SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

     (Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY  PERIOD ENDED JANUARY 31, 2004; OR
[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE    ACT    OF    1934    FOR    THE    TRANSITION    PERIOD    FROM
     _____________________________ TO ___________________________



           0-17430
     ----------------------
     Commission File Number


                           OBSIDIAN ENTERPRISES, INC.
             (Exact name of registrant as specified in its charter)


           DELAWARE                                    35-2154335
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


     111 MONUMENT CIRCLE, SUITE 4800
           INDIANAPOLIS, INDIANA                                  46204
(Address of principal executive offices)                        (Zip code)


                                 (317) 237-4122
              -----------------------------------------------------
              (Registrant's telephone number, including area code)

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



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes _X_   No___

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

          Common Stock          Outstanding at
          $.0001 par value      March 10, 2004
                                720,157 shares
<PAGE>

                   OBSIDIAN ENTERPRISES, INC. AND SUBSIDIARIES
                                      INDEX
                                                                         PAGE(S)
PART I - FINANCIAL INFORMATION:

     Item 1 -  Condensed Consolidated Financial Statements:

               Condensed  Consolidated  Balance  Sheets - January  31,  2004 and
                    October 31, 2003

               Condensed  Consolidated  Statements  of  Operations  Three Months
                    Ended January 31, 2004 and 2003

               Condensed  Consolidated  Statement  of Changes  of  Stockholders'
                    Deficit

               Condensed  Consolidated  Statements  of Cash Flows  Three  Months
                    Ended January 31, 2004 and 2003

               Notes to Condensed Consolidated Financial Statements

     Item 2 - Management's Discussion and Analysis of Financial Condition
       and Results of Operations

     Item 3 - Quantitative and Qualitative Disclosures About Market Risk

     Item 4 - Controls and Procedures

PART II - OTHER INFORMATION:

     Item 1 - Legal Proceedings

     Item 2 - Changes in Securities and Use of Proceeds

     Item 3 - Defaults Upon Senior Securities

     Item 4 - Submission of Matters to a Vote of Security Holders

     Item 5 - Other Information

     Item 6 - Exhibits and Reports on Form 8-K

<PAGE>
                         PART I - FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

                   OBSIDIAN ENTERPRISES, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands except share data)
                                   (unaudited)

                                                   January 31,    October 31,
                                                      2004           2003
                                                   --------------------------
Assets

Current assets:
   Cash and cash equivalents                        $   556        $1,148
   Marketable securities                                 74           114
   Accounts receivable, net of allowance for
     doubtful accounts of $494 for 2004
     and $496 for 2003                                2,868         3,665
   Accounts receivable, related parties                  57            52
   Inventories, net                                   8,435         7,455
   Prepaid expenses and other assets                  1,325         1,081
                                                    ---------------------
Total current assets                                 13,315        13,515

Property, plant and equipment, net                   24,144        24,480

Other assets:
Intangible assets, net of accumulated
  amortization of $1,052 for
  2004 and $907 for 2003                              7,756         7,878
Other                                                    13             9
                                                    ---------------------
                                                    $45,228       $45,882
                                                    =====================

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


                   OBSIDIAN ENTERPRISES, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands except share data)
                                   (unaudited)

                                                           January 31,    October 31,
                                                              2004           2003
                                                           --------------------------
<S>                                                          <C>           <C>

Liabilities and Stockholders' Deficit
Current liabilities:
   Current portion of long-term debt                         $ 9,634       $ 2,379
   Accounts payable, trade                                     3,939         2,742
   Accounts payable, related parties                             461           837
   Accrued expenses and customer deposits                      1,097         1,512
                                                             ---------------------

Total current liabilities                                     15,131         7,470

Accounts payable, related parties                                556            --

Long-term debt, net of current portion                        17,034        24,765

Long-term debt, related parties                               15,005        13,937

Deferred income tax liabilities                                  661           651

Commitments and contingencies

Minority interest                                                203           172

Mandatory redeemable preferred stock:
  Class of Series C Preferred Stock: 386,206 shares
        outstanding for 2004 and 2003                          1,942         1,803
  Class of Series D Preferred Stock: 16,071 shares
        outstanding for 2003                                      --           337

Stockholders' equity (deficit):
Common stock, par value $.0001 per share; 10,000,000
        shares authorized, 720,157 shares outstanding              1             1
Preferred stock, 5,000,000 shares authorized; Class of
        Series C convertible preferred stock, par
        value $.001, 4,600,000 authorized, 3,982,193
        issued and outstanding for 2004 and 2003,
        200,000 shares of undesignated preferred
        stock authorized                                           5             5
Preferred stock, 200,000 shares authorized; Class of
        Series D convertible preferred stock, par value
        $.001, 134,758 and 118,687 shares issued and
        outstanding in 2004 and 2003                              --            --
Additional paid-in capital                                    12,122        11,745
Accumulated other comprehensive loss                             (40)           --
Accumulated deficit                                          (17,392)      (15,004)
                                                             ---------------------
Total stockholders' deficit                                   (5,304)       (3,253)
                                                             ---------------------
                                                             $45,228       $45,882
                                                             =====================
The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                   OBSIDIAN ENTERPRISES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands except per share and share data)
                                   (unaudited)

                                                                                                 Three Months Ended
                                                                                         ------------------------------------
                                                                                         January 31, 2004    January 31, 2003
                                                                                         ------------------------------------
<S>                                                                                          <C>                <C>
Net sales                                                                                    $  12,046          $  10,899

Cost of sales                                                                                   10,979              9,739
                                                                                         ------------------------------------

Gross profit                                                                                     1,067              1,160

Selling, general and administrative expenses                                                     2,345              2,055
                                                                                         ------------------------------------

Loss from operations                                                                            (1,278)              (895)

Other income (expense):
  Interest expense, net                                                                           (969)              (784)
  Other income                                                                                      29                  4
                                                                                         ------------------------------------

Loss before income taxes and discontinued operations                                            (2,218)            (1,675)

Income tax benefit                                                                                --                  158
                                                                                         ------------------------------------

Loss before discontinued operations                                                             (2,218)            (1,517)

Loss from discontinued operations, net of tax                                                     --                  (49)
                                                                                         ------------------------------------

Loss before minority interest                                                                   (2,218)            (1,566)

Minority interest                                                                                  (31)                --
                                                                                         ------------------------------------

Net loss                                                                                     $  (2,249)         $  (1,566)
                                                                                         ====================================

Basic and diluted loss per share attributable to common shareholders:
  From continuing operations                                                                 $   (3.32)         $   (2.25)
  Discontinued operations, net of tax                                                             --                 (.07)
                                                                                         ------------------------------------

Net loss per share                                                                           $   (3.32)         $   (2.32)
                                                                                         ====================================

Weighted average common and common equivalent shares outstanding, basic and diluted:           720,157            720,157
                                                                                         ====================================
The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                   OBSIDIAN ENTERPRISES, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                             (dollars in thousands)
                                   (unaudited)

                                                                               Series C Convertible  Series D Convertible
                                          Comprehensive      Common Stock        Preferred Stock       Preferred Stock
                                              Loss        Shares      Amount    Shares       Amount   Shares       Amount
                                           ---------------------------------------------------------------------------------
<S>                                         <C>           <C>          <C>     <C>            <C>    <C>            <C>

Balance at October 31, 2003                               720,157      $  1    3,982,193      $  5   118,687        $ --

Assignment of 16,071 shares of Series D
  mandatory redeemable Preferred Stock      $   --
                                                               --        --           --        --    16,071          --

Extension of stock options                      --             --        --           --        --        --          --

Loss on available-for-sale marketable
  securities                                   (40)            --        --           --        --        --          --

Fair value adjustment on redeemable
  Preferred Stock                               --             --        --           --        --        --          --

Net loss                                    (2,249)            --        --           --        --        --          --
                                           ---------------------------------------------------------------------------------
Total comprehensive loss                   $(2,289)
                                           =======

Balance at January 31, 2004                               720,157      $  1    3,982,193      $  5   134,758        $ --
                                                          ==================================================================
</TABLE>
<TABLE>
<CAPTION>




                                          Additional        Other
                                           Paid-in      Comprehensive  Accumulated
                                           Capital           Loss        Deficit      Total
                                          --------------------------------------------------
<S>                                        <C>             <C>          <C>          <C>

Balance at October 31, 2003                $11,745         $    --      $(15,004)    $(3,253)

Assignment of 16,071 shares of Series D
  mandatory redeemable Preferred Stock
                                               337              --            --         337

Extension of stock options                      40              --            --          40

Loss on available-for-sale marketable
  securities                                    --             (40)           --         (40)

Fair value adjustment on redeemable
  Preferred Stock                               --              --          (139)       (139)

Net loss                                        --              --        (2,249)     (2,249)
                                          --------------------------------------------------
Total comprehensive loss


Balance at January 31, 2004                $12,122         $   (40)     $(17,392)    $(5,304)
                                          ==================================================



The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                          OBSIDIAN ENTERPRISES, INC. AND SUBSIDIARIES

                        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (in thousands)
                                         (unaudited)


                                                                        Three Months Ended
                                                                   -----------------------------------
                                                                   January 31, 2004   January 31, 2003
                                                                   -----------------------------------
<S>                                                                     <C>              <C>

Cash flow from operating activities:
  Net loss from continuing operations                                   $(2,249)         $(1,517)
  Adjustments to reconcile net loss from continuing operations
    to net cash used in operating activities:
  Depreciation and amortization                                             776              687
  Other                                                                     189              (93)
  Changes in operating assets and liabilities
    Accounts receivable, net                                                797              417
    Inventories, net                                                       (980)          (1,509)
    Other, net                                                              538             (534)
                                                                   -----------------------------------

