UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended June 30, 2001.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) for the transition period from _____________
to ____________.
Commission file number: 0-11734
CHINA FOOD AND BEVERAGE COMPANY
-------------------------------
(Name of Small Business Issuer in Its Charter)
Nevada 87-0548148
- ------------------------------- --------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
82-66 Austin St., Kew Gardens, New York 11415
-----------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(877) 667-9377
-------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No[ ]
The number of shares outstanding of Registrant's common stock ($0.001 par value)
as of the quarter ended June 30, 2001 was 11,495,788 shares and, as of the
latest practicable date, August 14, 2001, is 9,395,788.
1
TABLE OF CONTENTS
PART I
Page
ITEM 1. FINANCIAL STATEMENTS....................................... F-1 - F-10
ITEM 2. PLAN OF OPERATION................................................ 3
PART II
ITEM 1. LEGAL PROCEEDINGS................................................ 4
ITEM 2. CHANGES IN SECURITIES............................................ 5
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................................. 5
ITEM 4. SUBMISSION TO A VOTE OF SECURITY HOLDERS......................... 5
ITEM 5. OTHER............................................................ 5
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................. 5
SIGNATURES....................................................... 6
2
PART I
ITEM 1. FINANCIAL STATEMENTS
Unless otherwise indicated, the term "Company" refers to China Food and
Beverage Company and its subsidiaries and predecessors. The accompanying
consolidated unaudited condensed financial statements have been prepared by
management in accordance with the instructions in Form 10-QSB and, therefore, so
not include all information and footnotes required by generally accepted
accounting principals and should, therefore, be read in conjunction with
Company's Annual Report to Shareholders on Form 10-KSB for the fiscal year ended
December 31, 2000. These statements do include all the normal recurring
adjustments which the Company believes is necessary and affords a fair
presentation. The interim results are not necessarily indicative of the results
for the full year ending December 31, 2001. Accordingly, consolidated audited
interim financial statements, including a balance sheet for the Company as of
the fiscal quarter ended June 30, 2001, and, statements of operations and
statements of cash flows for the interim period up to the date of such balance
sheet and the comparable period of the preceding fiscal year are attached hereto
as Pages F-1 through F-10 and are incorporated herein by this reference.
F-1
CHINA FOOD AND BEVERAGE COMPANY
AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and December 31, 2000
F-2
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
June 30, December 31,
2001 2000
--------- ---------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalent $ 446,412 $ 762,855
Note receivable 80,000 --
Prepaid expense 75,000 --
--------- ---------
Total Current Assets 601,412 762,855
--------- ---------
PROPERTY AND FIXED ASSETS
Equipment 2,149 2,149
Accumulated depreciation (931) (716)
--------- ---------
Total Fixed Assets 1,218 1,433
--------- ---------
OTHER ASSETS
Deposits 1,950 --
--------- ---------
Total Other Assets 1,950 --
--------- ---------
TOTAL ASSETS $ 604,580 $ 764,288
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
F-3
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
2001 2000
----------- -----------
(Unaudited)
Accounts payable $ 66,706 $ 66,706
Related party payable 256 4,077
Accrued expenses 32,951 70,088
----------- -----------
Total Current Liabilities 99,913 140,871
----------- -----------
Total Liabilities 99,913 140,871
----------- -----------
STOCKHOLDERS' EQUITY
Common stock; 100,000,000 shares authorized of $0.001
par value, 11,495,788 and10,996,505 shares issued
and outstanding, respectively 11,496 10,997
Additional paid-in capital 2,077,364 2,027,864
Retained earnings accumulated prior to the development
stage 633,605 633,605
Deficit accumulated during the development stage (2,217,798) (2,049,049)
----------- -----------
Total Stockholders' Equity 504,667 623,417
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 604,580 $ 764,288
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
F-4
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
From
Inception of
Development
Stage on
January 1,
For the Six Months Ended For the Three Months Ended 2000 Through
June 30, June 30, June 30,
2001 2000 2001 2000 2001
---------------- --------------- --------------- ---------------- ---------------
NET SALES $ - $ - $ - $ - $ -
---------------- --------------- --------------- ---------------- ---------------
COSTS AND EXPENSES
General and administrative 171,290 201,217 100,878 131,800 457,818
---------------- --------------- --------------- ---------------- ---------------
Total Costs and Expenses 171,290 201,217 100,878 131,800 457,818
---------------- --------------- --------------- ---------------- ---------------
LOSS BEFORE OTHER EXPENSE (171,290) (201,217) (100,868) (131,800) (457,818)
---------------- --------------- --------------- ---------------- ---------------
