---

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**Washington, DC 20549

FORM 10-QSB

x QUARTERLY REPORT
  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

Or

 ̈TRANSITION REPORT
  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ To ________________

Commission file number 0  30927

GARUDA CAPITAL
CORP.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 980209053                           
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|502-1978 Vine Street, Vancouver, BC                                  | V6K 4S1                             
|(Address of principal executive offices)                             | (Zip Code)                          

604-737-0203(Registrants telephone number,
including area code)

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

Check whether the issuer (1) filed all reports required to be
  filed by Section 13 or 15(d) of the Exchange Act during the past 
  12 months (or for such shorter period that the registrant was require to file
  such reports), and (2) has been subject to such
  filing requirements for the past 90 days.x Yes   ̈
  No

Indicate by check mark whether the registrant is a shell company
  (as defined in Rule 12b-2 of the Exchange Act).  ̈ Yes x No

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

Indicate by check mark whether the registrant has filed all documents
  and reports required to be filed by Sections 
  12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution
  of securities under a plan 
  confirmed by a court. ̈ Yes  ̈
  No

APPLICABLE ONLY TO CORPORATE USERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.

Common Stock, $0.001 par value, 35,830,620 shares as of November
20, 2005

---

|-2-
|---

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying financial statements of Garuda Capital Corp.
(the Company) for the three months ended September 30, 2005 and September 30,
2004 have been prepared by the Companys management and they do not include all
information and notes to the financial statements necessary for a complete
presentation of the financial position, results of operations, and cash flows in
conformity with accounting principles generally accepted in the United States of
America. In the opinion of management, all adjustments considered necessary for
a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.

Operating results for the quarter ended September 30, 2005, are
not necessarily indicative of the results that can be expected for the year
ending June 30, 2006.

---

|-3-
|---







CONSOLIDATED FINANCIAL STATEMENTS







|1. | CONSOLIDATED BALANCE SHEETS                              
|-- | ---------------------------------------------------------
|   |                                                          
|2. | CONSOLIDATED STATEMENTS OF OPERATIONS                    
|   |                                                          
|3  | CONSOLIDATED STATEMENTS OF STOCKHOLDERS
      DEFICIENCY
|   |                                                          
|4. | CONSOLIDATED STATEMENTS OF CASH FLOWS                    
|   |                                                          
|5  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS               

---

|-4-
|---

GARUDA CAPITAL CORP. 
  Consolidated Balance SheetsSeptember 30, 2005 and June 30, 2005
  (Unaudited)

|                                                                          |   | US Dollars     |  
|------------------------------------------------------------------------- | - | -------------- | -
|                                                                          |   | Sept. 30, 2005 |  
|ASSETS                                                                    |   |                |  
|CURRENT ASSETS                                                            |   |                |  
|Accounts receivable                                                       | $ | 136,538        |  
|Marketable securities                                                     |   | -              |  
|Inventory (Note 4)                                                        |   | 409,026        |  
|Prepaid expenses and deferred charges                                     |   | 27,734         |  
|TOTAL CURRENT ASSETS                                                      |   | 573,298        |  
|                                                                          |   |                |  
|PROPERTY AND EQUIPMENT                                                    |   |                |  
|Machinery and Equipment, net of accumulated depreciation                  |   | 193,702        |  
|TOTAL PROPERTY AND EQUIPMENT                                              |   | 193,702        |  
|                                                                          |   |                |  
|OTHER ASSETS                                                              |   |                |  
|Patents and trademarks, net of accumulated amortization                   |   | 14,410         |  
|TOTAL OTHER ASSETS                                                        |   | 14,410         |  
|                                                                          |   |                |  
|TOTAL ASSETS                                                              | $ | 781,410        |  
|                                                                          |   |                |  
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                  |   |                |  
|CURRENT LIABILITIES                                                       |   |                |  
|Bank indebtedness (Note 5)                                                | $ | 73,703         |  
|Accounts payable and accrued expenses (Note 3)                            |   | 426,285        |  
|Bank loan (Note 5)                                                        |   | 170,000        |  
|Note payable  related party (Note 3)                                     |   | 424,353        |  
|Capital lease obligation                                                  |   | 1,842          |  
|TOTAL CURRENT LIABILITIES                                                 |   | 1,096,183      |  
|                                                                          |   |                |  
|LONG TERM LIABILITIES                                                     |   |                |  
|Government loan                                                           |   | 14,284         |  
|TOTAL LIABILITIES                                                         |   | 1,110,467      |  
|                                                                          |   |                |  
|COMMITMENTS AND CONTINGENCIES (Note 7)                                    |   |                |  
|                                                                          |   |                |  
|STOCKHOLDERS' DEFICIENCY                                                  |   |                |  
|Preferred stock, $0.01 par value; 10,000,000
      shares                 |   | -              |  
|authorized, none issued and
      outstanding                             |   |                |  
|Common stock, $0.001 par value; 100,000,000
      shares                  |   | 35,831         |  
|authorized, 35,830,620 and 34,655,619 shares
      issued and outstanding |   |                |  
|Additional paid-in capital                                                |   | 5,297,912      |  
|Contra equity (Note 10)                                                   |   | (172,167       | )
|Accumulated deficit                                                       |   | (5,467,500     | )
|Accumulated other comprehensive loss                                      |   | (23,133        | )
|TOTAL STOCKHOLDERS' DEFICIENCY                                            |   | (329,057       | )
|                                                                          |   |                |  
|TOTAL LIABILITIES AND STOCKHOLDERS'                                       |   |                |  
|DEFICIENCY                                                                | $ | 781,410        |  

The accompanying notes are an integral part of these
statements.

