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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 1934


For the quarterly period ended September 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 December 10, 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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|                                                                                                                               |  |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------------------------------------------------ |  |  |  |  |  |  |  | 
|Condensed Consolidated Balance Sheets as of September
30, 2003 (unaudited) and December 31, 2002                              
|Unaudited Condensed Consolidated Statements of Operations
for the three months ended September 30, 2003 and 2002              
|Unaudited Condensed Consolidated Statements of Operations
for the nine months ended September 30, 2003 and 2002               
|Unaudited Condensed Consolidated Statement of Changes
in Shareholders Deficiency for the nine months ended
September 30, 2003
|Unaudited Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 2003 and 2002               
|Unaudited Notes to Condensed Consolidated Financial
Statements as of September 30, 2003                                       
|Managements Discussion and Analysis or Plan of Operation                                                                     
|Controls and Procedures                                                                                                       
|Other Information                                                                                                             
|Changes in Securities                                                                                                         
|Defaults Upon Senior Securities                                                                                               
|Item 5. Other Information                                                                                                     
|Exhibits and Reports on Form 8-K                                                                                              
|Signatures                                                                                                                    
|EX-10.7 PROMISSORY NOTE                                                                                                       
|EX-10.8 AMENDMENT TO EXTENSION AND EXCHANGE AGMT                                                                              
|EX-10.9 AMENDMENT TO DEBT CONVERSION AGREEMENT                                                                                
|EX-31.1 SECTION 302 CERTIFICATION OF THE CEO                                                                                  
|EX-31.2 SECTION 302 CERTIFICATION OF THE PAO                                                                                  
|EX-32.0 SECTION 906 CERTIFICATION OF THE CEO & PAO                                                                            



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Table of Contents

Part I
    
    Financial Information
    
    PageItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets as of September
30, 2003 (unaudited) and December 31, 2002
    
    1Unaudited Condensed Consolidated Statements of Operations
for the three months ended September 30, 2003 and 2002
    
    2Unaudited Condensed Consolidated Statements of Operations
for the nine months ended September 30, 2003 and 2002
    
    3Unaudited Condensed Consolidated Statement of Changes
in Shareholders Deficiency for the nine months ended
September 30, 2003
    
    4Unaudited Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 2003 and 2002
    
    5Unaudited Notes to Condensed Consolidated Financial
Statements as of September 30, 2003
    
    6Item 2.
    
    Managements Discussion and Analysis or Plan of Operation
    
    26Item 3.
    
    Controls and Procedures
    
    38Part II
    
    Other InformationItem 2.
    
    Changes in Securities
    
    38Item 3.
    
    Defaults Upon Senior Securities
    
    38Item 5.
    
    Other Information
    
    39Item 6.
    
    Exhibits and Reports on Form 8-K
    
    39Signatures






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

ASSETS

September 30,2003
    
    December 31,(unaudited)
    
    2002CURRENT ASSETSCash
    
    $
    
    
    
    $
    43,939Accounts receivable (net of allowance for bad debt
of $185,984 and $158,984)
    
    
    1,262,712
    
    
    
    1,520,635Prepaid expenses
    
    
    150,869
    
    
    
    32,996Inventory
    
    
    1,188,229
    
    
    
    1,071,059Other current assets
    
    
    20,000
    
    
    
    20,375Total Current Assets
    
    
    2,621,810
    
    
    
    2,689,004PROPERTY AND EQUIPMENT, NET
    
    
    4,060,057
    
    
    
    4,182,134Goodwill
    
    
    1,536,784
    
    
    
    1,536,784Other intangible assets, net
    
    
    417,500
    
    
    
    520,000Assets held for sale
    
    
    115,000
    
    
    
    115,000Other assets
    
    
    272,671
    
    
    
    258,815TOTAL ASSETS
    
    $
    9,023,822
    
    
    $
    9,301,737LIABILITIES AND SHAREHOLDERS DEFICIENCYCURRENT LIABILITIESBank overdraft
    
    $
    314,046
    
    
    $
    Accounts payable and accrued expenses
    
    
    2,430,118
    
    
    
    1,999,093Accrued interest payable
    
    
    221,391
    
    
    
    109,746Advances payable
    
    
    170,500
    
    
    
    286,000Reserve for contingent losses
    
    
    1,026,453
    
    
    
    1,052,709Deferred taxes
    
    
    68,000
    
    
    
    68,000Capital leases payable (current portion)
    
    
    
    
    
    
    55,063Credit line payable
    
    
    292,117
    
    
    
    Notes payable  related parties (current portion)
    
    
    3,964,810
    
    
    
    3,166,600Notes payable (current portion)
    
    
    128,666
    
    
    
    191,351Liabilities of discontinued operations
    
    
    397,884
    
    
    
    505,267Total Current Liabilities
    
    
    9,013,985
    
    
    
    7,433,829LONG-TERM DEBTNotes payable  related parties (non-current portion)
    
    
    
    
    
    
    1,033,210Notes payable (non-current portion)
    
    
    2,498,736
    
    
    
    2,498,277TOTAL LIABILITIES
    
    
    11,512,721
    
    
    
    10,965,316COMMITMENTS AND CONTINGENCIESSHAREHOLDERS DEFICIENCYCommon stock, $.001 par value, 100,000,000 shares
authorized, 11,287,620 and 11,058,262 shares issued
and outstanding, respectively
    
    
    11,288
    
    
    
    11,058Additional paid-in capital
    
    
    11,975,618
    
    
    
    11,895,848Accumulated deficit
    
    
    (14,415,805
    )
    
