<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC. 20549

                                   FORM 10-KSB

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2000

                                       or

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

                        For the transition period from to

                             Commission file Number:

                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                 (Name of small business issuer in its charter)

      Washington                                             (I.R.S. Employer
(State of incorporation)                                     Identification No.)

                           9060 Activity Road, Suite A
                              San Diego, CA. 92126
                    (Address of principal executive offices)

                    Issuer's telephone number: (858) 273-5282

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, with par value
                                (Title of class)

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 [ ]     No [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this Form 10-KSB, and no disclosure will
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. [ ]


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         State issuer's revenues for its most recent fiscal year:

         State the aggregate market value of the voting stock held by computed
by reference to the price at which the stock was sold, or the average bid and
asked prices of such stock, as of a specified date within 60 days prior to the
date of filing:
$2,168,000 aggregate market value as of DATE March 30, 2001, based on the price
at which the stock was sold.

         Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 39,412,000 shares
of Common Stock, with $.001 par value, on March 31, 2001.

Transitional Small Business Disclosure Format (Check One): Yes [ ] ; No [ ]

<PAGE>

                                     PART I

ITEM 1: DESCRIPTION OF BUSINESS

LA JOLLA FRESH SQUEEZED COFFEE(TM) CO., Inc., a Washington Corporation ("LJCC"
or "we"), is a manufacturer and distributor of gourmet cold-brewed coffee liquid
extract, gourmet non-alcoholic cold coffee beverages and flavorant products.
LJCC's proprietary cold extraction process combined with a revolutionary
delivery system provides the institutional and food industry with a convenient
gourmet coffee alternative that reduces labor, waste disposal costs, and
production costs. We compete for revenues with the wholesale specialty coffee
industry.

Management believes that the Company's cold-brewed coffee has the advantages of
great taste, lower acidity and oil content, and the convenience of instant
liquid coffee. The Company's cold-brewed coffee has a gourmet taste that is
uncommon in the liquid coffee industry where flavor is often traded for
convenience. The coffee taste is often described as clean with no acidic
aftertaste. The liquid coffee delivery system used by the Company eliminates the
substantial amount of coffee wasted every year by traditional coffee delivery
systems that pre-brew the coffee often making the coffee burnt, or bitter. Our
coffee can also be prepared by simply adding hot water. We also use a delivery
system that requires no brewing; the coffee is prepared only as needed. In fact,
the coffee preparation is virtually instant, which lowers labor costs, waste
disposal costs for coffee grains and filters, and costs of wasted coffee
disposed of because it is burnt or bitter. We believe our coffee stays fresher
longer in an air pot providing longer service life than most other coffees,
which tend to become bitter within an hour.

The Company is developing an important flavor creation capability. The creation
of unique and commercially desirable flavors is a mixture of art, science and
business. Our Flavorant products are coffee extracts that can be utilized as an
ingredient in the manufacture of beverages and other food products such as ice
cream. We believe that our products' purity level will provide a competitive
advantage in the coffee extract market. We plan to position our flavorant
product as a premium level ingredient.

In taste tests that range from small focus groups to multi-national
manufacturers and exporters of coffees, La Jolla Fresh Squeezed Coffee products
have been judged to be far superior to nationally recognized competitors. It is
our belief that La Jolla Fresh Squeezed Coffee is able to achieve superior
flavors for three principle reasons: (i) the Company generally uses superior
beans; (ii) the Company's cold-brewing process removes unnecessary amounts of
oils and acids that damage the flavor of coffee; and (iii) Stephen Corey, our
Founder who is Vice President of Product Development, and his staff have a
special gift for creating original delicious flavors well received by consumers.

The Company's principal technology, the cold-brewing process, traces its origin
from the famous Scripps/Corey family of La Jolla, California. The Corey family
first arrived to San Diego in 1907 and for nearly four generations, the
families' cold-brewing process, derived from the Peruvian Inca Indians 900 years
ago, was refined and improved, with each succeeding generation adding to and
enhancing the process, while safe guarding their methods. Dr. Martha Dunn
Corey's secret family recipe for formulating the extract was handed down to
Stephen Corey a direct descendent. Stephen Corey, a fourth generation La Jollan,
then dedicated his life to bringing cold-brewed coffee to the world. For four
years, Corey and his talented group of technicians and consultants perfected the
commercialization of the cold coffee product and manufacturing process.

This research and development culminated into the HIPEX 7000, a commercial grade
high volume ASME grade brewing vessel which manufacturers the Company's
cold-brewed gourmet coffee extract. The cold brewed gourmet extract is used in
our liquid coffee concentrate product, our non-alcoholic cold coffee drink,
similar in style to Starbucks' Frappaccino, and in our coffee flavorant
products.


<PAGE>

The Company is presently undertaking the final steps necessary to produce larger
commercial volumes of their coffee products. These steps include the design and
manufacture of a higher volume ASME grade brewing vessel, delivery and
installation of this vessel. Management believes there is substantial potential
for international licensing of the Company's equipment and process.

The Company was incorporated in the state of Washington on February 9, 1987 as
North West Converters, Inc. On December 31,1996, the sole director and
shareholder discontinued the operations of the Company. On October 31, 1997, our
Articles of Incorporation were amended to change the par value of common stock
to $.001, and the Company then began operations in the wholesale and retail
gourmet and specialty foods and the operation of the retail store, both of which
were unsuccessful. On June 2, 1997, we amended our Articles of Incorporation to
change our name to North West Farms, Inc. In November 1998, we began the
development stage of entering the retail and wholesale specialty coffee market.
On June 2, 1999, we amended our Articles of Incorporation to change our name to
La Jolla Coffee Co., Inc. and on June 16,1999 we amended our Articles of
Incorporation to change our name to La Jolla Fresh Squeezed Coffee Co., Inc. On
June 15, 1999, the Company's Board of Directors ratified the acquisition of the
assets of Stephen's Coffee, Inc. and the merger with Stephen's Coffee Holding,
Inc. (See "Legal Proceedings"). The Nasdaq Stock Market implemented a change in
its rules requiring all companies trading securities on the OTC Bulletin Board
to become reporting companies under the Securities Exchange Act of 1934. The
Company was required to become a reporting company by the close of business on
February 24, 2000. The Company acquired all the outstanding shares of Sorisole
Acquisition Corp. to become successor issuer to it pursuant to Rule 12g-3 in
order to comply with the reporting company requirements implemented by the
Nasdaq Stock Market.

The Company's corporate headquarters and principal place of business is located
at 9060 Activity Road, Suite A, San Diego, California 92126. The Company's phone
number is (858) 273-5282.

INDUSTRY OVERVIEW

     GROWTH OF THE SPECIALITY COFFEE MARKET

The specialty coffees industry, as a group, has grown from $1.3 billion in 1993
to over $4 billion in 1998 (Source, SCAA, Specialty Coffee Association of
America). Sales are expected to approach $5,000,000,000 annually by the turn of
the century. The SCAA expects industry growth not to peak until around the year
2010. The US market for specialty coffee is large, fragmented and growing. The
development of the specialty coffee industry has shown there is room for a
variety of competitors.

According to the National Coffee Association's 1998 National Coffee Drinking
Trends report, approximately 65% of all consumers (age 10+) drink coffee on a
weekly basis, they drink an average of 3.0 cups per day, and the overall number
of coffee drinkers has grown from approximately 140 million in 1990 to
approximately 168 million in 1999. Coffee drinkers demographics include a wide
range of nationalities, ethnic origins, all age groups, sexes, income levels,
mainstream and fringe lifestyles.

The specialty coffee segment of the industry has experienced strong growth over
the past decade and is expected to continue to grow. Specialty coffees provide
consumers with a considerably higher quality coffee experience for relatively
little additional cost.

The specialty coffee market is highly competitive. Many of our competitors have
greater marketing and financial resources and brand name recognition combined
with larger customer base and distribution channels.

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                    SPECIALTY COFFEE CONSUMPTION IN MILLION$

                       [Graph of coffee consumption here]

                      SOURCE: SPECIALTY COFFEE ASSOCIATION

LIQUID COFFEE CONCENTRATE

We are part of the specialty coffee industry that is generally defined as Liquid
Extracts, Cold Flavored Coffees, and Super Premium Coffee. The Nestle
Corporation, which recently entered the liquid extract market, predicts that the
liquid extracts industry has a $680,000,000 market potential. 55 billion cups of
coffee are served annually in total food service, 1.7 billion cups of that is
soluble coffee. The Soluble Coffee Sector is defined as all forms of instant
coffee, including liquid coffee extracts and powdered concentrates. Liquid
coffee concentrate is a part of, and also competes with the soluble coffee
industry. The primary customers of the soluble coffee market are the
Institutional and Hospitality sectors, which are the largest consumers of coffee
and require convenient and economical coffee products. More specifically, the
hospitality convention oriented larger hotels (125 rooms plus) use concentrates
to predictably and conveniently dispense large volumes of coffee to several
hundred guests often at one time. Brewing coffee creates a time and labor
requirement that does not satisfy the demands of this market. Not surprisingly,
this market is the first to embrace the coffee concentrate concept. In fact,
eighty percent of all coffee served in Las Vegas is liquid coffee concentrate.

Hospitality and Institutional use of coffee concentrates in the United States is
led by Douwe Egbert, a subsidiary of Sara Lee. Superior Coffee distributes Douwe
Egbert products. Douwe Egbert offers a turnkey solution, which is economical and
easy to use but produces very mediocre tasting coffee.

