UNITED STATES
                       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 period ended March 31, 2004

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
    EXCHANGE ACT OF 1934
                     For the transition period from __ to __

                           Commission File No. 0-22744


                           VIKING CAPITAL GROUP, INC.
                           --------------------------
        (Exact name of small business issuer as specified in its charter)


                  Utah                                    87-0442090
    -------------------------------          ---------------------------------
    (State or other jurisdiction of          (IRS Employer Identification No.)
     incorporation or organization)

        Two Lincoln Centre, Suite 300, 5420 LBJ FWY, Dallas, Texas 75240
        ----------------------------------------------------------------
                    (Address of principal executive offices)

                                 (972) 386-9996
                           ---------------------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 April 30, 2004,  approximately  59,987,251 shares of Common Stock (Class A
Common) of the issuer were outstanding.  As of April 30, 2004, 100,000 shares of
Class B Common Stock of the issuer were outstanding.


<PAGE>

                   VIKING CAPITAL GROUP, INC. AND SUBSIDIARIES


                                    CONTENTS




                                                                            PAGE
                                                                            ----

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

     Consolidated Balance Sheets at March 31, 2004 (Unaudited) and
         December 31, 2003.....................................................3

     Consolidated Statements of Operations (Unaudited) for the three
         months ended March 31, 2004 and 2003..................................5

     Consolidated Statements of Cash Flows (Unaudited) for the three
         months ended March 31, 2004 and 2003..................................6

     Notes to Consolidated Financial Statements................................8

Item 2. Management's Discussion and Analysis or Plan of Operations............13

Item 3. Controls and Procedures...............................................16


PART II - OTHER INFORMATION

Item 2.  Changes in Securities................................................17

Item 5. Other Information.....................................................17

Item 6.  Exhibits and Reports on Form 8-K.....................................20

SIGNATURES....................................................................21

EXHIBITS......................................................................22



                                                                               2
<PAGE>
<TABLE>
<CAPTION>

                   VIKING CAPITAL GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS
                                     ------

                                                                               (unaudited)
                                                                                March 31,       December 31,
                                                                                   2004             2003
                                                                              -------------    -------------
                                                                                      (in thousands)
<S>                                                                           <C>              <C>
CURRENT ASSETS
   Cash and cash equivalents                                                  $           4    $           4
   Prepaid expenses                                                                      28               41
   Notes receivable and accrued interest, (including related
     party amount of $123 and $121 at March 31, 2004 (unaudited)
     and December 31, 2003, respectively), net of allowance of
     $428 at March 31, 2004 (unaudited) and December 31, 2003, respectively             123              121
                                                                              -------------    -------------

        Total current assets                                                            155              166

PROPERTY AND EQUIPMENT
   Computer equipment                                                                   157              157
   Furniture and office equipment                                                        21               21
                                                                              -------------    -------------
                                                                                        178              178

   Accumulated depreciation and amortization                                           (174)            (174)
                                                                              -------------    -------------

        Net property and equipment                                                        4                4

CAPITALIZED SOFTWARE, net of accumulated amortization
  of  $ - at March 31, 2004 (unaudited) and December 31, 2003                            50               50

LONG TERM NOTE RECEIVABLE, net of allowance
  of $6,500 at March 31, 2004 (unaudited) and December 31, 2003                          --               --

OTHER ASSETS                                                                              4                4
                                                                              -------------    -------------

TOTAL ASSETS                                                                  $         213    $         224
                                                                              =============    =============

</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                               3
<PAGE>
<TABLE>
<CAPTION>

                   VIKING CAPITAL GROUP, INC. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS - Continued


                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                      -------------------------------------


                                                                                   (unaudited)
                                                                                    March 31,     December 31,
                                                                                      2004            2003
                                                                                  ------------    ------------
                                                                                         (in thousands)
<S>                                                                               <C>             <C>

CURRENT LIABILITIES
  Current  maturities of long-term debt and other current debts
     (including $269 and $219 due to related parties at
     March 31, 2004 (unaudited) and December 31, 2003, respectively)              $        870    $        810
  Accounts payable                                                                          69              75
  Accrued officers' salaryand payroll taxes                                              1,589           1,588
  Other accrued expenses (including $46 and $39 due to related
     parties at March 31, 2004 (unaudited) and December 31, 2003, respectively)             71              75
                                                                                  ------------    ------------

             Total current liabilities                                                   2,599           2,548

LONG-TERM DEBT, related party, less current portion                                        500             500
                                                                                  ------------    ------------

             Total liabilities                                                           3,099           3,048

NON-CONTROLLING INTEREST                                                                    --              --

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
  Preferred stock $1.00 par value; 50,000,000 shares authorized:
     Series 2001 Callable Preferred Stock $1.00 par value; 5,000,000
        shares authorized, -0- shares issued and outstanding at
        March 31, 2004 (unaudited) and December 31, 2003                                    --              --
  Common stock $0.001 par value; 150,000,000 shares authorized,
     59,937,251 and 58,762,251 shares issued and outstanding at
     March 31, 2004 (unaudited) and December 31, 2003, respectively                         60              59
  Common stock Class B $0.001 par value; 100,000 shares authorized,
     issued and outstanding                                                                 --              --
  Additional paid-in capital                                                            33,926          33,880
  Accumulated deficit                                                                  (36,872)        (36,763)
                                                                                  ------------    ------------

             Total stockholders' deficit                                                (2,886)         (2,824)
                                                                                  ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                       $        213    $        224
                                                                                  ============    ============

</TABLE>




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                               4
<PAGE>
<TABLE>
<CAPTION>

                   VIKING CAPITAL GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                               (expressed in US $)
                                   (unaudited)

                                                                                  Three Months Ended
                                                                                  ------------------
                                                                                March 31,     March 31,
                                                                                  2004          2003
                                                                               ----------    ----------
                                                                       (in thousands, except earnings per share)
<S>                                                                            <C>           <C>

REVENUES
     Rental income                                                             $       --    $      286
     Sales of real estate, net of sales taxes                                          --            --
                                                                               ----------    ----------

         Total revenues                                                                --           286

COST OF REVENUE
     Cost of real estate sales                                                         --            --
     Selling expenses                                                                  --            (7)
                                                                               ----------    ----------

         Total cost of revenue                                                         --            (7)
                                                                               ----------    ----------

GROSS PROFIT                                                                           --           279

GENERAL AND ADMINISTRATIVE EXPENSES                                                   (74)         (428)
                                                                               ----------    ----------

Loss from operations                                                                  (74)         (149)

OTHER INCOME (EXPENSE)
     Interest income (including $2 and $41 from related parties)                        2            83
     Interest expense (including $22 and $9 to related parties)                       (38)         (268)
     Loss from equity accounted affiliates                                             --            (5)
                                                                               ----------    ----------

         Total other income (expense)                                                 (36)         (190)
                                                                               ----------    ----------

         Loss before provision for income taxes and non-controlling interest         (110)         (339)

         Income tax benefit                                                            --            34
                                                                               ----------    ----------

         Loss before non-controlling interest                                        (110)         (305)

NON-CONTROLLING INTEREST                                                               --            --
                                                                               ----------    ----------

NET LOSS                                                                       $     (110)   $     (305)
                                                                               ==========    ==========