    
    (13,503,818
    )Deferred debt offering costs
    
    
    (60,000
    )
    
    
    (66,667
    )Total Shareholders Deficiency
    
    
    (2,488,899
    )
    
    
    (1,663,579
    )TOTAL LIABILITIES AND SHAREHOLDERS DEFICIENCY
    
    $
    9,023,822
    
    
    $
    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 OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002(UNAUDITED)

Three months endedSeptember 30, 2003
      
      September 30, 2002REVENUESFood
          and beverage sales
      
      $
      4,398,083
      
      
      $
      4,831,699Other
          revenues
      
      
      79,512
      
      
      
      105,326Total
          Revenues
      
      
      4,477,595
      
      
      
      4,937,025COST
          OF GOODS SOLD
      
      
      3,321,331
      
      
      
      3,606,431GROSS
          PROFIT
      
      
      1,156,264
      
      
      
      1,330,594OPERATING
          EXPENSESSelling,
          general and administrative expenses
      
      
      1,434,193
      
      
      
      1,344,008Depreciation
          and amortization
      
      
      103,615
      
      
      
      77,506Total
          Operating Expenses
      
      
      1,537,808
      
      
      
      1,421,514LOSS
          FROM OPERATIONS
      
      
      (381,544
      )
      
      
      (90,920
      )OTHER
          INCOME (EXPENSE)Other
          income (expense)
      
      
      1,272
      
      
      
      (34,508
      )Interest
          expense
      
      
      (156,730
      )
      
      
      (211,841
      )Total
          Other (Expense)
      
      
      (155,458
      )
      
      
      (246,349
      )LOSS
          FROM CONTINUING OPERATIONS
      
      
      (537,002
      )
      
      
      (337,269
      )INCOME
          (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES
      
      
      
      
      
      
      NET
          LOSS
      
      $
      (537,002
      )
      
      $
      (337,269
      )Net
          loss per common share:Basic
          and fully diluted from continuing operations
      
      $
      (0.05
      )
      
      $
      (0.01
      )Basic
          and fully diluted from discontinued operations
      
      
      
      
      
      
      Basic
          and fully diluted loss per share
      
      $
      (0.05
      )
      
      $
      (0.01
      )Weighted
          average of common shares:Basic
          and fully diluted
      
      
      11,095,965
      
      
      
      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 NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)

Nine months endedSeptember 30, 2003
      
      September 30, 2002REVENUESFood
          and beverage sales
      
      $
      12,639,052
      
      
      $
      15,816,768Other
          revenues
      
      
      287,640
      
      
      
      112,454Total
          Revenues
      
      
      12,926,692
      
      
      
      15,929,222COST
          OF GOODS SOLD
      
      
      9,543,659
      
      
      
      12,346,020GROSS
          PROFIT
      
      
      3,383,033
      
      
      
      3,583,202OPERATING
          EXPENSESSelling,
          general and administrative expenses
      
      
      4,088,028
      
      
      
      4,111,355Depreciation
          and amortization
      
      
      292,349
      
      
      
      232,519Total
          Operating Expenses
      
      
      4,380,377
      
      
      
      4,343,874LOSS
          FROM OPERATIONS
      
      
      (997,344
      )
      
      
      (760,672
      )OTHER
          INCOME (EXPENSE)Gain
          on discharges in bankruptcy
      
      
      352,457
      
      
      
      Other
          income
      
      
      43,848
      
      
      
      30,469Interest
          expense
      
      
      (418,331
      )
      
      
      (701,319
      )Total
          Other (Expense)
      
      
      (22,026
      )
      
      
      (670,850
      )LOSS
          FROM CONTINUING OPERATIONS
      
      
      (1,019,370
      )
      
      
      (1,431,522
      )INCOME
          (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES
      
      
      107,383
      
      
      
      (30,219
      )NET
          LOSS
      
      $
      (911,987
      )
      
      $
      (1,461,741
      )Net
          income (loss) per common share:Basic
          and fully diluted from continuing operations
      
      $
      (0.09
      )
      
      $
      (0.13
      )Basic
          and fully diluted from discontinued operations
      
      
      0.01
      
      
      
      Basic
          and fully diluted loss per share
      
      $
      (0.08
      )
      
      $
      (0.13
      )Weighted
          average of common shares:Basic
          and fully diluted
      
      
      11,095,965
      
      
      
      11,058,262


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

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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS
DEFICIENCYFOR THE NINE MONTHS ENDED SEPTEMBER 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
    )Common stock issued to Director and spouse
    
    
    229,358
    
    
    
    230
    
    
    
    79,770
    
    
    
    
    
    
    
    (80,000
    )
    
    
    Amortization of deferred debt offering costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86,667
    
    
    
    86,667Net loss during 2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (911,987
    )
    
    
    
    
    
    
    (911,987
    )BALANCE, SEPTEMBER 30, 2003 (UNAUDITED)
    
    
    11,287,620
    
    
    $
    11,288
    
    
    $
    11,975,618
    
    
    $
    (14,415,805
    )
    
    $
    (60,000
    )
    
    $
    (2,488,899
    )


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 CASH FLOWSFOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)

September 30,
      
      September 30,2003
      
      2002CASH
          FLOWS FROM OPERATING ACTIVITIES:Net
          loss from continuing operations
      
      $
      (1,019,370
      )
      
      $
      (1,431,522
      )Adjustments
          to reconcile net loss to net cash used in operating activities:Depreciation
          and amortization
      
      
      292,349
      
      
      
