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<SEC-DOCUMENT>0001297077-05-000119.txt : 20050805
<SEC-HEADER>0001297077-05-000119.hdr.sgml : 20050805
<ACCEPTANCE-DATETIME>20050805170723
ACCESSION NUMBER:		0001297077-05-000119
CONFORMED SUBMISSION TYPE:	10KSB/A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20040430
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:		10KSB/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-17263
		FILM NUMBER:		051003464

	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>10KSB/A
<SEQUENCE>1
<FILENAME>csi10ksb-a043004.htm
<DESCRIPTION>10-KSB/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">
<p align="center">
<b>SECURITIES AND EXCHANGE COMMISSION</b><br><b>Washington, D.C.
20549</b><p align="center">
<b>FORM 10-KSB/A</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="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="3" rowspan="1" >
<p>
Mark One</p>
</td>
</tr>
<tr valign="top">
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p>
[&nbsp;X&nbsp;]</p>
</td>
<td width="510.666539" colspan="1" rowspan="1" >
<p>
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF</p>
</td>
</tr>
<tr valign="top">
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="1" rowspan="1" >
<p>
THE SECURITIES EXCHANGE ACT OF 1934</p>
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="3" rowspan="1" >
<p align="center">
<u>For the fiscal year ended April 30, 2004</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="3" rowspan="1" >
<p align="center">
OR</p align="center">
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p>
[&nbsp;&nbsp;&nbsp;]</p>
</td>
<td width="510.666539" colspan="1" rowspan="1" >
<p>
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF</p>
</td>
</tr>
<tr valign="top">
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="1" rowspan="1" >
<p>
THE SECURITIES EXCHANGE ACT OF 1934</p>
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="126.666635" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="510.666539" colspan="1" rowspan="1" >
<p>
For the transition period from ______ to ________</p>
</td>
</tr>
</table></div>
<p>
<p align="center">
<u>Commission file number 0-17263</u><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="182.666621" colspan="1" rowspan="1" >
<p align="center">
<u>Delaware</u></p align="center">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="166.666625" colspan="1" rowspan="1" >
<p align="center">
<u>52-1401755</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="182.666621" colspan="1" rowspan="1" >
<p align="center">
(State or other jurisdiction of</p align="center">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="166.666625" colspan="1" rowspan="1" >
<p align="center">
(I.R.S. Employer</p align="center">
</td>
</tr>
<tr valign="top">
<td width="182.666621" colspan="1" rowspan="1" >
<p align="center">
organization)</p align="center">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="166.666625" colspan="1" rowspan="1" >
<p align="center">
Identification No.)</p align="center">
</td>
</tr>
</table></div>
<p>
<p align="center">
<u>2420 Wilson Blvd., Suite 214, Arlington, VA 22201</u><br>(Address of
principal executive offices)<p align="center">
(Zip code)<p align="center">
<u>(703) 526-0400</u><br>(Registrant&#8217;s telephone number, including area
code)<p align="center">
Securities registered under Section 12(g) of the Exchange Act:</p>
&nbsp;	<p align="center">
<u>Common Stock, par value $.001 per share</u><br>(Title of
Class)<p align="center">
<u>Preferred Stock, par value $10.00 per share</u><br>(Title of Class)</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the
Registrant (1) has filed all report required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of1934 during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes&nbsp;&nbsp;<u>&nbsp;X    </u>No&nbsp;&nbsp;_<u>    &nbsp;&nbsp;</u></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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B is not contained in
this form, and no disclosure will be contained, to the best of the
registrant&#8217;s knowledge, in a definitive proxy or information statements
incorporated by reference in Part III of this Form10-KSB.    [X]</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended April 30, 2004, the
revenues of the registrant were $1,999,173.</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate market value of the
Common Stock of the Registrant held by non-affiliates of the Registrant based on
the average bid and asked price on July 15, 2004, was approximately
$422,000.</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of July 15, 2004, the Registrant
had a total of 8,824,658 shares of common stock outstanding.</p>
</td>
</tr>
</table></div>
<p>
<p align="center">
DOCUMENTS INCORPORATED BY REFERENCE<p align="center">
None</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">
TABLE OF CONTENTS</p>
&nbsp;	<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="637.333174" colspan="4" rowspan="1" >
&nbsp;PART I	</td>
</tr>
<tr valign="top">
<td width="539.999865" colspan="2" rowspan="1" >
&nbsp;Special Note Regarding Forward-Looking Statements.....................................................	</td>
<td width="97.333309" colspan="2" rowspan="1" >
&nbsp;3	</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 1.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Business                   ......................................................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;3	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 2.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Property.........................................................................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;9	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 3.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Legal Proceedings.........................................................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;9	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 4.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Submission of Matters to a Vote of Security Holders...................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;9	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="4" rowspan="1" >
&nbsp;PART II	</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 5.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;  Market for Common Equity and Related Stockholder Matters...................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;9	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 6.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Management&#8217;s Discussion and Analysis or Plan of Operation......................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;11	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 7.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Financial Statements and Supplementary Data.............................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;15	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 8.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Changes in and Disagreements with Accountants on	</td>
<td width="97.333309" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Accounting and Financial Disclosure...........................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;16	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 8A.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Controls and Procedures...............................................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;16	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="4" rowspan="1" >
&nbsp;PART III	</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 9.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Directors, Executive Officers, Promoters and Control 	</td>
<td width="97.333309" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Persons, Compliance with Section 16(a) of the Exchange Act .....................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;16	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 10. 	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Executive Compensation................................................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;17	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 11. 	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Security Ownership of Certain Beneficial Owners	</td>
<td width="97.333309" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;and Management............................................................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;19	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 12.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Certain Relationships and Related Transactions............................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;20	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 13.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Exhibits and Reports on Form 8-K................................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;20 	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;Item 14.	</td>
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;Principal Accountant Fees and Services.........................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;20	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="539.999865" colspan="2" rowspan="1" >
&nbsp;Report of Independent Accountants and Financial Statements..........................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;F1-F19	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="539.999865" colspan="2" rowspan="1" >
&nbsp;Signatures ...........................................................................................................................	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;44	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="539.999865" colspan="2" rowspan="1" >
&nbsp;Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;45	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="539.999865" colspan="2" rowspan="1" >
&nbsp;Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;47	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="539.999865" colspan="2" rowspan="1" >
&nbsp;Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;49	</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>2</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>PART I</b><p align="center">
<b>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</b></p>
&nbsp;	<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>
<b>Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Development of
Business.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CHAMPIONS Sports, Inc. (the "Company"
or "CSI") was incorporated under the laws of the State of Delaware on June 4,
1985 under the name  "International Group, Inc." In September 1985, the Company
completed a public offering of 40,000,000 Units, each Unit consisting of one
share of Common Stock and warrants to purchase three shares of Common Stock, at
a price of $0.01 per Unit. The net proceeds of the offering to the Company were
approximately $357,000.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January 16, 1986, the Company
acquired 100% of the outstanding shares of CHAMPIONS  Sports  International,
Inc.  ("CSII"), in exchange for 195,555,555 shares of the Company&#8217;s Common
Stock. In February, 1986, International Group, Inc. changed its name to
CHAMPIONS  Sports,  Inc. Between 1987 and 1988, most of  the original warrants
issued in September 1985 were exercised by stockholders and  consequently  the
Company  received  additional  capital of $2,356,268.  On September 12, 1989,
CSII was merged with and into the Company, with the Company as the surviving
corporation.  In November 1991, the Company effected a reverse split of its
outstanding shares on a 1 for 100 basis.  In November 1992, the Company
completed a public offering of 350,000 Shares of Series A 12% Convertible
Preferred Stock. In March 1993, the Company completed an exchange offer
converting all, except 64,575 preferred shares, into 2,171,657 shares of common
stock.  Through FY 2002, an additional 11,450 preferred shares were converted to
53,930 shares of common stock and in FY 2004, 20,675 preferred shares  were
converted to 310,199 shares of common stock.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is a licensee of one
CHAMPIONS Sports Bar Restaurant and the exclusive supplier of sports memorabilia
and consultant to Marriott International, Inc.  (Marriott).  Effective November
1997, the Company sold the rights to the CHAMPIONS brand to Marriott and became
an exclusive supplier of sports memorabilia and a consultant to all new managed
Marriott and Renaissance Hotel sports bar restaurants worldwide. At April 30,
2004, the Company owns one CHAMPIONS Sports Bar Restaurant in San Antonio, Texas
that is licensed, royalty free, from Marriott.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>3</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Current Business
Plan<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to operating the present
ongoing business of the Company, see Description of the Operating Business in
Item I(c) below, the current business plan for the Company is to actively pursue
opportunities whereby the Company will primarily serve as a vehicle for the
acquisition of a target business that the Company believes will have significant
growth potential. The Company intends to use its capital stock, to effect a
business combination with a private company that desires to establish a public
trading market for its securities while avoiding what it may deem to be adverse
consequences of undertaking a public offering itself, such as time delays,
significant expense, loss of voting control and other burdens including
significant professional fees. The business combination may be with a
financially stable, mature company or a company that is financially unstable or
in its early stages of development or growth.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In seeking to attain this business
objective, the Company will not restrict its search to any particular industry.
Rather, the Company may investigate businesses of essentially any kind or nature
and participate in any type of business that may, in management&#8217;s opinion,
meet the business objectives as described in this document. The Company
emphasizes that the description in this document of its business objectives is
extremely general and is not meant to restrict the discretion of management to
search for and enter into potential business opportunities. <p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has not chosen the
particular business in which the Company will engage in and has not conducted
any market studies with respect to any business or industry to evaluate the
possible merits or risks of the target business or the particular industry in
which the Company may ultimately operate. To the extent that the Company may
enter into a business combination with a financially unstable company or an
entity in its early stage of development or growth, including entities without
established records of sales or earnings, The Company will become subject to
numerous risks inherent in the business and operations of financially unstable
and early stage or potential emerging growth companies. In addition, to the
extent that the Company may enter a business combination with an entity in an
industry characterized by a high level of risk, the Company will become subject
to the currently unascertainable risks of that industry. An extremely high level
of risk frequently characterizes certain industries that experience rapid
growth. In addition, although the Company will endeavor to evaluate the risks
inherent in a particular industry or target business, the Company cannot give
assurance that the Company will properly ascertain or assess all significant
risk factors.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company anticipates that target
business candidates will be brought to its attention from various unaffiliated
sources, including but not restricted to, investment bankers, venture
capitalists, securities broker-dealers, bankers and other members of the
financial community, who may present solicited or unsolicited proposals.
Company&#8217;s officers and directors and their affiliates may also bring to
the Company&#8217;s attention target business candidates. While the Company does
not presently anticipate engaging the services of professional firms that
specialize in business acquisitions on any formal or basis, the Company may
engage such firms in the future, in which event, the Company may pay a
finder&#8217;s fee or other compensation for such introductions if they result
in consummated transactions. These fees are customarily between 1% and 5% of the
size of the overall transaction, based upon a sliding scale of the amount
involved.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>4</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s management will
have significant flexibility in identifying and selecting a prospective target
business. In evaluating a prospective target business, the management will
consider, among other factors, the following:<ul>
<li>the financial condition and results of operation of the target;</li>
<li>the growth potential of the target and that of the industry in which the
target operates;</li>
<li>the experience and skill of the target&#8217;s management and availability
of additional personnel;</li>
<li>the capital requirements of the target;</li>
<li>the competitive position of the target;</li>
<li>the stage of development that the target&#8217;s products, processes or
services are at;</li>
<li>the degree of current or potential market acceptance of the target&#8217;s
products, processes or services;</li>
<li>proprietary features and the degree of intellectual property or other
protection of the target&#8217;s products, processes or services;</li>
<li>the regulatory environment of the industry in which the target
operates;</li>
<li>the prospective equity interest in, and opportunity for control of, the
target; and</li>
<li>the costs associated with effecting the business combination.</li></ul><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These criteria are not intended to be
exhaustive. Any evaluation relating to the merits of a particular business
combination will be based, to the extent relevant, on the above factors as well
as other considerations deemed relevant by management in connection with
effecting a business combination consistent with Company&#8217;s business
objective. <p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with Company&#8217;s
evaluation of a prospective target business, the Company anticipates that it
will conduct due diligence review that will encompass, among other things,
meetings with incumbent management and inspection of facilities, as well as a
review of financial or other information that will be made available to the
Company.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will endeavor to structure
a business combination so as to achieve the most favorable tax treatment to the
Company, the target business and both of the companies&#8217; stockholders.
