|OMB APPROVAL                                                                                       
|---------------------------------------------------------------------------------------------------
|OMB Number: 3235-0416
Expires:  March 31, 2007
Estimated average burden
hours per response   182.00



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-QSB





[X]

QUARTERLY  REPORT  UNDER  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the Quarterly period ended August 31, 2005



[  ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT



For the transition period from ___________  to  _____________



ELGRANDE INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)



|Nevada                                         | 000-25335                 | 88-0409024                       
|---------------------------------------------- | ------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation) | (Commission File  Number) | (IRS Employer Identification No.)



|1450 Kootenay Street, Vancouver, B.C. Canada |  | V5K 4R1   
|-------------------------------------------- |  | ----------
|(Address of principal executive offices)     |  | (Zip Code)



(604) 689-0808

(Issuer's telephone number)



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



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ___  No _X_



The number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date:



Class

August 31, 2005

Common stock, $ 0.001 par value

30,612,479



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



SEC 2334 (9-05)

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.



1





---



ELGRANDE INTERNATIONAL, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2005





TABLE OF CONTENTS





Page



PART  I

FINANCIAL INFORMATION



ITEM  I -

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

3



Consolidated Balance Sheets as of

August 31, 2005 (Unaudited) and May 31, 2005

3



Consolidated Statements of Operations

for the Three Months ended August 31,

2005 and 2004 (Unaudited)

4



Consolidated Statements of Cash Flows

for the Three Months ended August 31, 2005

and 2004 (Unaudited)

5



Condensed Notes to Consolidated Interim Financial Statements

6



ITEM 2

MANAGEMENT'S  DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

10



ITEM 3

CONTROLS AND PROCEDURES

14



PART II

OTHER INFORMATION



ITEM 5

OTHER INFORMATION

14



ITEM 6

EXHIBITS

14





Signatures

15



Certifications    (filed as attachment)























2





---



ELGRANDE INTERNATIONAL, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2005



PART  I.  FINANCIAL  INFORMATION



Item 1 - Financial Statements



|ELGRANDE INTERNATIONAL, INC.                                                         
|-------------------------------------------------------------------------------------
|(Formerly Known as Elgrande.com, Inc.)                                               
|CONSOLIDATED BALANCE SHEETS                                                          
|                                                                                     
|                                                                                     
|A S S E T S                                                                          
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|L I A B I L I T I E S   &   S T O C K H O L D E R S '   E Q U I T Y ( D E F I C I T )
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     



See accompanying condensed notes.



3





---



|ELGRANDE INTERNATIONAL, INC.                                
|------------------------------------------------------------
|(Formerly Known as Elgrande.com, Inc.)                      
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|                                                            
|                                                            
|                                                            
|                                                            
|R E V E N U E S                                             
|COST OF REVENUES                                            
|GROSS PROFIT                                                
|                                                            
|E X P E N S E S                                             
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|LOSS FROM OPERATIONS                                        
|                                                            
|OTHER INCOME (EXPENSE)                                      
|                                                            
|                                                            
|                                                            
|                                                            
|LOSS BEFORE TAXES                                           
|                                                            
|INCOME TAX EXPENSE                                          
|                                                            
|NET LOSS                                                    
|                                                            
|OTHER COMPREHENSIVE INCOME (LOSS)                           
|                                                            
|COMPREHENSIVE LOSS                                          
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            



See accompanying condensed notes.



4





---



|ELGRANDE INTERNATIONAL, INC.                
|--------------------------------------------
|(Formerly Known as Elgrande.com, Inc.)      
|CONSOLIDATED STATEMENTS OF CASH FLOWS       
|                                            
|                                            
|                                            
|                                            
|                                            
|CASH FLOWS FROM OPERATING ACTIVITIES:       
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|CASH FLOWS FROM INVESTING ACTIVITIES:       
|                                            
|                                            
|                                            
|                                            
|CASH FLOWS FROM FINANCING ACTIVITIES:       
|                                            
|                                            
|                                            
|                                            
|                                            
|Net increase (decrease)  in cash            
|                                            
|                                            
|                                            
|Cash, beginning of period                   
|Cash, end of period                         
|                                            
|SUPPLEMENTAL DISCLOSURES:                   
|                                            
|                                            
|                                            
|                                            
|NON-CASH INVESTING AND FINANCING ACTIVITIES:
|                                            



See accompanying condensed notes.



