U.S. Securities and Exchange Commission

Washington, D.C. 20549



Form 10-QSB





[X] Quarterly report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended:  September 30, 2002.



[ ] Transition report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from

to

.



Commission file number:  333-45210



Supreme Hospitality

(Exact name of small business issuer as specified in its charter)



Nevada

(State or other jurisdiction of incorporation or organization)



88-0460457

(IRS Employer Identification No.)



Financial Center, 5056 Westheimer, Suite, 840 Houston, Texas 77056

(Address of principal executive office)



(713)621-4799

(Issuers telephone Number)



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[ ]



Applicable only to corporate issuers:

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common Stock:  10,000,000 shares outstanding.





Transitional Small Business Disclosure Format (check one): Yes    []

No [X]

















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Table of Contents



|Part I:  Financial Information                 | 3
|---------------------------------------------- | -
|Item 1:  Financial Statements                  | 3
|Condensed Consolidated Balance Sheets          | 3
|Condensed Consolidated Statement of Operations | 4
|Condensed Consolidated Statement of Cash Flow  | 5
|Notes to Financial Statements                  | 6
|Item 2:  Managements Discussion & Analysis     | 8
|Part II:  Other Information                    | 8
|Item 6:  Exhibits and Reports 8-K              | 8
|Signatures                                     | 8







<page>

Part I:  Financial Information



Item 1:  Financial Statements



SUPREME HOSPITALITY AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)



|                                                               | As of September 30,
2002 | As of December 31,
2001
|-------------------------------------------------------------- | ------------------------ | -----------------------
|ASSETS                                                         |                          |                        
|Current Assets                                                 |                          |                        
|Cash & Cash Equivalents                                        | $ 4,998                  | $1,754                 
|Trade accounts receivable                                      | -                        | 31,756                 
|Other                                                          |                          | -                      
|Total Current Assets                                           | 4,998                    | 33,510                 
|Property and Equipment                                         |                          |                        
|Property and Equipment at Cost Net                             | -                        | 4,738,902              
|Total Property & Equipment                                     | -                        | 4,738,902              
|Other Assets:                                                  |                          |                        
|Deferred offering costs                                        | 81,000                   | 81,000                 
|Other Assets                                                   | -                        | 29,059                 
|Loan fees, net                                                 | -                        | 40,387                 
|Total Other assets                                             | 81,000                   | 150,446                
|Total Assets                                                   | $85,998                  | $4,922,858             
|Liabilities and Stockholders Equity (Deficit)                 |                          |                        
|Current Liabilities                                            |                          |                        
|Trade accounts payable                                         | $-                       | $446,173               
|Related party loans                                            | -                        | 93,650                 
|Accrued liabilities                                            | 5,278                    | 221,983                
|Current maturities of long-term debt                           | -                        | 228,686                
|Other Liabilities                                              | -                        | -                      
|Total Current Liabilities                                      | 5,278                    | 990,492                
|                                                               |                          |                        
|Long-Term Debt, Less Current Maturities                        | -                        | 4,732,850              
|Total Long Term Debt                                           | -                        | 4,732,850              
|Total Liabilities                                              | 5,278                    | 5,723,342              
|Commitments and Contingencies                                  |                          |                        
|Stockholders Equity                                           |                          |                        
|Common stock, 100,000,000 authorized shares,
Par value $.0001  | $1,000                   | $1,000                 
|10,000,000 shares outstanding                                  |                          |                        
|Preferred Stock, 5,000,000 authorized shares,
Par value $.0001 | 1,000                    | -                      
|1,000,000 shares outstanding                                   |                          |                        
|Stock Subscription Receivable                                  | (6,300,000)              | -                      
|Additional Paid-in-Capital                                     | 6,300,500                | 1,500                  
|Accumulated Deficit                                            | 78,220                   | (802,984)              
|Total Stockholders Equity (Deficit)                           | 80,720                   | (800,484)              
|Total Liabilities and Stockholders Equity                     | $85,998                  | $4,922,858             



SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

3









<page>

SUPREME HOSPITALITY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



|For the Three Months Ended
September 30, | For the Nine Months Ended
September 30,
|---------------------------------------- | ---------------------------------------

|                                                     | 2002               | 2001                | 2002                | 2001               
|---------------------------------------------------- | ------------------ | ------------------- | ------------------- | -------------------
|Revenues                                             | $
-                | $
458,789           | $
890,267           | $
1,353,081        
|Expenses                                             |                    |                     |                     |                    
|Selling, general and administrative                  | 48,280             | 321,195             | 552,625             | 1,109,810          
|Depreciation and amortization                        | -                  | 68,425              | 136,850             | 205,275            
|Consulting                                           | -                  | -                   | 47,000              | -                  
|Interest                                             | -                  | 145,190             | 264,012             | 438,547            
|Total Expenses                                       | 48,280             | 534,810             | 1,000,487           | 1,753,632          
|Net Income (loss) from Operations                    | $         (48,280) | $          (76,021) | $     (110,220)     | $(400,551)         
|                                                     |                    |                     |                     |                    
|Other Income and Expenses:                           | $   86,840         | $     (201,001)     | $        (61,940)   | $      (324,530)   
|Other Expenses                                       | (22,753)           | -                   | (22,753)            | -                  
|                                                     |                    |                     |                     |                    
|Provision for Income Taxes:                          |                    |                     |                     |                    
|Income Tax Benefit (Expense)                         | -                  | -                   | -                   | -                  
|Net Income (loss)                                    | $
(71,033)         | $
(76,021)          | $
(132,973)         | $
(400,551)        
|                                                     |                    |                     |                     |                    
|Basic and Diluted Earnings Per Common Share          | $      (0.01)      | $           (0.01)  | $            (0.01) | $            (0.01)
|                                                     |                    |                     |                     |                    
|Weighted Average number of Common Shares Outstanding | 10,000,000         | 10,000,000          | 10,000,000          | 10,000,000         



SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

4

<page>

SUPREME HOSPITALITY AND SUBSIDIARY

STATEMENTS OF CASH FLOWS

(UNAUDITED)

| | For the Nine Months Ended
September 30,
| | ---------------------------------------

|                                                 | 2002               | 2001                 
|------------------------------------------------ | ------------------ | ---------------------
|Cash Flows From Operating Activities             |                    |                      
|Net Income (loss)                                | $(132,973)         | $(400,551)           
|Adjustments to Reconcile Net Income (Loss) to    |                    |                      
|Loss on Disposal of Assets                       | (22,753)           |                      
|Amortization of Loan Fees                        | 26,823             |                      
|Depreciation and Amortization                    | 136,850            | 205,275              
|(Increase) decrease in assets:                   |                    |                      
|Trade accounts receivable                        | -                  | 7,788                
|Other assets                                     | -                  | -                    
|Other current assets                             | -                  | (39)                 
|Increase (Decrease) in Liabilities:              |                    |                      
|Trade accounts payable                           | -                  | 174,710              
|Accrued liabilities                              | -                  | 147,813              
|                                                 |                    |                      
|Net Cash Provided (Used) in Operating Activities | $            7,947 | $             134,996
|Cash Flows from Investing Activities:            |                    |                      
|Purchase of Franchise                            | -                  | -                    
|Purchase of Furniture and Equipment              | (53,228)           | (7,879)              
|Advances on Notes Receivable                     | -                  | 236,920              
|Other Assets                                     | -                  | (64,598)             
|Payment Received on Notes Receivable             | -                  | (95,044)             
|Effect of Subsidiary Sold                        | 48,525             | -                    
|Other                                            | 3,147              | (9,132)              
|NET CASH (USED) IN INVESTING ACTIVITIES:         | $
(4,703)          | $              69,399
|CASH FLOWS FROM FINANCING ACTIVITIES:            |                    |                      
|Payments of Long-Term Debt                       | -                  | (194,800)            
|Loan repayments                                  | -                  | -                    
|                                                 |                    |                      
|NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES | -                  | (194,800)            
|INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS   | 3,244              | 9,595                
|Cash and Cash Equivalents at Beginning of Period | $1,754             | 2,677                
|Cash and Cash Equivalents at End of Period       | $4,998             | 12,272               
|Supplemental cashflow information:               |                    |                      
|Cash Paid for interest                           | $138,926           | $380,090             
|Cash Paid for income taxes                       | -                  | -                    



SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

5











<page>

SUPREME HOSPITALITY

NOTES TO FINANCIAL STATEMENTS



NOTE 1- BASIS OF PRESENTATION

General

The Company

Supreme Hospitality (the Company or Supreme), formerly Grubstake, Inc. and Richwood, Inc. were incorporated in Nevada on November 10, 1997. On May 28, 2002 United Managers Group, Inc. a Texas corporation; whose address is Galleria Financial Center, 5056 Westheimer, Suite, 840 Houston, Texas 77056, purchased 3,000,000 common shares from Ms. Louise Davis and an additional 2,710,000 common shares from Mr. Harrel Davis for a cost of $150,000.00 total.  The 5,710,000 common shares represent 67% of the outstanding 8,547,000 common shares.



