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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                 FORM 10-KSB/A1


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

                  For the fiscal year ended: December 31, 2005

                         Commission File Number: 0-13984

                  BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.
                       (Formerly Creative Bakeries, Inc.)
                 (Name of Small Business Issuer in Its Charter)

          New York                                     13-3832215
          --------                                     ----------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)

         20 Passaic Avenue, Fairfield, NJ              07004
         --------------------------------              -----
     (Address of Principal Executive Offices)        (Zip Code)

                    Issuer's telephone number: (973) 808-8248

         Securities registered under Section 12(b) of the Exchange Act:

                                                 Name of Each Exchange
             Title of Each Class                 on Which Registered
             -------------------                 -------------------
        Common Stock, $.025 per share                    OTCBB

      Securities registered under Section 12 (g) of the Exchange Act: None

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 |_|

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. |_|

Issuer's revenue for its most recent fiscal year was $2,223,611.  As of December
31, 2005 there were 541,013  shares of Company's  Common Stock,  par value $.025
per  share,  outstanding  (based  the  Issuer's  1:25  reverse  stock  split  of
outstanding  common stock effective March 20, 2006).  The aggregate market value
of the voting  stock of the issuer held by  non-affiliates  on December 31, 2005
was approximately $326,984.

    Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

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<PAGE>

                  BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                                   FORM 10-KSB
                          YEAR ENDED DECEMBER 31, 2005
                                TABLE OF CONTENTS

                                     PART I
                                                                            Page

Item 1.  Description of Business                                               3

Item 2.  Description of Property                                               5

Item 3.  Legal Proceedings                                                     5

Item 4.  Submission of Matters to a Vote of Security Holders                   5

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters              6

Item 6.  Management's Discussion and Analysis of Financial
         Condition and Plan of Operations                                      7

Item 7.  Financial Statements                                                 14

Item 8.  Changes In and Disagreements With Accountants on
         Accounting and Financial Disclosure                                  32

Item 8A. Controls and Procedures                                              32

Item 8B. Other Information                                                    32

                                    PART III


Item 9.  Directors and Executive Officers of the Registrant                   33

Item 10. Executive Compensation                                               34

Item 11. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters                           35

Item 12. Certain Relationships and Related Transactions                       35

Item 13. Exhibits                                                             37

Item 14. Principal Accountant Fees and Services                               42

SIGNATURES                                                                    43


                                                                               2
<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS


THE FOLLOWING  REPORT ON FORM 10-KSB TAKES INTO ACCOUNT THE REVERSE SPLIT OF OUR
ISSUED AND OUTSTANDING  COMMON STOCK EFFECTIVE MARCH 20, 2006.  UNLESS OTHERWISE
NOTED,  ALL  REFERENCES  TO COMMON  STOCK IN THIS REPORT  TAKE INTO  ACCOUNT AND
REFLECTS THE REVERSE  SPLIT.  THIS REPORT ALSO DISCUSSES  IMPORTANT  INFORMATION
REGARDING THE COMPANY'S  PROPOSED  AGREEMENT TO EFFECTUATE A TRANSFER OF CERTAIN
ASSETS OF ITS OPERATING SUBSIDIARY WITH OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER
FOR THE  FORGIVENESS  OR THE  ASSUMPTION  OF THE MAJORITY OF THE COMPANY' S DEBT
OBLIGATIONS.  PLEASE REFER TO ITEM 8B "OTHER  INFORMATION"  AND THE RISK FACTORS
CONTAINED HEREIN FOR IMPORANT INFORMATION  REGARDING THE STATUS OF OUR BUSINESS,
THE PROPOSED EXCHANGE TRANSACTION AND THE REVERSE SPLIT OF OUR COMMON STOCK.


REFER TO PART II, ITEM 8B. OTHER INFORMATION FOR STATUS OF THE BAKING BUSINESS.

GENERAL

      Brooklyn Cheesecake & Desserts Company, Inc. ("Brooklyn Cheesecake" or the
"Company"),   offers  a  high-end   gourmet  line  of  premium   quality  frozen
cheesecakes,  sugar free cheesecakes,  traditional apple cakes, and tart shells.
The  products  are  marketed  and  distributed  on  a  wholesale  basis  through
foodservice distributors, export, fund raising distributors and e-commerce.

      Brooklyn Cheesecake & Desserts Company,  Inc. was incorporated in November
1993.  The  Company's  executive  offices  are  located  at 20  Passaic  Avenue,
Fairfield, NJ 07004 and its telephone number is (973) 808-8248.

      The  Company  operates  through  its  wholly  owned  subsidiary   Brooklyn
Cheesecake  & Desserts  Company  and has  operated  at a loss  since  inception.
Management  has  attempted  to  increase  revenues  through a number of business
initiatives  and  streamline  operations by  undertaking a number of cost saving
measures. However, despite the Company's best efforts, it has never been able to
operate at a profit.  Brooklyn  Cheesecake  has  sought  funding  for  continued
operations  through a number of sources including  private  placements of equity
("PIPE") and through  loans.  The Company has not been able to raise  sufficient
funds through  PIPE's to maintain its  operations  and has had to rely primarily
upon a series of arms length loans from certain executive officers and directors
for  funding of its  operations.  These  loans have been  secured by a pledge of
certain assets of the Company's operating subsidiary.  In addition to not having
sufficient funds to maintain its business  operations,  Brooklyn  Cheesecake has
been unable to raise funds to satisfy its outstanding  obligations including the
loans made to it by its executive  officers and directors that have been used to
maintain  business  operations.   In  turn,  the  Company  has  entered  into  a
non-binding  letter of intent with its Chief  Executive  Officer  and  President
whereby it would exchange certain assets for satisfaction of and assumption of a
majority of the Company's outstanding obligations and liabilities.  The proposed
transaction is subject to a satisfactory  fairness opinion and customary closing
conditions.  Additionally,  should the proposed transaction occur, the nature of
the Company's  business  operations  will change  significantly.  For additional
information  please  refer to "Risk  Factors"  and  Item 8b.  Other  Information
contained herein.

PRODUCTS

Baked Goods

      The Brooklyn  Cheesecake & Desserts Company Subsidiary markets a full line
of premium  quality frozen baked products such as  cheesecakes,  apple cakes and
tart shells. We continue to work toward developing new


                                                                               3
<PAGE>

products and seek to cater to specific customer requests.

Kosher Foods

      Kosher foods generally are consumed by persons of the Jewish faith as well
as Muslims, Seven Day Adventists and others who perceive kosher certification as
a seal of purity. Kosher is a biblical term originally used to denote that which
is "fit" and "proper".

      Our wholly owned  subsidiary  Brooklyn  Cheesecake & Desserts  Company has
kosher  certification  and we believe that we can  capitalize  on the  projected
growth of this market. We believe that our kosher  certifications will enable us
to better penetrate  certain market areas despite the fact that our products are
currently not kosher for Passover.

CUSTOMERS

      Our operating  subsidiary sells its products through food  distributors to
hotels,   hospitals  and   institutional   feeders  such  as  corporate  caters,
restaurants,  coffee shops etc.  The products are also sold retail  through food
distributors and direct to supermarket  distribution centers as well as exported
to  Japan  and  sold  through  high-end  school  and   organization   fundraiser
distributors.

      We accounted for sales from one customer of 27% of our total sales for the
year ended  December 31, 2005. For the year ended December 31, 2004 sales to one
customer accounted for 26% of total sales.

INGREDIENTS AND PRINCIPAL SUPPLIERS

      We seek to use only the highest quality ingredients available.  We inspect
all raw ingredients before their intended use.

      The primary ingredients that we use consist of cream cheese,  flour, eggs,
sugar,  and chocolate.  All  ingredients  that we use are subject to substantial
price fluctuations. Historically we have been able to pass any significant price
increases in ingredients  through to our customers;  however no assurance can be
given  that we  will  be able to  continue  this  practice  in the  future.  Any
substantial  increase  in the prices of  ingredients  could,  if not offset by a
corresponding  increase in product prices, have a material adverse effect on our
business,  financial  condition or results of operations.  We do not believe the
loss  of any of our  suppliers  would  have a  material  adverse  effect  on our
business and believe that other suppliers could readily provide such products if
necessary.

DISTRIBUTION AND MARKETING

      Our Brooklyn Cheesecake & Desserts subsidiary bakes all of its products in
our Fairfield, New Jersey facility.  Although utilization of the facility varies
based on seasonal fluctuation, the facility operates on a five day a week basis.
Our  Brooklyn  Cheesecake  & Desserts  Company  subsidiary  delivers  31% of its
products  by common  carrier  trucks to its  institutional/wholesale  customers.
About 69% of its  customers  pick up their  orders  directly  at our  bakery and
utilize their own distribution networks.

      Historically,  we have relied upon word-of-mouth and customer satisfaction
to market our products to new customers and to make existing  customers aware of
new products.

COMPETITION

      The  baking  industry  is  a  highly  competitive  and  highly  fragmented
industry.  We compete  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.
Competition in both the retail and  institutional/wholesale  baking  industry is
based on product quality, brand name loyalty, price and customer service.


                                                                               4
<PAGE>

TRADEMARKS

      Our JMS subsidiary has registered trademarks with the United States Patent
and Trademark  office for the mark The Healthy  Bakery(R) (US  Registration  No.
1,644,559), Brooklyn Cheesecake Company Inc. (US Registration No. 3,040,023) and
Brooklyn  Cheesecakes & Desserts Company,  Inc. (US Registration No. 3,017,300).
The Company believes that the trademarks are a significant asset, are valid, and
enforceable,  however  there can be no assurance as to the degree of  protection
its registered trademarks will afford the Company.

PLAN OF OPERATION

      The Company  continues to seek  business in markets it does not  currently
serve.  As noted herein,  the Company has entered into a  non-binding  letter of
intent with its Chief Executive  Officer and President whereby it would exchange
certain assets for satisfaction of and assumption of a majority of the Company's
outstanding obligations and liabilities.  The proposed transaction is subject to
a satisfactory fairness opinion and customary closing conditions.  Additionally,
should the proposed  transaction  occur,  the nature of the  Company's  business
operations will change  significantly from a company that manufactures and sells
baked goods to a company that holds and licenses intellectual property.

GOVERNMENT REGULATION

      We are subject to numerous state  regulations  relating to the preparation
and sale of food.  We are also subject to federal and state laws  governing  our
relationship  with employees,  including  minimum wage  requirements,  overtime,
working and safety  conditions,  and  citizenship  requirements.  The failure to
obtain or retain  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, results of operations or financial condition.

EMPLOYEES

      As of  December  31,  2005,  Brooklyn  Cheesecake  & Desserts  Company had
approximately  33  employees,  of  which  18 are  full-time  production,  10 are
seasonal production, and 3 in administration and 2 in an executive position. The
Brooklyn  Cheesecake & Desserts Company Subsidiary does not have a union and the
Company  believes  that the  relationship  with its  employees is good.  ITEM 2.
DESCRIPTION OF PROPERTY

      We currently  lease our 27,362  square foot baking  facility and corporate
headquarters  in  Fairfield,  New Jersey.  We have a lease that extends  through
August 31, 2008.  We believe that our present  facility is well  maintained,  in
good  condition  and is  suitable  for us to  continue  to operate  and meet our
production needs for the foreseeable future.

ITEM 3. LEGAL PROCEEDING

      None.

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

      No matters were submitted to a vote of security  holders during the fourth
quarter of the fiscal year covered by this report.


                                                                               5
<PAGE>

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     THIS SECTION AND FURTHER REFERENCES TO SHARES OF COMMON STOCK HAVE BEEN
        ADJUSTED TO EFFECUATE A MARCH 20, 2006 1:25 REVERSE STOCK SPLIT.

      The  Company's  Common  Stock is quoted on the Over the  Counter  Bulletin
Board ("OTCBB") under the symbol "BCKE" effective March 22, 2006. Prior to that,
the Company's Common Stock was quoted on the OTCBB under the symbol "BCAK".  The
following  table sets forth the range of quarterly  high and low bid prices,  as
reported during the last two fiscal years.