The Gourmet Coffee Concentrate Market is currently a small but emerging market,
which Management believes will echo the development and stratification of the
ground coffee markets. Low-grade concentrates have pioneered the coffee
concentrate business over the last ten years in the United States and paved the
way for premium products. We compete with a number of liquid Coffee
manufacturers including: Douwe Egbert, Amelia Bay, Victory House, Beverage House
Inc., Lykes Pasco, Cool Brew, Nestle, Toddy, Sivetz, Filtron, and Flavor Brands.
Douwe Egbert is the leader in the coffee concentrates market offering products
that are economical and easy to use. These competitors use higher coffee
concentration levels at the expense of flavor.

We believe our gourmet coffee taste is our competitive advantage. We achieve
this gourmet taste by using our proprietary cold-brewing process and choosing
lower coffee concentration levels, which enhances the flavor and aromatic
profile of our coffee extract.

COLD COFFEE BEVERAGE

This "milk bottle" packaged market is dominated by a Starbucks/Pepsi partnership
producing Frappucino beverages. Starbucks has a 90% market share. Starbuck's,
the market leader, has brand name recognition, distribution channels and strong
financial resources. The remaining 10% is divided among the smaller regional
companies such as Coffee House USA and Buzz's Coffee.

INGREDIENT MARKET

Coffee is used as a key flavor ingredient in the manufacturer of hundreds of
food products in the US and abroad. These products include: hot, cold and adult
beverages, baked goods, cakes, cookies, novelties, candies, ice creams. Our
extracts are ideally suited for broad spectrum of flavorant applications due to
their excellent flavor profile, purity, and consistency. These qualities are
unique to our extracts due to our proprietary cold-brewing, filtering, and
packaging processes.


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KOSHER MARKET

The company's products recently received a Star-K kosher certification. The
Star-K certification is a universally recognized symbol for purity and quality.
We believe there is a tremendous market opportunity in the Orthodox Jewish
community because we will be replacing inferior instant coffee used during the
Sabbath and Passover with a gourmet alternative.

PRODUCTS AND SERVICES

We have developed the following products:

Javalixir. Javalixir, which was developed for the food service and hospitality
industry, is our pure coffee concentrate. Javalixit is supplied in three grades:
select, premiere and our top grade is supreme. This product was developed for
sale to major food service providers, such as family style restaurant chains,
fast food chains, national and international hotel chains and the military. We
will supply our cold brewed coffee concentrate in 1- gallon bag-in-box (BIB)
aseptically filled containers.

Retail Javalixir Coffee Concentrate. The Retail Javalixir Coffee Concentrate is
packaged in 5 ounce and 12 ounce bottles. We developed this product for retail
sale to individuals through gourmet grocery chains and our Internet site.

Flavorants. Our flavorant are coffee extracts that can be utilized as an
ingredient in the manufacture of beverages and other food products such as ice
cream. These flavorants have been developed to sell to any manufacturer of food
or beverage products that use coffee flavoring.

We are in the process of completing development of Javanectar, a bottled
10-ounce cold coffee drink. Javanectar will have a shelf life of approximately 6
months, which should allow us to market the product through national
distribution channels. Our target markets include supermarkets, upscale gourmet
markets and convenience stores.


DISTRIBUTION

LJSFC will employ a combination of one sales person and one food broker for each
of the three major markets in California. These markets include San Diego, Los
Angeles and San Francisco. As popularity and subsequent demand increases through
these regions, brokers and distributors will be employed to penetrate the
various fringe markets.



<PAGE>

COMPETITION

The schedule below identifies, to the best of the Company's knowledge, the
primary competitors for the liquid coffee business in the United States.
Currently the competition has clustered around low-medium grade products while
the Company is targeting the gourmet coffee niche.
<TABLE>
<CAPTION>

                       CONCENTRATION      LIQUID   COLD BREWED   CONCENTRATION      BEAN QUALITY      QUALITY/    PRICE/ CUP
                                                                     LEVEL                              TASTE

<S>                         <C>             <C>        <C>        <C>                <C>               <C>        <C>
Lykes Pasko                 35 to 1         Yes        No             High               Med             Med      $.07-.11
Douwe Egbert                35 to 1         Yes        No             High               Med             Med      $.07-.12
Victoria House               6 to 1         Yes        Yes           Medium              Low             Low      $.13
Amelia Bay                  70 to 1         Yes        No             High             Medium          Medium     $.07-10
Coffee Drop                 90 to 1         Yes        No            Medium              Low             Low      $.07-09
Sivetz                       6 to 1         Yes        No            Medium             High            High      $.18
Filtron                      6 to1          Yes        Yes           Medium          Low-Medium        Medium     $.24
Flavor Brands                6 to1          Yes        No         Medium-High        Low-Medium        Medium     $.16
Beverage House               90 to1         Yes        No         Medium-High        Low-Medium        Medium     $.07
LJFS COFFEE                 12 TO 1         YES        YES           MEDIUM             HIGH            HIGH      $.07-.11

</TABLE>

Our cold-brewed competitors are regionally based and Management believes their
products are inferior in quality and taste.

BUSINESS STRATEGY

Management has focused the Company's marketing effort on our cold-brewed coffee
concentrate and flavorant products because these products will achieve the
fastest profits. The cold-brewed coffee concentrates target market is the
hospitality and food service sector. Our flavorant products target the food
manufacturing industry, which uses our product as a flavoring ingredient in the
manufacture of ice creams baked goods, candies and beverages. The Company
continues to develop higher volume cold-brewing vessels, and plans to exploit
the resulting licensing opportunities in foreign markets. The Company is
developing its own flavor formulas, such as the "French Vanilla" flavor, in
order to expand product lines, improve quality, and increase profit margins.

COFFEE CONCENTRATE

Our strategy is to position La Jolla Fresh Squeezed Coffee as the new gourmet
entry in the liquid coffee market offering superior quality at a nominally
higher price. We target customers with high volume consumption who require
convenience and speed. The Company seeks to create the first "national brand"
premium grade cold-brewed coffee beverage. This is our main profit center.

Our target market is the hospitality and food service industry where we offer
turnkey coffee solutions by providing our gourmet coffee concentrate and state
of the art coffee dispensing machine. We supply our cold brewed coffee
concentrate in 1- gallon bag-in-box (BIB) aseptically filled containers. The
Company is targeting opinion-leading customers including major hotel chains,
fast food restaurants, hospitals and national airlines. After these accounts are
established, the Company will then pursue more traditional distribution channels
such as large food and beverage brokers and major retail and grocery chain
stores.


<PAGE>

Our goal is to dominate the marketplace in San Diego, then Southern California.
This approach significantly lowers shipping costs and increases profit margins
by eliminating distributors and brokers. San Diego is a highly populated city
with several universities, a military presence and a thriving tourism industry;
which all contribute to large industrial and food service demand. We target
customers already using our competitors' liquid coffee, because these customers
already understand the benefits of liquid coffee. However, We provide these
customers with a superior gourmet tasting liquid extract alternative. We believe
that our gourmet taste will increase these institutions coffee revenues because
better taste should translate into more coffee being served.

Management estimates that tens of millions of coffee drinkers have varying
degrees of sensitivity to the heavy acid and oil content of most coffees. This
deterrent often minimizes or eliminates their consumption of coffee. Utah State
University is testing the oil and acid content level in our coffee. When the
Company has scientifically established that our coffee is lower in acid and oil
than our competitors, then our products will be positioned as a healthier
alternative.

FLAVORANT PRODUCTS

Our Flavorant products are coffee extracts formulated to be utilized as
ingredients in the manufacture of beverages and other food products. Our
flavorant products focus on the food manufacturing industry for use in products
such as ice creams, baked goods, candies and beverages. This is a large and
lucrative market segment in which there is tremendous volume potential. We
believe that our products' superior taste and aromatic profiles will provide a
competitive advantage in the food manufacturing market. The Company intends to
promote its brand identity, whenever possible, in the ingredients business by
requiring clear labeling of La Jolla Fresh Squeezed Coffee Co. as the provider
of the coffee extract, similar to "Intel inside". We plan to position our
flavorant products as premium level ingredients.

IMAGE AND BRAND IDENTITY

La Jolla, California the Company's namesake is internationally known as the
"Riviera of the Pacific". We strive to reflect a brand identity and image that
reflects this world famous city's image; sophisticated, yet in keeping with the
laid back California lifestyle. Our logo contains the image of a beach chair
with a cup of coffee alongside it, which beckons the consumer to take a break,
slow down, relax and enjoy a small indulgence. Many consumers have embraced this
small indulgence concept as demonstrated by the record number gourmet coffee
shops clustered around business districts where people actually leave their
offices for an excellent cup of coffee. The company is in the process of filing
several federal trademark applications to protect its trade names.

"MICRO CAFE"

La Jolla Fresh Squeezed Coffee is in the development stages of entering the
coffee retail store sector. We are interested in the concept of a "Micro Cafe".
A 650 square foot store where we can offer all the products and services of a
larger store, while adding our delicious and innovative products and brand
related merchandise. We would offer the best assortment of popular coffee
products along with our own La Jolla Fresh Squeezed Coffee offerings. We believe
there exists a "hole" in the market between the coffee kiosks on wheels and the
Starbucks style super store. These cafes businesses have low start up and
operating costs and the flexibility to compete in any marketplace. Typical costs
are less than $75,000 for a fully operational store as compared to the $250,000
to $400,000 of a Starbucks style store. The large corporate coffee stores offer
a distinct franchise opportunity for a small intimate neighborhood store where
the product is excellent and the server actually knows you by name. Recent media
announcements indicate tens of thousands of so-called "right sized" employees
are looking for franchise opportunities.

