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 March 31, 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 May 1, 2002 was 42,753,571

<PAGE>
<TABLE>

                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION

                       PART I - FINANCIAL INFORMATION                                           PAGE
<S>                                                                                             <C>
Item 1.  Financial Statements:

         Consolidated Balance Sheet - (Unaudited)...........................................     3

         Consolidated Statements of Operations - (Unaudited)................................     5

         Consolidated Statements of Changes in Stockholders' Equity  - (Unaudited)..........     7

         Consolidated Statements of Cash Flows - (Unaudited)................................     9

         Notes to Consolidated Financial Statements.........................................    11

Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations.........................................................    21


                        PART II - OTHER INFORMATION                                             PAGE

Item 1. Legal Proceedings...................................................................    23

Item 2. Changes in Securities...............................................................    24

Item 3. Defaults Upon Senior Securities.....................................................    24

Item 4. Submission of Matters to a Vote of Security Holders.................................    24

Item 5. Other Information...................................................................    24

Item 6. Exhibits and Reports on Form 8-K....................................................    24

Signatures..................................................................................    25
</TABLE>

                                       2
<PAGE>
<TABLE>



                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)
                                 MARCH 31, 2002


                                     Assets


<S>                                                   <C>
Current assets
   Cash                                               $            4,374
   Accounts receivable, net                                       33,515
   Inventory                                                     241,674
   Prepaid expenses                                                9,755
                                                      ------------------
Total current assets                                             289,318

Property, plant and equipment, net                             5,224,686

Intangible asset, net                                            564,742


Other assets
   Other receivables                                               5,000
   Other assets                                                  196,113
                                                      ------------------
                                                                 201,113
                                                      ------------------

                                                      $        6,279,859
                                                      ==================
</TABLE>
                                       3
<PAGE>
<TABLE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)
                                 MARCH 31, 2002

                      Liabilities and Stockholders' Equity


<S>                                                                                  <C>
Current liabilities
   Bank overdraft                                                                    $          3,758
   Accounts payable                                                                         3,852,668
   Accrued expense                                                                            810,220
   Accrued interest                                                                           232,349
   Current portion of lines of credit - related party                                          55,000
   Current portion of lines of credit - other                                                  50,000
   Current portion of notes payable - related party                                           667,000
   Current portion of notes payable - other                                                   233,782
                                                                                     ----------------
Total current liabilities                                                                   5,904,777

Capitalized lease obligations                                                                 171,606

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                                                                    (16,472,552)
                                                                                     ----------------
                                                                                              203,476
                                                                                     ----------------

                                                                                     $      6,279,859
                                                                                     ================
</TABLE>
                                       4
<PAGE>
<TABLE>



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


                                                                     Three months ended March 31,
                                                                 2002                           2001
                                                        ------------------------       ---------------------
<S>                                                      <C>                            <C>
Revenue
   Sales, net of discounts and returns                   $             230,836          $          2,537,448
   Cost of goods sold                                                  219,655                     2,076,768
                                                        ------------------------       ---------------------

Gross profit                                                            11,181                       460,680
                                                        ------------------------       ---------------------

Expenses
   General and administrative                                          655,746                       285,266
   Sales expenses                                                       27,389                       368,863
   Marketing expenses                                                    5,877                        21,462
   Consulting and professional fees                                    681,363                       171,820
   Rent                                                                  5,564                        11,869
   Bad debt                                                                  -                        10,000
   Depreciation and amortization                                       140,302                       144,394
                                                        ------------------------       ---------------------
                                                                     1,516,241                     1,013,674
                                                        ------------------------       ---------------------
Loss from operations                                                (1,505,060)                     (552,994)

Other income/(expenses)
   Interest expense                                                   (114,735)                      (55,696)
   Other income                                                              -                           368

   Interest income                                                           -                            35
   Other expenses                                                            -                       (28,525)

   Litigation settlements                                               33,459                             -
                                                        ------------------------       ---------------------
                                                                       (81,276)                      (83,818)
                                                        ------------------------       ---------------------