OTHER INCOME (EXPENSE)
Interest expense - (31,200) - - (13,018)
Interest income 2,541 760 673 589 6,189
---------------- --------------- --------------- ---------------- ---------------
Total Other Income (Expense) 2,541 (30,440) 673 589 (6,829)
---------------- --------------- --------------- ---------------- ---------------
LOSS BEFORE TAX, EXTRAORDINARY
ITEM, MINORITY INTEREST AND
DISCONTINUED OPERATIONS (168,749) (231,657) (100,195) (131,211) (464,647)
INCOME TAX EXPENSE - - - - -
---------------- --------------- --------------- ---------------- ---------------
LOSS BEFORE EXTRAORDINARY ITEM (168,749) (231,657) (100,195) (131,211) (464,647
)
GAIN FROM FORGIVENESS OF DEBT - 255,640 - - 237,163
---------------- --------------- --------------- ---------------- ---------------
LOSS BEFORE MINORITY INTEREST
AND DISCONTINUED OPERATIONS (168,749) 23,983 (100,195) (131,211) (227,484)
LOSS ON DISCONTINUED
OPERATIONS - (1,990,314) - - (1,990,314)
---------------- --------------- --------------- ---------------- ---------------
NET LOSS $ (168,749) $ (1,966,331) $ (100,195) $ (131,211) $ (2,217,798)
================ =============== =============== ================ ===============
BASIC LOSS PER SHARE $ (0.02) $ (0.33) $ (0.02) $ (0.02)
================ =============== =============== ================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 11,178,227 5,925,603 11,178,227 5,875,401
================ =============== =============== ================
The accompanying notes are an integral part of these consolidated
financial statements.
F-5
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity
Additional Other Retained
Common Stock Paid-In Comprehensive Earnings
Shares Amount Capital Income (Deficit)
--------------- ----------------- --------------- --------------- ---------------
Balance, December 31, 1999 5,546,505 $ 5,547 $ 872,070 $ 8,421 $ 633,605
Common stock issued for cash
at $1.00 per share 50,000 50 49,950 - -
Common stock issued for cash
at $1.00 per share 200,000 200 199,800 - -
Common stock issued for cash
at $0.50 per share 200,000 200 99,800 - -
Common stock issued for cash
at $0.25 per share 400,000 400 99,600 - -
Common stock issued for cash
at $0.25 per share 800,000 800 199,200 - -
Common stock issued for cash
at $0.25 per share 800,000 800 199,200 - -
Common stock issued for cash
at $0.10 per share 2,000,000 2,000 198,000 - -
Common stock issued for cash
at $0.10 per share 1,000,000 1,000 99,000 - -
Related party forgiveness of
interest - - 11,244 - -
Change in currency translation - - - (8,421) -
Net loss for the year ended
December 31, 2000 - - - - (2,049,049)
--------------- ----------------- --------------- --------------- ---------------
Balance, December 31, 2000 10,996,505 10,997 2,027,864 - (1,415,444)
Cancellation of shares (unaudited) (717) (1) - - -
Common stock issued for cash
at $0.10 per share (unaudited) 500,000 500 49,500 - -
Net loss for the six months ended
June 30, 2001 (unaudited) - - - - (168,749)
--------------- ----------------- --------------- --------------- ---------------
Balance, June, 2001 (unaudited)
11,495,788 $ 11,496 $ 2,077,364 $ - $ (1,584,193)
=============== ================= =============== =============== ===============
The accompanying notes are an integral part of these consolidated
financial statements.
F-6
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
From
Inception of
Development
Stage on
January 1,
For the Six Months Ended 2000 Through
June 30 June 30,
2001 2000 2001
------------------ ------------------ -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (168,749) $ (1,966,331) $ (2,217,798)
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Depreciation and amortization 215 501 931
Common stock issued for services -
Discontinued operations - 1,990,314 1,990,314
Gain on settlement of debt - (255,640) (237,163)
Changes in assets and liabilities:
(Increase) in note receivable (80,000) - (80,000)
(Increase) in prepaid expense (75,000) - (75,000)
(Increase) in construction in progress - (143,183) -
(Decrease) in accounts payable and accrued expenses (40,959) - (481,000)
(Increase) in customer prepayments (1,950) - (1,950)
------------------ ------------------ -----------------
Net Cash (Used) by Operating Activities (366,443) (374,339) (1,101,666)
------------------ ------------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
------------------ ------------------ -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Loss of cash from discontinued operations - (424,757) (424,757)
Common stock issued for cash 50,000 450,000 1,200,000
Proceeds from notes payable - - -
Payments on notes payable - (163,720) (223,011)
------------------ ------------------ -----------------
Net Cash Provided (Used) by Financing Activities 50,000 (138,477) 552,232
------------------ ------------------ -----------------
NET (DECREASE) IN CASH (316,443) (512,816) (549,434)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 762,855 995,846 995,846
------------------ ------------------ -----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 446,412 $ 483,030 $ 446,412
================== ================== =================
SUPPLEMENTAL SCHEDULE OF
CASH FLOW ACTIVITY
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
The accompanying notes are an integral part of these consolidated
financial statements.
