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 June 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 August 16, 2004, there were 6,501,211 shares of the registrant's common
stock, par value $0.001 per share, outstanding.


<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003

                                      INDEX

PART I. FINANCIAL INFORMATION

         Item 1.  Condensed consolidated financial statements:

                  Balance sheet as of June 30, 2004 (unaudited)          F-2

                  Statement of operations for the six and
                  three months ended June 30, 2004 and 2003 (unaudited)  F-3

                  Statement of cash flows for the six months
                  ended June 30, 2004 and 2003 (unaudited)               F-4

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


         Item 2.  Management's discussion and analysis of
                  financial condition

         Item 3.  Controls and Procedures

PART II. OTHER INFORMATION

         Item 6.  Exhibits and reports on Form 8-A


SIGNATURES

CERTIFICATIONS


<PAGE>

PART I. FINANCIAL INFORMATION

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

                                     ASSETS

Current assets:
  Cash and cash equivalents                                        $      1,744
  Accounts receivable, less allowance for doubtful
   accounts of $400                                                     249,553
  Inventories                                                           154,308
  Prepaid expenses                                                       22,681
                                                                   ------------

    Total current assets                                                428,286
                                                                   ------------

Property and equipment, net                                             354,392
                                                                   ------------

Other assets:
  Security deposits                                                       5,765
  Tradename and licensing agreements,
    net of amortization                                                 119,106
                                                                   ------------
                                                                        124,871
                                                                   ------------

                                                                   $    907,549
                                                                   ============

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:
  Long-term debt, current portion                                  $     43,947
  Notes payable, officer, current portion                               434,999
  Accrued expenses                                                       52,835
  Accounts payable                                                      468,593
  Warrants payable                                                      115,625
                                                                   ------------

    Total current liabilities                                         1,115,999
                                                                   ------------

Other liabilities:
  Long-term debt, net of current portion                                 85,057
  Notes payable, officer, net of current portion                         83,869
  Deferred rent                                                          13,800
                                                                   ------------
                                                                        182,726
                                                                   ------------

Stockholders' equity (deficiency):
  Preferred stock $.001 par value, authorized 2,000,000
   shares, none issued
  Common stock, $.001 par value, authorized 10,000,000
   shares, issued and outstanding 6,501,211 shares                        6,501
  Additional paid in capital                                         11,388,163
  Deficit                                                           (11,785,840)
                                                                   ------------

                                                                       (391,176)
                                                                   ------------

                                                                   $    907,549
                                                                   ============

                 See notes to consolidated financial statements.

                                                                             F-2
<PAGE>

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

<TABLE>
<CAPTION>
                                                           Six Months                   Three Months
                                                          Ended June 30                Ended June 30,
                                                       2004           2003           2004           2003
                                                       ----           ----           ----           ----

<S>                                             <C>            <C>            <C>            <C>
Net sales                                       $ 1,157,905    $ 1,479,315    $   642,734    $   851,279

Cost of sales                                     1,038,150      1,300,030        545,815        725,532
                                                -----------    -----------    -----------    -----------

Gross profit                                        119,755        179,285         96,919        125,747
                                                -----------    -----------    -----------    -----------

Selling, general and

 administrative expenses                            504,158        377,392        309,795        203,554
Interest expense                                     32,467          3,823         19,450          2,283
                                                -----------    -----------    -----------    -----------
                                                    536,625        381,215        329,245        205,837
                                                -----------    -----------    -----------    -----------


Net income (loss)                               ($  416,870)   ($  201,930)   ($  232,326)   ($   80,090)
                                                ===========    ===========    ===========    ===========

Earnings per common share:
 Primary and fully diluted:
  Net loss per common share                     ($     0.07)   ($     0.04)   ($     0.04)   ($     0.01)
                                                ===========    ===========    ===========    ===========

Weighted average number of
 common shares outstanding                        5,667,840      5,446,750      5,838,929      5,446,750
                                                ===========    ===========    ===========    ===========
</TABLE>

                 See notes to consolidated financial statements.