BASIC AND DILUTED LOSS PER SHARE                                               $    (0.00)   $    (0.01)
                                                                               ==========    ==========

WEIGHTED-AVERAGE NUMBER OF SHARES
     OUTSTANDING - BASIC AND DILUTED                                               59,395        57,020
                                                                               ==========    ==========

</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                               5
<PAGE>
<TABLE>
<CAPTION>

                   VIKING CAPITAL GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (expressed in US $)
                                   (unaudited)

                                                                                              Three Months Ended
                                                                                              ------------------
                                                                                            March 31,      March 31,
                                                                                              2004           2003
                                                                                          -----------    -----------
                                                                                                (in thousands)
<S>                                                                                       <C>            <C>

CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                                             $      (110)   $      (305)
     Non cash charges included in operations
         Depreciation and amortization                                                             --              176
         Common stock issued for services                                                          --              6
         Expenses paid in common stock                                                             --             31
         Expenses paid with promissory note                                                        --             43
         Loss from equity accounted  affiliates                                                    --              5
     Changes in assets and liabilities (net of effect of divestiture of Fei Yun Viking)
         Decrease in mortgage loans receivable                                                     --             84
         Increase in accrued interest receivable                                                   (2)           (84)
         Decrease in other assets and prepaid expenses                                             13             13
         Decrease in accounts payable                                                              (6)          (111)
         Increase(decrease) in accrued officers' salary and
            payroll taxes                                                                           1            (16)
         Increase in other accrued expenses                                                        --            135
         Increase(decrease) in other payables including interest payable                           16           (129)
                                                                                          -----------    -----------

Net cash used in operating activities                                                             (88)          (152)

CASH FLOWS FROM INVESTING ACTIVITIES

     Net advances to related parties                                                               --            (44)
     Decrease in cash balances due to divestiture of Fei Yun Viking                                --         (1,379)
                                                                                          -----------    -----------

Net cash used in investing activities                                                              --         (1,423)


</TABLE>

                                 - Continued -


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                               6
<PAGE>
<TABLE>
<CAPTION>

                   VIKING CAPITAL GROUP, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
                               (expressed in US $)
                                   (unaudited)

                                                                                               Three Months Ended
                                                                                               ------------------
                                                                                             March 31,      March 31,
                                                                                               2004           2003
                                                                                           -----------    -----------
                                                                                                 (in thousands)
<S>                                                                                        <C>            <C>

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from notes payable                                                                    16            130
     Proceeds from notes payable - related party                                                    50             38
     Repayments of notes payable                                                                   (26)            --
     Repayments of notes payable - related party                                                    --            (20)
     Proceeds from sale of common stock                                                             48             10
                                                                                           -----------    -----------

Net cash provided by financing activities                                                           88            158
                                                                                           -----------    -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                                           --         (1,417)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                     4          1,423
                                                                                           -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                 $         4    $         6
                                                                                           ===========    ===========

SUPPLEMENTAL DISCLOSURES

     Cash flow information:

         Interest paid                                                                     $         6    $       147

     Non-cash financing activities:

         Common stock issued for:
             Payment of services                                                                    --              6
             Payment of accounts payable                                                            --             31

         Common stock received for divestiture of Fei Yun Viking (7.0 million shares)               --           (236)
         Common stock received for divestiture of Wuxi Viking (1.4 million shares)                  --            604

         Preferred stock received for divestiture of Fei Yun Viking (1.8 million shares)            --          1,800

         Long term note receivable received in connection
              with divestiture of Fei Yun Viking                                                    --          6,500

         Notes payable issued for:
              Payment of expenses                                                                   --             43
              Payment of accrued interest                                                           21              4


</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                               7
<PAGE>

                           VIKING CAPITAL GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - BASIS OF PRESENTATION

The consolidated  interim  financial  statements  include the accounts of Viking
Capital  Group,  Inc.,  its  consolidated  subsidiaries,  and  equity  accounted
investments (collectively the "Company").

The consolidated interim financial statements included herein have been prepared
by the Company,  without  audit,  pursuant to the rules and  regulations  of the
Securities and Exchange Commission (the "SEC"). Certain information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with  accounting  principals  generally  accepted in the United States have been
condensed  or omitted  pursuant  to such  rules and  regulations,  although  the
Company  believes  that the  disclosures  are  adequate to make the  information
presented not  misleading.  It is suggested that these  financial  statements be
read in conjunction with the consolidated financial statements and related notes
included in the Company's  Form 10-KSB as of and for the year ended December 31,
2003.

In the opinion of  management,  the  unaudited  interim  consolidated  financial
statements of the Company contain all adjustments, consisting only of those of a
normal  recurring  nature,  necessary to present fairly the Company's  financial
position  and the  results  of its  operations  and cash  flows for the  periods
presented. The preparation of financial statements in accordance with accounting
principals  generally accepted in the United States requires  management to make
estimates and  assumptions.  Such estimates and assumptions  affect the reported
amounts of assets and  liabilities,  as well as the  disclosures  of  contingent
assets and liabilities at the date of the financial statements, and the reported
amounts of revenue and expenses  during the  reporting  period.  Actual  results
could differ from those estimates.

NOTE B - STOCK-BASED COMPENSATION

The Company accounts for stock-based  employee  compensation using the intrinsic
value-based  method  prescribed by Accounting  Principles  Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and related interpretations. As such,
compensation  expense is recorded on the date of grant of a stock  option to the
extent the  current  market  price of the  underlying  stock  exceeds the option
exercise price. The Company did not record any  compensation  expense related to
stock  options  granted to employees  during the three month periods ended March
31, 2004 and 2003.  Had the Company  determined  compensation  based on the fair
value at the grant  date for its stock  options  under  Statement  of  Financial
Accounting Standards ("SFAS") No.123, "Accounting for Stock-Based Compensation,"
as  amended  by SFAS  No.  148,  "Accounting  For  Stock  Based  Compensation  -
Transition and  Disclosures - and Amendment of FASB Statement No. 123," net loss
and loss per share would have increased as shown in the table below.

                                                   Three Months Ended
                                          ------------------------------------
                                              March 31,          March 31,
                                                2004               2003
                                                ----               ----
                                                     (in thousands)

Net loss attributable to common
stockholders, as reported                     $  (110)           $  (305)
Add: Stock based employee compensation
expense included in reported net loss               -                  -
Deduct: Stock-based employee
compensation expense determined under
fair value based method                            (8)               (25)
                                              --------           --------
Proforma net loss                             $  (118)           $  (330)
                                              ========           ========
Weighted average shares outstanding,
basic and diluted                               59,395             57,020
Net loss per share as reported                $ (0.00)           $ (0.01)
                                              ========           ========
Proforma net loss per share                   $ (0.00)           $ (0.01)
                                              ========           ========