We believe possible entry into this retail coffee shop market would provide La
Jolla Fresh Squeezed Coffee with a public presence for our products and allow us
to capture high margin retail sales and continue market research.


<PAGE>

SUPPLIERS \ EQUIPMENT VENDORS

COFFEE MARKETS. Coffee is the world's second largest agricultural product, which
is a commercially grown in tropical regions in over 50 countries. Both the
market supply of coffee, and the price of coffee, is extremely volatile. Most
coffee is traded in the commodity market. There are different quality ranges
within each of the many different coffee varieties, which are priced
accordingly. Our liquid coffee concentrate allows for the finest quality beans
to be blended with medium lesser quality grade beans, yet still achieve a
gourmet flavor. We trade in premium grade coffees, at negotiated prices usually
above that of the commodity market depending on the current supply and demand,
and in medium grade beans, generally at the commodity price.

The producing countries, economic, political and weather conditions often affect
coffee prices. Historically, large organizations and associations also influence
green coffee prices by agreements that establish quotas or restrict worldwide
coffee supplies.

In order to combat these external factors, we engage contracts and forward
commitments in the coffee-buying season to ensure supply. Using a wide variety
and grade blend also reduces our exposure to price volatility of the premium
grade coffees. Developing relationships with our suppliers also mitigates market
exposure.

We purchase green coffee beans for roasting and grinding according to customer
specification and extract requirement. We buy premium beans from sources in
Costa Rica, Brazil, El Salvador, Guatemala, Columbia and Hawaii. Beans are
purchased directly from growers and through various coffee brokers, and from
Daymar Coffee in San Diego. The beans are then roasted and ground by Cafe Moto
in San Diego.

COFFEE BEANS. Holland Coffee is our main coffee supplier at this time.

ROASTING SERVICES. The beans we purchase are roasted for us to our
specifications by various roasters in San Diego, California. These include the
Art of Coffee, Caf Moto and Daymar.

DISPENSING EQUIPMENT. Our liquid coffee concentrate dispensing equipment is
primarily manufactured for us by Karma Inc., a leading manufacturer of highly
efficient coffee dispensing equipment.

DEPENDENCE ON ONE OR MORE MAJOR CUSTOMERS. We are not currently dependant on one
or more major customers.

PATENTS AND TRADEMARKS

The HIPEX 7000, LJCC's brewing vessel, is refined and highly efficient seventh
generation technology. The vessel produces a 12 to 1 coffee concentrate. The
Company currently holds no patents. The Company is protecting the proprietary
rights of the cold-brewing process using a strictly enforced trade secret
protocol until a patent protection is received from the United States Trademark
and Patent Office. A patent application has not been filed. On November 4, 1999,
LJCC filed an application with the United States Trademark and Patent Office to
protect "Fresh Squeezed Coffee(TM)." LJCC is currently changing its logo and
when that is complete an application for "La Jolla Fresh Squeezed Coffee Co."
with the accompanying logo will be sought including all product names.


<PAGE>

GOVERNMENTAL REGULATION

LJCC is subject to the general laws and regulations relating to the food service
industry. There are no specific laws or regulations that govern the coffee
industry as a whole, that are materially different than other retail or
wholesale food businesses.

RESEARCH AND DEVELOPMENT

LJCC invested $319,535 and $902,250 in research and development costs
respectively in 2000 and 1999.

EMPLOYEES

As of December 31, 2000,the Company had 10 employees, of which 9 were full time
and none were part time employees. The Company believes its employee relations
are good.

ITEM 2. DESCRIPTION OF PROPERTY

The Company headquarters are located in our 5700 square foot manufacturing
facility at 9060 Activity Road, Suite A, San Diego CA 92126. The property is in
excellent condition and was lease space was built to suit for the Company in
1999. Our current facility will support the Company's growth up to approximately
$10,000,000. Thereafter, the Company will relocate to a larger facility. The
current facility is oral subleased from James W. Watson of Entrepreneur
Associates, who has a sublease from GeoLogistics Americas, Inc. GeoLogistics
Americas, Inc. is the original tenant and has a lease that terminates until June
30, 2002.

ITEM 3. LEGAL PROCEEDINGS

The Company is not aware of any material pending litigation nor does it have any
reason to believe that any such litigation exists, except as follows:

In or about November 1999, Michael Gilbert, a former director of the Stephen's
Coffee, Inc. and Stephen's Coffee Holding, Inc. and current shareholder of the
Company, filed an action in the United States District Court, Central District
of California, alleging that the transfer of the assets of Stephen's Coffee,
Inc. to the Company was fraudulent and seeking declaratory relief to unwind the
transaction. In November 2000, the Company entered into a settlement agreement
and mutual releases with Mr. Gilbert providing the payment of $30,000 in five
payments of $5,000 and a final payment of $10,000. As of May 2001 Mr. Gilbert is
owed $5,000. Mr. Gilbert agreed to surrender the 150,000 shares in LJCC.

In 1999, Thomas Reed, a current shareholder of the Company, filed an action in
the Los Angeles Superior Court, alleging similar claims as those of Michael
Gilbert, specifically that the transfer of the assets of Stephen's Coffee, Inc.
to the Company was fraudulent and seeking declaratory relief to unwind the
transaction. The Company entered into an Agreement and Mutual Releases with Mr.
Reed under which the to repay a loan in the amount $17,000, will be issued
60,000 shares, receive a warrants for 175,000 shares at $0.45. Mr. Reed agreed
to return 83,000 shares of La Jolla Coffee Holding, Inc.

In November 1999, Nina Ushakow filed an action in Monterey superior Court
alleging default on a promissory note for a $33,656. The Company believes the
claim is without merit and intends to vigorously defend it. Company anticipates
a settlement conference in the matter in June 2001.

Management does not know of any other material legal actions against the
company.

ITEM 4: SUBMISSION OF MATTERS TO VOTE OF SECURITIES' HOLDERS

None.



<PAGE>

                                     PART II

ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

            The Company filed a 15c-211 application with the National
Association of Securities Dealers for quotation of certain of its shares on the
Over The Counter Bulletin Board under the stock symbol "NWFM." On October 12,
1998, the Company received their symbol and is currently listed on the OTC
Bulletin Board. In 1999, the Company amended its articles to change its name to
La Jolla Fresh Squeezed Coffee Company, Inc. On June 9, 1999, the Company
changed its Over the Counter Bulletin Board stock symbol to "LJCC."

        The table below sets forth for the periods indicated the high and low
sale prices per share of Coffee People common stock, as reported by the Over the
Counter Bulletin Board.

           Year End December 31,

                                                       High       Low
           Year 1999
           Fourth Quarter.............................$ 1.01   $ 0.34375
           Third Quarter..............................$ 1.75   $ 0.59375
           Second Qua.................................$ 1.6875 $ 1.00
           First Quarter..............................$ 1.125  $ 0.00

           Year 2000
           Fourth Quarter.............................$ 0.30   $ 0.12
           Third Quarter..............................$ 0.5    $ 0.185
           Second Quater..............................$ 0.8125 $ 0.2813
           First Quarter..............................$ 1.00   $ 0.2188
Quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.

         On March 30, 2001, the closing price of La Jolla Fresh Squeezed Coffee
Co., Inc. common stock, as reported on the Over the Counter Bulletin Board, was
$.055, and there were approximately 350 record holders of La Jolla Fresh
Squeezed Coffee Co. common stock.

            See footnotes to the Companies audited financial statements for more
details on the stock activities during the year.

         No cash dividends were declared or paid by La Jolla Fresh Squeezed
Coffee Co. during any of the periods presented above. La Jolla Fresh Squeezed
Coffee Co. presently does not intend to pay any cash dividends in the
foreseeable future, and intends to retain all earnings for use in its business
operations.



<PAGE>

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

 THIS ANNUAL REPORT ON FORM 10-KSB CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
FORWARD-LOOKING STATEMENTS ARE BASED ON OUR CURRENT EXPECTATIONS, ASSUMPTIONS,
ESTIMATES AND PROJECTIONS ABOUT OUR BUSINESS AND OUR INDUSTRY. WORDS SUCH AS
"BELIEVE," "ANTICIPATE," "EXPECT," "INTEND," "PLAN," "WILL," "MAY," AND OTHER
SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS. IN ADDITION, ANY
STATEMENTS THAT REFER TO EXPECTATIONS, PROJECTIONS OR OTHER CHARACTERIZATIONS OF
FUTURE EVENTS OR CIRCUMSTANCES ARE FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE REFLECTED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE,
BUT ARE NOT LIMITED TO, WHETHER OR NOT OUR PRODUCTS ARE ACCEPTED BY THE
MARKETPLACE AND THE PACE OF ANY SUCH ACCEPTANCE, OUR ABILITY TO OBTAIN FINANCING
TO MAINTAIN OUR OPERATIONS, CHANGING ECONOMIC CONDITIONS AND OTHER FACTORS, SOME
OF WHICH WILL BE OUTSIDE OUR CONTROL. YOU ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH RELATE ONLY TO EVENTS AS OF
THE DATE ON WHICH THE STATEMENTS ARE MADE. WE UNDERTAKE NO OBLIGATION TO
PUBLICLY REVISE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR
CIRCUMSTANCES THAT ARISE AFTER THE DATE HEREOF. YOU SHOULD REFER TO AND
CAREFULLY REVIEW THE INFORMATION

MANAGEMENT PLANS OF OPERATION IN THE NEXT 12 MONTHS IS AS FOLLOWS:

Javalixir: Food Service & Hospitality
Javalixer will be marketed through trade shows, Internet, direct sales to
opinion leading customers, industry trade publications and in conjunction with
dispensing equipment manufacturers such as Karma, who are being sought out for
turn key solutions for high volume coffee service. We will continue to convert
existing customers of Douwe Egbert and suppliers of similar quality extract for
a customer base that is migrating rapidly to a higher quality lower concentrate
level product.

