UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

                         Commission file number: 0-11734

                         CHINA FOOD AND BEVERAGE COMPANY
                         -------------------------------
             (Exact Name of Registrant as Specified in its Charter)

         NEVADA                                                 87-0548148
-------------------------                                  -------------------
(State of Incorporation)                                     (I.R.S. Employer
                                                            Identification No.)

                     710 W. 24th St., Kansas City, MO 64108
               --------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (877) 667-9377

              (Registrant's Telephone Number, Including Area Code)

             SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE
                        SECURITIES EXCHANGE ACT OF 1934:

                                                    Name of Each Stock Exchange
Title of Each Class                                    on Which Registered
------------------------                            ---------------------------
Common Stock, Par Value                                       None
   $0.001 Per Share

Indicate by check mark if disclosure of delinquent  filers  pursuant to item 405
of Regulation S-B 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-KSB or any  amendment to
this Form 10-KSB. [ ]

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 Small  business
issuer was  required  to file such  reports),  and (2) has been  subject to such
filing requirements for the past 90 da1 1 ys. YES [X] NO [ ]

The number of shares of  registrant's  Common Stock  outstanding on December 31,
2005, was 10,396,679.

The regitrant's total revenues for the year ended December 31, 2005, were $0.00.
<PAGE>

                                TABLE OF CONTENTS


                                                                        PAGE
                                                                      -------
PART I

ITEM 1.  DESCRIPTION OF BUSINESS                                         3

ITEM 2.  DESCRIPTION OF PROPERTY                                         4

ITEM 3.  LEGAL PROCEEDINGS                                               5

ITEM 4.  SUBMISSION OF MATTERS  TO A VOTE OF SECURITY HOLDERS            5

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED
         STOCKHOLDER  MATTERS                                            5

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS
         OF FINANCIAL CONDITION AND RESULTS OF
         OPERATIONS                                                      5

ITEM 7.  FINANCIAL STATEMENTS                                            6

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH
         ACCOUNTANTS                                                     6

ITEM 8A. CONTROLS AND PROCEDURES                                         6

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
         AND CONTROL PERSONS;  COMPLIANCE WITH
         SECTION 16(a) OF THE EXCHANGE ACT                               9

ITEM 10. EXECUTIVE COMPENSATION                                          9

ITEM 11. SECURITY OWNERSHIP OF BENEFICIAL OWNERS                        10

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
         TRANSACTIONS                                                   11

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                               11

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                         11

SIGNATURES                                                              12

                                      -2-
<PAGE>

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Business Development:

         China Food and Beverage  Company,  a Nevada  corporation (the "Company"
or, "we"), has executive offices at: 710 W. 24th St., Kansas City, MO 64108. The
Company  was  incorporated  in Nevada on  November  6, 1981 under the name Logos
Scientific  Inc.  On  May 5,  1992,  the  Company  changed  its  name  to  Logos
International,  Inc. On October 23, 1995,  the Company  changed its name to OMAP
Holdings Incorporated.  On March 31, 1997, we changed our name to China Food and
Beverage Company.

         Through a reverse  merger,  there was a  recapitalization  by which the
Company acquired 100% of Victoria Beverage  Company,  Ltd., for 4,200,000 shares
of the Company's  common stock which resulted in the Company owning 55% of Anhui
Hao Dun Brewery Co., Ltd., situated in the People's Republic of China.

         In May 2000,  the  sellers  claimed  the  Company was in default of its
obligations  to  repurchase  or  cause to be  repurchased  from  the  sellers  a
significant majority of the shares of the common stock issued upon conversion of
the  debentures  or to provide  additional  capital.  As a result of the alleged
default,  they  refused to provide the Company  with any  financial  information
concerning the operations of the brewery and assumed control of the brewery.

         We believe the claims made by the sellers are without  merit.  However,
as the  assets of the  brewery  are in the  Peoples'  Republic  of China and the
Company has no effective control over the business or the financial  concerns of
the brewery, the Company has fully reserved against all of its assets located in
China.

         Unless the Company is able to resolve  this dispute and because it does
not  presently  have the financial  ability to continue in operation,  we may be
obligated to secure additional debt or equity financing to enable the Company to
continue as an ongoing entity.

         Accordingly,  the Company  cancelled  2,100,000 shares of the 4,200,000
shares  previously  issued.  We have  placed a  stop-transfer  on the  remaining
2,100,000  shares pending  resolution of this issue between the sellers of Anhui
Hao Dun Brewery and the Company.  On April 15, 2003, the Company repurchased and
intends to cancel 525,000 shares of the  aforementioned  2,100,000 shares common
stock in exchange for $3,246.

         On September  2001,  the Company's  wholly owned  subsidiary,  Victoria
Beverage Company, was dissolved.  The only asset of the subsidiary was 6,000,000
shares of Gourmet's Choice Coffee Co., Inc. These shares were transferred to the
Company.  The  Company  will  carry  the  shares  at  Victoria's  cost of $0.00.
Gourmet's Choice is a related entity.
Business of Issuer:

         Since the  disposition of Anhui Hui Brewery,  the Company will continue
to seek to acquire businesses both in China and other countries.

         On March 4, 2001, the Company entered into an investment agreement with
Tritradex,  Inc., a US based parent corporation of Shanghai Tritradex Machinery,
Inc., a  manufacturer  and  distributor  of gasoline  assemblies in the People's
Republic of China, under license from the Wayne Division of Dresser, Inc., which
is based in Houston, Texas.

                                      -3-
<PAGE>

         Tritradex  was  incorporated  in the  state  of New  York in  1994  and
established a Sino-foreign venture in Pudong, Shanghai, the People's Republic of
China, named Shanghai Tritradex  Machinery,  Inc. ("STM").  The main business of
STM is designing  manufacturing and selling electronic fuel dispensing pumps and
related products for use in gasoline stations in China. In 1995 STM entered into
a license and technical  agreement  with Wayne  Division of Dresser  Industries,
Inc.  The  agreement  allowed  STM to  manufacture,  assemble,  sell and service
Wayne's products in China.

         Wayne is the  technological  leader in the  manufacture  and  supply of
retail petrol fuel  dispensers;  dispenser  control systems,  credit/debit  card
processing  terminals and point-of-sale  systems for petroleum markets worldwide
They are also the  industry  leader  in  developing  new  technologies.  Over 75
countries use their products.

         On September 17, 2001,  Tridradex,  Inc.  repaid an $80,000  investment
which the Company had previously  proffered on March 4, 2001.  The  negotiations
for the acquisition of Tritradex, Inc. have been discontinued.

         On November  11, 2003,  we entered  into an agreement in principle  and
Letter of Intent with "Fairest  Enterprises,  Ltd.",  for the  acquisition  of a
majority  interest  and  operating  control of the China  Xuzhou  Leader  Cement
Company,  Limited ("China Cement") in Da Miao Town,  Jiangsu Province,  Peoples'
Republic of China.  The nonbinding  Letter of Intent is pending upon the parties
pursuing the standard and customary  due  diligence.  The specific  terms of the
acquisition  were not announced,  as they have yet to be negotiated  between the
parties.  China  Cement is a modern  state-of-the  art  cement  plant  producing
various types of concrete products for the rapidly developing  building industry
in Jiangsu Province of China. The Company announced that the unaudited financial
documents,  preliminarily  supplied by China Cement,  indicated  total assets of
approximately  $2,000,000  as of December  31, 2002 with total  revenues for the
calendar  year 2002 of  $1,600,000  resulting  in a net income of  $170,000.  It
should be noted that the foregoing preliminary  financials are supplied by China
Cement on an  unaudited  basis and have not been  verified  or  reviewed  by the
Company or its agents. The Company is enthused about the prospects for acquiring
this threshold  industry within this  rapid-developing  region and the potential
establishment  of a  substantial  material  working  asset for the  company.  On
December 30, 2004, we terminated  negotiations with China Cement due to the fact
we were  unable to  verify  viable  financial  information  for China  Cement in
accordance with the accounting practices as set forth by US GAAP.

