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, 2002

                                       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 March 31,  2002,  approximately  57,455,060  shares of Common Stock of the
issuer were outstanding.  As of March 31, 2002, 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, 2002 (Unaudited)
       and December 31, 2001...................................................3

   Consolidated Statements of Operations (Unaudited) for the
       three months ended March 31, 2002 and 2001..............................5

   Consolidated Statements of Cash Flows (Unaudited) for the
       three months ended March 31, 2002 and 2001..............................6

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

Item 2. Management's Discussion and Analysis or Plan of Operations............11

PART II. - OTHER INFORMATION

Item 2.  Changes in Securities................................................15

Item 5. Other Information.....................................................15

Item 6.  Exhibits and reports on Form 8-K.....................................15

SIGNATURES....................................................................16

EXHIBITS......................................................................17



                                       2

<PAGE>
<TABLE>
<CAPTION>

                   VIKING CAPITAL GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                               (expressed in US $)


                                     ASSETS
                                     ------
                                                                  (unaudited)
                                                                   March 31,     December 31,
                                                                      2002            2001
                                                                 ------------    ------------
                                                                        (in thousands)
<S>                                                              <C>             <C>
CURRENT ASSETS
   Cash and cash equivalents                                     $      7,914    $      7,191
   Other receivables                                                      584             719
   Mortgage notes receivable                                           15,629          15,797
   Notes receivable and accrued interest, net of allowance of
     $191,000 and $131,000 (including related party amounts of
     $78,000 and $60,000 at March 31, 2002 (unaudited) and
     December 31, 2001, respectively                                       78              60
   Deposit                                                              1,208           1,210
   Real estate held for sale                                           50,672          50,592
                                                                 ------------    ------------

        Total current assets                                           76,085          75,569

PROPERTY AND EQUIPMENT
   Building                                                            37,543          37,543
   Computer equipment                                                     157             157
   Furniture and office equipment                                          43              43
   Vehicles                                                                39              39
   Building improvements                                                  640             640
                                                                 ------------    ------------

                                                                       38,422          38,422

   Accumulated depreciation and amortization                             (678)           (173)
                                                                 ------------    ------------

             Net property and equipment                                37,744          38,249

CAPITALIZED SOFTWARE, net of accumulated amortization
   of $361,000                                                            413             413

NOTES AND OTHER RECEIVABLES FROM RELATED PARTIES                       13,568          12,876

INVESTMENTS IN AFFILIATES                                               2,121           2,118

OTHER ASSETS                                                               48              44
                                                                 ------------    ------------

TOTAL ASSETS                                                     $    129,979    $    129,269
                                                                 ============    ============
</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
                               (expressed in US $)


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
                                                                       (unaudited)
                                                                         March 31,     December 31,
                                                                            2002            2001
                                                                       ------------    ------------
                                                                              (in thousands)
<S>                                                                    <C>             <C>
CURRENT LIABILITIES
  Current maturities of long-term debt (including $63,000 due to
     related parties, net of unamortized debt discount of $18,000
     and $48,000 at March  31, 2002 (unaudited) and
     December 31, 2001, respectively)                                  $     20,040    $     19,960
  Accounts payable                                                           12,193          12,454
  Accrued officers' salaryand payroll taxes                                   1,611           1,658
  Other payables                                                             12,289          12,642
  Due to related parties                                                      1,859           1,174
  Deferred income tax liability                                              13,430          13,737
  Current income taxes payable                                                  568             568
  Other accrued expenses                                                      9,057           8,320
                                                                       ------------    ------------

             Total current liabilities                                       71,047          70,513

LONG-TERM DEBT, less current portion                                         25,489          25,531
                                                                       ------------    ------------

             Total liabilities                                               96,536          96,044

MINORITY INTEREST                                                             8,810           8,091

STOCKHOLDERS' EQUITY
  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, 1,800,000 shares issued and outstanding
        (liquidation preference of $18,000,000)                               1,800           1,800
  Common stock $0.001 par value; 150,000,000 shares authorized,
     65,480,685 and 64,362,000 shares issued at March 31, 2002
     (unaudited) and December 31, 2001, respectively                             65              64
  Common stock Class B $0.001 par value; 100,000 shares authorized,
     issued and outstanding                                                    --              --
  Additional paid-in capital                                                 36,439          36,205
  Accumulated deficit                                                       (10,629)         (9,894)
                                                                       ------------    ------------
                                                                             27,675          28,175

