**SECURITIES AND EXCHANGE COMMISSION****Washington, D.C.20549**
**FORM 10-QSB**
                   MarkOne
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
  
[X ]

THE SECURITIES EXCHANGE ACT OF 1934
 

For the quarterly period ended         July 31, 2005
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
  
[  ]

THE SECURITIES EXCHANGE ACT OF 1934
 

For the transition period from     to
Commission file number         0-17263
CHAMPIONS SPORTS, INC.(Exact name of registrantas specified in its charter)
Delaware
52-1401755 
(State or other jurisdiction of
(I.R.S. Employer 
organization)
Identification No.) 

2200 Wilson Blvd., Suite 102-316,Arlington VA
 22201 
(Address of principal executive offices)
(Zip code) 

(703) 526-0400(Registrant's telephone number, including area code)
       Indicate by check mark whether theRegistrant (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 forsuch shorter period that the Registrant was required to file such reports), and(2) has been subject to such filing requirements for the past 90 days.  Yesx     No    
       As of September 13, 2005 theRegistrant had a total of 16,824,658 shares of common stockoutstanding.****   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES**
**CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
JULY 31, 2005 AND 2004****   

**       **
**       **
       
**CHAMPIONS SPORTS, Inc.**
**FORM 10-QSB**
INDEX
       
     
       Page
  
Part I. 

Financial Information
   
Item 1.

Financial Statements
   
Condensed Consolidated Balance Sheets as of
  
July 31, 2005(unaudited) and
  
April 30, 2005 (audited)
 
3
   
Condensed Consolidated Statements of Operations:
  
Three months ended  
  
July 31, 2005, and  July 31, 2004,  (unaudited)

4
   
Condensed Consolidated Statements of Cash Flows:
  
Three months ended July 31, 2005, and
  
July 31,2004 (unaudited)
 
5
   
Notes to Condensed Consolidated Financial Statements

7 - 17
   
Item 2.

Management's Discussions and
   
Analysis of Financial Condition
   
and Results of Operations
 
18
   
Item 4. Controls and Procedures
 
19
  
Part II.

Other Information and Signatures
   
Item 4.

Submission of Matters to a Vote
   
of Security Holders
 
20
  
Item 6. 

Exhibits and Reports on Form 8-K

21
   
Signatures
   
22
 

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200224
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200225
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200226****   

CHAMPIONS SPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 31, 2005 (Unaudited) and April 30, 2005   
ASSETS    
July 31,
April 30, 
2005
2005   
CURRENT ASSETS
  
       Cash and cash equivalents

67,615 
84,513 
       Inventories

-

18,459 
   
Total current assets

67,615 
102,972    
Property and equipment, net
 
152,520 
Deposits

 

11,052 
   
TOTAL ASSETS

67,615 

266,544 
   
LIABILITIES AND STOCKHOLDERS' (DEFICIT)   
CURRENT LIABILITIES
  
       Accounts payable 

86,617 
69,470 
       Dividend payable on preferredstock

350,460 
350,460 
       Other accrued expenses

233,183 
213,409    
Total current liabilities

670,260 

633,339 
   
COMMITMENTS AND CONTINGENCIES
     
STOCKHOLDERS' (DEFICIT)
  
       Preferred stock, $10 par value; 56,075shares authorized;
  
       32,450 shares issued andoutstanding

324,500 
324,500 
       Common stock, $.001 par value;50,000,000 shares authorized 
  
       16,824,658 and 8,824,658 shares issuedand outstanding

16,825 
16,825 
       Additional paid-in capital

5,922,349 
5,922,349 
       Accumulated deficit

 (6,866,319)

 (6,630,469)

Total stockholders' (deficit)

 (602,645)

 (366,795)
   
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)

67,615 

266,544 

**3**   

       **CHAMPIONSSPORTS, INC. AND SUBSIDIARIES**
**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**
**FOR THE THREE MONHTS ENDED JULY 31, 2005 AND 2004(UNAUDITED)**       
**(Restated)** 
**2005** 
**2004**
****
   
**OPERATING REVENUE**
   
       Sales

$                         -   
 
-   
    
**Total operating revenue**

-   
 
-   
    
**COSTS AND OPERATING EXPENSES**
   
       General and administrative

69,999 
 
58,762 

       
   
**Total costs and operating expenses**

69,999 
 
58,762 
    
**LOSS BEFORE OTHER (EXPENSE)**

 (69,999)
 
 (58,762)
    