      232,519Gain
          on discharge in bankruptcy
      
      
      (352,457
      )
      
      
      Gain
          on plant closures
      
      
      (34,901
      )
      
      
      Bad
          debt expense
      
      
      27,000
      
      
      
      18,144Amortization
          of deferred debt offering costs
      
      
      86,667
      
      
      
      408,333Changes
          in operating assets and liabilities:Accounts
          receivable
      
      
      166,683
      
      
      
      (195,492
      )Prepaid
          expenses
      
      
      (117,873
      )
      
      
      (487
      )Inventory
      
      
      (183,437
      )
      
      
      (103,485
      )Other
          assets
      
      
      (13,900
      )
      
      
      (320,419
      )Accounts
          payable and accrued expenses
      
      
      770,398
      
      
      
      793,770Accrued
          interest payable
      
      
      111,645
      
      
      
      82,242Reserve
          for contingent losses
      
      
      (26,255
      )
      
      
      (200,655
      )Net
          Cash Used In Operating Activities
      
      
      (293,451
      )
      
      
      (717,052
      )CASH
          FLOWS FROM INVESTING ACTIVITIES:Purchase
          of property and equipment
      
      
      (72,535
      )
      
      
      (1,503,373
      )Proceeds
          from sale of property and equipment
      
      
      
      
      
      
      290,000Decrease
          in restricted cash
      
      
      
      
      
      
      700,000Net
          Cash Used In Investing Activities
      
      
      (72,535
      )
      
      
      (513,373
      )CASH
          FLOWS FROM FINANCING ACTIVITIES:Bank
          overdrafts
      
      
      346,603
      
      
      
      (40,438
      )Borrowings
          on credit line
      
      
      292,117
      
      
      
      Borrowings
          on notes payable
      
      
      56,426
      
      
      
      651,675Payments
          on notes payable
      
      
      (22,599
      )
      
      
      (610,194
      )Advance
          received
      
      
      
      
      
      
      181,000Payments
          on advances payable
      
      
      (115,500
      )
      
      
      (5,658
      )Proceeds
          from notes payable  related parties
      
      
      50,000
      
      
      
      483,048Payments
          on notes payable  related parties
      
      
      (285,000
      )
      
      
      (84,658
      )Net
          Cash Provided By Financing Activities
      
      
      322,047
      
      
      
      574,775NET
          DECREASE IN CASH DURING THE PERIOD FROM CONTINUING OPERATIONS
      
      
      (43,939
      )
      
      
      (655,650
      )NET
          CASH USED IN DISCONTINUED OPERATIONS
      
      
      
      
      
      
      (31,375
      )CASH
           BEGINNING OF PERIOD
      
      
      43,939
      
      
      
      687,025CASH
           END OF PERIOD
      
      $
      
      
      
      $
      SUPPLEMENTAL
          DISCLOSURE OF CASH FLOW INFORMATION:Interest
          paid during the period
      
      $
      220,019
      
      
      $
      151,376


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 SEPTEMBER 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 unaudited condensed 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

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

considered in the diluted earnings per share calculations because the effect
would have been anti-dilutive.

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 SEPTEMBER 30, 2003
(UNAUDITED)

Nine Months Ended September 30,(Unaudited)2003
    
    2002Net Loss from continuing
operations as reported
    
    $
    (1,019,370
    )
    
    $
    (1,431,522
    )Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related tax
effects
    
    
    
    
    
    
    Pro forma amount
    
    $
    (1,019,370
    )
    
    $
    (1,431,522
    )Basic net loss per common share from
continuing
operations:As reported
    
    $
    (0.09
    )
    
    $
    (0.13
    )Pro forma
    
    $
    (0.09
    )
    
    $
    (0.13
    )


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 nine months ended September
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.

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

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 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.

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

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 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 September 30,
2003 and December 31, 2002:

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

9/30/03
    
    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. The
maturity date of this note was extended
to March 2004 (see Note 8)
    
    $
    495,342
    
    
    $
    495,342$1,600,000 note payable to an investment
company (A) that matures in 2003 bearing
interest at 10%. The maturity date of
this note was extended to March 2004 (see
Note 8)
    
    
    1,600,000
    
    
    
    1,600,000$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
    
    
    
    


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

$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 nine months ended September 30, 2003
and 2002 was $226,828 and $209,832, respectively.

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 September 30, 2003, the Company has drawn $292,117
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 September 30,
2003 and

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

December 31, 2002:

9/30/03
    
    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
    
    $
    2,579,784
    
    
    $
    $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
    
    
    
    $22,618 note payable issued to the former
auditing firm of the Company as a conversion
of trade accounts payable in the same amount
The note bears interest at 5%, and is to be
paid off in successive principal payments of
$2,000 until fully repaid
    
    
    22,618
    
    
    
    $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
February 2003
    
    
    
    
    
    
    2,568,574$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
    
    
    2,627,402
    
    
    
    2,689,628Less current maturities
    
    
    (128,666
    )
    
    
    (191,351
    )Long term debt  unrelated parties
    
    $
    2,498,736
    
    
    $
    2,498,277


Interest expense on these notes for the nine months ended September 30, 2003
and 2002 was $104,836 and $83,154, respectively.

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

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 nine months ended September 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 accounts payable and accrued
expenses in the nine months ended September 30, 2003.

