UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




- 2nd
Quarter 2008 -




FORM
10-Q


Amendment
No. 1





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




For
      the quarterly period ended June 30, 2008
or




o
            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 xNO o




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes oNo x




As of
August 13, 2008, there were 149,986,955 shares of Common Stock, par value $0.001
per share issued and outstanding.




Small
Company Disclosure (check one): YES xNO o











TABLE OF CONTENTS





PagePART IItem
      1.
            Financial
      Statements
            1Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            14Item
      3.
            Quantitative
      and Qualitative Disclosures About Market Risk
            19Item
      4.
            Controls
      and Procedures
            20PART IIItem
      1.
            Legal
      Proceedings
            21Item
      1A.
            Risk
      Factors
            21Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            21Item
      3.
            Defaults
      Upon Senior Securities
            21Item
      4.
            Submission
      of Matters to a Vote of Securities Holders
            21Item
      5.
            Other
      Information
            21Item
      6.
            Exhibits
            21










Explanatory
Note:
 
 This
Quarterly Report on Form 10-Q/A is being filed as Amendment No. 1 to our
Quarterly Report on Form 10-Q which was originally filed with the Securities and
Exchange Commission (“SEC”) on August 19, 2008. We are filing this form 10-Q/A
to disclose two stock transactions, previously unrecorded.
  For
the convenience of the reader, this Form 10-Q/A sets forth the entire Form 10-Q,
which was prepared and relates to the Company as of June 30,
2008.   However, this Form 10-Q/A only amends and restates the
items described above to reflect the effects of the restatement and no attempt
has been made to modify or update other disclosures presented in our June 30,
2008 Form 10-Q. Accordingly, except for the foregoing amended information, this
Form 10-Q/A continues to speak as of August 19, 2008 (the original filing date
of the June 30, 2008 Form 10-Q), and does not reflect events occurring after the
filing of our June 30, 2008 Form 10-Q and does not modify or update those
disclosures affected by subsequent events. Forward looking statements made in
the June 30, 2008 Form 10-Q have not been revised to reflect events, results or
developments that have become known to us after the date of the original filing
(other than the current restatements described above), and such forward looking
statements should be read in their historical context. Unless otherwise stated,
the information in this Form 10-Q/A not affected by such current restatements is
unchanged and reflects the disclosures made at the time of the original
filing.





PART I.
FINANCIAL INFORMATION




ITEM 1.
FINANCIAL STATEMENTS





B&D FOOD CORP. AND
SUBSIDIARY




CONSOLIDATED FINANCIAL
STATEMENTS




June 30, 2008




1




B&D FOOD CORP. AND
SUBSIDIARY




June 30, 2008




CONTENTS





PageCONSOLIDATED FINANCIAL
      STATEMENTSConsolidated
      Balance Sheets as at June 30, 2008 and December 31, 2007
            3 - 4Consolidated
      Statements of Loss and Comprehensive Loss for the Three and Six Months
      Ended
            5-6Consolidated
      Statements of Cash Flows for the Six Months Ended
            7Notes
      to the Consolidated Financial Statements
            8 -
      13





2




B&D FOOD CORP. AND
SUBSIDIARY




CONSOLIDATED BALANCE
SHEETS




AS AT




(Expressed in United States
Dollars)





Note
            
            June 30, 2008(Restated)
            
            Dec 31, 2007ASSETSCurrent
      AssetsCash
      and cash equivalents
            
            
            
            
            $
            1,659
            
            $
            3,175Accounts
      receivable - trade, net of allowance for doubtful accounts of $52,869
      (2007 - $47,787)
            
            
            
            
            
            16,572
            
            
            19,213Prepaid
      and sundry assets
            
            
            
            
            
            137,428
            
            
            4,689Total Current
      Assets
            
            
            
            
            
            155,659
            
            
            27,077Long-Term
      AssetsOther
      receivables
            
            
            
            
            
            500
            
            
            500Property,
      plant and equipment, net
            
            
            5
            
            
            1,651,317
            
            
            1,719,723Total Long-Term
      Assets
            
            
            
            
            
            1,651,817
            
            
            1,720,223Total
      Assets
            
            
            
