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

FORM 10-QSB

[X]
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2003[  ]
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _______ to ________

COMMISSION FILE NUMBER 0-27749

SYNDICATED FOOD SERVICE INTERNATIONAL, INC.

(Name of Small Business Issuer in Its Charter)

FLORIDA
    
    59-3479186(State or Other Jurisdiction of
Incorporation or Organization)
    
    (I.R.S. Employer
Identification Number)P.O. Box 2185
57 Viewpoint Lane
Front Royal, Virginia
    
    22630(Address of Principal Executive Offices)
    
    (Zip Code)(Issuers Telephone Number, Including Area Code)
    (540) 636-4190


Check whether the issuer (1) filed all reports required to be filed by
Sections 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 [  ] No [X]

As of November 15, 2003, there were 11,287,620 shares of the Registrants
Common Stock issued and outstanding.

Transitional Small Business Disclosure Format: Yes [  ] No [X]





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|                                                                                                                                                                      |  |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|SYNDICATED FOOD SERVICEW INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETSAS OF JUNE 30, 2003 (UNAUDITED) AND DECEMBER 31, 2002                              
|SYNDICATED FOOD SERVICE INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSFOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED)             
|SYNDICATED FOOD SERVICE INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSFOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED)               
|SYNDICATED FOOD SERVICE INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS DEFICIENCYFOR THE SIX MONTHS ENDED JUNE 30, 2003(UNAUDITED)
|SYNDICATED FOOD SERVICE INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002                           
|SYNDICATED FOOD SERVICE INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)                                       
|MANAGEMENTS DISCUSSION AND ANALYSIS                                                                                                                                 
|Item 3. Controls and Procedures                                                                                                                                      
|PART II  OTHER INFORMATION                                                                                                                                          
|Item 3. Defaults Upon Senior Securities                                                                                                                              
|Item 6. Exhibits and Reports on Form 8-K                                                                                                                             
|SIGNATURES                                                                                                                                                           
|EX-10.10 PROMISSORY NOTE, DATED NOVEMBER 12, 2003                                                                                                                    
|EX-31.1 SECTION 302 CERTIFICATION OF THE CEO                                                                                                                         
|EX-31.2 SECTION 302 CERTIFICATION OF THE CFO                                                                                                                         
|EX-32.0 SECTION 906 CERTIFICATION OF CEO & VP/PAO                                                                                                                    



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Table of Contents

Part I
    
    Financial Information
    
    PageItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets as of June
30, 2003 (unaudited) and December 31, 2002
    
    1Unaudited Condensed Consolidated Statements of Operations
for the three months ended June 30, 2003 and 2002
    
    2Unaudited Condensed Consolidated Statements of Operations
for the six months ended June 30, 2003 and 2002
    
    3Unaudited Condensed Consolidated Statement of Changes
in Shareholders Deficiency for the six months ended
June 30, 2003
    
    4Unaudited Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 2003 and 2002
    
    5Unaudited Notes to Condensed Consolidated Financial
Statements as of June 30, 2003
    
    6Item 2.
    
    Managements Discussion and Analysis or Plan of Operation
    
    24Item 3.
    
    Controls and Procedures
    
    35Part II
    
    Other InformationItem 3.
    
    Defaults Upon Senior Securities
    
    36Item 6.
    
    Exhibits and Reports on Form 8-K
    
    36Signatures






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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETSAS OF JUNE 30, 2003 (UNAUDITED) AND DECEMBER 31, 2002

June 30, 2003
    
    December 31,(unaudited)
    
    2002ASSETSCURRENT ASSETSCash
    
    $
    
    
    
    $
    43,939Accounts receivable (net of allowance for bad debt
of $176,984 and $158,984)
    
    
    1,232,698
    
    
    
    1,520,635Prepaid expenses
    
    
    137,427
    
    
    
    32,996Inventory
    
    
    965,737
    
    
    
    1,071,059Other current assets
    
    
    20,000
    
    
    
    20,375Total Current Assets
    
    
    2,355,862
    
    
    
    2,689,004PROPERTY AND EQUIPMENT, NET
    
    
    4,108,615
    
    
    
    4,182,134Goodwill
    
    
    1,536,784
    
    
    
    1,536,784Other intangible assets, net
    
    
    450,000
    
    
    
    520,000Assets held for sale
    
    
    115,000
    
    
    
    115,000Other assets
    
    
    277,551
    
    
    
    258,815TOTAL ASSETS
    
    $
    8,843,812
    
    
    $
    9,301,737LIABILITIES AND SHAREHOLDERS DEFICIENCYCURRENT LIABILITIESBank overdraft
    
    $
    247,373
    
    
    $
    Accounts payable and accrued expenses
    
    
    2,004,212
    
    
    
    1,999,093Accrued interest payable
    
    
    166,084
    
    
    
    109,746Advances payable
    
    
    170,500
    
    
    
    286,000Reserve for contingent losses
    
    
    1,027,912
    
    
    
    1,052,709Deferred taxes
    
    
    68,000
    
    
    
    68,000Capital leases payable (current portion)
    
    
    
    
    
    
    55,063Credit line payable
    
    
    155,067
    
    
    
    Notes payable  related parties (current portion)
    
    
    3,964,810
    
    
    
    3,166,600Notes payable (current portion)
    
    
    109,111
    
    
    
    191,351Liabilities of discontinued operations
    
    
    397,884
    
    
    
    505,267Total Current Liabilities
    
    
    8,310,953
    
    
    
    7,433,829LONG-TERM DEBTNotes payable  related parties (non-current portion)
    
    
    
    
    
    
    1,033,210Notes payable (non-current portion)
    
    
    2,521,423
    
    
    
    2,498,277TOTAL LIABILITIES
    
    
    10,832,376
    
    
    
    10,965,316COMMITMENTS AND CONTINGENCIESSHAREHOLDERS DEFICIENCYCommon stock, $.001 par value, 100,000,000 shares
authorized, 11,058,262 shares issued and outstanding
    
    
    11,058
    
    
    
    11,058Additional paid-in capital
    
    
    11,895,848
    
    
    
    11,895,848Accumulated deficit
    
    
    (13,878,803
    )
    
    
    (13,503,818
    )Deferred debt offering costs
    
    
    (16,667
    )
    
    
    (66,667
    )Total Shareholders Deficiency
    
    
    (1,988,564
    )
    
    
    (1,663,579
    )TOTAL LIABILITIES AND SHAREHOLDERS DEFICIENCY
    
    $
    8,843,812
    
    
    $
    9,301,737


See accompanying summary of accounting policies and notes to condensed consolidated financial statements.

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSFOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)

Three months endedJune 30, 2003
    
    June 30, 2002(unaudited)
    
    (unaudited)REVENUESFood and beverage sales
    
    $
    4,317,039
    
    
    $
    5,954,708Other revenues
    
    
    43,349
    
    
    
    5,813Total Revenues
    
    
    4,360,388
    
    
    
    5,960,521COST OF GOODS SOLD
    
    
    3,236,137
    
    
    
    4,796,850GROSS PROFIT
    
    
    1,124,251
    
    
    
    1,163,671OPERATING EXPENSESSelling, general and administrative expenses
    
    
    1,267,316
    
    
    
    1,264,700Depreciation and amortization
    
    
    94,614
    
    
    
    72,925Total Operating Expenses
    
    
    1,361,930
    
    
    
    1,337,625LOSS FROM OPERATIONS
    
    
    (237,679
    )
    
    
    (173,954
    )OTHER INCOME (EXPENSE)Other income
    
    
    42,935
    
    
    
    42,969Interest expense
    
    
    (122,226
    )
    
    
    (252,371
    )Total Other (Expense)
    
    
    (79,291
    )
    
    
    (209,402
    )LOSS FROM CONTINUING OPERATIONS
    
    
    (316,970
    )
    
    
    (383,356
    )INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES
    
    
    
    
    
    
    2,481NET LOSS
    
    $
    (316,970
    )
    
    $
    (380,875
    )Net loss per common share:Basic and fully diluted from continuing operations
    
    $
    (0.03
    )
    
    $
    (0.03
    )Basic and fully diluted from discontinued operations
    
    
    
    
    
    
    Basic and fully diluted loss per share
    
    $
    (0.03
    )
    
    $
    (0.03
    )Weighted average of common shares:Basic and fully diluted
    
    
    11,058,262
    
    
    
    11,058,262


See accompanying summary of accounting policies and notes to condensed consolidated financial statements.

2



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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSFOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(UNAUDITED)

Six months endedJune 30, 2003
    
    June 30, 2002(unaudited)
    
    (unaudited)REVENUESFood and beverage sales
    
    $
    8,240,969
    
    
    $
    10,985,069Other revenues
    
    
    208,128
    
    
    
    7,128Total Revenues
    
    
    8,449,097
    
    
    
    10,992,197COST OF GOODS SOLD
    
    
    6,222,328
    
    
    
    8,739,589GROSS PROFIT
    
    
    2,226,769
    
    
    
    2,252,608OPERATING EXPENSESSelling, general and administrative expenses
    
    
    2,653,835
    
    
    
    2,767,347Depreciation and amortization
    
    
    188,734
    
    
    
    155,013Total Operating Expenses
    
    
    2,842,569
    
    
    
    2,922,360LOSS FROM OPERATIONS
    
    
    (615,800
    )
    
    
    (669,752
    )OTHER INCOME (EXPENSE)Gain on discharges in bankruptcy
    
    
    352,457
    
    
    
    Other income
    
    
    42,576
    
    
    
    64,977Interest expense
    
    
    (261,601
    )
    
    
    (489,478
    )Total Other Income (Expense)
    
    
    133,432
    
    
    
    (424,501
    )LOSS FROM CONTINUING OPERATIONS
    
    
    (482,368
    )
    
    
    (1,094,253
    )INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF
TAXES
    
    
    107,383
    
    
    
    (30,219
    )NET LOSS
    
    $
    (374,985
    )
    
    $
    (1,124,472
    )Net income (loss) per common share:Basic and fully diluted from continuing operations
    
    $
    (0.04
    )
    
    $
    (0.10
    )Basic and fully diluted from discontinued operations
    
    
    0.01
    
    
    
    Basic and fully diluted loss per share
    
    $
    (0.03
    )
    
    $
    (0.10
    )Weighted average of common shares:Basic and fully diluted
    
    
    11,058,262
    
    
    
    11,058,262


See accompanying summary of accounting policies and notes to condensed consolidated financial statements.

3



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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS DEFICIENCYFOR THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)

Additional
    
    
    
    
    
    DeferredCommon Stock
    
    Paid-In
    
    Accumulated
    
    Debt OfferingShares
    
    Amount
    
    Capital
    
    Deficit
    
    Costs
    
    TotalBalance, December 31, 2002
    
    
    11,058,262
    
    
    $
    11,058
    
    
    $
    11,895,848
    
    
    $
    (13,503,818
    )
    
    $
    (66,667
    )
    
    $
    (1,663,579
    )Amortization of deferred debt offering costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    50,000Net loss during 2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (374,985
    )
    
    
    
    
    
    
    (374,985
    )BALANCE, JUNE 30, 2003 (UNAUDITED)
    
    
    11,058,262
    
    
    $
    11,058
    
    
    $
    11,895,848
    
    
    $
    (13,878,803
    )
    
    $
    (16,667
    )
    
    $
    (1,988,564
    )
















See accompanying summary of accounting policies and notes to condensed consolidated financial statements.

