UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[X] Quarterly Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange
    Act Of 1934

    For the quarterly period ended March 31, 2006

[ ] Transition Report Under Section 13 Or 15(d) Of The Securities Exchange
    Act Of 1934

    For the transition period ________ to ________

                        Commission file number 000-21753


                          CREATIVE EATERIES CORPORATION
                  Name of Small Business Issuer in Its Charter

         NEVADA                                            88-0263701
State of Incorporation                        I.R.S. Employer Identification No.

    7400 E. McDONALD, SUITE 121
         SCOTTSDALE, AZ                                      85250
Address of Principal Executive Offices                     Zip code

                                  480-355-8170
                            Issuer's Telephone Number

              Securities registered under Section 12(b) of the Act:

                                      NONE

              Securities registered under Section 12(g) of the Act:

             COMMON STOCK, PAR VALUE $0.001 PER SHARE Title of class

Check  whether  the  issuer:  (1)  filed  all  reports  required  to be filed by
Section13  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 [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  SB is not  contained  in  this  form,  and  no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-QSB
or any amendments to this Form 10-QSB [ ]

The number of shares  outstanding  of the  issuer's  only class of Common  Stock
$0.001 par value was 40,494,324 on May 16, 2006
<PAGE>
                                      INDEX

PART I FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheet as of March 31, 2006 (unaudited)                    3

Consolidated Statements of Operations for the three-month periods ended
March 31, 2006 and 2005 (unaudited)                                            4

Consolidated Statements of Cash Flows for the three-month periods ended
March 31, 2006 and 2005  (unaudited)                                           5

Notes to the Consolidated Financial Statements                                 6

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
        AND FINANCIAL CONDITIONS                                              17

Item 3. CONTROL AND PROCEDURES                                                20

PART II OTHER INFORMATION

     1. LEGAL PROCEEDINGS                                                     20

     2. CHANGES IN SECURITIES                                                 22

     3. DEFAULT UPON SENIOR SECURITIES                                        22

     4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                   22

     5. OTHER INFORMATION                                                     22

     6. EXHIBITS AND REPORTS ON FORM 8K                                       22

Signatures                                                                    23

                                       2
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                           Consolidated Balance Sheets
                                   (Unaudited)

                                                                      MAR 31, 06
                                                                      ----------
ASSETS

Current Assets
  Checking/Savings
    Cash                                                                    180
    Cash-restricted                                                      44,987
                                                                     ----------
Total cash                                                               45,167
Accounts receivable, less allowance for doubtful
 accounts: 2005 $85,092                                                 159,775
                                                                     ----------
Total Current Assets                                                    204,942

Property and Equipment                                                    2,695
                                                                     ----------

Total Assets                                                            207,637
                                                                     ----------

LIABILITIES AND STOCKHOLDER'S DEFICIT

Current Liabilities
  Accounts Payable                                                      763,125
  Accrued Liabilities                                                   240,408
  Notes Payable (current)                                               257,100
  Loans Payable (current)                                               151,651
  Deferred Revenue (current)                                             10,000
                                                                     ----------
Total Current Liabilities                                             1,422,284

Loans payable (long-term portion)                                        60,914
Amounts owing to related parties                                        447,469
                                                                     ----------

Total Liabilities                                                     1,930,667
                                                                     ----------
Stockholder's Deficit
  Common stock, 100,000,000 shares authorized, par
  value of $01, 39,234,324 and 28,400,000 issued and
  outstanding, respectively                                              39,234

Additional paid-in-capital                                            4,621,925

Deficit Accumulated in the Development Stage                         (6,384,188)
                                                                     ----------
Total Stockholder's Deficit                                          (1,723,029)

Total Liabilities and Stockholder's Deficit                             207,637

      See accompanying notes to unaudited consolidated financial statements

                                       3
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                          Accumulated from
                                              date of
                                            inception to       Three Months         Three Months
                                              March 31,       Ended March 31,      Ended March 31,
                                                2006               2006                2005
                                             -----------        -----------         -----------
                                                  $                  $                   $
<S>                                               <C>                <C>           <C>
Revenue                                           50,505             50,000                  --

Cost of sales                                         --                 --                  --
                                             -----------        -----------         -----------

Total Gross Profit                                 50505              50000                  --
                                             -----------        -----------         -----------
Expenses
  General and administrative                   6,311,848            853,190             116,719
  Interest                                       122,833             20,600              12,688
                                             -----------        -----------         -----------

Total Expenses                                 6,434,681            873,790             129,407
                                             -----------        -----------         -----------

Net Loss from Operations                      (6,384,177)          (823,790)            129,407
                                             -----------        -----------         -----------

Net Loss for the Period                       (6,384,177)          (823,790)            30,610
                                             ===========        ===========         ===========

Net Loss Per Share - Basic and Diluted              (.16)            (.0209)                 --
                                             ===========        ===========         ===========
Weighted Average Number of Shares
Outstanding                                                      39,234,100          34,054,000
                                                                ===========         ===========
</TABLE>

      See accompanying notes to unaudited consolidated financial statements

                                       4
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                      Accumulated from       Three months
                                                                     date of inception          ended
                                                                        to March 31,          March 31,
                                                                            2006                 2006
                                                                         ----------           ----------
                                                                             $                     $
<S>                                                                      <C>                    <C>
Cash Flows Used In Operating Activities
  Net loss                                                               (6,384,177)            (823,790)
  Depreciation and amortization                                                 461                  140
  Shares issued as compensation for services                              5,008,151              628,000
  Changes in operating assets and liabilities
    (Increase) decrease in accounts receivable                              (75,597)              (3,060)
    (Increase) decrease in notes receivable                                      --                   --
    (Increase) decrease in prepaid expenses and deposits                        268                  268
    Increase (decrease) in accounts payable and accrued liabilities         850,048              115,481
    Increase (decrease) in deferred revenue                                  10,000              (10,000)
                                                                         ----------           ----------

Net Cash Provided by (Used in) Operating Activities                        (590,846)             (92,961)
                                                                         ----------           ----------
Cash Flows Used in Investing Activities
  Acquisition of computer equipment                                          (3,156)                  --
  Cash from acquisition of UltraGuard                                         5,678                   --
                                                                         ----------           ----------

Net Cash Provided by (Used) in Investing Activities                           2,522                   --
                                                                         ----------           ----------
Cash Flows From Financing Activities
  Proceeds from subscribed shares                                           184,400                   --
  Increase (decrease) in loans/notes from unrelated parties                 257,100              (17,900)
  Proceeds from exercise of stock options                                    88,000               88,000
                                                                         ----------           ----------

Net Cash Provided by (Used in) Financing Activities                         529,500               70,100
                                                                         ----------           ----------

Decrease in Cash                                                            (13,857)             (13,857)

Cash - Beginning of the Period                                               14,037               14,037
                                                                         ----------           ----------

Cash - End of the Period                                                        180                  180
                                                                         ==========           ==========
</TABLE>

      See accompanying notes to unaudited consolidated financial statements

                                       5
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                   (Unaudited)

1. Reverse Acquisition, Nature of Operations and Continuance of Business

     On April 21,  2005,  the  Company's  Board of Directors  met to  reorganize
     UltraGuard  Water Systems Corp (now  Creative  Eateries  Corporation).  The
     Company  voted to change  its  business  focus from  water  filtration  and
     disinfection to restaurant franchising. On May 4, 2005, the Company filed a
     form PRE14A with the SEC,  calling a Special Meeting of the shareholders to
     be held on June 13, 2005. At the meeting,  the shareholders  approved by an
     88.65%  majority  vote, a proposal to change the Company's name to Creative
     Eateries Corporation  ("Creative") and by an 88.58% majority vote, to split
     the  outstanding  shares on a 1 for 100 basis.  All per share  amounts have
     been retroactively adjusted to reflect the reverse stock split.

