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

                                   Form 10-QSB


(Mark One)
       [X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended: March 31, 2004
                  --------------------------------------------

       [  ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT

      For the transition period from                      to
                                    ---------------------    -------------------
                        Commission file number 33-4707-NY
         ---------------------------------------------------------------

                                    CBQ, Inc.
   --------------------------------------------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)

        Colorado                                           84-1047159
--------------------------------------------------------------------------------
  (State or other jurisdiction                           (IRS Employer
 of incorporation or organization)                    Identification No.)

               12535 Orange Drive, Suite 163, Davie, Florida 33330
 ------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (954) 474-0224
                            Issuer's telephone number


(Former  name,  former  address and former  fiscal year,  if changed  since last
report.)


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDING DURING THE PRECEDING FIVE YEARS

         Check whether the registrant  filed all documents and reports  required
to be  filed  by  Section  12,  13 or  15(d)  of  the  Exchange  Act  after  the
distribution of securities under a plan confirmed by a court. Yes ----- No -----



<PAGE>




                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practical date: March 31, 2004  Approximately
500,000,000 shares

         Transitional Small Business Disclosure Format (check one).
Yes      ;  No   X
    ----       -----








































<PAGE>



                                     PART I

Item 1.  Financial Statements

                           CBQ, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                (Unaudited)
                                                                                 March 31,          December 31,
                                                                                    2004                2003
                                                                             ------------------  ------------------
Assets:

Current assets:
<S>                                                                          <C>                 <C>
   Cash                                                                      $           90,250  $           24,841
   Deferred Tax Asset                                                                     7,300               7,300
                                                                             ------------------  ------------------

     Total Current Assets                                                                97,550              32,141
                                                                             ------------------  ------------------

Fixed Assets:
   Office Equipment                                                                       2,688                   -
   Accumulated Depreciation                                                                (224)                  -
                                                                             ------------------  ------------------

     Net Fixed Assets                                                                     2,464                   -
                                                                             ------------------  ------------------

Other non-current assets:
   Deposits                                                                               1,713               1,713
                                                                             ------------------  ------------------

         Total assets                                                        $          101,727  $           33,854
                                                                             ==================  ==================
</TABLE>


















<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Continued)
<TABLE>
<CAPTION>



                                                                                (Unaudited)
                                                                                  March31,          December 31,
                                                                                    2004                2003
                                                                             ------------------  ------------------

Liabilities and Stockholders' Deficit:
Current liabilities:
<S>                                                                          <C>                 <C>
   Accounts payable, trade                                                   $            8,570  $           63,117
   Accrued expenses                                                                      79,000             254,000
   Customer Deposits                                                                     60,000              60,895
   Due to related party                                                                       -               1,215
   Due to shareholders                                                                        -             145,000
                                                                             ------------------  ------------------

      Total liabilities                                                                 147,570             524,227
                                                                             ------------------  ------------------

Stockholders' Deficit:
   Preferred Stock,  par value $.001 per share
      Authorized  100,000,000  shares,
      Issued -0- shares at March 31, 2004 and
      December 31, 2003                                                                       -                   -
   Common Stock, par value $.0001 per share
      Authorized 500,000,000 shares,
      Issued 499,350,300 Shares at March 31, 2004
      and December 31, 2003                                                              49,935              49,935
   Additional paid-in capital                                                           935,986             563,658
   Shareholder receivables                                                             (118,628)           (112,517)
   Accumulated deficit                                                                 (913,136)           (991,449)
                                                                             ------------------  ------------------

     Total Stockholders' Deficit                                                        (45,843)           (490,373)
                                                                             ------------------  ------------------

     Total Liabilities and
       Stockholders' Deficit                                                 $          101,727  $           33,854
                                                                             ==================  ==================
</TABLE>






                             See accompanying notes.


<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>




                                                                             (Unaudited)
                                                                    For the three months ended
                                                                               March 31,
                                                                ----------------------------------------
                                                                       2004                  2003
                                                                ------------------    ------------------

<S>                                                             <C>                   <C>
Revenues                                                        $          273,432    $          176,938
Cost of Sales                                                              142,140                90,679
                                                                ------------------    ------------------

   Gross Profit                                                            131,292                86,259
                                                                ------------------    ------------------

Operating Expenses:
   Sales and Marketing                                                       4,815                   323
   Other General and Administrative                                         47,344                66,905
                                                                ------------------    ------------------

     Total Operating Expenses                                               52,159                67,228
                                                                ------------------    ------------------

         Net Operating Income (Loss)                                        79,133                19,031

Other Income (Expense):
   Interest Expense                                                           (820)               (2,299)
                                                                ------------------    ------------------

     Net Income (Loss)                                          $           78,313    $           16,732
                                                                ==================    ==================

Weighted Average Shares Outstanding                                    499,350,300            97,000,000
                                                                ==================    ==================

Income (Loss) per Share                                         $                -    $                -
                                                                ==================    ==================
</TABLE>











                             See accompanying notes.