                                                                               8
<PAGE>

                           VIKING CAPITAL GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE C - OPERATIONS DISPOSED OF

Effective  January  31,  2003,  pursuant  to a Stock  and  Note  Receivable  For
Ownership  Agreement  dated January 31, 2003, the Company sold its 96% ownership
of Beijing Fei Yun Viking Enterprises Company,  Ltd. (Fei Yun Viking) to Beijing
Fei Yun Property Development Company, Ltd. (Fei Yun Property).  Among the assets
included in Fei Yun Viking is a 60% ownership of a  commercial/residential  real
estate  company  (Golden  Horse/Sunshine  Plaza),  40%  ownership  of a toll-way
construction  and operating  company,  100% of the operations  and  distribution
system of a chemical  exchange  company,  and two notes  receivable plus accrued
interest.  In exchange for the 96% ownership of Fei Yun Viking,  Viking  Capital
Group,  Inc.  received 1.8 million shares of its Series 2001 Callable  Preferred
Shares  (originally  issued  and  recorded  at $18  million),  7,000,000  common
restricted  shares  of  Viking  Capital  Group,  Inc.  and a $6.5  million  note
receivable due from Hebei  Kangshun  Feiyun  Organic Waste  Processing  Company,
Ltd.(Organic  Waste Company).  The note is collateralized by, and is convertible
into, a 40% ownership  interest in Organic Waste Company.  During the year 2003,
the Company recorded a $6.5 allowance for doubtful note receivable pertaining to
this note.  See Note K for more  information.  The  Company  also  received  7.5
million  common  shares of the Company that were held as treasury  shares at Fei
Yun Viking.

Effective March 28, 2003, the Company sold its 25% equity ownership  position in
Wuxi Viking Garment Co., Ltd. (Wuxi).  Viking Capital Group,  Inc.  received 1.4
million common  restricted  shares of Viking Capital Group, Inc. in exchange for
its 25% equity ownership position in Wuxi.

Unaudited pro-forma  financial  information for the three months ended March 31,
2003, as though the dispositions of Beijing Fei Yun Viking Enterprises  Company,
Ltd. and Wuxi Viking Garments  Company,  Ltd. had occurred on January 1, 2003 is
as follows (in thousands):

                                                     Three months ended
                                                     ------------------
                                                          March 31,
                                                            2003

     Revenues                                          $           -
                                                       =============
     Net loss                                          $       (175)
                                                       =============

     Net loss per share:
       Basic and diluted                               $      (0.00)
                                                       =============


NOTE D - SHORT TERM PROMISSORY NOTES PAYABLE

During the quarter ended March 31, 2004,  the Company  entered into new notes or
renewed  existing  notes,  some of which are  convertible  to common  restricted
stock,  totaling $421,095.  The total consists of $65,700 of new notes, $334,542
of renewed  notes and $20,853 of accrued  interest  that was added to principal.
All outstanding  short term promissory notes at March 31, 2004 mature within one
year or on demand,  bear interest ranging from 10% to 12% (except for $43,000 of
notes that bear no interest)  and are secured by the assets and net worth of the
Company  (except for a $100,000  note which is secured by 200,000  free  trading
shares owned by directors and shareholders of the Company). Interest payments on
these notes are due quarterly, semi-annually, annually or at the end of the term
of the note.

During the quarter ended March 31, 2004,  promissory  note principal and accrued
interest cash repayments were made totaling $26,000 and $6,402, respectively.

NOTE E - LONG-TERM PROMISSORY NOTE PAYABLE

During the quarter  ended June 30,  2003,  the Company  entered  into a $500,000
long-term  promissory  note  payable  with an existing  shareholder  and related
party.  The note  bears  interest  at 12% per annum and  matures  in ten  years.
Interest payments are to be made  semi-annually  with the exception of the first
year's  interest  which is paid in  advance.  Five equal  principal  payments of
$100,000 each are to be paid annually beginning on the sixth anniversary date of
the note. The note is collateralized by the assets and net worth of the Company.

                                                                               9
<PAGE>

                           VIKING CAPITAL GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE F - RELATED PARTY TRANSACTIONS

During the quarter ended March 31, 2004, the Company entered into $50,000 of new
short term promissory  notes with a related party.  The notes are due within one
year and bear  interest at 12% per year.  The Company  also renewed a short term
promissory note with a related party totaling $50,000.  Short term notes payable
with related parties at March 31, 2004 totaled $269,005 plus accrued interest of
$46,285.  All of these  notes are  secured  by the  assets  and net worth of the
Company.

During the quarter ended March 31, 2004, there were no new notes receivable with
related  parties and no repayments  were made. As of March 31, 2004, the balance
of notes  receivable from related parties was $103,821 plus accrued  interest of
$18,838.

During the current quarter,  a related party purchased 625,000 common restricted
shares of the Company for $25,000 or $0.04 per share.

NOTE G - SHAREHOLDERS' EQUITY

During the quarter ended March 31, 2004, the Company issued  1,175,000 shares of
common  restricted  stock  for cash of  $47,500  including  625,000  shares to a
related party for cash of $25,000.

NOTE H - GOING CONCERN AND OTHER INFORMATION

The consolidated  financial statements have been prepared on the assumption that
the Company  will  continue  as a going  concern.  The  Company has  experienced
recurring  losses from operations and negative cash flows from operations  since
its  inception.  Additionally,  as  further  described  in Note C,  the  Company
disposed of its primary revenue  generating  assets effective during the quarter
ended  March  31,  2003.  Lastly,  at  March  31,  2004  the  Company's  current
liabilities  significantly  exceeded its current liquid assets. These conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.

The  Company  continues  to  incur  expenses  relating  to  corporate  overhead,
considering acquisitions and other business opportunities.  As further described
in Note C, the Company  disposed of its foreign  operations  on January 31, 2003
and March 28, 2003. These disposals significantly reduced the corporate overhead
expenses of the  Company;  however,  the Company  has been and  continues  to be
dependent  upon outside  financing in the form of debt and equity to perform its
business  development  activities and cover current overhead expenses.  Although
the Company has been  successful at raising  capital in the past, if the Company
is unable to raise  capital,  it may be required to sell assets or may be unable
to continue in business.  Such actions could have a material  adverse  effect on
the Company's business and operations.

The  Company  also  intends  to  obtain  additional  funds in order to  complete
acquisitions and to develop other businesses in the U.S and abroad. This capital
may come from additional debt or equity issuances.  The Company currently has no
material financing commitments.

The consolidated  financial statements do not include any adjustments to reflect
the  possible  effects on the  recoverability  and  classification  of assets or
classification of liabilities which may result from the inability of the Company
to continue as a going concern.

NOTE I - SEGMENTS

During the quarter ended March 31, 2003,  the Company sold all of its reportable
segments but did recognize revenue and expenses for such segments prior to their
sale. The Company's  operations were  classified into four principal  reportable
segments  for  the  first  quarter  of  2003;   real  estate,   chemical  sales,
construction,  and  garment  manufacturing.  All  businesses  were  located  and
operated in the People's  Republic of China.  The real estate  segment owned and
operated a commercial and residential property.  The chemical segment traded and
transported  chemical  products.  The  construction  segment was  constructing a
highway in the Jiangsu  Province of the People's  Republic of China. The garment
manufacturing  segment  manufactured  clothing  specifically  focusing on export
garments.


