UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


           [X] Quarterly report pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                  For the quarterly period ended June 30, 2002


                         Commission file number: 0-13118

                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
        (Exact name of small business issuer as specified in its charter)

           Florida                                               65-0805935
  (State or Other Jurisdiction of                            (I.R.S. Employer
Incorporation or Organization)                            Identification Number)

                          1548 The Green's Way, Suite 1
                          Jacksonville Beach, FL 32250
                    (Address of principal executive offices)

                                 (904) 280-7795
                           (Issuers telephone number)


The number of issued and outstanding shares of the issuer's common stock, $0.001
                 par value, as of August 1, 2002 was $42,753,571

<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION

<TABLE>
                          PART I - FINANCIAL INFORMATION                                                    PAGE

Item 1.  Financial Statements:

<S>                                                                                                         <C>
         Consolidated Balance Sheet - (Unaudited)...................................................        1

         Consolidated Statements of Operations - (Unaudited)........................................        3

         Consolidated Statements of Changes in Stockholders' Equity  - (Unaudited) .................        5

         Consolidated Statements of Cash Flows - (Unaudited)........................................        8

         Notes to Consolidated Financial Statements.................................................        9

Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations.................................................................       17


                         PART II - OTHER INFORMATION                                                        PAGE

Item 1. Legal Proceedings...........................................................................       19

Item 2. Changes in Securities.......................................................................       19

Item 3. Defaults Upon Senior Securities.............................................................       19

Item 4. Submission of Matters to a Vote of Security Holders.........................................       19

Item 5. Other Information...........................................................................       19

Item 6. Exhibits and Reports on Form 8-K............................................................       19

Signatures..........................................................................................       20
</TABLE>

                                       ii
<PAGE>



                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)
                                  JUNE 30, 2002



                                     Assets


Current assets
   Cash                                                               $    9,002
   Accounts receivable, net                                               27,069
   Inventory                                                             193,200
   Prepaid expenses                                                       30,545
                                                                      ----------
Total current assets                                                     259,816

Property, plant and equipment, net                                     5,097,273

Intangible asset, net                                                    552,742


Other assets
   Other receivables                                                       5,000
   Other assets                                                          176,264
                                                                      ----------
                                                                         181,264
                                                                      ----------

                                                                      $6,091,095
                                                                      ==========

                                       1
<PAGE>

                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)
                                  JUNE 30, 2002



                      Liabilities and Stockholders' Equity



Current liabilities
   Accounts payable                                                $  2,265,157
   Accrued expense                                                      807,713
   Accrued interest                                                      93,599
   Current portion of line of credit - related party                     75,000
   Current portion of line of credit - other                             50,000
   Current portion of notes payable - related party                       7,000
   Current portion of notes payable - other                             268,782
                                                                   ------------
Total current liabilities                                             3,567,251

Capitalized lease obligations                                           171,606
Convertible note payable                                                947,000
Financing obligation                                                  1,368,000
Deferred gain                                                            50,010
                                                                   ------------
                                                                      2,536,616

Stockholders' equity
   Preferred stock, $0.001 par value, 20 million shares
     authorized, 563,100 shares issued and outstanding,
     redeemable at company's option
     (liquidation preference $ 6,761,000 )                                5,631
   Common stock, $0.001 par value, 80 million shares
     authorized, 42,753,571 shares issued and  outstanding               42,755
   Additional paid in capital                                        16,627,642
   Accumulated deficit                                              (16,688,800)
                                                                   ------------
                                                                        (12,772)
                                                                   ------------

                                                                   $  6,091,095
                                                                   ============
                                       2
<PAGE>

                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
                                                                 Three months ended June 30,             Six months ended June 30,
                                                                    2002              2001                2002              2001
                                                               ------------------------------        ------------------------------
<S>                                                            <C>                <C>                <C>                <C>
Revenue
   Sales, net of discounts and returns                         $   438,220        $ 1,420,276        $   669,056        $ 3,957,725

   Cost of goods sold                                              322,771          1,264,211            542,427          3,340,979
                                                               ------------------------------        ------------------------------


Gross profit                                                       115,449            156,065            126,629            616,746
                                                               ------------------------------        ------------------------------

Expenses

   General and administrative                                      105,227            178,122            760,974            463,388

   Sales expenses                                                   28,019            169,024             55,408            537,887

   Marketing expenses                                                4,288             20,548             10,165             42,010

   Consulting and professional fees                                 32,761            112,585            714,124            284,406

   Rent                                                              8,253             13,565             13,817             25,434

   Bad debt                                                              -             15,000                  -             25,000

   Depreciation and amortization                                   140,429            146,878            280,731            291,271
                                                               ------------------------------        ------------------------------

                                                                   318,977            655,722          1,835,219          1,669,396
                                                               ------------------------------        ------------------------------
Loss from operations
                                                                  (203,528)          (499,657)        (1,708,590)        (1,052,650)

Other income/(expenses)

   Interest expense                                                (97,353)           (64,592)          (212,088)          (120,287)

   Other income                                                          -                  -                  -                257

   Interest income                                                       -                  5                  -                 40

   Other expenses                                                        -            (15,401)                 -            (43,815)

