**UNITED
      STATES**


**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 EXCHANGE ACT OF
                1934





**For
      the quarterly period ended June 30, 2006**





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




For
      the
      transition period from ______ to __________





*Commission
      File Number* : 0-27569





**CSI
      BUSINESS FINANCE, INC.**


(Exact
      name of small business issuer as specified in its charter)





**Florida**
            
            **65-0847995**(State
                or other jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification No.)**109
                North Post Oak Lane, Suite 422****Houston,
                TX 77024**(Address
                of principal executive offices)**(713)
                621-2737**(Issuer’s
                telephone number)





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 o





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


Yes o No x





The
      number of shares outstanding of our common stock at July 17, 2006 was
      6,287,677.





Transitional
      Small Business Disclosure Format (check one): Yes o No x





-
          1
          -




**CSI
      BUSINESS FINANCE, INC.**





**FORM
      10-QSB**





**INDEX**








Page
              NumberPART
                I - FINANCIAL INFORMATIONItem
                1. Financial StatementsCondensed
                Consolidated Balance Sheet as of June 30, 2006 (Unaudited)
            3Condensed
                Consolidated Statements of Operations for the three months ended
                June 30, 2006 and 2005 (Unaudited)
            4Condensed
                Consolidated Statements of Operations for the six months ended
                June 30, 2006 and 2005 (Unaudited)
            5Condensed
                Consolidated Statements of Cash Flows for the six months ended
                June 30, 2006 and 2005 (Unaudited)
            6Notes
                to Condensed Consolidated Financial Statements (Unaudited)
            7
                -
                9Item
                2. Management’s Discussion and Analysis or Plan of
                Operation
            10
                - 13Item
                3. Controls and Procedures
            14
                - 15PART
                II - OTHER INFORMATIONItem
                1. Legal Proceedings
            15Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            15Item
                3. Defaults Upon Senior Securities
            15Item
                4. Submission of Matters to a Vote of Security Holders
            15Item
                5. Other Information
            16Item
                6. Exhibits
            16SIGNATURES
            17














-
          2
          -


**PART****I
      -FINANCIAL INFORMATION**





**CSI
                BUSINESS FINANCE, INC. AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED BALANCE SHEET****June
                30, 2006****(Unaudited)****ASSETS****CURRENT
                ASSETS**Cash
            
            $
            254,958Deferred
                financing costs
            
            
            191,665Notes
                receivable
            
            
            1,062,089Investment
                in marketable securities
            
            
            4,668,139Prepaids,
                accrued interest and accounts receivable other
            
            
            79,080Total
                current assets
            
            
            6,255,931Investments
            
            
            9,887,959Fixed
                assets, net of accumulated depreciation
            
            
            6,564Deferred
                financing costs
            
            
            228,953**TOTAL
                ASSETS**
            
            $
            16,379,407**LIABILITIES
                AND SHAREHOLDERS' DEFICIT****CURRENT
                LIABILITIES**Accounts
                payable, accrued liabilities and other
            
            $
            170,902Margin
                loan
            
            
            2,321,700Total
                current liabilities
            
            
            2,492,602Debenture
                payable--net of discount of $303,358
            
            
            15,331,841Derivative
                liability
            
            
            304,892Accrued
                interest payable-noncurrent
            
            
            629,691Total
                liabilities
            
            
            18,759,026**COMMITMENTS
                AND CONTINGENCIES**


**SHAREHOLDERS'
                DEFICIT**Preferred
                stock, $.01 par value; 10,000,000 shares authorizedPreferred
                stock Series A Convertible $0.01 par value;100,000
                shares authorized, issued and outstanding and no
            
            -liquidation
                or redemption value
            
            
            1,000Common
                stock, par value $0.001; 200,000,000 sharesauthorized;
                6,287,677 issued and outstanding
            
            
            6,288Additional
                paid-in capital
            
            
            150,904Retained
                deficit
            
            
            (2,537,811
            )Total
                shareholders' deficit
            
            
            (2,379,619
            )**TOTAL
                LIABILITIES AND SHAREHOLDERS' DEFICIT**
            
            $
            16,379,407See
                accompanying Notes to Condensed Consolidated Financial
                Statements





-3-




**CSI
                BUSINESS FINANCE, INC. AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS****(Unaudited)**


**Three
                 Months Ended June 30,****2006**
            
            **2005****REVENUE**Lease
                income
            
            $
            -
            
            $
            20,994Fee
                income
            
            
            66,155
            
            
            27,396Trading
                gains
            
            
            86,881
            
            
            -Dividends
                from marketable securities
            
            
            71,893
            
            
            -Interest
                income from notes and debenture receivable
            
            
            29,236
            
            
            -Total
                revenue
            
            
            254,165
            
            
            48,390Selling,
                general and administrative expenses(2006
                and 2005 expenses include $24,796 and $0, respectively,of
                expenses allocated from an affiliated entity)
            
            
            375,976
            
            
            38,221Interest
                expense
            
            
            261,200
            
            
            -**OPERATING
                INCOME (LOSS)**
            
            
            (383,011
            )
            
            10,169**OTHER
                (INCOME) EXPENSE**Net
                change in fair value of derivative
            
            
            (81,070
            )
            
            -Interest
                and other income
            
            
            (16,976
            )
            
            -Total
                other (income) expense
            
            
            (98,046
            )
            
            -Income
                (loss) before provision for income taxes
            
            
            (284,965
            )
            
            10,169**INCOME
                TAX PROVISION**
            
            
            -
            
            
            1,869**NET
                INCOME (LOSS)**
            
            
            (284,965
            )
            
            8,300Preferred
                dividends paid
            
            
            -
            
            
            (6,000
            )**INCOME
                (LOSS) APPLICABLE TO COMMON SHARES**
            
            $
            (284,965
            )
            $
            2,300Net
                income (loss) per share for basic and diluted
            
