UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




- 3rd
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 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 149,986,955 shares of Common Stock, par value
$0.001 per share issued and outstanding.




Small
Company Disclosure (check one):    Yes  x  No    ̈








TABLE
OF CONTENTS




PagePART
      IItem
      1.
              Financial
      Statements
              1-13Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              14-20Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              21Item
      4.
              Controls
      and ProceduresPART
      IIItem
      1.
              Legal
      Proceedings
              22Item
      1A.
              Risk
      Factors
              22Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              22Item
      3.
              Defaults
      Upon Senior Securities
              22Item
      4.
              Submission
      of Matters to a Vote of Securities Holders
              22Item
      5.
              Other
      Information
              22Item
      6.
              Exhibits
              22







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 November 19, 2008. We are filing this form 10-Q/A
to reflect changes made in the 10Q/A filed for June 30 , 2008 Quarterly
Report.





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  September 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
September  30, 2008 Form 10-Q. Accordingly, except for the foregoing
amended information, this Form 10-Q/A continues to speak as
of  November 19, 2008 (the original filing date of the
September  30, 2008 Form 10-Q), and does not reflect events occurring
after the filing of our September  30, 2008 Form 10-Q and does not
modify or update those disclosures affected by subsequent events. Forward
looking statements made in the September 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.




(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




1




B&D
FOOD CORP. AND SUBSIDIARY


September
30 , 2008


CONTENTS




PageCONSOLIDATED
      FINANCIAL STATEMENTSConsolidated
      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


2




B&D
FOOD CORP. AND SUBSIDIARY


CONSOLIDATED
BALANCE SHEETS


AS
AT


(Expressed
in United States Dollars)





Note
                                            
                                            
                                            Sept 30, 2008
                                              (Unaudited-restated)
                                            
                                            
                                            Dec 31, 2007
                                              (Audited)ASSETSCurrent
      AssetsCash
      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
                                            
                                            
                                            
                                            27,577Long-Term
      AssetsNote
      receivable
                                            
                                            
                                            
                                            
                                            
                                            5,765,347
                                            
                                            
                                            
                                            -Property,
      plant and equipment, net
                                            
                                            
                                            5
                                            
                                            
                                            
                                            2,017
                                            
                                            
                                            
                                            1,719,723Total
      Long-Term Assets
                                            
                                            
                                            
                                            
                                            
                                            
                                            5,767,364
                                            
                                            
                                            
                                            1,719,723Total
      Assets
                                            
                                            
                                            
                                            
                                            
                                            $
                                            6,222,549
                                            
                                            
                                            $
                                            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 SEPTEMBER 30


(Expressed
in United States Dollars)





Note
                                                  
                                                  
                                                  Sept 30, 2008
                                                    (Unaudited-
                                                    restated)
                                                  
                                                  
                                                  Dec 31, 2007
                                                    (Audited)LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesBank
      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
                                                  
                                                  
                                                  
                                                  11,472,557Total
      Current Liabilities
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  4,447,856
                                                  
                                                  
                                                  
                                                  19,877,127Long-Term
      LiabilitiesAllowance
      for severance pay
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  144,582Long-term
      debt
                                                  
                                                  
                                                  9
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  32,453Convertible
      debentures
                                                  
                                                  
                                                  10
                                                  
                                                  
                                                  
                                                  1,476,514
                                                  
                                                  
                                                  
                                                  1,023,474Total
      Long-Term Liabilities
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  1,476,514
                                                  
                                                  
                                                  
                                                  1,200,509Total
      Liabilities
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  5,924,370
                                                  
                                                  
                                                  
                                                  21,077,636Stockholders'
      DeficitPreferred
      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: 149,986,955 shares
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  149,987
                                                  
                                                  
                                                  
                                                  148,987Additional
      paid-in capital - common shares
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  2,711,769
                                                  
                                                  
                                                  
                                                  2,682,769Stock
      to be issued
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  145,000Accumulated
      other comprehensive loss
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  (379,635
                                                  )Accumulated
      deficit
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  (17,652,401
                                                  )
                                                  
                                                  
                                                  (21,782,457
                                                  )Total
      Stockholders' Deficit
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  298,179
                                                  
                                                  
                                                  
                                                  (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.