     As part of the  reorganization,  on June 30,  2005,  the Board of Directors
     finalized  details of the sale of UltraGuard Water System's  filtration and
     disinfection technologies and intellectual property to Innovative Fuel Cell
     Technologies  Inc (IFCT).  All shares of IFCT owned by the Company  will be
     distributed as a dividend in kind to Company shareholders of record on June
     12, 2005.  The number of IFCT shares  received by each Company  shareholder
     will be pro-rata to the number of Company shares owned by the shareholder.

     On July 11,  2005,  the  Company's  Board  of  Directors  approved  a share
     exchange   agreement  between   shareholders  of  Creative  and  Restaurant
     Companies  International,  Inc  ("RCI"),  a  Nevada  corporation.  RCI is a
     franchise development company organized on September 24, 2004 to capitalize
     on the growing demand for fast casual dining in North America.  On July 11,
     2005,  the Company  acquired,  by way of reverse  acquisition,  100% of the
     issued and outstanding capital stock of RCI in exchange for the issuance of
     30,802,367  shares  of  the  Company's  common  shares.   Pursuant  to  the
     Agreement, the Company's officers resigned. As a result, there was a change
     in control of the Company to the former shareholders of RCI.

     For  financial   accounting   purposes,   the  acquisition  was  a  reverse
     acquisition  of the Company by RCI under the purchase  method of accounting
     and  was  treated  as  a   recapitalization   with  RCI  as  the  acquirer.
     Accordingly,  the historical  financial statements have been restated after
     giving effect to the July 11, 2005  acquisition of the Company.  Consistent
     with  reverse  acquisition  accounting:  (i) all of the  Company's  assets,
     liabilities,  and  accumulated  deficit,  are  reflected at their  combined
     historical  cost (as the  accounting  acquirer)  and (ii) the  pre-existing
     outstanding  shares of the Company (the accounting  acquiree) are reflected
     at their net asset value.

     These  consolidated  financial  statements have been prepared in accordance
     with United States generally  accepted  accounting  principles,  on a going
     concern  basis,  which  contemplates  the  realization  of  assets  and the
     satisfaction  of  liabilities  and  commitments  in the  normal  course  of
     business.  As at June 30, 2005, the  UltraGuard  Water Systems Corp has not
     recognized  significant revenue, has a working capital deficit of $863,409,
     and has accumulated  operating losses of $1,671,571  since  inception.  The
     combined company has yet to generate  significant  revenue and will require
     additional  capital to do so. The  continuation of the Company is dependent
     upon the continuing  financial  support of creditors and  stockholders  and
     obtaining  short-term  and long-term  financing,  the completion of product
     development and achieving profitability. These conditions raise substantial
     doubt about the  Company's  ability to continue as a going  concern.  These
     financial  statements do not include any adjustments  that might arise from
     this uncertainty. Management is attempting to raise debt and equity capital
     and  use  the   proceeds  to  develop   restaurant   concepts  and  explore
     acquisitions of other existing restaurant  concepts.  However,  there is no
     assurance  that the Company will be  successful  in executing  its business
     plan.

2. Significant Accounting Policies

     CONSOLIDATED FINANCIAL STATEMENTS

     These  financial  statements  include the accounts of Creative and RCI. All
     significant  inter-company  transactions and balances of the  subsidiaries,
     Q's  Franchise  Company  and Fit `N Healthy  Franchise  Company,  have been
     eliminated.

     On July 11, 2005 ("the acquisition  date"),  Creative Eateries  Corporation
     ("Creative")  acquired all of the outstanding stock of Restaurant Companies
     International,  Inc ("RCI"). For accounting  purposes,  the acquisition was
     treated as the  acquisition  of Creative by RCI with RCI as the  accounting
     acquirer  (reverse  acquisition).  As a result,  the  historical  financial
     statements prior to the acquisition date are those of RCI from July 1, 2005
     (date of inception of RCI).

                                       6
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)

     CASH AND CASH EQUIVALENTS

     Cash and cash  equivalents  include  cash on hand,  in banks and all highly
     liquid investments with maturity of three months or less when purchased.

     PROPERTY AND EQUIPMENT

     Property and equipment are recorded at cost.  Depreciation is computed on a
     straight-line  method  using an  estimated  useful  life of five  years for
     furniture and three years for computer equipment.

     REVENUE RECOGNITION

     The Company  recognizes  revenue in accordance with Securities and Exchange
     Commission  Staff  Accounting  Bulletin  No.  104,  "Revenue  Recognition."
     Revenue will be  recognized  only when the price is fixed or  determinable,
     persuasive evidence of an arrangement exists, the service is performed, and
     collectibility is reasonably assured.  Deferred revenue represents deposits
     received for the  development  of  restaurants  sites.  Those  deposits are
     recognized as revenue when the respective stores open.

     ESTIMATES AND ASSUMPTIONS

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted   accounting   principles  used  in  the  United  States  requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts  of  assets  and  liabilities  in  the  financial   statements  and
     accompanying notes. Actual results could differ from these estimates.

     BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

     The Company  computes net income (loss) per share in  accordance  with SFAS
     No. 128, "Earnings per Share". This statement requires presentation of both
     basic  and  diluted  earnings  per  share  (EPS) on the face of the  income
     statement. Basic EPS is computed by dividing net income (loss) available to
     common  shareholders  (numerator) by the weighted  average number of common
     shares  outstanding  (denominator)  during the  period.  Diluted  EPS gives
     effect to all  dilutive  potential  common  shares  outstanding  during the
     period  including  stock  options,  using the treasury  stock  method,  and
     convertible  preferred stock,  using the if-converted  method. In computing
     diluted EPS, the average stock price for the period is used in  determining
     the number of shares  assumed to be  purchased  from the  exercise of stock
     options or  warrants.  The  convertible  debt of $50,000  plus  interest is
     convertible  into  220,000  shares at December 31,  2005.  These  potential
     common shares have been excluded from the diluted EPS  calculation  because
     the effect is anti-dilutive.

     ACCOUNTING FOR STOCK-BASED COMPENSATION

     The Company  accounts for stock based  compensation in accordance with SFAS
     No.  123R,  "Accounting  for  Stock-Based   Compensation."  This  statement
     requires  that stock  awards  granted  subsequent  to  January 1, 2006,  be
     recognized as compensation expense based on their fair value at the date of
     grant.  The Company accounts for stock issued for services to non-employees
     in  accordance  with SFAS No. 123 and EITF 96-18.  Compensation  expense is
     based on the fair market  value of the stock award or fair market  value of
     the goods and services received whichever is more reliably measurable.

     No stock  options  were  granted  to  employees  in  fiscal  2004 and 2005,
     therefore no pro-forma disclosures have been presented.

     LONG-LIVED ASSETS

     SFAS No. 144,  "Accounting  for the  Impairment  or Disposal of  Long-Lived
     Assets"  establishes a single  accounting model for long-lived assets to be
     disposed of by sale including  discontinued  operations.  SFAS 144 requires
     that  these  long-lived  assets be  measured  at the lower of the  carrying
     amount or fair  value less cost to sell,  whether  reported  in  continuing
     operations or discontinued operations.

                                       7
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)

     FINANCIAL INSTRUMENTS

     The fair value of cash,  accounts  receivable,  accounts  payable,  accrued
     liabilities  and  amounts  owing  to  related  parties  approximates  their
     carrying  value  due to the  immediate  or  short-term  maturity  of  these
     financial instruments.  The Company is not exposed to significant interest,
     currency or credit risks arising from these financial instruments.

     CONCENTRATION OF CREDIT RISK

     Financial  instruments that potentially  subject the Company to credit risk
     consist  principally of cash. Cash was deposited with a high credit quality
     institution.