   Litigation settlements                                           84,635                  -            118,094                  -
                                                               ------------------------------        ------------------------------

                                                                   (12,718)           (79,988)           (93,994)          (163,805)
                                                               ------------------------------        ------------------------------

Loss from continuing operations                                $  (216,246)       $  (579,645)       $(1,802,584)       $(1,216,455)
</TABLE>

                                       3
<PAGE>

                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


<TABLE>
                                                                Three months ended June 30,             Six months ended June 30,
                                                                    2002             2001                2002                2001
                                                               ------------------------------        ------------------------------

<S>                                                            <C>                <C>                <C>                <C>
Loss from continuing operations                                $  (216,246)       $  (579,645)       $(1,802,584)       $(1,216,455)

Discontinued operations

Loss from discontinued operations, net                                   -            (12,121)                 -            (56,360)

Loss on disposition, net                                                 -            (18,074)
                                                               ------------------------------        ------------------------------

                                                                         -            (12,121)                 -            (74,434)
                                                               ------------------------------        ------------------------------

Extraordinary items

   Gain on debt restructure                                              -                  -            309,598                  -
                                                               ------------------------------        ------------------------------

                                                                         -                  -            309,598                  -
                                                               ------------------------------        ------------------------------

Net loss                                                       $  (216,246)       $  (591,766)       $(1,492,986)       $(1,290,889)
                                                               ==============================        ==============================

Earnings (loss) per common share
   Loss before extraordinary items                             $     (0.01)       $     (0.06)       $     (0.06)       $     (0.12)

   Discontinued operations                                               -              (0.00)                 -              (0.01)

   Extraordinary items                                                   -                  -               0.01                  -
                                                               ------------------------------        ------------------------------
                                                               $     (0.01)       $     (0.06)       $     (0.05)       $     (0.13)
                                                               ------------------------------        ------------------------------
</TABLE>

                                       4
<PAGE>



                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
                         SIX MONTHS ENDED JUNE 30, 2002

<TABLE>
                                                                                         Additional
                                               Common Stock          Preferred Stock      Paid in      Accumulated
                                            Shares     Amount       Shares     Amount     Capital        Deficit       TOTAL
                                          ----------  --------     --------   -------   ------------ -------------- ------------
<S>                                        <C>        <C>           <C>       <C>       <C>           <C>            <C>
Balance December 31, 2000                  9,918,683  $  9,919      589,600   $ 5,896   $15,101,795   $(11,808,082)  $3,309,528


Issuance of shares of common stock for
consulting services
  rendered in connection with
private placement                             75,000        75                               37,425                      37,500

Issuance of shares of common stock
in exchange for

   legal services  rendered                   10,500        11                               28,866                      28,877

Issuance of common stock in
connection with

  convertible preferred stock.             3,124,501     3,125      (26,500)     (265)       (2,860)                          -

Issuance of shares as legal
settlement                                   100,000       100                                1,600                       1,700

Additional consideration for loan
agreement in

  exchange of warrants                                                                      140,040                     140,040


Net loss  2001                                                                                          (3,387,732)  (3,387,732)
                                          ------------------------------------------------------------------------------------------


Balance December 31, 2001                 13,228,684  $ 13,230      563,100   $ 5,631   $15,306,866   $(15,195,814)  $  129,913

Issuance of common stock in
connection with the

   Debt restructure                        2,183,325     2,183                              106,983                     109,166
                                          ------------------------------------------------------------------------------------------
             sub-total                    15,412,009  $ 15,413      563,100   $ 5,631   $15,413,849   $(15,195,814)  $  239,079


             sub-total                    15,412,009  $ 15,413      563,100   $ 5,631   $15,413,849   $(15,195,814)  $  239,079
</TABLE>

                                       5
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
                         SIX MONTHS ENDED JUNE 30, 2002

<TABLE>
                                                                                      Additional
                                             Common Stock          Preferred Stock     Paid in      Accumulated
                                          Shares      Amount      Shares    Amount     Capital        Deficit          TOTAL
                                        ----------    -------    --------   ------   -----------    ------------     ----------
<S>                                      <C>            <C>                               <C>
Additional shares of common stock
issued in connection

  with convertible preferred stock.      2,518,867      2,519                             (2,519)                             -

Issuance of shares of common stock
as consideration

  for a loan agreement.                    200,000        200                              9,800                         10,000

Issuance of shares of common stock
in consideration

  for reorganization services            1,150,000      1,150                             56,350                         57,500

Issuance of shares of common stock
in consideration

  for exchange of shares                 2,000,000      2,000                             98,000                        100,000

Issuance of shares of common stock
to  employees

   as bonus                             11,275,000     11,275                            552,475                        563,750

Issuance of shares of common stock
in consideration

  for finder fees                        2,000,000      2,000                             98,000                        100,000

Issuance of shares of common stock
in consideration

  for forbearance loan agreement         8,197,695      8,198                            401,687                        409,885


Net loss June 30, 2002                                                                                (1,492,986)    (1,492,986)
                                        ---------------------------------------------------------------------------------------


TOTAL                                   42,753,571    $42,755     563,100   $5,631   $16,627,642    $(16,688,800)    $  (12,772)
                                        =======================================================================================
</TABLE>


