UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                   FORM 10-QSB

(Mark one)

(X)   Quarterly Report Pursuant To Section 13 or 15(d) of the Securities
      Exchange Act of 1934

      For the Quarterly Period Ended September 30, 2004

                                       OR

(_)   Transition  Report  Pursuant  to  Section  13 or 15(d)  of the  Securities
      Exchange Act of 1939 For the transition period from to

                         Commission File Number 1-13984


                             CREATIVE BAKERIES, INC.
             (Exact name of Registrant as specified in its Charter)


            NEW YORK                                           13-3832215
            --------                                           ----------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                         Identification Number)


                     20 PASSAIC AVENUE, FAIRFIELD, NJ 07004
                     --------------------------------------
                    (Address of principal executive offices)


                                 (973) 808-9292
                                 --------------
              (Registrant's telephone number, including area code)


Former name: William Greenberg Jr. Desserts and Cafes, Inc.

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 __

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

                             YES __         NO X

As of November 15, 2004, there were 6,815,926 shares of the registrant's common
stock, par value $0.001 per share, outstanding.

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

                                      INDEX

PART I. FINANCIAL INFORMATION

         Item 1.  Condensed consolidated financial statements:

                  Balance sheet as of September 30, 2004                     F-2

                  Statement of operations for the nine and
                  three months ended September 30, 2004 and 2003             F-3

                  Statement of cash flows for the nine months
                  ended September 30, 2004 and 2003                          F-4

                  Notes to condensed consolidated financial
                  statements                                          F-5 - F-11

         Item 2.  Management's discussion and analysis of            F-12 - F-17
                  financial condition

         Item 3.  Controls and Procedures                                   F-18

PART II. OTHER INFORMATION

         Item 4.  Submission of Matters to a Vote of Security Holders       F-19

         Item 6.  Exhibits and reports on Form 8-K                          F-19

SIGNATURES                                                                  F-20

CERTIFICATIONS                                                       F-21 - F-22

<PAGE>

PART I. FINANCIAL INFORMATION

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED BALANCE SHEET - SEPTEMBER 30, 2004

<TABLE>
<CAPTION>
                                     ASSETS

Current assets:
<S>                                                                   <C>
  Cash and cash equivalents                                           $      1,569
  Accounts receivable, less allowance for doubtful
   accounts of $400                                                        268,852
  Inventories                                                              231,370
  Prepaid expenses                                                          33,394
                                                                      ------------

    Total current assets                                                   535,185
                                                                      ------------

Property and equipment, net                                                333,825
                                                                      ------------

Other assets:
  Security deposits                                                          5,765
  Tradename and licensing agreements,
    net of amortization                                                     74,625
                                                                      ------------
                                                                            80,390
                                                                      ------------

                                                                      $    949,400
                                                                      ============

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:

  Long-term debt, current portion                                     $     48,567
  Notes payable, officer, current portion                                  578,294
  Accounts payable                                                         555,215
  Accrued expenses                                                          91,799
  Warrants payable                                                         115,625
                                                                      ------------

    Total current liabilities                                            1,389,500
                                                                      ------------

Other liabilities:
  Long-term debt, net of current portion                                    82,168
  Notes payable, officer, net of current portion                            51,076
  Deferred rent                                                             17,340
                                                                      ------------
                                                                           150,584

Stockholders' equity (deficiency):
  Preferred stock $.001 par value, authorized 2,000,000
   shares, none issued
  Common stock, $.001 par value, authorized 30,000,000
   shares, issued and outstanding 6,815,926 shares                           6,815
  Additional paid in capital                                            11,387,849
  Deficit                                                              (11,985,348)
                                                                      ------------
                                                                          (590,684)
                                                                      ------------

                                                                      $    949,400
                                                                      ============
</TABLE>

                 See notes to consolidated financial statements.

                                                                             F-2

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
             NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

<TABLE>
<CAPTION>
                                           Nine Months                       Three Months
                                          Ended Sept 30                     Ended Sept 30,
                                      2004             2003             2004             2003
                                  -----------      -----------      -----------      -----------
<S>                               <C>              <C>              <C>              <C>
Net sales                         $ 1,746,549      $ 2,222,256      $   588,644      $   742,941

Cost of sales                       1,573,260        1,958,231          535,110          658,201
                                  -----------      -----------      -----------      -----------

Gross profit                          173,289          264,025           53,534           84,740
                                  -----------      -----------      -----------      -----------

Selling, general and
 administrative expenses              732,745          560,344          228,587          182,952
Write-off of tradename rights          17,981               --           17,981               --
Gain on sale of asset                 (10,000)              --          (10,000)              --
Cancellation of
 indebtedness                              --          (57,978)              --          (57,978)
 Interest expense                      48,941            6,860           16,474            3,037
                                      789,667          509,226          253,042          128,011
Loss from continuing
 operations                          (616,378)        (245,201)        (199,508)         (43,271)

Income from discontinued
 operations                                --          134,265               --          134,265
                                  -----------      -----------      -----------      -----------

Net income (loss)                 ($  616,378)     ($  110,936)     ($  199,508)     $    90,994
                                  ===========      ===========      ===========      ===========

Earnings per common share:
 Primary and fully diluted:
  Loss from continuing
   operations                     ($     0.10)     ($     0.04)     ($     0.03)     $      0.00
  Discontinued operations                0.00             0.02             0.00             0.02
                                  -----------      -----------      -----------      -----------

  Net income (loss) per
   common share                   ($     0.10)     ($     0.02)     ($     0.03)     $      0.02
                                  ===========      ===========      ===========      ===========

Weighted average number of
 common shares outstanding          5,991,304        5,449,680        6,631,202        5,455,446
                                  ===========      ===========      ===========      ===========
</TABLE>

                 See notes to consolidated financial statements.

