<PAGE>
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                      For the quarterly period ended   March 31, 1999 

                                       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 small business issuer as specified in its charter)

<TABLE>

<S>                                         <C>
          New York                              13-3832215      
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)             Identification Number)
</TABLE>

                     20 Passaic Avenue, Fairfield, NJ 07004

                    (Address of principal executive offices)

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

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 the number of Shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>

                 Class                        Outstanding at March 31, 1999
----------------------------------------      -----------------------------
<S>                                                <C>      
Common Stock, par value $0.001 per share              5,107,250
</TABLE>



<PAGE>
<PAGE>




                                      INDEX

Part I.  Financial information
<TABLE>

     <S>            <C>                                                <C>
         Item 1.   Condensed consolidated financial statements:
                   Balance sheet as of March 31, 1999                   F-2

                   Statement of operations for the three months

                   ended March 31, 1999 and 1998                        F-3

                   Statement of cash flows for the three months

                   ended March 31, 1999 and 1998                        F-4

                   Notes to condensed consolidated financial

                   statements                                       F-5 - F-13

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


</TABLE>

Part II.  Other information

Signatures



<PAGE>
<PAGE>


Item 1.

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              CONDENSED CONSOLIDATED BALANCE SHEET - MARCH 31, 1999
                                   (Unaudited)


<TABLE>
<S>                                                              <C>        
                                     ASSETS
Current assets:

  Cash and cash equivalents                                       $  155,964
  Accounts receivable, less allowance for doubtful
   accounts of $16,000                                               300,709
  Loans receivable                                                    28,940
  Inventories                                                        267,125
  Prepaid expenses and other current assets                           42,614
                                                                 -----------
    Total current assets                                             795,352
                                                                 -----------
Property and equipment, net                                          700,578
                                                                 -----------
Other assets:
  Goodwill, net of amortization                                      950,625
  Security deposits                                                    5,464
                                                                 -----------
                                                                     956,089
                                                                 -----------
                                                                  $2,452,019
                                                                 ===========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                               $   27,299
  Notes payable, bank                                                145,241
  Loans payable, other                                                26,500
  Accounts payable                                                   515,642
  Payroll taxes payable                                              104,090
  Accrued expenses                                                   295,878
                                                                 -----------
    Total current liabilities                                      1,114,650
                                                                 -----------
Other liabilities:
  Deferred rent                                                      147,917
  Net liabilities of discontinued operations less
   assets to be disposed of                                          518,721
                                                                 -----------
                                                                     666,638
                                                                 -----------
Stockholders' equity:
  Preferred stock, $.001 par value, authorized 2,000,000
   shares; none issued
  Common stock, $.001 par value, authorized 10,000,000
   shares, issued 5,291,750 shares                                     5,292
  Additional paid in capital                                      11,493,898
  Deficit                                                        (10,581,090)
                                                                 -----------
                                                                     918,100
  Common stock held in treasury, 184,500 shares                     (247,369)
                                                                 -----------
                                                                     670,731
                                                                 -----------
                                                                  $2,452,019
                                                                 ===========

</TABLE>

            See notes to condensed consolidated financial statements.

                                                                             F-2



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                   THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                 1998
                                                               1999            Restated
                                                               ----            --------
<S>                                                          <C>              <C>       
Net sales                                                    $907,435         $1,003,761

Cost of sales                                                 718,714            851,384
                                                           ----------         ----------
Gross profit                                                  188,721            152,377

Selling, general and administrative expenses                  297,106            358,064
                                                           ----------         ----------
Operating loss from continuing operations                    (108,385)          (205,687)
                                                           ----------         ----------
Other income (expenses):
  Sale of marketable securities                                 3,216
  Miscellaneous income                                         36,132
  Interest income                                               2,077              4,138
  Interest expense                                             (2,207)           (12,978)
                                                           ----------         ----------
                                                               39,218             (8,840)
                                                           ----------         ----------
Loss from continuing operations                               (69,167)          (214,527)