Javanectar 32-oz. Tetrapak
Marketing will be directed through major food distributing companies which
supplies the food service industry on a national basis. We also are forming
alliances with reputable food brokers that will be key to success in this sector
of the market. The employment of food brokers will in turn allow the Company to
minimize overhead for sales staff in the initial phases of our sales effort. The
Company will be directing marketing efforts to support wholesale customers such
as Smart & Final and Long's Drugs.

10-oz Javanectar / "Frappuccino" style bottled beverage:
Because introducing a product in this category on a national scale is extremely
costly, we will initially direct our efforts within the Southern California
region through C-stores, upscale grocery chains, and deli style restaurants
chains. As LJFSC builds brand identity throughout Southern California, we will
expand to the east. Distribution will be handled through conventional channels.

Retail Javalixir
The Company has challenged traditional product placement orthodoxy by placing
our Javalixer extract in the refrigerated dairy section next to the half and
half and coffee creamers. This has been successful because the product is able
to stand out as opposed to being lost in a sea of other coffee offerings which
would occur in the ordinary coffee aisle. The combination of our high end
packaging, competitive pricing and on-site sampling programs is driving sales of
the product. The Company is developing a television-advertising program, which
will educate consumers regarding the basic product concept, help build brand
identity, and direct them to convenient store locations. We will coordinate our
promotional programs with brokers who deal exclusively in specialty gourmet
products and whom we believe will be instrumental to our success in this regard.


<PAGE>

THE COMPANY IS SEEKING TO FILL THE FOLLOWING POSITIONS:

Manufacturing and production: The company is evaluating manufacturing and
production managers to support production ramp-up. Currently consultants and
members of the Board of Directors support this function.

Chemist / Food Scientist: The firm needs a chemist / food scientist that can
support both QC/QA functions and help manage production related activities.
Currently consultants support this function.

LJSFC will employ a combination of one sales person and one food broker for each
of the three major markets in California. These markets include San Diego, Los
Angeles and San Francisco. As popularity and subsequent demand increases through
these regions, brokers and distributors will be employed to penetrate the
various fringe markets.

SALES FORCE COMPENSATION

The Company will implement a combination of minimum base salary of $35,000 and
commission. As sales increase, sales personnel will move toward straight
commission and appropriate equity compensation.

PRODUCT RESEARCH AND DEVELOPMENT

Under development Hipex 7000 HV. Output capacity per day: 500 gallons 12x
concentrate (162,500 finished cups). This machine will be order over the next
year at an approximate cost of $90,000.

Product Stabilization and the resulting extension of shelf life is a key
component to commercialization. We have entered into a consulting relationship
with Cornell University Food Sciences Division and Utah State University. The
Company has also achieved satisfactory stabilization with their shelf stable
Javalixir testing with a private consultant. We expect to have a stabilized
javalixer in the 2nd quarter of 2001. This will dramatically enlarge Food
Service and general distribution opportunities.

The Company requires additional cash infusion to continue to operate. To that
end, the Company has a Private Placement Memorandum circulating to raise up to
$1,500,000 from the issuance of common stock to be used for operating costs, an
increased marketing effort and to purchase equipment to increase its production
capacity. The operations of the Company will be scaled to level of capital
raised to fund it.


<PAGE>

RESULTS OF OPERATIONS

Years Ended December 31, 2000 and 1999

                                    REVENUES
We had limited revenues of $38,000 during 2000 compared to none in 1999.
Recorded sales were made primarily in an effort to promote our coffee products.
During 2001, we intend to significantly increase our sales and marketing efforts
through hiring personnel and food brokers, thereby increasing product awareness
and sales of our product lines. There can be no assurances regarding when, or
if, such revenues will occur.

                        RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses were $320,000 in 2000 compared to $902,000 in
1999.
The decrease of $583,000 or 65% is primarily attributed to additional
compensation incurred in 1999 of $680,000 for the issuance of common stock at
less than fair value pursuant to an employment agreement with our founder and
chief technical officer. Offsetting this decrease in 2000 was a general increase
in payroll and other personnel expenses. We expect to increase our research and
development expenses in the future with the continued technical improvements of
our next generation brewing vessel, which will manufacture our liquid coffee
extract. This technology will aid in product stabilization and result in the
extension of shelf life, which is a key component to product commercialization.

                         SELLING AND MARKETING EXPENSES
Selling and marketing expenses were $648,000 in 2000 compared to $1.4 million in
1999. The decrease of $786,000 or 55% is primarily attributed to common stock
issued for the development of our website. The stock was valued at $1.29 per
share for a total value of $1.3 million. During 2000, we issued a total of 1.8
million shares of common stock to consultants employed to market our products
and raise capital at prices ranging from $0.18 to $0.45 per share for a total
charge to operations in 2000 of approximately $535,000. We expect to continue to
increase our selling and marketing expenses as demand for our products
increases. We intend to employ major food distributing companies and food
brokers, which will allow us to minimize overhead for sales staff in the initial
phases our sales efforts.

                       GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses were $1.04 million in 2000 compared to $1.01
million in 1999. The increase of $28,000 or 3% is due to a $560,000 compensation
charge in 1999 for options granted to a former officer. In 2000, we issued
2,850,000 shares to an officer at $0.1875 per share for a $534,000 6% note. In
connection with the issuance in 2000, we recorded additional compensation
expense of $520,000 arising from the sale of such stock at less than fair value.
Our general and administrative expenses are expected to increase in the future
in support of our product development and commercialization as well as
capital-raising activities.


<PAGE>

                                 OTHER EXPENSES
Other expenses were $2.4 million in 2000 compared to $185,000 in 1999. In 2000,
we issued 3,500,000 shares of common stock to acquire all the outstanding shares
of common stock of Sorisole from the shareholders thereof. This acquisition was
made for the purpose of retaining our listing on the Over-The-Counter Bulletin
Board ("OTC:BB") of the National Association of Securities Dealers. We recorded
the shares issued at fair value and recorded an acquisition expense totaling
$1,050,000. Additionally, during 2000 and 1999, we issued 5,390,758 and
1,186,107 shares of common stock, respectively, in private placements at
substantial discounts from quoted market prices of the OTC:BB for total proceeds
of $569,000 and $864,000, respectively. In connection with these issuances, we
recorded an expenses of $1.3 million and $185,000 in 2000 and 1999,
respectively, arising from the sale of such stock at less than fair value. We
have relied on exemptions available under the Securities Act of 1933. In the
event these exemptions are not available, we may be required to offer a
rescission of such sales.

LIQUIDITY AND CAPITAL RESOURCES

We have experienced net losses and negative cash flow from operations each year
since inception. Through December 31, 2000, we have incurred an accumulated
deficit of $8.8 million and have consumed cash from operations of $2.2 million.
We have financed our operations since inception through capital contributions
from our founder, related-party loans and private placements of our common
stock. The private placements of common stock have provided us with aggregate
gross proceeds of approximately $1.8 million. Contributions from our founder
totaled $468,000 since inception and loans from related parties totaled
approximately $100,000. As of December 31, 2000, we had limited cash reserves.

Our operations to date have consumed substantial amounts of cash. We have no
current source of ongoing revenues or capital beyond proceeds of private
placements of our common stock. In the course of our development activities, we
have incurred significant losses and expect to incur substantial additional
development costs. As a result, we will require additional funds to finance
operations. There is no assurance that funding will be available for us to
finance our operations on acceptable terms, if at all. Insufficient funding may
require us to delay or reduce operations or to obtain funds through
collaborative arrangements with third parties that may require us to relinquish
rights to certain products and services that we would not otherwise relinquish.
We believe that net proceeds from private placements of our common stock and the
results of continued negotiations with various investors will result in
additional capital adequate to satisfy our needs for at least the next 12
months.

As of December 31, 2000, we had federal and state income tax net operating loss
carryforwards of approximately $8.8 million and $3.9 million, respectively,
which begin to expire 2008 and 2001 for federal and state income tax purposes,
respectively. See Note 6 of Notes to Consolidated Financial Statements.

ITEM 7. FINANCIAL STATEMENTS.

To be received from auditor separately.

ITEM 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.

None.


<PAGE>

                                    PART III

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

Our executive officers and directors include the following:

Kurt B. Toneys: Director, President, Chief Executive Officer
Age: 46

Mr. Toneys joined the Company in February 1999 and since that time has acted as
its President, Chief Executive Officer and a director. Prior to joining the
Company, Mr. Toneys was a Senior Director of the Commercial Real Estate
Investment Banking Division of Grubb & Ellis in Los Angeles from 1987 through
1992. Mr. Toneys was a partner in Charles duPont & Co., a private
investment-banking firm from 1993 to 1996. From 1996 through 1998, Mr. Toneys
was President of Polar Pacific, Inc., a California-based global distributor of
refrigerants and reclamation technologies. Mr. Toneys studied business
administration with an emphasis in Finance and Entrepreneurship at the
University of Southern California.

