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, 2002
                                -------------------------------------------

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


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 offices)                      (Zip Code)

                                  604-837-0260
--------------------------------------------------------------------------------
               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,
6,049,575 shares as of November 18, 2002



<PAGE>


                         PART I - FINANCIAL INFORMATION

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

                          ITEM 1. FINANCIAL STATEMENTS

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



The accompanying  financial  statements of Garuda Capital Corp. at September 30,
2002 and September 30, 2001 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, 2002, are not necessarily
indicative  of the  results  that can be  expected  for the year ending June 30,
2003.



<PAGE>













                           CONSOLIDATED FINANCIAL STATEMENTS


                           GARUDA CAPITAL CORP.
                           (FORMERLY VANSTAR FILMS, INC.)

                           VANCOUVER, BRITISH COLUMBIA, CANADA

                           September 30, 2002 AND 2001













                  1. CONSOLIDATED BALANCE SHEETS

                  2. CONSOLIDATED STATEMENTS OF OPERATIONS

                  3. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                  4. CONSOLIDATED STATEMENTS OF CASH FLOWS

                  5. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



<PAGE>
<TABLE>
<CAPTION>


Garuda Capital Corp.

CONSOLIDATED BALANCE SHEETS
UNAUDITED

September 30, 2002 and June 30, 2002                                      (US Dollars)

                                                            September 30,    June 30,
                                                                2002           2002
--------------------------------------------------------------------------------------
<S>                                                         <C>            <C>
ASSETS

Current
    Cash                                                    $      --      $      --
    Subscriptions receivable                                       --          100,000
    Accounts receivable                                         351,698        210,834
    Available-for-sale securities                               211,455        204,186
    Inventory, net                                              399,758        365,989
    Prepaid expenses                                             18,650         20,523
--------------------------------------------------------------------------------------
    Current assets                                              981,561        901,532

Property and equipment, net                                     405,654        401,826
Goodwill                                                        661,524        661,524
--------------------------------------------------------------------------------------
                                                            $ 2,048,739    $ 1,964,882
=======================================================================================

LIABILITIES
Current
    Bank indebtedness                                       $   225,542    $    10,624
    Bank loan                                                   200,000           --
    Accounts payable and accrued expenses                       537,199        363,563
    Accounts payable - related parties                           14,838           --
    Unearned revenue                                             26,473         35,297
    Current portion of long term debt                             4,591          3,951
--------------------------------------------------------------------------------------
    Current liabilities                                       1,008,643        413,435

Long term debt                                                   11,297          6,166
Amounts due to shareholders                                      13,311        432,504
--------------------------------------------------------------------------------------
                                                              1,033,251        852,105
SHAREHOLDERS' EQUITY
Preferred stock, $0.001 par value; authorized 10,000,000;
     Issued: None                                                  --             --
Common stock, $0.001 par value; authorized 50,000,000;
     Issued: 6,049,575;                                           6,050          6,050
Capital in excess of par value                                2,359,801      2,359,801
Translation adjustment                                            7,287          3,340
Deficit                                                      (1,357,650)    (1,256,414)
--------------------------------------------------------------------------------------
                                                              1,015,488      1,112,777
--------------------------------------------------------------------------------------
                                                            $ 2,048,739    $ 1,964,882
=======================================================================================

The accompanying notes are an integral part of these statements.

                                                                                     4
</TABLE>

<PAGE>


Garuda Capital Corp.

CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED

Three Months ended September 30, 2002 and 2001                      (US Dollars)




                                                         2002            2001
-------------------------------------------------------------------------------
REVENUE

Sales                                                 $   697,705   $      --

Cost of goods sold                                        458,465          --
-------------------------------------------------------------------------------
                                                          239,240          --

EXPENSES

General and administrative                                245,438         2,509
Depreciation                                               11,123          --
Advertising and promotion                                   3,354          --
-------------------------------------------------------------------------------
                                                          259,915         2,509
-------------------------------------------------------------------------------
Loss before other items                                   (20,675)       (2,509)

Loss on sale of marketable securities                      (3,275)         --
-------------------------------------------------------------------------------
NET LOSS                                                  (23,950)       (2,509)

COMPREHENSIVE LOSS

Unrealized loss on marketable securities                  (77,286)         --
Gain from foreign currency translation                       --           2,092
-------------------------------------------------------------------------------
NET COMPREHENSIVE LOSS                                $  (101,236)  $      (417)
===============================================================================

NET LOSS PER COMMON SHARE - BASIC AND FULLY DILUTED   $       .02   $         0
-------------------------------------------------------------------------------

WEIGHTED AVERAGE NUMBER OF COMMON SHARES                6,049,575     4,951,500
-------------------------------------------------------------------------------







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, 2002 and 2001                                (US Dollars)




