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

                                  Form 10-QSB/A
                               Amendment Number 1

(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, 2001
                                            ----------------------------------

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

             For the transition period from                   to
                                            ------------------    -------------

                    Commission file number                  0-28831
                                            -----------------------------------


                                    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.)


                 1911 Ft. Myer Drive, Arlington, Virginia 22209
    -------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (703) 387-0300
                            Issuer's telephone number

                10923 McCormick Road, Hunt Valley, Maryland 21031
  (Former name, former address and 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:   November  10,  2001
Approximately 79,621,299 shares


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








































<PAGE>




                                    PART I


Item 1.  Financial Statements


                         INDEPENDENT ACCOUNTANT'S REPORT

To the Board of Directors and Shareholders
CBQ, Inc. and Subsidiaries



        We have reviewed the  accompanying  consolidated  balance sheets of CBQ,
Inc. and Subsidiaries as of March 31, 2001 and December 31, 2000 and the related
consolidated statements of operations and cash flows for the three month periods
ended March 31, 2001 and 2000. These consolidated  financial  statements are the
responsibility of the Company's management.

        We conducted our review in accordance with standards  established by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statement taken as a whole.
Accordingly, we do not express such an opinion.

        Based on our review, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements for them to
be in conformity with generally accepted accounting principles.

                                                   Respectfully submitted



                                                      /s/ Robison, Hill & Co.
                                                   -----------------------------
                                                   Certified Public Accountants

Salt Lake City, Utah
December 3, 2001







<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                 (Unaudited)
                                                                  March 31,      December 31,
                                                                    2001             2000
                                                               ---------------  --------------
Assets:

Current assets:
<S>                                                            <C>              <C>
   Cash                                                        $       543,823  $      147,873
   Accounts receivable, net of allowance for doubtful accounts         909,092       1,042,248
   Inventories                                                          86,711          75,420
   Other current assets                                                194,721         186,277
                                                               ---------------  --------------

      Total current assets                                           1,734,347       1,451,818
                                                               ---------------  --------------

Equipment:
   Computers and related equipment                                     540,144         537,890
   Office equipment                                                    356,514         355,664
   Software                                                             34,927          34,927
   Transportation equipment                                             47,078          47,078
   Leasehold improvements                                               18,611          18,611
                                                               ---------------  --------------
                                                                       997,274         994,170
      Less accumulated depreciation                                   (580,935)       (548,427)
                                                               ---------------  --------------

         Equipment, net of accumulated depreciation                    416,339         445,743
                                                               ---------------  --------------

Other non-current assets:
   Notes receivable, long-term                                          60,452          60,452
   Goodwill, less amortization                                       1,262,776         844,951
   Investments                                                          46,163          46,163
   Other assets                                                      1,300,144          75,999
                                                               ---------------  --------------

      Total other non-current assets                                 2,669,535       1,027,565
                                                               ---------------  --------------

         Total assets                                          $     4,820,221  $    2,925,126
                                                               ===============  ==============
</TABLE>








<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Continued)
<TABLE>
<CAPTION>
                                                                 (Unaudited)
                                                                  March31,       December 31,
                                                                    2001             2000
                                                               ---------------  --------------

Liabilities and Stockholders' Deficit:

Current liabilities:
<S>                                                            <C>              <C>
   Line of credit payable                                      $     1,312,157  $    1,312,157
   Current portion of long-term debt                                    74,840          87,908
   Accounts payable, trade                                           1,497,515       1,780,927
   Accrued expenses                                                    610,522         348,591
   Due to related party                                                  1,215           1,215
   Due to shareholders                                                 115,000         115,000
                                                               ---------------  --------------

      Total current liabilities                                      3,611,249       3,645,797
                                                               ---------------  --------------

Non-current liabilities:
   Long-term debt                                                    2,510,775       1,813,139
   Preferred stock of subsidiaries                                     525,000         525,000
                                                               ---------------  --------------

      Total non-current liabilities                                  3,035,775       2,338,139

         Total Liabilities                                           6,647,024       5,983,938
                                                               ---------------  --------------

Stockholders' Deficit:
   Preferred Stock, par value $.001 per share
      Authorized  100,000,000  shares,
      70,000 shares issued and outstanding at
      March 31, 2001 and December 31, 2000                                  70              70

   Common Stock, par value $.0001 per share
      Authorized  500,000,000  shares,
      Issued 77,221,835 Shares at March 31, 2001
      and 69,836,835 shares at December 31, 2000                         7,723           6,984
   Additional paid-in capital                                        3,615,191       2,304,813
   Accumulated deficit                                              (5,449,787)     (5,370,678)
                                                               ---------------  --------------

     Total Stockholders' Deficit                                    (1,826,803)     (3,058,811)
                                                               ---------------  --------------

     Total Liabilities and
       Stockholders' Deficit                                   $     4,820,221  $    2,925,126
                                                               ===============  ==============
</TABLE>

                       See accompanying notes and accountants' report.