Loss from continuing operations                          $          (1,586,336)          $           (636,812)
</TABLE>


                                       5
<PAGE>
<TABLE>



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


                                                                     Three months ended March 31,
                                                                    2002                     2001
                                                              ----------------         ----------------


<S>                                                           <C>                       <C>
Loss from continuing operations                               $     (1,586,336)         $      (636,812)

Discontinued operations
   Loss from discontinued operations, net                                    -                  (44,239)
   Loss on disposition, net                                                                     (18,074)
                                                              ----------------          ---------------

                                                                             -                  (62,313)
                                                              ----------------         ----------------

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

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

Net loss                                                      $     (1,276,738)         $      (699,125)
                                                              ================         ================

Earnings (loss) per common share
   Loss before extraordinary items                            $          (0.10)         $         (0.06)
   Discontinued operations                                                   -                    (0.01)
   Extraordinary items                                                    0.02                        -
                                                              -----------------        ----------------

                                                              $          (0.08)         $         (0.07)
                                                              ----------------         ----------------
</TABLE>


                                       6
<PAGE>
<TABLE>



                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
                        THREE MONTHS ENDED MARCH 31, 2002

                                                                                      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

   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

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

</TABLE>

                                       7
<PAGE>
<TABLE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
                        THREE MONTHS ENDED MARCH 31, 2002


<S>                                        <C>          <C>                              <C>                            <C>
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 March 31, 2002                                                                               (1,276,738)    (1,276,738)
                                           --------------------------------------------------------------------------------------

                                           42,753,571  $42,755     563,100  $5,631   $16,627,642    $(16,472,552)    $  203,476
                                           ======================================================================================
</TABLE>


                                       8
<PAGE>
<TABLE>




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


                                                                                        Three months ended March 31,
                                                                                      2002                       2001
                                                                             ----------------------         -----------------
<S>                                                                          <C>                            <C>
Cash flows from operating activities:
  Net loss                                                                   $    (1,276,738)               $   (699,125)
                                                                             ---------------------          -----------------

  Adjustments to reconcile net loss to net cash provided by operating
    activities:
      Depreciation and amortization                                                  140,302                     144,394
      Compensation in exchange for stock, options
         and warrants                                                              1,241,135                      23,598
      Bad Debt                                                                             -                      10,000
      (Gain) loss on debt restructure                                               (309,598)                          -
      Loss on disposition                                                                  -                      18,074
      (Increase) decrease in accounts receivable                                      52,701                    (196,503)
      (Increase) decrease in inventory                                                10,003                     (24,573)
      (Increase) decrease in prepaid expenses                                          9,397                      15,787
      (Increase) decrease in other assets                                             42,747                     403,264
      Increase (decrease) in accounts payable and accrued expenses                    14,273                     230,468
                                                                             ---------------------          -----------------
      Total adjustments                                                            1,200,960                     624,509
                                                                             ---------------------          -----------------
Net cash provided by (used in) operating activities                                  (75,778)                    (74,616)
                                                                             ---------------------          -----------------

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                                                                82,000                      35,000
   Bank overdraft                                                                      3,758                           -
   Principal payments on notes payable                                               (15,000)                     (3,298)
   Principal payment on capital leases                                                     -                      (5,431)
Net cash provided by financing activities                                             70,758                      26,271
                                                                             ---------------------          -----------------

Net increase (decrease) in cash and cash equivalents                                  (7,695)                      (59,223)
Cash and cash equivalents, beginning of period                                        12,069                       (75,802)
                                                                             ---------------------          -----------------

Cash and cash equivalents, end of period                                     $         4,374                $     (135,025)
                                                                             =====================          =================

</TABLE>
                                       9
<PAGE>



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


<TABLE>

                                                                            Three months ended March 31,
                                                                       2002                             2001
                                                             --------------------------------------------------------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
--------------------------------

<S>                                                           <C>                                <C>
    Interest expense                                          $       1,543                      $      39,646
                                                             --------------------------------------------------------
</TABLE>

Stockholders' equity note:
--------------------------

A total of 75,000  shares of common  stock  issued in  exchange  for  consulting
services  rendered.  The shares were valued using the trading price on March 16,
2001, or $183,000.

