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, 2004

                         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 tem
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
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]

     The number of shares of Registrant's  Common Stock  outstanding on December
31, 2004, was 9,896,679.

     The Registrant's  total revenues for the year ended December 31, 2004, were
$0.00.
<PAGE>

                                TABLE OF CONTENTS

                                     PART I
PAGE

----

ITEM 1.      DESCRIPTION OF BUSINESS......................................   3

ITEM 2.      DESCRIPTION OF PROPERTY......................................   5

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...................................................   6

ITEM 7.      FINANCIAL STATEMENTS.........................................   7

ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH
             ACCOUNTANTS..................................................   7

             PART III

ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
             AND CONTROL PERSONS;  COMPLIANCE WITH
             SECTION 16(a) OF THE EXCHANGE ACT............................   7

ITEM 10.     EXECUTIVE COMPENSATION.......................................   8

ITEM 11.     SECURITY OWNERSHIP OF BENEFICIAL OWNERS......................   8

ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED
             TRANSACTIONS.................................................   9

ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K.............................   9

ITEM 14.     CONTROLS AND PROCEDURES......................................   9

ITEM 15.     PRINCIPAL ACCOUNTANT FEES AND SERVICES.......................  10

SIGNATURES................................................................  11


                                       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.

         On December 30, 1998, we closed on an agreement with Calder Investments
Limited  and Li, Lin Hu by issuing  its 5 year and one day 8%  Debenture  in the
amount of $10,500,000 to each of Calder Investments Limited and Li, Lin Hu. This
issuance  consummated the transactions  described in the Company's 8-K dated May
6, 1998. On the same day,  December 30, 1998,  the Company caused the conversion
of the Debentures above described in the terms  incorporated  therein by issuing
to each of Li, Lin Hu and Calder Investments  Limited thereupon caused 1,050,000
of their shares to be issued to Anhui Lui An Beer Company  Ltd., to redeem their
note to Anhui Lui An Beer Company  Ltd. On December 31, 1998,  we issued a total
of 4,200,000 shares of its common stock to the following persons and entities in
the following  amounts  pursuant to Debentures  which were converted on December
30, 1998; Calder Investments Limited = 1,050,000 shares of common stock; Li, Lin
Hu = 1,050,000 shares of common stock Anhui Liu An Beer Company Ltd. = 2,100,000
shares of common stock.  This issuance caused the three individuals and entities
above set forth to become the control persons of the Registrant.

         Through a reverse merger recapitalization by which the Company acquired
100% of Victoria Beverage  Company,  Ltd., for 4,200,000 shares of the Company's
common stock,  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 that 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  that 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 on-going entity.

                                       3
<PAGE>

         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  Houston-based
Dresser, Inc.

         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. re-paid 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 non-binding 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


                                       4
<PAGE>

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 flows.

         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.

ITEM 3.  LEGAL PROCEEDINGS

         None

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

         None.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'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 2003 and 2004.  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.

                                       5
<PAGE>

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

Quarter Ending December 30, 2003            $ .29                     $ .29

Quarter Ending September 30, 2003           $ .17                     $ .17

Quarter Ended June 30, 2003                 $ .07                     $ .07

Quarter Ended March 30, 2003                $ .02                     $ .02

Quarter Ending December 30, 2004            $ .08                     $ .08

Quarter Ending September 30, 2004           $ .15                     $ .15

Quarter Ended June 30, 2004                 $ .15                     $ .15

Quarter Ended March 30, 2004                $ .21                     $ .21


Shareholders:

         There  were  approximately  193 record  holders  of Common  Stock as of
December 31, 2004,  holding a total of  9,896,679  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 2004.  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.

Results of Operations:

         We had no revenues as a result from business operations during the year
ended 2004. It continued to incur operating expenses, general and administrative
expenses  in the  amount of  $205,692  for the year  ended  2004,  as opposed to
$212,831 for the year ended 2003,  of which  $150,000 was for officer  salaries.
Net loss for the year ended 2004 was ($204,775) and the basic loss per share was
($.02).

         Our "Total  Liabilities and Stockholder's  Equity" for year ending 2004
was $13,084 of which, as set forth on Page F-6 of the attached  Financials.  The
"Statement  of  Operations"  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.

                                       6
<PAGE>

         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 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.  The negative cash flow reflected on the "Statements of Cash Flow"
Page F-8 of the attached Financials,  is a result of funds used to pay costs and
other accrued expenses.


ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See the audited financial  Statements  attached hereto and numbered F-1
through F-16.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

         There are no changes or disagreements with our accountants who are HJ &
Associates, LLC., 50 S. Main St., Ste. 1450, Salt Lake City, Utah 84144.

                                    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          43                President, Chief Executive
                                                 Officer, Treasurer &
                                                 Director

      Jane Zheng               42                Secretary, Director

      Gordon Wilson            62                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, in partnership with the Metallic Building Company ("MBC"),
a subsidiary of NCI Building  Systems,  to market its pre-  engineered  building
materials in the People's  Republic of China  ("PRC")  since 1992.  For the last
five years and again with Jane Zheng,  he has assisted Star Brite, a division of
Oceans  Bio-Tech,  in  establishing a sales  distribution  system in PRC for its
chemical products.

                                       7
<PAGE>

         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,  in  partnership
with the  Metallic  Building  Company  ("MBC"),  a  subsidiary  of NCI  Building
Systems, to market its pre-engineered  building materials in the PRC since 1992.
For the last five years and again with James Tilton, Ms. Zheng has assisted Star
Brite,  a division of Oceans  Bio-Tech,  in  establishing  a sales  distribution
system in China for its chemical  products.  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
trouble shooter 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,  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, 2004,  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 chief executive officer during
the Company's  last three fiscal years.  During this time no executive  officer,
excluding  James A.  Tilton,  the current  chief  executive  officer,  earned or
received annual compensation exceeding $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
                                       Annual Compensation         Long Term Compensation
                                       -------------------        -------------------------
                                                                     Other       Restricted
                                                                     Annual       Stock              Other
Name and principal position          Year    Salary   Bonus       Compensation     Awards         Compensation
----------------------------         ----    ------   -----       ------------   ----------       ------------
<S>                                  <C>     <C>         <C>            <C>              <C>              <C>
James A. Tilton, President           2003    $75,000     $0             $0               $0               $0
         "                           2004    $75,000     $0             $0               $0               $0

Jane Zheng, Secretary                2003    $75,000     $0             $0               $0               $0
         "                           2004    $75,000     $0             $0               $0               $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, 2004, 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  9,896,679
shares of Common Stock issued on December 31, 2004.

                                       8
<PAGE>

<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                  32%
                                   3 Athol St
                                   Douglas Isle of Man


Common Stock Par Value $0.001      Calder Investments Limited         3,000,000                  30%
                                   Omar Hodge Bldg
                                   Wicken Cay Road Town
                                   Tortula, BVI


Common Stock Par Value $0.001      Anhui Liu An Beer Company          1,050,000                  10%


Common Stock Par Value $0.001      Tiancheng China Corp, Ltd.(a)        530,000                   6%


Common Stock Par Value $0.001      Jane Zheng, Director                 281,586                   3%
                                   & Secretary
                                   82-66 Austin Street
                                   Kew Gardens, NY 11415

Common Stock Par Value $0.001      James A. Tilton, Director,            57,251             less than
                                   President & Treasurer(b)                                       1%
                                   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.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          None

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

         On November 11, 2003, the Company filed an 8-K announcing a non-binding
agreement  in  principle  to acquire a majority  interest  in a cement  plant in
Jiangsu Province, People's Republic of China. The company proposes to acquire an
unspecified  majority  position in the Xuzhou Leader Cement Company from Fairest
Enterprises, Ltd. of China.

ITEM 14. CONTROLS AND PROCEDURES

         Within 90 days  prior to the date if this  report,  we  carried  out an
evaluation under the supervision and with the participation of our President and
Secretary/Treasurer,  of the  effectiveness  of the design and  operation of our


                                       9
<PAGE>

disclosure controls and procedures.  Based on this evaluation, our President and
Secretary/Treasurer  concluded that our  disclosure  controls and procedures are
effective  in  timely  alerting  them to  material  information  required  to be
included in our periodic SEC reports.  It should be noted that the design of any
systems of controls is based in part upon certain  assumptions of the likelihood
of future events, and there can be no assurances that any design will succeed in
achieving it stated goals under all potential future  conditions,  regardless of
how remote. In addition we have reviewed our internal  controls,  and there have
been no  significant  changes in our internal  controls or in any other  factors
that could  significantly  affect those control  subsequent to the date of their
last evaluation.

ITEM 15.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

         The aggregate fees billed through April 19, 2005 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 2004 were $18,145.

         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 Form  10-QSB for
fiscal year 2003 were $13,970.