             Less treasury stock; 8,025,625 shares at cost                   (3,041)         (3,041)
             Less stock issued for note receivable                               (1)           --
                                                                       ------------    ------------

             Total stockholders' equity                                      24,633          25,134
                                                                       ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $    129,979    $    129,269
                                                                       ============    ============
</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 $)


                                                                          Three Months Ended
                                                                        ----------------------
                                                                        March 31,    March 31,
                                                                          2002         2001
                                                                        ---------    ---------
                                                               (in thousands, except earnings per share)
<S>                                                                     <C>          <C>
REVENUES
     Rental income                                                      $     551    $    --
     Sales of real estate, net of sales taxes                                 148         --
                                                                        ---------    ---------

         Total revenues                                                       699         --

COST OF REVENUE
     Cost of real estate sales                                               (105)        --
     Selling expenses                                                         (56)        --
                                                                        ---------    ---------

         Total cost of revenue                                               (161)        --
                                                                        ---------    ---------

GROSS PROFIT                                                                  538         --

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                                 (885)        (425)

WRITE OFF OF MORTGAGE NOTES RECEIVABLE, NET                                  (139)        --
                                                                        ---------    ---------

Loss from operations                                                         (486)        (425)

OTHER INCOME (EXPENSE)
     Interest income                                                            2            2
     Interest expense (including $2,000 and $1,000 to related parties)       (845)         (12)
     Income from equity accounted affiliates                                    3         --
     Other                                                                     (8)        --
                                                                        ---------    ---------

         Total other income (expense)                                        (848)         (10)
                                                                        ---------    ---------

         Loss before provision for income taxes and minority interest      (1,334)        (435)

         Income tax benefit                                                   285         --
                                                                        ---------    ---------

         Loss before minority interest                                     (1,049)        (435)

MINORITY INTEREST                                                             314         --
                                                                        ---------    ---------

NET LOSS                                                                $    (735)   $    (435)
                                                                        =========    =========

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

WEIGHTED-AVERAGE NUMBER OF SHARES
     OUTSTANDING - BASIC AND DILUTED                                       57,210       36,220
                                                                        =========    =========
</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 $)


                                                                  Three Months Ended
                                                                ----------------------
                                                                March 31,    March 31,
                                                                  2002         2001
                                                                ---------    ---------
                                                                     (in thousands)
<S>                                                             <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                   $    (735)   $    (435)
     Non cash charges included in operations
         Depreciation and amortization                                448           82
         Amortization of deferred financing costs                      29         --
         Common stock issued for services                              25           28
         Stock options issued for services                             18           48
         Loss from equity accounted in affiliates                       5         --
         Minority interest                                           (314)        --
         Write off of mortgage notes receivable                       139         --
     Changes in assets and liabilities
         (Increase) decrease in real estate held for sale             (78)        --
         (Increase) decrease in mortgage loans receivables            (90)        --
         (Increase) decrease in accrued interest receivable            (2)          (2)
         (Increase) decrease in other assets and receivables          134           55
         Increase (decrease) in accounts payable                     (242)         (28)
         Increase (decrease) in accrued officers' salary and
            payroll taxes                                            --             99
         Increase (decrease) in other accrued expenses                717         --
         Increase (decrease) in deferred income tax liability        (285)        --
         Increase (decrease) in other payables                       (336)           8
                                                                ---------    ---------

Net cash used for operating activities                               (567)        (145)

CASH FLOWS FROM INVESTING ACTIVITIES
     Loans made                                                      --            (21)
     Loans made to shareholders                                       (20)        --
     Advances to related parties                                     (250)        --
                                                                ---------    ---------

Net cash provided by (used for) investing activities                 (270)         (21)
</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 $)

