U.S. SECURITIES AND EXCHANGE
                                   COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB
                                   (Mark One)


[X] QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  AND EXCHANGE
            ACT OF 1934 For the quarterly period ended May 31, 2004

[ ]  TRANSITION  REPORT  UNDER  SECTION 13 OR 15(d) OF THE  EXCHANGE ACT For the
transition period from______________ to _____________

                         Commission file number 0-30276

                   Continental Beverage and Nutrition, Inc.,
                              (Formerly Known as)
                   Adirondack Pure Springs Mt. Water Co., Inc.
                 (Name of small business issuer in its charter)

       Delaware                                                 90-0143954
--------------------------------------------------------------------------------
(State or other jurisdiction                                 (I.R.S. Employer
incorporated or organization)                                Identification No.)

      100 Quentin Roosevelt Blvd., Suite 404, Garden City, New York, 11530
                    (Address of principal executive offices)

                                 (516) 222-0100
              (Registrant's telephone number, including area code)

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

APPLICABLE  ONLY TO  ISSUERS  INVOLVED  IN  BANKRUPTCY  PROCEEDINGS  DURING  THE
PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 of 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes [X] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practicable date: 21,085,193

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


                    CONTINENTAL BEVERAGE AND NUTRITION, INC.
                                   FORM 10-QSB
                                      INDEX

                                                                      Page No.
                                                                      --------

Part I - Financial Information

    Item 1- Financial Statements

      Balance Sheets - May 31, 2004 and February 28, 2004..........

      Statements of Operations - Three Months ended  May 31, 2004
        and 2003...................................................

      Statements of Cash Flows - Three months ended May 31, 2004
        and 2003...................................................

      Notes to Financial Statements................................

    Item 2 - Management's Discussion and Analysis of
      Financial Condition and Results of Operations................

Part II - Other Information

    Item 1 - Legal Proceedings.....................................

    Item 2 - Changes in Securities and Use of Proceeds.............

    Item 4 - Submission of Matters to a Vote of Security Holders...

    Item 5 - Other Information.....................................

    Item 6 - Exhibits and Reports on Form 8-K......................

    Signatures.....................................................




                    CONTINENTAL BEVERAGE AND NUTRITION, INC.
                (FKA ADIRONDACK PURE SPRINGS MT. WATER CO., INC.)
                                BALANCE SHEETS


                                     ASSETS

                                              May 31, 2004     February 28, 2004
                                              (Unaudited)          (Audited)

Current Assets:
   Accounts Receivable - Trade                 $  47,628            $      --
   Prepaid expense                                50,112               67,100
   Inventory                                      20,000                   --
   Due from related party                         12,347                6,367
                                               ---------             --------
Total Current Assets                             130,087               73,467

Property and Equipment, net                           --                   --

Other:
   Deferred Offering Costs                         2,450                2,450
   Loan Receivable                                10,000               10,000
   Security Deposits                                 603                  603
                                               ---------             --------
TOTAL ASSETS                                  $  143,140            $  86,520
                                               =========             ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts Payable and Accrued Expenses     $   185,409           $  190,634
   Accrued Salary                                628,770              603,770
   Debentures Payable                             46,350               46,350
   Loan payable - other                          135,000               50,000
   Loan Payable-Affiliate                        238,694              243,875
                                               ---------            ---------
Total Current Liabilities                      1,234,223            1,134,629
                                               ---------            ---------

Stockholders' Equity:
   Preferred Stock - Series A, Authorized
    1,000,000, $.0001 Par Value, 20,000
    Shares issued and outstanding at
    May 31, 2004  and February 28, 2004                2                    2
   Common Stock - Authorized 100,000,000
    Shares $.0001 Par Value; 21,085,193
    issued and outstanding at May 31, 2004
    and February 28, 2004                          2,098                2,098
   Paid-in Capital                             1,120,935            1,120,935
   Accumulated Deficit                        (2,090,528)          (2,047,554)
   Subscription Receivable                    (  123,590)          (  123,590)
                                              ----------           ----------
Total Stockholders' Equity                    (1,091,083)          (1,048,109)
                                              ----------           ----------
Total liabilities and
 Stockholders Equity                         $   143,140         $     86,520
                                              ==========           ==========