                                                                             F-3

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

                                                          2004           2003
                                                       ---------      ---------
Operating activities:
  Loss from continuing operations                      ($616,378)     ($245,201)
  Adjustments to reconcile loss from
   continuing operations to cash used in
   operating activities:
     Depreciation and amortization                        77,710         64,869
     Common stock issued for services                    100,000          5,000
     Write-off of tradename rights                        17,981             --
     Gain on sale of equipment                           (10,000)            --
     Cancellation of indebtedness                             --        (57,978)
   Changes in other operating assets and
    liabilities from operations:
      Accounts receivable                                (93,869)      (100,637)
      Inventory                                          (57,851)         8,858
      Prepaid expenses                                    32,682         22,433
      Security deposits                                   (1,051)            --
      Accounts payable                                   192,806         45,669
      Accrued expenses                                    10,155         28,720
      Deferred rent                                       11,820        (13,242)
                                                       ---------      ---------

      Net cash used in operating activities             (335,995)      (241,509)
                                                       ---------      ---------

Investing activities:
  Purchase of property and equipment                     (93,222)            --
  Sale of tradename rights and equipments                 35,000             --
                                                       ---------      ---------

      Net cash used in investing activities              (58,222)            --
                                                       ---------      ---------

Financing activities:
  Proceeds from notes payable                             90,152         50,124
  Payment of notes payable                              (256,769)            --
  Proceeds from officers loans                           487,107        144,563
  Payment of officers' loans                              (7,227)            --
                                                       ---------      ---------

      Net cash provided by financing activities          313,263        194,687
                                                       ---------      ---------

Net decrease in cash and cash equivalents                (80,954)       (46,822)
                                                       ---------      ---------

Cash and cash equivalents, beginning of period            82,523         51,155
                                                       ---------      ---------

Cash and cash equivalents, end of period               $   1,569      $   4,333
                                                       =========      =========

Supplemental disclosures:
  Cash paid during the year for:
    Interest:                                          $  25,786      $      --
                                                       =========      =========


                See notes to consolidated financial statements.

                                                                             F-4

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

1.    The  accompanying  unaudited  financial  statements  have been prepared in
      accordance  with  generally  accepted  accounting  principles  for interim
      financial   information   and  with  the   instructions  to  Form  10-QSB.
      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  management,  all  adjustments
      considered  necessary  for a fair  presentation  have been  included.  The
      results  of  operations  for the  nine  months  ended  is not  necessarily
      indicative  of the results to be expected  for the full year.  For further
      information,  refer to the consolidated financial statements and footnotes
      thereto  included  in the  Company's  annual  report  for the  year  ended
      December 31, 2003 included in its Annual Report filed on Form 10-KSB.

      Going concern:

      The Company has incurred losses from  continuing  operations over the last
      several quarters. Management has described its plan of action in regard to
      this uncertainty in its latest annual report filed December 31, 2003.

2.    Principles of consolidation:

      The accompanying consolidated financial statements include the accounts of
      the  Company  and  all  of its  wholly  owned  subsidiaries.  Intercompany
      transactions and balances have been eliminated in consolidation.

3.    Nature of operations, risks and uncertainties:

      The Company is a manufacturer of baking and confectionery products,  which
      are sold to supermarkets,  food  distributors,  educational  institutions,
      restaurants,  mail order and to the public. Although the Company sells its
      products  throughout the United  States,  its main customer base is on the
      East Coast of the United States.

      The process of preparing financial statements in conformity with generally
      accepted   accounting   principles  requires  the  use  of  estimates  and
      assumptions regarding certain types of assets,  liabilities,  revenues and
      expenses.  Such estimates  primarily relate to unsettled  transactions and
      events  as of the  date of the  financial  statements.  Accordingly,  upon
      settlement, actual results may differ from estimated amounts.

      The Company  maintains  all of its cash  balances in New Jersey  financial
      institutions.  The balances are insured by the Federal  Deposit  Insurance
      Company  (FDIC) up to $100,000.  At September 30, 2004, the Company had no
      uninsured cash balances.

                                                                             F-5

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003


4.    Accounts receivable:

      Following is a summary of receivables at September 30, 2004:

          Trade accounts                                    $ 269,252
          Less allowance for doubtful accounts                   (400)
                                                            ---------

                                                            $ 268,852
                                                            =========

5.    Inventories:

      Inventories at September 30, 2004 consist of:

          Finished goods                                      $ 98,569
          Raw materials                                         57,619
          Supplies                                              60,182
          Work in process                                       15,000
                                                              --------

                                                              $231,370
                                                              ========


6.    Property and equipment:

      The  following  is a summary of property and  equipment  at September  30,
      2004.

          Baking equipment                                  $1,482,810
          Furniture and fixtures                               100,998
          Leasehold improvements                               180,422
                                                            ----------
                                                             1,774,230

          Less: Accumulated depreciation
                  and amortization                           1,430,405
                                                            ----------
                                                            $  333,825
                                                            ==========

      Depreciation  expense was $60,409 and $60,369  respectively,  for the nine
      months ended September 30, 2004 and 2003.

      The useful  lives of property  and  equipment  for  purposes of  computing
      depreciation are:

                                                                    Years
                                                                    -----

          Machinery and equipment                                   10
          Furniture and computers                                    5
          Leasehold improvements                                    10-15


7.    Loan acquisition costs:

      The Company incurred loan acquisition costs for October 2003 in the amount
      of $16,957 in  connection  with one of the notes  payable  financings  the
      Company  entered into in 2003. In June 2004,  the related note was paid in
      full and the remaining acquisition costs were expensed.  Loan amortization
      expense for the three and nine months ended September 30, 2004 were $0 and
      $12,798.