Net cash used in operating activities                                      (929)          (2,549)
                                                                   -----------------------------------

Cash flows from investing activities:
  Capital expenditures                                                     (318)             (96)
                                                                   -----------------------------------

Net cash used in investing activities                                      (318)             (96)
                                                                   -----------------------------------

Cash flows from financing activities:
  Advances from (repayments to) related parties, net                        175             (652)
  Net borrowings (repayments) on lines of credit                           (345)           1,574
  Net borrowings on long-term debt, including related parties               825            1,277
                                                                   -----------------------------------

Net cash provided by financing activities                                   655            2,199

Net cash used in discontinued operations                                   --                (41)
                                                                   -----------------------------------

Decrease in cash and cash equivalents                                      (592)            (487)

Cash and cash equivalents, beginning of period                            1,148              920
                                                                   -----------------------------------

Cash and cash equivalents, end of period                                $   556          $   433
                                                                   ===================================

Interest paid                                                           $   545          $   718
                                                                   ===================================

Taxes paid                                                              $    15          $    14

                                                                   ===================================
The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                          OBSIDIAN ENTERPRISES, INC. AND SUBSIDIARIES

                        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (in thousands)
                                         (unaudited)


                                                                                                  Three Months Ended
                                                                                        ---------------------------------------
                                                                                        January 31, 2004       January 31, 2003
                                                                                        ---------------------------------------

<S>                                                                                            <C>                   <C>

Supplemental disclosure of noncash operating, investing and financing activities:
  Acquisition of coaches and equipment through issuance of debt                                $   --                $2,278
  Contribution to capital from sale of Champion  to related party                              $   --                $1,142
  Issuance of mandatory redeemable preferred stock in conjunction with the sale of Champion    $   --                $  675
  Tax effect of sale of coaches to a related party                                             $   --                $   96
  Fair value change on mandatory redeemable preferred stock                                    $ (139)               $ (103)
  Assignment and assumption of mandatory redeemable preferred stock to Fair Holdings           $  337                $   --


</TABLE>



The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.
<PAGE>




                   OBSIDIAN ENTERPRISES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                 (in thousands except per share and share data)
                                   (unaudited)

1.   BASIS OF  PRESENTATION,  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
     ACCOUNTING POLICIES


DESCRIPTION OF BUSINESS:

Obsidian   Enterprises,   Inc.   ("Obsidian   Enterprises"),   formerly   Danzer
Corporation,  was reorganized (the "Reorganization")  through an Acquisition and
Plan of Reorganization  with U.S. Rubber  Reclaiming,  Inc. and Related Entities
("U.S.  Rubber  Companies"),  which  was  consummated  on  June  21,  2001  (the
"Effective  Date").  The  Acquisition  and Plan of  Reorganization  of  Obsidian
Enterprises   with  U.S.  Rubber  Companies  was  accounted  for  as  a  reverse
acquisition as the shareholders of the U.S. Rubber Companies owned a majority of
the outstanding stock of Obsidian Enterprises  subsequent to the Acquisition and
Plan of Reorganization. For accounting purposes, U.S. Rubber Reclaiming, Inc. is
deemed to have acquired Obsidian Enterprises.

Pursuant to the Plan of Acquisition and Reorganization, United Expressline, Inc.
was acquired July 31, 2001.

The accompanying  financial data as of January 31, 2004 and for the three months
ended January 31, 2004 and 2003 has been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange  Commission
("SEC").  Certain  information  and footnote  disclosures  normally  included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to such rules and regulations.  The October 31, 2003 consolidated  balance sheet
was  derived  from  audited  financial  statements,  but  does not  include  all
disclosures  required by accounting  principles generally accepted in the United
States of  America.  However,  the Company  believes  that the  disclosures  are
adequate to make the information  presented not misleading.  These  consolidated
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  and the notes thereto  included in the  Company's  Annual
Report on Form 10-K for the period ended October 31, 2003.  The Company  follows
the same accounting policies in preparation of interim reports.

In the opinion of management,  all adjustments  (which include normal  recurring
adjustments except as disclosed herein) necessary to present a fair statement of
financial position as of January 31, 2004 and results of operations,  cash flows
and stockholders'  deficit for the three months ended January 31, 2004 have been
made.  The results of operations for the three months ended January 31, 2004 are
not necessarily  indicative of the operating results for the full fiscal year or
any future periods.

The entities  resulting from the merger described above,  considered  accounting
subsidiaries of U.S. Rubber Reclaiming, Inc. (the accounting acquirer) and legal
subsidiaries  of Obsidian  Enterprises,  Inc. after the  Acquisition and Plan of
Reorganization are as follows:

U.S. Rubber Reclaiming,  Inc. ("U.S. Rubber", the accounting acquirer), which is
engaged in  reclaiming  scrap  butyl  rubber  into butyl  reclaim  for resale to
manufacturers of rubber products.

Obsidian  Enterprises,  Inc.  (formerly Danzer,  the legal acquirer),  a holding
company.
<PAGE>


1. BASIS OF  PRESENTATION,  DESCRIPTION  OF BUSINESS AND SUMMARY OF  SIGNIFICANT
ACCOUNTING POLICIES, CONTINUED

Danzer Industries,  Inc. ("Danzer Industries"),  which is principally engaged in
the design, manufacture and sale of truck bodies and cargo trailers.

Pyramid  Coach,  Inc.  ("Pyramid"),  which is engaged in the leasing of coaches,
designed  and  fitted out for use for  travel by  country,  rock bands and other
business  enterprises,  primarily on weekly to monthly leases. The coach leasing
segment also includes the assets, liabilities,  equity and results of operations
of DW Leasing,  LLC ("DW Leasing"),  Obsidian Leasing Company,  Inc.  ("Obsidian
Leasing"),  formed  November  1,  2001  and DC  Investments  Leasing,  LLC  ("DC
Investments  Leasing),  formed  December 13, 2002. DW Leasing and DC Investments
Leasing are controlled by individuals who are also  controlling  shareholders of
Obsidian  Enterprises,  Inc.  and,  accordingly,  Pyramid.  In  addition,  these
entities meet the requirements for consolidation  under FASB  Interpretation No.
46 (FIN No. 46),  Consolidation of Variable Interest Entities, an interpretation
of  Accounting  Research  Bulletin No. 51. DW Leasing,  Obsidian  Leasing and DC
Investments  Leasing also own the  majority of the coaches  operated by Pyramid.
All intercompany transactions are eliminated in consolidation.

United  Expressline,  Inc.  ("United")  manufactures and sells general use cargo
trailers  and  specialty  trailers  used in the  racing  industry  and for other
special purposes.

Champion  Trailer,  Inc.  ("Champion"),  which  manufactures and sells transport
trailers to be used  primarily in the auto racing  industry.  Effective  October
2002, the Company's  Board of Directors  agreed to a plan to dispose of Champion
as further  described in Note 3. The sale of Champion was completed  January 30,
2003.  Accordingly,  the operations of Champion are  classified as  discontinued
operations in the accompanying financial statements.


BASIS OF PRESENTATION:

In the period since June 2001, the Company has incurred losses and reductions in
equity.  During this period losses and certain  third-party debt repayments have
been financed with DC  Investments,  LLC ("DC  Investments")  and its subsidiary
Fair Holdings,  Inc.  ("Fair  Holdings"),  entities  controlled by the Company's
Chairman.  Borrowings  from DC Investments  and Fair Holdings have been on terms
that may not have been  available  from other  sources.  As of January 31, 2004,
total debt  outstanding  to DC  Investments  and Fair Holdings was $15,005.  The
Company incurred a net loss for the year ended October 31, 2003 of $3,873, which
included a loss from  discontinued  operations of $49. In addition,  the Company
incurred a net loss from  continuing  operations  of $2,249 for the three months
ended January 31, 2004.

The Company has  continued  to address  liquidity  and working  capital  through
various means  including  operational  changes and  refinancing  existing  debt.
During the period these plans were put in place, the Company received  financial
support from Fair Holdings.

During 2003, the Company undertook various actions to improve its operations and
liquidity.  Such  actions  as  described  below  include  the sale of  Champion,
conversion of debt to equity and refinancing of certain of its debt  agreements.
Management  believes  that the  Company  has  financing  agreements  in place to
provide adequate liquidity and working capital throughout fiscal 2004.  However,
there can be no assurance  that such working  capital and liquidity will in fact
be adequate. Therefore, the Company may be required to draw upon other liquidity
sources.  The Company has therefore  secured an increased  financial  commitment
from Fair Holdings to provide, as needed,  additional borrowings under a $15,000
line of credit agreement, which expires January 1, 2007. Currently, availability
under the agreement is approximately $8,303.
<PAGE>


1. BASIS OF  PRESENTATION,  DESCRIPTION  OF BUSINESS AND SUMMARY OF  SIGNIFICANT
ACCOUNTING POLICIES, CONTINUED

In view of these matters  realization of assets and  satisfaction of liabilities
in the  ordinary  course of business is dependent  on the  Company's  ability to
generate  sufficient  cash flow to satisfy its  obligations  on a timely  basis,
maintain  compliance  with its  financing  agreements  and  continue  to receive
financing support from Fair Holdings to provide liquidity if needed.

