UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION




-
      3rd
      Quarter 2008 -




FORM
      10-Q




x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934




For
                the quarterly period ended September 30, 2008




 ̈
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT




For
                the transition period from _______________ to
                ____________________


Commission
                File Number: 000-21247




B
&
D
      FOOD CORP.




(Exact
      Name of Small Business Issuer as Specified in Its Charter)




Delaware
            
            13-2622429(State
                or Other Jurisdiction
              of
                Incorporation or Organization)
            
            (IRS
                Employer
              Identification
                No.)


575
      Madison Avenue


Ste
      1006


New
      York,
      New York 10022-257


(Address
      of Principal Executive Offices)




(212)
      937-8456


(Registrant’s
      Telephone Number)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 12 months (or for such shorter period that the registrant
      as required to file such reports) and (2) has been subject to such filing
      requirements for the past 90 days.


YES x NO  ̈




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes  ̈ No x




As
      of
      September 30, 2008, there were 154,986,955 shares of Common Stock, par value
      $0.001 per share issued and outstanding.




Small
      Company Disclosure (check
      one):    Yes x No  ̈










**TABLE
      OF CONTENTS**




**Page****PART
                I**Item
                1.
            Financial
                Statements
            1-11Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            12-18Item
                3.
            Quantitative
                and Qualitative Disclosures About Market RiskItem
                4.
            Controls
                and Procedures
            19**PART
                II**Item
                1.
            Legal
                Proceedings
            20Item
                1A.
            Risk
                Factors
            20Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            20Item
                3.
            Defaults
                Upon Senior Securities
            20Item
                4.
            Submission
                of Matters to a Vote of Securities Holders
            20Item
                5.
            Other
                Information
            20Item
                6.
            Exhibits
            22




i




PART
      I.
      FINANCIAL INFORMATION




ITEM
      1.
      FINANCIAL STATEMENTS




B
&
D
      FOOD, CORP.




(a
      Delaware corporation)









INTERIM
      CONSOLIDATED FINANCIAL




REPORTS
      (UNAUDITED)




AS
      AT




SEPTEMBER 30,
      2008













**B&D
      FOOD CORP. AND SUBSIDIARY**


**CONSOLIDATED
      FINANCIAL STATEMENTS**


**September
      30, 2008**




ii




**B&D
      FOOD CORP. AND SUBSIDIARY**


**September
      30 , 2008**


**CONTENTS**




Page**CONSOLIDATED
                FINANCIAL STATEMENTS**Consolidated
                Balance Sheets as at September 30, 2008 and December 31,
                2007
            1
                -
                2Consolidated
                Statements of Operations and Comprehensive Income for the Three and
                Nine
                Months Ended September 30, 2008
            3-4Consolidated
                Statements of Cash Flows for theNine Months Ended September 30,
                2008
            5Notes
                to the Consolidated Financial Statements
            6
                -
                11


iii




**B&D
      FOOD CORP. AND SUBSIDIARY**


**CONSOLIDATED
      BALANCE SHEETS**


**AS
      AT**


**(Expressed
      in United States Dollars)**





**Note**
            
            **Sept 30, 2008**
              **(Unaudited)**
            
            **Dec 31, 2007**
              **(Audited)****ASSETS****Current
                Assets**Cash
                and cash equivalents
            
            
            
            
            $
            -
            
            $
            3,175Accounts
                receivable - trade, net of allowance for doubtful accounts of $Nil
                (2007 -
                $47,787)
            
            
            
            
            
            -
            
            
            19,213Prepaid
                and sundry assets
            
            
            
            
            
            12,385
            
            
            5,189Advances
                to related party
            
            
            
            
            
            442,800
            
            
            -**Total
                Current Assets**
            
            
            
            
            
            455,185
            
            
            27,577**Long-Term
                Assets**Note
                receivable
            
            
            
            
            
            5,765,347
            
            
            -Property,
                plant and equipment, net
            
            
            5
            
            
            2,017
            
            
            1,719,723**Total
                Long-Term Assets**
            
            
            
            
            
            5,767,364
            
            
            1,719,723**Total
                Assets**
            
            
            
            
            $
            6,222,549
            
            $
            1,747,300


The
        accompanying notes are an integral part of these consolidated financial
        statements.


1




**B&D
      FOOD CORP. AND SUBSIDIARY**


**CONSOLIDATED
      BALANCE SHEETS (Continued)**


**AS
      AT SEPTEMBER 30**


**(Expressed
      in United States Dollars)**





**Note**
            
            **Sept 30, 2008**
              **(Unaudited)**
            
            **Dec 31, 2007**
              **(Audited)****LIABILITIES
                AND STOCKHOLDERS' EQUITY****Current
                Liabilities**Bank
                loans
            
            
            
            
            $
            669
            
            $
            1,380,572Accounts
                payable
            
            
            7
            
            
            378,948
            
            
            611,689Accrued
                liabilities and other payables
            
            
            8
            
            
            1,896,333
            
            
            5,198,371Long-term
                debt - current portion
            
            
            9
            
            
            -
            
            
            1,213,938Convertible
                debentures - current portion
            
            
            10
            
            
            2,171,906
            
            
            11,472,557**Total
                Current Liabilities**
            
            
            
            
            
            4,447,856
            
            
            19,877,127**Long-Term
                Liabilities**Allowance
                for severance pay
            
            
            
            
            
            -
            
            
            144,582Long-term
                debt
            
            
            9
            
            
            -
            
            
            32,453Convertible
                debentures
            
            
            10
            
            
            1,612,538
            
            
            1,023,474**Total
                Long-Term Liabilities**
            
            
            
            
            
            1,612,538
            
            
            1,200,509**Total
                Liabilities**
            
            
            
            
            
            6,060394
            
            
            21,077,636**Stockholders'
                Deficit**Preferred
                shares of $ 0.001 par value; Authorized: 10,000,000 shares; Issued
                and
                outstanding: 3,735,956 shares
            
            
            
            
            
            373,596
            
            
            -Additional
                paid-in capital - preferred shares
            
            
            
            
            
            14,570,228
            
            
            -Common
                shares of $ 0.001 par value; Authorized: 400,000,000 shares; Issued
                and
                outstanding: 148,986,955 shares
            
            
            
            
            
            148,987
            
            
            148,987Additional
                paid-in capital - common shares
            
            
            
            
            
            2,682,769
            
            
            2,682,769Accumulated
                other comprehensive loss
            
            
            
            
            
            -
            
            
            (379,635
            )Accumulated
                deficit
            
            
            
            
            
            (17,613,425
            )
            
            (21,782,457
            )**Total
                Stockholders' Deficit**
            
            
            
            
            
            162,155
            
            
            (19,330,336
            )**Total
                Liabilities and Stockholders' Deficit**
            
            
            
            
            $
            6,222,549
            
            $
            1,747,300


The
        accompanying notes are an integral part of these consolidated financial
        statements.