There can be no assurance, however, that the Internal Revenue Service or
appropriate state tax authority will agree with the tax treatment of the
business combination.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until the Company is presented with a
specific opportunity for a business combination, the Company is unable to
ascertain with any degree of certainty the time and costs required to select and
evaluate a target business and to structure and complete the business
combination. Any costs incurred in connection with the identification and
evaluation of a prospective target business with which a business combination is
not ultimately completed will result in a loss to the Company and will reduce
the amount of capital otherwise available to complete a business
combination.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>5</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the Company intends to
carefully scrutinize the management of a prospective target business before
effecting a business combination, the Company cannot give assurance that its
assessment of the target&#8217;s management will prove to be correct, especially
in light of the possible inexperience of Company&#8217;s management in
evaluating certain types of businesses. In addition, the Company cannot give
assurance that the target&#8217;s future management will have the necessary
skills, qualifications or abilities to manage a public company intending to
embark on a program of business development. Furthermore, the future role of
Company&#8217;s officers and directors, if any, in the target business cannot
presently be stated with any certainty. It is possible that one or more of the
Company&#8217;s officers and directors will remain associated in some capacity
with the Company following a business combination and will devote their efforts
to the affairs of the new business combination. Moreover, the Company cannot
give assurance that its officers and directors will have significant experience
or knowledge relating to the operations of the particular target business.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company may seek to recruit
additional managers to supplement the incumbent management of the target
business. The Company, however, cannot give assurance that it will be able to
recruit additional managers who have the requisite skills, knowledge or
experience necessary to enhance the incumbent management.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company expects to encounter
intense competition from other entities having a similar business objective.
Many of these entities, including financial consulting companies and venture
capital firms, have longer operating histories and have extensive experience in
identifying and effecting business combinations, directly or through affiliates.
Many of these competitors possess significantly greater financial, technical and
other resources. The Company cannot give assurance that it will be able to
effectively compete with these entities. In the event the Company is unable to
compete effectively with these entities, the Company may be forced to evaluate
less attractive prospects for a business combination. If the Company is forced
to evaluate these less attractive prospects, the Company cannot give assurance
that the stated business objectives will be met.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Description of the
Operating Business.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Concept<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company operates a restaurant in
San Antonio, Texas by the name of CHAMPIONS which has a sports theme concept
that combines casual dining, sports viewing with strategic marketing and
promotions.  The CHAMPIONS popularity is defined in the CHAMPIONS motto:  "Good
Food, Good Times, Good Sports." This concept is based, in large measure, on the
format implemented in the first CHAMPIONS location that opened in the Georgetown
section of Washington, D.C.  in 1983.  A strong food component was added to the
original concept so that the CHAMPIONS in San Antonio, Texas is a full-fledged
restaurant as well as bar.  The sports theme of CHAMPIONS is based upon
management&#8217;s belief that sports appeals to most socio-economic, age and
gender groups worldwide. The sports atmosphere at CHAMPIONS is created by the
presence of hundreds of items of original sports memorabilia such as uniforms,
sports equipment, posters, advertising, signs, magazine covers, official
programs, film posters, and photographs from local, national and international
celebrities and sporting events, past and present.  The sports decor seeks to
establish a feeling a comfort and belonging for all customers.  In addition,
CHAMPIONS atmosphere is enhanced by sports programming and viewing which is
accomplished through a network of strategically placed TV monitors designed to
continuously show local, national and international sporting events without
taking away from the casual dining experience. Although sports is a theme in
CHAMPIONS restaurants it is not the dominant factor.  At the heart of the
CHAMPIONS concept is the food.  The menu, which attracts guests for lunch and
dinner, appeals to those interested in dining at a moderate price. It
incorporates traditional American cuisine as well as popular regional items.
CHAMPIONS average check is about $14.25 per person, placing it within the
&#8220;casual dining&#8221; segment of the restaurant industry.  This segment
seeks to attract customers who want a higher quality of food and service than
that commonly provided at "fast food" or "family style&#8221; restaurants.
Although no element of the CHAMPIONS concept is unique, the combination of food,
atmosphere, sports memorabilia, sports viewing, marketing and promotions defines
the concept.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>6</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operations<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the end of the fiscal year, the
Company was engaged in the following types of operations:<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;Company-Owned
Operation</p>
<ol>
<li>The Company currently operates one Company-owned restaurant.  This location
is licensed from Marriott, royalty free, to use the name CHAMPIONS pursuant to a
licensing agreement signed in FY 1998.  This CHAMPIONS sports bar restaurant has
been in operation since 1989 and is located in the River Center Mall in San
Antonio, Texas. The San Antonio restaurant provided approximately 99% of the
Company&#8217;s revenues for FY 2004, as reflected in the consolidated financial
statements included herein. However, effective, June 30, 2005, the lease expires
and the landlord has not renewed the Company&#8217;s lease, and therefore
operations will cease.</li></ol><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;Supplier of Sports
Memorabilia and Consulting Services to Marriott<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In November 1997, the Company sold the
rights to the CHAMPIONS brand to Marriott and became a licensee of CHAMPIONS
Sports Bar Restaurants and an exclusive supplier of sports memorabilia and a
consultant to all new managed Marriott and Renaissance Hotel sports bar
restaurants worldwide. Under the terms of this agreement, Marriott is required
to purchase sports memorabilia and for the Company to serve as a consultant for
each new CHAMPIONS or like sports bar restaurant that opens in a new Marriott or
Renaissance Hotel worldwide at the same prescribed prices (with increases pegged
to the Consumer Price Index) as paid to the Company by Marriott in its previous
agreement, except that Marriott does not pay any annual fees as before. In FY
2004, the Company provided no sports memorabilia and consulting services to any
Champions Sports Bar Restaurants pursuant to the 1997 agreement with Marriott.
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Competition<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The food and beverage industry is
highly competitive. Food and beverage businesses are affected by changing
customer tastes, local and national economic conditions that affect spending
habits, population shifts and traffic patterns. Quality of service,
attractiveness of facilities and price are also important factors.  The
popularity of the concept of sports bar restaurants has spawned a number of
companies seeking to capitalize on that market.  While the Company believes that
the Champions concept is superior, there are other &#8220;sports" bar
restaurants in operation. The sports memorabilia business is also highly
competitive.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of the current business plan,
in addition to, operating the present ongoing Company business, the Company is
actively pursuing opportunities whereby the Company will primarily serve as a
vehicle for the acquisition of a target business that the Company believes will
have significant growth potential, The Company expects to encounter intense
competition from other entities having a similar business objective. Many of
these entities, including financial consulting companies and venture capital
firms, have longer operating histories and have extensive experience in
identifying and effecting business combinations, directly or through affiliates.
Many of these competitors possess significantly greater financial, technical and
other resources. The Company cannot give assurance that it will be able to
effectively compete with these entities. In the event the Company is unable to
compete effectively with these entities, the Company may be forced to evaluate
less attractive prospects for a business combination. If the Company is forced
to evaluate these less attractive prospects, the Company cannot give assurance
that the stated business objectives will be met.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>7</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service
Mark<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company sold the federally
registered service mark "Champions" to Marriott pursuant to the November, 1997
agreement and transferred to Marriott all of its international service marks
that the Company had registered. .<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government
Regulation<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s CHAMPIONS sports
bar restaurant is subject to federal, state and local governmental regulations,
including regulations relating to alcoholic beverage control, public health and
safety, zoning and fire codes. The failure to retain food, liquor or other
licenses would adversely affect the operations of the Company&#8217;s
restaurant.  While the Company has not experienced and does not anticipate any
problems in retaining required licenses, permits or approvals, any difficulties,
delays or failures in retaining such licenses, permits or approvals could
adversely affect the restaurant.  The license to sell alcoholic beverages must
be renewed annually and may be suspended or revoked at any time for cause,
including violation by the Company or its employees of any law or regulation
pertaining to alcoholic beverage control, such as those regulating the minimum
age of patrons or employees, advertising, wholesale purchasing, and inventory
control, handling and storage. However, the restaurant is operated in accordance
with standardized procedures designed to assure compliance with all applicable
codes and regulations.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company may be subject to
&#8220;dram-shop&#8221; statutes, which generally provide a person injured by an
intoxicated person the right to recover damages from an establishment that
wrongfully served alcoholic beverages to such person.  While the Company carries
liquor liability coverage, a judgment against the Company under a dram-shop
statute in excess of the Company&#8217;s liability coverage, or inability to
continue to obtain such insurance coverage at reasonable costs, could have a
material adverse effect on the Company.  The Company is also subject to the Fair
Labor Standards Act, the Immigration Reform and Control Act of 1986 and various
state laws governing such matters as minimum wages, overtime, tip credits and
other working conditions.  A significant number of the Company&#8217;s hourly
personnel are paid at rates related to the federal minimum wage and,
accordingly, increases in the minimum wage or decreases in the allowable tip
credit will increase the Company&#8217;s labor cost.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employees<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of April 30, 2004, the Company had
2 employees in its corporate office in Arlington, Virginia and 46 employees
(both management and hourly) at its San Antonio restaurant.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>8</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
<b>Item 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Properties.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is leasing, on a
month-to-month basis, its corporate office space located at 2420 Wilson Blvd.,
Suite 214, Arlington, VA 22201.  The Company&#8217;s rental payments are $500
per month.  The Company is leasing 5,289 square feet of space for its restaurant
in San Antonio, TX pursuant to a lease, which expires in June 2005. The lease
provides monthly rental payments of $23,536 including CAM charges and real
estate taxes.  In addition, the lease requires a percentage of the unit&#8217;s
revenues at the location in excess of $1,745,000 per year.<b> </b>The Company is
actively searching for additional business opportunities with which to merge or
acquire. It is not the intention of the Company to abandon or cease its
restaurant operations. However, effective, June 30, 2005, the lease at the San
Antonio restaurant expires and the landlord has not renewed the Company&#8217;s
lease, and therefore operations will cease at that location.<p>
<b>Item 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company knows of no material
pending legal proceedings as to which the Company is a party or of which its
properties are the subject, and no such proceedings are known to the Company to
be contemplated by governmental authorities.<p>
<b>Item 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of
Security Holders.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None<p align="center">
<b>PART II</b><p>
<b>Item 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Markets for Common Equity &amp; Related
Stockholder Matters.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Principal Market or
Markets.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock was traded on the
NASDAQ SmallCap Market until June 24, 1994. At that time, the Common Stock was
delisted from the NASDAQ SmallCap Market for falling below the minimum financial
requirements. The Common Stock is presently trading on the OTC Bulletin Board
under the symbol CSBR. In October 1993, the series A 12%  Convertible Preferred
Stock was delisted from NASDAQ due to lack of the required two market makers
necessary for continued listing and has not been trading
since.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>9</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="162.666626" colspan="2" rowspan="1" >
<p align="center">
Common Stock</p align="center">
</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
High</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
Low</p align="center">
</td>
</tr>
<tr valign="top">
<td width="371.999907" colspan="4" rowspan="1" >
<p>
</p>
</td>
</tr>
<tr valign="top">
<td width="207.999948" colspan="2" rowspan="1" >
<p>
<b>Fiscal 2004</b></p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
$</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
$</p align="center">
</td>
</tr>
<tr valign="top">
<td width="371.999907" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
<p>
First Quarter</p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
0.04</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
0.01</p align="center">
</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
<p>
Second Quarter</p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
0.01</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
0.01</p align="center">
</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
<p>
Third Quarter</p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
0.03</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
0.01</p align="center">
</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
<p>
Fourth Quarter</p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
0.05</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
0.01</p align="center">
</td>
</tr>
<tr valign="top">
<td width="371.999907" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="371.999907" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
High</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
Low</p align="center">
</td>
</tr>
<tr valign="top">
<td width="207.999948" colspan="2" rowspan="1" >
<p>
<b>Fiscal 2003 </b></p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
$</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
$</p align="center">
</td>
</tr>
<tr valign="top">
<td width="371.999907" colspan="4" rowspan="1" >
<p>
</p>
</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
<p>
First Quarter</p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
0.06</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
0.01</p align="center">
</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
<p>
Second Quarter</p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
0.04</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
0.02</p align="center">
</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
<p>
Third Quarter</p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
0.04</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
0.01</p align="center">
</td>
</tr>
<tr valign="top">
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="141.333298" colspan="1" rowspan="1" >
<p>
Fourth Quarter</p>
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
0.03</p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
0.01</p align="center">
</td>
</tr>
</table></div>
<p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Approximate Number of
Holders of Common Stock and the Preferred Stock.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of holders of record of the
Company&#8217;s common stock as of July 15, 2004 was 2,164 and the Company
estimates that there are approximately 3,000 additional beneficial shareholders.