     RECENT ACCOUNTING PRONOUNCEMENTS

     The Company  adopted  Statement of Financial  Accounting  Standards No. 123
     (revised 2004), Share-Based Payment (SFAS 123R), effective January 1, 2006.
     SFAS  123R  requires  the  recognition  of the fair  value  of  stock-based
     compensation in net income.  Stock-based compensation primarily consists of
     stock  options.  Stock options are granted to employees at exercise  prices
     equal  to the  fair  market  value of our  stock  at the  dates  of  grant.
     Generally,  options  fully  vest  immediately  and expire 30 days after the
     employee leaves the company.  The recognizes the  stock-based  compensation
     expense over the requisite service period of the individual grantees, which
     generally  equals the vesting  period and provides  newly issued  shares to
     satisfy stock option  exercises.  As there were no option awards granted in
     the three  months  ended  March 31, 2006 and all prior  option  awards were
     fully  vested  prior to  January  1, 2006  there  was no effect  due to the
     implementation of SFAS 123R in the three month period ended March 31, 2006.

     In December  2004,  FASB issued SFAS No.  153,  "EXCHANGES  OF  NONMONETARY
     ASSETS - AN  AMENDMENT  OF APB OPINION NO. 29". The guidance in APB Opinion
     No.  29,  "ACCOUNTING  FOR  NONMONETARY  TRANSACTIONS",  is  based  on  the
     principle that exchanges of nonmonetary  assets should be measured based on
     the fair value of the  assets  exchanged.  The  guidance  in that  Opinion,
     however, included certain exceptions to that principle. SFAS No. 153 amends
     Opinion No. 29 to eliminate  the  exception  for  nonmonetary  exchanges of
     similar  productive  assets and  replaces it with a general  exception  for
     exchanges of nonmonetary  assets that do not have commercial  substance.  A
     nonmonetary  exchange has commercial  substance if the future cash flows of
     the  entity  are  expected  to  change  significantly  as a  result  of the
     exchange.  The  provisions of SFAS No. 153 are  effective  for  nonmonetary
     asset exchanges  occurring in fiscal periods beginning after June 15, 2005.
     Early  application  is  permitted  and  companies  must apply the  standard
     prospectively.  The  adoption of this  standard  is not  expected to have a
     material  effect  on the  Company's  results  of  operations  or  financial
     position.

     In March 2005, the SEC staff issued Staff Accounting Bulletin No. 107 ("SAB
     107") to give guidance on the  implementation of SFAS No. 123R. The Company
     will consider SAB 107 during the implementation of SFAS NO. 123R.

     LOSS CONTINGENCIES

     The Company  estimates a loss  contingency in accordance  with Statement of
     Financial    Accounting   Standards   ("SFAS"   No.   5   "Accounting   for
     Contingencies".  The  Company  accrues  the loss by a charge to income when
     there is  information  available that it is probable that an asset has been
     impaired or a liability has been incurred and the amount of the loss can be
     reasonably estimated.

     GOODWILL AND OTHER INTANGIBLES

     In July 2001, the Financial  Accounting  Standards  Board  ("FASB")  issued
     statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill
     and Other Intangible Assets," which is effective for fiscal years beginning
     after December 15, 2001.  SFAS 142 prohibits the  amortization  of goodwill
     and intangible  assets with indefinite useful lives but requires that these
     assets be reviewed for  impairment at least annually or on an interim basis
     if an event occurs or  circumstances  change that could indicate that their
     value  has  diminished  or been  impaired.  Other  intangible  assets  will
     continue to be amortized over their  estimated  useful lives.  In addition,
     the  standard  includes  provisions  for the  reclassification  of  certain
     existing  recognized  intangibles as goodwill,  reassessment  of the useful
     lives of  existing  recognized  intangibles,  reclassification  of  certain
     intangibles out of previously  reported goodwill and the  identification of
     reporting units for purposes of assessing  potential future  impairments of
     goodwill.

                                       8
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)

     INCOME TAXES

     Potential  benefits of income tax losses are not recognized in the accounts
     until realization is more likely than not. The Company has adopted SFAS No.
     109 "Accounting for Income Taxes" as of its inception. Pursuant to SFAS No.
     109,  the  Company  is  required  to  compute  tax asset  benefits  for net
     operating losses carried forward. Potential benefit of net operating losses
     have not been recognized in these financial  statements because the Company
     cannot  be  assured  it is more  likely  than not it will  utilize  the net
     operating losses carried forward in future years.

3. Property and Equipment

     Property and equipment is stated at cost less accumulated depreciation.

                                                         March 31,     March 31,
                                                           2006          2005
                                         Accumulated     Net Book      Net Book
                                Cost     Depreciation      Value         Value
                                ----     ------------      -----         -----
                                 $            $              $             $

     Property and equipment    3,156         461           2,695           --
                              ======        ====          ======          ===

4. Debt

     a)   On August 15, 2005, a debenture payable totalling $50,000 was acquired
          with the  purchase  of Fit & Healthy,  a  restaurant  concept  with no
          operations  with  quarterly  interest of $1,250.  Principal was due on
          December 1, 2005.  The holder has the option to convert all or part of
          the principal amount and accrued interest into common stock, par value
          $0.001 per share at a price per share  equal to 50% of the closing bid
          price of the common stock on the date that the company receives notice
          of  conversion.  The Company  recognized  the value of the  beneficial
          conversion  feature as $50,000.  Since the obligation matured in 2005,
          the full amount of the discount was  amortized as interest  expense in
          the year ended  December 31, 2005. The Company is currently in default
          of this  debenture as no payments of interest or  principal  have been
          made.  Interest will continue to accrue until the debenture is paid or
          converted into common stock.

     b)   On November 8, 2005, a note payable totalling $100,000 and bearing 12%
          interest per annum was received. Principal is due on November 6, 2006.
          Interest is accrued and payable on November 6, 2006.

     c)   On January 26, 2006, a note payable  totalling  $7,100 and bearing 10%
          interest per annum was received.  Principal is interest are payable on
          demand.

<TABLE>
<CAPTION>
          Type             Description                     Date       Principal      Interest       Due Date
          ----             -----------                     ----       ---------      --------       --------
<S>      <C>              <C>                           <C>           <C>           <C>             <C>
          Note Payable     Restaurant Companies Int'l    4/2/2005      $100,000      8%/Annum       7/2/2006
          Debenture        Fit `N Healthy                8/15/2005     $ 50,000      10%/Annum      12/1/2005
          Note Payable     Creative Eateries             11/8/2005     $100,000      12%/Annum      11/8/2006
          Note Payable     Kenneth Fielding                1/26/06     $  7,100      10%/Annum      On Demand
</TABLE>

                                       9
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)

     d)   On April 25, 2003, Chelverton Fund Limited filed a suit in the Supreme
          Court of British Columbia  against  UltraGuard for non-payment of debt
          in the amount of $155,000.  UltraGuard entered an appearance,  filed a
          defence  against this claim,  and attempted to negotiate a settlement.
          Chelverton filed additional information that supported their claim and
          UltraGuard responded with a "no defines" position. Judgment was issued
          in the amount of $183,944  (Cnd$234,642)  including interest and legal
          costs. On April 5, 2004, the Company  appeared in the Supreme Court of
          British  Columbia  to provide to  Chelverton  and the court,  specific
          information  pertaining to the Company's assets and its ability to pay
          the judgment  including  interest.  The hearing was  adjourned  with a
          requirement  that UltraGuard  provide  additional  detailed  financial
          information.  This information has now been provided.  The Company has
          been in discussions  with Baker Tilley Co.  voluntary  liquidators for
          Chelverton  and has  reached an  agreement  to pay  $10,000  per month
          beginning  December 1, 2005 until the debt is settled.  The Company is
          currently in default of this  agreement as no payments have been made.
          With accrued interest, the amount owing is now $212,565.

