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 March 31, 2005.
[ ] 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
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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.)
710 W. 24th St., Kansas City, MO 64108
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(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 March 31, 2005 was 9,896,679.
TABLE OF CONTENTS
PART I
Page
----
ITEM 1. FINANCIAL STATEMENTS............................................. 3
ITEM 2. PLAN OF OPERATION................................................ 4
PART II
ITEM 1. LEGAL PROCEEDINGS................................................ 5
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
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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
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
principle 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,
2004. 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, 2005. Accordingly, unaudited interim financial statements,
including a balance sheet for the Company as of the fiscal quarter ended March
31, 2005, 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-7 and are
incorporated herein by this reference.
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CHINA FOOD AND BEVERAGE COMPANY
(A Development Stage Company)
FINANCIAL STATEMENTS
March 31, 2005 and December 31, 2004
F-1
CHINA FOOD AND BEVERAGE COMPANY
(A Development Stage Company)
Balance Sheets
ASSETS
March 31, December 31,
2005 2004
----------- -----------
(Unaudited)
CURRENT ASSETS
Cash $ 296 $ 899
Accounts receivable - related party 4,080 7,074
Prepaid expenses 5,323 5,111
----------- -----------
Total Current Assets 9,699 13,084
----------- -----------
PROPERTY AND FIXED ASSETS
Equipment 2,419 2,149
Accumulated depreciation (2,419) (2,149)
----------- -----------
Total Fixed Assets -- --
----------- -----------
TOTAL ASSETS $ 9,699 $ 13,084
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 269,100 $ 231,301
Accounts payable - related party 46,504 46,504
----------- -----------
Total Current Liabilities 315,604 277,805
----------- -----------
TOTAL LIABILITIES 315,604 277,805
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock; 100,000,000 shares authorized at $0.001
par value, 9,896,679 shares issued and outstanding 9,897 9,897
Additional paid-in capital 2,110,278 2,110,278
Retained earnings accumulated prior to the development stage 633,605 633,605
Deficit accumulated during the development stage (3,059,685) (3,018,501)
----------- -----------
Total Stockholders' Equity (Deficit) (305,905) (264,721)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 9,699 $ 13,084
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-2
CHINA FOOD AND BEVERAGE COMPANY
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
Inception of
Development
Stage on
January 1,
For the Three Months Ended 2000 Through
March 31, March 31,
----------- ----------- -----------
2005 2004 2005
----------- ----------- -----------
NET SALES $ -- $ -- $ --
COSTS AND EXPENSES
General and administrative 41,396 50,468 1,319,168
----------- ----------- -----------
Total Costs and Expenses 41,396 50,468 1,319,168
----------- ----------- -----------
LOSS BEFORE OTHER INCOME (41,396) (50,468) (1,319,168)
----------- ----------- -----------
OTHER INCOME (EXPENSE)
Refund of tax penalties -- -- 16,237
Interest expense -- -- (16,296)
Interest income 212 303 12,693
----------- ----------- -----------
Total Other Income (Expense) 212 303 12,634
----------- ----------- -----------
LOSS BEFORE TAX, EXTRAORDINARY
ITEM AND DISCONTINUED OPERATIONS (41,184) (50,165) (1,306,534)
INCOME TAX EXPENSE -- -- --
----------- ----------- -----------
LOSS BEFORE DISCONTINUED OPERATIONS (41,184) (50,165) (1,306,534)
LOSS ON DISCONTINUED OPERATIONS -- -- (1,990,314)
----------- ----------- -----------
LOSS BEFORE EXTRAORDINARY ITEM (41,184) (50,165) (3,296,848)
GAIN ON DISPOSITION OF DEBT -- -- 237,163
----------- ----------- -----------
NET LOSS $ (41,184) $ (50,165) $(3,059,685)
=========== =========== ===========
BASIC LOSS PER SHARE $ (0.01) $ (0.01)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 9,896,679 9,896,679
=========== ===========
The accompanying notes are an accompanying part of these financial statements.
F-3
CHINA FOOD AND BEVERAGE COMPANY
(A Development Stage Company)
Statements of Stockholders' Equity
Common Stock Additional Other Retained
-------------------------- Paid-In Comprehensive Earnings
Shares Amount Capital Income (Deficit)
----------- ----------- ----------- ----------- -----------
Balance, January 1, 2000 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 -- -- -- -- (2,039,898)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2000 10,996,505 10,997 2,027,864 -- (1,406,293)
Canceled shares (717) (1) -- -- --
Common stock issued for cash
at $0.10 per share 500,000 500 49,500 -- --
Canceled shares (2,100,000) (2,100) 2,100 -- --
Net loss for the year ended
December 31, 2001 -- -- -- -- (290,762)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2001 9,395,788 $ 9,396 $ 2,079,464 -- $(1,697,055)
----------- ----------- ----------- ----------- -----------
The accompanying notes are an integral part of these financial statements.
F-4
CHINA FOOD AND BEVERAGE COMPANY
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
Common Stock Additional Other Retained
-------------------------- Paid-In Comprehensive Earnings
Shares Amount Capital Income (Deficit)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2001 9,395,788 $ 9,396 $ 2,079,464 $ -- $(1,697,055)
Warrants granted at fair market value -- -- 31,315 -- --
Net loss for the year ended
December 31, 2002 -- -- -- -- (272,296)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2002 9,395,788 9,396 2,110,779 -- (1,969,351)
November 5, 2003, common
stock issued upon cashless
exercise of warrants 500,891 501 (501) -- --
Net loss for the year ended
December 31, 2003 -- -- -- -- (210,770)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2003 9,896,679 9,897 2,110,278 -- (2,180,121)
Net loss for the year ended
December 31, 2004 -- -- -- -- (204,775)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2004 9,896,679 9,897 2,110,278 -- (2,384,896)
Net loss for the three months
Ended March 31, 2005 (unaudited) -- -- -- -- (41,184)
----------- ----------- ----------- ----------- -----------
Balance, March 31, 2005 (unaudited) 9,896,679 $ 9,897 $ 2,110,278 $ -- $(2,426,080)
=========== =========== =========== =========== ===========
Retained earnings accumulated prior to the development stage $ 633,605
Deficit accumulated during the development stage (3,059,685)
-----------
$(2,426,080)
The accompanying notes are an integral part of these financial statements.
