United States
                       Securities and Exchange Commission

                              Washington, DC 20549
                                   (Mark One)

                                   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, 2003
                                -------------------------------------------

                                                        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               (I.R.S. Employer
or organization                                            Identification No.)

502-1978 Vine Street, Vancouver, BC                             V6K 4S1
--------------------------------------------------------------------------------
(Address of principal executive                               (Zip Code)
offices)
                                  604-737-0203
--------------------------------------------------------------------------------
               Registrant's telephone number, including area code:

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

          Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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

    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,
6,373,575 shares as of November 18, 2003



<PAGE>


                         PART I - FINANCIAL INFORMATION

       ------------------------------------------------------------------

                          ITEM 1. FINANCIAL STATEMENTS

       ------------------------------------------------------------------



The accompanying financial statements of Garuda Capital Corp. at September 30,
2003 and September 30, 2002 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, 2003, are not necessarily
indicative of the results that can be expected for the year ending June 30,
2004.



<PAGE>




                           CONSOLIDATED FINANCIAL STATEMENTS

                           GARUDA CAPITAL CORP.

                           VANCOUVER, BRITISH COLUMBIA, CANADA

                           September 30, 2003 AND 2002













                  1. CONSOLIDATED BALANCE SHEETS

                  2. CONSOLIDATED STATEMENTS OF OPERATIONS

                  3 CONSOLIDATED STATEMENTS OF CASH FLOWS

                  4. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



<PAGE>

<TABLE>
<CAPTION>


                                                                                     4

Garuda Capital Corp.

CONSOLIDATED BALANCE SHEETS
UNAUDITED

September 30, 2003 and June 30, 2003                                      (US Dollars)

                                                            September 30,     June 30,
                                                              2003             2003
--------------------------------------------------------------------------------------
<S>                                                         <C>              <C>
ASSETS

Current
    Accounts receivable                                     $   176,985        100,439
    Available-for-sale securities                                     0         94,644
    Inventory, net                                              383,938        293,222
    Prepaid expenses                                             25,597         25,817
--------------------------------------------------------------------------------------
    Current assets                                              586,520        514,122

Property and equipment, net                                     374,196        387,394
--------------------------------------------------------------------------------------
                                                            $   960,717    $   901,516
======================================================================================

LIABILITIES
Current
    Bank indebtedness                                       $   298,869    $   263,479
    Bank loan                                                   128,600        169,400
    Accounts payable and accrued expenses                       413,454        352,325
    Current portion of long term debt                             2,468          2,938
    Amounts due to shareholders                                 560,563        335,455
--------------------------------------------------------------------------------------
    Current liabilities                                       1,403,954      1,123,597

Long term debt
Capital lease obligation                                          5,045          4,463
--------------------------------------------------------------------------------------
                                                              1,408,999      1,128,060
SHAREHOLDERS' DEFICIT
Preferred stock, $0.001 par value; authorized 10,000,000;
     Issued: None                                                  --             --
Common stock, $0.001 par value; authorized 50,000,000;
     Issued: 6,373,575; (June 2003: 6,299,575)                    6,374          6,300
Capital in excess of par value                                2,444,715      2,437,389
Deficit                                                      (2,899,371)    (2,670,233)
--------------------------------------------------------------------------------------

                                                               (448,282)      (226,544)
--------------------------------------------------------------------------------------
                                                            $   960,717    $   901,516
======================================================================================


The accompanying notes are an integral part of these statements.

</TABLE>

<PAGE>


Garuda Capital Corp.

CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED

Three Months ended September 30, 2003 and 2002                     (US Dollars)




                                                        2003             2002
-------------------------------------------------------------------------------
REVENUE

Sales                                                $   276,078    $   697,705

Cost of goods sold                                       209,714        458,465
-------------------------------------------------------------------------------
                                                          66,364        239,240

EXPENSES

General and administrative                               243,181        248,792
Interest on debt                                          15,665           --
Depreciation                                              13,198         11,123
Equipment and Premises Leases                             36,479           --
-------------------------------------------------------------------------------
                                                         308,522        259,915
-------------------------------------------------------------------------------
Loss before other items                                 (242,159)       (20,675)

Loss on sale of marketable securities                    (14,820)        (3,275)
-------------------------------------------------------------------------------
NET LOSS                                                (256,979)       (23,950)

COMPREHENSIVE LOSS

Unrealized loss on marketable securities                    --          (77,286)
-------------------------------------------------------------------------------
NET COMPREHENSIVE LOSS                               $  (256,979)   $  (101,236)
===============================================================================

NET LOSS PER COMMON SHARE - BASIC AND FULLY DILUTED  $     (0.04)   $     (0.02)
-------------------------------------------------------------------------------

WEIGHTED AVERAGE NUMBER OF COMMON SHARES               6,308,698      6,049,575
-------------------------------------------------------------------------------







The accompanying notes are an integral part of these statements.


                                                                               5
<PAGE>
<TABLE>
<CAPTION>


Garuda Capital Corp.

CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED

Three Months ended September 30, 2003 and 2002                                (US Dollars)




                                                                      2003          2002
------------------------------------------------------------------------------------------
<S>                                                                <C>          <C>
OPERATIONS
Net loss                                                           $(256,979)   $(101,236)
Items not involving cash:
    Depreciation                                                      13,198       11,123
    Loss on foreign currency translations                             27,841        3,947
    Loss on sale of marketable securities                             14,820        3,275
    Shares issued as consultant compensation                           7,400         --
    Unrealized loss on marketable securities                            --         77,286
Changes in operating assets and liabilities:
    Decrease in accounts receivable                                  (76,546)     140,864
    Decrease in prepaid expenses                                         220        1,873
    Increase (decrease) in accounts payable and accrued expenses      61,711      173,636
    Increase in inventory                                            (90,716)     (33,769)
    Increase in unearned revenue                                        --         (8,824)
    Increase in accounts payable - related party                        --         14,838
------------------------------------------------------------------------------------------
          Net cash provided by (used in) operating activities       (299,051)       1,285

FINANCING
Increase in bank indebtedness                                         35,390      214,918
Decrease in subscription receivable                                     --        100,000
Draws on bank loan                                                    40,800      200,000
Draw on long term debt                                                  --          5,771
Cash paid to shareholders                                               --       (419,193)
Decrease in current lease obligations                                   (470)        --
Loans from shareholders                                              225,108         --
------------------------------------------------------------------------------------------

          Net cash provided by financing activities                  238,235      101,496

INVESTING
Sale of marketable securities                                        113,311       12,170
Purchase of marketable securities                                    (33,488)    (100,000)
Cash paid for purchase of property and equipment                        --         14,951
------------------------------------------------------------------------------------------
          Net cash used by investing activities                       79,823     (102,781)

Net increase (decrease) in cash                                         --           --

Cash, beginning of period                                               --           --
------------------------------------------------------------------------------------------
CASH, end of period                                                $    --      $    --
==========================================================================================

The accompanying notes are an integral part of these statements.

                                                                                       6
</TABLE>

<PAGE>


Garuda Capital Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months ended September 30, 2003 and 2002                      (US Dollars)

1.  NATURE OF OPERATIONS AND BASIS OF PRESENTATION
-------------------------------------------------------------------------------

Organization - The Company was incorporated in Nevada on July 8, 1997 and is a
public company traded on the NASDAQ OTC bulletin board. On February 14, 2002,
the Company changed its name from Vanstar Films, Inc. to Garuda Capital Corp.

Nature of Operations - The Company, through it subsidiaries, sells and processes
specialty food products and herbal medication to wholesale and retail customers
in North America.

For the period ended September 30, 2003, the Company incurred a net loss of
$256,979. The Company's ability to continue its operations and to realize assets
at their carrying values is dependent upon the continued support of its
shareholders, obtaining additional financing and generating revenues sufficient
to cover its operating costs. Management's plans in regard to these matters are
to raise additional equity funds as needed to meet any operating needs.

The financial statements do not give effect to any adjustments which would be
necessary should the Company be unable to continue as a going concern and
therefore be required to realize its assets and discharge its liabilities at
amounts different from those reflected in these consolidated financial
statements.