Management,  as a part of its plan towards resolving these issues and generating
positive  cash flow and  earnings,  is taking the  actions as  described  below.
Although   management   believes  these  actions  will  improve  operations  and
liquidity, there can be no assurance that such actions will sufficiently improve
operations or liquidity.

     o    We commenced a strategy in late 2003 of pursuing strategic acquisition
          opportunities  that  include  targets both in our  traditional,  basic
          industries and manufacturing sectors as well as targets that possessed
          assets  (including cash) that, while outside our traditional  areas of
          focus,  were  available  on terms that our  management  believed to be
          attractive.  While no material  negotiations are currently active with
          respect to any targets  (other than Net  Perceptions,  Inc.,  which is
          discussed  below  and  with  respect  to which  we have  commenced  an
          exchange  offer),  we anticipate  that over the course of 2004 we will
          pursue acquisition  opportunities that we deem attractive in a variety
          of industry sectors. Ultimately, these acquisitions may (but cannot be
          guaranteed to) result in our having increased  financial resources and
          potentially  a broader  asset  base and more  diversified  sources  of
          revenue.

     o    Cost  reduction  initiatives  for raw  materials  in the  trailer  and
          related  transportation  manufacturing segment with the implementation
          of  alternative  materials and  additional  vendor  discounts  through
          purchasing.

     o    Implementation  of the new fine grind production  process in the butyl
          rubber reclaiming segment. The new process provides the opportunity to
          maximize the use of the existing raw  materials in the existing  butyl
          reclaim production and also provides potential  additional  production
          of natural rubber.

     o    Capitalize on the trailer  production  line at Danzer  Industries that
          provides  a new  product  line at Danzer  Industries  to the  existing
          customers of Danzer.  This  production  line and related  sales effort
          have allowed us to enter a new market along the East coast of the U.S.
          Our ability to  capitalize on this  opportunity  will be a determining
          factor  on our  ability  to reduce  this  operation's  use of  working
          capital resources. Management will continue to evaluate the operations
          on a continuous basis.
<PAGE>


1. BASIS OF  PRESENTATION,  DESCRIPTION  OF BUSINESS AND SUMMARY OF  SIGNIFICANT
ACCOUNTING POLICIES, CONTINUED

Our  high  level  of debt  creates  liquidity  issues  for us and the  stringent
financial  covenants  that  are  common  for  this  type  of debt  increase  the
probability that our subsidiaries may from time to time be in technical  default
under these loans.  These risks are mitigated,  in part, for our United and U.S.
Rubber  subsidiaries by the right described under "Guarantees of Partners." They
are also mitigated by the divestiture of Champion, and the completed refinancing
efforts  over the past year with  respect to U.S.  Rubber and the coach  leasing
segment.

Significant  financial covenants in our credit agreements are the maintenance of
minimum  ratios,  levels of earnings to funded  debt and fixed  charge  coverage
rate. We did not meet  requirements  and covenants in certain debt agreements as
further discussed in Note 4.


SIGNIFICANT ACCOUNTING POLICIES:

USE OF ESTIMATES:

The  preparation  of the  financial  statements in  conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and  assumptions  that affect  reported  amounts of
assets,  liabilities,  revenues  and  expenses  and the related  disclosures  of
contingent  assets and liabilities.  Significant items subject to such estimates
and  assumptions   include   valuation   allowances  for  accounts   receivable,
inventories  and deferred tax assets,  the fair values of assets and liabilities
when  allocating the purchase price of  acquisitions,  and the carrying value of
property  and  equipment  and  goodwill.  Actual  results  may differ from those
estimates.


Earnings Per Share:

Basic per-share amounts are computed,  generally, by dividing net income or loss
attributable  to common  shareholders by the  weighted-average  number of common
shares  outstanding.  Diluted  per-share  amounts are computed  similar to basic
per-share  amounts  except  that the  weighted-average  shares  outstanding  are
increased to include additional shares for the assumed exercise of stock options
and warrants, if dilutive.

All references in the financial  statements related to share amounts,  per share
amounts and average  shares  outstanding  have been  adjusted  retroactively  to
reflect the Company's  1-to-50 reverse stock split of its common stock effective
February 16, 2004.

The Company has a note payable  agreement  which is convertible by the holder to
common stock totaling 100,000 shares at a conversion rate of $5.00 per share. In
addition,  the  Company has  options  outstanding  to purchase a total of 16,000
shares of common stock, at a weighted average exercise price of $4.50.  However,
because the Company  incurred a loss for the periods  ended January 31, 2004 and
2003,  respectively,  the  inclusion  of those  potential  common  shares in the
calculation of diluted loss per share would have an antidilutive effect.
<PAGE>


1. BASIS OF  PRESENTATION,  DESCRIPTION  OF BUSINESS AND SUMMARY OF  SIGNIFICANT
ACCOUNTING POLICIES, CONTINUED

Basic and diluted loss per share have been computed as follows:

<TABLE>
<CAPTION>


                                                                                              Three Months Ended
                                                                                       -------------------------------------
                                                                                       January 31, 2004     January 31, 2003
                                                                                       -------------------------------------
<S>                                                                                         <C>                <C>

Loss before discontinued operations                                                         $  (2,249)         $  (1,517)
Change in fair value of mandatory redeemable preferred stock                                     (139)              (103)
                                                                                            -----------------------------

Loss attributable to common shareholders before discontinued operations                        (2,388)            (1,620)

Loss from discontinued operations, net of tax                                                    --                  (49)
                                                                                            -----------------------------

Net loss attributable to common shareholders                                                $  (2,388)         $  (1,669)
                                                                                            =============================

Weighted average common and common equivalent shares outstanding, basic and diluted           720,157            720,157
                                                                                            =============================

Loss per share, basic and diluted, attributable to common shareholders:
  From continuing operations                                                                $   (3.32)         $   (2.25)
  Discontinued operations                                                                        --                 (.07)
                                                                                            -----------------------------

Net loss per share                                                                          $   (3.32)         $   (2.32)
                                                                                            =============================

</TABLE>


The Company's Series C Preferred Stock and Series D Preferred Stock,  which have
all the rights and privileges of the Company's  common stock, are convertible at
rates of .4 to 1 and 3.5 to 1,  respectively.  The inclusion of these  potential
common shares in the  calculation  of loss per share would have an  antidilutive
effect. However, pursuant to a Certificate of Designation,  these shares will be
converted  to  common  stock  immediately  upon  approval  by the  stockholders.
Accordingly,  we are presenting the following pro forma  information to indicate
the effect on earnings per share had such shares been converted to common shares
for the periods presented.
<PAGE>


1. BASIS OF  PRESENTATION,  DESCRIPTION  OF BUSINESS AND SUMMARY OF  SIGNIFICANT
ACCOUNTING POLICIES, CONTINUED

Pro forma basic and diluted  loss per share have been  computed  below as if the
Series C and Series D Preferred  Stock were  converted to common stock.  For the
three  months  ended  January  31,  2004 and 2003,  respectively,  the  Series C
Preferred  Stock has been reflected on a weighted  average basis  outstanding as
common shares, adjusted for the reverse stock split, of 1,747,360, respectively.
The Series D Preferred  Stock has been  reflected  on a weighted  average  basis
outstanding as common shares,  adjusted for the reverse stock split,  of 471,653
and 314,100 for the three months ended January 31, 2004 and 2003, respectively.

<TABLE>
<CAPTION>


                                                                               Three Months Ended
                                                                       -------------------------------------
                                                                       January 31, 2004     January 31, 2003
                                                                       -------------------------------------
<S>                                                                        <C>                  <C>

Pro forma weighted average common shares outstanding, including
  effect of the conversion of Series C and D Preferred Stock, basic
  and diluted                                                              2,939,170            2,781,617
                                                                           ==============================
Pro forma net loss per share, basic and diluted, attributable to
  common shareholders                                                      $   (.81)            $   (.60)
                                                                           ==============================

</TABLE>


The pro forma net loss per share is presented  for  informational  purposes only
and is not indicative of the weighted  average common shares  outstanding or net
loss per share  presented in accordance  with  accounting  principles  generally
accepted in the United States of America.


STOCK OPTIONS

The Company  accounts for stock-based  compensation  under the provisions of APB
No. 25. The Company has adopted the disclosure-only  provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. Accordingly, no compensation expense is
recognized if the exercise  price of stock options  equals the fair market value
of the underlying stock at the date of grant.  Had compensation  expense for the
Company's  stock  option  plans been  determined  based on the fair value at the
grant  date for awards  consistent  with the  provisions  of SFAS No.  123,  the
Company's basic and diluted net loss per share would have been as follows:
<PAGE>

1. BASIS OF  PRESENTATION,  DESCRIPTION  OF BUSINESS AND SUMMARY OF  SIGNIFICANT
ACCOUNTING POLICIES, CONTINUED

<TABLE>
<CAPTION>

                                                                 Three Months Ended
                                                      ---------------------------------------
                                                      January 31, 2004       January 31, 2003
                                                      ---------------------------------------
<S>                                                      <C>                  <C>
Net loss as reported                                     $  (2,249)           $   (1,566)
Deduct total stock-based employee compensation
    expense determined under fair value methods                 --                    --
                                                         -------------------------------


Pro forma net loss                                          (2,249)               (1,566)

Loss per share:
  As reported, basic and diluted:                        $   (3.32)            $   (2.32)

  Pro forma, basic and diluted:                          $   (3.32)            $   (2.32)

</TABLE>

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the  following   weighted  average
assumptions used for grants in 2000 and 1999,  respectively:  risk-free interest
rates  of 6.4 and 5.5  percent;  dividend  yield  of 0  percent  in both  years;
expected lives of 5 years; and volatility of 978 and 170 percent.  The estimated
weighted  average fair value of options  granted during 2000 and 1999 were $5.00
and $2.50 per share, respectively.


