456,000&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="197.333284" colspan="1" rowspan="1" >
<p>
Less:  valuation allowance</p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,456,000)</font></p>
</td>
</tr>
<tr valign="top">
<td width="197.333284" colspan="1" rowspan="1" >
<p>
Net deferred tax asset</p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-0-&nbsp;</font></p>
</td>
</tr>
</table></div>
<p>
<p align="center">
17</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>JULY 31, 2004 AND 2003</b><p>
<b>NOTE 10-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>PROVISION FOR INCOME TAXES</u>
(CONTINUED)</b></p>
<p style="margin-left:80">At July 31, 2004, the Company had federal net
operating loss carryforwards in the approximate amounts of $4,160,000 available
to offset future taxable income.  The Company established valuation allowances
equal to the full amount of the deferred tax assets due to the uncertainty of
the utilization of the operating losses in future periods.</p><p>
<p>
<b>NOTE 11-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>RESTATEMENT OF PREVIOUSLY ISSUED
FINANCIAL STATEMENTS</u></b></p>
<p style="margin-left:80">The Company has amended its previously issued
condensed consolidated financial statements for the three months ended July 31,
2004.  The Company has amended these condensed consolidated financial statements
to recognize an additional $40,330 in officer&#8217;s compensation and related
payroll tax expense for the three months ended July 31, 2004.  This transaction
resulted in an increase in net loss applicable to common shares of $40,330 for
the three months ended July 31, 2004 to a net loss of $69,286 as restated, and
an increase in the accumulated deficit to $6,453,211.</p><p>
<p align="center">
18</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<b>Item 2.&nbsp;&nbsp;Managements Discussion and Analysis of Financial Condition
and Results of Operations</b><p>
THERE IS SUBSTANTIAL DOUBT ABOUT THE COMPANY&#8217;S ABILITY TO CONTINUE AS A
GOING CONCERN DUE TO RECURRING LOSSES AND WORKING CAPITAL SHORTAGES, WHICH MEANS
THAT THE COMPANY MAY NOT BE ABLE TO CONTINUE OPERATIONS UNLESS IT OBTAINS
ADDITIONAL FUNDING.  THE COMPANY IS ACTIVELY   PURSUING MERGER OR ACQUISITION
CANDIDATES AND OTHER FINANCING POSSIBILITIES TO MEET ITS LIQUIDITY NEEDS.  THERE
IS NO ASSURANCE THAT THE COMPANY WILL BE ABLE TO STRUCTURE A MERGER OR
ACQUISITION, OR RAISE ADDITIONAL FINANCING TO CONTINUE OPERATIONS ON TERMS
SATISFACTORY TO THE COMPANY<p>
<u>Results of Operation</u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended July 31,
2004, the Company&#8217;s net loss was $69,286. The Company&#8217;s total assets
decreased by $24,693 to $367,226 from $391,919 at April30, 2004.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended July 31,
2003, the Company&#8217;s net loss was $47,348 and the net loss available to
common shareholders was $63,286, ($0.01) per common share. The Company&#8217;s
total assets decreased by $34,297 to $452,869 from $487,166 at April 30, 2003<p>
<u>Revenues</u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s total revenues
were $457,092 for the three months ended July 31, 2004 versus $543,195 for the
three-month period ended July 31, 2003, a decrease of $86,103 or 15.9% By
component, food and beverage sales decreased 15.2% from the previous year.  This
decrease in food and beverage sales is attributed to a decrease in customer
volume due a decline in convention and tourism in San Antonio.  Merchandise,
memorabilia and consulting revenues were $3,135 for the three months ended July
31, 2004 compared to $7,163 for the three months ended July 31, 2003. The
Company did not provide any consulting services to Marriott International during
the either of the three month reporting periods.  Other income represented less
than 1.0% of total revenues for the three months ended July 31, 2004 and
2003.<p>
<u>Expenses</u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of food and beverage was 32.3%
and 29.9% of  related sales for the three months ended July 31, 2004 and 2003.