2




**B&D
      FOOD CORP. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF LOSS AND COMPREHENSIVE LOSS**


**FOR
      THE THREE MONTH PERIOD ENDED SEPTEMBER 30**


**(Expressed
      in United States Dollars)**


**(Unaudited)**





**2008**
            
            **2007****REVENUES**
            
            $
            -
            
            $
            -**COST
                OF GOODS SOLD**
            
            
            -
            
            
            40,609**GROSS
                LOSS**
            
            
            -
            
            
            (40,609
            )**EXPENSES**Management
                and directors fees
            
            
            4,095,268
            
            
            -General
                and administrative
            
            
            216,386
            
            
            411,280Depreciation
            
            
            164
            
            
            -**TOTAL
                OPERATING EXPENSES**
            
            
            4,311,818
            
            
            525,887**LOSS
                FROM OPERATIONS**
            
            
            (4,311,818
            )
            
            (566,496
            )Financial
            
            
            (276,166
            )
            
            (263,293
            )Other
                income, net
            
            
            -
            
            
            (10,991
            )Gain
                on sale of subsidiary interests
            
            
            11,969,386
            
            
            -**INCOME
                (LOSS) BEFORE TAXES**
            
            
            7,381,402
            
            
            (840,780
            )Taxes
            
            
            -
            
            
            -**NET
                INCOME (LOSS)**
            
            $
            7,381,402
            
            $
            (840,780
            )**FOREIGN
                CURRENCY TRANSLATION ADJUSTMENT**
            
            
            -
            
            
            (239,571
            )**COMPREHENSIVE
                INCOME (LOSS)**
            
            $
            7,381,402
            
            $
            (965,744
            )**EARNINGS
                (LOSS) PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND
                DILUTED**
            
            $
            0.05
            
            $
            (0.01
            )**WEIGHTED
                AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND
                DILUTED**
            
            
            148,986,955
            
            
            140,943,478


The
        accompanying notes are an integral part of these consolidated financial
        statements.




3




**B&D
      FOOD CORP. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF LOSS AND COMPREHENSIVE LOSS**


**FOR
      THE NINE MONTH PERIOD ENDED SEPTEMBER 30**


**(Expressed
      in United States Dollars)**


**(Unaudited)**





**2008**
            
            **2007****REVENUES**
            
            $
            -
            
            $
            75,005**COST
                OF GOODS SOLD**
            
            
            80,824
            
            
            571,298**GROSS
                LOSS**
            
            
            (80,824
            )
            
            (496,293
            )**EXPENSES**Management
                and directors fees
            
            
            4,427,260
            
            
            -General
                and administrative
            
            
            762,719
            
            
            978,036Amortization
            
            
            68,570
            
            
            114,607**TOTAL
                OPERATING EXPENSES**
            
            
            5,258,549
            
            
            1,663,941**LOSS
                FROM OPERATIONS**
            
            
            (5,339,373
            )
            
            (1,588,936
            )Financial
            
            
            (2,505,128
            )
            
            (1,024,826
            )Other
                income, net
            
            
            44,146
            
            
            (50,611
            )Gain
                on sale of subsidiary interests
            
            
            11,969,386
            
            
            -**INCOME
                (LOSS) BEFORE TAXES**
            
            
            4,169,031
            
            
            (2,664,373
            )Taxes
            
            
            -
            
            
            -**NET
                INCOME (LOSS)**
            
            $
            4,169,031
            
            $
            (2,664,373
            )**FOREIGN
                CURRENCY TRANSLATION ADJUSTMENT**
            
            
            -
            
            
            (625,468
            )**COMPREHENSIVE
                INCOME (LOSS)**
            
            $
            4,169,031
            
            $
            (3,289,841
            )**EARNINGS
                (LOSS) PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND
                DILUTED**
            
            $
            0.03
            
            $
            (0.02
            )**WEIGHTED
                AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND
                DILUTED**
            
            
            148,986,955
            
            
            120,469,231


The
        accompanying notes are an integral part of these consolidated financial
        statements.




4




**B&D
      FOOD CORP. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE NINE MONTH PERIOD ENDED SEPTEMBER 30**


**(Expressed
      in United States Dollars)**


**(Unaudited)**




**2008**
            
            **2007****CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                earnings (loss)
            
            $
            4,169,031
            
            $
            (2,664,373
            )**Adjustments
                to reconcile net loss to net cash used in operating
                activities**Depreciation
            
            
            68,570
            
            
            114,607Convertible
                debt issued for services
            
            
            3,968,268
            
            
            -Change
                in provision for contingencies
            
            
            -
            
            
            14,450Interest
                due to convertible notes and bank debts
            
            
            773,970
            
            
            1,153,831Change
                in allowance for severance pay
            
            
            29,254
            
            
            -Deferred
                income taxes
            
            
            -
            
            
            125,769Gain
                from disposition of property, plant and equipment
            
            
            (50,000
            )
            
            1,727Gain
                on sale of subsidiary interests
            
            
            (11,969,386
            )
            
            -**Changes
                in operating assets and liabilities:**Accounts
                receivable
            
            
            2,641
            
            
            (5,244
            )Inventory
            
            
            -
            
            
            17,175Prepaid
                and sundry assets
            
            
            (145,124
            )
            
            -Other
                receivables
            
            
            -
            
            
            (113,531
            )Accounts
                payable
            
            
            103,415
            
            
            205,563Accrued
                liabilities and other payables
            
            
            1,040,163
            
            
            229,188Taxes
                recoverable
            
            
            -
            
            
            40,069**NET
                CASH USED IN OPERATING ACTIVITIES**
            
            
            (2,009,198
            )
            
            (880,769
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES**Acquisition
                of property, plant and equipment, net
            
            
            -
            
            
            (1,506
            )Proceeds
                from disposal of property, plant and equipment, net
            
            
            50,165
            
            
            -Purchase
                of intangible assets
            
            
            -
            
            
            (186,550
            )**NET
                CASH FLOWS PROVIDED (USED IN) BY INVESTING
                ACTIVITIES**
            
            
            50,165
            
            
            (188,056
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Proceeds
                from (repayment of) bank loans
            
            
            314,597
            
            
            (227,983
            )Proceeds
                from long term debt
            
            
            151,261
            
            
            -Proceeds
                from convertible debentures
            
            
            1,490,000
            
            
            1,015,000Receipt
                of loans from related party
            
            
            -
            
            
            312,000**NET
                CASH FLOWS PROVIDED BY FINANCING ACTIVITIES**
            
            
            1,955,858
            
            
            1,099,017**EFFECT
                OF FOREIGN CURRENCY TRANSLATION**
            
            
            -
            
            
            5,110**NET
                INCREASE IN CASH AND CASH EQUIVALENTS**
            
            
            (3,175
            )
            