Period                                              High          Low
-------                                            -----          ----
FISCAL YEAR 2004:
First Quarter                                      25.50          1.75
Second Quarter                                     12.50          3.50
Third Quarter                                       8.75          3.00
Fourth Quarter                                      3.00          1.50

Fiscal Year 2005:
First Quarter                                      10.50          1.50
Second Quarter                                      4.50          2.50
Third Quarter                                       3.25          2.00
Fourth Quarter                                      2.00           .50

Fiscal Year 2006
First Quarter (through March 24)                    1.25           .50


      The number of  shareholders  of record of the Common Stock on December 31,
2005 was 62  excluding  146,075  shares of Common  Stock  held by Cede & Co. The
Company believes that it has in excess of 200 shareholders.

      The Company has never paid cash dividends on its Common Stock and does not
anticipate  paying  dividends in the foreseeable  future.  The payment of future
cash  dividends is subject to the  discretion of the Board of Directors and will
depend upon the Company's earnings (if any), general financial  condition,  cash
flows,  capital  requirements  and other  considerations  deemed relevant by the
Board of Directors.


RECENT SALES OF UNREGISTERED SECURITIES

On February  17,  2006 the  Company  issued  143,417  shares of common  stock in
exchange for and in  satisfaction  of 143,417 stock options to  consultants  and
directors. The shares were issued pursuant to Regulation D of the Act.


                                                                               6
<PAGE>

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATIONS

GENERAL - RECENT DEVELOPMENTS

      Brooklyn Cheesecake has operated at a loss since inception. Management has
attempted  to  streamline  operations  by  undertaking  a number of cost  saving
measures. However, despite the Company's best efforts, it has never been able to
operate at a profit.  Brooklyn  Cheesecake  has  sought  funding  for  continued
operations  through a number of sources including  private  placements of equity
("PIPE") and through  loans.  The Company has not been able to raise  sufficient
funds through  PIPE's to maintain its  operations  and has had to rely primarily
upon a  series  of  arms  length  loans  from  certain  executive  officers  and
directors.  These loans have been  secured by a pledge of certain  assets of the
Company's  operating  subsidiary.  Brooklyn  Cheesecake has been unable to raise
sufficient funds to satisfy its outstanding obligations including the loans made
by its executive officers and directors that have been used to maintain business
operations. In turn, the Company has entered into a non-binding letter of intent
with its Chief Executive Officer and President whereby it would exchange certain
assets  for  satisfaction  of and  assumption  of a  majority  of the  Company's
outstanding obligations and liabilities.  The proposed transaction is subject to
a  satisfactory  fairness  opinion and due diligence.  Additionally,  should the
proposed transaction occur, the nature of the Company's business operations will
change significantly.  For additional information please refer to "Risk Factors"
and Item 8b. Other Information contained herein.


REFER TO ITEM 8B. "OTHER  INFORMATION" AND THE RISK FACTORS CONTAINED HEREIN FOR
INFORMATION REGARDING MANAGEMENT'S ACTIONS.

BUSINESS STRATEGY

      The Company's current business strategy is comprised of the following:

      Institutional/Wholesale:  The Company plans to increase its penetration in
the  institutional/wholesale  food market by expanding its marketing  efforts to
restaurants, hotels and corporate dining facilities and by offering its products
to  supermarkets  on a national  basis.  The  Company  plans to expand  both its
product line and geographic distribution through the following strategies:

      -     Expand geographic distribution by acquiring new food distributors in
            the state of Connecticut and in the Philadelphia  Pennsylvania areas
            as well as key distributor areas throughout the United States. To do
            this, the Company  intends to appoint food brokers in various states
            to handle sales on a commission-only basis.

      -     Develop Web Site for E-Commerce business

      -     Obtain ISO 9000 Certification

      -     Enter into co-packing arrangements whereby the Company would produce
            private label products for other bakery operations.

      Kosher  Foods.  The Company  also is seeking to benefit from the growth of
the kosher food industry.  According to prepared foods,  the food industry trade
publication,  the kosher food industry  generated  approximately  $33 billion in
sales in 1994 and has been growing at a rate of approximately 15% per annum. The
Company's Brooklyn Cheesecake & Desserts  Subsidiary has a kosher  certification
and the Company  believes that it can benefit from the projected  growth of this
market.

RESULTS OF OPERATIONS

      The Company's  consolidated revenues from continuing operations aggregated
$2,223,611 and $3,035,323


                                                                               7
<PAGE>

for the  years-ended  December  31,  2005 and 2004  respectively,  a decrease of
$811,712, or 26.7%. This is in comparison to a decrease of $334,419, or 9.9%, to
$3,035,323  from  $3,369,742  for the  years-ended  December  31,  2004 and 2003
respectively.  The  decrease  in 2005 and 2004 is a result  of the  decrease  in
international sales and the streamlining of products produced.

      The cost of goods sold were  $1,833,989 and $2,555,536 for the years-ended
December 31, 2005 and 2004  respectively,  a decrease of $721,547,  or 28.2%; as
opposed to a decrease of $348,604, or 12%, to $2,555,536 from $2,904,140 for the
years-ended  December 31, 2004 and 2003  respectively.  The decrease in 2005 and
2004 was due to the decrease in sales.

      Selling,  general and administrative expenses were $1,301,567 and $963,669
for the  years-ended  December  31, 2005 and 2004  respectively,  an increase of
$337,898,  or 35.1%. This is in comparison to an increase of $179,416, or 22.9%,
to  $963,669  from  $784,253  for the  year-ended  December  31,  2004  and 2003
respectively.   The  increase  in  2005  and  2004  increase  was  a  result  of
management's  upgrading  of  various  department  personnel.  Also  there was an
impairment loss of $201,887 on the valuation of the Company's website.

      During 2004,  the Company  wrote-off  the  $42,981,  balance of trade name
rights after  selling such rights for  $25,000.  Additionally,  the Company sold
fully depreciated equipment for $10,000.

      Interest expense  increased in 2005 to $152,366 from $96,213,  an increase
of $56,153,  or 58.4%,  in  comparison  to an  increase in 2004 to $96,213  from
$20,206,  an increase of $76,007,  or 376.2%. The 2005 and 2004 increases were a
result of increased borrowing.

      Other income of $13,752 in 2004 is the final payment of royalties from the
sale of the batterbake line. There was no similar transaction in 2005.

      The net loss increased in 2005 to $1,064,311 from $574,324, an increase of
$489,987,  or 85.3%. This is in comparison to a net loss in 2004 of $574,324 and
net loss in 2003 of  $146,614,  a decrease of  $427,710,  or 291.72%.  This is a
direct result of decrease in sales.

SEGMENT INFORMATION

      Not applicable.

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 December 31,  2005,  the Company had a negative  working  capital of
$1,252,005 as compared to a negative working capital of $659,923 at December 31,
2004.

      During 2005, the Company was able to secure loans  totaling  $185,089 from
the chairman of the Board of Directors. Additionally, the Company received loans
from the Chief Financial Officer totaling $94,201 (see Certain Relationships and
Related Transactions).  The proceeds of the loans were used to acquire equipment
and for working capital.  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.

INFLATION AND SEASONALITY:

      The Company's revenues are affected by seasons with higher revenues during
holiday seasons such as  Thanksgiving,  Christmas,  Jewish New Year,  Easter and
Passover.


                                                                               8
<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 annual report and those we may make from time to time.

      If We Are Unable to Obtain  Additional Funds, We May Have to Significantly
Modify Our Operations and Alter Our Business Model.

      Management  believes  that  profitable  operations  are  essential for the
Company  to  become  viable.  In the event we are  unable  to  obtain  immediate
additional  funding,,  management  believes that our current business operations
will be in financial jeopardy as our present financial resources will only allow
us to continue  operations  through  March 31, 2006. As such 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. In light of our
current financial condition, we have entered into a non-binding letter of intent
with our Chief Executive Officer and President whereby we would exchange certain
assets  for  satisfaction  of and  assumption  of a  majority  of the  Company's
outstanding obligations and liabilities.  The proposed transaction is subject to
a satisfactory fairness opinion and customary closing conditions.  Additionally,
should the proposed  transaction  occur,  the nature of the  Company's  business
operations will change  significantly from a company that manufactures and sells
baked goods to a company that holds and licenses intellectual property.

      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 reports of our independent  Certified Public  Accountants  dated March
15, 2006 and March 15,  2005 for the  December  31,  2005 and 2004  consolidated
financial  statements,  respectively  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 December 31, 2005, our accounts  payable  totaled  $548,447 of which
$156,283 were over sixty (60) days old. While we have  negotiated  payment plans
with our major suppliers and vendors, there can be no assurances that we will be
able to continue  these payment plans or obtain the necessary  materials  and/or
ingredients  to produce our baked goods.  If we are unable to obtain  additional
financing  on  acceptable  terms,  our  ability to make  timely  payments to our
critical  suppliers will be jeopardized and we will be unable to obtain critical
supplies and services to maintain and continue to manufacture,  ship and to sell
our products.

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

      All but a very small number of the outstanding  shares of our Common Stock
are freely tradable. Sales of Common Stock in the public market could materially
adversely  affect the  market  price of our  Common  Stock.  Such sales may also
inhibit our  ability to obtain  future  equity or  equity-related  financing  on
acceptable  terms. At our Annual Meeting of Stockholders held August 4, 2004 our
stockholders approved an increase in the number of


                                                                               9
<PAGE>

authorized shares of Common Stock from 10,000,000  shares to 30,000,000  shares.
The issuance and  registration  of  additional  shares could have a  significant
adverse effect on the trading price of our Common Stock.

      We Have  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 year ended December 31, 2005 was $1,064,311 and our  accumulated  deficit as
of December 31, 2005 was  $13,007,605.  We expect  operating  losses to continue
through  2006 as we continue  our  marketing  and sales  activities  and conduct
additional development of our products.

RISKS RELATED TO THE MARKET FOR OUR COMMON STOCK

      Risk Factors Associated With Our 1:25 Reverse Stock Split

There can be no  assurance  that the total  market  capitalization  of  Brooklyn
Cheesecake  common stock (the aggregate value of all Brooklyn  Cheesecake common
stock at the then market  price) after the Reverse  Stock Split will be equal to
or greater than the total market  capitalization  before the Reverse Stock Split
or that the per share  market price of our common  stock  following  the Reverse
Stock Split will either equal or exceed the current per share market price.

There can be no  assurance  that the  market  price  per new  share of  Brooklyn
Cheesecake  common stock after the Reverse Stock Split will remain  unchanged or
increase in  proportion to the reduction in the number of old shares of Brooklyn
Cheesecake common stock outstanding before the Reverse Stock Split.

Accordingly, the total market capitalization of Brooklyn Cheesecake common stock
after the Reverse Stock Split may be lower than the total market  capitalization
before the Reverse Stock Split and, in the future,  the market price of Brooklyn
Cheesecake  common  stock  following  the Reverse  Stock Split may not exceed or
remain higher than the market price prior to the Reverse Stock Split.

A decline in the market price of our common stock after the Reverse  Stock Split
may result in a greater  percentage decline than would occur in the absence of a
Reverse Stock Split, and the liquidity of Brooklyn Cheesecake common stock could
be adversely affected following such a Reverse Stock Split.

If the market price of our common stock declines,  the percentage decline may be
greater  than would occur in the absence of a Reverse  Stock  Split.  The market
price of our common stock will,  however,  also be based on our  performance and
other  factors,  which  are  unrelated  to the  number  of  shares  outstanding.
Furthermore,  the reduced number of shares  outstanding  after the Reverse Stock
Split could adversely affect the liquidity of our common stock.

      The Price of Our Common Stock is Subject to Volatility

      Our Common Stock has traded as low as $.50 per share and as high as $10.50
per share in the twelve (12) month ended December 31, 2005. 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


                                                                              10
<PAGE>

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 year ended December 31, 2005 was
approximately 153 shares .

RISKS RELATED TO OUR BUSINESS

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

      We currently record sales from approximately 35 customers.  Four customers
and one  customer  accounted  for in excess of 10% of our  revenues in the years
ended December 31, 2005 and 2004, respectively. 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.  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  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


                                                                              11
<PAGE>

products gain market acceptance.