There is one beneficial holder of the Company&#8217;s preferred stock as of July
15, 2004.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Dividends.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of common stock are entitled
to receive such dividends as may be declared by the Company&#8217;s Board of
Directors.  No dividends have been paid with respect to the Company&#8217;s
common stock and no dividends are anticipated to be paid in the foreseeable
future. Any future decisions as to the payment of dividends will be at the
discretion of the Company&#8217;s Board of Directors, subject to applicable law.
From November 1994 through November 2002, the Company&#8217;s Board of Directors
voted each year to defer payment of the annual dividend on the Series A, 12%
Preferred Stock, in order to preserve the Company&#8217;s cash reserves and in
November 2003 cancelled the payment of the annual dividend on the Series A, 12%
Preferred Stock. The Company&#8217;s Board of Directors determined, in the
reasonable and prudent exercise of their business judgment, that the only manner
in which any value could be realized to shareholders was from a merger of the
Company with another company and that there does not seem to be any other basis
on which the Company can continue. The Company is seeking to use its capital
stock to effect a business combination with a private company, which wishes to
establish a public trading market for its securities. Based on discussions with
potential merger partners, it was clear that no potential merger partner would
likely participate in a merger so long as there were outstanding preferred
shares. On September 15, 2003, the Company sent a letter to all preferred
shareholders announcing its intention to convert preferred shares to common
shares. The proposed terms of the conversion were the exchange of one share of
preferred stock for fifteen shares of common stock. The conversion also provided
for a payment of $0.01 per share converted. The letter announcing the conversion
made it clear that preferred shareholders could choose not to convert and that
they would be reissued their preferred shares. The Company set a 15 to 1 ratio
for the conversion of the preferred shares to common, in 2003, based on (a) the
additional accrued dividends and (b) the desire to set an attractive conversion
ratio which would facilitate conversion and place the corporation in a position
to go forward with its business combination plans. 20,675 preferred shares were
converted to 310,199 shares of common stock and payments of $206.75 were
issued.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>10</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
<b>Item 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management&#8217;s Discussion and
Analysis of Financial Condition and Results of Operations.</b><p>
<b>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.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Results of Operations
for Fiscal Years 2004 and 2003.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the fiscal year ended April 30,
2004, the Company&#8217;s revenues decreased slightly from $2,006,406 to
$1,999,173.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By component, food and beverage sales
increased 5.3% to $1,981,113 from to $1,882,118.  The Company attributes the
increased food and beverage sales to an increase in menu prices in the first
quarter of 2004 and to a slight increase in customer volume. The food to
beverage ratio for the San Antonio location was approximately 60% to 40% for
both comparable years. Food and beverage sales accounted for 99% and 93.8% of
the Company&#8217;s total revenue in the comparable periods.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the fiscal year ended April 30,
2003, the Company&#8217;s revenues decreased 6.6% to  $2,006,406 from $2,147,995
in FY 2002.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues from merchandise and
memorabilia sales and consulting fees accounted for less than 1% of the
Company&#8217;s total revenue in FY 2004 compared to 5.79% in FY 2003. Sales of
memorabilia are directly tied to the number of new Champions locations that open
during the fiscal year. In FY 2004, the Company did not provide any sports
memorabilia to any Champions locations. In FY 2003, the Company provided sports
memorabilia to one Champions location. During FY 2004 and FY 2003, the Company
other revenues accounted for less than 1% of its total revenues.
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>11</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s cost of food and
beverage was in FY2004 at the San Antonio restaurant location increased to 29.6%
of sales from 24.6% in FY2003. 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.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restaurant payroll and related costs
were 32% of related food and beverage sales for FY 2004 and 35.3% of related
sales in FY2003. This variance is attributed to a 5% increase in food and
beverage sales and eliminating one management position during FY2004.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restaurant occupancy costs for FY 2004
were 12.7% of food and beverage sales compared to 13.3% in FY 2003.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other restaurant costs decreased as a
percentage of food and beverage sales at 20.3% for FY 2004 compared to 21.5% for
FY 2003.  This variance is due to a 5% increase in food and beverage sales.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative costs
incurred in FY 2004 were $277,490 and $280,847 in FY 2003. The primary
components of G&amp;A expenses are operating the Company&#8217;s corporate
office, including salaries. The Company has undertaken significant expense
reduction actions in FY 2004 in order to preserve the Company&#8217;s cash. Its
corporate officers have not taken any salaries since December 2003. The Company,
on January 12, 2005, was advised by the Securities and Exchange Commission, upon
its review of the Company&#8217;s filing of the Form 10-KSB for the year ended
April 30, 2004, that when an executive officer, who is also a significant
shareholder of the company, contributes his services to the company, the fair
value of those services should be reflected as expense on the books of the
Company. The revised filing reflects the action taken by the Company to accrue
the salary of its executive officer, Mr. Martell, pursuant to the salary rate in
his employment agreement. The Company is continually evaluating other cost
reductions.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense in both FY 2004 and
2003 was immaterial.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Profits
/ Losses<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For FY 2004, the Company&#8217;s loss
was $215,234 from its operations before dividends accrued on the outstanding
preferred stock of $21,580, producing a net loss for   common shareholders of
$236,814, or $0.02 per common share. The San Antonio Champions location produced
a net profit of $68,934.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For FY 2003, the Company&#8217;s loss
was $145,994 from its operations before dividends accrued on the outstanding
preferred stock of $63,750, producing a net loss for common shareholders of
$209,744</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>12</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Liquidity and Capital
Resources for Fiscal Years 2004 and 2003<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are currently experiencing a
severe shortage of working capital.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s cash position on
April 30, 2004 was $120,116 compared to $195,101 on April 30, 2003, a decrease
of $74,985.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During FY 2004, the Company&#8217;s
operating activities used cash of $72,054. The Company used cash to purchase
equipment for its San Antonio restaurant for $2,931. The Company&#8217;s
operating activities and cash reserves were sufficient to meet its cash
requirement during FY 2004.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During FY 2003, The Company&#8217;s
operating activities used cash of $248,117. The Company purchased equipment for
its San Antonio Champions location for $9,135 and repaid a capital lease for
$1,929.  The Company&#8217;s operating activities and cash reserves were
sufficient to meet its cash requirement during FY 2003.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s restated working
capital on April 30, 2004 was a negative $412,242, compared to a negative
$463,353 on April 30, 2003.  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>
&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.<p>
&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>.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Miscellaneous for
Fiscal Years 2004 and 2003<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders&#8217; equity on April
30, 2004 was a negative $200,251 compared to a negative $209,749 on April 30,
2003. The Company&#8217;s Board of Directors voted in FY 2004 to cancel the
payment of the annual dividend on the Series A, 12%, Preferred Stock in order to
preserve the Company&#8217;s cash reserves. In FY 2003 the Company&#8217;s Board
of Directors voted to defer payment of the 12% annual dividend of the
Company&#8217;s preferred stock This dividend was recorded on the
Company&#8217;s balance sheet as a current liability. In addition, in FY 2004
and 2003, the Board of Directors voted to defer the annual meeting of
shareholders in order to preserve the Company&#8217;s cash
reserves.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>13</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
Impact of inflation<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inflationary factors have not had a
significant effect on the Company&#8217;s operations<p>
Risk factors<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The risks and uncertainties described
below are not the only ones facing the Company. Additional risks not presently
known or that the Company currently considers being insignificant may also
impair the Company&#8217;s business operations in the future. The
Company&#8217;s business, financial condition and plan of operations could be
materially adversely affected by any of the following risks.<ul>
<li>The Company had a loss for the year ended April 30, 2004 and 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 or merges with or is acquired by another company.  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.</li>
<li>The loss of the services of the Company&#8217;s key employee, James Martell,
the Company&#8217;s Chairman, President and CEO, may have a material adverse
affect on the Company&#8217;s business, financial condition and its ability to
obtain additional funding or structuring a merger or acquisition.</li>
<li>The Company may, in the future, issue additional shares of the
Company&#8217;s common stock, which would reduce shareholders&#8217; percent of
ownership and may dilute their share value. The Company&#8217;s Articles of
Incorporation authorize the issuance of 50,000,000 shares of common stock, par
value $.001 per share. As of July 25, 2004 the Company had 8,824,658 shares of
common stock issued and outstanding. The future issuance of all or part of the
remaining authorized common stock may result in substantial dilution in the
percentage of the common stock held by the Company&#8217;s then existing
shareholders. The Company may value any common stock issued in the future on an
arbitrary basis.  The issuance of common stock for future services or
acquisitions or other corporate actions may have the effect of diluting the
value of the shares held by the shareholders, and might have an adverse effect
on any trading market for the Company&#8217;s common stock.</li>
<li>The Company&#8217;s common stock may be affected by sporadic or limited
trading volume and may fluctuate significantly. Although the Company&#8217;s
common stock has been continually traded publicly since 1985, and at times
actively, it can be currently considered to be trading on a sporadic or limited
basis on the OTC Bulletin Board in comparison to the NASDAQ National Market, the
American Stock Exchange, New York Stock Exchange and other national securities
exchanges and there can be no assurance that an active trading market for the
common stock will develop. As a result, this could adversely affect the
shareholders&#8217; ability to sell their common stock in short time periods, or
possibly at all. Therefore, the Company cannot assure that there will be
liquidity in the common stock. The common stock has experienced, and is likely
to experience in the future, significant price and volume fluctuations, which
could adversely affect the market price of the common stock without regard to
the Company&#8217;s operating performance. In addition, the Company believes
that factors such as quarterly fluctuations in the Company&#8217;s financial
results and changes in the overall economy or the condition of the financial
markets could cause the price of the common stock to fluctuate substantially.