4



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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002

June 30, 2003
    
    June 30, 2002(unaudited)
    
    (unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net loss from continuing operations
    
    $
    (482,368
    )
    
    $
    (1,094,253
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    188,734
    
    
    
    155,013Gain on discharge in bankruptcy
    
    
    (352,457
    )
    
    
    Gain on plant closures
    
    
    (34,901
    )
    
    
    Bad debt expense
    
    
    18,000
    
    
    
    10,144Amortization of deferred debt offering costs
    
    
    50,000
    
    
    
    300,000Changes in operating assets and liabilities:Accounts receivable
    
    
    205,697
    
    
    
    87,342Prepaid expenses
    
    
    (104,431
    )
    
    
    (5,638
    )Inventory
    
    
    39,054
    
    
    
    (140,335
    )Other assets
    
    
    (18,780
    )
    
    
    (281,424
    )Accounts payable and accrued expenses
    
    
    344,495
    
    
    
    861,869Accrued interest payable
    
    
    56,336
    
    
    
    108,107Reserve for contingent losses
    
    
    (24,797
    )
    
    
    (109,330
    )Net Cash Used In Operating Activities
    
    
    (115,418
    )
    
    
    (108,505
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (49,978
    )
    
    
    (1,450,254
    )Decrease in restricted cash
    
    
    
    
    
    
    700,000Net Cash Used In Investing Activities
    
    
    (49,978
    )
    
    
    (750,254
    )CASH FLOWS FROM FINANCING ACTIVITIES:Bank overdrafts
    
    
    279,930
    
    
    
    (370,118
    )Borrowings on credit line
    
    
    155,067
    
    
    
    Borrowings on notes payable
    
    
    56,426
    
    
    
    651,675Payments on notes payable
    
    
    (19,466
    )
    
    
    (529,774
    )Advance received
    
    
    
    
    
    
    181,000Payments on advances payable
    
    
    (115,500
    )
    
    
    Proceeds from notes payable  related parties
    
    
    50,000
    
    
    
    433,048Payment on notes payable  related parties
    
    
    (285,000
    )
    
    
    Net Cash Provided By Financing Activities
    
    
    121,457
    
    
    
    365,831NET DECREASE IN CASH DURING THE PERIOD FROM
CONTINUING OPERATIONS
    
    
    (43,939
    )
    
    
    (492,928
    )NET CASH USED IN DISCONTINUED OPERATIONS
    
    
    
    
    
    
    (31,375
    )CASH  BEGINNING OF PERIOD
    
    
    43,939
    
    
    
    687,025CASH  END OF PERIOD
    
    $
    
    
    
    $
    162,722SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:Interest paid during the period
    
    $
    205,263
    
    
    $
    81,371


See accompanying summary of accounting policies and notes to condensed consolidated financial statements.

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

Note 1  Organization of the Company and Summary of Significant Accounting Policies

Syndicated Food Service International, Inc., (the Company or Syndicated),
formerly Floridinos International Holdings, Inc., was incorporated on June 25,
1997 in the State of Florida. The Company distributes food and produce to
wholesale and retail outlets, and produces frozen Italian food products for
institutional use, such as schools and prisons. The Companys operations and
clients are located in the middle and southeastern United States.

Basis of Presentation The accompanying unaudited condensed consolidated
financial statements are unaudited and have been prepared by the Company in
accordance with the rules and regulations of the Securities and Exchange
Commission (the SEC). Accordingly, certain information and footnote
disclosures usually found in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. The
financial statements should be read in conjunction with the consolidated
financial statements and related notes included in the Companys Form 10-KSB
for the year ended December 31, 2002.

The accompanying unaudited condensed consolidated financial statements reflect
all adjustments (including normal recurring adjustments) which, in the opinion
of management, are necessary to present fairly the financial position and
results of operations for the interim periods presented. The results of
operations for an interim period are not necessarily indicative of the results
of operations for a full fiscal year.

Consolidation The accompanying consolidated financial statements include the
accounts of the Company and all of its wholly owned subsidiaries. All
significant inter-company balances have been eliminated.

Use of Estimates- The preparation of the financial statements in conformity
with generally accepted accounting principles in the United States of America
requires management to make reasonable estimates and assumptions that affect
the reported amounts of the assets and liabilities and disclosure of contingent
assets and liabilities and the reported amounts of revenues and expenses at the
date of the financial statements and for the period they include. Actual
results may differ from these estimates.

Earnings per share In accordance with SFAS No. 128, Earnings Per Share",
basic net loss per share has been computed based on the weighted-average of
common shares outstanding during the period. Diluted earnings per share
include the effects of any outstanding financial instruments that may be
converted into common stock, and therefore classified as common stock
equivalents. SFAS No. 128 provides guidance to calculate the equivalent number
of common shares that would be likely issued in the event the holder would
elect to convert the financial instrument into common shares. As per SFAS No.
128, common stock equivalents are not considered in the diluted earnings per
share calculations because the effect would have been anti-dilutive.

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

Stock-based compensation- On April 30, 2001, the Companys Board of Directors
adopted the 2001 Equity Compensation Plan (the Plan). On November 16, 2001,
the shareholders ratified the Plan. The Plan provides for the issuance to
Company employees, non-employee directors and consultants and advisors shares
of Common Stock pursuant to the grant of incentive stock options, non-qualified
stock options and restricted stock. A total of 5,000,000 shares of the
Companys Common Stock were reserved for issuance under the Plan.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure  an amendment of FASB Statement No.
123.SFAS No. 148 amends SFAS No. 123, Accounting for Stock Based
Compensationand provides alternative methods for accounting for a change by
registrants to the fair value method of accounting for stock-based
compensation. Additionally, SFAS No. 148 amends the disclosure requirements of
SFAS No. 123 to require disclosure in the significant accounting policy
footnote of both annual and interim financial statements of the method of
accounting for stock based-compensation and the related pro-forma disclosures
when the intrinsic value method continues to be used. The statement is
effective for fiscal years beginning after December 15, 2002, and disclosures
are effective for the first fiscal quarter beginning after December 15, 2002.

In March 2003, the Company granted to each member of the Board of Directors
warrants to purchase 200,000 shares of common stock at an exercise price of
$.25 per share expiring in March 2008, for an aggregate of 1,000,000 warrants
issued. Additionally, the Company awarded two officers of the Company 50,000
warrants each to purchase common stock at an exercise price of $.25 per share
expiring in March 2008.

The Company accounts for its employee and director stock option plans in
accordance with APB Opinion No. 25, Accounting for Stock Issued to Employees
and related Interpretations. The Company measures compensation expense for
employee and director stock options as the aggregate difference between the
market value of its common stock and exercise prices of the options on the date
that both the number of shares the grantee is entitled to receive and the
exercise prices are known. Compensation expense associated with restricted
stock grants is equal to the market value of the shares on the date of grant
and is recorded pro rata over the required holding period. If the Company had
elected to recognize compensation cost for all outstanding options granted by
the Company applying the fair value recognition provisions of SFAS No. 148 to
stock-based employee compensation, net income (loss) and earnings (loss) per
share would have been reduced to the pro forma amounts indicated below:

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

Six Months Ended June 30,(Unaudited)2003
    
    2002Net Loss from continuing
operations as reported
    
    $
    (482,368
    )
    
    $
    (1,094,253
    )Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related tax
effects
    
    
    
    
    
    
    Pro forma amount
    
    $
    (482,368
    )
    
    $
    (1,094,253
    )Basic net loss per common share:As reported
    
    $
    (0.04
    )
    
    $
    (0.10
    )Pro forma
    
    $
    (0.04
    )
    
    $
    (0.10
    )


For the purpose of determining compensation expense, the fair value of each
warrant is measured at the grant date using the Black-Scholes option-pricing
model. As a result of the warrant issuance in the six months ended June 30,
2003 and 2002, the Company recorded compensation expense of $0 and $0,
respectively.

As noted above, the fair value of each warrant grant is estimated on the date
of grant using the Black-Scholes option-pricing model with the following
assumptions:

2003
    
    2002Estimated dividend yield
    
    $
    
    
    
    $
    Expected stock volatility
    
    
    182
    %
    
    
    20
    %Risk free interest rate
    
    
    6
    %
    
    
    6
    %Expected life of options (years)
    
    
    1.9
    
    
    
    2.0


The fair values generated by the Black-Scholes model may not be indicative of
the future benefit, if any, that may be received by the warrant holder. The
pro forma effect of including the compensation expense as calculated relating
to the warrants issued is not considered material.

Recent Accounting Pronouncements In January 2003, the FASB issued
Interpretation No. 46, Consolidation of Variable Interest Entities, an
interpretation of Accounting Research Bulletin (ARB) No. 51, Consolidated
Financial Statements. Interpretation No. 46 addresses consolidation by
business enterprises of variable interest entities, which have one or both of
the following characteristics: (i) the equity investment at risk is not
sufficient to permit the entity to finance its activities without additional
subordinated support from other parties, which is provided through other
interest that will absorb some or all of the expected losses of the entity; or
(ii) the equity investors lack one or more of the following essential
characteristics of a controlling

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

financial interest: the direct or indirect ability to make decisions about the
entitys activities through voting rights or similar rights; the obligation to
absorb the expected losses of the entity if they occur, which makes it possible
for the entity to finance its activities; or the right to receive the expected
residual returns of the entity if they occur, which is the compensation for the
risk of absorbing the expected losses.

Interpretation No. 46 also requires expanded disclosures by the primary
beneficiary (as defined) of a variable interest entity and by an enterprise
that holds a significant variable interest in a variable interest entity but is
not the primary beneficiary. Interpretation No. 46 applies immediately to
variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date.
It applies in the first fiscal year or interim period beginning after June 15,
2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. Interpretation No. 46 may
be applied prospectively with a cumulative-effect adjustment as of the date on
which it is first applied or by restating previously issued financial
statements for one or more years with a cumulative-effect adjustment as of the
beginning of the first year restated.

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities. The
changes in SFAS No. 149 improve financial reporting by requiring that contracts
with comparable characteristics be accounted for similarly. This statement is
effective for contracts entered into or modified after June 30, 2003 and all of
its provisions should be applied prospectively.

In May 2003, the FASB issued SFAS No. 150, Accounting For Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS No. 150
changes the accounting for certain financial instruments with characteristics
of both liabilities and equity that, under previous pronouncements, issuers
could account for as equity. The new accounting guidance contained in SFAS No.
150 requires that those instruments be classified as liabilities in the balance
sheet.

SFAS No. 150 affects the issuers accounting for three types of freestanding
financial instruments. One type is mandatorily redeemable shares, which the
issuing company is obligated to buy back in exchange for cash or other assets.
A second type includes put options and forward purchase contracts, which
involves instruments that do or may require the issuer to buy back some of its
shares in exchange for cash or other assets. The third type of instruments
that are liabilities under this Statement is obligations that can be settled
with shares, the monetary value of which is fixed, tied solely or predominantly
to a variable such as a market index, or varies

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

inversely with the value of the issuers shares. SFAS No. 150 does not apply
to features embedded in a financial instrument that is not a derivative in its
entirety.