                                                                     2002          2001
-----------------------------------------------------------------------------------------
<S>                                                                <C>          <C>
OPERATIONS
Net loss                                                           $(101,236)   $  (2,509)
Items not involving cash:
    Depreciation                                                      11,123         --
    Gain on foreign currency translations                              3,947        2,092
    Loss on sale of marketable securities                              3,275         --
    Unrealized loss on marketable securities                          77,286         --
Changes in operating assets and liabilities:
    Decrease in accounts receivable                                 (140,864)        --
    Decrease in prepaid expenses                                       1,873         --
    Increase (decrease) in accounts payable and accrued expenses     173,636      (29,655)
    Increase in inventory                                            (33,769)        --
    Increase in unearned revenue                                      (8,824)        --
    Increase in accounts payable - related party                      14,838       29,730
-----------------------------------------------------------------------------------------
          Net cash provided by (used in) operating activities          1,285         (342)

FINANCING
Increase in bank indebtedness                                        214,918         --
Decrease in subscription receivable                                  100,000
Draws on bank loan                                                   200,000         --
Draw on long term debt                                                 5,771         --
Cash paid to shareholders                                           (419,193)        --
-----------------------------------------------------------------------------------------
          Net cash provided by financing activities                  101,496         --

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

Net increase (decrease) in cash                                         --           (342)

Cash, beginning of period                                               --            520
-----------------------------------------------------------------------------------------
CASH, end of period                                                $    --      $     178
=========================================================================================



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, 2002 and 2001                      (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, 2002,  the Company  incurred a net loss of
$101,236. 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  90% of  Hagensborg  Foods  revenues  are derived  from the United
States with the remaining 10%  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 September 30, 2002.  These  securities are
carried at market value, with unrealized gains and losses reported as a separate
component of shareholders' equity. At September 30, 2002, these securities had a
fair market value of $211,455 which approximated their cost basis. Therefore, no
unrealized gains or losses were recorded on these 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.  The Company has  recorded an allowance of $25,000 for the year
ended June 30, 2002 for inventory obsolescence.


                                                                               7
<PAGE>


Garuda Capital Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued


Three Months ended September 30, 2002 and 2001                      (US Dollars)


Goodwill - Goodwill  represents 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.


2.  SIGNIFICANT ACCOUNTING POLICIES (continued)
--------------------------------------------------------------------------------

Revenue  recognition  -  Revenue  from  the sale of  products  to  customers  is
recognized at the time goods are shipped.

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, 2002 and 2001                      (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.


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 as of June 30, 2002:

                                                          2002          2001
--------------------------------------------------------------------------------
 2003                                                   $  5,164          --
 2004                                                      5,164          --
 2005                                                      2,128          --
--------------------------------------------------------------------------------
                                                          12,456          --
Less amount representing interest                         (2,339)         --
--------------------------------------------------------------------------------
                                                          10,117          --
Less current portion                                      (3,951)         --
--------------------------------------------------------------------------------
                                                        $  6,166          --
================================================================================

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


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

Advances due to  shareholders  are unsecured,  non-interest  bearing and have no
specific terms of repayment. Garuda Capital Corp.


                                                                               9
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued


Three Months ended September 30, 2002 and 2001                      (US Dollars)



6. COMMITMENTS
--------------------------------------------------------------------------------

The Company leases certain premises and equipment. Annual minimum lease payments
are due as of June 30, 2002 :

         2003                                            $      108,018
         2004                                                    15,408
         2005                                                     9,209
         2006                                                     -
         2007                                                     -
--------------------------------------------------------------------------------
                                                         $      132,635
================================================================================



7. 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, 2002.

During the three Months ended  September 30, 2002,  the Company had sales to two
customers representing 25% and 12% of the Company's total revenue.




                                                                              10
<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  2002 vs.  2001 - Garuda
Capital Corp. on Consolidated Basis

During the first quarter of fiscal 2003, we realized  total revenues of $697,705
and the net loss for the quarter ended September 30, 2002 was $101,236.


Liquidity and Capital  Resources  Three Months ended  September  2002 vs. 2001 -
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 2003/2004. 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.



                                                                              11

<PAGE>


Results of  Operations  for the Three  Months  ended  September  2002 vs. 2001 -
Hagensborg Foods Ltd.

Revenues of  $667,471  in the three  months  ended  September  30, 2002 were 34%
higher than the $497,405 in revenues  reported for the three months period ended
September 30, 2001. The increase was due to the  additional  revenue gained from
the recently acquired Seafood Pates product line.

Gross profit for the three months ended  September 30, 2002 was $223,284  versus
$147,299 in 2001. Gross profit percentage of 33% in 2002 was lower versus 29% in
2001. The increase in gross profit  percentage was largely due to higher margins
associated with the Seafood pate product line.