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

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

9/30/03
    
    9/30/02PROVIDED BY (USED IN) OPERATING ACTIVITIES:Accounts payable and accrued expenses discharged in
bankruptcy
    
    $
    144,558
    
    
    $
    Accrued expenses payable discharged in bankruptcy
    
    
    31,782Amounts written off as part of Agreement to Transfer
Assets and Liabilities Between the Company and
Cannon-Pack Enterprises, Inc.: (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
    
    
    $
    


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

PROVIDED BY (USED IN) INVESTING ACTIVITIES:Acquisition of property and equipment
    
    $
    
    
    
    $
    (1,973,325
    )Amounts written off as part of the Agreement to
Transfer Assets and Liabilities Between the Company and
Cannon-Pack Enterprises, Inc.: (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
    
    
    
    
    
    
    1,973,325Additional notes payable for capitalized interest
    
    
    
    
    
    
    100,000Additional interest expense for change in warrant
exercise price
    
    
    
    
    
    
    100,000Payoff 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. (see Note 10)
    
    
    25,000
    
    
    
    Common stock issued to a Director as part of the E&E
Agreement (see Note 7)
    
    
    80,000
    
    
    
    Additional interest expense related to common stock
issued to a Director (see Note 7)
    
    
    (80,000
    )
    
    
    $
    201,117
    
    
    $
    2,173,325SUMMARY OF CHANGES IN CASH FLOWS OF DISCONTINUED OPERATIONS:
    
    
    9/30/03
    
    
    
    9/30/02NET CASH USED IN OPERATING ACTIVITIES
    
    $
    
    
    
    $
    (30,625
    )NET CASH USED IN INVESTING ACTIVITIES
    
    
    
    
    
    
    NET CASH USED IN FINANCING ACTIVITIES
    
    
    
    
    
    
    (750
    )NET CASH USED IN DISCONTINUED OPERATIONS
    
    $
    
    
    
    $
    (31,375
    )


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

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

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
    
    Nine Months
    
    Three Months
    
    Nine MonthsEnded
    
    Ended
    
    Ended
    
    Ended9/30/03
    
    9/30/03
    
    9/30/02
    
    9/30/02Gross SalesFood service
    
    $
    4,323,725
    
    
    $
    12,303,309
    
    
    $
    4,577,437
    
    
    $
    15,052,862Food processing
    
    
    84,864
    
    
    
    462,798
    
    
    
    299,851
    
    
    
    713,009Corporate
    
    
    69,006
    
    
    
    160,585
    
    
    
    59,737
    
    
    
    163,351Total gross sales
    
    $
    4,477,595
    
    
    $
    12,926,692
    
    
    $
    4,937,025
    
    
    $
    15,929,222Gross ProfitFood service
    
    $
    1,055,455
    
    
    $
    3,101,392
    
    
    $
    1,162,721
    
    
    $
    3,238,432Food processing
    
    
    31,803
    
    
    
    121,056
    
    
    
    108,136
    
    
    
    181,419Corporate
    
    
    69,006
    
    
    
    160,585
    
    
    
    59,737
    
    
    
    163,351Total gross profit
    
    $
    1,156,264
    
    
    $
    3,383,033
    
    
    $
    1,330,594
    
    
    $
    3,583,202Income (loss) from operationsFood service
    
    $
    (14,421
    )
    
    $
    (17,399
    )
    
    $
    128,383
    
    
    $
    186,865Food processing
    
    
    (79,683
    )
    
    
    (164,304
    )
    
    
    (42,098
    )
    
    
    (82,656
    )Corporate
    
    
    (287,440
    )
    
    
    (815,641
    )
    
    
    (177,205
    )
    
    
    (864,881
    )Total loss from operations
    
    $
    (381,544
    )
    
    $
    (997,344
    )
    
    $
    (90,920
    )
    
    $
    (760,672
    )DepreciationFood service
    
    $
    43,910
    
    
    $
    128,741
    
    
    $
    24,664
    
    
    $
    71,351Food processing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,642Corporate
    
    
    27,205
    
    
    
    61,108
    
    
    
    20,342
    
    
    
    61,026Total
    
    $
    71,115
    
    
    $
    189,849
    
    
    $
    45,006
    
    
    $
    135,019


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

InterestFood service
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Food processing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    156,730
    
    
    
    418,331
    
    
    
    211,841
    
    
    
    701,319Total
    
    $
    156,730
    
    
    $
    418,331
    
    
    $
    211,841
    
    
    $
    701,319Total Assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12/31/02Food service
    
    
    
    
    
    $
    3,165,228
    
    
    
    
    
    
    $
    3,212,405Food processing
    
    
    
    
    
    
    171,770
    
    
    
    
    
    
    
    186,047Corporate
    
    
    
    
    
    
    5,686,824
    
    
    
    
    
    
    
    5,903,285Total
    
    
    
    
    
    $
    9,023,822
    
    
    
    
    
    
    $
    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 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

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

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 issued 229,358
common shares to the Shareholder, and agreed 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. To reflect the benefit to the Company of the successful
execution of this agreement, the Company recorded $80,000 of deferred debt
offering costs related to the issuance of the 229,358 common shares. These
costs were recognized to reflect a reasonable interest charge the Company
constructively incurred in return for the Shareholder deferring his right to
the aggregate amount of the Put Right, or $2,000,000. The Company calculated
interest at 12% per annum amortizable over a four month period, and included
$20,000 of amortization in interest expense for the nine months ended September
30, 2003.