                                                                              10
<PAGE>
<TABLE>
<CAPTION>

                           VIKING CAPITAL GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE I -   SEGMENTS (Continued)

The following  table presents  information  about the four segments  through the
dates of disposition (in thousands):

                                         Chemical                        Garment
                           Real Estate     Sales     Construction     Manufacturing    Adjustment     Consolidated
                           -----------     -----     ------------     -------------    ----------     ------------
<S>                        <C>           <C>         <C>              <C>              <C>            <C>

 Revenues from
   external customers      $      286    $      -     $        -       $        -      $        -      $      286
 Interest income                    -           -              -                -              83              83
 Interest expense                (240)          -              -                -             (28)           (268)
 Depreciation and
   amortization                  (176)          -              -                -               -            (176)
 Income (loss) from
   equity accounted
   investment                       -           -            (16)              11               -              (5)
 Income tax benefit                34           -              -                -               -              34
 Net income (loss)               (128)         (1)           (16)              11            (171)           (305)

</TABLE>

The real estate, chemical sales, construction and garment manufacturing segments
represent  the  foreign  operations  in the  People's  Republic  of  China.  The
adjustments  represent the corporate  expenses to reconcile  segment  amounts to
consolidated balances for the quarter ended March 31, 2003.

NOTE J - EMPLOYEE BENEFIT PLAN

An Employee  Benefit  Plan (Plan) was created in 1995 and has since been amended
and updated to designate a specified  number of shares  issuable under the Plan.
The shares  authorized  under the Plan are registered under Form S-8. During the
quarter  ended March 31,  2003,  the Plan was  modified to  authorize a total of
10,000,000 common shares under the Plan.  Accordingly,  an additional  5,750,000
shares were  registered  under Form S-8 on March 25, 2003. The Plan's purpose is
to make  available  free trading  shares to officers,  directors and  employees,
including  consultants and others,  in conformity with the rules and regulations
established for Form S-8 shares, in payment or recognition of their services and
contributions to the success of the Company.  Issuance of these shares is at the
discretion  of the Board of Directors  and/or a  Compensation  Committee.  These
shares may also be issued in conjunction with the exercise of options.

NOTE K - LONG-TERM NOTE RECEIVABLE

As part of the disposition of Fei Yun on January 31, 2003, the Company  received
a $6.5  million  note  receivable  from  Hebei  Kangshun  Feiyun  Organic  Waste
Processing Company,  Ltd. ("Organic Waste Company").  This note receivable bears
interest at 4% to be received annually. One-half of the principal balance of the
note is due five years from the date of the note with the remaining  one-half of
the receivable due ten years from the date of the note. This note is effectively
collateralized  by a 40% ownership  interest in the Organic Waste  Company.  The
Company  did not  receive  the  first  annual  interest  payment  on this  note.
Accordingly,  bad debt expense of $237,000 was recorded during the quarter ended
December  31, 2003 to provide for the  potential  non-receipt  of this  interest
income recognized during 2003.  Additionally,  at December 31, 2003, the Company
recorded  an  allowance  for  doubtful  receivables  of  $6,500,000  due  to the
uncertainty of its ability to collect the amount due or to obtain its collateral
interest in the underlying operating company.  Since the Company did not collect
the interest  payment on the long-term  note  receivable as required by the note
agreement,  no further  interest income will be recognized  related to this note
receivable after December 31, 2003, unless received.

NOTE L - PREPAID EXPENSES

The  Company  prepaid  one year of  interest  totaling  $60,000 on the  $500,000
long-term  promissory note payable with a related party during the quarter ended
June 30, 2003. This balance will be reduced by the accrued  interest  expense on
the note each quarter. During the quarter ended March 31, 2004, the Company also
prepaid audit fees of $15,750

                                                                              11
<PAGE>

                           VIKING CAPITAL GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE L -   PREPAID EXPENSES (Continued)

relating to the audit of the prior year's financial statements.

NOTE M - INCOME TAXES

Deferred income taxes are determined using the asset and liability method, under
which deferred tax assets and  liabilities  are calculated  based on differences
between financial accounting and tax bases of assets and liabilities.  Valuation
allowances are  established  when necessary to reduce deferred tax assets to the
amount expected to be realized.  Income tax expense or benefit is the payable or
refund for the period plus or minus the change during the period in deferred tax
assets and liabilities.

No income tax benefit has been recorded  (other than $34,000  during the quarter
ended March 31, 2003, which relates to the foreign operations that were disposed
of during the first quarter of 2003) because the  realization  of the benefit of
the Company's net operating  loss  carryforwards  and other  deferred tax assets
appear uncertain.  Accordingly,  a valuation allowance equal to the net deferred
tax asset is recorded.


NOTE N - NON-CONTROLLING INTEREST

Non-controlling  interest  of $ -0- at March  31,  2004 and  December  31,  2003
represents the cumulative non-controlling interests in Viking's ownership in Fei
Yun and Fei Yun's minority portion of its less than 100% owned subsidiaries. For
the quarter ended March 31, 2003, the losses attributable to the non-controlling
interest  were  greater  than the  investment  by the  non-controlling  parties.
Accordingly,  the  non-controlling  interest in the balance sheet was reduced to
zero with the excess  losses  absorbed by the  Company.  Fei Yun Viking was sold
during the quarter ended March 31, 2003.





               (The remainder of this page is blank intentionally)








                                                                              12
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


Forward Looking Statements

This  report  contains  certain  "forward-looking"  statements  as such  term is
defined in the Private Securities  Litigation Reform Act of 1995 and information
relating to the Company  and its  subsidiaries  that are based on the beliefs of
the  Company's  management  as  well  as  assumptions  made  by and  information
currently available to the Company's  management.  When used in this report, the
words "anticipate,"  "believe,"  "estimate,"  "expect",  "desire",  "intent" and
"intend" and words or phrases of similar  import,  as they relate to the Company
or  its   subsidiaries   or  Company   management,   are  intended  to  identify
forward-looking   statements.   Such  statements   reflect  the  current  risks,
uncertainties  and  assumptions  related to certain factors  including,  without
limitations, both inside and outside the U.S., changes or anticipated changes in
regulatory  environments,  competitive  factors,  general  economic  conditions,
customer  relations,  relationships  with vendors,  Viking and its subsidiaries'
ability to recruit and retain skilled personnel,  the interest rate environment,
governmental  regulation and supervision,  international  relations  between the
U.S.    and   foreign    countries,    seasonality,    distribution    networks,
telecommunication networks, product introductions and acceptance,  technological
change,  changes  in  industry  practices,   timely  completion  and  successful
integration of acquisitions,  economic,  social and political  conditions in the
countries in which  Viking,  its customers or its  suppliers  operate  including
security risks,  possible  disruptions in the communication  and  transportation
networks and  fluctuations in foreign currency  exchange rates,  one-time events
and other factors described herein and in other filings made by the Company with
the Securities and Exchange Commission.  Based upon changing conditions,  should
any one or more of these  risks or  uncertainties  materialize,  or  should  any
underlying assumptions prove incorrect,  actual results may vary materially from
those  described  herein  as  anticipated,   believed,  estimated,  expected  or
intended.   The  Company  does  not  intend  to  update  these   forward-looking
statements.

