**SECURITIES AND EXCHANGE COMMISSION****Washington, D.C.20549**
**FORM 10-QSB**
Mark One
  
  
[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
  
THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarterly period ended         October 31, 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         0-17263                      

CHAMPIONS SPORTS, INC.(Exact name of registrant as specified in itscharter)
Delaware
52-1401755
(State or other jurisdiction of
(I.R.S. Employer
organization)
Identification No.)

Suite 214, 2420 Wilson Blvd., Arlington VA 22201(Address of principalexecutive offices)(Zip code)
(703) 526-0400(Registrant’s telephone number, including areacode)

Indicate by check mark whether the Registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the Registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.  Yes     x        No    
 
As of December 14 2004, the Registrant had a total of 16,824,658 shares ofcommon stock outstanding.

****   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES**
**CONSOLIDATED FINANCIAL STATEMENTS**
**OCTOBER 31, 2004 AND 2003******   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****INDEX TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS****OCTOBER 31, 2004 AND 2003**
  
Page
     
Part I.   Financial Information
   
Item 1.   Financial Statements
   
Condensed Consolidated Balance Sheets as of
  
  October 31, 2004 (unaudited) and
  
  April 30, 2004 (audited)

3
   
Condensed Consolidated Statements of Operations:
  
  Six months ended  October 31, 2004 and October 31,
  
  2003,  (unaudited) 

4
   
Condensed Consolidated Statements of Cash Flows:
  
  Six and three months ended October 31, 2004, and
  
  October 31, 2003 (unaudited) 

5
   
Notes to Condensed Consolidated Financial Statements

6 - 16
   
Item 2.   Management’s Discussions and
   
Analysis of Financial Condition
   
and Results of Operations

17
   
Item 4.   Controls and Procedures

20
  
Part II.   Other Information and Signatures
   
Item 4.Submission of Matters to a Vote
   
of Security Holders

21
  
Item 6.    Exhibits and Reports on Form 8-K

21
   
Signatures

22
   
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

23
 
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

25
 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 

27
 
****   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES**
**CONDENSED CONSOLIDATED BALANCE SHEETS**    
**ASSETS**    
**October 31,** 
**April 30,** 
**2004** 
**2004** 
**(UNAUDITED)** 
**(Audited)**    
**CURRENT ASSETS**
   
    Cash and cash equivalents
 $	
67,926 
$
120,116 
    Accounts receivable

10,954  
22,713 
    Inventories

27,214  
30,349 
    Prepaid expenses

7,209 
 
6,750 
    
**Total current assets**

113,303  
179,928     
Property and equipment, net

176,729  
200,939     
Deposits

11,052 
 
11,052 
    
**TOTAL ASSETS**

$
301,084 

$
391,919 
    
**LIABILITIES AND STOCKHOLDERS’(DEFICIT)**       
**CURRENT LIABILITIES**
   
    Accounts payable 
 $	
81,409  
92,758 
    Dividend payable on preferred stock

350,460  
350,460 
    Other accrued expenses

44,653  
38,569 
    Deferred lease commission

656  
2,836 
    Related party payable

9,100 
 
- 
    
**Total current liabilities**

486,278 
 
484,623 
        
**COMMITMENTS AND CONTINGENCIES**       
**STOCKHOLDERS’ (DEFICIT)**
   
    Preferred stock, $10 par value; 56,075 sharesauthorized;
   
       32,450 shares issuedand outstanding

324,500  
324,500 
    Common stock, $.001 par value; 50,000,000 shares authorized
   
       16,824,658 and8,824,658 shares issued and outstanding, respectively

16,825  
8,825 
    Additional paid-in capital

5,922,349  
5,850,349 
    Subscription receivable

 (80,000) 
- 
    Accumulated deficit

 (6,368,868)
 
 (6,276,378)

**Total stockholders’ (deficit)**

 (185,194)
 
 (92,704)
    
**TOTAL LIABILITIES AND STOCKHOLDERS’(DEFICIT)**
$
301,084 

$
391,919 

**The accompanying notes are an integral part of these condensedconsolidated financial statements.****3**   

**CHAMPIONS SPORTS, INC. ANDSUBSIDIARIES**
**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**
**FOR THE SIX AND THREE MONHTS ENDED OCTOBER 31, 2004 AND 2003(UNAUDITED)**           
**SIX MONTHS ENDED** 
**THREE MONTHS ENDED** 
**OCTOBER 31,** 
**OCTOBER 31,** 
**2004** 
**2003** 
**2004** 
**2003**
****
       
**OPERATING REVENUE**
       
       Food andbeverage

$
851,710  
$
986,337  
$
451,712  
$
453,690  
       Merchandise,memorabilia, and consulting fees