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 retains the Put Right exercisable on or after November 1, 2003,
and as of the date of this filing, the Shareholder has agreed to extend the
Expiration Date to March 31, 2004 as a result of the Company tendering a
$289,000 payment for principal and interest on notes payable (see Note 8).
Though the Shareholder has not exercised the Put Right to date, the pro forma
effect of an exercise of the Put Right on the Companys September 30, 2003
financial statements would be as follows:

9/30/03TOTAL ASSETS AS REPORTED
    
    $
    9,023,822effect of exercise of Put Right on total assets
    
    
    PRO FORMA TOTAL ASSETS
    
    
    
    
    
    $
    9,023,822TOTAL LIABILITIES AS REPORTED
    
    $
    11,512,721effect of exercise of Put Right on total liabilities
    
    
    2,000,000PRO FORMA TOTAL LIABILITIES
    
    
    
    
    
    $
    13,512,721TOTAL SHAREHOLDERS DEFICIENCY AS REPORTED
    
    
    (2,488,899
    )effect of exercise of Put Right on shareholders deficiency
    
    
    (2,000,000
    )PRO FORMA TOTAL SHAREHOLDERS DEFICIENCY
    
    
    
    
    
    
    (4,488,899
    )PRO FORMA TOTAL LIABILITIES AND SHAREHOLDERS DEFICIENCY
    
    
    
    
    
    $
    9,023,822


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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAS OF SEPTEMBER 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 the
Company entered into a settlement agreement wherein the Company agreed to pay
to

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

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. As of
the date of this filing, FACTOR D has filed a voluntary dismissal, without
prejudice, with respect to the remainder of the claim, $63,022.

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 filing, 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 SEPTEMBER 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 filing, 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 was due in September 2003.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In November 2003, the Company borrowed $289,000 pursuant to a non-secured
promissory note to be used to fund a principal and interest payment on a
note payable to a Director of the Company and his spouse. The note
accrues interest at 10% per annum, and is due in March 2004.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As discussed in Note 9, the Company entered into an agreement to convert
certain notes payable due to a related investment company. This agreement was
amended in November 2003, with the original expiration date being extended to
March 31, 2004. Additionally, the Company extended the maturity date on
certain notes payable due to this investment company (see Note 2). Certain
other notes payable to this party fell into default on October 1, 2003, and the
Company is undergoing negotiations to extend and reschedule the maturity dates
of these notes as of the date of this filing.

In January through September 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

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

Exchange Agreement with this Director and his spouse to effect a remedy to
certain provisions of the Agreement and Plan of Merger between them and the
Company (see Note 7). As a result of this agreement, the Company issued
229,358 shares to this Director and his spouse, and recorded $80,000 in
deferred debt offering costs. The Company included $20,000 of amortization of these
costs in interest expense for the nine months ended September 30, 2003. In
November 2003, the Company tendered a $289,000 principal and interest payment
on a $1,266,420 note payable issued to this Director and his spouse as part of
acquiring the common stock of certain wholly owned subsidiaries (see Note 2).

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 principles,
which contemplate the continuation of the Company as a going concern. As of
September 30, 2003, the Company had a shareholders deficiency of $2,488,899, a
working capital deficiency of $6,392,175, incurred net losses from continuing
operations of $1,019,370 and had net cash outflows from operating activities of
$293,451 for the nine 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 be met by March 31, 2004.

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- Relocation of Discontinued Asheville, North Carolina Operations to
Jasonville, Indiana

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

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 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 nine
months ended September 30, 2003.

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. All restaurant operations are considered to be
discontinued operations, and 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:

9/30/03
    
    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


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

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 nine months ended September 30, 2003.

Note 12- Subsequent Events

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).

Extension of Certain Agreements with Related Parties:In November 2003, the
Company entered into an agreement with a related investment company to extend
the maturity dates of notes payable and a debt conversion agreement (see Note
8). Additionally, the Company entered into an agreement with a Director of the
Company and his spouse to extend certain dates relating to the Shareholder Put
Right as discussed in Note 7.

Loss of a Significant Customer:In November 2003, the Company was notified by
a significant customer that a supply agreement, whereby the Company distributed
produce to 11 franchise restaurants, would not be renewed. Under this
agreement, the Company recognized approximately $832,000 in revenues during
2003, and management estimates these revenues represent approximately 9% of
gross profit generated through the nine month period ended September 30, 2003.
As of the date of this filing, the Company does not foresee the resumption of
this supply agreement, and has undertaken a review of its operations to
determine the

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

appropriate remedial steps to mitigate the effect this loss in revenues and
gross margins will have on its operations.

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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 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

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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 SEPTEMBER 30,
2003 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2002:

Consolidated sales, gross profit and net loss:

Consolidated sales decreased approximately $460,000 for the three month
period ended September 30, 2003 compared to the same period ended September 30,
2002, reflecting the impact of the loss of an important customer in the Food
Service segment as well as the brief suspension of operations in the Food
Processing segment while operations were being transferred from Asheville,
North Carolina to Jasonville, Indiana. This revenue decrease directly impacted
gross margins, which were approximately $174,000 less in the three month period
ended September 30, 2003 than they were in the same period ended September 30,
2002. The combination of this loss in gross margin and an increase in
operating expenses of approximately $116,000, due primarily to increased
expenses related to concluding the audit of the Companys financial statements
and legal fees related to the preparation of the Companys December 31, 2002
Form 10-KSB, led to the loss from operations increasing by approximately
$290,000 in the three months ended September 30, 2003 over the same period
ended September 30, 2002. This increased loss was mitigated by a reduction in
interest expense of approximately $55,000, and a decline of other expenses of
approximately $35,000 in the three months ended September 30, 2003 compared to
the same period ended September 30, 2002. These mitigating factors resulted in
the loss from continuing operations, as well as net loss, increasing $200,000
in the three months ended September 30, 2003 compared to the same period ended
September 30, 2002.

