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<SEC-DOCUMENT>0001297077-06-000047.txt : 20060728
<SEC-HEADER>0001297077-06-000047.hdr.sgml : 20060728
<ACCEPTANCE-DATETIME>20060728131448
ACCESSION NUMBER:		0001297077-06-000047
CONFORMED SUBMISSION TYPE:	10KSB
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060430
FILED AS OF DATE:		20060728
DATE AS OF CHANGE:		20060728

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
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-17263
		FILM NUMBER:		06987022

	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
<SEQUENCE>1
<FILENAME>csi10ksb2006draft.htm
<DESCRIPTION>4/30/2006 10-KSB
<TEXT>
<html>
<head><meta content="text/html; charset=">
<title>                       SECURITIES AND EXCHANGE COMMISSION</title>
</head>

<body >
<ul>
</ul>

<p align="center">
<b>SECURITIES AND EXCHANGE COMMISSION</b><br><b>Washington, D.C.
20549</b><br><p align="center">
<b>FORM 10-KSB</b></p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Mark One</font></p align="center">
</td>
<td width="377.333239" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="377.333239" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<font size="2">[X]</font></p align="center">
</td>
<td width="377.333239" colspan="1" rowspan="1" >
<p>
<font size="2">ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF</font></p>
</td>
</tr>
<tr valign="top">
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="377.333239" colspan="1" rowspan="1" >
<p>
<font size="2">THE SECURITIES EXCHANGE ACT OF 1934</font></p>
</td>
</tr>
</table></div>
<p>
<p align="center">
<font size="2">For the fiscal year ended April 30, 2006</font><p align="center">
<font size="2">OR</font></p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<font size="2">[&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;</font></p align="center">
</td>
<td width="377.333239" colspan="1" rowspan="1" >
<p>
<font size="2">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF</font></p>
</td>
</tr>
<tr valign="top">
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="377.333239" colspan="1" rowspan="1" >
<p>
<font size="2">THE SECURITIES EXCHANGE ACT OF 1934</font></p>
</td>
</tr>
</table></div>
<p>
<p align="center">
<font size="2">For the transition period from ______ to
________</font><p align="center">
<font size="2">Commission file number
<u>&nbsp;0-17263&nbsp;&nbsp;</u></font><p align="center">
<font size="4"><b><u>CHAMPIONS SPORTS,
INC.</u></b></font><font size="2"><b><u></u></b></font><br><font size="2">(Exact
name of registrant as specified in its charter)</font></p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="235.999941" 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="209.333281" colspan="1" rowspan="1" >
<p align="center">
<u>52-1401755</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="235.999941" colspan="1" rowspan="1" >
<p align="center">
<font size="2">(State or other jurisdiction of</font></p align="center">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="209.333281" colspan="1" rowspan="1" >
<p align="center">
<font size="2">(I.R.S. Employer</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="235.999941" colspan="1" rowspan="1" >
<p align="center">
<font size="2">organization)</font></p align="center">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="209.333281" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Identification No.)</font></p align="center">
</td>
</tr>
</table></div>
<p>
<p align="center">
<font size="2"><u>2200 Wilson Blvd., Suite 102-316, Arlington, VA
22201</u></font><br><font size="2">(Address of principal executive
offices)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Zip code)</font><p align="center">
<font size="2"><u>(703) 526-0400</u></font><br><font size="2">(Registrant's
telephone number, including area code)</font><p align="center">
<font size="2">Securities registered under Section 12(g) of the Exchange
Act:</font><p align="center">
<font size="2"><u>Common Stock, par value $.001 per
share</u></font><br><font size="2">(Title of Class)</font><p align="center">
<font size="2"><u>Preferred Stock, par value $10.00 per
share</u></font><br><font size="2">(Title of Class)</font><p>
<font size="2">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.&nbsp;&nbsp;&nbsp;Yes
<u>&nbsp;X&nbsp;</u> No    <u>&nbsp;&nbsp;&nbsp;&nbsp;</u></font><p>
<font size="2">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's knowledge, in a definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-KSB.&nbsp;&nbsp;&nbsp;[X]</font><p>
<font size="2">For the year ended April 30, 2006, the revenues of the registrant
were $0.00</font><p>
<font size="2">The Company's common stock is listed on the Over-The-Counter
Bulletin Board under the stock ticker symbol "CSBR." 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, 2006, was approximately
$300,000.</font><p>
<font size="2">As of July 15, 2006, the Registrant had a total of 16,824,658
shares of common stock outstanding.</font><p align="center">
<font size="2">DOCUMENTS INCORPORATED BY REFERENCE</font><p align="center">
<font size="2">None</font></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">
<font size="2">TABLE OF CONTENTS</font></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="666.666500" colspan="2" rowspan="1" >
<p>
<font size="2">PART I</font></p>
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Special Note Regarding Forward-Looking Statements</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">3</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 1.&nbsp;&nbsp;Business</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">3</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 2.&nbsp;&nbsp;Property</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">7</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 3.&nbsp;&nbsp;Legal Proceedings</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">7</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 4.&nbsp;&nbsp;Submission of Matters to a Vote of Security
Holders</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">7</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="666.666500" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="666.666500" colspan="2" rowspan="1" >
<p>
<font size="2">PART II</font></p>
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 5.&nbsp;&nbsp;Market for Common Equity and Related
Stockholder Matters</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">8</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 6.&nbsp;&nbsp;Management's Discussion and Analysis or Plan
of Operation</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">9</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 7.&nbsp;&nbsp;Financial Statements and Supplementary
Data</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">11</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 8.&nbsp;&nbsp;Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">11</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 8A.&nbsp;&nbsp;Controls and Procedures</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">11</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="47.999988" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="666.666500" colspan="2" rowspan="1" >
<p>
<font size="2">PART III</font></p>
</td>
</tr>
<tr valign="top">
<td width="666.666500" colspan="2" rowspan="1" >
<p>
<font size="2">Item 9.&nbsp;&nbsp;Directors, Executive Officers, Promoters and
Control </font></p>
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Persons,
Compliance with Section 16(a) of the Exchange Act</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">12</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 10.&nbsp;&nbsp;Executive Compensation</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">13</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 11.&nbsp;&nbsp;Security Ownership of Certain Beneficial
Owners and Management</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">14</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 12.&nbsp;&nbsp;Certain Relationships and Related
Transactions</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">15</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 13.&nbsp;&nbsp;Exhibits and Reports on Form 8-K</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">15</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Item 14.&nbsp;&nbsp;Principal Accountant Fees and
Services</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">15</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="666.666500" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Report of Independent Accountants and Financial
Statements</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">F1-F18</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Signatures</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">36</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">37</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">38</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="618.666512" colspan="1" rowspan="1" >
<p>
<font size="2">Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002</font></p>
</td>
<td width="47.999988" colspan="1" rowspan="1" >
<p align="right">
<font size="2">39</font></p align="right">
</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">
<font size="2">PART I</font><p align="center">
<font size="2">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</font><p>
<font size="2">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'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'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's expectations, except as required by law.</font><p>
<font size="2"><b>Item 1.&nbsp;&nbsp;Business</b></font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Development of
Business.</font><p>
<font size="2">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.</font><p>
<font size="2">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'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% 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.  Subsequently, 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.</font><p>
<font size="2">Through June, 2005, the Company was a licensee of one CHAMPIONS
Sports Bar Restaurant and the exclusive   supplier of sports   memorabilia   and
consultant   to Marriott International, Inc.(Marriott). As of July 1, 2005, the
one licensed Champions Sport Bar Restaurant, that was licensed, royalty free,
from Marriott, ceased its operations when its sixteen year lease ended. In
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.
This agreement, to be the exclusive supplier of sports memorabilia and a
consultant to all new managed Marriott and Renaissance Hotel sports bar
restaurants worldwide, was terminated by Marriott effective May 28, 2005. As of
April 30, 2006, the Company owned no CHAMPIONS Sports Bar Restaurants.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Current Business
Plan</font><p>
<font size="2">Through April 30, 2006 and currently, the 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 or to initiate new ventures on
its own. The Company intends to use its  capital  stock,  to  effect a new
business or 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.</font></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>
<font size="2">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'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.</font><p>
<font size="2">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.</font><p>
<font size="2">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's officers and
directors and their affiliates may also bring to the Company'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'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.</font><p>
<font size="2">The Company'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:</font><p>
<font size="2">    &nbsp;- the financial condition and results of operation of
the target;</font><p>
<font size="2">    &nbsp;- the growth  potential of the target and that of the
industry in which the target operates;</font><p>
<font size="2">    &nbsp;- the experience and skill of the target's  management
and  availability of additional personnel; o the capital requirements of the
target;</font><p>
<font size="2">    &nbsp;- the competitive  position of the target;</font><p>
<font size="2">    &nbsp;- the stage of development that the target's products,
processes or services are at;</font><p>
<font size="2">    &nbsp;- the degree of current or  potential  market
acceptance  of the  target's products,  processes  or  services;</font><p>
<font size="2">    &nbsp;- proprietary features and the degree of intellectual
property or other protection of the target's products, processes or
services;</font><p>
<font size="2">    &nbsp;- the regulatory environment of the industry in which
the target operates;</font><p>
<font size="2">    &nbsp;- the prospective equity interest in, and opportunity
for control of, the target; and</font><p>
<font size="2">    &nbsp;- the costs associated with effecting the business
combination.</font><p>
<font size="2">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's business objective.</font><p>
<font size="2">In connection with Company'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.</font></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>
<font size="2">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' 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.</font><p>
<font size="2">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.</font><p>
<font size="2">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's management will prove to be correct, especially in light of the
possible inexperience of Company's management in evaluating certain types of
businesses.  In addition,  the Company cannot  give  assurance  that  the
target'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'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'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.</font><p>
<font size="2">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.</font><p>
<font size="2">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.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Description of
the Operating Business that ceased operations in June 2005.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Concept</font><p>
<font size="2">The Company ceased its only restaurant operation in June of 2005.
The Company  operated a  restaurant  in San  Antonio,  Texas by the name of
CHAMPIONS which had a sports theme concept that combined  casual dining,  sports
viewing with strategic  marketing and  promotions.  The CHAMPIONS popularity was
defined in the CHAMPIONS motto:  "Good Food, Good Times, Good Sports." This
concept was 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 became a full-fledged restaurant as well as bar.