2. INVENTORIES

Inventories  are stated at the  lower-of-cost  (first-in,  first-out  method) or
market and are comprised of the following components:

                                                 January 31,       October 31,
                                                    2004              2003
                                                 -----------------------------
Raw materials                                      $4,926            $4,647
Work-in-process                                       758               499
Finished goods                                      3,114             2,630
Valuation reserve                                    (363)             (321)
                                                 -----------------------------

Total                                              $8,435            $7,455
                                                 =============================
<PAGE>


3. DISCONTINUED OPERATIONS

On October 30, 2002, the Company's Board of Directors  agreed to sell the assets
of Champion to an entity controlled by Messrs. Durham and Whitesell (Officers of
the Company) for the  assumption of all  liabilities  of Champion  excluding its
subordinated  debt.  The  decision to divest  Champion was based on the entity's
inability to achieve  profitable  operations in the  foreseeable  future without
substantial  cash  infusion.  The Company also agreed in principal to settle the
outstanding  subordinated  debt due to Markpoint Equity Fund J.V.  ("Markpoint")
from  Champion in exchange  for a cash  payment of $675 and issuance to the debt
holder of 32,143 shares of the Company's  Series D Preferred Stock. In addition,
the agreement provided Markpoint the option to require the Company to repurchase
these shares at a price of $21 per share.  The sale of Champion was completed on
January 30, 2003.  Champion is accounted  for as a  discontinued  operation  and
therefore  the results of  operations  and cash flows have been removed from the
Company's continuing operations for all periods presented.

The sale of Champion resulted in an increase in equity of the Company of $1,142,
net of tax of $97.  No gain or loss was  recognized  on the sale  because of the
involvement of related parties.

A summary of the Company's  discontinued  operations  for the three months ended
January 31, 2003 is as follows:

                              Three Months Ended
                               January 31, 2003
                              ------------------
        Net sales                  $ 170
        Operating expenses          (286)
        Interest                     (85)
        Other                        127
        Tax benefit                   25
                              ------------------
        Net loss                   $ (49)
                              ==================



4.  FINANCING ARRANGEMENTS

UNITED

At January 31, 2004,  United had violated  financial  covenants with  Huntington
Capital Investment  Company.  Huntington Capital Investment Company waived their
covenant violations and we are currently in discussions regarding  modifications
to the covenants.

OBSIDIAN LEASING

Obsidian  Leasing did not meet certain  covenants  with Old National  Bank.  Old
National  Bank has not  waived  Obsidian  Leasing's  covenant  violations  as of
January 31, 2004. The total amount of $3,702 for Old National Bank is classified
as current as of January 31, 2004.


DC INVESTMENTS LEASING

In January 2004,  DC  Investments  Leasing  repaid debt in the amount of $324 to
Fair Holdings with  proceeds from a note with Main Source Bank,  which  includes
monthly  payments  of $4,  including  interest  at 7%, and a maturity of January
2014.
<PAGE>


5.   MINORITY INTEREST IN AFFILIATE

As  discussed  in  Note 1,  DW  Leasing  and DC  Investments  Leasing,  entities
controlled  by the  Company's  Chairman are included in  consolidated  financial
statements and are subject to the provisions of FIN No. 46. Historically,  these
entities  generated  negative  operating results and the operating model did not
anticipate income in excess of losses previously  recognized in the consolidated
financial statements.  During 2003 and the first quarter of 2004, DC Investments
Leasing reported  positive  operating  results.  As a result,  minority interest
related  to the income of DC  Investments  Leasing in the amount of $31 has been
recorded as a charge in the January 31, 2004  statement  of  operations  and has
been recognized on the balance sheet. Future operating results of DC Investments
Leasing,  if  positive,  will  continue to be charged to minority  interest.  In
addition,  should DW  Leasing  generate  future  income in excess of  previously
recognized  losses,  such amounts  would be charged to minority  interest in the
consolidated  statement of operations and recognized as minority interest on the
consolidated  balance  sheet.  During the quarter  ended  January 31,  2004,  DW
Leasing recorded a loss of $2. As of January 31, 2004,  accumulated losses of DW
Leasing recognized in consolidated  statements of operations  exceeded income by
approximately $333.


6.  MANDATORY REDEEMABLE PREFERRED STOCK

On November 10, 2003,  Markpoint  exercised  its  remaining  Put Option that was
assigned to Fair  Holdings,  as discussed in Note 3.  Markpoint was paid $337 by
Fair  Holdings  and the  exercise  of the  option  resulted  in a  reduction  in
mandatory  redeemable  preferred  stock and an  increase in  additional  paid-in
capital of $337.


7.  STOCKHOLDERS' DEFICIT

On December 3, 2003, the Company's  stockholders and Board of Directors approved
a 50-to-1 reverse stock split. The reverse stock split was effective for trading
purposes as of February 18, 2004. As a result of the reverse stock split and the
amendment to the Certificate of Incorporation,  approximately  720,157 shares of
common stock are now outstanding  and the number of authorized  shares of common
stock has been reduced to 10,000,000.

On December 31, 2003, the Company's Board of Directors approved the extension of
the  expiration  date of 4,000 fixed stock options,  exercisable  at $2.50.  The
original expiration date of December 31, 2003 was extended to June 30, 2004. The
Company  recognized $40 of compensation  expense related to the extension of the
options during the three months ended January 31, 2004.
<PAGE>
<TABLE>
<CAPTION>


8.   BUSINESS SEGMENT DATA AND GEOGRAPHIC DATA

The Company operates in three industry segments comprised of trailer and related
transportation equipment manufacturing (trailer  manufacturing);  coach leasing;
and butyl rubber reclaiming.  All sales are in North and South America primarily
in the  United  States,  Canada  and  Brazil.  Selected  information  by segment
follows:


                                                        Three Months Ended January 31, 2004
                            ------------------------------------------------------------------------------------------------
                               Trailer            Coach         Butyl Rubber    Total
                            Manufacturing        Leasing         Reclaiming    Segments        Corporate        Consolidated
                            ------------------------------------------------------------------------------------------------
<S>                           <C>               <C>               <C>           <C>              <C>               <C>
Sales:
  Domestic                    $  7,504          $  1,040          $  2,314      $10,858          $   --            $ 10,858
  Foreign                          980              --                 208        1,188              --               1,188
                              ---------------------------------------------------------------------------------------------

Total                         $  8,484          $  1,040          $  2,522      $12,046          $   --            $ 12,046

Cost of goods sold            $  7,887          $    587          $  2,505      $10,979          $   --            $ 10,979

Loss before taxes             $ (1,228)         $   (439)         $   (422)     $(2,089)         $ (160)           $ (2,249)

Identifiable assets           $ 19,863          $ 13,761          $ 10,535      $44,159          $1,069            $ 45,228

Depreciation and
  amortization expense        $    178          $    214          $    353      $   745          $   31            $    776

Interest expense              $    397          $    328          $    117      $   842          $  127            $    969


                                                        Three Months Ended January 31, 2003
                            ------------------------------------------------------------------------------------------------
                               Trailer            Coach         Butyl Rubber    Total
                            Manufacturing        Leasing         Reclaiming    Segments        Corporate        Consolidated
                            ------------------------------------------------------------------------------------------------

Sales:
  Domestic                    $  7,012          $  1,107          $  2,212      $10,331          $   --            $ 10,331
  Foreign                          347              --                 221          568              --                 568
                              ---------------------------------------------------------------------------------------------

Total                         $  7,359          $  1,107          $  2,433      $10,899          $   --            $ 10,899

Cost of goods sold            $  6,720          $    622          $  2,397      $ 9,739          $   --            $  9,739

Loss before taxes             $ (1,066)         $   (248)         $   (361)     $(1,675)         $   --            $ (1,675)

Identifiable assets           $ 20,466          $ 14,043          $ 10,977      $45,486          $  803            $ 46,289

Depreciation and
  amortization expense        $    189          $    190          $    308      $   687          $   --            $    687

Interest expense              $    333          $    270          $    123      $   726          $   58            $    784

</TABLE>
<PAGE>

8.   BUSINESS SEGMENT DATA AND GEOGRAPHIC DATA, CONTINUED

Obsidian  Enterprises,  Inc.  (legal  parent)  allocates  selling,  general  and
administrative  expenses  to  the  respective  companies  primarily  based  on a
percentage  of sales.  For the three  months  ended  January  31, 2004 and 2003,
allocated corporate expenses by segment were as follows:

                                Three Months Ended
                             -------------------------
                             January 31,   January 31,
                                2004         2003
                             -------------------------
Trailer manufacturing           $385         $318
Coach leasing                     69           48
Butyl rubber reclaiming          115           99
                             -------------------------
                                $569         $465
                             =========================
<TABLE>
<CAPTION>


9.   RELATED PARTIES

The  Company  makes  advances,   receives  loans  and  conducts  other  business
transactions with affiliates  resulting in the following amounts for the periods
ended:

                                                             January 31,      October 31,
                                                                2004             2003
                                                             ----------------------------
<S>                                                            <C>             <C>
Balance sheet:
  Current assets:
    Accounts receivable, Obsidian Capital Company              $     9         $     8
    Accounts receivable, other affiliated entities                  48              44
                                                             ----------------------------
Total assets                                                   $    57         $    52
                                                             ============================

  Current liabilities:
    Accounts payable, Obsidian Capital Company                 $  --                 $
                                                                                   275
    Accounts payable, stockholders & other affiliates               31             341
    Accounts payable, DC Investments and Fair Holdings             430             221
  Long-term portion:
    Accounts payable, stockholders
    Notes payable, DC Investments                                  556
                                                                   700            --
                                                                                   700
    Notes payable, Fair Holdings                                 7,608           7,192
    Line of credit, Fair Holdings                                6,697           6,045
                                                             ----------------------------
Total liabilities                                              $16,022         $14,774
                                                             ============================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


9.   RELATED PARTIES, CONTINUED

                                                                  Three Months Ended
                                                          -----------------------------------
                                                          January 31, 2004   January 31, 2003
                                                          -----------------------------------
<S>                                                            <C>                <C>
Income statement:
  Interest expense, DC Investments and Fair Holdings           $502               $179
  Rent expense, Obsidian Capital Company                       $ --               $ 21
  Rent expense, Fair Holdings                                  $  9               $  4


</TABLE>

Related-party  amounts classified as current reflect those portions of the total
receivable  or payable that were  currently  due in  accordance  with the terms.
Amounts  classified as long term represent  amounts not currently  due,  amounts
that are expected to be converted to equity  subsequent  to January 31, 2004 and
October  31,  2003,  respectively,   or  amounts  converted  to  long-term  debt
subsequent to January 31, 2004.