            35,302**CASH
                AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
            
            
            3,175
            
            
            2,968**CASH
                AND CASH EQUIVALENTS, END OF PERIOD**
            
            $
            -
            
            $
            38,270


5




**B&D
      FOOD CORP. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30 , 2008 and 2007**


**(Expressed
      in United States Dollars)**




**1.**
            **NATURE
                OF OPERATIONS AND BUSINESS
                COMBINATION**




B&D
      Food Corp. (“B&D” or “the Company”) is a US corporation that concentrates in
      acquiring, organizing, developing and upgrading companies in the food industry,
      and more specifically in the coffee industry. The Company does not currently
      have any active operations, however the Company has operating leases for proprty
      and plants, in Brazil and Ethiopia, where operations are under
      development.




The
      Company was incorporated on August 24, 1994 under the laws of the state of
      Delaware. Until October 2004, the principal business activity of the Company
      was
      ownership, management, and sale of residential real estate. This activity was
      carried on through the wholly owned subsidiary Rickets Enterprises
      International, Inc. In October 2004, the Company sold all of its remaining
      revenue producing assets and in December 2004 ceased all its active operations.




On
      July
      11, 2005, the Company entered into a Share Purchase Agreement (the “Agreement”)
      with BDFC Brasil Alimentos LTDA., a company formed pursuant to the laws of
      Brazil (“BDFC”) and the stockholders of BDFC (the “BDFC stockholders”) dated as
      July 8, 2005. Pursuant to the Agreement, the Company acquired effectively 100%
      of the outstanding equity stock of BDFC from the BDFC stockholders. As
      consideration for the acquisition of BDFC, the Company agreed to issue
      95,344,688 shares of the Company’s common stock to the BDFC stockholders. As
      additional consideration, the company issued an 8% convertible promissory note,
      in the amount of $10,000,000 to the BDFC stockholders in consideration for
      the
      entire preferred stock of BDFC. The note is payable (principal plus accumulated
      interest) on July 8, 2008 and may be converted, at the option of the holder,
      at
      any time, prior to or at the time of repayment by the Company, to the Company’s
      common stock at the rate of $0.20 per share. At the date of the agreement,
      BDFC
      stockholders were also the controlling shareholder of the Company.




BDFC
      was
      originally incorporated under the name Eastco Corporation do Brasil Ltda
      (“Eastco), under the laws of Brazil on September 2, 1995. In May 2004, the name
      of Eastco was changed to Eastco de Alimentos Ltda., as registered with the
      Junta
      Comercial de Sao Paolo (Commercial Council) and on September 28, 2005 the name
      was changed to BDFC Brasil Alimentos Ltda. BDFC has been in the coffee
      manufacturing business since 1997. The Company manufactured and purchased coffee
      grains, toasted and milled coffee, soluble coffee and related products, for
      sale, import and export.




On
      November 1, 2000, due to adverse financial conditions, BDFC filed a Judicial
      Creditor’s Agreement called “Concordata Preventiva”. This agreement consolidates
      the Company’s debts and postpones all obligations to suppliers and banks for a
      period of time. The creditor’s agreement under “Concordata Preventiva” provided
      for payment in two installments, the first installment of 40% to be paid in
      one
      year and the remaining 60% to be paid in two years. BDFC made the full payments
      of $144,000 and $216,000 on October 30, 2001 and November 25, 2002,
      respectively. On March 8, 2005, BDFC paid an additional $15,562 as required
      by
      the courts. To generate sufficient cash flows, in January 21, 2003 management
      leased its manufacturing facility and equipment to Comercio e Industrias
      Brasileiras Coimbre S/A (“Coimbra”), an unrelated party. Rents received from the
      lease were used by BDFC to pay its debts.




On
      July
      1, 2008, the Company completed execution of a stock purchase agreement with
      SBKF
      Investments, Ltd. (the “Purchaser”) for the sale of 100% of the issued and
      outstanding common stock of BDFC Brasil Alimentos LTDA. a subsidiary of the
      B&D. The purchase price totaled $5,764,847 and in consideration the Company
      received an note bearing annual interest of 18% repayable in equal monthly
      payments of principal and interest of $58,575. The net laibilities of BDFC
      at
      the time of the sale was $6,204,539, resulting in a gain on sale of
      $11,969,386.




6




**B&D
      FOOD CORP. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30 , 2008 and 2007**


**(Expressed
      in United States Dollars)**




**2.**
            **GOING
                CONCERN**




The
      Company's consolidated financial statements are presented on a going concern
      basis, which contemplates the realization of assets and satisfaction of
      liabilities in the normal course of business. The Company has raised capital
      and
      financing to cover all of its losses from operations since inception but the
      Company's ability to continue as a going concern is contingent upon its ability
      to attain and sustain profitable operations and to generate sufficient capital
      and financing from external investors and lendors. For the nine months ended
      September 30, 2008 the Company experienced a net operating loss of $5,339,373
      (September 30, 2007 - $525,887) and has a working capital deficiency of
      $3,962,673 (December 31, 2007 - $19,849,550).




In
      the
      opinion of the management, the sale of its BDFC subsidiary along with its new
      business plan and contacts with potential new investors in the future, will
      permit the Company to continue as a going concern in the coming year, until
      such
      time that the Company obtains profitable operations.




In
      the
      event the Company does not reach significant operations, it may become necessary
      to sell the land and building that the Company operates from.




The
      accompanying consolidated financial statements do not include any adjustments
      to
      reflect the possible future effects on the recoverability and classification
      of
      assets or the amounts and classification of liabilities that may result from
      the
      possible inability of the Company to continue as a going concern.




**3.**
            **BASIS
                OF PRESENTATION**




The
      accompanying consolidated financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      and include the accounts of the Company and, until July 1, 2008, its effectively
      100% owned subsidiary, BDFC Brazil Alimentos LTDA.




Brazilian
      company’s law required Brazilian corporations to have more than one stockholder.
      Until July 1, 2008, B&D Foods Corporation held effectively 100% of the
      shares and the minority interest is held in trust for B&D Food Corporation
      by a related party in order to comply with local regulations.




All
      significant inter-company accounts and transactions are eliminated on
      consolidation.