            
            $
            1,807,476
            
            $
            1,747,300





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





3




B&D FOOD CORP. AND
SUBSIDIARY




CONSOLIDATED BALANCE SHEETS
(Continued)




AS AT JUNE 30




(Expressed in United States
Dollars)





Note
                                                          
                                                          June 30, 2008(Restated)
                                                          
                                                          Dec 31, 2007LIABILITIES AND
      STOCKHOLDERS' DEFICITCurrent
      LiabilitiesBank
      loans
                                                          
                                                          
                                                          6
                                                          
                                                          $
                                                          1,694,829
                                                          
                                                          $
                                                          1,380,572Accounts
      payable
                                                          
                                                          
                                                          7
                                                          
                                                          
                                                          695,035
                                                          
                                                          
                                                          611,689Accrued
      liabilities and other payables
                                                          
                                                          
                                                          8
                                                          
                                                          
                                                          6,079,995
                                                          
                                                          
                                                          5,198,371Long-term
      debt - current portion
                                                          
                                                          
                                                          9
                                                          
                                                          
                                                          1,397,652
                                                          
                                                          
                                                          1,213,938Convertible
      debentures - current portion
                                                          
                                                          
                                                          10
                                                          
                                                          
                                                          12,402,131
                                                          
                                                          
                                                          11,472,557Total Current
      Liabilities
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          22,269,642
                                                          
                                                          
                                                          19,877,127Long-Term
      LiabilitiesAllowance
      for severance pay
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          173,837
                                                          
                                                          
                                                          144,582Long-term
      debt
                                                          
                                                          
                                                          9
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          32,453Convertible
      debentures
                                                          
                                                          
                                                          10
                                                          
                                                          
                                                          1,763,938
                                                          
                                                          
                                                          1,023,474Total Long-Term
      Liabilities
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,937,775
                                                          
                                                          
                                                          1,200,509Total
      Liabilities
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          24,207,417
                                                          
                                                          
                                                          21,077,636Stockholders'
      DeficitCommon
      shares of $ 0.001 par value; Authorized: 400,000,000 shares as of March
      31, 2008 and December 31, 2007; Issued and outstanding: 149,986,955 shares
      as of March 31, 2008 and December 31, 2007
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          149,987
                                                          
                                                          
                                                          148,987Additional
      paid-in capital
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          2,711,769
                                                          
                                                          
                                                          2,682,769Stock
      to be issued
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          145,000Accumulated
      other comprehensive loss
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (379,634
                                                          )
                                                          
                                                          (379,635
                                                          )Accumulated
      deficit
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (25,027,063
                                                          )
                                                          
                                                          (21,782,457
                                                          )Total Stockholders'
      Deficit
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (22,399,941
                                                          )
                                                          
                                                          (19,330,336
                                                          )Total Liabilities and
      Stockholders' Deficit
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          1,807,476
                                                          
                                                          $
                                                          1,747,300





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





4




B&D FOOD CORP. AND
SUBSIDIARY




CONSOLIDATED STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS




FOR THE THREE MONTH PERIOD ENDED JUNE
30




(Expressed in United States
Dollars)





2008(Restated)
            
            2007REVENUES
            
            $
            -
            
            $
            19,217COST OF GOODS
      SOLD
            
            
            45,592
            
            
            413,345GROSS
      LOSS
            
            
            (45,592
            )
            
            (394,128
            )EXPENSESGeneral
      and administrative
            
            
            312,292
            
            
            313,582Depreciation
            
            
            33,824
            
            
            -TOTAL OPERATING
      EXPENSES
            
            
            346,116
            
            
            313,582LOSS FROM
      OPERATIONS
            
            
            (391,708
            )
            
            (707,710
            )Financial
            
            
            (1,284,118
            )
            
            (380,620
            )Other
      income, net
            
            
            1,399
            
            
            -Other
      expenses
            
            
            -
            
            
            (31,525
            )LOSS BEFORE
      TAXES
            
            
            (1,674,427
            )
            
            (1,119,855
            )Taxes
            
            
            -
            
            
            -NET
      LOSS
            
            $
            (1,674,427
            )
            $
            (1,119,855
            )FOREIGN CURRENCY TRANSLATION
      ADJUSTMENT
            