2.  SIGNIFICANT ACCOUNTING POLICIES
-------------------------------------------------------------------------------

Principles of consolidation and basis of accounting - The consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries, as follows:

Garuda Ventures Canada Inc. and Garuda Gold Corp. are companies with no active
business operations. Hagensborg Foods Ltd. processes and sells specialty food
products to wholesale and retail customers in North America. Hagensborg Seafoods
Ltd. processes and sells high-quality seafood products throughout North America.
Natural Program Inc. sells natural herbal products to wholesale and retail
customers in North America. Natural Program Ltd. provides natural herbal
medication to wholesale and retail customers in North America.

Approximately 80% of Hagensborg Foods revenues are derived from the United
States with the remaining 20% originating in Canada. 100% of the of Hagensborg
Foods assets and liabilities originate in Canada. 100% of the assets,
liabilities, and revenues of Natural Program, Inc. originate in Canada. The
other entities included in the consolidation are located 100% in Canada. Their
assets and operations are maintained solely in Canada.

Available-for-sale securities - The Company has invested in various securities
classified as available-for-sale at June 30, 2003. These securities are carried
at market value, with unrealized gains and losses reported as a separate
component of shareholders' equity. At September 30, 2003, The Company had
disposed of all its securities.

Inventory - Inventory is recorded at the lower of average cost or market. Cost
includes materials, labor and applicable warehouse overhead. Market is
replacement cost for raw materials and supplies and net realizable value for
finished goods.


                                                                               7
<PAGE>


Garuda Capital Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued


Three Months ended September 30, 2003  and 2002                    (US Dollars)

-------------------------------------------------------------------------------

Goodwill - Goodwill represented the excess of the cost of the acquisition over
the fair value of the net identifiable assets acquired. Under Statement of
Financial Accounting Standards No. 142, on an ongoing basis, management reviews
the valuation of goodwill, including any events and circumstances which may have
impaired its fair value. If impairment exists, the amount is written off, rather
than being amortized as previous standards required. The amount of goodwill
impairment, if any, is determined by assessing recoverability based on expected
future cash flows and market conditions. Any impairment, other than temporary,
in the carrying value is charged to earnings in the year incurred. For the year
ended June 30, 2003, the company recorded an impairment loss of $661,524.

Revenue recognition - The Company ships its products by common carrier and also
sells products in its wholesale establishment. The Company receives its product
sales price in the form of cash, credit card or on approved terms. The Company
historically averages less than 1% in credits for returned or unsold products.
Sales revenue and related discounts or volume incentives are recorded when the
merchandise is shipped since performance by the Company is considered met when
products are in the hands of the common carrier.

Property and equipment - Property and equipment is recorded at cost less
accumulated depreciation. Depreciation is provided for over the estimated useful
lives of the assets on the following basis and annual rates:

Asset                            Basis                             Rate
--------------------------------------------------------------------------------
Manufacturing equipment          Straight-line                  15 years
Manufacturing tools              Straight-line                  15 years
Furniture and fixtures           Straight-line                  15 years
Leasehold improvements           Straight-line                       20%
Computer hardware and software   Straight-line                  15 years
Trademarks                       Declining balance                   20%

Foreign currency translation - As the majority of the Company's operations are
in Canada, the Canadian dollar has been chosen as the Company's functional
currency. All Canadian dollar denominated balances and transactions have been
translated into US funds as follows: monetary assets and liabilities are
translated at current rates of exchange and other assets and liabilities are
translated at historical rates of exchange. Revenue and expenses are translated
at average rates of exchange for the year, except for depreciation and
amortization that are translated at rates in effect when the related assets were
acquired. All exchange gains and losses are recorded as a separate component of
shareholders' equity.

Leases - Leases are classified as capital or operating leases. Leases which
transfer substantially the entire benefits and risks incident to ownership of
property are accounted for as capital leases. All other leases are accounted for
as operating leases and the related lease payments are charged to expense as
incurred.