AUDIT RELATED FEES

         For the fiscal years ended  December  31, 2004 and 2003,  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  years  ended  2004 and 2003  the fees  billed  for tax
compliance services and tax-planning advice provided were $217.

OTHER FEES

         For the  fiscal  years  ended  2004 and 2003  there  were no other fees
billed for services other than services described above.


                                       10
<PAGE>


                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
Registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized, this 2nd day of May, 2005.

                         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  Registrant and in the capacities and
on the dates indicated.


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

/s/ James A. Tilton
--------------------------           President,         May 2, 2005
James Tilton                         CEO, Treasurer
                                     and Director
/s/ Jane Zheng
--------------------------           Secretary and      May 2, 2005
Jane Zheng                           Director

/S/ Gordon Wilson                    Director           May 2, 2005
--------------------------
Gordon Wilson


                                       11
<PAGE>



                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                                December 31, 2004











                                      F-1
<PAGE>







                                 C O N T E N T S


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

Balance Sheet.............................................................. 4

Statements of Operations................................................... 5

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

Statements of Cash Flows................................................... 8

Notes to the Financial Statements..........................................10


                                       F-2

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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

We have audited the accompanying  balance sheet of China Food & Beverage Company
(a development  stage company) at December 31, 2004, and the related  statements
of operations, stockholders' equity (deficit) and cash flows for the years ended
December  31,  2004  and 2003 and from  inception  of the  development  stage on
January 1, 2000 through  December 31, 2004.  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 of 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 & Beverage Company
(a  development  stage  company) at December  31,  2004,  and the results of its
operations and its cash flows for the years ended December 31, 2004 and 2003 and
from inception of the development  stage on January 1, 2000 through December 31,
2004 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 4 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 4. 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 19, 2005

                                       F-3
<PAGE>




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

                                     ASSETS
                                  December 31,

                                 CURRENT ASSETS

   Cash                                                             $       899
   Accounts receivable - related party (Note 6)                           7,074
   Interest receivable - related party                                    5,111
                                                                    -----------

     Total Current Assets                                                13,084
                                                                    -----------

PROPERTY AND FIXED ASSETS (Note 3)

   Equipment                                                              2,149
   Accumulated depreciation                                              (2,149)
                                                                    -----------

     Total Fixed Assets                                                    --
                                                                    -----------

     TOTAL ASSETS                                                   $    13,084
                                                                    ===========


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

   Accounts payable and accrued expenses                            $   231,301
   Accounts payable - related party                                      46,504
                                                                    -----------

     Total Current Liabilities                                          277,805
                                                                    -----------

     TOTAL LIABILITIES                                                  277,805
                                                                    -----------

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock; 100,000,000 shares at $0.001
      par value; 9,896,679 shares issued and outstanding                  9,897
   Additional paid-in capital                                         2,110,278
   Retained earnings accumulated prior to the development stage         633,605
   Deficit accumulated during the development stage                  (3,018,501)
                                                                    -----------

     Total Stockholders' Equity (Deficit)                              (264,721)
                                                                    -----------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)           $    13,084
                                                                    ===========



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

                                        F-4

<PAGE>

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

                                                                        From
                                                                    Inception of
                                                                    Development
                                                                      Stage on
                                                                     January 1,
                                          For the Years ended       2000 Through
                                              December 31,          December 31,
                                      --------------------------    -----------
                                          2004          2003            2004
                                      -----------    -----------    -----------

NET SALES                             $      --      $      --      $      --

COSTS AND EXPENSES

   General and administrative             205,692        212,831      1,277,772
                                      -----------    -----------    -----------

     Total Costs and Expenses             205,692        212,831      1,277,772
                                      -----------    -----------    -----------

LOSS BEFORE OTHER EXPENSE                (205,692)      (212,831)    (1,277,772)
                                      -----------    -----------    -----------


OTHER INCOME (EXPENSE)

   Refund of tax penalties                   --             --           16,237
   Interest expense                          --             --          (16,296)
   Interest income                            917          2,061         12,481
                                      -----------    -----------    -----------

     Total Other Income (Expense)             917          2,061         12,422
                                      -----------    -----------    -----------

LOSS BEFORE TAX, EXTRAORDINARY
   ITEM AND DISCONTINUED OPERATIONS      (204,775)      (210,770)    (1,265,350)

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

LOSS BEFORE DISCONTINUED OPERATIONS      (204,775)      (210,770)      (265,350)