         We  intend  to  continue  to  attempt  to  locate   target   investment
opportunities  in China and Southeast Asia. The Company has no full or part time
employees  aside  from its  officers  and  directors.  If the  Company  requires
additional  personnel  to carry  out its  business  objectives,  it will  retain
outside  consultants.  In the past, the Company has been successful in retaining
consultants  through the issuance of its common stock and the Company intends to
continue this practice in an attempt to avoid expending valuable cash.

         Since the Company does not have significant liquid assets, we intend to
continue an attempt to acquire  business  opportunities  through the issuance of
equity  securities.  This will likely result in future dilution of the ownership
interest enjoyed by the Company's current shareholders. The Company has had some
past experience in acquiring subsidiaries in this manner.  However, there can be
no assurance that we will be able to continue such  acquisitions  in the future.
It is also likely that any future  acquisitions  by the Company will require the
Company to make capital contributions to the acquired businesses.

ITEM 2.  DESCRIPTION OF PROPERTY

         The Company presently  occupies office space free of charge at: 710 W.
24th St., Kansas City, MO 64108.

                                      -4-
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

         None

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

         None.

PART II

ITEM 5.  MARKET  FOR  SMALL  BUSINESS   ISSUER'S   COMMON  EQUITY  AND  RELATED
         STOCKHOLDER MATTERS

Market Information:

         The  following  table sets forth the prices of the Common  Stock on the
OTC Bulletin  Board for each quarter  during  fiscal years 2004 and 2005.  These
over-the-counter market quotations are based on inter-dealer bid prices, without
markup,  markdown,  or  commission,  and may not  necessarily  represent  actual
transactions.

         QUARTER                            HIGH              LOW
         -------                            ------            ------

Quarter Ending December 30, 2004            $ .29             $ .29
Quarter Ending September 30, 2004           $ .17             $ .17
Quarter Ending June 30, 2004                $ .07             $ .07
Quarter Ending March 30, 2004               $ .02             $ .02
Quarter Ending December 30, 2005            $ .08             $ .08
Quarter Ending September 30, 2005           $ .15             $ .15
Quarter Ending June 30, 2005                $ .15             $ .15
Quarter Ending March 30, 2005               $ .21             $ .21


Shareholders:

         There  were  approximately  193  shareholders  of  Common  Stock  as of
December 31, 2005,  holding a total of 10,396,679  outstanding  shares of Common
Stock.

Dividends:

         The Company has never  declared a cash dividend on its Common Stock and
does  not  anticipate  doing  so in the  near  future.  The  future  payment  of
dividends,  if any, on the Common Stock is within the discretion of the board of
directors  and will  depend on the  Company's  earnings,  capital  requirements,
financial condition, and other relevant factors.


ITEM 6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
         RESULTS OF OPERATIONS

         The Company  generated no revenues  for the year ended 2005.  Since the
Company does not have significant  liquid assets, the Company intends to acquire
business opportunities through the issuance of its equity securities.  This will
likely  result in future  dilution  of the  ownership  interest  enjoyed  by the
Company's  current  shareholders.  The Company has had some past  experience  in
acquiring  subsidiaries  in this  manner.  However,  the  Company can provide no
assurance that it will be able to continue such  acquisitions in the future.  It
is also likely that any future  acquisitions  by the  Company  will  require the
Company to make capital contributions to the acquired businesses.

                                      -5-
<PAGE>

Results of Operations:

         We had no revenues as a result from business operations during the year
ended  2005.  The  company  has $132 in assets as cash.  It  continued  to incur
administrative  and  general  expenses  in the amount of $234,  580 for the year
ended 2005,  as opposed to $205,692 for the year ended 2004,  of which  $150,000
was for officer salaries.  Net loss for the year ended 2005 was $233,833 and the
basic loss per share was ($0.02).  Net loss for the year ended 2004 was $204,775
and the basic loss per share was ($0.02).

         Our Total Liabilities and  Stockholder's  Equity (Deficit) for the year
ending 2005 was $132 as opposed to $13,084 for the year ended 2004, as set forth
on Page F-4 of the attached  Financials  on the  Statement of  Operations as set
forth on Page F-5 of the attached Financial Statements,  the Net Sales, the Cost
of Sales and the Gross Margin were all $0.00.

         We are uncertain if our existing capital will be sufficient to meet our
cash needs,  including the costs of  compliance  with the  continuing  reporting
requirements  of the Securities  Exchange Act of 1934, as amended.  Any required
cash flows will be  supplied by  officers.  We do not expect to purchase or sell
any significant equipment,  engage in product research or development and do not
expect any significant changes in the number of employees.

Capital Resources and Liquidity:

      On March 22, 2005,  the Company issued 500,000 common stock shares to Greg
Ruggerio valued at $.10 per share for services rendered.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See the audited financial  Statements  attached hereto and numbered F-1
through F-18.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

         There are no changes or disagreements with our accountants who are HJ &
Associates, LLC., 50 W Broadway, Ste. 600, Salt Lake City, Utah 84101.

ITEM 8A. CONTROLS AND PROCEDURES

Quarterly  Evaluation of Controls.  As of the end of the period  covered by this
annual report on Form 10-KSB,  we evaluated the  effectiveness of the design and
operation of (i) our disclosure controls and procedures ("Disclosure Controls"),
and (ii) our internal control over financial  reporting  ("Internal  Controls").
This  evaluation  ("Evaluation")  was performed by our President,  CFO and Chief
Executive Officer,  James Tilton. In this section, we present the conclusions of
our CEO and CFO based on and as of the date of the Evaluation,  (i) with respect
to the  effectiveness of our Disclosure  Controls,  and (ii) with respect to any
change in our Internal  Controls  that  occurred  during the most recent  fiscal
quarter that has  materially  affected,  or is  reasonably  likely to materially
affect our Internal Controls.

CEO and CFO Certifications. Attached to this annual report, as Exhibits 31.1 and
32.1,  are  certain  certifications  of the CEO and CFO,  which are  required in
accordance with the Exchange Act and the Commission's  rules  implementing  such
section  (the Rule  13a-14(a)/15d.,14(a)  Certifications).  This  section of the
annual report contains the information  concerning the Evaluation referred to in
the Rule 13a-14(a)/15d,14(a)  Certifications. This information should be read in
conjunction  with  the  Rule  13a-14(a)/15d.,14(a)  Certifications  for  a  more
complete understanding of the topic presented.

                                      -6-
<PAGE>

Disclosure  Controls and Internal Controls.  Disclosure  Controls are procedures
designed  with  the  objective  of  ensuring  that  information  required  to be
disclosed in our reports filed with the Commission  under the Exchange Act, such
as this annual report,  is recorded,  processed,  summarized and reported within
the time  period  specified  in the  Commission's  rules and  forms.  Disclosure
Controls  are also  designed  with  the  objective  of  ensuring  that  material
information  relating  to us is made  known  to the  CEO and the CFO by  others,
particularly during the period in which the applicable report is being prepared.
Internal Controls, on the other hand, are procedures which are designed with the
objective  of  providing  reasonable  assurance  that (i) our  transactions  are
properly   authorized,   (ii)  the  Company's  assets  are  safeguarded  against
unauthorized or improper use, and (iii) our transactions  are properly  recorded
and reported,  all to permit the preparation of complete and accurate  financial
statements in conformity with accounting  principals  generally  accepted in the
United States.