**DISCONTINUED OPERATIONS**
   
       Loss from discontinued operations (netof taxes)

(23,331) 
(10,524)
       Loss on disposal of assets

 (142,520)
 
-   
    
**Total discontinued operations**

 (165,851)
 
 (10,524)
    
**NET (LOSS) BEFORE PROVISION FOR INCOME TAXES**

(235,850) 
(69,286)
       Provision for income taxes

-   
 
-   
        
**NET LOSS APPLICABLE TO COMMON STOCKHOLDERS**

$              (235,850)
 
$                (69,286)
    
**BASIC LOSS PER COMMON SHARE**

$                    (0.01)
 
$                    (0.01)
    
**WEIGHTED AVERAGE SHARES OUTSTANDING**

16,824,658 
 
8,824,658 
    
**4**   

**CHAMPIONS SPORTS, INC. ANDSUBSIDIARIES**
**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW**
**FOR THE THREE MONHTS ENDED JULY 31, 2005 AND 2004(UNAUDITED)**       
**(Restated)** 
**2005** 
**2004**    
**CASH FLOW FROM OPERATING ACTIVITIES**
   
**Continuing Operations**
   
       Net loss

$               (69,999)
 
$           (58,762)

**       Adjustments to reconcile net lossto net cash**
   
**       provided by (used in) operatingactivities:**
       
**Changes in assets and liabilities**
   
       Accounts payable

17,147  
(510)
       Other accrued expenses

19,774 
 
46,193 

       Total adjustments

36,921 
 
45,683 
    
**       Net cash (used in) operatingactivities - operations**

 (33,078)
 
 (13,079)
    
**Discontinued Operations:**
   
       Loss from discontinued operations

 (165,851)
 
 (10,524)

**       Adjustments to reconcile net lossto net cash**
   
**       provided by operatingactivities:**
   
       Depreciation and amortization

-    
12,105 
       Loss on disposal of assets

142,520  
-       
**Changes in assets and liabilities**
   
       Accounts receivable

-    
22,713 
       Inventories

18,459  
1,026 
       Prepaid expenses

-    
(4,136)
       Deposits

11,052 
 
-   

       Total adjustments

172,031 
 
31,708 
    
**       Net cash provided by operatingactivities - discontinued operations**

6,180 
 
21,184 
    
**       Net cash provided by (used in)operating activities -**
   
**       continuing and discontinuedoperations**

 (26,898)
 
8,105 
    
**CASH FLOWS FROM INVESTING ACTIVITIES**
   
**Discontinued Operations:**
   
Proceeds from sale of assets

10,000 
 
-   

**       Net cash provided by investingactivities**

10,000 
 
-   
**5**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES**
**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW**
**FOR THE THREE MONHTS ENDED JULY 31, 2005 AND 2004 (UNAUDITED)Con't**    
**CASH FLOWS FROM FINANCING ACTIVITIES**
   
**Discontinued Operations:**
   
       Principal payments on capitallease

-   
 
 (1,090)

**       Net cash (used in) financingactivities**

-   
 
 (1,090)
    
**NET INCREASE (DECREASE) IN**
   
**       CASH AND CASH EQUIVALENTS**

(16,898) 
7,015     
**CASH AND CASH EQUIVALENTS -**
   
**       BEGINNING OF PERIOD**

84,513 
 
120,116 
 
  
 
**CASH AND CASH EQUIVALENTS - END OF PERIOD**

$                 67,615 
 
$           127,131 
    
**SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:**
   
       Cash paid during the period for:
   
       Interest paid

$                         -   
 
$                     -   

**6**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 1-     ORGANIZATION AND BASIS OFPRESENTATION**

Champions Sports, Inc., (the "Company") a Delawarecorporation, promoted a sport theme restaurant bar concept through Company ownedand licensed operations. The Company sold the rights to the Champions brand toMarriott International, Inc. (Marriott) and became a licensee of ChampionsSports Bar Restaurants. Substantially all memorabilia sales are to Marriott. OnJune 23, 2005, the Company ceased operations for its' only sports bar located inSan Antonio, Texas.  Fixed assets with a net book value of $152,520 were soldfor $10,000 and inventory consisting of primarily restaurant food and beveragewas sold for $3,200.