The sports theme of CHAMPIONS was based upon management's belief that sports
appeals to most socio-economic, age and gender groups worldwide.  The sports
atmosphere at CHAMPIONS was 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 established a feeling a comfort and
belonging for all customers.  In addition,  CHAMPIONS atmosphere was enhanced by
sports programming and viewing which was 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 was a theme in CHAMPIONS restaurants, it was
not the dominant factor. At the heart of the CHAMPIONS concept was the food. The
menu, which attracted guests for lunch and dinner, appealed to those interested
in dining at a moderate price. It incorporated traditional American cuisine as
well as popular regional items. CHAMPIONS  average  check was about  $14.25  per
person,  placing  it within the "casual  dining"  segment of the  restaurant
industry.  This  segment  attracts  customers  who want a higher  quality  of
food and  service  than  that commonly  provided at "fast  food" or "family
style"  restaurants.  Although no element of the CHAMPIONS concept was unique,
the combination of food, atmosphere, sports memorabilia, sports viewing,
marketing and promotions defined the concept.</font></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>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Operations</font><p>
<font size="2">As of April 30, 2006 the Company was not engaged in any
operations. During the FY 2006, the Company was engaged in the following types
of operations until they ceased or were terminated:</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Company-Owned
Operation</font><p>
<font size="2">Until June 23, 2005, the Company operated one Company-owned
restaurant.  This location was licensed from Marriott, royalty free, to use the
name CHAMPIONS pursuant to a licensing agreement signed with Marriott in FY
1998. This CHAMPIONS sports bar restaurant was in operation since 1989 and was
located in the River Center Mall in San Antonio, Texas. Effective July 1, 2005,
the lease for the Champions in San Antonio ended after sixteen years. The
Company was not able to renew the lease with the landlord and ceased its
operations.</font><p>
<font size="2"> </font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Supplier
of Sports Memorabilia and Consulting Services to Marriott</font><p>
<font size="2">In November  1997, the Company sold the rights, except for the
country of Poland, excluding the city of Warsaw, 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 was required to purchase sports memorabilia and for
the Company to serve as a consultant for each new CHAMPIONS or like sports bar
restaurant that opened in a new Marriott or Renaissance Hotel worldwide. The
1997 agreement, for Champions to be the exclusive supplier of sports memorabilia
and a consultant to all new managed Marriott and Renaissance Hotel sports bar
restaurants worldwide, was terminated by Marriott effective May 28,
2005.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Competition</font><p>
<font size="2">Until July 1, 2005, the Company was in the food and beverage
industry which was highly competitive.  Food and beverage businesses is affected
by changing customer tastes, local and national economic conditions that
affected 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 spawned a number of
companies seeking to capitalize on that market.  While the Company believed that
the Champions concept was superior, there were other "sports" bar restaurants in
operation.  The sports memorabilia business was also highly
competitive.</font><p>
<font size="2">As part of the current business plan, 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.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Service
Mark</font><p>
<font size="2">The Company sold the federally registered service mark
"Champions" to Marriott pursuant to the November 1997 agreement.  The Company
transferred to Marriott all of its international service marks that the Company
had registered, except for the country of Poland, excluding the city of Warsaw.
</font></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>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Government
Regulation</font><p>
<font size="2">Until the Company ceased it restaurant operation in June, 2005,
the Company's CHAMPIONS sports bar restaurant was 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 could have adversely affected the
operations of the Company's restaurant.  The license to sell alcoholic beverages
had to be renewed  annually and could have been 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. The restaurant was operated in
accordance with standardized procedures designed to assure compliance with all
applicable codes and regulations.</font><p>
<font size="2">Until the Company ceased it restaurant operation in June, 2005,
the Company could have been subject to "dram-shop" 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 carried liquor  liability  coverage,  a judgment against the
Company under a dram-shop  statute in excess of the  Company's  liability
coverage,  or inability to continue to obtain such  insurance  coverage at
reasonable  costs, could have had a materially adverse effect on the Company.
The Company was 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.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Employees</font><p>
<font size="2">As of April 30, 2006, the Company had 1 employee in its office in
Arlington, Virginia. </font><p>
<font size="2"><b>Item 2.&nbsp;&nbsp;Properties.</b></font><p>
<font size="2">The Company has an office address at 2200 Wilson Boulevard, Suite
102-316, Arlington, VA 22201.  The Company's rental payments are $40 per month.
Until July 1, 2005, the Company was leasing 5,289 square feet of space for its
restaurant in San Antonio, TX pursuant to a 15 year lease, which expired on June
30, 2005.  The lease provided monthly rental payments of $23,536 including CAM
charges and real estate taxes.  In addition, the lease required a percentage of
the unit's revenues at the location in excess of $1,745,000 per year. Effective,
June 30, 2005, the lease at the San Antonio restaurant expired and the
restaurant ceased its operations. </font><p>
<font size="2"><b>Item 3.&nbsp;&nbsp;Legal Proceedings.</b></font><p>
<font size="2">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.</font><p>
<font size="2"><b>Item 4.&nbsp;&nbsp;Submission of Matters to a Vote of Security
Holders.</b></font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</font></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 align="center">
<font size="2">PART II</font><p>
<font size="2"><b>Item 5.&nbsp;&nbsp;Markets for Common Equity &amp; Related
Stockholder Matters.</b></font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;
Principal Market or Markets.</font><p>
<font size="2">The Common Stock was traded on the NASDAQ Small Cap Market until
June 24, 1994.  At that time, the Common Stock was delisted from the NASDAQ
Small Cap 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.</font></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="313.333255" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="131.999967" colspan="2" rowspan="1" >
<p align="center">
<font size="2">Common Stock</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="313.333255" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">High</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Low</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="313.333255" colspan="2" rowspan="1" >
<p>
<font size="2">Fiscal 2006</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="313.333255" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="59.999985" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p>
<font size="2">First Quarter</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.07</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.04</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p>
<font size="2">Second Quarter</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.06</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.02</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p>
<font size="2">Third Quarter</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.08</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.02</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p>
<font size="2">Fourth Quarter</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.10</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.01</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="59.999985" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="313.333255" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">High</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Low</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="313.333255" colspan="2" rowspan="1" >
<p>
<font size="2">Fiscal 2005</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="313.333255" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="59.999985" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p>
<font size="2">First Quarter</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.04</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.02</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p>
<font size="2">Second Quarter</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.06</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.02</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p>
<font size="2">Third Quarter</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.07</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.03</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p>
<font size="2">Fourth Quarter</font></p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.06</font></p align="center">
</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0.02</font></p align="center">
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Approximate
Number of Holders of Common Stock and the Preferred Stock.</font><p>
<font size="2">The number of holders of record of the Company's common stock as
of July 15, 2006 was 2,140 and the Company estimates that there are
approximately 3,000 additional beneficial shareholders.  There is one beneficial
holder of the Company's preferred stock as of July 15, 2006.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Dividends.</font><p>
<font size="2">Holders of common stock are entitled to receive such dividends as
may be declared by the Company's Board of Directors.  No dividends have been
paid with respect to the Company'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's Board of Directors, subject
to applicable law. From November 1994 through November 2002, the Company's Board
of Directors voted each year to defer payment of the annual dividend on the
Preferred Stock, in order to preserve the Company's cash reserves and in
November 2003 cancelled the payment of the annual dividend and future annual
dividends on the Preferred Stock and subsequently notified the preferred
shareholders of the cancellation in November 2003. The Company'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 and has been seeking to use its capital stock to effect a new
business or 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.
</font></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>
<font size="2"><b>Item 6.&nbsp;&nbsp;Management's Discussion and Analysis of
Financial Condition and Results of Operations.</b></font><p>
<font size="2"><b>The Company's independent auditor, for the year ending April
30, 2006, has expressed substantial doubt that the Company can continue as a
going concern due to recurring losses and working capital shortage and that
there is no guarantee that the Company will be able to raise enough capital or
generate revenues to sustain its operations. The Company is facing severe
liquidity and cash problems as of date of the filing of this 10-KSB and has been
meeting its working capital needs by receiving advances from its executive
officer, James Martell, in June and July, 2006. The Company can give no
assurance that these advances can continue.  The Company's Champions sports bar
restaurant in San Antonio, Texas which provided almost 100 percent of its
revenues, ceased its restaurant operations in June of 2005 after its 16 year old
lease expired. It is the intention of the Company to continue operations until
such time as Champions finds a new business opportunity, merges with another
company or raises additional financing, although there is no assurance that this
can be done on terms satisfactory to the Company. The Company is pursuing
various business opportunities in order to continue operations. If the Company's
liquidity situation does not improve, the Company might have to discontinue its
business as a going concern. </b></font><p>
<font size="2"><b>The Company ceased its restaurant operations at San Antonio
Champions location on June 23, 2005. The lease on that location expired on June
30, 2005 and the Company vacated the premise on that date. The Company's
condensed consolidated financial statements have been reclassified to reflect
this cessation of business as discontinued operations, for all periods
presented.</b></font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Results of
Operations for Fiscal Years 2006 and 2005.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Operating
Revenues</font><p>
<font size="2">For the fiscal year ended April 30, 2006, the Company's operating
revenue was $0.00. For fiscal year ended April 30, 2005, the operating revenue
was $0.00 as reclassified. </font><p>
<font size="2">The Company's consolidated financial statements have been
reclassified to reflect the cessation of business of its San Antonio Champions
location as discontinued operations, for all periods presented. Summarized
operating results of discontinued operations are as follows:</font></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="199.999950" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center">
<font size="2">April 30,</font></p align="center">
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center">
<font size="2">April 30,</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="199.999950" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2006</font></p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2005</font></p>
</td>
</tr>
<tr valign="top">
<td width="403.999899" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="199.999950" colspan="1" rowspan="1" >
<p>
<font size="2">Revenues</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">274,626&nbsp;</font></p>
</td>
<td width="29.333326" colspan="2" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">1,797,283&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="199.999950" colspan="1" rowspan="1" >
<p>
<font size="2">Net loss before income taxes</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (303,718)</font></p>
</td>
<td width="29.333326" colspan="2" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (246,544)</font></p>
</td>
</tr>
<tr valign="top">
<td width="199.999950" colspan="1" rowspan="1" >
<p>
<font size="2">Provision for taxes </font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="2" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="199.999950" colspan="1" rowspan="1" >
<p>
<font size="2">Net loss</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (303,718)</font></p>
</td>
<td width="29.333326" colspan="2" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (246,544)</font></p>
</td>
</tr>
<tr valign="top">
<td width="199.999950" colspan="1" rowspan="1" >
<p>
<font size="2">Net loss per share</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.02)</font></p>
</td>
<td width="29.333326" colspan="2" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.02)</font></p>
</td>
</tr>
<tr valign="top">
<td width="199.999950" colspan="1" rowspan="1" >
<p>
<font size="2">Basic and Diluted loss per share</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.02)</font></p>
</td>
<td width="29.333326" colspan="2" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.02)</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Operating
Expenses</font><p>
<font size="2">For FY 2006, the operating expenses for the Company were the
general and administrative expenses which were $144,117 compared to $105,478 in
FY 2005. The increase was due to the expenses associated with closing of the
Company's restaurant operation in FY 2006. </font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Profits
/ Losses</font><p>
<font size="2">For FY 2006, the Company's net loss applicable to common
stockholders was $303,718. For FY 2005 it was $246,544. For FY 2006 and FY 2005
the loss was $0.02 per common share. </font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Liquidity and
Capital Resources for Fiscal Years 2006 and 2005.</font><p>
<font size="2">The Company is currently experiencing a severe shortage of
working capital. The Company's cash position on April 30, 2006, was $540
compared to $84,513 on April 30, 2005. In FY 2006, the net cash used in
operating activities of continuing and discontinued operations was $93,973 and
in FY 2005 it was $35,603. The Company's working capital as of April 30, 2006
was a negative $670,513 contrasted to a negative $366,795 on April 30, 2005.