                                                                             F-6

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003


8.    Tradename and licensing agreements:

      On March 7, 2002,  the  Company  purchased  the  rights to the  tradenames
      Brooklyn  Cheesecake  Company,  Inc. and Brooklyn  Cheesecake and Desserts
      Company,  Inc.  and the related  corporate  logo in  exchange  for 300,000
      shares of the  Company's  common  stock,  valued on the  purchase  date at
      $90,000.  The tradename  rights are being  amortized on the  straight-line
      basis over a fifteen-year term.  Amortization  expense was $4,500 for each
      of the nine months ended September 30, 2004 and 2003.

      The Company had a licensing  agreement  for the use of the  trademark  and
      name of one of its  subsidiaries  and various  recipes and methods used in
      the production of baked and other goods. The agreement calls for royalties
      to be paid  upon  reaching  certain  sales  levels  by the  licensee.  The
      trademark rights were sold on August 26, 2004 for $25,000.

9.    Notes payable to executive officer:

      Note dated May 21, 2004 in the amount of $54,000,  payable on demand, with
      interest at the rate of 8.5% per annum.  The note is secured by all of the
      Company's  assets.  This note  consolidates  in a single  promissory  note
      several loan advances received by the Company in the first quarter of 2004
      plus an additional $20,000 during the quarter ended June 30, 2004.

      Note dated June 15, 2004 in the amount of $317,000,  with  interest at the
      rate of 13% per annum.  Interest  payments are due on the last day of each
      month with the note  maturing on August 31,  2004.  The note is secured by
      all of the  Company's  assets.  The note has been extended to November 30,
      2004.

      This note  repaid  and  retired a former  note  payable  in the  amount of
      $250,000 that was to become due on August 31, 2004.

      Note payable  effective  April 2, 2003 in the original  amount of $54,000,
      with a variable interest rate that was 8.4% at September 30, 2004. Monthly
      payment of  principal  and  interest  are  approximately  $1,300.  Note is
      unsecured  and due on  demand.  The  outstanding  balance  on the loan was
      $47,022 at September 30, 2004.

      Note dated  January  1, 2003 in the  original  amount of  $88,000  with an
      interest  rate of 8.5% per annum.  Interest  only payments are due for the
      first  eighteen   months  and  principal  and  interest  are  due  monthly
      thereafter  until the maturity  date of December 31, 2005.  The balance on
      the note was $102,941 at September 30, 2004 including accrued interest.

      Note  dated  September  30,  2004 in the  amount of  $108,407,  payable on
      demand,  with interest at the rate of 8.5% per annum.  The note is secured
      by all  of the  Company's  assets.  This  note  consolidates  in a  single
      promissory note several loan advances received by the Company in the third
      quarter of 2004.

                                                                             F-7

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003


9.    Notes payable to executive officer (continued):

      Maturities for the next five years are as follows:

          September 30, 2005                                  $578,294
          September 30, 2006                                    26,854
          September 30, 2007                                    11,400
          September 30, 2008                                    11,400
          September 30, 2009                                     1,422
                                                              --------

                                                              $629,370
                                                              ========

10.   Long-term debt:

      Note dated May 25, 2004 in the amount of $31,000,  payable on demand, with
      interest at the rate of 8.5% per annum.  The note is secured by all of the
      assets of the Company.  This note consolidates in a single promissory note
      several loan advances received in during 2004. The holder of the note is a
      member of the Board of Directors.

      Capitalized  lease with an order  date of March 9, 2004,  in the amount of
      $47,940 plus a 10% buyout amount of $4,794.  Monthly payments of principal
      and  interest in the amount of $1,051  commencing  April 7, 2004,  payable
      over 60 months.  The lease matures in April 2009. The balance of the lease
      was $48,911 at September  30, 2004.  The note is guaranteed by a member of
      the Board of Directors.

      Note payable  effective August 18, 2003 in the original amount of $50,000,
      with a  variable  interest  rate that was  8.25% at  September  30,  2004.
      Monthly payments of principal and interest are approximately  $1,000. Note
      is unsecured and due on demand.  The  outstanding  balance on the loan was
      $48,324 at September  30, 2004.  The holder of the note is a member of the
      Board of Directors.

      Note dated June 28, 2004 in the amount of $2,500,  payable on demand, with
      interest at the rate of 8.5% per annum. The holder of the note is a member
      of the Board of Directors.

      Maturities for the next five years are as follows:

          September 30, 2005                                  $ 48,567
          September 30, 2006                                    16,542
          September 30, 2007                                    17,400
          September 30, 2008                                    18,214
          September 30, 2009                                    19,488
          Thereafter                                            10,524
                                                              --------

                                                              $130,735
                                                              ========

11.   Common Stock:

      During the quarter ended June 30, 2004 the Company  issued  314,715 shares
      of its common stock upon exercise of warrants.


                                                                             F-8

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

11.   Common Stock (continued):

      The issuance of the common stock was exempt from registration  pursuant to
      Section 4(2) of The Securities Act of 1933, as amended.

12.   Commitments and contingencies:

      The Company rents office,  plant and warehouse space in New Jersey under a
      five-year lease that expires August 31, 2008.  Rental expense for the nine
      months  ended  September  30,  2004 and 2003 was  $149,351  and  $180,838,
      respectively.