The condensed consolidated unaudited interim financialstatements included herein have been prepared, without audit, pursuant to therules and regulations of the Securities and Exchange Commission. The condensedconsolidated financial statements and notes are presented as permitted on Form10-QSB and do not contain information included in the Company's annualconsolidated statements and notes. Certain information and footnote disclosuresnormally included in financial statements prepared in accordance with accountingprinciples generally accepted in the United States of America have beencondensed or omitted pursuant to such rules and regulations, although theCompany believes that the disclosures are adequate to make the informationpresented not misleading. The results for the three months ended July 31, 2005may not be indicative of the results for the entire year.

These statements reflect all adjustments, consistingof normal recurring adjustments, which in the opinion of management, arenecessary for fair presentation of the information contained herein.

The Company has amended its previously issuedcondensed consolidated financial statements for the three months ended July 31,2004. The Company has amended these condensed consolidated financial statementsto recognize an additional $40,330 in officer's compensation and related payrolltax expense for the three months ended July 31, 2004. This transaction resultedin an increase in net loss applicable to common shares of $40,330 for the threemonths ended July 31, 2004 to a net loss of $69,286 as restated, and an increasein the accumulated deficit to $6,453,211. Additionally, the Company hasreclassified its financial statements to take effect for the disposal of itsonly operating business.

**7**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 2-**       **SUMMARY OF SIGNIFICANTACCOUNTING POLICIES**     

Principles of Consolidation

The condensed consolidated financial statementsinclude the accounts of the Company and its subsidiaries. All materialintercompany transactions have been eliminated in consolidation.     

Property and Equipment

Property and equipment are stated at cost.Depreciation and amortization is computed from the date property is placed inservice using the straight-line method over estimated useful lives asfollows:
 
Life
    
Furniture and equipment

5-15 years    
Leasehold improvements

Remaining term of the lease    
Depreciation and amortization expense was $0 and$12,105 for the three months ended July 31, 2005 and 2004, respectively. 

**8**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 2-       SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**

Net (Loss) Per Share

Historical net (loss) per common share is computedusing the weighted average number of common shares outstanding. Diluted earningsper share (EPS) includes additional dilution from common stock equivalents, suchas stock issuable pursuant to the exercise of stock options and warrants. Commonstock equivalents were not included in the computation of diluted earnings pershare when the Company reported a loss because to do so would be antidilutivefor periods presented.Net (Loss) Per Share (continued) 

The following is a reconciliation of the computationfor basic and diluted EPS:

Options and warrants outstanding to purchase stockwere not included in the computation of diluted EPS for July 31, 2005 and 2004because inclusion would have been antidilutive.

**9**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**

Cash and Cash Equivalents

For purposes ofthe condensed consolidated statementsof cash flow, the Company considers all highly liquid debt instruments purchasedwith a maturity of three months or less, unless restricted as to use, to be cashequivalents. At various times throughout the periods the Company had amounts ondeposit at financial institutions in excess of federally insured limits.

Income Taxes

The Company has adopted the provisions of Statement ofFinancial Accounting Standards No. 109 (the Statement), Accounting for IncomeTaxes. The Statement requires an asset and liability approach for financialaccounting and reporting for income taxes, and the recognition of deferred taxassets and liabilities for the temporary differences between the financialreporting bases and tax bases of the Company's assets and liabilities at enactedtax rates expected to be in effect when such amounts are realized orsettled.

Fair Value of Financial Instruments

The carrying amounts of the Company's financialinstruments, including cash and cash equivalents, accounts payable, and accruedexpenses, approximate fair values because of the short maturities of theseinstruments.

Options for Common Stock

The Company uses the intrinsic value method to accountfor options granted to executive officers, directors and other key employees forthe purchase of common stock. No compensation expense is recognized on the grantdate, since at that date, the option price equals or is higher than the marketprice of the underlying common stock. The Company discloses the pro forma effectof accounting for stock options under the fair value method. The Company usesthe fair value method to account for options granted to advisors for thepurchase of common stock. 

**       ****10**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**
**       **

Stock-Based Compensation

Employee stock awards under the Company's compensationplans are accounted for in accordance with Accounting Principles Board OpinionNo. 25 ("APB 25"), "Accounting for Stock Issued to Employees", and relatedinterpretations. The Company provides the disclosure requirements of Statementof Financial Accounting Standards No. 123, "Accounting for 

Stock-Based Compensation" ("SFAS 123"), and relatedinterpretations. Stock-based awards to non-employees are accounted for under theprovisions of SFAS 123 and has adopted the enhanced disclosure provisions ofSFAS No. 148 "Accounting for Stock-Based Compensation- Transition andDisclosure, an amendment of SFAS No. 123".