                                       6
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
                                                                                                     Six months ended June 30,
                                                                                                  2002                      2001
                                                                                               -------------------------------------
<S>                                                                                            <C>                      <C>
Cash flows from operating activities:
  Net loss                                                                                     $(1,492,986)             $(1,290,889)
                                                                                               -----------              ------------

  Adjustments to reconcile net loss to net
    cash provided by operating activities:

      Depreciation and amortization                                                                280,731                  291,271
     Compensation in exchange for stock, options
       and warrants                                                                              1,241,135                   52,475
      Bad Debt                                                                                           -                   25,000
     Litigation settlements                                                                         84,635
      (Gain) loss on debt restructure                                                             (309,598)                       -
     Loss on disposition                                                                                 -                   61,889
      (Increase) decrease in accounts receivable                                                    59,146                  160,809
      (Increase) decrease in inventory                                                              58,477                  135,333
      (Increase) decrease in prepaid expenses                                                      (11,393)                   2,114
      (Increase) decrease in other assets                                                           62,596                  432,285
      Increase (decrease) in accounts payable and
accrued expenses                                                                                   (95,135)                 185,773
                                                                                               -----------              -----------
      Total adjustments                                                                          1,370,594                1,346,949
                                                                                               -----------              -----------
Net cash provided by (used in) operating activities                                               (122,392)                  56,060
                                                                                               -----------              -----------
Cash flows from investing activities:
   Cash payments for the purchase of property                                                       (2,675)                 (10,878)
                                                                                               -----------              -----------
Net cash used in investing activities                                                               (2,675)                 (10,878)
                                                                                               -----------              -----------
Cash flows from financing activities:
   Proceeds from loans                                                                             137,000                   35,000
   Principal payments on notes payable                                                             (15,000)                  (3,298)
   Principal payment on capital leases                                                                   -                   (9,347)
Net cash provided by financing activities                                                          122,000                   22,355
                                                                                               -----------              -----------

Net increase (decrease) in cash and cash equivalents                                                (3,067)                  67,537

Cash and cash equivalents, beginning of period                                                      12,069                  (75,802)
                                                                                               -----------              -----------
Cash and cash equivalents, end of period                                                       $     9,002              $    (8,265)
                                                                                               ===========              ===========
</TABLE>

                                       7
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
                                                                       Six months ended June 30,
                                                                      2002                  2001
                                                                 ---------------        ------------
<S>                                                              <C>                    <C>
Supplemental disclosures of cash flow information:
Cash paid during the period for:

    Interest expense                                             $        11,334        $     55,869
                                                                 ---------------        ------------
</TABLE>

Stockholders' equity note:

On March 25, 2002, in a Debt Restructure  agreement,  the Company authorized the
issuance of 2,183,325  shares of common stock in exchange for notes payable from
one creditor totaling $350,000 plus interest of $68,764.  The Company recognized
an extraordinary gain of $309,598 on the restructuring.

On March 25, 2002,  the Company  authorized  the  issuance of 200,000  shares of
common stock in consideration for a line of credit with a third party. The value
of $0.05 per share was the trading price on the date of the grant.  Accordingly,
interest expense of $10,000 was charged to operations.

On March 25, 2002, the Company  authorized  the issuance of 1,150,000  shares of
common  stock  to  a  third  party  in   consideration   for   compensation  for
reorganization  services.  The value of $0.05 per share was the trading price on
the date of the grant. Accordingly, consulting expense of $57,500 was charged to
operations.

On March 25, 2002, the Company  authorized  the issuance of 2,000,000  shares of
common stock to a third party in  consideration  for  consulting  services.  The
value  of $0.05  per  share  was the  trading  price  on the date of the  grant.
Accordingly,  consulting expense of $75,000 and interest expense of $25,000 were
charged to operations.

On March 25, 2002, the Company  authorized the issuance of 11,275,000  shares of
common  stock as a bonus to  employees.  The  value of $0.05  per  share was the
trading price on the date of the grant. Accordingly, payroll expense of $563,750
was charged to operations.

On March 25, 2002, the Company  authorized  the issuance of 2,000,000  shares of
common stock to a third party in  consideration  for finder  fees.  The value of
$0.05 per share was the  trading  price on the date of the  grant.  Accordingly,
consulting expense of $100,000 was charged to operations.

On March 25, 2002, the Company  authorized  the issuance of 8,197,695  shares of
common stock to a third party in consideration for foreclosure forbearance.  The
value  of $0.05  per  share  was the  trading  price  on the date of the  grant.
Accordingly, consulting expense of $409,885 was charged to operations.

                                       8
<PAGE>

                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 2002




NOTE 1     UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The  accompanying  consolidated  financial  statements  of the Company have been
prepared in accordance with the instructions to Form 10-QSB and, therefore, omit
or  condense  certain  footnotes  and other  information  normally  included  in
financial  statements  prepared in accordance with generally accepted accounting
principles.   It  is  suggested  that  these  consolidated  condensed  financial
statements should be read in conjunction with the Company's financial statements
and notes thereto included in the Company's audited financial statements on Form
10-KSB for the fiscal year ended December 31, 2001.