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

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

      Attraction and Retention of Key Personnel

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

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

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

      Government Regulation: Maintenance of Licenses and Certification

      Brooklyn Cheesecake & Desserts Company,  Inc. 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  subjects food service
businesses  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.  Brooklyn Cheesecake & Desserts Company,  Inc. 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


                                                                              12
<PAGE>

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

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

      Possible Adverse Effect of Issuance of Preferred Stock

      Brooklyn  Cheesecake  & Desserts  Company,  Inc  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.

      Disposition of Baking Business

      On December 23, 2005,  the Company  entered into a  non-binding  letter of
intent with its Chairman and CEO whereby it would  exchange  certain  assets for
satisfaction  of and  assumption  of a  majority  of the  Company's  outstanding
obligations  and  liabilities.   The  proposed   transaction  is  subject  to  a
satisfactory  fairness opinion and customary closing  conditions.  Additionally,
should the proposed  transaction  occur,  the nature of the  Company's  business
operations will change  significantly from a company that manufactures and sells
baked goods to a company that holds and licenses intellectual property.


                                                                              13
<PAGE>

STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

      This  annual  report  contains  certain  forward-looking  statements  with
respect to the financial  condition,  results of operations  and business of the
Company including statements relating to the cost savings,  revenue enhancements
and  marketing  and other  advantages  that are expected to be realized from the
Company's  plans to restructure  and consolidate its operations and grow through
strategic  acquisitions.  Such forward-looking  statements involve certain risks
and  uncertainties  that could cause actual  results to differ  materially  from
those  contemplated  by  such   forward-looking   statements.   Such  risks  and
uncertainties  include,  without limitation:  (1) expected cost savings from the
restructured  or  consolidated   operations   cannot  be  fully  realized;   (2)
difficulties relating to the integration of new businesses that may be acquired;
(3) the impact of  competition  on revenues  and margins;  (4)  increases in the
costs of ingredients;  and (5) other risks and  uncertainties as may be detailed
from time to time in the Company's public announcements and Commission filings.


ITEM 7. FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm                       14

Consolidated Balance Sheet                                                    15

Consolidated Statements of Operations                                         16

Consolidated Statements of Stockholders' (Deficiency)                         17

Consolidated Statements of Cash Flows                                         18

Notes to Consolidated Financial Statements                                 19-30


                                                                              14
<PAGE>

             Report of Independent Registered Public Accounting Firm


To The Board of Directors and shareholders
Brooklyn Cheesecake & Desserts Company, Inc.

      We have audited the  accompanying  consolidated  balance sheet of Brooklyn
Cheesecake & Desserts  Company,  Inc. and  Subsidiaries as of December 31, 2005,
and the related consolidated statements of operations, stockholders' deficiency,
and  cash  flows  for  the  years  ended  December  31,  2005  and  2004.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

      We conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position of Brooklyn  Cheesecake  &
Desserts  Company,  Inc.  as of  December  31,  2005,  and  the  results  of its
operations  and cash flows for the years ended  December  31, 2005 and 2004,  in
conformity with accounting principles generally accepted in the United States of
America.

      The  accompanying  consolidated  financial  statements  have been prepared
assuming  the  Company  will  continue  as a  going  concern.  As  shown  in the
accompanying consolidated financial statements, the Company incurred significant
losses from  operations for the years ended December 31, 2005 and 2004 and as of
December 31, 2005 has a working capital  deficiency in the amount of $1,252,005,
which  raises  substantial  doubt about the  Company's  ability to continue as a
going  concern.  Management's  plans in regard to these matters are discussed in
the notes to the financial statements.  The accompanying financial statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.



                                                    /s/ Sherb & Co., LLP
                                                    Certified Public Accountants

Boca Raton, Florida
March 15, 2006


                                                                              15
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                 CONSOLIDATED BALANCE SHEET - DECEMBER 31, 2005

                                     ASSETS
Current assets:
  Cash and cash equivalents                                       $      7,444
  Accounts receivable, less allowance for doubtful
   accounts of $400                                                    103,865
  Inventories                                                          200,328
  Prepaid expenses                                                      33,205
                                                                  ------------
    Total current assets                                               344,842
                                                                  ------------

Property and equipment, net                                            268,352
                                                                  ------------
Other assets:
  Security deposits                                                      6,242
  Website development, net of amortization                             112,103
  Financing cost, net                                                    2,342
  Tradename, net of amortization                                        67,125
                                                                  ------------
     Total other assets                                                187,812
                                                                  ------------
                                                                  $    801,006
                                                                  ============
                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
 Accounts payable                                                 $    548,447
 Accrued expenses                                                       86,310
 Capital lease obligation                                               18,367
 Notes payable                                                           2,500
 Notes payable, officer                                                941,223
                                                                  ------------
    Total current liabilities                                        1,596,847
                                                                  ------------
Other liabilities:
  Capital lease obligation, net of current portion                      30,232
  Notes payable, officer, net of current portion                        64,518
  Deferred rent                                                         25,040
                                                                  ------------
   Total other liabilities                                             119,790
                                                                  ------------
Stockholders' deficiency:
  Preferred stock $.001 par value, authorized 2,000,000
   shares, none issued                                                      --
  Common stock, $.025 par value, authorized 30,000,000
   shares, issued and outstanding 541,013 shares                        13,525
  Additional paid-in capital                                        12,078,449
  Accumulated deficit                                              (13,007,605)
                                                                  ------------
    Total stockholders' deficiency                                (    915,631)
                                                                  ------------
                                                                  $    801,006
                                                                  ============

                 See notes to consolidated financial statements


                                                                              16
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                      CONSOLIDATED STATEMENTS OF OPERATIONS




                                                  YEARS ENDED DECEMBER 31,
                                                 --------------------------
                                                     2005           2004
                                                 -----------    -----------

Net sales                                        $ 2,223,611    $ 3,035,323
Cost of sales                                      1,833,989      2,555,536
                                                 -----------    -----------
Gross profit                                         389,622        479,787

Selling, general and administrative expenses       1,301,567        963,669
                                                 -----------    -----------
Loss from operations                             (   911,945)   (   483,882)
                                                 -----------    -----------

Other (income) expense:
Sale of trade name rights                                 --    (    25,000)
Write-off of trade name rights                            --         42,981
Gain on sale of assets                                    --    (    10,000)
Interest expense, net                                152,366         96,213
Other Income                                              --    (    13,752)
                                                 -----------    -----------
   Total other expense (income)                      152,366    (    37,772)
                                                 -----------    -----------
Net loss                                         ($1,064,311)   ($  574,324)
                                                 ===========    ===========


Loss per common share Basic and fully diluted:
    Net loss per share                           ($     2.14)   ($     2.25)
                                                 ===========    ===========

Weighted average number of common
     shares outstanding                              496,983        254,542
                                                 ===========    ===========


                See notes to consolidated financial statements.


                                                                              17
<PAGE>

<TABLE>
<CAPTION>
                              BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
                                   (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                                         YEARS ENDED DECEMBER 31, 2005 AND 2004


                                                          Common Stock
                                                     ---------------------
                                                       Number                 Additional                      Total
                                                         of                    Paid-in      Accumulated    Stockholders'
                                                       Shares      Amount      Capital        Deficit       Deficiency
                                                     ---------   ---------   ------------   ------------   -------------
<S>                                                  <C>         <C>         <C>            <C>            <C>
Balance at January 1, 2004                             219,870   $   5,497   $ 11,235,418   ($11,368,970)  ($ 128,055)
  Stock issued for salary                               26,630         665         99,935             --         100,600
  Stock issued for professional services                 2,782          69         10,431             --          10,500
  Stock issued for repayment of debt                    13,115         328         49,672             --          50,000
  Stock issued for warrant                              12,588         315   (        315)            --              --
  Exchange of warrants payable                          48,828       1,221        114,404             --         115,625
  Stock issued for Directors' fees                      16,000         400         27,600             --          28,000
  Net loss for the year ended December 31, 2004             --          --             --   (    574,324)  (     574,324)
                                                     ---------   ---------   ------------   ------------   -------------
Balance at December 31, 2004                           339,813       8,495     11,537,145   ( 11,943,294)  (     397,654)

  Stock issued for salary                               74,000       1,850        146,150             --         148,000
  Stock issued for professional services                12,517         313         25,937             --          26,250
  Stock issued for website development                 100,000       2,500        338,550             --         341,050
  Stock issued for repayment of debt                     9,017         225         17,809             --          18,034
  Stock issued for Directors' fees                       5,666         142         12,858             --          13,000
  Net loss for the year ended December 31, 2005             --          --             --   (  1,064,311)     (1,064,311)
                                                     ---------   ---------   ------------   ------------   -------------
Balance at December 31, 2005                           541,013   $  13,525   $ 12,078,449   ($13,007,605)  ($    915,631)
                                                     =========   =========   ============   ============   =============


                                     See notes to consolidated financial statements.


                                                                                                                      18
</TABLE>

<PAGE>

           BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
                (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                       CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                          YEARS ENDED DECEMBER 31,
                                                         --------------------------
                                                            2005            2004
                                                         -----------    -----------
<S>                                                      <C>            <C>
Operating activities:
    Loss from continuing operations                      ($1,064,311)   ($  574,324)
    Adjustments to reconcile loss from continuing
     operations to cash used in continuing operations:
       Depreciation and amortization                         113,346        100,068
       Common stock issued for services                      187,250        139,100
       Write-off of tradename right                               --         42,981
        Impairment Loss                                      201,887

Changes in operating assets and
    liabilities from continuing operations:
              Accounts receivable                            196,466       (125,348)
              Inventories                                (    96,526)        69,717
              Prepaid expenses                                15,934         16,937
              Security deposits                          (       477)   (     1,051)
              Financing costs                                 (2,342)
              Accounts payable                               115,500         84,822
              Accrued expenses                                42,375    (    43,926)
              Deferred rent                                    5,361         14,160
                                                         -----------    -----------
              Net cash used in operating activities      (   285,537)      (276,864)
                                                         -----------    -----------
Investing activities:
      Purchase of property and equipment                 (    30,163)   (    98,730)
                                                         -----------    -----------
Net cash used in investing activities                    (    30,163)   (    98,730)
                                                         -----------    -----------
Financing activities:
      Proceeds from officers' notes payable                  286,250        518,388
      Proceeds from notes payable                                 --         59,908
      Payment of notes payable                                    --       (250,000)
      Proceeds from capital lease                             12,503             --
      Payment of capital leases                              (10,834)            --
                                                         -----------    -----------
Net cash provided by financing activities                    287,919        328,296
                                                         -----------    -----------
Net (decrease) in cash and cash equivalents              (    27,781)       (47,298)

Cash and cash equivalents, beginning of year                  35,225         82,523
                                                         -----------    -----------
Cash and cash equivalents, end of year                   $     7,444    $    35,225
                                                         ===========    ===========
Cash paid during the year for:
      Interest:                                          $    72,814    $    88,865
                                                         ===========    ===========
      Taxes                                              $        --    $        --

Non-cash investing and financing transactions:
      Stock issued for compensation                      $   148,000    $   100,600
                                                         ===========    ===========
      Reclassification of warrants payable               $        --    ($  115,625)
                                                         ===========    ===========
      Issuance of common shares for debt                 $    18,000    $    50,000
                                                         ===========    ===========
      Issuance of stock for website development          $   341,050    $        --
                                                         ===========    ===========
</TABLE>

                  See notes to consolidated financial statements.

                                                                              19
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004

1.    Description of business and going concern:

      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.

      During the years ended  December 31, 2005 and 2004,  the Company  incurred
      losses from continuing  operations in the amount of $911,945 and $483,882,
      respectively,  and as of  December  31,  2005  had a net  working  capital
      deficiency of $1,252,005.  Although the Company is currently operating its
      businesses, their continuation is contingent upon, among other things, the
      continued  forbearance by the Company's  creditors from  exercising  their
      rights in connection with delinquent accounts payables.  These conditions,
      among  others,  raise  substantial  doubt about the  Company's  ability to
      continue as a going concern.