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The decrease in interest expense primarily relates to the amortization of
deferred debt offering costs which were $36,667 and $108,333, respectively, for
the three months ended September 30, 2003 and 2002.

II. CONSOLIDATED RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2003 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2002:

Consolidated sales, gross profit and net loss:

Consolidated sales for the nine months ended September 30, 2003 decreased
approximately $3,000,000 from the nine month period ended September 30, 2002.
The source of the majority of the decline was the Food Service segments loss
of a customer that underwent a process of streamlining its supply chain,
eliminating the need for many independent distributors. Management believes
this loss was not related to the quality of services being provided to this
customer, and is seeking suitable replacements as well as expanding the
existing customer base. An additional source of the decline is related to the
temporary suspension of the Food Processing operations in Asheville, North
Carolina. The facility these operations were transferred to was not fully
functional until late in August 2003, resulting in a loss of nearly two months
production.

Gross profit experienced a slight decline for the nine months ended
September 30, 2003 versus September 30, 2002, indicating that the revenue loss
discussed above had a negative impact on the operations of the Company. While
management is concerned about this revenue loss, it is also concerned about the
pricing pressure in the Food Service industry as a whole. Management is aware
that its flexibility in pricing is limited at the present time, and it will
concentrate its efforts on streamlining purchasing functions to the extent
possible, and focus on monitoring the operating expenses of the Company.

Operating expenses, which include selling, general and administrative
expenses and depreciation and amortization, increased slightly in the nine
months ended September 30, 2003 when compared to the same period ended
September 30, 2002. The major components comprising these expenses and, more
importantly, those which management feels it can exercise a degree of control
over in future periods, are payroll, professional fees (legal and accounting),
rent, repairs and maintenance and corporate franchise taxes. Taken together,
these expenses approximated $2,800,000 and $2,870,000, respectively, of the
total selling, general and administrative expenses for the periods ended
September 30, 2003 and 2002. While management believes the slight decline is
notable, it anticipates these expenses will decline in future periods as less
reliance is placed on outside legal and professional firms, and intends to
reduce the Companys exposure to corporate franchise taxes by restructuring the
capital structure of two of its wholly owned subsidiaries. Any decline in
these and other selling, general and administrative expenses the Company may
benefit from will help buttress the effect of declining

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or flat gross margin growth the Company may experience as a result of
pricing pressure and its competitive position in the Food Service and Food
Processing markets.

The increased loss in operations for the nine month period ended
September 30, 2003 from the same period ended September 30, 2002 is reflective
of the impact on declining gross margin levels. While operating expenses
remained largely consistent when comparing these periods, the decline in gross
margins, as discussed above, led directly to the Company generating
approximately $237,000 in additional losses from operations for the nine months
ended September 30, 2003 compared to the same period ended September 30, 2002.
These incremental losses from operations have been offset by gain on discharges
in bankruptcy of approximately $352,000 and a decrease in interest expense of
approximately $283,000 due to reduced amortization of deferred amortization
costs in the nine months ended September 30, 2003 versus the nine months ended
September 30, 2002. These mitigating factors resulted in the loss from
continuing operations decreasing approximately $412,000 in the nine months
ended September 30, 2003 compared to the same period ended September 30, 2002,
with the net loss for these periods decreasing approximately $550,000 when
including results from discontinued operations.

III. SEGMENT RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2003 COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2002.

Three Months Results for the Wholesale Foodservice Segment

Sales for the quarters ended September 30, 2003 and 2002 were $4,323,725
and $4,577,437, respectively. Gross profits for the quarters ended September
30, 2003 and 2002 were $1,055,455 and $1,162,721, respectively. For the
aforementioned quarter periods, gross profits represented approximately 25%,
and 26% 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 quarters ended September 30, 2003 and 2002 were
$1,069,879 and $1,034,338, respectively, generating loss from operations of
$14,421 for the quarter ended September 30, 2003 and income from operations of
$128,383 for the quarter ended September 30, 2002.

Nine Months Results for the Wholesale Foodservice Segment

Sales for the nine months ended September 30, 2003 and 2002 were
$12,303,309 and $15,052,862, respectively. Gross profits for the nine months
ended September 30, 2003 and 2002 were $3,101,392 and $3,238,432, respectively.
For the aforementioned nine month periods, gross profits represented
approximately 26%, and 22% 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 nine months ended September 30, 2003
and 2002 were $3,118,791 and $3,051,567, respectively, generating a loss from
operations of $17,399 for the nine months ended

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September 30, 2003 and income from operations of $186,865 for the nine
months ended September 30, 2002.

During the fourth quarter of calendar 2003, the Beasley Operation was notified
by Wendys International (Wendys) that its supply agreement for produce
would not be renewed. The event was initiated by Wendys as part of a
corporate decision to no longer utilize the services of independent
distributors, such as the Beasley Operation. The Beasley Operation services
approximately 11 Wendys restaurants with both general products as well as the
produce portion, which will no longer be required by Wendys. While Wendys
future procurement policy may change, as of the date of this filing, the
Beasley Operation does not foresee resumption of supplying produce to the
Wendys restaurants it previously served.

Revenue generated in calendar year 2003 from the sale of produce products to
the Wendys restaurants accounted for approximately 5% of total Beasley
Operation revenues on an annualized basis. The loss of the Wendys produce
business, on an annualized basis, will amount to approximately $832,000 of
revenues and represent a loss of gross margin contribution of approximately
$302,000 annually.