F-7
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been
prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of operations an cash flows at June 30, 2001 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed consolidated
financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December
31, 2000 audited consolidated financial statements. The results of
operations for periods ended June 30, 2001 and 2000 are not
necessarily indicative of the operating results for the full
years.
NOTE 2 - LOSS OF SUBSIDIARY
The loss in the first quarter of 2000 from discontinued operating
results from a dispute with the Anhui Liu An Beer Company Ltd.
("sellers") who represent a minority interest in the entity that
operates the Company's brewery in the Peoples' Republic of China.
In December 1998, the Company acquired a 55% interest in a Chinese
brewery for which it issued 8% convertible debentures in the total
principal amount of $21 million. The debentures had a $5.00
conversion price. Pursuant to the terms of the debentures, the
Company had the right to require conversion of the debentures. The
Company required said conversion and issued 4.2 million shares of
its common stock, also in December 1998. The sellers, from whom
the Company purchased its interest in the brewery, hold a 45%
equity interest in the brewery and agreed to maintain
responsibility for the day-to-day operations of the brewery.
The Company's Chinese asset, which is the brewery, is subject to
liens which resulted in the borrowing of approximately $6 million,
and the brewery had tax liabilities to the People's Republic of
china in excess of $4 million.
In May 2000, the sellers claimed that the Company was in default
of its obligations to repurchase or cause to be repurchased from
the sellers, a significant majority of the shares of the common
stock issued upon conversion of the debentures or, to provide
additional capital. As a result of the alleged default, they
refused to provide the Company with any financial information
concerning the operations of the brewery and assumed control of
the brewery.
The Company believes that the claims made by the sellers are
without merit. However, as the assets of the brewery are in the
Peoples' Republic of China and the Company has no effective
control over the business or the financial concerns of the
brewery, the Company has fully reserved against all of its assets
allocated in China. All operations have been classified as
discontinued as they relate to the brewery.
F-8
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 2 - LOSS OF SUBSIDIARY (Continued)
It is possible that, in addition to taking control of the assets,
the sellers may commence an action against the Company alleging,
among other claims, breach of contract. Conversely, the Company is
exploring its options, including but not limited to, initiating
legal action of its own to recover what it believes to be a
wrongful conversion of its assets by the sellers.
Unless the Company is able to resolve this dispute and because it
does not presently have the financial ability to continue in
operation, it may be obligated to secure additional debt or equity
financing to enable it to continue as an on-going entity.
NOTE 3 - LITIGATION
Securities and Exchange Commission v. China Food & Beverage, James
C. Tilton, et al. - On July 14, 1999, the Securities and Exchange
Commission ("SEC") in the United States District Court, Southern
District of Florida, Civil Action No. 99-1968-CIV-GOLD, filed a
Complaint for Injunctive and Other Equitable Relief, as well as a
Temporary Restraining Order against, et al, the Company and James
C. Tilton ("Tilton") individually who is the Company's chief
executive officer. On April 15, 1999, the Company entered into a
Consulting Agreement with The Globus Group, Inc. ("Globus"), a
Nevada corporation, whereby Globus was to act as a "...marketing
consultant/promoter..." of the Company. The complaint alleges that
the Company, knowingly or unknowingly disseminated material to the
public based on globus' false representations to the Company. The
complaint further alleges that when informed that Globus was
engaging in this and other improper activities that might result
in creating false impressions with the public, Tilton did not take
appropriate corrective action quickly enough.
As soon as the Company became aware of the SEC's complaint, the
Company took steps to investigate the allegations against Globus.
After numerous attempts to contact Globus, without success, the
Company's Officers and Board of Directors felt it was in the
Company's best interest to formally terminate the aforementioned
Consulting Agreement with Globus.