4




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
                                                  (Restated)
                                                
                                                
                                                2007REVENUES
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -COST
      OF GOODS SOLD
                                                
                                                
                                                -
                                                
                                                
                                                
                                                40,609GROSS
      LOSS
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (40,609
                                                )EXPENSESManagement
      and directors fees
                                                
                                                
                                                4,095,268
                                                
                                                
                                                
                                                -General
      and administrative
                                                
                                                
                                                216,386
                                                
                                                
                                                
                                                411,280Depreciation
                                                
                                                
                                                164
                                                
                                                
                                                
                                                -TOTAL
      OPERATING EXPENSES
                                                
                                                
                                                4,311,818
                                                
                                                
                                                
                                                525,887LOSS
      FROM OPERATIONS
                                                
                                                
                                                (4,311,818
                                                )
                                                
                                                
                                                (566,496
                                                )Financial
                                                
                                                
                                                (282,907
                                                )
                                                
                                                
                                                (263,293
                                                )Other
      income, net
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (10,991
                                                )Gain
      on sale of subsidiary interests
                                                
                                                
                                                11,969,386
                                                
                                                
                                                
                                                -INCOME
      (LOSS) BEFORE TAXES
                                                
                                                
                                                7,374,661
                                                
                                                
                                                
                                                (840,780
                                                )Taxes
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -NET
      INCOME (LOSS)
                                                
                                                $
                                                7,374,661
                                                
                                                
                                                $
                                                (840,780
                                                )FOREIGN
      CURRENCY TRANSLATION ADJUSTMENT
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (239,571
                                                )COMPREHENSIVE
      INCOME (LOSS)
                                                
                                                $
                                                7,374,661
                                                
                                                
                                                $
                                                (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.




5




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
                                                      (Restated)
                                                    
                                                    
                                                    2007REVENUES
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    75,005COST
      OF GOODS SOLD
                                                    
                                                    
                                                    80,824
                                                    
                                                    
                                                    
                                                    571,298GROSS
      LOSS
                                                    
                                                    
                                                    (80,824
                                                    )
                                                    
                                                    
                                                    (496,293
                                                    )EXPENSESManagement
      and directors fees
                                                    
                                                    
                                                    4,427,260
                                                    
                                                    
                                                    
                                                    -General
      and administrative
                                                    
                                                    
                                                    792,719
                                                    
                                                    
                                                    
                                                    978,036Amortization
                                                    
                                                    
                                                    68,570
                                                    
                                                    
                                                    
                                                    114,607TOTAL
      OPERATING EXPENSES
                                                    
                                                    
                                                    5,288,549
                                                    
                                                    
                                                    
                                                    1,663,941LOSS
      FROM OPERATIONS
                                                    
                                                    
                                                    (5,339,373
                                                    )
                                                    
                                                    
                                                    (1,588,936
                                                    )Financial
                                                    
                                                    
                                                    (2,514,104
                                                    )
                                                    
                                                    
                                                    (1,024,826
                                                    )Other
      income, net
                                                    
                                                    
                                                    44,146
                                                    
                                                    
                                                    
                                                    (50,611
                                                    )Gain
      on sale of subsidiary interests
                                                    
                                                    
                                                    11,969,386
                                                    
                                                    
                                                    
                                                    -INCOME
      (LOSS) BEFORE TAXES
                                                    
                                                    
                                                    4,130,055
                                                    
                                                    
                                                    
                                                    (2,664,373
                                                    )Taxes
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -NET
      INCOME (LOSS)
                                                    
                                                    $
                                                    4,130,055
                                                    
                                                    
                                                    $
                                                    (2,664,373
                                                    )FOREIGN
      CURRENCY TRANSLATION ADJUSTMENT
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (625,468
                                                    )COMPREHENSIVE
      INCOME (LOSS)
                                                    
                                                    $
                                                    4,130,055
                                                    
                                                    
                                                    $
                                                    (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
                                                    
                                                    
                                                    149,552,648
                                                    
                                                    
                                                    
                                                    120,469,231




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 NINE MONTH PERIOD ENDED SEPTEMBER 30


(Expressed
in United States Dollars)


(Unaudited)




2008
                                              (Restated)
                                            
                                            
                                            2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      earnings (loss)
                                            
                                            $
                                            4,130,055
                                            
                                            
                                            $
                                            (2,664,373
                                            )Adjustments
      to reconcile net loss to net cash used in operating
      activitiesDepreciation
                                            
                                            
                                            68,570
                                            
                                            
                                            
                                            114,607Convertible
      debt issued for services
                                            
                                            
                                            3,968,268
                                            
                                            
                                            
                                            -Change
      in provision for contingencies
                                            
                                            
                                            -
                                            
                                            
                                            