            
            -
            
            
            (257,518
            )COMPREHENSIVE
      LOSS
            
            $
            (1,674,427
            )
            $
            (1,377,373
            )LOSS PER WEIGHTED NUMBER OF
      SHARES OUTSTANDING - BASIC AND DILUTED
            
            $
            (0.01
            )
            $
            0.00WEIGHTED AVERAGE NUMBER OF
      SHARES OUTSTANDING - BASIC AND DILUTED
            
            
            149,679,263
            
            
            110,958,333





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





5




B&D FOOD CORP. AND
SUBSIDIARY




CONSOLIDATED STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS




FOR THE SIX MONTH PERIOD ENDED JUNE
30




(Expressed in United States
Dollars)





2008(Restated)
            
            2007REVENUES
            
            $
            -
            
            $
            75,005COST OF GOODS
      SOLD
            
            
            80,824
            
            
            530,689GROSS
      LOSS
            
            
            (80,824
            )
            
            (455,684
            )EXPENSESGeneral
      and administrative
            
            
            908,215
            
            
            681,363Depreciation
            
            
            68,406
            
            
            -TOTAL OPERATING
      EXPENSES
            
            
            976,621
            
            
            681,363LOSS FROM
      OPERATIONS
            
            
            (1,057,445
            )
            
            (1,137,047
            )Financial
            
            
            (2,231,197
            )
            
            (761,533
            )Other
      income, net
            
            
            44,037
            
            
            -Other
      expenses
            
            
            -
            
            
            (39,620
            )LOSS BEFORE
      TAXES
            
            
            (3,244,605
            )
            
            (1,938,200
            )Taxes
            
            
            -
            
            
            -NET
      LOSS
            
            $
            (3,244,605
            )
            $
            (1,938,200
            )FOREIGN CURRENCY TRANSLATION
      ADJUSTMENT
            
            
            -
            
            
            (385,896
            )COMPREHENSIVE
      LOSS
            
            $
            (3,244,605
            )
            $
            (2,324,096
            )LOSS PER WEIGHTED NUMBER OF
      SHARES OUTSTANDING - BASIC AND DILUTED
            
            $
            (0.02
            )
            $
            (0.02
            )WEIGHTED AVERAGE NUMBER OF
      SHARES OUTSTANDING - BASIC AND DILUTED
            
            
            149,333,109
            
            
            107,604,167





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





6




B&D FOOD CORP. AND
SUBSIDIARY




CONSOLIDATED STATEMENTS OF CASH
FLOWS




FOR THE SIX MONTH PERIOD ENDED JUNE
30




(Expressed in United States
Dollars)





2008(Restated)
                                                                                                              
                                                                                                              2007CASH FLOWS FROM OPERATING
      ACTIVITIESNet
      loss
                                                                                                              
                                                                                                              $
                                                                                                              (3,244,605
                                                                                                              )
                                                                                                              $
                                                                                                              (1,938,200
                                                                                                              )Adjustments to reconcile net
      loss to net cash used in operating activitiesDepreciation
                                                                                                              
                                                                                                              
                                                                                                              68,406
                                                                                                              
                                                                                                              
                                                                                                              75,249Stock
      based compensation
                                                                                                              
                                                                                                              
                                                                                                              30,000Interest
      due to convertible notes and bank debts
                                                                                                              
                                                                                                              
                                                                                                              525,038
                                                                                                              
                                                                                                              
                                                                                                              587,057Change
      in allowance for severance pay
                                                                                                              
                                                                                                              
                                                                                                              29,254
                                                                                                              
                                                                                                              
                                                                                                              9,973Deferred
      income taxes
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              85,619Gain
      from disposition of property, plant and equipment
                                                                                                              
                                                                                                              
                                                                                                              (50,000
                                                                                                              )
                                                                                                              
                                                                                                              1,692Changes in operating assets
      and liabilities:Accounts
      receivable
                                                                                                              
                                                                                                              
                                                                                                              2,641
                                                                                                              
                                                                                                              
                                                                                                              (6,715
                                                                                                              )Inventory
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              16,829Prepaid
      and sundry assets
                                                                                                              