On June 18, 2001 the offer made by the company was accepted by the
SEC. The SEC ordered that the company and Tilton cease and desist
from committing any securities violations in the futures.
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company
does not have significant cash or other material assets, nor does
it have an established source of revenues sufficient to cover its
operating costs and to allow it to continue as a going concern. It
is the intent of the Company to seek a merger with an existing,
operating company. Until that time, the stockholders have
committed to covering the operating costs of the Company.
F-9
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 5 - NEGOTIATIONS WITH TRITRADEX, INC.
The Company is in negotiations to acquire Tritradex, Inc. (a New
York corporation), the parent company of Shanghai Tritradex
Machinery, Inc., a manufacturer and distributor of gasoline
dispensing pumps in the Peoples' Republic of China. As part of the
negotiations, the Company has advanced $80,000 to Tritradex as an
interest free loan. In the event the negotiations with Tritradex
are not finalized, the $80,000 will be due to the Company within
10 days. At June 30, 2001 the acquisition had not closed.
NOTE 6 - SUBSEQUENT EVENTS
In July 2001, The Company recovered and canceled 2,100,000 shares
of the 4,200,000 shares originally issued for the Chinese
acquisition (see Note 2). The Company is attempting to recover the
remaining 2,100,000 shares. No assurance can be given to their
recoverability.
F-10
ITEM 2. PLAN OF OPERATION
The following discussion and analysis should be read in conjunction
with the Company financial statements and notes thereto included elsewhere in
this Form 10-QSB. Except for the historical information contained herein, the
discussion in this Form 10-QSB contains certain forward looking statements that
involve risks and uncertainties, such as statements of the Company plans,
objectives, expectations and intentions. The cautionary statements made in this
Form 10-QSB should be read as being applicable to all related forward statements
wherever they appear in this Form 10-QSB. The Company actual results could
differ materially from those discussed here.
Other than what has been disclosed herein and in the year end report
for year 2000, filed on April 13, 2001, the Company is not aware of any
immediate circumstances or trends which would have a negative impact upon future
sales or earnings. There have been no material fluctuations in the standard
seasonal variations of the Company business. The accompanying financial
statements include all adjustments, which in the opinion of management are
necessary in order to make the financial statements not misleading.
The Company
The Company presently offices at 82-66 Austin St., Kew Gardens, New York 11415.
Business of Issuer
Since the disposition of Anhui Brewery (Please see year ended 2000
10-KSB, Item 1. Management's Discussion and Analysis, filed on April 13, 2001),
the Company will continue to seek to acquire businesses both in China and other
countries. The Company intends to locate its target investment opportunities
through contacts which management has in China and Southeast Asia. The Company
has no full or part time employees, aside from its officers and directors. If
the Company requires additional personnel to carry out its business objectives,
it will retain outside consultants. In the past, the Company has been successful
in retaining consultants through the issuance of its Common Stock and the
Company intends to continue this practice in an attempt to avoid expending
valuable cash flows.
3
On March 4, 2001, the Company entered into an investment agreement with
Tritradex, Inc., a US based parent corporation of Shanghai Tritradex Machinery,
Inc., a manufacturer and distributor of gasoline assemblies in the People's
Republic of China, under license from the Wayne Division of Houston-based
Dresser, Inc.
Tritradex was incorporated in the state of New York in 1994 and
established a Sino-foreign venture in Pudong, Shanghai, the People's Republic of
China, named Shanghai Tritradex Machinery, Inc. ("STM"). The main business of
STM is designing manufacturing and selling electronic fuel dispensing pumps and
related products for use in gasoline stations in China. In 1995 STM entered into
a license and technical agreement with Wayne Division of Dresser Industries,
Inc. The agreement allowed STM to manufacture, assemble, sell and service
Wayne's products in China.
Wayne is the technological leader in the manufacture and supply of
retail petrol fuel dispensers; dispenser control systems, credit/debit card
processing terminals and point-of-sale systems for petroleum markets worldwide.
They are also the industry leader in developing new technologies. Over 75
countries use their products.
The Company is continuing to explore the possibility of further
investment or a business combination with Tritradex, Inc.
Since the Company does not have significant liquid assets, the Company
intends to acquire business opportunities through the issuance of its equity
securities. This will likely result in future dilution of the ownership interest
enjoyed by the Company's current shareholders. The Company has had some past
experience in acquiring subsidiaries in this manner. However, the Company can
provide no assurance that it will be able to continue such acquisitions in the
future. It is also likely that any future acquisitions by the Company will
require the Company to make capital contributions to the acquired businesses.
