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|                                                                                                                                                                                                                                                                                                                                                                                                     | UNITED STATES                      |                                     
|                                                                                                                                                                                                                                                                                                                                                                                                     | SECURITIES 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, 2004                
|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)                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                    
|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,  6,373,576 shares as of November 8, 2004                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                    











-2-



PART I - FINANCIAL INFORMATION







ITEM 1.

FINANCIAL STATEMENTS





The accompanying financial statements of Garuda Capital Corp. for the three months ended September 30, 2004 and September 30, 2003 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, 2004, are not necessarily indicative of the results that can be expected for the year ending June 30, 2005.









-3-























CONSOLIDATED FINANCIAL STATEMENTS





GARUDA CAPITAL CORP.



VANCOUVER, BRITISH COLUMBIA, CANADA



September 30, 2004 and September 30, 2003



























1. CONSOLIDATED BALANCE SHEETS



2. CONSOLIDATED STATEMENTS OF OPERATIONS



3 CONSOLIDATED STATEMENTS OF CASH FLOWS



4. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS











-4-

GARUDA CAPITAL CORP.

Consolidated Balance Sheets

September 30, 2004 and June 30, 2004

|                                                     | US Dollars      
|---------------------------------------------------- | ----------------
|                                                     | Sept. 30, 2004  
|                                                     | (Unaudited)     
|ASSETS                                               |                 
|CURRENT ASSETS                                       |                 
|Accounts receivable                                  | $         79,169
|Prepaid expenses                                     | 22,333          
|Inventory                                            | 340,125         
|TOTAL CURRENT ASSETS                                 | 441,627         
|                                                     |                 
|PROPERTY AND EQUIPMENT                               |                 
|Equipment, net of depreciation                       | 335,611         
|TOTAL PROPERTY AND EQUIPMENT                         | 335,611         
|                                                     |                 
|OTHER ASSETS                                         |                 
|Patents and trademarks, net of amortization          | 14,852          
|TOTAL OTHER ASSETS                                   | 14,852          
|                                                     |                 
|TOTAL ASSETS                                         | $       792,091 
|                                                     |                 
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)       |                 
|CURRENT LIABILITIES                                  |                 
|Bank indebtedness                                    | $       271,593 
|Accounts payable and accrued expenses                | 401,272         
|Notes payable - current portion                      | 162,517         
|Capital lease obligation - current portion           | 934             
|TOTAL CURRENT LIABILITIES                            | 836,316         
|                                                     |                 
|LONG TERM LIABILITIES                                |                 
|Notes payable - related party                        | 1,080,469       
|Notes payable                                        | 12,212          
|Capital lease obligation                             | 2,758           
|TOTAL LONG TERM LIABILITIES                          | 1,095,439       
|                                                     |                 
|COMMITMENTS AND CONTINGENCIES                        | -               
|                                                     |                 
|STOCKHOLDERS' EQUITY (DEFICIT)                       |                 
|Preferred stock, $0.01 par value; 10,000,000 shares  |                 
|authorized, none issued and outstanding              |                 
|Common stock, $0.001 par value; 50,000,000 shares    | 6,374           
|authorized, 6,373,575 shares issued and outstanding  |                 
|Additional paid-in capital                           | 2,444,715       
|Accumulated deficit                                  | (3,416,446)     
|Current period income (loss)                         | (197,003)       
|Other comprehensive loss                             | 22,696          
|TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                 | (1,139,664)     
|                                                     |                 
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $       792,091 

The accompanying notes are an integral part of these statements.





-5-



GARUDA CAPITAL CORP.

Consolidated Statements of Operations

For the periods ended September 30, 2004 and 2003



|                                             | Three months ended September 30
|-------------------------------------------- | -------------------------------
|                                             | 2004                           
|                                             | (Unaudited)                    
|REVENUE                                      |                                
|                                             |                                
|SALES                                        | $         135,137              
|                                             |                                
|COST OF SALES                                | 108,582                        
|                                             |                                
|GROSS PROFIT                                 | 26,555                         
|                                             |                                
|EXPENSES                                     |                                
|                                             |                                
|General and administrative                   | 134,773                        
|Depreciation                                 | 10,883                         
|Advertising and promotion                    | 28,707                         
|Equipment and premises leases                | 45,824                         
|Total Operation Expenses                     | 220,187                        
|                                             |                                
|LOSS FROM OPERATION                          | (193,632)                      
|                                             |                                
|OTHER INCOME (EXPENSE)                       |                                
|Gain (Loss) on sale of marketable securities | 30,665                         
|Interest expenses                            | (11,221)                       
|Total Other Income (Expenses)                | 19,444                         
|                                             |                                
|LOSS BEFORE TAXES                            | (174,188)                      
|                                             |                                
|INCOME TAXES                                 | -                              
|                                             |                                
|NET LOSS                                     | (174,188)                      
|                                             |                                
|OTHER COMPREHENSIVE INCOME (LOSS)            |                                
|Gain (loss) on foreign currency translation  | 3,271                          
|Total Other Comprehensive Income (Loss)      | 3,271                          
|                                             |                                
|COMPREHENSIVE NET LOSS                       | $        (170,917)             
|                                             |                                
|NET LOSS PER COMMON SHARE,                   |                                
|BASIC AND DILUTED                            | $              (0.03)          
|                                             |                                
|WEIGHTED AVERAGE NUMBER                      |                                
|OF COMMON SHARES OUTSTANDING,                |                                
|BASIC AND DILUTED                            | 6,373,575                      
|                                             |                                