                                            14,450Stock
      based compensation
                                            
                                            
                                            30,000Interest
      due to convertible notes and bank debts
                                            
                                            
                                            782,946
                                            
                                            
                                            
                                            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
                                            
                                            
                                            -
                                            
                                            
                                            
                                            40,069NET
      CASH USED IN OPERATING ACTIVITIES
                                            
                                            
                                            (2,009,198
                                            )
                                            
                                            
                                            (880,769
                                            )CASH
      FLOWS FROM INVESTING ACTIVITIESAcquisition
      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 ACTIVITIESProceeds
      from (repayment of) bank loans
                                            
                                            
                                            314,597
                                            
                                            
                                            
                                            (227,983
                                            )Proceeds
      from long term debt
                                            
                                            
                                            151,261
                                            
                                            
                                            
                                            -Proceeds
      from convertible debentures
                                            
                                            
                                            1,345,000
                                            
                                            
                                            
                                            1,015,000Receipt
      of loans from related party
                                            
                                            
                                            -Proceeds
      from common stock to be issued
                                            
                                            
                                            145,000
                                            
                                            
                                            
                                            312,000NET
      CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
                                            
                                            
                                            1,955,858
                                            
                                            
                                            
                                            1,099,017EFFECT
      OF FOREIGN CURRENCY TRANSLATION
                                            
                                            
                                            -
                                            
                                            
                                            
                                            5,110NET
      INCREASE IN CASH AND CASH EQUIVALENTS
                                            
                                            
                                            (3,175
                                            )
                                            
                                            
                                            35,302CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                                            
                                            
                                            3,175
                                            
                                            
                                            
                                            2,968CASH
      AND CASH EQUIVALENTS, END OF PERIOD
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            38,270




7




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.




8




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 $5,369,373
(September 30, 2007 - $525,887) and has a working capital deficiency of
$3,992,671 (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, 2007Packaging
                        
                        $
                        -
                        
                        
                        $
                        122,247Dissolvable
      coffee
                        
                        
                        -
                        
                        
                        
                        16,871Material
      for resale
                        
                        
                        -
                        
                        
                        
                        4,479Fuel
      and lubricants
                        
                        
                        -
                        
                        
                        
                        6,129Less
      provision for obsolescence
                        
                        
                        -
                        
                        
                        
                        (149,726
                        )$
                        -
                        
                        
                        $
                        -




9




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,
                            2007Land
      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,
                            2007UCS
      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,
                              2007Trade
      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).




10




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, 2007Brazilian
      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, 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.
                          
                          $
                          -
                          
                          
                          $
                          980,114Various
      unsecured term loans at TR plus 0.2%.
                          
                          
                          -
                          
                          
                          
                          266,277-
                          
                          
                          
                          1,246,391Less
      current portion
                          
                          
                          -
                          
                          
                          
                          (1,213,938
                          )$
                          -
                          
                          
                          $
                          32,453




11




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
                          (Restated)
                        
                        
                        December 31, 2007Convertible
      debentures - parent company
                        
                        $
                        -
                        
                        
                        $
                        10,377,778Convertible
      debentures - other
                        
                        
                        2,109,180
                        
                        
                        
                        1,755,691Promissory
      notes
                        
                        
                        1,539,240
                        
                        
                        
                        362,562$
                        3,648,420
                        
                        
                        $
                        12,496,031




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




September 30,
                          2008
                          (Restated)
                        
                        
                        December 31,
                          2007Current,
      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
                        
                        
                        906,509
                        
                        
                        
                        -$
                        3,648,420
                        
                        
                        $
                        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
May2008, 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





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.




12





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 to be
issued.




12.
            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




13.
            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.




14.
            RESTATEMENT OF
      FINANCIAL STATEMENTS




Subsequent
to the original release of B&D Food Corp’s September 30, 2008 financial
statements, the Company concluded the financial statements are required to be
restated due to the restatement of June 30, 2008 Quarterly
Report.
 The
effect of these adjustments on the financial statements was to reduce long term
debt by $136,024, increase interest expense by $8976, stock compensation by
$30,000  and net loss by $38,976.  There were no changes to
cash flow or assets.




13




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.




14




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 $3,992,671 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 $3,648,420 issued to third
parties.




The
shareholders’ equity as at September 30, 2008 totaled $298,179 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.




15




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
$4,130,055, 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 $576,333, 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
$2,514,104, 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:




16




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.




17




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.




18




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
141Restablishes
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.




19





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.




20




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.




21




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




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