                                                                                                              
                                                                                                              (132,739
                                                                                                              )
                                                                                                              
                                                                                                              -Other
      receivables
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              (94,319
                                                                                                              )Accounts
      payable
                                                                                                              
                                                                                                              
                                                                                                              83,347
                                                                                                              
                                                                                                              
                                                                                                              39,263Accrued
      liabilities and other payables
                                                                                                              
                                                                                                              
                                                                                                              881,624
                                                                                                              
                                                                                                              
                                                                                                              242,936NET CASH USED IN OPERATING
      ACTIVITIES
                                                                                                              
                                                                                                              
                                                                                                              (1,807,034
                                                                                                              )
                                                                                                              
                                                                                                              (980,616
                                                                                                              )CASH FLOWS FROM INVESTING
      ACTIVITIESAcquisition
      of property, plant and equipment, net
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              (1,506
                                                                                                              )Proceeds
      from disposal of property, plant and equipment, net
                                                                                                              
                                                                                                              
                                                                                                              50,000
                                                                                                              
                                                                                                              
                                                                                                              -NET CASH FLOWS PROVIDED
      (USED IN) BY INVESTING ACTIVITIES
                                                                                                              
                                                                                                              
                                                                                                              50,000
                                                                                                              
                                                                                                              
                                                                                                              (1,506
                                                                                                              )CASH FLOWS FROM FINANCING
      ACTIVITIESRepayment
      of bank loans
                                                                                                              
                                                                                                              
                                                                                                              314,257
                                                                                                              
                                                                                                              
                                                                                                              (31,382
                                                                                                              )Proceeds
      from long term debt
                                                                                                              
                                                                                                              
                                                                                                              151,261
                                                                                                              
                                                                                                              
                                                                                                              -Proceeds
      from convertible debentures
                                                                                                              
                                                                                                              
                                                                                                              1,145,000
                                                                                                              
                                                                                                              
                                                                                                              690,000Receipt
      of loans from related party
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              83,111Proceeds
      from common stock to be issued
                                                                                                              
                                                                                                              
                                                                                                              145,000
                                                                                                              
                                                                                                              
                                                                                                              325,000NET CASH FLOWS PROVIDED BY
      FINANCING ACTIVITIES
                                                                                                              
                                                                                                              
                                                                                                              1,755,518
                                                                                                              
                                                                                                              
                                                                                                              1,066,729EFFECT OF FOREIGN CURRENCY
      TRANSLATION
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              18,826NET INCREASE IN CASH AND
      CASH EQUIVALENTS
                                                                                                              
                                                                                                              
                                                                                                              (1,516
                                                                                                              )
                                                                                                              
                                                                                                              103,433CASH AND CASH EQUIVALENTS,
      BEGINNING OF PERIOD
                                                                                                              
                                                                                                              
                                                                                                              3,175
                                                                                                              
                                                                                                              
                                                                                                              2,968CASH AND CASH EQUIVALENTS,
      END OF PERIOD
                                                                                                              
                                                                                                              $
                                                                                                              1,659
                                                                                                              
                                                                                                              $
                                                                                                              106,401





7




B&D FOOD CORP. AND
SUBSIDIARY
  NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
  June 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. Currently the Company's operates
through its subsidiary in Brazil.
  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 June 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 June 28, 2005 the name was
changed to BDFC Brasil Alimentos Ltda. BDFC has been in the coffee manufacturing
business since 1997. The Company manufactures and purchases 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.
  8
  B&D FOOD CORP. AND
SUBSIDIARY
  NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
  June 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 six months ended June
30, 2008 the Company experienced a net loss of $3,244,605 (June 30, 2007 -
$1,938,200) and has a working capital deficiency of $22,113,983 (December 31,
2007 - $19,850,050). In addition, the Company has defaulted on certain bank
loans as further described in note 9.
  In the
opinion of the management, the anticipated growth of operations, the funds
raised during 2007 and the first and second quarter of 2008, and the 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 its effectively 100% owned
subsidiary, BDFC Brazil Alimentos LTDA.
  Brazilian
company’s law required Brazilian corporations to have more than one stockholder.
B&D Foods Corporation holds 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.
  9
  B&D FOOD CORP. AND
SUBSIDIARY
  NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
  June 30 , 2008 and
2007
  (Expressed in United States
Dollars)
  4.
              INVENTORY
  Inventory
costs include the cost of material, labor and manufacturing overhead. The
following is a summary of inventories by component:
 