Stephen F. Corey: Director, Secretary, Vice President of Product Development and
Founder Age: 46

Our founder, Mr. Stephen F. Corey, has performed over five continuous years of
intense scientific research on coffee and coffee processing systems, including
coffee history, molecular structure of coffee, extraction processes, new
technology of concentration and extraction, blend creation, product receptivity,
and statistical analysis. Mr. Corey is directly responsible for developing the
various coffee lines used by the Company as well as supervising its
manufacturing process and research and development for all future products. Mr.
Corey studied science, chemistry, physics and empirical background in
engineering while attending three years of college in Davos, Switzerland and one
year at the College of Idaho. Mr. Corey holds technical degrees in Aviation and
Airway Sciences. Corey leads the development of new products and the
manufacturing of existing products for us and manages all activities in this
area. Mr. Corey is recognized for having a "golden palate" which allows him to
create products with broad commercial appeal. Mr. Corey has eight years
experience in coffee development and manufacturing.

Richard A. Gartrell C.P.A Chief Financial Officer
Rich Gartrell is a CPA with 20 years of experience with a specialty in
accounting for small public companies. Rich is formerly an accountant with
Arthur Andersen were he worked in both tax and audit. Rich holds a BS in
accounting from Colorado State in 1974.

Neither of our directors serves as a director of any other reporting company.
There are no family relationships among our directors or executive officers.
None of our directors receives compensation for rendering services as a
director.

Item 10: EXECUTIVE COMPENSATION

The following table shows the compensation paid over the past three fiscal years
with respect to the Company's Chief Executive Officer as of the end of the 2000
fiscal year. No other executive officer serving at the end of the 2000 fiscal
year received an annual salary or bonus exceeding $100,000 and there were no
additional individuals who would be included but for the fact that the
individual was not serving as an executive officer of the Company at the end of
the last completed fiscal year:
<TABLE>
<CAPTION>

                                            SUMMARY COMPENSATION TABLE

                                                                       LONG TERM COMPENSATION
                                 ANNUAL COMPENSATION                    AWARDS                              PAYOUTS
                                                         OTHER
                                                         ANNUAL              SECURITIES                   ALL OTHER
  NAME AND PRINCIPAL                                    COMPEN-  RESTRICTED  UNDERLYING      LTIP          COMPEN-
       POSITION                    SALARY      BONUS     SATION    STOCK      OPTIONS/       PAYOUTS       SATION
       POSITION          YEAR       ($)         ($)        ($)     AWARDS      SARs(1)          ($)         ($)
       --------          ----       ---         ---        ---     ------      -------          ---         ---
<S>                      <C>      <C>            <C>       <C>     <C>             <C>          <C>         <C>
DIRECTOR, CHIEF
 EXECUTIVE OFFICER &
      PRESIDENT
Kurt Toneys,             2001     $47,591        0         ---        ---          ---          ---         ---
                         2000     $52,000        0         ---        ---          ---          ---         ---
                         1999     $67,500        0         ---     2,200,000       ---          ---         ---


DIRECTOR, FOUNDER
SVP
Stephen Corey

                         2001     $84,000        0         ---        ---          ---          ---          ---
                         2000     $84,000        0         ---        ---          ---          ---          ---
                         1999     $84,000        0         ---         0           ---          ---          ---

CHIEF FINANCIAL OFFICER
Richard Gartrell         2001                                      1,000,000
                         2000
                         1999

DIRECTOR OF MARKETING
Richard Klune            2001     $48,000                            250,000
                         2000     $48,000                                        25,000

</TABLE>

(1)     No stock appreciation rights were granted in 1998, 1999 or 2000.

<PAGE>

Item 11:        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of May 18, 2001, information with respect to
the shares of Common Stock beneficially owned by (i) each director; (ii) each
person (other than a person who is also a director) who is an executive officer;
(iii) all executive officers and directors as a group and (iv) each beneficial
owner (other than directors and named executive officers) of more than 5% of our
Common Stock. The term "executive officer" is defined as the President, Chief
Operating Officer/Treasurer, any vice-president in charge of a principal
business function (such as administration or finance), or any other person who
performs similar policy making functions for the Company.
<TABLE>
<CAPTION>

                                                                            AMOUNT AND NATURE OF
                                                                                BENEFICIAL                PERCENT OF
  TITLE OF CLASS                          NAME(1)                              OWNERSHIP(2)(3)            CLASS
  --------------                          -------                              ---------------            -----
<S>                      <C>                                                    <C>                        <C>
Common Stock             Kurt Toneys, Executive Officer and Director            2,850,000                  %  7.5
                                                                                Shares/Direct
                                                                                Ownership
Common Stock             Stephen F. Corey, Executive Officer and Director             3,741,163            %  9.8
                                                                                    Shares/Direct
Common Stock             Richard A. Gartrell CFO                                1,000,000Shares/Direct     %  2.7
                                                                                and Indirect Ownership
Common Stock             Cody Ashwell                                                 7,500,000            % 19.6
                                                                                    Shares/Direct

All Current Directors
and Executive Officers                                                                                     % 39.6
as a Group

</TABLE>

Item 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On February 18th, 2000, Mr. Kurt Toneys, a director and executive
officer, purchased 2,850,000 shares of our Common Stock for $0.1875 per share by
executing a promissory note in the amount of $534,375.00, bearing interest at
six percent per annum and due in Februrary, 2009.

         On February 4th, 1999, Mr. Stephen Corey, a director and technical
officer, purchased 3,400,000 shares of our Common Stock for $0.15 per share by
executing a promissory note in the amount of $510,000.00, bearing interest at
six percent per annum and due in Februrary, 2009.



<PAGE>

                                 PART IV

ITEM 13:  EXHIBITS AND REPORTS ON FORM 8-K
1.       Articles of Incorporation
2.       By-laws
3.       Instruments defining the rights of holders, incl. Indentures
4.       Voting trust agreements
5.       Material Contracts
6.       Statement re: per share earnings
7.       Annual or quarterly reports Form 10Q and Form 10Qsb
8.       Letter on change in certifying accountant
9.       Letter on change on accounting principles
10.      Subsidiaries of registrant
11.      Published report regarding matters submitted to vote
12.      Consent of Experts and Counsel
13.      Power of Attorney
14.      Financial Data Schedule
15.      additional exhibits


<PAGE>
<TABLE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
<CAPTION>

<S>                                                                                            <C>
Independent Auditors' Report...................................................................F-2

Consolidated Financial Statements:

         Consolidated Balance Sheet as of December 31, 2000....................................F-3

         Consolidated Statements of Operations for each of the years in the
         two-year period ended December 31, 2000, and the period from August 13,
         1993 (Inception) to December 31, 2000.................................................F-4

         Consolidated Statements of Stockholders' Deficit for the period from
         August 13, 1993 (Inception) to December 31,1998, and for each of the
         years in the two-year period ended December 31, 2000..................................F-5

         Consolidated Statements of Cash Flows for each of the years in the
         two-year period ended December 31, 2000 and the period from August 13,
         1993 (Inception) to December 31, 2000.................................................F-12

         Notes to Consolidated Financial Statements............................................F-13

                                      F-1
</TABLE>

<PAGE>

                          Independent Auditors' Report
                          ----------------------------

Board of Directors
La Jolla Fresh Squeezed Coffee Co., Inc.

We have audited the accompanying consolidated balance sheet of La Jolla Fresh
Squeezed Coffee Co., Inc. (the "Company"), a development-stage company, as of
December 31, 2000, and the related consolidated statements of operations,
stockholders' deficit, and cash flows for each of the years in the two-year
period ended December 31, 2000 and the period from August 13, 1993 (Inception)
to December 31, 2000. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of La Jolla Fresh
Squeezed Coffee Co., Inc. as of December 31, 2000, and the results of their
operations and their cash flows for each of the years in the two-year period
ended December 31, 2000 and the period from August 13, 1993 (Inception) to
December 31, 2000, in conformity with accounting principles generally accepted
in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has incurred operating losses,
has a working capital deficit and requires additional financing to sustain
operations. These conditions raise substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters are also
described in Note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                                               /s/ McKennon, Wilson & Morgan LLP
                                               ---------------------------------
Irvine, California
May 10, 2001

                                      F-2


<PAGE>

                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 2000

--------------------------------------------------------------------------------

                                     ASSETS
Current assets:
     Cash                                                           $        34
     Receivable                                                           3,026
                                                                    ------------
         Total current assets                                             3,061

Property and equipment, net                                              92,385
                                                                    ------------
                                                                    $    95,445
                                                                    ============

                      LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities:
     Accounts payable                                               $   223,415
     Accrued payroll and related benefits                                75,275
     Other accrued expenses                                              72,168
     Other current liabilities                                           65,609
                                                                    ------------
         Total current liabilities                                      436,467

Due to related party (Note 7)                                            74,546
                                                                    ------------
         Total liabilities                                              511,013

Commitments and contingencies (Note 4)

Stockholders' deficit (Notes 5 and 9):
   Common stock, $0.001 par value; 50,000,000
     shares authorized; 35,381,002 issued and outstanding                35,381
   Additional paid-in capital                                         9,440,072
   Deficit accumulated during the development stage                  (8,836,021)
   Notes receivable from officers                                    (1,055,000)
                                                                    ------------

         Total stockholders' deficit                                   (415,568)
                                                                    ------------
                                                                    $    95,445
                                                                    ============

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

                                      F-3


<PAGE>

<TABLE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

------------------------------------------------------------------------------------------------
<CAPTION>

                                                         For the year ended     For the period from
                                                            December 31,          August 13, 1993
                                                   -----------------------------  (Inception) to
                                                       2000             1999     December 31, 2000
                                                   -------------   -------------   -------------
                                                                   (as restated)
<S>                                                <C>             <C>             <C>
Net sales                                          $     38,375    $          -    $     38,375

Cost of sales                                            46,498               -          46,498
                                                   -------------   -------------   -------------