Discontinued operations:
  Loss from operations of New York facility
   to be disposed of                                          (29,722)          (212,719)
                                                           ----------         ----------
Net loss                                                    ($ 98,889)         ($427,246)
                                                           ==========         ==========
Earnings per common share:
  Primary and fully diluted:
    Loss on continuing operations                              ($0.01)            ($0.04)
    Loss from discontinued operations                           (0.01)            ( 0.04)
                                                           ----------         ----------
Net loss per common
 share                                                         ($0.02)            ($0.08)
                                                           ==========         ==========
Weighted average number
 of common shares
 outstanding                                                5,243,750          5,161,750
                                                           ==========         ==========

</TABLE>



            See notes to condensed consolidated financial statements.

                                                                             F-3



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                   THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                 1998
                                                             1999              Restated
                                                             ----              --------
<S>                                                        <C>                <C>       
Operating activities:
  Loss from continuing operations                          ($69,167)          ($214,527)
  Adjustments to reconcile income from
   continuing operations to cash provided from
   continuing operations:
     Depreciation                                            28,806              33,751
     Amortization                                            20,228              20,223
     Gain on sale of marketable securities                   (3,216)
   Changes in other operating assets and liabilities
    from continuing operations:
     Accounts receivable                                    (38,233)             38,110
     Inventory                                              (31,533)             72,012
     Prepaid expenses and other current assets               (1,055)             10,650
     Security deposits                                                          (22,989)
     Accounts payable                                        (9,998)             10,013
     Accrued expenses and other current liabilities         148,386            (260,300)
     Deferred rent                                           (3,421)             (9,259)
                                                            --------           --------
     Net cash provided by (used in) operating
      activities                                             40,797            (322,316)
     Net cash provided by (used in) discontinued
      operations                                           (187,882)            160,283
                                                           --------            --------
     Net cash used in operating activities                 (147,085)           (162,033)
                                                           --------            --------
Investing activities:
  Proceeds from sale of marketable securities                 4,533
  Purchase of property and equipment                         (7,170)
                                                           --------
     Net cash used in investing activities                   (2,637)
                                                           --------
Financing activities:
  Proceeds from issuance of common stock and
   warrants                                                 187,500
  Payment of debt                                           (11,440)            (18,922)
                                                           --------            --------
     Net cash provided by (used in) financing
      activities                                            176,060             (18,922)
                                                            --------          --------
Net increase (decrease) in cash and cash
 equivalents                                                 26,338            (180,955)
Cash and cash equivalents, beginning of period              129,626             479,312
                                                           --------            --------
Cash and cash equivalents, end of period                   $155,964            $298,357
                                                           ========            ========
Supplemental disclosures:
  Cash paid during the period:
    Interest paid during the period
      Continuing operations                                $  2,207            $  4,138
                                                           ========            ========
      Discontinued operations                              $      0            $      0
                                                           ========            ========
</TABLE>





            See notes to condensed consolidated financial statements.

                                                                             F-4



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 three 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, 1998 included in its Annual Report filed on
         Form 10-KSB.

2.      Principles of consolidation:

        The consolidated financial statements of Creative Bakeries, Inc. and
         subsidiaries include the accounts of all significant wholly owned
         subsidiaries, after elimination of all significant intercompany
         transactions and accounts.  The accounts of J.M. Specialties, Inc. and
         WGJ Desserts and Cafes, Inc. are included as the subsidiaries of
         Creative Bakeries, Inc.  Financial statements have been restated as of
         March 31, 1998 to reflect the discontinuation of the operations of WGJ
         Desserts, Inc. (see Note 15)

3.      Acquisition of J.M. Specialties, Inc.:

        On January 23, 1997, the Company purchased 100% of the outstanding
         common stock of J.M. Specialties, Inc. ("JMS") in a transaction to be
         accounted for as a purchase (the "Acquisition"). The purchase price of
         $2,160,000 consisted of (i) $900,000 in cash, (ii) 500,000 shares of
         the Company's common stock valued at fair market value of $1.75 per
         share (aggregating $875,000), and (iii) 350,000 purchase warrants
         valued at fair value of $1.10 per warrant (aggregating $385,000) to
         acquire 350,000 shares of the Company's common stock at $2.50 per
         share. The warrants are in the same form as those described below.