            $
            (0.05
            )
            $
            0.00Weighted
                shares outstanding:Basic
            
            
            6,287,670
            
            
            1,468,052Diluted
            
            
            -
            
            
            1,690,324See
                accompanying Notes to Condensed Consolidated Financial
                Statements





-4-




**CSI
                BUSINESS FINANCE, INC. AND SUBSIDIARIES****CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS****(Unaudited)**


**Six
                Months Ended June 30,****2006**
            
            **2005****REVENUE**Lease
                income
            
            $
            39,684
            
            $
            41,311Fee
                income
            
            
            66,155
            
            
            47,113Trading
                losses
            
            
            (46,892
            )
            
            -Dividends
                from marketable securities
            
            
            246,435
            
            
            -Interest
                income from notes and debenture receivable
            
            
            172,666
            
            
            -Total
                revenue
            
            
            478,048
            
            
            88,424Selling,
                general and administrative expenses(2006
                and 2005 include $45,040 and $0, respectively,of
                expenses allocated from an affiliated entity)
            
            
            699,335
            
            
            66,517Interest
                expense
            
            
            536,188
            
            
            0**OPERATING
                INCOME (LOSS)**
            
            
            (757,475
            )
            
            21,907**OTHER
                (INCOME) EXPENSE**Net
                change in fair value of derivative
            
            
            (63,812
            )
            
            -Loss
                on extinguishment of debenture receivable
            
            
            639
            
            
            -Interest
                and other income
            
            
            (28,235
            )
            
            -Total
                other (income) expense
            
            
            (91,408
            )
            
            -Income
                (loss) before provision for income taxes
            
            
            (666,067
            )
            
            21,907**INCOME
                TAX PROVISION**
            
            
            -
            
            
            4,010**NET
                INCOME (LOSS)**
            
            
            (666,067
            )
            
            17,897Preferred
                dividends paid
            
            
            -
            
            
            (12,000
            )**INCOME
                (LOSS) APPLICABLE TO COMMON SHARES**
            
            $
            (666,067
            )
            $
            5,897Net
                income (loss) per share for basic and diluted
            
            $
            (0.11
            )
            $
            0.00Weighted
                shares outstanding:Basic
            
            
            6,287,669
            
            
            1,330,925Diluted
            
            
            -
            
            
            1,553,197See
                accompanying Notes to Condensed Consolidated Financial
                Statements





-5-




**CSI
                BUSINESS FINANCE, INC.****CONDENSED
                CONSOLIDATED STATEMENT OF CASH FLOWS****(Unaudited)**


**Six
                Months Ended June 30,****2006**
            
            **2005****CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                income (loss)
            
            $
            (666,067
            )
            $
            17,897Adjustment
                to reconcile net income (loss) to net cashprovided
                by operating activities
            
            
            1,061,064
            
            
            27,553Net
                cash provided by operating activities
            
            
            394,997
            
            
            45,450**CASH
                FLOWS FROM INVESTING ACTIVITIES**Purchases
                of fixed assets
            
            
            -
            
            
            (1,000
            )Purchases
                of minimum lease payments receivable
            
            
            -
            
            
            (25,037
            )Net
                cash used in investing activities
            
            
            -
            
            
            (26,037
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Payments
                on notes payable to affiliate
            
            
            (344,282
            )
            
            -Net
                cash used in financing activities
            
            
            (344,282
            )
            
            -**NET
                CHANGE IN CASH**
            
            
            50,715
            
            
            19,413**CASH,
                BEGINNING OF PERIOD**
            
            
            204,243
            
            
            -**CASH,
                END OF PERIOD**
            
            $
            254,958
            
            $
            19,413**SUPPLEMENTAL
                INFORMATION**Interest
                paid
            
            $
            73,544
            
            $
            -Taxes
                paid
            
            $
            -
            
            $
            -Preferred
                dividends paid by parent and charged tointercompany
                account
            
            $
            -
            
            $
            12,000Exchange
                of certain receivable for common stock:Common
                stock acquired
            
            $
            9,887,959
            
            $
            -Debentures
                and notes receivable exchanged
            
            $
            9,609,283
            
            $
            -Accrued
                interest receivable exchanged
            
            $
            278,676
            
            $
            -See
                accompanying Notes to Condensed Consolidated Financial
                Statements





-6-




**CSI
      Business Finance, Inc. and Subsidiaries**


**Notes
      to Condensed Consolidated Financial Statements**


**(Unaudited)**




**NOTE
      1**  **-
      BASIS OF PRESENTATION**





Our
      Condensed Consolidated Balance Sheet as of June 30, 2006, the Condensed
      Consolidated Statements of Operations for the three and six months ended
      June 30, 2006 and June 30, 2005, and the Condensed Consolidated
      Statement of Cash Flows for the six months ended June 30, 2006 and
      June 30, 2005 have not been audited. These statements have been prepared on
      a basis that is substantially consistent with the accounting principles applied
      in our Annual Report on Form 10-KSB for the fiscal year ended December 31,
      2005. In our opinion, these financial statements include all normal and
      recurring adjustments necessary for a fair presentation of CSI Business Finance,
      Inc. (“CSI Business Finance” ) and “Subsidiaries”. The results for the three and
      six months are not necessarily indicative of the results expected for the year.





As
      used
      herein, the “Company”, “management”, “we”, “our” refers to CSI Business Finance,
      Inc. or CSI Business Finance, Inc. together with its subsidiaries. The Company’s
      fiscal year ends on December 31st.




Certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States of America have been omitted in accordance with the published
      rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”)
      for interim financial statements. The unaudited Condensed Consolidated Financial
      Statements and the notes thereto in this report should be read in conjunction
      with the audited Consolidated Financial Statements and notes thereto included
      in
      our Annual Report on Form 10-KSB for the fiscal year ended December 31,
      2005 (the “10-KSB”).