---

|-5-
|---

GARUDA CAPITAL CORP.Consolidated Statements of OperationsFor the periods ended September 30, 2005 and 2004
  (Unaudited)

|                                                                           |   | Three months ended September 30 |  
|-------------------------------------------------------------------------- | - | ------------------------------- | -
|                                                                           |   | 2005                            |  
|REVENUE                                                                    |   |                                 |  
|                                                                           |   |                                 |  
|SALES                                                                      | $ | 93,132                          |  
|                                                                           |   |                                 |  
|COST OF SALES                                                              |   | 103,735                         |  
|                                                                           |   |                                 |  
|GROSS PROFIT (LOSS)                                                        |   | (10,603                         | )
|                                                                           |   |                                 |  
|EXPENSES                                                                   |   |                                 |  
|                                                                           |   |                                 |  
|General and administrative                                                 |   | 191,992                         |  
|Legal and Accounting                                                       |   | 25,033                          |  
|Depreciation                                                               |   | 3,260                           |  
|Advertising and promotion                                                  |   | 231,193                         |  
|Premises leases                                                            |   | 41,431                          |  
|Total Operation Expenses                                                   |   | 492,909                         |  
|                                                                           |   |                                 |  
|LOSS FROM OPERATION                                                        |   | (503,512                        | )
|                                                                           |   |                                 |  
|OTHER INCOME (EXPENSE)                                                     |   |                                 |  
|Foreign currency
      transaction gain                                    |   | 14,287                          |  
|Gain (loss) on sale of marketable
      securities                         |   | (21,683                         | )
|Other expenses                                                             |   | (579                            | )
|Interest expense                                                           |   | (17,265                         | )
|Total Other Income (Expenses)                                              |   | (25,240                         | )
|                                                                           |   |                                 |  
|NET LOSS                                                                   |   | (528,752                        | )
|                                                                           |   |                                 |  
|OTHER COMPREHENSIVE INCOME                                                 |   |                                 |  
|Gain on foreign currency translation                                       |   | 12,725                          |  
|Reclassification of unrealized loss on available
      for sale securities |   | 88,277                          |  
|Total Other Comprehensive
      Income                                     |   | 101,002                         |  
|                                                                           |   |                                 |  
|COMPREHENSIVE LOSS                                                         | $ | (427,750                        | )
|                                                                           |   |                                 |  
|NET LOSS PER COMMON SHARE,                                                 |   |                                 |  
|BASIC AND DILUTED                                                          | $ | (0.01                           | )
|                                                                           |   |                                 |  
|WEIGHTED AVERAGE NUMBER                                                    |   |                                 |  
|OF COMMON SHARES OUTSTANDING,                                              |   |                                 |  
|BASIC AND DILUTED                                                          |   | 35,215,131                      |  

The accompanying notes are an integral part of these
statements.

---

|-6-
|---

|Garuda Capital Corp.                                          |  |                            
|------------------------------------------------------------- |  | ---------------------------
|                                                              |  |                            
|**CONSOLIDATED STATEMENTS OF
      STOCKHOLDERS DEFICIENCY**
|                                                             
|Period ended September 30, 2005                               |  | (Expressed in U.S. dollars)
|(Unaudited)                                                   |  |                            