9,384   
12,918   
3,135   
5,755  
       Other income

4,138  
 
4,820  
 
2,245  
 
1,435  
        
**Total operating revenue**

865,232  
 
1,004,075  
 
457,092  
 
460,880  
        
**COSTS AND OPERATING EXPENSES**
       
       Cost of food andbeverage

276,631   
274,953   
146,115   
115,901  
       Cost of merchandise andmemorabiia

1,462   
12,414   
1,462   
4,852  
       Restaurant payroll andrelated costs

306,341   
332,977   
161,988   
153,575  
       Restaurant occupancycosts

124,856   
129,522   
61,765   
62,156  
       Other restaurantcosts

169,204   
184,577   
84,181   
84,450  
       General andadministrative

55,019   
125,328   
18,432   
60,398  
       Depreciation andamortization

24,209   
24,209   
12,105   
12,105   
     
 
     
 
     
 
     

       
       
**Total costs and operating expenses**

957,722  
 
1,083,980  
 
486,048  
 
493,437  
        
**NET (LOSS) BEFORE PROVISION FOR INCOME TAXES**

 (92,490) 
 (79,905) 
 (28,956) 
 (32,557)
       Provision for incometaxes

-  
 
-  
 
-  
 
-  
        
**NET LOSS**

 (92,490) 
 (79,905) 
 (28,956) 
 (32,557)        
Preferred stock dividends

-  
 
 (21,580)
 
-  
 
 (10,790)
        
**(LOSS) APPLICABLE TO COMMON STOCKHOLDERS**

$
 (92,490)

$
 (101,485)

$
 (28,956)

$
 (43,347)
        
**BASIC (LOSS) PER COMMON SHARE**

$
 (0.01)

$
 (0.01)

$
 (0.00)

$

 (0.01)
        
**WEIGHTED AVERAGE SHARES OUTSTANDING**

9,703,779  
 
8,514,459  
 
13,985,948  
 
8,514,459  
         	 	

**The accompanying notes are an integral part of these condensedconsolidated financial statements****.****4**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES**
**CONDENSED CONSOLIDATED STATEMENTS CASH FLOWS**
**FOR THE SIX MONTHS ENDED OCTOBER 31, 2004 AND 2003(UNAUDITED)**         
**2004** 
**2003**    
**CASH FLOW FROM OPERATING ACTIVITIES**
   
       Net loss

$
 (92,490)

$
 (79,905)

**       Adjustments toreconcile net loss to net cash**
   
**       (used in) operatingactivities:**
   
       Depreciation andamortization

24,209  
24,209     
**Changes in assets and liabilities**
               
       Accountsreceivable

11,759  
- 
       Inventories

3,135  
 (3,848)
       Prepaidexpenses

 (459) 
 (4,449)
       Accountspayable

 (11,349) 
8,433 
       Other accruedexpenses

6,085  
 (12,326)
       Deferred leaseconcessions

 (2,180)
 
 (2,907)

       Totaladjustments

31,200 
 
9,112 
    
**       Net cash (used in)operating activities**

 (61,290)
 
 (70,793)
    
**CASH FLOWS FROM INVESTING ACTIVITIES**
   
       Purchases of propertyand equipment

- 
 
 (2,931)

**       Net cash (used in)investing activities**

- 
 
 (2,931)
    
**CASH FLOWS FROM FINANCING ACTIVITIES**
   
       Related partypayable

9,100  
-          
     
 
     

**       Net cash provided byfinancing activities**

9,100 
 
- 
    
**NET (DECREASE) IN CASH AND CASH EQUIVALENTS**

(52,190) 
(73,724)    
**CASH AND CASH EQUIVALENTS -**
   
**       BEGINNING OFPERIOD**

120,116 
 
195,101 
 
 
  
**CASH AND CASH EQUIVALENTS - END OF PERIOD**

$
67,926 

$
121,377 
    
**SUPPLEMENTAL DISCLOSURE OF CASH FLOWINFORMATION:**
   
       Cash paid during theperiod for:
   
       Interestpaid

$
- 

$
- 
    
**SUPPLEMENTAL DISCLOSURE OF NON-CASHINFORMATION:**
       
Exercise of common stock option by officer

$
80,000 

$
- 
    
**The accompanying notes are an integral part of these condensedconsolidated financial statements.****5**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS****OCTOBER 31, 2004 AND 2003**
 	
**NOTE 1-     ORGANIZATION AND BASIS OFPRESENTATION**

Champions Sports, Inc., (the “Company”) aDelaware corporation, promoted a sports theme restaurant bar concept throughCompany owned and licensed operations. The Company sold the rights to theChampions brand to Marriott International, Inc. (Marriott) and became a licenseeof Champions Sports Bar Restaurants. Substantially all memorabilia sales are toMarriott. At October 31, 2004 and 2003, respectively, the Company through itssubsidiaries, owns and licenses, without a royalty fee, one Champions Sports BarRestaurant in San Antonio, Texas.