                    CONTINENTAL BEVERAGE AND NUTRITION, INC.
                (FKA ADIRONDACK PURE SPRINGS MT. WATER CO., INC.)
                            STATEMENTS OF OPERATIONS
                              FOR THE QUARTER ENDING
                                   (Unaudited)

                                          March 1, 2004         March 1, 2003
                                         to May 31, 2004       to May 31, 2003


Revenues:
   Sales                                   $   47,627             $  175,522
   Cost of Sales                               29,908                125,067
                                             --------                -------
Gross Profit                                   17,719                 50,455

Expenses:
   Officer's Salary                            25,000                 25,000
   Professional Fees                           11,599                 21,672
   Selling General and Administrative          19,545                 59,408
                                             --------                -------
Total Expenses                                 56,144                106,080
                                             --------                -------
Operating Loss                                (38,425)              ( 55,625)

Other Income (Expenses):
   Interest Expense                           ( 4,549)              (  1,738)
                                              -------                -------
Total Other Income (Expenses):                ( 4,549)              (  1,738)
                                              -------                -------
Net Loss                                   $  (42,974)             $( 57,363)
                                              =======                =======

(Loss) Per Share                               (.002)                (0.003)
                                               ======                 =====

Average shares outstanding for period        21,085,193            18,771,000
                                             ==========            ==========



                    CONTINENTAL BEVERAGE AND NUTRITION, INC.
                (FKA ADIRONDACK PURE SPRINGS MT. WATER CO., INC.)
                             STATEMENT OF CASH FLOWS
                  FOR THE PERIODS MARCH 1, 2004 TO MAY 31, 2004
                                       AND
                         MARCH 1, 2003 TO MARCH 31, 2003


                                           March 1, 2004         March 1, 2003
                                         to May 31, 2004        to May 31, 2003



 Cash Flows From Operating Activities:


  Net Loss                                  $  (42,974)           $  (  57,363)
 Adjustments to Reconcile
 Net Income to Net Cash
 Provided by Operating Activities:
   Depreciation and Amortization                    --                   2,687
   Changes in operating current assets and
    liabilities:
   Accounts Receivable                         (47,628)              (  19,890)
   Inventory                                   (20,000)              (  15,500)
   Accounts Payable and Accrued Expense        ( 5,225)                112,959
   Accrued Salaries Payable                     25,000                  25,000
   Deferred Offering Costs                          --                   4,600
   Prepaid Expense                              16,988                  17,800
                                               -------                --------
Net Cash (Used) Provided
   By Operating Activities                    ( 73,839)                 70,293
                                               -------                --------
Cash Flows (used) Provided by
   Financing Activities:
      Loan Payable-Affiliate                   (11,161)              (  70,293)
      Loan Payable - Other                      85,000                      --
                                               -------                --------
                                                73,839               (  70,293)

Net Increase (Decrease) In Cash                     --                      --
Cash -Beginning                                     --                      --
                                              --------               ---------
Cash - Ending                               $       --             $        --
                                              ========               =========



                   CONTINENTAL BEVERAGE AND NUTRITION, INC.
                (FKA ADIRONDACK PURE SPRINGS MT. WATER CO., INC.)
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION


Adirondack Pure Springs Mt. Water Co., Inc. a New York corporation ("Adirondack"
"we" or "us") was organized on March 6, 1997. Adirondack was founded to extract,
distribute and bottle natural mountain and spring water from a stream and spring
fed natural  reservoir in the  northeastern  United  States.  On January 5, 2004
Continental  Beverage and  Nutrition,  (CB&N) Inc.  was formed in Delaware  with
101,000,000 shares authorized,  1,000,000 preferred shares, par value $.0001 and
100,000,000  common shares par value .0001. On the same day a plan of merger was
agreed  to  between  Adirondack  Pure  Springs  Mt.  Water Co.  (APSW)  majority
shareholders and CB&N to exchange one share of APSW common and preferred for one
share of CB&N which effectively made CB&N the surviving Company.