|                                                                           |  |              |  |         |  |             |  |               |   | Accumulated |   |               |   |            |  
|-------------------------------------------------------------------------- |  | ------------ |  | ------- |  | ----------- |  | ------------- | - | ----------- | - | ------------- | - | ---------- | -
|                                                                           |  |              |  |         |  | Additional  |  |               |   | other       |   |               |   | Total      |  
|                                                                           |  | Common stock |  | paid-in |  | Accumulated |  | comprehensive |   | Contra      |   | Stockholders' |  
|                                                                           |  | Shares       |  | Amount  |  | capital     |  | deficit       |   | loss        |   | equity        |   | equity     |  
|                                                                           |  | #            |  | $       |  | $           |  | $             |   | $           |   | $             |   | $          |  
|                                                                           |  |              |  |         |  |             |  |               |   |             |   |               |   |            |  
|Balance, June 30, 2003                                                     |  | 6,299,576    |  | 6,300   |  | 2,437,389   |  | (2,728,160    | ) | (47,045     | ) |              |   | (331,516   | )
|Shares issued for services at $0.30 per share                              |  | 74,000       |  | 74      |  | 7,326       |  |              |   |            |   |              |   | 7,400      |  
|Gain/loss on foreign currency
      translation                            |  |             |  |        |  |            |  |              |   | (8,116      | ) |              |   | (8,116     | )
|Unrealized gain on available for sale
      securities                     |  |             |  |        |  |            |  |              |   | 51,770      |   |              |   | 51,770     |  
|Net loss for the year ended June 30, 2004                                  |  |             |  |        |  |            |  | (844,595      | ) |            |   |              |   | (844,595   | )
|Balance, June 30, 2004                                                     |  | 6,373,576    |  | 6,374   |  | 2,444,715   |  | (3,572,755    | ) | (3,391      | ) |              |   | (1,125,057 | )
|Shares issued for
      compensation at $0.02 per share                    |  | 1,555,000    |  | 1,555   |  | 29,545      |  |              |   |            |   |              |   | 31,100     |  
|Shares issued for compensation at $0.10 per
      share                    |  | 800,000      |  | 800     |  | 79,200      |  |              |   |            |   |              |   | 80,000     |  
|Shares issued for services at
      $0.10 per share                        |  | 2,980,000    |  | 2,980   |  | 295,020     |  |              |   |            |   |              |   | 298,000    |  
|Shares issued for services at $0.12 per share                              |  | 3,000,000    |  | 3,000   |  | 357,000     |  |              |   |            |   |              |   | 360,000    |  
|Shares issued for services at
      $0.15 per share                        |  | 27,000       |  | 27      |  | 4,023       |  |              |   |            |   |              |   | 4,050      |  
|Shares issued for debt at $0.10 per share                                  |  | 11,170,044   |  | 11,170  |  | 1,105,834   |  |              |   |            |   |              |   | 1,117,004  |  
|Shares issued for cash at
      $0.10 per share                            |  | 8,750,000    |  | 8,750   |  | 866,250     |  |              |   |            |   |              |   | 875,000    |  
|Gain/loss on foreign currency translation                                  |  |             |  |        |  |            |  |              |   | (32,467     | ) |              |   | (32,467    | )
|Unrealized loss on available
      for sale securities                     |  |             |  |        |  |            |  |              |   | (88,277     | ) |              |   | (88,277    | )
|Net
      loss for the year ended June 30, 2005                            |  |             |  |        |  |            |  | (1,365,993    | ) |            |   |              |   | (1,365,993 | )
|                                                                           |  | 34,655,620   |  | 34,656  |  | 5,181,587   |  | (4,938,748    | ) | (124,135    | ) |              |   | 153,360    |  
|Contra equity                                                              |  |             |  |        |  |            |  |              |   |            |   | (418,667      | ) | (418,667   | )
|Balance, June 30, 2005                                                     |  | 34,655,620   |  | 34,656  |  | 5,181,587   |  | (4,938,748    | ) | (124,135    | ) | (418,667      | ) | (265,307   | )
|Shares issued for cash at $0.10 per share                                  |  | 175,000      |  | 175     |  | 17,325      |  |              |   |            |   |              |   | 17,500     |  
|Contra equity                                                              |  |              |  |         |  |             |  |              |   |            |   | 246,500       |   | 246,500    |  
|Shares issued for debt                                                     |  | 1,000,000    |  | 1,000   |  | 99,000      |  |              |   | -           |   |              |   | 100,000    |  
|Gain/Loss on foreign currency
      translation                            |  |             |  |        |  |            |  |              |   | 12,725      |   |              |   | 12,725     |  
|Reclassification of unrealized loss on available for sale
      securities |  |             |  |        |  |            |  |              |   | 88,277      |   |              |   | 88,277     |  
|Net loss for the quarter ended September 30, 2005                          |  |             |  |        |  |            |  | (528,752      | ) |            |   |              |   | (528,752   | )
|Balance, September 30, 2005                                                |  | 35,830,620   |  | 35,831  |  | 5,297,912   |  | (5,467,500    | ) | (23,133     | ) | (172,167      | ) | (329,057   | )

The accompanying notes are an integral part of these statements.

---

|-7-
|---

GARUDA CAPITAL CORP. Consolidated Statements of Cash FlowFor the periods ended September 30, 2005 and 2004
  (Unaudited)

|                                                                   |  | Three months ended
        September 30 |  
|------------------------------------------------------------------ |  | --------------------------------------- | -
|                                                                   |  | 2005                                    |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                              |  |                                         |  
|Net loss                                                           |  | (528,752                                | )
|Adjustments to reconcile
      net loss to net cash                |  |                                         |  
|Provided by
      (used by) operating activities                   |  |                                         |  
|Depreciation                                                       |  | 11,720                                  |  
|Consulting services
      paid in common stock in prior year       |  | 246,500                                 |  
|Debt
      interest converted to shareholders loan                |  | 4,537                                   |  
|Changes in non cash working capital items:                         |  | -                                       |  
|Accounts
      receivable                                          |  | (52,442                                 | )
|Prepaid expenses and
      deferred charges                        |  | (1,266                                  | )
|Inventory                                                          |  | (131,074                                | )
|Accounts payable and
      accrued expenses                        |  | 81,393                                  |  
|Net
      cash used by operating activities                        |  | (369,384                                | )
|                                                                   |  |                                         |  
|CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:                       |  |                                         |  
|Purchase of equipment                                              |  | -                                       |  
|Purchase of marketable
      securities                            |  | (63,689                                 | )
|Proceeds from sale of marketable securities                        |  | 437,407                                 |  
|Net
      cash provided by (used by) investing activities          |  | 373,718                                 |  
|                                                                   |  |                                         |  
|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:                       |  |                                         |  
|Increase/(Decrease) in bank indebtedness                           |  | (21,051                                 | )
|Decrease in bank loan                                              |  | (15,000                                 | )
|(Decrease) in capital lease obligations                            |  | (532                                    | )
|Common stock issued for
      cash                                 |  | 17,500                                  |  
|Increase (decrease) in shareholder loan                            |  | (4,876                                  | )
|Net
      cash provided by (used by) financing activities          |  | (23,959                                 | )
|                                                                   |  |                                         |  
|Effect of exchange rate
      changes on cash and cash equivalents |  | (19,625                                 | )
|                                                                   |  |                                         |  
|**Net
      increase (decrease) in cash**                          |  | -                                       |  
|                                                                   |  |                                         |  
|Cash at beginning of period                                        |  | -                                       |  
|                                                                   |  |                                         |  
|Cash at end of period                                              |  | -                                       |  
|                                                                   |  |                                         |  
|NON-CASH FINANCING AND INVESTING ACTIVITIES:                       |  |                                         |  
|Common stock issued for debt                                       |  | 100,000                                 |  

The accompanying notes are an integral part of these
statements.