        JMS, which was founded in 1984, offers a line of both batter and frozen
         finished cakes, brownies and muffins - with muffins constituting
         approximately 90% of sales. These products are produced in batches
         using partially automated equipment at its facility in Parsippany, New
         Jersey. The product is sold to wholesale customers as well as
         supermarket distribution centers and is marketed primarily through food
         distribution companies in New Jersey and New York. In turn, according
         to JMS's management, the distributor sells approximately forty percent
         of the product to supermarkets and sixty percent to food service
         customers, such as hospitals, colleges, restaurants and corporate
         dining rooms.

        In connection with the Acquisition, the Company entered into an
         employment agreement with the selling shareholder pursuant to which he
         will serve as a director and chief executive officer of the Company at
         an annual salary level of $250,000 for 1997 and a minimum of $150,000
         thereafter. In addition, the Company agreed to provide $600,000 to JMS
         for working capital.

                                                                             F-5



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3.      Acquisition of J.M. Specialties, Inc. (continued):

        In connection with the acquisition, the Company transferred all of its
         then owned business assets to a newly formed wholly-owned subsidiary in
         exchange for all of the issued and outstanding shares if common stock
         of WGJ Desserts and Cafes, Inc. As a result, the Company currently acts
         as a holding company with two wholly-owned subsidiaries, JMS and WGJ.
         Upon obtaining the Company's stockholders, the Company changed its name
         to Creative Bakeries, Inc.

        In order to finance the Acquisition, the Company sold in a private
         placement 1,875,500 common stock purchase warrants ("the Placement
         Warrants") at a net price to the Company (after expenses of $315,000)
         of $1,747,500. Each Placement Warrant entitles the holder thereof to
         purchase one common share, par value $.001 per share, of the common
         stock of the Company at an exercise price per share of $2.50 for a term
         which will expire on December 31, 2000.

        The Company has the right to redeem the Placement Warrants, in
         installments, at a redemption price of $.10 per warrant commencing six
         months after the date of issuance if the stock trades at a designated
         level for a least five trading days prior to the month preceding the
         date on which the redemption right may be exercised.

        The holders of the Placement Warrants have a put option pursuant to
         which for a 60 day period prior to their expiration date, the holder
         has the right to require the Company to repurchase the Placement
         Warrants for a consideration consisting of $.10 per warrant plus 40% of
         a share of common stock. In addition, the Placement Warrants have
         standard anti-dilution protection.

        The assets acquired and the liabilities assumed at December 31, 1996, in
         connection with the Acquisition, are as follows:

<TABLE>

                   <S>                                           <C>         <C>
                    Assets:
                      Cash                                      $ 84,129
                      Accounts receivable                        224,378
                      Notes receivable                            60,000
                      Inventories                                274,803
                      Prepaid expenses                            14,063
                      Property and equipment                     483,608
                      Other assets                                27,999
                                                                --------
                                                                                 $1,168,980
                    Liabilities:
                      Long-term debt                              23,607
                      Notes payable - bank                        75,000
                      Accounts payable and accrued expenses      123,938
                                                                --------
                                                                                    222,545
                                                                                 ----------
                    Excess of net assets acquired over
                     liabilities assumed                                            946,435
                    Goodwill                                                      1,213,565
                                                                                 ----------
                                                                                 $2,160,000
                                                                                 ==========

</TABLE>
                                          
                                                                             F-6



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3.      Acquisition of J.M. Specialties, Inc. (continued):

        Under the terms of its agreement with InterEquity Capital Partners,
         L.P., the Company reserved 185,682 shares of its common stock for
         issuance under the warrant. Management ascribed a fair value of $1.10
         per common share.