The Company measures compensation expense for itsemployee stock-based compensation using the intrinsic-value method. Under theintrinsic-value method of accounting for stock-based compensation, when theexercise price of options granted to employees is less than the estimated fairvalue of the underlying stock on the date of grant, deferred compensation isrecognized and is amortized to compensation expense over the applicable vestingperiod. In each of the periods presented, the vesting period was the period inwhich the options were granted. 

The Company measures compensation expense for itsnon-employee stock-based compensation under the Financial Accounting StandardsBoard (FASB) Emerging Issues Task Force (EITF) Issue No. 96-18, "Accounting forEquity Instruments that are Issued to Other Than Employees for Acquiring, or inConjunction with Selling, Goods or Services". The fair value of the optionissued is used to measure the transaction, as this is more reliable than thefair value of the services received. The fair value is measured at the value ofthe Company's common stock on the date that the commitment for performance bythe counterparty has been reached or the counterparty's performance is complete.The fair value of the equity instrument is charged directly to compensationexpense and additional paid-in capital.

**11**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**

Recent Accounting Pronouncements

Share Based Payments

In December 2004, the FASB issued Financial AccountingStandards No. 123 (revised 2004) (FAS 123R), "Share-Based Payment, " FAS 123Rreplaces FAS No. 123, "Accounting for Stock-Based Compenasation", and supersedesAPB Opinion No. 25, "Accounting for Stock Issued to Employees."  FAS 123Rrequires compensation expense, measured as the fair value at the grant date,related to share-based payment transactions to be recognized in the financialstatements over the period that an employee provides service in exchange for theaward.  The Company intends to adopt FAS 123R using the "modified prospective"transition method as defined in FAS 123R.  Under the modified prospectivemethod, companies are required to 1) record compensation cost prospectively forthe unvested portion, as of the date of adoption, of previously issued andoutstanding awards over the remaining vesting period of such awards.  FAS 123Ris effective January 1, 2006.  The Company is evaluating the impact of FAS 123Ron its' results and financial position.

Inventory Costs

In November 2004, the FASB issued Financial AccountingStandards No. 151 (FAS 151), "Inventory Costs - an amendment of ARB No. 43,Chapter 4".  FAS 151 clarifies the accounting for abnormal amounts of idlefacility expense, freight, handling costs and spoilage.  In addition, FAS 151requires companies to base the allocation of fixed production overhead to thecosts of conversion on the normal capacity of production facilities.  FAS 151 iseffective for the Company in 2006.  The Company does not expect FAS 151 to havea material impact on its results or financial statements.  

**12**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**

Recent Accounting Pronouncements (Continued)

Exchange of Non-Monetary AssetsOn December 16,2004, FASB issued Statement of Financial Accounting Standards No. 153,"Exchanges of Non-monetary Assets, an amendment of APB Opinion No. 29,Accounting for Non-monetary Transactions" ("SFAS 153").  This statement amendsAPB Opinion 29 to eliminate the exception for non-monetary exchanges of similarproductive assets and replaces it with a general exception for exchanges ofnon-monetary assets that do not have commercial substance.  Under SFAS 153, if anon-monetary exchange of similar productive assets meets a commercial-substancecriterion and fair value is determinable, the transaction must be accounted forat fair value resulting in recognition of any gain or loss.  SFAS 153 iseffective for non-monetary transactions in fiscal periods that begin after June15, 2005.  The Company does not anticipate that the implementation of thisstandard will have a material impact on its financial position, results ofoperations or cash flows.

Reclassifications

The loss from discontinued operations for the threemonths ended July 31, 2004 was reclassified to reflect the sale of the Company'sonly operating business activity in the condensed consolidated statements ofoperations in accordance with the provisions of SFAS 144. The reclassificationhad no effect on net loss for the three-month period ended July 31, 2004.

**13**   
**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 3-**     **COMMITMENTS ANDCONTINGENCIES**

Operating leases     

The Company leases, as tenant, restaurant space underan operating lease, which expired June 30, 2005 and was not renewed. The leaseescalated for increases in the landlord's expenses for increases in the ConsumerPrice Index, and required additional rentals based on a percentage of restaurantsales over a defined amount. The lease granted the Company certain concessions,which were amortized to lease expense over the term of the lease.

Rental expense during the three months ended July 31,2005 and 2004 was $43,132 and $50,121, respectively.

**NOTE 4-     MARRIOTT LICENSE**

The Company was an exclusive supplier of sportsmemorabilia and a consultant to all new Champions Sports Bars located inMarriott and Renaissance Hotels worldwide.  This agreement was terminated byMarriott effective May 28, 2005. 