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

LOSS BEFORE  EXTRAORDINARY ITEM          (204,775)      (210,770)    (3,255,664)

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

NET LOSS                              $  (204,775)   $  (210,770)   $(3,018,501)
                                      ===========    ===========    ===========

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

WEIGHTED AVERAGE NUMBER OF
   SHARES OUTSTANDING                   9,896,679      9,472,637
                                      ===========    ===========


   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)

                                                                                  Additional           Other           Retained
                                                       Common Stock                 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 5)                               (717)              (1)                -                -                 -

Common stock issued for cash
   At $0.10 per share                                500,000              500            49,500                -                 -

Cancelled shares (Note 5)                         (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                      -                -            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)

November  5, 2003, common
  stock issued upon cashless
  exercise of warrants                               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)
                                            ================     ============      ============  ===============   ===============

Retained earnings accumulated prior to the development stage                                                       $       633,605
Deficit accumulated during the development stage                                                                        (3,018,501)
                                                                                                                   ---------------

                                                                                                                   $    (2,384,896)
</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,
                                                            2004           2003           2004
                                                         -----------    -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                      <C>            <C>            <C>
   Net loss                                              $  (204,775)   $  (210,770)   $(3,018,501)
   Adjustments to reconcile net loss to net cash
     used by operating activities:
       Depreciation                                              143            430          2,149
       Discontinued operations                                  --             --        1,990,314
       Gain on settlement of debt                               --             --         (237,163)
       Warrants issued below market                             --             --           31,315
   Changes in assets and liabilities:
     Decrease in prepaid expenses                             11,473        160,968           --
     (Increase) in accounts receivable - related party          --             --           (1,602)
     Decrease in exchange credits                               --           19,819         19,594
     Increase (Decrease) in accounts payable and
      accrued expenses                                       161,230          3,192       (345,536)
     Decrease(Increase) in related party payable              17,030           --           12,954
                                                         -----------    -----------    -----------

       Net Cash Used by Operating Activities                 (14,899)       (26,361)    (1,546,476)
                                                         -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

     Decrease in note receivable - related party              12,926           --           (7,074)
     Increase in note receivable                                --           (2,592)       (82,592)
     (Increase) in interest receivable                          (917)          --             (917)
     Receipt of payment on note receivable                      --             --           80,000
     Sales of exchange credits                                  --             --          419,980
                                                         -----------    -----------    -----------

       Net Cash Provided by Investing Activities              12,009         (2,592)       409,397
                                                         -----------    -----------    -----------

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                                29,474        129,474
   Payments on notes payable                                    --             --         (323,011)
                                                         -----------    -----------    -----------

       Net Cash Provided by Financing Activities              29,474        581,706
                                                         -----------    -----------    -----------

NET DECREASE IN CASH                                          (2,890)           521       (555,373)

CASH AT BEGINNING OF PERIOD                                    3,789          3,268        556,272
                                                         -----------    -----------    -----------

CASH AT END OF PERIOD                                    $       899    $     3,789    $       899
                                                         ===========    ===========    ===========
</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
SUPPLEMENTAL SCHEDULE OF CASH FLOW                                          Inception of
   ACTIVITIES:                                                              Development
                                                                              Stage on
                                                 For the Years Ended         January 1,
                                                      December 31,          2000 Through
                                              --------------------------    December 31,
                                                 2004           2003           2004
                                              -----------    -----------    -----------
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
</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, 2004 and 2003

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 has  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 owned 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 7),  and,  as
          discussed in Note 8,  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.

                                      F-10

<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2004 and 2003

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

          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.

          e. Capital Assets and Amortization

          Capital assets are recorded at cost and  amortization is provided over
          the estimated economic life on a straight-line  basis at the following
          rates:

              Equipment                             5 years


          f. Revenue Recognition

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

          g. New Accounting Pronouncements

          On December  16, 2004 the FASB  issued  SFAS No.  123(R),  Share-Based
          Payment,  which  is an  amendment  to SFAS  No.  123,  Accounting  for
          Stock-Based Compensation.  This new standard eliminates the ability to
          account for share-based  compensation  transactions  using  Accounting
          Principles  Board ("APB") Opinion No. 25,  Accounting for Stock Issued
          to Employees, and generally requires such transactions to be accounted
          for using a fair-value-based  method and the resulting cost recognized
          in our financial statements. This new standard is effective for awards
          that are  granted,  modified  or settled in cash in interim and annual
          periods beginning after June 15, 2005. In addition,  this new standard
          will apply to unvested options granted prior to the effective date. We
          will adopt this new standard  effective for the fourth fiscal  quarter
          of 2005,  and have not yet  determined  what impact this standard will
          have on our financial position or results of operations.

