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, 2004



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



For  the  transition  period  from  ___________  to  _____________



Commission  file  number  000-25335



ELGRANDE.COM, INC.

(Exact  name  of  registrant  as  specified  in  its  charter)



Nevada                                       88-0409024

(State  or  other  jurisdiction  of            (IRS Employer Identification No.)

incorporation  or  organization)



1450 Kootenay Street, Vancouver, B.C.

V5K 4R1 Canada

(Address of principal executive offices)



(604) 689-0808

(Issuer's telephone number)



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



Class                                      August 31, 2004

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

Common stock, $ 0.001 par value                           17,030,621







































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ELGRANDE.COM, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2004



TABLE OF CONTENTS





Page



PART  I.  FINANCIAL  INFORMATION                                          3



ITEM  I - Unaudited  Consolidated  Financial Statements



Consolidated Balance Sheets as of

August 31, 2004 (Unaudited) and  May  31,  2004                 3



Consolidated  Statements  of  Operations

for  the  Three Months ended  August 31,

2004 and  2003  (Unaudited)                                     4



Consolidated  Statements  of  Cash  Flows

for  the  Three  Months  ended August 31, 2004

and  2003 (Unaudited)                                           5



Condensed Notes to Consolidated Interim Financial Statements    6



ITEM  2   Management's  Discussion  and  Analysis  of

Financial  Condition  and  Results  of  Operations              9



PART II.  OTHER  INFORMATION                                              15



Signatures                                                                16



Certification  (filed as attachment)























































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ELGRANDE.COM, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2004



PART  I.  FINANCIAL  INFORMATION



Item 1 - Financial Statements

|ELGRANDE.COM INC.                                                                    
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|CONSOLIDATED BALANCE SHEETS                                                          
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|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 )
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The accompanying condensed notes are an integral part of these financial statements.



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|ELGRANDE.COM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
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|R E V E N U E S                                        
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|COST OF REVENUES                                       
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|GROSS PROFIT                                           
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|E X P E N S E S                                        
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|LOSS FROM OPERATIONS                                   
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|OTHER INCOME (EXPENSE)                                 
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|NET LOSS                                               
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|OTHER COMPREHENSIVE LOSS                               
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|COMPREHENSIVE LOSS                                     
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The accompanying condensed notes are an integral part of these financial statements.



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|ELGRANDE.COM INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
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|Balance, May 31, 2002                                                     
|Stock issued for consulting services                                      
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|Stock issued for services at $0.03  per share                             
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|Stock issued for services at $0.04 per share                              
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|Net loss for the year ended May 31, 2003                                  
|Foreign currency translation gain (loss)                                  
|Balance, May 31, 2003                                                     
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|Stock issued for debt and interest at an average of                       
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|Stock issued for accrued expenses at an average of                        
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|Stock issued for conversion of debentures at an average                   
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|Stock issued for services at an average of $0.31 per share                
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|Stock rescinded                                                           
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|Stock issued for cash at $0.20 per share less                             
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|Warrants expired                                                          
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|Options expired                                                           
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|Miscellaneous stock adjustment for reverse split                          
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|Net loss for the year ended May 31, 2004                                  
|Foreign currency translation gain (loss)                                  
|Balance, May 31, 2004                                                     
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|Stock issued for services at of $0.17 per share                           
|Stock issued for presently converted debt on a re-negotiated price        
|Net loss for the year ended August 31, 2004                               
|Foreign currency translation gain (loss)                                  
|Balance, August 31, 2004                                                  



The accompanying condensed notes are an integral part of these financial statements.

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|ELGRANDE.COM                                
|--------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOW        
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|CASH FLOWS FROM OPERATING ACTIVITIES:       
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|CASH FLOWS FROM INVESTING ACTIVITIES:       
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|CASH FLOWS FROM FINANCING ACTIVITIES:       
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|Net increase (decrease)  in cash            
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|Cash, beginning of period                   
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|Cash, end of period                         
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|SUPPLEMENTAL DISCLOSURES:                   
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|NON-CASH INVESTING AND FINANCING ACTIVITIES:
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The accompanying condensed notes are an integral part of these financial statements.

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ELGRANDE.COM, INC.



CONDENSED NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS



AUGUST 31, 2004



The financial statements have been prepared in accordance with generally accepted accounting principles for the interim financial information with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company's management, all adjustments (consisting of only normal accruals) considered necessary for a fair presentation have been included.



For further information refer to the financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended May 31, 2004.



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, 2004 the Company has a working capital deficit of approximately $884,000, an accumulated deficit of approximately $9,811,000 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 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Revenue and Cost Recognition

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

The Company recognized revenue for product sales when the 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 cost. The Company has not carried accounts receivable in the past and 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, 2004 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 are recorded using the first in first out method and valued at the lower of cost or market value.



NOTE 2 - COMMON STOCK AND WARRANTS



During the three months ended August 31, 2004, the Company issued 71,164 shares of common stock for debt and services valued at $10,691.  All stock was issued at its fair market value at the date of grant.



In August 2003 the Company effected a 10 for 1 reverse split of the company's capital stock. As result of the reverse split, the Company's authorized common stock decreased from 200,000,000 to 20,000,000 shares. Capital restructuring was a necessary step in order to enable the Company to raise additional funding to support and grow the business.



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ELGRANDE.COM, INC.



CONDENSED NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS



AUGUST 31, 2004



NOTE 3 - STOCK OPTIONS



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 three months ended August 31, 2004, the Company did not issue any stock options from this plan.