      The minimum future rentals on the facilities are as follows:

          September 30, 2005                                   145,000
          September 30, 2006                                   156,500
          September 30, 2007                                   162,500
          September 30, 2008                                   154,000
                                                              --------

                                                              $618,000
                                                              ========

      The Company has 1,156,250  outstanding common stock purchase warrants that
      give the  warrant  holder the right to elect that the  Company  repurchase
      each warrant for consideration  consisting of $.10 per warrant plus 40% of
      one share of the Company's common stock or exercise the warrants at $.6875
      per warrant less the $.10 feature.

      The  warrants  originally  expired  on  December  31,  2000 and have  been
      extended  for a one-year  period over the last two years.  The Company has
      again extended the expiration  date of the warrants from December 31, 2003
      to December 31, 2004 in exchange for the warrant holders' forbearance. The
      total number of shares represented by the warrants is 462,500.

      The  Company  entered  into an  agreement  for legal  services  commencing
      November 1, 2003. The agreement calls for half of the monthly retainer fee
      of $1,500 to be paid  through  the  issuance  of an  equivalent  number of
      restricted common shares based on an agreed upon market value formula.  At
      September  30, 2004 18,682  shares of the  Company's  common stock was due
      under the agreement.

13.   Concentration of Credit Risk

      As of September 30, 2004, the Company had included in accounts  receivable
      two customers whose outstanding  balances equaled or exceeded 10% of total
      accounts  receivable.  If either of the customers should default, it could
      have a significant impact on the Company's operation.


                                                                             F-9

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003


14.   Income taxes:

      The Company  accounts for income  taxes in  accordance  with  Statement of
      Financial  Accounting  Standards  ("SFAS No. 109")  "Accounting for Income
      Taxes",  which  requires  an asset and  liability  approach  to  financial
      accounting and reporting for income taxes.  Deferred income tax assets and
      liabilities are computed  annually for  differences  between the financial
      statement and income tax basis of assets and liabilities  that will result
      in taxable or  deductible  amounts in the future based on enacted tax laws
      and rates  applicable to the periods in which the differences are expected
      to affect taxable income.

      Valuation allowances are established when necessary to reduce deferred tax
      assets to the amount  expected to be  realized.  Income tax expense is the
      tax payable or refundable for the period,  plus or minus the change during
      the period in deferred tax assets and liabilities. There was no cumulative
      effect of  adoption  or current  effect in  continuing  operations  mainly
      because the Company has  accumulated a net operating loss. The Company has
      made no provision for a deferred tax asset due to the net  operating  loss
      carryforward  because a valuation  allowance  has been  provided  which is
      equal to the deferred tax asset. It cannot be determined at this time that
      a deferred tax asset is more likely than not to be realized.

      The  Company  has a loss  carryforward  of  $9,860,154  that may be offset
      against future taxable income.  The carryforward  losses expire at the end
      of the years 2006 through 2023.

15.   Warrants:

      At September 30, 2004 the Company had outstanding  1,156,250  common stock
      purchase  warrants with an exercise price of $.6875 each,  which expire on
      December 31, 2004.  These  warrants are the same  warrants as described in
      Note 12, commitments and  contingencies,  and are exercisable as described
      in Note 12 or they can be used to  purchase  40% of one  share  of  common
      stock per one warrant.  The warrants  are included in the  computation  of
      outstanding  stock  options and  warrants as  described  in the  Company's
      December 31, 2003 annual report filed on Form 10-KSB.


                                                                            F-10

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

16.   Earnings per share:

      Primary  earnings  per share is  computed  based on the  weighted  average
      number of shares actually outstanding plus the shares that would have been
      outstanding  assuming  conversion  of the common stock  purchase  warrants
      which are considered to be common stock equivalents. However, according to
      FASB 128,  effective for financial  statements  issued and annual  periods
      beginning  after December 15, 1997,  entities with a loss from  continuing
      operations  should not include the  exercise  of  potential  shares in the
      calculation  of earnings  per share since the  increase  would result in a
      lower loss per share.  Thus,  common  stock  purchase  warrants  and stock
      options are excluded from the calculation of earnings per share.

      Reconciliation of shares used in computation of earnings per share:

                                                    2004          2003
                                                  ---------     ---------

          Weighted average of shares actually
            outstanding                           5,991,304     5,449,680
                                                  =========     =========
          Common stock purchase warrants
          Primary and fully diluted weighted
            average common shares outstanding     5,991,304     5,449,680
                                                  =========     =========


                                                                            F-11

<PAGE>

ITEM 2. MANAGEMENTS  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

      The  company  continues  to seek  additional  financing  required  for its
continued operations.  The company continues to streamline its operations.  This
includes upgrading its accounting, shipping and receiving departments as well as
funding a quality control staff.  Established  quality assurance systems must be
in place to attract both domestic and international high volume distributors.

      Increased  cost of  staff  as  well  as  historically  high  costs  of raw
materials and freight contributed to the third quarter loss of $ 199,508.  The $
154,297,  reduction in gross sales for the third  quarter of 2004 as compared to
the same  period of 2003,  can be  attributed  to raising  prices on  marginally
priced  items  (muffins  and  mini  cakes),  The  result  was  retailers  either
purchasing from a different vendor or discontinuing the items.

      New products  have been  developed to support items for export and the low
carbohydrate markets.

      Management  will continue to refine  operations and control costs.  Active
solicitation  for  companies  to  be  acquired  by  or  merged,  continue  to be
evaluated.

RESULTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2003

      The Company had  consolidated  net sales of $588,644  and $742,941 for the
three  months  ended  September  30, 2004 and 2003  respectively,  a decrease of
$154,297,  or 20.8%.  Consolidated net sales for the nine months ended September
30, 2004 and 2003 were  $1,746,549  and $2,222,264  respectively,  a decrease of
$475,715,  or 21.4%.  The  decrease  in sales is a result of raising  prices for
which customers either changed vendors or discontinued items.