Most of the provisions of SFAS No. 150 are consistent with the existing
definition of liabilities in FASB Concepts Statement No. 6, Elements of
Financial Statements. The remaining provisions of this Statement are
consistent with the FASBs proposal to revise that definition to encompass
certain obligations that a reporting entity can or must settle by issuing its
own shares. This Statement shall be effective for financial instruments
entered into or modified after May 31, 2003 and otherwise shall be effective at
the beginning of the first interim period beginning after June 15, 2003, except
for mandatorily redeemable financial instruments of a non-public entity, as to
which the effective date is for fiscal periods beginning after December 15,
2003.

In June 2003, the FASB issued an Exposure Draft for proposed SFAS entitled
"Qualifying Special Purpose Entities (QSPE) and Isolation of Transferred
Assets, an amendment of SFAS No. 140 (The Exposure Draft). The Exposure
Draft is a proposal that is subject to change and as such, is not yet
authoritative. If the proposal is enacted in its current form, it will amend
and clarify SFAS 140. The Exposure Draft would prohibit an entity from being a
QSPE if it enters into an agreement that obliged a transferor of financial
assets, its affiliates, or its agents to deliver additional cash or other
assets to fulfill the special-purposes entitys obligation to beneficial
interest holders.

Management does not expect the impact from these statements pronouncements to
have a material impact on the Companys consolidated financial position or
results of operations.

Note 2- Notes Payable  Related Parties

The following is a listing of related party notes payable as of June 30, 2003
and December 31, 2002:

6/30/03
    
    12/31/02$500,000 mortgage payable to an
investment company (A) at 9% due in 2003
The mortgage is secured by the property
located in Lakeland, Florida. This
mortgage is currently in default and
revised terms have yet to be formalized.
    
    $
    495,342
    
    
    $
    495,342$1,600,000 note payable to an investment
company (A) that matures in 2003 bearing
interest at 10%. This note is currently
in default and revised terms have yet to
be formalized.
    
    
    1,600,000
    
    
    
    1,600,000


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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

$98,048 unsecured notes payable (5) to an
investment company (A) bearing interest
at 10% and maturing in 2003. The notes
are currently in default and revised
terms have yet to be formalized.
    
    
    98,048
    
    
    
    98,048$285,000 unsecured notes payable (3) to
an investment company (A) bearing
interest at 10% and maturing in 2003.
    
    
    
    
    
    
    285,000$20,000 unsecured note payable to an
investment company (A) bearing interest
at 10% and maturing in 2003. This note
is currently in default and revised terms
have yet to be formalized.
    
    
    20,000
    
    
    
    20,000$435,000 unsecured note payable to an
investment company (A) bearing interest
at 12% and maturing in 2003.
    
    
    435,000
    
    
    
    435,000$50,000 unsecured note payable to an
investment company (A) bearing interest
at 10% and maturing in 2003. This note
is currently in default and revised terms
have yet to be formalized.
    
    
    50,000
    
    
    
    $1,266,420 note payable to sellers of
common stock in acquired subsidiaries
bearing interest at 3.91%. The note is
payable in three installments commencing
in 2003, and matures in 2005. This note
is currently in default and revised terms
have yet to be formalized.
    
    
    1,266,420
    
    
    
    1,266,420Total debt
    
    
    3,964,810
    
    
    
    4,199,810Less current maturities
    
    
    (3,964,810
    )
    
    
    (3,166,600
    )Long-term debt
    
    $
    
    
    
    $
    1,033,210


(A) The investment company referred to above is a related party as it
holds a significant amount of common stock of the Company.

Interest expense on these notes for the six months ended June 30, 2003 and 2002
was $151,926 and $138,957, respectively.

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

Note 3- Notes Payable  Unrelated Parties

Mortgage and Term Facility

In February 2003, Syndicated Bloomington I LLC entered into a $2,625,000
financing arrangement with a Bank, which provided for a first lien security
interest in the land and building in Bloomington, Indiana. The purpose of the
mortgage was to refinance certain indebtedness against the facility and real
estate. The maturity date of the mortgage is seven years from the date of the
closing of the mortgage loan. The amortization period is for twenty years with
payments of principal and interest due monthly based upon a 20-year
amortization period calculated utilizing a simple mortgage amortization
formula. The mortgage may be prepaid in whole or in part on any payment date
without penalty or premium. Additionally, the Bank provided Beasley Food
Service with a one-year term working capital credit line of $1,000,000 (the
Term Facility). The Term Facility provides for an advance rate against
eligible receivables of 70%, at a variable interest rate approximating 5.25%
per annum. The Bank also received a first security interest in all assets of
Beasley Food Service, Inc., as well as the guarantee by the Company and a
pledge of its capital stock of both Beasley Food Service, Inc. and Beasley
Transportation, Inc. As of June 30, 2003, the Company has drawn $155,067 on
the term facility, which is reflected in the condensed consolidated balance
sheet as credit line payable.

The following is a listing of unrelated party notes payable as of June 30, 2003
and December 31, 2002:

6/30/03
    
    12/31/02$2,625,000 mortgage payable at interest of
4.88% maturing in 2010. The mortgage is
secured by the plant building and land in
Bloomington, Indiana.
    
    $
    2,605,534
    
    
    $
    $25,000 note payable issued as part of the
Agreement to Transfer Assets and Liabilities
Between the Company and Cannon-Pack
Enterprises, Inc. The note bears interest at
5% and matures in June 2004.
    
    
    25,000
    
    
    
    $2,625,000 mortgage payable at interest of
5.25% maturing in 2009. The mortgage was
paid in full as part of a refinancing in
January 2003.
    
    
    
    
    
    
    2,568,574


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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

$140,000 mortgage payable to an individual at
interest of 9% maturing with an original
maturity in 2007. The mortgage was written
off as part of a Chapter 7 Bankruptcy filing
in March 2003.
    
    
    
    
    
    
    121,054Total debt  unrelated parties
    
    
    2,630,534
    
    
    
    2,689,628Less current maturities
    
    
    (109,111
    )
    
    
    (191,351
    )Long term debt  unrelated parties
    
    $
    2,521,423
    
    
    $
    2,498,277


Interest expense on these notes for the six months ended June 30, 2003 and 2002
was $59,675 and $50,520 respectively.

Note 4- Debts Discharged in Bankruptcy

On March 14, 2003, the Company filed voluntary Chapter 7 bankruptcy petitions
on behalf of certain wholly owned subsidiaries previously engaged in the
restaurant and food processing segments of the Companys operations. The
composition of the debts discharged under these proceedings and the resulting
gain recognized in the Companys Condensed Consolidated Statement of Operations
for the six months ended June 30, 2003 is as follows:

Accounts payable
    
    $
    144,558Accrued expenses
    
    
    31,782Capital lease payable
    
    
    55,063Mortgage payable
    
    
    121,054Total gain on discharges in bankruptcy  continuing
operations
    
    $
    352,457


The Company also recognized income from discontinued operations in the amount
of $107,383 related to the discharge of trade accounts payable and accrued
expenses in the six months ended June 30, 2003.

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

Note 5- Supplemental disclosure of non-cash investing and financing activities

The following non-cash transactions are not included in the consolidated
statements of cash flows:

6/30/03
    
    6/30/02PROVIDED BY (USED IN) OPERATING ACTIVITIES:Accounts payable discharged in bankruptcy
    
    $
    144,558
    
    
    $
    Accrued expenses payable discharged in bankruptcy
    
    
    31,782
    
    
    
    Amounts written off as part of Agreement to Transfer
Assets and Liabilities Between the Company and
Cannon-Pack Enterprises, Inc. as part of the plant
closure in Asheville, North Carolina (see Note 10):Trade accounts receivable
    
    
    (64,240
    )
    
    
    Inventory
    
    
    (66,268
    )
    
    
    Other current assets
    
    
    (419
    )
    
    
    Bank overdraft
    
    
    32,556
    
    
    
    Accounts payable and accrued expenses
    
    
    163,035
    
    
    
    $
    241,004
    
    
    $
    PROVIDED BY (USED IN) INVESTING ACTIVITIES:Acquisition of property and equipment
    
    $
    
    
    
    $
    (1,973,325
    )Amounts written off as part of Agreement to Transfer
Assets and Liabilities Between the Company and
Cannon-Pack Enterprises, Inc. as part of the plant
closure in Asheville, North Carolina (see Note 10):
    
    
    (4,763
    )
    
    
    $
    (4,763
    )
    
    $
    (1,973,325
    )PROVIDED BY (USED IN) FINANCING ACTIVITIES:Capital lease payable discharged in bankruptcy
    
    $
    55,063
    
    
    $
    Mortgage payable discharged in bankruptcy
    
    
    121,054
    
    
    
    Note payable issued for Syndicated Bloomington I LLC
    
    
    
    
    
    
    1,973,325Payoff of mortgage on real property of Syndicated
Bloomington I LLC
    
    
    (2,568,574
    )
    
    
    Mortgage on real property of Syndicated Bloomington I LLC
    
    
    2,568,574
    
    
    
    Note payable issued as part of the Agreement to Transfer
Assets and Liabilities Between the Company and
Cannon-Pack Enterprises, Inc. as part of the plant
closure in Asheville, North Carolina(see Note 10):
    
    
    25,000
    
    
    
    $
    201,117
    
    
    $
    1,973,325SUMMARY OF CHANGES IN CASH FLOWS OF DISCONTINUED OPERATIONS:
    
    
    6/30/03
    
    
    
    6/30/02NET CASH USED IN OPERATING ACTIVITIES
    
    $
    
    
    
    $
    (33,106
    )NET CASH USED IN INVESTING ACTIVITIES
    
    
    
    
    
    
    NET CASH USED IN FINANCING ACTIVITIES
    
    
    
    
    
    
    (750
    )NET CASH USED IN DISCONTINUED OPERATIONS
    
    $
    
    
    
    $
    (33,856
    )


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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

Note 6- Segment Reporting

The Company discloses segment information in accordance with SFAS No. 131,
"Disclosure About Segments of an Enterprise and Related Information, which
requires companies to report selected segment information on a quarterly basis
and to report certain entity-wide disclosures about products and services,
major customers, and the material countries in which the entity holds assets
and reports revenues.

The Company has three reportable segments: wholesale foodservice distribution,
food processing, and corporate. The Companys reportable segments are
strategic divisions that offer different services and are managed separately as
each division requires different resources and marketing strategies. The
wholesale foodservice distribution division markets and distributes national
and private label food and food-related products to restaurants, hotels,
cafeterias, schools, healthcare facilities and other institutions. The food
processing division manufactures certain food products, including frozen pizza
and, pursuant to a license trademark agreement, barbeque and chili for sale
principally through distributors to institutional accounts. The Corporate
division provides executive management and houses the Company real estate. The
Company evaluates segment performance based on revenues, gross profit, and
income before provision for income taxes. The Company does not allocate income
taxes or unusual items to the segments.