<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                      (Unaudited)
                                                             For the three months ended
                                                                        March 31,
                                                          -------------------------------------
                                                                2004                2003
                                                          -----------------  ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Continuing operations:
<S>                                                       <C>                <C>
   Net Income (Loss)                                      $          78,313  $           16,732
Adjustments necessary to reconcile net loss
   to net cash used in operating activities:
      Depreciation                                                      224                   -
     (Increase) decrease in security deposits                             -              (1,713)
      Increase (decrease) in accounts payable                        (3,434)                  -
      Increase (decrease) in customer deposits                         (895)                  -
                                                          -----------------  ------------------

Net cash used in operating activities                                74,208              15,019
                                                          -----------------  ------------------

CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of fixed assets                                             (2,688)                  -
                                                          -----------------  ------------------
Net cash provided by (used) investing activities                     (2,688)                  -
                                                          -----------------  ------------------

CASH FLOWS FROM FINANCING
ACTIVITIES:
Shareholder receivables                                              (6,111)                  -
                                                          -----------------  ------------------
Net Cash Provided by
  Financing Activities                                               (6,111)                  -
                                                          -----------------  ------------------

Net (Decrease) Increase in
  Cash and Cash Equivalents                                          65,409              15,019
Cash and Cash Equivalents
  at Beginning of Period                                             24,841                   -
                                                          -----------------  ------------------
Cash and Cash Equivalents
  at End of Period                                        $          90,250  $           15,019
                                                          =================  ==================


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest                                                $             820  $            2,299
  Franchise and income taxes                              $               -  $                -
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES: NONE

                             See accompanying notes.


<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This summary of accounting  policies for CBQ, Inc. and  Subsidiaries is
presented to assist in understanding  the Company's  financial  statements.  The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.

Interim Reporting

         The  unaudited  financial  statements  as of March 31, 2004 and for the
three month  periods  ended March 31, 2004 and 2003  reflect,  in the opinion of
management,  all adjustments  (which include only normal recurring  adjustments)
necessary to fairly state the financial  position and results of operations  for
the three  months.  Operating  results for interim  periods are not  necessarily
indicative of the results which can be expected for full years.

Organization and Basis of Presentation

         CBQ, Inc., (formerly Freedom Funding, Inc.) a Colorado corporation, was
incorporated  September 18, 1986,  under the laws of the State of Delaware,  and
changed its situs to Colorado in 1989.

         Souvenir  Direct,  Inc. was incorporated on September 9, 2002 under the
laws of the State of Florida.

         On December 1, 2003, CBQ, Inc. acquired 100% of the outstanding  common
stock of Souvenir  Direct,  Inc. in a reverse  acquisition.  At this time, a new
reporting entity was created.  Souvenir Direct, Inc. is considered the reporting
entity for financial reporting purposes.

Nature of Business

         The  Company  is engaged  in the  business  of  marketing  and  selling
novelty,   gift,  and  promotional  items  in  North  America.   The  items  are
manufactured  in the  People's  Republic of China by  third-party  manufacturing
companies.

Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Principles of Consolidation

         The consolidated  financial statements for the three months ended March
31, 2004 and the year ended December 31, 2003 include the accounts of the parent
entity and its subsidiary Souvenir Direct, Inc.


<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

         The  results  of  subsidiaries  acquired  or sold  during  the year are
consolidated  from their effective dates of acquisition  through their effective
dates of disposition.

         All  significant  intercompany  balances  and  transactions  have  been
eliminated.

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  required  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Net Income (Loss) Per Common Share

         Basic earnings (loss) per share has been computed by dividing  earnings
(loss) available to common stockholders by the weighted average number of common
shares  outstanding  during the years.  There  were no common  stock  equivalent
shares outstanding at March 31, 2004 and 2003.

Concentration of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign hedging arrangements.

Reclassifications

         Certain   reclassifications  have  been  made  in  the  2003  financial
statements to conform with the 2004 presentation.