5





---



ELGRANDE INTERNATIONAL, INC.

(Formerly Known as Elgrande.com, Inc.)

CONDENSED NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AUGUST 31, 2005

______________________________________________________________________________________________



NOTE 1  BASIS OF PRESENTATION



The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements.  These unaudited interim financial statements should be read in conjunction with the audited financial statements for the period ended May 31, 2005. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.



The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period.  Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.



The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered material recurring losses from operations since inception. At August 31, 2005, the Company has a working capital deficit of approximately $1,383,875, an accumulated deficit of approximately $10,735,454 and negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern.



Continuation of the Company is dependent on achieving sufficiently profitable operations and obtaining additional financing. Management has and is continuing to raise additional capital from various sources. The Company has developed a wholesale division which sources unique home décor items from Europe for distribution in North America. There can be no assurances that the Company will be successful in raising additional capital. The financial statements do not include any adjustment relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Revenue and Cost Recognition

The Company recognizes revenue for product sales when products are shipped and title passes to customers. Cost of sales consists of the purchase price of products sold, inbound and outbound shipping charges, and packaging supplies.



Accounts Receivable

The Company carries its accounts receivable at net realizable value.  The Company is in the process of developing a policy for recognizing doubtful accounts.  The Company's policy is to accrue interest on trade receivables 30 days after invoice date. A receivable is considered past due if the Company does not receive payment within 30 days.



Inventories

Inventory at August 31, 2005 consists of a variety of home-décor products.  Inventories are recorded using the specific identification method and valued at the lower of cost or market value. Inventory consisting of manufactured products is recorded using the first in first out method and valued at the lower of cost or market value.





6





---



ELGRANDE INTERNATIONAL, INC.

(Formerly Known as Elgrande.com, Inc.)

CONDENSED NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AUGUST 31, 2005

______________________________________________________________________________________________



Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 153.  This statement addresses the measurement of exchanges of nonmonetary assets.  The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged.  The guidance in that opinion, however, included certain exceptions to that principle.  This statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance.  A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange.  This statement is effective for financial statements for fiscal years beginning after June 15, 2005.  Earlier application is permitted for nonmonetary asset exchanges incurred during fiscal years beginning after the date of this statement is issued.  Management believes the adoption of this statement will have no impact on the financial statements of the Company.



In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 152, which amends FASB statement No. 66, Accounting for Sales of Real Estate, to reference the financial accounting and reporting guidance for real estate time-sharing transactions that is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions.  This statement also amends FASB Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, to state that the guidance for (a) incidental operations and (b) costs incurred to sell real estate projects does not apply to real estate time-sharing transactions.  The accounting for those operations and costs is subject to the guidance in SOP 04-2.  This statement is effective for financial statements for fiscal years beginning after June 15, 2005.  Management believes the adoption of this statement will have no impact on the financial statements of the Company.



In December 2004, the Financial Accounting Standards Board issued a revision to Statement of Financial Accounting Standards No. 123R, Accounting for Stock Based Compensation.  This statement supercedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance.  This statement establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entitys equity instruments or that may be settled by the issuance of those equity instruments.  This statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  This statement does not change the accounting guidance for share based payment transactions with parties other than employees provided in Statement of Financial Accounting Standards No. 123.  This statement does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, Employers Accounting for Employee Stock Ownership Plans. Management believes the adoption of this statement will have no impact on the financial statements of the Company. The Company previously adopted Statement of Financial Accounting Standard No. 123.



In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 151, Inventory Costs an amendment of ARB No. 43, Chapter 4. This statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that . . . under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges. . . . This statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of so abnormal. In addition, this statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not believe the adoption of this statement will have any immediate material impact on the Company.





7





---



ELGRANDE INTERNATIONAL, INC.

(Formerly Known as Elgrande.com, Inc.)

CONDENSED NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AUGUST 31, 2005

______________________________________________________________________________________________



In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity (hereinafter SFAS No. 150). Statement of Financial Accounting Standards No. 150 establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity and requires that those instruments be classified as liabilities in statements of financial position. Previously, many of those instruments were classified as equity. Statement of Financial Accounting Standards No. 150 is effective for financial instruments entered into or modified after May 31, 2003 and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Management does not believe the adoption of this statement will have any impact on the Company.