The
      Company, formerly known as Health Express USA, Inc., was incorporated in Florida
      on July 2, 1998. On August 25, 2005, the Company completed the closing of that
      certain Share Exchange Agreement, by and among the Company, CSI Business
      Finance, Inc., a Texas corporation and now wholly-owned subsidiary of the
      Company herein referred to as (“CSI”) and the shareholder of CSI (the “CSI
      Shareholder”).





On
      August
      25, 2005, the Company effectively exchanged with the CSI Shareholder the issued
      and outstanding common stock of CSI in exchange for 100,000 shares of Series
      A
      Convertible Preferred Stock, par value $0.01 per share, of the Company (the
      “Preferred Stock”), and CSI became a wholly-owned subsidiary of the Company.
      Each share of the Company's Series A Preferred Stock is convertible into 780
      shares of common stock (post 1 to 25 reverse stock split) of the Company,
      beginning one (1) year after the effective date of the merger. The shares of
      Preferred Stock were subsequently distributed to the shareholders of Corporate
      Strategies, Inc., the former shareholder of CSI. In addition, at the exchange
      date, 4,326,861(post 1 to 25 reverse stock split) shares of common stock of
      the
      Company were issued to pay off notes and debentures. If the stockholders of
      Preferred Stock were to convert to common stock as of the date of the merger,
      they would hold 78,000,000 shares (post 1 to 25 reverse stock split), or
      ninety-two and one half percent (92.5%) of the issued and outstanding shares
      of
      common stock of the Company. This conversion would result in the holders of
      the
      Preferred Stock effectively controlling the Company.




The
      holders of the Preferred Stock and the holders of the common stock of the
      Company vote together and not as separate classes, and the Preferred Stock
      shall
      be counted on an “as converted” basis, thereby giving the holders of Preferred
      Stock control of the Company. The transaction was accounted for as a reverse
      acquisition since control of the Company passed to the shareholders of the
      acquired company (CSI).




CSI,
      the
      operating entity of the Company, was incorporated primarily for the purpose
      of
      engaging in equipment leasing. Subsequent to the merger, the Company's
      consolidated operations have expanded to include the purchase of debentures
      and
      notes receivable, secured lending and factoring to micro-cap public and private
      companies.  The
      Company also actively trades marketable securities and options with available
      cash, and on margin, through a third party investment advisor. Because some
      of
      our trading involves leveraging, these transactions contain a considerable
      amount of risk.




Since
      CSI
      is the surviving entity of the reverse merger, the financial reports include
      the
      operating results of the Company and its Subsidiaries for the quarter ended
      June 30, 2006 and for CSI only for the quarter ended June 30,
      2005.




On
      May
      23, 2006, our Board of Directors approved a 1 to 25 reverse common stock
      split.




-7-




The
      consolidated financial statements include the accounts of CSI Business Finance,
      Inc. and its wholly-owned subsidiaries. All significant inter-company accounts
      and transactions have been eliminated in consolidation.




**NOTE
      2**  **.
      INCOME (LOSS) PER COMMON SHARE AND STOCK BASED
      COMPENSATION**




**Net
      Income (Loss) Per Common Share**




In
      accordance with SFAS No. 128, "Earnings per Share", basic earnings per share
      are
      computed based on the weighted average shares of common stock outstanding during
      the periods.  Diluted earnings per share are computed based on the weighted
      average shares of common stock plus the assumed issuance of common stock for
      all
      potentially dilutive securities.





Our
      basic
      and diluted shares used to compute loss per common share amounts are the same
      for both the three months and six months ended June 30, 2005 and 2006. Since
      we
      had a net loss for the three and six months ended June 30, 2006, the assumed
      exercise of stock options and the conversion of the Series A Preferred Stock
      and
      secured convertible debentures outstanding as of June 30, 2006 would be
      anti-dilutive. Net income for the three and six months ended June 30, 2005
      was
      minimal thereby creating no dilutive effect for the periods ending June 30,
      2005. The following table represents the weighted average number of primary
      and
      dilutive shares for the three months and six months ended June 30, 2006 and
      2005, respectively:





Three
                months ended
              June
                30, 2006
            Three
                months ended
              June
                30, 2005
            Six
                months ended
              June
                30, 2006
            Six
                months ended
              June
                30, 2005Weighted
                avg. primaryShares
                outstanding
            6,287,670
            1,468,052
            6,287,669
            1,330,925Potentially
                dilutive shares
            -
            1,690,324
            -
            1,553,197





We
      currently do not have sufficient authorized shares to meet the number of shares
      on the conversion of the debentures. The Company is in the process of amending
      our articles of incorporation and bylaws to increase the number of our
      authorized shares.





**Stock
      Based Compensation**




Statement
      of Financial Accounting Standards No. 123(R), “Accounting for Stock-Based
      Compensation” (“SFAS 123(R)”), provides for the use of a fair value-based method
      of accounting for employee stock compensation. There are outstanding stock
      options to purchase 5,695 (post 1 to 25 reverse common stock split) of the
      Company’s common stock at an exercise price of $1.31 per share. These options
      expire in August 2007. We believe these options do not have a fair market value
      and we expect them to be forfeited.




**NOTE
      3 - RESTATEMENT OF PRIOR PERIODS**




We
      have
      restated our financial results for fiscal 2005 and for the related interim
      periods therein previously reported. The restatement will result in the
      requirement to reissue the report on Form 10-QSB at September 30, 2005 and
      for
      the three and nine months then ended. The restatements include adjustments
      to
      (a) correct the accounting for convertible debentures to recognize the effects
      of derivatives, and (b) remove the beneficial conversion feature previously
      recorded for the convertible debentures.