Fair value of financial instruments - Substantially all of the Company's assets
and liabilities are carried at fair value or contracted amounts that approximate
fair value. Estimates of fair value are made at a specific point in time, based
on relative market information and information about the financial instrument,
specifically, the value of the underlying financial instrument. Assets that are
recorded at fair value consist largely of short-term receivables and marketable
securities, which are carried at contracted amounts that approximate fair value.
Similarly, the Company's liabilities consist of short term liabilities and
shareholder loans recorded at contracted amounts that approximate fair value.


                                                                               8
<PAGE>

Garuda Capital Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued


Three Months ended September 30, 2003 and 2002                      (US Dollars)



Income taxes - Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for future timing
differences between the financial statement carrying amounts and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered.

Use of estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires 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.

Long-lived assets - The Company reviews its long-lived assets for impairment
whenever changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. For purposes of evaluating the recoverability of
long-lived assets, the recoverability test is performed using undiscounted net
cash flows estimated to be generated by the asset.

Stock-Based Compensation - Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"), encourages, but does not
require, companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to account for
stock-based compensation using Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and has adopted the
disclosure only provisions of SFAS 123. Accordingly, compensation cost for stock
options is measured at intrinsic value, which is the excess, if any, of the
quoted market price of the Company's stock at the date of the grant over the
amount an employee is required to pay for the stock.

On December 31, 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure." This standard amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. This standard also requires prominent
disclosures in interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The disclosure requirements of SFAS No. 148 have been presented below.

Had the Company measured compensation cost based on the fair value of the
options at the grant date consistent with the method prescribed by SFAS 123, the
Company would have incurred compensation cost as follows:



                                                                               9
<PAGE>
<TABLE>
<CAPTION>


Garuda Capital Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued


Three Months ended September 30, 2003 and 2002                      (US Dollars)

                                                                              Three Months
                                                                Year Ended       Ended
                                                                 June 30,     September 30,
                                                                  2003            2003
                                                               -----------    -----------
                                                               (Restated)
<S>                                                            <C>            <C>
Net loss, as reported                                          $(1,370,114)   $  (256,979)

Add:  Stock-based employee compensation expense included in
reported net income, net of related tax effects                       --             --

Deduct:  Total  stock-based  employee  compensation  expense
determined  under fair value  based  method for all  awards,
net of related tax effects
                                                                  (150,403)       (50,133)
                                                               -----------    -----------
Pro forma net loss
                                                               $(1,520,517)   $  (307,112)
                                                               ===========    ===========
Earnings per share:
  Basic and diluted earnings (loss) per common share
       As reported
       Pro forma                                               $     (0.22)   $     (0.04)
                                                                     (.024)         (0.05)
</TABLE>

In addition, during the three months ended September 30, 2003 the company issued
74,000 shares of common stock at a market price of US $0.10 per share to certain
consultants as compensation.

3.  BANK INDEBTEDNESS
--------------------------------------------------------------------------------

The Company has a demand credit facility. It is personally guaranteed by a
shareholder of the Company. Outstanding advances bear interest at prime plus 2%.

4.  CAPITAL LEASE OBLIGATIONS
--------------------------------------------------------------------------------

Future minimum payments and the obligations due under capital leases are as
follows:

                                                2003             2002
-------------------------------------------------------------------------
    2003                                 $            -    $        5,164
    2004                                          5,164             5,164
    2005                                          2,128             2,128
-------------------------------------------------------------------------
                                                  7,292            12,456
Less amount representing interest                     -           (2,339)

                                                  7,292           10,117
Less current portion                            (2,938)           (3,951)
-------------------------------------------------------------------------
                                         $        4,463    $       6,166
=========================================================================

Interest of $502 was imputed on the capital leases, at a rate of 1.88%.