</font></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>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Miscellaneous
for Fiscal Years 2006 and 2005.</font><p>
<font size="2">Stockholders' equity on April 30, 2006 was a negative $670,513
compared to a negative $366,795 on April 30, 2005. In FY 2006 and 2005, the
Board of Directors voted to defer the annual meeting of shareholders in order to
preserve the Company's cash reserves.</font><p>
<font size="2">Impact of inflation</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inflationary factors
have had no significant effect on the Company's operations.</font><p>
<font size="2">Risk factors</font><p>
<font size="2">&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's business operations in the
future.  The Company's business, financial condition and plan of operations
could be materially adversely affected by any of the following risks.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- The Company had a
loss for the year ended April 30, 2006 and there is substantial doubt about the
Company'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, finds a new business
opportunity 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.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- The loss of the
services of the Company's  key employee,  James Martell,  the  Company's
Chairman,  President  and  CEO,  may  have a material adverse affect on the
Company's business, financial condition and its ability to find a new business
opportunity, obtain  additional  funding or structuring a merger or
acquisition.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- The Company may, in
the future, issue additional shares of the Company's common stock, which would
reduce shareholders' percent of ownership and may dilute their share value. The
Company's Articles of Incorporation authorize the issuance of 50,000,000 shares
of common stock, par value $.001 per share. As of July 15, 2006 the Company had
16,824,658 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'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's common stock.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- The Company's common
stock may be affected by sporadic or limited trading volume and may fluctuate
significantly.  Although the Company's  common stock has continually  been
trading  publicly  since 1985,  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'  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's operating
performance.  In addition, the Company believes that factors such as quarterly
fluctuations in the Company'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.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- The Company'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's
securities may be subject to "penny stock rules" 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'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'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.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Subsequent
events</font></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>
<font size="2">The Company has been receiving advances from its executive
officer, James Martell, to meet the Company's working capital needs in June and
July, 2006. The Company can give no assurance that these advances can continue.
</font><p>
<font size="2"><b>Item 7.&nbsp;&nbsp;Financial Statements and Supplementary
Data.</b></font><p>
<font size="2">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-18 hereof.</font><p>
<font size="2"><b>Item 8.&nbsp;&nbsp;Changes In and Disagreements with
Accountants on Accounting &amp; Financial Disclosure.</b></font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In FY 2006, the Company
did not change its independent auditor, Bagell, Josephs &amp; Co. L.L.C. There
have been no disagreements between the Company and its independent accountant on
any matter of accounting principles or practices or financial statement
disclosure during the last two fiscal years.</font><p>
<font size="2"><b>Item 8 A.&nbsp;&nbsp;Controls and Procedures.</b></font><p>
<font size="2">The Company maintains a set of disclosure controls and procedures
designed to ensure that information required to be disclosed by the Company in
the reports filed under the Securities Exchange Act, is recorded, processed,
summarized and reported within the time periods specified by the SEC's rules and
forms. Disclosure controls are also designed with the objective of ensuring that
this information is accumulated and communicated to the Company's management,
including the Company's chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required disclosure.</font><p>
<font size="2">Based upon their evaluation as of the end of the period covered
by this report, the Company's chief executive officer and chief financial
officer concluded that, the Company's disclosure controls and procedures are not
effective to ensure that information required to be included in the Company's
periodic SEC filings is recorded, processed, summarized, and reported within the
time periods specified in the SEC rules and forms.</font><p>
<font size="2">The Company's Board of Directors was advised by Bagell, Josephs
&amp; Company, L.L.C., the Company's independent registered public accounting
firm, that during their performance of audit procedures for FY 2006, Bagell,
Josephs &amp; Company, L.L.C. identified a material weakness as defined in
Public Company Accounting Oversight Board Standard No. 2 in the Company's
internal control over financial reporting.</font><p>
<font size="2">This deficiency consisted primarily of inadequate staffing and
supervision that could lead to the untimely identification and resolution of
accounting and disclosure matters and failure to perform timely and effective
reviews. However, the size of the Company prevents it from being able to employ
sufficient resources to enable the Company to have adequate segregation of
duties within its internal control system. Management is required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and
procedures.</font><p>
<font size="2">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.</font></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 align="center">
<font size="2">PART III</font><p>
<font size="2"><b>Item 9.&nbsp;&nbsp;Directors and Executive
Officers.</b></font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Executive Officers
and Directors of the Company are as follows:</font></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="113.333305" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">NAME</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="419.999895" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">POSITION(S) PRESENTLY HELD</font></p>
</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="659.999835" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="2" rowspan="1" >
<p>
<font size="2">James M. Martell</font></p>
</td>
<td width="515.999871" colspan="2" rowspan="1" >
<p>
<font size="2">Chairman, President, Chief Executive Officer, Chief Financial
Officer and Director</font></p>
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="2" rowspan="1" >
<p>
<font size="2">Durwood C. Settles</font></p>
</td>
<td width="515.999871" colspan="2" rowspan="1" >
<p>
<font size="2">Director</font></p>
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="2" rowspan="1" >
<p>
<font size="2">Michael M. Tomic</font></p>
</td>
<td width="515.999871" colspan="2" rowspan="1" >
<p>
<font size="2">Director</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2"><b>James M.  Martell</b>, age 59, 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'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.</font><p>
<font size="2"><b>Durwood C.  Settles</b>, age 63, has served as Director of the
Company since March 2001. Mr. Settles is a former Certified Public Accountant in
individual practice since 1983. From 1973 to 1982, Mr.  Settles was with Coopers
&amp; Lybrand in Washington, DC 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 1964 from Davidson College,
Davidson, North Carolina and completed accounting studies in 1973 at George
Washington University, Washington, D.C.</font><p>
<font size="2"><b>Michael M. Tomic</b>, age 60, 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.</font><p>
<font size="2">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's earlier death, resignation or removal.</font><p>
<font size="2"><b>James E. McCollum</b>, age 59, who served as Chief Accounting
Officer of the Company since July 1992 and Controller since May 1988, passed
away on April 7, 2006.</font><p>
<font size="2">Board Committees</font><p>
<font size="2">As the Board of Directors only has three directors and the
Company has only one officer, no Audit or Strategy Committee has been
established. The Company does not have a standing nominating committee or any
committee performing a similar function. The Company currently has no
compensation committee or other board committee performing equivalent functions.
Currently, all members of the Company's Board of Directors participate in
discussions concerning executive officer compensation.</font><p>
<font size="2">Code of Ethics </font><p>
<font size="2">The Company has not adopted a formal code of ethics applicable to
the Company's principal executive, financial, and accounting officers and
persons performing similar functions, since the Company has only one individual
in the applicable role and also that the Company's financial operations are not
sufficiently complex to warrant adoption of a formal code of ethics.
</font></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>
<font size="2"><b>Item 10.&nbsp;&nbsp;Executive Compensation.</b></font><p>
<font size="2">The  following  table sets forth cash  compensation  for services
rendered during FY 2006,  and 2005  which was paid by the  Company  to, or
accrued by the Company for, each of the Company's most highly  compensated
executive  officers whose cash compensation in such year equaled or exceeded
$100,000:</font></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="437.333224" colspan="5" rowspan="1" >
<p align="center">
<font size="2"><u>SUMMARY COMPENSATION TABLE</u></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="437.333224" colspan="5" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="257.333269" colspan="3" rowspan="1" >
<p align="center">
<font size="2"><u>Annual Compensation</u></font></p align="center">
</td>
<td width="179.999955" colspan="2" rowspan="1" >
<p align="center">
<font size="2"><u>Long Term Compensation</u></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="257.333269" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="179.999955" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Number of</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Restricted</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Securities</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">All other</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
<p>
<font size="2">Name and</font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<font size="2">FY</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Salary</font></p align="center">
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Bonus</font></p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Underlying</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Compensation</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">Principal Position</font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Year</font></p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">($)</font></p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">($)</font></p>
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Options</font></p>
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">($)</font></p>
</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
<p>
<font size="2">James M. Martell,</font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<font size="2">2006</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">73,933<sup>1</sup></font></p align="center">
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0</font></p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="137.333299" colspan="1" rowspan="1" >
<p>
<font size="2"> President, CEO</font></p>
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<font size="2">2005</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">148,000<sup><a name="fnB1" href="#fn1">[1]</a></sup></font></p align="center">
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0</font></p align="center">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">0</font></p align="center">
</td>
</tr>
</table></div>
<p>
<p>
<sup><font size="2">1</font></sup><font size="2"> The Company, on January 12,
2005, was advised by the Securities and Exchange Commission, upon its review of
the Company'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 10-KSB 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 in FY 2005
and pursuant to a reduced salary in FY 2006. For FY 2005, $148,000 was accrued
and for FY 2006, $73,933 was accrued. No cash compensation was paid to Mr.
