SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549




                                   FORM 10-QSB




                                    Mark One
               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    [X ] THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended October 31, 1996

                                       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 its charter)


                               Delaware 52-1401755
                               -------------------
                (State or other jurisdiction of (I.R.S. Employer
                        organization) Identification No.)

              Suite 305, 2500 Wilson Boulevard, 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 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 required to file such reports),  and (2) has been subject to such
filing  requirements  for the past 90 days. Yes x No

     As of December 13, 1996 the Registrant  had a total of 8,500,638  shares of
common stock outstanding.



                                        1

<PAGE>






                             CHAMPIONS SPORTS, Inc.

                                   FORM 10-QSB

                                      INDEX

                                                                      Page

Part I.           Financial Information

                  Item 1.    Financial Statements

                  Consolidated Balance Sheets as of
                    October 31, 1996 (unaudited) and
                    April 30, 1996                                      3

                  Consolidated Statements of Operations:
                    Three months and six months ended
                    October 31, 1996, and  October 31, 1995,
                            (unaudited)                                 4

                  Consolidated Statements of Cash Flows:
                    Six months ended October 31, 1996, and
                    October  31, 1995 (unaudited)                       5

                  Notes to Consolidated Financial Statements            6

                  Item 2.    Management's Discussions and
                           Analysis of Financial Condition
                           and Results of Operations                    7

Part II.          Other Information and Signatures

                  Item 4.    Submission of Matters to a Vote
                             of Security Holders                        9

                  Item 6.    Exhibits and Reports on Form 8-K           9

                  Signatures                                           10






                                                         2

<PAGE>




                     Champions Sports, Inc. and Subsidiaries
                           Consolidated Balance Sheets
<TABLE>
<CAPTION>


                                                                          OCTOBER 31                 APRIL 30
                                                                             1996                      1996

<S>                                                                             <C>                          <C>

                               ASSETS
Current assets
   Cash and cash equivalents                                                     $170,635                    $141,930
   Certificate of deposit                                                          25,080                      25,080
   Accounts receivable - trade                                                     17,503                       4,545
   Inventories                                                                     72,567                      53,160
   Prepaid  expenses                                                               11,344                      20,516
         Total current assets                                                     297,128                     245,231

Property and Equipment
   Furniture and Equipment                                                        516,383                     516,383
   Leasehold improvements                                                         567,312                     567,312
                                                                                1,083,695                   1,083,695
   Accumulated depreciation and amortization                                     (623,456)                   (596,322)
                                                                                  460,239                     487,373
Other assets
   Deposits                                                                        11,052                      11,052


         Total assets                                                            $768,419                    $743,656




                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
   Accounts payable                                                               $46,044                     $53,338
   Dividend payable on preferred stock                                            134,580                     134,580
   Notes payable                                                                   30,607                      31,010
   Deferred revenue                                                                     0                           0
   Other accrued expenses                                                          36,130                      39,303
   Current portion of deferred lease concession                                     4,363                       4,363
         Total current liabilities                                                251,724                     262,594

Deferred lease concession (excluding current portion)                              31,190                      33,371
Note payable, excluding current portion                                                 0                      12,010

                                               

Stockholders' equity
   Preferred stock:
    Series A, 12% convertible cumulative, par value $10 per share,
    preferred as to dividends and liquidation: 650,000 shares
    authorized 56,075 issued and outstanding.                                    560,752                     560,752
    Undesignated, par value $10 per share, 150,000 authorized
    and unissued.                                                                     0                           0

   Common stock, par value $.001 per share,
   50,000,000 shares authorized, 8,500,638
   shares issued and outstanding at
   October 31 and April 30, 1996                                                   8,501                       8,501

    Additional paid-in capital                                                  5,308,112                   5,308,112
    Accumulated deficit                                                        (5,391,860)                 (5,441,684)
          Total stockholders' equity                                              485,505                     435,681

          Total liabilities and stockholders' equity                             $768,419                    $743,656


See notes to consolidated financial statements

</TABLE>



                                                      

<PAGE>



<TABLE>
<CAPTION>


                             CHAMPIONS SPORTS, INC.
                      Consolidated Statement of Operations
                                   (Unaudited)

                                                         Three months ended           Six months ended                            
                                                             October 31                   October 31
                                                           1996       1995            1996          1995 
<S>                                                    <C>           <C>            <C>            <C>                              
Revenue
   Food and beverage sales                              $413,673     $399,410       $845,418       $856,613
   Merchandise                                             4,468        3,503          7,623          7,592
   Licensing fees, royalties and memorabilia              95,985      127,224        195,687        224,328
   Interest income                                           514        1,097            794          1,932
   Other income                                            5,698       13,698         10,568         16,978
                                                        $520,338     $544,932     $1,060,090     $1,107,443