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.

                                       10
<PAGE>

                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 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 three-month period
ended March 31, 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.


                                       11
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002


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 March 31, 2002 that  exceed  federal  insurance
limits.

At March 31,  2002,  one  customer  represented  approximately  52% of the trade
accounts  receivable.  Four other customers  represented 32% of the receivables.
The Company  obtains  detailed  credit  evaluations of customers and establishes
credit limits as required. According to management, the company will be severely
impacted if the customer that represents 52% of trade receivables,  should cease
doing business with the Company.

                                       12
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002



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 March 31,
2002 is as follows:
<TABLE>
<S>                                                                                             <C>
                  Basic and dilutive weighted average
                      number of shares outstanding                                              15,197,010


NOTE 4   ACCOUNTS RECEIVABLE

Accounts receivable at March 31, 2002 consisted of the following:

         Accounts receivable                                                                      $131,170
         Less allowance for doubtful account                                                       (97,655)
                                                                                               -----------

                                                                                               $    33,515
                                                                                               -----------
</TABLE>

There was no bad debt expense for the three months ended March 31, 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 March 31, 2002,  factored accounts
receivable totaled $73,164.


NOTE 5   INVENTORY
<TABLE>

Inventory at March 31, 2002 consisted of the following:

<S>                                                                                            <C>
         Finished goods                                                                        $    98,167
         Raw materials                                                                             143,507
                                                                                               -----------

                                                                                               $   241,674
                                                                                               ===========

</TABLE>

                                       13
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002



NOTE 6   PROPERTY, PLANT AND EQUIPMENT
<TABLE>

Property and equipment at March 31, 2002 consisted of the following:
         Amortization
                                                                                            Period in Years
                                                                                            ---------------
<S>                                                                       <C>
         Land                                                             $   400,000               -
         Building                                                           1,912,007              39
         Plant equipment                                                    3,935,542               7
         Plant improvements                                                   124,483              39
         Office machines and equipment                                        103,682               7
         Lease equipment                                                       16,296               7
                                                                          -----------

                                                                            6,492,010
         Less accumulated depreciation                                     (1,267,324)
                                                                          -----------

                                                                          $ 5,224,686
                                                                          ===========
</TABLE>

Depreciation expense for the three months ended March 31, 2002 was $128,302.


NOTE 7   INTANGIBLES
<TABLE>

Intangible assets are summarized by major classification as follows:

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

                                                                                                   731,266
         Less accumulated amortization                                                           ( 166,524)
                                                                                               -----------

                                                                                               $   564,742
                                                                                               ===========
</TABLE>

Amortization expense for the three months ended March 31, 2002 totaled $12,000.



                                       14
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002



NOTE  8  LINES OF CREDIT

Line of credit - related party
------------------------------

The Company has a line of credit from a shareholder,  who is also an officer and
director,  totaling $100,000. The credit line has an interest rate of 10% and is
due June 1, 2002.  As of March 31, 2002,  the Company owes $55,000  against this
credit line. The line of credit is collateralized by assignment of all assets of
the company.

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 is due June 1, 2002.
As of March 31, 2002,  the Company owes  $50,000  against this credit line.  The
line of credit is collateralized by assignment of all assets of the company.

Interest expense for the three months ended March 31, 2002 was $2,518.


NOTE 9   NOTES PAYABLE

The Company has outstanding notes payable at March 31, 2002 as follows:

        Notes Payable - Related Parties
        -------------------------------
<TABLE>
<S>                                                                                            <C>
        Forbearance  agreement with a related party to avoid foreclosure sale of
        building;   interest   rate  11%.  The  Company  will  pay  $160,000  as
        consideration  for the  forbearance,  and warrants to acquire  1,800,000
        shares of common stock at an exercise price of $0.25 per share have been
        granted as an additional consideration.                                                $   660,000

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



                                                                                               $   667,000
                                                                                             -------------
</TABLE>