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 six months ended October 31, 2004may 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.

**NOTE 2-**     **SUMMARY OF SIGNIFICANTACCOUNTING POLICIES**
**             Principlesof Consolidation**

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

**             Propertyand 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 $24,209and$24,209for the six months ended October 31, 2004 and 2003, respectively.

**6**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****OCTOBER 31, 2004 AND2003**
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**
**             Inventories**

Inventories consist of goods and supplies held forsale in the ordinary course of business and are stated at the lower of cost,determined on the first-in-first-out basis, or market. The components ofinventories at October 31, 2004 were as follows:
   
2004

Restaurant food and beverage
 
$

20,079 
Promotional merchandise for sale to
   
       restaurant customers
  
7,135 
  
$

27,214 

**             Net(Loss) Per Share**

Historical net (loss) per common share is computedusing the weighted average number of common shares outstanding.  Dilutedearnings per share (EPS) includes additional dilution from common stockequivalents, such as stock issuable pursuant to the exercise of stock optionsand warrants.  Common stock equivalents were not included in the computation ofdiluted earnings per share when the Company reported a loss because to do sowould be antidilutive for periods presented.

The following is a reconciliation of the computationfor basic and diluted EPS:
     
**October** 
**October**     
**2004** 
**2003**        
Net loss
    $	
 (92,490)
 $	
 (101,485)
        
Weighted-average common shares
     
Outstanding (Basic)
   
9,703,779  
8,514,459         
Weighted-average common stock
     
Equivalents
      
       Stock options
   
-  
- 
       Warrants
   
- 
 
- 
        
Weighted-average common shares
     
Outstanding (Diluted)
   
9,703,779 
 
8,514,459 

Options and warrants outstanding to purchase stockwere not included in the computation of diluted EPS for October 31, 2004 and2003 because inclusion would have beenantidilutive.
**7**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****OCTOBER 31, 2004 AND2003**
**NOTE 2     -     SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES****(CONTINUED)**
 	
**             Cashand Cash Equivalents**

For purposes of the condensed consolidated statementsof cash flows, the Company considers all highly liquid debt instrumentspurchased with a maturity of three months or less, unless restricted as to use,to be cash equivalents. At various times throughout the periods the Company hadamounts on deposit at financial institutions in excess of federally insuredlimits.

**             AccountsReceivable**

Management believes that all accounts receivable as ofOctober 31, 2004 are fully collectible.  Therefore, no allowance for doubtfulaccounts is recorded.  

**             IncomeTaxes**

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 atenacted tax rates expected to be in effect when such amounts are realized orsettled.  

**             FairValue 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.

**             ****Optionsfor 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 

**8**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****OCTOBER 31, 2004 AND2003**
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**
 	
**             Optionsfor Common Stock (Continued)**
 	
the pro forma effect of accounting for stockoptions under the fair value method. The Company uses the fair value method toaccount for options granted to advisors for the purchase of common stock.

             **Stock-BasedCompensation**

Employee stock awards under the Company’scompensation plans are accounted for in accordance with Accounting PrinciplesBoard Opinion No. 25 (“APB 25”), “Accounting for StockIssued to Employees”, and related interpretations. The Company providesthe disclosure requirements of Statement of Financial Accounting Standards No.123, “Accounting for 

Stock-Based Compensation” (“SFAS123”), and related interpretations.  Stock-based awards to non-employeesare accounted for under the provisions of SFAS 123 and has adopted the enhanceddisclosure provisions of SFAS No. 148 “Accounting for Stock-BasedCompensation- Transition and Disclosure, 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 for Equity Instruments that are Issued to Other Than Employeesfor Acquiring, or in Conjunction with Selling, Goods or Services”.  Thefair value of the option issued is used to measure the transaction, as this ismore reliable than the fair value of the services received.  The fair value ismeasured at the value of the Company’s common stock on the date that thecommitment for performance by the counterparty has been reached or thecounterparty’s performance is complete. The fair value of the equityinstrument is charged directly to compensation expense and additional paid-incapital.