**NOTE 5-     ACCRUED EXPENSES**

This account represents accrued officer's payroll andrelated payroll taxes. 

**NOTE 6-     STOCKHOLDERS' DEFICIT**

Common Stock 

The Company has 50,000,000 shares authorized and16,824,658 shares issued and outstanding at July 31, 2005.

There were no issuances of common stock during thethree months ended July 31, 2005 and 2004, respectively.

Preferred Stock 

The Company has 56,075 shares of preferred stockauthorized and 32,450 shares issued and outstanding at July 31, 2005. 

**14**   

**CHAMPION SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 6-     STOCKHOLDERS' DEFICIT (Continued)**

Preferred Stock (Continued) 

The Series A preferred stock requires a dividend of 12percent per annum, and the dividends are to be accrued on the Company's book ifnot paid. The dividend may be paid in common stock of the Company at theCompany's discretion. The number of shares comprising the dividend paid incommon stock shall be determined by dividing $1.20 by the closing bid price forthe common stock on the payment date. The Series A preferred stock is preferredin liquidation or dissolution up to the amount of their par value ($10 pershare). The Series A preferred stock in 2004 converted into 15 shares of theCompany's common stock. There were no conversions in 2003.

For each of the ten fiscal years ended April 30, 2005,the Company deferred payment of the annual dividend on the Series A preferredstock. For the quarters ended July 31, 2005 and 2004, the deferral was $0,respectively. Preferred stock dividends in arrears at July 31, 2005 aggregated$350,460 ($10.83 per preferred share). The remaining accrued dividends areanticipated to be paid in cash or common stock upon successful merger or otherbusiness combination. 

Common Stock Options

The Company in 1993 adopted a stock option plan, whichexpired on August 2, 2002. No options were exercised under the plan. All optionsgranted by the Company were granted pursuant to board resolutions and not underthe stock option plan. 

**NOTE 7-     GOING CONCERN**

As shown in the accompanying condensed consolidatedfinancial statements, the Company has sustained net operating losses for theyears ended April 30, 2005 and 2004 and for the three months ended July 31,2005, and has sustained large accumulated deficits that raise substantial doubtabout its ability to continue as a going concern. In addition, the Company is insearch of acquiring a business, or finding a suitable merger candidate

**15**   

**CHAMPION SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 7-     GOING CONCERN (Continued)**

Management has restructured the Company and iscontinuing to search for a more profitable company to acquire. 

The Company's future success is dependent upon itsability to achieve profitable operations and generate cash from operatingactivities, and upon additional financing. There is no guarantee that theCompany will be able to raise enough capital or generate revenues to sustain itsoperations.

The condensed consolidated financial statements do notinclude any adjustments that might result from the outcome of thisuncertainty.

**NOTE 8-     PROVISION FOR INCOMETAXES**

Deferred income taxes will be determined using theliability method for the temporary differences between the financial reportingbasis and income tax basis of the Company's assets and liabilities. Deferredincome taxes will be measured based on the tax rates expected to be in effectwhen the temporary differences are included in the Company's consolidated taxreturn. Deferred tax assets and liabilities are recognized based on anticipatedfuture tax consequences attributable to differences between financial statementcarrying amounts of assets and liabilities and their respective taxbases.

At July 31, 2005, deferred tax assets consist of thefollowing:                 

Deferred tax asset

$  2,403,212

Less:  valuation allowance

  (2,403,212)
 
Net deferred tax asset

$        -0    -
 
At July 31, 2005, the Company had federal netoperating loss carryforwards in the approximate amounts of $4,410,850 availableto offset future taxable income. The Company established valuation allowancesequal to the full amount of the deferred tax assets due to the uncertainty ofthe utilization of the operating losses in future periods.

**16**   

**CHAMPION SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**NOTE 9-     RESTATEMENT OF PREVIOUSLY ISSUEDFINANCIAL STATEMENTS**

The Company has amended its previously issuedcondensed consolidated financial statements for the three months ended July 31,2004. The Company has amended these condensed consolidated financial statementsto recognize an additional $40,330 in officer's compensation and related payrolltax expense for the three months ended July 31, 2004. This transaction resultedin an increase in net loss applicable to common shares of $40,330 for the threemonths ended July 31, 2004 to a net loss of $69,286 as restated, and an increasein the accumulated deficit to $6,453,211.