This variance is attributed to an increase in wholesale prices, especially in
beef, poultry and produce. While the Company implemented retail price increases
during FY 2004, in order to remain competitive, they were not sufficient to
absorb all of the wholesale price increases.  There was no increases in selling
prices during the three month period. Cost of merchandise and memorabilia sales
for the three months ended July 31, 2004  was $3,135 compared to $7,163 in the
preceding year.  Restaurant payroll and related costs  were 35.9% of related
food and beverage sales for the three months ended July 31, 2004 and 33.7% for
the three months ended July 31, 2003.  Restaurant occupancy costs were $61,765
or 13.7% of food and beverage sales compared to $67,366 or 12.7% of related
sales during the three months ended July 31, 2003.  This decrease in occupancy
costs is attributed to the percentage paid to the landlord in common area
charges and base rent. Other restaurant costs were 18.6% of related food and
beverage sales  for the three months ended July 31, 2004 compared to 18.8% of
related sales during the three months ended July 31, 2003. General and
administrative expense for the Company&#8217;s corporate office was 12.9% of the
Company&#8217;s total revenues for the three months ended July 31, 2004 compared
to 12.2 % of total revenues for the three months ended July 31,2003. The Company
has amended its previously issued condensed consolidated financial statements
for the three months ended July 31, 2004.  The Company has amended these
condensed consolidated financial statements to recognize an additional $40,330
in officer&#8217;s compensation and related payroll tax expense for the three
months ended July 31, 2004.  This transaction resulted in an increase in net
loss applicable to common shares of $40,330 for the three months ended July 31,
2004 to a net loss of $69,286 as restated, and an increase in the accumulated
deficit to $6,453,211.<p align="center">
19</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense
were constant at approximately 2.7% of the Company&#8217;s total revenues for
the three months ended July 31, 2004 compared to 2.2% in the comparable period.
<p>
<u>Liquidity and Capital Resources</u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s cash position as
of July 31, 2004 was $127,130 compared to $120,116 on April 30, 2004. For the
three month period, the Company&#8217;s operations provided $8,105 in cash. The
Company used $1,090 for payment of a capital lease. The Company met its
liquidity needs from its cash reserves and from the cash flow from  its San
Antonio location.<p>
The Company&#8217;s cash position as of July 31, 2003 was $167,359 compared to
$195,101 on April 30, 20034, a decrease of $27,742.  For the three month period,
the Company&#8217;s operations used $24,812 in cash in excess of revenues. The
Company purchased equipment for it San Antonio location for $2,930. The Company
met its liquidity needs during the period from its cash reserves and cash flow
provided from its San Antonio location.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s  restated working
capital was a negative $469,423 on July 31 2004 and a negative $412,242 on April
30, 2004. The Company&#8217;s working capital when compared to other publicly
traded companies in the restaurant industry is unfavorable.  This is primarily
attributed to the fact that other companies in the industry have multiple
locations with a broader sales base and generate greater cash flows to offset
corporate overhead expense. In the Company&#8217;s current situation, the one
operating unit has generated cash to cover its operating expense, but has not
produced sufficient cash to offset the corporate overhead costs<p>
Stockholder&#8217;s equity was a negative $269,537 as of July 31, 2004 compared
to a negative $200,251 as of April 30, 2004. <p align="center">
20</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
<u>Other</u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is facing liquidity
problems and is uncertain that it will be able to continue operations without an
infusion of cash.  The Company continues to review and evaluate its operations
and priorities.  The Company is actively   pursuing merger or acquisition
candidates and other financing possibilities to meet its liquidity needs.  There
is no assurance that the Company will be able to structure a merger or
acquisition, or raise additional financing to continue operations on terms
satisfactory to the Company. The lease for the Company owed San Antonio
restaurant will expire on June 30, 2005. The landlord has indicated that it will
not be renewed. Consequently, the restaurant will cease operations on that date,
furthering the Company&#8217;s liquidity problems.<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Furthermore, The Company&#8217;s
independent auditor has expressed substantial doubt that the Company can
continue as a going concern.</b><p align="center">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This document contains
"forward-looking statements" (within the meaning of the Private Securities
Litigation Act of 1995) that inherently involve risk and uncertainties.  The
Company generally uses words such as "believe," "may," "could," "will,"
"intend,"  "expect,"  "anticipate,"  "plan," and similar expressions to identify
forward-looking statements.  One should not place undue reliance on these
forward-looking statements.  The Company&#8217;s actual results could differ
materially from those anticipated in the forward-looking statements for many
unforeseen factors, which may include, but are not limited to, changes in
general economic conditions, the ongoing threat of terrorism, customer
acceptance of products offered, other general competitive factors, ability to
have access to financing sources on reasonable terms and other risks that are
described in this document. Although the Company believes the expectations
reflected in the forward-looking statements are reasonable, they relate only to
events as of the date on which the statements are made, and the Company&#8217;s
future results, levels of activity, performance or achievements may not meet
these expectations.  The Company does not intend to update any of the
forward-looking statements after the date of this document to conform these