Three Months Ended
    
    Six Months Ended
    
    Three Months Ended
    
    Six Months Ended6/30/03
    
    6/30/03
    
    6/30/02
    
    6/30/02Gross SalesFood service
    
    $
    4,113,271
    
    
    $
    7,979,584
    
    
    $
    5,669,679
    
    
    $
    10,475,425Food processing
    
    
    212,614
    
    
    
    377,934
    
    
    
    227,053
    
    
    
    413,158Corporate
    
    
    34,503
    
    
    
    91,579
    
    
    
    63,789
    
    
    
    103,614Total gross sales
    
    $
    4,360,388
    
    
    $
    8,449,097
    
    
    $
    5,960,521
    
    
    $
    10,992,197Gross ProfitFood service
    
    $
    1,045,131
    
    
    $
    2,045,937
    
    
    $
    1,079,915
    
    
    $
    2,075,711Food processing
    
    
    44,617
    
    
    
    89,253
    
    
    
    19,967
    
    
    
    73,283Corporate
    
    
    34,503
    
    
    
    91,579
    
    
    
    63,789
    
    
    
    103,614Total gross profit
    
    $
    1,124,251
    
    
    $
    2,226,769
    
    
    $
    1,163,671
    
    
    $
    2,252,608Income (loss) from operationsFood service
    
    $
    1,736
    
    
    $
    (2,978
    )
    
    $
    (895
    )
    
    $
    58,482Food processing
    
    
    (59,826
    )
    
    
    (84,621
    )
    
    
    4,270
    
    
    
    (40,558
    )Corporate
    
    
    (179,589
    )
    
    
    (528,201
    )
    
    
    (177,329
    )
    
    
    (687,676
    )Total loss from operations
    
    $
    (237,679
    )
    
    $
    (615,800
    )
    
    $
    (173,954
    )
    
    $
    (669,752
    )


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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

DepreciationFood service
    
    $
    43,553
    
    
    $
    84,831
    
    
    $
    20,083
    
    
    $
    46,687Food processing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,642Corporate
    
    
    13,561
    
    
    
    33,903
    
    
    
    20,342
    
    
    
    40,684Total
    
    $
    57,114
    
    
    $
    118,734
    
    
    $
    40,425
    
    
    $
    90,013InterestFood service
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Food processing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    122,226
    
    
    
    261,601
    
    
    
    252,371
    
    
    
    489,478Total
    
    $
    122,226
    
    
    $
    261,601
    
    
    $
    252,371
    
    
    $
    489,478Total Assets
    
    
    
    
    
    
    6/30/03
    
    
    
    
    
    
    
    12/31/02Food service
    
    
    
    
    
    $
    3,008,313
    
    
    
    
    
    
    $
    3,212,405Food processing
    
    
    
    
    
    
    75,975
    
    
    
    
    
    
    
    186,047Corporate
    
    
    
    
    
    
    5,759,524
    
    
    
    
    
    
    
    5,903,285Total
    
    
    
    
    
    $
    8,843,812
    
    
    
    
    
    
    $
    9,301,737


The goodwill of $1,536,784 relates to the food service segment. The segments
of the Company follow the same accounting policies as the consolidated group.

Note 7  Commitments and Contingencies

Contingencies

Shareholder Put Right

As part of the acquisition of wholly owned subsidiaries, the Company entered
into a First Amendment to the Agreement and Plan of Merger that included, in
part, a put right (the Put Right) with the selling party (the Shareholder).
The Put Right provides for the Shareholder having a right to put, at any time
during the 20-day period commencing on June 30, 2003 (the Put Date) and
ending on July 20, 2003 (the Expiration Date) all, but not less than all, the
458,716 shares of common stock of the Companys common stock received by the
Shareholder to the Company, in the event that the average closing asked price
for common shares of the Company for the 20 trading days immediately preceding
the Put Date is less than $4.36 per common share for an aggregate value of
approximately $2,000,000. In the event the Shareholder exercises the Put Right
and the Company tenders the $2,000,000, the second installment of principal due
to the Shareholder on the $1,266,420 note payable referred to in Note 2 shall
be deferred by one year to January 2, 2005, when it will become payable
concurrent with the third and final installment due on that note.

Effective July 8, 2003, the Shareholder provided the Company with a Notice of
Exercise of Put Right. The Company has been unable to satisfy its obligations
resulting from the exercise of the

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

Put Right, rendering the Company in default. To remedy the default, the
Company and the Shareholder executed an Extension and Exchange Agreement (the
E&E Agreement) in August 2003. The terms of the E&E Agreement provide for
the following commitments by the Company in consideration for certain
forbearances and amendments agreed to by the Shareholder. Effective as of
August 29, 2003, the Company has released the Shareholder from any
indemnification obligations under the Agreement and Plan of Merger and released
the Shareholders 458,716 common shares from a pledge as security for those
indemnification obligations. In addition, the Company became obligated to
issue an additional 229,358 common shares to the Shareholder, and to attempt to
secure for the Shareholder the senior lenders consent to junior security
interests in the assets of certain wholly owned subsidiaries that would be
subordinate to the senior lender.

The Company also agreed that in the event it is successful raising new equity
capital in a private placement, then the Shareholders original common shares
(458,716) will be converted into $2,000,000 of a newly created Series A
Preferred Stock with enhanced voting rights.

The Shareholder still retains the Put Right exercisable on or after November 1,
2003, until a new expiration date of November 30, 2003. The Shareholder has
agreed to defer calling its $1,266,420 note into default and agreed not to
realize on the security for the note until the Put Right again becomes
exercisable, and has further agreed both to waive any outstanding defaults and
to adjust a principal paying date, in the event the Company closes the
anticipated private placement to raise new equity capital and satisfies the
principal and interest payments then outstanding to the Shareholder. As of the
filing of this report, the Shareholder has not exercised the Put Right, but the
pro forma information provided below details the effect on the Companys
financial statements as if the Shareholder exercised the Put Right:

6/30/03TOTAL ASSETS AS REPORTED
    
    $
    8,843,812effect of exercise of Put Right on total assets
    
    
    PRO FORMA TOTAL ASSETS
    
    
    
    
    
    $
    8,843,812TOTAL LIABILITIES AS REPORTED
    
    $
    10,832,376effect of exercise of Put Right on total liabilities
    
    
    2,000,000PRO FORMA TOTAL LIABILITIES
    
    
    
    
    
    $
    12,832,376TOTAL SHAREHOLDERS DEFICIENCY AS REPORTED
    
    
    (1,988,564
    )effect of exercise of Put Right on shareholders deficiency
    
    
    (2,000,000
    )PRO FORMA TOTAL SHAREHOLDERS DEFICIENCY
    
    
    
    
    
    
    (3,988,564
    )PRO FORMA TOTAL LIABILITIES AND SHAREHOLDERS DEFICIENCY
    
    
    
    
    
    $
    8,843,812


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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003 (UNAUDITED)

Claims related to Third Party Billing actions

The general nature of what is described as and heretofore referred to as Third
Party Billing activities relates to the alleged practice of certain members of
former management, certain financial factoring companies (the Factors) and
unrelated sellers of trade accounts receivables (collectively the Originating
Seller). As best understood by current management and corporate counsel, the
Third Party Billing process involved Company personnel falsely attesting to the
ordering, receipt of and payment obligation for goods allegedly delivered to it
by the Originating Seller, creating trade receivables for the Originating
Seller. The subject receivables were sold to the Factors by the Originating
Seller under a separate agreement between the Factors and the Originating
Seller, with the Originating Seller receiving advances on the invoice totals
underlying the receivables sold. It is believed that the Originating Seller
replicated this scheme to some fifty separate companies involving multiple
factoring companies. It is also believed individual members of the companies
involved were being remunerated directly by the Originating Seller for their
active participation in this scheme.

Based upon the current knowledge of the Company, neither it nor any of its
subsidiaries received goods against these invoices. Complaints filed against
the Company are based upon the representations earlier referenced, and that the
Originating Seller has filed a Chapter 11 proceeding in the Southern District
of Florida, with the Originating Seller owing substantial monies to the
Factors. The issue that the Originating Seller did not ship the goods and does
not have the financial resources to return monies advanced to it by the Factors
based upon these invoices (supported by representations made by certain members
of the Companys former management) forms the basis for the related complaints
against the Company and other entities involved.

Certain actions relating to Third Party Billing actions were fully settled as
of December 31, 2002 (described as FACTOR B, C, E and F in the Companys most
recent Securities and Exchange Commission form 10-KSB filing), and a summary of
the remaining Third Party Billing actions filed against the Company by the
Factors is as follows:

FACTOR A: In November 2001, FACTOR A commenced a lawsuit against the
Company in the Superior Court of New Jersey. FACTOR A alleged that the Company
purchased goods from an Originating Seller and that the Company owed FACTOR A,
as the Originating Sellers assignee, $438,627 for the goods allegedly
purchased and received. On or about June 7, 2002, FACTOR A was granted a
summary judgment in the lawsuit. On or about August 26,
2002, FACTOR A and

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

the Company entered into a settlement agreement wherein the
Company agreed to pay to FACTOR A $270,000, together with interest thereon in
full satisfaction of all FACTOR A claims against it with respect to the
lawsuit. The terms of payment of the balance of monies owed included monthly
payments commencing August 15, 2002 and continuing thereafter each month until
July 15, 2004. As of the date of this report, the Company is in default
pursuant to the terms of the settlement agreement, rendering the original
settlement terms null and void. The Company is presently liable for the net of
the original damages, plus accrued interest, less $155,000 in payments for
approximate outstanding damages of $332,000.

FACTOR D:In May 2002, FACTOR D commenced a lawsuit against the Company
and two of its subsidiaries in the Circuit Court of Miami-Dade County, Florida.
FACTOR D alleged that the Company and the subject subsidiaries purchased goods
from an Originating Seller and that the Company and the subject subsidiaries
owed FACTOR D, as Originating Sellers assignee, $285,732 for the goods
allegedly purchased. This action was partially settled in December 2002 with
the Company making a payment of $80,580 to FACTOR D. This payment fully
released one of the subject subsidiaries from any further claims by FACTOR D.
The claim against the other subsidiary in the amount of $121,985 was included
in that subsidiarys Chapter 7 Bankruptcy filing dated March 14, 2003. The
remainder of the claim, $63,022, has not been settled in any manner through the
date of this report.

In March 2003, a non-related party commenced a lawsuit against the Company in
the Lawrence County Circuit Court, in the State of Kentucky. The complaint was
also filed against an unrelated entity believed to be owned by certain members
of former management and, individually, against the Companys former Vice
President, Controller. The complaint alleges fraud, breach of fiduciary duty
relative to the goods allegedly purchased and certain documents retained by the
defendants. While the complaint does not specify a dollar amount being sought,
the non-related party has represented that demand has been made against it for
an excess of $800,000 by the Factors involved. Although pending litigation has
not been fully developed through discovery, an assessment of the likelihood of
an adverse result cannot be made at this time. It is the Companys position
that if a fraud was committed, it was done so by named parties independent of
the Company and the Company plans to defend itself accordingly.