Our  business  to date has  focused on the still  water,  and value  added water
beverage  segments of the bottled  water market  because of its quality  natural
mountain and spring water, the quantity of available water, relationships in the
nutritional supplement industry, and contributing market factors,  including the
central location in the northeastern United States market,  increased government
regulation  of water  quality  and  increased  public  awareness  and demand for
bottled water.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Property and Equipment

Property and equipment  are recorded at cost when  acquired.  Improvements  that
significantly  add to the  productive  capacity or extend the useful life of the
related asset are  capitalized.  Site  development  costs are amortized over the
lesser of the life of the lease or asset.  Office  equipment is depreciated over
the  estimated  useful  lives of the  assets  ranging  from 3 to 7  years.  When
property or  equipment  is sold or  otherwise  disposed of, the related cost and
accumulated  depreciation or amortization  are removed from the accounts and any
gain or loss is included in income.  As of February  28, 2004 a future cash flow
assessment  was made,  which  showed  the future  value of the fixed  assets was
questionable  and therefore all of the property and equipment  were removed from
the  books  which  resulted  in a write  off of fixed  assets  in the  amount of
$78,415.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

Income Taxes

We account  for income  taxes  according  to the  liability  method.  Under this
method,  deferred tax assets and liabilities are determined based on differences
between  financial  reporting and income tax bases of assets and liabilities and
are measured using enacted tax rates and laws that are in effect.

Method of Accounting

We  prepare  our  financial  statements  on the  accrual  method of  accounting,
recognizing income when earned and expenses when incurred.  Income is considered
earned when products are shipped, at which time customers are billed and revenue
is recognized.

Accounts Receivable

Management  considers all accounts  receivable to be collectible.  However,  our
only  customer  during FY 2003-2004 has disputed its debt to us and therefore we
have  reserved 100% of the debt. As of May 31, 2004,  accounts  receivable  were
$47,628 which was all attributable to sales for the first quarter of fiscal year
2004-2005.

Impairment of Long-Lived Assets

Long-lived  assets (i.e.,  property,  plant and equipment)  held and used by the
Company are reviewed for impairment  whenever events or changes in circumstances
indicate  that  the net book  value  of the  asset  may not be  recoverable.  An
impairment  loss will be recognized if the sum of the expected future cash flows
(undiscounted  and before  interest)  from the use of the asset is less than the
net book value of the asset.  Generally,  the amount of the  impairment  loss is
measured  as the  difference  between  the net book  value of the assets and the
estimated fair value of the related asset.


                     CONTINENTAL BEVERAGE AND NUTRITION, INC.
                (FKA ADIRONDACK PURE SPRINGS MT. WATER CO., INC.)
                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)

Earnings per Share

Effective  for the year  ended  February  28,  1998,  We  adopted  Statement  of
Financial  Standards No. 128,  Earnings Per Share ("FAS 128").  FAS 128 replaces
prior earnings per share ("EPS")  reporting  requirements  and requires the dual
presentation  of basic and  diluted  EPS.  Basic EPS  excludes  dilution  and is
computed  by  dividing  net  income  by the  weighted  average  number of shares
outstanding  for the period.  Diluted EPS reflects the  potential  dilution that
could  occur  if  securities  or other  contracts  to issue  common  stock  were
exercised or converted into common stock.

Inventory

We report  inventory  at the lower of cost or market  value using the  first-in,
first-out  method.  Inventory  consists  of  bottles  and  packaging  materials.
Inventory is decreased based on the number of units bottled per customer orders.
Inventory as of May 31, 2004 was $20,000 and $0 as of February 28, 2004.