statements to actual results or to changes in the Company&#8217;s expectations,
except as required by law.<p>
Item 4.&nbsp;&nbsp;CONTROLS AND PROCEDURES<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disclosure controls are procedures
that are designed with the objective of ensuring that information required to be
disclosed in Company&#8217;s reports under the Securities Exchange Act of 1934,
such as this Form 10Q-SB, is reported in accordance with the Securities and
Exchange Commission&#8217;s rules.  Disclosure controls are also designed with
the objective of ensuring that such information is accumulated and communicated
to management, including the Chief Executive Officer and Chief Financial Officer
as appropriate to allow timely decisions regarding required
disclosure.<p align="center">
21</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within the 90 days prior to the date
of this report, the Company carried out an evaluation under  the  supervision
and  with  the participation of the Company&#8217;s  management,  including the
Company&#8217;s Chief  Executive  Officer  and  Chief  Financial  Officer,   of
the effectiveness of  the  design  and   operation  of  the  Company&#8217;s
disclosure  controls  and  procedures  pursuant  to  the  Securities Exchange
Act Rule  13a-14.  Based upon that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that the Company&#8217;s disclosure controls
and procedures are effective in timely alerting them to material  information
relating  to the  Company (including  its  consolidated  subsidiaries)  required
to be in the Company&#8217;s periodic SEC filings. There were no significant
changes in the Company&#8217;s internal controls or in other factors that could
significantly affect these controls subsequent to the date of their
evaluation.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certifications of the Chief Executive
Officer and Chief Financial Officer regarding, among other items, disclosure
controls and procedures are included immediately after the signature section of
this Form 10Q-SB.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Part II.   Other Information</b><p>
<b>Item 4.&nbsp;&nbsp;Submission of Matters to A Vote of Security Holders</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None<p>
<b>Item 6.&nbsp;&nbsp;Exhibits and Reports on Form 8-K</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form 8-K was filed on June 28, 2004
relating to a change in the Company&#8217;s independent accountant. <p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form 8-K/A was filed on August 13,
2004 amending the Form 8-K filed on June 28, 2004 relating to a change in the
Company&#8217;s independent accountant.<p align="center">
22</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
SIGNATURES<p>
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
<p>
<b>CHAMPIONS Sports, Inc.</b></p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
<p>
<u>/s/ James Martell</u></p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
<p>
James Martell</p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
<p>
Chairman, President and Chief Executive Officer</p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="643.999839" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="643.999839" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="643.999839" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
<p>
<!--<a name="BM_1_"></a>--> <u>/s/ James E. McCollam</u></p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
<p>
James E. McCollam</p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
<p>
Corporate Secretary, Chief Accounting</p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="353.333245" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="1" rowspan="1" >
<p>
Officer and Controller</p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p>
September 13, 2004<p align="center">
23</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
CERTIFICATION OF CHIEF EXECUTIVE OFFICER<p align="center">
Section 302 Certification<p>
I, JAMES MARTELL, certify that:<p>
(1)&nbsp;&nbsp;I have reviewed this quarterly report on Form 10Q-SB of CHAMPIONS
SPORTS, INC., a Delaware corporation (the "registrant");<p>
(2)&nbsp;&nbsp;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;<p>
(3)&nbsp;&nbsp;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;<p>
(4)&nbsp;&nbsp;The  registrant&#8217;s  other  certifying  officers  and I are
responsible  for establishing and maintaining  disclosure  controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Designed such
disclosure controls and procedures to ensure that material information relating
to the registrant, including its consolidated     subsidiaries, is made known to
us by others within those entities, particularly during the period in which this
quarterly report is being      prepared;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Evaluated the
effectiveness of the registrant&#8217;s disclosure controls and  procedures  as
of a date  within 90 days prior to the  filing  date of this  quarterly report
(the "Evaluation Date"); and<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Presented  in  this
quarterly   report  our  conclusions   about  the effectiveness  of the
disclosure  controls  and  procedures  based  on our evaluation as of the
Evaluation Date;<p>
(5)&nbsp;&nbsp;The registrant&#8217;s  other certifying  officers and I have
disclosed,  based on our most recent evaluation, to the registrant&#8217;s
auditors and the audit committee of the  registrant&#8217;s  board of directors
(or persons  performing  the equivalent functions):<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;all  significant
deficiencies  in the design or  operation of internal      controls which could
adversely affect the  registrant&#8217;s  ability to record,      process,
summarize and report  financial data and have  identified for the
registrant&#8217;s auditors any material weaknesses in internal controls;
and<p align="center">
24</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;any fraud,  whether or
not material,  that involves management or other      employees  who  have  a
significant  role  in  the  registrant&#8217;s  internal      controls; and<p>
(6)&nbsp;&nbsp;The  registrant&#8217;s  other  certifying  officers and I have