**9**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****OCTOBER 31, 2004 AND2003**
 	
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**
**             RecentAccounting Pronouncements**

On October 3, 2001, the FASB issued Statement ofFinancial Accounting Standards No. 144, “Accounting for the Impairment orDisposal of Long-Lived Assets”  (“SFAS 144”), that isapplicable to financial statements issued for fiscal years beginning afterDecember 15, 2001.  The FASB’s new rules on asset impairment supersedeSFAS 121, “Accounting for the Impairment of Long-Lived Assets and forLong-Lived Assets to Be Disposed Of,” and portions of AccountingPrinciples Board Opinion 30, “Reporting the Results of Operations.”This Standard provides a single accounting model for long-lived assets to bedisposed of and significantly changes the criteria that would have to be met toclassify an asset as held-for-sale. Classification as held-for-sale is animportant distinction since such assets are not depreciated and are stated atthe lower of fair value and carrying amount.  This Standard also requiresexpected future operating losses from discontinued operations to be displayed inthe period (s) in which the losses are incurred, rather than as of themeasurement date as presently required. The adoption of SFAS No. 144 did nothave a significant impact on the Company’s results of operations orfinancial position.

In April 2002, the FASB issued SFAS No. 145,Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No.13, and Technical Corrections.  This statement rescinds SFAS No. 4, ReportingGains and Losses from Extinguishment of Debt, and an amendment of thatstatement, SFAS No. 44, Accounting for Intangible Assets of Motor Carriers, andSFAS No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.This statement amends SFAS No. 13, Accounting for Leases, to eliminateinconsistencies between the required accounting for sales-leaseback transactionsand the required accounting for certain lease modifications that have economiceffects that are similar to sales-leaseback transactions. 

Also, this statement amends other existingauthoritative pronouncements to make various technical corrections, clarifymeanings, or describe their applicability under changed conditions.  Provisionsof SFAS No. 145 related to the rescissions of SFAS No. 4 were effective for theCompany on November 1, 2002 and provisions affecting SFAS No. 13 were effectivefor transactions occurring after May 15, 2002.  The adoption of SFAS No. 145 didnot have a significant impact on the Company’s results of operations orfinancial position.

**10**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****OCTOBER 31, 2004 AND2003**
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**
**             RecentAccounting Pronouncements (Continued)**

In June 2003, the FASB issued SFAS No. 146,Accounting for Costs Associated with Exit or Disposal Activities.  Thisstatement covers restructuring type activities beginning with plans initiatedafter December 31, 2002.  Activities covered by this standard that are enteredinto after that date will be recorded in accordance with provisions of SFAS No.146.  The adoption of SFAS No. 146 did not have a significant impact on theCompany’s results of operations or financial position.

In December 2002, the FASB issued Statement No. 148,“Accounting for Stock-Based Compensation-Transition and Disclosure, anamendment of FASB Statement No. 123”(“SFAS 148”). SFAS 148amends FASB Statement No. 123, “Accounting for Stock-BasedCompensation,” to provide alternative methods of transition for an entitythat voluntarily changes to the fair value based method of accounting forstock-based employee compensation. It also amends the disclosure provisions ofthat Statement to require prominent disclosure about the effects on reported netincome of an entity’s accounting policy decisions with respect tostock-based employee compensation. Finally, this Statement amends AccountingPrinciples Board (“APB”) Opinion No. 28, “Interim FinancialReporting”, to require disclosure about those effects in interim financialinformation. SFAS 148 is effective for financial statements for fiscal yearsending after December 15, 2002. The Company will continue to account forstock-based employee compensation using the intrinsic value method of APBOpinion No. 25, “Accounting for Stock Issued to Employees,” but hasadopted the enhanced disclosure requirements of SFAS 148.

In April 2003, the FASB issued SFAS Statement No. 149,"Amendment of Statement 133 on Derivative Instruments and Hedging Activities",which amends and clarifies financial accounting and reporting for derivativeinstruments, including certain derivative instruments embedded in othercontracts (collectively referred to as derivatives) and for hedging activitiesunder FASB Statement No. 133, Accounting for Derivative Instruments and HedgingActivities.  This Statement is effective for contracts entered into or modifiedafter June 30, 2003, except for certain hedging relationships designated afterJune 30, 2003.  Most provisions of this Statement should be appliedprospectively.  The adoption of this statement did not have a significant impacton the Company’s results of operations or financial position.

**11**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****OCTOBER 31, 2004 AND2003**
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**
**             RecentAccounting Pronouncements (Continued)**

In May 2003, the FASB issued SFAS Statement No. 150,"Accounting for Certain Financial Instruments with Characteristics of bothLiabilities and Equity". This Statement establishes standards for how an issuerclassifies and measures certain financial instruments with characteristics ofboth liabilities and equity.  It requires that an issuer classify a financialinstrument that is within its scope as a liability (or an asset in somecircumstances).  This statement is effective for financial instruments enteredinto or modified after May 31, 2003, and otherwise is effective at the beginningof the first interim period beginning after June 15, 2003, except formandatorily redeemable financial instruments of nonpublic entities, ifapplicable.  It is to be implemented by reporting the cumulative effect of achange in an accounting principle for financial instruments created before theissuance date of the Statement and still existing at the beginning of theinterim period of adoption.  The adoption of this statement did not have asignificant impact on the Company’s results of operations or financialposition.