---

|-8-
|---

|GARUDA CAPITAL CORP.                                             
|-----------------------------------------------------------------
|Condensed Notes to Consolidated Financial Statements             
|Three Months ended
      September 30, 2005 and 2004 (US Dollars)
|(Unaudited)                                                      

NOTE 1  BASIS OF PRESENTATION

The foregoing unaudited interim consolidated financial statements
  have been prepared in accordance with generally accepted accounting principles
  for interim financial information and with the instructions to Form 10-QSB and
  Regulation S-B as promulgated by the Securities and Exchange Commission. Accordingly,
  these financial statements do not include all of the disclosures required by
  generally accepted accounting principles for complete financial statements.
  These unaudited interim consolidated financial statements should be read in
  conjunction with the Company’s audited consolidated financial statements
  for the year ended June 30, 2005. In the opinion of management, the unaudited
  interim consolidated financial statements furnished herein include all adjustments,
  all of which are of a normal recurring nature, necessary for a fair statement
  of the results for the interim period presented.

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

Certain amounts from prior periods have been reclassified to
conform to the current period presentation. This reclassification has resulted
in no changes to the Companys accumulated deficit or net losses presented.

Operating results for the three-month period ended September
30, 2005 are not necessarily indicative of the results that may be expected for
the year ending June 30, 2006.

NOTE 2  GOING CONCERN UNCERTAINTY

The accompanying financial statements have been prepared on a
  going concern basis, which contemplates the realization of assets and satisfaction
  of liabilities in the normal course of business. The Company has incurred material
  recurring losses from operations. At September 30, 2005, the Company had an
  accumulated deficit of $5,467,500 and limited cash resources. For the three
  months ended September 30, 2005, the Company sustained a net loss of $528,752.
  These factors, among others, raises substantial doubt about its ability to continue
  as a going concern. The financial statements do not include any adjustments
  relating to the recoverability and classification of recorded asset amounts
  or the amounts and classification of liabilities that may be necessary should
  the Company be unable to continue as a going concern. The Company’s continuation
  as a going concern is contingent upon its ability to obtain additional financing,
  and to generate revenue and cash flow to meet its obligations on a timely basis.
  The Company expects to raise capital through the conversion of outstanding warrants
  and equity sales as necessary to fund future growth until they operate above
  the break-even point The Company’s management is currently putting sales
  strategies in place which will, if successful, mitigate these factors which
  raise substantial doubt about the Company’s ability to continue as a going
  concern.

---

|-9-
|---

|GARUDA CAPITAL CORP.                                       
|-----------------------------------------------------------
|Condensed Notes to Consolidated Financial Statements       
|Three Months ended September 30, 2005 and 2004 (US Dollars)
|(Unaudited)                                                

NOTE 3  RELATED PARTY TRANSACTIONS

The Company is indebted to certain shareholders as follows:

|                                                        |   | September 30, |  |   | June
        30, | 
|------------------------------------------------------- | - | ------------- |  | - | ---------------- | 
|                                                        |   | 2005          |  |   | 2005             | 
|Shareholder notes bearing interest at 10%,              |   |               |  |   |                  | 
|No specific due dates, collateralized
      by          |   |               |  |   |                  | 
|all personal property
      of Hagensborg Foods Ltd.and |   |               |  |   |                  | 
|Garuda Capital Corporation.                             | $ | 56,046        |  | $ | 54,670           | 
|Shareholder note bearing interest at 15%,               |   |               |  |   |                  | 
|no specified due date, unsecured                        |   | 260,916       |  |   | 260,056          | 
|Shareholder convertible note bearing interest at 1%     |   |               |  |   |                  | 
|per month, due June 30, 2006                            |   | 0             |  |   | 100,000          | 
|Advances from shareholders, unsecured, non-interest     |   |               |  |   |                  | 
|bearing with no specific due dates                      |   | 107,391       |  |   | 109,832          | 
|                                                        | $ | 424,353       |  | $ | 524,558          | 

As at September 30, 2005 an additional amount of $26,841 is due
  to related parties and is reflected in the accounts payable and accrued expenses.
  Total interest expense on related party loans totalled $9,537 and is included
  in interest expense.

NOTE 4  INVENTORY

Inventories are stated at the lower of average cost or net realizable
  value. The cost of finished goods includes the cost of raw material, direct
  and indirect labor, and other indirect manufacturing costs. The Company has
  recorded an allowance of $0 for inventory obsolescence in both periods.

The components of inventory at September 30, 2005 and June 30,
2005 are as follows:

September 30,
    
    
    June 30,2005
    
    
    2005Packaging supplies
    $
    230,013
    
    $
    175,553Finished goods
    
    92,635
    
    
    59,140Raw materials
    
    86,183
    
    
    37,666Other supplies
    
    195
    
    
    5,593$
    409,026
    
    $
    277,952


---

|-10-
|----

|GARUDA CAPITAL CORP.                                       
|-----------------------------------------------------------
|Condensed Notes to Consolidated Financial Statements       
|Three Months ended September 30, 2005 and 2004 (US Dollars)
|(Unaudited)                                                

NOTE 5  BANK INDEBTEDNESS AND BANK LOANS

Demand LoanThe Company has a demand loan facility
from a bank in the amount of $200,000, which is personally guaranteed by a
shareholder of the Company. Outstanding advances bear interest at the banks
base rate plus 2%, payable on demand by the bank. The loan is collateralized by
all present and future personal property of Hagensborg Foods Ltd.