**4.**
            **INVENTORY**




Inventory
      costs include the cost of material, labor and manufacturing overhead. The
      following is a summary of inventories by component:





**September 30,**
              **2008**
            
            **December 31, 2007**Packaging
            
            $
            -
            
            $
            122,247Dissolvable
                coffee
            
            
            -
            
            
            16,871Material
                for resale
            
            
            -
            
            
            4,479Fuel
                and lubricants
            
            
            -
            
            
            6,129Less
                provision for obsolescence
            
            
            -
            
            
            (149,726
            )$
            -
            
            $
            -


7




**B&D
      FOOD CORP. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30 , 2008 and 2007**


**(Expressed
      in United States Dollars)**




**5.**
            **PROPERTY,
                PLANT AND EQUIPMENT**




The
      components of property, plant and equipment were as follows:





**September 30,**
              **2008**
            
            **December 31,**
              **2007**Land
                and building
            
            $
            -
            
            $
            1,955,167Computers,
                furniture and machinery
            
            
            6,583
            
            
            1,337,034Motor
                vehicles
            
            
            -
            
            
            24,6876,583
            
            
            3,316,888Accumulated
                depreciation
            
            
            (4,566
            )
            
            (1,597,165
            )Net
                book value
            
            $
            2,017
            
            $
            1,719,723




**6.**
            **BANK
                LOANS**





**September 30,**
              **2008**
            
            **December 31,**
              **2007**UCS
                Fomento Comercial S.A.
            
            $
            -
            
            $
            1,345,152Unibanco
            
            
            -
            
            
            468,969Banco
                Real
            
            
            -
            
            
            30,156Other
                bank overdrafts
            
            
            669
            
            
            23,661$
            669
            
            $
            1,867,938




The
      Company has outstanding and defaulted various demand loans from various
      financial institutions in Brazil. The average interest rate on these loans
      is
      the Brazilian monthly interest reference rate, derived by averaging the
      variations in 30-day CD yield rates among the top financial institutions in
      the
      Brazil ("TR"), plus 0.5%. All loans are unsecured and are due on demand. The
      Company is currently attempting to renegotiate the terms with the banks.
      Included in bank loans is a loan to a financial institution, which is owned
      by
      the controlling shareholder, in the amount of $Nil (December 31, 2007 -
      $1,345,152).




**7.**
            **ACCOUNTS
                PAYABLE**





**September 30,**
              **2008**
            
            **December 31,**
              **2007**Trade
                payable
            
            $
            378,950
            
            $
            1,226,864Less
                judicial deposits (*)
            
            
            -
            
            
            (615,174
            )$
            378,950
            
            $
            611,690




(*)
      The
      judicial deposit represent payments made mainly in 2001 and 2002 under the
      Judicial Creditors Agreement (see also note 1).




8




**B&D
      FOOD CORP. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30 , 2008 and 2007**


**(Expressed
      in United States Dollars)**




**8.**
            **ACCRUED
                LIABILITIES AND OTHER
                PAYABLES**





**September 30,**
              **2008**
            
            **December 31, 2007**Brazilian
                taxes payable other than income tax
            
            $
            -
            
            $
            2,432,412Employees
                and related institutions
            
            
            1,36
                3,694
            
            
            1,744,583Provision
                for contingencies
            
            
            -
            
            
            427,372Amounts
                payable to stockholders of the Company, unsecured, non interest bearing
                and payable on demand
            
            
            88,698
            
            
            152,384Other
                accrued liabilities
            
            
            473,941
            
            
            441,620$
            1,89
                6,333
            
            $
            5,198,371




Included
      in employees and related institutions is $1,253,241 (December 31, 2007 -
      $1,002,138) in accrued management fees which are payable to a corporate
      shareholder.




**9.**
            **LONG-TERM
                DEBT**





**September 30,**
              **2008**
            
            **December 31, 2007**Mortgage,
                payable in blended monthly installments of $31,330, bearing interest
                at
                the rate of TR, due March 2008. The mortgage is secured by the property
                disclosed in note 5. The Company has defaulted on its payments and
                is
                currently attempting to renegotiate the terms with the
                bank.
            
            $
            -
            
            $
            980,114Various
                unsecured term loans at TR plus 0.2%.
            
            
            -
            
            
            266,277-
            
            
            1,246,391Less
                current portion
            
            
            -
            
            
            (1,213,938
            )$
            -
            
            $
            32,453


9




**B&D
      FOOD CORP. AND SUBSIDIARY**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30 , 2008 and 2007**


**(Expressed
      in United States Dollars)**




**10.**
            **CONVERTIBLE
                DEBENTURES AND PROMISSORY
                NOTES**




Composed
      of:




**September 30,**
              **2008**
            
            **December 31, 2007**Convertible
                debentures - parent company
            
            $
            -
            
            $
            10,377,778Convertible
                debentures - other
            
            
            3,192,005
            
            
            1,755,691Promissory
                notes
            
            
            592,439
            
            
            362,562$
            3,784,444
            
            $
            12,496,031




The
      convertible debentures and promissory notes are unsecured and mature and become
      due as follows:




**September 30,**
              **2008**
            
            **December 31,**
              **2007**Current,
                due in 2008
            
            
            1,162,531
            
            
            11,472,557Amount
                due in 2009
            
            
            1,169,991
            
            
            732,863Amount
                due in 2010
            
            
            103,833
            
            
            -Amount
                due in 2011
            
            
            305,556
            
            
            290,611Amount
                due in 2013
            
            
            1,042,533
            
            
            -$
            3,784,444
            
            $
            12,496,031




During
      January 2008, the Company issued unsecured convertible promissory notes to
      an
      unrelated individual in the principal amount of $190,000. The notes bear annual
      interest at 13% and mature after one year. At any time after the first six
      months, the holder has the right to convert the principal and interest due
      into
      fully paid and non-assessable shares of the Company’s common stock, par value
      $.001 per share. The number of shares of common stock to be issued upon such
      conversion shall be equal to the quotient obtained by dividing the entire
      principal amount plus accrued interest (if any) by 0.10.




During
      February 2008, the Company issued an unsecured promissory note to to an
      unrelated individual in the principal amount of $700,000. The note is unsecured,
      bears annual interest at 8% and matures after one year.




During
      May 2008, the Company issued two unsecured promissory notes to to unrelated
      individuals in the principal amount of $400,000 and $300,000, bearing interest
      at annual rates of 8% and 10% respectively and maturing after five and two
      years
      respectively.




On
      September 28, 2008 the Board approved the transfer of the outstanding
      convertible promissory note held by Livorno Investments S.A. (“Livorno”) to the
      respective owners of Livorno (the "Purchasers"). The Company also issued
      additional convertible notes to the Purchasers totalling $3,968,268 for services
      rendered related to the sale of BDFC. Immediately therafter, the Company
      received a conversion notice, by which the Purchasers elected to convert all of
      the principal and accumulated interest on their convertible notes (which
      amounted to $14,943,824) into shares of the Company’s preferred stock at a
      conversion price of $0.04 per share. On conversion, the Company issued 3,735,956
      shares of preferred stock to the Purchasers. The terms of the preferred shares
      subscription agreement state that the preferred shares are convertible to common
      shares at a rate of 1 to 100.