         Gross loss                                      (8,123)              -          (8,123)

Operating expenses (Notes 4 and 5):
   Research and development                             319,535         902,250       1,553,152
   Selling and marketing                                648,335       1,434,346       2,082,681
   General and administrative                         1,042,073       1,013,938       2,611,943
                                                   -------------   -------------   -------------

         Total operating expenses                     2,009,943       3,350,534       6,247,776
                                                   -------------   -------------   -------------

         Loss from operations                        (2,018,066)     (3,350,534)     (6,255,899)
                                                   -------------   -------------   -------------

Other expenses (Note 5):
   Expenses recognized from the sale of stock at
     less than fair market value                      1,326,876         184,859       1,511,735
   Sorisole acquisition charge                        1,050,000               -       1,050,000
   Interest expense                                      18,387               -          18,387
                                                   -------------   -------------   -------------

         Total other expenses                         2,395,263         184,859       2,580,122
                                                   -------------   -------------   -------------

         Net loss                                  $ (4,413,329)   $ (3,535,393)   $ (8,836,021)
                                                   =============   =============   =============

Basic and diluted loss per share                   $      (0.14)   $      (0.19)
                                                   =============   =============

Basic and diluted weighted average common shares
outstanding                                          30,882,619      18,730,031
                                                   =============   =============

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

</TABLE>
                                      F-4


<PAGE>
<TABLE>

                                        LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                                              (A DEVELOPMENT-STAGE COMPANY)

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                     FOR THE PERIOD FROM AUGUST 13, 1993 (INCEPTION)
                                                  TO DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                                                           Deficit
                                                                                         Accumulated
                                                        Common Stock        Additional    During the       Notes
                                                --------------------------    Paid-In     Development    Receivable
                                                   Shares        Amount       Capital        Stage      From Officers      Total
                                                ------------  ------------  ------------  ------------   ------------   ------------
<S>                                             <C>           <C>           <C>           <C>            <C>            <C>
Common stock issued to founder and
 shareholders in recapitalization               $ 1,142,500   $     1,143   $   148,113   $         -    $         -    $   149,256

Capital contributed by founder                            -             -       467,650             -              -        467,650

Shares retained by shareholders in
 recapitalization on November 1, 1998            11,974,140        11,974       (11,974)            -              -              -

Stock issued in November and December 1998
 in a private placement at $0.35 per share          503,571           503       175,747             -              -        176,250

Net loss for the period from August 13, 1993
 (Inception) through December 31, 1998                    -             -             -      (887,299)             -       (887,299)
                                                ------------  ------------  ------------  ------------   ------------   ------------

Balances, December 31, 1998                      13,620,211        13,620       779,536      (887,299)             -        (94,143)

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

                                                          F-5


<PAGE>
                                        LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                                              (A DEVELOPMENT-STAGE COMPANY)

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                     FOR THE PERIOD FROM AUGUST 13, 1993 (INCEPTION)
                                                  TO DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Deficit
                                                                                         Accumulated
                                                        Common Stock        Additional    During the       Notes
                                                --------------------------    Paid-In     Development    Receivable
                                                   Shares        Amount       Capital        Stage      From Officers      Total
                                                ------------  ------------  ------------  ------------   ------------   ------------

Stock issued from January to March 1999 in a
 private placement at $0.35 per share               496,429           496       173,254             -              -        173,750

Stock issued in April and May 1999 in a
 private placement at $0.65 per share for
 total proceeds of $204,000                         313,846           314       203,686             -              -        204,000

Value of stock options granted to officers in
 February 1999 at $0.15 per share                         -             -     1,000,000             -              -      1,000,000

Exercise of stock options by officer in
 February 1999 at $0.15 per share for note        3,400,000         3,400       506,600             -       (510,000)             -

Exercise of stock options exercised in February
 1999 at $0.15 per share for employment
 services whereby no payment was received         1,600,000         1,600       238,400             -              -        240,000

Stock issued in June 1999 valued at $1.29 per
 share for services                               1,000,000         1,000     1,287,698             -              -      1,288,698

Stock issued in June 1999 in a private
 placement at $0.65 per share for total
 proceeds of $65,000, excluding expense
 recognized from sale of stock at less than
 fair value of $1.29 per share                      100,000           100       128,900             -              -        129,000

Stock issued in July 1999 in a private
 placement at $0.65 per share for total
 proceeds of $31,200, excluding expense
 recognized from sale of stock at less than
 fair value of $1.17 per share                       48,000            48        56,112             -              -         56,160

Stock issued in August 1999 in a private
 placement at $0.65 per share for total
 proceeds of $40,125, excluding expense
 recognized from sale of stock at less than
 fair value of $0.90 per share                       61,730            62        55,495             -              -         55,557

Stock issued in September 1999 in a private
 placement at $0.65 per share for total
 proceeds of $85,800, excluding expense
 recognized from sale of stock at less than
 fair value of $0.74 per share                      132,000           132        97,548             -              -         97,680

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

                                                          F-6


<PAGE>
                                        LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                                              (A DEVELOPMENT-STAGE COMPANY)

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                     FOR THE PERIOD FROM AUGUST 13, 1993 (INCEPTION)
                                                  TO DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------------------------------

                                                                                           Deficit
                                                                                         Accumulated
                                                        Common Stock        Additional    During the       Notes
                                                --------------------------    Paid-In     Development    Receivable
                                                   Shares        Amount       Capital        Stage      From Officers      Total
                                                ------------  ------------  ------------  ------------   ------------   ------------

Stock issued in October 1999 in a private
 placement at $0.65 per share for total
 proceeds of $153,400, excluding expense
 recognized from sale of stock at less than
 fair value of $0.71 per share                      236,000           236       167,324             -              -        167,560

Stock issued in November 1999 in a private
 placement at $0.65 per share (equal to fair
 value) for total proceeds of $20,000                30,800            31        19,969             -              -         20,000

Stock issued in November 1999 in a private
 placement at $0.32 per share for total
 proceeds of $60,875, excluding expense
 recognized from sale of stock at less than
 fair value of $0.57 per share                      188,731           189       107,388             -              -        107,577

Stock issued in December 1999 in a private
 placement at $0.40 per share for total
 proceeds of $30,000, excluding expense
 recognized from sale of stock at less than
 fair value of $0.50 per share                       75,000            75        37,425             -              -         37,500

Net loss                                                  -             -             -    (3,535,393)             -     (3,535,393)
                                                ------------  ------------  ------------  ------------   ------------   ------------

Balances, December 31, 1999 (as restated)        21,302,747        21,303     4,859,335    (4,422,692)      (510,000)       (52,054)

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

                                                           F-7


<PAGE>
                                        LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                                              (A DEVELOPMENT-STAGE COMPANY)

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                     FOR THE PERIOD FROM AUGUST 13, 1993 (INCEPTION)
                                                  TO DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------------------------------

                                                                                           Deficit
                                                                                         Accumulated
                                                        Common Stock        Additional    During the       Notes
                                                --------------------------    Paid-In     Development    Receivable
                                                   Shares        Amount       Capital        Stage      From Officers      Total
                                                ------------  ------------  ------------  ------------   ------------   ------------

Stock issued for Sorisole acquisition             3,500,000         3,500     1,046,500             -              -      1,050,000

Stock issued in February 2000 to an officer at
 $0.1875 per share for a 6% note, excluding
 compensation expense recognized from sale of
 stock at less than fair value of $0.37 per
 share                                            2,850,000         2,850     1,051,650             -       (534,375)       520,125

Exercise of stock options at $0.015 per share       402,000           402         5,628             -              -          6,030

Stock issued from January to March 2000
 during private placements at $0.40 per share
 for total proceeds of $99,800, including
 expense recognized from sale of stock at less
 than fair value of $0.47 per share                 249,500           250       117,015             -              -        117,265

Stock issued in February 2000 in a private
 placement at $012 per share for total proceeds
 of $40,000, excluding expense recognized from
 sale of stock at less than fair value of
 $0.37 per share                                    340,000           340       126,489             -              -        126,829

Stock issued in March 2000 during private
 placements at $0.45 per share for total
 proceeds of $27,500, excluding expense
 recognized from sale of stock at less than
 fair value of $0.67 per share                       61,111            61        41,002             -              -         41,063

Stock issued in April 2000 at $0.45 per
 share for consulting services rendered             150,000           150        67,350             -              -         67,500

Stock issued in April 2000 in a private
 placement at $0.17 per share for total
 proceeds of $37,000, including expense
 recognized from sale of stock at less than
 fair value of $0.45 per share                      217,647           218        98,458             -              -         98,676

Stock issued in April 2000 in a private
 placement at $0.04 per share for total
 proceeds of $85,000, including expense
 recognized from sale of stock at less than
 fair value of $0.45 per share                    2,000,000         2,000       904,750             -              -        906,750

Stock issued in May 2000 at $0.37 per share
 for consulting services rendered                    25,000            25         9,225             -              -          9,250

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

                                                          F-8


<PAGE>
                                        LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                                              (A DEVELOPMENT-STAGE COMPANY)

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                     FOR THE PERIOD FROM AUGUST 13, 1993 (INCEPTION)
                                                  TO DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------------------------------

                                                                                           Deficit
                                                                                         Accumulated
                                                        Common Stock        Additional    During the       Notes
                                                --------------------------    Paid-In     Development    Receivable
                                                   Shares        Amount       Capital        Stage      From Officers      Total
                                                ------------  ------------  ------------  ------------   ------------   ------------