      In view of these matters  management  believes that the actions  presently
      being taken to revise the Company's  operating and financial  requirements
      provide the  opportunity  for the Company to continue as a going  concern.
      The  accompanying  financial  statements  do not include  any  adjustments
      relating  to the  recoverability  and  classification  of  asset  carrying
      amounts or the amount and  classification of liabilities that might result
      should the Company be unable to continue as a going concern.

2.    Summary of significant accounting policies:

      Principles of consolidation:

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

      Cash and cash equivalents:

      For the purpose of the statement of cash flows, the Company  considers all
      short-term  debt  securities  purchased with a maturity of three months or
      less to be cash equivalents.

      Accounts receivable and allowances:

      Accounts  receivable are reported at net realizable value. The company has
      established  an  allowance  for  doubtful   accounts  based  upon  factors
      pertaining to the credit risk of specific  customers,  historical  trends,
      and other  information.  Delinquent  accounts  are  written off when it is
      determined that the amounts are uncollectible.

      Inventories:

      Inventories  are  stated  at the  lower  of cost  (first-in-first-out)  or
      market.

      Property and equipment:

      The  cost of  property,  plant  and  equipment  is  depreciated  over  the
      estimated  useful  lives of the  related  assets.  The  cost of  leasehold
      improvements  is depreciated  over the lesser of the length of the related
      leases  or the  estimated  useful  lives of the  assets.  Depreciation  is
      computed on the straight-line method for financial reporting purposes.

      Deferred rent:

      The accompanying consolidated 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 expenses as required by


                                                                              20
<PAGE>

         BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004

2.    Summary of significant accounting policies (continued):

      generally accepted accounting principles.

      Use of estimates:

      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.

      Net (Loss) Income Per Share:

      We compute  net (loss)  income per share in  accordance  with SFAS No. 128
      Earnings  Per  Share.  Basic net  (loss)  income per share is based on the
      weighted average common shares outstanding during the same period. Diluted
      net (loss) income adjusts the weighted average for potential dilution that
      could occur if  securities  or other  contracts to issue common stock were
      exercised  or  converted  into common stock or resulted in the issuance of
      common stock, which would then share in the earnings of the Company. Stock
      options  have been  excluded as common  stock  equivalents  in the diluted
      earnings per share  because their effect would be  anti-dilutive.  143,417
      stock options have been excluded from the calculation of diluted  earnings
      per share.

      Recognition of Revenue:

      Income from sales of product is  recognized  when the orders are completed
      and shipped or  possession  of product is taken by the  customer  provided
      that  collection of the resulting  receivable is reasonably  assured.  The
      Company's goods are shipped both Free on Board  ("F.O.B.")  shipping point
      and F.O.B. destination. The Company follows the guidance of the Securities
      and Exchange  Commission's  Staff Accounting  Bulletin No. 104 for revenue
      recognition.  In general,  the Company  records  revenue  when  persuasive
      evidence of an arrangement exists,  services have been rendered or product
      delivery  has  occurred,  the  sales  price  to the  customer  is fixed or
      determinable,  and  collectability  is reasonably  assured.  The following
      policies reflect specific criteria for the various revenues streams of the
      Company:

      Shipping and Handling Costs

      The Company  follows the guidance of EITF 00-10,  "Accounting for Shipping
      and Handling Fee and Costs".  The Company's  shipping costs of $83,191 and
      $65,468 for the periods ending  December 31, 2005 and 2004,  respectively,
      and are included in warehouse and delivery expenses.

      Income Taxes:

      The  Company  accounts  for  income  taxes in  accordance  with  Financial
      Accounting  Standards  Board  ("FASB")  Statement of Financial  Accounting
      Standards  ("SFAS") No. 109,  "Accounting  for Income  Taxes." The Company
      recognizes  deferred tax assets and  liabilities  based on the differences
      between  the book bases and the tax bases of the  assets and  liabilities,
      using the  effective tax rates in the years in which the  differences  are
      expected to reverse. A valuation allowance is recorded when it is probable
      that some or all of a deferred tax asset will not be realized.

      Impairment of Long-Lived Assets:

      The   Company   reviews   long-lived   assets  for   impairment   whenever
      circumstances  and situations change such that there is an indication that
      the carrying amounts may not be recovered.  The  recoverability  of assets
      held and used in  operations  is measured by a comparison  of the carrying
      amount of the assets to the future net cash flows expected to be generated
      by  the  assets.  If  such  assets  are  considered  to be  impaired,  the
      impairment  to be  recognized  is  measured  by the  amount  by which  the
      carrying amount of the assets exceeds the fair value of the assets.


                                                                              21
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004


      During the year ended  December  31,  2004 the  Company  expensed  $42,981
      remaining on their  William  Greenberg  Tradename,  due to their  carrying
      amount exceeding their fair value.

      Stock Based Compensation:

      As permitted under SFAS No. 148, "Accounting for Stock-Based  Compensation
      - Transition and Disclosure," which amended SFAS No. 123,  "Accounting for
      Stock-Based  Compensation,"  the Company has elected to continue to follow
      the intrinsic  value method in  accounting  for its  stock-based  employee
      compensation  arrangements  as  defined  by  Accounting  Principles  Board
      Opinion  ("APB")  25,  "Accounting  for Stock  Issued to  Employees,"  and
      related   interpretations   including  FASB  Interpretation   ("FIN")  44,
      "Accounting for Certain  Transactions  Involving Stock  Compensation,"  an
      interpretation  of APB 25.  Under  APB 25,  if the  exercise  price of the
      Company's  employee  stock options or stock  purchase  warrants  equals or
      exceeds the market price of the  underlying  stock on the date of grant no
      compensation expense is recognized.

      Fair Value of Financial Instruments:

      The Company's financial  instruments consist of cash, accounts receivable,
      accounts payable,  accrued expenses, notes payable and long-term debt. The
      carrying amounts of the financial instruments reported in the consolidated
      balance sheet approximate fair value based on the short-term maturities of
      these instruments.

      Reclassifications:

      Certain  reclassifications have been made to the prior year's consolidated
      financial  statements  to  conform to current  year's  presentation.  Such
      reclassifications   had  no  effect  on  the  reported  net  loss  or  net
      stockholders deficit.

      Recent accounting pronouncements:

      In December 2004, the FASB finalized SFAS No. 123R  "Share-Based  Payment"
      ("SFAS 123R"),  amending SFAS No. 123,  effective  beginning the Company's
      first  quarter  of fiscal  2006.  SFAS 123R will  require  the  Company to
      expense  stock  options  based on grant date fair  value in its  financial
      statements.  Further,  adoption of SFAS No. 123R will  require  additional
      accounting  related  to  income  tax  effects  and  additional  disclosure
      regarding   cash  flow  effects   resulting  from   share-based   payments
      arrangements.  The effect of  expensing  stock  options  on the  Company's
      results  of  operations  using a  Black-Scholes  option-pricing  model  as
      presented  in Note 2.  The  adoption  of SFAS  123R  will not  effect  the
      Company's cash flows or financial position, but may have an adverse impact
      on results of operations if options are granted in the future.

      On March 3, 2005 the FASB issued FASB Staff  Position FIN 46 (R)-5,  which
      addresses whether a reporting  enterprise should consider whether it holds
      an implicit  variable  interest in a variable interest entity ("VIE") or a
      potential  VIE when  specific  conditions  exist.  The  guidance  shall be
      applied to the first reporting  period  beginning after March 3, 2005, but
      early application is permitted for periods which financial statements have
      not yet been issued.  The adoption of FIN 46 (R)-5 is not expected to have
      a  material  impact  on the  Company's  consolidated  financial  position,
      liquidity, or results of operations.


                                                                              22
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004

3.    Concentration of credit risk and major customers:

      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 December 31, 2005,  the Company had no
      uninsured cash balances.

      At December 31, 2005, there were two customers whose balances  included in
      accounts  receivable  comprised 27% and 14% of total accounts  receivable.
      During the years ended December 31, 2005 those customers accounted for 41%
      of total  revenue.  In the year  ended  December  31,  2004 two  customers
      accounted 26% of revenue.

      Purchases  from  two  suppliers  for the  year  ended  December  31,  2005
      represented  approximately 38% of non-affiliated  purchases.  For the year
      ended  December  31,  2004  purchases  from  three  suppliers  represented
      approximately  75% of  non-affiliated  purchases.  At December  31,  2005,
      amounts due to the suppliers amounted to 43% of accounts payable.

4.    Accounts receivable:

      Following is a summary of receivables at December 31, 2005:

           Trade accounts                                         $   104,265
           Less allowance for doubtful accounts                   (       400)
                                                                  -----------
                                                                  $   103,865
                                                                  ===========
5.    Inventories:

      Inventories at December 31, 2005 consist of:

           Finished goods                                         $    98,441
           Raw materials                                               31,452
           Supplies                                                    70,435
                                                                  -----------
                                                                  $   200,328
                                                                  ===========


                                                                              23
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004

6.    Property and equipment:

      The following is a summary of property and equipment at December 31, 2005:

           Baking equipment                                       $ 1,520,378
           Furniture, fixtures and equipment                          109,105
           Leasehold improvements                                     180,422
                                                                  -----------
                                                                    1,809,905
           Less:  Accumulated depreciation
                   and amortization                                 1,541,553
                                                                  -----------
                                                                  $   268,352
                                                                  ===========

      Depreciation expense charged to operations was $80,287 and $81,270 in 2005
      and 2004, respectively.

      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.    Website development costs:


      On March 1, 2005,  the  Company  entered  into an  agreement  to develop a
      website.  In exchange the Company issued 2,500,000 shares of the Company's
      common stock,  valued at $341,050.  Management  detemined that the website
      was  not   functioning   effectively,   and  sales  did  not  live  up  to
      expectations.  Thus the Company  recorded an impairment  expense  totaling
      $201,887.  The  impairment  expense is included  in  selling,  general and
      administrative  expenses  on the  income  statement.  The net value of the
      website before  amortization  is $139,164  calculated on a three year cash
      flow analysis with an 8% discount  rate The website  development  is being
      amortized on a straight-line  basis over a three-year  term.  Amortization
      expense for the year ended December 31, 2005 amounted to $27,060.

      The company's policy is to capitalize website development costspursuant to
      paragraphs 21 and 31 of SOP 98-1.


      The following is a schedule of future amortizations on the website:

      Years Ended December 31,

           2006                                                   $    46,388
           2007                                                        46,388
           2008                                                        19,327
                                                                  -----------
                                                                  $   112,103
                                                                  ===========

8.    Loan acquisition costs:

      The Company  incurred loan  acquisition  costs in the amount of $16,957 in
      connection with one of the notes


                                                                              24
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004


      payable  financings  the Company  entered  into in 2003.  These costs were
      being  amortized over the life of the loan.  This loan was repaid in 2004,
      and all remaining costs were expensed.  Loan amortization  expense for the
      year ended December 31, 2004 amounted to $12,798.

9.    Tradename and licensing agreements:

      On March 7, 2002,  the  Company  purchased  the  rights to the  tradenames
      Brooklyn  Cheesecake  Company,  Inc.  and  Brooklyn  Cheesecake & 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  $6,000 and
      $6,000, respectively, for the years ended December 31, 2005 and 2004.

      The following is a schedule of future amortizations on the trade name:

      Years Ended December 31,
           2006                                                   $     6,000
           2007                                                         6,000
           2008                                                         6,000
           2009                                                         6,000
           2010                                                         6,000
           Thereafter                                                  37,125
                                                                  -----------
                                                                  $    67,125
                                                                  ===========

      The Company had a fully amortized  licensing  agreement for the use of the
      trademark  and name of a former  subsidiary,  various  recipes and methods
      used in the production of baked and other goods.  The agreement called for
      royalties to be paid upon  reaching  certain sales levels by the licensee.
      The Company sold this licensing agreement in 2004 for $25,000.