5. Amounts Owing to Related Parties

     Unpaid wages, consulting and loans amounting to $555,607 owed to two former
     officers and current  directors  and their  related  companies,  659999 BC,
     Ltd., Integrated Industries,  and UV Systems Technology, are due on demand,
     unsecured,  and will bear interest  calculated  at 10%  effective  April 1,
     2005.  Included  in this  amount  of  $447,468  are  amounts  owing  to the
     President of the Company as a result of loans, management fees and expenses
     amounting to $35,873  advanced  during the period ending December 31, 2005.
     In fiscal 2003,  two officer  directors were issued 24,000 shares of common
     restricted  stock of the Company at $3.38 per share  totalling  $81,120 for
     partial  payment of amounts owing.  During this fiscal  period,  on June 8,
     2005  officers  and  directors  were  issued  18,420  shares  from the 2004
     Incentive  Plan of Creative at $1.00,  the current market price on the date
     of issue was  charged  against the amounts  payable to these  officers  and
     directors.  On April 29, 2005,  25,872 of  restricted  stock were issued at
     $0.70 to settle $18,110 debt owing to a company managed by two officers and
     directors.  Advances to the officers and directors  totalling $108,139 have
     been applied to the amount owing to reduce the payable to $447,469.

6. Common Stock

     a) Stock Split

          On June 13,  2005,  the  Board  of  Directors  approved  a one for one
          hundred  reverse stock split of common shares.  The Company issued one
          share for each one hundred  common shares  outstanding  effective June
          13, 2005.  All per share amounts have been  retroactively  adjusted to
          reflect  the reverse  stock  split.  The number of shares  outstanding
          pre-reverse  split was 60,891,806.  After giving effect to the reverse
          split the outstanding shares totalled 609,021.

     b)   On November 26, 2003,  the Company  adopted The  Incentive  Plan ("the
          Plan") that was registered with the Securities  Exchange Commission on
          December  1, 2003 on Form S-8.  Under the Plan,  the Company may issue
          5,000,000  shares of common  stock or grant  options.  During the year
          ended  December  31, 2004,  the Company  issued all  remaining  shares
          pursuant to the Plan.

                                       10
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)


     c)   Independents Contractors/Consulting Plan

     On July 27, 2005 the Company adopted the Independent Contractors/Consulting
     Plan (the "Plan").  Under the Plan, the Company may issue 5,000,000  common
     shares or grant  options.  The value of the shares  granted  is  determined
     based on the trading  price of the  Company's  common  stock at the date of
     grant. The shares issued are in the following table:

                 DATE GRANTED            NUMBER OF SHARES        VALUE
                 ------------            ----------------        -----
               January 5, 2006                750,000             $.20
               January 5, 2006                480,000             $.20
               January 5, 2006                250,000             $.20
               January 5, 2006                520,000             $.20

     d)   Qualified Stock Option Plan

     On February,  9 2006 the Company  adopted the  Qualified  Stock Option Plan
     (the "Plan"). Under the Plan, the Company may issue 5,000,000 common shares
     or grant options.  The value of the shares  granted is determined  based on
     the trading price of the Company's  common stock at the date of grant.  The
     Company  issued 800,000  options to one employee  during the quarter ending
     March 31,  2006.  The  Company  expensed  the fair value of the  options of
     $168,000  in  the  quarter  ended  March  31,  2006.   The  options  vested
     immediately  and were  exercised  within the  period.  There are no options
     outstanding at March 31, 2006.

     e)   Issuance of Restricted Common Shares

     During the period  ending  March 31,  2006 the  Company  issued  restricted
     shares  to two  employees  for  90,000  shares as an  incentive  and to six
     consultants for consulting services in the following amounts:

               January 5, 2006                250,000
               January 20, 2006                40,000

     Valuation of Common Stock Issued for Services and Assets

     The Company applies EITF 96-18 "Accounting for Equity  Instruments that are
     issued to Other  Than  Employers  for  Acquiring,  or in  Conjunction  with
     Selling,   Goods  or  Services",   in  accounting   for  shares  issued  to
     consultants.  The values of these shares were based on calculating the fair
     market value of the stock and the services provided.

                                       11
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)

     During the quarter  ending March 31, 2006 the Company  issued the following
     common shares:

<TABLE>
<CAPTION>
                                                                                               Weighted
                                                                                                Average
                                                                                              Fair Market
                                                                                    Shares       Value        Total
                                                                                    Issued     Per Share   Fair Value
                                                                                    ------     ---------   ----------
                                                                                      #            $            $
<S>                                                                               <C>            <C>         <C>
     Consulting services provided pursuant to incentive plan (Note 6c)             2,000,000      .20         400,000
     Employee Qualified Stock Option Plan (Note 6d) shares under options             800,000      .21         168,000
     Consulting services provided pursuant to 144 restricted shares (Note 6e)        290,000      .22          63,800
                                                                                   ---------                 --------
                                                                                   2,570,000                  631,800
                                                                                   =========                 ========
</TABLE>

8. Legal Proceedings/Contingency Accrual

     a)   On October 20, 1998, a suit was filed in the Supreme  Court of British
          Columbia  by an original  shareholder  ("the  plaintiff")  against the
          Company's  President  and  Director,  and a former  Director  and Vice
          President of the Company. The plaintiff alleges that in April of 1996,
          he purchased  common shares of the Company  based on a  representation
          that  they  would  be free  trading  in 40 days  of "the  filing  of a
          prospectus."  The plaintiff  further alleges that in September of 1996
          he  purchased  additional  common  shares of the Company  based on the
          representation that the shares would be free trading within 40 days of
          the common shares  becoming  free trading and that the  representation
          was a warranty and was incorrect.  The plaintiff  further alleges that
          he  suffered a loss  because the share  price  decreased  while he was
          holding  the  shares and is seeking  damages  for breach of  warranty,
          negligence, misrepresentation and breach of fiduciary duty. The amount
          claimed is not  specified.  The  Company  filed an answer  denying the
          claims and will  continue  to actively  defend the suit.  The suit has
          remained  inactive since early 1999.  There has been no loss provision
          accrued   pursuant  to  this  action  against  the  Company,   as  the
          probability of incurring a material loss is remote.

     b)   On April 25, 2003, Chelverton Fund Limited filed a suit in the Supreme
          Court of British Columbia  against  UltraGuard for non-payment of debt
          in the amount of $155,000.  UltraGuard entered an appearance,  filed a
          defence  against this claim,  and attempted to negotiate a settlement.
          Chelverton filed additional information that supported their claim and
          UltraGuard responded with a "no defines" position. Judgment was issued
          in the amount of $183,944  (Cnd$234,642)  including interest and legal
          costs. On April 5, 2004, the Company  appeared in the Supreme Court of
          British  Columbia  to provide to  Chelverton  and the court,  specific
          information  pertaining to the Company's assets and its ability to pay
          the judgment  including  interest.  The hearing was  adjourned  with a
          requirement  that UltraGuard  provide  additional  detailed  financial
          information.  This information has now been provided.  The Company has
          been in discussions  with Baker Tilley Co.  voluntary  liquidators for
          Chelverton  and has  reached an  agreement  to pay  $10,000  per month
          beginning  December 1, 2005 until the debt is settled.  The Company is
          currently in default of this  agreement as no payments have been made.
          With accrued interest, the amount owing is now $212,565.