Stock issued in June 2000 in a private
 placement at $0.19 per share for total
 proceeds of $2,400, including expense
 recognized from sale of stock at less than
 fair value of $0.34 per share                       12,500            12         4,235             -              -          4,247

Stock issued in June 2000 to two former
 officers at $0.01 per share for a 6% note,
 including compensation expense recognized
 from sale of stock at less than fair value
 of $0.34 per share                               1,062,500         1,062       360,188             -        (10,625)       350,625

Stock issued in July 2000 during private
 placements at $0.15 per share for total procee
 of $33,000, including expense recognized from
 sale of stock at less than fair value of
 $0.36 per share                                    220,000           220        78,865             -              -         79,085

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

                                                          F-9


<PAGE>
                                        LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                                              (A DEVELOPMENT-STAGE COMPANY)

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                     FOR THE PERIOD FROM AUGUST 13, 1993 (INCEPTION)
                                                  TO DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------------------------------

                                                                                           Deficit
                                                                                         Accumulated
                                                        Common Stock        Additional    During the       Notes
                                                --------------------------    Paid-In     Development    Receivable
                                                   Shares        Amount       Capital        Stage      From Officers      Total
                                                ------------  ------------  ------------  ------------   ------------   ------------

Stock issued in July 2000 at $0.36 per share fo
 consulting services rendered                         8,354             8         2,999             -              -          3,007

Stock issued in July 2000 at $0.36 per share in
 satisfaction of debt                                94,643            95        33,977             -              -         34,072

Stock issued in August 2000 during private
 placements at $0.20 per share for total procee
 of $61,000, including expense recognized from
 sale of stock at less than fair value of
 $0.26 per share                                    305,000           305        79,931             -              -         80,236

Stock issued in September 2000 during private
 placements at $0.20 per share for total procee
 of $66,000, including expense recognized from
 sale of stock at less than fair value of
 $0.23 per share                                    330,000           330        74,440             -              -         74,770

Stock issued in September 2000 in a private
 placement at $0.04 per share for total proceed
 of $52,000, including expense recognized from
 sale of stock at less than fair value of
 $0.23 per share                                  1,300,000         1,300       293,248             -              -        294,548

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

                                                          F-10


<PAGE>
                                        LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                                              (A DEVELOPMENT-STAGE COMPANY)

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                                     FOR THE PERIOD FROM AUGUST 13, 1993 (INCEPTION)
                                                  TO DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------------------------------

                                                                                           Deficit
                                                                                         Accumulated
                                                        Common Stock        Additional    During the       Notes
                                                --------------------------    Paid-In     Development    Receivable
                                                   Shares        Amount       Capital        Stage      From Officers      Total
                                                ------------  ------------  ------------  ------------   ------------   ------------

Stock issued in October 2000 at $0.19 per
 share for consulting services rendered              50,000            50         9,450             -              -          9,500

Stock issued in November 2000 in a private
 placement at $0.13 per share for total proceed
 of $10,000, including expense recognized from
 sale of stock at less than fair value of
 $0.21 per share                                     80,000            80        17,027             -              -         17,107

Stock issued in November 2000 at $0.21 per
 share for consulting services rendered             201,000           201        42,009             -              -         42,210

Stock issued in December 2000 during private
 placements at $0.18 per share for total
 proceeds of $55,000                                275,000           275        54,725             -              -         55,000

Stock issued in December 2000 at $0.18 per
 share for consulting services rendered             344,000           344        61,576             -              -         61,920

Net loss                                                  -             -             -    (4,413,329)             -     (4,413,329)
                                                ------------  ------------  ------------  ------------   ------------   ------------

Balances at December 31, 2000                    35,381,002   $    35,381   $ 9,440,072   $(8,836,021)   $(1,055,000)   $  (415,568)
                                                ============  ============  ============  ============   ============   ============

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

</TABLE>
                                                          F-11


<PAGE>

<TABLE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

----------------------------------------------------------------------------------------------
<CAPTION>

                                                         For the year ended   For the period from
                                                            December 31,        August 13, 1993
                                                    --------------------------- (Inception) to
                                                       2000            1999    December 31, 2000
                                                    ------------   ------------   ------------
                                                                   (as restated)
<S>                                                 <C>            <C>            <C>
Cash flows from operating activities:
   Net loss                                         $(4,413,329)   $(3,535,393)   $(8,836,021)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
   Depreciation                                          42,845         16,232         59,077
   Value of stock options issued below fair value             -      1,000,000      1,000,000
   Expense recognized from sale of stock at less
     than fair value                                  1,326,876        184,859      1,511,735
   Issuance of common stock for services
     rendered                                         1,064,138      1,528,698      2,592,836
   Sorisole acquisition charge                        1,050,000              -      1,050,000
   Interest expense paid with issuance of stock           7,072              -          7,072
   Changes in operating assets and liabilities:
     Receivable                                             745         (3,771)        (3,026)
     Accounts payable                                   211,778          6,109        223,415
     Accrued expenses                                    18,296         53,871         72,167
     Accrued payroll and related benefits                52,754          9,357         75,275
     Other current liabilities                           23,608          8,000         65,609
                                                    ------------   ------------   ------------

       Net cash used in operating activities           (615,217)      (732,038)    (2,181,861)
                                                    ------------   ------------   ------------

Cash flows from investing activities-
   Purchases of property and equipment                  (33,005)      (118,457)      (151,462)
                                                    ------------   ------------   ------------

Cash flows from financing activities:
   Increase (decrease) in due to related parties         57,000        (10,000)       101,546
   Issuance of stock for cash                           568,700        863,925      1,758,131
   Cash proceeds from exercise of options                 6,030              -          6,030
   Contributions of capital                                   -              -        467,650
                                                    ------------   ------------   ------------

       Net cash provided by financing activities        631,730        853,925      2,333,357
                                                    ------------   ------------   ------------

   Net increase (decrease) in cash                      (16,492)         3,430             34
   Cash at beginning of period                           16,526         13,096              -
                                                    ------------   ------------   ------------

   Cash at end of period                            $        34    $    16,526    $        34
                                                    ============   ============   ============

Non-c ash financing activities:
   Stock issued in satisfaction of debt             $    27,000    $         0    $    27,000
                                                    ============   ============   ============
   Stock issued to officers for notes               $   545,000    $   510,000    $ 1,055,000
                                                    ============   ============   ============

Supplemental cash flow information:
   Cash paid for interest expense                   $    11,173    $         0    $    11,173
                                                    ============   ============   ============

 The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
                                      F-15


<PAGE>

                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION

La Jolla Fresh Squeezed Coffee Company, Inc., formerly North West Farms, Inc.
("LJFSC") was incorporated in the state of Washington on February 9, 1987. Its
wholly-owned subsidiaries are Stephen's Coffee Co., Inc. ("SCC"), California
Corporation and Sorisole Acquisition Corp. ("Sorisole"), a Delaware corporation.
SCC was incorporated in the state of California on August 13, 1993
("Inception"). SCC is the operating company responsible for the development of
manufacturing methods and products for distribution. Effective November 1, 1998,
SCC was acquired for 1,142,500 shares of common stock representing approximately
9% of the outstanding voting stock of LJFSC in exchange for the common stock of
SCC. LJFSC has had no significant operations. The entities are collectively
referred to as the "Company". The Company since Inception has had no significant
revenue producing activities and, accordingly, is a company in the development
stage.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant inter-company accounts have been
eliminated in consolidation. The accompanying consolidated financial statements
reflect the historical assets and liabilities, and the related historical
operations of SCC for all periods presented. The expenses of LJFSC and Sorisole
have been included in operations from the dates of acquisition.

GOING CONCERN CONSIDERATIONS

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has incurred
losses from operations since its inception, has a stockholders' deficit at
December 31, 2000 of $415,568, and requires substantial funds for its
operational activities and sales efforts. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management has
received monies from sales of its common stock at a significant discount from
its market quotations through May 10, 2001 (see Notes 5 and 7). Management is
negotiating a financing through private placement of its common stock, or a
newly issued preferred stock. There are no assurances that funds will be
available to or, if available, that the Company will achieve revenues sufficient
to meet its cost structure and obligations as they become due. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles in the United States 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 consolidated financial statements, and the reported amounts of
revenues and expenses during the reported periods. Actual results could
materially differ from those estimates. Significant estimates made by management
include, but are not limited to, the allowance for losses on uncollectible
accounts receivable, and the impairment of long-lived assets.

                                      F-16


<PAGE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

CONCENTRATION OF CREDIT RISK

The Company purchased certain products from two suppliers, which accounted for
approximately 60% and 14% of total purchases during 2000. Purchases of products
from two suppliers accounted for approximately 24% and 23% of total purchases
during 1999. Management does not believe that the loss of such suppliers could
have a severe impact on the results of operations.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company accounts for impairment of long-lived assets under the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of."
This statement requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to
sell. Management believes no permanent impairment has occurred.

PROPERTY AND EQUIPMENT

Property and equipment are depreciated over their estimated useful lives using
the straight-line method over three to seven years. Additions and betterments
are capitalized. The cost of maintenance and repairs is charged to expense as
incurred. When depreciable property is retired or otherwise disposed of, the
related cost and accumulated depreciation are removed from the accounts and any
gain or loss is reflected in operations.

REVENUE RECOGNITION

Revenue from coffee products is recognized upon shipment of product. Estimated
returns and allowances are accrued to expenses at the time of sale.

In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements," providing the staff's views in applying generally accepted
accounting principles to selected revenue recognition issues. The Company
adopted these portions of SAB No. 101 with no material effect on the Company's
financial position or results of operations.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development costs are expensed as incurred.