**NOTE
      4**  **-
      AGREEMENT IN LIEU OF FORECLOSURE**




The
      Company completed an agreement in lieu of foreclosure (the “Agreement”) with Bio
      One Corporation (“Bio-One”) on March 22, 2006 and received the stock of
      Interactive Nutrition International, Inc (“INII”), along with other assets and
      claims, in return for the forgiveness of $9,887,959 in debt and accrued interest
      of Bio-One and will now be treated as an investment in INII. INII is currently
      being operated by Price Waterhouse Coopers as Receiver and Manager pursuant
      to
      Section 246(2) of the Bankruptcy and Insolvency Act of Canada, after being
      requested to do so by Nesracorp Inc., Eli Nesrallah, Joseph Nesrallah and Pamela
      Nesrallah (collectively, the “Sellers”), purporting  default in payment of
      obligations incurred in the purchase of INII assets  by Bio-One. A
      Court-supervised sale of the assets has been requested by the Receiver, and
      the
      Company intends to vigorously oppose this and pursue all claims against the
      Sellers. Additionally, the Company has been assigned all rights and claims
      previously asserted against Nesracorp Inc., Eli Nesrallah, Joseph Nesrallah,
      Pamela Nesrallah, Roxanne Anderson and Price Waterhouse Coopers, Inc. filed
      by
      INII and Bio-One in the Ontario Superior Court of Justice on January 13,
      2005. The Company intends to pursue some or all of the previous claims in the
      filing of January 13, 2005 in Ontario Superior Court of Justice, as the stock
      of
      INII and these claims, as well as others, have been assigned to the Company
      as
      part of the Agreement the Company executed with Bio-One on March 22,
      2006.




On
      May 5,
      2006, the Board of Directors terminated the Nesrallahs as employees of the
      Company. On March 30, 2006, the Company filed a lawsuit in State Court in
      Orlando, Florida against Eli Nesrallah, Joseph Nesrallah and Pamela Nesrallah,
      alleging, among other claims, breach of fiduciary duty to INII. No reserve
      has
      been established for a loss on this transaction, as the Company believes its
      claims are meritorious and have a reasonable probability of prevailing in
      a Court of law. However, should the Company fail to prevail or settle its
      claims against the Sellers, the Company may be required to write down its entire
      investment of $9,887,959 in INII.





As
      a
      result of the above foreclosure, the Company has recorded a $9,887,959
      investment in the INII stock consisting of an $8,500,000 debenture receivable,
      $1,109,283 notes receivable and $278,676 of accrued interest
      receivable.




-8-




**NOTE**  ****  **5
      - MARGIN LOAN.**




As
      of
      June 30, 2006, our company had borrowed $2,321,700 on its margin account which
      is collateralized by marketable securities. The interest rate on this account
      is
      variable and as of June 30, 2006 the interest rate was approximately seven
      and one-quarter percent (7.25%). The margin loan was covered by approximately
      $4,600,000 of market value securities.




**NOTE
      6 - DERIVATIVE FINANCIAL INSTRUMENTS**




The
      derivatives for the debenture payable have been accounted for in accordance
      with
      SFAS 133 and EITF No. 00-19, “Accounting for Derivative Financial
      Instruments Indexed to, and Potentially Settled in, a Company's Own
      Stock”.




We
      have
      determined that the following instrument has derivatives requiring evaluation
      and accounting under the relevant guidance applicable to financial
      derivative:




·
            Cornell
                Convertible Debenture (the “Convertible Debenture”), issued on
                September 9, 2005 in the face amount of
                $15,635,199.




Management
      has determined that the above debenture has embedded derivatives. These embedded
      derivatives have been bifurcated from their respective host debt contracts
      and
      accounted for as a derivative liability in accordance with EITF 00-19. When
      multiple derivatives exist within the Convertible Debenture, they have been
      bundled together as a single hybrid compound instrument in accordance with
      SFAS
      No. 133 Derivatives Implementation Group Implementation Issue
      No. B-15, “Embedded Derivatives: Separate Accounting for Multiple
      Derivative Features Embedded in a Single Hybrid Instrument”.




The
      embedded derivatives within the Convertible Debenture have been recorded at
      fair
      value at the date of issuance; and are marked-to-market each reporting period
      with changes in fair value recorded to our income statement as “Net change in
      fair value of derivative”. We utilized a third party valuation firm to fair
      value the embedded derivatives using a layered discounted probability-weighted
      cash flow approach. The fair value model utilized to value the various embedded
      derivatives in the Convertible Debenture, comprises multiple
      probability-weighted scenarios under various assumptions reflecting the
      economics of the Convertible Debenture, such as the risk-free interest rate,
      expected issuer stock price and volatility, likelihood of conversion and or
      redemption and likelihood default status and timely registration.




The
      fair
      value of the derivative liability is subject to the changes in the trading
      value
      of our common stock, as well as other factors. As a result, our financial
      statements may fluctuate from quarter-to-quarter based on factors, such as
      the
      price of our common stock at the balance sheet date and the amount of shares
      converted by the note holders. Consequently, our financial position and results
      of operations may vary from quarter-to-quarter based on conditions other than
      our operating revenues and expenses.




The
      conversion feature, reset provision and the Company's optional early redemption
      right have been bundled together as a single compound embedded derivative
      liability, and using a layered discounted probability-weighted cash flow
      approach, was initially fair valued at $413,603 at September 9, 2005. Using
      the
      same methodology, the single compound embedded derivative liability was valued
      at $304,892 at June 30, 2006. The change in fair value of the derivative
      liability was a decrease of $81,070 from our prior reporting period, and has
      been classified as “net change in fair value of derivative” in our Condensed
      Consolidated Statements of Operations for the three months ended June 30,
      2006.




The
      Company had a debenture receivable which was extinguished on March 22, 2006.
      The
      derivative instrument related to the debenture receivable was initially fair
      valued at $33,315 upon acquisition at September 9, 2005. The single compound
      embedded derivative receivable was valued at $26,273 at March 22, 2006. For
      the
      period January 1 through March 22, 2006, the change in fair value of the
      derivative asset was an increase of $104, which has been classified as “net
      change in fair value of derivative”.