      The cost of sales were $535,110 and $658,201 and $1,573,260 and $1,958,231
for the three and nine months ended September 30, 2004 and 2003 respectively,  a
decrease of $123,091  (18.7%) and $384,971 (19.7%)  respectively.  The reduction
was a direct result of the decreased sales. The gross profit percentages for the
three and nine months ended September 30 average 9.1% and 9.9% respectively. The
inability to purchase  ingredients  efficiently,  due to poor cash flow, and the
slow summer season, were the leading contributors to these decreases.

      Selling, general and administrative expenses however, totaled $228,587 and
$182,952 for the three months ended September 30, 2004 and 2003 and $732,745 and
$560,344 for the nine months  ended  September  30, 2004 and 2003  respectively.
This was an increase of $45,635 (24.9%) and $172,401 (30.8%) respectively.  This
was a result of managements upgrade of various departments personnel.

      During the quarter  ended  September  30, 2004,  the Company wrote off the
balance of trademark rights after selling such rights for $25,000. Additionally,
the Company sold fully depreciated equipment for $10,000.  There were no similar
transactions for the quarter ended September 30, 2003.

      The company had a cancellation of debt in the three months ended September
30, 2003 of $57,978,  which was a result of renegotiating  its current warehouse
lease.  The write-off was for an  accumulated  rent  straight-lining  liability.
There was no cancellation of debt as of September 30, 2004.

      Interest  expense  was  $16,474  and  $3,037  for the  three-months  ended
September 30, 2004 and 2003 respectively,  an increase of $13,437 or 442.4%. The
increase of $42,081 or 613.4% to $48,941  from $6,860 for the nine months  ended
September 30, 2004 and September 30, 2003 were due  substantially  to additional
loans from the Chairman and Chief Executive Officer and a second director.


                                                                            F-12
<PAGE>


SEGMENT INFORMATION

      Not applicable since retail operations were discontinued.

LIQUIDITY AND CAPITAL RESOURCES

      Since its inception the Company's only source of working  capital has been
the $8,455,000 received from the issuance of its securities.

      As of September 30, 2004, the Company had a negative  working capital from
continuing  operations  of  approximately  $854,315  as  compared  to a negative
working capital of $372,879 at September 30, 2003.

      Although  the  Company  has  previously   been   successful  in  obtaining
sufficient  capital funds through  issuance of common stock and warrants,  there
can be no assurance that the Company will be able to do so in the future.

RISK FACTORS

      The  following  information  sets forth  facts that could cause our actual
results to differ materially from those contained in forward looking  statements
we have made in this quarterly report and those we may make from time to time.

      If We Are Unable to Obtain  Additional Funds, We May Have to Significantly
Curtail the Scope of Our Operations and Alter Our Business Model.

      Management  believes  that  profitable  operations  are  essential for the
Company to become  viable.  The present  business plan  contemplates  profitable
operations will be achieved.  However,  in the event that profitable  operations
are not achieved,  our present  financial  resources should allow us to continue
operations  through  December 31, 2004. If additional  financing is required and
not available when required or is not available on acceptable  terms,  we may be
unable to continue our operations at current levels or at all. We are engaged in
seeking  additional  financing  and we  continue to impose  actions  designed to
minimize  our  operating  loses.  We  would  consider  strategic  opportunities,
including investment in the Company, a merger or other acceptable  transactions,
to sustain our operations. We do not currently have any agreements in place with
respect to any such strategic  opportunity,  and there can be no assurances that
additional capital will be available to us on acceptable terms, or at all. If we
are unable to obtain  additional  financing  or to arrange a suitable  strategic
opportunity, our business will be placed in significant financial jeopardy.

      Our  Independent  Auditors  have  Stated  that Our  Recurring  Losses from
Operations and Our Accumulated Deficit Raise Substantial Doubt About Our Ability
to Continue as a Going Concern.

      The report of our independent Certified Public Accountants dated March 17,
2004 for the December 31, 2003 consolidated  financial  statements  contained an
explanatory  paragraph that states that our recurring losses from operations and
accumulated  deficit raise  substantial doubt about our ability to continue as a
going  concern.  The  consolidated  financial  statements  do  not  include  any
adjustments that might result from the outcome of that  uncertainty.  We believe
we will need to raise more money to  finance  our  operations  and  sustain  our
business model. We may not be able to obtain additional  financing on acceptable
terms, or at all. Any failure to raise additional financing will likely place us
in significant financial jeopardy.


                                                                            F-13
<PAGE>
      Our  Financial  Condition  Has  Adversely  Affected  Our  Ability  to  Pay
Suppliers  on a Timely  Basis Which May  Jeopardize  Our Ability to Continue Our
Operations Necessary to Continue Shipment and Sales of Our Products.

      As of September 30, 2004 our accounts  payable  totaled  $555,215 of which
$105,109 were over sixty (60) days old. While we have  negotiated  payment plans
with our major  suppliers and vendors  whereby we pay C.O.D.  with a nominal pay
down of any past due amounts, there can be no assurances that we will be able to
continue  these  payment  plans  or  obtain  the  necessary   materials   and/or
ingredients  to produce our baked goods.  If we are unable to obtain  additional
financing  on  acceptable  terms,  our  ability to make  timely  payments to our
critical  suppliers will be jeopardized and we will be unable to obtain critical
supplies and services to maintain and continue to manufacture,  ship and to sell
our products.

      The Company And the Price Of Our Shares May Be  Adversely  Affected By the
Public Sale of a Significant Number of the Shares Eligible For Future Sale.