                                       12
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)


     c)   On June 6, 2003, a group of shareholders  (Shareholder  Group) filed a
          consent  resolution,  which, among other things elected a new slate of
          directors and revised the Company's  by-laws.  The Company  refused to
          accept the  consent  resolution  or  by-laws as in the  opinion of the
          Company's  legal  counsel,   the  consent   resolutions  were  not  in
          accordance  with  Nevada  Statutes or the filing  requirements  of the
          Security and Exchange Commission.  At a directors meeting held June 9,
          2003, the Company elected two additional  directors:  Edward White and
          Erin  Strench to the  Company's  board,  bringing  the total number of
          directors to five. On June 16, 2003, the  Shareholder  Group filed for
          and obtained a temporary  restraining  order (TRO) against the Company
          and its five  directors  prohibiting  the  Company,  from among  other
          things,  issuing stock,  transferring assets,  changing management and
          other  actions  that would  affect the status quo of the  Company.  In
          addition,  two  shareholders  issued writs against various  directors,
          alleging  breach of fiduciary  duty in respect of the issue of certain
          common shares to the Company's  officers others.  On June 24, 2003, in
          discussions  between legal counsel for  plaintiff,  respondent and the
          hearing Judge,  the TRO was vacated and a date of July 2, 2003 was set
          for a new TRO hearing to be held in Reno, Nevada. At the July 2, 2003,
          the TRO hearing  Judge did not grant a TRO and requested the plaintiff
          and respondent file a series of three briefs outlining their position.
          The first brief was filed on July 11, 2003 by the  Company's  counsel.
          The  plaintiff  responded on July 18, 2003 and the  Company's  counsel
          filed  the  final  brief on July 25,  2003.  The  Judge has not made a
          ruling on the TRO. The Company's  counsel has responded to the various
          other suits filed against the Company and its  directors.  Counsel for
          the Company was  successful  in moving these actions from Nevada State
          jurisdiction to federal jurisdiction.

          In March 2004, the Company's  legal counsel filed to withdraw from the
          action as a result of  non-payment  of legal fees.  The court approved
          the  withdrawal  of the lawyer on two of the four cases.  By April 29,
          2004, the Plaintiff and the Defendant were required to file a proposed
          pre-trial order with the Federal Court.  The Company and the Plaintiff
          requested  and received an extension to August 26, 2004 to settle this
          matter or file the pre-trial  order,  which upon  approval;  the Court
          will set down for trial. On October 28, 2004 the Company jointly filed
          a pre-trial  notice and on November 15, 2004 in a conference call with
          the sitting Judge a trial date was set for February 22, 2005. Prior to
          the trial date, the parties reached a settlement on all matters. Under
          the  terms  of the  settlement,  the  Plaintiffs  agreed  to and  have
          dismissed all of the lawsuits and have cancelled all debts owed by the
          Company to the Plaintiff amounting to about $98,797.

     d)   The  Company  has made a  provision  for a loss of  $27,000 in a claim
          filed with the British Columbia Labor Relations (LRB) Board, made by a
          former employee for wrongful dismissal. The loss amount was the amount
          determined by the LRB. This amount represented the total probable loss
          of the lawsuit and has been  recorded  as an accrued  liability  as of
          December 31, 2004 and 2003.  On October 20, 2005 the employee  filed a
          lawsuit in the Supreme Court of British  Columbia  against the Company
          and a former  subsidiary;  UV Systems  Technology  Inc whom the former
          employee was  employed by,  claiming  wrongful  dismissal.  UV Systems
          Technology  Inc has filed a  Statement  of  Defense.  Counsel  for the
          former  employee  informed the Company that counsel would be filing an
          amended Statement of Claim. The amount of the claim is for one year of
          salary,  which would represent  CAN$90,000  (US$77,193)  including the
          $27,000  determined  for  the  LRB.  Subsequent  to the  year-end,  on
          February 28, 2006, the Company  appeared in BC Supreme Court at a Rule
          18A  hearing at which the lawyers  for the  plaintiff  and the Company
          each  presented  evidence  to the Court.  The Judge has  reserved  his
          decision on the matter.  The  possible  rulings by the Court may be in
          favour of either the  Company,  the  Plaintiff or the Court could also
          dismiss the Rule 18A  hearing  and set the matter to trial,  to a date
          set in April 2006.

     e)   On October 4, 2005,  the Company  completed a Purchase  Agreement with
          Franchise  Capital  Corporation.  Creative  purchased  from  Franchise
          Capital its  interest in  Kokopelli  Sonoran  Grill,  Comstock  Jakes,
          Cousin Vinnie's Italian Diner, and Kirby Foo's Asian Grill. As per the
          Agreement,  Creative will pay $200,000  cash and  3,583,667  shares of
          Creative's  common stock.  The Company has not paid the cash,  but has
          funded  approximately  $150,000 of the Kokopelli  and Comstock  Jake's
          operations.

                                       13
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)


          On December 29, 2005,  the Company and Franchise  Capital  Corporation
          have agreed to rescind the October Purchase Agreement and have entered
          into a Funding  Agreement.  The Company will provide Franchise Capital
          Corporation a total $600,000 in funding for the operation of Kokopelli
          and Comstock.  The Company has already funded  approximately  $150,000
          and has agreed to fund the  balance  of  approximately  $450,000  with
          monthly payments of $100,000 beginning January 25, 2006. In return for
          the funding of operation for Kokopelli and Comstock Jake's,  Franchise
          Capital Corporation will pay the Company an amount equal to 50% of the
          profits Franchise Capital  Corporation  receives from its ownership in
          Kokopelli  and Comstock  Jake's for the periods  commencing on July 1,
          2006 and ending on June 30, 2011.  If the Company fails to provide the
          full amount of funding but at least $300,000, the profit payments will
          be reduced to 25%. If the Company  fails to provide at least  $300,000
          of  funding,  then the  Franchise  Capital  Corporation  will have not
          obligation to pay any profit  payments to the Company.  The Company is
          currently in default with this agreement.

     f)   On  November  1, 2005 the  Company's  board of  directors  approved  a
          purchase  agreement  with  Pasta  Pranzo,  LLC.  The  members of Pasta
          Pranzo, LLC approved the purchase agreement on the same date. The date
          to close the purchase was set for January 1, 2006.  The property to be
          acquired was the Pasta Pranzo System  including,  without  limitation,
          the Marks and Recipes of their California  operation.  Pursuant to the
          terms of the  purchase  agreement,  $300,000  in common  shares of the
          Company  and  a  note  for  $300,000  was  to  be  exchanged  for  the
          aforementioned assets. Said shares shall be restricted.  The principal
          followed in determining  the amount of  consideration  given was based
          upon the  current  value and  future  revenue  streams  and the market
          exposure  in  relation  to the  Company's  current  position  and  the
          restrictive nature of the stock.

          On December 28, 2005, the Company  rescinded the agreement,  cancelled
          the issuance for $300,000 common shares,  and cancelled the promissory
          note for  $300,000,  effective the same day. The Company was unable to
          secure the required financing to close on the purchase agreement.

9. Business Combination

     The  Company  valued the  transaction  to acquire  Ultra Guard based on the
     estimated fair value of the assets acquired at June 30, 2005. Ultra Guard's
     common  stock  issued  in  the  transaction  is  thinly  traded  and it was
     determined that the estimated fair value of the net assets  transferred was
     a better indicator of the value of the transaction. Neither Ultra Guard nor
     RCI had any significant  operations at the time of the  transaction.  Ultra
     Guard had a net deficit of $680,872 at acquisition as the current assets of
     $118,801were  acquired along with the liabilities  totalling $799,672.  The
     Company determined that the book value of the net assets  approximated fair
     value in that most were  current  assets  and  liabilities  expected  to be
     settled in the near term.  Because the  liabilities  assumed  exceeded  the
     assets acquired, the difference is recorded as charge to additional paid in
     capital.