Introduction

The following  discussions  should be read in conjunction  with the consolidated
financial  statements  and related notes and the other  information  included in
this report. The Company's report on Form 10-KSB for the year ended December 31,
2003  should  also  be  read  in  conjunction  with  this  current  report.  The
discussions below include both a Plan Of Operations  section and a Discussion Of
Operations section.  This is due to the fact that the Company sold its operating
entities  in  China  during  the  first  quarter  of 2003  and is not  currently
generating revenues.  The Plan Of Operations section is intended to give insight
into the current and future actions of the Company. The Discussion Of Operations
section is intended to convey current and historical financial information.

Plan Of Operations

Whereas  the  Company  previously  had  all of its  operations  in  China  (with
consolidated assets of $112 million at December 31, 2002) which were sold during
the first quarter of 2003, the Company is currently seeking  acquisition targets
and fee income clients in the United States.  The Company's  current focus is on
the food and beverage industry although other industries have not been ruled out
such as the gas and oil pipeline supply industry discussed later. The Company is
focusing  on the food and  beverage  industry  because  of  expertise  available
through  two  directors  who  each  have  over 30 years  experience  in the food
industry.  More specifically,  the Company is selecting targets primarily in the
cookie & cracker and breading & batter niches.  Generally speaking,  the Company
intends to stay in the "dry ingredient blending" market space, which may include
pet  food,  and is not  intending  to  focus on fresh  produce,  meat,  or dairy
products. The food industry is a mature industry and is highly competitive.  The
Company desires to become the dominant independent source of production capacity
for its product types in the United States.  The Company announced its intent to
enter into the food and  beverage  industry in its third  quarter 2003 report on
Form 10-QSB and on December 5, 2003 issued a press  release  disclosing a letter
of intent to purchase Texamerican Food Marketing,  Inc.(Texamerican),  a company
owned and  operated  by Robin M.  Sandifer  and his wife.  R. M.  Sandifer  is a
director of the  Company.  Texamerican  creates and markets  breading and batter
solutions.  The  acquisition  is active and  pending  financing.  The  Company's
interest  in this  market is due to  expected  growth  opportunities  within new
product  niches to  accommodate  the  "low-carb"  trend and expected  consistent
future cash flows due to the  expectation  of  multi-year  production  contracts
already  in  place  at  targets  or  multi-year  production  contracts  that are
anticipated  to be  negotiated  after the  purchase of targets.  The gas and oil
pipeline  supply  niche is a second focus of the Company.  This  business  niche
provides  the  equipment  and  supplies   necessary  for  the  construction  and
maintenance of gas and oil pipelines,  excluding the pipe itself. Competition in
the niche  appears to be based  primarily  on service,  as it appears  that core
customers  remain very loyal to their  suppliers.  The industry  fluctuates with
relatively  high and/or low  periods of new  construction  activities  but has a
stable repair and

                                                                              13
<PAGE>

maintenance  market.  The  Company's  interest in this market is due to expected
high profit margins,  opportunity for  consolidation  in the niche, and expected
increases in natural gas pipeline  construction  in the future.  A third area of
interest,  but not a focus,  is to bring  potential fee based clients to Viking.
Such clients would either desire to retain Viking to act as an acquisition  team
and manage a life insurance company  acquisition on their behalf or such clients
may want to  invest  in Viking  for the  purpose  of  acquiring  life  insurance
companies that Viking would own.

Funding for acquisitions is expected to come from  institutional  lenders and/or
institutional  equity  investors,  other assets the Company owns, and the assets
and/or  cash  flow of  targeted  companies.  Targets  will be  considered  based
primarily  upon their sales and profits with little  weight given to asset size.
Therefore,  no industry  will be excluded in the  Company's  efforts to increase
shareholder  wealth.  Capital  raised will be for  acquisitions,  fees and costs
associated with acquisitions, working capital and potential debt reduction.

Potential  increases to the Viking Capital Group, Inc. U.S.  administrative  and
management level (Parent  Operations or Parent Company Level) cash needs include
hiring  additional  employees in the financial and  administrative  departments,
hiring additional executives  associated with acquisitions,  potential increases
in professional  fees associated  with normal  recurring  audits and reviews and
costs associated with the acquisition of targeted companies  including,  but not
limited to, legal and audit fees,  investment  banker and advisor fees and other
related  professional or consulting fees and increasing debt levels.  Management
believes  that it may be able to continue to raise funds from private  investors
for its  cash  needs  for  Parent  Operations.  The  Company  expects  to  raise
significantly  larger  amounts  of capital  for the  purposes  described  above,
including working capital. However, there can be no degree of assurance that the
Company can  continue to raise  capital  from  private  investors or that it can
raise  funds  from any other  sources  in large or small  amounts.  See also the
Liquidity and Capital Resources section below.

Discussion of Operations

The following  discussion  should be read in conjunction  with the  consolidated
financial  statements  and related notes and the other  information  included in
this report.  It should be noted at the outset that the Company's assets and all
of its  revenues  relating to China were sold during the first  quarter of 2003.
Beijing Fei Yun Viking Enterprises Company, Ltd., 96% owned by Viking, including
its 60% owned subsidiary Golden Horse(Fei Yun Viking),  was sold for 1.8 million
shares of Viking's Series 2001 Callable  Preferred Shares  (originally issued at
$18 million),  7,000,000 common  restricted  shares of Viking and a $6.5 million
note receivable due from Hebei Kangshun Feiyun Organic Waste Processing Company,
Ltd.(Organic  Waste Company).  This note is  collateralized  by, and convertible
into, a 40% ownership  interest in Organic Waste  Company.  Viking also received
7.5 million common shares of Viking that were held as treasury shares at Fei Yun
Viking. This transaction was disclosed in a February 3, 2003 Form 8-K filing and
a February 18, 2003 Form 8-K filing both with an event date of January 31, 2003.
The Company also completed the sale of its 25% equity ownership position in Wuxi
Viking Garment Co., Ltd.  (Wuxi Viking) on March 28, 2003. The Company  received
1.4  million  Viking  common  restricted  shares  for its 25%  equity  ownership
position in Wuxi  Viking.  The sale of Fei Yun was  precipitated  by a number of
economic  factors and the  availability  of a buyer at the time. The Company had
intended to raise $18 million for the purpose of acquiring  the remaining 40% of
Golden Horse which would have also  satisfied a potential $5 million  registered
capital  requirement for Fei Yun Viking.  However,  market conditions during the
entire time after Fei Yun Viking's  purchase  were not  favorably  indicating an
equity  capital raise for the Company to expand its ownership of Golden Horse or
other  acquisitions  in China.  As of December 31,  2003,  the $6.5 million note
receivable  related to the sale of Fei Yun Viking was fully reserved and written
down to zero as reflected on the Company's Balance Sheet. This was the Company's
largest asset. This action was taken for a number of reasons. The first interest
payment was due January 31, 2004 and has not yet been received, placing the note
in  technical  default.  Conservative  accounting  demands a strict  look at the
ability to  collect on the note  receivable  and/or  its  collateral.  While the
Company does not  anticipate a dispute over the 40%  ownership  conversion,  any
such action could take considerable  time and money,  which the Company does not
currently have available. Further, although the Company has the right to convert
this note to 40% ownership of Organic  Waste  Company at any time,  even without
default, in the event that it did take its 40% ownership  interest,  the Company
does not currently have the resources available to hire and train the executives
and accountants  that it believes it would be required to place at Organic Waste
Company in order to comply with the reporting  requirements of the Company under
SEC rules and regulations,  including the Sarbanes-Oxley Act. However, this does
put the  Company in control  of the  timing of taking 40%  ownership  of Organic
Waste Company.  Upon the receipt of any future interest or principal  payment or
the conversion of the $6.5 million note to the Company's 40% ownership  position
of Organic Waste Company, such amounts will be accounted for as Other Income.