                                                           Three Months Ended March 31,
                                                           ------------    ------------
                                                                2002            2001
                                                           ------------    ------------
                                                                  (in thousands)
<S>                                                        <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES
     Capital Contributions                                  $       604    $       --
     Proceeds from notes payable                                    207            124
     Advances from related parties                                  687            --
     Repayments of notes payable                                    (69)            (12)
     Payments of capital lease obligations                         --                (3)
     Proceeds from sale of common stock                             131              45
                                                           ------------    ------------

Net cash provided by financing activities                         1,560             154
                                                           ------------    ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                723             (12)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                  7,191              13
                                                           ------------    ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                 $      7,914    $          1
                                                           ============    ============

SUPPLEMENTAL DISCLOSURES

     Cash flow information:

         Interest paid                                     $         63    $          1
         Income taxes paid                                         --              --

     Non-cash financing activities:

         Common stock issued for:
             Repayment of notes payable                              54               5
             Notes receivable                                         1            --
             Payment of interest                                      6            --

Common stock cancelled for conversion of note receivable           --                60

Marketable securities acquired for note payable                    --                 9
</TABLE>

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


<PAGE>

                           VIKING CAPITAL GROUP, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION

The consolidated  interim  financial  statements  include the accounts of Viking
Capital  Group,  Inc.  and  its  wholly  owned  subsidiaries  (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 generally accepted  accounting  principals  ("GAAP") 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,
2001.

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 GAAP
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.

2.   NOTES PAYABLE

During the current  quarter,  the Company  entered  into new  convertible  notes
totaling  $207,000.  These notes bear interest at 12%, are secured by all assets
of  Viking  and are due on  demand.  Interest  payments  on these  notes are due
annually. During the current quarter, notes payable totaling $54,000 and related
accrued interest of $6,480 were converted into 403,200 shares of common stock.

3.   RELATED PARTY TRANSACTIONS

During the current quarter, the Company entered into $20,000 of promissory notes
receivable  with  related  parties.  At  March  31,  2002,  there  were  $78,000
promissory notes  receivable from related parties.  At March 31, 2002 there were
$63,000 in  promissory  notes  payable to related  parties.  During the  current
quarter,  the Company also paid for  services  with  100,000  common  restricted
shares  valued  at  $20,000  and  100,000  common   restricted   share  options,
exercisable for two years at the rate of $0.20 per share to a related party.

During the current quarter, the Company advanced $250,000 to related parties. At
March 31,  2002,  amounts  due from  related  parties to Fei Yun Viking  totaled
$1,958,000.  This balance  includes  $177,000 that is due to Golden Horse from a
shareholder of Golden Horse,  and $1,780,000  that is due from an entity that is
owned by two  directors  of Fei Yun  Viking.  The  amounts  due from the related
parties are unsecured, bear no interest and have no fixed terms of repayment.

     In  connection  with the Fei Yun Viking in 2001,  acquisition,  the Company
obtained two notes receivable totaling $11,630,604 from officers of Fei Yun. The
first note  receivable  totals  $5,148,060.  This note bears  interest,  payable
annually, at 4%. The first principal payment equaling 50% of the note balance is
due 5 years  from  the  date of the note  (or  July  2006)  with  the  remaining
principal  balance  due 10 years  from the date of the note  (2011).  This  note
contains an option for the Company to purchase  40% of the common  ownership  of
Heibie Kangshun FeiYun Organic Waste Processing Company,  Ltd. for consideration
consisting of the surrender of the note receivable.

                                       -8-
<PAGE>

                           VIKING CAPITAL GROUP, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


The second note receivable totals $6,482,544.  This note bears interest, payable
annually, at 4%. The first principal payment equaling 50% of the note balance is
due 5 years  from  the  date of the note  (or  July  2006)  with  the  remaining
principal  balance  due 10 years  from the date of the note  (2011).  This  note
contains an option for the  Company to purchase 33 1/3% of the common  ownership
of Beijing Anhua Office Building Co., Ltd. for  consideration  consisting of the
surrender of the note receivable.