</li>
<li>The Company&#8217;s common stock is deemed to be "penny stock," which may
make it more difficult for shareholders to resell their shares due to
suitability requirements. The common stock is a penny stock. Penny stocks
generally are equity securities with a price of less than $5.00 per share other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ Stock Market, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system. The Company&#8217;s securities may be subject to  "penny stock
rules&#8221; that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally those with assets in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 together with their
spouse). For transactions covered by these rules, the broker-dealer must make a
special suitability determination for the purchase of such securities and have
received the purchaser&#8217;s written consent to the transaction prior to the
purchase.  Additionally, for any transaction involving a penny stock, unless
exempt, the "penny stock rules" require the delivery, prior to the transaction,
of a disclosure schedule prescribed by the Commission relating to the penny
stock market.  The broker-dealer also must disclose the commissions payable to
both the broker-dealer and the registered representative and current quotations
for the securities.  Finally, monthly statements must be sent disclosing recent
price information on the limited market in penny stocks. Consequently, the
"penny stock rules" may restrict the ability of broker-dealers to sell
Company&#8217;s securities and may have the effect of reducing the level of
trading activity of the common stock in the secondary market. The foregoing
required penny stock restrictions will not apply to securities if such
securities maintain a market price of $5.00 or greater. The Company can give no
assurance that the price of its securities will reach or maintain such a
level.</li></ul><p>
<p>
<b>Item 7. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Supplementary
Data.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Report of Independent Accountants
appears at page F-1 and the Consolidated Financial Statements and Notes to the
Consolidated Financial Statements appear at pages F-3 through F-19
hereof.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>15</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
<b>Item 8. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes In and Disagreements with
Accountants on Accounting &amp; Financial Disclosure.</b></p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2004, the Company changed independent auditors from Michael F. Moore, CPA (sole practitioner) to Bagell, Josephs &amp; Co. L.L.C. Information concerning the change in accountants was included in the Company&#8217;s Form 8-K filed with the Securities and Exchange Commission on June 28, 2004. For FY 2003, the Company changed independent auditors from Pannell Kerr Forster PC to Michael F. Moore, CPA (sole practitioner). There have been no disagreements between the Company and its independent accountants on any matter of accounting principles or practices or financial statement disclosure during the last two fiscal years.	<p>
<p>
<b>Item 8A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Controls and Procedures</b><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 the  Company&#8217;s  reports under the Securities Exchange
Act of 1934, such as this Form 10-KSB 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>
&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 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 10-KSB.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>16</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>PART III</b><p>
<b>Item 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors and Executive Officers.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Executive Officers and Directors
of the Company are as follows:</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p>
NAME </p>
</td>
<td width="383.999904" colspan="1" rowspan="1" >
<p>
POSITION(S) PRESENTLY  HELD</p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="606.666515" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p>
James M. Martell</p>
</td>
<td width="383.999904" colspan="1" rowspan="1" >
<p>
Chairman, President, Chief Executive Officer and Director </p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p>
James E. McCollam</p>
</td>
<td width="383.999904" colspan="1" rowspan="1" >
<p>
Controller, Chief Accounting Officer, Corporate Secretary</p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p>
Durwood C. Settles</p>
</td>
<td width="383.999904" colspan="1" rowspan="1" >
<p>
Director</p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p>
Michael M. Tomic</p>
</td>
<td width="383.999904" colspan="1" rowspan="1" >
<p>
Director</p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>James M. Martell</b>, age 57, has
served as President from May 1990 to June 1992 and from January 1993 to
September 1993 and from March 1994 to the present and as Chief Executive Officer
from May 1990 to June 1992 and from January 1993 to September 1993 and from
March 1994 to August 2000 and from June 2001 to the present and as Chairman from
November 1991 to August, 2000 and from June 2001 to the present. Mr. Martell
served as Director of the Company since its inception on June 4, 1985.
Additionally, he served the Company as Vice President from October 1988 to May
1990, as Treasurer from June 1985 to January 1989, and as Secretary from June
1985 to January 1986. Mr. Martell is a director and officer of all of the
Company&#8217;s wholly owned subsidiaries, except for the Been Corporation.
From 1983 to 1987, Mr. Martell was a partner along with Mr. Tomic in Tomar
Associates, a consulting company specializing in European-American joint
ventures, venture capital financing, technology transfer, and corporate finance.
From 1981 to 1983, Mr. Martell was a partner in International Group, a
partnership involved in promoting national and international business
development.  From 1973 to 1981, he served in various administrative positions
at the U.S. Department of Energy. Mr. Martell received a Bachelor of Science
degree in Chemistry in 1968 and a Master of Science degree in Geochemistry in
1973, from George Washington University. <p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>James E. McCollam</b>, age 57, has
served as Chief Accounting Officer of the Company since July 1992 and Controller
since May 1988. From 1984 to 1987 he was Controller of the Winston Group, Inc.,
a five-unit food service organization in the Washington D.C.  metropolitan area.
From 1977 to 1983, he was the Controller of Capitol Hill Cabaret, Inc., an
organization that owned and operated two restaurants and nightclubs in the
Washington D.C. area. From 1973 to 1977, Marriott Corporation in various
positions in the corporate accounting department.   He earned a Bachelor of
Science degree in Finance from the University of Maryland 1970.<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Durwood C. Settles, </b>age 61,<b>
</b>has served as Director of the Company since March 2001.<b> </b>Mr. Settles
is a Certified Public Accountant in individual practice since 1983.  From 1973
to 1982, Mr. Settles was with Coopers &amp; Lybrand in Washington, D.C. as a
member of the audit staff and as Manager-Special Projects.  During the period
1974 to 1986, Mr. Settles served as Controller or Treasurer of the various
political campaign organizations of Congressman Richard A. Gephardt of Missouri,
Governor Charles S. Robb of Virginia, and Congressman Joseph L. Fisher of
Virginia.  From 1970 to 1973, Mr. Settles was an owner and executive of a
company that manufactured and sold Plexiglas furniture located in Kensington,
Maryland.  From 1966 to 1969, Mr. Settles was a promoter of popular music
concerts in various cities in the Eastern and Southern United States.  From 1964
to 1966, Mr. Settles was a Group Pension Management Assistant and Computer Files
Service Supervisor with the Mutual of New York Life Insurance Company (MONY) in
New York, New York.   Mr. Settles received a Bachelor of Arts degree in
Economics in 1964 from Davidson College, Davidson, North Carolina and completed
accounting studies in 1973 at George Washington University, Washington,
D.C.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>17</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Michael M. Tomic</b>, age 58, has
served as a Director of the Company since its inception on June 4, 1985.  From
June 1985 to January 1986, he also served as Vice President of the Company.
From 1983 to 1987, Mr. Tomic was a partner along with Mr. Martell in Tomar
Associates, a consulting company specializing in European-American joint
ventures, venture capital financing, technology transfer, and corporate finance.
He received a Bachelor of Science degree in International Marketing and
Economics in 1969 from the University of Maryland.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The term of office of each Director is
until the next annual election of Directors and until a successor is elected and
qualified or until the Director&#8217;s earlier death, resignation or
removal.<p>
<b>Item 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive Compensation.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth cash
compensation for services rendered during FY 2004, and 2003 which was paid by
the Company to, or accrued by the Company for, each of the Company&#8217;s most
highly compensated executive officers whose cash compensation in such year
equaled or exceeded $100,000:</p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="637.333174" colspan="8" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">SUMMARY COMPENSATION TABLE</font></p>
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="69.333316" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="69.333316" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="62.666651" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="221.333278" colspan="3" rowspan="1" >
<p align="center">
<u>Annual Compensation</u></p align="center">
</td>
<td width="210.666614" colspan="2" rowspan="1" >
<p align="center">
<u>Long Term Compensation</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="69.333316" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="69.333316" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="62.666651" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="221.333278" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center">
Number of</p align="center">
</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="69.333316" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="69.333316" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="62.666651" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="221.333278" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center">
Restricted</p align="center">
</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="203.999949" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="59.999985" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center">
Securities</p align="center">
</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="center">
All Other</p align="center">
</td>
</tr>
<tr valign="top">
<td width="203.999949" colspan="3" rowspan="1" >
<p>
Name and</p>
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
FY</p align="center">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
Salary</p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
Bonus</p align="center">
</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center">
Underlying</p align="center">
</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="center">
Compensation</p align="center">
</td>
</tr>
<tr valign="top">
<td width="203.999949" colspan="3" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">Principal Position</font></p>
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Year</font></p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">($)</font></p>
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">($)</font></p>
</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Options</font></p>
</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">($)</font></p>
</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="203.999949" colspan="3" rowspan="1" >
<p>
James M. Martell,</p>
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
2004</p align="center">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
148,000 (1)</p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
0</p align="center">
</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center">
8,000,000</p align="center">
</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="center">
0</p align="center">
</td>
</tr>
<tr valign="top">
<td width="203.999949" colspan="3" rowspan="1" >
<p>
President, CEO</p>
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
2003</p align="center">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
123,333    &nbsp;</p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
0</p align="center">
</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center">
0</p align="center">
</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="center">
0</p align="center">
</td>
</tr>
</table></div>
<p>
<p>
<sup>1</sup>&nbsp;&nbsp;$49,333 was cash compensation and $98,667 was accrued.
The Company, on January 12, 2005, was advised by the Securities and Exchange
Commission, upon its review of the Company&#8217;s filing of the Form 10-KSB for
the year ended April 30, 2004, that when an executive officer, who is also a
significant shareholder of the company, contributes his services to the company,
the fair value of those services should be reflected as expense on the books of
the Company. The revised filing reflects the action taken by the Company to
accrue the salary of its executive officer, Mr. Martell, pursuant to the salary
rate in his employment agreement.  <p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In FY 2004, all executive officers of
the Company as a group (2 in number) received cash compensation of $73,666.
Effective January 2004, salaries to all executive officers were suspended in
order to preserve the Company&#8217;s cash position and will not be paid until
the cash position of the Company improves. In FY 2003, all officers of the
Company as a group (2 in number) received cash compensation of $184,166. The
Board of Directors has the right to change and increase the compensation of
executive officers at any time.  The Company has no arrangement by which any of
its directors are compensated for services solely as directors, and these
individuals do not receive any additional remuneration for their services as
directors.  The Company may from time to time pay consulting fees to its
officers and directors.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>18</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as described below, the Company
has no compensatory plan or arrangement which would result in executive officers
receiving compensation as a result of their resignation, retirement or any other
termination of employment with the Company or its affiliates, or from a change
in control of the Company or a change in responsibilities following a change in
control of the Company.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company entered into an employment
agreement with Mr. Martell in September 1993, under which Mr. Martell received
options to purchase 200,000 shares of the Company&#8217;s Common Stock at $1.00
per share at any time prior to September 6, 2001, whether or not Mr. Martell is
an employee at such time. If there is a change in the management of the Company
and such management acts contrary to the policy of the current Board, or if Mr.
