U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 1997

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM 
______________ TO ______________

COMMISSION FILE NUMBER: 33-43621

INTERNATIONAL FOOD & BEVERAGE, INC. (1)
(Exact name of registrant as specified in its charter)

Delaware
State or jurisdiction of incorporation or organization)

33-0307734
I.R.S. Employer Identification No.)

30152 Aventura, Rancho Santa Margarita, California (2)   92688 (2)
(Address of principal executive offices)			(Zip Code)

Registrant's telephone number:  (714) 858-8800 (2)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15(d) of the 
Securities Exchange Act of 1934 during the preceding 12 months (or 
for such shorter period that the registrant was required to file 
such reports), and (2) been subject to such filing requirements for 
the past 90 days.  Yes   X    No   .

Indicate by check mark if disclosure of delinquent filers 
pursuant to Item 405 of Regulation S-K is not contained herein, and 
will not be contained, to the best of registrant's knowledge, in 
definitive proxy or information statements incorporated by reference 
in Part III of this Form 10-K or any amendment to this Form 10-K [].
Not Applicable.

The aggregate market value of the voting stock held by non-
affiliates of the registrant as of March 25, 1999: Common Stock, par 
value $0.001 per share -- $32,416,985.  As of March 25, 1999, the 
registrant had 177,302,997 shares of common stock issued and 
outstanding.
 
(1)As of February 17, 1999, the name was change to: Internet 
Business's International, Inc.

(2) As of March 1, 1999, the address and telephone number was 
changed 
to: 3900 Birch Street, Suite 111, Newport Beach, California 92660; 
(949) 833-0261

TABLE OF CONTENTS

PART I										
									 PAGE
	ITEM 1.  BUSINESS							3
	
	ITEM 2.  PROPERTIES						7
	
	ITEM 3.  LEGAL PROCEEDINGS					7
	
	ITEM 4.  SUBMISSION TO MATTERS TO VOTE
          	   OF SECURITY HOLDERS					7

PART II
	ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY
               AND RELATED STOCKHOLDER MATTERS			7
	
	ITEM 6.  SELECTED FINANCIAL DATA				8
	
	ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF 
		   OPERATIONS						9
	
	ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	13
	
	ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH
			ACCOUNTANTS ON ACCOUNTING AND
			FINANCIAL DISCLOSURE				13

PART III
	ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE
                REGISTRANT						13
	
	ITEM 11.  EXECUTIVE COMPENSATION				16
	
	ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                OWNERS AND MANAGEMENT				17
	
	ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED
                TRANSACTIONS						18

PART IV
	ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES,
                AND REPORTS ON FORM 8-K				19

SIGNATURES									21


PART I.

ITEM 1.  BUSINESS.

Introduction.

International Food & Beverage, Inc. ("Company") manufactures a 
complete line of pizzas, pizza components, and specialty baked 
products and markets them nationally through foodservice customers 
which include retail supermarket service delicatessens as well as 
restaurants, hotels, sport and theme parks, and other catering 
locations.  The Company utilizes its proprietary manufacturing 
process to produce premium quality HAND-TOSSED crusts that deliver 
the unique taste, texture and appearance of fresh pizzeria pizzas.

Since 1986 the Company has continued to develop its distinctive 
product line and strong industry relationships.  From 1986 through 
early 1990 the Company relied solely on a number of outside contract 
manufacturers for production but in 1990 opened the bakery section 
of 
its state-of-the-art 50,000 sq. ft. facility.  The Company's 
manufacturing plant was completed in mid-1993 with the addition of a 
USDA certified pizza topping section, providing the capacity to 
produce a much improved line of premium quality pizzas at a 
significantly reduced cost.

In July 1995 the Company entered into an agreement with a 
marketing and sales organization under which the Company provides 
manufacturing and distribution services.  Pizzas are produced for 
shipment to domestic customers and for export to Pacific Rim 
countries.  The President of this organization is also a member of 
the Company's Board of Directors.  Management believes that this 
type 
of contract production will continue to enable a greater utilization 
of the Company's manufacturing facility and deliver incremental 
margin contribution.

Market.

Pizza is "America's favorite food" according to the trade press 
with estimated annual sales at $30 billion within the United States.  
Over the past decade, pizza has become the nation's leading take-
home 
and home-delivered food while category growth continues.  American-
style pizza has also become popular around the world as various 
cultures accept the value, convenience, nutrition and, most of all, 
fun of eating pizza!

The Company primarily sells to customers within the retail 
supermarket and the foodservice/catering segments of this market.  
SUPERMARKET BUSINESS MAGAZINE and Chicago-based Information 
Resources, Inc. estimate that 1995 annual sales of pizza at retail 
supermarkets reached nearly $3 billion and that over the past five 
years pizza has been one of the supermarkets' fastest growing 
categories.

The Company believes the sales of pizza at foodservice 
locations (other than pizzeria restaurants or institutional feeding 
locations) exceeds $5 billion annually and that pizza sales continue 
to grow in these locations. 

Products.

The Company's product line consists of fully prepared pizzas 
(cheese pizzas or pizzas complete with assorted meat and/or 
vegetable 
toppings) available on a variety of crusts; various sizes, shapes 
and 
styles of hand-made pizza crusts; and a variety of cheeses, topping 
ingredients, and packaging supplies which are purchased for resale 
to 
customers.  Additionally, the Company manufactures Gourmet Italian 
Cheese Crusts (similar to the Boboli-Registered Trademark-product 
from CPC International) and other specialty flavored bread products.

The Company manufactures and distributes nationally a line of 
HAND-TOSSED pizzas.  Unlike competitive products which are either 
stamped into a  mold or die cut from a sheet of dough, the Company's 
crusts are hand-formed and then hearth baked to provide the taste, 
texture and appearance of "fresh pizzeria" quality.  Utilizing a 
variety of dough recipes, the Company produces its crusts and baked 
products in a highly automated manufacturing process that nearly 
replicates the steps performed in a pizzeria restaurant.  A number 
of 
products involve hand-stretching and hand-tossing of dough pieces to 
form desired shapes while preserving the naturally fermented gases 
that contribute to product taste and texture.  While costing 
slightly 
more than competitive pizza crusts, the Company's products are 
viewed 
by executive chefs and service deli merchandisers as superior in 
quality to either stamped or die cut crusts available from 
competitive suppliers.  The Company's proprietary baking process has 
evolved over the years with an important breakthrough achieved late 
in 1994 that ensures a significantly crispier crust with more yeasty 
flavor and "fresh made" texture.

Many of the Company's products have been developed after 
collaborative efforts with executive chefs and research and 
development personnel of the Company's major customers.  The Company 
offers a custom development service to these large customers whereby 
premium quality products can be designed to meet specific operator 
requirements for serving application, taste and distinctiveness, and 
to satisfy preparation constraints.  These "signature" products 
satisfy the customers' need for unique offerings while adding to the 
Company's capability and technical expertise.

The Company's products and programs are generally designed to 
replace or be alternatives to traditional component programs which 
are more labor, ingredient and space intensive.  In addition, these 
other programs result in products which are inconsistent in 
appearance and sometimes lacking in availability due to peaks and 
valleys in consumption demand.  Increasingly, customers are 
searching 
for "labor friendly" alternatives that offer ready-to-top or fully 
prepared pizzas that are "hand-made" in appearance and deliver 
"pizzeria quality" in taste and texture.

Sales and Marketing.

The Company markets products under its own brand names 
(JUKEBOX-Registered Trademark-, MAMA MIA ITALIANO-TM-, MAMA MIA 
HOMESTYLE-TM- and MAMMA GINA'S); sells its products under 
foodservice 
distributor private labels, including Sysco Corporation's IMPERIAL 
and ARREZZIO labels and S.E. Rykoff/John Sexton and Company's 
BELLAGIO-Registered Trademark-label; and is the primary supplier to 
Safeway, Inc. under a controlled PIZZERIA FRESCA label and SAFEWAY 
Brand private label.