The accompanying notes are an integral part of these statements.

-6-



GARUDA CAPITAL CORP.

Consolidated Statements of Cash Flow

For the periods ended September 30, 2004 and 2003

|                                             | Three months ended September 30                                                     
|-------------------------------------------- | ------------------------------------------------------------------------------------
|                                             | 2004                                                                                
|                                             | (Unaudited)                                                                         
|CASH FLOWS FROM OPERATING ACTIVITIES:        |                                                                                     
|                                             | Net loss                                                                            
|                                             | Adjustments to reconcile net loss to net cash
provided (used by operating activities
|                                             |                                                                                     
|                                             |                                                                                     
|                                             |                                                                                     
|                                             |                                                                                     
|                                             | Changes in assets and liabilities:                                                  
|                                             |                                                                                     
|                                             |                                                                                     
|                                             |                                                                                     
|                                             |                                                                                     
|                                             |                                                                                     
|                                             |                                                                                     
|                                             |                                                                                     
|CASH FLOWS PROVIDED BY INVESTING ACTIVITIES: |                                                                                     
|                                             | Gain from agency transaction                                                        
|                                             | Purchase of equipment                                                               
|                                             | Purchase of securities                                                              
|                                             | Proceeds from sale of securities                                                    
|                                             |                                                                                     
|                                             |                                                                                     
|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: |                                                                                     
|                                             | Proceeds from loan                                                                  
|                                             | Repayment of borrowings and capital leases                                          
|                                             | Proceeds from shareholder loan                                                      
|                                             |                                                                                     
|                                             | Net decrease in cash and cash equivalents                                           
|                                             | Other comprehensive gain  - foreign currency translation                            
|                                             |                                                                                     
|Cash at beginning of period                  | -                                                                                   
|                                             |                                                                                     
|Cash at end of period                        | -                                                                                   
|                                             |                                                                                     
|SUPPLEMENTAL CASH FLOW DISCLOSURES:          |                                                                                     
|                                             | Income taxes paid                                                                   
|                                             | Interest paid                                                                       
|                                             |                                                                                     
|NON-CASH FINANCING AND INVESTING ACTIVITIES: |                                                                                     
|                                             | Common stock issued for services                                                    



The accompanying notes are an integral part of these statements.





-7-



GARUDA CAPITAL CORP.

Condensed Notes to Consolidated Financial Statements

Three Months ended September 30, 2004 and 2003 (US Dollars)



NOTE 1  BASIS OF PRESENTATION



The foregoing unaudited interim 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 financial statements should be read in conjunction with the Companys audited financial statements for the year ended June 30, 2004.  In the opinion of management, the unaudited interim 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 the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period.  Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.



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, 2004 are not necessarily indicative of the results that may be expected for the year ending June 30, 2005.



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, 2004, the Company had an accumulated deficit of $3,590,634 and limited cash resources.  For the three months ended September 30, 2004, the Company sustained a net loss of $174,188.  These factors, among others, indicate that the Company may be unable to continue as a going concern for a reasonable period of time.  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



-8-



GARUDA CAPITAL CORP.

Condensed Notes to Consolidated Financial Statements

Three Months ended September 30, 2004 and 2003 (US Dollars)



timely basis. 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.



NOTE 3  RELATED PARTY TRANSACTIONS



The Company is indebted to certain shareholders as follows:



|                                                    |                                                       |   |           |   |        
|--------------------------------------------------- | ----------------------------------------------------- | - | --------- | - | -------
|September 30,                                       | June 30,                                             
|2004                                                | 2004                                                 
|Shareholder notes bearing interest at 10%,          |                                                       |   |           |  
|                                                    | due September 1, 2003, secured by all                 |   |           |   |        
|                                                    | personal property of certain subsidiaries, delinquent | $ | 50,000    | $ | 50,000 
|Shareholder note bearing interest at 10%,           |                                                       |   |           |  
|                                                    | due November 1, 2003, secured by all                  |   |           |   |        
|                                                    | personal property of certain subsidiaries, delinquent |   | 60,000    |   | 60,000 
|Shareholder note bearing interest at 10%,           |                                                       |   |           |  
|                                                    | unspecified due date, unsecured                       |   | 203,534   |   | 203,534
|Shareholder note non-interest bearing               |                                                       |   |           |  
|                                                    | due June 30, 2006                                     |   | 200,000   |   | 200,000
|                                                    |                                                       |   | 513,534   |   | 513,534
|Advances from shareholders, unsecured, non-interest |                                                       |   |          
|                                                    | bearing with no specific due dates                    |   | 566,935   |   | 418,599
|                                                    |                                                       | $ | 1,080,469 | $ | 932,133



NOTE 4  INVENTORY



Inventories are stated at the lower of average cost or market. 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 $25,000 for inventory obsolescence.



The components of inventory at September 30, 2004 and June 30, 2004 are as follows:



|                   |   |         | September 30, 2004 |   |         | June 30, 2004
|------------------ | - | ------- | ------------------ | - | ------- | -------------
|Packaging supplies | $ | 204,546 |                    | $ | 173,251
|Finished goods     |   | 54,144  |                    |   | 57,291 
|Raw materials      |   | 76,346  |                    |   | 36,547 
|Other goods        |   | 5,089   |                    |   | 5,102  
|                   |   | $       | 340,125            |   | $       | 272,191      



-9-



GARUDA CAPITAL CORP.

Condensed Notes to Consolidated Financial Statements

Three Months ended September 30, 2004 and 2003 (US Dollars)



NOTE 5  BANK INDEBTEDNESS AND BANK LOANS



Demand Loan

The Company has a demand loan 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 secured by all present and future personal property acquired by Hagensborg Foods Ltd.



Overdraft

The Company has a bank overdraft facility in the amount of $250,000. Outstanding advances bear interest at the banks base rate plus 2%. At September 30, 2004 and June 30, 2004, the Company had a net outstanding balance of $271,593 and $206,653, respectively, on this overdraft facility. The facility is personally guaranteed by a shareholder of the Company and secured by all present and future personal property acquired by Hagensborg Foods Ltd.



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.



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



|                   |   | Three Months Ended September 30, 2004
|------------------ | - | -------------------------------------
|                   |   |                                      
|                   |   | Hagensborg                           
|                   |   | Foods Ltd.                           
|                   |   |                                      
|Gross profit       | $ | 1,017                                
|Other income(loss) | $ | -                                    
|Net income (loss)  | $ | (201,751)                            
|Segment assets     | $ | 1,250,356                            
|                   |   |                                      



-10-



GARUDA CAPITAL CORP.

Condensed Notes to Consolidated Financial Statements

Three Months ended September 30, 2004 and 2003 (US Dollars)



|                   |   |                          |   |         |   |          |   |           |   |          
|------------------ | - | ------------------------ | - | ------- | - | -------- | - | --------- | - | ---------
|                   |   | Year Ended June 30, 2004
|                   |   |                          |   |         |   |          |   |           |   |          
|Gross profit       | $ | 112,616                  | $ | 75,618  | $ | 34,920   | $ | -         | $ | 223,154  
|Other income(loss) | $ | -                        | $ | -       | $ | -        | $ | (163,241) | $ | (163,241)
|Net income (loss)  | $ | (464,845)                | $ | (5,378) | $ | (94,157) | $ | (228,878) | $ | (793,258)
|Segment assets     | $ | 1,088,622                | $ | 109,172 | $ | 54,830   | $ | (479,304) | $ | 773,328  
|                   |   |                          |   |         |   |          |   |           |   |          



NOTE 7  GAIN FROM AGENCY TRANSACTION



During the three months ended September 30, 2004, the Company was paid a fee of $30,665 from an agency transaction. This is recorded in the accompanying financial statements as other income.



NOTE 8  COMMITMENTS AND CONTINGENCIES



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 September 30, 2004 and June 30, 2004, the Company was in violation of this condition. As of the date of this report, the bank has not taken an action related to this violation.



Litigation

On May 26, 2004, a lawsuit was filed in Ontario Superior Court against the Company alleging trademark infringement associated with Krafts Toblerone chocolate bar.  Given the stage of the action, it is too early to evaluate the prospective outcome.





-11-



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 two 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 and has no other assets. Garuda Gold Corporation is currently inactive and has no assets, but will be activated as soon as a suitable project has been identified.