The accounting policies followed for interim financial reporting are the same as
those disclosed in Note 1 of the Notes to Financial  Statements  included in the
Company's  audited  financial  statements for the fiscal year ended December 31,
2001, which are included in Form 10- KSB.

In the opinion of management,  the unaudited  consolidated  financial statements
include all necessary adjustments (consisting of normal, recurring accruals) for
a fair  presentation of the financial  position,  results of operations and cash
flow  for  the  interim  periods  presented.  Preparing  consolidated  financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets,  liabilities,  revenues and expenses. Actual results
may differ from these estimates.  Interim results are not necessarily indicative
of results for a full year. The results of operations  for the six-month  period
ended June 30, 2002 are not  necessarily  indicative of operating  results to be
expected for a full year.

The  Financial  Accounting  Standards  Board has  recently  issued  several  new
accounting  pronouncements,  which may apply to the Company. Statement No.133 as
amended by Statement No. 137 and 138, Accounting for Derivative  Instruments and
Hedging Activities established accounting and reporting standards for derivative
instruments  and related  contracts and hedging  activities.  This  statement is
effective  for all fiscal  quarters  and fiscal years  beginning  after June 15,
2000. The adoption of this  pronouncement  did not have a material effect on the
Company's financial position, results of operations or liquidity.  Statement No.
141,  Business   Combinations  (SFAS  141)  establishes  revised  standards  for
accounting for business combinations. Specifically, the statement eliminates the
pooling method,  provides new guidance for recognizing intangible assets arising
in a  business  combination,  and  calls for  disclosure  of  considerably  more
information  about a business  combination.  This  statement  is  effective  for
business  combinations  initiated on or after July 1, 2001. The adoption of this
pronouncement  on July 1, 2001 did not have a material  effect on the  Company's
financial  position,  results of  operations  or  liquidity.  Statement No. 142,
Goodwill and Other Intangible Assets (SFAS 142) provides new guidance concerning
the accounting for the  acquisition of  intangibles,  except those acquired in a
business  combination,  which is  subject  to SFAS 141,  and the manner in which
intangibles  and goodwill  should be accounting  for subsequent to their initial
recognition.  Generally,  intangible assets with indefinite lives, and goodwill,
are no longer amortized; they are carried at lower of cost or market and subject
to annual impairment evaluation,  or interim impairment evaluation if an interim
triggering event occurs, using a new fair market value method. Intangible assets
with finite lives are amortized  over those lives,  with no stipulated  maximum,
and an impairment  test is performed only when a triggering  event occurs.  This
statement is effective for all fiscal years beginning after December 15, 2001.

                                       9
<PAGE>


NOTE 1     UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS  - continued

The Company believes that the  implementation  of SFAS 142 on April 1, 2002 will
not have a  material  effect on the  Company's  financial  position,  results of
operations or liquidity.  Statement No. 144,  Accounting  for the  Impairment or
Disposal of Long-Lived Assets supercedes  Statement No. 121,  Accounting for the
Impairment  of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed of
(SFAS 121). Though it retains the basic  requirements of SFAS 121 regarding when
and  how  to  measure  an  impairment   loss,   SFAS  144  provides   additional
implementation  guidance.  SFAS 144 excludes  goodwill and intangibles not being
amortized among other exclusions. SFAS 144 also supersedes the provisions of APB
30, Reporting the Results of Operations,  pertaining to discontinued operations.
Separate reporting of a discontinued  operation is still required,  but SFAS 144
expands  the  presentation  to include a  component  of an entity,  rather  than
strictly a business segment as defined in SFAS 131,  Disclosures  about Segments
of an Enterprise and Related  Information.  SFAS 144 also eliminates the current
exemption  to  consolidation  when  control  over a  subsidiary  is likely to be
temporary.  This  statement is effective  for all fiscal years  beginning  after
December 15, 2001. The Company believes that the  implementation  of SFAS 144 on
April 1,  2002  will not  have a  material  effect  on the  Company's  financial
position, results of operations or liquidity.

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

On February 7, 2002, the Company's  board of directors  resolved to enter into a
factoring  agreement  with a  related  party  for the sale of  certain  customer
accounts  receivable at 98% of the purchase  price with an 8% reserve,  factored
with  recourse  with respect to credit risk. An allowance for losses is provided
for known and  potential  losses  arising  from  claims  and for  customers  not
factored, based on a periodic review of these accounts.


NOTE 2     CONCENTRATION OF CREDIT RISK

There were no cash  balances  at June 30,  2002 that  exceed  federal  insurance
limits.

At June 30,  2002,  one  customer  represented  approximately  61% of the  trade
accounts  receivable.  Four other customers  represented 27% of the receivables.
The Company  obtains  detailed  credit  evaluations of customers and establishes
credit limits as required. It is the opinion of management that the Company will
be severely  impacted if the customer that  represents 61% of trade  receivables
should cease doing business with the Company.

NOTE 3     EARNINGS (LOSS) PER SHARE

Basic  earnings  (loss) per share is computed by dividing  income (loss) for the
period by the weighted  average number of common shares  outstanding  during the
period.  Diluted  earnings  (loss) per share include the effects of common stock
equivalents to the extent they are dilutive.