Martell&#8217;s position as an officer or director is terminated, Mr. Martell
may resign and become entitled to liquidated damages determined pursuant to a
formula prescribed in the contract. . This agreement was extended for two years
in FY 2000 at an annual salary of $148,000 and further extended for another
three years in FY 2002. In FY 2003, Mr. Martell&#8217;s salary was reduced in
the interim to $74,000 and since January 2004 Mr. Martell has not taken a salary
in order to preserve the Company&#8217;s cash position.  In FY 2001, the Board
of Directors reissued to Mr. Martell the options to purchase the 200,000 shares
of Company&#8217;s Common stock at $0.11 per share instead of $1.00 per share as
previously granted and extended the expiration of those options to August 22,
2003. These options expired in FY 2004. In FY 1996, the Board of Directors
granted to Mr. Martell an option to purchase 1,200,000 restricted shares of the
Company&#8217;s Common Stock at $0.05 per share. Mr. Martell in FY 1996
exercised this option for 1,200,000 restricted shares for $60,000.   In January
2004, the Board of Directors granted to Mr. Martell a seven-year option to
purchase 8,000,000 restricted shares of the Company&#8217;s Common Stock at
$0.01 per share.              <p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In FY 2001, the Board of Directors, as
part of its efforts to diversify into high technology, granted the following
options to the Company&#8217;s Officers, Directors and Advisory Board Members: a
three year option to purchase 575,000 restricted shares of the Company&#8217;s
Common Stock at $0.11 per share to James J. Heigl, then Chairman and CEO in FY
2001; a three year option to purchase 550,000 restricted shares of the
Company&#8217;s Common Stock at $0.11 per share to Harry Alton Lee, then COO and
Director in FY 2001; a three year option to purchase 900,000 restricted shares
of the Company&#8217;s Common Stock at $0.11 per share to Michael Tomic,
Director; a three year option to purchase 100,000 restricted shares of the
Company&#8217;s Common Stock at $0.11 per share to Durwood Settles, Director; a
three year option to purchase 50,000 restricted shares of the Company&#8217;s
Common Stock at $0.11 per share to James McCollam, Chief Accounting Officer and
Controller; and three year options to purchase 5,000 restricted shares of the
Company&#8217;s Common Stock at $0.28 per share to each of its Advisory Board
Members. In FY 2004 the Board of Directors extended the options that were
granted in FY 2001 to Michael Tomic, Durwood Settles and James McCollam for one
additional year. All other options granted in FY 2001 expired unexercised in FY
2004.<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>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted Option Grants<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table represents the
restricted stock options granted in FY 2004 to the executive officer identified
in the Summary Compensation table above.</p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="671.999832" colspan="4" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Restricted Options Granted in the Last Fiscal Year</font></p>
</td>
</tr>
<tr valign="top">
<td width="671.999832" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p>
</p>
</td>
<td width="185.333287" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="185.333287" colspan="1" rowspan="1" >
<p align="center">
Number of</p align="center">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="185.333287" colspan="1" rowspan="1" >
<p align="center">
Restricted</p align="center">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center">
Percent of Total</p align="center">
</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="185.333287" colspan="1" rowspan="1" >
<p align="center">
Securities</p align="center">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center">
Options Granted</p align="center">
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="center">
Exercise Price of</p align="center">
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="185.333287" colspan="1" rowspan="1" >
&nbsp;Underlying	</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;to Employees in	</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;Options	</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;Name of Executive   	</td>
<td width="185.333287" colspan="1" rowspan="1" >
&nbsp;Options Granted	</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;Fiscal Year	</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">Date of expiration     </font></p>
</td>
<td width="185.333287" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">(#)</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">(%)</font></p>
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">($)</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="185.333287" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p>
James M. Martell    </p>
</td>
<td width="185.333287" colspan="1" rowspan="1" >
<p align="center">
8,000,000</p align="center">
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center">
100</p align="center">
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="center">
0.01</p align="center">
</td>
</tr>
<tr valign="top">
<td width="671.999832" colspan="4" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">1/12/11</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<b>Item 11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security Ownership of Certain
Beneficial Owners and Management</b>.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of July 15, 2004, the following
were persons known to the Company to own beneficially more than 5% of the
Company&#8217;s outstanding Common Stock: </p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="215.999946" colspan="1" rowspan="1" >
<p>
<b>Name and Address of</b></p>
</td>
<td width="305.333257" colspan="1" rowspan="1" >
<p>
<b>Common Stock</b></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="215.999946" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Beneficial Owner </b></font></p>
</td>
<td width="305.333257" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Beneficially Owned (1)</b></font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Percentage</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="623.999844" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="215.999946" colspan="1" rowspan="1" >
<p>
James M. Martell</p>
</td>
<td width="305.333257" colspan="1" rowspan="1" >
<p>
1,548,000</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
17.5</p align="center">
</td>
</tr>
<tr valign="top">
<td width="623.999844" colspan="3" rowspan="1" >
<p>
2420 Wilson, Blvd., Suite 214</p>
</td>
</tr>
<tr valign="top">
<td width="623.999844" colspan="3" rowspan="1" >
<p>
Arlington, VA 22201</p>
</td>
</tr>
</table></div>
<p>
<p>
(1) Beneficial Ownership includes shares for which an individual, directly or
indirectly, has or shares, or has the right within 60 days to have or share,
voting or investment power or both. Beneficial ownership as reported in the
above table has been determined in accordance with Rule 13d-3 of the Exchange
Act.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The stock ownership by officers and
directors of the Company and all officers and directors as a group are as
follows:</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="197.333284" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="4" rowspan="1" >
<p>
<b>Common Stock</b></p>
</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="197.333284" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="4" rowspan="1" >
<p>
<b>Beneficially Owned</b></p>
</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Name</b></font></p>
</td>
<td width="197.333284" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Title </b></font></p>
</td>
<td width="143.999964" colspan="3" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3"><b>as of July 15, 2004 (1)</b></font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Percentage</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="623.999844" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
<p>
James M. Martell</p>
</td>
<td width="215.999946" colspan="2" rowspan="1" >
<p>
President &amp; Director</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
1,548,000</p align="right">
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
17.5</p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
<p>
Michael M. Tomic</p>
</td>
<td width="215.999946" colspan="2" rowspan="1" >
<p>
Director</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
225,000</p align="right">
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
2.6</p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
<p>
James E. McCollam</p>
</td>
<td width="215.999946" colspan="2" rowspan="1" >
<p>
Controller, </p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
2,000</p align="right">
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
*</p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="215.999946" colspan="2" rowspan="1" >
<p>
Chief Accounting Officer</p>
</td>
<td width="227.999943" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="215.999946" colspan="2" rowspan="1" >
<p>
&amp; Corporate Secretary</p>
</td>
<td width="227.999943" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="395.999901" colspan="3" rowspan="1" >
<p>
All officers &amp; directors as a group  </p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
1,765,000</p align="right">
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
20.1</p align="center">
</td>
</tr>
<tr valign="top">
<td width="623.999844" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="623.999844" colspan="6" rowspan="1" >
<p>
*Less  than 1.0%</p>
</td>
</tr>
</table></div>
<p style="margin-left:80"><br>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beneficial
Ownership includes shares for which an individual, directly or indirectly, has
or shares, or has the right within 60 days to have or share, voting or
investment power or both. Beneficial ownership as reported in the above table
has been determined in accordance with Rule 13d-3 of the Exchange Act.</p><p>
<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>
Compliance with Section 16(a).<p>
Section 16(a) of the Exchange Act, as amended, requires the Company&#8217;s
executive officers, directors and persons who beneficially own more than 10% of
the Company&#8217;s common stock to file reports of their beneficial ownership
and changes in ownership (Forms 3,4 and 5, and any amendment thereto) with the
SEC. Executive officers, directors, and greater-than-ten percent holders are
required to furnish the Company with copies of all Section 16(a) forms they
file. Based on the Company&#8217;s review of the activity of the officers and
directors for the fiscal year ended April 30, 2004, the Company believes that
reports pursuant to Section 16(a) were filed.<p>
<b>Item 12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain Relationships and Related
Transactions.</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During FY 2004 and FY 2003, there were
no related party transactions.<p>
<b>Item 13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and Reports on Form
8-K.</b></p>
<div 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="221.333278" colspan="2" rowspan="1" >
<p>
(a) Index to Financial Statements</p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="305.333257" colspan="2" rowspan="1" >
<p>
PAGE</p>
</td>
</tr>
<tr valign="top">
<td width="623.999844" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="203.999949" colspan="1" rowspan="1" >
<p>
Independent Auditors&#8217; Reports</p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p>
</p>
</td>
<td width="171.999957" colspan="1" rowspan="1" >
<p>
F-1 - 20</p>
</td>
<td width="133.333300" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="221.333278" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="171.999957" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="133.333300" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="221.333278" colspan="2" rowspan="1" >
<p>
(b) Reports on Form 8-K</p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="171.999957" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="133.333300" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no Form 8-K&#8217;s filed
during the last quarter of the period covered   by this report. Subsequent to
April 30, 2004, Form 8-K was filed on June 28, 2004 relating to a change in the
Company&#8217;s independent accountant.<p>
<b>Item 14</b>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>PRINCIPAL ACCOUNTANT FEES AND
SERVICES</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of the fees
billed to the Company by its principal accountants during the fiscal years ended
April 30, 2004, and April 30, 2003:</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="185.333287" colspan="1" rowspan="1" >
<p>
<u>Fee category</u></p>
</td>
<td width="101.333308" colspan="2" rowspan="1" >
<p align="center">
<u>2004</u></p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
<u>2003</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="371.999907" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="185.333287" colspan="1" rowspan="1" >
<p>
Audit fees</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
$8,000</p align="right">
</td>
<td width="113.333305" colspan="2" rowspan="1" >
<p align="right">
$21,000</p align="right">
</td>
</tr>
<tr valign="top">
<td width="185.333287" colspan="1" rowspan="1" >
<p>
Audit-related fees</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
$2,891</p align="right">
</td>
<td width="113.333305" colspan="2" rowspan="1" >
<p align="right">
$&nbsp;&nbsp;1,270</p align="right">
</td>
</tr>
<tr valign="top">
<td width="185.333287" colspan="1" rowspan="1" >
<p>
Tax fees</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
$0</p align="right">
</td>
<td width="113.333305" colspan="2" rowspan="1" >
<p align="right">
$0</p align="right">
</td>
</tr>
<tr valign="top">
<td width="185.333287" colspan="1" rowspan="1" >
<p>
All other fees</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
$0</p align="right">
</td>
<td width="113.333305" colspan="2" rowspan="1" >
<p align="right">
$0</p align="right">
</td>
</tr>
<tr valign="top">
<td width="371.999907" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="185.333287" colspan="1" rowspan="1" >
<p>
Total fees</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
$10,891</p align="right">
</td>
<td width="113.333305" colspan="2" rowspan="1" >
<p align="right">
$22,270</p align="right">
</td>
</tr>
</table></div>
<p>
<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;Audit fees.  Consists of fees for
professional services rendered by our principal accountants for the audit of the
annual financial statements.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit-related fees.  Consists of fees
for assurance and related services by our principal accountants that are
reasonably related to the performance of the audit or review of financial
statements and are not reported under "Audit fees."<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax fees.  Consists of fees for
professional services rendered by our principal accountants for tax compliance,
tax advice and tax planning.  <p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All other fees.  Consists of fees for
products and services provided by our principal accountants, other than the
services reported under "Audit fees," "Audit-related fees" and "Tax fees" above.