Other Asserted Claims

In June 2001, the seller of a wholly owned subsidiary of the Company commenced
an action against the Company alleging breach of contract, claiming restitution
of approximately $12,000 and title to 15,000 restricted shares of the Companys
common stock. As of the date of this report, this action has been settled by
all of the involved parties (see Note 12).

In May 2002, a former employee commenced an action against the Company alleging
breach of contract, claiming restitution of approximately $112,000 and shares
of the Companys common

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

stock valued at $60,000. The dispute arises from the Company refusing to honor
the terms of an employment agreement between it and the employee, holding that
the employee was terminated for cause and that the provisions of the subject
employment agreement are unenforceable. As of the date of this report, this
action has been settled by all of the involved parties, which settlement
requires the plaintiff to dismiss with prejudice (see Note 12).

The Company is involved in other lawsuits and claims arising out of the
ordinary course of its business. In the opinion of management, based on the
advice of corporate counsel, the lawsuits and claims pending are not likely to
have a material adverse effect on the Company, its financial position, its
results of operations or its cash flows.

Note 8- Related Party Transactions

During 2003, the Company had the following funding transactions with an
investment company and affiliated entities which together hold a significant
share of the Companys outstanding common stock (See Note 2):



| |  | In February 2003, the Company repaid $285,000 on three notes payable and
$75,000 in accrued interest on other outstanding notes payable.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  | In March 2003, the Company borrowed $50,000 pursuant to a non-secured
promissory note to be used for general working capital. The note accrues
interest at 10% per annum, and is due in September 2003.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As discussed in Note 9, the Company entered into an agreement to convert
certain notes payable due to this investment company. This agreement took
effect in August 2003 and expired on October 31, 2003; as of the date of this
report, the Company is seeking to amend and extend the original terms of this
agreement. Additionally, the Company defaulted on certain notes payable due to
this investment company on October 1, 2003. As of the date of this report, the
Company is undergoing negotiations to extend and reschedule the maturity dates
of the notes payable comprising the default.

In January through June 2003, the Company paid to a Director of the Company a
total of $115,500 in accrued rent and other advances payable, and paid $20,589
in accrued interest on an outstanding note payable.

In August 2003, the Company entered into an Extension and Exchange Agreement
with a Director of the Company to effect a remedy to certain provisions of the
Agreement and Plan of Merger between the Company and the Director (see Note 7).
As a result of this agreement, the Company issued 229,358 shares to this
Director.

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003(UNAUDITED)

Pursuant to a compensation agreement between the Company and the Chief
Executive Officer, the Company tendered a $50,000 payment to the Chief
Executive Officer in March 2003 as part of completing the closing of the
Mortgage and Term Facility referred to in Note 3.

Note 9- Going Concern

The accompanying unaudited interim condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principals,
which contemplate the continuation of the Company as a going concern. As of
June 30, 2003, the Company had a shareholders deficiency of $1,988,564, a
working capital deficiency of $5,955,091, incurred net losses from continuing
operations of $482,368 and had net cash outflows from operating activities of
$115,418 for the six months then ended. Additionally, as discussed in Note 7,
the Company is subject to the terms of the Put Right, terms that, if enforced,
would materially affect the operations of the Company. These factors raise
substantial doubt about the ability of the Company to continue as a going
concern.

To address these concerns, management entered bankruptcy petitions for certain
wholly owned subsidiaries of the Company (see Note 4), reduced associated
payroll and overhead costs not associated with operations to nominal levels,
and initiated efforts to secure external equity capital through the private
placement of Company common stock. Additionally, the Company is party to an
agreement to convert certain notes payable due to a related investment company
to common shares of the Company should certain terms by met. As of the date of
this report, this agreement has expired but the Company has undertaken to amend
and extend the original terms.

The eventual outcome of the success of managements plans cannot be ascertained
with any degree of certainty. The accompanying unaudited interim condensed
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Note 10- Suspension of Asheville, North Carolina Operations

Effective June 30, 2003, the Company executed an Agreement to Transfer Assets
and Liabilities By and Between Momentum Food Service, Inc., (a wholly owned
subsidiary of the Company), the Company and Cannon-Pack Enterprises, Inc. As
part of this agreement the Company agreed to terminate all activity in
Asheville, North Carolina and return all assets and liabilities (see Note 5) of
the Asheville operations to the former owners in exchange for a promissory note
of $25,000, a full release of all liabilities associated with the Asheville
operation and the right to continue to manufacture and sell certain licensed
products produced prior to the termination of operations. The Company
recognized a gain of $34,901 as a result of the final disposition of the assets
and liabilities under this agreement; this amount is included in Other Income
in the Companys Condensed Consolidated Statement of Operations for the six
months ended June 30, 2003.

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003
(UNAUDITED)

The operations discussed above were transferred to a production facility
located in Jasonville, Indiana owned by a Director of the Company. The Company
executed an operating lease with the Director and re-commenced operations in
August 2003.

Note 11- Sale of Restaurant and Discontinued Operations

In October 2001, the Company sold the last restaurant that it operated, located
in New York, New York. Under the terms of the agreement, the Company retained
the catering portion of the operations until the catering agreement itself was
terminated in May 2002.

As noted in Note 1 to the financial statements, the FASB issued SFAS No. 144
Accounting for the Impairment or Disposal of Long-Lived Assetswhich is
effective for fiscal years beginning after December 15, 2001. As encouraged by
the FASB, the Company early adopted SFAS No. 144 in the fourth quarter 2001 and
has retroactively applied it to transactions occurring during the year ended
December 31, 2001. All prior full year reporting periods have been restated to
reflect the adoption. The application of this statement resulted in the
classification and separate financial presentation of certain entities as
discontinued operations, which are not included in continuing operations.
There have been no sales from discontinued operations in 2003. The major
classes of discontinued assets and liabilities included in the Balance Sheets
are as follows:

6/30/03
    
    12/31/02Cash
    
    $
    
    
    
    $
    Accounts receivable
    
    
    
    
    
    
    Prepaid expenses
    
    
    
    
    
    
    Inventory
    
    
    
    
    
    
    Net property and equipment
    
    
    
    
    
    
    Other assets
    
    
    
    
    
    
    TOTAL ASSETS OF DISCONTINUED
OPERATIONS
    
    $
    
    
    
    $
    Accounts payable and accrued expenses
    
    $
    272,884
    
    
    $
    380,267Advances payable
    
    
    125,000
    
    
    
    125,000TOTAL LIABILITIES OF DISCONTINUED
OPERATIONS
    
    $
    397,884
    
    
    $
    505,267


The Company recognized income from discontinued operations in the amount of
$107,383 related to the discharge of trade accounts payable and accrued
expenses in the six months ended June 30, 2003.

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF JUNE 30, 2003
(UNAUDITED)

Note 12- Subsequent Events

Consulting Services Warrants:In August 2003, pursuant to a consulting
agreement, the Company issued warrants to purchase 25,000 shares of its common
stock to a consulting firm for services rendered to the Company. Each warrant
is exercisable at $.25 per share and expires in August 2006.

Settlement of Trade Payables:On October 1, 2003, the Company, its former
counsel and a related investment company entered into an agreement whereby
approximately $330,000 in trade accounts payable were discharged in return for
a $200,000 unsecured promissory note payable to former counsel due August 14,
2004, and a payment of $100,000 to former counsel from a related investment
company.

Settlements of Certain Legal Actions:On October 2, 2003, the Company
formalized a settlement agreement with the seller of a wholly owned subsidiary
of the Company who had commenced an action against the Company in June 2001.
Pursuant to this agreement, the Company will tender a payment of $15,000 and
issue 10,000 shares of the Companys common stock to the parties by December
31, 2003 (see Note 7).

On November 12, 2003, the Company entered into an Agreement and Mutual Release
of Claims to settle an action against the Company by a former employee, which
provides for the effectiveness of the release upon payment of $32,000, plus 10%
interest on or before September 26, 2004, as evidenced through the issuance of
an unsecured promissory note, plus the release by the employee of any ownership
in any and all of the 58,253 shares of the Companys common stock previously
granted to the employee by predecessor management (see Note 7).

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







MANAGEMENTS DISCUSSION AND ANALYSIS

General Statement: Factors that may affect future results

With the exception of historical information, the matters discussed in
Managements Discussion and Analysis or Plan of Operation contain forward
looking statements under the 1995 Private Securities Litigation Reform Act that
involve various risks and uncertainties. Typically, these statements are
indicated by words such as anticipates, expects, believes, plans,
could, and similar words and phrases. Factors that could cause the Companys
actual results to differ materially from managements projections, forecasts,
estimates and expectations include, but are not limited to, the following:
trends in the economy as a whole, which may affect consumer confidence and
consumer demand for the types of food products sold by the Company; competitive
pressures from domestic and foreign processors and distributors of Italian
frozen foods and meat which may affect the nature and viability of the
Companys business strategy; unpredictable changes in growing conditions
inherent in agriculture; other agricultural risks, including those associated
with pesticides, herbicides and disease control and crop protection efforts;
the Companys ability to maintain and expand its distribution base; the
Companys ability to maintain and improve its plants, equipment and
technological systems; changes in the Companys customer base as a result of
competition and/or consolidation of retail grocery chains; risks associated
with governmental regulation and taxation, including the existence or effects
of tariffs; availability and cost of labor employed; changes in industry
capacity and production; the availability, costs and terms of financing,
including the risk of rising interest rates; availability of trade credit and
terms with vendors; the Companys use of financial leverage and the potential
impact of such leverage on the Companys ability to execute its operating
strategies; the ability to maintain gross profit margins; the seasonal nature
of the Companys business and the ability of the Company to predict consumer
demand as a whole, as well as demand for specific items; costs associated with
the storage, shipping, handling and control of inventory; and potential adverse
publicity for the food industry or certain of the Companys food products.

OVERVIEW

Syndicated Food Service International, Inc. (the Company or
Syndicated), formerly known as Floridinos International Holdings, Inc., was
organized in June 1997 under the laws of the State of Florida, having the
stated purpose of engaging in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Florida.

The Company became a reporting company on October 21, 1999 through a
registration of its shares pursuant to Section 12(g) of the Securities Exchange
Act of 1934, as amended (the

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Exchange Act). The Company changed its name from Floridinos
International Holdings, Inc. to its present name by filing Amended and Restated
Articles of Incorporation on November 20, 2001. During the fourth quarter of
2001, the Company made a decision to transform its business philosophy and
changed its operations from a restaurant operator and food processor to a
wholesale foodservice distributor and, on a selected basis, as a food
processor.

As previously reported in the Companys Current Report on Form 8-K, filed
August 22, 2002, the Company replaced its entire Board of Directors during the
first and second quarters of 2002 and new directors were elected to the board
in their place. Also, during the first and second quarters of 2002 the Company
terminated its former management and elected new management in their place.