<PAGE>


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

                                                               (Unaudited)
                                                        For the three months ended
                                                                March 31,
                                                     --------------------------------
                                                          2001              2000
                                                     --------------    --------------

Continuing operations:

<S>                                                  <C>               <C>
   Revenues                                          $    1,472,491    $    2,992,199

  Costs and expenses:
      Cost of revenues                                      739,149         2,006,076
      Sales and marketing                                   171,665            22,402
      General and administrative                            464,449           215,895
      Depreciation and amortization                          94,432             2,406
      Interest, net                                          88,913             6,802
                                                     --------------    --------------

         Total costs and expenses                         1,558,609         2,253,581
                                                     --------------    --------------

         Net income (loss) from continuing operations       (86,118)          738,618

Discontinued operations:

   Income (Loss) from operations of
      discontinued operations                                 7,009          (325,630)

   Loss on disposal of
      discontinued operations                                     -                 -
                                                     --------------    --------------

    Net Income (loss) from
      discontinued operations                                 7,009          (325,630)
                                                     --------------    --------------

     Net Income (Loss)                               $      (79,109)   $      412,988
                                                     ==============    ==============

Basic & Diluted loss per share                       $            -    $            -
                                                     ==============    ==============
</TABLE>


                       See accompanying notes and accountants' report.


<PAGE>

                           CBQ, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                         (Unaudited)
                                                 For the three months ended
                                                          March 31,
                                               -------------------------------
                                                    2001            2000
                                               --------------- ---------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Continuing operations:
   Net Income (Loss)                           $       (86,118)$       738,618
Adjustments necessary to reconcile net loss
   to net cash used in operating activities:
      Depreciation and amortization                     94,434           2,406
      Decrease (increase) in accounts receivable       224,698        (672,453)
      Decrease (increase) in inventories               (11,291)         46,533
      Decrease (increase) in other current assets       (8,444)         (4,068)
      Decrease (increase) in other assets                  680           7,786
      Increase (decrease) in accounts payable         (283,412)         10,671
      Increase (decrease) in accrued expenses          261,932         (64,230)
                                               --------------- ---------------
  Net Cash Used in continuing operations               192,479          65,263
                                               --------------- ---------------

Cash flows from discontinued operations                  7,008        (325,630)
                                               --------------- ---------------

CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of equipment                                (3,105)        (56,683)
                                               --------------- ---------------
Net cash provided by (used) investing activities        (3,105)        (56,683)
                                               --------------- ---------------

CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of preferred stock of subsidiary                    -         275,000
Other decreases in long-term debt                      (15,432)       (127,482)
Repayment of notes payable to shareholder                    -         (59,817)
Common stock issued for cash                           215,000         251,083
Common stock issued for services                             -         112,625
                                               --------------- ---------------
Net Cash Provided by
  Financing Activities                                 199,568         451,409
                                               --------------- ---------------

Net (Decrease) Increase in
  Cash and Cash Equivalents                            395,950         134,359
Cash and Cash Equivalents
  at Beginning of Period                               147,873        (118,184)
                                               --------------- ---------------
Cash and Cash Equivalents
  at End of Period                             $       543,823 $        16,175
                                               =============== ===============

<PAGE>

                           CBQ, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    Continued



SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest                                     $        37,418 $         8,350
  Franchise and income taxes                   $             - $             -

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:

        On March 1, 2001, the Company  purchased Easy Soft  International,  Inc.
("Easy  Soft").  The  purchase  price was  5,625,000  shares of common  stock in
exchange for assets valued at $580,596 (receivables in the approximate amount of
$95,665,  equipment  and other assets of $5,181 and  goodwill of $479,750)  less
liabilities of $9,305.

        On March 27,  200l the  Company  purchased  certain  assets  of  Technet
Computers  Services,  Inc. and Networkland,  Inc. for 7,650,000 shares of common
stock and a 10% note  payable of  $700,000  in  exchange  for which the  Company
received  assets  valued  at  $1,930,023  (  receivables  $1,534,147,  inventory
$27,067,  equipment  $45,120,  goodwill  $103,609 and other assets $220,080) and
assumed liabilities of $705,198.

The allocation of purchase price include  certain  assumptions  and  preliminary
estimates and are subject to change.


















                        See accompanying notes and accountants' report.


<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000

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  consolidated  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,  2001 and for the
three month  periods  ended March 31, 2001 and 2000  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.

        The Company  ceased its  development  stage with its merger with Quantum
Technology Group, Inc. ("Quantum Group") in August 2000.

Nature of Business

        The  Company's  lines  of  businesses   include   software   development
outsourcing,  web  development,  custom  software  development,  network systems
integration and management.

Principles of Consolidation

         The consolidated  financial statements for the three months ended March
31,  2001 and 2000  include  the  accounts  of the parent  entity and all of its
subsidiaries: Quantum Group and its subsidiary, ProWare, Inc. ("ProWare"); China
Partners, Inc. (from the date of its formation in March 2000); CyberQuest,  Inc.
("CyberQuest");  Reliance  Technologies,  Inc.  ("Reliance") and its subsidiary,
TopherNet, Inc. ("TopherNet");  and Priority One Electronic Commerce Corporation
("Priority  One").  Two  subsidiaries  of  Quantum  Group,   Quantum  Technology
Distribution, Inc. ("Quantum Distribution") and dpi Net Solutions, Inc. ("DPI"),
are included in the consolidated financial statements from November 15, 1999 and
April 1, 2000, their respective dates of acquisition by Quantum Group.




<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

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

        As more fully described in Note 2, the business combinations between the
Company  and  ChinaSoft,  Inc.  ("ChinaSoft")  in January  2000 and  between the
Company  and  Quantum  Group in August  2000 were  accounted  for as poolings of
interests.  Accordingly,  the Company's  consolidated  financial statements have
been restated for all periods to reflect the  consolidated  financial  position,
results of  operations  and cash flows of the  Company,  ChinaSoft  and  Quantum
Group.

All significant intercompany balances and transactions have been eliminated.

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.