Limitations on the  Effectiveness  of Controls.  Our management  does not expect
that our Disclosure Controls or our Internal Controls will prevent all error and
all fraud.  A control  system,  no matter how well  developed and operated,  can
provide only reasonable,  but not absolute  assurance that the objectives of the
control system are met.  Further,  the design of the control system must reflect
the fact that there are resource constraints,  and the benefits of controls must
be considered  relative to their costs.  Because of the inherent  limitations in
all control systems,  no evaluation of controls can provide  absolute  assurance
that all control  issues and instances so of fraud,  if any,  within the Company
have been  detected.  These  inherent  limitations  include the  realities  that
judgments  in  decision-making  can be  faulty,  and that  breakdowns  can occur
because of simple error or mistake.  Additionally,  controls can be circumvented
by the individual acts of some persons,  by collusion of two or more people,  or
by management  override of the control.  The design of a system of controls also
is based in part upon certain assumptions about the likelihood of future events,
and there can be no  assurance  that any design will  succeed in  achieving  its
stated objectives under all potential future conditions.  Over time, control may
become  inadequate  because of changes in  conditions,  or because the degree of
compliance  with the  policies or  procedures  may  deteriorate.  Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or fraud may occur and not be detected.

Scope of the Evaluation. The CEO and CFO's evaluation of our Disclosure Controls
and Internal  Controls  included a review of the controls' (i) objectives,  (ii)
design,  (iii)  implementation,  and  (iv) the  effect  of the  controls  on the
information  generated  for use in this  annual  report.  In the  course  of the
Evaluation,  the CEO and CFO sought to identify data errors,  control  problems,
acts of fraud,  and they sought to confirm that appropriate  corrective  action,
including process improvements, was being undertaken. This type of evaluation is
done on a quarterly basis so that the conclusions  concerning the  effectiveness
of our  controls  can be reported in our  quarterly  reports on  Form10-QSB  and
annual  reports on Form 10-KSB.  The overall goals of these  various  evaluation
activities are to monitor our Disclosure Controls and our Internal Controls, and
to make  modifications  if and as necessary.  Our external  auditors also review
Internal  Controls in  connection  with their audit and review  activities.  Our
intent in this regard is that the Disclosure  Controls and the Internal Controls
will be maintained as dynamic systems that change  (including  improvements  and
corrections) as conditions warrant.

Among other matters, we sought in our Evaluation to determine whether there were
any significant  deficiencies or material  weaknesses in our Internal  Controls,
which are reasonably likely to adversely affect our ability to record,  process,
summarize and report  financial  information,  or whether we had  identified any
acts of fraud, whether or not material,  involving management or other employees
who have a  significant  role in our Internal  Controls.  This  information  was
important   for  both  the   Evaluation,   generally,   and   because  the  Rule
13a-14(a)/15d.14(a)  Certifications,  Item  5,  require  that  the  CEO  and CFO

                                      -7-
<PAGE>

disclose that information to our Board (audit committee), and to our independent
auditors, and to report on related matters in this section of the annual report.
In professional auditing literature,  "significant deficiencies" are referred to
as "reportable conditions". These are control issues that could have significant
adverse affect on the ability to record, process, summarize and report financial
data in the financial  statements.  A "material weakness" is defined in auditing
literature as a particularly  serious  reportable  condition  where the internal
control does not reduce,  to a relatively low level, the risk that  misstatement
caused by error or fraud may occur in amounts that would be material in relation
to the  financial  statements  and not be  detected  within a timely  period  by
employees in the normal course of performing their assigned  functions.  We also
sought to deal with other controls matters in the evaluation,  and in each case,
if a problem was identified,  we considered what revisions,  improvements and/or
corrections to make in accordance with our ongoing procedures.

Conclusions.  Based upon the Evaluation,  our disclosure controls and procedures
are designed to provide  reasonable  assurance of achieving our objectives.  Our
CEO and CFO have  concluded  that our  disclosure  controls and  procedures  are
effective at that reasonable assurance level to ensure that material information
relating to the Company is made known to management,  including the CEO and CFO,
particularly during the period when our periodic reports are being prepared, and
that our Internal  Controls are  effective  at that  assurance  level to provide
reasonable   assurance  that  our  financial  statements  are  fairly  presented
inconformity with accounting principals generally accepted in the United States.
Additionally,  there has been no change in our Internal  Controls  that occurred
during our most  recent  fiscal  quarter  that has  materially  affected,  or is
reasonably likely to affect, our Internal Controls.


                                      -8-
<PAGE>

PART III

ITEM 9.  DIRECTORS,   EXECUTIVE   OFFICERS,   PROMOTERS  AND  CONTROL   PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Name                       Age              Position(s) and Office(s)
-------                    ----             -----------------------------
James A. Tilton            45               President, Chief Executive
                                            Officer, Treasurer & Director

Jane Zheng                 43               Secretary, Director

Gordon Wilson              63                Director


         James A. Tilton was appointed the Company's president,  chief executive
officer,  treasurer and one of its directors on October 23, 1995. Mr. Tilton has
extensive business and marketing  experience in the Far East and has worked with
his wife, Jane Zheng.

         Jane Zheng was  appointed as secretary and a director of the Company on
October 23, 1995. Ms. Zheng has extensive  business and marketing  experience in
the Far East and has worked with her husband,  James A. Tilton. She received her
engineering degree from Shanghai University,  in Shanghai, China. Ms. Zheng also
has an MBA degree in Finance from Adelphi University, New York.

         Gordon Wilson has been a successful senior  executive,  team leader and
troubleshooter  having set up, developed and turned around UK and  International
trading  operations for major banking,  financial services and trading groups in
East and Western Europe, the Middle East, Africa and North America. He presently
is a director of a number of UK companies  including Wilton Corporate Finance, a
member of the Wilton Group.

Compliance With Section 16(a)of the Exchange Act:

         Based  solely  upon a  review  of  Forms  3, 4 and 5  furnished  to the
Company,  the  Company is not aware of any person  who,  at any time  during the
fiscal year ended  December 31, 2005,  was a director,  officer,  or  beneficial
owner of more than ten  percent  of the  Common  Stock of the  Company,  and who
failed  to file on a timely  basis  reports  required  by  Section  16(a)of  the
Securities Exchange Act of 1934 during such fiscal year.

ITEM 10.  EXECUTIVE COMPENSATION

         The following table summarizes certain information concerning executive
compensation  paid to or accrued by the Company's  President and Chief Executive
Officer,  James A. Tilton,  during the Company's last three fiscal years as well
as, Jane Zheng,  the  Company's  secretary . During this time  neither  James A.
Tilton or Jane Zheng, earned or received annual compensation exceeding $100,000.