10.  COMMITMENTS AND CONTINGENCIES

In the normal course of business,  the Company is liable for contract completion
and product performance. In the opinion of management, such obligations will not
significantly affect the Company's financial position or results of operations.


11.  SUBSEQUENT EVENTS

Obsidian  Enterprises,  Inc.'s line of credit with Fair  Holdings was amended on
February 2, 2004 and March 10, 2004.  Maximum  borrowings  were  increased  from
$8,000 to $15,000,  and the  maturity  date was  extended  from  January 2005 to
January 2007.
<PAGE>




                   OBSIDIAN ENTERPRISES, INC. AND SUBSIDIARIES

ITEM 2 MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS
     OF OPERATIONS

IMPORTANT NOTE ABOUT FORWARD-LOOKING STATEMENTS.


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The Private Securities  Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. The Company and its representatives may from time to
time make  written  or oral  forward-looking  statements,  including  statements
included in or incorporated by reference into this Quarterly Report on Form 10-Q
and  the  Company's   other  filings  made  with  the  Securities  and  Exchange
Commission. These forward-looking statements are based on management's views and
assumptions and involve risks,  uncertainties and other important factors,  some
of which may be beyond the  control of the  Company,  that  could  cause  actual
results  to  differ   materially   from  those   expressed  or  implied  in  the
forward-looking  statements.  Factors  that might  cause or  contribute  to such
differences  include,  but are not limited to,  those  discussed in this Item 2.
Readers should  carefully review the risks described in this and other documents
that the  Company  files  from time to time  with the  Securities  and  Exchange
Commission.  The forward-looking  statements speak only as of the date that they
are made and the Company undertakes no obligation to update or revise any of the
forward-looking statements.


OVERVIEW

The  Company  operates  in three  industry  segments,  comprised  of trailer and
related transportation  equipment  manufacturing,  butyl rubber reclaiming,  and
coach  leasing.  Trailer  and  related  transportation  equipment  manufacturing
includes the operations of United and Danzer Industries. Butyl rubber reclaiming
includes the operations of U.S. Rubber and coach leasing includes the operations
of Pyramid, DW Leasing, Obsidian Leasing and DC Investments Leasing.

Champion is accounted for as a discontinued operation, therefore, its results of
operations  and cash  flow  have  been  removed  from the  Company's  continuing
operations for all periods presented.


RESULTS OF OPERATIONS

The Company's overall operating results and financial condition during the three
months ended  January 31, 2004  compared to the three  months ended  January 31,
2003 were adversely affected by the limited availability of raw materials in the
butyl  reclaiming  segment,  adverse  weather  conditions  in the  Midwest  that
affected  the  Company's  ability to deliver  orders in the  trailer and related
transportation  equipment  manufacturing  segment,  and increased material costs
also in the trailer and related transportation manufacturing segment.

We  commenced  a  strategy  in  late  2003  of  pursuing  strategic  acquisition
opportunities that include targets both in our traditional, basic industries and
manufacturing  sectors as well as targets that possessed assets (including cash)
that, while outside our traditional areas of focus, were available on terms that
our management  believed to be attractive.  While no material  negotiations  are
currently active with respect to any targets (other than Net Perceptions,  Inc.,
which is discussed below and with respect to which we have commenced an exchange
offer),  we anticipate  that over the course of 2004 we will pursue  acquisition
opportunities  that  we  deem  attractive  in a  variety  of  industry  sectors.
Ultimately,  these acquisitions may (but can not be guaranteed to) result in our
qualifying for listing on the Nasdaq  SmallCap  Market or a national  securities
exchange,  having increased  financial resources and potentially a broader asset
base and more diversified sources of revenue.
<PAGE>

The following table shows net sales by product segment:


                                      Three Months Ended
                            ---------------------------------------
                            January 31, 2004       January 31, 2003
                            ---------------------------------------
Trailer manufacturing           $ 8,484                 $ 7,359
Butyl rubber reclaiming           2,522                   2,433
Coach leasing                     1,040                   1,107
                            ---------------------------------------
Net Sales                       $12,046                 $10,899
                            =======================================

The  following is a discussion  of the major  elements  impacting  the Company's
operating  results  by segment  for the three  months  ended  January  31,  2004
compared to the three months ended  January 31, 2003.  The comments  that follow
should  be  read  in  conjunction  with  the  Company's  condensed  consolidated
financial statements and related notes contained in this Form 10-Q.


TRAILER AND RELATED TRANSPORTATION EQUIPMENT MANUFACTURING

The following table shows sales, cost of sales and gross profit for this segment
for the periods indicated:

                            Three Months Ended
                  -----------------------------------------
                  January 31, 2004         January 31, 2003
                  -----------------------------------------

Net Sales              $8,484                   $7,359
Cost of Sales           7,887                    6,720
                  -----------------------------------------
Gross Profit           $  597                   $  639
                  =========================================
Gross Profit %            7.1%                     8.7%
                  =========================================


Three Months Ended  January 31, 2004  Compared to The Three Months Ended January
31, 2003

Sales in this segment  increased  $1,125 or 15.3% over the comparable  period of
2003.  The  increase  was  primarily  due to the  acceptance  of our new product
introduction  of the economy line trailer as well a stronger  order position for
our cargo  trailers as compared to 2003.  Although we did  increase our sales as
compared to 2003, the adverse winter weather  conditions  delayed our ability to
ship orders to our  customers.  The truck body line continues to be depressed as
capital spending in the telecommunications industries has remained low.

Looking ahead, sales for the trailer and related equipment manufacturing segment
are  expected to grow in fiscal 2004  compared to fiscal 2003  because we expect
our new product  line for cargo  trailers,  which has been well  received,  will
eliminate  the need for a sales  discounting  program.  We also have  additional
production  capacity in our new leased facility and at Danzer.  We believe sales
of truck  bodies  will  continue  at  about  the  same  level  as 2003  unless a
replacement market can be developed.

The gross profit decrease was primarily a result of increased material cost. The
cost  of  plywood,   a  major  component  of  our  cargo   trailers,   increased
significantly starting in August 2003. The increase in price on average has been
approximately 55%. We have and will continue to evaluate  alternative  materials
to replace the plywood.  Management is also negotiating  with new suppliers.  We
also believe gross profits will continue to be adversely impacted by the lack of
sales volume in truck bodies  during 2004 at the  Hagerstown,  Maryland,  plant.
Although the  Hagerstown  plant has increased its  production and sales of cargo
trailers,  the  volume  is  currently  below  levels to fully  absorb  its fixed
overhead costs.
<PAGE>


BUTYL RUBBER RECLAIMING

The following table shows sales, cost of sales and gross profit for this segment
for the periods indicated:

                                Three Months Ended
                      ------------------------------------
                      January 31, 2004    January 31, 2003
                      ------------------------------------

Net Sales                 $2,522                $2,433
Cost of Sales              2,505                 2,397
                      ------------------------------------
Gross Profit              $   17                $   36
                      ====================================

Gross Profit %               0.7%                  1.5%
                      ====================================


Three Months Ended  January 31, 2004  Compared To The Three Months Ended January
31, 2003

Net sales in this  segment  for the  three  months  ended  January  31,  2004 as
compared to the three-month  period ended January 31, 2003 increased 3.7% in the
amount of $89.

Sales in this segment  were higher than the three months ended  January 31, 2003
due to increased  demand from  Company's  tire  manufacturing  customers and the
demand for pipeline mastic wraps.  While the Company  experienced an increase in
sales  in the  three  months  ended  January  31,  2004,  overall,  the  lack of
consistent sources of raw materials limits the Company's ability to increase its
sales  significantly.  Looking ahead, sales are expected to remain consistent in
fiscal 2004 as compared to fiscal 2003.  Future sales growth will depend greatly
on successful  implementation  of our recycling program with the chapters of The
National FFA  Organization  and finding other sources of material.  In addition,
the continued implementation of our fine grind process will increase the ability
to utilize some additional  rubber products in our butyl reclaim process and add
potential new products.