OverdraftThe Company has a bank overdraft facility in the amount of $100,000. Outstanding
  advances bear interest at the banks base rate plus 2% per annum, payable
  monthly. At September 30, 2005 and June 30, 2005, the Company had a net outstanding
  balance of $73,703 and $94,754, respectively, on this overdraft facility. The
  facility is personally guaranteed by a shareholder of the Company and collateralized
  by all present and future personal property of Hagensborg Foods Ltd.

See Note 7 for further discussions of bank loans.

NOTE 6  SEGMENT INFORMATION

The Company has adopted Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information," (hereinafter SFAS No. 131). SFAS No. 131 established standards
for reporting information about operating segments in annual financial
statements and requires selected information about operating segments in interim
financial reports issued to stockholders. It also established standards for
related disclosures about products and services and geographic areas. Operating
segments are defined as components of an enterprise about which separate
financial information is available, evaluated regularly by the chief operating
decision makers, or a decision making group, in deciding how to allocate
resources and in assessing performance for the company. These segments are
defined by product line.

The following table reflects certain information for the
Companys segments:

Three Months Ended September 30,
      2005Hagensborg
    
    
    Natural
    
    
    CorporateHagensborg
    
    
    Seafoods
    
    
    Program
    
    
    andFoods Ltd.
    
    
    Ltd.
    
    
    Inc.
    
    
    Eliminations
    
    
    TotalGross profit (loss)
    $
    (9,730
    )
    $
    0
    
    $
      (873
    )
    $
    -
    
    $
      (10,603
    )Otherincome(expenses)
    $
    (8,856
    )
    $
    -
    
    $
    -
    
    $
    (16,383
    )
    $
      (25,240
    )Net income (loss)
    $
    (400,193
    )
    $
    (57
    )
    $
    (8,758
    )
    $
    (119,744
    )
    $
    (528,752
    )Segment assets
    $
    728,047
    
    $
    0
    
    $
    46,700
    
    $
    6,663
    
    $
    781,410


---

|-11-
|----

|GARUDA CAPITAL CORP.                                       
|-----------------------------------------------------------
|Condensed Notes to Consolidated Financial Statements       
|Three Months ended September 30, 2005 and 2004 (US Dollars)
|(Unaudited)                                                

NOTE 6  SEGMENT INFORMATION - Continued

Three months ended September 30, 2004Gross profit
    $
      (7,190
      )
    $
      23,177
    
    $
      2,242
      
    $
      119
      
    $
      18,348Other income(loss)
    $
      (8,221
      )
    $
    -
    
    $
    -
    
    $
      27,665
      
    $
      19,444Net income (loss)
    $
      (178,936
    )
    $
      23,167
      
    $
      (11,997
    )
    $
      (6,422
    )
    $
      (174,188
    )Segment assets
    $
      572,889
    
    $
      64,893
    
    $
      43,515
    
    $
      5,822
    
    $
      687,119


NOTE 7  COMMITMENTS AND CONTINGENCIES

|(a) | Pursuant to the Companys bank loan agreement (more fully
      discussed in Note 5), the Companys ratio of current assets to current
      liabilities cannot exceed 1.2 to 1.0. At June 30, 2005, the Company was in
      violation of this condition. At September 30, 2005 the company was also in
      violation of a second covenant whereby the Company's ratio of debt to
      tangible net worth may not exceed 3.0 to 1.0. The bank has waived any
      action until December 31, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(b) | During the year ended June 30, 2005, Garuda Gold
      Corporation, a wholly owned subsidiary, entered into a Letter of Intent to
      earn the exclusive right and option to acquire a 65% right and interest in
      and to the Mining Rights to mine rock vein system in an area in Prestia,
      Ghana.                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | In order to have the option exercised, Garuda Gold Corporation
        must, on or before May 17, 2006, incur direct or indirect expenses totalling
        $300,000 on a program of work in respect of this particular mining right.                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | No expenses have been incurred on this mining right
        to date.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(c) | During the year ended June30, 2005, Garuda Minerals Inc.,
      a wholly owned subsidiary, has entered into a Letter of Intent to earn the
      exclusive right and option to acquire 65% right, title and interest in and
      to an exploration license on an area of approximately 200 km2located near the town of Ho in the Volta region of Ghana.                                                                                                                                              

---

|-12-
|----

|GARUDA CAPITAL CORP.                                       
|-----------------------------------------------------------
|Condensed Notes to Consolidated Financial Statements       
|Three Months ended September 30, 2005 and 2004 (US Dollars)
|(Unaudited)                                                

In order to have the option exercised,
Garuda Minerals Inc. must, on or before May 17, 2006, incur direct or indirect
expenses totalling $300,000 on a program of work in respect of this particular
property.