**NOTE 10-      DISPOSAL OF BUSINESS**

On June 23, 2005, the Company ceased operations forits' only sports bar located in San Antonio, Texas.  Fixed assets with a netbook value of $152,520 were sold for $10,000 and inventory consisting ofprimarily restaurant food and beverage was sold for $3,200.  The Company'scondensed consolidated financial statements have been reclassified to reflectthis sale as discontinued operations, for all periods presented. Summarizedoperating results of discontinued operations are as follows:
 
July 31,
July 31,  
2005

2004
   
Revenues

$   273,622
$457,092  
Loss before income taxes

$ (235,850)
$(69,286)  
Provision for taxes

$               -
$            -  
Net (loss)

$ (235,850)
$(69,286)  
Net income per share

$       (0.01)
$    (0.01)  
Diluted income per share

$       (0.01)
$    (0.01)     
**17**   

**CHAMPION SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**Item 2. Managements Discussion and Analysis of Financial Condition andResults of Operations**

There is substantial doubt about theCompany's ability to continue as a going concern. The Company's independentauditor, for the year ending April 30, 2005, has expressed substantial doubtthat the Company can continue as a going concern due to recurring losses andworking capital shortages and that there is no guarantee that the Company willbe able to raise enough capital or generate revenues to sustain its operations.The Company is continuing to face grave liquidity and cash problems as of dateof the filing of this 10-QSB. The Company's Champions sports bar restaurant inSan Antonio, Texas which provided almost 100 percent of its revenues, ceased itsrestaurant operations in June of 2005 after its 16 year old lease expired. TheCompany does not have the resources to open and operate a restaurant in anotherlocation. It is the intention of the Company to continue operations until suchtime as Champions finds a business opportunity and merges with another companyor raises additional financing, although there is no assurance that this can bedone on terms satisfactory to the Company. The Company is continuing to activelylook at various business opportunities in order to continue operations. If theCompany's liquidity situation does not improve, the Company might have todiscontinue its business as a going concern.

Results of Operation

For the three months ended July, 31, 2005, theCompany's net loss was   $235,850.  The Company's total assets decreased by $198,929 to $67,615 from $266,544 at April 30, 2005.

For the three months ended July 31, 2004, theCompany's net loss was $69,286. The Company's total assets decreased by $125,375to $266,544 from $391,919 at April30, 2004.     

Revenues

The Company's total revenues were $0.00 for the threemonths ended July 31, 2005 and for the three-month period ended July 31, 2004,as reclassified.  The Company ceased operations at the San Antonio ChampionsSports Restaurant location on June 23, 2005. The lease on this location expiredon June 30, 2005 and the Company vacated the premise on that date. The SanAntonio location had provided 99% of the Company's revenues.  The Company'scondensed consolidated financial statements have been reclassified to reflectthis sale as discontinued operations, for all periods presented. Summarizedoperating results of discontinued operations are asfollows:
 
       July 31,

       July 31,
  
       2005

       2004
   
Revenues

$   273,622

$457,092
  
Loss before income taxes

$ (235,850)

$(69,286)
  
Provision for taxes

$               -

$            -
  
Net (loss)

$ (235,850)

$(69,286)
 
Expenses

General and administrative expense for the Company'scorporate office was $69,999 for the three months ended July 31, 2005 comparedto $58,762 for the three months ended July 31, 2004.  
**18**   
**CHAMPION SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**

Liquidity and Capital Resources

The Company's cash position as of July 31, 2005 was$67,615 compared to $84,513 on April 30, 2005. For the three month period, theCompany's operations, continuing and discontinued, used $26,898 in cash. TheCompany met its liquidity needs from its cash reserves.The Company'sworking capital was a negative $602,645 on July 31 2005 and a negative $366,795on April 30, 2005.  The Company's working capital is very unfavorable whencompared to other public companies.

Other

The Company is facing liquidity problems and isuncertain that it will be able to continue operations without an infusion ofcash.  The Company's liquidity problems have been further exasperated by theclosing to the Company's San Antonio Champions Sports Bar Restaurant.  TheCompany continues to review and evaluate its operations and priorities.  TheCompany is actively   pursuing merger or acquisition   candidates and otherfinancing possibilities to meet its liquidity needs.  There is no assurance thatthe Company will be able to structure a merger or acquisition, or raiseadditional financing to continue operations on terms satisfactory to theCompany.

Furthermore, The Company's independent auditor hasexpressed substantial doubt that the Company can continue as a goingconcern.