indicated in this quarterly report whether there were significant  changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent  evaluation,  including any
corrective  actions with<p>
regard to significant deficiencies and material weaknesses.<p>
Date:&nbsp;&nbsp;September 13, 2004</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="395.999901" colspan="1" rowspan="1" >
<p>
By:</p>
</td>
<td width="215.999946" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">/s/ JAMES MARTELL</font></p>
</td>
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="395.999901" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="215.999946" colspan="1" rowspan="1" >
<p>
JAMES MARTELL</p>
</td>
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="395.999901" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="215.999946" colspan="1" rowspan="1" >
<p>
Chief Executive Officer</p>
</td>
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p align="center">
25</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
CERTIFICATION OF CHIEF FINANCIAL OFFICER<p align="center">
Section 302 Certification<p>
I, JAMES E. MCCOLLAM, certify that:<p>
(1)&nbsp;&nbsp;I have reviewed this quarterly report on Form 10Q-SB of CHAMPIONS
SPORTS, INC., a Delaware corporation (the "registrant");<p>
(2)&nbsp;&nbsp;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.<p>
(3)&nbsp;&nbsp;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; <p>
(4)&nbsp;&nbsp;The  registrant&#8217;s  other  certifying  officers  and I are
responsible  for establishing and maintaining  disclosure  controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Designed  such
disclosure  controls  and  procedures  to ensure  that     material information
relating to the registrant, including its consolidated     subsidiaries,  is
made  known  to  us by  others  within  those  entities,     particularly
during  the period in which  this  quarterly  report is being     prepared;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Evaluated the
effectiveness of the registrant&#8217;s disclosure controls and     procedures
as of a date  within 90 days prior to the  filing  date of this     quarterly
report (the "Evaluation Date"); and<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Presented  in  this
quarterly   report  our  conclusions   about  the effectiveness  of the
disclosure  controls  and  procedures  based  on our evaluation as of the
Evaluation Date;<p>
(5)&nbsp;&nbsp;The registrant&#8217;s  other certifying  officers and I have
disclosed,  based on our most recent evaluation, to the registrant&#8217;s
auditors and the audit committee of the  registrant&#8217;s  board of directors
(or persons  performing  the equivalent functions):<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;all  significant
deficiencies  in the design or  operation of internal     controls which could
adversely affect the  registrant&#8217;s  ability to record,     process,
summarize and report  financial data and have  identified for the
registrant&#8217;s auditors any material weaknesses in internal controls;
and<p align="center">
26</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;any fraud,  whether or
not material,  that involves management or other     employees  who  have  a
significant  role  in  the  registrant&#8217;s  internal     controls; and<p>
(6)&nbsp;&nbsp;The  registrant&#8217;s  other  certifying  officers and I have
indicated in this quarterly report whether there were significant  changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent  evaluation,  including any
corrective  actions with regard to significant deficiencies and material
weaknesses.<p>
Date:  September 13, 2004</p align="right">
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="221.333278" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3"> /s/ JAMES E. McCOLLAM</font></p>
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="221.333278" colspan="1" rowspan="1" >
<p>
JAMES E. McCOLLAM</p>
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="221.333278" colspan="1" rowspan="1" >
<p>
Chief Financial Officer</p>
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p align="center">
27</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
<b>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT
</b><br><b>TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</b><p>
In connection with the annual report of Champions Sports, Inc. (the "Company")
on Form 10-QSB for the three months ended July 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), each of
the undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to their knowledge:</p>
<p style="margin-left:80">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Report fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and </p><p>
</p>
<p style="margin-left:45">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information
contained in the Report fairly presents, in all material  respects, the
financial condition and results of operation of the Company. </p><p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="314.666588" colspan="1" rowspan="1" >
<p>
Dated: September 13, 2004</p>
</td>
<td width="30.666659" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="282.666596" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">/s/ James M. Martell</font></p>
</td>
</tr>
<tr valign="top">
<td width="314.666588" colspan="1" rowspan="1" >
<p>
&nbsp; </p>
</td>
<td width="30.666659" colspan="1" rowspan="1" >
<p>
&nbsp; </p>
</td>
<td width="282.666596" colspan="1" rowspan="1" >
<p>
James M. Martell, Chief Executive Officer&nbsp;</p>
</td>
</tr>
</table></div>
<p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="314.666588" colspan="1" rowspan="1" >
<p>
Dated: September 13, 2004</p>
</td>
<td width="30.666659" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="282.666596" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">/s/ James E. McCollam&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="314.666588" colspan="1" rowspan="1" >
<p>
&nbsp; </p>
</td>
<td width="30.666659" colspan="1" rowspan="1" >
<p>
&nbsp; </p>
</td>
<td width="282.666596" colspan="1" rowspan="1" >
<p>
James E. McCollam, Chief Financial Officer&nbsp;</p>
</td>
</tr>
</table></div>
<p>
<p align="center">
28</p align="center">
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