4.      Acquisition of Chatterly Elegant Desserts, Inc.:

        On September 1, 1997, the Company acquired 100% of the outstanding
         common shares of Chatterly Elegant Desserts, Inc. (Chatterly) in a
         transaction to be accounted for as a pooling of interest. The Company
         issued 1,300,000 of its common shares pursuant to the acquisition, of
         which 200,000 shares were returned to the Company on March 10, 1998
         when the seller's sales agreement was amended.

        Chatterly, which was founded in 1985, produces a line of cakes, tortes
         and other dessert items which are made in its facility in Fairfield,
         New Jersey. The products are sold to wholesale customers as well as
         supermarkets and other food distributors in New Jersey and New York.

        In connection with the acquisition of Chatterly Elegant Desserts, Inc.,
         the Company entered into an agreement with the selling shareholder for
         a two year period commencing September 1, 1997. The agreement calls for
         an annual salary of $100,000 to be paid to such shareholder.

        The assets acquired and the liabilities assumed at December 31, 1996, in
         connection with the acquisition of Chatterly, are as follows:

<TABLE>

                <S>                                           <C>              <C>
              Assets:
                 Accounts receivable                          $124,950
                 Inventories                                   128,576
                 Prepaid expenses                                4,713
                 Property and equipment                        422,493
                 Other assets                                   56,700
                                                              --------
                                                                               $737,432
              Liabilities:
                 Long-term debt                                111,034
                 Notes payable, others                          47,320
                 Accounts payable and accrued expenses         421,960
                 Deferred rent                                 136,958
                                                              --------
                                                                                717,272
                                                                               --------
              Excess of net assets acquired over
                 liabilities assumed                                           $ 20,160
                                                                               ========

</TABLE>


                                                                             F-7



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5.      Property and equipment:

        The following is a summary of property and equipment at March 31, 1999:

<TABLE>

                    <S>                                   <C>       
                    Baking equipment                     $1,427,719
                    Furniture and fixtures                   76,813
                    Leasehold improvements                  180,422
                                                         ----------
                                                          1,684,954
                    Less:  Accumulated depreciation
                            and amortization                984,376
                                                         ----------
                                                         $  700,578
                                                         ==========
</TABLE>

6.      Intangible assets:

        The excess cost over the fair value of the net assets acquired from
         J.M. Specialties, Inc. aggregated $1,213,545. This goodwill has been
         amortized over its estimated useful life of fifteen years. Amortization
         charged to operations amounted to $20,228 in 1999 and 1998.

7.      Deferred rent:

        The accompanying financial statements reflect rent expense on a
         straight-line basis over the life of the lease. Rent expense charged to
         operations differs with the cash payments required under the terms of
         the real property operating leases because of scheduled rent payment
         increases throughout the term of the leases. The deferred rent
         liability is the result of recognizing rental expense as required by
         generally accepted accounting principles.

8.      Common stock:

        In January 1999, the Company issued 150,000 of its common stock at $1.25
         for total proceeds of $187,500.

        In January 1999, the Company issued 40,000 of its common shares in lieu
         of payment of a note amounting to $100,000 held by a former
         shareholder.

                                                                             F-8



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9.      Commitments and contingencies:

        Employment agreements:

        In conjunction with the purchase of Chatterly Elegant Desserts, Inc.,
         The Company entered into an employment agreement with a former employee
         of Chatterly. The agreement covers a three year period commencing upon
         the transfer of the Company's shares to the seller of Chatterly on
         September 1, 1997. In the first year of the contract the employee is to
         receive warrants to purchase 20,000 shares of the Company's common
         stock at $2.50 per share. In the second two years of the agreement, the
         employee is to receive an annual salary of $150,000 per year. The
         Company has not recognized compensation on the granting of warrants to
         this employee since the fair value of the warrants is less than the
         exercise price. As of February 1998, this employee resigned and the
         employment agreement, according to management, has been terminated.
         This debt was settled in January of 1999 with the issuance of 40,000 of
         the Company's shares in complete satisfaction of the amount due of
         $100,000.