                                       15
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002



NOTE 9            NOTES PAYABLE - continued

        Notes Payable - Unrelated Parties
<TABLE>
<S>                                                                                            <C>
        Note  payable  to  individuals  with an  interest  rate of 8% per  annum
        payable in 36 monthly payments;  unsecured,  due 3/31/03. The note is in
        default as of the date of this audit.                                                  $    43,782


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

        Note payable to an individual at a 10.25% interest rate per year; due on
        demand;  secured by  multi-packer  equipment of Company.  The note is in
        default as of the date of this audit.                                                      150,000

        Note payable to an individual  with no interest per year; due on demand;
        secured by receivables of Company.                                                          25,000
                                                                                               -----------

                                                                                                   233,782
        Less current portion                                                                     ( 233,782)
                                                                                               -----------

                                                                                               $         0
                                                                                               ===========
</TABLE>

The total interest expense related to these loans was $24,573 at March 31, 2002.
In addition,  the  forbearance  agreement  included a loan fee of $160,000,  for
which, at March 31, 2002, $39,999 was charged to interest expense.


NOTE 10  INCOME TAXES

At March 31, 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 March 31, 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 be realized due to uncertainty of the
Company's ability to generate future taxable income.  The deferred tax asset was
adjusted  based on estimated use of net operating  losses  through  December 31,
2001 to $1,173,000.


                                       16
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002


NOTE 11  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 12  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.


                                       17
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002



NOTE 12  STOCKHOLDERS' EQUITY - continued

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.


NOTE 13  RELATED PARTY

On December  17, 2001 the Company  entered  into a  forbearance  agreement  with
Universal Realty  Investors LLC, to avoid a foreclosure sale on the building.  A
forbearance  allows the  temporary  postponement  of the  principal  payment for
periods of up to one year at a time.  Accordingly,  Universal Realty  Investors,
LLC loaned the Company  $660,000 to pay bank notes payable in an effort to avoid
a  foreclosure  sale of the  building.  An officer,  who is also a director  and
shareholder  of the Company owns 15% of Universal  Realty  Investors  LLC, along
with another  shareholder who owns 15%. The agreement calls for an interest rate
of 11% on the loan,  a loan fee of $160,000,  and warrants to acquire  1,800,000
shares of common stock at an exercise price of $0.25 per share. The loan fee has
been  capitalized  and amortized over a period of one year. For the three months
ended  March 31,  2002,  $39,999  has been  amortized  and  recorded as interest
expense.

At March 31,  2002,  the Company was indebted to a  shareholder,  who is also an
officer and director,  for a $55,000 line of credit. The accrued interest on the
indebtedness at March 31, 2002 was $1,268. No interest was paid during the three
months ended March 31, 2002.

At March 31, 2002,  the  Company's  board of directors  resolved to enter into a
factoring  agreement with an officer,  director and  shareholder 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 14  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 two foreclosures,  and four unpaid
judgments as follows:

1)       Building  foreclosure for which the Company entered into a  forbearance
         agreement  with Universal  Realty Investors  LLC to avoid a foreclosure
         sale on the building.

2)       Foreclosure judgment by a contractor in the amount of $561,697.

                                       18
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002



NOTE 14  LEGAL MATTERS - continued

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

4)       Unpaid  judgment for $38,000 in favor of a Miami law firm who filed  an
         action for fees and costs for legal  services rendered to subsidiaries.
         (See Note 16)

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

6)       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,  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 four 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
proceedings  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.


NOTE 15  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.


                                       19
<PAGE>


                    UNIVERSAL BEVERAGES HOLDINGS CORPORATION
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002



NOTE 15  GOING CONCERN UNCERTAINTY - continued

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 in regard to these matters  includes  raising
working  capital,  and  obtaining  a  mortgage  on the  building  to assure  the
Company's viability.


NOTE  16 SUBSEQUENT EVENTS

On February 7, 2002, the board of directors passed a resolution  authorizing the
Company to obtain a mortgage loan on its building in Leesburg,  Florida,  and to
use the proceeds to satisfy liens against the property and other trade debts. At
March 31, 2002, no loan has been closed.