Expense
   Cost of food and beverage sales                       111,911      113,422        224,504        243,486
   Cost of merchandise and memorabilia sales              19,125       13,823         22,124         20,615
   Restaurant payroll and related costs                  136,531      150,086        284,580        312,479
   Restaurant occupancy costs                             54,623       50,222        104,720         93,017
   Other restaurant costs                                 89,461      102,723        183,029        213,102
   General and administrative                             74,196       83,747        162,945        145,382
   Depreciation and amortization                          13,567       17,873         27,134         33,634
   Interest expense                                          884        1,404          1,229          2,420
                                                         500,298      533,300      1,010,266      1,064,135

Net Income                                               $20,040      $11,632        $49,824        $43,308

Net income  per common share                               $0.00        $0.00          $0.01          $0.01

Net income  per common share - assuming
full dilution                                              $0.00        $0.00          $0.00          $0.00

   Weighted average number of common
    shares outstanding during the
    period                                             8,500,638    7,300,638      8,500,638      7,300,638

</TABLE>



                                                     

<PAGE>


<TABLE>
<CAPTION>



                     CHAMPIONS SPORTS, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                Increase (Decrease) in Cash and Cash Equivalents
                      For the six months ended October 31,


                                                                 1996         1995
<S>                                                        <C>           <C>    
Cash flows from operating activities:
   Net income ...........................................   $  49,824    $  43,307
   Adjustments to reconcile net income
   to cash provided by (used ) by operating activities:
    Depreciation and amortization .......................      27,134       33,634
  Changes in asset and liabilities
      Accounts receivable ...............................     (12,958)      34,835
      Inventories .......................................     (19,407)      (9,418)
      Prepaid expenses ..................................       9,172         (826)
      Accounts payable ..................................      (7,294)     (51,350)
      Deferred revenue ..................................           0      (75,000)
      Other accrued expenses ............................      (3,173)      (5,370)
      Deferred lease concessions ........................      (2,181)      (2,181)
        Net cash provided (used) by operating activities       41,117      (32,369)


Cash flows from financing activities:
   Repayment of borrowings ..............................     (12,413)      (9,579)
        Net cash provided (used)  by financing activities     (12,413)      (9,579)


Net increase  (decrease) in cash and cash equivalents ...      28,705      (41,949)

Cash and cash equivalents at beginning of year ..........     141,930      131,102
Cash and cash equivalents at October 31, ................     170,635       89,153

Supplemental disclosure of cash flow information:
  Cash paid during the period  for interest .............       1,229        2,420

See notes to consolidated financial statements


</TABLE>


                                                      

<PAGE>







                             CHAMPIONS SPORTS, INC.

                   Notes to Consolidated Financial Statements

                                October 31, 1996

Summarized Financial Information

Company or group of companies for which report is filed:

CHAMPIONS Sports, Inc. and Subsidiaries

The  consolidated  balance  sheet  as of  October  31,  1996,  the  consolidated
statements of operations and the  consolidated  statements of cash flows for the
three  months and six months  ended  October  31, 1996 and October 31, 1995 have
been prepared by the company,  without audit. In the opinion of management,  all
adjustments  (which  include  only normal  recurring  adjustments)  necessary to
present fairly the financial position, results of operations and changes in cash
flow at October 31, 1996 and for all periods presented have been made.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted. It is suggested that these consolidated  financial statements
be read in conjunction with the financial  statements and notes thereto included
in the Company's  10-KSB as of April 30, 1996. The results of operations for the
period ended  October 31, 1996 are not  necessarily  indicative of the operating
results for the full year.






                                                       

<PAGE>




     Item 2.  Managements  Discussion  and Analysis of Financial  Condition  and
Results of Operations

Results of Operation

         For the six month period ended October 31,1996,  the Company realized a
net profit of $49,824 or $0.00 per  common  share as  compared  to a profit of $
43,308 or $ .01 per common  share for the six month  period  ended  October  31,
1995.  The  Company's  assets  increased  to  $768,419  at October 31, 1996 from
$743,656 at April 30, 1996. For both comparable  periods,  the Company's  profit
was derived from its operations.

Revenues

         The Company's  total revenues were  $1,060,090 for the six months ended
October 31, 1996 versus  $1,107,443  for the six month period ended  October 31,
1995,  a decrease of $47,353 or 4.3%.  By  component,  food and  beverage  sales
decreased  1.3% from  $856,613 to $845,418 for the six months ended  October 31,
1996.  This decrease in food and beverage sales for the same  comparable unit is
attributed  to a decrease  in customer  volume as there were no  material  price
adjustments for menu items.  Merchandise  sales for the six months ended October
31, 1996 and 1996 were less than 1% if the Company's  total  revenues.  Revenues
from licensing fees,  royalties and  memorabilia  decreased by 12.8% to $195,687
for the six months  ended  October  31,  1996 from  $224,328  in the  proceeding
period.  During  each  of the  periods  presented,  one new  Champions  licensed
location opened. One in Jakarta, Indonesia (1995) and Beirut, Lebanon (1996).