        Litigation matters:

        The Company and its subsidiary, WGJ Desserts, Inc., have been named as
         defendants in an action entitled Bacal v Creative Bakeries, Inc. which
         was filed in the Supreme Court of the State of New York for the County
         of New York. The complaint in the action alleges that defendants Edmund
         Abramson, currently a director of the Company and Willa Abramson, who
         resigned as a director in 1996, allegedly acting on behalf of the
         Company and Greenberg, entered into an agreement with plaintiff, Murray
         Bacal, whereby Mr. Bacal would purchase warrants for common stock of
         the Company and that the Abramson's agreed to repurchase the warrants
         for the same price at which they were originally sold to him, plus out
         of pocket expenses. As a consequence, the complaint seeks $131,500 in
         compensatory damages and $1,000,000 in punitive damages. On December
         14, 1998, the Company moved by order to show cause to dismiss the
         complaint in its entirety as against the Company based on the fact that
         the action involves a private transaction between the plaintiff and the
         Abramson's, and the complaint fails to state a cause of action against
         Creative Bakeries, Inc. After a full briefing and oral argument, the
         papers were taken by the court on submission and the Company is
         awaiting a ruling on that motion.

        The Company has also been named as a defendant in an action entitled
         Ackerman v Alan Sloan, an adversary proceeding brought in the United
         States Bankruptcy Court by the Chapter 7 trustee of Alliotto Bakery
         Cafe, Inc. The complaint alleges that the Company, while operating as
         William Greenberg, Jr. Desserts and Cafes, Inc. used customer lists and
         property of the Chapter 7 debtor for a period of several weeks sometime
         after June 1998 without having paid fair value or consideration. While
         the Company does not believe it committed any actionable conduct, the
         Company does not believe the claim is material because it is believed
         to involve a potential exposure of only several thousand dollars. The
         Company has not yet filed a formal response to the claim.

                                                                             F-9



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10.     Long-term debt:

        Equipment with a cost of $197,000 has been pledged as collateral on a
         note payable in monthly installments of $2,909, including interest. The
         notes carry interest varying rates of 10.30% to 17.87% and mature
         between 1998 and 2000.

        The total future annual payments as of March 31, 1999 are as follows:

<TABLE>

                           <S>                           <C>    
                           March 31, 2000                $27,299
                                                         =======
</TABLE>

11.     Earnings per share:

        Primary earnings per share is computed based in 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 issued after December 15, 1997, entities with a loss
         from continuing operations, the exercise of any potential shares
         increases the number of shares outstanding and results in a lower loss
         per share. Thus, potential issuances are excluded from the calculation
         of earnings per share. These common stock purchase warrants amounted to
         2,485,000 in 1999 and 1998.

        Reconciliation of shares used in computation of earnings per share:

<TABLE>
<CAPTION>
                                                                  1999               1998
                                                                  ----               ----
              <S>                                              <C>                <C>      
               Weighted average of shares actually
                 outstanding                                   5,243,750          5,161,750
               Common stock purchase warrants                                              
                                                               ---------          ---------
               Primary and fully diluted weighted
                 average common shares outstanding             5,243,750          5,161,750
                                                               =========          =========

</TABLE>

12.     Inventories:

<TABLE>

       <S>                                             <C>     
        Inventories consist of the following:

                        Raw materials                   $ 93,494
                        Finished goods                    74,795
                        Packaging supplies,
                         labels, etc.                     98,836
                                                        --------
                                                        $267,125
                                                        ========