Incentive Stock Options

We adopted a stock  incentive plan on July 1, 1998. The Plan enables us to grant
incentive stock options,  nonqualified options and stock appreciation rights for
up to 1.5  million  shares of our common  stock.  All  options  must  conform to
federal income tax  regulations  and have an exercise price of not less than the
fair  value of  shares  at the date of the  grant  (110% of fair  value  for ten
percent or more shareholders). Fair value is determined on the option issue date
using  the  market  value  of  the  stock  on an  established  exchange  or  the
Black-Scholes  model  if the  stock is not  listed  on an  exchange  at the time
options are issued.  Options are issued by a committee  established by the board
of directors based on eligibility  and must be exercised  within terms specified
on the grant date.



                   CONTINENTAL BEVERAGE AND NUTRITION, INC.
                (FKA ADIRONDACK PURE SPRINGS MT. WATER CO., INC.)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)

For financial statement purposes, compensation expense would be recorded only if
the options  were issued  below fair  value.  As of the date of these  financial
statements,  no options had been issued under the stock incentive plan.  Outside
of the stock incentive  plan, in conjunction  with the offering of the Company's
stock  referenced in Note 5, the Company issued options as compensation to legal
counsel for 100,000  shares of common  stock at $0.20 per share.  This value was
agreed upon between counsel and management. See also Note 11.

NOTE 3 - LOAN PAYABLE

Default on Debentures

The Company has outstanding  $46,350 in debentures  issued in the year 2000. The
notes are for a period of 3 years and carry  interest  at 10% per annum  payable
semiannually. The Company has not paid the interest on these notes and considers
itself in technical  default.  No note holder has started an action  against the
Company at this time. The notes and accrued  interest are  convertible in common
stock by the note holder at the rate of $.20 of outstanding  liabilities for one
share of common  stock.  The accrued  interest to date  including 5%  additional
default interest was $46,504.

Loan Payable - Affiliate

This  affiliate  is a  consultant  to the  company,  the  father  of its CEO and
Chairman  and the sole  preferred  stockholder.  The advances he has made to the
Company  bear  interest  at 5%. As of May 31,  2004 and  February  28,  2004 the
company owed the affiliate $238,694 and $243,875, respectively.

During  the first  quarter  of fiscal  year  2004-2005  a  consultant  loaned us
$85,000.  The  consultant is also a partner in the Company that holds the Marvel
License.  We have an  agreement  with that  Company  to produce  and  distribute
bottled  water and  nutritionally  enhance water  products.  As of May 31, 2004,
$135,000 is owed to this consultant.


                    CONTINENTAL BEVERAGE AND NUTRITION, INC.
                (FKA ADIRONDACK PURE SPRINGS MT. WATER CO., INC.)
                          NOTES TO FINANCIAL STATEMENTS


NOTE 4 - GOING CONCERN

The  Company's  financial  statements  are  prepared  using  generally  accepted
accounting  principles  applicable  to a going concern  which  contemplates  the
realization of assets and the liquidation of liabilities in the normal course of
business.  The Company has not yet established  revenues sufficient to cover its
operating  costs.  The  Company   currently  has  negative  working  capital  of
$1,104,136.   Management  is  planning  an  additional  sale  of  common  stock.
Management is  continuing to advance funds to the Company and deferring  payment
of  salary  until  such  time  the  Company  has  sufficient  operating  income.
Management is also looking into acquisitions and/or mergers with other companies
in the industry.

NOTE 5 - PREPAID EXPENSE

As of May 31,  2004 and  February  28,  2004,  prepaid  expense  was $50,112 and
$67,100, which consisted of multiple year consulting agreements.

NOTE 6 - PROPERTY AND EQUIPMENT

As of February 28, 2004 all of the property and equipment  were removed from the
books which resulted in write off of fixed assets in the amount of $78,415.