NOTE 3 - COMMON STOCK AND WARRANTS



During the three months ended August 31, 2005, the Company did not issue any common stock.



NOTE 4 - STOCK OPTIONS



During the three months ended August 31, 2005, the Companys board of directors approved the Elgrande International, Inc. 2005 Stock Option Plan. The Company may issue up to 6,000,000 common stock options with a maximum per share price of $0.03.



During the fiscal year ended May 31, 2003, the Companys board of directors approved the Elgrande.com, Inc. 2003 Stock Options Plan. The Company may issue up to 5,000,000 common stock options with a maximum per share price of $0.05.



During the year ended May 31, 2005 and during three months ended August 31, 2005, the Company did not issue any stock options under either plan.



The following is a summary of stock option activity:



|                                                       | Number of Weighted Average Shares |  | Exercise Price
|------------------------------------------------------ | --------------------------------- |  | --------------
|Outstanding June 1, 2003                               | 3,640,000                         |  | $ 0.61        
|Expired                                                | (1,119,000)                       |  | $(0.11)       
|Options outstanding at May 31, 2004                    | 2,521,000                         |  | $0.83         
|Expired                                                | -                                 |  | -             
|Options outstanding at May 31, 2005                    | 2,521,000                         |  | $0.83         
|Expired                                                | -                                 |  | -             
|Options outstanding and exercisable at August 31, 2005 | 2,521,000                         |  | $ 0.83        





NOTE 5 - NOTES AND DEBENTURES PAYABLE



Short-term Notes

During the three months ended August 31, 2005, the Company's officers loaned the Company $78,364 to fund continuing operations.







8





---



ELGRANDE INTERNATIONAL, INC.

(Formerly Known as Elgrande.com, Inc.)

CONDENSED NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AUGUST 31, 2005

______________________________________________________________________________________________



NOTE 6 - INVESTMENT IN EUROPEAN SUBSIDIARY



In the quarter ended August 31, 2002, the Company invested $100,000 in its wholly owned European subsidiary, Elgrande Europe AG, stock of which has a par value of one euro. The subsidiary was created to provide an operating presence in Europe.



At August 31, 2004, there was no sales activity recorded in the European company. Elgrande Europe AG has been consolidated in these financial statements.



NOTE 7  INVESTMENT IN BISCAYNE BAY TRADING CORPORATION



In the quarter ended November 30, 2003, the Company acquired Biscayne Bay Trading Corporation for 35,000 shares of restricted common stock. Approximately 1.3 million shares are held in escrow for future borrowings for debenture agreements.







































































9





---



ELGRANDE INTERNATIONAL, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2005



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION



Cautionary Statement Regarding Forward-Looking Statements



This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this report. Forward-looking statements are often identified by words like: "believe", "expect", "estimate", "anticipate", "intend", "project" and similar expressions or words which, by their nature, refer to future events.



In some cases, you can also identify forward-looking statements by terminology such as "may", "will", "should", "plans", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.



Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.



RESULTS OF OPERATIONS



Comparison of the three months ended August 31, 2005 and August 31, 2004.



In November 2002 we launched our wholesale division, European Sources Direct (ESD). Since then, we have established wholesale sales representation in key U.S. and Canadian regional giftware and home décor wholesale centers. We have secured certain exclusive corporate and wholesale distribution rights for products within the USA, Canada and Mexico.



For the quarter ended August 31, 2005, we had revenues of $163,942 versus $291,470 for the same period ending last year. This decrease in revenues is primarily due to a local container strike that delayed the receipt of our products from Germany and adversely affected our ability to fulfill orders to our customers.



For the quarter ended August 31, 2005, cost of revenues increased to $150,759. This represents the cost of inventory sold and the corresponding freight-in charges of importing products.



For the quarter ended August 31, 2005, gross profit was $13,183, or 8% versus $155,961 for the same period ending last year.



Revenue accounts for sales of products that have been delivered to customers. Pending sales are orders that have been received but not yet fulfilled due to reasons such as back orders or customer credit issues. The financial statements do not reflect pending sales as per GAAP.



Management is endeavoring to improve our operations. By improving inventory management, shipping logistics and product handling, we believe that we can increase efficiency and further lower costs of revenues to improve gross profit margins.