</TABLE>

                                                                            F-10



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13.     Supplemental schedule of non-cash investing and financing activities:

<TABLE>
<CAPTION>
                                                               1999             1998
                                                               ----             ----
           <S>                                               <C>               <C>
            Common shares issued in consideration
              of legal, consulting fees and other
              obligations                                    $100,000          
                                                             --------         --------
                                                             $100,000         $      0
                                                             ========         ========
</TABLE>

14.     Note receivable:

        On November 3, 1998, the Company sold its one remaining retail facility
         for $405,000 which represented disposition of equipment and a license
         to sell under the "William Greenberg, Jr. Desserts and Cafes" name. The
         agreement called for a cash down payment of $110,000 with the remainder
         being paid on a note receivable due in semi-annual installments of
         $36,875 plus interest at prime.

        The maturities of the notes are as follows:

<TABLE>

                       <S>                           <C>     
                        March 31, 2000               $ 73,750
                        March 31, 2001                 73,750
                        March 31, 2002                 73,750
                        March 31, 2003                 73,750
                                                     --------
                                                     $295,000
                                                     ========
</TABLE>

        In the event that the licensee opens and operates any additional retail
         store(s) utilizing the license (other than the original retail store)
         and the annual gross retail sales of any such store(s) exceeds
         $400,000, then the licensee shall pay the licensor (the Company) a five
         percent royalty on all sales in excess of the $400,000 of sales in each
         store. The licensee shall pay the licensor a royalty on a semi-annual
         basis of 3% of all mail order sales in excess of $100,000.

15.     Discontinued operations:

        In 1998, the Company adopted a formal plan to close WGJ Desserts and
         Cafes, Inc., its New York manufacturing facility, which was done in
         July of 1998 and to dispose of its one remaining retail store, which
         was accomplished in November 1998. The New Jersey facility was
         unaffected and still continues to sell and manufacture.

                                                                            F-11



<PAGE>
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

15.     Discontinued operations (continued):

        The sale of the final retail location resulted in a selling price of
         $405,000 which includes a note receivable of $295,000. The sale
         resulted in a gain of $321,350.

        Net liabilities, less assets to be disposed of, of WGJ Desserts, Inc.
         consisted of the following as of March 31, 1999:

<TABLE>

                   <S>                                   <C>     
                    Accounts payable                     $394,785
                    Accrued payroll                       303,084
                    Accrued expenses                      222,775
                    Deferred rent                          42,652
                                                         --------
                                                          963,296
                                                         --------
                    Cash                                   45,556
                    Notes receivable                      299,000
                    Interest receivable                     9,271
                    Property and equipment                 35,000
                    Covenant not to compete                31,250
                    Security deposits                      24,498
                                                         --------
                                                          444,575
                                                         --------
                                                         $518,721
                                                         ========

</TABLE>


        Information relating to discontinued operations for WGJ Desserts and
         Cafes, Inc. for the three months ended March 31, 1999 and 1998 is as
         follows:

<TABLE>
<CAPTION>
                                                          1999              1998
                                                          ----              ----
             <S>                                          <C>             <C>
              Net sales                                                   $366,041

              Cost of sales                                                163,270
                                                                          --------
              Gross profit                                                 202,771

              Operating expenses                          $35,360          272,317
                                                          -------         --------
              Loss from operations                        (35,360)         (69,546)

              Loss on abandonment of leasehold
               improvements                                                143,173

              Interest income                               5,638                 
                                                          --------        --------
              Net loss from discontinued operations      ($29,722)       ($212,719)
                                                          ========        ========

</TABLE>



                                                                            F-12



<PAGE>
<PAGE>



                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

16.     Other matters:

        The year 2000 issue relates to the inability of many electronic data
         processing (EDP) systems to accurately process year-date data beyond
         the year 1999. Unless year 2000 problems are remedied, significant
         problems relating to the integrity of all electronically processed
         information based on time will occur.