On May 8, 2002,  the Company  was  granted a motion to set aside  final  default
judgment  granted  to a Miami law firm who filed an action for fees and costs in
the amount of $38,000 for legal services rendered.

The Company entered into  negotiations with various creditors for the purpose of
settling  its debts,  including  capital  leases.  All  settlements  are pending
approval of a mortgage loan on the building.





                                       20
<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 March 31, 2002 was $230,836, in contrast
to $2,537,448 for the same period of 2001. This  substantial  decline in revenue
is primarily  attributable  to the loss of the Sam's Club  account,  and the low
sales of our Syfo branded  products after having lost most of the shelf space in
2001.  The  dramatic  decline  in  revenue is also  attributable  to  management
focusing  its  attention  on a  potential  sale  of  the  Company's  assets  and
litigation with certain of the Company's shareholders and former chief executive
officer.

     The decline in  production  and sales and loss of Sam's Club  business also
resulted  in the loss of  certain  operating  efficiencies  that are  enjoyed at
higher levels of  production  and sales.  Our raw material  component in cost of
goods  decreased  slightly  in the  current  quarter to  approximately  59.8% as
compared  to 69.7% for the same  period  in 2001.  Cost of goods  sold  includes
direct  manufacturing  costs and was 95.15% for the first quarter ending 2002 as
compared  to 81.84 % for the  quarter  ended March 31,  2001.  Gross  profit was
$11,181 for the current  quarter as compared to $460,680 for the same quarter in
2001.  Although the cost of raw material  decreased in the first quarter of 2002
as compared to the first  quarter of 2001 the  decrease in revenues  has reduced
our gross profit to 5.1% versus 18.15% for the first quarter of 2001.

     Our general and administrative  expenses increased for the first quarter of
2002 to  $655,746 as  compared  to  $285,266  for the same  period in 2001.  The
General and Administrative costs for the first quarter of 2002 includes $563,750
in imputed costs for the issuance of common stock for compensation. Exclusive of
the stock,  General and Administrative  costs for the first quarter of 2002 were
$91,996 as compared to $285,266  for the first  quarter of 2001.  The decline in
the  core  costs  is  primarily   attributable  to  a  decline  in  general  and
administrative  costs  associated with the reduced  production and sales. We are
required to charge to income the imputed costs of the issuance of stock if it is
used as  compensation.  Our sales  expense  declined  to  $27,389  for the first
quarter, from $368,863 for the same quarter a year ago, reflecting lower freight
charges for  accounts  such as Sam's,  the total lack of costs  associated  with
merchandising for our branded  products.  Marketing expense for the quarter just
ended  was,  down from  $21,462  for the same  quarter in 2001 to $5,877 for the
current period (1st Quarter 2002). Marketing expense for 2001 was also higher as
a result of costs attributable to our exclusive agreement to distribute water in
All Tel Stadium in  Jacksonville,  Florida and our marketing of the Jacksonville
Jaguars NFL team. Consulting and professional fees increased to $681,363 for the
quarter  just from  $171,821  for the first  quarter of 2001.  The  increase  is
attributable  to stock issued for consulting  services being imputed as having a
value of  $642,385.  The direct costs for  professional  fees,  excluding  costs
associated  with issuance of stock,  for the first quarter of 2002 were $38,978,
which were primarily legal and accounting costs for regulatory  compliance.  The
Professional  fees for the  first  quarter  of 2001  included  $23,598  in costs
imputed for stock issuance,  leaving $148,223 of direct  professional costs. The

                                       21
<PAGE>

costs  reported  for the same period a year ago also  included  the costs of the
litigation being conducted  against the previous  management of the company (who
have now regained control of the company).  This litigation is now substantially
concluded,  having  been  resolved  in favor of the former  president  and chief
executive  officer.  (See Note 15,  Subsequent  Events).  Rent  expense  for the
current  quarter of $5,564 has  declined  as compared to $11,869 a year ago as a
result of the termination of the Company's lease for  administrative  offices in
Jacksonville and certain warehouse facilities.