Martell in FY 2006 and FY 2005.</font><p>
<font size="2">In FY 2006, all executive officers of the Company as a group (2
in number) received no cash compensation.  Effective January 2004,  payments of
salaries to all executive  officers  were  suspended  in order to preserve  the
Company's  cash position and will not be paid until the cash  position of the
Company  improves.  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.</font><p>
<font size="2">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.</font><p>
<font size="2">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'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 was a change in the management of the Company
and such management acted contrary to the policy of the current Board, or if Mr.
Martell's position as an officer or director was terminated, Mr. Martell could
have resigned 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'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's cash position. In FY 2001, the Board of Directors
reissued to Mr. Martell the options to purchase the 200,000 shares of Company'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'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's Common Stock at $0.01 per share. In October, 2004, Mr. Martell
exercised his stock option to purchase 8,000,000 of the Company's common shares
at $0.01 per share by tendering a two year purchase note for $80,000 to the
Company pursuant to his stock option agreement. In April, 2005, the Board of
Directors approved the cancellation and forgiveness of the purchase note and any
interest due, in consideration of the services provided by Mr.
Martell.</font><p>
<font size="2">In FY 2001,  the Board of  Directors,  as part of its efforts to
diversify into high technology,  granted the following options to the Company's
Officers, Directors and Advisory  Board Members:  a three year option to
purchase  575,000 restricted  shares of the Company'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'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'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'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'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'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 James
McCollam, Michael Tomic and Durwood Settles for an additional year. All other
options granted in FY 2001 expired unexercised in FY
2004.</font></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>
<font size="2">There were no options granted in FY 2006. </font><p>
<font size="2"><b>Item 11.&nbsp;&nbsp;Security Ownership of Certain Beneficial
Owners and Management.</b></font><p>
<font size="2">As of July 15, 2006, the following were persons known to the
Company to own beneficially more than 5% of the Company's outstanding Common
Stock:</font><p>
<font size="2"> </font></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="221.333278" colspan="1" rowspan="1" >
<p>
<font size="2">Name and Address of</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Common Stock</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="221.333278" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="2">Beneficial Owner</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2">Beneficially Owned (1)</font></p>
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2">Percentage</font></p>
</td>
</tr>
<tr valign="top">
<td width="221.333278" colspan="1" rowspan="1" >
<p>
<font size="2">James M. Martell</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p align="center">
<font size="2">9,548,000</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">56.8</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="3" rowspan="1" >
<p>
<font size="2">2200 Wilson Blvd., </font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="3" rowspan="1" >
<p>
<font size="2">Suite 102-316</font></p>
</td>
</tr>
<tr valign="top">
<td width="479.999880" colspan="3" rowspan="1" >
<p>
<font size="2">Arlington, VA 22201</font></p>
</td>
</tr>
</table></div>
<p>
<sup><font size="2">(1))</font></sup><font size="2">&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.</font><p>
<font size="2">As of April 30, 2006, the stock ownership by officers and
directors of the Company and all officers and directors as a group are as
follows:</font></p align="center">
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="221.333278" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Common Stock</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="221.333278" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Beneficially Owned</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="221.333278" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="2">Name</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="2">Title</font></p>
</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2">as of July 15, 2006 (1)</font></p>
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2">Percentage</font></p>
</td>
</tr>
<tr valign="top">
<td width="221.333278" colspan="1" rowspan="1" >
<p>
<font size="2">James M. Martell</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p>
<font size="2">President  &amp; Director</font></p>
</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="center">
<font size="2">9,548,000</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">56.8</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="221.333278" colspan="1" rowspan="1" >
<p>
<font size="2">Michael M. Tomic</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
<p>
<font size="2">Director</font></p>
</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="center">
<font size="2">225,000</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">2.6</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="221.333278" colspan="1" rowspan="1" >
<p>
<font size="2">All officers &amp; directors as a group</font></p>
</td>
<td width="161.333293" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="1" rowspan="1" >
<p align="center">
<font size="2">9,775,000</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">59.4</font></p align="center">
</td>
</tr>
</table></div>
<p>
<sup><font size="2">(1)</font></sup><font size="2">&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.</font><p>
<font size="2">Compliance with Section 16(a).</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 16(a) of the
Exchange Act, as amended, requires the Company's executive officers, directors
and persons who beneficially own more than 10% of the Company'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's review of
the activity of the officers and directors for the fiscal year ended April 30,
2006, the Company believes that reports pursuant to Section 16(a) were
filed.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>14</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
<font size="2"><b>Item 12.&nbsp;&nbsp;Certain Relationships and Related
Transactions.</b></font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During FY 2006 there
were no related party transactions. In FY 2005, in October 2004, the Company
received an advance from James Martell, the President of the Company, for
certain working capital needs.  These funds were repaid in November 2004.
</font><p>
<font size="2"><b>Item 13.&nbsp;&nbsp;Exhibits and Reports on Form
8-K.</b></font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Index to Financial
Statements
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAGE</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Independent
Auditors' Reports  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F-1 - 18</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Reports on Form 8-K
</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
were no Form 8-K's filed during the last quarter of the period covered by this
report.</font><p>
<font size="2"><b>Item 14.&nbsp;&nbsp;Principal Accountant Fees and
Services.</b></font><p>
<font size="2">The following is a summary of the fees billed to the Company by
its principal accountants during the fiscal years ended April 30, 2006, and
April 30, 2005:</font></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="115.999971" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">Fee category</font></p>
</td>
<td width="70.666649" colspan="1" rowspan="1" >
<p>
<font size="2">    </font></p>
</td>
<td width="63.999984" colspan="2" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2006</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2005</font></p>
</td>
</tr>
<tr valign="top">
<td width="115.999971" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="70.666649" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="63.999984" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="187.999953" colspan="2" rowspan="1" >
<p>
<font size="2">Audit fees</font></p>
</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$8,000</font></p align="right">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$8,000</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="187.999953" colspan="2" rowspan="1" >
<p>
<font size="2">Audit-related fees</font></p>
</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$4,500</font></p align="right">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$4,500</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="187.999953" colspan="2" rowspan="1" >
<p>
<font size="2">Tax fees</font></p>
</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$0</font></p align="right">
</td>
<td width="25.333327" colspan="2" rowspan="1" >
<p>
<font size="2">  </font></p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$0</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="187.999953" colspan="2" rowspan="1" >
<p>
<font size="2">All other fees</font></p>
</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">$0</font></p>
</td>
<td width="25.333327" colspan="2" rowspan="1" >
<p>
<font size="2">  </font></p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">$0</font></p>
</td>
</tr>
<tr valign="top">
<td width="115.999971" colspan="1" rowspan="1" >
<p>
<font size="2">  </font></p>
</td>
<td width="159.999960" colspan="4" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="187.999953" colspan="2" rowspan="1" >
<p>
<font size="2">Total fees</font></p>
</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> $12,500</font></p>
</td>
<td width="25.333327" colspan="2" rowspan="1" >
<p>
<font size="2"> </font></p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">$12,500</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">&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.</font><p>
<font size="2">&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."</font><p>
<font size="2">&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.</font><p>
<font size="2">&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.</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee
Policies and Procedures.</font><p>
<font size="2">The Company does not have an audit committee at this
time.</font></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 align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>CONSOLIDATED FINANCIAL
STATEMENTS</b></font><br><font size="2"><b>APRIL 30, 2006 and
2005</b></font></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">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font></p>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p>
<font size="2"><b><u>Page(s)</u></b></font></p>
</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
<p>
<font size="2">Report of Independent Registered Public Accounting
Firm</font></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p align="right">
<font size="2">1</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
<p>
<font size="2">Consolidated Balance Sheet as of April 30, 2006</font></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p align="right">
<font size="2">2</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
<p>
<font size="2">Consolidated Statements of Operations for the years ended
</font></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
<p>
<font size="2">   April 30, 2006 and 2005</font></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p align="right">
<font size="2">3 </font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
<p>
<font size="2">Consolidated Statement of Stockholders' (Deficit) for
the</font></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
<p>
<font size="2">   Years ended April 30, 2006 and 2005</font></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p align="right">
<font size="2">4</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
<p>
<font size="2">Consolidated Statements of Cash Flows for the years ended
</font></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
<p>
<font size="2">   April 30, 2006 and 2005</font></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p align="right">
<font size="2">5</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="569.333191" colspan="1" rowspan="1" >
<p>
<font size="2">Notes to Consolidated Financial Statements</font></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
<p align="right">
<font size="2">6-18</font></p align="right">
</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">
<font size="2"><b>BAGELL, JOSEPHS, LEVINE &amp; COMPANY,
L.L.C.</b></font><br><font size="2">Certified Public
Accountants</font><br><font size="2">High Ridge
Commons</font><br><font size="2">Suites 400-403</font><br><font size="2">200
Haddonfield Berlin Road</font><br><font size="2">Gibbsboro, New Jersey
08026</font><br><font size="2">(856) 346-2828  Fax (856)
346-2882</font><p align="center">
<font size="2">REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</font><p>
<font size="2">Board of Directors</font><br><font size="2">Champions Sports,
Inc. and Subsidiaries</font><br><font size="2">Arlington, Virginia</font><p>
<font size="2">We have audited the accompanying consolidated balance sheets of
Champions Sports, Inc. and Subsidiaries as of April 30, 2006 and 2005 and the
related consolidated statements of operations, changes in stockholders'
(deficit), and cash flow for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.</font><p>
<font size="2">We have conducted our audits in accordance with standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits 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 audits provide a reasonable basis for our opinion.</font><p>
<font size="2">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 April 30, 2006 and 2005 and the
results of its operations, changes in stockholders' (deficit), and their cash
flow for the years then ended in conformity with accounting principles generally
accepted in the United States of America.</font><p>
<font size="2">The accompanying consolidated financial statements for the years
ended April 30, 2006 and 2005 have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 8 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's operating and financing plans in regard to these matters
are also discussed in Note 8. The consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.</font><p>
<font size="2"><b>BAGELL, JOSEPHS, LEVINE &amp; COMPANY,
L.L.C.</b></font><br><font size="2">BAGELL, JOSEPHS, LEVINE &amp; COMPANY,
L.L.C.</font><br><font size="2">Certified Public
Accountants</font><br><font size="2">Gibbsboro, New Jersey</font><p>
<font size="2">July 21, 2006</font></p>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
<p>
<font size="2">MEMBER OF:</font></p>
</td>
<td width="449.333221" colspan="1" rowspan="1" >
<p>
<font size="2">AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS</font></p>
</td>
</tr>
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="449.333221" colspan="1" rowspan="1" >
<p>
<font size="2">NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS</font></p>
</td>
</tr>
<tr valign="top">
<td width="119.999970" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="449.333221" colspan="1" rowspan="1" >
<p>
<font size="2">PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS</font></p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-1</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<p>
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>CONSOLIDATED BALANCE
SHEETS</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><br></p align="center">
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>ASSETS</b></font></p align="center">
</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="429.333226" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
<p align="center">
<font size="2"><b>(Reclassified)</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="429.333226" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>2006</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>2005</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
<p>
<font size="2"><b>CURRENT ASSETS</b></font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;Cash and cash equivalents</font></p>
</td>
<td width="17.333329" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">540&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">84,513&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Net assets held for sale</font></p>