                                                                              10
<PAGE>

Garuda Capital Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued


Three Months ended September 30, 2003 and 2002                      (US Dollars)


5.  AMOUNTS DUE TO SHAREHOLDERS
--------------------------------------------------------------------------------

The Company is indebted to certain shareholders as follows:


<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------
                                                                        Sept 30, 2003     June 30, 2003
-------------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>
Shareholder note bearing interest at 30%, due August 1, 2003
unsecured                                                              $      56,000     $           -

Shareholder notes bearing interest at 10%, due September 1, 2003                                     -
secured by all personal property of HFL and GGC                               100,000

Shareholder notes bearing interest at 10%, due November 1, 2003
secured by all personal property of HFL and GGC                               175,000                -

Shareholder notes bearing interest at 10%, due December 1, 2003               200,000                -
Secured by all personal property of HFL and GGC
-------------------------------------------------------------------------------------------------------
                                                                              531,000                -

Advances from shareholders, unsecured, non-interest bearing with no
specified due dates                                                            29,563          335,455

-------------------------------------------------------------------------------------------------------
                                                                       $      560,563    $     335,455
======================================================================================================
</TABLE>


6. OFF-BALANCE SHEET RISKS
--------------------------------------------------------------------------------

The Company has purchased securities as investments and may incur losses if the
market value of these securities decline subsequent to September 30, 2003.

During the three Months ended September 30, 2003, two major customers accounted
for 34% and 18% of total revenue.


7. SEGMENT INFORMATION
--------------------------------------------------------------------------------

The Financial Accounting Standards Board has released statement #131
"Disclosures about Segments of an Enterprise and Related Information" which is
effective for all financial reporting periods subsequent to December 15, 1997.
This statement requires the reporting of certain information about operating
segments. The following table reflects certain information as promulgated by the
statement for the years ended September 30, 2003 and 2002:




                                                                              11
<PAGE>
<TABLE>
<CAPTION>


Garuda Capital Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued


Three Months ended September 30, 2003 and 2002                                                         (US Dollars)




                                                   June 30, 2003
                                                   -------------
                                                                                    Corporate
                                                                                      and
                           HFL                 HSL                   NPI          Eliminations           Totals
                      ------------     ---------------     ---------------     ---------------      --------------
<S>                   <C>              <C>                 <C>                 <C>                  <C>
Net sales             $    244,982     $       239,439     $        15,759     $       (3,384)      $       496,796
Other income (loss)         11,961                   -              (3,874)             67,610               75,697
Net income (loss)         (483,179)              5,246             (69 216)           (822,965)          (1,370,114)
Segment assets           1,284,057             185,046              51,984            (619,571)             901,516
Segment liabilities      3,092,704             760,314             121,507          (2,846,465)           1,128,060

                                                 September 30, 2003
                                                 ------------------
                                                                                    Corporate
                                                                                      and
                           HFL                 HSL                     NPI        Eliminations           Totals
                      ------------     ---------------     ---------------     ---------------      --------------
Net sales             $     43,323     $        46,644     $        11,565     $       (35,168)     $        66,364
Other income (loss)           -                      -                  -             (14,820)               14,820
Net income (loss)         (167,502)             50,873             (30,726)           (109,624)            (256,979)
Segment assets             684,102             213,741              29,894              32,980              960,717
Segment liabilities      1,541,525             830,730             149,772          (1,113,028)           1,408,999

</TABLE>
                                                                              12
<PAGE>


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

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., a Vancouver-based manufacturer and
marketer of fine chocolates and other gourmet foods and Natural Program Inc., a
manufacturer and distributor of natural medicine.

We have incorporated two further subsidiaries, Garuda Ventures Canada Inc. and
Garuda Gold Corporation. Both companies are incorporated under the laws of
British Columbia, Canada. Garuda Ventures Canada Inc. holds idle working capital
to be invested in marketable securities. The company has no other assets. Garuda
Gold Corporation is currently inactive and has no assets. The company will be
activated as soon as a suitable project has been identified.


Results of Operations Three Months ended September 2003 vs. 2002 - Garuda
Capital Corp. on Consolidated Basis

During the first quarter of fiscal 2004, we realized total revenues of $276,078
and the net loss for the quarter ended September 30, 2003 was $256,979.


Liquidity and Capital Resources Three Months ended September 2003 vs. 2002 -
Garuda Capital Corp. on Consolidated Basis

We believe that sales from our new subsidiaries will not provide sufficient
capital resources to sustain operations and fund product development until
fiscal year 2004/2005. While we have received a "going concern" opinion from our
auditors, 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.

