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 March 31, 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 May 14,  2004,  there were  5,496,750  shares of the  registrant's  common
stock, par value $0.001 per share, outstanding.

<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003

                                      INDEX



<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
<S>      <C>      <C>                                                             <C>
         Item 1.  Condensed consolidated financial statements:

                  Balance sheet as of March 31, 2004 (unaudited)                         F-2
                  Statement of operations for the three
                           months ended March 31, 2004 and 2003 (unaudited)              F-3
                  Statement of cash flows for the three months
                  ended March 31, 2004 and 2003 (unaudited)                              F-4
                  Notes to condensed consolidated financial
                  Statements                                                      F-5 - F-10


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

         Item 3.  Controls and Procedures
</TABLE>


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 - March 31, 2004
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                       ASSETS

<S>                                                                              <C>
Current assets:
  Cash and cash equivalents                                                      $        858
  Accounts receivable, less allowance for doubtful
   accounts of $400                                                                   210,562
  Inventories                                                                         192,885
  Prepaid expenses                                                                     47,837
                                                                                 ------------

    Total current assets                                                              452,142
                                                                                 ------------

Property and equipment, net                                                           300,737
                                                                                 ------------

Other assets:
  Security deposits                                                                     4,714
  Loan acquisition costs, net of amortization                                           7,998
  Tradename and licensing agreements,
    net of amortization                                                               120,606
                                                                                 ------------

                                                                                      133,318

                                                                                 $    886,197
                                                                                 ============
                                        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Long-term debt, current portion                                                $     36,244
  Notes payable                                                                       327,158
  Accounts payable                                                                    489,250
  Accrued expenses                                                                     74,236
  Notes payable, officer                                                               85,358
  Warrants payable                                                                    115,625
                                                                                 ------------

    Total current liabilities                                                       1,127,871
                                                                                 ------------

Other liabilities:
  Long-term debt, net of current portion                                               61,265
  Deferred rent                                                                         9,660
                                                                                 ------------

                                                                                       70,925

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 5,496,750 shares                                      5,497
  Additional paid in capital                                                       11,235,418
  Deficit                                                                         (11,553,514)
                                                                                 ------------

                                                                                     (312,599)

                                                                                 $    886,197
                                                                                 ============
</TABLE>

           See notes to condensed consolidated financial statements.

                                                                             F-2
<PAGE>




                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                   THREE MONTHS ENDED March 31, 2004 AND 2003
                                   (UNAUDTIED)





                                       Three Months
                                      Ended March 31,
                                   2004              2003
                                -----------      -----------

Net sales                       $   515,171      $   628,036

Cost of sales                       492,335          574,498
                                -----------      -----------

Gross profit                         22,836           53,538
                                -----------      -----------

Selling, general and
 administrative expenses            194,363          173,838
Interest expense                     13,017            1,540
                                -----------      -----------
                                    207,380          175,378
                                -----------      -----------

Net (loss)                      ($  184,544)     ($  121,840)
                                ===========      ===========

Earnings per common share:
 Primary and fully diluted:
  Net (loss) per
   common share                 ($     0.03)     ($     0.02)
                                ===========      ===========

Weighted average number of
 common shares outstanding        5,496,750        5,446,750
                                ===========      ===========









           See notes to condensed consolidated financial statements.

                                                                             F-3
<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                        2004         2003
                                                                                        ----         ----
<S>                                                                                  <C>           <C>
Operating activities:
  Net loss                                                                           ($184,544)    ($121,840)
  Adjustments to reconcile net loss from
   operations to cash used in
   operating activities:
     Depreciation and amortization                                                      25,578        21,623
     Interest accrued on long-term debt                                                  2,029
    Changes  in  other  operating   assets  and   liabilities   from  continuing
    operations:
      Accounts receivable                                                              (35,579)        6,011
      Inventory                                                                        (19,366)       10,864
      Prepaid expenses                                                                  18,239        21,299
      Accounts payable                                                                  73,091        25,821
      Accrued expenses                                                                 (13,625)       (8,194)
      Deferred rent                                                                      4,140        (5,483)
                                                                                      --------      --------

      Net cash used in operating activities                                           (130,037)      (49,899)

Investing activities:
  Purchase of property and equipment                                                   (19,000)
                                                                                      --------      --------

      Net cash used in investing activities                                            (19,000)
                                                                                      --------      --------

Financing activities:
  Proceeds from officers' note payable                                                  41,443
  Proceeds from notes payable                                                           32,315
  Payment of officers' note payable                                                     (3,877)
  Payment of notes payable                                                              (2,509)
                                                                                      --------      --------

      Net cash provided by financing activities                                         67,372
                                                                                      --------      --------

Net decrease in cash and cash equivalents                                              (81,665)      (49,899)

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

Cash and cash equivalents, end of period                                              $    858      $  1,256
                                                                                      ========      ========

Supplemental disclosures:
  Cash paid during the year for:
      Interest:                                                                       $ 10,076      $      0
                                                                                      ========      ========
</TABLE>





            See notes to condensed consolidated financial statements.