The Company's sales efforts are conducted by an in-house sales 
management team together with field merchandisers assigned to 
specific accounts.  The Company's sales organization directs its 
primary efforts at identifying large regional or national accounts 
and distributor organizations, presenting product and program 
offerings tailored to each user and managing the resulting 
implementation and customer relationships.  Additionally, the sales 
organization manages independent food brokers in various regions 
throughout the United States and also works in concert with sales 
organizations provided by full-line foodservice distributors who 
service individual end user customers.

The majority of the Company's foodservice business is conducted 
through traditional foodservice distribution channels.  Sales to 
retail customers are made direct or with the assistance of 
specialized brokers, with shipments generally made directly to the 
customers' warehouses.

The Company generally sells its products pursuant to customer 
purchase orders and fills orders within ten days of receipt.  
Because 
purchase orders are filled shortly after receipt, backlog is not 
material to the Company's retail or foodservice businesses.  
Substantially all of the Company's domestic products are delivered 
to 
customers by independent trucking companies or picked up by 
customers 
at one of the Company's warehouses. With regard to the Company's 
export sales (currently to Korea only), backlog of orders are normal 
and the Company receives payment in full at time of shipment.

Seasonality.

The Company's retail pizza business experiences moderate 
seasonality with the highest sales periods occurring between fall 
and 
early spring.  Foodservice sales are comparatively stable throughout 
the calendar year.

Customers.

The Company sells its products to full line foodservice 
distributors, direct to major foodservice customer's warehouses, and 
to retail grocery warehouses and distributors throughout the United 
States.  Products sold to foodservice distributors are resold to end 
user customers ranging in size from national accounts to multi-unit 
regional organizations to single location accounts.  Given the fact 
that the Company focuses its own selling efforts on national and 
multi-unit regional accounts, the majority of its foodservice sales 
are to these types of organizations.

The Company's retail customers include, among others, Safeway 
Inc., Von's Grocery Company and Albertson's.  Its principal 
foodservice distributor customers are Sysco Corporation, U.S. 
Foodservice (recently acquired S.E. Rykoff/John Sexton and Company), 
Martin-Brower, MBM Foodservice and Alliant Foodservice (formerly 
Kraft Foodservice).  These distributor organizations in turn sell to 
end user customers of the Company including restaurant chains such 
as 
Friendly's Ice Cream, Golden Corral Restaurants, Marie Callender's 
Restaurants, Old Country Buffet Restaurants, and Tony Roma's; hotel 
chains such as Marriott, Radisson and Doubletree; theme and event 
centers such as Knott's Berry Farm, Anaheim Stadium and the Great 
Western Forum; transportation terminals such as Host Airport 
locations; and military locations such as Camp Pendleton.

Suppliers.

The Company believes that the raw materials utilized in 
manufacturing its products, which principally include flour, cheese, 
tomatoes, spices, meat products, and packaging materials, are 
readily 
available from a number of potential suppliers.  The Company 
utilizes 
at least two sources of supply for each of its key raw material 
categories although pricing and current production volumes dictate 
that the majority of purchases for an item be made from a single 
principal supplier.  Although the Company does not maintain 
contracts 
with most of its suppliers, the Company believes that there are 
numerous alternative sources of supply available to meet production 
requirements. 

Many of the Company's raw materials are agricultural 
commodities; consequently, the prices the Company pays for its 
materials vary over time due to commodity market conditions 
including 
demand, crop yield and weather.  The Company believes that normal 
historical commodity price variations would not have a material 
effect on gross profit margins beyond the extent to which raw 
material cost increases could be passed on to the Company's 
customers.

Competition.

The Company faces significant competition in the marketing and 
sale of its products.  The Company competes with a number of 
national 
organizations and numerous regional companies, which have 
significantly greater financial, manufacturing, marketing and 
distribution resources than the Company.  The Company believes that 
the principal competitive factors in the marketing of pizza and 
specialty baked products are quality, price, ease of preparation, 
and 
variety of product offerings.  While the Company believes that its 
products compete favorably with respect to these factors, and 
believes that its willingness and ability to develop custom products 
to meet specific customer requirements represents a substantial 
benefit to potential customers, there can be no assurance that the 
Company will be able to compete successfully.  See "Management's 
Discussion and Analysis of Financial Condition and Results of 
Operations - Liquidity and Capital Resources".

Regulation.

The Company's manufacturing facility and its products are 
subject to extensive regulation by the United States Food and Drug 
Administration, the United States Department of Agriculture, and by 
other state and local authorities in jurisdictions in which the 
Company's products are processed or sold.  The manufacturing 
facility 
is subject to periodic inspection by federal, state and local 
authorities.  The Company believes that its manufacturing facility 
is 
currently in substantial compliance with all material governmental 
laws and regulations and that all material permits and licenses 
relating to their operations have been maintained.

Employees.

The Company currently employs approximately 50 people.  No 
employee of the Company is a member of a collective bargaining unit 
and the Company is unaware of any attempt by its employees to 
organize such units.  The Company believes that its relationship 
with 
its employees is good.

ITEM 2.  PROPERTIES.

The Company's principal executive offices and 50,000 square 
feet manufacturing facility is located at 30152 Aventura, Rancho 
Santa Margarita, California 92688.  The Company leases that facility 
pursuant to a ten year lease, with two 5-year renewal options, at a 
monthly rent of $25,000 exclusive of insurance and taxes.  The 
Company also utilizes public warehouses for finished goods storage.  
Utilization of these warehouses is the result of arrangements with 
large distributor organizations to facilitate mixed load shipments 
of 
private label products, accommodation to certain customers to ensure 
convenient small lot shipments to local operating units or temporary 
storage for finished goods inventory when levels exceed the storage 
capacity of the Company's own on-site freezer.

The Company's manufacturing facility is equipped with a single 
baking and topping line.  The facility contains sufficient space for 
future installation of a second baking and topping line.

ITEM 3.  LEGAL PROCEEDINGS.

The Company is not a party to any material pending legal 
proceedings and, to the best of its knowledge, no such action by or 
against the company has been threatened.

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

No matters were submitted to a vote of the Company's 
stockholders during the fourth quarter of the fiscal year covered by 
this report.

PART II.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED 
STOCKHOLDER MATTERS.

The Company's Common Stock is not quoted on NASDAQ but has been 
traded in the over-the-counter market since approximately October 
1987.  There has been relatively little trading in the Company's 
Common Stock and there can be no assurance that a more active market 
will develop or be sustained.  Throughout the two years ended June 
30, 1997 the high and low bid quotations for the Company's Common 
Stock has been less than or equal to $.01 per share.  The high and 
low bid quotations represent prices between dealers and do not 
include retail markups, markdowns or commissions, and may not 
represent actual transactions.  Throughout the two years ended June 
30, 1997 there has been considerable disparity between the quoted 
bid 
and ask prices, regularly approaching as much as a $.10 per share 
spread.  Accordingly, the market price for shares of the Company's 
Common Stock may be highly volatile, with a limited public float.

The approximate number of holder of records of the Company's 
Common Stock on September 1, 1997 was 500.

The Company has not and does not expect to pay cash dividends 
on its Common Stock in the foreseeable future.

ITEM 6.  SELECTED FINANCIAL DATA.

The selected financial data for the years ended June 30, 1997 
and 1996, for the six months ended June 30, 1995 and December 31, 
1994, and for the years ended June 30, 1994 and 1993 are derived 
from 
the audited financial statements of the Company and should be read 
in 
conjunction with the audited financial statements included herein.  
The selected financial data for the six months ended June 30, 1995 
and December 31, 1994, and the years ended June 30, 1994 and 1993 
are 
derived from the audited financial statements of the Company which 
are not included herein.