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.

Revenue Recognition

Revenue is recognized as services are performed or as products are shipped.

Inventories

Inventories  are stated at lower of cost or market,  with cost determined on the
first-in, first-out method.

Income Taxes

        The  Company  has a net  operating  loss for  income  taxes.  Due to the
regulatory  limitations  in  utilizing  the loss,  it is  uncertain  whether the
Company  will be able to  realize a benefit  from  these  losses.  Therefore,  a
deferred  tax  asset  has  not  been  recorded.  There  are no  significant  tax
differences requiring deferral.


<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

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

Loss per Share

        The reconciliations of the numerators and denominators of the basic loss
per share computations are as follows:
<TABLE>
<CAPTION>
                                                                                  Per-Share
                                                  Income           Shares           Amount
                                                  ------           ------           ------
                                                (Numerator)     (Denominator)

                                                 For the three months ended March 31, 2001
                                                 -----------------------------------------
Basic Loss per Share
<S>                                           <C>                   <C>         <C>
Loss to common shareholders                   $       (79,109)      72,287,946  $            -
                                              ===============  ===============  ==============

                                                 For the three months ended March 31, 2000
                                                 -----------------------------------------
Basic Loss per Share
Income to common shareholders                 $       412,988       63,263,708  $            -
                                              ===============  ===============  ==============
</TABLE>

        The  effect  of   outstanding   common   stock   equivalents   would  be
anti-dilutive for March 31, 2001 and 2000 and are thus not considered.

Property and Equipment

Property  and  equipment  is  recorded  at cost,  except for assets  acquired in
acquisitions  accounted  for as purchases.  Property and  equipment  acquired in
acquisitions accounted for as purchases are recorded at their fair market values
at the date of  acquisition.  All property and  equipment are  depreciated  on a
straight-line basis with the following useful lives:

Computers and related equipment        3 years
Office equipment                       7 years
Software                               3 years
Transportation equipment               5 years
Leasehold improvements                 Lesser of 5 years or remaining lease term

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.


<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

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

Goodwill

        Goodwill  reflects  the excess of  purchase  prices over the fair market
value  of  assets  acquired  in  the  CyberQuest  reverse  acquisition  and  DPI
acquisition. Goodwill is amortized over a five-year period.

Reclassifications

        Certain reclassifications have been made in the March 31, 2000 financial
statements to conform with the March 31, 2001 presentation.

NOTE 2 - ACQUISITIONS

        On November  18, 1998,  Freedom  Funding,  Inc., a Colorado  corporation
("FFI"), entered into a reorganization agreement (Reorganization Agreement) with
CyberQuest,   Inc.,  a  Colorado  corporation  (CyberQuest),   as  well  as  the
shareholders  of  CyberQuest,   pursuant  to  which  FFI  acquired  all  of  the
outstanding  proprietary  interest of CyberQuest  in a stock for stock  exchange
which resulted in CyberQuest  becoming a wholly owned  subsidiary of FFI and the
shareholders of CyberQuest  acquiring control of the Company through their stock
ownership. FFI also changed its name to CBQ, Inc. on this date.

        FFI, under the Reorganization Agreement, issued 18,000,000 common shares
and 70,000 shares of the Class A: Redeemable, Convertible Preferred Stock of the
Company  to the  shareholders  of  CyberQuest  in  exchange  for the  issued and
outstanding shares of this subsidiary.

        The  acquisition of CyberQuest  was treated as a reverse  acquisition of
FFI by CyberQuest.  In a reverse  acquisition the  shareholders of a Company own
less than 50% of the post  acquisition  shares.  The  shareholders of CyberQuest
received  approximately  80% of the post  acquisition  shares of the Company and
therefore,  CyberQuest is the accounting  acquirer.  Common stock and additional
paid-in  capital have been  restated to reflect the same ratio as the  Company's
common  stock  and  additional  paid-in  capital  at that  time.  This  business
combination was accounted for as a purchase.

        On March 15, 1999,  the Company  merged with Reliance and its subsidiary
in a tax-free exchange. All of the outstanding shares of Reliance were exchanged
for 1,000,000 restricted common shares of the Company. This business combination
was accounted for as a pooling of interests.



<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 2 - ACQUISITIONS Continued

        On April 9, 1999,  the Company  merged with  Priority  One in a tax-free
exchange.  All of the  outstanding  shares of Priority  One were  exchanged  for
900,000 restricted common shares of the Company.  This business  combination was
accounted for as a pooling of interests.

        On November  15, 1999,  Quantum  Group  acquired all of the  outstanding
shares of  Quantum  Distribution  for 250  shares of  Quantum  Group's  Series B
preferred  stock,  valued at  $250,000,  plus  $125,000 in cash.  This  business
combination was accounted for as a purchase.

        On January 14,  2000,  the Company  merged with  ChinaSoft in a tax-free
exchange.  All of  the  outstanding  shares  of  ChinaSoft  were  exchanged  for
30,000,000  restricted common shares of the Company.  This business  combination
was accounted for as a pooling of interests.

        On April 1, 2000  Quantum  Group,  prior to its merger with the Company,
acquired  all of the  outstanding  shares of DPI for  $200,000 in cash,  290,000
shares of Quantum  Group's Series A common stock,  275 shares of Quantum Group's
Series C preferred stock,  plus 550 shares of Quantum Group's Series D preferred
stock. This business  combination was accounted for as a purchase,  resulting in
$972,000 of goodwill that is being amortized over five years.