During the  current  quarter  the Company  received  advances o  f$687,000  from
related parties.  At March 31, 2002, amounts due to related parties from Fei Yun
Viking totaled  $1,859,000.  This balance includes  $1,339,000 that was advanced
from China Land Property, an entity related to a shareholder of Golden Horse and
$481,000  that was advanced  from an entity that acts as a property  manager for
Golden Horse. The amounts due to related parties are unsecured, bear no interest
and have no fixed terms of repayment.

4.   OPTIONS ISSUED

During the current  quarter,  the Company  granted  9,850,000  share  options to
employees for common restricted stock exercisable at $0.20 per share that expire
in five years for compensation. The Company also issued 26,000 share options for
common restricted stock exercisable at $0.50 per share that expire in six months
in  connection  with  the  purchase  of  common   restricted  shares  for  cash.
Additionally,  200,000 share  options for  non-employees  with  exercise  prices
ranging  from $0.20 - $0.30 per share which  expire in two years were issued for
services.  The Company also granted 224,000 common  restricted  stock options in
connection  with $64,480 of debt and interest  converting  to stock that have an
exercise price of $0.50 per share and expire within one year.

5.   OTHER

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.  Additionally at March 31, 2002 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.

In December  2001 the Company  completed the  acquisition  of Fei Yun, an entity
based in  Beijing,  China.  The  Company  expects  to  generate  cash flows from
operations from its Chinese subsidiaries but has verbally agreed not to withdraw
funds up to the Parent during its first year of control.  The Company also plans
to reduce current debt levels and related interest expense through  negotiations
with debt holders although the likelihood of success of the negotiations  cannot
be predicted at this time. In the  meantime,  the Company will continue to incur
expenses  relating to  corporate  overhead and  activities  in  connection  with
managing the Company's investments and considering additional opportunities. 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  raising
capital  in the past,  if the  Company  is unable  to raise  capital,  it may be
required  to sell  assets or reduce the level of its  operations.  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
additional  acquisitions in China and to develop its financial services business
in the United States of America.  This capital may come from  additional debt or
equity  issuances.  The Company  currently has no firm  commitments  in place to
provide additional financing. There can be no degree of assurance given that the
Company will be successful in completing additional financing transactions.

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 that may result from the inability of the Company
to continue as a going concern.

                                       -9-
<PAGE>
<TABLE>
<CAPTION>

                           VIKING CAPITAL GROUP, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


6.   SEGMENTS

The Company's operations are classified into four principal reportable segments;
real  estate,  chemical  sales,  construction,  and garment  manufacturing.  All
businesses are located and operate in the People's  Republic of China.  The real
estate  segment owns and operates a commercial  and  residential  property.  The
chemical  segment  trades and transports  chemical  products.  The  construction
segment  is  constructing  a highway in the  Jiangsu  Province  of the  People's
Republic  of China.  The garment  manufacturing  segment  manufactures  clothing
specifically focusing on export garments.

The following table presents  information  about the four segments for the three
months ended March 31, 2002 (in thousands):

                       Real Estate       Chemical                           Garment
                          Sales            Sales        Construction     Manufacturing    Adjustment      Consolidated
                      -------------    -------------    -------------    -------------   -------------    -------------
<S>                   <C>              <C>              <C>              <C>             <C>              <C>
Revenues from
  externalcustomers   $         699    $        --      $        --      $        --     $        --      $         699
Interest income                --               --               --               --                 2                2
Interest expense               (801)            --               --               --               (44)            (845)
Depreciation and
  amortization                 (448)            --               --               --               (30)            (478)
Income (loss) from
  equity accounted
  investment                   --               --                (19)              22            --                 (3)
Income tax benefit
  (expense)                     285             --               --               --              --                285
Net income (loss)              (384)              (4)             (19)              22            (350)            (735)
Total assets                113,605            1,453            1,556              565          12,800          129,979
</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  assets  (including  $11,610,000  of notes
receivable  from related  parties) and corporate  expenses to reconcile  segment
amounts to consolidated balances.