10.   Notes payable to executive officer:

      a)    Note dated May 21, 2004 in the amount of $54,000, payable on demand,
            with interest at the rate of 8.5% per annum.  The note is unsecured.
            This note consolidates  into a single promissory note,  several loan
            advances received by the Company in the first and second quarters of
            2004.

      b)    Note  dated  November  30,  2005 in the  amount  of  $317,000,  with
            interest at the rate of 13% per annum.  Interest payments are due on
            the last day of each month  with the note  maturing  on January  31,
            2006. The note is secured by all of the Company's assets.

      c)    Note  payable  effective  April 2,  2003 in the  original  amount of
            $50,000, with a variable interest rate that was 9.9% at December 31,
            2005.  Monthly  payment of principal and interest are  approximately
            $1,300. Note is unsecured and due on demand. The outstanding balance
            on the loan was $45,330 at December 31, 2005.

      d)    Note dated January 1, 2003 in the original amount of $88,000 with an
            interest  rate of 8.5% per annum.  The note is  unsecured.  Interest
            only payments were due for the first  eighteen  months and principal
            and interest payments are due monthly  thereafter until the maturity
            date. The balance of the note was $112,971 at December 31, 2005.


                                                                              25
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004


      e)    Note dated  December 31, 2004 in the amount of $111,651,  payable on
            demand,  with  interest  at the rate of 8.5% per annum.  The note is
            unsecured.  This  note  consolidates  in a  single  promissory  note
            several  loan  advances  received  by the  Company  in the third and
            fourth quarters of 2004.

10.   Notes payable to executive officer (continued):

      f)    Note dated  December 31, 2005 in the amount of $185,089,  payable on
            demand,  with  interest  at the rate of 8.5% per annum.  The note is
            unsecured.  This  note  consolidates  in a  single  promissory  note
            several  loan  advances  received  by the  Company  in the third and
            fourth quarters of 2004.

      g)    Note dated May 25, 2004 in the amount of $28,000, payable on demand,
            with interest at the rate of 8.5% per annum.  The note is unsecured.
            This note  consolidates  in a single  promissory  note  several loan
            advances received during the first and second quarters of 2004.

      h)    Note payable  effective  August 18, 2003 in the  original  amount of
            $50,000,  with a variable  interest rate that was 11.25% at December
            31,  2005.   Monthly   payments  of   principal   and  interest  are
            approximately $1,000. Note is unsecured.  The outstanding balance on
            the loan was $48,588 at December 31, 2005.

      i)    Note dated  December  31,  2004 in the amount of $8,911,  payable on
            demand,  with  interest  at the rate of 8.5% per annum.  The note is
            unsecured.  This  note  consolidates  in a  single  promissory  note
            several loan advances  received during the third and fourth quarters
            of 2004.

      j)    Note dated  September 30, 2005 in the amount of $94,201,  payable on
            demand,  with  interest  at the rate of 8.5% per annum.  The note is
            unsecured.  This  note  consolidates  in a  single  promissory  note
            several loan advances received during the first,  second,  and third
            quarters of 2005.

      Maturities for the next five years are as follows:

           December 31, 2006                                      $   941,223
           December 31, 2007                                           16,800
           December 31, 2008                                           16,800
           December 31, 2009                                           16,800
           December 31, 2010                                            7,400
           Thereafter                                                   6,718
                                                                  -----------
                                                                  $ 1,005,741
                                                                  ===========

      On January 31, 2006, Notes 10 a) thru f) were  consolidated  into one note
      to the Chief Executive  Officer,  inclusive of accrued  interest  totaling
      $995,818. The note is secured by the Company's assets.

      On January 31, 2006, Notes 10 g) thru j) were  consolidated  into one note
      to the Chief Financial  Officer,  inclusive of accrued  interest  totaling
      $187,086.  The note is secured by the Company's  assets and is subordinate
      to the Chief Executive Officer's note.

11.   Note Payable:

      Note dated June 28, 2004 in the amount of $2,500,  payable on demand, with
      interest at the rate of 8.5% per


                                                                              26
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004


      annum.  The note is  unsecured.  The holder of the note is a member of the
      Board of Directors.

12.   Leases - Capital:

      Capitalized  lease with an order  date of March 9, 2004,  in the amount of
      $47,940 plus a 10% buyout amount of $4,794.  Monthly payments of principal
      and  interest in the amount of $1,051  commencing  April 7, 2004,  payable
      over 60 months.  The lease matures in April 2009. The balance of the lease
      was $38,505 at December 31, 2005.  The note is  guaranteed  by a member of
      the Board of Directors.

      Capitalized  lease with an order date of February 22, 2005,  in the amount
      of $13,000.  Monthly  payments of principal  and interest in the amount of
      $477 commenced March 22, 2005,  payable over 36 months.  The lease matures
      in February  2008.  The  balance of the lease was $10,094 at December  31,
      2005. The note is guaranteed by a member of the Board of Directors.

      At December 31, 2005  equipment held under capital leases is summarized as
      below:

                                                                     2005
                                                                  -----------
      Manufacturing equipment                                     $    66,129
      Less: Accumulated depreciation                                    9,053
                                                                  -----------
                                                                  $    57,076
                                                                  ===========
      Minimum Future Lease Payments
      Minimum future lease payments under capital leases as of December 31, 2005
      for each of the next five years and in the aggregate are:

      Year Ended December 31,
           2006                                                   $    18,336
           2007                                                        18,336
           2008                                                        13,566
           2009                                                         7,947
                                                                  -----------
      Total minimum lease payments                                     58,185
      Less: Amount representing interest                                9,586
                                                                  -----------
      Present value of net minimum lease payment                  $    48,599
                                                                  ===========

      The interest rate on the capitalized  lease is 9.7% and 19% and is imputed
      based on the  lower of the  Company's  incremental  borrowing  rate at the
      inception of the lease or the lessor's implicit rate of return.

13.   Common stock:

      The following  common stock issuances were made in the year ended December
      31, 2005:

      o     On January 13, 2005 the Company issued 74,000 shares of common stock
            for  services  valued at  $148,000.  All the shares  were  issued to
            officers of the Company,  valued at $148,000,  or $2.00 per share on
            January 13, 2005, the closing trading price on the date of issuance.

      o     On March 2, 2005 the Company  issued 9,017 shares of common stock in
            settlement of an account payable of


                                                                              27
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004


13.   Common stock (continued):

            $18,034.  These shares are valued at  approximately  $2.00 per share
            the closing trading price on the date of issuance.

      o     On January 13, 2005, in payment of fees to Company Board members and
            Corporate  Secretary,  the  Company  issued  4,500  shares of common
            stock, valued at $9,000.  These shares are valued at $2.00 per share
            the closing trading price on the date of issuance.

      o     On March 2, 2005 the Company  issued  42,000  shares of common stock
            for the initial  payment of the website  development  costs totaling
            $152,250.  These  shares are  valued at $3.63 per share the  closing
            trading price on the date of issuance.

      o     On April 27, 2005 the Company issued an additional  42,000 shares of
            common  stock as  consideration  of the  website  development  costs
            totaling  $151,200.  These  shares are valued at $3.60 per share the
            closing trading price on the date of issuance.

      o     On August 29th and September  29th,  2005 the Company issued a total
            of 2,637  shares of common  stock for  services  rendered  valued at
            $8,750,  pursuant to a monthly  service  retainer  agreement.  These
            shares were issued at various  times during the quarter and have per
            share  values  ranging from  approximately  $2.63 to $4.38 per share
            depending on the closing trading price on the date of issuance.

      o     On August 29, 2005,  in payment of fees to Company Board members and
            the Corporate  Secretary,  the Company issued 3,048 shares of common
            stock, valued at $8,000.  These shares are valued at $2.63 per share
            the closing trading price on the date of issuance.

      o     On September 29, 2005 the Company  issued the final 16,000 shares of
            common  stock as  consideration  of the  website  development  costs
            totaling  $37,600.  These  shares  are valued at $2.35 per share the
            closing trading price on the date of issuance.

      o     On August 29, 2005 the Company  issued  6,000 shares of common stock
            for services rendered valued at $9,000.

      o     On  September  21, 2005 the Company  issued  2,000  shares of common
            stock for services rendered valued at $4,500.

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

      In February 2005, the Company amended their  Certificate of  Incorporation
      and increased the number of authorized  common shares to 30,000,000 from a
      previous 10,000,000 shares.

      The following  common stock issuances were made in the year ended December
      31, 2004:

      o     In May 2004 the Company  issued  26,630  shares of common  stock for
            services valued at $100,600.  Of these shares, 26,230 were issued to
            an officer of the Company,  valued at $100,000,  or $3.75 per share,
            the closing trading price on the date of issuance.

      o     In May  2004  and  December  2004 the  Company  issued  834 and 1947
            shares,  respectively,  of common stock for services rendered valued
            at $10,500, pursuant to a monthly service retainer agreement.  These
            shares


                                                                              28
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004


13.   Common stock (continued):

            were  issued at  various  times  during  the year and have per share
            values  ranging  from  approximately   $1.00  to  $5.50  per  shares
            depending on the closing trading price on the date of issuance.

      o     In May 2004 the  Company  issued  13,115  shares of common  stock in
            settlement of a loan payable of $50,000.  These shares are valued at
            approximately $3.75 per shares the closing trading price on the date
            of issuance.

      o     In December 2004, In payment of fees to Company Board  members,  the
            Company issued  400,000  shares of common stock,  valued at $28,000.
            These  shares  are  valued at  approximately  $1.75 per  shares  the
            closing trading price on the date of issuance.

14.   Commitments and contingencies:

      The Company  entered into an amendment  under an existing lease for use of
      27,362 square feet of office and plant space in New Jersey. The terms call
      for a  reduction  in  annual  rent in the  first  year  from  $200,000  to
      $136,800.  The amendment also shifts  responsibility  for snow removal and
      landscaping  from  the  lessee  to the  lessor.  The  new  rental  amounts
      commenced September 1, 2003 and expire December 31, 2008.

      The minimum future rentals on the baking facility are as follows:

           December 31, 2006                                          158,000
           December 31, 2007                                          164,000
           December 31, 2008                                          112,000
                                                                  -----------
                                                                  $   434,000
                                                                  ===========

      Rent expense  including real estate taxes and common area charges amounted
      to  $201,884  in 2005  and  $160,661  in 2004 and  includes  straight-line
      amortization of rent adjustments discussed in Note 2.

      The  Company  entered  into an  agreement  for legal  services  commencing
      February  1,  2005.  The  agreement  calls for  one-third  of the  monthly
      retainer fee of $3,000 to be paid  through the  issuance of an  equivalent
      number of  restricted  common  shares based on an agreed upon market value
      formula.  The shares  are to be issued on a  quarterly  basis.  In October
      2005,  the agreement was amended to  discontinue  the stock portion of the
      agreement.

15.   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.

      The Company had a net loss of  $1,064,311  during the year ended  December
      31, 2005 and had no Federal or State income tax  obligations.  The Company
      had no  significant  deferred  tax effects  resulting  from the  temporary
      differences  that  give rise to  deferred  tax  assets  and  deferred  tax
      liabilities  for the year ended December 31, 2005 other than net operating
      losses.

      Valuation allowances are established when necessary to reduce deferred tax
      assets to the amount expected to


                                                                              29
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004


15. Income taxes (continued):

      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  carryforward  of  approximately  $11,146,700.  The
      Company has made no provision for a deferred tax asset nor for increase in
      such due to 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 that not to be realized.

      The Company's loss carryforward of approximately $11,146,700 may be offset
      against future taxable income.  The carryforward  losses expire at the end
      of the years 2006 through 2025.

      The  utilization of the above loss  carryforwards,  for federal income tax
      purposes,   may  be  subject  to  limitation  resulting  from  changes  in
      ownership.

16.   Common stock options:

      The Board of Directors has full  authority and discretion to determine the
      eligible  participants  to be granted the  options,  the  exercise  option
      price,  the date of issuance and the date of expiration.  The total number
      of shares set aside was  143,417.  At the grant  date the option  exercise
      price was  equal to the fair  market  value of the  Company's  stock.  The
      options expire five years from the grant date. There were 143,417 and zero
      options granted during the calendar years 2005 and 2004.