</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">   -&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="2" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">170,979&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current
assets</b></font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">540&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">255,492&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;Deposits</font></p>
</td>
<td width="15.999996" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">   -&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">11,052&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TOTAL ASSETS</b></font></p>
</td>
<td width="17.333329" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">540&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">266,544&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>LIABILITIES AND STOCKHOLDERS'
(DEFICIT)</b></font></p align="center">
</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>CURRENT LIABILITIES</b></font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Accounts payable</font></p>
</td>
<td width="17.333329" colspan="2" rowspan="1" >
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
<font size="2">33,251&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="2" rowspan="1" >
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right">
<font size="2">69,470&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;Dividend payable on preferred stock</font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">350,460&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">350,460&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Other accrued expenses</font></p>
</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">287,342&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="2" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">213,409&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current
liabilities</b></font></p>
</td>
<td width="15.999996" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">671,053&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">633,339&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>COMMITMENTS AND CONTINGENCIES</b></font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>STOCKHOLDERS' (DEFICIT)</b></font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Preferred stock, $10 par value; 56,075 shares
authorized;</font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;32,450 shares issued and outstanding</font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">324,500&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">324,500&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Common stock, $.001 par value; 50,000,000 shares
authorized;</font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;16,824,658 issued and outstanding</font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">16,825&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">16,825&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Additional paid-in capital</font></p>
</td>
<td width="95.999976" colspan="3" rowspan="1" >
<p align="right">
<font size="2">5,922,349&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" >
<p align="right">
<font size="2">5,922,349&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;Accumulated deficit</font></p>
</td>
<td width="15.999996" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(6,934,187)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(6,630,469)</font></p>
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Total stockholders' (deficit)</font></p>
</td>
<td width="15.999996" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(670,513)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="2" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(366,795)</font></p>
</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="107.999973" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="481.333213" colspan="3" rowspan="1" >
<p>
<font size="2"><b>TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)</b></font></p>
</td>
<td width="17.333329" colspan="2" rowspan="1" >
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2">540</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="2" rowspan="1" >
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2">266,544</font></p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-2</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>CONSOLIDATED STATEMENTS OF
OPERATIONS</b></font><br><font size="2"><b>FOR THE YEARS ENDED APRIL 30, 2006
AND 2005</b></font></p>
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>(Reclassified)</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>2006</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>2005</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
<p>
<font size="2"><b>OPERATING REVENUE</b></font></p>
</td>
<td width="95.999976" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;Sales</font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating
revenue</b></font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>OPERATING EXPENSES</b></font></p>
</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;General and administrative</font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">144,117&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">105,478&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating
expenses</b></font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">144,117&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="70.666649" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">105,478&nbsp;</font></p>
</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NET LOSS FROM CONTINUING
OPERATIONS</b></font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(144,117)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(105,478)</font></p>
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
<p>
<font size="2"><b>DISCONTINUED OPERATIONS</b></font></p>
</td>
<td width="95.999976" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;Loss from discontinued operations (net of
taxes)</font></p>
</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">(17,081)</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">(141,066)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Loss on disposal of assets</font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(142,520)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total discontinued
operations</b></font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(159,601)</font></p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(141,066)</font></p>
</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;NET (LOSS) BEFORE PROVISION FOR INCOME
TAXES</b></font></p>
</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="right">
<font size="2">    (303,718)</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
<p align="right">
<font size="2"> (246,544)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for income
taxes</font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;NET LOSS APPLICABLE TO COMMON
STOCKHOLDERS</b></font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">(303,718)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">(246,544)</font></p>
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>BASIC AND DILUTED LOSS PER COMMON SHARE</b></font></p>
</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Basic and diluted from continuing
operations</font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right">
<font size="2">(0.01)</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
<font size="2">(0.01)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;Basic and diluted from discontinued
operations</font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(0.01)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(0.01)</font></p>
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted loss per
common share </b></font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">(0.02)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2"> $</font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">(0.02)</font></p>
</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="473.333215" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;WEIGHTED AVERAGE SHARES OUTSTANDING</b></font></p>
</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="3">16,824,658&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="18.666662" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="3">13,230,137&nbsp;</font></p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-3</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<p>
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font face="Times New Roman Bold" size="2"><b>CONSOLIDATED
STATEMENTS OF STOCKHOLDERS'
(DEFICIT)</b></font><font size="2"><b></b></font><br><font size="2"><b>FOR THE
YEARS ENDED APRIL 30, 2006 AND 2005</b></font></p>
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>Series A, 12%</b></font></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><b>Convertible Cumulative</b></font></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>Preferred Stock</b></font></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>Common Stock</b></font></p align="center">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>Paid-in</b></font></p align="center">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>Accumulated</b></font></p align="center">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>Shares</b></font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>Amount</b></font></p>
</td>
<td width="23.999994" 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="2"><b>Shares</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>Amount</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>Capital</b></font></p>
</td>
<td width="23.999994" 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="2"><b>Deficits</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>Total</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" >
<p>
<font size="2">Balance, April 30, 2004</font></p>
</td>
<td width="139.999965" colspan="1" rowspan="1" >
<p align="right">
<font size="2">32,450&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right">
<font size="2">324,500&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">8,824,658&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
<font size="2">8,825&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
<font size="2">5,850,349&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (6,383,925)</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (200,251)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" >
<p>
<font size="2">Exercise of common stock</font></p>
</td>
<td width="139.999965" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">option by officer</font></p>
</td>
<td width="139.999965" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">8,000,000&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">8,000&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">72,000&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">80,000&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">Net loss for the year</font></p>
</td>
<td width="139.999965" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(246,544)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(246,544)</font></p>
</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">Balance, April 30, 2005</font></p>
</td>
<td width="139.999965" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">32,450&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">324,500&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">16,824,658&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">16,825&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">5,922,349&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">(6,630,469)</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">(366,795)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">Net loss for the year</font></p>
</td>
<td width="139.999965" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(303,718)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(303,718)</font></p>
</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="139.999965" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="173.333290" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">Balance, April 30, 2006</font></p>
</td>
<td width="139.999965" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">32,450&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">324,500&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">16,824,658&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2"> 16,825&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">5,922,349&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2"> (6,934,187)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2"> (670,513)</font></p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-4</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p align="center">
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>CONSOLIDATED STATEMENTS OF CASH
FLOW</b></font><br><font size="2"><b>FOR THE YEARS ENDED APRIL 30, 2006 AND
2005</b></font></p>
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>2006</b></font></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2"><b>2005</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>CASH FLOW FROM OPERATING ACTIVITIES</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2"><b>Continuing Operations:</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from continuing
operations</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">  (144,117)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (105,478)</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net
loss to net cash</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(used in) operating
activities:</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and
liabilities</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">(36,219)</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">(23,288)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other accrued expenses</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">73,933&nbsp;</font></p>
</td>
<td width="17.333329" 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="2">147,293&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total adjustments</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">37,714&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">124,005&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) operating
activities-countinuing</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(106,403)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">18,527&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discontinued
Operations:</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from discontinued
operations</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (159,601)</font></p>
</td>
<td width="17.333329" 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="2"> (141,066)</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net
loss to net cash</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(used in) operating
activities:</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
amortization</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">48,419&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of
assets</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
<font size="2">142,520&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and
liabilities</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">22,713&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
<font size="2">18,459&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">11,890&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits </font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">11,052&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">6,750&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred lease
concessions</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(2,836)</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total adjustments</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">172,031&nbsp;</font></p>
</td>
<td width="17.333329" 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="2">86,936&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in)
operating activities-</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;discontinued
operations</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">12,430&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (54,130)</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) operating
activities-</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;continuing and
discontinued operations</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (93,973)</font></p>
</td>
<td width="17.333329" 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="2"> (35,603)</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CASH FLOWS FROM INVESTING
ACTIVITIES</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discontinued