Three Months Results for the Food Processing Segment

Sales for Momentum for the quarters ended September 30, 2003 and 2002 were
$84,864 and $299,851, respectively. Gross profits for the quarters ended
September 30, 2003 and 2002 were $31,803 and $108,136, respectively. For the
aforementioned quarter period, gross profits represented approximately 38%, and
36% of sales, respectively. Operating expenses for Momentum for the quarters
ended September 30, 2003 and 2002 were $111,486 and $150,234, respectively,
generating a loss from operations of $79,683 for the quarter ended September
30, 2003 and a loss from operations of $42,098 for the quarter ended September
30, 2002.

Nine Months Results for the Food Processing Segment

Sales for Momentum for the nine months ended September 30, 2003 and 2002
were $462,798 and $713,009, respectively. Gross profits for the nine months
ended September 30, 2003 and 2002 were $121,056 and $181,419, respectively.
For the aforementioned nine months period, gross profits represented
approximately 27%, and 26% of sales respectively. Operating expenses for
Momentum for the nine months ended September 30, 2003 and 2002 were $285,360
and $264,075, respectively, generating a loss from operations of $164,304 for
the nine months ended September 30, 2003 and a loss from operations of $82,656
for the nine months ended September 30, 2002.

Based on the operating results, current management is determining whether
to continue the Companys Momentum operation and its Food Processing Segment.
Legacy supply contracts

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which are unprofitable, fixed costs associated with legacy facilities
inherited from predecessor management, coupled with revenues which 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.

Three Months Results for the Corporate Segment

Corporate segments loss from operations for the quarters ended September
30, 2003 and September 30, 2002 were $287,440 and $177,205. Of the $287,440
loss from operations for the quarter ended September 30, 2003, approximately
$172,000 was attributable to costs incurred with the restructuring activities
of current management, comprised principally of legal and accounting services
addressing principally the audit and filing requirements with the U.S.
Securities & Exchange Commission.

Nine Months Results for the Corporate Segment

Corporate segments loss from operations decreased by $49,240 to $815,641
for the nine months ended September 30, 2003 from $864,881 for the nine months
ended September 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 $815,641 loss from operations for the nine months
ended September 30, 2003, included therein were approximately $407,268 of costs
incurred with the restructuring activities of current management, which were
comprised principally of legal and accounting services associated with the
settlement of litigation, audit, and filing requirements with the U.S.
Securities & Exchange Commission.

IV. LIQUIDITY AND CAPITAL RESOURCES:

Based upon the ratio of current assets to current liabilities, as of
September 30, 2003, the Company had a working capital deficit of $6,392,175.
Of this amount, $3,964,810 is classified as a current liability and owing to
parties related to the Company. Additionally, $1,026,453 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 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

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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 September 30, 2003 of $2,450,941 to
address $3,556,838 of bank overdrafts, accounts payable and accrued expenses,
accrued interest payable, short term borrowings 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 September
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.

Towards this end, with the conclusion of the Company program to gain
compliance pursuant to its reporting requirements with the U.S. Securities &
Exchange Commission, and the settlement of the remaining instances of
litigation lodged against the Company, the Company should realize a material
reduction of its corporate expenses. As previously disclosed, during the nine
month period ended September 30, 2003, the Company incurred expenses
approximating $407,000 which were directly related to accounting and legal
services to address: 1) completing the audit of the Companys books and records
for calendar years ended December 31, 2002 and 2001, including the restatement
of its financial results for calendar year 2000, as well as the review of the
quarterly interim reports for calendar 2003; 2) settlement of numerous lawsuits
filed against the Company; and 3) legal preparation and review of the Companys
Form 10-KSB and 10-QSB for the periods previously addressed.

The Companys management continues to determine whether to discontinue its
Food Processing Segment, a legacy operation inherited from the Companys prior
management, and terminate its operations which lost approximately $164,000
through the nine months ended September 30, 2003. Should this decision be made
and implemented, it will further reduce on-going working capital requirements.

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. Effective November 25, 2003

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the parties to the Debt Conversion Agreement amended the agreement to
provide for (1) an extension of time to allow the Company to raise the
$1,000,000 of new equity working capital until March 31, 2004, (2) an extension
of the warrant exercise term associated with issued warrants to purchase the
aggregate of 2,500,000 share of the Companys common stock from December 31,
2003 until March 31, 2004, and (3) an extension of the maturity dates on the
$2,100,000 notes payable until March 31, 2004. If current management is
successful in effecting the conversion of the $2,100,000 of debt in this
instance, the Company will realize a savings in interest expense of
approximately $200,000 per annum

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. Effective November 21, 2003, the parties to
the Extension and Exchange Agreement amended the agreement to provide for an
extension of the Put Period until March 31, 2004 upon receipt of principal and
interest payments in the aggregate of $289,000 due pursuant to the $1,266,420
Promissory Note issued to the related party. An investment company related to
the Company provided said funds through a short term borrowing, allowing the
Company to remit payment of the $289,000 confirming the amendment as earlier
described.

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
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 in conjunction with its efforts to regain market share and
related growth in cash flow from its Food Service segment.

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

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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 any and all shares of the Companys 58,253 shares of 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.

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 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

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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 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

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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 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

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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.

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

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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.







PART II  OTHER INFORMATION







Item 2. Changes in Securities

Pursuant to and in reliance on the exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended, Regulation D, and other
applicable exemptions, on August 29, 2003, the Company agreed to issue 229,358
shares of its common stock to Charles Beasley and Marjorie Beasley pursuant to
an Extension and Exchange Agreement entered into then between the Company and
Charles Beasley and Marjorie Beasley. The shares were issued as part of the
consideration to the Beasleys for agreeing to modify the terms of certain debt
obligations due to them from the Company.