As
      result
      of the foreclosure discussed on Note 4, the derivative asset and a premium
      on
      the debenture receivable was written off and a $639 loss on extinguishment
      of
      debenture receivable was recorded for the six months ended June 30,
      2006.





-9-





**ITEM
                2****.**
            **MANAGEMENT’S
                DISCUSSION AND ANALYSIS OR PLAN OF
                OPERATION.**




**FORWARD-LOOKING
      STATEMENTS AND ASSOCIATED RISKS**





This
      Quarterly Report on Form 10-QSB, and the accompanying M,D&A, contains
      forward-looking statements.  Statements contained in this report about CSI
      Business Finance, Inc.'s future outlook, prospects, strategies and plans, and
      about industry conditions, demand for our financial services are
      forward-looking.  All statements that express belief, expectation,
      estimates or intentions, as well as those that are not statements of historical
      fact, are forward looking. The words "proposed," "anticipates," "anticipated,"
      "will," "would," "should," "estimates" and similar expressions are intended
      to
      identify forward-looking statements.  Forward-looking statements represent
      our reasonable belief and are based on our current expectations and assumptions
      with respect to future events. While we believe our expectations and assumptions
      are reasonable, they involve risks and uncertainties beyond our control that
      could cause the actual results or outcome to differ materially from the expected
      results or outcome reflected in our forward-looking statements.  In light
      of these risks, uncertainties and assumptions, the forward-looking events
      discussed in this quarterly report may not occur.  Such risks and
      uncertainties include, without limitation, our successful efforts in the outcome
      of our litigation concerning our investment in INII, our success in trading
      marketable securities, our ability to maintain contracts that are critical
      to
      our operations, actual customer demand for our financing and related services,
      collection of accounts and notes receivable, our ability to obtain and maintain
      normal terms with our vendors and service providers and conditions in the
      capital markets and equity markets during the periods covered by the
      forward-looking statements.





The
      forward-looking statements contained in this report speak only as of the date
      hereof.  We undertake no obligation to publicly update or revise any
      forward-looking statements, whether as a result of new information, future
      events or any other reason.  All forward-looking statements attributable to
      CSI Business Finance, Inc. or any person acting on its behalf are expressly
      qualified in their entirety by the cautionary statements contained or referred
      to in our annual report filed on Form 10-KSB and in our future periodic reports
      filed with the SEC. The following M,D&A should be read in conjunction with
      these unaudited Condensed Consolidated Financial Statements of the Company,
      and
      the related notes thereto included elsewhere herein, and in conjunction with
      our
      audited financial statements, together with footnotes and the M,D&A, in our
      2005 annual report filed on Form 10-KSB with the SEC.





**Overview**




On
      August
      25, 2005, Health Express USA, Inc., a Florida corporation, entered into a share
      exchange agreement with CSI Business Finance, Inc., a Texas corporation (“CSI”)
      and the shareholder of CSI (Corporate Strategies, Inc.). The transaction is
      being reflected as a reverse acquisition since control of the Company has passed
      to the shareholders of Corporate Strategies, Inc. (“Corporate Strategies”). The
      merged group was subsequently renamed CSI Business Finance, Inc. (the Florida
      corporation).





At
      present our company, through our operating subsidiary, primarily generates
      cash
      and revenue from financing and investing activities. To date these activities
      have included equipment leasing, factoring, brokerage activities earned in
      originating and selling business leases, providing short term secured lending,
      and investing in marketable securities. We commonly purchase notes receivable
      instruments and blocks of common stock from publicly traded micro cap issuers
      and individual holders of notes and publicly traded common stock. We offer
      individual issuers and holders in need of liquidity the opportunity to sell
      these notes or securities quickly and easily. We believe that gains are
      possible in holding these notes and securities and then selling the securities
      or collecting the notes purchased in the normal course of business
      over a reasonable period of time. Competition for the services we provide
      comes mainly from financial institutions that provide factoring services,
      equipment leases and small business loans, many of which have substantially
      more
      capital resources than our Company.





We
      also
      actively trade marketable securities and options with available cash, and on
      margin, through a third party investment advisor. Because our trading involves
      leveraging, these transactions contain a considerable amount of risk .




Management
      of the Company mitigates its risk in lending by securing loans with pledged
      assets (collateral) that, when liquidated, have a reasonable probability of
      realizing proceeds that would retire the liability. In some instances, we obtain
      personal guarantees from individuals of net worth which are adequate to repay
      the liability in the event of default. Additionally, in the example of public
      company finance, we utilize conversion features at a substantial discount to
      the
      market in the event of default that would enable us realize adequate proceeds
      from the sale of the borrower's stock to repay the liability to the
      Company.





Over
      the
      long term, management would like to concentrate its efforts on growing the
      business of INII, our largest asset. Ultimately, we plan to rename the company
      to better reflect the on-going operations of INII. Our operating subsidiary,
      as
      described above, is primarily a financial services business that does not fit
      well with our long term plans. For this reason, we are currently seeking
      potential buyers for our operating subsidiary.





-10-





On
      May
      23, 2006, our Board of Directors approved a 1 to 25 reverse common stock split.
      We currently do not have sufficient authorized shares to meet the number of
      shares on the conversion of the debentures. The Company is in the process of
      amending our articles of incorporation and bylaws to increase the number of
      our
      authorized shares.





Recent
      Accounting Pronouncements





In
      July
      2006, the FASB issued FIN 48, which clarifies the accounting for uncertainty
      in
      tax positions. This Interpretation requires that we recognize in our financial
      statements, the impact of a tax position, if that position is more likely than
      not of being sustained on audit, based on the technical merits of the position.
      The provisions of FIN 48 are effective as of the beginning of our 2007 fiscal
      year, with the cumulative effect of the change in accounting principle recorded
      as an adjustment to opening retained earnings. We are currently evaluating
      the
      impact of adopting FIN 48 on our financial statements.