7.   UNAUDITED PRO FORMA INFORMATION

Unaudited pro-forma  financial  information for the three months ended March 31,
2002 and 2001, as though the acquisitions of Beijing Fei Yun Viking  Enterprises
Company,  Ltd. and Wuxi Viking Garments Company, Ltd. had occurred on January 1,
2001 is as follows (in thousands):

                                        Three months ended
                                    --------------------------
                                     March 31,      March 31,
                                           2002           2001
                                    -----------    -----------

     Revenues                       $       699    $     1,162
                                    ===========    ===========
     Net income (loss)              $      (735)   $    (1,414)
                                    ===========    ===========

     Net income (loss) per share:
       Basic and diluted            $     (0.01)   $     (0.04)
                                    ===========    ===========

                                      -10-
<PAGE>

Item 2. Management's Discussion and Analysis or Plan 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.

Forward Looking Statements

     This Quarterly  Report on Form 10-QSB  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"  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 US
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.

Plan of Operations

     Viking Capital Group, Inc. is a diversified  international  holding company
whose  mission  is to become the  recognized  leader at  creating  extraordinary
long-term  value for its  shareholders  through  acquisitions.  To  achieve  our
mission,  Viking  identifies  businesses for acquisition  that are currently not
optimizing  opportunities  that are  available.  To determine the  opportunities
available,  Viking looks at the overall business  environment with a clear focus
on fundamental changes in politics, regulation, technology and world economics.

     The Company is  currently  focusing  on  acquisitions  in China  because of
business  contacts  available to management,  the growth of the Chinese  economy
(gross domestic product) in excess of 7% a year with expectations to continue to
grow  at  such  rates,  the   privatization   of  assets  and  businesses,   the
restructuring  of  companies'  debt at banks (the Company  looks for debt relief
negotiations and/or purchase of companies at a steep discount) and China's entry
into World Trade  Organization  (WTO) in December 2001.  Specific areas of focus
are real estate (multi-family  residential and commercial),  manufacturing,  and
technology  services (such as application  service  provider (ASP) or enterprise
resource planning (ERP) solutions provider).

                                      -11-
<PAGE>

     The Company expects to continue to acquire companies in China that have, on
average,  U.S. dollars,  $100 to $200 million in assets.  The Company focuses on
making  acquisitions from China's  privatization  program and bank restructuring
opportunities.

     Part of the expected continued success of the acquisition  strategy is that
the  Company's  stock has been well  accepted  in China.  The  Company  expects,
however,  that it will  need  additional  cash for  acquisitions  and  therefore
desires  and  expects  to  raise  significant   amounts  of  capital  to  pursue
acquisitions.  The Company may also use  companies  or assets it already owns as
all or part of the purchase price of future acquisitions.

     Capital raised will be for additional acquisitions,  repurchase of existing
outstanding  preferred  stock,  fees and  costs  associated  with  acquisitions,
working capital and potential debt reduction.  Part of the Company's strategy in
any acquisition is Management's  belief that a significant  amount of debt at an
acquisition  candidate may be negotiated and settled at a significant  discount.
It is also  Management's  belief that after the preferred  stock is  repurchased
(which was used to  purchase a portion  of  Beijing  Fei Yun Viking  Enterprises
Company, Ltd. (Fei Yun Viking)), an additional 40% of Beijing Golden Horse Great
Wall Estate  Construction  Company,  Ltd.  (Golden Horse) may be available under
very favorable terms. The Company currently owns 60% of Golden Horse via Fei Yun
and expects to pursue the remaining 40%.

     The Company has in the past been  dependent  upon  raising  capital for its
U.S.  administrative and management operations.  The Company has been successful
in the past in meeting its cash needs from private  investors  and will continue
to raise capital for these  purposes from  qualified  private  investors for the
foreseeable  future.  During  the first  quarter  of 2002,  the  Company  raised
approximately  $338,000  to meet  its cash  needs.  Potential  increases  to the
Company's U.S. cash needs include hiring  additional  employees in the financial
and  administrative  departments and potential  increases in  professional  fees
associated with  acquisitions  and audits.  Operations in China will continue to
manage their own cash needs except for acquisitions. Management believes that it
can  continue to raise funds from  private  investors  for its cash needs in the
U.S.. The Company is expecting 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.