      Information  relating to stock option and warrant  activity for 2005 is as
      follows:

                                                                   Weighted
                                                     Shares         Average
                                                   Underlying      Exercise
                                                    Options         Price
                                                  -----------     -----------
      Outstanding at January 1, 2003                   44,089     $     11.25
         Granted                                           --              --
         Cancelled                                     31,089     $      9.00
                                                  -----------     -----------
      Outstanding at December 31, 2004                 13,000     $      2.50
         Granted                                      143,417     $      2.22
         Cancelled                                  (  13,000)    $      2.50
                                                  -----------     -----------
      Outstanding at December 31, 2005                143,417     $      2.22
                                                  ===========     ===========
      Options exercisable at December 31, 2004         13,000     $      2.50
                                                  ===========     ===========
      Options exercisable at December 31, 2005        143,417     $      2.22
                                                  ===========     ===========

                            Stock Options Outstanding

                                      Weighted Avg     Weighted
                           Shares       Remaining      Average
      Range of           Underlying    Contractual    Exercise
      Exercise Prices      Options    Life in Years     Price
      ---------------    ----------   -------------   --------
      $2.00-2.63            143,417            3.77   $   2.22
                         ==========   =============   ========


                                                                              30
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004


                            Stock Options Exercisable

                                Weighted Avg     Weighted
                           Shares       Remaining      Average
      Range of           Underlying    Contractual    Exercise
      Exercise Prices      Options    Life in Years     Price
      ---------------    ----------   -------------   --------
      $2.00-2.63            143,417            3.77   $   2.22
                         ==========   =============   ========


      The Company has chosen the  intrinsic  value method as its option  pricing
      model.  This  information  is  presented  in the  summary  of  significant
      accounting  policies,  on page 22.  Footnote 16,  common stock options has
      been expanded to include the assumptions  underlying the pricing model and
      the pro-forma  compensation  effects for the year ended December 31, 2005,
      in which 143,417 options were granted. The following has been added to the
      footnote:

      Pro forma  information  regarding net loss is required by SFAS 123,  which
      also  requires  that the  information  be determined as if the Company has
      accounted for its employee stock options under the fair value method.  The
      fair value for options  granted was  estimated  at the date of grant using
      the Black Scholes option pricing model with the following weighted-average
      assumptions:


      For 2005 risk free  interest  rate of 2.91%;  expected  dividends of zero;
      volatility  factor of the expected  market price of the  Company's  common
      stock of 231% for options with an expected life of 5 years;  The Company's
      net  loss  for the year  ended  December  31,  2005  was  $1,064,311.  The
      Company's  pro  forma net loss for the year  ended  December  31,2005  was
      $1,092,948.  The  Company's  basic and  diluted net loss per share for the
      year ended  December 31, 2005 was $(2.14).  The  Company's pro forma basic
      and  diluted net loss per share for the year ended  December  31, 2005 was
      $(2.20). The impact of the Company's pro forma net loss and loss per share
      of the SFAS 123 pro forma requirements are not likely to be representative
      of future pro forma results.


      Options granted to employees were:

      Date Granted      Purpose            Options
      ------------      -------------      -------
      1/13/2005         Director fees       48,000
      1/13/2005         Employee            38,400
       3/2/2005         Vendor               9,017
       8/3/2005         Consultant           4,000
       8/3/2005         Director fees       17,000
       8/3/2005         Employee             1,000
       8/8/2005         Consultant          10,000
      8/31/2005         Consultant           8,000
       9/9/2005         Consultant           8,000
                                           -------
                                           143,417
                                           =======

      During 2005 the Company  issued 30,000  options to  consultants.  The fair
      market value of these  options total  $77,400.  The Company did not record
      this expense  since it was  immaterial  in  comparison  to the net loss of
      $1,064,311.  However when these  options were  exchanged  for $.025 common
      stock shares on February 17, 2006 an expense of $37,500,  the market value
      on that date, was recorded.



                                                                              31
<PAGE>

          BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC. AND SUBSIDIARIES
               (FORMERLY CREATIVE BAKERIES, INC. AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2005 AND 2004


18.   Subsequent Events


      On February  17, 2006 the Board of  directors  authorized  the exchange of
      143,417options for shares of the company's $.025 common stock on a one for
      one basis.


      On March 20, 2006 the Board of Directors effectuated a reverse stock split
      at a ratio of 1:25 as  authorized by the  shareholders  on August 4, 2004.
      All stock  references  have been  retroactively  adjusted to reflect  this
      split.

      The reverse split of the Company's  outstanding  common stock as traded on
      the  Over  The  Counter  Bulletin  Board  (OTCBB)  is  effective  with the
      commencement  of business on March 22, 2006. The new tradin symbol for the
      Company's common stock on the OTCBB following the reverse split is BCKE.

      The  company  has  operated  at a loss  since  inception.  Management  has
      attempted to increase  revenues  through a number of business  initiatives
      and streamline operations by undertaking a number of cost saving measures.
      However,  despite the Company's  best  efforts,  it has never been able to
      operate at a profit.  Brooklyn Cheesecake has sought funding for continued
      operations  through a number of sources  including  private  placements of
      equity ("PIPE") and through loans.  The Company has not been able to raise
      sufficient  funds through PIPE's to maintain its operations and has had to
      rely primarily  upon a series of arms length loans from certain  executive
      officers and  directors  for funding of its  operations.  These loans have
      been  secured by a pledge of  certain  assets of the  Company's  operating
      subsidiary.  In addition to not having  sufficient  funds to maintain  its
      business operations, Brooklyn Cheesecake has been unable to raise funds to
      satisfy  its  outstanding  obligations  including  the  loans  made by its
      executive  officers and directors that have been used to maintain business
      operations.  In turn, the Company has entered into a non-binding letter of
      intent with its Chief  Executive  Officer and  President  whereby it would
      exchange  certain assets for  satisfaction of and assumption of a majority
      of the Company's  outstanding  obligations and  liabilities.  The proposed
      transaction  is subject to a satisfactory  fairness  opinion and customary
      closing conditions.  Additionally,  should the proposed transaction occur,
      the nature of the Company's business operations will change  significantly
      from a company that  manufactures  and sells baked goods to a company that
      holds and licenses intellectual property.


                                                                              32
<PAGE>

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE.

      On January 13, 2005, the Company's Board of Directors engaged Sherb & Co.,
LLP  ("Sherb") to audit the  consolidated  financial  statements of the Company.
During the Company's two most recent fiscal years and through  January 13, 2005,
the Company has not consulted with Sherb regarding either (i) the application of
accounting principles to a specified transaction,  either completed or proposed;
or the type of audit opinion that might be rendered on the  Company's  financial
statements,  and neither a written  report nor oral advice was provided that was
an important  factor  considered by the Company in reaching a decision as to the
accounting,  auditing or financial  reporting issue; or (ii) any matter that was
either  the  subject  of a  disagreement,  as  that  term  is  defined  in  Item
304(a)(1)(iv)  of  Regulation  S-B and the related  instructions  to Item 304 of
Regulation S-B.

ITEM 8A. CONTROLS AND PROCEDURES


            Our  management   evaluated  the  effectiveness  of  our  disclosure
            controls  and  procedures  pursuant  to  Rule  13a-15(b)  under  the
            Securities  Exchange Act of 1934  (Exchange  Act) as of December 31,
            2005. Based on the evaluation of the Company's  disclosure  controls
            and  procedures as of the end of the fiscal  period  covered by this
            report, the Chief Executive Officer and Chief Financial Officer have
            concluded that in their judgment,  the Company's disclosure controls
            and  procedures  are  designed to ensure that  material  information
            relating to the Company,  including the Company's  subsidiaries,  is
            accumulated and communicated to the Company's management,  including
            its principal executive and financial officers of the Company or its
            subsidiaries,   to  allow  timely   decisions   regarding   required
            disclosure. Management necessarily applied its judgment in assessing
            the costs and  benefits of such  controls and  procedures,  which by
            their  nature  can  provide  only  reasonable   assurance  regarding
            management's  control  objectives.  The  design  of  any  system  of
            controls  and  procedures  is based in part on  certain  assumptions
            about the  likelihood  of future  events.  There can be no assurance
            that any design will succeed in achieving its stated goals under all
            potential future conditions, regardless of how remote.

            There were no significant changes in the Company's internal controls
            or in other factors that could  significantly  affect these controls
            subsequent to the date of their evaluation, including any corrective
            actions  with  regard  to  significant   deficiencies  and  material
            weaknesses.

      Limitations on the Effectiveness of Controls

      A control system,  no matter how well conceived and operated,  can provide
only  reasonable,  not absolute,  assurance  that the  objectives of the control
system are being met.  Further,  the design of a control system must reflect the
fact that there are resource  constraints,  and the benefits of controls must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control issues and instances of fraud,  if any, within the Company have been
detected.  These  inherent  limitations  include the realities that judgments in
decision making can be faulty, and that breakdowns can occur because of a simple
error or mistake.  Additionally,  controls can be circumvented by the individual
acts of some  persons,  by  collusion of two or more  people,  or by  management
override of the control.  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,  controls may be inadequate
because of changes in conditions,  or the degree of compliance with the 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 may
not be  detected.  The Company  conducts  periodic  evaluations  of its internal
controls to enhance, where necessary, its procedures and controls."


ITEM 8B. OTHER INFORMATION


                                                                              33
<PAGE>

Issuance of Common Stock


      On February  17, 2006 the Board of  directors  authorized  the exchange of
143,417  options for shares of the company's $.025 common stock on a one for one
basis to members of the Board and certain consultants.


Reverse Stock Split

      On March 20,  2006 the  Company  affected a 1 for 25 reverse  split of its
common stock pursuant to prior shareholder  approval,  and filed an Amendment to
its  Certificate  of  Incorporation  to implement the reverse stock split of the
outstanding  shares  of the  Company's  common  stock at a ratio  of  1:25.  The
Company's  authorized  shares of common  stock and  preferred  stock will not be
affected by the reverse split.

      The reverse split of the Company's  outstanding  common stock as traded on
the Over the Counter  Bulletin Board (OTCBB) is effective with the  commencement
of business on March 22, 2006. The new trading  symbol for the Company's  common
stock on the OTCBB following the reverse split is BCKE.

Proposed Exchange of Assets

      The  Company  has  operated  at a loss  since  inception.  Management  has
attempted  to increase  revenues  through a number of business  initiatives  and
streamline operations by undertaking a number of cost saving measures.  However,
despite  the  Company's  best  efforts,  it has never  been able to operate at a
profit.  Brooklyn Cheesecake has sought funding for continued operations through
a number of sources including private  placements of equity ("PIPE") and through
loans. The Company has not been able to raise sufficient funds through PIPE's to
maintain  its  operations  and has had to rely  primarily  upon a series of arms
length loans from certain  executive  officers and  directors for funding of its
operations.  These loans have been secured by a pledge of certain  assets of the
Company's  operating  subsidiary.  In addition to not having sufficient funds to
maintain its business  operations,  Brooklyn Cheesecake has been unable to raise
funds to satisfy its outstanding  obligations  including the loans made to it by
its executive  officers and directors  that have been used to maintain  business
operations. In turn, the Company has entered into a non-binding letter of intent
with its Chief Executive Officer and President whereby it would exchange certain
assets  for  satisfaction  of and  assumption  of a  majority  of the  Company's
outstanding obligations and liabilities.  The proposed transaction is subject to
a satisfactory fairness opinion and customary closing conditions.  Additionally,
should the proposed  transaction  occur,  the nature of the  Company's  business
operations will change  significantly from a company that manufactures and sells
baked goods to a company that holds and licenses intellectual property.