Basic  weighted and dilutive  average  number of shares  outstanding at June 30,
2002 is as follows:

<TABLE>
<S>                                                                                             <C>
                  Basic and dilutive weighted average
                      number of shares outstanding                                              29,051,413
</TABLE>


                                       10
<PAGE>

NOTE 4     ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2002 consisted of the following:

<TABLE>
<S>                                                                                               <C>
         Accounts receivable                                                                      $124,725
         Less allowance for doubtful account                                                       (97,656)
                                                                                                  --------
                                                                                                  $ 27,069
                                                                                                  ========
</TABLE>

There was no bad debt expense for the six months ended June 30, 2002.

On February 7, 2002, the Company's  board of directors  resolved to enter into a
factoring  agreement  with a  related  party  for the sale of  certain  customer
accounts  receivable at 98% of the purchase  price with an 8% reserve,  factored
with recourse with respect to credit risk. At June 30, 2002,  factored  accounts
receivable totaled $61,638.


NOTE 5     INVENTORY

Inventory at June 30, 2002 consisted of the following:

<TABLE>
<S>                                                                                              <C>
         Finished goods                                                                          $  63,816
         Raw materials                                                                             129,384
                                                                                                 ---------
                                                                                                 $ 193,200
                                                                                                 =========
</TABLE>



NOTE 6     PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30, 2002 consisted of the following:

<TABLE>
         Amortization
                                                                                            Period in Years
                                                                                            ---------------
<S>                                                                       <C>
         Land                                                             $   400,000              -
         Building                                                           1,912,007              39
         Plant equipment                                                    3,936,558               7
         Plant improvements                                                   124,483              39
         Office machines and equipment                                        103,682               7
         Lease equipment                                                       16,296               7
                                                                           ----------

                                                                            6,493,026
         Less accumulated depreciation                                     (1,395,753)
                                                                           ----------

                                                                          $ 5,097,273
                                                                          ===========
</TABLE>


Depreciation expense for the six months ended June 30, 2002 was $256,731.

On May 31, 2002 the Company  entered  into a  sale-leaseback  agreement  for the
building, land and plant improvements.  For accounting purposes, the transaction
has been  accounted for under the  financing  method.  The Company  recognized a
deferred gain of $50,010 (See Note 10)

                                       11
<PAGE>

NOTE 7     INTANGIBLE ASSETS

Intangible assets are summarized by major classification as follows:

<TABLE>
<S>                                                                                             <C>
         Trademark and brand name                                                               $  728,449
         Others                                                                                      2,817
                                                                                                ----------

                                                                                                   731,266
         Less accumulated amortization                                                           ( 178,524)
                                                                                                ----------

                                                                                                $  552,742
                                                                                                ==========
</TABLE>


Amortization expense for the six months ended June 30, 2002 totaled $24,000.

NOTE  8    LINES OF CREDIT

Line of credit - related party
------------------------------
The Company has a line of credit  totaling  $100,000 from a shareholder,  who is
also an officer and  director.  The credit line has an interest  rate of 10% and
was due June 1, 2002. As of June 30, 2002, the Company owes $75,000 against this
credit line. The line of credit is collateralized by assignment of all assets of
the company. The line of credit is in default as of the date of this review.

Line of credit - unrelated party
--------------------------------
The  Company  has a line  of  credit  from an  unrelated  third  party  totaling
$100,000.  The credit line has an interest rate of 10% and was due June 1, 2002.
As of June 30, 2002, the Company owes $50,000 against this credit line. The line
of credit is collateralized by assignment of all assets of the company. The line
of credit is on default as of the date of this review.

Interest expense for the six months ended June 30, 2002 was $5,497.


NOTE 9     NOTES PAYABLE

The Company has outstanding notes payable at June 30, 2002 as follows:

<TABLE>
        Notes Payable - Related Parties
        -------------------------------

        Note  payable  to an  officer  and  director  of the  Company,  at a 10%
<S>                                                                               <C>
        interest rate per year; due on demand.                                    $      7,000

        Notes Payable - Unrelated Parties

        Note  payable  to  individuals  with an  interest  rate of 8% per  year,
        payable in 36 monthly payments;  unsecured, due March 31, 2003. The note
        is in default at June 30, 2002.                                           $     43,782


        Note payable to a company with a 10% interest rate per year;  secured by
        all assets and due on demand.                                                   15,000
</TABLE>

                                       12
<PAGE>

<TABLE>
<S>                                                                                    <C>
        Note payable to an individual  with a 10.25% interest rate per year; due
        on demand;  secured by multi-packer equipment of Company. The note is in
        default at June 30, 2002.                                                      150,000

        Convertible  note payable to a company with a 8% interest rate per year;
        unsecured,  due on May 14, 2005.  At the option of the holder,  the note
        may be  converted  into  6,000,000  shares of common stock at 80% of the
        trading price of the shares at the date of the conversion.                $    947,000

        Note payable to various  individuals  with no interest per year;  due on
        demand; secured by receivables of the Company.                                  60,000

                                                                                     1,215,782
        Less current portion                                                         ( 268,782)
                                                                                  ------------

                                                                                  $    947,000
                                                                                  ============
</TABLE>

The total interest expense related to these loans was $ 70,180 at June 30, 2002.