                                                                              14
<PAGE>

Fei Yun Viking and Wuxi Viking,  including any subsidiaries,  may be referred to
collectively as the operations in China, Chinese Operations or China Operations.
Due to the sale of the  Chinese  Operations  in the first  quarter of 2003,  the
periods presented below are not comparable.


FOR THE THREE MONTHS ENDED MARCH 31, 2004 and 2003

Revenues

For the first  quarter of 2004,  revenues were $-0- compared to $286 thousand in
the comparable  period in 2003. The $286 thousand of revenue was due entirely to
rental  income at Golden  Horse/Sunshine  Plaza during the month of January 2003
before Fei Yun Viking was sold.  Fei Yun Viking and its  subsidiaries  were sold
effective January 31, 2003.

Equity Accounted Investments

For the first quarter of 2004,  loss from equity  accounted  affiliates was $-0-
versus a loss of $5 thousand for the comparable period in 2003.

The Company sold its China based equity accounted  investments  during the first
quarter of 2003 and has no equity accounted investments as of March 31, 2004.

General and Administrative Expenses

Consolidated  G&A costs for the first  quarter  of 2004 were  approximately  $74
thousand   versus  $428  thousand  for  the  comparable   period  in  2003.  The
depreciation  portion  of these  costs  was $ -0- in the first  quarter  of 2004
versus $176  thousand in the  comparable  period in 2003.  The  reduction can be
attributed to the sale of the China Operations during the first quarter of 2003.

Parent Company G&A costs for the first quarter of 2004 were $74 thousand  versus
$213 thousand for the comparable period in 2003. The reduction can be attributed
primarily to reduced audit costs related to China  Operations and one-time costs
associated with the sale of Fei Yun Viking. Other reductions were due to overall
efforts to reduce costs.

Interest Expense

Consolidated  interest  expense for the first quarter of 2004 was  approximately
$38  thousand  versus  $268  thousand  for the  comparable  period in 2003.  The
decrease is due to the  divestiture of Fei Yun Viking and its  associated  debts
effective  January 31, 2003,  thus  relieving  the company of accruing  interest
costs on the  associated  debts.  Parent Company  interest  expense in the first
quarter  of 2004 and 2003 were  approximately  $38  thousand  and $28  thousand,
respectively.  The increase can be attributed to increased debt levels including
the $500 thousand long-term note payable originated during June 2003.

Net Income(Loss)

Consolidated  net loss for the  first  quarter  of 2004 was  approximately  $110
thousand  versus a net loss of $305 thousand for the comparable  period in 2003.
The change can be  primarily  attributed  to the  divestiture  of Fei Yun Viking
during  the  first  quarter  of 2003 and the  resulting  reduction  in  expenses
associated with its operations.

Liquidity and Capital Resources

Cash needs for general and  administrative  expenses at the Parent Company Level
have been satisfied in the past by new  promissory  notes and the sale of common
stock.  The Parent  Company Level will continue to rely upon raising  additional
capital for its cash needs, at least for the immediate future, and believes that
current  methods of raising  capital may be  sufficient  to satisfy  general and
administrative  needs as they  arise,  barring  any  unexpected  or  significant
changes in such costs.  The  Company  does not have  sufficient  cash on hand to
operate  for  the  next  twelve  months  and the  Company  will  need  to  raise
substantial  additional  capital for future  acquisitions.  The Company does not
have any binding  agreements  to supply  such cash at this time.  The Company is
seeking  debt  financing  and  equity  financing  on a large  scale  for  future
acquisitions  and  growth  including,  but  not  limited  to,  funding  for  the
acquisition

                                                                              15
<PAGE>

of Texamerican Food Marketing,  Inc. that was previously publicly announced. The
Company  expects  that it may be able to  augment  institutional  debt or equity
investments  through  the use of its tax  loss  carryforward,  the use of  other
assets it already owns, and/or the assets and cash flows from companies targeted
for acquisition.

Consolidated  liabilities at March 31, 2004 were $3,099,000 versus $3,048,000 at
December 31, 2003.  The debts at March 31, 2004 are  comprised as follows:  long
term debt of  $500,000  in a single  10 year  note to be  repaid in five  annual
installments of $100,000 each beginning on its sixth anniversary;  several notes
payable due within one year or on demand totaling  $870,000;  $71,000 of accrued
interest payable; $69,000 of accounts payable; $2,000 of other accrued expenses;
and $1,587,000 of accrued officer's  salaries.  It should be noted that the long
term and short term promissory notes are due to private  investors and not banks
or  financial  institutions.  The  Company  had $4,000  cash at March 31,  2004,
prepaid expenses of $28,000;  $123,000 of notes receivable and accrued interest,
$54,000  of  property,  plant &  equipment  (including  $50,000  of  capitalized
software  development  costs),  and a $6.5  million note  receivable  due from a
Chinese  entity  that has been  written  down to zero.  Interest  receivable  of
$260,000  was due on January 31, 2004  relating to the $6.5 million note but has
not yet been  collected.  Accordingly,  the Company had written down the related
$237,000 of accrued interest receivable at December 31, 2003 to zero and has not
accrued interest on this note from that date forward.

The cash flow  information  provided  below is provided net of the effect of the
sale of the Chinese Operations during the first quarter of 2003.

Net cash used in  operating  activities  for the first  quarter  of 2004 was $88
thousand  compared to $152 thousand of cash used in operating  activities during
the comparable  period in 2003. The reduction is due to reduced costs associated
with the China Operations that were sold during the first quarter of 2003.

Net cash used in investing  activities  for the first  quarter of 2004 was $ -0-
compared to $1,423  thousand  used in  investing  activities  in the  comparable
period  in  2003.  The  prior  year's  use  of  funds  is  primarily  due to the
divestiture  of $1,379  thousand in cash as part of the  divestiture  of Fei Yun
Viking.  The balance of $44 thousand in funds used is also due to  activities at
Fei Yun Viking prior to its sale.

Net cash  provided by  financing  activities  for the first  quarter of 2004 was
approximately  $88 thousand  versus $158 thousand for the  comparable  period in
2003.  During the current period,  all of the financing amounts relate to Parent
Company  activities  including  proceeds of approximately  $48 thousand from the
sale of stock and $66 thousand of new promissory notes offset by $26 thousand of
promissory note repayments. During the same period a year ago, net cash provided
by financing includes $10 thousand from the sale of stock and $168 thousand from
new promissory notes offset by $20 thousand of promissory note repayments.

International Currency Fluctuation

The Company is not exposed  directly to international  currency  fluctuations at
this time. The $6.5 million note  receivable due from a Chinese entity is a U.S.
dollar denominated note. Further, the exchange rate between the Chinese Yuan and
the U.S. Dollar currently is a fixed rate within a very narrow range.