Operations:</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of
assets</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">10,000&nbsp;</font></p>
</td>
<td width="17.333329" 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="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing
activities</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">10,000&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>NET (DECREASE) IN CASH AND CASH EQUIVALENTS</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">(83,973)</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">(35,603)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">84,513&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">120,116&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>CASH AND CASH EQUIVALENTS - END OF YEAR</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;540&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;84,513&nbsp;</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="242.666606" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="241.333273" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2"><b>SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Cash paid during the period for:</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;Interest paid</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Income taxes</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</font></p>
</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" >
<p>
<font size="2"><b>SUPPLEMENTAL DISCLOSURE OF NON-CASH
INFORMATION:</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="485.333212" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">&nbsp;&nbsp;Exercise of common stock option by officer</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80,000&nbsp;</font></p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-5</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<p>
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS </b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 1-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>ORGANIZATION AND BASIS
OF PRESENTATION</u></b></font><p>
<font size="2">Champions Sports, Inc., (the "Company") a Delaware corporation,
promoted 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. On June 23,
2005, the Company ceased operations for its' only sports bar located in San
Antonio, Texas.  Fixed assets with a net book value of $152,520 were sold for
$10,000 and inventory consisting of primarily restaurant food and beverage was
sold for $3,200.</font><p>
The Company has reclassified its financial statements to take effect for the
disposal of its only operating business.<p>
<font size="2"><b>NOTE 2-</b>  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES</u></b></font><p>
<font size="2">Principles of Consolidation</font><p>
<font size="2">The consolidated financial statements include the accounts of the
Company and its subsidiaries. All material intercompany transactions have been
eliminated in consolidation. </font><p>
<font size="2"><b><u>Property and Equipment</u></b></font><p>
<font size="2">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:</font></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="219.999945" 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="219.999945" 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="219.999945" 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="219.999945" 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="219.999945" colspan="1" rowspan="1" >
<p align="center">
Remaining term of the lease</p align="center">
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">Depreciation and amortization expense was $0 and $48,419 for the
years ended April 30, 2006 and 2005, respectively. </font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-6</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p align="center">
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</b></font><p>
<font size="2"><b><u>Net (Loss) Per Share</u></b></font><p>
<font size="2"><b>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.  </b></font><p>
<font size="2">The following is a reconciliation of the computation for basic
and diluted EPS:</font></p>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="114.666638" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><b>April 30,</b></font></p align="center">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><b>April 30,</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="114.666638" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2006</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2005</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="114.666638" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="114.666638" colspan="1" rowspan="1" >
<p>
<font size="2">Net loss</font></p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(303,718)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(246,544)</font></p>
</td>
</tr>
<tr valign="top">
<td width="114.666638" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="222.666611" colspan="4" rowspan="1" >
<p>
<font size="2">Weighted-average common shares</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="150.666629" colspan="2" rowspan="1" >
<p>
<font size="2">Outstanding (Basic)</font></p>
</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,824,658&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,230,137&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="114.666638" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="222.666611" colspan="4" rowspan="1" >
<p>
<font size="2">Weighted-average common stock</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="150.666629" colspan="2" rowspan="1" >
<p>
<font size="2">Equivalents</font></p>
</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="150.666629" colspan="2" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
options</font></p>
</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</font></p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="150.666629" colspan="2" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warrants</font></p>
</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="114.666638" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="42.666656" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="222.666611" colspan="4" rowspan="1" >
<p>
<font size="2">Weighted-average common shares</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="193.333285" colspan="3" rowspan="1" >
<p>
<font size="2">Outstanding (Diluted)</font></p>
</td>
<td width="27.999993" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,824,658&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,230,137&nbsp;</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">Options and warrants outstanding to purchase stock were not
included in the computation of diluted EPS for April 30, 2006 and 2005 because
inclusion would have been antidilutive.  </font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-7</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p align="center">
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</b></font><p>
<font size="2"><b><u>Use of Estimates</u></b></font><p>
<font size="2">The preparation of consolidated financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.  Actual
results could differ from those estimates. </font><p>
<font size="2"><b><u>Cash and Cash
Equivalents&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></b></font><p>
<font size="2">For purposes of the consolidated statements of cash flow, the
Company considers all highly liquid debt instruments purchased with a maturity
of three months or less, unless restricted as to use, to be cash equivalents. At
various times throughout the periods the Company had amounts on deposit at
financial institutions in excess of federally insured limits.</font><p>
<font size="2"><b><u>Income Taxes</u></b></font><p>
<font size="2">The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 109 ("FAS 109"), Accounting for Income Taxes. FAS 109
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's assets and liabilities at enacted tax rates expected to be in
effect when such amounts are realized or settled.</font><p>
<font size="2"><b><u>Fair Value of Financial Instruments</u></b></font><p>
<font size="2">The carrying amounts of the Company's financial instruments,
including cash and cash equivalents, accounts payable, and accrued expenses,
approximate fair values because of the short maturities of these
instruments.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-8</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
<font size="2"> </font></p align="center">
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</u></b></font><p>
<font size="2"><b><u>Options for Common Stock</u></b></font><p>
<font size="2">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.</font><p>
<font size="2"><b><u>Stock-Based Compensation</u></b></font><p>
<font size="2">Employee stock awards under the Company's compensation plans are
accounted for in accordance with Accounting Principles Board Opinion No. 25
("APB 25"), "<i>Accounting for Stock Issued to Employees</i>", and related
interpretations. The Company provides the disclosure requirements of FAS 123,
"<i>Accounting for Stock-Based Compensation</i>", and related interpretations.
Stock-based awards to non-employees are accounted for under the provisions of
FAS 123 and has adopted the enhanced disclosure provisions of FAS No. 148
"Accounting for Stock-Based Compensation- Transition and Disclosure, an
amendment of FAS No. 123".</font><p>
<font size="2">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. </font><p>
<font size="2">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, "<i>Accounting for Equity
Instruments that are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services</i>". 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's common stock on the date that the commitment for performance by
the counterparty has been reached or the counterparty's performance is complete.
The fair value of the equity instrument is charged directly to compensation
expense and additional paid-in capital.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-9</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<p>
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</u></b></font><p>
<font size="2"><b><u>Recent Accounting Pronouncements</u></b></font><p>
<font size="2"><b><u>Share Based Payments</u></b></font><p>
<font size="2">In December 2004, the FASB issued FAS 123R, "Share-Based Payment,
"FAS 123R replaces FAS No. 123, "Accounting for Stock-Based Compensation", and
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees."  FAS
123R requires compensation expense, measured as the fair value at the grant
date, related to share-based payment transactions to be recognized in the
financial statements over the period that an employee provides service in
exchange for the award.  The Company intends to adopt FAS 123R using the
"modified prospective" transition method as defined in FAS 123R.  Under the
modified prospective method, companies are required to record compensation cost
prospectively for the unvested portion, as of the date of adoption, of
previously issued and outstanding awards over the remaining vesting period of
such awards.  The pro forma disclosures previously permitted under FAS
No.&nbsp;123 no longer will be an alternative to financial statement recognition
of compensation expense. In accordance with a recently-issued Securities and
Exchange Commission rule, small business registrants will be allowed to
implement FAS No.&nbsp;123R as of the beginning of the first fiscal year that
begins after December&nbsp;15, 2005. Accordingly, the Company will adopt FAS
No.&nbsp;123R for the fiscal quarter ending July 31, 2006.  The Company does not
expect FAS 123R to have a material impact on its results of operations or cash
flows.</font><p>
<font size="2"><b><u>Inventory Costs</u></b></font><p>
<font size="2">In November 2004, the FASB issued Financial Accounting Standards
No. 151 (FAS 151), "Inventory Costs - an amendment of ARB No. 43,
Chapter&nbsp;4".  FAS 151 clarifies the accounting for abnormal amounts of idle
facility expense, freight, handling costs and spoilage.  In addition, FAS 151
requires companies to base the allocation of fixed production overhead to the
costs of conversion on the normal capacity of production facilities.  The
standard is effective for fiscal years beginning after June&nbsp;15, 2005,
therefore, the FAS 151 is effective for the Company on May 1, 2006. The
implementation of this standard is not anticipated to have a material impact on
its financial position, results of operations or cash
flows.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-10</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<p>
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</u></b></font><p>
<font size="2"><b><u>Recent Accounting Pronouncements
(Continued)</u></b></font><p>
<font size="2"><b><u>Exchange of Non-Monetary Assets</u></b></font><p>
<font size="2"><i>On December 16, 2004, FASB issued FAS 153, "Exchanges of
Non-monetary Assets, an amendment of APB Opinion No. 29, Accounting for
Non-monetary Transactions".  This statement amends APB Opinion 29 to eliminate
the exception for non-monetary exchanges of similar productive assets and
replaces it with a general exception for exchanges of non-monetary assets that
do not have commercial substance.  Under FAS 153, if a non-monetary exchange of
similar productive assets meets a commercial-substance criterion and fair value
is determinable, the transaction must be accounted for at fair value resulting
in recognition of any gain or loss.  FAS 153 is effective for non-monetary
transactions in fiscal periods that begin after June 15, 2005.  The
implementation of this standard did not have a material impact on its financial
position, results of operations or cash flows.</i></font><p>
<font size="2"><b><u>Accounting Changes and Error Corrections</u></b></font><p>
<font size="2">In May&nbsp;2005, the FASB issued FAS No.&nbsp;154, "Accounting
Changes and Error Corrections." FAS No.&nbsp;154 replaces Accounting Principles
Board ("APB") Opinion No.&nbsp;20, "Accounting Changes" and FAS No.&nbsp;3,
"Reporting Accounting Changes in Interim Financial Statements." SFAS
No.&nbsp;154 requires retrospective application to prior periods' financial
statements of a voluntary change in accounting principle unless it is
impracticable. APB No.&nbsp;20 previously required that most voluntary changes
in accounting principle be recognized by including the cumulative effect of
changing to the new accounting principle in net income in the period of the
change. FAS No.&nbsp;154 is effective for accounting changes and corrections of
errors made in fiscal years beginning after December&nbsp;15, 2005. The adoption
of FAS No.&nbsp;154 is not anticipated to have a material impact on the
Company's financial position or results of operations.
</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-11</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<p>
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</u></b></font><p>
<font size="2"><b><u>Recent Accounting Pronouncements
(Continued)</u></b></font><p>
<font size="2"><b><u>Accounting for Certain Hybrid Financial
Instruments</u></b></font><p>
<font size="2">In February&nbsp;2006, the ASB issued FAS No.&nbsp;155,
"Accounting for Certain Hybrid Financial Instruments, an amendment of FASB
Statements No.&nbsp;133 and 140." FAS No.&nbsp;155 resolves issues addressed in
FAS No.&nbsp;133 Implementation Issue No.&nbsp;D1, "Application of Statement 133
to Beneficial Interests in Securitized Financial Assets," and permits fair value
remeasurement for any hybrid financial instrument that contains an embedded
derivative that otherwise would require bifurcation, clarifies which
interest-only strips and principal-only strips are not subject to the
requirements of FAS No.&nbsp;133, establishes a requirement to evaluate
interests in securitized financial assets to identify interests that are
freestanding derivatives or that are hybrid financial instruments that contain
an embedded derivative requiring bifurcation, clarifies that concentrations of
credit risk in the form of subordination are not embedded derivatives and amends
FAS No.&nbsp;140 to eliminate the prohibition on a qualifying special-purpose
entity from holding a derivative financial instrument that pertains to a
beneficial interest other than another derivative financial instrument. FAS
No.&nbsp;155 is effective for all financial instruments acquired or issued after
the beginning of the first fiscal year that begins after September&nbsp;15,
2006. The Company is currently evaluating the effect the adoption of FAS
No.&nbsp;155 will have on its financial position or results of operations.
</font><p>
<font size="2"><b><u>Accounting for Servicing of Financial
Assets</u></b></font><p>
<font size="2">In March&nbsp;2006, the FASB issued FAS No.&nbsp;156, "Accounting
for Servicing of Financial Assets, an amendment of FASB Statement No.&nbsp;140."