In November 2002, the FASB issued Interpretation No.45 ("FIN 45"), Guarantor’s Accounting and Disclosure Requirements forGuarantees, Including Indirect Guarantees of Indebtedness of Others.  FIN 45requires a company, at the time it issues a guarantee, to recognize an initialliability for the fair value of obligations assumed under the guarantees andelaborates on existing disclosure requirements related to guarantees andwarranties.  The recognition requirements are effective for guarantees issued ormodified after December 31, 2002 for initial recognition and initial measurementprovisions.  The adoption of FIN 45 did not have a significant impact on theCompany’s results of operations or financial position.

In January 2003, the FASB issued FASB InterpretationNo. 46 ("FIN 46"), Consolidation of Variable Interest Entities, anInterpretation of ARB No. 51.  FIN 46 requires certain variable interestentities to be consolidated by the primary beneficiary of the entity if theequity investors in the entity do not have the characteristics of a controllingfinancial interest or do not have sufficient equity at risk for the entity tofinance its activities without additional subordinated financial support fromother parties.  FIN 46 is effective for all new variable interest entitiescreated or acquired after January 31, 2003.  For variable interest entitiescreated or acquired prior to February 1, 2003, the provisions of FIN 46 must beapplied for the first interim or annual period beginning after June 15, 2003.The adoption of FIN 46 did not have a significant impact on the Company’results of operations or financial position.

**12**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****OCTOBER 31, 2004 AND2003**
**NOTE 2-     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)**
**             Reclassifications**

Certain amounts for the six months ended October 31,2003 have reclassified to conform to the presentation of the October 31, 2004amounts.  The reclassifications have no effect on net loss for the six monthsended October 31, 2003. 

**NOTE 3-     RELATED PARTY PAYABLE**

In October 2004, the Company received an advance froman officer of the Company for certain working capital needs.  These funds wererepaid in November 2004. 

**NOTE 4-**     **COMMITMENTS AND CONTINGENCIES**

Operating leases

The Company leases, as tenant, restaurant space underan operating lease which expires June 30, 2005. The lease escalates forincreases in the landlord’s expenses of for increases in the ConsumerPrice Index, and requires additional rentals based on a percentage of restaurantsales over a defined amount. The lease grants the Company certain concessions,which are amortized to lease expense over the term of the lease.

Rental expense charged to expense during the sixmonths ended October 31, 2004 and 2003 was $101,144 and $129,522, respectively.Future minimum payments under the noncancellable restaurant lease as of October31, 2004 are as follows:

2005 $	
93,440 

**NOTE 5-     CAPITAL LEASE OBLIGATION**

The Company leased equipment under a capital lease.The equipment cost of $32,286 was amortized over its useful life and suchamortization was included in the depreciation and amortization expense for 2003.During 2003, the lease expired and the Company purchased the equipment.

**13**   

**CHAMPIONS SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****OCTOBER 31, 2004 AND2003**
**NOTE 6-     MARRIOTT LICENSE**
 	
The Company is an exclusive supplier of sportsmemorabilia and a consultant to all new Champions Sports Bars located inMarriott and Renaissance Hotels worldwide. 

**NOTE 7-     STOCKHOLDERS’DEFICIT**
**             CommonStock**

The Company has 50,000,000 shares authorized and16,824,658 shares issued and outstanding at October 31, 2004.

On October 11, 2004, an officer of the Companyexercised his stock option to acquire 8,000,000 shares of restricted commonstock at $.01 per share. 

There were no other issuances of common stock duringthe six months ended October 31, 2004 and 2003, respectively.

**             PreferredStock**

The Company has 56,075 shares of preferred stockauthorized and 32,450 shares issued and outstanding at October 31, 2004. 

The Series A preferred stock requires a dividend of 12percent per annum, and the dividends are cumulative and are to be accrued on theCompany’s book if not paid. The dividend may be paid in common stock ofthe Company at the Company’s discretion. The number of shares comprisingthe dividend paid in common stock shall be determined by dividing $1.20 by theclosing bid price for the common stock on the payment date. The Series Apreferred stock is preferred in liquidation or dissolution up to the amount oftheir par value ($10 per share). The Series A preferred stock in 2004 convertedinto 15 shares of the Company’s common stock. There were no conversions in2003.

For each of the nine fiscal years ended April 30,2004, the Company deferred payment of the annual dividend on the Series Apreferred stock. For the quarters ended October 31, 2004 and 2003, the deferralwas $0 and $15,938, respectively. Preferred stock dividends in arrears at July31, 2004 aggregated $350,460 ($10.83 per preferred share).  Effective November2003, pursuant to a board resolution, the Company cancelled its payment and/oraccruing of preferred stock dividends. 