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee Policies and
Procedures<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company does not have an audit
committee at this time.<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 align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><p align="center">
<b>CONSOLIDATED FINANCIAL STATEMENTS</b><p align="center">
<b>APRIL 30, 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 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 align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><p align="center">
<b>INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS</b><p align="center">
<b>APRIL 30, 2004 AND 2003</b></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" >
<p align="center">
<b><u>Page(s)</u></b></p align="center">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="5" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
Report of Independent Registered Public Accounting Firm - 2004</p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
1</p align="center">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="5" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
Independent Auditors&#8217; Report - 2003</p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
2</p align="center">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="5" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
Consolidated Balance Sheets as of April 30, 2004 and 2003 </p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
3</p align="center">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="5" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
Consolidated Statements of Operations for the Years </p>
</td>
<td width="102.666641" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;Ended April 30, 2004 and 2003</p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
4</p align="center">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="5" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
Consolidated Statement of Changes in Stockholders&#8217; </p>
</td>
<td width="102.666641" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;(Deficit) for the Years Ended April 30, 2004 and 2003</p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
5</p align="center">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="5" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
Consolidated Statements of Cash Flows for the Years Ended</p>
</td>
<td width="102.666641" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
</p>
</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;April 30, 2004 and 2003</p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
6</p align="center">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="509.333206" colspan="1" rowspan="1" >
<p>
Notes to Consolidated Financial Statements</p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
7-19</p align="center">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="637.333174" colspan="5" rowspan="1" >
&nbsp;</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>BAGELL, JOSEPHS &amp; COMPANY, L.L.C.</b><br>Certified Public
Accountants<p align="center">
High Ridge Commons<br>Suites 400-403<br>200 Haddonfield Berlin
Road<br>Gibbsboro, New Jersey 08026<br>(856) 346-2828  Fax (856)
346-2882<p align="center">
<b>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</b><p>
Board of Directors<br>Champions Sports, Inc. and Subsidiaries<br>Arlington,
Virginia<p>
We have audited the accompanying consolidated balance sheet of Champions Sports,
Inc. and Subsidiaries as of April 30, 2004 and the related consolidated
statements of operations, changes in stockholders&#8217; (deficit), and cash
flows for the year then ended.  These consolidated financial statements are the
responsibility of the Company&#8217;s management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.<p>
We have conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.<p>
The accompanying consolidated financial statements for the year ended April 30,
2004 have been prepared assuming that the Company will continue as a going
concern.   As discussed in Note 9 to the consolidated financial statements, the
Company has sustained operating losses and capital deficits that raise
substantial doubt about its ability to continue as a going concern.
Management&#8217;s operating and financing plans in regard to these matters are
also discussed in Note 9.  The consolidated financial statements do not include
any adjustments that might result from the outcome of these uncertainties.<p>
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Champions Sports,
Inc. and Subsidiaries as of <p>
April 30, 2004 and the results of its operations, changes in stockholders&#8217;
(deficit) and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="125.333302" colspan="1" rowspan="1" >
<p>
MEMBER OF:</p>
</td>
<td width="477.333214" colspan="1" rowspan="1" >
<p>
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS</p>
</td>
</tr>
<tr valign="top">
<td width="125.333302" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="477.333214" colspan="1" rowspan="1" >
<p>
NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS</p>
</td>
</tr>
<tr valign="top">
<td width="125.333302" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="477.333214" colspan="1" rowspan="1" >
<p>
PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS</p>
</td>
</tr>
</table></div>
<p>
<p>
As noted in Note 11, the Company has amended its previously issued consolidated
financial statements for the year ended April 30, 2004 on its report dated July
12, 2004.  The Company has amended these consolidated financial statements to
recognize an additional $107,547 in officer&#8217;s compensation and related
payroll tax expense for the year ended April 30, 2004.  This transaction
resulted in an increase in net loss applicable to common shares of $107,547 for
the year ended April 30, 2004 to a net loss of $215,234 as restated, and an
increase in the accumulated deficit to $6,383,925.<p>
<b>BAGELL, JOSEPHS &amp; COMPANY, L.L.C.</b><br>BAGELL, JOSEPHS &amp; COMPANY,
L.L.C.<br>Certified Public Accountants<br>Gibbsboro, New Jersey<br>July 12,
2004, except for footnote 11 dated June 2, 2005<p align="center">
- -1-</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="right">
<b>Michael F. Moore, CPA</b><br>Sole Practitioner<p align="right">
<b>1412 Kingsvale Circle</b><br><b>Herndon, VA 20170</b><p align="center">
<b>INDEPENDENT AUDITORS&#8217; REPORT</b><p>
To the Stockholders and Board of Directors<br>Champions Sports,
Inc<br>Arlington, Virginia<p>
I have audited the accompanying consolidated balance sheet of Champions Sports,
Inc. and its subsidiaries as of April 30, 2003, and the related consolidated
statements of operations, changes in stockholders&#8217; (deficiency of net
assets), and cash flows for the years then ended.  These financial statements
are the responsibility of the Company&#8217;s management.  My responsibility is
to express an opinion on these financial statements based on my audit.<p>
I conducted my audit in accordance with the auditing standards of the Public
Company Accounting Oversight Board (United States).  Those standards require
that I plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  I believe that my
audit provides a reasonable basis for my opinion.<p>
In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidates financial position of
Champions Sports, Inc. as of April 30, 2003, and the results of their operations
and their cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.<p>
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in Note 9 to
the financial statements, the Company has suffered losses from operations and
has a net capital deficiency that raise substantial doubt about its ability to
continue as a going concern. Management&#8217;s plans in regard to these matters
are also described in Note 9.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.<p>
<b>/s/ Michael F. Moore, CPA</b><br>Sole Practitioner </p>
<p>
July 1, 2003</p>
<p>
<p align="center">
- -2-</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="721.333153" colspan="8" rowspan="1" >
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="721.333153" colspan="8" rowspan="1" >
<p align="center">
<b>CONSOLIDATED BALANCE SHEETS</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="721.333153" colspan="8" rowspan="1" >
<p align="center">
<b>APRIL 30, 2004 AND 2003</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="721.333153" colspan="8" rowspan="1" >
<p align="center">
<b>ASSETS</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="center">
<b>(Restated)</b></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="center">
<b>2004</b></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="center">
<b>2003</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
<b>CURRENT ASSETS</b></p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="366.666575" colspan="3" rowspan="1" >
<p>
&nbsp;&nbsp;Cash and cash equivalents</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
120,116&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
195,101&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;Accounts receivable</p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
22,713&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
- -&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;Inventories</p>
</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
30,349&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
23,750&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;Prepaid expenses</p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">6,750&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">10,836&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="198.666617" colspan="2" rowspan="1" >
<p>
<b>Total current assets</b></p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
179,928&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
229,687&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="366.666575" colspan="3" rowspan="1" >
<p>
Property and equipment, net</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
200,939&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
246,427&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
<p>
Deposits</p>
</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">11,052&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">11,052&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
<b>TOTAL ASSETS</b></p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
$</p>
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">391,919&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">487,166&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="721.333153" colspan="8" rowspan="1" >
<p align="center">
<b>LIABILITIES AND STOCKHOLDERS&#8217; (DEFICIT)</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
<b>CURRENT LIABILITIES</b></p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;Accounts payable </p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
92,758&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
65,246&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="366.666575" colspan="3" rowspan="1" >
<p>
&nbsp;&nbsp;Dividend payable on preferred stock</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
350,460&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
575,192&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;Other accrued expenses</p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
146,116&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
49,280&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="378.666572" colspan="4" rowspan="1" >
<p>
&nbsp;&nbsp;Current portion of deferred lease concession</p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">2,836 &nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">3,322&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="198.666617" colspan="2" rowspan="1" >
<p>
<b>Total current liabilities</b></p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">592,170&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">693,040&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="378.666572" colspan="4" rowspan="1" >
<p>
Deferred lease concession, net of current portion</p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">3,875&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
<b>TOTAL LIABILITIES</b></p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">592,170&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">696,915&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="378.666572" colspan="4" rowspan="1" >
<p>
<b>COMMITMENTS AND CONTINGENCIES</b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="366.666575" colspan="3" rowspan="1" >
<p>
<b>STOCKHOLDERS&#8217; (DEFICIT)</b></p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="5" rowspan="1" >
<p>
&nbsp;&nbsp;Preferred stock, $10 par value; 56,075 shares authorized;</p>
</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="5" rowspan="1" >
<p>
32,450 and 53,125 shares issued and outstanding, respectively</p>
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
324,500&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
531,250&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="5" rowspan="1" >
<p>
&nbsp;&nbsp;Common stock, $.001 par value; 50,000,000 shares authorized </p>
</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="5" rowspan="1" >
<p>
8,824,658 and 8,514,459 shares issued and outstanding, respectively</p>
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
8,825&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
8,514&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;Additional paid-in capital</p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right">
5,850,349&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right">
5,397,598&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="285.333262" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;Accumulated deficit</p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3" color="#ff0000"> </font><font size="3">(6,383,925)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (6,147,111)</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="209.333281" colspan="3" rowspan="1" >
<p>
<b>Total stockholders&#8217; (deficit)</b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (200,251)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (209,749)</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="378.666572" colspan="4" rowspan="1" >
<p>
<b>TOTAL LIABILITIES AND STOCKHOLDERS&#8217; (DEFICIT)</b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">391,919&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="138.666632" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">487,166&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="167.999958" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="117.333304" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="138.666632" 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">
- -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="522.666536" colspan="9" rowspan="1" >
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b></p align="center">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="522.666536" colspan="9" rowspan="1" >
<p align="center">
<b>CONSOLIDATED STATEMENTS OF OPERATIONS</b></p align="center">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="522.666536" colspan="9" rowspan="1" >
<p align="center">
<b>FOR THE YEARS ENDED APRIL 30, 2004 AND 2003</b></p align="center">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="522.666536" colspan="9" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="center">
<b>(Restated)</b></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="center">
<b><u>2004</u></b></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="center">
<b><u>2003</u></b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
<p>
<b> </b></p>
</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="314.666588" colspan="3" rowspan="1" >
<p>
<b>OPERATING REVENUE</b></p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="314.666588" colspan="3" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Food and beverage</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
1,981,113&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
1,882,118&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="337.333249" colspan="5" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Merchandise, memorabilia, and
consulting fees</p>
</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
16,738&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
113,641&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="206.666615" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income</p>
</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">1,322&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">10,647&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="225.333277" colspan="3" rowspan="1" >
<p>
<b>Total operating revenue</b></p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">1,999,173&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">2,006,406&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="337.333249" colspan="5" rowspan="1" >
<p>
<b>COSTS AND OPERATING EXPENSES </b></p>
</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="314.666588" colspan="3" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of food and beverage</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
585,991&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
463,074&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="326.666585" colspan="4" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of merchandise and
memorabilia</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
15,408&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
38,799&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="326.666585" colspan="4" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restaurant payroll and related
costs</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
634,530&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
663,947&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="326.666585" colspan="4" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restaurant occupancy costs</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
250,645&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
251,899&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="314.666588" colspan="3" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other restaurant costs</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
401,924&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
405,365&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="314.666588" colspan="3" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
277,490&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
280,847&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="326.666585" colspan="4" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
48,419&nbsp;</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
48,419&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="206.666615" colspan="2" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest</p>
</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">50&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="237.333274" colspan="4" rowspan="1" >
<p>
<b>Total costs and operating expenses</b></p>
</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">2,214,407&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">2,152,400&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="371.999907" colspan="7" rowspan="1" >
<p>
<b>NET (LOSS) BEFORE PROVISION FOR INCOME TAXES</b></p>
</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
(215,234)</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
(145,994)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="314.666588" colspan="3" rowspan="1" >
<p>
Provision for income taxes</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" 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="206.666615" colspan="2" rowspan="1" >
<p>
<b>NET LOSS</b></p>
</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right">
(215,234)</p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
(145,994)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="314.666588" colspan="3" rowspan="1" >
<p>
Preferred stock dividends</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (21,580)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (63,750)</font></p>
</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="354.666578" colspan="6" rowspan="1" >
<p>
<b>(LOSS) APPLICABLE TO COMMON STOCKHOLDERS</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(236,814)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (209,744)</font></p>
</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="337.333249" colspan="5" rowspan="1" >
<p>
<b>BASIC (LOSS) PER COMMON SHARE</b></p>
</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.02)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">(0.02)</font></p>
</td>
</tr>
<tr valign="top">
<td width="99.999975" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="354.666578" colspan="6" rowspan="1" >
<p>
<b>WEIGHTED AVERAGE SHARES OUTSTANDING </b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">8,669,559&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">8,514,459&nbsp;</font></p>
</td>
</tr>
</table></div>
<p>
<p align="center">
The accompanying notes are an integral part of the consolidated financial
statements.<p>
<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>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="173.333290" colspan="2" rowspan="1" >
<p align="center">
<b>Series A, 12%</b></p align="center">
</td>
<td width="215.999946" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="173.333290" colspan="2" rowspan="1" >
<p align="center">
<b>Convertible</b></p align="center">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<b>Additional</b></p align="center">