      All but a very small number of the outstanding  shares of our Common Stock
are freely tradable. Sales of Common Stock in the public market could materially
adversely  affect the  market  price of our  Common  Stock.  Such sales may also
inhibit our  ability to obtain  future  equity or  equity-related  financing  on
acceptable  terms. At our Annual Meeting of Stockholders held August 4, 2004 our
stockholders  approved an increase in the number of authorized  shares of Common
Stock from 10,000,000 shares to 30,000,000 shares. The issuance and registration
of  additional  shares could have a  significant  adverse  effect on the trading
price of our Common Stock.

      We Have Obtained  Secured  Financing  With the Pledge of All of Our Assets
Which Will Have Priority Over Security Interests of Any Holders of Our Preferred
Shares.

      We have previously  procured  financing to continue our operations at arms
length transaction from the following  directors:  Ronald L. Schutte,  the Chief
Executive  Officer  and  Chairman of the Board,  in the amount of  $629,370  and
Anthony J.  Merante,  a Director of the  Company,  in the amount of $79,324.  We
intend to grant security interest to these two directors.

      We HAVE  Incurred  Losses in the Past and We Expect To Incur Losses in the
Future.

      We have  incurred  losses in each year since our  inception.  Our net loss
after write off of certain old  liabilities,  for the fiscal year ended December
31, 2003 was  $146,614 and our  accumulated  deficit as of December 31, 2003 was
$11,368,970.  We expect operating losses to continue for the foreseeable  future
as we  continue  our  marketing  and sales  activities  and  conduct  additional
development of our products.

                RISKS RELATED TO THE MARKET FOR OUR COMMON STOCK

      The Price of Our Common Stock is Subject to Volatility

      Our Common  Stock has traded as low as $.06 per share and as high as $1.02
per share in the twelve (12) month ended September 30, 2004. Our average trading
volume is  extremely  low. As such, a  significant  sale of our Common Stock may
result in a major fluctuation of the market price. Some other factors leading to
the volatility include:

      o     Price and volume  fluctuation  in the stock market at large which do
            not relate to our operating performance;

      o     Fluctuation in our operating results;

      o     Concerns about our ability to finance our continuing operations;

      o     Financing   arrangements   which  may  require  the  issuance  of  a
            significant number of shares in relation to the number shares of our
            Common Stock currently outstanding;

      o     Fluctuations in market demand and supply of our products.

                                                                            F-14
<PAGE>
      Our Common  Stock is  Currently  Traded on the  Over-The-Counter-Bulletin-
Board and an Investor's Availability to Trade Our Common Stock May Be Limited by
Trading Volume

      The trading  volume in our common shares has been  relatively  limited.  A
consistently  active trading market for our Common Stock may not continue on the
Over-The-Counter-Bulletin-Board.  The average trading volume in our Common Stock
on the  Over-The-Counter-Bulletin-Board  for the month ended  September 30, 2004
was approximately 3,772 shares.

                          RISKS RELATED TO OUR BUSINESS

      We are  Currently  Dependent on a Few Major  Customers  for a  Significant
Portion of Our Revenues

      We currently record sales from  approximately 53 customers.  None of these
customers  account for 10% of our  revenues.  We intend to  establish  long-term
relationships with our customers and continue to expand our customer base. While
we diligently  seek to become less  dependent on any one customer,  it is likely
that  certain  business  relationships  may  result  in  one or  more  customers
contributing  to a significant  portion of our revenue in any given year for the
foreseeable future.

      We Have Limited Ability to Sell and Market Our Products

      At the current time, we have limited marketing capability as compared with
many  of our  competitors  and  we do not  have a  large  sales,  promotion  and
marketing  budget as we are  constrained by our lack of working  capital and our
ability  to raise  the  necessary  cash  flow from our  business  operations  to
re-invest  in our  marketing  programs.  As a result  of our  limited  marketing
capabilities,  we are forced to rely upon  customer  referrals  and a  part-time
sales  force.  Our  competitors  have  direct  advertising  and sales  promotion
programs for their  products as well as sales and marketing  personnel  that may
have a competitive advantage over us in contacting  prospective  customers.  Our
position  in the  industry  is  considered  minor in  comparison  to that of our
competitors,  and while we continue to develop and explore new marketing methods
and techniques and programs  directed toward foreign  customers,  our ability to
compete at the present time is limited.  Our success depends upon the ability to
market,  penetrate  and expand  markets and form  alliances  with  distributors.
However, there can be no assurances that:

      o     Our direct selling efforts will be effective;
      o     We will obtain an expanded degree of market acceptance;
      o     We will be able to successfully form relationships with distributors
            to market our products.

      We Depend Upon the Marketability of Primary Products

      Frozen cheesecake,  pre-portioned desserts and tart shells are our primary
products.  We may have to cease  operations if any of our primary products fails
to achieve market acceptance and/or generate significant revenues. Additionally,
the  marketability of our products is dependent upon customer taste,  preference
and acceptance, which are variables that may be beyond our ability to control.

      We May Not Be Able to Successfully Develop and Market New Products That We
Plan to Introduce

      We plan to develop  new baked  goods for  production.  There are  numerous
developmental  issues that may preclude the  introduction of these products into
commercial  sale.  If we are unable to  establish  market  acceptance  for these
products,  we may  have to  abandon  them  or  alter  our  business  plan.  Such
modifications  to our business plan will likely delay  achievement of milestones
related to revenue increases and achievement of profitability.

      We May  Experience  Problems in  Manufacturing  Sufficient  Quantities and
Commercial Quantities of Our Products

      We may  encounter  difficulties  in the  production of our current and any
future products due to such reasons as: o Lack of working  capital  necessary to
gain market acceptance;

      o     Limited equipment and resources to produce product;
      o     Quality control and assurance;
      o     Supplies of ingredients; and
      o     Shortages of qualified personnel.