**             CommonStock Options**

The Company in 1993 adopted a stock option plan, whichexpired on August 2, 2002.  No options were exercised under the plan.  Alloptions granted by the Company were granted pursuant to board resolutions andnot under the stock option plan. 

**14**   

**CHAMPION SPORTS, INC. AND SUBSIDIARIES****NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)****OCTOBER 31, 2004 AND2003**
 	
**NOTE 8-     GOING CONCERN**

As shown in the accompanying condensed consolidatedfinancial statements, the Company has sustained net operating losses for the sixmonths ended October 31, 2004 and 2003, and has sustained large accumulateddeficits. In addition, the Company is in search of acquiring a business, orfinding a suitable merger candidate. 

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

The Company’s future success is dependent uponits ability 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 9-     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.Deferred income taxes will be measured based on the tax rates expected to be ineffect when the temporary differences are included in the Company’sconsolidated tax return.  Deferred tax assets and liabilities are recognizedbased on anticipated future tax consequences attributable to differences betweenfinancial statement carrying amounts of assets and liabilities and theirrespective tax bases.At October 31, 2004, deferred tax assets consist ofthe following:  

Net operating loss carryforwards  
 $	
1,423,800 
Less:  valuation allowance
 
(1,423,800)
  $	
       -0- 

At October 31, 2004, the Company had federal netoperating loss carryforwards in the approximate amounts of $4,068,000 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.

**15**   

**NOTE 10-     SUBSEQUENT EVENT**

In November 2004, the Company received a down paymentfrom Marriott, for the memorabilia and consulting fee for the new ChampionsSports Bar Restaurant that is projected to open in the Marriott hotel inLouisville, Kentucky in March 2005.

**16**   

**Item 2. Managements Discussion and Analysis of Financial Condition andResults of Operations**
**       THERE IS SUBSTANTIAL DOUBT ABOUTTHE COMPANY’S ABILITY TO CONTINUE AS A GOING CONCERN DUE TO RECURRINGLOSSES AND WORKING CAPITAL SHORTAGES, WHICH MEANS THAT THE COMPANY MAY NOT BEABLE TO CONTINUE OPERATIONS UNLESS IT OBTAINS ADDITIONAL FUNDING.  THE COMPANYIS ACTIVELY   PURSUING MERGER OR ACQUISITION   CANDIDATES AND OTHER FINANCINGPOSSIBILITIES TO MEET ITS LIQUIDITY NEEDS.  THERE IS NO ASSURANCE THAT THECOMPANY WILL BE ABLE TO STRUCTURE A MERGER OR ACQUISITION, OR RAISE ADDITIONALFINANCING TO CONTINUE OPERATIONS ON TERMS SATISFACTORY TO THE COMPANY**
**Results of Operation**
       For the six months ended October 31,2004, the Company’s net loss from operations was $92,490,  ($0.01) percommon share. For the three month period ended October 31, 2004, theCompany’s net loss from its operations was $28,956, ($0.00) per commonshare
       For the six months ended October 31,2003, the Company’s net loss from operations was $79,905 before preferredstock dividends of $21,580, resulting in a net loss available to commonshareholders of  $101,485. For the three months ended October 31, 2003, theCompany’s net loss from operations was $32,557 before preferred stockdividends of $10,790, resulting in a net loss available for common shareholdersof $43,347.
       The Company’s assets decreasedto $301,084 at October 31, 2004 from $391,919 at April 30, 2004, as a result ofthe net loss for the six-month period.
**Revenues**
       The Company’s total revenuesdecreased by 13.8% for the six-month period and decreased 0.8% for the threemonths period ended October 31, 2004. The Company’s total revenues were$865,232 and   $1,004,075 for the six months ended October 31, 2004 and 2003. Bycomponent, food and beverage sales decreased 13.6% for the comparable six-monthperiods. For the three-month period, food and beverage sales were essentiallythe same for the comparable period. Merchandise and memorabilia sales for thesix months ended October 31, 2004 were $9,384 compared to $12,918 in thecomparable period. The Company did not provide any sports memorabilia toMarriott hotels during the six months ended October 31, 2004.**17**   
**Expenses**
       Cost of food and beverage were 32.5%and 27.9% of food and beverage sales of for the six months ended October 31,2004 and 2003. The increase in the cost of food and beverage is attributed tothe increase in wholesale prices. Subsequently, the Company has increased menuprices to reflect the increased costs.   Restaurant payroll and related costsincreased to 36.0% from 33.8% of related sales for the six months ended October31, 2004 and 2003. Restaurant occupancy costs were 14.7% from 13.1% ofrestaurant sales for the six-month comparable periods.  Other restaurant costswere 19.9% and 18.7% of sales for the comparable periods.  General andadministrative expenses for the Company’s corporate office were $55,018 or6.4% of the Company’s total revenues for the six months ended October 31,2004 compared to $125,328 or 12.5% for the six months ended October 31, 2003.Depreciation and amortization expense represented 2.8% of the Company’stotal revenues during each six-month period ended October 31, 2004 and 2.4% forthe six-month period ended October 31, 2003.
**Liquidity and Capital Resources**
       The Company’s cash position onOctober 31, 2004 was $67,926 compared to $120,116 on April 30, 2004, a decreaseof $52,190. For the six months ended October 31, 2003 the Company’soperating activities used $70,724 in cash.  For the six months ended October 31,2003, the Company replaced aging equipment for the  San Antonio Championsrestaurant for $2,931.
       During the six months ended October31, 2004 and 2003, the Company met its cash needs from its revenues and cashreserves and from cash flow from its San Antonio restaurant. During the sixmonths ended October 31, 2004, an officer of the Company advanced the Company$9,100  to meet its immediate obligations, subsequently, the $9,100 has beenrepaid.
       On October 31, 2004 theCompany’s working capital was a negative $372,975 versus a negative$304,695 on April 30, 2004.   The Company is uncertain that it will be able tomeet its cash requirements for the next twelve months from its cash reserves andfrom its operating activities.
       Stockholder’s equity increasedto $(185,194) as of October 31, 2004 compared to $(92,704) as of April 30, 2004,as a result of the net loss for the six-month period. 
       The Company’s Board of Directorsvoted to defer the annual meeting of shareholders in order to preserve theCompany’s cash position.**18**   