                                      -9-
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
                           Annual Compensation                Long Term Compensation
                           --------------------------         ---------------------------------

Name and principal position         Year             Salary            Bonus Compensation
------------------------------      -----            -------           --------------------------
<S>                                 <C>              <C>               <C>
James A. Tilton, President          2004             $75,000           $0
                                    2005             $75,000           $0

Jane Zheng, Secretary               2004             $75,000           $0
                                    2005             $75,000           $0
</TABLE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

         The following table sets forth certain information concerning the stock
ownership as of December 31, 2005, with respect to: (i) each person who is known
to the Company to  beneficially  own more than 5% of the Company's  Common Stock
(ii) all directors;  and (iii) directors and executive  officers as a group (the
notes below are necessary  for a complete  understanding  of the  figures).  The
Company  calculated  the owners of 5% of the Common  Stock using the  10,396,679
shares of Common Stock issued on December 31, 2005.
<TABLE>
<CAPTION>
                           Name and Address                   Amount and Nature of               Percentage
Title of Class             of Beneficial Owner                Beneficial Ownership               of Class
--------------             ----------------------             ---------------------------        -------------
<S>                        <C>                                <C>                                <C>
Common Stock
Par Value $0.001           Korkor Holdings, Ltd.              3,172,400                          31%
                           3 Athol St
                           Douglas Isle of Man

                           Calder Investments Limited         3,000,000                          29%
                           Omar Hodge Bldg
                           Wicken Cay Road Town
                           Tortola, BVI
                           Anhui Liu An Beer Company          1,050,000                          10%

                           Tiancheng China Corp, Ltd.(a)        530,000                           5%

                           Jane Zheng, Director                 281,586                           3%
                           & Secretary
                           82-66 Austin Street
                           Kew Gardens, NY 11415

                           James A. Tilton, Director,            57,251                       less than 1%
                           President & Treasurer(b)
                           82-66 Austin Street
                           Kew Gardens, NY 11415
</TABLE>

(a) Includes 211 shares of common stock owned by ATJ,  Incorporated,  a Delaware
holding  company,  of which  James  A.  Tilton  is sole  officer,  director  and
shareholder.

(b)  Includes 185 shares of common  stock owned by ZJ,  Incorporated  a Delaware
holding company, of which Jane Zheng is sole officer, director and shareholder.

                                      -10-
<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          None

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit No.       Description
-----------       -----------

14.1              China Food & Beverage Company Code of Ethics

31.1              Rule  13a-14(a)/15d-14(a)  Certifications  by Chief  Executive
                  Officer/Chief Financial Officer

32.1              Section 1350  Certifications by Chief Executive  Officer/Chief
                  Financial Officer

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

         The aggregate fees billed through April 23, 2006 by HJ & Associates LLC
for  professional  services  rendered  for the  audit  of our  annual  financial
statements and review of the financial statements included in the annual reports
on Form 10-QSB for fiscal year 2005 were $ 15,953.

         The  aggregate  fees  billed by HJ &  Associates  LLC for  professional
services rendered for the audit of our annual financial statements and review of
the financial statements included in the annual reports on Form10-QSB for fiscal
year 2004 were $17,140.

AUDIT RELATED FEES

         For the fiscal year ended December 31, 2005,  there were no fees billed
for the audit or review of the financial  statements that are not reported above
Audit Fees.

TAX FEES

         For the  fiscal  year ended  2005 the fees  billed  for tax  compliance
services and tax-planning advice provided were $0.

OTHER FEES

         For the fiscal  year  ended  2005  there were no other fees  billed for
services other than the services described above.


                                      -11-
<PAGE>

                                   SIGNATURES

         In  accordance  with Section 13 or 15(d) of the Exchange Act, the small
business  issuer  caused  this  annual  report to be signed on its behalf by the
undersigned, thereunto duly authorized, this __ day of April, 2006.

                         CHINA FOOD AND BEVERAGE COMPANY


                         /s/James A. Tilton
                         -------------------------------
                         James A. Tilton, President

         In accordance  with the Exchange Act, this report has been signed below
by the  following  persons  on behalf of the Small  business  issuer  and in the
capacities and on the dates indicated.

Signature                           Title                     Date
-----------                         -----                     ----

/s/ James A. Tilton
-----------------------             President,                April 26, 2006
James Tilton                        CEO, Treasurer
                                    and Director
/s/ Jane Zheng
------------------                  Secretary and             April 26, 2006
Jane Zheng                          Director

/s/ Gordon Wilson                   Director                  April 26, 2006
-----------------------
Gordon Wilson



                                      -12-
<PAGE>



<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                                December 31, 2005


                                      F-1
<PAGE>







                                 C O N T E N T S


Report of Independent Registered Public Accounting Firm.................... F-3

Balance Sheet.............................................................. F-4

Statements of Operations................................................... F-55

Statements of Stockholders' Equity (Deficit)............................... F-6

Statements of Cash Flows................................................... F-8

Notes to the Financial Statements.......................................... F-10



                                      F-2
<PAGE>




             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors of
China Food and Beverage Company
Kew Gardens, NY


We have  audited  the  accompanying  balance  sheet of China  Food and  Beverage
Company (a  development  stage  company) at December 31,  2005,  and the related
statements of operations,  stockholders' equity (deficit) and cash flows for the
years ended  December 31, 2005 and 2004 and from  inception  of the  development
stage on January 1, 2000 through December 31, 2005.  These financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of China Food and Beverage Company
(a  development  stage  company) at December  31,  2005,  and the results of its
operations and its cash flows for the years ended December 31, 2005 and 2004 and
from inception of the development  stage on January 1, 2000 through December 31,
2005 in conformity with United States generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
financial   statements,   the  Company  has  recorded  significant  losses  from
operations and has no revenues to support operational cash flows, which together
raise  substantial  doubt  about its  ability to  continue  as a going  concern.
Management's  plans in regard to these matters are also described in Note 3. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.




/s/ HJ & Associates, LLC
------------------------
Salt Lake City, Utah
April 13, 2006

                                      F-3
<PAGE>


                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                                  Balance Sheet


                                     ASSETS


                                                                  December 31,
                                                                      2005
                                                                  ------------
CURRENT ASSETS

   Cash                                                           $       132

     Total Current Assets                                                 132
                                                                  -----------

     TOTAL ASSETS                                                 $       132
                                                                  ===========


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

   Accounts payable and accrued expenses                          $   400,739
   Accounts payable - related party                                    47,947
                                                                  -----------

     Total Current Liabilities                                        448,686
                                                                  -----------

     TOTAL LIABILITIES                                                448,686
                                                                  -----------


STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock; 100,000,000 shares at $0.001
      par value; 10,396,679 shares issued and outstanding              10,397
   Additional paid-in capital                                       2,159,778
   Retained earnings accumulated prior to the development stage       633,605
   Deficit accumulated during the development stage                (3,252,334)
                                                                  -----------

     Total Stockholders' Equity (Deficit)                            (448,554)
                                                                  -----------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)         $       132
                                                                  ===========




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

                                      F-4
<PAGE>



<TABLE>
<CAPTION>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                            Statements of Operations


                                                                             From
                                                                         Inception of
                                                                         Development
                                                                           Stage on
                                             For the Years ended          January 1,
                                                December 31,            2000 Through
                                        ----------------------------     December 31,
                                           2005             2004            2005
                                        ------------    ------------    ------------

<S>                                     <C>             <C>             <C>
NET SALES                               $       --      $       --      $       --

COSTS AND EXPENSES

   General and administrative                234,580         205,692       1,512,352
                                        ------------    ------------    ------------

     Total Costs and Expenses                234,580         205,692       1,512,352
                                        ------------    ------------    ------------

LOSS BEFORE OTHER EXPENSE                   (234,580)       (205,692)     (1,512,352)
                                        ------------    ------------    ------------

OTHER INCOME (EXPENSE)

   Refund of tax penalties                      --              --            16,237
   Interest expense                             --              --           (16,296)
   Interest income                               747             917          13,228
                                        ------------    ------------    ------------

     Total Other Income (Expense)                747             917          13,169
                                        ------------    ------------    ------------

LOSS BEFORE TAX, DISCONTINUED
   OPERATIONS, AND EXTRAORDINARY ITEM       (233,833)       (204,775)     (1,499,183)