       Years ended    	Six Months Ended (1)     Years Ended
          June 30     	December 31    June 30    June 30
     1993       1994  	1994           1995   	 1996     1997
Statement of Operations Data:
(In thousands, except for share data)

Revenues
     $ 8,446   $10,703   $ 3,580       $2,718    $6,572  $7,358

Cost of sales
       8,257     8,385     3,279        2,212	  5,374   5,847

Gross profit
         189     2,318       301          506     1,198   1,511

Selling and distribution
     Expense
       2,534     2,927     1,412          702     1,135   1,512

General and administrative
     Expense
       1,180     1,841       361           29       524     407

Interest expense, net
         139       113       111            3        54     122

Net income (loss)
      (3,331)   (2,563)   (1,583)        (497)     (515)   (530)

Net income (loss) applicable to
     common shareholders
      (3,657)   (2,563)   (1,583)        (497)     (515)   (530)





       Years ended	   Six Months Ended (1)	  Years Ended
         June 30		   December 31  June 30      June 30
     1993      1994        1994	    1995 	  1996    1997

Statement of Operations Data:
(In thousands, except for share data)

Net income (loss)
per common share

     (0.04)   (0.02)       (0.01)	     nil	   nil	nil

Weighted average shares
Outstanding

    88,169    53,924      153,924     153,924   154,145   154,763

		June 30,
                   	1993	  1994     1995	   1996     1997
Balance Sheet Data:
(In thousands)

Current assets        $1,691  $2,019    $  922   $1,175    $711

Fixed assets           2,001   1,760     1,053      905     800

Total assets           4,591   4,547     1,975    2,080   1,511

Current liabilities    1,617   2,396     1,711    1,941   1,947

Long-term debt           504   2,316       373      756     677

Shareholders' equity
     (deficiency)      2,398    (165)     (109)    (617) (1,113)


(1)  A change in control transaction occurred December 31, 1994 and 
was recorded in conformity with Accounting Principles Board Opinion 
No. 16.  Accordingly, assets and liabilities as of January 1, 1995, 
and the results of operations for the six months ended June 30, 
1995, 
reflect the "push-down" of the new controlling shareholder's basis, 
minority interest at its historical basis, and the consideration 
received from BT Capital Corporation.  See accompanying footnotes to 
the audited financial statements for a description of the 
transaction.

The company has not paid dividends in any of the periods presented.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with the 
financial statements of the Company and notes thereto contained 
elsewhere in this report.

Results of Operations.

Fiscal 1997 Compared To Fiscal 1996

Revenues for the twelve month period ended June 30, 1997 of 
$7,358,000 increased approximately 11% when compared with revenues 
of 
$6,572,000 in the prior year.   This revenue increase is due to a 
full year of contract manufacturing for a marketing company that 
sells to both domestic retail chains and export customers.  The 
Company continues to market its pizzas and crusts nationally to 
retail supermarket service delicatessen customers and major 
foodservice accounts.  Beginning in May 1996, the Company began a 
private label program producing a line of pizzas being sold in the 
frozen food section of a major national grocery retailer.

The gross profit margin of 20.5% for the twelve months ended 
June 30, 1997 was roughly comparable to the gross margin of 18.2% 
reported for twelve months ended June 30, 1996.  Current year 
margins 
in the past twelve months reflect cost reduction improvements 
combined with gains in operating efficiencies.

Fixed overhead per unit sold remains high at the Company's low 
level of production.  The Company anticipates an increase in its 
gross profit contribution rate given recent price increases and 
assuming the Company is able to achieve increased production volume.  
Additionally, gross profit would be further benefited if cheese 
prices return to historical price levels.

The improvement as a percent of sales in fiscal 1997 versus the 
fiscal year 1996 reflects the impact of a full year of operations 
following restructuring and cost containment efforts that were 
initiated early in calendar 1995.  The Company does not anticipate 
having to add substantially to fixed overhead costs to support 
revenue growth of fifty to one hundred percent of its current 
revenue 
level assuming a similar mix of products and customers.

The resulting loss for the twelve month period ended June 30, 1997
was $530,000 versus a reported loss for the year ended June 30, 
1996 of $515,000.

Fiscal 1996 Compared to Fiscal 1995.

The change in control and utilization of purchase accounting as 
of  January 1, 1995 has resulted in the accompanying statements for 
the twelve months ended June 30, 1996 being non comparable versus 
the 
prior year twelve month corresponding period.  Accordingly, the 
following discussion addresses historical results in periods since 
January 1, 1995.

Revenues for the twelve month period ended June 30, 1996 of 
$6,572,000 increased approximately 20% when compared with revenues 
of 
$5,436,000 in the prior year (utilizing the revenues for the six 
month period ended June 30, 1995 of $2,718,000, annualized).  This 
revenue increase is due to a full year of  contract manufacturing 
for 
a marketing company that sells to both domestic retail chains and 
export customers.  The Company continues to market its pizzas and 
crusts nationally to retail supermarket service delicatessen 
customers and major foodservice accounts.  Beginning in May 1996, 
the 
Company began a private label program producing a line of pizzas 
being sold in the frozen food section of a major national grocery 
retailer.

The gross profit margin of 18.2% for the twelve months ended 
June 30, 1996 was roughly comparable to the gross margin of 18.6% 
reported for the six months ended June 30, 1995.  Current year 
margins in the past twelve months reflect cost reduction 
improvements 
combined with gains in operating efficiencies, offset by higher 
material costs (principally in cheese) that have occurred over the 
past six months.  To combat the higher material costs the Company 
raised prices.  These price increases however were primarily made 
beginning late in fiscal 1996 and in certain cases not until 
September 1996.  Fixed overhead per unit sold remains high at the 
Company's low level of production.  The Company anticipates an 
increase in its gross profit contribution rate given recent price 
increases and assuming the Company is able to achieve increased 
production volume.  Additionally, gross profit would be further 
benefited if cheese prices return to historical price levels.

Selling, general and administrative expenses for the Company's 
first, second and third fiscal quarters ended March 30, 1996 were 
substantially constant in dollars and as a percent of sales and 
decreased slightly as a percent of sales for the fourth quarter of 
fiscal 1996 with the increase in revenues.  The improvement as a 
percent of sales in fiscal 1996 versus the six month period ended 
June 1995 reflects the impact of a full year of operations following 
restructuring and cost containment efforts that were initiated early 
in calendar 1995.  The Company does not anticipate having to add 
substantially to fixed overhead costs to support revenue growth of 
fifty to one hundred percent of its current revenue level assuming a 
similar mix of products and  customers.

The resulting loss for the twelve months ended June 30, 1996 
was $515,000 versus a reported loss for the six months ended June 
30, 
1995 of $497,000.

Inflation.

The moderate rate of inflation over the past few years has had 
an insignificant impact on the Company's sales and results of 
operations during the period.

Liqiudity and Capital Resources.

Net cash provided by operating activities was $169,000 for the 
twelve month period ended June 30, 1997.  This cash results largely 
from (i) accounts receivable of $251,000, (ii) inventories of 
$220,000, and (iii) depreciation and amortization of $166,000.

Capital Expenditures.

The Company has however committed to a capital improvement 
which will result in the replacement of its current CO(2) tunnel 
freezer with a higher capacity CO(2) spiral freezer.  This 
undertaking affords the Company the opportunity to significantly 
improve (i) line efficiencies with resulting expected lower per unit 
production costs and (ii) overall product quality.  The improvement 
is being financed by the holder of the note for the equipment being 
replaced, with the down payment to be satisfied with the underlying 
equity in the  current equipment.  The resulting eighty four month 
equipment contract increases the Company's present monthly payment 
by 
approximately $3,500 before giving effect to expected production 
cost 
savings.