The Company operates three on-going business segments: Wholesale
Foodservice Distribution, including the Companys Beasley Food Service, Inc.
and Beasley Transportation, Inc. subsidiaries (collectively the Beasley
Operation), Food Processing, including the Companys Momentum Food Services,
Inc. subsidiary (Momentum) and Corporate. Included under Corporate segment
is the Companys real estate holding, owned by the Companys wholly owned
subsidiary Syndicated Bloomington I LLC, which owns the land and buildings upon
which the Beasley Operation is operated. The Companys business segments are
based on business divisions that offer similar products and services. With the
October 2001 sale of the Companys last restaurant, the Company treated its
Restaurant segment as discontinued operations for the years ended December 31,
2002, 2001 and 2000.

I. CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2003
COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2002:

Consolidated sales, gross profit and net loss:

Consolidated sales for the quarters ended June 30, 2003 and 2002 were
$4,360,388 and $5,960,521, respectively. Gross profits for the quarters ended
June 30, 2003 and 2002 were $1,124,251 and $1,163,671, respectively. For the
aforementioned quarterly periods, gross profits represented approximately 26%
and 20% of sales respectively.

The decline in sales for the periods was principally encountered in the
Wholesale Foodservice Segment with the Companys Beasley Operation. The
decline in revenues was in part caused by a general softening of the market.
Additionally, during calendar 2003, due to the corporate policy to source
inventory through its parent company, one of the Beasley Operations customers,
which accounted for approximately $3,000,000 of annualized revenues, was lost,
thereby causing the decline in year on year results.

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While the percentage of gross profits for the period increased over the
prior year as a percentage of revenue, overall gross profit decreased for the
quarter ended June 30, 2003 over the year earlier period principally due to the
previously discussed decline in revenues for the period. While revenues were
significantly down, the Beasley Operation has continued to replace the sales
lost from the one customer, as earlier mentioned, while in lesser amounts, with
new higher gross margin business. The lost sales generated average gross
margin in the 5% range. Sales to new customers, which in part replaced some of
the lost sales, generated gross margin in the 18% to 20% range.

Selling, general and administrative expenses for the quarters ended June
30, 2003 and 2002 were $1,267,316 and $1,264,700, respectively, reflecting
minimal growth in expenses and is reflective of managements concentration on
reducing growth in these areas. After deducting selling, general and
administrative costs, plus depreciation and amortization, losses from
operations increased over the year earlier period to $237,679 for the quarter
ended June 30, 2003 from $173,954 for the quarter ended June 30, 2002. The
increased loss was driven primarily by the lower level of revenue generated
from operations for the quarter ended June 30, 2003, as well as a marginal
increase in depreciation expense for the quarter ended June 30, 2003 from the
quarter ended June 30, 2002.

After deducting the net of other income and interest expense, the Company
decreased its loss from continuing operations to $316,970 for the quarter ended
June 30, 2003 from $383,356 for the quarter ended June 30, 2002. The Company
encountered no losses from discontinued operations for the quarter ended June
30, 2003 versus slight income from discontinued operations for the quarter
ended June 30, 2002 of $2,481, thereby reducing its net loss to $316,970 for
the quarter ended June 30, 2003 from a net loss of $380,875 for the quarter
ended June 30, 2002.

Other income and expense positively impacted the reduction in loss from
continuing operations, principally through the year on year reduction in
interest expense to $122,226 for the quarter ended June 30, 2003 from $252,371
for the quarter ended June 30, 2002. The decrease in interest expense is
primarily due to the Company recognizing $25,000 versus $150,000 of
amortization of deferred offering costs for the quarters ended June 30, 2003
and 2002, respectively. The Company recorded $600,000 in deferred offering
costs as part of issuing 2,500,000 warrants to purchase common stock in
September 2001. These costs were amortized over the one-year period through
August 2002, and resulted in a charge to interest expense of $150,000 for the
three months ended June 30, 2002. The Company extended the expiration period
of these warrants and lowered the exercise price in August 2002, resulting in
the Company recording deferred offering costs of $100,000. These costs are
amortizable over the one-year period through August 2003, and resulted in a
charge to interest expense of $25,000 for the three months ended June 30, 2003.

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II. CONSOLIDATED RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED

JUNE 30, 2003 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2002:

Consolidated sales for the six months ended June 30, 2003 and 2002 were
$8,449,097 and $10,992,197, respectively. Gross profits for the six months
ended June 30, 2003 and 2002 were $2,226,769 and $2,252,608, respectively. For
the aforementioned six months periods, gross profits represented approximately
26% and 21% of sales, respectively.

Selling, general and administrative expenses for the six months ended June
30, 2003 and 2002 were $2,653,835 and $2,767,347, respectively, reflecting the
stabilization of operations and managements focus on managing expenses as
discussed above. After deducting selling, general and administrative costs,
and depreciation and amortization, the Company decreased losses from operations
to $615,800 for the six months ended June 30, 2003 from $669,752 for the six
months ended June 30, 2002.

After deducting other income and expense, net, the Company decreased its
loss from continuing operations to $482,368 for the six months ended June 30,
2003 from $1,094,253 for the six months ended June 30, 2002. The Company
generated income of $107,383 from discontinued operations for the six months
ended June 30, 2003 versus a loss from discontinued operations of $30,219 for
the six months ended June 30, 2002, thereby reducing its net loss to $374,985
for the six months ended June 30, 2003 from a net loss of $1,124,472 for the
six months ended June 30, 2002.

III. SEGMENT RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2003 COMPARED TO THE THREE AND SIX MONTHS ENDED JUNE 30, 2002:

Three Months Results for the Wholesale Foodservice Segment

Sales for the Beasley Operation for the quarters ended June 30, 2003 and
2002 were $4,113,271 and $5,669,679, respectively. Gross profits for the
quarters ended June 30, 2003 and 2002 were $1,045,131 and $1,079,915,
respectively. For the aforementioned quarter periods, gross profits
represented approximately 26%, and 19% of sales, respectively. These
percentages are generally consistent with, or above industry standards, and
management expects this level to remain constant, depending on the product mix
and composition of gross revenues. Operating expenses for the Beasley Operation
for the quarters ended June 30, 2003 and 2002 were $1,045,131 and $1,079,915,
respectively, generating income from operations of $1,736 for the quarter ended
June 30, 2003 and a loss from operations of $895 for the quarter ended June 30,
2002.

Six Months Results for the Wholesale Foodservice Segment

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Sales for the Beasley Operation for the six months ended June 30, 2003 and
2002 were $7,979,584 and $10,475,425, respectively. Gross profits for the six
months ended June 30, 2003 and 2002 were $2,045,937 and $2,075,711,
respectively. For the aforementioned six month periods, gross profits
represented approximately 26%, and 20% of sales, respectively. These
percentages are generally consistent with, or above industry standards, and
management expects this level to remain constant, depending on the product mix
and composition of gross revenues. Operating expenses for the Beasley Operation
for the six months ended June 30, 2003 and 2002 were $2,048,915 and $2,017,229,
respectively, generating a loss from operations of $2,978 for the six months
ended June 30, 2003 and income from operations of $58,482 for the six months
ended June 30, 2002.

Three Months Results for the Food Processing Segment

Sales for Momentum for the quarters ended June 30, 2003 and 2002 were
$212,614 and $227,053, respectively. Gross profits for the quarters ended June
30, 2003 and 2002 were $44,617 and $19,967, respectively. For the
aforementioned quarter period, gross profits represented approximately 21%, and
9% of sales, respectively. Operating expenses for Momentum for the quarters
ended June 30, 2003 and 2002 were $104,440 and $15,667, respectively,
generating a loss from operations of $59,826 for the quarter ended June 30,
2003 and income from operations of $4,270 for the quarter ended June 30, 2002.

Based on the operating results, current management is determining whether
to continue the Companys Momentum operations. Legacy supply contracts which
are unprofitable, fixed costs associated with legacy facilities inherited from
predecessor management, coupled with revenue levels that are insufficient to
drive gross profits adequate to cover, albeit minimal, selling, general and
administrative costs associated with the operation are some of the factors
under review. As reported in the Companys Form 10-KSB for the calendar years
ended December 31, 2002 and 2001, the Company terminated Momentums activities
in Asheville, North Carolina in June 2003 in an effort to begin to address
these issues. Based upon the results through the balance of calendar 2003,
management will determine whether to maintain or discontinue this operation.

Six Months Results for the Food Processing Segment

Sales for Momentum for the six months ended June 30, 2003 and 2002 were
$377,934 and $413,158, respectively. Gross profits for the six months ended
June 30, 2003 and 2002 were $89,253 and $73,283, respectively. For the
aforementioned six month period, gross profits represented approximately 24%,
and 18% of sales, respectively. Operating expenses for Momentum for the six
months ended June 30, 2003 and 2002 were $173,874 and $113,841, respectively,
generating a loss from operations of $84,621 for the six months ended June 30,
2003 and a loss from operations of $40,558 for the six months ended June 30,
2002.

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Three Months Results for the Corporate Segment

Corporate segments loss from operations for the quarter ended June 30,
2003 and June 30, 2002 was $179,589 and $177,329, respectively. Of the
$179,589 loss from operations for the quarter ended June 30, 2003,
approximately $92,000 was attributable to costs incurred with the restructuring
activities of current management, comprised principally of legal services
associated with settlement of outstanding litigation against the Company and
accounting services associated with the Companys effort to conclude its audit
for the calendar years ended December 31, 2002 and 2001.

Six Months Results for the Corporate Segment

Corporate segments loss from operations decreased by $159,475 to $528,201
for the six months ended June 30, 2003 from $687,676 for the six months ended
June 30, 2002. As earlier mentioned, this decrease was in part due to the
termination of predecessor management at the end of the quarter ended March 31,
2002 and elimination of the related costs associated with their activities.
Current management has instituted changes to reduce corporate costs
accordingly. Of the $528,201 loss from operations for the six months ended
June 30, 2003, approximately $272,000 was attributable to costs incurred with
the restructuring activities of current management, comprised principally of
legal services associated with settlement of outstanding litigation against the
Company and accounting services associated with the Companys effort to
conclude its audit for the calendar years ended December 31, 2002 and 2001.
The approximate $244,000 of legal and accounting fees for the six months ended
June 30, 2003 compared with approximately $459,000 for the nine months ended
September 30, 2002.

IV. LIQUIDITY AND CAPITAL RESOURCES:

Based upon the ratio of current assets to current liabilities, as of June
30, 2003, the Company had a working capital deficit of $5,955,091. Of this
amount, $3,964,810 is classified as a current liability and owing to parties
related to the Company. Additionally, $1,027,912 remains as a reserve for
contingent losses associated with the restructuring and wind up of historic
issues created by prior management. While there can be no assurances, and as
discussed below, to address the Companys deficit working capital position,
current management is undertaking to convert $2,100,000 of related party notes
to equity as well as an additional $2,000,000 of obligations that may become
due pursuant to certain put rights of a related party. Management anticipates
that the final disposition of the reserves for contingent losses should be
concluded by the end of the Companys fiscal year ending December 31, 2003, the
outcome of which at this time is uncertain.

While the Companys total working capital deficit is significant, when
addressing day-to-day trade operations, management is working with cash,
accounts receivable and inventory as of

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June 30, 2003 of $2,198,435 to address $2,852,347 of bank overdrafts,
trade accounts payable and accrued expenses, accrued interest payable, short
term borrowing against a line of credit, advances payable, and the current
portion on notes payable to non-affiliates.