**RESULTS
      OF OPERATIONS**




**Three
      Months Ended June 30, 2006 and June 30, 2005**




We
      had no
      leasing income for the three months ended June 30, 2006. Leasing income for
      the
      three months ended June 30, 2005 was $20,994. We expect to continue to seek
      leasing opportunities in the future as the Company has increased capital from
      prior levels that could result in a growing lease portfolio. We are continuously
      seeking turn-around opportunities as these opportunities arise. Fee income
      from
      brokerage fees earned in originating and selling business leases and loans
      was
      $66,155 for the three months ended June 30, 2006 versus $27,396 for the three
      months ended June 30, 2005. During the quarter ended June 30, 2006, the Company
      funded short-term loans to four new clients totaling approximately $837,000.




Interest
      income was $29,236 for the three months ended June 30, 2006 compared to zero
      dollars ($0) for the three months ended June 30, 2005. Interest income was
      derived mainly from notes receivable relating to receivables factoring and
      investments. We expect interest income to increase in the future since the
      Company has increased working capital availability for business lending and
      factoring. Dividend income was


$
      71,893
      for the three months ended June 30, 2006 compared to zero dollars ($0) for
      the
      three months ended June 30, 2005. Dividend income is primarily derived from
      various investments in marketable securities. For the three months ended June
      30, 2006, the Company recorded net trading gains from various investments in
      marketable securities in the amount of $86,881 ($302,726 in realized trading
      gains and $215,845 in unrealized trading losses).




We
      have
      not yet reached the size to benefit from separate office space and a dedicated
      staff. Our company shares office space and certain administrative functions
      and
      staff with an affiliated company. Costs are allocated for these shared functions
      based on an estimate of time usage.




Selling,
      general and administrative expenses were $375,976 for the three months ended
      June 30, 2006 versus $38,221 for the three months ended June 30, 2005.
      Professional fees of $197,400 associated with the Company’s investment in INII
      as described in Note 4 to the Condensed Consolidated Financial Statements and
      salaries expense of $98,676 comprised the majority of these expenses. The
      remainder of our selling, general and administrative expenses for the three
      months ended June 30, 2006 consist primarily of business development, allocated
      rent, and other ordinary expenses necessary for the operation of the Company.
      Salaries and benefits were $18,659 for the three months ended June 30, 2005,
      while the remainder of the expenses incurred were for allocated expenses,
      professional fees and other ordinary office related expenses. The increase
      in
      salaries and benefits is due to officer’s salaries incurred since the August
      2005 merger.





-11-


Interest
      expense was $261,200 for the three months ended June 30, 2006 compared to zero
      dollars ($0) for the three months ended June 30, 2005. Interest primarily
      relates to the expense associated with the $15,635,199 five percent (5%)
      convertible debenture entered into in September 2005 to fund INII and
      anticipated growth of CSI Business Finance, Inc and interest on our margin
      loan.





**Six
      Months Ended June 30, 2006 and June 30, 2005**




Lease
      income for the six months ended June 30, 2006 of $39,684 remained relatively
      constant as compared to $41,311 for the six months ended June 30, 2005. We
      expect to continue to seek leasing opportunities in the future as the Company
      has increased capital from prior levels that could result in a growing lease
      portfolio. We are continuously seeking turn-around opportunities as these
      opportunities arise. Fee income from brokerage fees earned in originating and
      selling business leases and loans was $66,155 for the six months ended June
      30,
      2006 versus $47,113 for the three months ended June 30, 2005. For the six months
      ended June 30, 2006, the Company funded short-term loans to four new clients
      totaling approximately $837,000 and entered into commitments to fund up to
      $800,000 monthly to two new accounts receivable factoring clients.




Interest
      income was $172,666 for the six months ended June 30, 2006 compared to zero
      dollars ($0) for the six months ended June 30, 2005. Interest income was derived
      mainly from notes receivable relating to receivables factoring and investments
      as well as interest from a debenture and notes that were subsequently traded
      on
      March 22, 2006 for stock in a Canadian subsidiary of the maker of the
      debentures. We expect interest income to increase in the future since the
      Company has increased working capital availability for business lending and
      factoring. Dividend income was $246,435 for the six months ended June 30, 2006
      compared to zero dollars ($0) for the six months ended June 30, 2005. Dividend
      income is primarily derived from various investments in marketable securities.
      For the six months ended June 30, 2006, the Company recorded net trading losses
      from various investments in marketable securities in the amount of $46,982
      ($161,948 in realized trading losses and $114,966 in unrealized trading gains).
      These losses were attributable to sharp, short term losses in value of certain
      portfolio segments that were not properly hedged against sudden decreases in
      value. The Company has taken steps to protect its portfolio with the use of
      put
      and call options to limit the risk of losses in the future, while maximizing
      upside potential.




We
      have
      not yet reached the size to benefit from separate office space and a dedicated
      staff. Our company shares office space and certain administrative functions
      and
      staff with an affiliated company. Costs are allocated for these shared functions
      based on an estimate of time usage.




Selling,
      general and administrative expenses were $699,335 for the six months ended
      June
      30, 2006 versus $66,517 for the six months ended June 30, 2005. Professional
      fees of $396,397 associated with the Company’s investment in INII as described
      in Note 4 to the Condensed Consolidated Financial Statements and salaries
      expense of $182,237 comprised the majority of these expenses. The remainder
      of
      our selling, general and administrative expenses for the six months ended June
      30, 2006 consist primarily of business development, allocated expenses, and
      other ordinary expenses necessary for the operation of the Company. Salaries
      and
      benefits were $32,106 for the six months ended June 30, 2005, while the
      remainder of the expenses incurred were for allocated expenses, professional
      fees and other ordinary office related expenses. The increase in salaries and
      benefits is due to officer’s salaries incurred since the August 2005
      merger.