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

Information Concerning the Board of Directors and Executive Officers

      The following table sets forth certain information concerning the Board of
Directors,  persons nominated to be elected as directors and executive  officers
of the Company:


                                                                              34
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Name of Director or
Executive Officer,
Age and Position          Principal Occupation                       Date of Initial
Held with Company         For Previous Five Years                    Election as Director
-----------------------------------------------------------------------------------------
<S>                       <C>                                        <C>
Ron Schutte, 49           Chief Executive Officer,                   June 1, 2001
President and Director    Aug. 2000 - May 2001
                          Brooklyn Cheesecake Company
                          Apr. 1999 - Jul 2000
                          Crestwood Consulting
                          Mar 1997 - Mar 1999
                          Mother's Kitchen
                          July 1982 - Feb 1997
                          Pres,Creative Bakers Inc.
                          Brooklyn, NY
-----------------------------------------------------------------------------------------
Anthony Merante, 45       Certified Public Accountant                January 2003
Vice-President and        Chief Financial Officer
Director
-----------------------------------------------------------------------------------------
Carmelo Foti, 53          VP & Manager Credit & Marketing National   January 2003
Director                  Bank Of Egypt, NY Branch
-----------------------------------------------------------------------------------------
Vincent Bucchimuzzo, 52   Executive for CINN Worldwide               January 2003
Director                  Westchester Venture Group
                          Univest Partners 1982-1995
-----------------------------------------------------------------------------------------
Liborio Borsellino, 50    Partner, RBC and Associates                August 2004
Director
-----------------------------------------------------------------------------------------
David Rabe, 45            President, Interpro Systems, Inc.          August 2004
Director
-----------------------------------------------------------------------------------------
Donald O'Toole, 54        Senior Vice-president, Petry TV, Inc.      August 2005
Director
-----------------------------------------------------------------------------------------
</TABLE>

All  directors  hold office until the next annual  meeting of  shareholders  and
until their successors are elected and qualified.

Officers are appointed by the Board of Directors and serve at the  discretion of
the Board.

Section 16(a) Beneficial Ownership Reporting Compliance

The Securities and Exchange  Commission  (the  "Commission")  has  comprehensive
rules  relating  to the  reporting  of  securities  transactions  by  directors,
officers and  shareholders  who  beneficially own more than 10% of the Company's
Common Shares (collectively,  the "Reporting Persons").  These rules are complex
and  difficult  to  interpret.  Based  solely on a review of  Section 16 reports
received by the Company from  Reporting  Persons,  the Company  believes that no
Reporting  Person has failed to file a beneficial  ownership  report on a timely
basis during the most recent fiscal year,  except for Messrs Schutte and Merante
who filed beneficial ownership reports late.


                                                                              35
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

Compensation of Directors

Directors of the Company  receive a fee of $1,000 for attending  each meeting of
the Board of Directors or a committee  thereof.  In addition,  all directors are
reimbursed for their reasonable  out-of-pocket  expenses  incurred in connection
with attending such meetings.

Executive Compensation

The following table sets forth  compensation paid to the Chief Executive Officer
and to executive officers of the
Company, excluding those executive officers who did not receive an annual salary
and bonus in excess of $100,000, for the three years ended December 31, 2005

<TABLE>
<CAPTION>
--------------------------------- ----------------------------------------------------------------
Name and Principal Position       Year      Salary ($)      Bonus ($)    Other Annual Compensation
--------------------------------- ----------------------------------------------------------------
<S>                               <C>       <C>             <C>          <C>
Ron Schutte, CEO                  2005      $200,000        $0.00        $0.00
                                  2004      $200,000        $0.00        $0.00
                                  2003      $100,000        $0.00        $0.00
</TABLE>

No other executive officer received a salary and bonus in excess of $100,000 for
the three years ended December 31, 2005.

ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

The  following  table  sets forth the number  and  percentage  of Common  Shares
beneficially  owned,  as of December 31, 2005,  by: (i) all persons known by the
Company to be the beneficial owner of more than 5% of the outstanding  shares of
Common  Stock;  (ii) each  director  of the  Company;  (iii)  each of the "named
executive officers" as defined under the rules and regulations of the Securities
Act of 1933, as amended;  and (iv) all  directors and executive  officers of the
Company as a group (6 persons):

-----------------------------------------------------------------------------
NAME OF BENEFICIAL OWNER          NO. OF SHARES BENEFICIALLY OWNED   PERCENT
-----------------------------------------------------------------------------
Ronald L. Schutte (officer)         125,368 (1)                          23.3%
Anthony J. Merante (officer)         59,852 (2)                          11.1%
Charles Brothman                     28,000                               5.2%
James Bruchetta                      28,000                               5.2%
Richard Rosa                         28,000                               5.2%
Bailey Family Trust                  33,602                               6.3%
ICM Asset Managment                  35,280                               6.6%
Directors and Nominal Executives     56,905 (3)                          10.5%
as a Group (5 persons)

----------
(1)   Includes 725,000 options exercisable at $.08 and $.10 per share.
(2)   Includes 425,000 options exercisable at $.08 and $.10 per share.
(3)   Includes 1,125,000 options exercisable at $.08 and $.10 per share.


                                                                              36
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Notes from Chairman and Chief Executive Officer

Note dated May 21,  2004 in the  amount of  $54,000,  payable  on  demand,  with
interest  at the  rate of 8.5%  per  annum.  The note is  unsecured.  This  note
consolidates  into a single  promissory note,  several loan advances received by
the Company in the first and second quarters of 2004.

Note dated  November  30, 2005 in the amount of $317,000,  with  interest at the
rate of 13% per annum.  Interest  payments are due on the last day of each month
with the note  maturing  on August 31,  2004.  The note is secured by all of the
Company's assets.

Note payable  effective April 2, 2003 in the original amount of $50,000,  with a
variable  interest rate that was 9.9% at December 31, 2005.  Monthly  payment of
principal and interest are  approximately  $1,300.  Note is unsecured and due on
demand. The outstanding balance on the loan was $45,330 at December 31, 2005.

Note dated  January 1, 2003 in the  original  amount of $88,000 with an interest
rate of 8.5% per annum.  The note is unsecured.  Interest only payments were due
for the first  eighteen  months and  principal  and  interest  payments  are due
monthly thereafter until the maturity date. The balance on the note was $112,971
at December 31, 2005.

Note dated December 31, 2004 in the amount of $111,651,  payable on demand, with
interest  at the  rate of 8.5%  per  annum.  The note is  unsecured.  This  note
consolidates in a single  promissory note several loan advances  received by the
Company in the third and fourth quarters of 2004.

Note dated December 31, 2005 in the amount of $185,089,  payable on demand, with
interest  at the  rate of 8.5%  per  annum.  The note is  unsecured.  This  note
consolidates in a single  promissory note several loan advances  received by the
Company in the third and fourth quarters of 2004.

On January 31, 2006 all the notes were  consolidated  into one note to the Chief
Executive Officer,  inclusive of accrued interest totaling $995,818. The note is
secured by the Company's assets.

Notes from Vice-President and Chief Financial Officer

Note dated May 25,  2004 in the  amount of  $28,000,  payable  on  demand,  with
interest  at the  rate of 8.5%  per  annum.  The note is  unsecured.  This  note
consolidates in a single  promissory note several loan advances  received during
the first and second quarters of 2004.

Note payable effective August 18, 2003 in the original amount of $50,000, with a
variable interest rate that was 11.25% at December 31, 2005. Monthly payments of
principal  and  interest  are  approximately  $1,000.  Note  is  unsecured.  The
outstanding balance on the loan was $48,588 at December 31, 2005.

Note dated  December 31, 2004 in the amount of $8,911,  payable on demand,  with
interest  at the  rate of 8.5%  per  annum.  The note is  unsecured.  This  note
consolidates in a single  promissory note several loan advances  received during
the third and fourth quarters of 2004.

Note dated September 30, 2005 in the amount of $94,201,  payable on demand, with
interest  at the  rate of 8.5%  per  annum.  The note is  unsecured.  This  note
consolidates in a single  promissory note several loan advances  received during
the first, second, and third quarters of 2005.

On January 31, 2006 all the notes were  consolidated  into one note to the Chief
Financial Officer,  inclusive of accrued interest totaling $187,086. The note is
secured by the Company's assets.


                                                                              37
<PAGE>

Proposed Exchange of Assets

These  promissory  notes  described  above  and  issued to the  Company's  Chief
Executive  Officer and Chairman have been secured by a pledge of certain  assets
of the  Company's  operating  subsidiary.  The Company  currently  does not have
sufficient  funds to satisfy the loans made to it by its executive  officers and
directors that have been used to maintain business operations.  Resultantly, the
Company has entered into a non-binding letter of intent with its Chief Executive
Officer and President  whereby it would exchange certain assets for satisfaction
of and  assumption of a majority of the Company's  outstanding  obligations  and
liabilities.  The proposed  transaction  is subject to a  satisfactory  fairness
opinion and  customary  closing  conditions.  Additionally,  should the proposed
transaction occur, the nature of the Company's  business  operations will change
significantly  from a  company  that  manufactures  and sells  baked  goods to a
company that holds and licenses intellectual property.


                                                                              38
<PAGE>

ITEM 13.  EXHIBITS

EXHIBITS

      2.1   Purchase and Sale  Agreement,  dated June 2, 1995,  by and among the
            Company,  Greenberg  Dessert  Associates  Limited  Partnership,  SMG
            Baking Enterprises,  Inc. and its limited partners.  Incorporated by
            reference  to the  Company's  Registration  Statement  on Form  SB-2
            Registration Number 33-96094.

      2.2   Stock  Purchase  Agreement,  dated as of January  17,  1997,  by and
            between   the   Company  and  Philip   Grabow,   without   exhibits.
            Incorporated by reference to Schedule 13-D filed by Philip Grabow on
            SEC File Number 005-48185.

      3.1   Restated Certificate of Incorporation.  Incorporated by reference to
            the  Company's  Registration  Statement  on Form  SB-2  Registration
            Number 33-96094.

      3.2   Amended and  Restated  By-laws.  Incorporated  by  reference  to the
            Company's  Registration  Statement on Form SB-2 Registration  Number
            33-96094.

      3.3   Amendment to Certificate of Incorporation. Incorporated by reference
            to the  Company's  Current  Report on Form 8-K,  dated  February 23,
            2005.

      3.4   Amendment to Certificate of Incorporation. Incorporated by reference
            to the Company's Current Report on Form 8-K, dated March 22, 2006.

      4.1   Form of  certificate  for shares of Common  Stock.  Incorporated  by
            reference  to the  Company's  Registration  Statement  on Form  SB-2
            Registration Number 33-96094.

      4.2   Form of  Representatives  Warrant.  Incorporated by reference to the
            Company's  Registration  Statement on Form SB-2 Registration  Number
            33-96094.

      10.   Loan  Agreement,  dated July 10,  1995,  by and between  InterEquity
            Capital Partners, L.P. and the Company. Incorporated by reference to
            the  Company's  Registration  Statement  on Form  SB-2  Registration
            Number 33-96094.

      10.1  Employment  Agreement,  dated  July 10,  1995,  by and  between  the
            Company and Stephen Fass. Incorporated by reference to the Company's
            Registration Statement on Form SB-2 Registration Number 33-96094.

      10.2  Employment Agreement,  dated as of July 10, 1995, by and between the
            Company and Willa Rose Abramson.

      10.3  Employment Agreement,  dated as of July 10, 1995, by and between the
            Company and Maria Maggio Marfuggi.  Incorporated by reference to the
            Company's  Registration  Statement on Form SB-2 Registration  Number
            33-96094.

      10.4  Employment Agreement and Consulting Agreement,  dated July 10, 1995,
            by and  between  the Company  and Seth  Greenberg.  Incorporated  by
            reference  to the  Company's  Registration  Statement  on Form  SB-2
            Registration Number 33-96094.

      10.5  Consulting  Agreement,  dated  July 10,  1995,  by and  between  the
            Company and William Greenberg Jr. and Carol Greenberg.  Incorporated
            by reference to the  Company's  Registration  Statement on Form SB-2
            Registration Number 33-96094.

      10.6  Departmental  License  Agreement  effective  February  1995  by  and
            between the Company and


                                                                              39
<PAGE>

            Macy's  East,  Inc.  Incorporated  by  reference  to  the  Company's
            Registration Statement on Form SB-2 Registration Number 33-96094.

      10.8  Form of Warrant for InterEquity Capital Partners,  L.P. Incorporated
            by reference to the  Company's  Registration  Statement on Form SB-2
            Registration Number 33-96094.