Consolidated  liabilities  at March 31,  2002 were $96.5  million  versus  $96.0
million at December  31,  2001 and are almost  entirely  associated  with Golden
Horse.   These   liabilities   are  expected  to  be  repaid  through  sales  of
condominiums,  rental/lease  income,  and  negotiated  settlements.  Part of the
negotiated  settlements  may  include the payment of a lump sum of money that is
less than the full amount due to a creditor. Such funds may come from additional
investments made into Viking.  Other negotiated  settlements may not require any
cash and will be settled  through an  agreement  for  release of the  liability.
Approximately  $6 million of  liabilities  were settled in December  2001 due to
Viking  management's  negotiation  efforts.  There can be no degree of assurance
given that  management  will  continue  to be  successful  in  negotiating  such
settlements.

Discussion of Operations

     While  reading the  following  information,  bear in mind that there was no
revenue  recorded  on  Viking's  financial  statements  for the year 2001.  When
revenue  information  for the  year  2001  is  presented,  it is for  comparison
purposes only. This lack of revenue  recognition in 2001 is due to the fact that
the Company's  acquisitions  in China did not become  effective  until  December
2001.

                                      -12-
<PAGE>

     Pursuant to a purchase  agreement dated August 1, 2001 the Company acquired
25% of Fei Yun Viking,  a Chinese  holding company with three  subsidiaries  and
other assets.  Subsequently the Company  purchased another 71% of Fei Yun Viking
bringing  its total  ownership  to 96%.  These  transactions  were  effective in
December 2001. Separately,  25% of Wuxi Viking Garments Company, Ltd. (Wuxi) was
purchased late in 2001.

Revenues:

     Lease  revenues  for the first  quarter of 2002 were  $550,606 or a monthly
average of $183,535  versus zero lease  revenues in the same period 2001.  Lease
revenues (at Golden Horse before it was acquired,  for comparison  purposes) for
the  entire  year 2001 were  approximately  $735,000  or a  monthly  average  of
$61,250. This is an increase of 200% over last year's results.

     Condominium  sales  totaling  $148,000  (net of sales  tax) were  completed
during  the  first  quarter  of 2002  versus  zero for the same  period in 2001.
Condominium  sales (at  Golden  Horse  before it was  acquired,  for  comparison
purposes) for the entire year 2001 were approximately $9.3 million.  Also during
the  first  quarter,  approximately  $430,000  of sales  from  before  1997 were
reversed and returned to property held for sale (inventory).  The profit portion
of the transaction reduced current period profits by $139,000. Properties may be
returned to  inventory  when full  payments  are not  received if local laws and
procedures are followed.

     The revenues described above are from the single largest  revenue-producing
asset acquired during 2001 which is the real estate complex Sunshine Plaza owned
by Golden Horse,  a subsidiary of Fei Yun Viking.  Sunshine Plaza is a mixed use
real  estate  complex  with a total  of  approximately  1,688,000  square  feet.
Sunshine Plaza primarily  derives its revenues from leasing retail space and the
sale of  condominiums.  During  most of  2001,  Sunshine  Plaza  was  remodeling
approximately  67% of its leaseable retail space to accommodate  Pretty Mall and
Wonderful Mart.

     Beijing Fei Yun Viking  Chemical  Trading Co., Ltd.  (Chemical  Co.) is not
actively  brokering/trading  chemicals at this time. The Chemical Co. is waiting
for capital reserves for extending credit terms to its customers.

     Lianyugang  East Sea  Highway  Development  and  Management  Company,  Ltd.
(Tollway)  is a tollway  development  and  management  company  and is an equity
accounted  investment at Fei Yun Viking.  Its current project is not expected to
be completed and generating revenues until the latter half of 2002.

Equity Accounted Investments:

     Viking's equity accounted investment in Wuxi Viking Garments Company, Ltd.,
generated  approximately $22,000 of income on the Company's income statement for
the first  quarter of 2002 versus zero for the same period in 2001.  The Tollway
investement incurred a $19,000 loss during the first quarter of 2002 versus zero
for the smae period 2001.