10




**11.**
            **COMMITMENT**




On
      September 26, 2008, the Company entered into a lease agreement with SBKF
      Investments, Ltd for a term of 18 years, wherby they would lease all of the
      land
      building and factory that was sold to them, as described in Note 1. The
      Company's remainign lease obligations, with future minimum annual payments
      (exclusive of taxes, insurance and maintenance costs) are as
      follows:




Year
                One
            
            
            802,909Year
                Two
            
            
            802,909Year
                Three
            
            
            802,909Year
                Four
            
            
            802,909Year
                Five and therafter
            
            
            11,240,726$
            14,452,362




**12.**
            **SUBSEQUENT
                EVENTS**




On
      November 11, 2008, the Company issued an unsecured promissory note, convertible
      into shares of the Company's common stock at the option of the holder, to an
      unrelated corporation in the principal amount of $25,000, bearing interest
      at an
      annual rate of 15% and maturing on December 31, 2009.


11


ITEM
                2.
            MANAGEMENT’S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS




**INFORMATION
      REGARDING FORWARD LOOKING STATEMENTS**




The
      following discussion should be read in conjunction with the financial statements
      and notes thereto set forth in Item 1 of this Report. In addition to historical
      information, this discussion and analysis contains forward-looking statements
      that relate to future events and expectations and, as such, constitute
      forward-looking statements. Forward-looking statements include those containing
      such words as "anticipates", "believes", "estimates", "expects", "hopes",
      "targets", "should", “will", "will likely result", "forecast", "outlook",
      "projects" or similar expressions. Such forward-looking statements involve
      known
      and unknown risks, uncertainties and other factors that may cause actual
      results, performance or achievements of the Company to be materially different
      from those expressed or implied in the forward-looking statements.




**OVERVIEW**




The
      Company (formerly REII Incorporated) is a holding company, which focuses on
      acquiring, organizing, and developing companies in the food industry, and more
      specifically in the coffee industry. The Company’s management plans to integrate
      manufacturing and distribution operations in order to achieve maximum return
      on
      capital.




In
      2005,
      the Company obtained a manufacturing arm by acquiring BDFC which owns and
      operates a coffee manufacturing plant. BDFC has the ability to manufacture
      and
      pack roasted and ground coffee, instant coffee and several mixtures of coffee
      and tea like cappuccino and others. Currently, the Company is focusing on
      selling its coffee products in South America and Eastern Europe. In addition,
      the Company is looking to acquire a strong marketing capability in the United
      States.




In
      the
      summer of 2008, the Company started work on developing a global trading
      arm.




On
      September 28, 2008, pursuant to a transfer agreement dated the same date between
      Livorno, Daniel Ollech, Jacques Ollech and Mark Radom (the “Purchasers”),
      Livorno transferred its right, title and interest in, under and to the Note
      to
      the Purchasers in accordance with their respective ownership interests in
      Livorno. On the same date thereof, pursuant to a preferred share subscription
      agreement, the Purchasers converted 100% of the outstanding principal and
      interest into 3,735,956 preferred shares (the “Series A Preferred shares”) of
      the Company (the Note having been amended on September 28, 2008 to allow for
      conversion into preferred shares. The Series A Preferred Shares carry the
      following rights:




•
            Cumulative
                dividend of U.S. $100,000 (it being understood that the Company has
                no
                obligation to declare and pay any dividends, but that Purchasers
                shall
                receive with a right of first priority pro rata to their ownership
                in
                Livorno U.S. $100,000 for every full calendar year that elapses before
                the
                Company declares and pays a dividend prior to the Company paying
                any
                dividends to holders of its common
                shares);




•
            Conversion
                at the option of each of the Purchasers upon 45 days’ written notice into
                ten shares of the Company’s common stock for each share of Series A
                Preferred Shares to be converted (it being understood that the Company
                shall take any action necessary to effect a conversion into shares
                of
                common stock promptly upon receiving written notice from a Purchaser);
                and




•
            Priority
                in distributions in the event of a liquidation or winding down of
                the
                Company’s business.




On
      September 29, 2008, pursuant to a sale and leaseback agreement dated the same
      date between the Company and SBKF, the Company sold 100% of its ownership in
      BDFC to and leased back the Brazilian coffee roasting facility for a period
      of
      18 years from SBKF. After offsetting the amounts to be received by the Company
      in payment for BDFC, the Company will have to make a net annual lease payment
      to
      SBKF of U.S. $100,000.


12




The
      foregoing description of the agreements and the transactions contemplated
      thereby is not complete and is qualified in its entirety by reference to the
      forms of agreement attached hereto as Exhibits 10.1, 10.2. and
      10.3.




**FINANCIAL
      CONDITION AND LIQUIDITY**




Unless
      otherwise specified, all figures are as at the Balance Sheet Date.




The
      Company’s total assets as at September 30, 2008, as reflected in the
      consolidated balance sheet, totaled $6,222,549 compared to $1,747,300 as at
      December 31, 2007.




The
      Company’s consolidated deficit in working capital amounted to $3,962,673 and the
      consolidated quick ratio was 0.10%.




The
      Company has significantly improved its debt to equity position due to two
      transactions. The first was the sale of its interest in its subsidiary, BDFC.
      BDFC accounted for approximately $7,945,000 of the total debt of the Company.
      The second was to convert $14,943,824 of the convertible promissory notes to
      preferred shares. This has resulted in the decrease to the Company's total
      debt
      of approximately $18,300,000. The Company’s remaining short-term indebtedness
      was approximately $669.




The
      Company’s remaining long-term financing is mainly based on convertible
      promissory notes in the aggregate amount of $3,733,533 issued to third parties.




The
      shareholders’ equity as at September 30, 2008 totaled $162,155 compared to a
      shareholders’ deficit of $19,330,336 as at December 31, 2007. The increase in
      shareholders’ equity is derived primarily from the transactions described above
      less the operating losses during the nine month period in the aggregate amount
      of $5,339,373.




One
      of
      the Company’s shareholders provided a personal guarantee to two banks in Brazil
      in connection with loans received from those banks by BDFC. The Company had
      accrued a guarantee fees payable to the shareholder for providing the guarantee,
      in the amount of $21,250 per quarter. This fee accrual terminated on the sale
      of
      BDFC on July 1, 2008.




The
      Company will need to obtain additional debt or equity financing in the near
      term
      in order to have sufficient working capital to execute its business plan or
      continue as a going concern. The Company is in the process of seeking such
      financing; however, there is no assurance that it will be able to obtain such
      financing on satisfactory terms or at all.