On July 8, 2002 Mr. Thomas John Cloud, Jr. and Robert Joseph Wilson, Directors of Supreme Hospitality and without any disagreement with the Company agreed to complete the terms of the Purchase Agreement for 7,160,000 common shares of stock dated May 27th, 2002.  The Board of Directors will transfer 100% ownership of the Temecula Valley Inn, Inc., which includes the Temecula Valley Inn (the Hotel), to Harrel and Louise Davis, therein removing the sole assets with its liabilities from the holding company, Supreme Hospitality.



On September 8, 2002, the Company filed Articles of Amendment with the Nevada Secretary of State to change the total outstanding stock to 100,000,000 in common stock with a par value of $.0001 and 5,000,000 preferred stock with a par value of $.0001. As of September 30, 2002, there were 10,000,000 outstanding common shares and 1,000,000 preferred shares outstanding.



Financial Statement Presentation

The consolidated unaudited interim financial statements of the Company as of September 30, 2002 and for the three and nine months ended September 30, 2002, included herein have been prepared in accordance with the instructions for Form 10QSB under the Securities Exchange Act of 1934, as amended, and Article 10 of Regulation S-X under the Securities Act of 1933, as amended. The December 31, 2001 Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations relating to interim consolidated financial statements.



In the opinion of management, the accompanying consolidated unaudited interim financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company at September 30, 2002, and the results of their operations for the three  and nine months ended September 30, 2002 and 2001, and their cash flows for the nine months ended September  30, 2002.



The results of operations for such periods are not necessarily indicative of results expected for the full year or for any future period. These financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2001and related notes included in the Companys Form 10-KSB filed with the Securities and Exchange Commission



Loss per Common Share

The Company adopted Financial Accounting Standards  (SFAS) No.  128,  Earnings Per Share, which simplifies the computation of earnings per share requiring the restatement of all prior periods.



Basic earnings per share are computed on the basis of the weighted average number of common shares outstanding during each year.



Diluted earnings per share are computed on the basis of the weighted average number of common shares and dilutive securities outstanding.  Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.  The Company does not have any dilutive securities as of September 30, 2002.











6

(page)



Note 2  Preferred Stock

On September 25, 2002, the Company entered into and agreement to issue 1,000,000 shares of its preferred stock in exchange for a stock subscription receivable in the amount of $6,300,000.  The payments on the receivable in the amount of $100,000 per month beginning October 25, 2002 with the balance being due September 15, 2004, subject to a one-year extension at the sole discretion of the Company. Interest will accrue on the note at the rate of 6%  and compounded annually.



Note 3  Commitment and Contingencies

The Company has not recognized any commitments or contingencies at this time.









7





<page>

Item 2:  Managements Discussion and Analysis or Plan of Operation



September 30, 2002 Quarter Compared to Prior Quarter in 2001



Total Revenue for the three months ended September 30, 2002, is $0 compared to the three months ended September 30, 2001, which was $458,789.  Total Revenue for the nine months ended September 30, 2002, is $890,267 compared to the nine months ended September 30, 2001, which was $1,353,081.



Total operating expenses for the three months ended September30, 2002, are $48,280 compared to the three months ended September 30, 2001, which was $534,810.  Total operating expenses for the nine months ended September 30, 2002, are $1,000,487 compared to the nine months ended September 30, 2001, which was $1,753,632.  This is a decrease in expenses of $266,615.



Thus, the net loss for the three months ended September 30, 2002 is $71,033 compared to the three months ended September 30, 2001, which was a loss of $76,021.  The net loss for the nine months ended September 30, 2002 is $132,973 compared to the nine months ended September 30, 2001, which was a loss of $400,551.









Part II:  Other Information

Item 6:  Exhibits and Reports on Form 8-K

(a) Exhibits Schedule

The exhibits marked with an * were filed with the companys registration statement, form 10SB12G filed on 06/14/2000.



*3.1 Articles of Incorporation

*3.2 Bylaws



(b) Reports on Form 8-K:



On July 12, 2002 an 8-k was filed signifying a change in control of registrant.

On July 12th and 17, 2002 an 8-k amendment was filed.









Signatures

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



Supreme Hospitality

(Registrant)



By/s/ Thomas John Cloud, Jr.

Thomas John Cloud, Jr.

President and CEO

Date:  November 13, 2002

8