10





---



ELGRANDE INTERNATIONAL, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2005



CHANGES IN FINANCIAL CONDITION



A summary of expenses for the three months ended August 31, 2005 compared to the period ended August 31, 2004 is as follows:



2005

2004



Consulting

$   38,240

$  16,555

Selling expense

24,058

97,085

Legal and other

24,795

4,149

Salaries

96,112

140,419

Depreciation and amortization

2,737

9,386

Office and administration

38,599

106,867

Travel and entertainment

8,931

19,286

________

________

$233,472

$393,747

=======

=======



There were some changes in our financial condition. Significant changes that warrant discussion include:



Selling Expenses



Our Advertising and Marketing expenses are significantly lower in the quarter ended August 31, 2005 primarily due to the fact that our product lines are now well established within the market place. We minimized our involvement in new marketing contracts and instead concentrated on building upon the foundation we had created.  As well, in 2004, we have to incur costs to supply samples to our showrooms located at select sales agencies across North America which was not necessary this quarter.



Salaries



The significant decrease in salaries expense by 30% over last year reflects adjustments made to policies and procedures to increase our internal efficiency and create an improved balance between our staffing levels and our growth volume.



Office and Administration



Office and administration costs were lower by 60% in the quarter ended August 31st, 2005 compared to 2004 due to a variety of reasons. Investor relations expenses were severely cut back leading to a plunge of $24,000 in costs. As well, because we now have a solid customer base with established credit history, our collections administration costs have been reduced by 32%.



Travel and Entertainment



In the year ended August 31, 2005, we cut our travel and entertainment costs by being selective in the trade shows we attended. We also limited our representation at these trade shows, further cutting back travel costs.



Management is currently investigating other ways to improve its business administration. This may involve additional investments in information technology to create efficiencies.





11





---



ELGRANDE INTERNATIONAL, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2005



LIQUIDITY AND CAPITAL RESOURCES



TRENDS LIKELY TO HAVE A MATERIAL IMPACT ON SHORT & LONG TERM LIQUIDITY THE

SUCCESS OF THE WHOLESALE LINE



In the previous fiscal year, we established relationships with a network of sixteen wholesale marketing agencies and representatives covering the North American market. In the last fiscal quarter, we added two marketing agencies in Canada. With exclusive distribution rights with our principal supplier and having established North American sales representation, we believe that revenues will continue to grow to reach its full potential. This will position us to be cash flow positive, self-sustaining and ultimately, profitable.



UNCERTAINTIES LIKELY TO HAVE A MATERIAL IMPACT ON SHORT & LONG TERM LIQUIDITY



Uncertainties and/or fluctuations in the marketplace have an impact on Liquidity that cannot be quantified at this time.



INTERNAL AND EXTERNAL SOURCES OF CAPITAL



We have limited assets to sell in order to create short or long term liquidity. Therefore we are dependant on a combination of external sources for funding and the developing trend to positive net cash flow to maintain liquidity.



We have no material commitments requiring capital expenditures. There are no contracts with third parties that require funds.



We anticipate the need to develop sufficient inventory to meet sales demand. Short term, we will have to rely on external sources for funding to support immediate inventory requirements. Long-term, inventory build-up is planned to coincide with our ability to generate positive cash flow. Until such time as we have positive cash flow on a monthly basis, the dependence on external capital will remain.



There are no guarantees that we will be able to raise external capital in sufficient amounts or on terms acceptable to us. Our ability to demonstrate a consistent trend of positive cash flow and profitable quarters will have a beneficial effect on liquidity.



TRENDS, EVENTS OR UNCERTAINTIES THAT HAVE HAD OR THAT ARE REASONABLY EXPECTED TO HAVE A MATERIAL IMPACT ON NET SALES OR REVENUES OR INCOME FROM CONTINUING OPERATIONS



OPERATING ACTIVITIES



As revenue grows, so does the potential for trends, events and uncertainties to influence future cash flow and revenue.



Our wholesale activity is centered on procuring, importing, marketing and selling international products within the North American wholesale market. The current principal country of supply is Germany, with which we have negotiated exclusivity of product supply and currency rate. This will secure us a level of uniqueness of products in the marketplace and a reduction of exposure to foreign currency fluctuations between the Euro and US dollars.