        Additionally, there are many other operational issues that need to be
         assessed, such as computer-run maintenance systems, as well as systems
         that may be indirectly controlled by computer by way of a chip embedded
         in their designs.

        The effect, if any, at this time about the problems that could occur and
         the costs to remedy can not be determined.

                                                                            F-13



<PAGE>
<PAGE>



Item 2. Management's Discussion and Analysis of Financial Condition and Plan of
        Operation

General:

In order to concentrate on the wholesale end, the company has
been downsizing its retail operations since 1997. Four stores were shut down as
of December 1997. In March '98 the Company closed its operations at the Macy's
location. In June '98 the Company closed its commissary at 47th street after
entering into a co-packing arrangement with JMJ Baking Corp.

In early November 1998 the Company sold its only remaining retail store on
Madison Ave., thus completing its exit from direct involvement in retailing.

The buyer has purchased:

1. The Madison Avenue Store

2. The license to open additional stores on which the Company will get royalty
and 

3. A 50% stake in the wholesale and mail order business.

At March 31, 1999 to the extent the Company may have taxable income in future
periods, there is available a net operating loss for federal income tax purposes
of approximately $7,100,000 which can be used to reduce the tax on income up to
that amount through the year 2011.

b. Results of Operations (continuing ) for three months ending March 31, 1999
vs. three months ended March 31, 1998:

The Company's consolidated revenues aggregated $907,435 vs. $1,003,761. The cost
of goods sold was $718,714 vs. $851,384. Operating expenses were $297,106 vs.
$358,064. As a result, the loss from operations for the first quarter 1999 and
1998 was $108,385 and $205,687 respectively. The reduction in sales was mainly
due to the retrenchment in the retail division. The related much steeper
reduction in operating expenses was due to the restructuring at the WGJ
Subsidiary with the resultant cost savings.

The net interest expense for the quarter was $2,207.

The resulting net loss aggregated $69,167 for 1999 ($.01) per share and $214,527
for 1998 ($.04) per share.

Net loss from discontinued operations was 29,722 for 1999 ($0.01) per share vs.
212,719 for 1998 ($0.04) per share.

Batter Bake-Chatterley Inc., (the BBC subsidiary) offers a line of batter and
frozen finished cakes, muffins, tart shells and other desserts. BBC's financial
records and affairs




<PAGE>
<PAGE>



are kept separate from the parent but included in the consolidated financial
statements at March 31, 1999 and 1998.

c.       Plan of Operation:

Exit from Retail Operations:

After analyzing the Company's retail operations, management concluded that the
unprofitable retail division was diverting management's attention away from
pursuing profitable opportunities in the Company's other division.

Therefore, by December 31, 1997, the company closed down four of its six stores.
A fifth store, in Macy's cellar was taken over by Ferrara Bakery from April 1,
1998. The commissary was closed down on June 30, 1998 and the last remaining
store on Madison Avenue was sold in early November, 1998.

The Company retains a 50% stake in the Wholesale and Mail Order Business which
it will develop jointly with the new owners.

Since there was no justification to maintain the commissary, the Company entered
into a co-packing arrangement with JMJ Baking Corp. to supply the product at the
same high quality standard. In order to assure the quality, JMJ has employed
Greenberg's bakers and has agreed to use only Greenberg's recipes.

In connection with the restructuring plan, management has written down property
& equipment as of March 31, 1999 to approximately $35,000. The Company had
charged 1996 with a $450,000 provision for actions aimed at restructuring the
Company, of which $369,459 was actually incurred as of March 31, 1999. This
charge mainly comprises write down of leasehold improvements on stores that have
been closed down, provisions for lease obligations on certain retail stores, and
charges for consultants involved in the restructuring. By taking the above
actions, future periods will not be burdened with the amortization, depreciation
or expense of these costs.

We took a step back at the retail end in order to move forward. We are now at a
point where we have minimized the losses and are pursuing ways of growing the
business profitably.