 June 30,
                2008
              
              December 31,
                2007Packaging
              
              $
              135,247
              
              $
              122,247Dissolvable
      coffee
              
              
              18,665
              
              
              16,871Material
      for resale
              
              
              4,956
              
              
              4,479Fuel
      and lubricants
              
              
              6,781
              
              
              6,129Less
      provision for obsolescence
              
              
              (165,649
              )
              
              (149,726
              )$
              -
              
              $
              -
  5.
              PROPERTY, PLANT AND
      EQUIPMENT
  The
components of property, plant and equipment were as follows:
 
 June 30,
                2008
              
              December 31,
                2007Land
      and building
              
              $
              2,046,689
              
              $
              1,955,167Computers,
      furniture and machinery
              
              
              1,162,133
              
              
              1,337,034Motor
      vehicles
              
              
              21,932
              
              
              24,6873,230,754
              
              
              3,316,888Accumulated
      depreciation
              
              
              (1,579,437
              )
              
              (1,597,165
              )Net
      book value
              
              $
              1,651,317
              
              $
              1,719,723
  10


B&D FOOD CORP. AND
SUBSIDIARY
  NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
  June 30 , 2008 and
2007
  (Expressed in United States
Dollars)
  6.
                BANK
    LOANS
 
 June 30,
                  2008
                
                December 31,
                  2007UCS
      Fomento Comercial S.A.
                
                $
                1,102,086
                
                $
                857,790Unibanco
                
                
                533,208
                
                
                468,969Banco
      Real
                
                
                33,364
                
                
                30,156Other
      bank overdrafts
                
                
                26,171
                
                
                23,661$
                1,694,829
                
                $
                1,380,576
  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. A
corporate stockholder has guaranteed one of the loans in the amount of $533,208.
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 $$1,102,086 (December 31, 2006 -
$857,790).
  7.
                ACCOUNTS
      PAYABLE
 
 June 30,
                  2008
                
                December 31,
                  2007Trade
      payable (*)
                
                $
                1,375,634
                
                $
                1,226,864Less
      judicial deposits
                
                
                (680,597
                )
                
                (615,174
                )$
                695,037
                
                $
                611,690
  (*) The
judicial deposit represent payments made mainly in 2001 and 2002 under the
Judicial Creditors Agreement (see also note 1).
  11
 B&D FOOD CORP. AND
SUBSIDIARY
  NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
  June 30 , 2008 and
2007
  (Expressed in United States
Dollars)
 8.
                ACCRUED LIABILITIES AND OTHER
      PAYABLES
 
 June 30,
                  2008
                
                December 31,
                  2007Brazilian
      taxes payable other than income tax
                
                $
                2,974,969
                
                $
                2,437,611Employees
      and related institutions
                
                
                2,147,105
                
                
                1,739,384Provision
      for contingencies
                
                
                472,822
                
                
                427,372Amounts
      payable to stockholders of the Company, unsecured, non interest bearing
      and payable on demand
                
                
                14,904
                
                
                152,384Other
      accrued liabilities
                
                
                470,195
                
                
                441,620$
                6,079,995
                
                $
                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.
  Until
June 2006, BDFC’s debt to the Brazilian tax authority was subject to the Refis
II Program, which, in Brazil, affords a company an opportunity to pay taxes in
instalments over a 180 month (15 year) period. Due to a delay in July’s payment
BDFC lost its eligibility to participate in the Refis II Program and is now in
the process of negotiating a payment plan in respect of the debt with the tax
authority, totalling $1,295,576. Until there is a final agreement with the tax
authorities there can be no certainty of the outcome. Management’s estimate of
the tax liability has been classified as current liabilities and is included in
other payables.
  9.
                LONG-TERM
      DEBT
 
 June 30,
                  2008
                
                December 31,
                  2007Mortgage,
      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.
                