**Other**
       The Company is facing liquidityproblems and is uncertain that it will be able to continue operations without aninfusion of cash.  The Company continues to review and evaluate its operationsand priorities.  The Company is actively   pursuing merger or acquisitioncandidates and other financing possibilities to meet its liquidity needs.  Thereis no assurance that the Company will be able to structure a merger oracquisition, or raise additional financing to continue operations on termssatisfactory to the Company.
**       Furthermore, The Company’sindependent auditor has expressed substantial doubt that the Company cancontinue as a going concern.**
**Subsequent Event**
       In November 2004, the Company receiveda down payment from Marriott, for the memorabilia and consulting fee for the newChampions Sports Bar Restaurant that is projected to open in the Marriott hotelin Louisville, Kentucky in March 2005.
**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**
       This document contains"forward-looking statements" (within the meaning of the Private SecuritiesLitigation Act of 1995) that inherently involve risk and uncertainties.  TheCompany generally uses words such as "believe," "may," "could," "will,""intend,"  "expect,"  "anticipate,"  "plan," and similar expressions to identifyforward-looking statements.  One should not place undue reliance on theseforward-looking statements.  The Company’s actual results could differmaterially from those anticipated in the forward-looking statements for manyunforeseen factors, which may include, but are not limited to, changes ingeneral economic conditions, the ongoing threat of terrorism, customeracceptance of products offered, other general competitive factors, ability tohave access to financing sources on reasonable terms and other risks that aredescribed in this document. Although the Company believes the expectationsreflected in the forward-looking statements are reasonable, they relate only toevents as of the date on which the statements are made, and the Company’sfuture results, levels of activity, performance or achievements may not meetthese expectations.  The Company does not intend to update any of theforward-looking statements after the date of this document to conform thesestatements to actual results or to changes in the Company’s expectations,except as required by law.**19**   

**Item 4.  CONTROLS AND PROCEDURES**
       Disclosure controls are proceduresthat are designed with the objective of ensuring that information required to bedisclosed in Company’s reports under the Securities Exchange Act of 1934,such as this Form 10Q-SB, is reported in accordance with the Securities andExchange Commission’s rules.  Disclosure controls are also designed withthe objective of ensuring that such information is accumulated and communicatedto management, including the Chief Executive Officer and Chief Financial Officeras appropriate to allow timely decisions regarding required disclosure.
       Within the 90 days prior to the dateof this report, the Company carried out an evaluation under  the  supervisionand  with  the participation of the Company’s  management,  including theCompany’s Chief  Executive  Officer  and  Chief  Financial  Officer,   ofthe effectiveness of  the  design  and   operation  of  the  Company’sdisclosure  controls  and  procedures  pursuant  to  the  Securities ExchangeAct Rule  13a-14.  Based upon that evaluation, the Chief Executive Officer andChief Financial Officer concluded that the Company’s disclosure controlsand procedures are effective in timely alerting them to material  informationrelating  to the  Company (including  its  consolidated  subsidiaries)  requiredto be in the Company’s periodic SEC filings. There were no significantchanges in the Company’s internal controls or in other factors that couldsignificantly affect these controls subsequent to the date of theirevaluation.
       Certifications of the Chief ExecutiveOfficer and Chief Financial Officer regarding, among other items, disclosurecontrols and procedures are included immediately after the signature section ofthis Form 10Q-SB.**20**   
**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**
       Form 8-K was filed on October 13, 2004relating to the exercise of a stock option for 8,000,000 common shares by anofficer of the Company.**21**   