Net Operating Loss Carryforwards.

As of June 30, 1997, the Company, had net operating loss 
carryforwards for federal and state purposes of approximately 
$505,437 and $505,437, respectively.  These carryforwards begin to 
expire in 2011 and 2001, respectively.

Year 2000 Issue.

	The Year 2000 issue arises because many computerized systems 
use two digits rather than four to identify a year.  Date sensitive 
systems may recognize the year 2000 as 1900 or some other date, 
resulting in errors when information using the year 2000 date is 
processed.  In addition, similar problems may arise in some systems 
which use certain dates in 1999 to represent something other than a 
date.  The effects of the Year 2000 issue may be experienced before, 
on, or after January 1, 2000, and if not addressed, the impact on 
operations and financial reporting may range from minor errors to 
significant system failure which could affect the Company's ability 
to conduct normal business operations. This creates potential risk 
for all companies, even if their own computer systems are Year 2000 
compliant.  It is not possible to be certain that all aspects of the 
Year 2000 issue affecting the Company, including those related to 
the 
efforts of customers, suppliers, or other third parties, will be 
fully resolved.

	The Company is in the process of developing an ongoing program 
of communication with suppliers and vendors to determine the extent 
to which those companies are addressing Year 2000 compliance issues.  
There can be no assurance that the Company will be able to develop a 
contingency plan that will adequately address issues that may arise 
in the Year 2000.

	The Company's Year 2000 plans are based on management's best 
estimates.  Based on currently available information, management 
does 
not believe that the Year 2000 issues will have a material adverse 
impact on the Company's financial condition or results of 
operations; 
however, because of the uncertainties in this area, no assurances 
can 
be given in this regard.

Forward Looking Statements.

The foregoing Management's Discussion and Analysis contains 
"forward looking statements" within the meaning of Section 27A of 
the 
Securities Act of 1933, as amended, and Section 21E of the 
Securities 
Act of 1934, as amended, and as contemplated under the Private 
Securities Litigation Reform Act of 1995, including statements 
regarding, among other items, the Company's business strategies, 
continued growth in the Company's markets, projections, and 
anticipated trends in the Company's business and the industry in 
which it operates.  The words "believe," "expect," "anticipate," 
"intends," "forecast," "project," and similar expressions identify 
forward-looking statements.  These forward-looking statements are 
based largely on the Company's expectations and are subject to a 
number of risks and uncertainties, certain of which are beyond the 
Company's control.  The Company cautions that these statements are 
further qualified by important factors that could cause actual 
results to differ materially from those in the forward looking 
statements, including, among others, the following: reduced or lack 
of increase in demand for the Company's products, competitive 
pricing 
pressures, changes in the market price of ingredients used in the 
Company's products and the level of expenses incurred in the 
Company's operations.  In light of these risks and uncertainties, 
there can be no assurance that the forward-looking information 
contained herein will in fact transpire or prove to be accurate.  
The 
Company disclaims any intent or obligation to update "forward 
looking 
statements". 

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Information with respect to this Item is set forth in "Index to 
Financial Statements."

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING 
AND FINANCIAL DISCLOSURE.

On March 15, 1998, the Company engaged the services of Henry 
Schiffer C.P.A., a P.C., of Beverly Hills, California to provide an 
audit of its financial statements for the fiscal years ended June 
30, 
1997 and 1996.  Mr. Schiffer is not associated with the June 30, 
1995 
audited financial statements nor any other financial statements 
prior 
to the June 30, 1996 financial statements.  The former accountants, 
Coopers & Lybrand of Newport Beach, California, declined to stand 
for 
re-election for the 1997 engagement.  The decision to change 
accountants was approved by the Company's Board of Directors with 
the 
selection of the successor accountant.  The Company and its former 
accountants had no disagreements during the fiscal year ended June 
30, 1997 or any prior periods, and through the date they declined to 
stand for re-election.

PART III.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The directors and executive officers of the Company and their 
ages as of September 1, 1997 are as follows:

     Name                Age        Position

Michael W. Hogarty       54   	President, Chief
						Executive Officer
                                    and Director

Daniel E. Ferrari        48        	Vice President of Sales
    
Patrick A. Cusack        49        	Vice President of Operations

Ann M. Gooch             40        	Vice President of Finance,
                                    Secretary and Treasurer

Norman N. Habermann (1)  64        	Chairman of the Board

Eber E. Jaques (1)       58        	Director

David R. Newstadt (1)    67  		Director

James R. Tolliver		 51        	Director

(1)  Member of the audit and compensation committees.

Each member of the Board of Directors of the Company is elected 
for a one-year term and until his successor is elected and 
qualified.

Michael W. Hogarty.

Mr. Hogarty has been President and Chief Executive Officer and 
a director of the Company since March 1988.  From December 1984 to 
December 1987, Mr. Hogarty was the President and Chief Executive 
Officer of Edy's Grand Ice Cream, Dreyer's Grand Ice Cream's midwest 
and eastern subsidiary, a manufacturer and marketer of ice cream and 
related products.  From July 1978 to December 1984, Mr. Hogarty was 
President and Chief Executive Officer of S.B. Thomas, Inc., the 
specialty baking subsidiary of CPC International, a food processing 
corporation and Executive Vice President of S.B. Thomas, Inc., from 
1974 to 1978.  Mr. Hogarty previously served as a Vice President of 
Johnson and Johnson.

Daniel E. Ferrari.

Mr. Ferrari joined the Company in January 1995 as Vice 
President of Sales.  From January 1994 to December 1994, Mr. Ferrari 
served as District Manager for Kraft USA products in the Southern 
California market area.  From 1989 through 1993 while at Kraft USA 
he 
held the positions of Director of Sales for Kraft's Western Dairy 
Group and was District Manager at Kraft's Knudsen Division of Los 
Angeles.  From 1984 to 1988, Mr. Ferrari was Western Regional Sales 
Manager for No Nonsense Fashions and from 1976 to 1984 he held 
various sales positions with Proctor & Gamble.

Patrick A Cusack.

Mr. Cusack joined the Company in July 1994 as Vice President of 
Operations.  From April 1989 to July 1994, Mr. Cusack held positions 
as Plant Manager and Division Service/Quality Manager of Operations 
for International Multifoods, Frozen Specialty Division in 
Riverside, 
California.  Prior to that time, Mr. Cusack held various operational 
management positions with Pillsbury, Van De Kamps Division and North 
Consumer Products, a division of Siebe North, Inc., a manufacturer 
of 
personal safety products.

Ann M.  Gooch.

Ms. Gooch joined the Company in June 1988 as Director of 
Finance.  She was appointed Treasurer of the Company in May 1991 and 
Vice President of Finance and Secretary in March 1992.  From 1986 
until 1988, Ms. Gooch served as Corporate Controller for Rusty 
Pelican Restaurants, Inc. from 1978 to 1986 she was employed by 
Deloitte & Touche, an international public accounting firm.  Ms. 
Gooch is a certified public accountant.

Norman N. Habermann.

Mr. Habermann has served as Chairman of the Board of the 
Company since May 1991.  From 1986 until February 1994, Mr. 
Habermann 
was President and Chief Executive Officer of the Restaurant 
Enterprises Group (formerly the restaurant division of W.R. Grace & 
Co.) an owner and operator of over 600 restaurants including Coco's, 
Carrows, El Torito, Reubens and others. He is now President of 
Scobrett Associates, Inc. which is involved in consulting and 
venture 
capital activities.

Eber E. Jaques.

Mr. Jaques has been a director of the Company since 1989.  From 
1981 to 1988, he served as Executive Vice President of Del Taco, 
Inc., which operated and franchised fast service Mexican-American 
restaurants. Mr. Jaques is currently Executive Vice President of 
Empire Entertainment, an entertainment company.