F-5
CHINA FOOD AND BEVERAGE COMPANY
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
Inception of
Development
Stage on
January 1,
For the Three Months Ended 2000 Through
March 31, March 31,
-------------------------- -----------
2005 2004 2005
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (41,184) $ (50,165) $(3,059,685)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization -- 107 2,149
Discontinued operations -- -- 1,990,314
Gain on settlement of debt -- -- (237,163)
Fair value warrants granted -- -- 31,315
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses -- -- --
(Increase) decrease in accounts receivable - related party 2,782 (304) 1,180
(Increase) decrease in exchange credits -- -- 19,594
Increase (decrease) in accounts payable and
accrued expenses 37,799 40,544 (307,737)
Decrease in related party payable -- -- 12,954
----------- ----------- -----------
Net Cash Used by Operating Activities (603) (9,818) (1,547,079)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of exchange credits -- -- (7,074)
Increase in notes receivable - related party -- -- (82,592)
Increase in note receivable -- -- (917)
Receipt of payment on note receivable -- -- 80,000
Sales of exchange credits -- -- 419,980
----------- ----------- -----------
Net Cash Provided by Investing Activities -- -- 409,397
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Loss of cash from discontinued operations -- -- (424,757)
Common stock issued for cash -- -- 1,200,000
Proceeds from related party -- -- 129,474
Payments (Increase) - notes payable -- 7,030 (323,011)
----------- ----------- -----------
Net Cash Provided by Financing Activities -- 7,030 581,706
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH (603) (2,788) (555,976)
CASH AT BEGINNING OF PERIOD 899 3,789 556,272
----------- ----------- -----------
CASH AT END OF PERIOD $ 296 $ 1,001 $ 296
=========== =========== ===========
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES:
Cash Paid For:
Income taxes $ -- $ -- $ --
Interest $ -- $ -- $ --
The accompanying notes are an integral part of these financial statements.
F-6
CHINA FOOD AND BEVERAGE COMPANY
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2005 and December 31, 2004
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying unaudited condensed financial statements have
been prepared by the Company pursuant to the rules and regulations
of the Securities and Exchange Commission. 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 in accordance with such rules and regulations. The
information furnished in the interim condensed financial
statements include normal recurring adjustments and reflects all
adjustments, which, in the opinion of management, are necessary
for a fair presentation of such financial statements. Although
management believes the disclosures and information presented are
adequate to make the information not misleading, it is suggested
that these interim condensed financial statements be read in
conjunction with the Company's most recent audited financial
statements and notes thereto included in its December 31, 2004
Annual Report on Form 10-KSB. Operating results for the three
months ended March 31, 2005 are not necessarily indicative of the
results that may be expected for the year ending December 31,
2005.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using accounting
principles generally accepted in the United States of America
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-7
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 2004, filed on April 14, 2005, 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 occupies office space, free of charge at 710 W.
24th St., Kansas City, MO 64108.
Business of Issuer
- ------------------
Since the disposition of Annu Hui Brewery, 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.
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 March 31, 2005, there were no issuances of the
Company's common stock.
Results of Operations
- ---------------------
For the three month period ended March 31, 2005, the Company sustained
a loss of ($41,184), or ($0.01) per share (basic and diluted) on revenue of
$0.00. The loss in the first quarter of 2005 can be contributed to the fact the
Company had no revenue producing operations yet still had administrative
expenses. For the comparable period of 2004, the Company sustained a loss of
($50,165), or ($0.00) per share on revenue of $0.00. The stockholder's equity
(deficit) for the quarter ended March 31, 2005 was ($9,699).
-4-
Controls and Procedures
- -----------------------
Within 90 days prior to the date of filing of this report, we carried
out an evaluation, under the supervision and with the participation of our
management, including the Chief Executive Officer and the Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective in causing material information to be recorded,
processed, summarized, and reported by our management on a timely basis and to
ensure that the quality and timeliness of our public disclosures complies with
SEC disclosure obligations. There were no significant changes in our internal
controls or in other factors that could significantly affect these internal
controls after the date of our most recent evaluation.
PART II
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
During the quarter ended March 31, 2005, there were no changes in
securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
During the quarter ended March 31, 2005, there were no defaults upon
senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the quarter ended March 31, 2005, there were no submission of
matters to a vote of security holders.
ITEM 5. OTHER
During the quarter ended March 31, 2005, there were no material events
to report that have not been previously disclosed herein.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
During the quarter ended March 31, 2005, there were no reports on form
8-K.
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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 21st day of May 2005.
CHINA FOOD AND BEVERAGE
/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
- --------- ----- ----
/s/James Tilton Chief Executive Officer, President, May 21, 2005
- ---------------- CFO, Treasurer and Director
James Tilton
/s/Jane Zheng Secretary and Director May 21, 2005
- -----------------
Jane Zheng
/s/Gordon Wilson Director May 21, 2005
- -----------------
Gordon Wilson
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