        On August  8,  2000,  the  Company  merged  with  Quantum  Group and its
subsidiaries  in a tax- free exchange.  All of the  outstanding  common stock of
Quantum  Group was  exchanged  for  11,508,568  restricted  common shares of the
Company.  This business combination was accounted for as a pooling of interests.
450 shares of Quantum  Group's  Series D  preferred  stock were  converted  into
720,000 shares of the Company's common stock on August 31, 2000.

         On March 1, 2001, the Company purchased Easy Soft  International,  Inc.
("Easy  Soft").  The  purchase  price was  5,625,000  shares of common  stock in
exchange for all of the outstanding preferred and common shares of Easy Soft.

        On March 27,  200l the  Company  purchased  certain  assets  of  Technet
Computers  Services,  Inc. and Networkland,  Inc. for 7,650,000 shares of voting
common stock and a 10% note payable of $700,000 due in quarterly installments of
interest  only until the  principal is paid in full.  The company may prepay the
principal  amount  in whole or in part at any  time.  At any time  after  twelve
months  from the date of the note,  the  outstanding  principal  balance and any
unpaid  interest may be converted in whole at the option of the holder in common
stock of the company at a conversion  price of $0.75 per share.  All outstanding
principal and any accrued and unpaid interest is due March 1, 2004.




<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 3 - INVESTMENTS

        On May 11, 1999, the Company acquired 19% of the outstanding interest of
Global Logistics Partners, LLC ("GLP"), a privately held Texas limited liability
company  in a tax-free  exchange.  This  interest  was  acquired  solely for the
issuance of 4,233,200 common shares.

NOTE 4 - LINE OF CREDIT

        Quantum  Group  has a  $1,312,157  line of credit  payable  to a bank at
December 31, 2000 under a $4,000,000  revolving  line of credit  agreement  with
interest at the bank's  prime rate or LIBOR plus 2.5%  (9.279% at  December  31,
2000),  and expired on April 1, 2001.  The line of credit is  collateralized  by
substantially  all of the  company's  assets,  and is  personally  guaranteed by
certain of the company's officers and stockholders.

        The line of credit  agreement with the bank contains  various  covenants
pertaining  to  maintenance  of certain debt  coverage and leverage  ratios.  In
addition,  the  agreement  restricted  entrance  into any merger or  acquisition
agreement  without  prior  written  consent of the bank.  At March 31,  2001 the
company  was not in  compliance  with  the  covenants.  Under  the  terms of the
agreement,  the bank may call the loan if the  company  is in  violation  of any
restrictive  covenant.  As of the May 8,  2001,  the  bank  has not  waived  the
covenant violations.

NOTE 5 - DUE TO SHAREHOLDERS

        Due to  shareholders at March 31, 2001 and December 31, 2000 consists of
the following:
<TABLE>
<CAPTION>
                                                         March 31,     December 31,
                                                           2001            2000
                                                      --------------- --------------
<S>                                                   <C>             <C>
Demand note payable, unsecured, with interest at
 15%, payable monthly.  Principal and
  accrued interest due on this note payable are
  subordinated to all bank debt.                      $        50,000 $       50,000

Advances, unsecured, non-interest bearing,
due on demand                                                  65,000         65,000
                                                      --------------- --------------

                                                      $       115,000 $      115,000
                                                      =============== ==============
</TABLE>


<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 6 - LONG-TERM DEBT

Long-term  debt at  March  31,  2001  and  December  31,  2000  consists  of the
following:
<TABLE>
<CAPTION>
                                                         March 31,     December 31,
                                                           2001            2000
                                                      --------------- --------------
<S>                                                   <C>             <C>
Note payable, bank, with interest at 8.66%,
  payable in monthly installments of principal
  of $5,555 plus interest through April 30, 2003      $   153,228     $      166,294

Capital lease obligations, at interest rates
  ranging from 4.90% to 14.17%, payable in monthly
  installments of $3,461 through the maturity dates
  ranging from November 2000 to February 2004             32,387              34,753

Subordinated debenture due in monthly installments
  of 12% interest only until April 30, 2003; 13.5%
  beginning  May 1, 2003;  14% beginning May 1, 2004
  and continuing thereafter. Beginning May 1, 2002
  monthly principal installments of $20,000 are due
  until maturity on April 30, 2006                       1,200,000         1,200,000

Subordinated debenture due in monthly installments
  of 12% interest only until September 30, 2001;
  13% beginning October 1, 2001; 14% beginning
  October 1, 2002 and continuing thereafter.
  Principal and any unpaid interest due at
  maturity date on October 1, 2005                        500,000            500,000

Note payable, with interest of 10% payable in
  Quarterly installments of interest only.
  Principal and any unpaid interest due at
  maturity date on March 1, 2004                          700,000                  -
                                                      --------------- --------------

                                                         2,585,615         1,901,047

      Less amounts due within one year                    74,840              87,908
                                                      --------------- --------------

                                                      $  2,510,775    $    1,813,139
                                                      =============== ==============

</TABLE>
<PAGE>

                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 6 - LONG-TERM DEBT continued

                       The following are maturities of long-term debt:

                                                      Period Ending
                                                      March 31, 2001
                                                     ----------------

                                          2001       $         74,840
                                          2002                298,185
                                          2003                972,590
                                          2004                240,000
                                          2005                740,000
                                          2006                260,000
                                                     ----------------

                                                     $      2,585,615
                                                     ================

NOTE 7 - LEASES

The Company leases  facilities and equipment under various capital and operating
leases with expiration dates through 2004.