                                       14
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)

          UltraGuard Water Systems                 June 30, 2005
          ------------------------                 -------------
          CURRENT ASSETS
              Cash                                   $   5,678
              Accounts receivable                        4,645
              Notes receivable                         103,710
              Prepaid expenses and deposits              4,768

          TOTAL CURRENT ASSETS                       $ 118,801

          CURRENT LIABILITIES
               Accounts payable                        178,078
               Accrued liabilities                     426,404

          TOTAL CURRENT LIABILITIES                  $ 604,482

          OTHER LIABILITIES                            195,190

          TOTAL LIABILITIES                            799,672

          DIFFERENCE                                  (680,872)

10. Income Taxes

     Deferred income taxes reflect the net tax effects of temporary  differences
     between  the  carrying  amounts of assets  and  liabilities  for  financial
     reporting  purposes  and the  amounts  used for  income tax  purposes.  The
     Company has a deferred income tax asset of $2,222,000 as of March 31, 2006.
     The net  deferred  income tax asset has been  reduced in its  entirety by a
     valuation  allowance.  No  provision  or benefit for income  taxes has been
     reported in the  accompanying  statements of  operations  since any current
     income tax benefit  would be offset by an equal  increase in the  valuation
     allowance.  The valuation  allowance  increased by $2,222,000  for the year
     ended December 31, 2005.  There were no material tax effects for the period
     from September 24, 2004 (date of inception) through December 31, 2004

                                       15
<PAGE>
                          Creative Eateries Corporation
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                                    Continued
                                   (Unaudited)

     A  reconciliation  of the  differences  between the statutory and effective
     income tax rates for the year ended  December  31,  2005 and for the period
     from September 24, 2004 (date of inception)  through  December 31, 2004 was
     as follows:

<TABLE>
<CAPTION>
                                                 2005                            2004
                                    -------------------------           --------------------
                                       Amount            %               Amount          %
                                    -----------       -------           --------      ------
<S>                                 <C>                <C>              <C>          <C>
     Federal statutory rates        $(1,889,908)       (34.00)          $     --          --
     State income taxes - net of
      federal benefit                  (333,513)        (6.00)                --          --
     Valuation allowance              2,222,154         39.08                 --          --
     Other                                1,268           .02                 --          --
                                    -----------       -------           --------      ------
              Effective rate        $         0             0           $     --          --
                                    ===========       =======           ========      ======
</TABLE>

     The total net operating loss carry forward of  approximately  $1,072,000 as
     of December 31, 2004, for both federal and state purposes,  begins expiring
     in 2024 and 2009, respectively.

11. Subsequent Events

     On May 8, 2006 the  Company  entered  into a  consulting  agreement  with K
     Kapital  Group,  Inc. As per the  agreement K Kapital will provide  various
     services  related to the Company's  business in exchange for 300,000 shares
     of the Company's stock.

                                       16
<PAGE>
ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF RESULTS OF  OPERATIONS  AND
         FINANCIAL CONDITIONS

CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

This report contains  forward-looking  statements  within the meaning of Section
27A of the  Securities  Act and  Section  21E of the  Securities  Exchange  Act.
Forward-looking statements deal with our current plans, intentions,  beliefs and
expectations  and are  statements  of future  economic  performance.  Statements
containing  terms  like  "believes",  "does not  believe",  "plans",  "expects",
"intends", "estimates",  "anticipates", and other phrases of similar meaning are
considered to imply uncertainty and are forward-looking statements.

Forward-looking  statements  involve known and unknown  risks and  uncertainties
that may cause our actual  results in future periods to differ  materially  from
what is currently  anticipated.  We make cautionary  statements  throughout this
report and the  documents we have  incorporated  by reference,  including  those
stated  under the  heading  "Risk  Factors".  You should  read these  cautionary
statements  as  being  applicable  to  all  related  forward-looking  statements
wherever they appear in this report,  the materials  referred to in this report,
and the materials incorporated by reference into this report.

We cannot  guarantee  our future  results,  levels of activity,  performance  or
achievements.  Neither we nor any other person  assumes  responsibility  for the
accuracy and completeness of these forward-looking  statements.  We are under no
duty to  update  any of the  forward-looking  statements  after the date of this
report.

Where we say "we",  "us",  "our",  or "the Company",  we mean Creative  Eateries
Corporation and its subsidiaries.

MANAGEMENT DISCUSSION-OVERVIEW

As a result of the reverse  acquisition  of Creative  Eateries on July 11, 2005,
the Company's status changed to that of a development stage company.  Therefore,
consolidated  balance sheets of Creative  Eateries  Corporation  and the related
consolidated  statements of operations and cash flows and stockholders'  equity,
include operations for the period from September 24, 2004 (Date of Inception) to
March 31, 2006. The company has generated total revenue since inception to March
31, 2006 of $50,505.  This revenue  relates to services prior to the acquisition
and is unrelated to the restaurant franchising business.

The Company has incurred aggregate net losses of approximately $6,200,188 during
the period from  inception  on  September  24, 2004 to March 31,  2006.  We will
likely continue to incur  significant  additional  operating losses as marketing
efforts  continue.  Operating  losses may fluctuate from quarter to quarter as a
result of  differences  in the timing of expenses  incurred  and when revenue is
recognized.

Total general and administrative  operating expenses for the three months ending
March 31, 2006 were  $669,201.  This was primarily for  consulting  fees and the
issuance of the Company's common stock for these fees.

The Company  recorded a net loss for the three  months  ending March 31, 2006 of
$6,200,188.  This loss was  primarily  due to the  expense  related  to  various
consultants.  The consultants provide such services and advice to the Company in
business development, business strategy and corporate image

RESULTS OF OPERATIONS

The Company had revenue of $50,000 for the three  months  ending March 31, 2006.
This revenue is from  restaurant  development  services the Company  provides to
restaurant franchisees.

Total general and administrative  operating expenses for the three months ending
March 31, 2006 were $689,801.  This was primarily for consulting fees, which and
the issuance of the Company's common stock for these fees.

                                       17
<PAGE>
The Company  recorded a net loss for the three  months  ending March 31, 2006 of
$689,801.  This  loss  was  primarily  due to the  expense  related  to  various
consultants.  The consultants provide such services and advice to the Company in
business development, business strategy and corporate image.

LIQUIDITY AND CAPITAL RESOURCES

The Company  experienced a cash outflow of $(203,857) from operating  activities
during the three months ending March 31, 2006.  The Company is moving forward in
executing  its business  plan and is in  negotiations  with several  acquisition
targets in the  restaurant  industry.  To acquire  the  restaurants  the Company
intends  to obtain  financing  through a  combination  of debt and  equity.  The
Company is currently in negotiations  with a financial  institution and hopes to
soon complete an agreement with them.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The  preparation  of our  financial  statements in  conformity  with  accounting
principles  generally  accepted  in the United  States of America  requires  our
management to make certain  estimates and  assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  As such, in accordance with
the use of  accounting  principles  generally  accepted in the United  States of
America,  our actual  realized  results  may differ  from  management's  initial
estimates  as reported.  A summary of our  significant  accounting  policies are
detailed  in the  notes  to  the  financial  statements  which  are an  integral
component of this filing.

CERTAIN RISK FACTORS AFFECTING OUR BUSINESS

Our  business  involves  a high  degree  of  risk.  Potential  investors  should
carefully  consider the risks and  uncertainties  described  below and the other
information  in this report before  deciding  whether to invest in shares of our
common  stock.  If any of the  following  risks  actually  occur,  our business,
financial condition, and results of operations could be materially and adversely
affected.  This could  cause the trading  price of our common  stock to decline,
with the loss of part or all of an investment in the common stock.