On a consolidated basis, cash on hand was $0 and $43,939 as of June 30,
2003 and December 31, 2002, respectively, generating a decrease in cash for the
period of $43,939.

As disclosed in the Companys Form 10-KSB for the calendar years ended
December 31, 2002 and 2001, to fund on-going operations, management has
designed and implemented a plan to address working capital needs which included
settlement of certain legal complaints filed against the Company, the reduction
of accounts payable associated with closed operations and entities, reduction
of corporate expenses compared to historic levels, a plan to convert certain of
its debt obligations to equity, and to secure additional working capital
through a private offering of the Companys equity securities.

Additionally, in August 2003, the Company entered into a Debt Conversion
Agreement to convert certain notes payable due to two investment companies and
related parties in the aggregate of approximately $2,100,000 to common shares
of the Company. Pursuant to this agreement, the Company could convert the
aggregate amount of the debt in return for issuing 7,000,000 common shares at
an issue price of $.30 per share if the Company could raise $1,000,000 of new
equity working capital by October 31, 2003. As of the date of this filing, the
Company has failed to raise the minimum amount of capital necessary to trigger
the conversion features of this Agreement, but the Company has undertaken to
negotiate with the related parties to extend and amend the original terms to
lessen the carrying costs of its debt burden.

Similarly, in August 2003, the Company entered into an Extension and
Exchange Agreement to convert certain put rights which would be classified as a
debt obligation, if exercised, of $2,000,000 as of June 30, 2003 from a related
party, into what would be a newly created preferred stock. Pursuant to this
agreement, the conversion shall occur at such time as the Company raises
$1,000,000 of new equity working capital. If the Company is unable to raise
said working capital on or before November 1, 2003, then the put obligation
will remain classified as debt. As of the date of this filing, the Company has
failed to raise the minimum amount of capital necessary to trigger the
conversion features of this Agreement, but the Company has undertaken to
negotiate with the related party to extend and amend the original terms to
lessen the carrying costs of its debt burden.

As of the third quarter of the fiscal year ending December 31, 2003,
management has initiated a plan to conduct a private offering of the Companys
equity securities to raise a minimum amount of $1,000,000 and a maximum amount
of $2,000,000 to address the Companys liquidity position and fund on-going
corporate expenses. The Company will further seek to raise additional equity
and or debt to finance external growth through acquisitions of

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companies similar to its Beasley Operation.

During the fourth calendar quarter of fiscal year ending December 31,
2003, in its effort to continue to reduce historic accounts payable and settle
remaining litigation, the Company, its former counsel and a related investment
company entered into an agreement whereby approximately $330,000 in trade
accounts payable were discharged in return for a $200,000 unsecured promissory
note payable to former counsel due August 14, 2004, and a payment of $100,000
to former counsel from a related investment company.

Management also settled outstanding litigation between the Company and
Hilbert Binderow styled Hilbert Binderow vs. Floridinos International
Holdings, Inc. and Triton Prestige Products, Inc. The terms of the settlement
provided for the issuance of 10,000 shares of the Companys common stock plus
the agreement to pay $15,000 to the litigants on or before December 31, 2003.

Management further settled outstanding litigation between the Company and
Robert Klezmer, a former employee, pursuant to an Agreement and Mutual Release
of Claims, which provides for the effectiveness of the release upon payment of
$32,000, plus 10% interest on or before September 26, 2004, as evidenced
through the issuance of an unsecured promissory note, plus the release by Mr.
Klezmer of any ownership in 58,253 shares of the Companys common stock
previously granted to Mr. Klezmer by predecessor management.

Management anticipates that its aggregate working capital requirements
through the balance of calendar 2003 are $400,000. This increase from the
estimated capital requirements as of the quarter ended March 31, 2003 stems
from increased costs related to the conclusion of the Companys audit for the
calendar years ended December 31, 2002 and 2001, as well as preparation and
review of its quarterly reports for the interim quarters for the calendar year
ending December 31, 2003. Part of the funding for these costs have been and,
while there can be no assurance of available funds, will continue to be
positive cash flow from the Companys Beasley Operation as well as short term
borrowings from related parties.

V. CRITICAL ACCOUNTING POLICIES

The Company believes the following are its most critical accounting
policies in that they are the most important to the portrayal of the Companys
financial condition and results and require managements most difficult,
subjective or complex judgments.

Revenue and Cost Recognition

The Company recognizes gross revenues from sales of food and food-related
products when goods are shipped and title or risk of loss resides with the
customer, which typically occurs

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when the customer accepts the shipment and products. Rebates and
allowances from vendors are recognized in the period they are received from the
vendor unless such rebates and allowances are reasonably estimable at the end
of a reporting period.

Allowance for Doubtful Accounts

The Company regularly monitors and assesses its risk of not collecting
amounts owed to it by its customers. This evaluation is based upon a variety
of factors including: an analysis of amounts currently and past due along with
relevant history and facts particular to the customer. Based upon the results
of this analysis, the Company records an allowance for uncollectible accounts
for this risk. This analysis requires the Company to make significant
estimates, and changes in facts and circumstances could result in material
changes in the allowance for doubtful accounts.

Inventory

Inventory is stated at the lower of cost (first-in, first-out method) or
market, and primarily consists of food, produce products, and ingredients used
in the frozen food processing facility. The inventories of the Companys
processing and distribution facilities are constantly monitored for slow moving
or damaged products which, if existing, are written off from saleable
inventory, with a charge to inventory impairment made for the difference
between the carrying value and estimated market value. The Company also
conducts periodic physical counts to test the efficacy of the policies and
procedures for receiving, storing, processing and shipping inventory.

Asset Impairment

The Company reviews its long-lived assets and identifiable intangibles for
impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. In performing the review
for recoverability, the Company estimates the future cash flows expected to
result from the use of the asset and its eventual disposition. If the sum of
the expected future cash flows (undiscounted and without interest charges) is
less than the carrying amount of the asset, an impairment loss is recognized.
Otherwise, an impairment loss is not recognized. Measurement of an impairment
loss for long-lived assets and identifiable intangibles would be based on the
fair value of the asset.

Income Taxes

The Company accounts for income taxes under the accrual method established
by Statement of Financial Accounting Standards No. 109, which requires
recognition of deferred tax assets and liabilities for the expected future tax
consequences and events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities

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are determined based on the difference between the financial statements
and tax bases of assets and liabilities using enacted rates for the year in
which the differences are expected to reverse.

Business Combinations and Goodwill

In July 2001, the Financial Accounting Standards Board (FASB) issued
Statements of Financial Accounting Standards (SFAS) No. 141, Business
Combinations and No. 142, Goodwill and Other Intangible Assets. SFAS No.
141 and SFAS No. 142 establish accounting and reporting standards for business
combinations and for goodwill and intangible assets resulting from business
combinations, respectively. SFAS No. 141 prohibits the use of the
pooling-of-interests method of accounting for business combinations and applies
to all business combinations initiated after June 30, 2001. SFAS No. 142
discontinues the periodic amortization of goodwill (and intangible assets
deemed to have indefinite lives) and requires impairment to be tested annually.
Further, SFAS No. 142 replaces the measurement guidelines for impairment,
whereby goodwill not considered impaired under previous accounting literature
may be considered impaired under SFAS No. 142. SFAS No. 142 is effective for
all fiscal years beginning after December 15, 2001, and cannot be applied
retroactively. SFAS No. 142 is to be applied to all recorded goodwill and
intangible assets as of the date of adoption. The Company has applied SFAS No.
142 for the accounting of goodwill and other intangible assets beginning
January 1, 2002.

The Company assesses the recoverability of goodwill and other intangible
assets by determining whether the fair values of these assets exceed their
carrying values. The evaluation of fair value requires the use of projections,
estimates and assumptions as to the future performance of the operations as
well as assumptions regarding sales and earnings multiples that would be
applied in comparable acquisitions in the food service and food processing
industry. Actual results could differ from these assumptions and projections
resulting in the Company revising its assumptions and, if required, recognizing
an impairment loss.

VI. FACTORS WHICH MAY IMPACT FUTURE RESULTS AND FINANCIAL CONDITION

Interest rates

The Companys exposure to market risk for changes in interest rates
relates primarily to the Companys debt obligations under its credit facility.

Interruption of Supplies

The Company obtains substantially all of its foodservice products from
third party suppliers. For the most part, the Company does not have long-term
contracts with its suppliers

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committing them to provide products to the Company. Although purchasing
volumes can provide leverage when dealing with suppliers, suppliers may not
provide the foodservice products and supplies needed by the Company in the
quantities requested. Because the Company does not control the actual
production of the entire product line that it offers for sale, it is also
subject to delays caused by interruption in production based on conditions
outside its control. These conditions include job actions or strikes by
employees of suppliers, weather, crop conditions, transportation interruptions,
and natural disasters or other catastrophic events. The inability to obtain
adequate supplies of its foodservice products as a result of any of the
foregoing factors or otherwise, could mean that the Company could not fulfill
its obligations to customers, and customers may turn to other distributors.

Low Margin Business; Economic Sensitivity

The foodservice distribution industry is characterized by relatively high
inventory turnover with relatively low profit margins. The Company makes a
significant portion of its sales at prices that are based on the cost of
products it sells plus a percentage markup. As a result, profit levels may be
negatively impacted during periods of food price deflation, even though gross
profit percentage may remain relatively constant. The foodservice industry is
sensitive to national and regional economic conditions and operating results
are also sensitive to, and may be adversely affected by, other factors,
including difficulties with the collectability of accounts receivable,
inventory control, competitive price pressures, severe weather conditions and
unexpected increases in fuel or other transportation-related costs. Although
these factors have not had a material adverse impact on past operations, there
can be no assurance that one or more of these factors will not adversely affect
future operating results.

Product Liability Claims

The Company, like any other seller of food, faces the risk of exposure to
product liability claims in the event that the use of products sold causes
injury or illness. With respect to product liability claims, the Company
believes it has sufficient primary or excess umbrella liability insurance for
the operating entities to cover any exposure in this regard. However, this
insurance may not continue to be available at a reasonable cost, or, if
available, may not be adequate to cover all liabilities. In certain cases, the
Company may seek contractual indemnification and insurance coverage from
parties supplying its products, but this indemnification or insurance coverage
is limited, as a practical matter, to the creditworthiness of the indemnifying
party and the insured limits of any insurance provided by suppliers. If the
Company does not have adequate insurance or contractual indemnification
available, product liability claims relating to defective products could
materially reduce net income and earnings per share.

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The Companys Market Is Highly Competitive And The Company May Not Be Able To
Continue To Compete Efficiently

Many competitors are larger, diversified companies with substantially
greater financial resources and name recognition than the Company. Major
competitors include large companies such as U.S. Food Service, Sysco
Corporation and Performance Food Group, Inc., among others. The Company may be
at a disadvantage in competing with companies with greater diversification and
resources because competitors may be better able to withstand current or future
downturns in the market.