Until such time we are able to diversify our source of supply and range of product, interruptions in supply from manufacturers may have a negative impact on operations, as would any major reduction in consumer demand.







12





---



ELGRANDE INTERNATIONAL, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2005



Our principal product line is subject to two buying seasons. A Spring/Summer season, which has buying in the period late January through late April of each year, and a Fall/Winter season which has buying in the period late June through late October. There are order lulls in the periods between the two buying seasons, specifically November through January and May through June.  The seasonality of the industry therefore has a material effect on the financial condition or results of operations.



We generated negative cash flow from operating activities for the period from inception (April 8, 1998) through August 31, 2005. We realized negative cash flow of $122,534 from operating activities for the three months ending August 31, 2005 compared to negative cash flow of $255,683 from operating activities for the three months ending August 31, 2004.



INVESTING ACTIVITIES



Investing activities for the period from inception through August 31, 2005 consisted primarily of the purchase of inventory and soft costs associated with the development of our wholesale activities.



FINANCING ACTIVITIES



Since inception, we financed operations through proceeds from the issuance of equity and debt securities and loans from shareholders and others. To date, we raised approximately $7 million from the sale of common stock and have borrowed approximately $2 million from investors and shareholders. Funds from these sources have been used as working capital to fund our wholesale activity.



During the quarter ending August 31, 2003, we underwent capital restructuring. Since then we have been engaged in a turnaround process that entailed shifting the business focus to importing and wholesale distribution in the giftware and home decor sector. This transition has been extremely successful as evidenced by our increasing sales and revenue. Our Board and management have been focused on carefully examining ways and means of continuing to move ahead. This process included speaking with key suppliers, large customers and potential funding sources. By August 2003, it had become clear that capital restructuring was a necessary step to allow the expansion of its product base, to sign large customers, to improve its due diligence profile with key account customers and suppliers, and to conclude negotiations for the funding necessary to support and grow the business. Upon reviewing these facts and on the advice of counsel, the Board decided that it was in our long-term best interest and the best interests of our shareholders to effectuate a change in our capital structure, and thereby provide us with a more stable base to build upon. In August 2003 we effected a 10 for 1 reverse split of our common stock.



Our financing activities for the quarter ended August 31, 2005 provided a net total of $145,218. Cash at the end of the period was $10,456.





























13





---



ELGRANDE INTERNATIONAL, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2005



ITEM 3. CONTROLS AND PROCEDURES.



QUARTERLY EVALUATION OF THE COMPANY'S DISCLOSURE CONTROLS AND INTERNAL CONTROLS.



As of the close of the period covered by this Quarterly Report on Form 10-QSB, the Company evaluated the effectiveness of the design and operation of its "disclosure controls and procedures" (Disclosure Controls), and its "internal controls and procedures for financial reporting" (Internal Controls). This evaluation (the Controls Evaluation) was done under the supervision and with the participation of management, including our Chief Executive Officer (CEO). Rules adopted by the SEC require that in this section of the Quarterly Report we present the conclusions of the CEO about the effectiveness of our Disclosure Controls and Internal Controls based on and as of the date of the Controls Evaluation. Based upon that evaluation, the Chief Executive Officer and Principal Financial and Accounting Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in this Quarterly Report on Form 10-QSB. There have been no changes in the Company's internal controls or in other factors which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.



CEO CERTIFICATIONS.



Appearing immediately following the Signatures section of this Quarterly Report there are two separate forms of "Certifications" of the CEO. The first form of Certification is required in accord with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certification).  This section of the Quarterly Report which you are currently reading is the information concerning the Controls Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.



DISCLOSURE CONTROLS AND INTERNAL CONTROLS.



Disclosure Controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (Exchange Act), such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified.





PART II. OTHER INFORMATION.





ITEM 5.  OTHER INFORMATION



The Company did not file any reports on Form 8-K during the quarter ended August 31, 2005.



ITEM  6.  EXHIBITS.





No.

Description

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

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

31

Certification of Michael Holloran Pursuant to Section 302of the -Sarbanes-Oxley Act of 2002, filed herewith

32

Certification of Michael F. Holloran Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith



14





---







SIGNATURES





Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.







ELGRANDE.COM, INC.





By: /s/ Michael F. Holloran

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

Michael F. Holloran

President and Chief Executive Officer (Principal

Executive and Financial Officer)



Dated:  October 17, 2005







































































15