13




**NINE
      MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
      30,
      2007**




Net
      Income (Loss)




The
      Company’s consolidated net income for the third quarter of 2008 amounted to
      $4,169,031, compared to a consolidated net loss of $2,664,373 for the third
      quarter of the previous year.




The
      net
      income for the third quarter of 2008 increased in comparison to the second
      quarter of the previous year mainly due to the Company's profit on the sale
      of
      the net liabilities of BDFC.




Revenue




The
      Company was not in operations and therefore did not generate any revenue for
      the
      nine months ended September 30, 2008, compared to $75,005 for the third quarter
      of the previous year.




The
      revenue from coffee production through the third quarter of 2008 was Nil in
      light of the Company’s management strategy to make sales through a targeted
      marketing arm to be acquired in the near future. The Company’s operations are
      suspended at this moment due to changes in the structure of its operations,
      including the refurbishment of its factory in Brazil, which is expected to
      be
      completed by the forth quarter of 2008.




Cost
      of
      Revenues




As
      with
      the Company’s revenues in the second quarter of 2008, the cost of revenues was
      minimal.




General
      and Administrative Expenses




The
      consolidated general and administrative expenses for the third quarter of 2008
      amounted to $546,333, compared to consolidated general and administrative
      expenses of $978,036 for the third quarter of the previous year.




The
      increase in general and administrative expenses was attributable primarily
      to
      the additional professional services and traveling expenses of the management
      of
      the Company in connection with the suspension of the Company’s operations
      incurred in the third quarter of the previous year.]




Financial
      Expenses




The
      consolidated financial expenses for the third quarter of 2008 amounted to
      $2,505,128, compared to consolidated financial expenses of $1,024,826 for the
      third quarter of the previous year.




The
      increase in financial expenses through the second quarter of 2008 results from
      interest and financing charges related to the convertible notes incurred over
      the past 12 months.





***Inflation*** ****





Our
      results of operations have not been affected by inflation and management does
      not expect that inflation risk would cause material impact on its operations
      in
      the future.





***Seasonality***





Our
      results of operations are not materially affected by seasonality and we do
      not
      expect seasonality to cause any material impact on our operations in the near
      future.





***Critical
      Accounting Policies***




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires our management to make
      assumptions, estimates and judgments that affect the amounts reported in the
      financial statements, including the notes thereto, and related disclosures
      of
      commitments and contingencies, if any. We consider our critical accounting
      policies to be those that require the more significant judgments and estimates
      in the preparation of financial statements, including the
      following:


14





***Principles
      of Consolidation*** —The
      consolidated financial statements include the accounts of the Company, it's
      wholly owned subsidiary BDFC Brazil Alimentos LTDA (“BDFC”). All material
      intercompany accounts, transactions and profits have been eliminated in
      consolidation.




***Use
      of Estimates*** —The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Significant estimates include accrued warranty
      costs, as well as revenue and costs recorded under the percentage-of-completion
      method. Actual results could differ from those estimates.




***Cash
      Equivalents*** —The
      Company classifies any highly liquid investments purchased with a maturity
      of
      three months or less as cash equivalents.




***Accounts
      Receivable*** —Accounts
      receivable are carried at original invoice amount less an estimate for doubtful
      receivables based on a review of all outstanding amounts at year end. Management
      determines the allowance for doubtful accounts by using historical experience
      applied to an aging of accounts. Trade receivables are written off when deemed
      uncollectible. Recoveries of trade receivables previously written off are
      recorded when received.




***Property
      and Equipment*** —Property
      and equipment are recorded at cost, less accumulated depreciation. Depreciation
      is provided for using straight-line methods over the estimated useful lives
      of
      the respective assets, usually five years.




***Revenue
      Recognition*** —Substantially
      all of the Company’s revenues are on contracts recognized using the
      percentage-of-completion method, measured by the ratio of costs incurred to
      date
      to estimated total costs for each contract. Contract costs include all direct
      material and labor costs and those indirect costs related to contract
      performance, such as supplies and travels. General and administrative costs
      are
      charged to expense as incurred. Losses on contracts are recorded in full as
      they
      are identified.




***Share-Based
      Payments*** —The
      Company adopted Statement of Financial Accounting Standards No 123(R),
“Share-Based Payments” (“SFAS No. 123R”) effective January 1, 2006. SFAS No.
      123R amends existing accounting pronouncements for share-based payment
      transactions in which an enterprise receives employee and certain non-employee
      services in exchange for (a) equity instruments of the enterprise or (b)
      liabilities that are based on the fair value of the enterprise’s equity
      instruments or that may be settled by the issuance of such equity instruments.
      SFAS No.123R generally requires such transactions be accounted for using a
      fair-value-based method. The Company has never issued any stock options to
      any
      employees.




***Income
      Taxes*** —Deferred
      income tax assets and liabilities are recognized for the estimated future tax
      consequences attributable to differences between the financial statement
      carrying amounts of existing assets and liabilities and their respective income
      tax bases. Deferred income tax assets and liabilities are measured using enacted
      tax rates in effect for the year in which those temporary differences are
      expected to be recovered or settled. A valuation allowance is established
      against deferred tax assets if it is more likely than not that all, or some
      portion, of such assets will not be realized.





Effective
      January 1, 2007, we adopted Financial Accounting Standard Board (FASB)
      Interpretation No. 48 (FIN 48), *Accounting
      for Uncertainty in Income Taxes—an interpretation of FASB Statement
      No. 109* , *Accounting
      for Income Taxes* .
      FIN 48 prescribes a comprehensive model for how companies should recognize,
      measure, present, and disclose in their financial statements uncertain tax
      positions taken or expected to be taken on a tax return. Under FIN 48, tax
      positions are initially recognized in the financial statements when it is more
      likely than not the position will be sustained upon examination by the tax
      authorities. Such tax positions are initially and subsequently measured as
      the
      largest amount of tax benefit that is greater than 50% likely of being realized
      upon ultimate settlement with the tax authority assuming full knowledge of
      the
      position and all relevant facts.




***Impairment
      of Long-Lived Assets*** —The
      Company adopts SFAS No. 144 "Accounting for the Impairment or Disposal of
      Long-Lived Assets". The Company periodically evaluates long-lived assets for
      impairment whenever events or changes in circumstances indicate that the
      carrying value of an asset may not be recoverable. If the estimated future
      cash
      flows (undiscounted and without interest charges) from the use of an asset
      were
      less than the carrying value, a write-down would be recorded to reduce the
      related asset to its estimated fair value.