The Companys Business May Suffer From The Loss of Key Personnel

The Companys operations are dependent on the continued efforts of its
officers and executive management. In addition, it is dependent on the
performance and productivity of its local managers and field personnel. The
Companys ability to attract and retain business is significantly affected by
local relationships and the quality of service rendered. The loss of those key
officers and members of executive management may cause a significant disruption
to its business.

The Price Of The Companys Common Stock May Fluctuate Significantly, which May
Result In Losses For Investors

The market price for the Companys common stock has been and may continue
to be volatile. Its stock price can fluctuate as a result of a variety of
factors, including factors listed in the above Risk Factors and others, many of
which are beyond the Companys control. These factors include: actual or
anticipated variations in the Companys quarterly operating results;
announcements relating to strategic relationships or acquisitions; changes in
financial estimates or other statements by securities analysts; and changes in
general economic conditions.

Because of this volatility, the Company may fail to meet the expectations
of its shareholders or of securities analysts and its stock price could decline
as a result.







Item 3. Controls and Procedures

The Companys present executive management all became officers or
directors in 2002 or 2003 following the complete replacement of all previous
directors and officers due to resignation or termination for cause from
February to June 2002. Under the circumstances, the Company has not evaluated
prior managements policies and implementation thereof regarding disclosure
controls and procedures of the historic Companys operations. The Companys
new management is in the process of developing new written policies regarding
disclosure controls and procedures in order to ensure that information required
to be disclosed by the Company in the reports that it files under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the required time periods. The Board of Directors has also
created an Internal Controls and Procedures Committee to assist with this
process.

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PART II  OTHER INFORMATION







Item 3. Defaults Upon Senior Securities

The Company is currently in default on certain notes payable due to Fidra
Holdings, Ltd., Chan Capital, Ltd. and Charles A. and Marjorie A. Beasley in
the aggregate of approximately $3,804,533 in principal and interest, as
reflected in the following table:

OriginalPayment or
    
    Amended
    
    Principal
    
    Accelerated
    
    Accrued
    
    TotalNote Due
    
    Note Due
    
    Amount
    
    Principal
    
    Interest
    
    AmountDate
    
    Date
    
    Due at Default
    
    Amount Due
    
    Thereon *
    
    DueChan Capital, Ltd.
    
    
    12/31/2002
    
    
    
    9/30/2003
    
    
    $
    1,600,000
    
    
    $
    
    
    
    $
    158,333
    
    
    $
    1,758,333Fidra Holdings, Ltd.
    
    
    1/1/2002
    
    
    
    9/30/2003
    
    
    
    495,342
    
    
    
    
    
    
    
    49,959
    
    
    
    545,301Fidra Holdings, Ltd.
    
    
    8/31/2002
    
    
    
    9/30/2003
    
    
    
    98,048
    
    
    
    
    
    
    
    14,707
    
    
    
    112,755Fidra Holdings, Ltd.
    
    
    12/31/2002
    
    
    
    9/30/2003
    
    
    
    20,000
    
    
    
    
    
    
    
    2,333
    
    
    
    22,333Fidra Holdings, Ltd.
    
    
    8/31/2003
    
    
    not amended
    
    
    50,000
    
    
    
    
    
    
    
    4,000
    
    
    
    54,000Charles A. and Marjorie A. Beasley
    
    
    1/2/2003
    
    
    not amended
    
    
    233,210
    
    
    
    1,033,210
    
    
    
    45,391
    
    
    
    1,311,811TOTALS
    
    
    
    
    
    
    
    
    
    $
    2,496,600
    
    
    $
    1,033,210
    
    
    $
    274,723
    
    
    $
    3,804,533


* Calculated through October 31, 2003







Item 6. Exhibits and Reports on Form 8-K

(a) Documents filed as a Part of this Report as required by Item 601 of
Regulation S-B:

Exhibit No
    
    Description4.1
    
    Warrant Agreement between
    
    Incorporated by referencethe Company and Thomas P
    
    as Exhibit No. 4.4 from theTanis, Jr.; 02-003, dated
    
    Companys 10-KSB for theAugust 31, 2003, effective
    
    calendar years endedMarch 6, 2002, for 246,796
    
    December 31, 2001 andcommon stock warrants
    
    December 31, 2002, filedOctober 14, 20034.2
    
    Form of Warrants for all
    
    Incorporated by reference2003 Officer/Director
    
    as Exhibit No. 4.13 fromGrants, dated March 2003
    
    the Companys 10-KSB forthe calendar years endedDecember 31, 2001 andDecember 31, 2002, filedOctober 14, 2003


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4.3
    
    Warrant Agreement between
    
    Incorporated by referencethe Company and Hagerty &
    
    as Exhibit No. 4.14 fromAssociates; 03-008, dated
    
    the Companys 10-KSB forAugust 31, 2003, for 25,000
    
    the calendar years endedcommon stock warrants
    
    December 31, 2001 andDecember 31, 2002, filedOctober 14, 200310.1
    
    Agreement To Transfer
    
    Incorporated by referenceAssets and Liabilities By
    
    as Exhibit No. 10.43 fromand Between Momentum Food
    
    the Companys 10-KSB forService, Inc., Syndicated
    
    the calendar years endedFood Service International,
    
    December 31, 2001 andInc. and Cannon
    
    December 31, 2002, filedPack-Enterprises, Inc.,
    
    October 14, 2003dated June 30, 200310.2
    
    5% Promissory Note from the
    
    Incorporated by referenceCompany to Cannon
    
    as Exhibit No. 10.44 fromPack-Enterprises, Inc.,
    
    the Companys 10-KSB fordated June 30, 2003, for
    
    the calendar years ended$25,000, due June 30, 2004
    
    December 31, 2001 andDecember 31, 2002, filedOctober 14, 200310.3
    
    Trademark License Agreement
    
    Incorporated by referencebetween Cannon
    
    as Exhibit No. 10.45 fromPack-Enterprises and
    
    the Companys 10-KSB forMomentum Food Service,
    
    the calendar years endedInc., dated June 30, 2003
    
    December 31, 2001 andDecember 31, 2002, filedOctober 14, 200310.4
    
    Debt Conversion Agreement
    
    Incorporated by referencebetween the Company and
    
    as Exhibit No. 10.75 fromChan Capital, Ltd. and
    
    the Companys 10-KSB forFidra Holdings, Ltd., dated
    
    the calendar years endedAugust 25, 2003
    
    December 31, 2001 andDecember 31, 2002, filedOctober 14, 200310.5
    
    Notice of Exercise of Put
    
    Incorporated by referenceRight by Charles A. and
    
    as Exhibit No. 10.76 fromMarjorie A. Beasley to the
    
    the Companys 10-KSB forCompany, dated July 8, 2003
    
    the calendar years endedDecember 31, 2001 andDecember 31, 2002, filedOctober 14, 200310.6
    
    Extension and Exchange
    
    Incorporated by referenceAgreement between the
    
    as Exhibit No. 10.77 fromCompany and Charles A. and
    
    the Companys 10-KSB forMarjorie A. Beasley, dated
    
    the calendar years endedAugust 29, 2003
    
    December 31, 2001 andDecember 31, 2002, filedOctober 14, 200310.7
    
    Property Lease Agreement
    
    Incorporated by referencebetween Momentum Food
    
    as Exhibit No. 10.78 fromService, Inc. and Charles
    
    the Companys 10-KSB forA. Beasley for the
    
    the calendar years endedJasonville property, dated
    
    December 31, 2001 andJuly 1, 2003
    
    December 31, 2002, filedOctober 14, 200310.8
    
    Property Lease Agreement
    
    Incorporated by referencebetween the Company
    
    as Exhibit


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and Thomas P. Tanis, Jr.
    
    No.10.79 from the Companys 10-KSBfor the corporate office
    
    for the calendar years endedin Front Royal, Virginia,
    
    December 31, 2001 anddated June 1, 2003
    
    December 31, 2002, filedOctober 14, 200310.9
    
    Promissory Note between the
    
    Incorporated by referenceCompany and Proskauer Rose
    
    as Exhibit No. 10.26 fromLLP, dated August 15, 2003
    
    the Companys 10-QSB forfor $200,000 due August 14,
    
    the quarter ended March 31,2004
    
    2003, filed November 17,200310.10
    
    Promissory Note between the
    
    Filed herewithCompany and Robert Klezmerdated November 12, 2003 for$32,000 due September 26,200431.1
    
    Certification under Rule
    
    Filed herewith13a-14(a) of Thomas P.Tanis, Jr., President andChief Executive Officer31.2
    
    Certification under Rule
    
    Filed herewith13a-14(a) of Barry L.Nogay, Vice President andPrincipal AccountingOfficer32.0
    
    Joint Certification under
    
    Filed herewithRule 13a-14(b) of Thomas P.Tanis, Jr. and Barry L.Nogay


(b) Reports on Form 8-K

The following reports on Form 8-K filed during the quarter for which this
Report is filed were previously reported in the Companys Form 10-KSB for the
calendar years ended December 31, 2002 and December 31, 2001, filed October 14,
2003, and are restated as follows:

On April 3, 2003, the Company filed a Form 8-K/A, as a second amendment
amending the Form 8-K filed on February 20, 2003, to clarify Paragraph
(a)(1)(ii) of the Form 8-K dated February 12, 2003 to report that the Companys
previous certifying public accountants report on the Companys financial
statements for the year ended December 31, 2000 was modified by the inclusion
of an explanatory paragraph addressing the ability of the Company to continue
as a going concern; to clarify that the engagement of the Companys new
certifying public accountant was effected on February 21, 2003; to clarify the
membership in the Companys audit committee; and to further clarify that the
decision to dismiss the Companys previous certifying public accountant was not
based on any question as to the previous certifying public accountants
independence. Due to technical difficulties, duplicate copies of this April 3,
2003 Form 8K/A were filed via EDGAR. The Company has requested that the SEC
delete the duplicate copy from the SECs EDGAR database.

On April 23, 2003, the Company filed a Form 8-K/A, as a third amendment
amending the Form 8-K filed on February 20, 2003, to provide additional detail
on the Board of Directors decision to make a change in the Companys
certifying public accountant; to explain the

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Companys determination that its previous certifying public accountant was
at all times independent in the conduct of its Company audits consistent with
the Statements of Auditing Standards and final rulings on auditor independence
within the meaning of the Securities Acts administered by the U.S. Securities
and Exchange Commission; and to attach as an exhibit to the Form 8-K, the
letter from the Companys previous certifying public accountant expressing
agreement with the statements made by the Company in the Form 8-K.

On May 14, 2003, the Company filed a Form 8-K/A, as a fourth amendment
amending the Form 8-K filed on February 20, 2003, to add an additional exhibit
in the form of a letter to the Securities and Exchange Commission from the
former certifying public accountant of the Company.

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SIGNATURES

In accordance with 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.

Syndicated Food Service International, Inc.
(Registrant)

Name
    
    Title
    
    Date/s/ Thomas P. Tanis, Jr.
    
    President, Treasurer, Chief Executive Officer and Director
    
    November 26, 2003.Thomas P. Tanis, Jr./s/ Barry L. Nogay
    
    
    
    November 26, 2003.Vice President and Principal Accounting OfficerBarry L. Nogay


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