NOTE 10    FINANCING OBLIGATION

On May 31, 2002, the Company entered into a  sale-leaseback  transaction for the
building, land and plant improvements for a total of $2,429,000. The transaction
was accounted for under the financing method,  providing a security  arrangement
for the buyer-lessor's  investment.  A total of $1,268,000 has been disbursed to
satisfy payments as follows:

<TABLE>
<S>                                                                               <C>
         Forbearance agreement                                                    $    660,000
         Accrued interest forbearance agreement                                        106,313
         Foreclosure judgment                                                          551,697
                                                                                  ------------

                                                                                  $  1,318,010
                                                                                  ============
</TABLE>


The company  recognized  a deferred  gain on the  transaction  of  $50,010.  The
sale-leaseback  includes a purchase  option due August 30,  2002.  The  purchase
option will increase by $100,000 if not exercised by August 30, 2002.


NOTE 11    INCOME TAXES

At June 30, 2002,  the Company had useable net operating loss  carryforwards  of
approximately  $15,575,289  for income tax purposes,  available to offset future
taxable income of the U.S. entity expiring through 2021.

The valuation  allowance was  $5,285,000  at June 30, 2002.  This  allowance was
reserved at December 31, 2001,  as management  estimates  that it is more likely
than not that the deferred tax assets will not be realized due to uncertainty of
the Company's ability to generate future taxable income.  Based on estimated use
of net operating  losses  through  December 31, 2001, the deferred tax asset was
adjusted to $1,173,000.

                                       13
<PAGE>



NOTE 12    DEBT RESTRUCTURE

On March 25,  2002,  the Company  renegotiated  notes  payable from one creditor
totaling  $350,000 plus interest of $68,764 in a debt  restructure  agreement as
follows:

        Notes  payable of $350,000 in exchange  for  2,183,325  shares of common
        stock.  On the date of the  exchange,  the  trading  price of the common
        stock was $.05 per share. The Company  recognized an extraordinary  gain
        of $309,598 on the restructuring.


NOTE 13    STOCKHOLDERS' EQUITY

On March 21, 2002, with approval of the board of directors,  the Company amended
its  Articles of  Incorporation  to provide  for an  increase in the  authorized
number of shares  of  common  stock to  80,000,000  at  $0.001  par  value.  The
authorized  number of shares of preferred  stock  remained at 20,000,000  with a
change in par value to $0.001.

On March 25, 2002, by resolution of the board of directors, the Company approved
the issuance of  2,518,867  shares of common  stock to correct  preferred  stock
conversions for Series D, E, and F.

On March 25, 2002, in a debt restructure  agreement,  the Company authorized the
issuance of 2,183,325  shares of common stock in exchange for notes payable from
one creditor totaling $350,000 plus interest of $68,764.  The Company recognized
an extraordinary gain of $309,598 on the restructuring.

On March 25, 2002,  the Company  authorized  the  issuance of 200,000  shares of
common stock in consideration for a line of credit with a third party. The value
of $0.05 per share was the trading price on the date of the grant.  Accordingly,
interest expense of $10,000 was charged to operations.

On March 25, 2002, the Company  authorized  the issuance of 1,150,000  shares of
common  stock  to  a  third  party  in   consideration   for   compensation  for
reorganization  services.  The value of $0.05 per share was the trading price on
the date of the grant. Accordingly, consulting expense of $57,500 was charged to
operations.

On March 25, 2002, the Company  authorized  the issuance of 2,000,000  shares of
common stock to a third party in  consideration  for  consulting  services.  The
value  of $0.05  per  share  was the  trading  price  on the date of the  grant.
Accordingly,  consulting expense of $75,000 and interest expense of $25,000 were
charged to operations.

On March 25, 2002, the Company  authorized the issuance of 11,275,000  shares of
common  stock as a bonus to  employees.  The  value of $0.05  per  share was the
trading price on the date of the grant. Accordingly, payroll expense of $563,750
was charged to operations.

On March 25, 2002, the Company  authorized  the issuance of 2,000,000  shares of
common stock to a third party in  consideration  for finder  fees.  The value of
$0.05 per share was the  trading  price on the date of the  grant.  Accordingly,
consulting expense of $100,000 was charged to operations.

On March 25, 2002, the Company  authorized  the issuance of 8,197,695  shares of
common stock to a third party in consideration for foreclosure forbearance.  The
value  of $0.05  per  share  was the  trading  price  on the date of the  grant.
Accordingly, consulting expense of $409,885 was charged to operations.


                                       14
<PAGE>


NOTE 14    RELATED PARTY

At June  30,  2002,  the  Company  was  indebted  to an  officer,  who is also a
shareholder and director,  for a $55,000 line of credit. The accrued interest on
the  indebtedness  at June 30, 2002 was $2,997.  No interest was paid during the
six months ended June 30, 2002.

At June 30, 2002,  the Company  continued  under a factoring  agreement  with an
officer,  who is also a shareholder  and director,  for the sale of the accounts
receivable at 98% of the purchase  price with an 8% reserve,  with recourse with
respect to credit risk.