15




The
      assumptions used by management in determining the future cash flows are
      critical. In the event these expected cash flows are not realized, future
      impairment losses may be recorded. Management has determined that no impairments
      of long-lived assets currently exist.




***Issuance
      of Shares by Subsidiaries—*** Sales
      of
      stock by a subsidiary is accounted for in accordance with Staff Accounting
      Bulletin Topic 5H, “Accounting for Sales of Stock by a Subsidiary.” The Company
      has adopted the capital transaction method to account for subsidiary stock
      sales. Accordingly, increases and decreases in the Company’s share of its
      subsidiary’s net equity resulting from subsidiary stock transactions are
      recorded on the Consolidated Balance Sheets and Consolidated Statements of
      Stockholders’ Equity as increases or decreases to Additional paid-in
      capital.




***Concentrations
      of Credit Risk*** —Financial
      instruments that subject the Company to credit risk consist primarily of
      accounts receivable, which are concentrated in a small number of customers
      in
      the Chinese governments. The Company performs ongoing credit evaluations of
      its
      customers. To date, there has been no bad debt incurred.




***Statement
      of Cash Flows*** —In
      accordance with SFAS No. 95, "Statement of Cash Flows", cash flows from the
      Company's operations are based upon the local currencies. As a result, amounts
      related to assets and liabilities reported on the statement of cash flows will
      not necessarily agree with changes in the corresponding balances on the balance
      sheet.




***Translation
      Adjustment*** —The
      Brazilian Real ("Real"), the national currency of Brazil, is the primary
      currency of the economic environment in which the operations of BDFC are
      conducted. The Company uses the United States dollar ("U.S. dollars") for
      financial reporting purposes.




The
      Company translates BDFC's assets and liabilities into U.S. dollars using the
      rate of exchange prevailing at the balance sheet date, and the statement of
      income is translated at average rates during the reporting period. Adjustments
      resulting from the translation of BDFC's financial statements from Real into
      U.S. dollars are recorded in stockholders' equity as part of accumulated
      comprehensive gain - translation adjustments. Gains or losses resulting from
      transactions in currencies other than Real are reflected in income for the
      reporting period.




***Comprehensive
      Income*** —Comprehensive
      income includes accumulated foreign currency translation gains and losses.
      The
      Company has reported the components of comprehensive income on its statements
      of
      stockholders’ equity.





***Fair
      Value of Financial Instruments*** —
The
      carrying amounts of cash and cash equivalents, accounts receivable, deposits
      and
      accounts payable approximate their fair value because of the short maturity
      of
      those instruments.





***New
      Accounting Pronouncements***





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No. 157, *Fair
      Value Measurements* ,
      (SFAS 157). SFAS 157 defines fair value, establishes a framework for
      measuring fair value in generally accepted accounting principles and expands
      disclosures about fair value measurements. FAS 157 is effective for
      financial statements issued for fiscal years beginning after November 15,
      2007 and interim periods within those fiscal years. In February 2008, FASB
      issued Staff Position 157-2, *Effective
      Date of FASB Statement No. 157* ,
      (FSP
      157-2) which delays the effective date of SFAS 157 for nonfinancial assets
      and nonfinancial liabilities, except for items that are recognized or disclosed
      at fair value in the financial statements on a recurring basis.




In
      February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      159, " *The
      Fair Value Option for Financial Assets and Financial Liabilities - Including
      an
      Amendment of FASB Statement No. 115* ".
      This
      statement permits entities to choose to measure many financial instruments
      and
      certain other items at fair value. Most of the provisions of SFAS No. 159 apply
      only to entities that elect the fair value option. However, the amendment to
      SFAS No. 115 " *Accounting
      for Certain Investments in Debt and Equity Securities* "
      applies
      to all entities with available-for-sale and trading securities. SFAS No. 159
      is
      effective as of the beginning of an entity's first fiscal year that begins
      after
      November 15, 2007.


16




In
      June
      2007, the FASB ratified Emerging Issue Task Force (“EITF”) Issue No. EITF 06-11 *Accounting
      for the Income Tax Benefits of Dividends on Share-Based Payment
      Awards* (“EITF
      06-11”). EITF 06-11 provides that tax benefits associated with dividends on
      share-based payment awards be recorded as a component of additional paid-in
      capital. EITF 06-11 is effective, on a prospective basis, for fiscal years
      beginning after December 15, 2007.




In
      June
      2007, the FASB issued EITF Issue No. 07-03, *Accounting
      for Non-Refundable Advance Payments for Goods or Services to Be Used in Future
      Research and Development Activities* (“EITF
      07-03”). EITF 07-03 provides guidance on whether non-refundable advance payments
      for goods that will be used or services that will be performed in future
      research and development activities should be accounted for as research and
      development costs or deferred and capitalized until the goods have been
      delivered or the related services have been rendered. EITF 07-03 is effective
      for fiscal years beginning after December 15, 2007.





In
      December 2007, the FASB issued SFAS 141R, “ *Business
      Combinations - Revised 2007* ,”
which
      replaces FASB Statement No. 141, “ *Business
      Combinations* .”
SFAS
      141R ** establishes
      principles and requirements intending to improve the relevance, representational
      faithfulness, and comparability of information that a reporting entity provides
      in its financial reports about a business combination and its effects. This
      is
      accomplished through requiring the acquirer to recognize assets acquired and
      liabilities assumed arising from contractual contingencies as of the acquisition
      date, measured at their acquisition-date fair values. This includes contractual
      contingencies only if it is more likely than not that they meet the definition
      of an asset of a liability in FASB Concepts Statement No. 6, “ *Elements
      of Financial Statements* - *a
      replacement of FASB Concepts Statement No. 3.* ” ** This
      statement also requires the acquirer to recognized goodwill as of the
      acquisition date, measured as a residual. However, this statement improves
      the
      way in which an acquirer’s obligations to make payments conditioned on the
      outcome of future events are recognized and measured, which in turn improves
      the
      measure of goodwill. This statement also defines a bargain purchases as a
      business combination in which the total acquisition-date fair value of the
      consideration transferred plus any noncontrolling interest in the acquiree,
      and
      it requires the acquirer to recognize that excess in earnings as a gain
      attributable to the acquirer. This therefore improves the representational
      faithfulness and completeness of the information provided about both the
      acquirer’s earnings during the period in which it makes a bargain purchase and
      the measures of the assets acquired in the bargain purchase.