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This document contains "forward-looking statements"(within the meaning of the Private Securities Litigation Act of 1995) thatinherently involve risk and uncertainties.  The Company generally uses wordssuch as "believe," "may," "could," "will," "intend,"  "expect,"  "anticipate,""plan," and similar expressions to identify forward-looking statements.  Oneshould not place undue reliance on these forward-looking statements.  TheCompany's actual results could differ materially from those anticipated in theforward-looking statements for many unforeseen factors, which may include, butare not limited to, changes in general economic conditions, the ongoing threatof terrorism, ability to have access to financing sources on reasonable termsand other risks that are described in this document. Although the Companybelieves the expectations reflected in the forward-looking statements arereasonable, they relate only to events as of the date on which the statementsare made, and the Company's future results, levels of activity, performance orachievements may not meet these expectations.  The Company does not intend toupdate any of the forward-looking statements after the date of this document toconform these statements to actual results or to changes in the Company'sexpectations, except as required by law.

**19**   
**CHAMPION SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****JULY 31, 2005 AND 2004(UNAUDITED)**
**Item 4.     CONTROLS AND PROCEDURES**

Disclosure controls are procedures that are designedwith the objective of ensuring that information required to be disclosed inCompany's reports under the Securities Exchange Act of 1934, such as this Form10Q-SB, is reported in accordance with the Securities and Exchange Commission'srules.  Disclosure controls are also designed with the objective of ensuringthat such information is accumulated and communicated to management, includingthe Chief Executive Officer and Chief Financial Officer as appropriate to allowtimely decisions regarding required disclosure.Within the 90 days priorto the date of this report, the Company carried out an evaluation under  thesupervision  and  with  the participation of the Company's  management,including the Company's Chief  Executive  Officer  and  Chief  FinancialOfficer,   of  the effectiveness of  the  design  and   operation  of  theCompany's disclosure  controls  and  procedures  pursuant  to  the  SecuritiesExchange  Act Rule  13a-14.  Based upon that evaluation, the Chief ExecutiveOfficer and Chief Financial Officer concluded that the Company's disclosurecontrols and procedures are effective in timely alerting them to materialinformation  relating  to the  Company (including  its  consolidatedsubsidiaries)  required  to be in the Company's periodic SEC filings. There wereno significant changes in the Company's internal controls or in other factorsthat could significantly affect these controls subsequent to the date of theirevaluation.

Certifications of the Chief Executive Officer andChief Financial Officer regarding, among other items, disclosure controls andprocedures are included immediately after the signature section of this Form10Q-SB.

**Part II.   Other Information**
**Item 4.  Submission of Matters to A Vote of Security Holders**

None

**Item 6.  Exhibits and Reports on Form 8-K**

None

**20**   

SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registranthas duly caused this report to be signed on its behalf by the undersignedhereunto duly authorized.
       **CHAMPIONS Sports, Inc.**
       /s/ JamesMartell          JamesMartell     Chairman, President and Chief ExecutiveOfficer
       
       /s/ James E.McCollam     James E.McCollam     Corporate Secretary, ChiefAccounting     Officer and Controller
September 14, 2005**21**   
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Section 302 Certification
I, JAMES MARTELL, certify that:
(1) I have reviewed this quarterly report on Form 10Q-SB of CHAMPIONS SPORTS,INC., a Delaware corporation (the "registrant");
(2) Based on my  knowledge,  this  quarterly  report does not contain any untruestatement of a material fact or omit to state a material fact  necessary to makethe statements made, in light of the  circumstances  under which such statementswere made, not  misleading  with respect to the period covered by this quarterlyreport;
(3)  Based on my  knowledge,  the  financial  statements,  and  other  financialinformation  included in this quarterly  report,  fairly present in all materialrespects the financial  condition,  results of operations  and cash flows of theregistrant as of, and for, the periods presented in this quarterly report;
(4)  The  registrant's  other  certifying  officers  and I are  responsible  forestablishing and maintaining  disclosure  controls and procedures (as defined inExchange Act Rules 13a-14 and 15d-14) for the registrant and have:
       (a) Designed such disclosure controlsand procedures to ensure that material information relating to the registrant,including its consolidated     subsidiaries, is made known to us by otherswithin those entities, particularly during the period in which this quarterlyreport is being      prepared;
       (b) Evaluated the effectiveness of theregistrant's disclosure controls and  procedures  as of a date  within 90 daysprior to the  filing  date of this  quarterly report (the "Evaluation Date");and
       (c)  Presented  in  this  quarterlyreport  our  conclusions   about  the effectiveness  of the  disclosurecontrols  and  procedures  based  on our evaluation as of the EvaluationDate;
(5) The registrant's  other certifying  officers and I have disclosed,  based onour most recent evaluation, to the registrant's auditors and the audit committeeof the  registrant's  board of directors (or persons  performing  the equivalentfunctions):
       (a) all  significant  deficiencies  inthe design or  operation of internal      controls which could adversely affectthe  registrant's  ability to record,      process,  summarize and reportfinancial data and have  identified for the      registrant's auditors anymaterial weaknesses in internal controls; and
       (b) any fraud,  whether or notmaterial,  that involves management or other      employees  who  have  asignificant  role  in  the  registrant's  internal      controls; and
(6) The  registrant's  other  certifying  officers and I have  indicated in thisquarterly report whether there were significant  changes in internal controls orin other factors that could significantly affect internal controls subsequent tothe date of our most recent  evaluation,  including any corrective  actionswith
regard to significant deficiencies and material weaknesses.
Date:  September 14, 2005