                                                                             F-3
<PAGE>

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

                                                            2004           2003
                                                            ----           ----
Operating activities:
  Net Loss                                           $  (416,870)   $  (201,930)
  Adjustments to reconcile net loss to
   cash used in operating activities:
     Depreciation and amortization                        55,643         43,245
     Common stock issued for services                    100,000
     Bad debt
    Changes in other operating assets and
    liabilities from operations:
      Accounts receivable                                (74,570)       (54,603)
      Inventory                                           19,211          9,955
      Prepaid expenses                                    43,395         41,260
      Security Deposits                                   (1,051)            --
      Accounts payable                                   106,184         27,159
      Accrued expenses                                   (30,925)        23,563
      Deferred rent                                        8,280        (10,967)
                                                    ------------   ------------

      Net cash used in operating activities             (190,703)      (122,318)
                                                    ------------   ------------

Investing activities:
  Purchase of property and equipment                     (93,222)            --
                                                    ------------   ------------

      Net cash used in investing activities              (93,222)            --
                                                    ------------   ------------

Financing activities:
  Proceeds from notes payable                             81,652         16,450
  Payment of notes payable                              (250,000)            --
  Proceeds from officers' loans                          375,800             --
  Payment of officers' loans                              (4,306)        56,512
                                                    ------------   ------------

      Net cash provided by financing activities          203,146         72,962
                                                    ------------   ------------

Net decrease in cash and cash equivalents                (80,779)       (49,356)
                                                    ------------   ------------

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

Cash and cash equivalents, end of period            $      1,744   $      1,799
                                                    ============   ============


Supplemental disclosure:
  Cash paid during the period for:
      Interest:                                     $     22,332   $        743
                                                    ============   ============

                 See notes to consolidated financial statements.

                                                                             F-4
<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 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 six 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 June 30, 2004, the Company had no
      uninsured cash balances.

                                                                             F-5
<PAGE>

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

4.    Accounts receivable:

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

           Trade accounts                                 $  249,953
           Less allowance for doubtful accounts                 (400)
                                                          ----------

                                                          $  249,553
                                                          ==========

5.    Inventories:

      Inventories at June 30, 2004 consist of:

           Finished goods                                 $   24,900
           Raw materials                                      54,166
           Supplies                                           75,242
                                                          ----------

                                                          $  154,308
                                                          ==========

6.    Property and equipment:

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

           Baking equipment                               $1,492,810
           Furniture and fixtures                            100,998
           Leasehold improvements                            180,422
                                                          ----------
                                                           1,774,230

           Less:  Accumulated depreciation

                   and amortization                        1,419,838
                                                          ----------
                                                          $  354,392
                                                          ==========

      Depreciation expense was $39,843 and $40,245, respectively, for the six
      months ended June 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 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 six months ended June 30, 2004 were $7,998 and $12,798
      respectively.

                                                                             F-6
<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 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 $3,000 for each
      of the six months ended June 30, 2004 and 2003.

      The Company has 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
      carrying amount of the license agreement at June 30, 2004 was $42,981.

9.    Notes payable, 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.

      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 June 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
      $47,043 at June 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 $100,825 at June 30, 2004 including accrued interest.

                                                                             F-7
<PAGE>

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



9.    Notes payable, officer (continued):

      Maturities for the next five years are as follows:

      June 30, 2005                                           $ 434,999
      June 30, 2006                                              58,694
      June 30, 2007                                              11,556
      June 30, 2008                                              11,556
      June 30, 2009                                               2,063
                                                              ---------

                                                              $ 518,868

10.   Long-term debt:

      Note dated May 25, 2004 in the amount of $28,020, 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 the first quarter of 2004 plus an
      additional $3,000 during the quarter ended June 30, 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 $50,846 at June 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 June 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
      $50,158 at June 30, 2004. The holder of the note is a member of the board
      of directors.

      Maturities for the next five years are as follows:

      June 30, 2005                                         $  43,947
      June 30, 2006                                            16,762
      June 30, 2007                                            17,659
      June 30, 2008                                            18,648
      June 30, 2009                                            21,430
      Thereafter                                               10,558
                                                            ---------

                                                            $ 129,004
                                                            =========

11.   Common Stock:

      During the quarter ended June 30, 2004 the Company issued 20,854 shares of
      its common stock in exchange for legal services.