                                                                            F-15
<PAGE>


      Any of the  foregoing  or other  difficulties  would affect our ability to
meet increases in demand should our products gain market acceptance.

      We Claim Certain  Proprietary Rights in Connection with the Combination of
Ingredients and Manufacture of Our Products

      Although we do not possess any patent  protection for the  formulation and
production of our products,  we believe that the  combination of ingredients and
our method of  production  are unique and  important  to our  ability to produce
quality baked goods and  desserts.  As we do not possess  intellectual  property
protection,  there is the risk that we may not be able to  prevent a  competitor
from duplicating our recipes or our methods of production.

      We Use Certain  Names that Do Not Have  Protection  under Federal or State
Trademark Laws.

      Our use of the names,  "Creative  Bakeries,  Inc.,"  "Brooklyn  Cheesecake
Company,  Inc." and  "Brooklyn  Cheesecake  and Desserts  Company,"  under which
Creative Bakeries conducts business and has established  goodwill may be subject
to legal  challenge  since there are other  businesses  operating  under similar
names and we have not registered  trademarks for these names with either federal
or state  agencies.  In addition,  we utilize  packaging with  depictions of the
Brooklyn Bridge in designed or stylized  formats in conjunction  with the names,
"Brooklyn  Cheesecake  Company,  Inc."  and  "Brooklyn  Cheesecake  and  Deserts
Company,"  which have not been registered with either federal or state agencies.
In that we do not  possess  registered  trademarks  for our trade names or trade
dress,  we may face  opposition  to our  usage of same  that may  require  us to
discontinue  usage of  certain  trade  names or  packaging,  which in turn  will
require  us to  re-establish  goodwill  associated  with our  product  names and
packaging.  We are seeking trademark registrations with the United States Patent
and Trademark  Office but there can be no assurances  that we will be successful
in obtaining a registered mark.

      Attraction and Retention of Key Personnel

      Our future success depends in significant  part on the continued  services
of key sales and senior management personnel. The loss of Ronald L. Schutte, our
Chairman  and Chief  Executive  Officer,  or other key  employees  could  have a
material  adverse  affect on our business,  results of operations  and financial
condition. There can be no assurances that we can attract,  assimilate or retain
other highly qualified personnel in the future.

      We have Limited Product Liability Insurance Due to the High Cost of Same

      We manufacture,  market and sell baked goods and dessert products.  In the
event our products are  tainted/spoiled  or cause illness in  consumers,  we may
face potential claims. Due to the high cost of product liability  insurance,  we
only  maintain  insurance  coverage  of  $2,000,000  to protect  against  claims
associated with the consumption of our product. Any claim against us, whether or
not  successful,  may  result  in  our  expenditure  of  substantial  funds  and
litigation.  Further,  any claims may require  management's  time and use of our
resources and may have a materially adverse impact on us.

      Geographic Concentration in New York City Tri-State Area

      Most of Creative  Bakeries' retail and  institutional/wholesale  customers
are located in the New York City metropolitan  area. Adverse changes in economic
conditions in the New York City  metropolitan area are more likely to affect the
Company's  business,  financial  condition and results of operations than if its
operations were spread over a larger market area.


                                                                            F-16
<PAGE>

      Government Regulation: Maintenance of Licenses and Certification

      Creative Bakeries is subject to numerous state regulations relating to the
preparation  and sale of food.  It is also  subject  to  federal  and state laws
governing the Company's  relationship  with  employees,  including  minimum wage
requirements,   overtime,   working  and  safety  conditions,   and  citizenship
requirements.  The failure to obtain or retain the required  food licenses or to
be in compliance with applicable  governmental  regulations,  or any increase in
the minimum wage rate,  employee benefits costs (including costs associated with
mandated health  insurance  coverage) or other costs  associated with employees,
could  adversely  affect  our  business,   financial  condition  or  results  of
operations.  In addition,  the  Company's  products  are  certified as kosher by
independent  entities.  We  believe  that we will  continue  to meet the  kosher
certification  requirements.  However,  the  failure  to retain  or obtain  such
certification  in  the  future  could  have a  material  adverse  effect  on our
business, financial condition or results of operations.

      Continuing Changes in Food Service Industry

      The results of  operations  of food  service  businesses  are affected by,
among other things,  changes in consumer  tastes,  national,  regional and local
economic conditions,  demographic trends,  traffic patterns and the type, number
and location of competing units.  Multi-unit food service  companies also can be
substantially  adversely affected by publicity resulting from poor food quality,
illness, injury or other health concerns or operating difficulties stemming from
one unit or a limited number of units, or health concerns as to particular types
of food or methods of preparing food. There can be no assurance that the Company
will be able  to  maintain  the  quality  of its  food  products.  In  addition,
dependence  on frequent  deliveries  of fresh  ingredients  also  subjects  food
service  businesses,  such as Creative  Bakeries,  to the risk that shortages or
interruptions  in supply  caused by adverse  weather or other  conditions  could
adversely affect the availability, quality and cost of ingredients.

      Competition

      The  baking  industry  is  a  highly  competitive  and  highly  fragmented
industry.  Creative Bakeries competes with national, regional and local bakeries
as well as  supermarket  chains  that  have  in-store  bakeries.  Many of  these
competitors are larger;  more  established and have greater  financial and other
resources than we do. Competition in both the retail and institutional/wholesale
baking  industry  is based on product  quality,  brand name  loyalty,  price and
customer service.  Competitors with significant economic resources in the baking
industry could, at any time, enter the wholesale or retail bakery/cafe business.