The following is a summary of stock option activity:



|                                                       | Number of Weighted Average Shares | Exercise Price
|------------------------------------------------------ | --------------------------------- | --------------
|Outstanding at June 1, 2002                            | 3,655,000                         | $ 0.61        
|Outstanding at May 31, 2003                            | 3,655,000                         | $ 0.61        
|Options exercisable at May 31, 2003                    | 3,640,000                         | $ 0.61        
|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        
|Options outstanding and exercisable at August 31, 2004 | 2,521,000                         | $ 0.83        



NOTE 4 - NOTES AND DEBENTURES PAYABLE



Short-term Notes

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

During the three months ended August 31, 2004, the Company's officers loaned the Company $24,167 to fund continuing operations. During the three months ended August 31, 2004, the Company also received an interest free short-term loan of $269,976 from an individual.



NOTE 5 - 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 were no sales activity recorded in the European Company. Elgrande Europe AG has been consolidated in these financial statements.



NOTE 6  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.



NOTE 7  CORRECTION OF AN ERROR



Subsequent to the issuance of the original financial statements for the period ended May 31, 2004, management discovered that certain accounting positions and information were not correct.



The Company had issued 3,301,764 shares originally held in escrow subsequent to the audit at May 31, 2004.  Management determined that this transaction had been a timing issue between consideration received and shares issued and had no effect on net loss or accumulated deficit for the period.



These corrections had no effect on the net loss, accumulated deficit or losses per share for the three months ending August 31, 2004.

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ELGRANDE.COM, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2004



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, 2004 and August 31, 2003.



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,  2004, we had  revenues of $291,470 versus $164,690 for the same period ending last  year.  This increase  in revenues is primarily due to our increasing customer base and the continued strong

performance of our principal product-line, The Love Plates.



For the quarter ended August 31, 2004, cost of revenues increased to $135,509. This represents the cost of inventory sold and the corresponding freight-in charges of importing products.



For the quarter ended August 31, 2004, gross profit was $155,961, or 54% versus $53,304 or 32% for the same period ending last year.









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ELGRANDE.COM, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2004





In addition, we had pending sales of $145,207 booked as at August 31, 2004.



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.





CHANGES IN FINANCIAL CONDITION



A summary of expenses for the three months ended August 31, 2004 compared to the period ended August 31, 2003 is as follows:



2004         2003

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

Consulting                                 $ 16,555      $53,899

Legal and other                               4,149        6,243

Salaries                                    140,419       77,860

Depreciation and amortization                 9,386       36,893

Office and administration                    88,127       87,549

Travel and entertainment                     19,286       22,270

Advertising and Marketing                    97,085       36,602

Rent                                         16,966       6,970

Bad Debts                                     1,774           -

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

$393,747     $328,286

=======      =======



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



Consulting Fees



Consulting fees for the three months ended August 31, 2004 were lower versus the prior year's three months due to the reduction in consulting contracts.





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ELGRANDE.COM, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2004



Salaries



The significant increase in salaries expense reflects costs in meeting our staffing needs.   In the quarter ended August 31, 2003, we had not fully developed the human infrastructure to support our sales ramp up.



Advertising and Marketing



Our Advertising and Marketing expenses are significantly higher in the quarter ended August 31, 2004 primarily due to the increase in sales.  As sales were higher in the quarter than in the same quarter ended 2003, a larger amount of sales commissions were paid out.  As part of our sales strategy, we were also involved in promotional sales activity which lead to increased marketing costs.  As our wholesale line was expanded to include the Ginger Kelly Glasses, costs were incurred to include samples of these at our showrooms located at select sales agencies across North America.



Rent



The increase in rent for the three months ended August 31, 2004  reflects the rent payable at our current warehouse location.  We relocated our offices in August 2003 from a smaller office which provided no warehouse facilities.  We currently occupy 8,089 square feet compared to 2,200 square feet previously.



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



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 16 wholesale marketing agencies and representatives covering the North American market.  In the last fiscal quarter, we added 2 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.





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ELGRANDE.COM, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2004



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.



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.











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ELGRANDE.COM, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2004



We generated negative cash flow from operating activities for the  period  from

inception  (April 8, 1998) through  August 31, 2004.  We realized negative cash

flow of $255,683 from operating activities for the three months ending August 31,

2004 compared to negative cash flow of $271,892 from  operating activities  for

the three months ending August 31, 2003.



INVESTING ACTIVITIES



Investing activities  for the period  from  inception  through  August 31, 2004

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, 2004 provided  a net

total of $224,886.  Cash at the end of the period was $66,555.





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.

















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ELGRANDE.COM, INC.

FORM 10-QSB

For the Quarterly period ended August 31, 2004



PART II. OTHER INFORMATION.



Item 2.   Changes in Securities.



(a)  Not applicable.



(b)  Not applicable.



(c)  The  following provides information of all sales of  outstanding stock

in the quarter ended August 31, 2004 which were not registered under

the Securities Act of 1933 (the "Act"):





|Date               | Title and Amount                                                                                                                               | Purchasers        | Principal Underwriter | Total Offering Price/Underwriting Discounts
|------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | --------------------- | -------------------------------------------
|May 2004           | 71,896 shares of common stock                                                                                                                  | Private Investor  | NA                    | Debt valued at $10,425/NA                  
|June 2004          | 57,021 shares of common stock                                                                                                                  | Private Investor  | NA                    | Debt valued at $8,268/NA                   
|June  August 2004 | 3,301,764 shares of common stock pursuant to the Company's Series A Senior Subordinated Convertible Redeemable Debentures due October 31, 2004 | Private Investors | NA                    | Valued at $0.03 to $0.16 per share/NA      



(d)  Not applicable.



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



(a)     EXHIBITS



No.            Description

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

31             Certification of Michael Holloran Pursuant to Section 302

of 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







(b)     Reports on Form 8-K  relating to the quarter ended August 31, 2004.



The Company  did not  file any  reports on  Form 8-K during  the quarter  ended

August 31, 2004.







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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 20, 2004