WE HAVE A LIMITED  OPERATING  HISTORY AND THERE IS NO ASSURANCE THAT OUR COMPANY
WILL  ACHIEVE  PROFITABILITY.   Until  recently,  we  have  had  no  significant
operations with which to generate profits or greater liquidity. Although we have
recently  established joint ventures with various fast-casual dining restaurants
in keeping with our proposed  business model, we have not generated a meaningful
amount of operating revenue and we have a very limited current operating history
on which investors can evaluate our potential for future success. Our ability to
generate revenue is uncertain and we may never achieve profitability.  Potential
investors  should  evaluate  our  company  in  light  of the  expenses,  delays,
uncertainties,   and   complications   typically   encountered   by  early-stage
businesses,  many of which will be beyond our control.  These risks  include the
following:

     *    lack of sufficient capital,
     *    unanticipated problems,  delays, and expenses relating to acquisitions
          of  other   businesses,   concepts,   or   product   development   and
          implementation,
     *    licensing and marketing difficulties,
     *    competition, and
     *    uncertain market acceptance of our products and services.


As a result of our  limited  operating  history,  our plan for  growth,  and the
competitive  nature  of the  markets  in which  we may  compete,  our  company's
historical  financial data are of limited value in anticipating  future revenue,
capital requirements,  and operating expenses.  Our planned capital requirements
and  expense  levels  will  be  based  in part  on our  expectations  concerning
potential  acquisitions,  capital  investments,  and future  revenue,  which are
difficult  to  forecast  accurately  due  to  our  company's  current  stage  of
development.  We  may be  unable  to  adjust  spending  in a  timely  manner  to
compensate  for  any  unexpected  shortfall  in  revenue.  Once we  acquire  new
restaurant  concepts,  product  development and marketing  expenses may increase
significantly as we expand operations. To the extent that these expenses precede

                                       18
<PAGE>
or are not rapidly followed by a corresponding increase in revenue or additional
sources of financing,  our business,  operating results, and financial condition
may be materially and adversely affected.

WE MAY NEED SIGNIFICANT INFUSIONS OF ADDITIONAL CAPITAL.  Based upon our current
cash reserves and forecasted operations,  we believe that we will need to obtain
outside funding. We may require significant  additional  financing in the future
in order to  further  satisfy  our cash  requirements.  Our need for  additional
capital to finance our business strategy, operations, and growth will be greater
should, among other things,  revenue or expense estimates prove to be incorrect.
If we fail to arrange for sufficient  capital in the future,  we may be required
to reduce the scope of our  business  activities  until we can  obtain  adequate
financing. We cannot predict the timing or amount of our capital requirements at
this  time.  We may not be able to obtain  additional  financing  in  sufficient
amounts or on acceptable  terms when needed,  which could  adversely  affect our
operating  results and prospects.  Debt  financing must be repaid  regardless of
whether or not we generate  profits or cash flows from our business  activities.
Equity financing may result in dilution to existing shareholders and may involve
securities that have rights,  preferences,  or privileges that are senior to our
common stock.

WE WILL FACE A VARIETY OF RISKS ASSOCIATED WITH ESTABLISHING AND INTEGRATING NEW
JOINT VENTURES.  The growth and success of our company's business will depend to
a great  extent  on our  ability  to find  and  attract  appropriate  restaurant
concepts  with which to form joint  ventures  in the future.  We cannot  provide
assurance that we will be able to

     *    identity suitable restaurant concepts,
     *    form joint ventures on commercially acceptable terms,
     *    effectively  integrate the  operations of any joint  ventures with our
          existing operations,
     *    manage effectively the combined operations of the businesses,
     *    achieve our  operating and growth  strategies  with respect to the new
          joint ventures, or
     *    reduce our  overall  selling,  general,  and  administrative  expenses
          associated with the new joint ventures.

The integration of the management,  personnel,  operations,  products, services,
technologies,  and facilities of any businesses that we associate ourselves with
in the future could involve  unforeseen  difficulties.  These difficulties could
disrupt our ongoing  businesses,  distract our  management  and  employees,  and
increase  our  expenses,  which  could  have a  material  adverse  affect on our
company's business, financial condition, and operating results.

WE DEPEND ON OUR CURRENT MANAGEMENT TEAM. Our company's success will depend to a
large  degree upon the skills of our current  management  team and  advisors and
upon our ability to identify,  hire, and retain  additional  senior  management,
sales,  marketing,  technical,  and financial  personnel.  We may not be able to
retain our  existing  key  personnel  or to attract  and retain  additional  key
personnel. The loss of any of our current executives,  employees, or advisors or
the failure to attract, integrate, motivate, and retain additional key employees
could have a material adverse effect on our company's  business.  We do not have
"key person" insurance on the lives of any of our management team.

OUR  COMPANY  MAY NOT BE ABLE TO MANAGE ITS GROWTH.  We  anticipate  a period of
significant  growth. This growth could cause significant strain on our company's
managerial,  operational,  financial,  and other resources.  Success in managing
this expansion and growth will depend,  in part,  upon the ability of our senior
management  to manage  effectively  the growth of our  company.  Any  failure to
manage the proposed  growth and  expansion of our company  could have a material
adverse effect on our company's business.

THERE IS NO ASSURANCE THAT OUR FUTURE  PRODUCTS AND SERVICES WILL BE ACCEPTED IN
THE  MARKETPLACE.  Our products and  services  may not  experience  broad market
acceptance.  Any market  acceptance for our company's  products and services may
not  develop  in a timely  manner or may not be  sustainable.  New or  increased

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<PAGE>
competition may result in market saturation,  more competitive pricing, or lower
margins. Further, overall performance and user satisfaction may be affected by a
variety of  factors,  many of which will be beyond our  company's  control.  Our
company's  business,   operating  results,  and  financial  condition  would  be
materially  and  adversely  affected if the market for our products and services
fails to develop or grow,  develops or grows more slowly  than  anticipated,  or
becomes  more  competitive  or if our  products and services are not accepted by
targeted customers even if a substantial market develops.

WE MAY FACE STIFF  COMPETITION.  There are existing companies that offer or have
the ability to develop  products and services  that will compete with those that
our  company  may offer in the  future.  These  include  large,  well-recognized
companies with  substantial  resources and  established  relationships  in their
respective industries. Their greater financial,  technical, marketing, and sales
resources  may permit them to react more  quickly to emerging  technologies  and
changes  in  customer  requirements  or  to  devote  greater  resources  to  the
development,  promotion,  and sale of competing products and services.  Emerging
companies  also may develop and offer  products and  services  that compete with
those offered by our company.

OUR COMMON STOCK MAY BE SUBJECT TO THE "PENNY STOCK" RULES AS PROMULGATED  UNDER
THE EXCHANGE ACT. In the event that no exclusion  from the  definition of "penny
stock"  under the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act") is available,  then any broker  engaging in a transaction in our company's
common stock will be required to provide its  customers  with a risk  disclosure
document,   disclosure  of  market  quotations,   if  any,   disclosure  of  the
compensation of the broker-dealer  and its sales person in the transaction,  and
monthly account statements showing the market values of our company's securities
held in the customer's  accounts.  The bid and offer quotation and  compensation
information  must be provided  prior to effecting  the  transaction  and must be
contained  on the  customer's  confirmation  of sale.  Certain  brokers are less
willing to engage in  transactions  involving  "penny stocks" as a result of the
additional  disclosure  requirements  described  above,  which  may make it more
difficult for holders of our company's common stock to dispose of their shares.