     Interest  expense  increased to $114,735  for the quarter  ending March 31,
2002,  up from  $55,696  for the  same  period  a year  ago.  This  increase  is
associated  with the  additional  debt the  Company  took on in 2001 and  higher
interest rate on our defaulted debt and other charges,  which have resulted from
actions taken by the previous  management.  The other  significant  item for the
current quarter were gains associated with the settlement of vendor  liabilities
and other  settlements  of $309,598  and $33,459  for a total of  $343,057.  The
company reported charges totaling $62,313 for the same period in 2001, resulting
from the management in control of the company at that times liquidation mode.

     We are  reporting a net loss of  $1,276,738  for the first quarter of 2002,
compared to the net loss reported in 2001 for the first quarter of $699,125. The
loss we are reporting for the first quarter of the current year (2002)  includes
charges  for the  issuance  of stock of  $1,206,135  and  gains  resulting  from
settlements of liabilities  totaling  $343,057.  Excluding these charges the net
loss would  have been  $413,660.  Including  the gains  from the  settlement  of
liabilities  we have  reported of $343,057 we would have  reported a net loss of
$70,603 for the first quarter of 2002.

     For the three  months  ended March 31, 2002 our  revenue  was  $230,836,  a
decrease of $2,306,612  from the three months ended March 31, 2001.  The Company
experienced  an increase in the cost of goods sold to 95.16% from 81.84% for the
three months  ended March 31, 2001.  Because of the decrease in revenues for the
three  months  ended March 31, 2002 our gross  profit was $11,181 as compared to
$460,680 for the same period in 2001.  Our general and  administrative  expenses
for the three months ended March 31, 2002 were $655,746,  which includes 563,750
of cost  associated  with  issuance of stock.  Excluding the impact of the stock
issuance or our basic general and administrative  cost were $91,996, in contrast
to $285,266 for the same period of 2001. This decrease  reflects the lower costs
associated the sales and production  decline throughout 2001, with corresponding
reductions in marketing and sales  expenses.  Consulting and  professional  fees
remained high for the quarter  ended 2002 as a consequence  of the impact of the
issuance  of  stock of  $642,385.  Depreciation  and  amortization  expense  was
slightly  less for the  current  quarter as compared to the same period of 2001,
$140,302 as compared to $144,394 for the three months ended March 31, 2001.

     Our  interest  expense  for the  three  months  ended  March  31,  2002 was
$114,735,  up from the interest  expense for the same period in 2001 of $55,696.
The relatively  higher interest  expense in 2002 reflects the additional debt of
the Company this year and higher interest rates incurred as a result of defaults
on the Company's indebtedness and charges associated with debt restructuring.

     Our loss from  continuing  operations  for the three months ended March 31,
2002 was $1,586,336 compared to $636,811 for the same period in 2001. The losses
for the first  quarter of 2002 includes  $1,206,135 in noncash  charges from the


                                       22
<PAGE>

issuance of stock.  Excluding the imputed cost of the stock  issuance,  the loss
from continuing  operations would be $380,201.  After taking into  consideration
the gains from the settlements of liabilities the company would report a loss of
$70,463.


Liquidity and Capital Resources

     As of March 31,  2002,  our  current  liabilities,  including  the  current
portion of long-term debt, exceeded our current assets by $5,615,459.  We have a
substantial  amount  of  debt  past  due and in  default  to  lenders,  vendors,
suppliers, judgment holders, and others.


     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
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  would  likely  have a material  adverse
effect on our financial condition.




                                     23
<PAGE>

              ITEM 2.    CHANGES IN SECURITIES

     The Articles of Incorporation were amended by a vote of the majority of the
common shareholders (consents were received by the company representing over 51%
of  those  shares  eligible  to vote) to amend  the  Articles  of  Incorporation
authorizing the company to increase the 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

                         None.

              ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K



              A.         Exhibits

                         27.1 Financial Data Schedule

              B.         Reports on Form 8-K - None







                                       24
<PAGE>


     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: May 20, 2002
                                                    UNIVERSAL BEVERAGES HOLDINGS
                                                    CORPORATION


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









                                       25