                $
                1,089,235
                
                $
                980,114Various
      unsecured term loans at TR plus 0.2%.
                
                
                308,417
                
                
                266,2771,397,652
                
                
                1,246,391Less
      current portion
                
                
                (1,397,652
                )
                
                (1,213,938
                )$
                -
                
                $
                32,453
  Approximate
principal repayments required by the loans are comprised as
follows:
  2008
                
                $
                1,397,6522009
                
                
                -$
                1,397,652
  12
  10.
                CONVERTIBLE DEBENTURES AND
      PROMISSORY NOTES
  Composed
of:
  June 30,
                  2008
                  (restated)
                
                December 31,
                  2007Convertible
      debentures - parent company
                
                $
                10,775,556
                
                $
                10,377,778Convertible
      debentures - other
                
                
                1,892,064
                
                
                1,755,691Promissory
      notes
                
                
                1,498,449
                
                
                362,562$
                14,166,069
                
                $
                12,496,031
  The
convertible debentures and promissory notes are unsecured and mature and become
due as follows:
  June 30,
                  2008
                
                December 31,
                  2007Current,
      due in 2008
                
                
                11,915,714
                
                
                11,472,557Amount
      due in 2009
                
                
                968,699
                
                
                732,863Amount
      due in 2010
                
                
                101,333
                
                
                -Amount
      due in 2011
                
                
                300,555
                
                
                290,611Amount
      due in 2013
                
                
                879,768
                
                
                -$
                14,166,069
                
                $
                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
May 2008, the Company issued unsecured convertible promissory notes to an
unrelated individual in the principal amount of $100,000. The notes bear annual
interest at 10% 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 0.30.
 During
May 2008, the Company issued an unsecured promissory note to an unrelated
individual in the principal amount of $855,000. The note is unsecured, bears
annual interest at an effective rate of approximately 11% and matures
after five years.
  11.
                  COMMON
      STOCK
  On
April 28, 2008 the company issued 1,000,000 shares of its common stock as
compensation for financial services rendered relating to negotiating raising
funds with potential investors.
 
 In May
2008, the Company entered into a subscription agreement with an investor to
issue a total of 5,000,000 shares of common stock for the payment of an
aggregate amount of $145,000.  This amount is recorded as stock
issuable.
  12.
                SUBSEQUENT
      EVENTS
  During
July and August 2008, the Company issued various unsecured promissory notes to
unrelated individuals in the principal amount of $200,000, bearing interest at
annual rates of 8% and maturing in one year.
 13.
                  RESTATEMENT OF FINANCIAL
      STATEMENTS
 
 Subsequent
to the original release of B&D Food Corp’s June 30, 2008 financial
statements, the Company concluded the financial statements are required to be
restated due to accounting errors.  Management identified two share
transactions that had not been recorded.
 
 The
effect of these adjustments on the financial statements was to reduce long term
debt by $142,765, increase interest expense by $2,235, stock compensation by
$30,000 and net loss by_$32,235. There were no changes to cash flow or
assets.
  13
 ITEM2.
                    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.
  FINANCIAL CONDITION AND
LIQUIDITY
  Unless
otherwise specified, all figures are as at the Balance Sheet Date.
  The
Company’s total assetsas at June 30, 2008, as reflected in the consolidated
balance sheet, totaled $1,807,476 compared to $1,747,300 as at December 31,
2007.
  The
Company’s consolidated deficit in working capital amounted to $22,113,983 and
the consolidated quick ratio was 0.01%.
  The
Company’s consolidated long-term financing is mainly based on convertible
promissory notes in the aggregate amount of $14,166,069 issued to third parties,
$10,775,556 of which is held by Livorno. The other consolidated long term
financing consists of (i) long term bank loans in the aggregate amount of $- and
(ii) allowance for severance pay in the aggregate amount of $173,837.
  The
Company’s short-term indebtedness was approximately $6,063,025, including demand
loans in the aggregate amount of $1,694,829 (short term) and $1,397,652 (Long
Term Loans - Due within one year), which are payable in monthly installments
until December 2008.
  The
shareholders’ deficit as at June 30, 2008 totaled $22,399,9416 compared to a
shareholders’ deficit of $19,330,336 as at December 31, 2007. The increase in
shareholders’ deficiency is derived primarily from losses during the six month
period in the aggregate amount of $3,244,605
  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. As at June 30, 2008,
the outstanding balance of such guaranteed loans totaled $533,208. The Company
accrues a guarantee fee payable to the shareholder for providing the guarantee,
in the amount of $21,250 per quarter.
  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.
  14
  SIX MONTHS ENDED JUNE 30, 2008
COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2007
  Net
Income (Loss)
  The
Company’s consolidated net loss for the second quarter of 2008 amounted to
$3,244,605, compared to a consolidated net loss of $1,938,200 for the second
quarter of the previous year.
  The net
loss for the second quarter of 2008 increased in comparison to the second
quarter of the previous year mainly due to the Company not engaging in sales
activities and the high interest related to the increased convertible and
promissory notes.
  Revenue
  The
Company was not in operations and therefore did not generate any revenue for the
six months ended June 30, 2008, compared to $75,005 for the first quarter of the
previous year.
  The
revenue from coffee production through the second 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 third 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 second quarter of 2008
amounted to $908,215, compared to consolidated general and administrative
expenses of $681,363 for the second 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 second quarter of 2008 amounted to
$2,231,197, compared to consolidated financial expenses of $761,533 for the
first 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.
 