NOTE 15    LEGAL MATTERS

The  Company is subject to various  investigative  claims and legal  proceedings
covering  a wide  range of  matters  that  arose in the  ordinary  course of its
business activity. The Company currently has three unpaid judgments as follows:

     1)    Unpaid  judgment  is for  $57,000  in favor of a vendor  who filed an
           action for non-payment of a shipping invoice.

     2)    Unpaid  judgment for $80,000 in favor of an  individual  who filed an
           action for rent and costs for legal services.

     3)    Unpaid  judgment for $42,000 in favor of an  individual  who filed an
           action for sale of  restricted  shares of common  stock and for legal
           services. In addition, as part of this settlement,  100,000 shares of
           common stock were issued on October 5, 2000.

Additional unresolved matters include, but are not limited to the following:

     1)    An  action  filed by a  supplier  for  non-payment  of  invoices  for
           ingredients and packing materials and the related shipping costs. The
           case has not been set for trial.

     2)    A  lien  filed  by  a  supplier  for   non-payment  of  invoices  for
           ingredients and packing materials and the related shipping costs. The
           case has not been set for trial.

     3)    A lien filed by a consulting company for non-payment.

With the exception of the three judgments  mentioned in paragraph one above, the
ultimate  outcome is  unknown;  however,  management  has  accrued an  estimated
liability in the amount of $827,000  against legal matters that occurred in past
years.

In the opinion of the  Company's  management,  although the outcome of any legal
proceeding cannot be predicted with certainty, ultimate liability resulting from
the above matters,  even if limited to the liability accrued in the accompanying
financial statements, may have a material effect on the results of operations or
cash flows of the Company and its ability to continue as a going concern.


                                       15
<PAGE>

NOTE 16    GOING CONCERN UNCERTAINTY

These financial statements are presented assuming the Company will continue as a
going  concern.  For the years ended  December  31,  2001 and 2000,  the Company
showed  operating  losses  of  $3,254,215  and  $3,142,235,   respectively,  and
accumulated  deficit of  $15,195,814  at December  13,  2001.  The  accompanying
financial  statements indicate that current liabilities exceed current assets by
$5,869,395 and $3,969,347 for the years ended December 31, 2001 and 2000.

The  Company is  involved in various  lawsuits  relating to default  payments on
purchases  and loans,  among other  matters,  of which some  outcomes  are still
pending.  Liability  resulting from pending  litigation,  even if limited to the
liability  accrued in the financial  statements,  may have a materially  adverse
effect on the Company's ability to continue as a going concern.

The  Company's  negative  working  capital,  recurring  losses from  operations,
pending  litigations,  and defaults under the Company's contract  agreements and
short-term  loans  raise  substantial  doubt  about its ability to continue as a
going concern.  Management's  plan with regard to these matters includes raising
working  capital,  and  obtaining  a  mortgage  on the  building  to assure  the
Company's viability.



                                       16
<PAGE>



Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

The following discussion of our financial condition and results of operations is
based  upon  the  financial  statements  contained  in this  Form  10Q-SB.  This
discussion   contains   forward-looking   statements   that  involve  risks  and
uncertainties.  At the  end of the  section  there  is a  description  of  those
forward-looking statements and the risks and uncertainties.

Results of Operations

Revenue for the three  months ended June 30, 2002 was  $438,220,  in contrast to
$1,420,276 for the same period of 2001. This  substantial  decline in revenue is
primarily  attributable to the loss of the Sam's Club account and lower sales of
our Syfo  branded  products as a result of the loss of shelf space in 2001.  Our
Syfo brand  revenues are 22% below the sales during the second  quarter of 2001.
As we begin to see some results from our extensive  efforts to rebuild the sales
of our Syfo brand, we anticipate that during the third quarter of 2002 our sales
will return to 2001 levels. Our Syfo brand revenues have doubled since the first
quarter of this year (Syfo  brand  revenues  for the first  quarter of 2002 were
only 51% of the  revenues  for the same period in 2001).  The decline in revenue
may also be attributed,  at least in part, to the fact that prior  management of
the Company was focusing on a sale of the Company's  assets,  rather than growth
of the Company's revenues, and litigation with former officers of the Company.

Our raw material  component in cost of goods  decreased in the second quarter to
approximately  54.3% as compared  to 71.5% for the same period in 2001.  Cost of
goods sold includes  direct  manufacturing  costs and was 73.65% for the quarter
ending June 30, 2002 as compared to 89.01% for the quarter  ended June 30, 2001.
Gross profit was  $115,449  for the current  quarter as compared to $156,066 for
the same quarter in 2001. The gross profit for the current quarter is 73% of the
gross  profit for the same  quarter in 2001,  even though the  revenues  for the
quarter  ended June 30,  2001 were more than three  times the  revenues  for the
quarter ended June 30, 2002.