NOTE 9 - COMMITMENTS, CONTINGENCIES

Properties - The Company has a pending exclusive ground and water lease with the
Incorporated  Village of Lake  George,  which  provides  rights to four (4) pure
water sources,  as well as five (5) acres of property for  construction of an up
to a 50,000  square foot  bottling  plant.  The initial lease term for the water
source was for five (5) years  expiring  May 2002 with two five (5) year renewal
options.  If the plant is  constructed,  the lease term extends to 2029.  At the
termination of the lease, all  improvements  become the property of the Village.
Initial  base rent for water  drawn is $.001 per gallon  with a minimum  $30,000
commencing in the second year of the lease.  The new lease is not signed and the
Company has entered into a month-to-month agreement for approximately 500 square
feet of office space at 100 Quentin  Roosevelt Blvd.  Suite 404, Garden City, NY
11530 for  approximately  $1,000 per month. The month to month agreement is with
an affiliate that has a two year lease with the building owner.

Verbal Employment Contract

The Company has entered into a verbal  employment  agreement with David Sackler,
its President and Chief Executive Officer, for an initial term of five years and
one year renewable thereafter, at a salary of $100,000 per year. At May 31, 2004
the Company owed Mr. Sackler  $628,770.  The Company has not accrued interest on
the amount due Mr. Sackler.

Consulting Agreements

During the fiscal year ending  February  28,  2003,  the Company had  consulting
agreements in which the detail are as follows.

                                                            Amount paid
                                                           To February 28,
   Service             Term                Cost                 2003
   -------             ----                ----                 ----

Marketing           7/22/02-7/21/04   880,000 shares or     590,000 shares
                                                            $150,000 per annum

Marketing           7/22/02-7/21/04   880,000 shares or     590,000 shares
                                                            $150,000 per annum

Financial and
 Administration (A) 7/22/02-7/21/04   1,300,000 share       500,000 shares
                                                            $172,000 per annum

Financial Advise    1/7/03-1/7/05     1,000,000 shares      500,000 shares
                    over 2 years

Distribution Advise 06/3/03-06/2/05   1,000,000 shares      37,500 per annum


On  December  16,  2003 an  affiliate  signed a license  agreement  with  Marvel
Enterprises  for the use of certain  comic  characters  to be used with  bottled
water and  nutritionally  enhanced water for  distribution in the United States,
territories,  possessions  and Mexico.  The license is for a period of two years
commencing  on January 1, 2004 and expiring on December 31, 2005.  Royalties are
up to 18% of net sales  with a minimum  royalty  payments  of  $320,000  payable
$87,500 on signing and payments of $77,500 on July 01,  2004,  March 1, 2005 and
June 1, 2005. The Agreement also calls for an advertisings  and promotion fee of
35,000 due December 31,  2004, a common  marketing  fee of 26,000 due 6,500 upon
signing and 6,500  payments on July 1, 2004,  March 1, 2005 and June 1, 2005. We
have an agreement with the affiliate to produce and distribute.

(A)  The  agreement is with a company 100% owned by David  Sackler CEO's father,
     who will perform the services.

Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS

The following  discussion and analysis  should be read in  conjunction  with the
financial statements and accompanying notes appearing elsewhere herein. And with
the audited  financial  statements and  accompanying  notes included in the Form
10KSB for the fiscal year ending February 28, 2004.

The accompanying  financial statements have been prepared in conformity with the
accounting  principles stated in the audited  financial  statements for the year
ended February 28, 2004 and reflect all adjustments which are, in the opinion of
management,  necessary for a fair statement of the financial  position as of May
31, 2004, and the results of operations for the periods presented. The operating
results for the interim  periods are not  necessarily  indicative of results for
the full fiscal year.

RESULTS OF OPERATIONS

Sales

The Company had sales of $47,627 in the quarter ended May 31, 2004 as opposed to
$175,522 in the quarter ended May 31, 2003,  sales decreased by $127,895 or 73%.
The loss for  quarter  ending May 31, 2004 was $42,975 as opposed to $57,363 for
the same quarter in 2003.