Major Suppliers

         The Company's major  suppliers are from the People's  Republic of China
and to a lesser extent a variety of Pacific Rim countries. The Company relies on
30 manufacturing  concerns in China for its products.  The loss of these Chinese
manufacturing sources would adversely impact on the business of the Company.

Major Customers

         At March 31, 2004, the Company receives  approximately 36% of its gross
revenues  from  its top  three  accounts.  The  loss of  these  customers  would
adversely impact the business of the Company.


<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

Revenue Recognition

         Sales  revenue is  recognized  upon the  shipment of  merchandise  from
suppliers to customers.  Allowances for sales returns, rebates and discounts are
recorded  as a  component  on  net  sales  in  the  period  the  allowances  are
recognized.

Advertising

         Advertising  costs are  expensed as incurred.  Advertising  expense was
$4,815 for the three  months  ended March 31, 2004 and $323 for the three months
ended March 31, 2003.

Income Taxes

         The Company  accounts for income taxes under the provisions of SFAS No.
109, "Accounting for Income Taxes." SFAS No.109 requires recognition of deferred
income  tax  assets  and   liabilities   for  the  expected  future  income  tax
consequences,  based on enacted tax laws, of temporary  differences  between the
financial reporting and tax bases of assets and liabilities.

NOTE 2 - LEASES

         The Company leases approximately 1,500 square feet of office space from
Flamingo   Commons,   LLC.  The  lease   requires   monthly  lease  payments  of
approximately  $1,200 . The lease expires in September 2005. The office space is
used as the corporate  headquarters.  It is located at 12535 Orange Drive, Suite
613, Davie, Florida 33330.

         The Company also rents a storage  facility on a  month-to-month  basis.
Monthly rentals for the storage facility are approximately $150.

         Rental  expense  under these leases was  approximately  $15,000 for the
year ended December 31, 2003.










<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE 4 - LEASES (continued)

The minimum  future  lease  payments  under these leases for the next five years
are:


          Year Ended December 31,
-------------------------------------------
         2004                                             $       14,400
         2005                                                     10,800
         2006                                                          -
         2007                                                          -
         2008                                                          -
                                                          --------------
         Total minimum future lease payments              $       25,200
                                                          ==============

NOTE 5 - STOCK TRANSACTIONS

         On September 9, 2002, the Company issued 100 shares of common stock for
$2,774 of start- up expenses.

         On December 1, 2003,  the Company  issued  97,000,000  shares of common
stock to acquire Souvenir Direct, Inc. in a reverse acquisition.  The 100 shares
that  were  previously  issued  were  retroactively   adjusted  to  reflect  the
equivalent  number of shares  that were  issued in  connection  with the reverse
acquisition.  The acquisition was recorded by a credit to common stock of $9,600
and a debit to paid-in  capital of $2,674 and a debit to  retained  earnings  of
$6,926.  Also on December 1, 2003,  an additional  402,350,300  shares of common
stock were issued to the previous  owners of CBQ,  Inc. All  references to stock
reflect the retroactive adjustment to the shares.

NOTE 6 - INCOME TAXES

         As of December 31, 2003,  the  provision  for income taxes  consists of
federal  income tax and Florida state income tax. The provision  consists of the
following:


Current:
   Federal                                        $               -
   State                                                          -
                                                  -----------------
                                                                  -
   Deferred tax benefit                                      (7,300)
                                                  -----------------
   Income tax benefit                             $          (7,300)
                                                  =================

         Deferred taxes result from temporary  differences in the recognition of
income and expenses for income tax reporting and financial  statement  reporting
purposes. The Company had deferred tax






<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE 6 - INCOME TAXES (continued)

benefits of $7,300 as of December 31, 2003.  These deferred tax benefits are the
result of prepaid customer deposits that are made towards future sales.

         The  difference  between the effective  income tax rate and the federal
statutory  income tax rate on the income (loss) from  continuing  operations are
presented below:
<TABLE>
<CAPTION>
                                                                                                    December 31,
                                                                                                        2003
                                                                                                 ------------------
<S>                                                                                              <C>
Expense (Benefit) at the federal statutory rate of 15%                                           $                -
Nondeductible expenses                                                                                            -
State Income Taxes                                                                                                -
Deferred Tax Benefit                                                                                         (7,300)
Other                                                                                                             -
                                                                                                 ------------------
Effective Tax Expense (Benefit)                                                                  $           (7,300)
                                                                                                 ==================
</TABLE>

         The above table reflects activity from December 1, 2003 to December 31,
2003.  Prior to December 1, 2003, the Company was an  S-corporation  and did not
incur  income  taxes.  Instead,  its  earnings  and losses were  included in the
personal  returns of its  shareholders and taxed depending on their personal tax
situations.  The 2002 financial statements do not reflect a provision for income
taxes.