       By

: /s/ JAMES MARTELL

       

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

JAMES MARTELL
 
       

Chief Executive Officer
 
**22**   

CERTIFICATION OF CHIEF FINANCIAL OFFICER
Section 302 Certification
I, JAMES E. MCCOLLAM, certify that:
(1) I have reviewed this quarterly report on Form 10Q-SB of CHAMPIONS SPORTS,INC., a Delaware corporation (the "registrant");
(2) Based on my knowledge, this  quarterly  report does not contain any untruestatement of a material fact or omit to state a material fact  necessary to makethe statements made, in light of the  circumstances  under which such statementswere made, not  misleading  with respect to the period covered by this quarterlyreport.
(3) Based on my  knowledge,  the  financial  statements,  and  other  financialinformation  included in this quarterly  report,  fairly present in all materialrespects the financial  condition,  results of operations  and cash flows of theregistrant as of, and for, the periods presented in this quarterly report; 
(4)  The  registrant's  other  certifying  officers  and I are  responsible  forestablishing and maintaining  disclosure  controls and procedures (as defined inExchange Act Rules 13a-14 and 15d-14) for the registrant and have:
       (a)  Designed  such  disclosurecontrols  and  procedures  to ensure  that     material information relating tothe registrant, including its consolidated     subsidiaries,  is  made  knownto  us by  others  within  those  entities,     particularly  during  the periodin which  this  quarterly  report is being     prepared;
       (b) Evaluated the effectiveness of theregistrant's disclosure controls and     procedures  as of a date  within 90days prior to the  filing  date of this     quarterly report (the "EvaluationDate"); and
       (c)  Presented  in  this  quarterlyreport  our  conclusions   about  the effectiveness  of the  disclosurecontrols  and  procedures  based  on our evaluation as of the EvaluationDate;
(5) The registrant's  other certifying  officers and I have disclosed,  based onour most recent evaluation, to the registrant's auditors and the audit committeeof the  registrant's  board of directors (or persons  performing  the equivalentfunctions):
       (a) all  significant  deficiencies  inthe design or  operation of internal     controls which could adversely affectthe  registrant's  ability to record,     process,  summarize and reportfinancial data and have  identified for the     registrant's auditors anymaterial weaknesses in internal controls; and
       (b) any fraud,  whether or notmaterial,  that involves management or other     employees  who  have  asignificant  role  in  the  registrant's  internal     controls; and
(6) The  registrant's  other  certifying  officers and I have  indicated in thisquarterly report whether there were significant  changes in internal controls orin other factors that could significantly affect internal controls subsequent tothe date of our most recent  evaluation,  including any corrective  actions withregard to significant deficiencies and material weaknesses.
Date:  September 14, 2005
By:
/s/ JAMES E. McCOLLAM
 
       
-------------------------
 
       

JAMES E. McCOLLAM
 
       

Chief Financial Officer
 
**23**   
**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**
In connection with the annual report of Champions Sports, Inc. (the "Company")on Form 10-QSB for the three months ended July 31, 2005 as filed with theSecurities and Exchange Commission on the date hereof (the "Report"), each ofthe undersigned, in the capacities and on the dates indicated below, herebycertifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 2002, that to their knowledge:

1.      

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

 

2.      

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

Dated: September 14, 2005

By:  

/s/ James M. Martell

 

 

  

  

James M. Martell, Chief Executive Officer 

Dated: September 14, 2005

By:  

/s/ James E. McCollam 

 

 

  

  

James E. McCollam, Chief Financial Officer 

**24**