Gross profit  percentage  decreased  .8% for the three months ended  January 31,
2004 as compared to the three months ended January 31, 2003. The primary reasons
for this decrease are a lack of a consistent supply of raw materials,  increased
energy costs and increased  repairs and  maintenance on machinery and equipment.
The Company's  reclaim  process is most efficient when raw material  consists of
primarily road worn inner tubes with a mix of other butyl rubber. As a result of
having to use less than  optimum raw  material  mix in the  reclaiming  process,
additional processing time is incurred to ensure delivery of quality product.
<PAGE>

COACH LEASING

The following table shows sales, cost of sales and gross profit for this segment
for the periods indicated:

                                  Three Months Ended
                          ----------------------------------
                          January 31, 2004  January 31, 2003
                          ----------------------------------
Net Sales                       $1,040          $1,107
Cost of Sales                      587             622
                          ----------------------------------
Gross Profit                    $  453          $  485
                          ==================================
Gross Profit %                    43.6%           43.8%
                          ==================================


Three Months Ended  January 31, 2004  Compared To The Three Months Ended January
31, 2003

Sales for the three months ended January 31, 2004  decreased  6.1% in the amount
of $67 over the  comparable  three-month  period  ended  January 31,  2003.  The
decrease in sales is  attributable  to decreased  utilization of the coach fleet
compared  to  the  same  period  in  2003.  Management  believes  the  decreased
utilization is a result of increased  market  competition.  The first quarter is
typically  the  segment's  lowest sales period due to  seasonality.  Business is
historically  stronger in the spring,  summer and fall. Looking ahead, we expect
segment  sales in fiscal 2004 to increase  as a result of the  full-year  impact
increase in the total number of coaches added to our fleet.  We are also working
to continually improve our utilization percentage.

Gross profit for this  segment was 43.6% for the three months ended  January 31,
2004 compared to 43.8% for the comparable  three-month  period ended January 31,
2003.

Looking  ahead,  we expect  fiscal 2004 gross profit to be higher than 2003 with
the additional sales related to the six new coaches added which reduces the need
to sublease from third parties.


SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES

The Company's selling,  general and administrative expenses for the three months
ended January 31, 2004 increased $290 or 14.1% over the three-month period ended
January 31, 2003. The increase  relates  primarily to increases in  depreciation
related  to the  addition  of new  coaches  in 2003 and  increased  amortization
expense of intangible  assets and other general  increases for  compensation and
other general and administrative expenses.


INTEREST EXPENSE

Interest  expense for the three months ended January 31, 2004 as a percentage of
average debt borrowings of $41,377 was 2.3% (9.2% on an annual basis).  Interest
expense for the three months ended  January 31, 2003 as a percentage  of average
debt  borrowings of $37,318 was 2.1% (8.4% on an annual basis).  The increase is
primarily due to  additional  borrowings  from Fair Holdings at higher  interest
rates.


INCOME TAX PROVISION

There was no income  tax  benefit  recorded  for the  three-month  period  ended
January 31, 2004 as  compared to $158 of tax benefit in the  three-month  period
ended January 31, 2003.  Income tax benefits are created  primarily  through NOL
carry  forwards  recognized  to the  extent  they are  available  to offset  the
Company's net deferred tax liability.  Operating losses during the quarter ended
January 31, 2004 have been  reserved with a valuation  allowance.  Any quarterly
tax benefits are based on the estimated effective tax rate for the full year.
<PAGE>

DISCONTINUED OPERATIONS

On  October  30,  2002,  the  Company's  Board  of  Directors   agreed  to  sell
substantially all assets of Champion to an entity  controlled by Messrs.  Durham
and Whitesell in exchange for assumption of all  liabilities of Champion,  other
than its  subordinated  debt.  In accordance  with the criteria  provided for in
Statement of Financial  Accounting  Standards  ("SFAS") No. 144,  Accounting for
Impairment of  Long-Lived  Assets,  the operating  results of Champion have been
classified as discontinued  operations.  The losses from discontinued operations
for the three months ended  January 31, 2003  represents  the losses of Champion
during the period, net of tax benefit of $97.

Substantially  all assets of Champion  subject to its  liabilities  were sold on
January 30, 2003. No gain or loss was recognized in the  consolidated  statement
of  operations  due to the  involvement  of  related  parties.  The  benefit  of
liabilities  assumed by the  purchaser in excess of assets sold in the amount of
$1,142 was recorded as additional paid in capital.


LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW

In June  2001,  we  purchased  four new  businesses  and began  operations  as a
consolidated holding company with multiple operating subsidiaries. In the period
since June 2001, we have incurred  losses and  reductions in our equity.  During
this period we have financed our losses and have been able to refinance  certain
third-party  obligations  with DC  Investments,  LLC and  its  subsidiary,  Fair
Holdings,  and other third parties.  Our borrowings from Fair Holdings have been
on terms that may not have been available from other sources.  As of January 31,
2004,  our total  debt  outstanding  to DC  Investments  and Fair  Holdings  was
$15,005.

We are continuing to address our liquidity and working  capital  through various
means including  operational  changes and financing  matters which are discussed
below.  During the period  these plans are put in place,  we have  continued  to
receive  financing,  and  have  in  place  arrangements  to  receive  additional
financial support from Fair Holdings, if necessary.

WORKING CAPITAL

Our businesses are working  capital  intensive and require funding for purchases
of production  inventory,  capital  expenditures  and expansion and upgrading of
facilities.  Each of our subsidiaries have separate  revolving credit agreements
and term loan  borrowings  through which the subsidiary  finances its operations
together with cash  generated  from  operations.  Our working  capital  position
(current  assets over current  liabilities)  was negative at January 31, 2004 by
$1,816.  At October 31,  2003,  our working  capital  position  was  positive by
$6,045.  The decrease in working capital is primarily  attributable to a balloon
payment on our coach group debt of approximately  $3,540 that is due in December
2005 and reclassification of approximately $4,100 of debt under revolving credit
lines that are due for  renewal in  November  2004.  Other  unfavorable  changes
include increases in accounts payable.

We continue to address liquidity and working capital issues in a number of ways.
At January 31, 2004, net cash used in continuing operations was $929 compared to
$2,549 in 2003.  The use of cash and working  capital was  primarily  related to
operating losses and business seasonality.  In 2004, we expect our operations to
generate positive cash and increase our overall working capital through improved
operations as follows:

     o    We continue to look for ways to strengthen our  liquidity,  equity and
          working capital through ongoing  evaluations of merger and acquisition
          candidates.  As fully described in the Registration  Statement on Form
          S-4 and the other  filings we have made with the SEC, on December  15,
          2003 we commenced an exchange offer for all of the outstanding  shares
          of Net  Perceptions,  Inc., a
<PAGE>

          developer of software  products for the retail industry which has been
          winding down its operations and whose assets are predominately cash or
          cash  equivalents.  We cannot predict whether we will be successful in
          acquiring some or all of the outstanding  shares of Net Perceptions in
          exchange for our common shares due to the fact that several  important
          conditions  are in  the  control  of the  Board  of  Directors  of Net
          Perceptions.  If we are successful in acquiring all of the outstanding
          shares based upon our latest  proposal,  the effect of the transaction
          would be to substantially  increase our working capital and equity and
          to substantially increase the number of our outstanding common shares.
          If we are  unsuccessful  in acquiring  Net  Perceptions,  we will have
          incurred  substantial expenses which will impact our operating results
          and available working capital.

     o    Discontinuing the cargo trailer discounting program that ended in July
          2003 with the  introduction  of a new product line to replace the need
          to provide  discounts to maintain  market share.  The new product line
          has a competitive  price,  while  providing  gross profits at historic
          levels.

     o    Cost  reduction  initiatives  for raw  materials  in the  trailer  and
          related  transportation  manufacturing segment with the implementation
          of alternative materials and additional discounts through purchasing.

     o    Implementation  of the new fine grind production  process in the butyl
          rubber  reclaiming  segment.  The new process will maximize the use of
          the existing raw materials in the existing  butyl  reclaim  production
          and also provide potential additional production of natural rubber.

     o    Capitalize on the trailer  production  line put in place in the fourth
          quarter  of 2002 that  provides  a new  product  line to the  existing
          customers of Danzer.  This  production  line and related  sales effort
          have allowed us to enter a new market along the East coast of the U.S.
          Our ability to  capitalize on this  opportunity  will be a determining
          factor  on our  ability  to reduce  this  operation's  use of  working
          capital resources. Management will continue to evaluate the operations
          on a continuous basis.

     o    We secured an additional  financial  commitment  from Fair Holdings to
          provide,  as needed,  additional  borrowings  under a $15,000  line of
          credit  agreement,  which  expires  on  January  1,  2007.  Currently,
          approximately $8,303 is available to us under the agreement.

Management  believes the steps taken to improve our operations  will  positively
impact our liquidity and working  capital for fiscal 2004.  However,  success is
dependent on our ability to restore  gross  profits and  capitalize on potential
new markets in the trailer and  related  transportation  manufacturing  segment,
obtain  consistent  material supply in the butyl rubber  reclaiming  segment and
continue to grow the coach leasing  segment.  If our operating  results are less
than  expected,  the  increased  commitment  from  Fair  Holdings  will  provide
additional liquidity in 2004.


FINANCIAL COVENANT WAIVERS

Significant  financial covenants in our credit agreements are the maintenance of
minimum  ratios,  levels of earnings to funded  debt and fixed  charge  coverage
rate. We did not meet requirements and covenants in certain debt agreements.  At
January 31,  2004,  United had  violated  financial  covenants  with  Huntington
Capital Investment  Company.  Huntington Capital Investment Company waived their
covenant violations and we are currently in discussions regarding  modifications
to the covenants.