Costs and Expenses

Cost of goods sold were $29,908 in the quarter ended May 31, 2004 as compared to
$ 125,067 in the  quarter  ended May 31,  2003.  The  reason for the  percentage
decrease in cost was due to reduced sales.

Professional services decreased by $10,073 46% from $21,672 in the first quarter
of 2003 to $11,599 in the first  quarter of 2004.

Selling general and administrative  expense decreased by 67% from $59,408 in the
first quarter of 2003 to $19,545 in 2004, a decrease of $39,863. The main reason
for the decrease was mostly travel, insurance, office and rent.

Officers' Salaries

Officers'  Salaries  remained the same for the comparative  quarters at $25,000.
The Salaries were not paid but were accrued.

Interest Expense

Interest  expense remained  constant on the outstanding  notes of $1,738 for the
comparative  quarter ending May 31, 2004 and May 31, 2003.  Additional  interest
expense of $2,811 was accrued on loan payable - affiliate at a rate of 5%.



We intend to increase  our market  position  in the health and fitness  industry
through both our brand placement,  via sales and marketing  efforts that include
event  marketing  and  product  placement,  as well as contract  packaging  with
companies  that are  established  in the health and  fitness  industry.  We also
intend to continue our short and long term strategy of increasing its ability to
service both wholesale/retail and contract packaging clientele,  as well as more
effectively producing and selling our products, by pursuing viable joint venture
or  merger/acquisition  candidates  throughout North America that are capable of
enhancing our production capabilities and that are geographically  positioned to
limit  extensive  freight costs.  No assurances are given that we can accomplish
these goals.

Liquidity and Capital Resources

We have a  negative  working  capital  as of May 31,  2004  of  $1,104,136.  The
decrease in working  capital was in part due to accrued  salary to the president
and the increase in the  loan-payable to affiliates.  The Company had $20,000 in
inventory as of May 31, 2004.

The Company has no long-term  liabilities  and no bank  borrowings as of May 31,
2004.

At May 31, 2004, our balance sheet reflects cash of $0;  accounts  receivable of
$47,628 and  inventory of $20,000 as opposed to a cash  balance of $0;  accounts
receivable of $0 and $0 inventory for the fiscal year ending  February 28, 2004.
A reserve  for  accounts  receivable  was taken in the amount of  $36,000  which
resulted in a zero balance for accounts receivable as of February 28, 2004.

Recently Issued Accounting Standards

In June 2001,  the FASB  issued SFAS No. 143,  Accounting  for Asset  Retirement
Obligations.  This statement  requires  entities to record the cost of any legal
obligation  for the  retirement of tangible  long-lived  assets in the period in
which it is incurred.  SFAS 143 is effective  for fiscal years  beginning  after
June 15, 2002. The Company adopted the standard  effective  January 1, 2003. The
adoption of SFAS 143 did not have a material  effect on the financial  position,
results of operations or cash flows of the Company.

In August 2001,  the FASB issued SFAS No. 144,  Accounting for the Impairment or
Disposal of Long-Lived  Assets.  SFAS 144  addresses  financial  accounting  and
reporting  for the  impairment  or disposal of  long-lived  assets.  The Company
adopted  SFAS 144  effective  January 1, 2002.  The adoption of SFAS 144 did not
have a material effect on the financial position,  results of operations or cash
flows of the Company.

In July 2002, the FASB issued Statement No. 146, Accounting for Costs Associated
with Exit or Disposal  Activities.  Statement  No. 146  addresses  the timing of
recognition  and the related  measurement  of the costs of one-time  termination
benefits.  Under  SFAS  146,  liabilities  for costs  associated  with a plan to
dispose of an asset or to exit a business  activity  must be  recognized  in the
period in which the costs are incurred  Statement  No. 146 is effective for exit
activities  initiated after December 31, 2002, with early  application  allowed.
The Company adopted SFAS 146 effective January 1, 2002. The adoption of SFAS 146
did not have a material effect on the financial position,  results of operations
or cash flows of the Company.