</td>
<td width="215.999946" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="2" rowspan="1" >
<p align="center">
<b>Common Stock</b></p align="center">
</td>
<td width="173.333290" colspan="2" rowspan="1" >
<p align="center">
<b>Preferred Stock</b></p align="center">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<b>Paid-in</b></p align="center">
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="center">
<b>Accumulated</b></p align="center">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Shares</b></font></p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Amount</b></font></p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Shares</b></font></p>
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Amount</b></font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Capital</b></font></p>
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Deficits</b></font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>Total</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
Balance, April 30, 2002</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
8,514,459 </p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
$        8,514 </p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53,125 </p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
$        531,250 </p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
$ 5,392,598 </p align="right">
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right">
$   (5,937,367)</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
$       (5,005)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
<p>
Dividend on preferred stock </p>
</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
accrued and unpaid</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(63,750)</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(63,750)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
Subscriptions received, stock unissued</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,000 </p align="right">
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,000 </p align="right">
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
Net loss for the year </p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(145,994)</font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(145,994)</font></p>
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
Balance, April 30, 2003</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
8,514,459 </p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,514 </p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53,125 </p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;531,250 </p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
5,397,598 </p align="right">
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6,147,111)</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(209,749)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
Dividend on preferred stock accrued and unpaid</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-  </p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(21,580)</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(21,580)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
Preferred stock converted to common stock, 15:1</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;310,199 </p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;311 </p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20,675)</p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(206,750)</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;206,439 </p align="right">
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
<p>
Cancellation of preferred stock dividends due</p>
</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
to conversion to common stock</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-  </p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;246,312 </p align="right">
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;246,312 </p align="right">
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
Prior period adjustment, Note 10</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="365.333242" colspan="4" rowspan="1" >
&nbsp;</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right">
(107,547)</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(107,547)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
Net loss for the year, as originally stated </p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </font></p>
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(107,687)</font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(107,687)</font></p>
</td>
</tr>
<tr valign="top">
<td width="965.333092" colspan="8" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="293.333260" colspan="1" rowspan="1" >
<p>
Balance, April 30, 2004, as restated</p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">   8,824,658 </font></p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $        8,825 </font></p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32,450 </font></p>
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $        324,500 </font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $ 5,850,349 </font></p>
</td>
<td width="113.333305" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $   (6,383,925)</font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $    (200,251)</font></p>
</td>
</tr>
</table></div>
<p>
<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="726.666485" colspan="5" rowspan="1" >
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="726.666485" colspan="5" rowspan="1" >
<p align="center">
<b>CONSOLIDATED STATEMENTS CASH FLOWS </b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="726.666485" colspan="5" rowspan="1" >
<p align="center">
<b>FOR THE YEARS ENDED APRIL 30, 2004 AND 2003</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="center">
(Restated)</p align="center">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="center">
<b>2004</b></p align="center">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="center">
<b>2003</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>CASH FLOW FROM OPERATING ACTIVITIES</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
Net loss</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (215,234)</font></p>
</td>
<td width="13.333330" 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:solid windowtext .5pt">
<font size="3"> (145,994)</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>   Adjustments to reconcile net loss to net cash </b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(used in) operating
activities:</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
48,419&nbsp;</p align="right">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
48,419&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>  Changes in assets and liabilities</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
(22,713)</p align="right">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
- -&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
(6,599)</p align="right">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
1,805&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
4,086&nbsp;</p align="right">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
3,253&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
27,512&nbsp;</p align="right">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
(22,858)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other accrued expenses</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
96,836&nbsp;</p align="right">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
(3,510)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
- -&nbsp;</p align="right">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
(124,871)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred lease concession</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="13.333330" 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"> (4,361)</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total adjustments</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">147,541&nbsp;</font></p>
</td>
<td width="13.333330" 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"> (102,123)</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) operating
activities</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (67,693)</font></p>
</td>
<td width="13.333330" 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"> (248,117)</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>CASH FLOWS FROM INVESTING ACTIVITIES</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and
equipment</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (2,931)</font></p>
</td>
<td width="13.333330" 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"> (9,135)</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) investing
activities</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (2,931)</font></p>
</td>
<td width="13.333330" 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"> (9,135)</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>CASH FLOWS FROM FINANCING ACTIVITIES</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subscriptions received, stock
unissued</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
- -&nbsp;</p align="right">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
5,000&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on capital
lease</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (4,361)</font></p>
</td>
<td width="13.333330" 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"> (1,929)</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in)
financing activities</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (4,361)</font></p>
</td>
<td width="13.333330" 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">3,071&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>NET (DECREASE) IN</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>    CASH AND CASH EQUIVALENTS</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right">
(74,985)</p align="right">
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
<p align="right">
(254,181)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>CASH AND CASH EQUIVALENTS -</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>    BEGINNING OF YEAR</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">195,101&nbsp;</font></p>
</td>
<td width="13.333330" 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">449,282&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>CASH AND CASH EQUIVALENTS - END OF YEAR</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">120,116&nbsp;</font></p>
</td>
<td width="13.333330" 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">195,101&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid during the period for:</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">-&nbsp;</font></p>
</td>
<td width="13.333330" 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">50&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
<b>SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION:</b></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued dividend on preferred
stock</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">21,580&nbsp;</font></p>
</td>
<td width="13.333330" 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">63,750&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
Increase in common stock due to conversion of preferred stock</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">311&nbsp;</font></p>
</td>
<td width="13.333330" 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;</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
Decrease in preferred stock due to conversion to common stock</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (206,750)</font></p>
</td>
<td width="13.333330" 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;</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
Increase in additional paid-in capital due to conversion of </p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;preferred stock to common stock</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">206,439&nbsp;</font></p>
</td>
<td width="13.333330" 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;</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="110.666639" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="102.666641" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cancellation of preferred stock
dividends due to conversion to common stock</p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="110.666639" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">246,312&nbsp;</font></p>
</td>
<td width="13.333330" 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;</font></p>
</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 align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS</b><br><b>APRIL 30, 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 sport 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 April 30, 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 Company has amended its previously issued
consolidated financial statements for the year ended April 30, 2004 on its
report dated July 12, 2004.  The Company has amended these consolidated
financial statements to recognize an additional $107,547 in officer&#8217;s
compensation and related payroll tax expense for the year ended April 30, 2004.
This transaction resulted in an increase in net loss applicable to common shares
of $107,547 for the year ended April 30, 2004 to a net loss of $215,234 as
restated, and an increase in the accumulated deficit to $6,383,925.</p><p>
<p>
<b>NOTE 2-</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES</u></b><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 consolidated financial statements include the
accounts of the Company and its subsidiaries. All material inter-company
transactions have been eliminated in consolidation. </p><p>
<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:</p><p>
</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="187.999953" 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="187.999953" 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="187.999953" 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="187.999953" 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="187.999953" colspan="1" rowspan="1" >
<p align="center">
Remaining term of the lease</p align="center">
</td>
</tr>
</table></div>
<p>
</p>
<p style="margin-left:80">Depreciation expense was $11,150 for the years ended
April 30, 2004 and 2003. Amortization expense was $37,269 for the years ended
April 30, 2004 and 2003. </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 align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)</b></p>
&nbsp;	<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 April 30, 2004 and 2003, were as
follows:</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="74.666648" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2004</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="255.999936" colspan="1" rowspan="1" >
<p>
Restaurant food and beverage</p>
</td>
<td width="74.666648" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
23,214</p align="right">
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
17,336</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="74.666648" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="74.666648" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">7,135</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">6,414</font></p>
</td>
</tr>
<tr valign="top">
<td width="255.999936" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="74.666648" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">30,349</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">23,750</font></p>
</td>
</tr>
</table></div>
<p>
</p>
<p style="margin-left:80">Net (Loss) Per Share</p><p>
</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>
<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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<b>(Restated)</b></p align="center">
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<b>April 30,</b></p align="center">
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<b>April 30,</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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2004</b></font></p>
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" bgcolor=>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">    (236,814)</font></p>
</td>
<td width="21.333328" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(209,744)</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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="222.666611" colspan="3" rowspan="1" >
<p>
Weighted-average common shares</p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
8,669,559&nbsp;</p align="right">
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="222.666611" colspan="3" rowspan="1" >
<p>
Weighted-average common stock</p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="2" rowspan="1" >
<p>
Equivalents</p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
- -&nbsp;</p align="right">
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="222.666611" colspan="3" rowspan="1" >
<p>
Weighted-average common shares</p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" 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="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">8,669,559&nbsp;</font></p>
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">8,514,459&nbsp;</font></p>
</td>
</tr>
</table></div>
<p>
</p>
<p style="margin-left:80">Options and warrants outstanding to purchase stock
were not included in the computation of diluted EPS for April 30, 2004 and 2003
because inclusion would have been antidilutive.</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 CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
<b><u>Cash and Cash Equivalents</u></b><p>
For purposes of the consolidated statements of cash flows, 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 year the Company had amounts on deposit at financial institutions
in excess of federally insured limits.<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<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>
<b><u>Deferred Revenue</u></b></p>
<p style="margin-left:80">Deferred revenue consisted of payments received in
advance of revenue being earned under memorabilia sales agreements.</p><p>
<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>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<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 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 align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
<i>Stock-Based Compensation</i></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 Stock-Based Compensation&#8221; (&#8220;SFAS 123&#8221;),
and related interpretations.  </p><p>
</p>
<p style="margin-left:80">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>
<b>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. All options were expensed to compensation in the period granted rather
than the exercise date.</b></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 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 CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<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.  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>
<b>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. </b></p>
&nbsp;	<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 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 CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Recent
Accounting Pronouncements</u> (Continued)</b></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>
<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 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 align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES </u>(CONTINUED)</b><p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Recent
Accounting Pronouncements</u> (Continued)</b></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).  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>
<b>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.</b><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 align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><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">Rental expense charged to expense during the years
ended April 30, 2004 and 2003 was $212,220 and $199,834, respectively. Future
minimum payments under the noncancellable restaurant lease as of April 30, 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>
2005</p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right">
140,159</p align="right">
</td>
</tr>
<tr valign="top">
<td width="106.666640" colspan="1" rowspan="1" >
<p>
2006</p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">23,360</font></p>
</td>
</tr>
<tr valign="top">
<td width="106.666640" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">163,519</font></p>
</td>
</tr>
</table></div>
<p>
<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>
<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 $107,547 and $0 as of
April 30, 2004 and 2003.</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 and 8,514,459 shares issued and outstanding at April 30, 2004 and
2003, respectively.</p><p>
<p align="center">
- -14-</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">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 7-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>STOCKHOLDERS&#8217; DEFICIT</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>Common
Stock</u> (Continued)</b></p>
<p style="margin-left:80">For the year ended April 30, 2004, the Company issued
310,199 shares of common stock in conversion of 20,675 shares of preferred
stock.</p><p>
</p>