Expenses

         Cost of food and  beverage  was  $224,504 or 26.6% of related  sales of
$845,418 for the six months ended October 31, 1996 compared to $243,486 or 28.4%
of related sales for the comparable  six months ended October 31, 1995.  Cost of
merchandise and memorabilia  sales for the six months ended October 31, 1996 was
of $22,124 and $20,615 for the six months  ended  October 31,  1995.  Restaurant
payroll and related costs  decreased to 33.7% or food and beverage sales for the
six months ended October 31, 1996 contrasted to 36.5% of food and beverage sales
during  the  six  months  ended  October  31,1995.  Restaurant  occupancy  costs
escalated by 12.6% from the comparable period in 1995, due to an increase in the
base rent as  prescribed  in the lease  agreement and in increases in the common
area charges and real estate taxes passed on by the landlord.  Other  restaurant
costs decrease by 14.1% to $183,029 from  $213,102.  This decrease is attributed
to reduction in advertising  costs which during the six months ended October 31,
1995  proved not to be  effective.  General and  administrative  expense for the
Company's  corporate  office was $162,945  for the six months ended  October 31,
1996   compared  to  $145,382  for  the  six  months  ended  October  31,  1995.
Depreciation and amortization expense dropped from $33,634 during the six months
ended  October 31, 1996 to $27,134 for the six months ended October 31, 1996, as
some of the Company's equipment, still in use, becomes fully depreciated.




Liquidity and Capital Resources

         The Company's  cash position on October 31, 1996 was $170,635  compared
to $141,930 on April 30, 1996, a increase of $28,705.  On October 31, 1996,  the
Company maintained a certificate of deposit of $25,080,  as well as on April 30,
1996.  For the six months  ended  October 31,  1996,  the  Company's  operations
provided  cash of  $41,117  and used  $12,413 to repay  borrowings.  For the six
months  ended  October  31,  1995,  the  Company  used  $32,369  in cash for its
operating  activities,  repaid  borrowings of $9,579 and decreased other current
liabilities  of $56,720.  During the six months ended October 31, 1996 and 1995,
the Company

                                                      

<PAGE>



met its cash needs from  licensing  fees and from cash flow from its San Antonio
operation. On October 31, 1996, the Company's working capital was $45,404 versus
a negative $17,363 on April 30, 1996. The Company  anticipates that the revenues
generated from its location in San Antonio, Texas along with licensing,  royalty
and memorabilia revenues will be sufficient to met its operating obligations for
the next six months.

         Stockholder's  equity  increased  to  $485,505  on of October  31, 1996
compared to $435,681 as of April 30, 1996, as a result of the net profit for the
six month period.


Other Events

     On October 4, 1996, Champions Sports, Inc. signed a joint venture letter of
agreement  with  Business  Expansion  Capital  Corporation,   a  privately  held
corporation,  to  assist  Champions  Sports,  Inc.  in  actively  searching  and
selection of merger or acquisitions  candidate(s).  Business  Expansion  Capital
Corporation is owned by George A. Naddaff.  The term of the agreement is for two
years.  Champions  Sports,  Inc  issued  8,500,000  performance  based  warrants
exercisable at $0.11 per share,  subject to Champions Sports, Inc. approval of a
successful  acquisition  or merger.  Mr. George A. Naddaff has been appointed to
the Board of Directors of Champions Sports, Inc.

Subsequent Events


         On November 6, 1996,  the Company's  Board of Directors  voted to defer
payment of  $67,290,  the  annual  dividend  on the  Series A, 12%  convertible,
cumulative  Preferred  Stock,  par value $10, of which there were 56,075  shares
outstanding at October 31, 1996.




                                                         

<PAGE>





Part II.   Other Information

Item 4.  Submission of Matters to A Vote of Security Holders

         The were no matters  submitted to a vote of Security Holders during the
three month period ended October 31, 1996



Item 6.  Exhibits and Reports on Form 8-K

         On October 4, 1996, the Company filed with the Commission  Form 8-K, in
which the Company  disclosed a joint  venture  letter of  agreement  between the
Company and Business Expansion Capital Corporation and the issuance of 8,500,000
performance based warrants.

                                                    

<PAGE>







                                                    SIGNATURES

Pursuant to the requirements of Securities  Exchange Act of 1934, the registrant
has duly  caused  this  report  to be signed  on its  behalf by the  undersigned
thereunto duly authorized.

                                               CHAMPIONS Sports, Inc.




                                              __/s/ James Martell______

                                               James Martell
                                               Chairman, President and 
                                               Chief Executive Officer



                                               __/s/ James E. McCollam__

                                               James E. McCollam
                                               Controller and 
                                               Chief Accounting Officer


December 13, 1996