Equipment  capitalized  under capital leases had fair market value of $73,000 as
of April 1, 2000 (date of  acquisition  of the equipment  and  assumption of the
related  leases by the  Company).  Total rental  expense for the Company for the
years ended December 31, 2000 and 1999 was $153,106 and $159,045,  respectively,
including rent under month-to month leases.

Net minimum rental commitments under all non-cancelable  operating leases are as
follows:
<TABLE>
<CAPTION>
                                                  Capital         Operating
           Year Ending December 31,               Leases           Leases           Total
                                              ---------------  ---------------  --------------

<S>                  <C>                      <C>              <C>              <C>
                     2001                     $        16,958  $       123,354  $      140,312
                     2002                              11,804          106,304         118,108
                     2003                               8,189           83,286          91,475
                     2004                               1,869           63,882          65,751
                                              ---------------  ---------------  --------------

       Total minimum lease payments due                38,820          376,826         415,646

      Less amounts representing interest              (4,068)                -         (4,068)
                                              ---------------  ---------------  --------------

                                              $        34,752  $       376,826  $      411,578
                                              ===============  ===============  ==============
</TABLE>

<PAGE>

                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 8 - PREFERRED STOCK OF SUBSIDIARY

        Quantum Group has two classes of preferred  stock  outstanding.  Class B
preferred stock has no dividend rights and an aggregate  liquidation  preference
of $250,000. Class C preferred stock has total stated amount of $275,000. All of
the Class C  preferred  stock has 8%  cumulative  dividend  rights on the stated
amount, which aggregates $275,000. Dividends on the Class C preferred stock were
last declared and paid during the third quarter of 2000.

NOTE 9 - CONTINGENCIES

        The  Company is a  defendant  in  several  lawsuits.  In the  opinion of
Company  management,  none of these lawsuits will have a material adverse impact
on the Company's consolidated financial position,  results of operations or cash
flows.

NOTE 10 - PREFERRED STOCK

        The Company has the option to call the preferred stock as follows:

7,000  shares at the greater of $10.00 per share or the traded  market  value of
the preferred stock on or before October 23, 1999

21,000  shares at the greater of $10.715 per share or the traded market value of
the preferred stock on or before October 23, 2000

42,000  shares at the greater of $11.905 per share or the traded market value of
the preferred stock on or before October 23, 2001

70,000  shares at the greater of $12.50 per share or the traded  market value of
the preferred stock on or before October 23, 2002

NOTE 11 - COMMON STOCK
        During 2000, the Company settled liabilities of $923,398 in exchange for
1,658,920 shares of common stock.



<PAGE>


                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 12 - STOCK OPTIONS


        The options have a five-year  life and are  currently  exercisable.  The
following  summarizes  stock option activity during the years ended December 31,
2000 and 1999:
<TABLE>
<CAPTION>
                                                 Year Ended December 31,
                              -------------------------------------------------------------
                                          2001                            2000
                              -----------------------------  ------------------------------
                                                Exercise                        Exercise
                                 Shares       Price/Share        Shares       Price/Share
                              -------------  --------------  --------------  --------------
<S>                               <C>        <C>             <C>             <C>
Options outstanding,
  Beginning of year:              5,545,471        -                      -        -
Options granted                   3,050,000   $1.00-$2.125        5,545,471      $2.125
Options exercised                  (662,263)     $2.125                   -        -
Options canceled                   (217,500)     $2.125                   -        -
                              -------------                  --------------
   Options outstanding,
         End of year:             7,715,708   $1.00-$2.125        5,545,471      $2.125

Options granted                   7,725,000   $0.25-$2.125                -        -
Options exercised                         -        -                      -        -
Options canceled                          -        -                      -        -
                              -------------                  --------------
Options outstanding,
       March 31, 2001 and 2000   15,440,708   $0.25-$2.125        5,545,471      $2.125
                              =============                  ==============
</TABLE>

Substantially  all of the options are exercisable  during five-year periods from
the dates of grant.

NOTE 13 - GOING CONCERN

        The Company has had recurring  losses during its  development  stage and
during the short period in which it has been in operations.  Management believes
that the losses  incurred in 2000 will be abated in 2001,  and will  continue to
pursue a two-track  strategy to address the cash needs of  CBQ--internal  growth
and  acquisitions.  The acquisitions of EasySoft and Technet will strengthen the
software  capabilities  of  CBQ,  and  permit  the  marketing  of  its  software
development  expertise  on an  ever-broadening  scale.  CBQ  plans to  develop a
sustainable competitive advantage by outsourcing the majority of the programming
labor to skilled  software  engineers  located in China ("the  China  team") and
India ("the India team").  The  acquisition of Networkland  will  strengthen the
hardware,  networking,  and  integration  business  of  CBQ.  These  synergistic
acquisitions  will provide  management  efficiencies,  economies of scale, and a
broader  reach into the District of Columbia  and  Virginia.  In 2000  EasySoft,
Technet and Networkland accounted for over $15 million in gross



<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 13 - GOING CONCERN continued

revenues.  The larger nature of the enterprise  should improve the prospects for
profitability  in  2001.  Continuation  of the  Company  as a going  concern  is
dependent  upon  obtaining  the  additional  working  capital  necessary  to  be
successful  in its  planned  activity,  and the  management  of the  Company has
developed a strategy,  which it believes will accomplish this objective  through
additional equity funding and long-term financing, which will enable the Company
to operate for the coming year.