In order to be more informative regarding the results of operations and the
liquidity and capital resources, discussion thereof will be separated between
Hagensborg Foods Ltd. and Natural Program Inc.


                                                                              13
<PAGE>


Results of Operations for the Three Months ended September 2003 vs. 2002 -
Hagensborg Foods Ltd.

Revenues of $278,946 in the three months ended September 30, 2003 were 58% lower
than the $667,471 in revenues reported for the three months period ended
September 30, 2002. The decrease was mainly due to the fact that we cut down our
outsourced US sales force to bring our sales efforts in-house for improved
control procedures and accountabilities. We also eliminated unprofitable
business from our sales portfolio.

Gross profit for the three months ended September 30, 2003 was $78,500 versus
$223,284 for the same period of 2002. Gross profit percentage of 28% in 2003 was
stable when compared to 29% in 2002.

Net loss for the three months ended September 30, 2003 was $107,159 versus a net
income of $29,043 for the same period in 2002. The decrease in net income was
primarily due to the fact that the lower level of confectionary sales did not
allow us to operate at the break even capacity of our chocolate manufacturing
plant.

Our sales and marketing costs consist primarily of personnel costs, advertising,
promotions, and tradeshows. Total costs were $ 53,406 and $101,460 for three
months ended September 30, 2003 and 2002 respectively. The 47% decrease of
$47,658 is largely a result of our cost cutting efforts to reach a break even
point with our operations. We anticipate that sales and marketing costs will
stay constant over the foreseeable future.

Our general and administrative costs consist primarily of personnel costs,
professional and legal costs, consulting fees, and general office costs. Our
general and administrative costs were $66,575 and $52,156 for the three months
ended September 30, 2003 and 2002, respectively. General and administrative
costs as a percentage of revenue increased between the two periods because as
sales go down these costs stay constant in the short term since they are
independent of our sales volume. We anticipate that general and administrative
costs will decrease to match our level of sales in the foreseeable future.

Our premise and equipment leases were $33,601 and $31,514 for the three months
ended September 30, 2003 and 2002, respectively. Our lease expires March 31,
2004 and the premise owner has offered to reduce the lease space to match our
needs.


Liquidity and Capital Resources for the Three Months ended September 2003 vs.
2002 - Hagensborg Foods Ltd.

Since inception through April 1, 2002 when Hagensborg Foods Ltd. was acquired by
Garuda Capital Corp., we have financed our operations partly through revenues
from operations and bank credit facilities, and partly through the issuance of
equity shares and convertible debentures. We have not been able to operate above
the break-even point for the last four fiscal years and have had to rely on our
parent company for capital resources. We believe that sales from our new product
lines will add new capital resources, but may not be sufficient to sustain
operations and fund new product launches until fiscal 2004/2005.


                                                                              14
<PAGE>

During the three months ended September 30, 2003, our current assets to current
liabilities ratio increased from 1.08 to 0.90. Current assets decreased $153,174
from $707,787 to $ 549,274. This was primarily due to lower accounts receivables
as a result of lower overall sales.

Noncurrent assets decreased increased from $372,085 to $348,569 net of
depreciation during the three months ended September 30, 2003 mainly due to the
newly acquired computer and production equipment.


Results of Operations for the Three Months ended September 2003 vs. 2002-
Natural Program Inc.

Natural Program Inc. is a start-up operation. Its revenue for the three months
ended September 30, 2003 was $14,443 and its gross profit was $5,175. Net loss
for the three months ended September 30, 2003 was $30,726.

Currently, our sales consist mostly of Chinese herbal formulations to
practitioners of traditional Chinese medicine on a wholesale basis. We sell the
herbs to practitioners for a wholesale price and they in turn retail them to
their patients with a mark-up (usually 100%). We collect the difference for the
practitioners and balance their accounts at the end of every month. In addition
to our range of Chinese herbs, we are in the process of test marketing a line of
Western herbal remedies in the Vancouver market. As we implement our marketing
plan for this product category in Western Canada, the Pacific North West and
subsequently the rest of Canada and the United States we expect sales to
increase over the coming year.