FAS No.&nbsp;156 requires an entity to recognize a servicing asset or liability
each time it undertakes an obligation to service a financial asset by entering
into a servicing contract under a transfer of the servicer's financial assets
that meets the requirements for sale accounting, a transfer of the servicer's
financial assets to a qualified special-purpose entity in a guaranteed mortgage
securitization in which the transferor retains all of the resulting securities
and classifies them as either available-for-sale or trading securities in
accordance with FAS No.&nbsp;115, "Accounting for Certain Investments in Debt
and Equity Securities" and an acquisition or assumption of an obligation to
service a financial asset that does not relate to financial assets of the
servicer or its consolidated affiliates. </font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-12</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p align="center">
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 2-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)</u></b></font><p>
<font size="2"><b><u>Recent Accounting Pronouncements
(Continued)</u></b></font><p>
<font size="2"><b><u>Accounting for Servicing of Financial Assets
(Continued)</u></b></font><p>
<font size="2">Additionally, FAS No.&nbsp;156 requires all separately recognized
servicing assets and servicing liabilities to be initially measured at fair
value, permits an entity to choose either the use of an amortization or fair
value method for subsequent measurements, permits at initial adoption a one-time
reclassification of available-for-sale securities to trading securities by
entities with recognized servicing rights and requires separate presentation of
servicing assets and liabilities subsequently measured at fair value and
additional disclosures for all separately recognized servicing assets and
liabilities. FAS No.&nbsp;156 is effective for transactions entered into after
the beginning of the first fiscal year that begins after September&nbsp;15,
2006. The Company is currently evaluating the effect the adoption of FAS
No.&nbsp;156 will have on its financial position or results of operations.
</font><p>
<font size="2"><b><u>Reclassifications</u></b></font><p>
<font size="2">The loss from discontinued operations for the year ended April
30, 2005 was reclassified to reflect the sale of the Company's only operating
business activity in the consolidated statements of operations in accordance
with the provisions of FAS 144. The reclassification had no effect on net loss
for the year ended April 30, 2005.  The reclassifications had no effect on net
loss for the year ended April 30, 2006. </font><p>
<font size="2"><b>NOTE 3-</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>RELATED PARTY
TRANSACTION</u></b></font><p>
<font size="2">In October 2004, the Company received an advance from an officer
of the Company for certain working capital needs.  These funds were repaid in
November 2004.</font><p>
<font size="2"><b>NOTE 4-</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>COMMITMENTS AND
CONTINGENCIES</u></b></font><p>
<font size="2"><b><u>Operating leases</u></b></font><p>
<font size="2">The Company leased, as tenant, restaurant space under an
operating lease, which expired June 30, 2005 and was not renewed. The lease
escalated for increases in the landlord's expenses for increases in the Consumer
Price Index, and required additional rentals based on a percentage of restaurant
sales over a defined amount. The lease granted the Company certain concessions,
which were amortized to lease expense over the term of the lease.</font></p>
<p> <font color="0000ff"></font> </p><p>
</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 align="center">
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 4-</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>COMMITMENTS AND
CONTINGENCIES (CONTINUED)</u></b></font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Operating leases
(Continued) </u></font><p>
Rental expense during the years ended April 30, 2006 and 2005 was $43,132 and
$249,913, respectively.<p>
<font size="2"><b>NOTE 5-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MARRIOTT
LICENSE</b></font><p>
<font size="2">The Company was an exclusive supplier of sports memorabilia and a
consultant to all new Champions Sports Bars located in Marriott and Renaissance
Hotels worldwide.  This agreement was terminated by Marriott effective May 28,
2005. </font><p>
<font size="2"><b>NOTE 6-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>OTHER ACCRUED
EXPENSES</u></b></font><p>
<font size="2">This account represents accrued officer's payroll and related
payroll taxes. </font><p>
<font size="2"><b>NOTE 7-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>STOCKHOLDERS'
DEFICIT</u> </b></font><p>
<font size="2"><b><u>Common Stock</u> </b></font><p>
<font size="2">The Company has 50,000,000 shares authorized and 16,824,658
shares issued and outstanding as of April 30, 2006 and 2005.</font><p>
<font size="2">There were no issuances of common stock for the years ended April
30, 2006 and 2005, respectively.</font><p>
<font size="2"><b><u>Preferred Stock </u></b></font><p>
<font size="2">The Company has 56,075 shares of preferred stock authorized and
32,450 shares issued and outstanding as of April 30, 2006 and 2005.</font><p>
<font size="2">The Series A preferred stock required a dividend of 12 percent
per annum, and the dividends were accrued on the Company's book if not paid. The
dividend was paid in common stock of the Company at the Company's discretion.
The number of shares comprising the dividend was paid in common stock and
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's common stock.
There were no conversions in 2006 and 2005.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-14</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p align="center">
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 7-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>STOCKHOLDERS' DEFICIT
(CONTINUED) </u> </b></font><p>
<font size="2"><b><u>Preferred Stock (Continued) </u></b></font><p>
<font size="2">For each of the nine fiscal years ended April 30, 2004, the
Company deferred payment of the annual dividend on the Series A preferred stock.
For the years ended April 30, 2006 and 2005, the deferral was $0, respectively.
Preferred stock dividends in arrears at October 31, 2005 aggregated $350,460
($10.83 per preferred share). Effective November 2003, pursuant to a board
resolution, the Company cancelled its payment and/or accruing of preferred stock
dividends.  </font><p>
<font size="2"><b><u>Common Stock Options</u></b></font><p>
<font size="2">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. </font></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="215.999946" colspan="4" rowspan="1" >
<p align="center">
<font size="2">Year Ended</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="215.999946" colspan="4" rowspan="1" >
<p align="center">
<font size="2">April 30, 2006</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Weighted-</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Number</font></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">average</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Of</font></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">exercise</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Options</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" 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="217.333279" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
<p>
<font size="2">Outstanding - beginning of period</font></p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right">
<font size="2">1,050,000&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">.11&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
<p>
<font size="2">Expired </font></p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (1,050,000)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (.11)</font></p>
</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
<p>
<font size="2">Outstanding - end of period</font></p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">0&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">0&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="217.333279" colspan="1" rowspan="1" >
<p>
<font size="2">Exercisable at end of period:</font></p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right">
<font size="2">0&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">0&nbsp;</font></p align="right">
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-15</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 7-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>STOCKHOLDERS' DEFICIT
(CONTINUED) </u> </b></font><p>
<font size="2"><b><u>Common Stock Options (Continued)</u></b></font></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="211.999947" colspan="4" rowspan="1" >
<p align="center">
<font size="2">Year Ended</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">`</font></p>
</td>
<td width="211.999947" colspan="4" rowspan="1" >
<p align="center">
<font size="2">April 30, 2005</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Weighted-</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Number</font></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p align="center">
<font size="2">average</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
<font size="2">Of</font></p align="center">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p align="center">
<font size="2">exercise</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Options</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97.333309" 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="210.666614" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97.333309" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
<p>
<font size="2">Outstanding - beginning of period</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
<font size="2">9,050,000&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p align="right">
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.11&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
<p>
<font size="2">Granted </font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(8,000,000)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.11)</font></p>
</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97.333309" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
<p>
<font size="2">Outstanding - end of period</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">1,050,000&nbsp;</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<a name="OLE_LINK4"></a><font size="3">   0.11&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97.333309" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="210.666614" colspan="1" rowspan="1" >
<p>
<font size="2">Exercisable at end of period:</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
<font size="2">1,050,000&nbsp;</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p align="right">
<font size="2">    0.11&nbsp;</font></p align="right">
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">If compensation expense for the Company's stock-based
compensation plans had been determined consistent with SFAS&nbsp;123, the
Company's net income and net income per share including pro forma results would
have been the amounts indicated below:</font></p>
<div align="center" style="position:relative; left: 100"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="313.333255" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="217.333279" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><i><u>Year Ended April&nbsp;30,</u></i></font></p align="center">
</td>
</tr>
</table></div>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="86.666645" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2006</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">2005</font></p>
</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2"><i>Net loss:</i></font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2"><i>As reported</i></font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
<p align="right">
<font size="2"><i> ($303,718)</i></font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2"><i>($246,544)</i></font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">Total stock-based employee compensation</font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;expense determined under fair value based</font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;method for all awards, net of related tax
effects</font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (0)</font></p>
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (0)</font></p>
</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">Pro forma</font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> ($303,718)</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> ($246,544)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="86.666645" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2"><i>Net loss per share:</i></font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As reported:</font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
<p align="right">
<font size="2">( $0.02)</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">($0.02)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted </font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
<p align="right">
<font size="2">($0.02)</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">($0.02)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro forma:</font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
<p align="right">
<font size="2">($0.02)</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">($0.03)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="307.999923" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</font></p>
</td>
<td width="86.666645" colspan="1" rowspan="1" >
<p align="right">
<font size="2">($0.02)</font></p align="right">
</td>
<td width="17.333329" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">($0.03)</font></p align="right">
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-16</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p align="center">
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 7-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>STOCKHOLDERS' DEFICIT
(CONTINUED) </u> </b></font><p>
<font size="2"><b><u>Common Stock Options (Continued)</u></b></font><p>
<font size="2">The fair value of the options granted during 2006 and 2005 was
estimated on the date of grant using the Black-Scholes option-pricing model. The
weighted-average assumptions used are as follows:</font></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">2006</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">2005</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="206.666615" colspan="1" rowspan="1" >
<p>
Expected term</p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="right">
- -   </p align="right">
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="62.666651" colspan="1" rowspan="1" >
<p align="right">
- -   </p align="right">
</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="65.333317" colspan="1" rowspan="1" >
<p align="right">
- -   </p align="right">
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="62.666651" colspan="1" rowspan="1" >
<p align="right">
- -   </p align="right">
</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="65.333317" colspan="1" rowspan="1" >
<p align="right">
- -   </p align="right">
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="62.666651" colspan="1" rowspan="1" >
<p align="right">
- -   </p align="right">
</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="65.333317" colspan="1" rowspan="1" >
<p align="right">
- -   </p align="right">
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="62.666651" colspan="1" rowspan="1" >
<p align="right">
- -   </p align="right">
</td>
</tr>
</table></div>
<p>
</p>
<p> <font color="0000ff"></font> </p><p>
<font size="2"><b>NOTE 8-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>GOING
CONCERN</u></b></font><p>