David R. Newstadt.

Mr. Newstadt has been a director of the Company since 1989; he is 
currently retired.  From May 1986 through July 1987, Mr. Newstadt 
served as President and Chief Executive Officer of Sun-Diamond 
Growers of California, a cooperative of growers.  From 1981 to 1985, 
he was President of the Best Foods Division of CPC 
International, a food processing corporation.

James R. Tolliver.

Mr. Tolliver has been a Director of the Company since July 
1996.  Since December 1987, Mr. Tolliver has been the President and 
sole owner of Sunset Specialty Foods, Inc., a Company that markets 
and distributes frozen pizza products to retail supermarket and 
export customers.

Subject to modification by the Board of Directors, Mssrs. 
Habermann, Jaques and Newstadt receive an annual retainer of $2,500.  
In addition, each of these directors have been granted an option to 
purchase up to 800,000 shares of the Company's Common Stock at the 
fair market value of the Common Stock on the date of individual 
grants.  Options granted to these directors become exercisable 
ratably over the period during the continuing service as a director 
and expire seven years from the date of grant. All directors are 
reimbursed for expenses incurred on behalf of the Company.

ITEM 11.  EXECUTIVE COMPENSATION.

The following table sets forth the cash compensation paid by 
the Company during its fiscal year ended June 30, 1997 to (i) the 
four most highly compensated current executive officers of the 
Company and (ii) all executive officers of the Company as a group:

Name of Individual
or Number of              	Capacities in		Cash 
Persons in Group			Which Served	Compensation (1) 

Michael W. Hogarty       	President and
					Chief Executive
					Officer			$150,000

Daniel E. Ferrari        	Vice President
					of Sales			$ 95,000 (2)

Patrick A. Cusack        	Vice President
					of Operations		$ 70,000

Ann M. Gooch             	Vice President
					of Finance,
                         	Treasurer and
					Secretary			$ 68,000

All executive officers
as a group (4 persons)   	All capacities		$383,000

(1)  The Company provides executive officers with certain personal 
benefits which do not exceed in value 10% of the officer's cash 
compensation or, as to all executive officers as a group, 10% of the 
aggregate cash compensation for the group.

(2)  Mr. Ferrari began his employment with the Company in January 
1995 
and resigned in December 1995.  He subsequently rejoined the Company 
in late June 1996.  His current annual salary is $95,000.

Employment Agreements.

Mr. Hogarty has an employment agreement with the Company that 
provides for a minimum base salary of $150,000 per year.  The 
employment agreement continues until Mr. Hogarty's death or 
voluntary 
resignation, until he is removed for cause or until all the members 
of the Board of Directors (except for Mr. Hogarty) determine that 
the 
Company is failing to make reasonable progress toward its business 
plan goals.

Bonus Plan.

The Board of Directors has approved a bonus plan that provides 
for management bonuses.  The bonus pool is to be allocated to key 
members of the management in accordance with a plan approved by the 
Board of Directors.  As of this date, the Company has made no 
payments of bonuses.

Stock Option Plan.

The Company has adopted the 1988 Stock Option Plan for Key 
Employees (the "Plan").  All employees of the Company are eligible 
to 
receive options under the Plan.  The maximum aggregate amount of 
stock to be issued upon exercise of all options granted under the 
Plan may not exceed 1,800,000 shares, subject to adjustment upon the 
occurrence of certain events such as a stock split, stock dividend, 
reorganization, merger or similar corporate change.  Unless earlier
terminated by the Board of Directors, the Plan will terminate in 
November 1998.

The Plan provides for administration by the Board of Directors 
or if the Board of Directors authorizes, by a committee appointed by 
the Board (the "Committee").  The Board of Directors has a 
Compensation Committee of disinterested directors who, among their 
duties, will make recommendations to the Board of Directors 
regarding 
grants of options under the Plan.  The Board of Directors has the 
authority, subject to the express provisions of the Plan, to 
determine the persons to be granted options, to determine whether 
options granted under the Plan are intended to be non-statutory 
stock 
options or incentive stock options, to determine the terms and 
provisions of options, including the times at which such options 
shall be granted, the number of shares subject to each option, the 
option price and the duration of each option, to interpret and 
construe the Plan, to prescribe, amend and rescind rules and 
regulations relating to the Plan and to make all other 
determinations 
necessary or advisable for the administration of the Plan.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 
MANAGEMENT.

The following table sets forth information regarding the 
beneficial ownership of shares of the Company's Common Stock as of 
September 1, 1997 by (i) all stockholders known to the Company to be 
beneficial owners of more than 5% of the outstanding Common Stock; 
(ii) each director; and (iii) all officers and directors of the 
Company as a group.  Except as may be otherwise indicated in the 
footnotes to the table, each person has sole voting power and sole 
dispositive power as to all of the shares shown as beneficially 
owned 
by them.

					Shares of
Name of         			Common Stock		Percent
Beneficial Owner(1)(2)    Beneficially Owned	Beneficially Owned

Michael W. Hogarty(3)		124,409,179			78.71%
BT Capital Corporation(4)	 18,000,000			11.39
Ann M. Gooch(5)                 6,338,214			 4.01
Daniel E. Ferrari(6)            6,211,766			 3.93
Patrick A. Cusack(7)            6,211,766			 3.93
Shares of 
All directors and
executive officers as
a group(4 persons)(8)		143,170,925			90.58

(1)  Unless otherwise indicated in these footnotes, the address of 
each person listed is c/o International Food and Beverage, Inc., 
30152 Aventura, Rancho Santa Margarita, California 92688.
(2)  Does not give effect to the potential issuance of shares upon 
the 
exercise of (i) 316,666 shares granted to other members of 
management 
under the Company's Stock Option Plan (exercise prices between 
$.00177 and $.40 per share) and (ii) other options and warrants to 
acquire up to 122,000 shares (exercise price $.35 per share).

(3)  Included in Mr. Hogarty's beneficially owned shares are 
18,000,000 shares of Common Stock which BT Capital Corporation has 
the right to purchase under an option agreement received in 
connection with the change in control transaction in December 1994 
(exercise price of $.00177) expiring December 1999.
 
(4)  The address of BT Capital Corporation is 280 Park Avenue, 32 
West, New York, New York 10017.  Represents shares owned by Mr. 
Hogarty over which BT Capital Corporation has an option.  The 
exercise price is $.00177 and the option expires in December 1999.

 (5)  Includes 3,078,471 shares which under a Stock Purchase 
Agreement 
with Mr. Hogarty are subject to certain purchase rights by him which 
expire in December 1998.  Includes 140,000 shares which Ms. Gooch 
has 
the right to acquire upon exercise of outstanding options.

(6)  Includes 4,309,860 shares which under a Stock Purchase 
Agreement 
with Mr. Hogarty are subject to certain purchase rights by him which 
expire in December 1998.

(7)  Includes 4,309,860 shares which under a Stock Purchase 
Agreement 
with Mr. Hogarty are subject to certain purchase rights by him which 
expire in December 1998.

(8)  Includes currently vested options held by directors and 
officers 
of the Company.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On various dates during the first six months of fiscal 1995 BT 
Capital Corporation ("BTCC") loaned a total of $700,000 to the 
Company pursuant to notes and a Security Agreement collateralized by 
the Company's accounts receivable and inventories.  The proceeds 
were 
used primarily for working capital.