                                                                             F-4
<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   THREE MONTHS ENDED MARCH 31, 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  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, 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  condensed  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 March 31,  2004,  the Company had no
        uninsured cash balances.

                                                                             F-5
<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003



4. Accounts receivable:

      Following is a summary of receivables at March 31, 2004:

           Trade accounts                                            $  210,962
           Less allowance for doubtful accounts                     (       400)
                                                                     ----------

                                                                     $  210,562

5. Inventories:

      Inventories at March 31, 2004 consist of:

           Finished goods                                            $   55,623
           Raw materials                                                 41,058
           Supplies                                                      96,204
                                                                     ----------

                                                                     $  192,885

6. Property and equipment:

      The following is a summary of property and equipment at March 31, 2004.

           Baking equipment                                          $1,421,608
           Furniture and fixtures                                        97,978
           Leasehold improvements                                       180,422
                                                                     ----------
                                                                      1,700,008
           Less:  Accumulated depreciation
                   and amortization                                   1,399,271
                                                                     -----------
                                                                     $  300,737

      Depreciation  expense  was  $19,278  and  $20,123,  respectively,  for the
quarters ended March 31, 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. These costs are being amortized over the life of the loan.
        Loan amortization  expense for the quarter ended March 31, 2004 amounted
        to $4,800.


                                                                             F-6
<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   THREE MONTHS ENDED MARCH 31, 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 $1,500 for
         each of the quarters ended March 31, 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 March 31,
         2004 was $42,981.


9. Notes payable:

        During the quarter a member of the Board of  Directors  made  additional
         loans to the Company in the amount of $29,806,  net of repayments.  The
         loans carry an interest rate of 8.25% and are due on demand.

        The terms of the loan transactions by the Company's Board member were on
         a fair and reasonable  basis and on terms more favorable to the Company
         than could have been obtained with  non-affiliated  parties as a result
         of the tenuous financial condition at the time.

        The Company has a note payable in the amount of $250,000  that  requires
         the Company to meet certain  covenant  requirements.  At March 31, 2004
         the Company was not in compliance  with one of the covenants in respect
         to certain sales  levels.  The Company's  Chief  Executive  Officer has
         negotiated  an  alternative  source of capital to replace this note and
         pay it in full.


10. Notes payable, officer:

        During the quarter an officer  made  additional  loans to the Company in
         the amount of $37,566,  net of repayments.  The loans carry an interest
         rate of 8.25% and are due on demand.

        The terms of the loan  transactions  by the Company's  officer were on a
         fair and  reasonable  basis and on terms more  favorable to the Company
         than could have been obtained with  non-affiliated  parties as a result
         of the tenuous financial condition at the time.

                                                                             F-7
<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003

11.     Long-term debt

        During 2002,  an officer of the Company made loans to the Company in the
         amount of $88,000.  On January 1, 2003 this short-term note was amended
         by an agreement  extending the maturity date to December 31, 2005.  The
         note bears  interest at 8.5% per annum.  Interest only payments are due
         on the principal balance  outstanding at each month's end for the first
         eighteen  months and  principal  and interest  payments are due monthly
         thereafter  until note maturity.  If any amount owing under the note is
         not paid when due the  interest  rate on that unpaid  portion  shall be
         12.5% per annum. The balance on the note was $97,509 at March 31, 2004,
         including accrued interest.

        Maturities for long-term debt are as follows:

        March 31, 2005                                                  $ 36,244
        March 31, 2006                                                    61,265
                                                                        --------
                                                                        $ 97,509


12.     Commitments and contingencies:

        In August 2003, the Company  entered into an amendment under a net lease
         for its office and plant  facility in New Jersey.  The terms call for a
         2,000 square foot  reduction in rental space and a reduction in current
         annual  rent from  $200,000  to  $136,800  during the first  year.  The
         amendment also shifts  responsibility  for snow removal and landscaping
         from the  lessee to the  lessor.  The  rental  amounts  under the lease
         amendment  commenced  September 1, 2003 and expire August 31, 2008. The
         minimum  future rentals on the facility over the next five years are as
         follows:

           March 31, 2005                                               $141,000
           March 31, 2006                                                151,000
           March 31, 2007                                                159,500
           March 31, 2008                                                165,500
           Thereafter                                                     70,000
                                                                        --------
                                                                        $687,000

        Rental  expense  for all  operating  leases were  $51,051  and  $59,238,
         respectively, for the quarters ended March 31, 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.

                                                                             F-8
<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003


12.     Commitments and contingencies (continued):

        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 March 31, 2004 18,741 shares of the Company's common stock
         were due under the agreement with 9,063 shares  representing the amount
         due under the agreement for the quarter ending March 31, 2004.


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.

                                                                             F-9
<PAGE>

                    CREATIVE BAKERIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   THREE MONTHS ENDED MARCH 31, 2004 AND 2003

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 did not act upon the
         warrant.  The  Company  has not heard from the  lender  since and it is
         management's   opinion  the  warrant   will  not  be   exercised.   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.