Obsidian  Leasing did not meet certain  covenants  with Old National  Bank.  Old
National  Bank has not  waived  Obsidian  Leasing's  covenant  violations  as of
January 31, 2004. The total amount of $3,702 for Old National Bank is classified
as current as of January 31, 2004.
<PAGE>


FUNDS AVAILABILITY

On a consolidated  basis, as of January 31, 2004, the Company had  approximately
$556 of cash and cash equivalents.  Danzer Industries,  U.S. Rubber,  United and
Obsidian  Enterprises  each have  revolving  credit lines  available for working
capital at each individual  entity.  Borrowings under the credit  facilities are
available to the lesser of the maximum  amount or the borrowing  base as defined
in the credit agreement.  At January 31, 2004,  additional current  availability
under  these  credit  lines  and  maximum  availability  if  supported  by their
individual borrowing base are:

    Company            Current Availability        Maximum Availability
Danzer Industries            $   231                   $   231
U.S. Rubber                      288                     2,154
United                            --                        --
Obsidian Enterprises           8,303                     8,303

The Company generated  negative net cash flow of $929 from operations during the
three months ended January 31, 2004. Cash used in operations  during the quarter
is primarily  due to operating  losses and  increases in  inventories  offset by
increases in accounts payable. The Company has increased  inventories during the
first  quarter  primarily  in the trailer and related  transportation  equipment
manufacturing  segment.  The first  quarter is  historically  the lowest  volume
quarter due to seasonality of this business.  Inventories  were increased during
this quarter to provide an increase in the Company's  ability to deliver  orders
during the second and third  quarters when sales have  historically  been higher
than in the first  quarter.  Funding  during the  quarter was  provided  through
borrowings on lines of credit and from related parties.


GUARANTEES OF PARTNERS

We have an agreement  with Partners that gives us the right to mandate a capital
contribution  from the Partners if the lenders to U.S.  Rubber or United were to
declare a  default.  In either of those  events,  the  Company  has the right to
enforce a capital  contribution  agreement  with  Partners  up to $1,370 on U.S.
Rubber and $1,000 on United to fund the respective subsidiary's shortfall. These
payments,   if  any,  would  be  applied   directly  to  reduce  the  respective
subsidiary's debt obligations to the lender.


CASH FLOWS

A summary of our contractual  cash  obligations for the fiscal years ending 2004
through 2007 and 2008 and thereafter at January 31, 2004 is as follows:

<TABLE>
<CAPTION>

                                                                                                           2008 and
Contractual Obligations                       Total       2004          2005         2006         2007    Thereafter
                                            ------------------------------------------------------------------------
<S>                                         <C>          <C>           <C>          <C>         <C>          <C>
Long-term debt, and all debt service
   interest payments                        $51,900      $12,408       $ 9,864      $11,715     $10,692      $7,221
Operating leases                              1,177          452           314          220         173          18
Mandatory redeemable preferred stock          1,942           --            --        1,942          --          --
                                            ------------------------------------------------------------------------
Total contractual cash obligations          $ 55,019     $12,860       $10,178      $13,877     $10,865      $7,239
                                            =======================================================================
</TABLE>
<TABLE>
<CAPTION>


Cash flow and liquidity are discussed  further  below,  and the footnotes to our
financial statements discuss cash flow, liquidity and the current classification
of debt due to loan covenant violations.

We also have a commercial commitment as described below:


                                Total Amount       Outstanding at
Other Commercial Commitment       Committed       January 31, 2004      Date of Expiration
-------------------------------------------------------------------------------------------
<S>                               <C>                  <C>                      <C>
Line of credit, related party     $ 1,500              $1,269             April 1, 2006
Line of credit                      4,000               4,000             February 1, 2005
Line of credit                      4,000               1,846             October 1, 2005
Line of credit, related party      15,000               6,697             January 1, 2007

</TABLE>
<PAGE>

Our net cash used in  continuing  operations  for the three months ended January
31, 2004 was $929.  This is comprised of a loss from  continuing  operations  of
$2,249,  offset by noncash  depreciation and amortization of $776,  increases in
inventories  of $980,  other  assets of $244,  accounts  payable  of $1,197  and
deferred  taxes of $6 and  decreases in accounts  receivable  of $797,  customer
deposits of $245 and accrued  expenses of $170.  In  addition,  we had  minority
interest of $30,  accretion of interest of $112 and stock-based  compensation of
$40.

Net cash flow  provided  from  financing  activities  for the three months ended
January 31, 2004 was $655.  This is comprised of borrowings of long-term debt of
$1,751 and related parties of $175, offset by principal repayments of short-term
and long-term debt of $1,271.

Cash flow was used in investing  activities  for the three months ended  January
31, 2004 of $318. This is comprised of purchases of equipment.

The total decrease in cash is summarized as follows:

                                                      Three Months Ended
                                                 -----------------------------
                                                 January 31,       January 31,
                                                    2004            2003
                                                 -----------------------------
Net cash used in operations                       $  (929)         $(2,549)
Net cash used in investing activities                (318)             (96)
Net cash provided by financing activities             655            2,199
Net cash used in discontinued operations               --              (41)
                                                 -----------------------------
Decrease in cash and cash equivalents             $  (592)         $  (487)
                                                 =============================

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are summarized in Note 2 to the consolidated
financial statements in the Annual Report on Form 10-K for the fiscal year ended
October 31, 2003 and describe the  significant  accounting  policies and methods
used in the preparation of the consolidated  financial  statements.  Some of the
most critical policies are also discussed below.

As a matter of policy,  we review our major  assets  for  impairment.  Our major
operating  assets are  accounts  receivable,  inventory,  intangible  assets and
property and equipment.  We have not  historically  experienced  significant bad
debts  expense,  although the filing of Chapter 11  bankruptcy  during 2002 of a
customer resulted in a bad debt charge of $379.  However, we believe our reserve
for doubtful accounts of $494 should be adequate for any exposure to loss in our
January 31, 2004  accounts  receivable.  We have also  established  reserves for
slow-moving  and  obsolete  inventories  and  believe  the  reserve  of  $363 is
adequate.  We  depreciate  our property and  equipment  and amortize  intangible
assets (except for goodwill)  over their  estimated  useful lives.  Property and
equipment  is reviewed for  impairment  when events and  circumstances  indicate
potential impairment factors are present. In assessing the recoverability of the
Company's  property and  equipment,  the Company  must make various  assumptions
regarding  estimated future cash flows and other factors in determining the fair
values of the respective assets. If these estimates or their related assumptions
change in the future,  the Company may be required to record impairment  charges
for these assets in future periods.  Any such resulting impairment charges could
be material to the Company's results of operations.

Goodwill and  intangibles  are reviewed  annually for impairment as of the first
day of the  fourth  quarter or more  frequently  when  events and  circumstances
indicate  potential  impairment  factors are  present.  The  realization  of the
goodwill  of $5,784 is  primarily  dependent  on the  future  operations  of the
operating  entity  whether the  goodwill is allocated  (at  United).  Historical
operating results,  current product demand and estimated future results indicate
the results of  operations  at United  should be adequate to continue to realize
this amount.  However,  future results may not meet expectations due to economic
or other factors,  and failure to meet  expectations  may result in the goodwill
not being fully  realizable and accordingly  result in impairment  charges which
could be material to the Company's operating results.

The initial cost of coaches acquired is depreciated  over a straight-line  basis
over  15  years  to  a  salvage  value  of  38%  of  original  cost.  Subsequent
enhancements and refurbishments of coaches are depreciated over five years using
the straight-line  method.  The age of coaches in our fleet range from less than
one year to ten years, with an average age of approximately  four years.  Actual
value of coaches  after 15 years is dependent on several  factors  including the
level of maintenance and the market conditions at the time of disposal.  We have
not disposed of a material  number of coaches,  and our estimate of depreciation
is based on information other than actual disposal experience.  Accordingly,  we
continue to evaluate our estimates  with respect to the actual  depreciation  of
such vehicles  based on market  conditions  and our experience in disposals when
they occur.  Should future factors indicate the current  depreciation  policy is
not adequate,  we will adjust the  depreciation  rates, and such adjustments may
have an adverse impact on our results of operations.

In conjunction  with financing of the acquisition of United,  the Company issued
386,206  shares of Series C preferred  stock to  Huntington  Capital  Investment
Corporation  ("Huntington").  The note purchase  agreement  includes a provision
that gives  Huntington  the option to require  the Company to  repurchase  these
shares at 90% of market  value  upon the  earlier  of: a) fifth  anniversary  of
issuance of such shares,  b) default under the subordinated  debt agreement,  c)
other factors  related to a sale of  substantially  all assets of the Company as
defined in the  agreement.  Increases in the value of the  Company's  stock will
result in a corresponding increase to this repurchase requirement.  Accordingly,
a substantial increase in stock price at the repurchase date may have an adverse
impact on the Company's liquidity. At January 31, 2004, the Company had violated
certain  financial  covenants  defined in the  subordinated  debt agreement with
Huntington.  The Company received a waiver of these violations as of January 31,
2004.


ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk related to interest rate changes.  See the
discussion of market risk in  Management's  Discussion and Analysis of Financial
Condition and Results of Operations in Item 2, which  discussion is incorporated
by reference herein.