Wholesale Operations:

The next phase in the company's plan of action is to build up the wholesale end
of its business with fewer but profitable products. This process includes the
following:



<PAGE>
<PAGE>



Calling on supermarket headquarters and chain restaurant accounts. Brokers have
been appointed and sales calls and visits are being made.

Continue to expand the fat free product line targeting existing as well as new
customers and

Enter into co-packing arrangements whereby the company would introduce private
label products of other bakery operations.

Liquidity and Capital Resources:

Since its inception the Company's only source of working capital has been the
$8,642,500 received from the issuance of its securities.

In June 1995, the Company issued 180,000 shares of common stock to unrelated
parties for $600,000 and in August 1995, the Company issued 60,000 shares of its
common stock to unrelated parties for $200,000. In connection with the
acquisition of Greenberg's- L.P., the Company received $2,000,000 from the sale
of two notes to InterEquity Capital Partners, L.P. ("InterEquity"). During
October 1995, the Company received net proceeds of $4,900,000 from the sale of
1,150,000 shares of its common stock in an initial public offering. During
January 1997 the Company received net proceeds of $1,747,500 from the private
placement of 1,875,500 common stock purchase warrants at $1.10 per warrant.
During October 1997 the Company received net proceeds of $883,000 from the
exercise of a portion of these common stock warrants. During January 1999, the
Company received a further $187,500 from the exercise of another 150,000 of
these warrants. Of the $5,700,000 proceeds from the aforementioned stock sales:
(i) $2,125,000 was issued to repay the InterEquity debt including interest; (ii)
$2,615,000 was used in operations; (iii) $765,000 was used to purchase property,
equipment and leaseholds; and (iv) $195,000 was used for general corporate
purposes. The $1,650,000 proceeds from the private placement warrants was used
to acquire JMS. Of the $1,071,000 proceeds from the exercise of warrants
$325,000 was used for consolidation and merger of JMS and Chatterley and the
balance is being used for corporate purposes and to fund new business.

As of March 31, 1999, the Company (continuing operations) has a negative working
capital of approximately $319,298 as compared to a negative working capital of
$1,306,004 at March 31, 1998.

During 1997 and 1998 Management took actions aimed at restructuring the Company
in order to reduce operating costs and enhance the Company's focus and
efficiency. Pursuant to the restructuring a new management team was put into
place, executive contracts and leases were renegotiated and certain positions
were eliminated and an exit strategy out of retailing was completed.


<PAGE>
<PAGE>



As a result of the new strategy and concentration on growing Batter
Bake-Chatterley, revenues have been increased. The Company has secured
approximately $1,000,000.00 in new annualized business and estimates an
additional $800,000 in annualized sales starting in June 1999.

As announced the company is negotiating a merger with Paramark Corporation.


 <PAGE>
<PAGE>

                                  SIGNATURES

    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 May 20, 1999.


                                    CREATIVE BAKERIES, INC.

                                    By: /s/ Philip Grabow
                                        --------------------------
                                        Philip Grabow
                                        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 May 20, 1999.


<TABLE>
<CAPTION>

Signatures                                       Title
----------                                       -----
<S>                                              <C>
                                                 President, Chief Executive
/s/ Philip Grabow                                Officer/Director
----------------------                           
Philip Grabow

                                                 Chief Financial Officer
/s/ Ashwin R. Shah                               (Principal Accounting Officer)
----------------------
Ashwin R. Shah


                                                 Director
----------------------
Richard Fector


/s/ Raymond J. McKinstry                         Director
----------------------
Raymond J. McKinstry


/s/ Kenneth Sitomer                              Director
----------------------
Kenneth Sitomer


/s/ Karen Brenner                                Director
----------------------
Karen Brenner


/s/ Yona Abrahami                                Director
----------------------
Yona Abrahami

</TABLE>


                                     27

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