In December 2002, the FASB issued Statement No. 148,  Accounting for Stock-Based
compensation  - Transition  and  Disclosure - an amendment of FASB Statement No.
123.  Statement No. 148 amends  Statement No. 123,  Accounting  for  Stock-Based
Compensation,  to provide  alternative  methods of  transition  for a  voluntary
change to the  fair-value  based method of accounting for  stock-based  employee
compensation.  In addition, Statement No. 148 amends the disclosure requirements
of  Statement  No. 123 to require  disclosure  in interim  financial  statements
regarding the method of accounting for stock-based employee compensation and the
effect of the method used on reported  results.  The Company  does not intend to
adopt  a  fair-value  based  method  of  accounting  for  stock-based   employee
compensation  until a final  standard  is  issued  by the  FASB  that  addresses
concerns  related to the  applicability  of  current  option  pricing  models to
non-exchange  traded  employee  stock  option  plans  SFAS 148 also  amends  the
disclosure  requirements  of SFAS 123 to require  prominent  disclosures in both
annual and  interim  financial  statements  about the method of  accounting  for
stock-based employee  compensation and the effect of the method used on reported
results.  SFAS 148 is effective  for  financial  statements  for annual  periods
ending after December 15, 2002 and interim periods  beginning after December 31,
2002.

We have adopted the amendments to SFAS 123 disclosure  provisions required under
SFAS 148 but will continue to use intrinsic value method under APB 25 to account
for  stock-based  compensation.  As such, the adoption of this statement has not
had a  significant  impact  on the  Company's  financial  position,  results  of
operations or cash flows.

Forward Looking Statements

When used in this Form 10KSB and in future filings by us with the Securities and
Exchange  Commission,  the words or phrases  "will likely  result,"  "management
expects," or we expect," "will  continue," is  anticipated,"  "estimated," or we
expect"," "will continue," "is anticipated,"  "estimated," or similar expression
or use of the future tense, are intended to identify forward looking  statements
within the  meaning of the  Private  Securities  Litigation  Reform Act of 1995.
Readers are  cautioned not to place undue  reliance on any such  forward-looking
statements,  each of which speak only as of the date made.  These statements are
subject to risks and uncertainties, some of which are described below and others
are  described  in other  parts of this Form  10KSB.  Actual  results may differ
materially  from  historical   earnings  and  those  presently   anticipated  or
projected. We have no obligation to publicly release the result of any revisions
that may be made to any forward-looking statements to reflect anticipated events
or circumstances occurring after the date of such statements.


Controls and Procedures

(a)      Evaluation of Disclosure Controls and Procedures

The  Registrant  maintains  controls  and  procedures  designed  to ensure  that
information required to be disclosed in the reports that the Registrant files or
submits  under the  Securities  Exchange Act of 1934,  as amended,  is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
rules and forms of the  Securities  and  Exchange  Commission.  Based upon their
evaluation  of those  controls and  procedures  performed  within 90 days of the
filing date of this report,  the Chief Executive and Chief Financial Officers of
the  Registrant   concluded  that  the  Registrant's   disclosure  controls  and
procedures were adequate.

(b)      Changes in Internal Controls

The Registrant made no significant  changes in its internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the  evaluation of those  controls by the Chief  Executive  and Chief  Financial
Officers.

Part II - Other Information

Item 1 - Legal Proceedings

         The Company is not currently involved in any material legal proceedings
         to the best of management's knowledge. (See 10KSB for the Period Ending
         May 31, 2004.)

Item 2 - Changes in Securities and Use of Proceeds

         There are none.

Item 4 - Submission of Matters to a Vote of Security Holders.

         Not applicable

Item 5 - Other Information.

         None

Item 6 - Exhibits and Reports on Form 8-K

         a) Exhibits - Exhibit 31 & 32.1, 32.2 (a) - Certification of Chief
             Executive Officer and Chief Financial Officer
         b) Reports on Form 8-K - No reports on Form 8-K were filed during
                  the quarter