        At March 31,  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  11,   commitments  and   contingencies,   and  are
         exercisable as described in Note 11 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                                  5,496,750     5,446,750
                                                        ---------     ---------
         Common stock purchase warrants
         Primary and fully diluted weighted
           average common shares outstanding            5,496,750     5,446,750
                                                        =========     =========


                                      F-10
<PAGE>

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

         Inclement weather, record high commodities prices and reduced purchases
from a high volume  customer,  contributed to a first quarter loss of $ 184,544.
The  reduction  in gross sales for the first  quarter of 2004 as compared to the
same period of 2003,  was the result of attempting to raise prices on marginally
priced items. A large retailer of muffins representing approximately $150,000 in
sales  for the  same  period  of 2003,  discontinued  using  most of our  muffin
products.  In the short run the loss of sales revenue  contributed to the severe
lack of working capital, however, in the long run the products discontinued were
not included in the planned product mix of the future.

         Management   continues  to  recruit   quality   employees  who  can  be
multi-tasked  to  maximize  efficiency  of  operations  and  reduce  costs.  Key
employees were hired to work in the accounting department,  warehouse operations
and quality control.

         New product  development to support items for export,  low carbohydrate
markets,  and  portion  controlled  specialty  vendors  continues  to be a  high
priority for management.

         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 MONTHS ENDED MARCH 31, 2004 COMPARED TO THREE MONTHS ENDED MARCH 31,
2003

          The Company had  consolidated  net sales of $515,171  and $628,036 for
the three  months  ended  March 31,  2004 and 2003  respectively,  a decrease of
$112,865,  or 18%.  The  decrease  in sales is a result of the large  retailer's
discontinued use of our muffin products.

          The cost of sales were  $492,535  and  $574,498  for the three  months
ended March 31, 2004 and 2003 respectively,  a decrease of $81,963,  or 14%. The
reduction was a direct result of the decreased sales.  Gross profit  percentages
for the three months ended March 31, 2004 and 2003 were 4% and 9%, respectively.
Increased costs was the leading contribution to this decline.

          Operating  expenses totaled $194,363 and $173,838 for the three months
ended March 31, 2004 and 2003. This was an increase of $20,525, or 12%. This was
a result of increased  professional fees,  healthcare costs, and amortization of
loan costs.

          Interest  expense was $13,017  and $1,540 for the  three-months  ended
March 31,  2004 and 2003  respectively,  an  increase  of $11,477  or 745%.  The
increase 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 March 31, 2004, the Company had a negative  working capital from
continuing  operations  of  approximately  $675,729  as  compared  to a negative
working capital of $232,026 at March 31, 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 June 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 Accounts 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 March 31, 2004 our  accounts  payable  totaled  $489,250 of which
$161,131 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  anticipated to be held
this year,  we intend to ask our  stockholders  to approve  an  increase  in the
number of authorized shares of Common Stock from 10,000,000 shares to 30,000,000
shares and an increase in the number of  authorized  shares of  Preferred  Stock
10,000,000 to 20,000,000 shares. Based upon current Common Stock outstanding and
convertible securities,  we may have an insufficient number of authorized common
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 1, 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  $182,867  and  Anthony J.  Merante,  a Director of the
Company, in the amount of $77,158. 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 $0.04 per share and as high as
$1.02 per share in the twelve  (12) month  ended  March 31,  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 March 31, 2004 was
approximately 2,652 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 36 customers. One of these
customers accounts for in excess of 10% of our revenues.  We intend to establish
long-term  relationships  with our customers and continue to expand our customer
base. While we diligently seek to become less dependent on any one customer,  it
is  likely  that  certain  business  relationships  may  result  in one or  more
customers contributing to a significant portion of our revenue in any given year
for the  foreseeable  future.  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 Do Not Have a Current Contract with Our Chairman and Chief Executive
Officer

         Our  Chairman  and  Chief  Executive  Officer,  Ronald L.  Schutte,  is
instrumental in the day-to-day operations and long-range success of our Company.
In the event Mr.  Schutte is unable to perform  his job or is  unwilling  to, we
will  face an  immediate  void in the  management  of our  Company  that  may be
difficult and/or impossible to fill in a timely manner. Additionally,  we do not
currently have an employment agreement with Mr. Schutte and as such there are no
restrictions  on either the Company or Mr.  Schutte ending his employment at any
time.

         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.

<PAGE>

         Government Regulation:  Maintenance of Licenses and Certification

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

         Continuing Changes in Food Service Industry

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

         Competition

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

         Quarterly Fluctuations; Seasonality; Possible Volatility of Stock Price

         Creative  Bakeries'  operating  results  may  be  subject  to  seasonal
fluctuations,  especially during the Thanksgiving,  Christmas,  Chanukah, Easter
and Passover seasons. Such variations could cause the market price of the Common
Stock to fluctuate  substantially.  In addition, the stock markets in the United
States  have,  from  time to time,  experienced  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 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 quarter
ended March 31, 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 May 24, 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
May 24, 2004.


  Signatures                                                   Title
                                                               -----

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