INCOME TAX EXPENSE                              --              --              --
                                        ------------    ------------    ------------

LOSS BEFORE DISCONTINUED OPERATIONS         (233,833)       (204,775)     (1,499,183)

LOSS ON DISCONTINUED OPERATIONS                 --              --        (1,990,314)
                                        ------------    ------------    ------------

LOSS BEFORE EXTRAORDINARY ITEM              (233,833)       (204,775)     (3,489,497)

GAIN ON DISPOSITION OF DEBT                     --              --           237,163
                                        ------------    ------------    ------------

NET LOSS                                $   (233,833)   $   (204,775)   $ (3,252,334)
                                        ============    ============    ============

BASIC LOSS PER SHARE                    $      (0.02)   $      (0.02)   $      (0.02)
                                        ============    ============    ============

WEIGHTED AVERAGE NUMBER OF
   SHARES OUTSTANDING                     10,287,090       9,896,679       9,896,679
                                        ============    ============    ============
</TABLE>




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

                                      F-5
<PAGE>


<TABLE>
<CAPTION>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                  Statements of Stockholders' Equity (Deficit)



                                               Common Stock            Additional      Other         Retained
                                        --------------------------      Paid-In     Comprehensive     Earnings
                                          Shares          Amount        Capital        Income        (Deficit)
                                        -----------    -----------    -----------   -----------    -----------

<S>                                       <C>          <C>            <C>           <C>            <C>
Balance, December 31, 1999                5,546,505    $     5,547    $   872,070   $     8,421    $   633,605

Common stock issued for cash
   at $1.00 per share                        50,000             50         49,950          --             --

Common stock issued for cash
   at $1.00 per share                       200,000            200        199,800          --             --

Common stock issued for cash
   at $0.50 per share                       200,000            200         99,800          --             --

Common stock issued for cash
   at $0.25 per share                       400,000            400         99,600          --             --

Common stock issued for cash
   at $0.25 per share                       800,000            800        199,200          --             --

Common stock issued for cash
   at $0.25 per share                       800,000            800        199,200          --             --

Common stock issued for cash
   at $0.10 per share                     2,000,000          2,000        198,000          --             --

Common stock issued for cash
   at $0.10 per share                     1,000,000          1,000         99,000          --             --

Related party forgiveness of interest          --             --           11,244          --             --

Change in currency translation                 --             --             --          (8,421)          --

Net loss for the year ended
   December 31, 2000                           --             --             --            --       (2,039,898)
                                        -----------    -----------    -----------   -----------    -----------

Balance, December 31, 2000               10,996,505         10,997      2,027,864          --       (1,406,293)

Cancelled shares (Note 4)                      (717)            (1)          --            --             --

Common stock issued for cash
   at $0.10 per share (Note 4)              500,000            500         49,500          --             --

Cancelled shares (Note 4)                (2,100,000)        (2,100)         2,100          --             --

Net loss for the year  ended
   December 31, 2001                           --             --             --            --         (290,762)
                                        -----------    -----------    -----------   -----------    -----------

Balance, December 31, 2001                9,395,788    $     9,396    $ 2,079,464          --      $(1,697,055)
                                        -----------    -----------    -----------   -----------    -----------

</TABLE>

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

                                      F-6
<PAGE>


<TABLE>
<CAPTION>
                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
            Statements of Stockholders' Equity (Deficit) (Continued)



                                           Common Stock          Additional       Other        Retained
                                    -------------------------     Paid-In     Comprehensive    Earnings
                                      Shares         Amount       Capital         Income       (Deficit)
                                    -----------   -----------   -----------    -----------   -----------

<S>                                   <C>         <C>           <C>            <C>           <C>
Balance, December 31, 2001            9,395,788   $     9,396   $ 2,079,464    $      --     $(1,697,055)

Warrants granted at fair market
   value (Note 4)                          --            --          31,315           --            --

Net loss for the year ended
   December 31, 2002                       --            --            --             --        (272,296)
                                    -----------   -----------   -----------    -----------   -----------

Balance, December 31, 2002            9,395,788         9,396     2,110,779    $      --      (1,969,351)

Common stock issued upon cashless
   exercise of warrants (Note 4)        500,891           501          (501)          --            --

Net loss for the year ended
   December 31, 2003                       --            --            --             --        (210,770)
                                    -----------   -----------   -----------    -----------   -----------

Balance, December 31, 2003            9,896,679         9,897     2,110,278           --      (2,180,121)

Net loss for the year ended
   December 31, 2004                       --            --            --             --        (204,775)
                                    -----------   -----------   -----------    -----------   -----------

Balance, December 31, 2004            9,896,679         9,897     2,110,278           --      (2,384,896)

Common stock issued for services
   at $0.10 per share (Note 4)          500,000           500        49,500

Net loss for the year ended
   December 31, 2005                       --            --            --             --        (233,833)
                                    -----------   -----------   -----------    -----------   -----------

Balance, December 31, 2005           10,396,679   $    10,397   $ 2,159,778    $      --     $(2,618,729)
                                    ===========   ===========   ===========    ===========   ===========

Retained earnings accumulated prior to the development stage                                 $   633,605
Deficit accumulated during the development stage                                              (3,252,334)
                                                                                             ------------

                                                                                             $(2,618,729)
</TABLE>



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

                                      F-7
<PAGE>

<TABLE>
<CAPTION>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                            Statements of Cash Flows

                                                                                              From
                                                                                           Inception of
                                                                                           Development
                                                                                            Stage on
                                                                For the Years Ended         January 1,
                                                                    December 31,           2000 Through
                                                             --------------------------    December 31,
                                                                2005            2004          2005
                                                             -----------    -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES

<S>                                                           <C>            <C>            <C>
   Net loss                                                   $  (233,833)   $  (204,775)   $(3,252,334)
   Adjustments to reconcile net loss to net cash
     used by operating activities:
       Depreciation                                                  --              143          2,149
       Discontinued operations                                       --             --        1,990,314
       Common stock issued for services                            50,000           --           50,000
       Gain on settlement of debt                                    --             --         (237,163)
       Warrants issued below market                                  --             --           31,315
   Changes in assets and liabilities:
     Decrease in prepaid expenses                                    --           11,473           --
     Decrease in accounts receivable - related party                 --             --           (1,602)
     Decrease in exchange credits                                    --             --           19,594
     Increase (Decrease) in accounts payable and
     accrued expenses                                             169,438        161,229       (176,098)
     Increase (Decrease) in related party payable                   1,443         17,031         14,397
                                                              -----------    -----------    -----------

       Net Cash Used by Operating Activities                      (12,952)       (14,899)    (1,559,428)
                                                              -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

     (Increase) Decrease in note receivable - related party         7,074         12,926           --
     Increase in note receivable                                     --             --          (82,592)
     (Increase) Decrease in interest receivable                     5,111           (917)         4,194
     Receipt of payment on note receivable                           --             --           80,000
     Sales of exchange credits                                       --             --          419,980
                                                              -----------    -----------    -----------

       Net Cash Provided by Investing Activities                   12,185         12,009        421,582
                                                              -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES

   Loss of cash from discontinued operations                         --             --         (424,757)
   Common stock issued for cash                                      --             --        1,200,000
   Proceeds from related party                                       --             --          129,474
   Payments on notes payable                                         --             --         (323,011)
                                                              -----------    -----------    -----------

       Net Cash Provided by Financing Activities                     --             --          581,706
                                                              -----------    -----------    -----------

NET DECREASE IN CASH                                                 (767)        (2,890)      (556,140)