      Quarterly Fluctuations; Seasonality; Possible Volatility of Stock Price

      Creative   Bakeries'   operating   results  may  be  subject  to  seasonal
fluctuations,  especially during the Thanksgiving,  Christmas,  Chanukah, Easter
and Passover seasons. Such variations could cause the market price of the Common
Stock to fluctuate  substantially.  In addition, the stock markets in the United
States  have,  from  time to  time,  experience  significant  price  and  volume
fluctuations that are unrelated or disproportionate to the operating performance
of individual companies. Such fluctuations may adversely affect the price of the
Company's Common Stock.

      Possible Adverse Effect of Issuance of Preferred Stock

      Creative  Bakeries' Restated  Certificate of Incorporation  authorizes the
issuance of 1,000,000 (increased to 2,000,000 at August 4, 2004 annual meeting )
shares  of  Preferred  Stock,  with  designations,  rights  and  preferences  as
determined  from  time to time by the  Board of  Directors.  As a result  of the
foregoing,  the  Board of  Directors  can  issue,  without  further  shareholder
approval,  Preferred  Stock with dividend,  liquidation,  conversion,  voting or
other rights that could adversely affect the voting power or other rights of the
holders of Common Stock.  The issuance of Preferred  Stock could,  under certain
circumstances, discourage, delay or prevent a change in control of the Company.


                                                                            F-17
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

      As of the end of the  period  covered  by this  Quarterly  Report  on Form
10-QSB,  we  carried  out an  evaluation,  under  the  supervision  and with the
participation of our management,  including our Chief Executive Officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures.  Based on the forgoing,  our Chief  Executive  Officer has concluded
that our disclosure  controls and procedures were effective as of the end of the
quarter ended September 30, 2004.

      We maintain disclosure controls and procedures that are designed to ensure
that  information  required  to be  disclosed  in our  Exchange  Act  reports is
recorded,  processed,  summarized and reported within the time periods specified
in the SEC's  rules and forms,  and that such  information  is  accumulated  and
communicated  to our  management,  including  our Chief  Executive  Officer,  as
appropriate,  to  allow  timely  decisions  regarding  required  disclosure.  In
designing and  evaluating  the disclosure  controls and  procedures,  management
recognized  that any controls and  procedures,  no matter how well  designed and
operated,  can provide only  reasonable and not absolute  assurance of achieving
the desired  control  objectives.  In reaching a reasonable  level of assurance,
management  was required to apply its judgment in  evaluating  the  cost-benefit
relationship of possible controls and procedures. In addition, the design of any
system of  controls  also is based in part upon  certain  assumptions  about the
likelihood of future events,  and there can be no assurance that any design will
succeed in achieving  its stated goals under all  potential  future  conditions;
over time,  control may become inadequate  because of changes in conditions,  or
the degree of compliance with policies or procedures may deteriorate. Because of
the inherent limitations in a cost-effective  control system,  misstatements due
to error or fraud may occur and not be detected.

PART II - OTHER INFORMATION

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


      The company held its 2004 Annual Meeting of Stockholders on August 4, 2004
with the following proposal being submitted:

1. To elect six  directors of the Company to hold office until their  successors
are elected and have been qualified.

2. To approve  authorization  to the Board of Directors to amend the Certificate
of  Incorporation  to  authorize a reverse  split of the  outstanding  shares of
common stock in any split ratio  between 1:2 and 1:25 at the  discretion  of the
Board of Directors.

3. To approve an increase of authorized  capital stock from 10,000,000 shares of
common stock to 30,000,000  shares of common stock and from 1,000,000  shares of
preferred stock to 2,000,000 shares of preferred stock.

4. To approve  authorization  of the Board of Directors to amend the Certificate
of Incorporation at their discretion to change the name of the Company.

5. To approve Creative Bakeries, Inc. 2004 Stock Incentive Plan.

6. To ratify the appointment of Zeller, Weiss, & Kahn, LLP as Creative Bakeries,
Inc.'s independent auditors for the fiscal year ending December 31, 2004.

7. To transact any other  business  that may properly come before the meeting or
any adjournment or postponement thereof.

      The  record  date for  determining  stockholders  eligible  to vote at the
meeting was June 11, 2004. On the record date,  there were  6,501,211  shares of
the Company's common stock  outstanding and eligible to vote. There were present
at the  meeting  5,425,637  shares,  representing  83.46%  of the  common  stock
outstanding.


                                                                            F-18
<PAGE>


Each nominee for the Board of Directors was elected at the 2004 Annual  Meeting.
The following number of votes was cast for and against each nominee.

                                     For               Against
                                     ---               -------

          Ronald Schutte           4,556,537             0
          Vincent Bocchimmuzzo     4,937,037             0
          Anthony Merante          4,937,037             0
          Carmelo L. Foti          4,937,037             0
          Ben Borsellino           4,937,037             0
          David Rabe               4,937.037             0

The stockholders also approved the five remaining proposals. The following votes
were tabulated.

                                        For          Against       Abstain
                                        ---          -------       -------

          Proposal             2     4,921,312        23,500       480,825
          Proposal             3     4,551,537       394,100       480,000
          Proposal             4     4,939,037         6,600       480,000
          Proposal             5     2,947,236       393,900     2,084,501
          Proposal             6     4,939,037         4,600       482,000
          Proposal             7     4,484,183       389,200       552,254


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      31.1  Certification  of President and Chief Executive  Officer pursuant to
            Section 302 of the Sarbanes-Oxley Act of 2002.

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

(b)   Reports on Form 8-K

      None.


                                                                            F-19
<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


Dated November 15, 2004


          Signatures                                  Title
          ----------                                  -----

  /s/Ron Schutte                    President, Chief Executive Officer/Director
-----------------------------
  Ron Schutte



                                                                            F-20