NOTE 7 - LEGAL SETTLEMENTS

         On December 19, 2003, the Company settled a $459,662 judgment with Bell
Microproducts, Inc. This $459,662 plus interest of $103,996 had been included in
the Company's  accounts payable.  Bart Fisher, a former officer and director and
principal  shareholder  of the Company paid the entire  settlement  of 3,000,000
shares of  common  stock and  $25,000  cash.  Mr.  Fisher  agreed to assume  the
obligation to pay the  settlement  consideration  without any  consideration  or
reimbursement from the Company.

         In June 2001,  ITC/INFO Tech  ("Claimant")  obtained a default award of
$79,000  against the Company.  The award was based on  non-payment  for computer
goods shipped by ITC to two subsidiaries of the Company. The Company has offered
to settle the award for shares of restricted stock, but the Claimant has refused
to accept such an offer to date.  The Claimant has made no effort to enforce its
award since June 2001. The Company may offer a cash and stock  settlement in the
near future to eliminate this award. As of December 31, 2003 and March 31, 2004,
the award amount has been included in the accrued expenses of the Company.




<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS MARCH 31, 2004 AND 2003

NOTE 8 - CONTINGENCIES

         Celeste Trust Reg.,  Esquire Trade,  et al. v. CBQ, Inc. (Case# 03 Civ.
9650 RMB; US District Court, SDNY, 12/4/2003). A lawsuit filed against CBQ, Inc.
by three  plaintiffs on or about December 4, 2003, but which the Company did not
receive  notice of until  the week of  February  18,  2004 or  thereabouts.  The
plaintiffs  purchased  debentures  issued by Socrates  Technologies  Corporation
(STC), a public  Delaware  corporation in 2000.  When the Company  purchased the
assets of two STC  subsidiaries  in March 2001, the  plaintiffs  allege that the
Company  promised to issue to the plaintiffs and others the  consideration  that
was to be  paid  to STC  for  the  acquired  assets  and  to so do in  order  to
compensate the plaintiffs for their investment in the STC debentures, which were
apparently  in default at that time.  The total  consideration  paid for the STC
subsidiaries'  assets were 7.65  million  shares of Company  Common  Stock and a
Promissory Note made by CBQ, Inc. for $700,000  principal amount. The Company is
currently  contesting  the  lawsuit.  On April 15,  2004,  the Court  denied the
plaintiffs'  motion for  default  judgment  and set the case for  discovery  and
trial.

NOTE 9 - SUBSIDIARY

         In February  2004,  the Company  established  a new  subsidiary,  China
Pathfinder Fund, LLC, a Florida limited liability  company.  The purpose of this
new   subsidiary  is  to  pursue  the  business  of  acting  as  a  funding  and
merger-and-acquisition agent in the United States and China.


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

General  - This  discussion  should  be read in  conjunction  with  Management's
Discussion and Analysis of Financial  Condition and Results of Operations in the
Company's annual report on Form 10-KSB for the year ended December 31, 2003.

PLAN OF  OPERATIONS  - The Company was  organized  for the purpose of creating a
corporate  vehicle to seek,  investigate  and, if such  investigation  warrants,
acquire an interest in one or more  business  opportunities  presented  to it by
persons or firms who or which desire to seek perceived  advantages of a publicly
held corporation.

         The  Company  may  incur   significant   post-merger   or   acquisition
registration costs in the event management wishes to register a portion of their
shares for subsequent  sale. The Company will also incur  significant  legal and
accounting  costs in  connection  with the  acquisition  including  the costs of
preparing post- effective amendments,  Forms 8-K, agreements and related reports
and documents.