During the three months ended September 30, 2003, our total payroll decreased
from $12,638 in the three months ended September 30, 2002 to $10,080 in the
three months ended September 30, 2003. This decrease in mainly a result of our
successful efforts to introduce greater efficiencies to the labor-intensive
process of preparing custom formulations. We have also hired a marketing and
administrative associate which resulted in the elimination of consulting fees
for these functions. In the future, as we implement our growth plans, we
anticipate to hire additional sales personnel whose compensation with be sales
performance related.

Office and General expenses increased from $13,526 in the three months ended
September 30, 2002 to $35,870 in 2003. The higher expenses in 2003 include
management fees for our President Joyce Groote who joined the company in January
2003, computer and network maintenance and upgrades as well as costs associated
with administering a public company, including legal and accounting fees.

We anticipate to incur sales and marketing costs, including hiring sales
personnel, broker fees and tradeshow attendance fees as we implement our
business growth strategies.


                                                                              15
<PAGE>

Liquidity and Capital Resources for the Three Months ended September 2003 vs.
2002 - Natural Program Inc.

Since inception through April 1, 2003 when Natural Program Inc. was acquired by
Garuda Capital Corp. we have financed our operations partly through revenues and
bank credit facilities, and partly through the issuance of equity shares. We are
not yet able to operate above the break-even point and have to rely on our
parent company for capital resources. We believe that additional sales resulting
from our increased marketing efforts will add new capital resources, but may not
be sufficient to sustain operations and fund new product launches until fiscal
2004/2005.

In the three months ended September 30, 2003, our current assets to liabilities
ratio increased from 0.33 to1.0. Current assets increased from $17,013 to
$30,676. This was primarily due to increased inventory levels to support sales
as well as increased accounts receivables levels associated with higher sales
volumes.

Total liabilities increased from $81,646 in the three months ended September 30,
2002 to $149,772 in 2003. This includes $26,569 in current liabilities, a $5,076
shareholder loan and loans from our parent company totaling $118,748.



PART 2      OTHER INFORMATION

Item 1.   Legal Proceedings.      None.

Item 2.   Changes in Securities.  None

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.

     (a)  Exhibits:

2.1 (1)     --         Hagensborg Foods Ltd. Acquisition Agreement
2.2 (1)     --         Natural Program Inc. Acquisition Agreement
3.1 (2)     --         Articles of Incorporation
3.2 (1)     --         Bylaws
3.3 (1)     --         Articles of Amendment
11          --         Statement RE: Computation of Per Share Earnings

1.   Incorporated by reference from Form 10-kSB Annual Report filed on or about
     October 15, 2003

2.   Incorporated by reference from Form 10-SB registration statement SEC File #
     filed on or about June 29, 2000


                                                                              16
<PAGE>

         (b)      Reports on Form 8-K:      None



    -----------------------------------------------------------------------

                                   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.



                                           GARUDA CAPITAL CORP.
                                                [Registrant]


                                               /s/ C. Robin Relph
                                         -------------------------
Date November 19, 2003                   C. Robin Relph, President


                                               /s/ Juergen Wolf
                                         -------------------------
Date November 19, 2003                   Juergen Wolf, Director



                                               /s/ G. Arnold Armstrong
                                         -------------------------
Date November 19, 2003                   Arnold Armstrong, Director



                                                                              17
<PAGE>


 Certification of Principal Executive Officer Regarding Facts and Circumstances
                        Relating to Exchange Act Filings


I, C. Robin Relph, certify that:

     1. I have read this quarterly report on Form 10-QSB of Garuda Capital
Corp.;

     2. To my knowledge, the information in this report is true in all important
respects as of September 30, 2003; and

     3. This report contains all information about the company of which I am
aware that I believe is important to a reasonable investor, in light of the
subjects required to be addressed in this report, as of September 30, 2003.