Pursuant to and in reliance on the exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended, Regulation D, and other
applicable exemptions, on August 31, 2003, the Company issued a warrant to
purchase 25,000 shares of its common stock to Hagerty & Associates for services
rendered to the Company under a consulting agreement. The per share warrant
exercise price is $0.25, which is due to expire on August 31, 2006.







Item 3. Defaults Upon Senior Securities

The Company is currently in default on certain notes payable due to Fidra
Holdings, Ltd., in the aggregate of approximately $190,572 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 *
      
      DueFidra
          Holdings, Ltd.
      
      
      8/31/2002
      
      
      
      9/30/2003
      
      
      
      98,048
      
      
      
      
      
      
      
      15,524
      
      
      
      113,572Fidra
          Holdings, Ltd.
      
      
      12/31/2002
      
      
      
      9/30/2003
      
      
      
      20,000
      
      
      
      
      
      
      
      2,500
      
      
      
      22,500Fidra Holdings, Ltd.
      
      
      8/31/2003
      
      
      not amended
      
      
      50,000
      
      
      
      
      
      
      
      4,500
      
      
      
      54,500TOTALS
      
      
      
      
      
      
      
      
      
      $
      168,048
      
      
      $
      
      
      
      $
      22,524
      
      
      $
      190,572


* Calculated through November 30, 2003

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Item 5. Other Information

In November, the Company entered into certain amendments and extension
agreements modifying existing rights and obligations, all as described in the
Financial Statements in Part I, Item 1, Note 8, Related Party Transactions, the
text of which is incorporated into this Item 5 by this reference.







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
    
    DescriptionNo.4.1
    
    Warrant Agreement between
the Company and Thomas P.
Tanis, Jr.; 02-003, dated
August 31, 2003, effective
March 6, 2002, for 246,796
common stock warrants
    
    Incorporated by reference
as Exhibit No. 4.4 from the
Companys 10-KSB for the
calendar years ended
December 31, 2001 and
December 31, 2002, filed
October 14, 20034.2
    
    Warrant Agreement between
the Company and Hagerty &
Associates; 03-008, dated
August 31, 2003, for 25,000
common stock warrants
    
    Incorporated by reference
as Exhibit No. 4.14 from
the Companys 10-KSB for
the calendar years ended
December 31, 2001 and
December 31, 2002, filed
October 14, 200310.1
    
    Debt Conversion Agreement
between the Company and
Chan Capital, Ltd. and
Fidra Holdings, Ltd., dated
August 25, 2003
    
    Incorporated by reference
as Exhibit No. 10.75 from
the Companys 10-KSB for
the calendar years ended
December 31, 2001 and
December 31, 2002, filed
October 14, 200310.2
    
    Notice of Exercise of Put
Right by Charles A. and
Marjorie A. Beasley to the
Company, dated July 8, 2003
    
    Incorporated by reference
as Exhibit No. 10.76 from
the Companys 10-KSB for
the calendar years ended
December 31, 2001 and
December 31, 2002, filed
October 14, 200310.3
    
    Extension and Exchange
Agreement between the
Company and Charles A. and
Marjorie A. Beasley, dated
August 29, 2003
    
    Incorporated by reference
as Exhibit No. 10.77 from
the Companys 10-KSB for
the calendar years ended
December 31, 2001 and
December 31, 2002, filed
October 14, 2003


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10.4
    
    Property Lease Agreement
between Momentum Food
Services, Inc. and Charles
A. Beasley for the
Jasonville property, dated
July 1, 2003
    
    Incorporated by reference
as Exhibit No. 10.78 from
the Companys 10-KSB for
the calendar years ended
December 31, 2001 and
December 31, 2002, filed
October 14, 200310.5
    
    Promissory Note between the
Company and Proskauer Rose
LLP, dated August 15, 2003
for $200,000 due August 14,
2004
    
    Incorporated by reference
as Exhibit No. 10.26 from
the Companys 10-QSB for
the quarter ended March 31,
2003, filed November 17,
200310.6
    
    Promissory Note between the
Company and Robert Klezmer,
dated November 12, 2003 for
$32,000 due September 26,
2004
    
    Incorporated by reference
as Exhibit No. 10.10 from
the Companys 10-QSB for
the quarter ended June 30,
2003, filed December 1,
200310.7
    
    Promissory Note between the
Company and Fidra Holdings,
Ltd., dated November 24,
2003 for $289,000 due March
31, 2004
    
    Filed herewith10.8
    
    Amendment to Extension and
Exchange Agreement dated
November 20, 2003
    
    Filed herewith10.9
    
    Amendment to Debt
Conversion Agreement dated
November 25, 2003
    
    Filed herewith31.1
    
    Certification under Rule
13a-14(a) of Thomas P.
Tanis, Jr., President and
Chief Executive Officer
    
    Filed herewith31.2
    
    Certification under Rule
13a-14(a) of Barry L.
Nogay, Vice President and
Principal Accounting
Officer
    
    Filed herewith32.0
    
    Joint Certification under
Rule 13a-14(b) of Thomas P.
Tanis, Jr. and Barry L.
Nogay
    
    Filed herewith


(b) Reports on Form 8-K

None

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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
    
    December 12, 2003.Thomas P. Tanis, Jr./s/ Barry L. NogayBarry L. Nogay
    
    Vice President and Principal Accounting Officer
    
    December 12, 2003.


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