Results of Operations for the Three Months ended September 30, 2004 Compared to September 30, 2003  Garuda Capital Corp. on a Consolidated Basis



During the three months ended September 30, 2004, we realized total revenues of $135,137, compared to $276,078 in revenues for the three months ended September 30, 2003 and we incurred a net loss for the quarter ended September 30, 2004 of $174,188, compared to a net loss of $256,979 for the same period in 2003.  The decrease in revenues and resultant decrease in net loss for 2004 was as a result of decreased sales for our Hagensborg operations during the three months ended September 30, 2004.  As a result of the decreased sales, we have now increased our sales staff and taken more aggressive steps in marketing our Hagensborg products.



-12-



Gross profit for the three months ended September 30, 2004 was $26,555compared to $66,364for the same period in 2003.



Our general and administrative costs for the three months ended September 30, 2004 were $134,773 compared to $189,775for the three months ended September 30, 2003, which consisted primarily of personnel costs, professional and legal costs, consulting fees, and general office costs.  The decrease in general and administrative costs between the two periods is largely the result of cost saving measures to reduce our overhead for operations for both Hagensborg and Natural Program.



Our equipment leases for both Hagensborg and Natural Program were $45,824and $36,479for the three months ended September 30, 2004 and September 30, 2003, respectively.



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.



Liquidity and Capital Resources for the Three Months ended September 30, 2004 Compared to. September 30, 2003 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 ended June 30, 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.



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, 2005.



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, 2005.



-13-



During the three months ended September 30, 2004, our current assets decreased $144,893 from $586,520 in 2003 to $441,627 in 2004, primarily as a result of decreased accounts receivable in 2004.



Non-current assets for the three months ended September 30, 2004 were $350,464, net of depreciation, compared to non-current assets of $374,196 for the three months ended September 30, 2003.



Total liabilities increased from $1,408,999 for the three months ended September 30, 2003 to $1,931,755 for the same period in 2004.  For the three months ended September 30, 2004, this includes $836,316 in current liabilities, including the current portion of notes payable in the sum of $162,517.



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 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



A lawsuit was commenced against Hagensborg Food Ltd. (Hagensborg) in the Ontario Superior Court of Justice bearing Court File No. 04-CV-269496CM1 by Kraft Foods Schweiz AG and Kraft Canada Inc. (collectively Kraft).



The statement of claim was issued on May 26, 2004.  The claim alleges trade-mark infringement of various registered trade-marks and distinguishing guises associated with Krafts Toblerone chocolate bar.  Kraft seeks declaratory and injunctive relief, damages, or alternatively, an accounting of all revenues received and profits made by Hagensborg on account of the alleged infringement, as well as punitive and exemplary damages.  Hagensborg filed a statement of defence and counterclaim on July 27, 2004, denying the allegations in the statement of claim and asserting, amongst other things that Krafts trade-

-14-



mark registrations are invalid.  In its counterclaim, Hagensborg seeks declaratory relief, injunctive relief and damages or an accounting of profits.  On August 11, 2004, Kraft delivered its Reply and Defence to Counterclaim.  On August 23, 2004, Hagensborg delivered its Reply to the Defence to Counterclaim and the pleadings are now closed.  There has been no documentary or oral discovery to date.



Pursuant to the Rules of Civil Procedure in the Ontario courts, the parties are required to attend a mediation session.  At present, the parties trying to determine a mutually agreeable date for the mediation.



Given the stage of the action, it is too early to evaluate the likelihood of success or of an unfavorable outcome and the possible range of loss.



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



31.1

Certification of the Chief Executive Officer and Chief Financial Officer Pursuant To Rule 13a-14 Or 15d-14 of the Securities Exchange Act Of 1934,as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



32.1

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.  Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



-15-



(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 filed on or about June 29, 2000



(b)

Reports on Form 8-K



None.



-16-



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.



Dated:

November 23, 2004



GARUDA CAPITAL CORP.



By:

/s/ C. Robin Relph



C. Robin Relph,

President and CEO





By:

/s/ Jurgen Wolf



Jurgen Wolf,

Director





By:

/s/ G. Arnold Armstrong



G. Arnold Armstrong,

Director



Exhibit 31.1



CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, C. Robin Relph, certify that:



1.

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



2.

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



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;



4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the Registrant and have:



a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



c)

Evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d)

Disclosed in this report any change in the Registrants internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting; and



5.

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrants auditors and the audit committee of the Registrants board of directors (or persons performing the equivalent functions):



a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrants ability to record, process, summarize and report financial information; and



b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control over financial reporting.



Date:

November 23, 2004

/s/C. Robin Relph



C. Robin Relph,

Chief Executive Officer and

Chief Financial Officer





Exhibit 32.1





CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Quarterly Report of Garuda Capital Corp. (the Company) on Form 10-QSB for the period ended September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, C. Robin Relph, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 that:



1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and



2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.





By:

/s/C. Robin Relph



C. Robin Relph,

Chief Executive Officer and

Chief Financial Officer

November 23, 2004