         While the Company believes that SDI will be able to generate sufficient
cash flow to pay for SDI's and the  Company's  direct  overhead  costs and, with
respect to SDI, its internal  planned  growth in fiscal year 2004,  SDI does not
generate  sufficient  cash  flow at this  time to fund an  acquisition  program,
development of new businesses (except ones requiring low start-up costs or which
are   complementary   to  the  Company's   current   low-overhead   distribution
operations). The Company will


<PAGE>



not  have  sufficient  funds  (unless  it is able to raise  funds  in a  private
placement or in connection  with an  acquisition)  to undertake any  significant
business development,  or extensive marketing, in terms of scope of campaign and
geographical reach, of new products. Accordingly, following the acquisition, the
Company  will,  in all  likelihood,  be  required  to either seek debt or equity
financing  or obtain  funding  from third  parties,  in  exchange  for which the
Company may be required to give up a substantial  portion of its interest in the
acquired product or to issue large number of shares of its capital stock.  There
is no  assurance  that the  Company  will be able  either to  obtain  additional
financing  or  interest  third  parties in  providing  funding  for the  further
development, marketing and manufacturing of any products acquired.

RESULTS OF OPERATIONS - The Company had no  operations  during 2002. On December
1, 2003, the Company acquired all of the issued and outstanding shares of common
stock of Souvenir Direct, Inc. ("SDI"), a private Florida corporation engaged in
the business of  distributing  to its customers  custom  manufactured  souvenir,
promotional and gift items  manufactured in China. The financial  results of SDI
for the  three  months  ended  March  31,  2004 and 2003  are  reflected  in the
financial statements of this Report.

         Prior to the  spring  of 2002,  the  Company  was  engaged  in  systems
development,  the  development  of  customized  software  programs  for business
clients  and  in  value-added   reseller  of  computer   hardware  and  software
manufactured  by other  companies.  After the spring of 2002, the Company had no
business  operations.  Accordingly,  comparisons  with  prior  periods  are  not
meaningful.

LIQUIDITY  AND CAPITAL  RESOURCES.  Historically,  the Company has not generated
enough cash flow from  operations  to cover its  overhead  costs and the cost of
growth.  The  inadequacy  of cash  flow  and the  inability  of the  Company  to
consistently obtain funding and ongoing funding on commercially reasonable terms
have  undermined  the former  business  operations of the Company and forced the
Company  to obtain  funding  from  management  and  through  the sale of Company
securities.

         The  Company  sought  to  acquire  SDI  because  it is a  low  overhead
distributor  operation run by two persons,  with no inventory of any consequence
to finance and with the ability to grow without  extensive outlays of funds. The
Company is hoping that SDI will generate  enough cash flow to cover the overhead
costs of the Company and SDI and to fund the  expansion of SDI's  business.  Any
acquisitions by the Company will most likely require  third-party funding of the
acquisition and the acquired  operations.  As a small business and a penny stock
company,  the Company will continue to face difficulty in obtaining financing or
funding on reasonable commercial terms.

         The Company  expects future  development and expansion will be financed
through cash flow from  operations and other forms of financing such as the sale
of  additional  equity and debt  securities,  capital  leases  and other  credit
facilities.  There are no assurances  that such  financing  will be available on
terms  acceptable  or  favorable to the  Company.  Further,  the increase in the
number of shares of common stock in the public markets may reduce the ability or
appeal of the Company to future sources of possible financing or funding.

GOVERNMENT REGULATIONS - The Company is subject to all pertinent Federal, State,
and


<PAGE>



Local laws  governing  its  business.  The Company is subject to  licensing  and
regulation by a number of  authorities in its State or  municipality.  These may
include health, safety, and fire regulations.  The Company's operations are also
subject to Federal and State minimum wage laws governing such matters as working
conditions and overtime.

IMPACT OF INFLATION.  To date, the Company has not  experienced  any significant
effect  from  inflation.  The  Company's  major  expenses  have been the cost of
marketing its product lines to customers in North America.  That effort involves
mostly Mr.  Ullman  traveling  to make  direct  marketing  and sales  pitches to
customers  and  potential  customers  as well as  showing  the SDI  products  at
industry  trade shows  around North  America and visiting  China to maintain and
expand SDI's  distribution and  manufacturing  relationships  and channels.  The
Company  generally has been able to meet increase in costs by raising  prices of
its products.

COUNTRY RISK. Almost all of the Company's contract manufacturing  operations and
sources of  products  are located in China.  As such,  the Company is subject to
significant  risks not  typically  faced by companies  operating in or obtaining
products from North America and Western  Europe.  Political,  economic and trade
conflicts between the United States and China,  including possible conflict over
North Korea's  nuclear  weapons  program or the  independence  of Taiwan,  could
severely  hinder the ability of the Company to obtain products and fill customer
orders  from the  Company's  current  Chinese  manufacturing  sources.  Further,
Chinese commercial law is still evolving to accommodate increasing capitalism in
Chinese society,  especially in terms of commercial  relationships  and dealings
with foreign  companies,  and can be  unpredictable in application or principal.
The same unpredictability exists with respect to the central Chinese government,
which can unilaterally and without prior warning impose new legal,  economic and
commercial  laws,  policies and  procedures.  This  element of  unpredictability
heightens the risk of doing business in China.