-12-





Interest
      expense was $536,188 for the six months ended June 30, 2006 compared to zero
      dollars ($0) for the six months ended June 30, 2005. Interest primarily relates
      to the expense associated with the $15,635,199 five percent (5%) convertible
      debenture entered into in September 2005 to fund INII and anticipated growth
      of
      CSI Business Finance, Inc and interest on our margin loan.





**Liquidity
      and Capital Resources**  ****





Operating
      Activities





We
      incurred a net loss for the six months ended June 30, 2006 in the amount of
      $666,067. During the six months ended June 30, 2006, our operations provided
      cash flow in the amount of $394,997. Our operating cash flow was provided
      primarily by an increase in the value of our investments in marketable
      securities ($1,378,580), changes in minimum lease payments receivable ($241,532)
      and debentures receivable ($519,238). Our decreases in net operating cash were
      primarily a result of changes in the amount of notes receivable ($767,898)
      and a
      decrease of our margin loan outstanding ($614,494).





Investing
      Activities





During
      the six months ended June 30, 2006 we had no investing activities.





Financing
      Activities





During
      the six months ended June 30, 2006, we made $344,282 of payments on a note
      to an
      affiliate. As of June 30, 2006 this note has been fully repaid.





The
      Company had working capital of $3,763,329 at June 30, 2006 which is relatively
      consistent with $3,853,727 in working capital at March 31, 2006. Included in
      our
      working capital is $4,668,139 of marketable securities. For
      the
      six months ended June 30, 2006, we funded short-term loans to four new clients
      totaling approximately $837,000 and entered into commitments to fund up to
      $800,000 monthly to two new accounts receivable factoring clients.


.


Our
      cash
      flows for the periods are summarized below:





6
                months ended
            6
                months endedJune
                30, 2006
            June
                30, 2005Net
                cash provided by operating activities
            
            
            394,997
            $45,450Net
                cash used in investing activities
            
            
            0
            26,037Net
                cash used in financing activities
            
            
            344,282
            0





Our
      cash
      increased $50,715 since December 31, 2005.





Management
      believes the Company has adequate working capital and cash to be provided from
      operating activities to fund current levels of operations. We anticipate that
      our company will grow. As our business grows we believe that we will have to
      raise additional capital in the private debt and public equity markets to fund
      our investments.




**Off-Balance
      Sheet Arrangements**




The
      Company had no off-balance sheet arrangements or guarantees of third party
      obligations at June 30, 2006.




**Inflation**




The
      Company believes that inflation has not had a significant impact on operations
      since inception.





-13-





**ITEM
      3. CONTROLS AND PROCEDURES**




**(A)
      Evaluation of Disclosure Controls and Procedures**




As
      of the
      end of the period covered by this report, the Company's management carried
      out
      an evaluation, under the supervision and with the participation of the Company's
      Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the
      effectiveness of the design and operation of the Company's system of disclosure
      controls and procedures pursuant to the Securities and Exchange Act, Rule
      13a-15(e) and 15d-15(e) under the Exchange Act). The Company’s disclosure
      controls and procedures are designed to provide a reasonable level of assurance
      of achieving the Company’s disclosure control objectives. The Company’s CEO and
      CFO have concluded that the Company's disclosure controls and procedures were
      not effective, as of the date of that evaluation, for the purposes of recording,
      processing, summarizing and timely reporting of material information required
      to
      be disclosed in reports filed by the Company under the Exchange
      Act.




**(B)
      Changes**  **in
      Internal Controls over Financial Reporting**




In
      connection with the evaluation of the Company’s internal controls during the
      Company’s last fiscal quarter covered by this report, the Company’s CEO and CFO
      have determined that there were no changes to the Company’s internal controls
      over financial reporting that have materially affected, or are reasonably likely
      to materially effect, the Company’s internal controls over financial
      reporting.




**Material
      Weaknesses Identified**




In
      connection with the audit of our consolidated financial statements for the
      fiscal year ended December 31, 2005, our independent registered public
      accounting firm informed us that we have significant deficiencies constituting
      material weaknesses. As defined by the Public Company Accounting Oversight
      Board
      Auditing Standard No. 2, a material weakness is a significant control
      deficiency or a combination of significant control deficiencies that result
      in
      there being more than a remote likelihood that a material misstatement in the
      annual or interim financial statements will not be prevented or detected. The
      specific problems identified by the auditor were (1) lack of segregation of
      duties necessary to maintain proper checks and balances between functions,
      (2)
      failure of internal personnel to adequately communicate the scope and nature
      of
      non-routine transactions, and (3) applications of improper accounting principles
      to derivative financial instruments. The absence of qualified full time
      accounting personnel was a contributing factor to the problems identified by
      the
      auditor. The specific circumstances giving rise to the weaknesses include
      utilizing the services of contract accountants on a part time basis in the
      absence of internal accounting personnel. As a result of the absence of full
      time in-house accounting personnel and the failure of in-house personnel to
      adequately communicate information to the outside contract accountants, certain
      journal entries required during 2004 and 2005 were not made until the time
      of
      the audit when the need for such entries was identified by the
      auditor.




As
      a
      result of our review of the items identified by our auditors, we have concluded
      that our previous derivative accounting policies were incorrect and a
      communication failure resulted in not properly disclosing hedging
      activities.




In
      light
      of the above, we have determined to restate our consolidated financial
      statements for the third quarter of 2005 to correct our accounting for
      derivatives.