 15
  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:
 
 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.
  16
  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.
  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.
  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.
  17
  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.
  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.
  18
  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.
 
 Off-Balance Sheet Arrangements
 
 We do not
have any off-balance arrangements.
 
 MARKET
RISK AND CONTINGENT LIABILITIES
 
 BDFC
primarily operates 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 BDFC'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 BDFC'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.
 
 BDFC is
liable for various claims arising in the ordinary course of business. The
Company has made appropriate provision for those claims. The Company’s
management believes that the provisions recorded in the accounts are adequate to
cover the anticipated losses (if any) arising from those claims.
 
 19
 
 ITEM
3.  CONTROLS AND PROCEDURES
  a)
                Evaluation
      of Disclosure Controls and Procedures. As at March 31, 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 third 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.
  20


PART
II.   OTHER INFORMATION




ITEM 1.   LEGAL
PROCEEDINGS




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




BDFC is
involved in several proceedings, which arose out of the ordinary course of
business. BDFC terminated approximately 100 employees between 2001 and 2004.
Approximately 65% of those employees have filed severance claims with the
Brazilian labor courts. Most of these claims range in value from approximately
$500 to $10,000 per claim. Based on the judicial agreement and judgments
rendered, BDFC is required to pay an aggregate amount of $102,000, of which it
has already paid approximately $50,000. BDFC intends to dispute or is in the
process of negotiating a settlement for the remaining claims for severance pay.
In addition, a former plant manager and director of BDFC made various claims
against BDFC. BDFC disputed the verdict given by a higher labor court in Brazil
and appealed to the Brazilian supreme labor court. BDFC recorded a provision for
the claim in the full amount of the expected verdict by the supreme labor court
totaling approximately $197,960.




As at
June 30, 2008, BDFC owed an aggregate of $1,960,490,10 to the Secretaria da
Fazenda Nacional (the Brazilian tax authority) for overdue taxes. Until June
2006, $1,120,376 of this debt was subject to the Refis II Program, which, in
Brazil, affords a company an opportunity to pay taxes in installments over a 180
month (15 year) period. Due to a delay in July’s payment BDFC lost its
eligibility to participate in the Refis II Program and is now in the process of
negotiating a payment plan in respect of the debt with the tax authority. BDFC
also owes to Instituto Nacional de Seguro Social an aggregate of
$1,911,961.




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.




In June
2008, the Company issued 5,000,000 shares of Common Stock to an investor in
connection with an investment in the Company. The Company is using the funds
received from this investment to refurbish BDFC’s factory in Brazil and to
establish new trading operations in Ethiopia with initial activity expected to
commence by the end of 2008.




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, January 28,
  2008





21





EXHIBITS




Number
            
            Title10.1
            
            Entry
      into a Material Definitive Agreement, June 1, 200831.1
            
            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


22





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 19th day of November 2009.




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


23