NOTE 14 - PROFORMA RESULTS OF OPERATIONS

        During 2001,  CBQ, Inc. (the  "Company" or "CBQ")  completed a number of
business and asset  acquisitions.  These unaudited pro forma condensed  combined
statements of  operations  are based on the December 31, 2000 and March 31, 2001
historical  consolidated  financial statements of the Company and the historical
financial statements of EasySoft International,  Inc. ("ESI"),  Technet Computer
Services,  Inc.  (TCS)  and  Networkland,  Inc.  ("NWL"),  giving  effect to the
transaction under the purchase method of accounting, with the Company treated as
the acquiring entity for financial reporting  purposes.  The unaudited pro forma
condensed combined statement of operations presents the results of operations of
the Surviving  Corporation,  assuming the acquisitions were completed on January
1, 2000 (for the Year  ended  December  31,  2000) and  January 1, 2001 (for the
three months ended March 31, 2001).

ESI     - On  March  1,  2001  the  shareholders'  of ESI  entered  into a stock
        purchase  agreement with CBQ. The purchase price was 5,625,000 shares of
        common stock in exchange for assets valued at $580,596  (receivables  in
        the approximate amount of $95,665,  equipment and other assets of $5,181
        and goodwill of $479,750)  less  liabilities  of $9,305 or $0.101563 per
        share  calculated  based on the  average  closing  prices of the  period
        February  22, 2001 to March 8, 2001,  the five days before and after the
        date of acquisition. ESI was based in Florida.

TCS     and NWL - On March 27, 200l the Company  purchased certain assets of TCS
        and  NWL  from  their  Parent,  Socrates  Technologies  Corp,  Inc.  for
        7,800,000  shares of common  stock and a 10% note payable of $700,000 in
        exchange for which the Company  received  assets  valued at $1,699,247 (
        receivables $1,434,389,  inventory $27,067,  equipment $45,120, goodwill
        $192,671  and  other  assets   $220,080)  and  assumed   liabilities  of
        $785,198..

        The pro forma  adjustments  include certain  assumptions and preliminary
estimates  and are  subject to  change.  These pro forma  statements  may not be
indicative of the results that actually  would have occurred if the  combination
had been in effect  on the  dates  indicated  or which  may be  obtained  in the
future.  These pro forma financial statements should be read in conjunction with
the  historical  financial  information  of CBQ, ESI, TCS and NWL (including the
notes thereto).



<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 14 - PROFORMA RESULTS OF OPERATIONS continued
<TABLE>
<CAPTION>
                                                           For the Year Ended December 31, 2000
                                             ----------------------------------------------------------------
                                                                  Technet                         Acquired
                                                EasySoft         Computer                         Entities
                                             International,      Services,       Networkland,     Combined
                                                  Inc.             Inc.              Inc.         Balance
                                             --------------  -----------------  -------------- --------------

<S>                                          <C>             <C>                <C>            <C>
Revenues:                                    $    1,162,508  $       4,926,152  $    9,784,369 $   15,873,029
Cost of Revenues                                    823,624          2,225,635       9,304,903     12,354,162
                                             --------------  -----------------  -------------- --------------
   Gross Profit                                     338,884          2,700,517         479,466      3,518,867


Expenses:
   Advertising                                        9,718                  -          32,868         42,586
   General & Administrative                         225,539          5,755,988       3,753,584      9,735,111
   Other (Income) Expense                           174,338            113,122           2,135        289,595
                                             --------------  -----------------  -------------- --------------

Net Income (Loss) Before Taxes                      (70,711)        (3,168,593)     (3,309,121)    (6,548,425)

Income Taxes (Benefit)                                    -            161,881             750        162,631
                                             --------------  -----------------  -------------- --------------


Net Income (Loss)                            $      (70,711) $      (3,330,474) $   (3,309,871)$   (6,711,056)
                                             ==============  =================  ============== ==============

Income (Loss) per share                      $        70.71  $      (3,330.47)      (1,654.94)

Weighted average shares outstanding                   1,000              1,000           2,000
</TABLE>














<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 14 - PROFORMA RESULTS OF OPERATIONS continued
<TABLE>
<CAPTION>
                                                        For the Three Months Ended March 31, 2001
                                             ----------------------------------------------------------------
                                                                  Technet                         Acquired
                                                EasySoft         Computer                         Entities
                                             International,      Services,       Networkland,     Combined
                                                  Inc.             Inc.              Inc.         Balance
                                             --------------  -----------------  -------------- --------------

<S>                                          <C>             <C>                <C>            <C>
Revenues:                                    $      192,165  $       1,094,990  $      978,482 $    2,265,637
Cost of Revenues                                    129,886            229,532         711,650      1,071,068
                                             --------------  -----------------  -------------- --------------
   Gross Profit                                      62,279            865,458         266,832      1,194,569


Expenses:
   Advertising                                            -                  -           1,653          1,653
   General & Administrative                          16,327            824,950         165,706      1,006,983
   Other (Income) Expense                              (466)            21,733           1,922         23,189
                                             --------------  -----------------  -------------- --------------

Net Income (Loss) Before Taxes                       46,418             18,775          97,551        162,744

Income Taxes (Benefit)                                    -                  -             620            620
                                             --------------  -----------------  -------------- --------------


Net Income (Loss)                            $       46,418  $          18,775  $       96,931 $      162,124
                                             ==============  =================  ============== ==============

Income (Loss) per share                      $        46.42  $           18.77  $        48.47

Weighted average shares outstanding                   1,000              1,000           2,000
</TABLE>