On December 31, 1994 BTCC, MH Investments, Inc., a California 
corporation wholly-owned by Michael W. Hogarty, the Chief Executive 
Officer and President of the Company, and Michael W. Hogarty entered 
into agreements which provided for the sale by BTCC of 91.8% of the 
outstanding shares of Common Stock of the company to MH Investments, 
Inc. for $250,000.  Concurrent with the foregoing transaction, the 
Company entered into a Tax Allocation Agreement with BTCC.  The 
parties elected under Section 338(h)(10) of the Internal Revenue 
Code 
to treat the transaction as an asset acquisition for tax purposes.  
Under the terms of the Tax Allocation Agreement, BTCC agreed to pay 
to the Company $3,475,000 as full consideration for the potential 
tax 
benefits which have or may in the future inure to the benefit of 
BTCC 
and its affiliates with such amount paid by (i) elimination of 
$2,675,000 of debt and interest owed to BTCC by the Company, and 
(ii) 
payment of $800,000 in cash and short term notes receivable.  As a 
result of the Section 338(h)(10) election, BTCC and its affiliates 
will be entitled to use, subject to applicable limitations and 
restrictions, any net operating losses of the Company existing as of 
December 31, 1994.  In connection with the foregoing transaction, MH 
Investments, Inc. has given BTCC a five year option to purchase up 
to 
18,000,000 shares of Common Stock of the Company from MH 
Investments, 
Inc. at the same price per share paid
by MH Investments, Inc.

In February 1996, the Company entered into a "Manufacturing 
Services and Marketing Agreement" as amended, (the "Agreement") with 
Sunset Specialty Foods, Inc. ("Sunset") and James R. Tolliver, the 
sole owner of Sunset.  The Agreement provides the terms by which the 
Company will contract manufacture product for Sunset, who heretofore 
has purchased product for sale to both domestic retail chains and 
export customers.  Pursuant to the Agreement the Company is 
obligated 
to issue as a commission to Sunset at the completion of each quarter 
Common Stock of the Company equal to four shares of Common Stock for 
each $1.00 of pizza finished product produced and purchased during 
the period from February 1, 1996 through June 30, 1996, and three 
shares of Common Stock for each $1.00 of pizza finished product 
produced and purchased during the two quarters ending December 31, 
1996.  Effective July 1, 1996 the Agreement was amended to exclude 
the stock commission on purchases by Sunset for export.  Through the 
quarter ended June 30, 1996 the Company issued or was obligated to 
issue 2,555,782 shares.

With respect to each of the major transactions described above, 
the transactions were approved by a majority of the disinterested 
directors of the Company.

PART IV.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON 
FORM 8-K.

(a) Index to Financial Statements and Schedules			Page


Report of Independent Accountants . . . . . .. . . . . . . 	F-1

Balance Sheets of the Company as
of June 30, 1997 and June 30, 1996 . . . . . . . . . . . . 	F-2

Statements of Operations for the year
ended June 30,1997, the year ended
June 30, 1996, and the six months ended
June 30, 1995 and December 31, 1994 . . . . . . . . . . . 	F-3

Statements of Shareholders' Equity
Deficiency) for the year ended
June 30, 1997, the year ended June 30, 1996, and 
the six months ended June 30, 1995 and
December 31, 1994 . . . . . . . . . . . . . . . . . . . .   F-4
        
Statements of Cash Flows for the year
ended June 30,1997,the year ended
June 30, 1996, and the six months ended 
June 30, 1995 and December 31, 1994 . . . . . . . . . . .	F-5

Notes to Financial Statements . . . . . . . . . . . . . .	F-6

(b)  Reports on Form 8-K.  There are no reports on Form 8-K 
filed during the last quarter of the fiscal year covered by this 
report.

(c)   Exhibits included or incorporated by reference herein: 
See Exhibit Index

 
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.										

					INTERNET BUSINESS'S INTERNATIONAL, 
INC.
					(formerly known as International 
					Food & Beverage, Inc.)


Dated: April 28, 1999		By: /s/ Albert R. Reda    
					   Albert R. Reda
					   Chief Executive Officer, Secretary


Pursuant to the requirements of the Securities Exchange Act of 
1934, this report has been signed below by the following persons on 
behalf of the registrant and in the capacities and on the date 
indicated.


/s/ Albert R. Reda
Albert R. Reda		Chief Executive Officer,
				Secretary, and Director		April 28, 1999

/s/ Arnold Sock
Arnold Sock			President and Director		April 28, 1999

/s/ Louis Cherry
Louis Cherry		Chairman of the Board and
				Treasurer (Principal
				Financial and Accounting
				Officer)				April 28, 1999

/s/ Greg Stack
Greg Stack			Director				April 28, 1999



REPORT OF INDEPENDENT ACCOUNTANT

To the Board of Directors and Stockholders of
International Food & Beverage, Inc.

I have audited the accompanying balance sheets of International Food 
& Beverage, Inc. at June 30, 1997 and 1996, and the related 
statements of income, stockholders' deficiency and cash flows for 
the 
years then ended.  These financial statements are the responsibility 
of the Company's management.  My responsibility is to express an 
opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing 
standards.  Those standards require that I plan and perform the 
audit 
to obtain reasonable assurance about whether the financial 
statements 
are free of material misstatement.  An audit also includes assessing 
the accounting principles used and significant estimates made by 
management, as well as evaluating  the overall financial statement 
presentation.  I believe that my  audit provides a reasonable basis 
for my opinion.

The accompanying financial statement have been prepared assuming 
that 
the Company will continue as a going concern.  The Company ceased 
operations on January 18, 1998 and will not resume until management 
has unsuccessfully raised the funds needed to acquire the necessary 
working capital.

In my opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of 
International Food & Beverage, Inc. at June 30, 1997 and 1996, and  
the results of its operations and its cash flows for the years then 
ended in conformity with generally accepted accounting principles.


/s/ Henry Schifffer C.P.A., a P.C.
Beverly Hills, California
April 1, 1998


INTERNATIONAL FOOD & BEVERAGE, INC.
BALANCE SHEET

						Year Ended		Year Ended
                                   June 30, 1996 	June 30, 1997
CURRENT ASSETS
Current Assets:
Cash and cash equivalents		$   20,000          $    28,000
Accounts receivable, net of
allowance for doubtful accounts
of $40,000 at 6-30-97 & $70,000
at 6-30-96					   505,000              254,000
Inventories					   643,000              423,000
Prepaid expenses				     7,000                6,000
	
Total current asset			 1,175,000              711,000
	
Fixed Assets				   905,000              800,000

Total Assets				$2,080,000           $1,511,000

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICT)

CURRENT LIABILITIES:
Notes payable and current
maturities of long-term debt		$  429,000           $  408,000
Accounts payable		               840,000              918,000
Accrued wages and benefits             373,000              207,000
Accrued commissions and marketing      181,000              261,000
Other accrued expenses			   118,000              153,000
	    
Total current liabilities            1,941,000            1,947,000

LONG TERM DEBT                         756,000              677,000
	
COMMITMENTS:
SHAREHOLDERS' EQUITY (DEFICT):
Preferred Stock, par value $0.01
per share;1,000,000 shares
authorized Common Stock, par
value $0.01 per share;
199,000,000 shares authorized,
158,060,194, and 154,763,438
shares issued and outstanding at
June 30, 1997 and 1996,
Respectively				   394,000             428,000
Additional paid-in capital	           1,000               1,000
Retained earnings (deficit)  		(1,012,000)         (1,542,000)
Total Shareholders'
Equity(Deficit)				  (617,000)         (1,113,000)
 
Total Liabilities &
Shareholders' Equity (Deficit)	$2,080,000          $1,511,000

See Accompanying Notes to Financial Statement

INTERNATIONAL FOOD & BEVERAGE, INC.
STATEMENTS OF OPERATIONS

 Six Months Ended		Six Months Ended    Year Ended        Year 
Ended
 December 31, 1994	June 30, 1995	  June 30, 1996     June 
30, 1997