<p style="margin-left:80">There were no issuances of common stock during the
year ended April 30, 2003.</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 and 53,125 shares issued and outstanding at April 30, 2004
and 2003, respectively. </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  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:80">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. The deferral was $21,580 and $63,750, in 2004 and 2003,
respectively. Preferred stock dividends in arrears at April 30, 2004 and 2003
aggregated $350,460 ($10.83 per preferred share) and $575,192 ($10.83 per
preferred share), respectively.  Effective November 2003, pursuant to a board
resolution, the Company cancelled its payment and/or accruing of preferred stock
dividends.  Therefore, only $21,580 was accrued for the year ended April 30,
2004.</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>
<b>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</b>. <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 align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 7-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>STOCKHOLDERS&#8217; DEFICIT</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>Common
Stock Options</u></b> <b>(Continued)</b></p>
<p style="margin-left:80">Under the Black-Scholes option pricing model, the
total value of the stock options granted in 2003 is charged to operations as
these options are fully vested. SFAS No. 123, &#8220;Accounting for Stock-Based
Compensation&#8221;, encourages adoption of a fair-value-based method for
valuing the cost of stock-based compensation. </p><p>
</p>
<p style="margin-left:80">However, it allows companies to continue to use the
intrinsic-value method for options granted to employees and disclose pro forma
net loss. All of these options are vested as of April 30, 2004.</p><p>
</p>
<p style="margin-left:80">The following tables summarizes the activity of the
Company&#8217;s stock option plan:</p><p>
</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82.666646" colspan="4" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="221.333278" colspan="4" rowspan="1" >
<p align="center">
Restated Year Ended</p align="center">
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82.666646" colspan="4" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="221.333278" colspan="4" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">April 30, 2004</font></p>
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
Weighted-</p align="center">
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
average</p align="center">
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
Number of</p align="center">
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
exercise</p align="center">
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Options</font></p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">price</font></p>
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="195.999951" colspan="3" rowspan="1" >
<p>
Outstanding - beginning of period</p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
3,440,000&nbsp;</p align="right">
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.13&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
<p>
Granted </p>
</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
8,000,000&nbsp;</p align="right">
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
..01&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
<p>
Forfeited</p>
</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">    (2,390,000)</font></p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(.13)</font></p>
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
<p>
Outstanding - end of period</p>
</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">9,050,000&nbsp;</font></p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
..011&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
<p>
Exercisable at end of period:</p>
</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
9,050,000&nbsp;</p align="right">
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.011&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="189.333286" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="4" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="210.666614" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="4" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="210.666614" colspan="4" rowspan="1" >
<p align="center">
Year Ended</p align="center">
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="4" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="210.666614" colspan="4" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">April 30, 2003</font></p>
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="center">
Weighted-</p align="center">
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
<p align="center">
Number</p align="center">
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="center">
average</p align="center">
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
<p align="center">
Of</p align="center">
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="center">
exercise</p align="center">
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Options</font></p>
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">price</font></p>
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
<p>
Outstanding - beginning of period</p>
</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
<p align="right">
3,440,000&nbsp;</p align="right">
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.13&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
<p>
Granted </p>
</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
<p align="right">
0&nbsp;</p align="right">
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="right">
..00&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
<p>
Forfeited</p>
</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
<p align="right">
0&nbsp;</p align="right">
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="right">
..00&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
<p>
Outstanding - end of period</p>
</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
<p align="right">
3,440,000&nbsp;</p align="right">
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.13&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
<p>
Exercisable at end of period:</p>
</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
<p align="right">
3,440,000&nbsp;</p align="right">
</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="right">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.13&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="202.666616" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="1.333333" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="2.666666" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94.666643" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="10.666664" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<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 align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 7-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>STOCKHOLDERS&#8217; DEFICIT</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>Common
Stock Options</u> (Continued)</b></p>
&nbsp;	<p style="margin-left:80">If compensation expense for the Company&#8217;s
stock-based compensation plans had been determined consistent with
SFAS&nbsp;123, the Company&#8217;s net income and net income per share including
pro forma results would have been the amounts indicated below:</p><p>
</p>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="191.999952" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Year Ended April&nbsp;30,</font></p>
</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
(Restated)</p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<u>2004</u></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<u>   2003</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
Net loss:</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;As reported</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
($215,234)</p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
($145,994)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;Total stock-based employee compensation</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;expense determined under fair value based</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="326.666585" colspan="1" rowspan="1" >
<p>
&nbsp;method for all awards, net of related tax effects</p>
</td>
<td width="98.666642" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> ( 80,000)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(0)</font></p>
</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;Pro forma</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
($295,234)</p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
($145,994)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
Net loss per share:</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;As reported:</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
( $0.02)</p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
($0.02)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted </p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
($0.02)</p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
($0.02)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;Pro forma:</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
($0.03)</p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
($0.02)</p align="right">
</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
($0.03)</p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
($0.02)</p align="right">
</td>
</tr>
</table></div>
<p>
</p>
<p style="margin-left:80">The fair value of the options granted during 2004 and
2003 was estimated on the date of grant using the Black-Scholes option pricing
model. The weighted-average assumptions used are as follows:</p><p>
</p>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="206.666615" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2004</font></p>
</td>
<td width="63.999984" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" 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="206.666615" colspan="1" rowspan="1" >
<p>
Expected term</p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right">
3 years</p align="right">
</td>
<td width="63.999984" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p>
</td>
</tr>
<tr valign="top">
<td width="206.666615" colspan="1" rowspan="1" >
<p>
Expected stock volatility</p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right">
140%</p align="right">
</td>
<td width="63.999984" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p>
</td>
</tr>
<tr valign="top">
<td width="206.666615" colspan="1" rowspan="1" >
<p>
Risk-free interest rate</p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right">
2.5%</p align="right">
</td>
<td width="63.999984" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p>
</td>
</tr>
<tr valign="top">
<td width="206.666615" colspan="1" rowspan="1" >
<p>
Dividend</p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p>
</td>
<td width="63.999984" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-   </p>
</td>
</tr>
</table></div>
<p>
</p>
<p>
</p>
<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 align="center">
</p align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 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 consolidated financial
statements the Company has sustained net operating losses for the years ended
April 30, 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 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 April 30, 2004, deferred tax assets consist of the
following:       </p><p>
</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" >
<p>
Deferred tax asset   </p>
</td>
<td width="130.666634" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="right">
1,442,000&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" >
<p>
Less:  valuation allowance</p>
</td>
<td width="130.666634" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (1,442,000)</font></p>
</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="130.666634" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> -0-&nbsp;</font></p>
</td>
</tr>
</table></div>
<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 align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)</b><br><b>APRIL 30, 2004 AND 2003</b><p>
<b>NOTE 10-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>PROVISION FOR INCOME TAXES</u>
(CONTINUED)</b><p>
<b>At April 30, 2004, the Company had federal net operating loss carryforwards
in the approximate amounts of $4,120,000 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.</b><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
consolidated financial statements for the year ended April 30, 2004 on its
report dated July 12, 2004.  The Company has amended these consolidated
financial statements to recognize an additional $107,547 in officer&#8217;s
compensation and related payroll tax expense for the year ended April 30, 2004.
This transaction resulted in an increase in net loss applicable to common shares
of $107,547 for the year ended April 30, 2004 to a net loss of $215,234 as
restated, and an increase in the accumulated deficit to $6,383,925.</p><p>
<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 align="center">
<b>SIGNATURES</b><p>
In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.<p align="center">
<b><u>CHAMPIONS SPORTS, INC</u></b></p align="right">
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
<u>/s/ James E. McCollam</u></p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" 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="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Chief Accounting Officer and Controller</p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Date: July 27, 2004</p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p>
In accordance  with the Exchange Act, this report has been signed below by the
following persons on behalf of the  registrant and in the capacities and on the
dates indicated    </p align="right">
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
<u> /s/ James M. Martell</u></p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
James M. Martell</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Chairman, President and CEO</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Date: July 27, 2004</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="733.333150" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
<u> /s/ Michael M. Tomic</u></p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Michael M. Tomic</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Director</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Date: July 27, 2004</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="733.333150" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
<u>/s/ Durwood C. Settles</u></p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Durwood C. Settles</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Director</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Date: July 27, 2004</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p align="center">
45</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">
<b>CERTIFICATION OF CHIEF EXECUTIVE OFFICER</b><p align="center">
<b>Section 302 Certification</b></p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, James M. Martell, certify that:	<p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) I have reviewed this annual report
on Form 10-KSB of Champions Sports, Inc., a Delaware corporation (the
"registrant");<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Based on my  knowledge,  this
annual 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 annual report;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Based on my knowledge,  the
financial  statements,  and other financial information  included  in this
annual  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 annual report;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
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 annual report is being prepared;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
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 annual
report (the "Evaluation Date"); and<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Presented in this annual report our conclusions about the effectiveness of the
disclosure  controls and  procedures  based on our  evaluation as of the
Evaluation Date;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) 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  registrant&#8217;s
board of directors  (or persons  performing  the equivalent functions):<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
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>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
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 align="center">
46</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;(6) The registrant&#8217;s other
certifying officers and I have indicated in this annual 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:&nbsp;&nbsp;&nbsp;July 27, 2004</p align="right">
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
<u> /s/ James M. Martell</u></p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
James M. Martell</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Chief Executive Officer</p>
</td>
<td width="7.999998" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p align="center">
47</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">
<b>CERTIFICATION OF CHIEF FINANCIAL OFFICER</b><p align="center">
<b>Section 302 Certification</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, James E. McCollam, certify that:<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) I have reviewed this annual report
on Form 10-KSB of Champions  Sports, Inc., a Delaware corporation (the
"registrant");<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Based on my  knowledge,  this
annual 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 annual report;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Based on my knowledge,  the
financial  statements,  and other financial information  included  in this
annual  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 annual report;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
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 annual report is being prepared;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
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 annual
report (the "Evaluation Date"); and<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Presented in this annual report our conclusions about the effectiveness of the
disclosure  controls and  procedures  based on our  evaluation as of the
Evaluation Date;<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The registrant&#8217;s other
certifying officers and I have disclosed,  based on our most  recent
evaluation,  to the  registrant&#8217;s  auditors  and  registrant&#8217;s board
of directors  (or persons  performing  the equivalent function):<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
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>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
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>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) The registrant&#8217;s other
certifying officers and I have indicated in this annual 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:    July 27, 2004</p align="right">
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
<u>/s/ James E. McCollam</u></p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" 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="479.999880" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="245.333272" colspan="1" rowspan="1" >
<p>
Chief Financial Officer</p>
</td>
<td width="6.666665" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p align="center">
49</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>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT
TO</b><br><b>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-KSB for the year ended April 30, 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>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="35.999991" colspan="1" rowspan="1" >
<p>
1.</p>
</td>
<td width="683.999829" colspan="1" rowspan="1" >
&nbsp;The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 	</td>
</tr>
<tr valign="top">
<td width="719.999820" colspan="2" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="35.999991" colspan="1" rowspan="1" >
<p>
2.</p>
</td>
<td width="683.999829" colspan="1" rowspan="1" >
<p>
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operation of the Company. </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="359.999910" colspan="1" rowspan="1" >
<p>
Dated:&nbsp;&nbsp;&nbsp;July 27, 2004&nbsp; </p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
By:&nbsp; </p>
</td>
<td width="323.999919" 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="359.999910" colspan="1" rowspan="1" >
<p>
&nbsp; </p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
&nbsp; </p>
</td>
<td width="323.999919" 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="359.999910" colspan="1" rowspan="1" >
<p>
Dated:&nbsp;&nbsp;&nbsp;July 27, 2004&nbsp; </p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
By:&nbsp; </p>
</td>
<td width="323.999919" 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="359.999910" colspan="1" rowspan="1" >
<p>
&nbsp; </p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
&nbsp; </p>
</td>
<td width="323.999919" colspan="1" rowspan="1" >
<p>
James E. McCollam, Chief Financial Officer&nbsp;</p>
</td>
</tr>
</table></div>
&nbsp;	<p>
</p>


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