Furthermore,
      based on the material weaknesses described herein, we concluded that our
      disclosure controls and procedures were not effective at the reasonable
      assurance level at June 30, 2006. More specifically, our failure to
      maintain effective controls over the selection, application and monitoring
      of
      our accounting policies to assure that certain transactions were accounted
      for
      in conformity with generally accepted accounting principles resulted in a
      failure during 2005 to record an appropriate derivative liability, deemed
      interest expense associated with the derivative liability and related charges
      associated with changes in the value of embedded derivatives, arising from
      the
      issuance during 2005 and a failure during the last quarter of 2005 to properly
      disclose hedging activities.




The
      effects of the aforementioned weaknesses related to the closing and preparation
      of the financial statements were corrected by management prior to the issuance
      of this Quarterly Report on Form 10-QSB.





**Remediation
      Plan regarding the Material Weaknesses**




Because
      of its size, we share our accounting staff with an affiliated company. The
      accounting department is comprised of our Chief Financial Officer, a part-time
      Controller, an accounting manager and a data entry clerk, all of whom are
      considered contract employees since they are on the payroll of its affiliate
      and
      we reimburse our affiliate for the our share of the costs.




-14-




Management
      is actively engaged in remediation efforts to address the material weaknesses
      identified in the Company’s internal control over financial reporting as of June
      30, 2006. These on-going remediation efforts, outlined below, are specifically
      designed to address the material weaknesses identified by Management and to
      improve and strengthen the Company’s overall control environment.




The
      Company has taken the following steps to address the specific problems
      identified by the auditors:




·
            Our
                previous contract CFO was part time. Due to family health issues
                he was
                unable to devote full time to this position and has resigned as contract
                CFO and has become a part time contract controller. Our affiliate
                has
                hired a Chief Financial Officer and a contract full-charge bookkeeper
                to
                allow us to properly implement the segregation of duties necessary
                to
                maintain checks and balances between accounting and executive
                functions.





·
            All
                non-routine transactions will be reviewed by our CFO and accounting
                manager before they are completed.




·
            Our
                CFO will monitor our accounting policies to insure proper accounting
                for
                financial derivatives and other unusual transactions on an ongoing
                basis.




During
      the quarter ended December 31, 2005, a full time accounting manager was
      hired by our affiliate. We believe that in conjunction with the hiring of a
      contract full charge bookkeeper, we will be able to materially improve our
      internal controls over financial reporting.




The
      Company continues its efforts to remediate control weaknesses and further
      improve and strengthen its internal control over financial reporting under
      the
      direction of the CEO and the CFO.




**PART
      II - OTHER INFORMATION**





**ITEM
      1**  **.
      LEGAL PROCEEDINGS**




The
      Company completed an agreement in lieu of foreclosure (the “Agreement”) with Bio
      One Corporation (“Bio-One”) on March 22, 2006 and received the stock of
      Interactive Nutrition International, Inc (“INII”), along with other assets and
      claims, in return for the forgiveness of $9,887,959 in debt and accrued interest
      of Bio-One and will now be treated as an investment in INII. INII is currently
      being operated by Price Waterhouse Coopers as Receiver and Manager pursuant
      to
      Section 246(2) of the Bankruptcy and Insolvency Act of Canada, after being
      requested to do so by Nesracorp Inc., Eli Nesrallah, Joseph Nesrallah and Pamela
      Nesrallah (collectively, the “Sellers”), purporting  default in payment of
      obligations incurred in the purchase of INII assets  by Bio-One. A
      Court-supervised sale of the assets has been requested by the Receiver, and
      the
      Company intends to vigorously oppose this and pursue all claims against the
      Sellers. Additionally, the Company has been assigned all rights and claims
      previously asserted against Nesracorp Inc., Eli Nesrallah, Joseph Nesrallah,
      Pamela Nesrallah, Roxanne Anderson and Price Waterhouse Coopers, Inc. filed
      by
      INII and Bio-One in the Ontario Superior Court of Justice on January 13,
      2005. The Company intends to pursue some or all of the previous claims in the
      filing of January 13, 2005 in Ontario Superior Court of Justice, as the stock
      of
      INII and these claims, as well as others, have been assigned to the Company
      as
      part of the Agreement the Company executed with Bio-One on March 22,
      2006.




On
      May 5,
      2006, the Board of Directors terminated the Nesrallahs as employees of the
      Company. On March 30, 2006, the Company filed a lawsuit in State Court in
      Orlando, Florida against Eli Nesrallah, Joseph Nesrallah and Pamela Nesrallah,
      alleging, among other claims, breach of fiduciary duty to INII. No reserve
      has
      been established for a loss on this transaction, as the Company believes its
      claims are meritorious and have a reasonable probability of prevailing in
      a Court of law. However, should the Company fail to prevail or settle its
      claims against the Sellers, the Company may be required to write down its entire
      investment of $9,887,959 in INII.





**ITEM
      2**  **.
      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**




None.





**ITEM
      3**  **.
      DEFAULTS UPON SENIOR SECURITIES**




None.





**ITEM
      4**  **.
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




None.




-15-





**ITEM
      5**  **.
      OTHER INFORMATION**




None.





**ITEM
      6. EXHIBITS AND REPORTS ON FORM 8-K**




**(A)
      Documents filed as a part of this report.**




EXHIBIT
      31.1      Officer's Certification Pursuant to Section
      302




EXHIBIT
      32.1      Certificate pursuant to 18 U.S.C. Section 1350 as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002




**(B)
      Current Reports filed on Form 8-K:**





None




-16-





**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the Company has caused
      this Quarterly Report on Form 10-QSB to be signed on its behalf by the
      undersigned, thereunto duly authorized.




Date:
                July 25, 2006
            CSI
                Business Finance, Inc.(Registrant)/s/
                Timothy J ConnollyTimothy
                J. Connolly
              Chief
                Executive Officer








Date:
                July 25, 2006
            CSI
                Business Finance, Inc.(Registrant)/s/
                Wm Chris MathersWm
                Chris Mathers
              Chief
                Financial Officer





-17-