Our general and administrative expenses decreased for the second quarter of 2002
to $105,228,  as compared to $178,122 for the same period in 2001.  The decrease
in general and administrative  costs for the second quarter of 2002 is primarily
attributable to greater efficiency resulting from lower staff levels and greater
productivity.  Our sales  expense  declined to $28,019  for the  current  period
compared to $169,024 for the same quarter a year ago,  reflecting  lower freight
charges  associated  with lower  sales.  Marketing  expense for the quarter just
ended decreased to $4,288 from $20,548 for the same quarter in 2001.  Consulting
and professional  fees decreased from $112,585 for the second quarter of 2001 to
$32,761 for the current period.  The higher  consulting and professional fees in
2001 were primarily  attributable to consultants  engaged by prior management of
the Company and higher legal expenses incurred by the Company in connection with
its litigation with former  officers of the Company.  The fees reported for 2002
are  primarily  associated  with  accounting  and  legal  expenses  incurred  in
connection with routine financial reporting and regulatory compliance.

Rent expense for the current quarter declined to $8,253 from $13,565  reflecting
the lower cost of the current Jacksonville headquarters.


                                       17
<PAGE>

Interest  expense  increased to $97,353 for the current  quarter up from $64,592
for the same  period a year ago.  This  increase  is  associated  with the costs
associated with the sale and lease back transaction for the Company's plant with
Bansgrove  Ltd. These costs  represent  interest due Bansgrove for the period on
their  judgments,  amortization  of the  abatement  fee,  current  period  lease
payments/interest,  amortization of the Bansgrove option payment and interest on
a vendor note of $947,000 at 8%.

We have also recorded gains associated with the settlement of various  judgments
and  liabilities.  For example,  a default  judgment  against the Company in the
amount of  approximately  $38,000  was set aside in the second  quarter of 2002,
resulting  in a  reversal  of the  previous  charge to income and a gain for the
period.

Our net losses  declined  $363,339  from $591,766 for the quarter ended June 30,
2001 to $216,246 for the same period in 2002.


Liquidity and Capital Resources

As of June 30, 2002, our current  liabilities,  including the current portion of
long-term  debt,  were  $3,567,251  as compared to  $4,668,169  reported for the
second  quarter of 2001.  This  reflects a decrease  in current  liabilities  of
$1,100,918.  This also is a decrease of  $2,337,526  in our current  liabilities
compared to our current  liabilities  as reported  for the first  quarter of the
current year.  Current  liabilities  exceed our current assets by $3,307,435 for
the current  quarter as compared  to  $4,154,831  for the same period last year.
This  comparison is generally been held to be a company's  working capital which
means our working  capital is a negative  $3,307,435  for the second  quarter of
this year.  However these results also mean we have improved our working capital
position by $847,396 as compared to the same period a year ago and $2,308,024 as
compared to the first quarter of this year.

We have reduced current liabilities by converting a substantial amount of vendor
payables  into long term  obligations,  settling  them for reduced  amounts,  or
converting them into equity.

Our goal is to continue to reduce our current liabilities,  increase our current
assets  and  achieve a positive  working  capital.  We still have a  substantial
amount of past due vendor  payables,  defaults to lenders,  vendors,  suppliers,
judgment holders, and other debts.


We are currently seeking short-term  financing and accommodations to restructure
or extend our indebtedness.

Forward-Looking Statements

The  above  management's   discussion  and  analysis  contains   forward-looking
statements as defined by the Private  Securities  Litigation  Reform Act of 1995
relating to adjustments in costs of goods sold expected to occur and our ability


                                       18
<PAGE>

to  solve  our  working  capital  needs  and  liquidity.  In  addition  to these
statements, trend analyses and other information including words such as "seek,"
"anticipate,"  "believe,"  "plan,"  "estimate,"  "expect,"  "intend"  and  other
similar  expressions  are  forward  looking  statements.  Some  or all of  these
forward-looking  statements may not occur. These forward-looking  statements are
subject  to risks and  uncertainties  that may cause  actual  results  to differ
materially from the  forward-looking  statements.  These risks and uncertainties
include the following:  our ability to harmonize our old accounting  system with
our new  accounting  system,  our  ability  to reach an  accommodation  with our
creditors  and preferred  shareholders  and ability to  efficiently  install and
operate our bottle making facility. These statements are based on our beliefs as
well as  assumptions  we made using  information  currently  available to us. We
undertake  no  obligation  to  publicly  update  or revise  any  forward-looking
statements, whether as a result of new information, future events, or otherwise.


                           PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

We are a party to a number of lawsuits  arising out of commercial  transactions.
Although none of the suits would normally involve a material amount of potential
liability,  our current  liquidity needs result in a different  conclusion.  Any
adverse  determination  in any of  the  pending  lawsuits  would  likely  have a
material adverse effect on our financial condition.


ITEM 2.    CHANGES IN SECURITIES

Effective April 5, 2002, the Articles of  Incorporation  were amended by written
consent of a majority of the  Company's  common  shareholders  to  increase  the
number of authorized common shares to 80,000,000 shares.


ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

We are required to make quarterly dividend payments to our Series B and Series C
preferred  shareholders.  We are in arrears on those payments and certain of the
Company's preferred shareholders have declared default.

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

None.

ITEM 5.    OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.


                                       19
<PAGE>

A.         Exhibits

27.1 Financial Data Schedule

B.         Reports on Form 8-K

SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Date: August 14, 2002

                                                    UNIVERSAL BEVERAGES HOLDINGS
                                                    CORPORATION


                                                    By /s/  Jonathon Moore
                                                    ---------------------------
                                                    Jonathon Moore
                                                    President and Chairman


                                       20