No expenses have been incurred on this
property to date

NOTE 8  STOCK OPTION

At September 30, 2005, 8,000,000 share options were available
  for future grant under the 2005 Stock Option Plan and 175,000 stock options
  were available for grant (subject to vesting requirements) pursuant to an employment
  agreement.

|                           | Options outstanding
|-------------------------- | -------------------
|                           | Shares             
|                           | available          
|                           | for grant          
|                           | #                  
|Balance June 30, 2004      | 1,600,000          
|Options forfeited          |                    
|Options vested and granted |                    
|Options exercised          |                    
|Balance June 30, 2005      | 8,210,000          
|Options vested and granted |                    
|Balance September 30, 2005 | 8,175,000          

The Company applies APB Opinion No. 25 in accounting for options
  and, accordingly, recognized no compensation cost for its stock options vested
  and granted in the periods ended September 30, 2005 and 2004. The following
  reflects the Company’s pro forma net loss and net loss per share as if
  the fair value-based method using the Black-Scholes option pricing model had
  been applied in measuring compensation expense.

|                                                      |  | 2005     |   |  | 2004     |  
|----------------------------------------------------- |  | -------- | - |  | -------- | -
|                                                      |  | $        |   |  | $        |  
|                                                      |  |          |   |  |          |  
|Net loss as reported                                  |  | (528,752 | ) |  | 174,188  |  
|Compensation expense determined under the             |  |          |   |  |          |  
|fair value method                                     |  | (2,380   | ) |  |          |  
|Pro forma net
      loss                              |  | (531,132 | ) |  | (174,188 | )
|                                                      |  |          |   |  |          |  
|Pro forma net
      loss per share, basic and diluted |  | (0.01    | ) |  | (0.03    | )

The following assumptions were made to measure compensation expense
  under the Black-Scholes option pricing model:

| | Risk-free interest rate | 4.0%       | 
| | ----------------------- | ---------- | 
| | Expected life           | 4.25 years | 
| | Expected volatility     | 88.65%     | 
| | Dividend yields         | nil        | 

The Black-Scholes option valuation model was developed for use
  in estimating the fair value of traded options, which have no vesting restrictions
  and are fully transferable. The weighted average fair value of stock options
  under employer stock option plans granted during the period was $2,380 [2004
  - $nil].

In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Companys employee stock options have characteristics significantly
different from

---

|-13-
|----

|GARUDA CAPITAL CORP.                                       
|-----------------------------------------------------------
|Condensed Notes to Consolidated Financial Statements       
|Three Months ended September 30, 2005 and 2004 (US Dollars)
|(Unaudited)                                                

those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in managements
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

9. COMMON STOCK

|[a] | Authorized                                                                                                                                                                                                                                                                                                                                  
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                             
|    | The Company is authorized to issue up to 100,000,000
      shares of common stock, par value $0.001 per share. The Company is also
      authorized to issue up to 10,000,000 shares of preferred stock, par value
      $0.01 per share.                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                             
|    | In July 2005, the Company increased its authorized common
      stock from 50,000,000 shares to 100,000,000 shares pursuant to the vote of
      stockholders held on June 27, 2005.                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                             
|[b] | Issued and outstanding                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                             
|    | On August 24, 2005, the Company issued 175,000 shares and
      87,500 warrants pursuant to private placements at $0.10 per unit for cash
      proceeds of $17,500.                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                             
|    | On August 11, 2005 the shareholders convertible note
        was converted to 1,000,000 units with a price of $0.10 per unit. Each
        unit is comprised of one share of common stock in the Company, and one
        warrant to acquire an additional share of the Company at $0.20 for every
        two units issued upon conversion.
|    |                                                                                                                                                                                                                                                                                                                                             
|[c] | Warrants                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                             
|    | As at September 30, 2005, the Company had issued
      10,460,022 warrants that had not been exercised. Each warrant allows the
      purchase of one share of common stock at an exercise price of $0.20 per
      share, exercisable for two years from issuance. The outstanding warrants
      expire as follows:                       

| |  | No. of     |  | Expiry     | 
| |  | ---------- |  | ---------- | 
| |  | warrants   |  | date       | 
| |  | 500,000    |  | June 2006  | 
| |  | 8,210,022  |  | March 2007 | 
| |  | 1,750,000  |  | June 2007  | 
| |  | 10,460,022 |  |            | 

Any value associated with the
outstanding warrants was included in the original common stock price and
included in the additional paid-in capital.

|10. | CONTRA EQUITY
|--- | -------------

During the year ended June 30, 2005 the
  Company issued common stock for services, some of which services will be rendered
  to the Company subsequent to the period end. The value of the services to be
  rendered subsequent to September 30, 2005 totalled $172,167 [June 30, 2005 -
  $nil].

---

|-14-
|----

ITEM
2.          MANAGEMENTS DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION / PLAN OF OPERATIONS

Forward Looking Statements

This report on Form 10-QSB contains certain forward-looking
statements within the meaning of Section 21e of the Securities Exchange Act
of 1934, as amended, and other applicable securities laws. All statements
other than statements of historical fact are forward-looking statements
for purposes of these provisions, including any projections of earnings,
revenues, or other financial items; any statements of the plans, strategies, and
objectives of management for future operation; any statements concerning
proposed new products, services, or developments; any statements regarding
future economic conditions or performance; statements of belief; and any
statement of assumptions underlying any of the foregoing. Such forward-looking
statements are subject to inherent risks and uncertainties, and actual results
could differ materially from those anticipated by the forward-looking
statements.

Overview

Our original goal from inception in July 1997 was to develop a
film production business. These efforts were abandoned in September 2001. On
September 7, 2001 all existing officers and directors resigned and new officers
and directors were appointed to evaluate new business opportunities.

By two agreements dated April 1, 2002, we acquired Hagensborg
Foods Ltd. (Hagensborg), a Vancouver-based manufacturer and marketer of
fine chocolates and other gourmet foods and Natural Program Inc. (Natural
Program), a manufacturer and distributor of natural medicine.