      327,869 shares were issued in exchange for a note payable due to a member
      of the board of directors. 655,738 shares were issued to the Company's
      chief executive officer as part of his compensation agreement dated Ma 1,
      2004.

      The shares were at the average price of the Company's common stock during
      the period the services were rendered. The issuance of the common stock
      was exempt from registration pururant to Section 4(2) of The Securities
      Act of 1933, as amended.

                                                                             F-8
<PAGE>

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

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 six
      months ended June 30, 2004 and 2003 was $98,502 and $131,127,
      respectively.

      The minimum future rentals on the facilities are as follows:

      June 30, 2005                                           $ 131,400
      June 30, 2006                                             154,000
      June 30, 2007                                             161,000
      June 30, 2008                                             167,000
      June 30, 2009                                              28,000
                                                              ---------

                                                              $ 641,400
                                                              =========

      Rental expense for all operating leases were $51,051 and $59,238,
      respectively, for the quarters ended June 30, 2004 and 2003.

      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
      June 30, 2004 5,948 shares of the Company's common stock was due under the
      agreement.

      On May 1, 2004 the Company entered into an employment agreement with its
      chief executive officer to extend his employment for an additional three
      years through May 1, 2007. The contract calls for a salary of $200,000 per
      year with $100,000 in the first year payable in common stock of the
      Company. Additional compensations in the form of a bonus of up to 250% of
      the base salary may be awarded based upon performance criteria and goals
      as established by the compensation committee.

                                                                             F-9
<PAGE>

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

13.   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 approximately $9,000,000 that may
      be offset against future taxable income. The carryforward losses expire at
      the end of the years 2006 through 2023.

14.   Warrants:

      In order to obtain financing for the acquisition of Greenberg's -L.P., a
      discontinued subsidiary, the Company sold to a lender for $1,000, a
      Convertible Note which in accordance with the terms of the conversion
      agreement, was converted by the lender into a warrant to acquire shares of
      stock of the Company in a number sufficient to equal 6% of the Company's
      then outstanding preferred and common stock. The warrant contains
      anti-dilutive provisions throughout its six (6) year life which entitles
      the holder to its applicable percentages of the Company's capital stock on
      the date the warrant is exercised. The warrant, representing 314,715
      shares, was to expire on October 1, 2001 and the lender inquired regarding
      exercising its right under the warrant before the expiration date. The
      lender, who is in bankruptcy, held discussions with the Company's
      management and has agreed to exercise the warrant under its original
      terms. The representative shares have been included in the computation of
      outstanding stock options 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
                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003

14.   Warrants (continued):

      At June 30, 2004 the Company also 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.

15.   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                                    5,667,840   5,446,750
                                                          ---------   ---------
         Common stock purchase warrants
         Primary and fully diluted weighted
           average common shares outstanding              5,667,840   5,446,750
                                                          =========   =========

                                                                            F-11
<PAGE>

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

OVERVIEW

      Record high prices paid for cream cheese and freight contributed to the
second quarter loss of $ 232,326. The reduction in gross sales for the second
quarter of 2004 as compared to the same period of 2003, was the result of
raising prices on marginally priced items (muffins and mini cakes), which
resulted in the items being replaced by the retailers. Approximately, $ 300,000
of sales was lost as a result of raising prices. $ 90,000 of new business
(cheesecake and tart shells) for the quarter was generated to offset the sales
decline. An extensive analysis of the costs associated with producing each item
has provided management with critical information to determine the most
profitable product mix.

      In an effort to attract and develop new business from large distributors,
Management implemented a complete quality control program. This includes a full
Hazards Analysis and Critical Control Points (HAACP) plan and establishing
policies and procedures to become ISO 9002 certified by the end of the first
quarter of 2005.

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

      Lack of sufficient cash flow has created the necessity for management to
provide direct financing to the company. $ 317,000 (as well as prior amounts)
were loaned to the company by the C.E.O. to prevent a default of a note and
subsequent foreclosure of the business.

      Management will continue to refine operations and control costs. Active
solicitation for companies to be acquired by or merged with Brooklyn Cheesecakes
& Desserts Company, continue to be evaluated.

RESULTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THREE AND SIX MONTHS ENDED
JUNE 30, 2003

      The Company had consolidated net sales of $642,734 and $851,279 for the
three months ended June 30, 2004 and 2003 respectively, a decrease of $208,545,
or 24%. Consolidated net sales for the six months ended June 30, 2004 and 2003
were $1,157,905 and $1,479,315 respectively, a decrease of $321,410, or 22%. The
decrease in sales is a result of the large retailer's discontinued use of our
muffin products.

      The cost of sales was $545,815 and $725,532 and $1,038,150 and $1,300,030
for the three and six months ended June 30, 2004 and 2003 respectively, a
decrease of $179,717 (25%) and $261,880 (20%) respectively. The reduction was a
direct result of the decreased sales. The gross profit percentages for the three
and six months ended June 30 average 15% and 10% respectively.

      Operating expenses totaled $309,795 and $203,554 for the three months
ended June 30, 2004 and 2003 and $504,158 and $377,392 for the six months ended
June 30, 2004 and 2003 respectively. This was an increase of $106,241 or 52% and
$126,766 or 34% respectively. This was a result of increased professional fees,
healthcare costs, amortization of loan costs and officer's salary.

      Interest expense was $19,450 and $2,283 for the three-months ended June
30, 2004 and 2003 respectively, an increase of $17,167 or 752%. The increase of
$28,644 or 749% to $32,467 from $3,823 for the six months ended June 30, 2004
and June 30, 2003 is a result of additional borrowing.

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 June 30, 2004, the Company had a negative working capital from
continuing operations of approximately $687,713 as compared to a negative
working capital of $295,978 at June 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.

<PAGE>

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 September 30, 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 Accountant 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.

      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 June 30, 2004 our accounts payable totaled $468,593 of which
$133,195 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.

<PAGE>

      We Have Not Issued Shares of Common Stock We May be Required to Issue
Pursuant to a Warrant.

      Inter-Equity Capital Partners, L.P., is a holder of a warrant for six
percent (6%) of the total number of shares of each class of our capital stock
outstanding, on a fully diluted basis after giving effect to the exercise of the
warrant and all other warrants, options and rights to acquire any shares of our
capital stock and the conversion of all the convertible securities (if any)
thereto issued by us. Inter-Equity Capital Partners, L.P., exercised its warrant
on October 15, 2001 but we have refrained from issuing the underlying shares. In
lieu of the shares, we have offered to make cash payments of $10,000. If we
cannot agree to a resolution of this matter, we may be required to issue 314,715
shares to Inter Equity Capital Partners, L.P.

      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 procured interim financing in the amount of $250,000 from an
unaffiliated lender. As part of this financing, we were required to pledge and
grant a security interest in all the assets of the Company as a condition
precedent. In the event of default, the lender will obtain, in addition to other
remedies, the right to all of our assets as well as the right to appoint
qualified members to our Board of Directors that would constitute a majority.

      In addition, we have previously procured financing from the following
directors: Ronald L. Schutte, the Chief Executive Officer and Chairman of the
Board, in the amount of $135,677.77 and Anthony J. Merante, a Director of the
Company, in the amount of $50,124.30. We intend to grant security interest to
these two directors that will be subordinate to the recent $250,000 financing.

      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 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
through 2004 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 $.04per share and as high as $1.02
per share in the twelve (12) month period ended June 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.


      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 June 30, 2004 was
approximately 7,426 shares.


<PAGE>

                          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 43 customers. 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. The loss of one or more of these significant
customers may result in a material adverse effect on our revenues and our
ability to become profitable or our ability to continue our business operations.

      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.


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


<PAGE>

      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.

      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.


<PAGE>

      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 2,000,000 (increased to 3,000,000 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.


<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 June 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 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.


<PAGE>

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on August 16, 2004.

CREATIVE BAKERIES, INC.

By: /s/Ron Schutte
   ----------------------------------
President and Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities indicated on
August 16, 2004.


  Signatures                        Title
                                    -----


                                    President, Chief Executive Officer/Director

  /s/Ron Schutte
  ----------------------------
  Ron Schutte