General and Administrative Expenses:

     Consolidated  general and administrative  costs from all operations for the
first quarter of 2002 and 2001,  were $887,161 and $342,607,  respectively.  The
amortization/depreciation  portion of these  costs in the first  quarter of 2002

                                      -13-
<PAGE>

and 2001 were  $478,000  and $82,250,  respectively.  An increase of $395,750 in
amortization  is attributed to the  acquisitions  completed  last year partially
offset  by  reduced  amortization  of  software  development  costs in the first
quarter  of 2002.  During  the first  quarter  2002,  accrued  officer's  salary
expense(a component of G&A) was zero versus $120,000 in the same period of 2001.

Interest Expense:

     Consolidated  interest  expense for the first quarter of 2002 and 2001 were
$845,240  and  $11,687  respectively.  The  increase  is  due  primarily  to the
acquisition  of Fei Yun  Viking  completed  last year and its  associated  debt.
Included  in this debt is a past due note that is being  renegotiated  currently
and consequently no interest  payments have been made on this note although they
are being accrued.

Liquidity and Capital Resources

     Operating  and  capital  needs  at the  holding  company  level  have  been
satisfied  by new  promissory  notes and sale of  common  stock.  Operating  and
capital  needs at all other levels have been  satisfied by cash  generated  from
operations and short term borrowing in the normal course of operations.  Fei Yun
Viking also received a capital infusion from related parties.

     For the three months ended March 31, 2002 and 2001, cash used for operating
activities amounted to $567,000 and $145,000,  respectively.  Part of the use of
cash in the  current  quarter  was a  reduction  of  various  payables  totaling
$578,000.  Increased  Other  Payables of $717,000  (including  accrued  interest
expense) offset this amount.

     For the three months ended March 31, 2002 and 2001,  cash used in investing
activities  amounted  to  $270,000  and  $21,00),  respectively.  In the current
quarter, the $270,000 consisted of loans or advances made to related parties.

     For the three  months  ended  March 31,  2002 and 2001,  cash  provided  by
financing  activities  amounted to $1,560,000  and $154,000  respectively.  Cash
provided by financing  activities  in the first  quarter of 2002  resulted  from
increased   borrowing  from  related  parties  of  $687,000  and  $207,000  from
others,$131,000  cash  proceeds  from  the sale of  common  stock  and  $604,000
contributions to capital at Fei Yun Viking from related parties. Also during the
current quarter, $69,000 of existing notes payables were repaid.


PART II - OTHER INFORMATION


Item 2. Changes in Securities

     During the quarter ended March 31, 2002, the Company sold common restricted
shares (Class A Common) in private sales under exemption from registration under
the Securities Act pursuant to Section 4(2) and/or Regulation D, Rule 506. Sales
have been made to accredited  investors only. In summary;  120,000 common shares
were issued for services  valued at $25,000,  403,200  common shares were issued
for payment of promissory notes and interest due valued at $60,480, 5,000 common
shares were issued for a note  receivable  valued at $1,000,  and 591,000 common
shares were issued for cash of $130,500.


Item 5. Other Information

     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.

Item 6.  Exhibits and Reports on Form  8-K

     a)   Exhibits

     Designation  of
     Exhibits  in
     This  Report          Description  of  Exhibit
     ---------------       ------------------------

     21.1                  Subsidiaries of the Registrant


     b)   The  following  reports  were filed on Form 8-K or Form  8-K/A  during
          first quarter of 2002.


                  Date
     Date         Financial
     Original     Statements
     8-K          Filed
     Filed        On 8-K/A       Description
     --------     --------       -----------
     12/17/01     2/12/02        Disclosed acquisition of 25% of Fei Yun Viking
                                 Enterprises
     1/11/02      2/12/02        Disclosed  acquisition of additional 71% of Fei
                                 Yun Viking Enterprises


                                      -14-
<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 15,  2002                                 By:  /s/ William J. Fossen
                                                        ------------------------
                                                        William J. Fossen, CEO


Dated: May 15, 2002                                  By: /s/ Matthew W. Fossen
                                                        ------------------------
                                                        Matthew W. Fossen
                                                        Chief Financial Officer
                                                        President




                                      -15-