We have incorporated three subsidiaries, Garuda Ventures Canada
Inc., Garuda Gold Corporation and Garuda Minerals Inc. All three companies are
incorporated under the laws of British Columbia, Canada. Garuda Ventures Canada
Inc. holds idle working capital to be invested in marketable securities and has
no other assets.

During the year ended June 30, 2005, Garuda Gold Corporation
entered into a Letter of Intent to earn the exclusive right and option to
acquire a 65% right and interest in and to the Mining Rights to mine rock vein
system in an area in Prestia, Ghana.

In order to have the option exercised, Garuda Gold Corporation
  must, on or before May 17, 2006, incur direct or indirect expenses totalling
  $300,000 on a program of work in respect of this particular mining right.
  No expenses have been incurred on this mining right to date.
  During the year ended June30, 2005, Garuda Minerals Inc. entered into a Letter
  of Intent to earn the exclusive right and option to acquire 65% right, title
  and interest in and to an exploration license on an area of approximately 200
  km2 located near the town of Ho in the Volta region of Ghana.

---

|-15-
|----

In order to have the option exercised, Garuda Minerals Inc. must, on or before May 17, 2006, incur direct or indirect expenses totalling $300,000 on a program of work in respect of this particular property.

No expenses have been incurred on this property to date.

Results of Operations for the Three Months ended September 30, 2005 Compared to September 30, 2004  Garuda Capital Corp. on a Consolidated Basis

During the three months ended September 30, 2005, we realized
  total revenues of $93,132, compared to $135,137 in revenues for the three months
  ended September 30, 2004 and we incurred a net loss for the quarter ended September
  30, 2005 of $528,752, compared to a net loss of $174,188 for the same period
  in 2004. The decrease in revenues and resultant increase in net loss for 2005
  was as a result of decreased sales for our Hagensborg operations during the
  three months ended September 30, 2005 and the increase in advertising and promotion
  expense. As a result of the decreased sales, we have now increased our sales
  staff and taken more aggressive steps in marketing our Hagensborg products.
  Gross profit (loss) for the three months ended September 30, 2005 was ($10,603)
  compared to $18,348 for the same period in 2004.

Our general and administrative costs for the three months ended September 30, 2005 were $191,992 compared to $122,093for the three months ended September 30, 2004, which consisted primarily of personnel costs, consulting fees, and general
office costs.  The increase in general and administrative costs between the two periods is largely the result of our overhead for operations for Hagensborg.

Our legal and accounting costs for the three months ended
  September 30, 2005 were $25,033 compared to $12,680 for the three months ended
  September 30, 2004. This increase is due to additional legal services provided.

Our premise leases for both Hagensborg and Natural Program were $41,431 and $45,842 for the three months ended September 30, 2005 and September 30, 2004, respectively. Our advertising and promotion costs for the three months ended September
30, 2005 were $231,193 and $28,707 for the three months ended September 30, 2004. The increase in advertising and promotion costs between the two periods is largely the result of our marketing research and product redesign for
Hagensborg.

We anticipate that we will incur increased sales and marketing costs, including hiring sales personnel, broker fees and tradeshow attendance fees, as we implement our business growth strategies for both Hagensborg and Natural Program.

---

|-16-
|----

**Liquidity and Capital Resources for the Three Months
  ended September 30, 2005 Compared to June 30, 2005 on Consolidated Basis**

We believe that sales from our subsidiaries will not provide
sufficient capital resources to sustain operations and fund product development
until our fiscal year ending June 30, 2006. Although we have incurred recurring
net losses and working capital deficiencies which raise substantial doubt about
our ability to continue as a going concern, we expect to raise capital through
the conversion of outstanding warrants and equity sales as necessary to fund
future growth until we operate above the break-even point. We continually
evaluate opportunities to sell additional equity or debt securities, or obtain
credit facilities from lenders to strengthen our financial position. The sale of
additional equity or convertible debt securities could result in additional
dilution to our stockholders.

Since inception through April 1, 2002, when we acquired
Hagensborg Foods Ltd., we have financed Hagensborgs operations partly through
revenues from operations and bank credit facilities, and partly through the
issuance of equity shares and convertible debentures. Hagensborg has not been
able to reach the break-even point for the last four fiscal years and has had to
rely on Garuda for capital resources. We believe that sales from Hagensborgs
new product lines will add new capital resources, but may not be sufficient to
sustain operations and fund new product launches until the fiscal year ended
June 30, 2006.

Since inception through April 1, 2003, when Natural Program
Inc. was acquired by Garuda Capital Corp., we have financed Natural Programs
operations partly through revenues and bank credit facilities, and partly
through the issuance of equity shares. Natural Program has not yet able to reach
the break-even point and has had to rely on Garuda for capital resources. We
believe that additional sales resulting from Natural Programs increased
marketing efforts will add new capital resources, but may not be sufficient to
sustain operations and fund new product launches until the fiscal year ended
June 30, 2006.

During the three months ended September 30, 2005, our current
assets increased $131,672 from $441,627 in 2004 to $573,298 in 2005, primarily
as a result of increased inventory.

Non-current assets for the three months ended September 30,
2005 were $208,112, net of accumulated depreciation, compared to non-current
assets of $245,492 for the three months ended September 30, 2004.

Total liabilities decreased from $1,983,092 for the three
months ended September 30, 2005 to $1,110,467 for the same period in 2005. For
the three months ended September 30, 2005, this includes $1,096,183 in current
liabilities, including the bank loan in the sum of $170,000.