         China is also under  international  pressure to value its currency in a
manner  that would  increase  the value of Chinese  currency in respect of other
world  currencies  and thereby  increase the cost of Chinese  goods in the world
market.  The Company does not believe that such  revaluation of Chinese currency
would  adversely  impact  its  business  because of the  low-cost  nature of the
Company's  products and the fact that U.S. dollars is the currency of use in all
of the Company's commercial transactions.

Item 3.  Controls and Procedures

The  Company's  Chief  Executive   Officer  and  Chief  Financial  Officer  have
concluded,  based on an evaluation  conducted within 90 days prior to the filing
date of this  Quarterly  Report on Form 10- QSB, that the  Company's  disclosure
controls and  procedures  have  functioned  effectively  so as to provide  those
officers the information necessary to evaluate whether:

         (i) this Quarterly  Report on Form 10-QSB contains any untrue statement
         of a material fact or omits to state a material fact  necessary to make
         the  statements  made, in light of the  circumstances  under which such
         statements were made, not misleading with respect to the period covered
         by this Quarterly Report on Form 10-QSB, and

         (ii) the financial statements, and other financial information included
         in this Quarterly Report on Form 10-QSB, fairly present in all material
         respects the financial condition, results of


<PAGE>



         operations  and cash flows of the  Company as of, and for,  the periods
         presented in this Quarterly Report on Form 10-QSB.

There have been no significant  changes in the Company's internal controls or in
other  factors  since  the  date of the  Chief  Executive  Officer's  and  Chief
Financial Officer's  evaluation that could  significantly  affect these internal
controls,   including  any   corrective   actions  with  regard  to  significant
deficiencies and material weaknesses.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         CELESTE TRUST LITIGATION.  Celeste Trust Reg., Esquire Trade, et al. v.
CBQ,  Inc.  (Case# 03 Civ.  9650 RMB; US District  Court,  SDNY,  12/4/2003).  A
lawsuit  filed against CBQ,  Inc. by three  plaintiffs  on or about  December 4,
2003, but which the Company did not receive notice of until the week of February
18, 2004 or thereabouts.  The plaintiffs purchased debentures issued by Socrates
Technologies  Corporation (STC), a former public Delaware corporation,  in 2000.
When the Company purchased the assets of two STC subsidiaries in March 2001, the
plaintiffs  allege that the  Company  promised  to issue to the  plaintiffs  the
consideration  that  was to be paid to STC by CBQ,  Inc.  for the  acquired  STC
subsidiaries'  assets and to so do in order to  compensate  the  plaintiffs  for
their investment in the STC debentures, which were apparently in default at that
time. The total  consideration  paid for the STC subsidiaries'  assets were 7.65
million shares of Company  Common Stock and a Promissory  Note made by CBQ, Inc.
for $700,000 principal amount. The Company is currently  contesting the lawsuit.
On April 15, 2004, the Court denied the plaintiffs'  motion for default judgment
and the case is being for discovery and trial.

ITEM 2.  CHANGES IN SECURITIES

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None/Not Applicable.

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

None/Not Applicable.

ITEM 5.  OTHER INFORMATION

None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS



<PAGE>



3.3      Operating  Agreement for China  Pathfinder Fund, LLC, a Florida limited
         liability company.

10.1     Form  of  Indemnification   Agreement,   dated  April  18,  2004.

10.2     Employment  Agreement by CBQ, Inc. and Howard  Ullman,  Dated April 18,
         2003.

31       Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.

32       Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.



(b) Reports on Form 8-K.

i)       Items 12 and 7 - Financial  results for Fiscal Year 2003.  Report dated
         and filed April 22, 2004.

ii)      Item 9 Regulation  FD  Disclosure - Web Cast  Transcript.  Report dated
         February 13, 2004 and filed February 26, 2004; and

iii)     Item 5 - Appointment  of new director.  Report dated  February 13, 2004
         and dated February 26, 2004.































<PAGE>



                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 14th day of May, 2004.

CBQ, Inc.

May 14, 2004

/s/ Howard Ullman
Howard Ullman
CEO, President and Chairman
(Principal Executive Officer)
(Principal Financial and Accounting Officer)