CASH AT BEGINNING OF PERIOD                                           899          3,789        556,272
                                                              -----------    -----------    -----------

CASH AT END OF PERIOD                                         $       132    $       899    $       132
                                                              ===========    ===========    ===========
</TABLE>

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

                                      F-8
<PAGE>

<TABLE>
<CAPTION>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                      Statements of Cash Flows (Continued)

                                                                                                       From
                                                                                                   Inception of
                                                                                                    Development
                                                                                                     Stage on
                                                                          For the Years Ended       January 1,
                                                                              December 31,        2000 Through
                                                                        ------------------------  December 31,
                                                                           2005         2004          2005
                                                                        -----------  -----------  ------------

SUPPLEMENTAL SCHEDULE OF CASH FLOW
   ACTIVITIES:

Cash Paid For:
<S>                                                                     <C>          <C>          <C>
   Income taxes                                                         $     --     $     --     $     --
   Interest                                                             $     --     $     --     $    3,000

SCHEDULE OF NON-CASH FINANCING ACTIVITIES:

   Warrants issued at fair market                                       $     --     $     --     $   31,315
   Common stock for services                                            $   50,000   $     --     $   50,000

</TABLE>











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

                                      F-9
<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              a.  Business Organization

              China Food and Beverage  Company (the Company) was incorporated on
              November  6,  1987  under  the laws of the  State of  Nevada.  The
              Company subsequently ceased its original business activity in 1997
              and  thereafter  primarily  investigated  and sought new  business
              opportunities.

              The Company had a 100% owned subsidiary, Victoria Beverage Company
              Limited  (Victoria),  which has a 55% owned subsidiary  (Anhui Hao
              Dun Brewery Co. Ltd.) (Anhui) which was incorporated in the nation
              of China in 1986 for the  purpose  of  operating  a beer  brewery.
              Victoria  was  incorporated  in the Isle of Man on May 9, 1993 for
              the purpose of acquiring foreign companies.

              The Company acquired 100% of the shares of Victoria which owns 55%
              of Anhui for 4, 200,000 shares of the Company's  common stock. The
              acquisition  was accounted for as a  recapitalization  of Victoria
              because the shareholders of Victoria  controlled the Company after
              the acquisition.  Therefore, Victoria was treated as the acquiring
              entity.  There  was no  adjustment  to the  carrying  value of the
              assets or liabilities of Victoria in the exchange.  The Company is
              the  acquiring  entity  for legal  purposes  and  Victoria  is the
              surviving  entity for accounting  purposes.  On December 18, 1998,
              the  shareholders  of the Company  authorized a 1-for-100  reverse
              stock   split.   All   references   to  common   stock  have  been
              retroactively restated to reflect the reverse stock split.

              The Company  reentered the development stage on January 1, 2000 as
              a result of the discontinued operations of Anhui (Note 6), and, as
              discussed  in  Note  7,  Victoria  was  completely   dissolved  in
              September 2001.

              b.  Accounting Method

              The Company's financial  statements are prepared using the accrual
              method of  accounting.  The Company has elected a December 31 year
              end.

              c.  Cash and Cash Equivalents

              Cash equivalents  include  short-term,  highly liquid  investments
              with   maturities   of  three  months  or  less  at  the  time  of
              acquisition.

              d.  Estimates

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


                                      F-10
<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND SUMMARY  OF   SIGNIFICANT   ACCOUNTING   POLICIES
              (Continued)

              e.  Revenue Recognition

              The  Company   currently  has  no  source  of  revenues.   Revenue
              recognition  policies will be determined when principal operations
              begin.

              f.  Recent Accounting Pronouncements

                 In  November  2004,  the FASB  issued  SFAS No. 151  "Inventory
                 Costs,  an amendment of ARB No. 43,  Chapter 4. The  amendments
                 made by  Statement  151 clarify that  abnormal  amounts of idle
                 facility expense, freight, handling costs, and wasted materials
                 (spoilage) should be recognized as  current-period  charges and
                 require  the  allocation  of  fixed  production   overheads  to
                 inventory  based  on the  normal  capacity  of  the  production
                 facilities.  The  guidance is  effective  for  inventory  costs
                 incurred  during  fiscal years  beginning  after June 15, 2005.
                 Earlier  application is permitted for inventory  costs incurred
                 during  fiscal years  beginning  after  November 23, 2004.  The
                 Company has  evaluated  the impact of the adoption of SFAS 151,
                 and does not  believe  the impact  will be  significant  to the
                 Company's overall results of operations or financial position.

                 In December 2004, the FASB issued SFAS No.152,  "Accounting for
                 Real Estate  Time-Sharing  Transactions--an  amendment  of FASB
                 Statements  No. 66 and 67" ("SFAS 152) The  amendments  made by
                 Statement  152 This  Statement  amends FASB  Statement  No. 66,
                 Accounting for Sales of Real Estate, to reference the financial
                 accounting and reporting guidance for real estate  time-sharing
                 transactions  that is provided in AICPA  Statement  of Position
                 (SOP)   04-2,   Accounting   for   Real   Estate   Time-Sharing
                 Transactions. This Statement also amends FASB Statement No. 67,
                 Accounting  for Costs and  Initial  Rental  Operations  of Real
                 Estate Projects,  to state that the guidance for (a) incidental
                 operations and (b) costs incurred to sell real estate  projects
                 does not apply to real estate  time-sharing  transactions.  The
                 accounting  for those  operations  and costs is  subject to the
                 guidance in SOP 04-2. This Statement is effective for financial
                 statements for fiscal years  beginning after June 15, 2005. The
                 Company has  evaluated  the impact of the adoption of SFAS 152,
                 and does not  believe  the impact  will be  significant  to the
                 Company's overall results of operations or financial position.

               In December  2004,  the FASB issued SFAS  No.153,  "Exchanges  of
               Nonmonetary   Assets,   an  amendment  of  APB  Opinion  No.  29,
               Accounting for Nonmonetary  Transactions."The  amendments made by
               Statement  153 are  based  on the  principle  that  exchanges  of
               nonmonetary  assets should be measured based on the fair value of
               the assets  exchanged.  Further,  the  amendments  eliminate  the
               narrow exception for nonmonetary  exchanges of similar productive
               assets and replace it with a broader  exception  for exchanges of
               nonmonetary  assets  that  do  not  have  commercial   substance.
               Previously,  Opinion  29  required  that  the  accounting  for an
               exchange of a productive asset for a similar  productive asset or
               an equivalent  interest in the same or similar  productive  asset
               should be based on the recorded amount of the asset relinquished.
               Opinion  29  provided  an  exception  to  its  basic  measurement
               principle  (fair  value)  for  exchanges  of  similar  productive
               assets.  The Board  believes  that  exception  required that some
               nonmonetary  exchanges,  although  commercially  substantive,  be
               recorded  on a carryover  basis.  By focusing  the  exception  on
               exchanges that lack commercial substance, the Board believes this
               Statement  produces  financial  reporting  that  more  faithfully
               represents the economics of the

                                      F-11
<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

              f. Recent Accounting Pronouncements (Continued)

              transactions.  The  Statement is effective for  nonmonetary  asset
              exchanges  occurring in fiscal  periods  beginning  after June 15,
              2005.  Earlier  application  is permitted  for  nonmonetary  asset
              exchanges  occurring in fiscal periods beginning after the date of
              issuance.  The  provisions  of this  Statement  shall  be  applied
              prospectively.  The  Company  has  evaluated  the  impact  of  the
              adoption  of SFAS 153,  and does not  believe  the impact  will be
              significant  to the  Company's  overall  results of  operations or
              financial position.