ITEM 3. CONTROL AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As at the  end of the  period  covered  by  this  report,  the  Company's  Chief
Executive  Officer and Chief Financial  Officer carried out an evaluation of the
effectiveness of the design and operation of the Company's disclosure.  Based on
the  evaluation,  the  Chief  Executive  Officer  and  Chief  Financial  Officer
concluded  that,  as at the  end of the  period  covered  by  this  report,  the
Company's  disclosure  controls  and  procedures  are  effective  to ensure that
information required to be disclosed in the reports that we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time
periods  specified  in the  Commission's  rules and  forms  and to  ensure  that
information required to be disclosed by us in the reports that we file or submit
under the  Exchange  Act is  accumulated  and  communicated  to our  management,
including our principal  executive and principal  financial officer,  or persons
performing similar functions, as appropriate to allow timely decisions regarding
disclosure

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On October 20, 1998 a suit was filed in the Supreme Court of British Columbia by
Thomas O'Flynn against  Service  Systems,  Kenneth  Fielding  (Service  Systems'
President  and  Director),  and  Charles  P Nield (a  former  Director  and Vice
President of the Company).  O'Flynn  alleges that in April of 1996, he purchased
shares of Service  Systems'  common  stock based on a  representation  that they
would be free  trading in 40 days of "the  filing of a  prospectus".  He further
alleges  that, in September of 1996,  he purchased  additional  shares of common
stock based on the  representation  that the shares would be free trading within
40 days of the common stock  becoming  free  trading.  O'Flynn  alleges that the
representation  was a warranty  and was  incorrect.  He further  alleges that he
suffered a loss  because  the share  price  decreased  while he was  holding the

                                       20
<PAGE>
shares. He seeks damages for breach of warranty,  negligence,  misrepresentation
and breach of fiduciary  duty. The amount claimed is not specified.  The Company
filed an answer  denying the claims and  continues to actively  defend the suit.
Examination  for discovery of Charles P Nield was conducted in June 1999,  since
then there has been no further activity.

On April 25, 2003,  Chelverton Fund Limited filed a suit in the Supreme Court of
British  Columbia  against the Company for  non-payment of debt in the amount of
$155,000.  The Company  entered an appearance  and filed a defence  against this
claim and  attempted  to negotiate a  settlement.  Chelverton  filed  additional
information  that  supported  their claim and the Company  responded  with a "no
defines"   position   and   judgment  was  issued  in  the  amount  of  $193,944
(Cnd$234,642)  including  interest  and legal costs On April 5, 2004 the Company
appeared  in  Supreme  Court to provide to  Chelverton  and the court,  specific
information  pertaining  to the  Company's  assets  and its  ability  to pay the
judgment  including  interest.  The  Company was  required to and has,  provided
additional detailed financial information. No further activity has occurred.

On June 6, 2003 a group of  shareholders  consisting  of the original  owners of
Innovative  Fuel  Cell  Technologies  Inc  (Shareholder  Group)  filed a consent
resolution,  which  among  other  things  elected a new slate of  directors  and
revised  the  company  by-laws.  The  Company  refused  to  accept  the  consent
resolution  or bylaws as in the  opinion of the  Company's  legal  counsel,  the
consent  resolutions  were not in accordance  with Nevada Statutes or the filing
requirements of Security and Exchange  Commission.  At a directors  meeting held
June 9th, 2003, the Company elected two additional directors; Edward a White and
Erin  Strench to the Company  board,  bringing  the total number of directors to
five. On June 16, 2003 the Shareholder  Group filed for and obtained a temporary
restraining  order (TRO) against the Company and its five  director  prohibiting
the  Company  from among  other  things,  issuing  stock,  transferring  assets,
changing  management  and other  actions that would affect the STATUS QUO of the
Company.  In addition two shareholders  issued writs against the four directors,
alleging  breach of  fiduciary  duty in respect  of the issue of certain  common
shares to John Gaetz, Ken Fielding and others.  On June 24, 2003, in discussions
between legal counsel for plaintiff,  respondent  and the hearing  Judge;  Judge
Adams,  the TRO was  vacated  and a date of July 2,  2003  was set for a new TRO
hearing to be held in Reno,  Nevada. At the July 2, 2003 TRO hearing Judge Adams
did not grant a TRO and requested the plaintiff and respondent  file a series of
three briefs  outlining  their  position.  The first brief was filed on July 11,
2003 by our counsel.  The  plaintiff  responded on July 18, 2003 and our counsel
filed the final brief on July 25, 2003.  The Company's  counsel has responded to
the various other suits filed against the Company and its directors. The Company
had  attempted  during the second  quarter to have these cases moved from Nevada
State court to federal court and in the third quarter we were advised that these
cases would be heard in federal court. Subsequent to December 31, 2003, in March
2004 the  Company's  legal counsel filed to withdraw from the action as a result
of  non-payment  of legal fees.  The court approved the withdrawal in two of the
four cases.  By April 29, 2004,  the  Plaintiff  and the  Defendant  must file a
proposed pre-trial order with the Federal Court, which upon approval,  the Court
will set down for trial.  During this  quarter  the  Company  and the  Plaintiff
requested  and received an extension to August 26, 2004 to settle this matter or
file the  pre-trial  order,  which  upon  approval,  the Court will set down for
trial.  On October 28, 2004 we jointly filed a pre-trial  notice and on November
15, 2004 in a  conference  call with the sitting  Judge a trial date was set for
February 22, 2005.  During this fiscal period,  one of the  Plaintiffs  withdrew
from the  action.  On October 28,  2004 the  Company  jointly  filed a pre-trial
notice and on November  15, 2004 in a conference  call with the sitting  Judge a
trial date was set for February  22,  2005.  Prior to the trial date the parties
reached a settlement  on all  matters.  Under the terms of the  settlement,  the
Plaintiffs  agreed to and have  dismissed all of the lawsuits and have cancelled
all debts owed by the Company to the Plaintiff amounting to about $98,797.

                                       21
<PAGE>
ITEM 2. CHANGES IN SECURITIES

During the three  months ended March 31, 2006 the Company  issued the  following
shares for the listed consideration:

                                    Residency/     Consideration
Date                  Shares        Citizenship      Valued at         Exemption
----                  ------        -----------      ---------         ---------
January 05/06         750,000           USA          $150,000            S-8*
January 05/06         480,000           USA          $ 96,000            S-8*
January 05/06         250,000           USA          $ 50,000            S-8*
January 05/06         250,000           USA          $ 50,000           Reg 144
January 20/06          40,000           USA          $ 10,000           Reg 144
January 22/06         800,000           USA          $176,000           S-8**

----------
*  Registered S-8 on July 27, 2005
** Registered S-8 on February 9, 2006

At a special  meeting of the  shareholder  held June 13, 2005, the  shareholders
approved a 1 for 100 reverse split of the Company stock which has been accounted
for retroactively.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are either attached hereto or incorporated  herein by
reference as indicated:

Exhibit
Number                        Description
------                        -----------
31.1    Certification  pursuant to SEC Release No. 33-8238,  as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002

31.2    Certification  pursuant to SEC Release No. 33-8238,  as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002

32.1    Certification  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002

32.2    Certification  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002

(b) The  Registrant  has not filed any  Current  Reports  on Form 8-K during the
three-month period covered by this Quarterly Report.

                                       22
<PAGE>
                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934,
the registrant caused this registration  statement to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                CREATIVE EATERIES CORPORATION

Date: May 23, 2006              By: /s/ Frank Holdraker
                                   ---------------------------------------------
                                Title: Frank Holdraker, President
                                       Director

Date: May 23, 2006              By: /s/ Scott Campbell
                                   ---------------------------------------------
                                Title: Scott Campbell, Vice President of Finance

                                       23
<PAGE>
                                  EXHIBIT INDEX

Exhibit
Number                        Description
------                        -----------
31.1    Certification  pursuant to SEC Release No. 33-8238,  as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002

31.2    Certification  pursuant to SEC Release No. 33-8238,  as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002

32.1    Certification  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002

32.2    Certification  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002