     4. I:

          (a) am responsible for establishing and maintaining internal
     disclosure controls and procedures;
          (b) have designed such internal disclosure controls and procedures to
     ensure that material information relating to the company is made known to
     me by others within the company, particularly during the period in which
     the periodic reports are being prepared;
          (c) have evaluated the effectiveness of the issuer's internal
     disclosure controls and procedures as of a date within 90 days prior to the
     report; and
          (d) have presented in the report my conclusions about the
     effectiveness of their internal disclosure controls and procedures based on
     my evaluation as of that date;

     5. I have disclosed to the company's auditors and the audit committee of
the board of directors (or persons fulfilling the equivalent function):

         (a) all significant deficiencies in the design or operation of
internal disclosure controls and procedures which could adversely affect the
company's ability to record, process, summarize, and report financial data and
have identified for the company's auditors any material weaknesses in internal
controls; and
         (b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the company's internal controls;
and

     6. I have indicated in the report whether or not there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

     7. Based on my knowledge, the report does not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by the report.

     8. Based on my knowledge, the financial statements, and other financial
information included in the report, fairly present in all material respects the
financial condition, results of operations and cash flows of the company as of,
and for, the period presented in the report.


                                                                              18
<PAGE>

     For purposes of this certification, information is "important to a
reasonable investor" if:


          (a) There is a substantial likelihood that a reasonable investor would
     view the information as significantly altering the total mix of information
     in the report; and

          (b) The report would be misleading to a reasonable investor if the
     information is omitted from the report.


BY:   /s/ C. Robin Relph                     Subscribed and sworn to
      -----------------------------------    before me this 19th day of
      C. Robin Relph, President and C.E.O.   November, 2003
      (Principal Executive Officer)

DATE: November 19, 2003
      ------------------                     /s/  G. Arnold Armstrong
                                             -------------------------
                                             Notary Public



                                           My Commission Expires:
                                           At the pleasure of the queen
                                           of England.


                                                                              18
<PAGE>


 Certification of Principal Financial Officer Regarding Facts and Circumstances
                        Relating to Exchange Act Filings


I, John E. Curry, certify that:

     1. I have read this quarterly report on Form 10-QSB of Garuda Capital
Corp.;

     2. To my knowledge, the information in this report is true in all important
respects as of September 30, 2003; and

     3. This report contains all information about the company of which I am
aware that I believe is important to a reasonable investor, in light of the
subjects required to be addressed in this report, as of September 30, 2003.

     4. I:

          (a) am responsible for establishing and maintaining internal
     disclosure controls and procedures;
          (b) have designed such internal disclosure controls and procedures to
     ensure that material information relating to the company is made known to
     me by others within the company, particularly during the period in which
     the periodic reports are being prepared;
          (c) have evaluated the effectiveness of the issuer's internal
     disclosure controls and procedures as of a date within 90 days prior to the
     report; and
          (d) have presented in the report my conclusions about the
     effectiveness of their internal controls based on my evaluation as of that
     date;

     5. I have disclosed to the company's auditors and the audit committee of
the board of directors (or persons fulfilling the equivalent function):

          (a) all significant deficiencies in the design or operation of
     internal disclosure controls and procedures which could adversely affect
     the company's ability to record, process, summarize, and report financial
     data and have identified for the company's auditors any material weaknesses
     in internal controls; and

          (b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in the company's internal
     controls; and

     6. I have indicated in the report whether or not there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

     7. Based on my knowledge, the report does not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by the report.

     8. Based on my knowledge, the financial statements, and other financial
information included in the report, fairly present in all material respects the
financial condition, results of operations and cash flows of the company as of,
and for, the period presented in the report.


                                                                              20
<PAGE>


     For purposes of this certification, information is "important to a
reasonable investor" if:


          (a) There is a substantial likelihood that a reasonable investor would
     view the information as significantly altering the total mix of information
     in the report; and

          (b) The report would be misleading to a reasonable investor if the
     information is omitted from the report.


BY:   /s/ John E. Curry                      Subscribed and sworn to
      -----------------------------------    before me this 19th day of
      John E. Curry, CFO                       November, 2003
      (Principal Financial Officer)

DATE: November 19, 2003
      ------------------                     /s/  G. Arnold Armstrong
                                             -------------------------
                                             Notary Public

                                           My Commission Expires:
                                           At the pleasure of the queen
                                           of England.



                                                                              21