              In December  2004,  the FASB issued  SFAS No.123  (revised  2004),
              "Share-Based Payment". Statement 123(R) will provide investors and
              other users of financial statements with more complete and neutral
              financial  information  by requiring  that the  compensation  cost
              relating to  share-based  payment  transactions  be  recognized in
              financial statements. That cost will be measured based on the fair
              value of the equity or  liability  instruments  issued.  Statement
              123(R)   covers   a  wide   range  of   share-based   compensation
              arrangements  including  share  options,  restricted  share plans,
              performance-based  awards, share appreciation rights, and employee
              share purchase plans. Statement 123(R) replaces FASB Statement No.
              123, Accounting for Stock-Based  Compensation,  and supersedes APB
              Opinion  No.  25,   Accounting  for  Stock  Issued  to  Employees.
              Statement  123,  as  originally  issued  in 1995,  established  as
              preferable a fair-value-based method of accounting for share-based
              payment  transactions  with  employees.  However,  that  Statement
              permitted  entities the option of continuing to apply the guidance
              in Opinion 25, as long as the  footnotes to  financial  statements
              disclosed  what net  income  would  have  been had the  preferable
              fair-value-based  method been used.  Public  entities  (other than
              those filing as small business  issuers) will be required to apply
              Statement  123(R) as of the  first  interim  or  annual  reporting
              period  that  begins  after June 15,  2005.  The  Company  adopted
              Statement 123(R) in December of 2005.

              In December 2004, the Financial  Accounting Standards Board issued
              two FASB  Staff  Positions  - FSP FAS 109-1,  Application  of FASB
              Statement 109  "Accounting  for Income Taxes" to the Tax Deduction
              on Qualified  Production  Activities Provided by the American Jobs
              Creation Act of 2004, and FSP FAS 109-2  Accounting and Disclosure
              Guidance for the Foreign  Earnings  Repatriation  Provision within
              the American Jobs Creation Act of 2004.  Neither of these affected
              the Company as it does not participate in the related activities.

              In March 2005, the SEC released Staff Accounting Bulletin No. 107,
              "Share-Based  Payment" ("SAB 107"),  which  provides  interpretive
              guidance  related  to the  interaction  between  SFAS  123(R)  and
              certain  SEC  rules  and  regulations.  It also  provides  the SEC
              staff's  views   regarding   valuation  of   share-based   payment
              arrangements.  In April 2005, the SEC amended the compliance dates
              for SFAS 123(R),  to allow  companies to implement the standard at
              the  beginning  of their  next  fiscal  year,  instead of the next
              reporting  period  beginning  after June 15, 2005.  Management  is
              currently   evaluating  the  impact  SAB  107  will  have  on  our
              consolidated financial statements.


                                      F-12
<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

              f. Recent Accounting Pronouncements (Continued)

              In March  2005,  the  FASB  issued  FASB  Interpretation  No.  47,
              "Accounting for Conditional  Asset Retirement  Obligations"  ("FIN
              47"). FIN 47 provides guidance  relating to the  identification of
              and financial  reporting for legal obligations to perform an asset
              retirement activity. The Interpretation  requires recognition of a
              liability  for the fair value of a  conditional  asset  retirement
              obligation  when  incurred  if the  liability's  fair value can be
              reasonably  estimated.  FIN 47 also  defines  when an entity would
              have sufficient  information to reasonably estimate the fair value
              of an asset retirement  obligation.  The provision is effective no
              later than the end of fiscal years ending after December 15, 2005.
              The  Company  will  adopt FIN 47  beginning  the first  quarter of
              fiscal  year 2006 and does not believe  the  adoption  will have a
              material impact on its consolidated  financial position or results
              of operations or cash flows.

              In May 2005, the FASB issued FASB  Statement No. 154,  "Accounting
              Changes and Error  Corrections."  This new  standard  replaces APB
              Opinion No. 20,  "Accounting  Changes,  and FASB  Statement No. 3,
              Reporting Accounting Changes in Interim Financial Statements," and
              represents  another  step  in the  FASB's  goal  to  converge  its
              standards  with those  issued by the IASB.  Among  other  changes,
              Statement  154  requires  that a  voluntary  change in  accounting
              principle  be  applied   retrospectively  with  all  prior  period
              financial  statements  presented on the new accounting  principle,
              unless it is  impracticable  to do so. Statement 154 also provides
              that (1) a change  in  method  of  depreciating  or  amortizing  a
              long-lived  non-financial  asset be  accounted  for as a change in
              estimate   (prospectively)  that  was  effected  by  a  change  in
              accounting  principle,  and (2) correction of errors in previously
              issued financial  statements should be termed a "restatement." The
              new standard is effective for accounting changes and correction of
              errors made in fiscal  years  beginning  after  December 15, 2005.
              Early  adoption  of this  standard  is  permitted  for  accounting
              changes and  correction  of errors made in fiscal years  beginning
              after June 1, 2005 . The Company has  evaluated  the impact of the
              adoption of Statement  154 and does not believe the impact will be
              significant  to the  Company's  overall  results of  operations or
              financial position.

              In February of 2006, the FASB issued SFAS No. 155, "Accounting for
              Certain  Hybrid  Financial  Instruments",  which  is  intended  to
              simplify the  accounting  and improve the  financial  reporting of
              certain hybrid financial  instruments (i.e.,  derivatives embedded
              in other  financial  instruments).  The statement  amends SFAS No.
              133,   "Accounting   for   Derivative   Instruments   and  Hedging
              Activities",  and SFAS No.  140,  "Accounting  for  Transfers  and
              Servicing   of   Financial   Assets   and    Extinguishments    of
              Liabilities--a  replacement  of FASB  Statement No. 125." SFAS No.
              155 is effective for all financial  instruments issued or acquired
              after the  beginning of an entity's  first fiscal year that begins
              after September 15, 2006.. The Company is currently evaluating the
              impact  SFAS  No.  155  will  have on its  consolidated  financial
              statements, if any.


                                      F-13
<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

              g.  Income Taxes

              Deferred taxes are provided on a liability method whereby deferred
              tax assets are recognized for deductible temporary differences and
              operating  loss and tax  credit  carryforwards  and  deferred  tax
              liabilities  are  recognized  for taxable  temporary  differences.
              Temporary  differences  are the  differences  between the reported
              amounts of assets and  liabilities  and their tax bases.  Deferred
              tax  assets are  reduced by a  valuation  allowance  when,  in the
              opinion  of  management,  it is more  likely  that not  that  some
              portion or all of the  deferred  tax assets will not be  realized.
              Deferred tax assets and  liabilities  are adjusted for the effects
              of changes in tax laws and rates on the date of enactment.

              Net deferred tax assets consist of the following  components as of
December 31, 2005 and 2004:
<TABLE>
<CAPTION>

                                                       2005                2004
                                                ------------------  ------------------
<S>                                             <C>                 <C>
              Deferred tax assets
                  NOL carryover                 $        1,910,785  $        1,902,025
                  Accrued expenses                         125,950              62,975

              Deferred tax liabilities                           -                   -

              Valuation allowance                       (2,036,735)         (1,965,000)
                                                ------------------  ------------------

              Net deferred tax asset            $                -  $                -
                                                ==================  ==================
</TABLE>

              The income  tax  provision  differs  from the amount of income tax
              determined by applying the U.S. federal and state income tax rates
              of 39% to pretax income from  continuing  operations for the years
              ended December 31, 2005 and 2004 due to the following:


                                      2005            2004
                                   -----------    -----------

              Book income           $   (91,235)   $   (79,800)
              Misc                         --              100
              Stock for services         19,500           --
              Valuation allowance        71,735         79,700
                                    -----------    -----------

                                    $      --      $      --
                                      2,222,222      2,222,222

              At  December  31,  2005,   the  Company  had  net  operating  loss
              carryforwards  of  approximately  $4,800,000  that  may be  offset
              against  future taxable income from the year 2005 through 2025. No
              tax benefit has been  reported in the December 31, 2005  financial
              statements  since  the  potential  tax  benefit  is  offset  by  a
              valuation allowance of the same amount.