<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 14 - PROFORMA RESULTS OF OPERATIONS continued
<TABLE>
<CAPTION>
                                                           For the Year Ended December 30, 2000
                                             ----------------------------------------------------------------
                                               CBQ, Inc.                                         Pro Forma
                                                  and            Acquired       Pro Forma         Combined
                                              Subsidiaries       Entities      Adjustments        Balance
                                             --------------  ----------------- ------------    --------------

<S>                                          <C>             <C>               <C>             <C>
Revenues:                                    $    9,450,315  $      15,873,029 $          -    $   25,323,344
Cost of Revenues                                  8,059,359         12,354,162            -        20,413,521
                                             --------------  ----------------- ------------    --------------
   Gross Profit                                   1,390,956          3,518,867            -         4,909,823


Expenses:
   Advertising                                            -             42,586            -            42,586
   Selling                                          898,797                  -            -           898,797
   General & Administrative                       2,690,410          9,735,111     (100,000)  A    12,325,521
   Other (Income) Expense                           228,784            289,595       70,000   B       588,379
                                             --------------  ----------------- ------------    --------------

 Income (Loss) from Continuing Operations        (2,427,035)        (6,548,425)     (30,000)       (8,945,460)

Income Taxes                                              -            162,631     (162,631)                -
                                             --------------  ----------------- ------------    --------------

Net Income (Loss) from
    Continuing Operations                        (2,427,035)        (6,711,056)     192,631        (8,945,460)

Discontinued (Loss) Operations                   (1,833,325)                 -            -        (1,833,325)
                                             --------------  ----------------- ------------    --------------

Net Income (Loss)                            $   (4,260,360) $      (6,711,056)$    192,631    $  (10,778,785)
                                             ==============  ================= ============    ==============

Income (Loss) per share                      $       (0.06)                                    $       (0.14)

Weighted average shares outstanding              66,696,163                                        80,121,163
</TABLE>










<PAGE>



                           CBQ, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                                   (Continued)

NOTE 14 - PROFORMA RESULTS OF OPERATIONS continued
<TABLE>
<CAPTION>
                                                        For the Three Months Ended March 31, 2001
                                             ----------------------------------------------------------------
                                               CBQ, Inc.                                          Pro Forma
                                                  and            Acquired         Pro Forma       Combined
                                              Subsidiaries       Entities        Adjustments       Balance
                                             --------------  -----------------  -------------   -------------

<S>                                          <C>             <C>                <C>             <C>
Revenues:                                    $    1,472,491  $       2,265,637  $           -   $   3,738,128
Cost of Revenues                                    739,149          1,071,068              -       1,810,217
                                             --------------  -----------------  -------------   -------------
   Gross Profit                                     733,342          1,194,569              -       1,927,911


Expenses:
   Advertising                                            -              1,653                          1,653
   Selling                                          171,665                  -                        171,665
   General & Administrative                         558,881          1,006,983        (25,000) A    1,540,864
   Other (Income) Expense                            88,913             23,189         17,500  B      129,602
                                             --------------  -----------------  -------------   -------------

 Income (Loss) from Continuing Operations           (86,117)           162,744          7,500          84,127

Income Taxes                                              -                620         16,853          16,233
                                             --------------  -----------------  -------------   -------------

Net Income (Loss) from
    Continuing Operations                           (86,117)           162,124         24,353         100,360

Discontinued Operations                               7,009                  -              -           7,009
                                             --------------  -----------------  -------------   -------------

Net Income (Loss)                            $      (79,108) $         162,124  $      24,353   $     107,369
                                             ==============  =================  =============   =============

Income (Loss) per share                      $            -                                     $           -

Weighted average shares outstanding              77,221,835                                        77,221,835
</TABLE>


        The  adjustments  to the  accompanying  unaudited  pro  forma  condensed
combined statements of operations are described below:

        (A) Reduction of salaries from consolidation of operations.

        (B) Interest expense on notes payable.


<PAGE>



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

        This Quarterly Report contains certain forward-looking statements within
the  meaning of Section  27A of the  Securities  Act of 1933,  as  amended,  and
Section  21E of the  Securities  Exchange  Act of 1934,  as  amended,  which are
intended  to be covered  by the safe  harbors  created  thereby.  Investors  are
cautioned that all  forward-looking  statements  involve risks and  uncertainty,
including  without  limitation,  the  ability  of the  Company to  continue  its
expansion  strategy,  changes in costs of raw  materials,  labor,  and  employee
benefits,  as  well as  general  market  conditions,  competition  and  pricing.
Although   the   Company   believes   that  the   assumptions   underlying   the
forward-looking   statements  contained  herein  are  reasonable,   any  of  the
assumptions could be inaccurate,  and therefore,  there can be no assurance that
the  forward-looking  statements included in this Quarterly Report will prove to
be accurate. In light of the significant  uncertainties inherent in the forward-
looking statements included herein, the inclusion of such information should not
be  regarded  as a  presentation  by the  Company or any other  person  that the
objectives and plans of the Company will be achieved.

        As used  herein  the term  "Company"  refers to CBQ,  Inc.,  a  Colorado
corporation and its predecessors and subsidiaries,  unless the context indicates
otherwise.