Capital Resources and Liquidity
During the quarter ended June 30, 2001, the Company issued 500,000
shares of Common Stock for cash valued at $.10 per share.
Results of Operations
For the three month ended June 30, 2001, the Company sustained a loss
of $100,195 or $0.02 per share (basic and diluted). The loss in the second
quarter of 2001 can be attributed to a lack of revenues. For the comparable
period of 2000, the Company sustained a loss of $131,211 or $0.02 per share
(basic and diluted). As a result of a reserve the Company had a deficiency of
stockholder's equity of $504,667 at June 30, 2001.
PART II
ITEM 1. LEGAL PROCEEDINGS
Securities and Exchange Commission v. China Food & Beverage, James C.
Tilton, et al. - On July 14, 1999, the Securities and Exchange Commission
("SEC") in the United States District Court, Southern District of Florida, Civil
Action No. 99-1968-CIV-GOLD, filed a Complaint for Injunctive and Other
Equitable Relief, as well as a Temporary Restraining Order against, et al, the
Company and James C. Tilton ("Tilton") individually, who is the Company's chief
executive officer. On April 15, 1999, the Company entered into a Consulting
Agreement with The Globus Group, Inc. ("Globus"), a Nevada corporation, whereby
Globus was to act as a "...marketing consultant/promoter..." of the Company. The
complaint alleges that the Company knowingly or unknowingly disseminated
material to the public based on Globus' false representations to the Company.
The complaint further alleges that when informed that Globus was engaging in
this and other improper activities that might result in creating false
impressions with the public, Tilton did not take appropriate corrective action
quickly enough.
As soon as the Company became aware of the SEC's complaint, the Company
took immediate steps to investigate the allegations against Globus. After
numerous attempts to contact Globus, without success, the Company's Officers and
Board of Directors felt it was in the Company's best interest to formally
terminate the aforementioned Consulting Agreement with Globus.
4
The company announced that effective as of June 18, 2001, China Food &
Beverage Co. entered into a cease-and-desist Order ("the Order"), along with its
principal executive officer, with the Securities and Exchange Commission
pursuant to section 21C of the Securities and Exchange Act of 1934. The Order
instituting the cease-and-desist was entered by consent. A copy of the actual
Order is attached. See Exhibit - Item 99.
ITEM 2. CHANGES IN SECURITIES
During the quarter ended June 30, 2001, there were no changes in
securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
During the quarter ended June 30, 2001, there were no defaults upon
senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the quarter ended June 30, 2001, there were no matters submitted
to a vote of the Company's shareholders.
ITEM 5. OTHER
Through a reverse merger recapitalization by which the Company acquired
100% of Victoria Beverage Company, Ltd., for 4,200,000 shares of the Company's
common stock, resulted in the Company owning 55% of Anhui Hao Dun Brewery Co.,
Ltd., situated in the People's Republic of China.
In May 2000, the sellers of Anhui Hao Dun Brewery Co., Ltd. claimed
that the Company was in default of its obligations to repurchase or cause to be
repurchased from the sellers, a significant majority of the shares of the common
stock issued upon conversion of the debentures or, to provide additional
capital. As a result of the alleged default, they refused to provide the Company
with any financial information concerning the operations of the brewery and
assumed control of the brewery.
The Company believes that the claims made by the sellers are without
merit. However, as the assets of the brewery are in the Peoples' Republic of
China and the Company has no effective control over the business or the
financial concerns of the brewery, the Company has fully reserved against all of
its assets located in China.
Accordingly, the Company cancelled 2,100,000 shares of the 4,200,000
shares previously issued. The Company has placed a stop-transfer on the
remaining 2,100,000 pending resolution of this issue between the sellers of
Anhui Hao Dun Brewery and the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
During the quarter ended June 30, 2001, the Company filed an 8-K on
June 29, 2001, a copy of which is attached hereto.
5
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized this 14th_ day of August, 2001.
CHINA FOOD AND BEVERAGE
By: /s/ James Tilton
--------------------
James Tilton, President
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Signature Title Date
- --------- ----- ----
By: /s/James Tilton Chief Executive Officer, President, August 14, 2001
- ------------------- Treasurer and Director
James Tilton
By: /s/ Jane Zheng Secretary and Director August 14, 2001
- ------------------
Jane Zheng
By: /s/ Li, Lin Hu Director August 14, 2001
- ------------------
Li, Lin Hu
6