                                      F-11

<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2004 and 2003

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

          g. New Accounting Pronouncements (Continued)

          In December 2004, the FASB issued SFAS No.153, Exchange of Nonmonetary
          Assets.  This  Statement  addresses  the  measurement  of exchanges of
          nonmonetary assets. The guidance in APB Opinion No. 29, Accounting for
          Nonmonetary Transactions,  is based on the principle that exchanges of
          nonmonetary  assets should be measured  based on the fair value of the
          assets  exchanged.  The guidance in that  Opinion,  however,  included
          certain exceptions to that principle. This Statement amends Opinion 29
          to  eliminate  the  exception  for  nonmonetary  exchanges  of similar
          productive  assets  and  replaces  it  with a  general  exception  for
          exchanges of nonmonetary assets that do not have commercial substance.
          A nonmonetrary  exchange has  commercial  substance if the future cash
          flows of the entity are expected to change  significantly  as a result
          of the exchange.  This Statement is effective for financial statements
          for fiscal years beginning after June 15, 2005. Earlier application is
          permitted for nonmonetary asset exchanges incurred during fiscal years
          beginning  after  the date of this  statement  is  issued.  Management
          believes  the  adoption of this  Statement  will have no impact on the
          financial  statements  of  the  Company.  The  implementation  of  the
          provisions  of  these  pronouncements  are  not  expected  to  have  a
          significant effect on the Company's financial statement presentation.

          h. 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.

                                       F-12

<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2004 and 2003

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

          h. Income Taxes (Continued)

          Net  deferred tax assets  consist of the  following  components  as of
          December 31, 2004 and 2003:

                                             2004           2003
                                          -----------    -----------

              Deferred tax assets
                  NOL Carryover           $ 1,902,025    $ 1,885,300
                  Accrued Expenses             62,975           --

              Deferred tax liabilities:          --             --

              Valuation allowance          (1,965,000)    (1,885,300)
                                          -----------    -----------

              Net deferred tax asset      $      --      $      --
                                          ===========    ===========

          The  income  tax  provision  differs  from the  amount of  income  tax
          determined  by  applying  the U.S.  federal  income tax rate of 39% to
          pretax income from continuing  operations for the years ended December
          31, 2004 and 2003 due to the following:

                                           2004            2003
                                        -----------    -----------

            Book loss                   $   (79,800)   $   (82,200)
            Miscellaneous                       100
            Valuation allowance              79,700         82,200
                                        -----------    -----------

                                        $      --      $      --
                                        ===========    ===========


          At December 31, 2004, the Company had net operating loss carryforwards
          of approximately  $4,800,000 that may be offset against future taxable
          income  from the year  2004  through  2024.  No tax  benefit  has been
          reported in the  December  31,  2004  financial  statements  since the
          potential  tax benefit is offset by a valuation  allowance of the same
          amount.  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.

                                       F-13


<PAGE>
                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2004 and 2003

NOTE 2 -  PROPERTY AND FIXED ASSETS

                                                        2004
                                   Accumulated      Net Book
                         Cost      Depreciation      Amount
                       ----------   ----------   -------------

           Equipment   $    2,194   $    2,194   $        --
                       ==========   ==========   =============


          During  the  years  ended  December  31,  2004 and 2003,  the  Company
          expensed $143 and $430 in depreciation, respectively.

NOTE 3 -  CONCENTRATIONS OF RISK

          a. 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,
          2004.

NOTE 4 -  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 5 -  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.

                                       F-14
<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2004 and 2003

NOTE 5 -  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 6 -  RELATED PARTY TRANSACTIONS

          Accounts Receivable

          On April 17, 2002, the Company  advanced  $20,000 to the president and
          CEO of the Company.  At December 31, 2004, the balance outstanding was
          $7,074.  The advance is payable on demand and accrues  interest at 12%
          per  annum.  During the years  ended  December  31,  2004 and 2003 the
          Company has recognized $917 and $2,061 of interest income respectively
          related to the note.

                                      F-15
<PAGE>

                         CHINA FOOD AND BEVERAGE COMPANY
                          (A Development Stage Company)
                        Notes to the Financial Statements
                           December 31, 2004 and 2003

NOTE 7 -  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  that 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  that 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 8 -  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-16