REVENUES

$3,580,000			$2,718,000	        $6,572,000        
$7,358,000

COST OF SALES

 3,279,000               2,212,000           5,374,000         
5,847,000

GROSS PROFIT
   301,000			   506,000           1,198,000         
1,511,000

OPERATING EXPENSES:
Selling and distribution
  1,412,000			   702,000       	   1,135,000         
1,512,000
General and administration
    361,000			   298,000	           524,000           
407,000
Interest expense, net
    111,000			     3,000              54,000           
122,000

  1,884,000              1,003,000           1,713,000	   
2,041,000

NET LOSS
$(1,583,000)            $ (497,000)         $ (515,000)       $ 
(530,000)

NET LOSS PER
COMMON SHARE
$ nil 			$ nil	                $ nil              $ 
nil

WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING

 153,923,569           153,923,569         154,144,914        
154,763,438


See Accompanying Notes to Financial Statement

INTERNATIONAL FOOD & BEVERAGE, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

Six Months Ended    Six Months Ended    Year Ended        Year Ended
December 31, 1994   June 30, 1995	    June 30, 1996     June 30, 
1997

Common Stock:
Balance, beginning
of year

$ 1,539,000 	   $    386,000 *      $387,000         $ 394,000

Common Stock issued and
capital contributions
                                        
	0                     1,000           7,000		 34,000

Balance, end of year

  1,539,000			  387,000         394,000           428,000

Additional Paid In Capital
Balance, beginning of year                    

 20,126,000				  0 *         1,000             1,000

Common Stock issued and
capital contributions                                           

	0                     1,000               0			0

Balance, end of year                              

 20,126,000                 1,000           1,000             1,000

Retained Earnings (Deficit)
Balance, beginning of year                  

(21,830,000)			   0 *     (497,000)       (1,012,000)

Net income (loss)

 (1,583,000)   		  (497,000)      (515,000)         (530,000)
 
Balance, end of year

(23,413,000)              (497,000)    (1,012,000)       (1,542,000)

Total stockholders' equity (deficit)    

 (1,748,000)              (109,000)      (617,000)       (1,113,000)


*  Effect of "push-down" accounting in connection with change in 
control of registrant.  See Note 2 to the accompanying Notes to 
Financial Statements.


See Accompanying Notes to Financial Statements


INTERNATIONAL FOOD & BEVERAGE, INC.
STATEMENTS OF CASH FLOWS

Six Months Ended		Six Months Ended   Year Ended      Year 
Ended
December 31, 1994		June 30, 1995	 June 30, 1996   June 30, 
1997

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Loss                                                     

$(1,583,000)		$(497,000)	       $(515,000)       
$(530,000)

Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation and amortization

    304,000                84,000	         165,000          
166,000

Issuance of Common Stock under
distribution agreement

   							     7,000           
34,000

Deferred interest on debt

    110,000			  111,000              2,000 

Deferred payments on litigation settlement

				  550,000

Changes in assets and liabilities:
Accounts receivable 
    297,000              (186,000)          (319,000)		  
251,000


Inventories

    (72,000)             (504,000)          (139,000) 	  
220,000 

Prepaid expenses

    (38,000)               23,000	          33,000 		    
1,000

Accounts payable

     19,000               422,000	         338,000            
78,000

Accrued wages and benefits

     31,000               137,000 	         (40,000)         
(166,000)

Accrued commissions and marketing

    125,000               408,000	        (265,000)           
80,000

Other accrued expenses

   (305,000)               43,000	           8,000            
35,000

Net cash provided by (used in)
operating activities

 (1,050,000)              (91,000)          (727,000)          
169,000

	
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to fixed assets

    (83,000)              (1l,000)           (17,000)          
(61,000)

Cash used to satisfy net acquired
liabilities of predecessor company

  				 (557,000)

Net cash provided by (used in)
investing activities

    (83,000)             (568,000)           (17,000)          
(61,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable

    700,000               100,000            684,000

Principal payments on notes payable

    (48,000)        	  (49,000)          (112,000)         
(100,000)

Net cash provided by (used in)
financing activities

    652,000                51,000            572,000         
(100,000)

NET INCREASE (DECREASE) IN CASH

   (481,000)             (608,000)          (172,000)           
8,000

CASH AND CASH EQUIVALENTS,
beginning of period

     481,000              800,000            192,000           
20,000

CASH AND CASH EQUIVALENTS,
end of period

     $      0           $ 192,000           $ 20,000         $ 
28,000

See Accompanying Notes to Financial Statement

INTERNATIONAL FOOD & BEVERAGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996

Note 1 - Description of the Business

International Food & Beverage, Inc. (the "Company"), manufactures 
and 
markets fully prepared pizzas, pizza components and specialty baked 
products to customers within the food service industry including 
retail supermarket service delicatessens, restaurants, hotels, 
sports 
and theme parks, and catering locations.

Note 2 - Change in Control

On December 31, 1994, BT Capital Corporation ("BTCC"), MH 
Investments, Inc., a California corporation wholly owned by Michael 
W. Hogarty, the Chief Executive Officer and President of the 
Company, 
and Michael W. Hogarty entered into agreements which provided for 
the 
sale of 91.8% by BTCC of the outstanding shares of Common Stock of 
the company to MH Investments, Inc. for $250,000. Concurrent with 
the 
foregoing transaction the Company entered into a Tax Allocation 
Agreement with BTCC. The parties elected under Section 338(h)(10) of 
the Internal Revenue Code to treat the transaction as an asset 
acquisition for tax purposes. Under the terms of the tax Allocation 
Agreement, BTCC agreed to pay to the company $3,475,000 as full 
consideration for the potential tax benefits which have or may in 
the 
future inure to the benefit of BTCC and its affiliates with such 
amount paid by (i) elimination of $2,675,000 of debt and interest 
owed to BTCC by the Company, and (ii)payment of $800,000 in cash and 
short term notes receivable. As a result of the Section 338(h)(10) 
election, BTCC and its affiliates will be entitled to use, subject 
to 
applicable limitations and restrictions, any net operating losses of 
the company existing as of December 31, 1994.

In connection with the foregoing transaction, MH Investments, Inc. 
has given BTCC a five year option to purchase up to 18,000,000 
shares 
of Common Stock of the Company from MH Investments, Inc. at the same 
price per share paid by MH Investments, Inc.

For financial reporting purposes this transaction was recorded in 
conformity with Accounting Principles Board Opinion No. 16. 
Accordingly, the assets and liabilities as of January 1, 1995, and 
the results of operations for the six months ended June 30, 1995, 
reflect the "push-down" of the new controlling shareholder's basis, 
minority interest at its historical basis, and the consideration 
received from BTCC.

Note 3 - Summary of Significant Accounting Policies

Fiscal Year

The Company's fiscal year is the 52-53 week period ending on the 
Saturday closest to June 30. The fiscal year end and period end 
dates 
for the periods being reported on herein are June 29, 1996 and June 
28, 1997.  For clarity of presentation, fiscal year end and period 
end dates in the accompanying financial statements and notes are 
referred
to as June 30 for thc applicable period presented.

Accounts Receivable and Revenues

Substantially all of the Company's sales are made to full-line food 
service distributors, national food service chains major regional 
supermarket chains or a related party who sells to such 
organizations. Concentrations of credit risk exist because of the 
concentration of the Company's customers within these industries and 
its dependence on a limited number of customers for a large portion 
of annual revenues. Such risk, however, is mitigated by the 
longevity 
of the Company's customer relationships and is considered a normal 
part of the food service, institutional and retail grocery 
industries.

Inventories

Inventories consist of furnished goods and raw materials and are 
stated at the lower of cost (first-in, first-out method) or market.