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/ James Martell
  
James Martell
  
Chairman, President and Chief Executive Officer
     
/s/ James E. McCollam
  
James E. McCollam
  
Corporate Secretary, Chief Accounting
  
Officer and Controller
 

December 14, 2004**22**   

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  responsiblefor establishing and maintaining  disclosure  controls and procedures (asdefined in Exchange Act Rules 13a-14 and 15d-14) for the registrant andhave:

       (a) Designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated     subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this quarterly report is being      prepared;

       (b)Evaluated the effectiveness of the registrant’s disclosure controls andprocedures  as of a date  within 90 days prior to the  filing  date of thisquarterly report (the "Evaluation Date"); and

       (c)Presented  in  this  quarterly   report  our  conclusions   about  theeffectiveness  of the  disclosure  controls  and  procedures  based  on ourevaluation as of the Evaluation Date;

(5) The registrant’s  other certifying  officers and I have disclosed,based on our most recent evaluation, to the registrant’s auditors and theaudit committee of the  registrant’s  board of directors (or personsperforming  the equivalent functions):

       (a) allsignificant  deficiencies  in the design or  operation of internal      controlswhich could adversely affect the  registrant’s  ability to record,process,  summarize and report  financial data and have  identified for theregistrant’s auditors any material weaknesses in internal controls;and

       (b) anyfraud,  whether or not material,  that involves management or otheremployees  who  have  a  significant  role  in  the  registrant’sinternal      controls; and

**23**   
(6) The  registrant’s  other  certifying  officers and I have  indicatedin this quarterly report whether there were significant  changes in internalcontrols or in other factors that could significantly affect internal controlssubsequent to the date of our most recent  evaluation,  including any correctiveactions with
regard to significant deficiencies and material weaknesses.
Date:  December 14, 2004
By:  
/s/ JAMES MARTELL
  
JAMES MARTELL
  
Chief Executive Officer
 
**24**   

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 areresponsible  for establishing and maintaining  disclosure  controls andprocedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for theregistrant and have:

       (a) Designedsuch disclosure  controls and  procedures  to ensure  that     materialinformation relating to the registrant, including its consolidatedsubsidiaries,  is  made  known  to  us by  others  within  those  entities,particularly during  the period in which  this  quarterly  report is beingprepared;

       (b)Evaluated the effectiveness of the registrant’s disclosure controls andprocedures  as of a date  within 90 days prior to the  filing  date of thisquarterly report (the "Evaluation Date"); and

       (c)Presented  in  this  quarterly   report  our conclusions   about  theeffectiveness  of the  disclosure  controls  and  procedures  based on ourevaluation as of the Evaluation Date;

(5) The registrant’s  other certifying  officers and I have disclosed,based on our most recent evaluation, to the registrant’s auditors and theaudit committee of the  registrant’s  board of directors (or personsperforming  the equivalent functions):

       (a) allsignificant  deficiencies in the design or  operation of internal controls whichcould adversely affect the  registrant’s  ability to record, process,summarize and report  financial data and have  identified for theregistrant’s auditors any material weaknesses in internal controls;and       (b) any fraud, whether or notmaterial, that involves management or other employees who have a significantrole in the registrant’s internal controls, and

**25**   

(6) The  registrant’s  other  certifying  officers and I have  indicatedin this quarterly report whether there were significant  changes in internalcontrols or in other factors that could significantly affect internal controlssubsequent to the date of our most recent  evaluation,  including any correctiveactions with regard to significant deficiencies and material weaknesses.
Date:  December 14, 2004
By:  
/s/ JAMES E. McCOLLAM
  
JAMES E. McCOLLAM
  
Chief Financial Officer
 
**26**   

**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 report of Champions Sports, Inc. (the "Company") on Form10-QSB for the six months ended October 31, 2004 as filed with the Securitiesand Exchange Commission on the date hereof (the "Report"), each of theundersigned, 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 materialrespects, the financial condition and results of operation of the Company. 

Dated: December 14, 2004

By:  

/s/ James M. Martell           

  

  

James M. Martell, Chief Executive 
  
Officer 

Dated: December 14, 2004

By:  

/s/ James E. McCollam      

  

  

James E. McCollam, Chief Financial 
  
Officer 

**27**