ITEM 4 CONTROLS AND PROCEDURES

The Company  maintains  disclosure  controls and procedures that are designed to
ensure that information required to be disclosed in the reports we file pursuant
to the Securities  Exchange Act of 1934 is recorded,  processed,  summarized and
reported  within the time periods  specified in the SEC's rules and forms.  Such
information  is  accumulated  and  communicated  to  the  Company's  management,
including  its  Chief  Executive  Officer  and  Chief  Financial   Officer,   as
appropriate,  to allow  timely  decisions  regarding  required  disclosure.  The
Company's  management  recognizes  that,  because  the  design of any  system of
controls  is based in part upon  certain  assumptions  about the  likelihood  of
future events and also is subject to other  inherent  limitations,  any controls
and  procedures,  no matter how well  designed  and  operated,  can provide only
reasonable, and not absolute, assurance of achieving the desired objectives. The
Company's management believes,  however,  that the Company's disclosure controls
and procedures  provide  reasonable  assurance that the disclosure  controls and
procedures are effective.

The Company has carried out as of January 31,  2004,  an  evaluation,  under the
supervision and with the  participation of the Company's  management,  including
the  Company's  Chief  Executive  Officer and Chief  Financial  Officer,  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and procedures.  Based on this evaluation, the Chief Executive Officer and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  were  effective.

We have been taking steps to improve our financial infrastructure to account for
complex  transactions  on a consolidated  basis since the  reorganization  which
occurred in 2001. Our auditors  identified our limited financial  infrastructure
and the failure to  physically  inventory our United  Expressline  operations on
quarterly basis as a material  weaknesses in internal control in connection with
the audit of our financial  statements  for the period ending  October 31, 2003.
Effective  November  1,  2003,  the  Company  implemented  an  enterprise  wide,
integrated  accounting  system that  replaced  the separate  accounting  systems
previously  maintained  by the  several  subsidiaries  and  since  that date has
implemented an enhanced  segregation of duties of various accounting  personnel.
The  Company  now  performs  a  physical  inventory  of our  United  Expressline
operations on a quarterly  basis and has enhanced our financial  infrastructure.
Management  will  continue to evaluate  whether  additional  steps are needed to
improve  our  financial  infrastructure.  There  have been no other  significant
changes  in the  Company's  internal  controls  or in other  factors  that could
significantly affect internal controls subsequent to the date of the January 31,
2004 evaluation.


                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is party to  ordinary  litigation  incidental  to its  business.  No
current  pending  litigation  is expected to have a material  adverse  effect on
results of operations, financial condition or cash flows.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

At the Company's  Annual Meeting of  Stockholders  held on December 3, 2003, the
stockholders  approved  amendments  to the  Certificates  of  the  Designations,
Preferences,  Rights  and  Limitations  of  Series  C  Preferred  Stock  and the
Certificate of the Designations, Preferences, Rights and Limitations of Series D
Preferred Stock.  Each of these amendments added a new subsection to provide for
the  proportionate  increase  or  decrease  in the  number of shares of Series C
Preferred  and Series D  Preferred,  respectively,  to reflect  an  increase  or
decrease in the shares of outstanding  Common Stock. At the Annual Meeting,  the
stockholders   also  approved   amendments  to  the  Company's   Certificate  of
Incorporation  to implement a 50-to-1 reverse stock split and a reduction of the
Company's  authorized  shares of Common  Stock from  40,000,000  to  10,000,000.
Holders of fractional shares subsequent to the reverse stock split received cash
payments for their fractional shares.

As disclosed  in the  Company's  Annual  Report on Form 10-K for the fiscal year
ended October 31, 2003, which disclosure is incorporated herein by reference, in
January 2003, the Company  agreed to a modification  of terms with the debenture
holders  to  provide  for  less  stringent  covenants.   In  exchange  for  this
modification,  the Company issued warrants to the debenture  holders to purchase
up to 16,000 shares of the Company's  common stock at an exercise  price of $.20
per share.  These  warrants  expire January 24, 2006. The sales and issuances of
the warrants  were made in reliance  upon the  exemption  from the  registration
provisions of the Securities Act of 1933, as amended,  set forth in Section 4(2)
thereof as transactions by an issuer not involving any public offering and other
applicable  exemptions.  Copies  of the  warrant  agreements  were  attached  as
exhibits to the Form 10-K.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.


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

The Company  held its Annual  Meeting of  Stockholders  on December 3, 2003,  at
which the stockholders  voted on the following matters as indicated.  The number
of votes  are prior to the  Company's  reverse  stock  split  that  took  effect
February 16, 2004.


(1) ELECTION OF DIRECTORS

On  Proposal  1 for the  election  of seven  directors,  the  following  persons
received the number of votes set opposite their  respective names (all Preferred
Stock was voted on an as-converted basis):

Names                        Number of Votes           Votes Withheld
-----                        ---------------           --------------

Timothy S. Durham              137,152,905                    0
Daniel S. Laikin               137,152,905                    0
D. Scott McKain                137,152,905                    0
Jeffrey W. Osler               137,152,905                    0
John A. Schmidt                137,152,905                    0
Goodhue W. Smith, III          137,152,905                    0
Terry G. Whitesell             137,152,905                    0


(2) AMENDMENT OF CERTIFICATE OF DESIGNATION FOR SERIES C PREFERRED STOCK

On  Proposal 2 for the  amendment  of the  Certificate  of  Designation  for the
Company's  Series C Preferred  Stock,  the  following  number of votes were cast
"For" and "Against" such Proposal.

<TABLE>
<CAPTION>
                                                                                BROKER
        Class of Shares                       FOR            AGAINST            NON-VOTE
        ---------------                       ---            -------            --------
<S>                                        <C>               <C>               <C>
        Common Shares (including
        Series C and Series D Stock on
        an as-converted basis)             128,731,255       288,514           8,100,267

        Series C Preferred Stock            87,367,980             0                   0


(3) AMENDMENT OF CERTIFICATE OF DESIGNATION FOR SERIES D PREFERRED STOCK

On  Proposal 3 for the  amendment  of the  Certificate  of  Designation  for the
Company's  Series D Preferred  Stock,  the  following  number of votes were cast
"For" and "Against" such Proposal.

                                                                                BROKER
        Class of Shares                       FOR            AGAINST            NON-VOTE
        ---------------                       ---            -------            --------
        Common Shares (including
        Series C and Series D Stock on
        an as-converted basis)             128,731,130       288,804           8,100,042

        Series D Preferred Stock            20,770,225             0                   0

<PAGE>

(4) AMENDMENT TO CERTIFICATE OF INCORPORATION TO EFFECT REVERSE STOCK SPLIT

On Proposal 4 for the amendment to the Company's Certificate of Incorporation to
effect a 50 to 1 reverse stock split,  the  following  number of votes were cast
"For" and "Against" such proposal.

                                                                                BROKER
        Class of Shares                       FOR            AGAINST            NON-VOTE
        ---------------                       ---            -------            --------
        Common Shares (including
        Series C and Series D Stock on
        an as-converted basis)             136,855,044       336,832                   0

        Series C Preferred Stock            87,367,980             0                   0

        Series D Preferred Stock            20,770,225             0                   0


(5) AMENDMENT TO CERTIFICATE OF INCORPORATION TO DECREASE AUTHORIZED SHARES

On Proposal 5 for the amendment to the Company's Certificate of Incorporation to
reduce  the number of  authorized  shares of capital  stock to  15,000,000,  the
following number of votes were cast "For" and "Against" such Proposal.
                                                                                BROKER
        Class of Shares                       FOR            AGAINST            NON-VOTE
        ---------------                       ---            -------            --------
        Common Shares (including
        Series C and Series D Stock on
        an as-converted basis)             137,044,883       146,301                   0

        Series C Preferred Stock            87,367,980             0                   0

        Series D Preferred Stock            20,770,225             0                   0
</TABLE>


(6) RATIFICATION OF INDEPENDENT AUDITORS-MCGLADREY & PULLEN, LLP

On Proposal 6 for the ratification of the Company's  independent  auditors,  the
following  number of votes  were cast "For" and  "Against"  such  Proposal  (all
Preferred Stock was voted on an as-converted basis).

         FOR: 137,131,461       AGAINST: 61,188         BROKER NON-VOTE:  0


ITEM 5. OTHER INFORMATION

None.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


EXHIBITS

The  exhibits  filed as part of this Form 10-Q are listed in the Exhibit  Index,
which is incorporated herein by reference.


REPORTS ON FORM 8-K

None.
<PAGE>


                                   SIGNATURES

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



March 16, 2004          By: /s/ Timothy S. Durham
--------------          --------------------------------------------------------
 Date                       Timothy S. Durham, Chairman and Chief Executive
                                Officer



March 16, 2004          By: /s/ Rick D. Snow
--------------          --------------------------------------------------------
 Date                       Rick D. Snow, Executive Vice President/Chief
                                Financial Officer
<PAGE>
<TABLE>
<CAPTION>
                                        EXHIBIT INDEX


Exhibit No.      Description

<S>              <C>                                                                    <C>
10.1             Fourth Amendment to Promissory Note (Line of Credit),                  Incorporated by reference
                 dated March 10, 2004, between Obsidian Enterprises,                    to Exhibit 10.76 to
                 Inc. and Fair Holdings, Inc.                                           Amendment No. 2 to the
                                                                                        Registration Statement on
                                                                                        Form S-4 filed by the
                                                                                        Registrant on March 11,
                                                                                        2004.


31.1             Certification of Timothy S. Durham.                                    Attached

31.2             Certification of Rick D. Snow.                                         Attached

32.1             Statement Regarding Certification Pursuant to 18 U.S.C. Section
                 1350 by Timothy S. Durham, Chief Executive Officer.                    Attached

32.2             Statement Regarding Certification Pursuant to 18 U.S.C. Section
                 1350 by Rick D. Snow, Chief Financial Officer.                         Attached

</TABLE>