Net income for the three  months  ended  September  30, 2002 was $29,043  versus
$17,016 for the same period in 2001,  representing a 70% increase in net income.
The increase in net income was primarily due to the additional  sales of the new
Seafood pate product lines and the higher margins of this product line.

Our sales and marketing costs consist primarily of personnel costs, advertising,
promotions,  and  tradeshows.  Total costs were  $101,460  and $38,695 for three
months ended September 30, 2002 and 2001  respectively.  The increase of $62,765
is largely due to  additional  marketing  costs of the new Seafood pate line and
product  development  costs.  We anticipate  that sales and marketing costs will
continue to grow over the foreseeable future as we implement our business growth
strategies.

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 $52,156 and $46,010 for the three months
ended  September  30, 2002 and 2001,  respectively.  The increase in general and
administrative  costs  between  the two  periods  is  largely  the  result of an
increase in interest and bank  charges.  General and  administrative  costs as a
percentage of revenue increased between the two periods as a result of increases
in expenses over the same periods. We anticipate that general and administrative
costs will remain stable over the foreseeable future.

Our premise and  equipment  leases were $31,514 and $29,402 for the three months
ended  September  30, 2002 and 2001,  respectively.  Our lease expires March 31,
2003 and the  premise  owner has  offered to reduce the lease space to match our
needs.  We are also actively  searching  for new lease  premises that may better
suit our requirements.


Liquidity and Capital  Resources for the Three Months ended  September  2002 vs.
2001 - 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
for  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 2003/2004.


                                                                              12
<PAGE>

During the three months ended  September 30, 2002, our current assets to current
liabilities ratio increased from 0.77 to 1.08.  Current assets increased $23,373
from $731,160 to $707,787.  This was primarily due to increased  inventory needs
for our new Seafood Pate product line.

Noncurrent  assets  increased  by $39,314 net of  depreciation  during the three
months  ended  September  30, 2002 mainly due to the newly  acquired  production
equipment associated with our Seafood business.

Cash flows used from  operations  were  $37,495  during the three  months  ended
September 30, 2002 cash flows used in financing  activities  included a new bank
loan of $200,000.



Results of  Operations  for the Three  Months  ended  September  2002 vs.  2001-
Natural Program Inc.

Natural Program Inc. is a start-up  operation.  Its revenue for the three months
ended September 30, 2002 was $21,384 and its gross profit was $13,751.  Net loss
for the three months ended September 30, 2002 was $12,415.

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, 2002,  our total payroll  increased
from $7,567 in the three months ended September 30, 2001 to $12,638 in the three
months  ended  September  30,  2002.  This  increase  in mainly due to the labor
intensity  of preparing  custom  formulation  and the  resulting  necessity  for
additional staff. In the future, as we implement our growth plans, we anticipate
to hire two new employees to take on sales,  marketing and accounting  functions
which will result in decreased consulting expenses.

Office and General  expenses  increased  from $8,027 in the three  months  ended
September 30, 2001 to $13,526 in 2002. The higher expenses in 2002 include added
costs  associated  with  administering  a public  company,  including  legal and
accounting fees.



                                                                              13
<PAGE>

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


Liquidity and Capital  Resources for the Three Months ended  September  2002 vs.
2001 - Natural Program Inc.

Since inception  through April 1, 2002 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
2003/2004.

In the three months ended  September 30, 2002, our current assets to liabilities
ratio  decreased  from 1.29 to 0.33.  Current  assets  increased  from $6,778 to
$17,013.  This was primarily due to increased inventory levels to support sales.
Noncurrent  assets  decreased  by $1,120  net of  depreciation  during the three
months ended September 30, 2002.

Total liabilities increased from $49,290 in the three months ended September 30,
2001 to $81,646 in 2002.  This  includes  $51,643  in  current  liabilities  and
$10,604 in  long-term  debt.  Long-term  debt  associated  with the lease of the
company vehicle decreased from $8,178 to $6,283. In addition, we received a loan
from our parent company of $19,408.



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


                                                                              14
<PAGE>

1.   Incorporated  by reference from Form 10-kSB Annual Report filed on or about
     October 15, 2002

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

         (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, 2002                        C. Robin Relph, President


                                                    /s/ John E. Curry
                                          -----------------------------
Date November 19, 2002                        John E. Curry, C.A.,  CFO






                                                                              15
<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, 2002; 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, 2002.

     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.


                                                                              16
<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, 2002
      (Principal Executive Officer)

DATE: November 19, 2002
      ------------------                     /s/  G. Arnold Armstrong
                                             -------------------------
                                             Notary Public

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


                                                                              17
<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, 2002; 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, 2002.

     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.


                                                                              18
<PAGE>

     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.



     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, 2002
      (Principal Financial Officer)

DATE: November 19, 2002
      ------------------                     /s/  G. Arnold Armstrong
                                             -------------------------
                                             Notary Public

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






                                                                              19