Off Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements.

Item 3.  Controls and Procedures

An evaluation as of the end of the period covered by this report was carried out
under the supervision and with the participation of the Registrant's management,
including  its Chief  Executive  Officer  and Chief  Financial  Officer,  of the
effectiveness  of  the  design  and  operation  of the  Registrant's  disclosure
controls and procedures. Based upon that evaluation, the Chief Executive Officer
and Chief  Financial  Officer  concluded  that  those  disclosure  controls  and
procedures were adequate to ensure that information  required to be disclosed by
the Registrant in the reports that it files or submits under the Exchange Act is
recorded, processed,  summarized and reported, within the time periods specified
in the  Commission's  rules and forms. It should be noted that the design of any
system of controls is based

                                                                              16
<PAGE>

in part upon certain  assumptions  about the  likelihood of future  events,  and
there can be no assurance  that any design will succeed in achieving  its stated
goals under all potential future conditions, regardless of how remote.

PART II - OTHER INFORMATION

Item 2. Changes in Securities

During the three month period ended March 31, 2004,  the Company  issued  common
restricted shares (Class A Common) in private  transactions under exemption from
registration under the Securities Act pursuant to Section 4(2) and/or Regulation
D, Rule 506 or other applicable  exemptions.  Sales have been made to accredited
investors only. In summary;  1,175,000 common  restricted shares were issued for
$47,500 cash.

Item 5. Other Information

General
-------

The Company's  common stock trades on the OTC  Electronic  Bulletin  Board.  Its
symbol  is  "VGCP".  Company  information  can be  found  on  its  web  site  at
www.vcgi.com.

Risk Factors
------------

     The Company faces  substantial  risks at all times. Some of these risks are
listed here. This list is not intended to be an exhaustive description of risks,
but as a reminder that there are substantial risks involved in investing in this
stock or any stock.  Persons  inclined  to invest in the  Company or any company
should do so only after  personal due  diligence  and a personal  assessment  of
their risk  tolerance.  We  encourage  you to review  this entire  document  and
perform other information gathering of your own.


     1)   Our ability to acquire companies is subject to substantial  obstacles.
          Our failure to overcome  any of these  obstacles  may  materially  and
          adversely affect our planned growth.

     One key element of our  strategy is to acquire  additional  companies.  The
     success  of our  acquisitions  will  depend  on  our  ability  to  overcome
     substantial obstacles,  such as the availability of acquisition candidates,
     our ability to compete  successfully with other potential acquirors seeking
     similar or the same  acquisition  candidates,  the availability of funds to
     finance  acquisitions  and the  availability  of  management  resources  to
     oversee  the  operation  of  acquired  businesses.  The Company has limited
     resources  and  we  can  offer  no  assurance   that  we  will  succeed  in
     consummating  any  acquisitions  or that we will be able to  integrate  and
     manage any acquisitions successfully.


     2)   A  substantial  portion  of our  outstanding  common  stock is  freely
          tradable and may be sold into the market at any time.

     Of the Company's  59,937,251 Class A Common shares outstanding at March 31,
     2004,  21,934,325 shares are currently freely trading shares. The remaining
     38,002,926 common restricted shares are eligible for removal of some or all
     transfer  restrictions within one year.  Nevertheless,  trading activity in
     Company stock is thin,  making the shares  subject to sudden drops in price
     if one or more  shareholders  choose to sell  their  shares at or about the
     same time.  This could cause the market  price of our common  stock to drop
     significantly, even if our business is growing.


     3)   Our share price has been and may continue to be volatile.

     Our common stock has experienced in the past, and is expected to experience
     in the future, significant price and volume volatility, which substantially
     increases the risk of loss to shareholders.


                                                                              17
<PAGE>

     4)   We depend heavily on key personnel, and would be adversely affected if
          we ceased to employ these key personnel.

     Our  performance  would be severely  adversely  affected by the  departure,
     disability or death of one or more of our directors or executive  officers.
     In particular, our Chairman and Chief Executive Officer, William J. Fossen,
     has spent years developing relationships with powerful individuals in China
     and learning the culture in China.  These have been significant  factors in
     the Company's ability to learn about and do business in China. Further, his
     experience,  reputation,  contacts and  knowledge  regarding  the insurance
     industry within the U.S. cannot be overestimated in determining the success
     of any endeavors into the insurance marketplace.  Moreover, we benefit from
     and rely on the  substantial  experience of all our executives and advisors
     including Matthew W. Fossen, the Company's CFO and President,  and Robin M.
     Sandifer and Mary M.  Pohlmeier,  both of whom are directors of the Company
     and have,  among other  valuable  knowledge,  skills and traits,  extensive
     experience and knowledge of the food industry. Additionally, we compete for
     qualified  employees.  If we are  unable to recruit  and  retain  qualified
     employees at competitive salaries, our business will be adversely affected.


     5)   Our  business has  substantial  cash  requirements  and we may require
          additional  sources of funds if our current sources are unavailable or
          insufficient to satisfy these  requirements,  and we cannot assure you
          that these additional  sources of funds will be available or available
          on reasonable terms.

      We have substantial  cash  requirements in connection with our operations,
      capital expenditure and debt service obligations.  If the cash we generate
      from our  operations  or that we can  access  from  other  sources  is not
      available when needed or is insufficient to satisfy our  requirements,  we
      may  require  additional  sources of funds,  including  by way of possible
      asset sales. We cannot assure you that any required  additional sources of
      funds would be available or available on reasonable terms, particularly in
      light of our existing debt levels,  or that we would be able to dispose of
      assets to raise cash in a timely  manner or for fair  value.  If we do not
      generate  sufficient  amounts of capital to  support  our  operations  and
      service our debt, or we do not generate  sufficient  amounts of capital at
      the times needed and on  reasonable  terms,  our  business  will likely be
      adversely affected.

     6)   The Company has in the past and may in the future conduct  business in
          or with Chinese companies. Additional risks pertaining to operating in
          a foreign country must be considered.

              (Note:  In the  first  quarter  of  2003,  the  Company  sold  its
              interests in China. In one of the sales transactions,  the Company
              received a note  receivable  that is  collateralized  by an equity
              interest in a Chinese  company.  This note  receivable was written
              down to zero at December 31, 2003.)

         The  Chinese  government  could  change  its  policies  toward  private
         enterprise or even nationalize or expropriate it, which could result in
         the total loss of our investment in that country.

                  Investments  in businesses in China are subject to significant
              political and economic uncertainties and may be adversely affected
              by political,  economic and social developments in China. Over the
              past several years,  the Chinese  government has pursued  economic
              reform policies  including the  encouragement  of private economic
              activity  and  greater  economic  decentralization.   The  Chinese
              government  may not  continue  to  pursue  these  policies  or may
              significantly  alter them to our detriment  from time to time with
              little, if any, prior notice.

                  Changes  in  policies,   laws  and  regulations  or  in  their
              interpretation,   or  the  imposition  of  confiscatory  taxation,
              restrictions on currency conversion,  restrictions or prohibitions
              on dividend payments to stockholders,  devaluations of currency or
              the nationalization or other expropriation of private enterprises,
              could  have  a  material   adverse   effect  on  our   businesses.
              Nationalization  or  expropriation  could even result in the total
              loss of our  investment  in China  and in the  total  loss of your
              investment.