Fixed Assets

Substantially all of the Company's fixed assets were acquired within 
the past six years. The historical acquisition cost of these assets 
was approximately $4,000,000, however, as a result of the 
application 
of "push-down" accounting in connection with the change of control 
these assets are reported currently on the Company's financial 
statements with a cost before accumulated depreciation and 
amortization of $1,154,000. Asset additions subsequent to December 
31, 1994 are stated at cost. Depreciation is provided using the 
straight-line methods over the shorter of the estimated useful life 
of an asset or the remaining lease term for leasehold improvements 
(three to seven years).

Significant improvements are capitalized. All maintenance and repair 
costs are charged to operations as incurred. When assets are sold or 
otherwise disposed of, the costs and accumulated depreciation or 
amortization are removed from the accounts and any resulting gain or 
loss is reflected in operations.

Other Assets

Other assets consisted primarily of cost capitalized in connection 
with a June 1990 debt restructuring. These costs were being 
amortized 
using the interest method over seven years, and were reduced to 
zero, 
effective January 1, 1995, in connection with the change in control 
of the Company.

Goodwill

The excess of cost over the fair value of net assets acquired by the 
predecessor company was recorded as goodwill and amortized using the 
straight-line method over twenty-five years. Th

goodwill was reduced to zero effective January 1, 1995, in 
connection 
with the change on control of the Company.

Income Taxes

The Company follows Statement of Financial Accounting Standards 
("SFAS") No. 109, "Accounting for Income Taxes". Under this method, 
deferred income taxed are recognized for the tax consequences in 
future years of difference between the tax bases of assets and 
liabilities, and their financial reporting amounts at each year-end 
based on enacted tax laws and statutory tax rates applicable to the 
periods in which the differences are expected to affect taxable 
income. Valuation allowances are established, when necessary, to 
reduce deferred tax assets to the amount expected to be realized. 
Under this standard the provision for income taxes represents the 
tax 
payable for the period and the change during the period in deferred 
tax assets and liabilities.

Net Loss Per Common Share

Net loss per common share is based on the reported net loss divided 
by the weighted average number of common shares outstanding. Shares 
issuable under options have been excluded from the calculation in 
each period presented because of their anti-dilutive effect.

Cash and Cash Equivalents

The Company considers highly liquid debt instruments purchased with 
a 
maturity of three months or less to be cash equivalents.

Fair Value of Financial Instruments

The carrying value of the Company's cash and cash equivalents, 
accounts receivable, accounts payable, accrues expenses and notes 
payable approximates fair value.

Management Estimates

The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimated 
and assumptions that affect the reported amounts of assets and 
liabilities at the date of the financial statements and the reported 
amounts of revenues and expenses during the reporting period. Actual 
results could differ from those estimates.

Note 4 - Commitments

Leases

The company has an operating lease for its manufacturing and 
corporate office facility. The lease, which expires in June 2000, 
requires monthly payments of approximately $25,000 through 
October 31, 1996 and thereafter is subject to annual adjustments of 
at least 4%, but not more than 7% based on the Consumers Price 
Index.

Building and equipment rent expense for the periods ended June 30, 
1996 and 1995. December 1, 1994, and June 30, 1994 was $298,000, 
$156,000, $150,000 and $249,000, respectively.

Future minimum lease commitments on non-cancellable operating leases 
are as follows:

	For the years ended June 30			Amount

		1998                            $   322,000
		1999						333,000
		2000						346,000

							  $ 1,001,000

Note 5 - Stock Issuance

	In February 1996, the Company entered into a "Manufacturing 
Service 
and Marketing Agreement" as amended, (the Agreement") with Sunset 
Specialty Foods, Inc. ("Sunset") and James R. Tolliver, the sole 
owner of Sunset. The Agreement the Company is obligated to issue as 
a 
commission to Sunset at the completion of each quarter Common Stock 
of the Company equal to four shares of Common Stock for each $ 1.00 
of pizza finished product produced and purchased during the period 
from February 1, 1996 through June 30, 1996, and three shares of 
Common Stock for each $ 1.00 of pizza finished product produced and 
purchased during the two quarters ending December 31,1996. Effective 
July 1, 1996 the Agreement was amended to exclude the stock 
commission on purchases by Sunset for export. Through the quarter 
ended June 30, 1996 the Company has issued 729,869 shares of Common 
Stock and is accounted for as a non-cash transaction on the 
Statement 
of Cash Flows. In August 1996 the Company issued an additional 
1,825,913 shares of Common Stock in satisfaction of the commissions 
earned as of June 29, 1996.



EXHIBIT INDEX


Exhibit No.		Description

3.01     		Certificate of Incorporation, as amended 
			(incorporated by reference to
         		Exhibit 3.01 of the Registrant's Annual 
			Report on Form 10-K for the
         		fiscal year ended June 26, 1993).

3.02			Bylaws (incorporated by reference to Exhibit 3.02 
to the
			Company's registration statement on Form S-1 filed 
with 
			the Securities and Exchange Commission on October 
29, 1991,
			the "Registration Statement").

4.01     		Specimen Common Stock Certificate (incorporated by 
			reference to Exhibit 4.01 to the Registration 
Statement).

10.1     		Employment Agreement, dated March 15, 1988, as 
			amended January 5, 1989, and November 9, 1990 
between
			Michael W. Hogarty and the Company (incorporated
			by reference to Exhibit 10.11 to the Registration
			Statement).

10.2     		Standard Form Industrial Lease, dated August 31, 
			1989, between Tijeras Partnership, as landlord, 
and the
			Company (incorporated by reference to Exhibit 
10.13
			to the Registration Statement).

10.3			1988 Stock Option Plan for Key Employees of
			International Food and Beverage, Inc. 
(incorporated by 
			reference to Exhibit 10.19 to the Registration 
Statement).

10.4     		Lease Amendment, dated December 8, 1992 to the 
			Standard Form Industrial Lease, dated August 31, 
1989,
			Between Tijeras Partnership, as landlord, and the 
Company
			(incorporated by reference to Exhibit 10.8 of the
			Registrant's Annual Report on Form 10-K for the 
fiscal
			year ended June 26, 1993).

10.5     		Promissory Note of the Company dated June 29, 
1995, 
			in the principal amount of $100,000 in favor of 
Michael W. 
			Hogarty. Promissory Notes of the Company in 
substantially
			the same form as in Exhibit 10.5 herein were 
issued at
			various times between October 16, 1995 and January 
31,
         		1996 in the total principal amount of $355,000 in 
favor of
			Michael W. Hogarty (incorporated by reference to 
Exhibit
			10.6 of the Registrant's Annual Report on Form 10-
K for the
			fiscal year ended June 30, 1995).

10.6     		Loan and Security Agreement, dated June 29, 1995 
			between the Company and Michael W. Hogarty 
(incorporated
			by reference to Exhibit 10.7 of the Registrant's 
Annual 
			Report on Form 10-K for the fiscal year ended 
			June 30, 1995).

10.7     		Loan and Security Agreement, dated March 15, 1996 
			between Fremont Business Credit and the Company 
and related 
			documents and agreements executed in connection 
therewith 
			(incorporated by reference to Exhibit 10.7 of the
			Registrant's Annual Report on Form 10-K for the 
fiscal
			year ended June 30, 1996).

10.8			Building lease Estoppel Certificate dated December 
11, 1995
			to Ms. Nancee Ehlers Boldman and Ms. Sally Ehlers 
Stillion
			as Purchasers of the real property subject to the 
building
			lease included in this Exhibit Index as Exhibit 
10.2 and
			Exhibit 10.4  incorporated by reference to Exhibit 
10.8
			of the Registrant's Annual Report on Form 10-K for 
the
			fiscal year ended June 30, 1996).

22.1			Subsidiaries (incorporated by reference to Exhibit 
22.1
			to the Registration Statement).

27       		Financial Data Schedule.