                                      F-14
<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

              g. Income Taxes (Continued)

              Due to the change in ownership provisions of the Tax Reform Act of
              1986,  net operating  loss  carryforwards  for Federal  income tax
              reporting  purposes  are subject to annual  limitations.  Should a
              change in ownership occur, net operating loss carryforwards may be
              limited as to use in the future.

NOTE 2 -      CONCENTRATIONS OF RISK

              Barter Exchange Credits

              The Company has owned certain  barter  exchange  credits held with
              ITEX  Corporation.  This  balance is not  insured  by the  Federal
              Deposit  Insurance  Corporation.  Value of the credits is $0 as of
              December 31, 2005.

NOTE 3 -      GOING CONCERN

              The Company's  financial  statements are prepared using accounting
              principles  generally  accepted  in the  United  States of America
              applicable to a going concern which  contemplates  the realization
              of assets and  liquidation  of liabilities in the normal course of
              business.  However,  the Company does not have significant cash or
              other material assets,  nor does it have an established  source of
              revenues  sufficient to cover its operating  costs and to allow it
              to continue as a going concern. It is the intent of the Company to
              seek a merger  with an  existing,  operating  company.  Until that
              time,  the  stockholders  have committed to covering the operating
              costs of the Company.

NOTE 4 -      COMMON STOCK TRANSACTIONS

              Common Stock Issuances and Cancellations

              On January  29,  2001,  the  Company  cancelled  717 shares of its
              common   stock   pursuant  to  a  settlement   agreement   with  a
              shareholder.

              On April 25, 2001, the Company issued 500,000 shares of its common
              stock at $0.10 per share for a total of $50,000.

              On May 11, 2001,  the Company  cancelled  2,100,000  shares of its
              common  stock.  These shares were part of the  original  4,200,000
              issued in the acquisition of the Anhui Brewery.

              On November 5, 2003,  the Company  issued 500,891 shares of common
              stock as a cashless exercise of an outstanding warrant to purchase
              550,000 shares of common stock.

              On March 22, 2005,  the Company  issued  500,000  shares of common
              stock at $0.10 per share for a total of  $50,000 in  exchange  for
              services.

                                      F-15
<PAGE>


                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2005 and 2004

NOTE 3 -      COMMON STOCK TRANSACTIONS (Continued)

              Issuance of Warrant

              On March 5, 2002, the Company issued a warrant to a  non-employee.
              The  warrant  allowed  the holder to  purchase  550,000  shares of
              common  stock at an exercise  price of $0.06 per share,  and would
              expire five years from the date of issuance.

              The  Company  applied  SFAS No.  123 for  warrants  issued,  which
              required  the Company to estimate  the fair value of each  warrant
              issued at the grant date by using the Black-Scholes  pricing model
              with the following assumptions:

                      Risk-free interest rate          3.50%
                      Expected life                  3 Years
                      Expected volatility               1.71
                      Dividend yield                     0.0

              As a result of  applying  SFAS No. 123,  the  Company  recorded an
              expense of $31,315  during the year ended  December 31, 2002.  The
              expense is included in general and  administrative  expense in the
              statement of operations.

              As of December  31,  2002,  this was the only  warrant  issued and
              outstanding. This warrant was exercised in November 2003.

NOTE 5 -      RELATED PARTY TRANSACTIONS

              Accounts Receivable

              On April 17, 2002, the Company  advanced  $20,000 to the president
              and CEO of the  Company.  The  advance  is  payable  on demand and
              accrues interest at 12% per annum.  During the year ended December
              31,  2005,  the Company  has  recognized  $747 of interest  income
              related to the note.  The balance of the note at December 31, 2005
              is $0.

              Prepaid Expenses

              During the first quarter of 2002, the Company prepaid two years of
              salaries  to two  employees  and  officers of the  Company.  As of
              December 31, 2002, one half of the  prepayment,  representing  one
              year of salaries and payroll taxes,  has been fully expensed.  The
              remaining  prepaid  salaries  and taxes,  $157,532,  was  expensed
              during the year ended  December 31, 2003.  Therefore,  the prepaid
              salaries and payroll taxes account balance as of December 31, 2005
              is $0.



                                      F-16
<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2005 and 2004

NOTE 6 -      DISCONTINUED OPERATIONS

              Loss of Subsidiary

              The loss from discontinued  operations results from a dispute with
              the Anhui Liu An Beer Company  Ltd.  ("sellers")  who  represent a
              minority  interest  in the  entity  that  operated  the  Company's
              brewery in the Peoples'  Republic of China.  In December 1998, the
              Company  acquired a 55% interest in a Chinese brewery for which it
              issued 8% convertible  debentures in the total principal amount of
              $21 million. The debentures had a $5.00 conversion price. Pursuant
              to the  terms of the  debentures,  the  Company  had the  right to
              require  conversion of the debentures.  The Company  required said
              conversion and issued 4.2 million shares of its common stock, also
              in December 1998. The sellers, from whom the Company purchased its
              interest in the brewery, hold a 45% equity interest in the brewery
              and  agreed  to  maintain   responsibility   for  the   day-to-day
              operations of the brewery.

              The Company's Chinese asset, which was the brewery, was subject to
              liens which resulted in the borrowing of approximately $6 million,
              and the brewery had tax  liabilities  to the People's  Republic of
              China in excess of $4 million.

              In May 2000, the sellers claimed the Company was in default of its
              obligations  to  repurchase  or cause to be  repurchased  from the
              sellers a  significant  majority of the shares of the common stock
              issued upon conversion of the debentures or to provide  additional
              capital.  As a result of the  alleged  default,  they  refused  to
              provide the Company with any financial information  concerning the
              operations of the brewery and assumed control of the brewery.

              The  Company  believes  the claims made by the sellers are without
              merit.  However,  as the assets of the brewery are in the Peoples'
              Republic of China and the Company has no  effective  control  over
              the business or the financial concerns of the brewery, the Company
              has fully reserved  against all of its assets  allocated in China.
              All operations have been classified as discontinued as they relate
              to activities prior to January 1, 2000.

              It is possible  that, in addition to taking control of the assets,
              the sellers may commence an action  against the Company  alleging,
              among other claims, breach of contract. Conversely, the Company is
              exploring its options,  including  but not limited to,  initiating
              legal  action  of its  own to  recover  what it  believes  to be a
              wrongful conversion of its assets by the sellers.

              Since  there  is no  information  for  the  loss  on  discontinued
              operations  for the year ended  December 31, 2000,  the  remaining
              excess of net assets over  liabilities has been allowed for in the
              total loss on discontinued operations total of $1,990,314.

NOTE 7 -      DISSOLUTION OF SUBSIDIARY

              In September 2001, the Company's wholly owned subsidiary, Victoria
              Beverage,  was  dissolved.  The only asset of the  subsidiary  was
              6,000,000 shares of Gourmet's Choice Coffee Company.  These shares
              were transferred to the Company. The Company will carry the shares
              at Victoria's cost of $0.00. Gourmet's Choice is controlled by the
              President of the Company.


                                      F-17