In
      December 2007, the FASB issued SFAS No. 160, “ *Noncontrolling
      Interests in Consolidated Financial Stateme0147nts - an amendment of ARB No.
      51,* ” ** which
      establishes accounting and reporting standards to improve the relevance,
      comparability, and transparency of financial information in its consolidated
      financial statements. This is accomplished by requiring all entities, except
      not-for-profit organizations, that prepare consolidated financial statements
      to
      (a) clearly identify, label, and present ownership interests in subsidiaries
      held by parties other than the parent in the consolidated statement of financial
      position within equity, but separate from the parent’s equity, (b) clearly
      identify and present both the parent’s and the noncontrolling interest’s
      attributable consolidated net income on the face of the consolidated statement
      of income, (c) consistently account for changes in parent’s ownership interest
      while the parent retains it controlling financial interest in subsidiary and
      for
      all transactions that are economically similar to be accounted for similarly,
      (d) measure of any gain, loss or retained noncontrolling equity at fair value
      after a subsidiary is deconsolidated, and (e) provide sufficient disclosures
      that clearly identify and distinguish between the interests of the parent and
      the interests of the noncontrolling owners. This Statement also clarifies that
      a
      noncontrolling interest in a subsidiary is an ownership interest in the
      consolidated entity that should be reported as equity in the consolidated
      financial statements. SFAS No. 160 is effective for fiscal years, and interim
      periods on or after December 15, 2008. The Company does not expect the adoption
      of this pronouncement to have a material impact on its financial
      statements.




In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
      Instruments and Hedging Activities.” SFAS No. 161 is intended to
      improve financial reporting about derivative instruments and hedging activities
      by requiring enhanced disclosures to enable investors to better understand
      their
      effects on an entity’s financial position, financial performance, and cash
      flows. SFAS No. 161 is effective for financial statements issued for
      fiscal years and interim periods beginning after November 15, 2008. The
      Company believes that the adoption of SFAS No. 161 will not have a
      material impact on its consolidated financial statements.


17


***Off-Balance
      Sheet Arrangements***





We
      do not
      have any off-balance arrangements.





MARKET
      RISK AND CONTINGENT LIABILITIES





The
      Company is seeking to operate primarily in Brazil, making it susceptible to
      changes in the economic, political, and social conditions in Brazil. Brazil
      has
      experienced political, economic, and social uncertainty in recent years,
      including an economic crisis characterized by exchange rate instability and
      Brazilian Real devaluation, increased inflation, high domestic interest rates,
      negative economic growth, reduced consumer purchasing power and high
      unemployment. Under its current leadership, the Brazilian government has been
      pursuing economic stabilization policies, including the encouragement of foreign
      trade and investment and an exchange rate policy of free market flotation.
      In
      the last year, there was an improvement in the Brazilian economic environment.
      Nevertheless, no assurance can be given that the Brazilian government will
      continue to pursue these policies, that these policies will be successful if
      pursued or that these policies will not be significantly altered. In case of
      a
      decline in the Brazilian economy, political or social problems or a reversal
      of
      Brazil's foreign investment policy it is likely that any such change will have
      an adverse effect on the Company's results of operations and financial
      condition. Additionally, inflation in Brazil may lead to higher wages and
      salaries for employees and increases in the cost of raw materials, which would
      adversely affect the Company's profitability.





Risks
      inherent in foreign operations include nationalization, war, terrorism, and
      other political risks and risks of increases in foreign taxes or changes in
      U.S.
      tax treatment of foreign taxes paid and the imposition of foreign government
      royalties and fees.


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ITEM
      3.  CONTROLS AND PROCEDURES




a)
            Evaluation
                of Disclosure Controls and Procedures. As at September 30, 2008,
                the
                Company’s management carried out an evaluation, under the supervision of
                the Company’s Chief Executive Officer and Chief Financial Officer, of the
                effectiveness of the design and operation of the Company’s system of
                disclosure controls and procedures pursuant to the Securities and
                Exchange
                Act, Rule 13a-15(d) and 15d-15(d) under the Exchange Act. Based upon
                that
                evaluation, the Chief Executive Officer and Chief Financial Officer
                concluded that the Company’s disclosure controls and procedures were not
                effective, as of the date of their evaluation, for the purposes of
                recording, processing, summarizing and timely reporting material
                information required to be disclosed in reports filed by the Company
                under
                the Securities Exchange Act of 1934 in that they failed to result
                in the
                timely reporting of material financial information. The Company intends
                to
                implement new controls and procedures in the fourth quarter of 2008
                that
                will be designed to process, summarize and timely report all material
                information, including financial, on a going forward
                basis.




b)
            Changes
                in internal controls. There were no changes in the Company’s internal
                controls over financial reporting, that occurred during the period
                covered
                by this report that have materially affected, or are reasonably likely
                to
                materially affect, the Company’s internal control over financial
                reporting.




19





PART
      II.   OTHER INFORMATION




ITEM 1.   LEGAL
      PROCEEDINGS




As
      at
      September 30, 2008, the Company was not a party to any litigation of any kind.




ITEM
      1A.
      RISK FACTORS.





As
      a
      small business company, we are not required to provide the information required
      by this item.





ITEM 2.   UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.




On
      September 28, 2008, the Company issued 373,595,592  shares
      of
      its Series A Preferred Shares to two affiliated investors and an unaffiliated
      investor in connection with the conversion of the outstanding principal and
      accrued interest on the Note into equity in the Company.




ITEM 3.   DEFAULTS
      UPON SENIOR SECURITIES.




The
      Company has not defaulted on any senior securities.




ITEM 4.   SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS




Not
      applicable.




ITEM 5.   OTHER
      INFORMATION




Not
      applicable.





ITEM 6.   EXHIBITS
      AND REPORTS ON FORM 8-K




Reports
      on Form 8-K




1.
            Entry
                into a Material Definitive Agreement, September 28,
                2008





EXHIBITS




Number
            
            Title10.1
            
            8-K
                Report re Entry into a Material Definitive Agreement, September 28,
                200810.2
            
            First
                Amendment to the Series A Preferred Shares Subscription
                Agreement10.3
            
            BDFC
                Leaseback Agreement31.1
            
            Certification
                by Daniel Ollech, Chief Executive Officer, Pursuant to Section 302
                of the
                Sarbanes-Oxley Act of 200231.2
            
            Certification
                by Daniel Ollech, Chief Financial Officer, Pursuant to Section 302
                of the
                Sarbanes-Oxley Act of 200232.1
            
            Certification
                by Daniel Ollech, Chief Executive Officer, Pursuant to 18 U.S.C.
                Section 1350, as Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 200232.1
            
            Certification
                by Daniel Ollech, Chief Financial Officer, Pursuant to 18 U.S.C.
                Section 1350, as Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002




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SIGNATURES




Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, as amended, the Registrant has duly caused this Report to be signed on
      its
      behalf by the undersigned, thereunto duly authorized, in New York, New York,
      on
      the 15th day of November 2008.




B
                & D FOOD, CORP.By:
                /s/ Daniel OllechDaniel
                OllechChief
                Executive Officer


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