         A lack of adequate  remedies and  impartiality  under the Chinese legal
         system may  adversely  impact our ability to do business and to enforce
         the agreements to which the Company is a party.

                  We  and  our  previous   subsidiaries   regularly  enter  into
              agreements  governed  by Chinese  law in the course of our Chinese
              business   operations.   Our  business  would  be  materially  and
              adversely affected if

                                                                              18
<PAGE>

              the other  parties to the  agreements  do not honor  them.  In the
              event of a dispute, enforcement of these agreements in China could
              be  extremely  difficult.  Unlike the United  States,  China has a
              civil law  system  based on  written  statutes  in which  judicial
              decisions have little  precedential  value. The Chinese government
              has enacted some laws and regulations dealing with matters such as
              corporate   organization  and  governance,   foreign   investment,
              commerce, taxation and trade. However, the government's experience
              in  implementing,   interpreting  and  enforcing  these  laws  and
              regulations  is  limited,  and our  ability to enforce  commercial
              claims  or  to   resolve   commercial   disputes   is   uncertain.
              Furthermore,  enforcement  of  the  laws  and  regulations  may be
              subject to the exercise of considerable  discretion by agencies of
              the Chinese  government,  and forces unrelated to the legal merits
              of  a   particular   matter  or  dispute   may   influence   their
              determination.  These  uncertainties  could limit the  protections
              that are available to us.

         If relations between the United States and China deteriorate, our stock
         price may decrease and we may have  difficulty  accessing U.S.  capital
         markets.

                  At various times during  recent  years,  the United States and
              China  have  had  significant  disagreements  over  political  and
              economic  issues.  Controversies  may arise in the future  between
              these two countries.  Any political or trade controversies between
              the United  States and China,  whether or not directly  related to
              our  business,  could  adversely  affect the  market  price of our
              common stock and our ability to access U.S. capital markets.

         Our business licenses may not be renewed.

                  Our  activities  in China may require  business  licenses from
              various Chinese  governmental  entities.  The licenses that we may
              hold are  subject  to  periodic  review and  approval.  We are not
              certain  that the Chinese  government  will  continue to renew our
              licenses  that we may hold or that it will not revoke our licenses
              with little, if any, prior notice.

         Our business  interests in China are susceptible to the risk of manmade
         or  natural  disasters  that  may  result  in  damage  not  covered  by
         insurance.

                  The  Company has a $6.5  million  note  receivable,  currently
              fully  reserved to a zero book value,  that is  collateralized  by
              and/or exchangeable into a 40% ownership of a Chinese company that
              makes plant fertilizer from organic waste (Organic Waste Company).
              This Organic Waste Company could be severely affected if a natural
              or manmade disaster damages the site,  structures,  raw materials,
              equipment  and finished  goods used or owned by the company.  Fire
              fighting and disaster  relief and assistance in China are not well
              developed by Western  standards.  Losses from the  interruption of
              this business and negative  publicity  resulting from a natural or
              manmade disaster would adversely affect this business and decrease
              the value of our collateral.













                                                                              19
<PAGE>

Item 6.  Exhibits and Reports on Form  8-K

a)       Exhibits

Exhibit
Number               Description of Exhibit                               Note
------               ----------------------                               ----

   2.1   Contract  for  acquisition  of 25% of  Beijing  Fei Yun Viking
         Enterprises Co., Ltd                                             (iii)
   2.2   Contract for  acquisition of additional 71% of Beijing Fei Yun
         Viking Enterprises Co. Ltd.                                      (iii)

   2.3   Contract  for  disposition  of 96% of  Beijing  Fei Yun Viking
         Enterprises Co. Ltd.                                             (v)
   3.1   Amended  and  Restated  Articles  of  Incorporation  of Viking
         Capital Group, Inc.                                              (ii)
   3.2   Amendment to Amended and Restated Articles of Incorporation of
         Registrant                                                       (iv)
   3.3   Bylaws of Viking Capital Group, Inc. as amended                  (i)
   4.1   Specimen Common Stock Certificate                                (i)
   4.2   Specimen Preferred Stock Certificate                             (i)
  10.1   1996 Stock Option Plan of the Registrant  Filed on Form 14A in
         1996                                                             (ii)
  16.1   Notice and letter  from  auditor  that King  Griffin & Adamson
         P.C.  resigned to allow its successor  entity KBA Group LLP to
         be engaged as the Registrant's independent public accountants.
         Filed on Form 8-K March 7, 2003.                                 (viii)
  21.1   List of Subsidiaries
  31.1   Section 302 Certification Of Chief Executive Officer
  31.2   Section 302 Certification Of Chief Financial Officer
  32.1   Section 906 Certification Of Chief Executive Officer and Chief
         Financial Officer
  99.1   Press Release Re: Sale of Fei YunViking  Enterprises  Company,
         Ltd.  filed on Form 8-K on February 3, 2003 with an event date
         of January 31, 2003.                                             (vi)
  99.2   Presse  Release Re:  Letter of Intent to purchase  Texamerican
         Food Marketing, Inc.                                             (vii)

Note
----
(i)      Incorporated  by reference  pursuant to Exchange Act Rule 12b-23 to the
         Registrant's Form 10-SB(File No. 0-22744) effective December 27, 1993.
(ii)     Incorporated  by reference  pursuant to Exchange Act Rule 12b-23 to the
         Registrant's Form 14A (File No. 0-22744) for 1996.
(iii)    Incorporated  by reference  pursuant to Exchange Act Rule 12b-23 to the
         Registrant's  Forms  8-K filed on  12/17/01  and  1/11/02  and to their
         respective amendments filed on 2/12/02.
(iv)     Incorporated  by reference  pursuant to Exchange Act Rule 12b-23 to the
         Registrant's Form 10-KSB for the fiscal year ended December 31, 2001.
(v)      Incorporated  by reference  pursuant to Exchange Act Rule 12b-23 to the
         Registrant's  Form 8-K  filed on  February  18,  2003 with  event  date
         January 31, 2003 including amendments.
(vi)     Incorporated by reference  pursuant to Exchange Act Rule 12b-23 to such
         Form 8-K filing  filed on February 3, 2003 with event date  January 31,
         2003.
(vii)    Incorporated by reference  pursuant to Exchange Act Rule 12b-23 to such
         Form 8-K filing  filed on December 5, 2003 with event date  December 5,
         2003.
(viii)   Incorporated by reference  pursuant to Exchange Act Rule 12b-23 to such
         Form 8-K filing filed on March 7, 2003 with event date March 1, 2003.


b)       Reports on Form 8-K

         No reports were filed on Form 8-K during the current quarter.



              (The remainder of this page is intentionally blank.)




                                                                              20
<PAGE>

                                   SIGNATURES



         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                   VIKING CAPITAL GROUP, INC.

Dated: May 7, 2004             By:  /s/ William J. Fossen
                                    ----------------------------------
                                    William J. Fossen
                                    Chief Executive Officer


Dated: May 7, 2004             By:  /s/ Matthew W. Fossen
                                    ----------------------------------
                                    Matthew W. Fossen
                                    Chief Financial Officer
                                    President




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