ITEM
3.          CONTROLS AND
PROCEDURES

(a) ****Evaluation of disclosure controls and procedures

Our Chief Executive Officer and our Chief Financial Officer
evaluated our disclosure controls and procedures (as defined in Rule
13a-14 (c) of the Securities Exchange Act of 1934 (the "Exchange
Act") as of a date within 90 days before the filing date of this report and
have concluded that as of the evaluation date, our disclosure controls and
procedures

---

|-17-
|----

are effective to ensure that information we are required to
disclose in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.

(b) Changes in internal controls.

Subsequent to the date of their evaluation, there were no
significant changes in our internal controls or in other factors that could
significantly affect these controls. There were no significant deficiencies or
material weaknesses in our internal controls so no corrective actions were
taken.

PART II  OTHER INFORMATION

ITEM
1.          LEGAL
PROCEEDINGS

None

ITEM
2.          UNREGISTERED SALES OF
EQUITY SECURITIES

On August 11, 2005, Fadelle Ventures Ltd. delivered notice to
the Company to convert $100,000 of a Convertible Note entered into with the
Company on June 30, 2004 into units at an exercise price of $0.10 per unit.
Consequently, on August 11, 2005, the Company issued 1,000,000 units to Fadelle
Ventures Ltd. Each unit consisted of the following:

| | a. | One share of common stock in the Company; and                                                                                                                         
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                       
| | b. | One warrant to acquire an additional share of the Company
        at $0.20 for every two units issued upon conversion, each warrant expiring
        on June 30, 2007.

On August 24, 2005, the Company issued 175,000 shares and
87,500 warrants pursuant to private placements at $0.10 per unit. The units were
priced at $0.10 each. Each unit consisted of one share of common stock and a
one-half non-transferable warrant. Each full warrant allows the purchase one
share by the cash payment of the exercise price of $0.20 per share, exercisable
for a period of two years from the date of issuance

ITEM
3.          DEFAULTS UPON SENIOR
SECURITIES:

None

ITEM
4.          SUBMISSION OF MATTERS
TO A VOTE OF SECURITY HOLDERS:

None

ITEM
5.          OTHER
INFORMATION:

None

ITEM
6.          EXHIBITS AND REPORTS ON
FORM 8-K.

|Exhibits
|--------
|3.1     
|
|        
|3.2     

---

|-18-
|----

|3.3  | Articles of Amendment (incorporated by reference as
        Exhibit 3.3 to our Annual Report on Form 10-KSB filed on October 15, 2002)                                                                       
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                              
|3.4  | Articles of Amendment (incorporated by reference as Exhibit
        3.4 to our Annual Report on Form 10-KSB filed on November 14, 2005)                                                                      
|     |                                                                                                                                                                                                              
|10.1 | Design Agreement between Hagensborg and Turner Duckworth
        dated March 16, 2005 (incorporated by reference as exhibit 10.1 to our
        Quarterly Report on Form 10-QSB filed on May 12, 2005)       
|     |                                                                                                                                                                                                              
|10.2 | Agreement between Garuda Minerals, Newhaven and Aquarian
        dated May 18, 2005 (incorporated by reference as exhibit 10.1 to our Report
        on Form 8-K filed on May 25, 2005)                      
|     |                                                                                                                                                                                                              
|10.3 | Agreement between Garuda Gold, Newhaven and Aquarian dated
        May 18, 2005 (incorporated by reference as exhibit 10.2 to our Report
        on Form 8-K filed on May 25, 2005)                          
|     |                                                                                                                                                                                                              
|10.4 | Agreement between Garuda and Newhaven dated May 6, 2005
        (incorporated by reference as exhibit 10.3 to our Report on Form 8-K filed
        on May 25, 2005)                                          
|     |                                                                                                                                                                                                              
|10.5 | Environmental Permit for Mineral Exploration dated April
        20, 2005 (incorporated by reference as Exhibit 10.5 to our Annual Report
        on Form 10-KSB filed on November 14, 2005)                 
|     |                                                                                                                                                                                                              
|10.6 | Proposed Work Program for Chromium Prospecting in Ghana
        (incorporated by reference as Exhibit 10.6 to our Annual Report on Form
        10-KSB filed on November 14, 2005)                           
|     |                                                                                                                                                                                                              
|10.7 | Agreement for Mining Services between Robert Appiah
        and Newhaven dated May 6, 2005 (incorporated by reference as Exhibit 10.7
        to our Annual Report on Form 10-KSB filed on November 14, 2005)
|     |                                                                                                                                                                                                              
|21   | Subsidiaries of the Registrant                                                                                                                                                                               

| | Name                        | State of Incorporation
| | --------------------------- | ----------------------
| |                             |                       
| | Hagensborg Foods Ltd.       | British Columbia      
| | Hagensborg Seafoods Ltd.    | British Columbia      
| | Natural Program Inc.        | Nevada                
| | Natural Program Ltd.        | British Columbia      
| | Garuda Ventures Canada Inc. | British Columbia      
| | Garuda Gold Corporation     | British Columbia      
| | Garuda Minerals Inc.        | Nevada                

|31.1 | Rule 13a-14(a)/15d-14(a) Certification of CEO
      and CFO
|---- | -----------------------------------------------------------
|     |                                                            
|32.1 | Section 906 Certification of CEO and CFO                   



---

|-19-
|----

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.

Date: December 14, 2005

GARUDA CAPITAL CORP.(Issuer)

By: /s/C. Robin Relph

C. Robin Relph, President, Chief Executive Officer, Chief
Financial Officer (Principal Financial and Accounting Officer)

---