Business of the Company and its Subsidiaries:

        CBQ exhibits core competency in the United States Information Technology
software industry with offices in Hunt Valley,  Maryland and Miami,  Florida and
significant  private  industry and  governmental  relationships  in the People's
Republic of China.  In January 2000, CBQ merged with ChinaSoft Inc., the private
industry partner of the state-owned software development companies. CBQ may call
on  ChinaSoft's   substantial   programmer   resources  for  contract   software
development or outsourcing.  CBQ also works jointly with a privately owned China
based  software  development  and  outsourcing  company  with  English  language
expertise in both management and staff.  These resources are capable of offering
software  services  in  virtually  any  programming  language to the US. CBQ can
deliver these services through software product offerings and outsourcing and/or
project development, both in the US and in China.

        CBQ's lines of businesses include software development outsourcing,  web
development,  custom  software  development,  network  systems  integration  and
management.  These lines of business are  reflective  of the  Company's  renewed
focus on these business segments.

        The Company is in the  process of  attempting  to  identify  and acquire
favorable  business  opportunities.  The Company has  reviewed  and  evaluated a
number of business  ventures for possible  acquisition or  participation  by the
Company.  Other than  previously  mentioned the Company has not entered into any
agreement,  nor does it have any  commitment or  understanding  to enter into or
become  engaged in a  transaction  as of the date of this  filing.  The  Company
continues to investigate,  review,  and evaluate business  opportunities as they
become  available  and will  seek to  acquire  or  become  engaged  in  business
opportunities at such time as specific opportunities warrant.




<PAGE>



Results of Operations

        The Company merged with ChinaSoft,  Inc.  ("ChinaSoft")  in January 2000
and with Quantum  Technology Group, Inc. and its subsidiaries  ("Quantum Group")
in August 2000. Both of these business  combinations were treated as poolings of
interests.  Accordingly,  the Company's  consolidated operating results and cash
flows have been restated for all periods presented to reflect these mergers.

        Quantum Group acquired Quantum Technology  Distribution,  Inc. ("Quantum
Distribution") on November 15, 1999 and dpi Net Solutions, Inc. ("DPI") on April
1, 2000.  Both of these  acquisitions  were made prior to Quantum Group's merger
with  the  Company,  and  both  business  combinations  were  accounted  for  as
purchases.  Accordingly,  the consolidated  results of operations and cash flows
include  the  operations  of  Quantum  Distribution  and  DPI  only  from  their
respective dates of acquisition.

Continuing Operations:
Three Months Ended March 31, 2001 and 2000


        Revenues  decreased by $1,519,708 from the quarter ended March 31, 2000.
The  decrease  is a result of a change in the  company's  business  model in its
subsidiary,  Quantum Distribution. In a declining parts and distribution market,
the company  switched its model to white box custom builds where there continues
to be a strong growth pattern and higher profit  margins.  The decrease in costs
of revenues of $1,266,927 is primarily a result of this change in strategy. Cost
of revenues  includes direct salaries and related payroll taxes,  product costs,
and outside services charged to customers.

        The increase in sales and  marketing of $149,263  from 2000 reflects the
change in the company's  marketing  strategy towards system  integration and the
targeting  of a new  customer  base as well as the  development  of a sales  and
marketing team which began in the October of 2000. Sales and marketing  includes
salaries, commissions, and related payroll taxes for the sales team, advertising
and  marketing  costs,  and  related  selling  costs such as  travel,  meals and
entertainment.

        The  increase in general and  administrative  expenses of $248,554  from
2000  reflects  the  company's   on-going   pursuit  of  new   acquisitions  and
merger-related  expenses  including  legal,  accounting,  consulting  as well as
integration  costs  for  its  most  recent  acquisitions  from  Technet,   Inc.,
Networkland, Inc. and EasySoft International, Inc.

        Depreciation  and  amortization  expenses  increased  $92,026 from 2000.
These increases  reflect the equipment  purchased as a result of the acquisition
of DPI in April 2000 as well as related goodwill amortization as a result of the
company's acquisitions.

        Interest  expense  increased  $82,111 from 2000 as a result of long-term
debt  financing and use of the Company's  line of credit  facility which was put
into place in April 2000.



<PAGE>



        The Company  recorded a net loss of $79,109 for the three  months  ended
March 31, 2001  compared to net income of $412,988  for the same period in 2000.
The company continues to refine its business model, acquisition philosophy,  and
marketing  strategy  in an effort to  compete  in the  ever-changing  technology
industry.

Capital Resources and Liquidity

        Liquidity  during  2000 was  primarily  generated  by issuance of common
stock, stockholder loans and issuance of long-term debt.

        At March 31, 2001,  the Company had total  current  assets of $1,734,000
and total assets of  $4,820,000  as compared to  $1,452,000  current  assets and
$2,925,000  total  assets at December  31,  2000.  The Company had a net working
capital  deficit of $1,877,000 and $2,194,000 at March 31, 2001 and December 31,
2000.

        Net  stockholders'  deficit in the Company was $2,042,000 and $3,059,000
as of March 31, 2001 and December 31, 2000.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

No material  legal  proceedings to which the Company (or any officer or director
of the Company,  or affiliate  or owner of record or  beneficially  of more than
five percent of the Common Stock,  to  management's  knowledge) is a party or to
which the  property of the Company is subject is pending,  and no such  material
proceeding is known by management of the Company to be contemplated.

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



<PAGE>


         (a) EXHIBITS



         (b) Reports on Form 8-K.  No reports on Form 8-K were filed  during the
period covered by this Form 10-QSB.

                                   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 3rd day of December, 2001.

CBQ, Inc.


/s/ Bart S. Fisher
------------------------
Bart S. Fisher
Chairman, Chief Executive Officer
and Chief Financial Officer