      10.9  1995 William  Greenberg Jr.  Desserts and Cafes,  Inc.  Stock Option
            Plan.  Incorporated  by  reference  to  the  Company's  Registration
            Statement on Form SB-2 Registration Number 33-96094.

      10.10 Lease  Agreement  dated July 1995  between  the  Company  and Murray
            Greenstein.  Incorporated by reference to the Company's Registration
            Statement on Form SB-2 Registration Number 33-96094.

      10.11 Lease Agreement dated January 1994 between  Schnecken  Baking Realty
            Corp.  and  Gerel  Corporation.  Incorporated  by  reference  to the
            Company's  Registration  Statement on Form SB-2 Registration  Number
            33-96094.

      10.12 Assignment  and  Assumption  of Lease  dated July 1995  between  the
            Company and Schnecken Baking Realty Corp.  Incorporated by reference
            to the Company's  Registration  Statement on Form SB-2  Registration
            Number 33-96094.

      10.13 Lease dated April 1991 between  Greenberg's  35th Street Baking Co.,
            Inc. and Rugby Managed Asset Fund.  Incorporated by reference to the
            Company's  Registration  Statement on Form SB-2 Registration  Number
            33-96094.

      10.14 Assignment  and  Assumption  of Lease  dated July 1995  between  the
            Company and  Greenberg's  35th  Street  Baking Co.  Incorporated  by
            reference  to the  Company's  Registration  Statement  on Form  SB-2
            Registration Number 33-96094.

      10.15 Lease dated May 1989 as modified in January 1991 between Greenberg's
            Triple S. Baking Co., Inc. and Stahl Real Estate Co. Incorporated by
            reference  to the  Company's  Registration  Statement  on Form  SB-2
            Registration Number 33-96094.

      10.16 Assignment  and  Assumption  of Lease  dated July 1995  between  the
            Company and Greenberg's  Triple S. Baking Co., Inc.  Incorporated by
            reference  to the  Company's  Registration  Statement  on Form  SB-2
            Registration Number 33-96094.

      10.17 Consulting  Agreement,  dated  July 10,  1995,  by and  between  the
            Company  and  Marilyn  Miller.  Incorporated  by  reference  to  the
            Company's  Registration  Statement on Form SB-2 Registration  Number
            33-96094.

      10.18 Form  of  Indemnity  Agreement.  Incorporated  by  reference  to the
            Company's  Registration  Statement on Form SB-2 Registration  Number
            33-96094.

      10.19 Sublease dated December 1995 between Timothy's Coffees of the World,
            Inc.,  and the Company.  Incorporated  by reference to the Company's
            Registration Statement on Form SB-2 Registration Number 33-96094.

      10.20 Lease dated March 8, 1995 between Harran  Holding  Corp.,  c/o A. J.
            Clarke Management and the Company.  Incorporated by reference to the
            Company's Annual Report for the fiscal year ended December 31, 1995,
            on Form 10-KSB Commission File Number 1-13984.

      10.21 Agreement  dated  January  13,  1996 by and  between the Company and
            Barry Kaplan Associates.  Incorporated by reference to the Company's
            Annual Report for the fiscal year ended December


                                                                              40
<PAGE>

            31, 1995, on Form 10-KSB Commission File Number 1-13984.

      10.22 Employment  Agreement,  dated  January 23, 1997,  by and between the
            Company  and  Philip  Grabow.   Incorporated  by  reference  to  the
            Company's Annual Report for the fiscal year ended December 31, 1996,
            on Form 10-KSB Commission.

      10.23 Form of Warrant for the Private  Placement made in conjunction  with
            the JMS  Subsidiary  acquisition.  Incorporated  by reference to the
            Company's Annual Report for the fiscal year ended December 31, 1996,
            on Form 10-KSB Commission.

      10.24 Stock Purchase  Agreement dated August 28, 1997, between the Company
            and  Yona  Abrahami.  Incorporated  by  reference  to the  Company's
            Current Report on Form 8-K, dated September 11, 1997 and Form 8-K/A,
            dated November 17, 1997.

      10.25 Employment  Agreement  dated August 28, 1992 between the Company and
            Yona Abrahami.  Incorporated  by reference to the Company's  Current
            Report on Form 8-K, dated  September 11, 1997 and Form 8-K/A,  dated
            November 17, 1997.

      10.26 Employment  Agreement  dated August 28, 1992 between the Company and
            David Abrahami.  Incorporated by reference to the Company's  Current
            Report on Form 8-K, dated  September 11, 1997 and Form 8-K/A,  dated
            November 17, 1997.

      10.27 Amendment to Stock Purchase  Agreement dated March 10, 1997, between
            the Company and Yona  Abrahami.  Incorporated  by  reference  to the
            Company's Annual Report for the fiscal year ended December 31, 2002,
            on Form 10KSB/A No. 2.

      10.28 Sixth  Amendment to Lease dated October 31, 2003 between the Company
            and Airport Plaza Shopping Center, L.L.C.  Incorporated by reference
            to the Company's  Annual  Report for the fiscal year ended  December
            31, 2003, on Form 10KSB/A No. 2.

      10.29 Loan and  Security  Agreement  dated  October  9, 2003  between  the
            Company and Fairfield  Gourmet Food Corp.  Incorporated by reference
            to the Company's  Annual  Report for the fiscal year ended  December
            31, 2003, on Form 10KSB/A No. 2.

      10.30 Loan and  Security  Agreement  dated  September  1, 2004 between the
            Company  and  Ronald L Schutte.  Incorporated  by  reference  to the
            Company's Annual Report for the fiscal year ended December 31, 2004,
            on Form 10KSB.


      10.31 Note  dated  September  1, 2004  between  the  Company  and Ronald L
            Schutte.  Incorporated  by reference to the Company's  Annual Report
            for the fiscal year ended December 31, 2004, on Form 10KSB.

      10.32 Loan and  Security  Agreement  dated  December  1, 2004  between the
            Company  and  Ronald L Schutte.  Incorporated  by  reference  to the
            Company's Annual Report for the fiscal year ended December 31, 2004,
            on Form 10KSB.

      10.33 Note  dated  December  1, 2004  between  the  Company  and  Ronald L
            Schutte.  Incorporated  by reference to the Company's  Annual Report
            for the fiscal year ended December 31, 2004, on Form 10KSB.

      10.34 Employment  agreement  dated January 1, 2005 between the Company and
            Ronald L Schutte.  Incorporated by reference to the Company's Annual
            Report for the fiscal year ended December 31, 2004, on Form 10KSB.


                                                                              41
<PAGE>

      10.35 Employment  agreement  dated January 1, 2005 between the Company and
            Anthony J.  Merante.  Incorporated  by  reference  to the  Company's
            Annual  Report for the fiscal year ended  December 31, 2004, on Form
            10KSB.

      10.36 Website  Development and Service  Agreement  between the Company and
            Burbro  Capital,  Inc.  dated as of March 1, 2005.  Incorporated  by
            reference to the Company's Current Report on Form 8-K dated March 7,
            2005.

      10.37 Form of Warrant Exchange and Release  Agreement  between the Company
            and Bailey Family  Trust,  Fortuna  Investment  Partners and Fortuna
            Unplugged  dated December 9, 2004.  Incorporated by reference to the
            Company's Annual Report for the fiscal year ended December 31, 2004,
            on Form 10KSB.

      10.38 Promissory  Note dated  December  31,  2004  between the Company and
            Anthony J.  Merante.  Incorporated  by  reference  to the  Company's
            Annual  Report for the fiscal year ended  December 31, 2004, on Form
            10KSB.

      10.39 Modification  agreement  between the  Company and Ronald L.  Schutte
            dated April 30, 2005.  Incorporated  by  reference to the  Company's
            Current Report on Form 8-K dated May 5, 2005.

      10.40 Modification  agreement  between the  Company and Ronald L.  Schutte
            dated May 20,  2005.  Incorporated  by  reference  to the  Company's
            Current Report on Form 8-K dated May 26, 2005.

      10.41 Modification  agreement  between the  Company and Ronald L.  Schutte
            dated June 17, 2005.  Incorporated  by  reference  to the  Company's
            Current Report on Form 8-K dated June 23, 2005.

      10.42 Modification  agreement  between the  Company and Ronald L.  Schutte
            dated July 31, 2005.  Incorporated  by  reference  to the  Company's
            Current Report on Form 8-K dated August 4, 2005.

      *10.43 Factoring Agreement between the Company and Rockland Credit Finance
             LLC, dated August 26, 2005.

      *10.44 Financing Agreement between the Company and Rockland Credit Finance
             LLC, dated August 26, 2005.

      10.45 Modification  agreement  between the  Company and Ronald L.  Schutte
            dated November 30, 2005.  Incorporated by reference to the Company's
            Current Report on Form 8-K dated December 7, 2005.

      *10.46 Note dated  January,  31 2006  between  the  Company  and Ronald L.
             Schutte.

      *10.47 Note dated  January,  31 2006  between  the  Company and Anthony J.
             Merante.

      21.1  List of Subsidiaries of the Company,  the state of  incorporation of
            each,  and the names  under  which such  subsidiaries  do  business.
            Incorporated  by reference to the  Company's  Annual  Report for the
            fiscal year ended December 31, 2002, on Form 10KSB/A No. 2.

      *31.1 Certification of Chief Executive  Officer and president  pursuant to
            the Sarbanes-Oxley Act of 2002.

      *31.2 Certification of Chief Financial Officer and vice-president pursuant
            to the Sarbanes-Oxley Act of 2002.


                                                                              42
<PAGE>

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

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

---------------------
*     Filed Herewith.


                                                                              43
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT'S FEES AND SERVICES

The  following  table  shows the fees that we paid or accrued  for the audit and
other services provided by our principal Accountant for the 2005 and 2004 fiscal
years.
                                         Fiscal 2005        Fiscal 2004
                                        ------------       ------------
Audit Fees                              $     34,000       $     34,919
Audit-Related Fees                                 0                  0
Tax Fees                                           0                  0
All Other Fees                                     0                  0
                                        ------------       ------------
         Total                          $     34,000       $     34,919
                                        ============       ============

Audit  Fees  --  This  category  includes  the  audit  of our  annual  financial
statements, review of financial statements included in our Form 10-QSB Quarterly
Reports and services that are normally  provided by the independent  auditors in
connection with engagements for those fiscal years.  This category also includes
advice on audit and accounting matters that arose during, or as a result of, the
audit or the review of interim financial statements.

Audit-Related  Fees -- This category  consists of assurance and related services
by the  independent  auditors that are reasonably  related to the performance of
the audit or review of our financial statements and are not reported above under
"Audit Fees." The services for the fees  disclosed  under this category  include
consultation  regarding  our  correspondence  with the SEC and other  accounting
consulting.

Tax Fees -- This  category  consists of  professional  services  rendered by our
independent  auditors for tax  compliance  and tax advice.  The services for the
fees disclosed under this category include tax return  preparation and technical
tax advice.

All Other Fees -- This category consists of fees for other miscellaneous items.

Our Board of  Directors  has adopted a procedure  for  pre-approval  of all fees
charged by our independent auditors. Under the procedure, the Board approves the
engagement letter with respect to audit, tax and review services. Other fees are
subject to pre-approval by the Board, or, in the period between  meetings,  by a
designated  member of  Board.  Any such  approval  by the  designated  member is
disclosed to the entire Board at the next  meeting.  The audit and tax fees paid
to the auditors with respect to fiscal year 2005 were pre-approved by the entire
Board of Directors.


                                                                              44
<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 March 28, 2005.

BROOKLYN CHEESECAKE & DESSERTS COMPANY, 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
March 27, 2005.

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


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


/s/ Anthony Merante                  Vice-President, Chief Financial
----------------------------------   Officer/Director
Anthony Merante


/s/ Carmelo Foti                     Director
----------------------------------
Carmelo Foti


/s/ Vincent Bucchimuzzo              Director
----------------------------------
Vincent Bucchimuzzo


/s/Liborio Borsellino                Director
----------------------------------
Liborio Borsellino


/s/David Rabe                        Director
----------------------------------
David Rabe


/s/Donald O'Toole                    Director
----------------------------------
Donald O'Toole


                                                                              45