<font size="2">As shown in the accompanying consolidated financial statements,
the Company has sustained net operating losses for the years ended April 30,
2006 and 2005 and has sustained large accumulated deficits that raise
substantial doubt about its ability to continue as a going concern. In addition,
the Company is in search of acquiring a business, or finding a suitable merger
candidate. </font><p>
<font size="2">Management has restructured the Company and is continuing to
search for a more profitable company to acquire. </font><p>
<font size="2">The Company'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.</font><p>
<font size="2">The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.</font><p>
<font size="2"><b>NOTE 9-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>PROVISION FOR INCOME
TAXES</u></b></font><p>
<font size="2">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'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'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.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-17</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font><br><font size="2"><b>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)</b></font><br><font size="2"><b>APRIL 30, 2006 AND
2005</b></font><p>
<font size="2"><b>NOTE 9-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>PROVISION FOR INCOME
TAXES (CONTINUED)</u></b></font><p>
<font size="2">At April 30, 2006 and 2005, deferred tax assets consist of the
following: </font><p>
<font size="2"> </font></p>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="147.999963" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82.666646" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2006</b></font></p>
</td>
<td width="37.333324" 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"><b>2005</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82.666646" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="37.333324" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="1" rowspan="1" >
<p>
<font size="2">Deferred tax asset         </font></p>
</td>
<td width="26.666660" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="82.666646" colspan="1" rowspan="1" >
<p align="right">
<font size="2">1,567,000&nbsp;</font></p align="right">
</td>
<td width="37.333324" colspan="1" rowspan="1" >
<p align="right">
<font size="2">  $</font></p align="right">
</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="right">
<font size="2">1,461,000&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="1" rowspan="1" >
<p>
<font size="2">Less:  valuation allowance</font></p>
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82.666646" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(1,567,000)</font></p>
</td>
<td width="37.333324" 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">   (1,461,000)</font></p>
</td>
</tr>
<tr valign="top">
<td width="147.999963" colspan="1" rowspan="1" >
<p>
<font size="2">Net deferred tax asset</font></p>
</td>
<td width="26.666660" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="82.666646" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">   -0&nbsp;</font></p>
</td>
<td width="37.333324" colspan="1" rowspan="1" >
<p align="right">
<font size="2">    $</font></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>
<font size="2">At April 20, 2006 and 2005, the Company had federal net operating
loss carryforwards in the approximate amounts of $4,478,000 and $4,175,000
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.</font><p>
<font size="2"><b>NOTE 10- &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DISPOSAL OF
BUSINESS</b></font><p>
<font size="2">On June 23, 2005, the Company ceased operations for its' only
sports bar located in San Antonio, Texas.  Fixed assets with a net book value of
$152,520 were sold for $10,000 and inventory consisting of primarily restaurant
food and beverage was sold for $3,200.  The Company's consolidated financial
statements have been reclassified to reflect this sale as discontinued
operations, for all periods presented. Summarized operating results of
discontinued operations are as follows:</font></p>
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="174.666623" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="25.333327" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><b>April 30,</b></font></p align="center">
</td>
<td width="31.999992" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><b>April 30,</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="174.666623" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="25.333327" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2006</b></font></p>
</td>
<td width="31.999992" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2005</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="174.666623" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="25.333327" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="75.999981" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="31.999992" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="174.666623" colspan="1" rowspan="1" >
<p>
<font size="2">Revenues</font></p>
</td>
<td width="25.333327" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">274,626&nbsp;</font></p>
</td>
<td width="31.999992" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">1,797,283&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="174.666623" colspan="1" rowspan="1" >
<p>
<font size="2">Net loss before income taxes</font></p>
</td>
<td width="25.333327" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (303,718)</font></p>
</td>
<td width="31.999992" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">246,544)</font></p>
</td>
</tr>
<tr valign="top">
<td width="174.666623" colspan="1" rowspan="1" >
<p>
<font size="2">Provision for taxes</font></p>
</td>
<td width="25.333327" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">-&nbsp;</font></p>
</td>
<td width="31.999992" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="174.666623" colspan="1" rowspan="1" >
<p>
<font size="2">Net loss</font></p>
</td>
<td width="25.333327" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (303,718)</font></p>
</td>
<td width="31.999992" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (246,544)</font></p>
</td>
</tr>
<tr valign="top">
<td width="174.666623" colspan="1" rowspan="1" >
<p>
<font size="2">Net loss per share</font></p>
</td>
<td width="25.333327" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.02)</font></p>
</td>
<td width="31.999992" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.02)</font></p>
</td>
</tr>
<tr valign="top">
<td width="174.666623" colspan="1" rowspan="1" >
<p>
<font size="2">Basic and Diluted loss per share</font></p>
</td>
<td width="25.333327" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="75.999981" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.02)</font></p>
</td>
<td width="31.999992" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">0.02)</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">Net assets from discontinued operations held for sale at April
30, 2005, represented the following:  Inventory - $18,459 and Net Property and
Equipment of $152,520.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>F-18</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<font size="2"><b>SIGNATURES</b></font><p>
<font size="2">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.</font></p>
<div 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="335.999916" colspan="2" rowspan="1" >
<p>
<font size="2">CHAMPIONS SPORTS, INC</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="733.333150" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="733.333150" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="733.333150" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">/s/ James M. Martell</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p>
<font size="2">James M. Martell</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p>
<font size="2">Chairman, President, CEO and CFO</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p>
<font size="2">Date: July 27, 2006</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p>
<font size="2">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.</font></p>
<div 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="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">/s/ Michael M. Tomic l</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p>
<font size="2">Michael M. Tomic </font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p>
<font size="2">Director</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p>
<font size="2">Date: July 27, 2006</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p>
<div 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="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="2">Durwood C. Settles</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p>
<font size="2">Durwood C. Settles </font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p>
<font size="2">Director </font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="311.999922" colspan="1" rowspan="1" >
<p>
<font size="2">Date: July 27, 2006</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>36</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<font size="2"><b>CERTIFICATION OF CHIEF EXECUTIVE
OFFICER</b></font><p align="center">
<font size="2"><b>Section 302 Certification</b></font><p>
<font size="2">I, JAMES M. MARTELL, certify that:</font><p>
<font size="2">(1) I have reviewed this annual report on Form 10-KSB of
CHAMPIONS SPORTS, INC., a Delaware corporation (the "registrant");</font><p>
<font size="2">(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;</font><p>
<font size="2">(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;</font><p>
<font size="2">(4)  The  registrant'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:</font></p>
<p style="margin-left:45">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designed  such
disclosure  controls and  procedures  to ensure that  material  information
relating  to the  registrant, including its consolidated  subsidiaries,  is made
known to us by others within those entities,  particularly  during the period in
which this annual report is being prepared;</p><p>
</p>
<p style="margin-left:45">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Evaluated  the
effectiveness   of  the   registrant'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 (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><p>
<p>
<font size="2">(5) The registrant's  other certifying  officers and I have
disclosed, based on our most recent evaluation,  to the registrant's  auditors
and the registrant's  board of  directors  (or persons  performing  the
equivalent functions):</font></p>
<p style="margin-left:45">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all significant
deficiencies in the design or operation of   internal   controls   which  could
adversely   affect  the registrant's  ability to record,  process,  summarize
and report financial data and have identified for the registrant's  auditors any
material weaknesses in internal controls;  and</p><p>
</p>
<p style="margin-left:45">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any  fraud,  whether
or not  material,  that  involves management or other employees who have a
significant  role in the registrant's internal controls; and</p><p>
<p>
<font size="2">(6) The registrant's other certifying officers and I have
indicated in this annual  10-KSB  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.</font></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
<p>
<font size="2">Date:&nbsp;&nbsp;July 27, 2006</font></p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">/s/ James M. Martell</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p>
<font size="2">James M. Martell</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p>
<font size="2">Chief Executive Officer</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>37</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<font size="2"><b>CERTIFICATION OF CHIEF FINANCIAL
OFFICER</b></font><p align="center">
<font size="2"><b>Section 302 Certification</b></font><p>
<font size="2">I, JAMES M. MARTELL, certify that:</font><p>
<font size="2">(1)&nbsp;I have reviewed this annual report on Form 10-KSB of
CHAMPIONS SPORTS, INC., a Delaware corporation (the "registrant");</font><p>
<font size="2">(2)&nbsp;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;</font><p>
<font size="2">(3)&nbsp;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;</font><p>
<font size="2">(4)&nbsp;The registrant'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:</font></p>
<p style="margin-left:45">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designed  such
disclosure  controls and  procedures  to ensure that  material  information
relating  to the  registrant, including its consolidated  subsidiaries,  is made
known to us by others within those entities,  particularly  during the period in
which this annual report is being prepared;</p><p>
</p>
<p style="margin-left:45">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Evaluated  the
effectiveness   of  the   registrant'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><p>
</p>
<p style="margin-left:45">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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><p>
<p>
<font size="2">(5)&nbsp;The registrant's  other certifying  officers and I have
disclosed, based on our most recent evaluation,  to the registrant's  auditors
and the registrant's  board of  directors  (or persons  performing  the
equivalent function):  (a) all significant  deficiencies in the design or
operation of internal controls which could adversely affect the registrant's
ability to record,  process,  summarize and report  financial data and have
identified for the registrant's auditors any material weaknesses in internal
controls; and (b) any fraud,  whether or not material,  that  involves
management or other employees who have a significant  role in the  registrant's
internal controls; and</font><p>
<font size="2">(6)&nbsp;The registrant's other certifying officers and I have
indicated in this  annual  10-KSB 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.</font></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
<p>
<font size="2">Date:&nbsp;&nbsp;July 27, 2006</font></p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">/s/ James M. Martell</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p>
<font size="2">James M. Martell</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p>
<font size="2">Chief Financial Officer</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>38</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<font size="2"><b>CERTIFICATION PURSUANT TO 18 U.S.C.  SECTION 1350 AS ADOPTED
PURSUANT TO</b></font><br><font size="2"><b>SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002.</b></font><p>
<font size="2">In connection with the annual report of Champions Sports, Inc.
(the "Company") on Form 10-KSB for the year ended April 30, 2006 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:</font><p>
<font size="2">1. The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and</font><p>
<font size="2">2. The information contained in the Report fairly presents, in
all material respects,   the financial condition and results of operation of the
Company.</font></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
<p>
<font size="2">Date:&nbsp;&nbsp;July 27, 2006</font></p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="3">/s/ James M. Martell</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p>
<font size="2">James M. Martell</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
<p>
<font size="2">Chief Financial Officer</font></p>
</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="155.999961" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="73.333315" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>39</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<hr><p>
</p>



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