                                      F-17


<PAGE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

INCOME TAXES

The Company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting for Income Taxes," whereby deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary differences
between bases used for financial reporting and income tax reporting purposes.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. A valuation allowance is
provided for certain deferred tax assets if it is more likely than not that the
Company will not realize tax assets through future operations.

STOCK-BASED COMPENSATION

The Company accounts for employee stock options using the intrinsic method
prescribed by Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting
for Stock Issued to Employees." The Company makes pro forma disclosures of net
income and earnings per share, as if the fair value method of accounting had
been applied in accordance with SFAS 123. The Company accounts for non-employee
stock options under the fair value method using the Black-Scholes model.

In March 2000, the Financial Accounting Standards Board issued Interpretation
No. 44 ("FIN 44"), "Accounting for Certain Transactions Involving Stock
Compensation, an interpretation of APB 25." FIN 44 provides criteria for the
recognition of compensation expense in certain stock-based compensation
arrangements that are accounted for under APB 25. FIN 44 was effective July 1,
2000, with certain provisions that are effective retroactively to December 15,
1998 and January 12, 2000. FIN 44 did not have any material impact on the
accompanying consolidated financial statements.

LOSS PER SHARE

Basic EPS is computed as net income (loss) divided by the weighted average
number of common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur from common stock issuable through stock
options, warrants and other convertible securities. The Company did not have any
potentially dilutive common stock equivalents outstanding as of December 31,
2000 or 1999.

REPORTING COMPREHENSIVE INCOME

SFAS No. 130, "Reporting Comprehensive Income" establishes standards for
reporting the components of comprehensive income and requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income be included in a financial statement that is displayed with
the same prominence as other consolidated financial statements. Comprehensive
income includes net income (loss), as well as certain non-shareholder items that
are reported directly within a separate component of stockholders' equity and
bypass net income (loss). The Company had adopted the provisions of this
statement with no impact on the accompanying consolidated financial statements.

DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information" requires disclosures of financial and descriptive information about
an enterprise's operating segments in annual and interim financial reports
issued to stockholders. The statement defines an operating segment as a
component of an enterprise that engages in business activities that generate
revenue and incur expense, whose operating results are reviewed by the chief
operating decision-maker in the determination of resource allocation and
assessing performance, and for which discrete financial information is
available. The Company adopted the provisions of this statement in 1999 with no
impact on the accompanying consolidated financial statements.

                                      F-18


<PAGE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 establishes standards for the accounting and reporting
of derivative instruments and hedging activities, including certain derivative
instruments embedded in other contracts. Under SFAS No. 133, entities are
required to carry all derivative instruments at fair value on their balance
sheets. The accounting for changes in the fair value (i.e., gains or losses) of
a derivative instrument depends on whether it has been designated and qualifies
as part of a hedging activity and the underlying purpose for it. The adoption of
SFAS No. 133 did not have a significant impact on the Company's consolidated
financial statements or related disclosures.

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31, 2000:

              Equipment                                      $      82,209
              Furniture and fixtures                                 1,248
              Leasehold improvements                                68,005
                                                             --------------
                                                                   151,462
              Less accumulated depreciation                        (59,077)
                                                             --------------
                                                             $      92,385
                                                             ==============

During the years ended December 31, 2000 and 1999, depreciation expense totaled
$42,845 and $16,232 respectively.

NOTE 4 - COMMITMENTS AND CONTINGENCIES

LESSEE

The Company is the lessee of office equipment under operating leases typically
for periods of three years. The Company leases its office space under a
non-cancelable operating lease in which the terms are for a period of three
years. Total rent expense for all leases for the years ended December 31, 2000
and 1999 amounted to approximately $111,945 and $72,254, respectively.

The Company's future annual minimum lease payments for all non-cancelable
operating leases as of December 31, 2000, are as follows:

               Years Ending
               ------------

                    2001                                   $        47,172
                    2002                                            29,730
                    2003                                             7,957
                                                           ----------------
                                                           $        84,859
                                                           ================

                                      F-19


<PAGE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

LITIGATION

In November 1999, a former director of SCC made a claim against the Company
alleging that certain corporate formalities were not complied with during the
transfer of the assets of SCC entitling the plaintiff to unwind the transfer,
$150,000 in damages and additional shares in the Company. In November 1998, the
Company believed it had settled the matter by the payment of $15,000, the
issuance of 150,000 shares and the director's resignation. This matter was
settled in November 2000. Pursuant to the terms of the settlement agreement, the
Company became obligated to pay the plaintiff a total of $30,000 over a five
month period. This settlement was charged to the Company's operations in 2000.
As of December 31, 2000, the Company had a remaining balance due to the
plaintiff of $24,000 which was incuded in accounts payable.

In November 1999, a shareholder of the Company filed a claim against the Company
alleging similar claims as above, specifically that the transfer of the assets
of SCC was fraudulent and is seeking declaratory relief to unwind the transfer,
and other damages. This matter was settled in April 2001. Pursuant to the terms
of the settlement agreement, the Company is obligated to pay the plaintiff a
total of $17,000 over a 60 day period or face having a judgment entered against
the Company for the unpaid balance. This amount was charged to the Company's
operation in 2000 and reflected as a liability in the accompanying balance
sheet. In addition, the Company has agreed to issue the plaintiff 60,000 shares
of the Company's common stock and grant an option to purchase 175,000 additional
shares at $0.45 per share. The 60,000 shares had an estimated fair market value
of $0.13 per share based on the average trading price of the Company's common
stock during April 2001 for an aggregate amount of $7,800. As of December 31,
2000, the Company accrued a total of $24,800 related to this matter.

In May 2000, a former creditor of Monterey Seasons, Inc. filed a claim against
the Company alleging that the Company failed to fulfill it's obligation to pay a
promissory note of $28,500 executed by the Company as a successor to Monterey
Seasons, Inc. The Company believes it is not the successor of the obligor and in
turn filled a cross complaint seeking the return of approximately $9,000 paid by
the Company to the plaintiff. The trial for this matter is set for July 18,
2001. The outcome of the case is uncertain. As such, no provision for loss has
been made in the accompanying consolidated statements of operations.

NOTE 5 - STOCKHOLDERS' DEFICIT

During the period from Inception to December 31, 1998, the president and founder
of SCC had personally funded much of the Company's operations. Approximately
$467,000 was contributed by the founder to the development of its cold
extraction process and delivery system.

COMMON STOCK ISSUANCES

As discussed in Notes 1, effective November 1, 1998, LJFSC issued 1,142,500
shares of its common stock for all the assets subject to liabilities assumed of
SCC. Since the acquisition was treated as a recapitalization of SCC, these
shares are reflected as outstanding since Inception. The shares totaling
11,974,140 retained by the stockholders of LJFSC are considered as issued in
connection with the recapitalization in the accompanying consolidated statements
of stockholders' deficit.

                                      F-20


<PAGE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

In 1998, the Company issued 503,571 shares of common stock for $0.35 per share
in a private placement offering for a total of $176,250. In 1999, the Company
sold an additional 496,429 shares of common stock for $0.35 per share pursuant
to such offering for a total of $173,750. Management has relied on exemptions
available under the Securities Act of 1933. See below for additional 1999
private placement transactions.

As more detailed in the accompanying statement of stockholders' deficit, the
Company issued 1,186,107 shares of common stock at prices ranging from $0.31 to
$0.65 per share for total proceeds of $690,400 at various times during 1999. The
purchase prices per share of such sales of common stock were negotiated based on
market conditions. Such sales of common stock were executed at significant
discounts to market quotations of the Over-The-Counter Bulletin Board
("OTC:BB"). In connection with these issuances, the Company recorded an expense
of $184,859 arising from the sale of stock at less than fair value. The fair
value was determined by management based on the average trading ask prices on
the OTC:BB in the month the transaction was effected, less a discount of 10% for
transferability restrictions. All such sales of unregistered securities were
made to unrelated parties. Management has relied on exemptions available under
the Securities Act of 1933. In the event these exemptions are not available,
management may be required to offer a rescission of such sales.

In June 1999, the Company issued 1,000,000 shares of common stock to a third
party in exchange for website development and maintenance services. The common
stock was valued by management at $1,288,698 or $1.29 per share, based on the
average trading ask prices on the OTC:BB in the month the transaction was
effected, less a discount of 10% for transferability restrictions. The Company
did not receive services in accordance with the contract. Because management had
no significant financial resources at the time of the breach of contract, they
were unable to pursue legal remedies. Accordingly, management charged such costs
to operations.

On February 22, 2000, the Company acquired all the outstanding shares of common
stock of Sorisole from the shareholders thereof in exchange for 3,500,000 shares
of common stock. Sorisole was a Rule 12G reporting shell corporation under the
Securities Act of 1934. Sorisole has no assets or liabilities and no significant
operations. This acquisition was made for the purpose of retaining the Company's
listing on the OTC:BB of the National Association of Securities Dealers (the
"NASD"). Management recorded the shares issued at fair value and charged
operations totaling $1,050,000.

In February 2000, holders of options to purchase a total of 402,000 shares of
common stock exercised their rights for total proceeds of $6,030 or $0.015 per
share. These options, previously retained by the stockholders of LJFSC, were
considered as granted in connection with the recapitalization of SCC and,
accordingly, no value was ascribed to the options.

As more detailed in the accompanying statement of stockholders' deficit, the
Company issued 5,390,758 shares of common stock at prices ranging from $0.04 to
$0.65 per share for aggregate proceeds of $568,700 at various times during 2000.
The purchase prices per share of such sales of common stock were negotiated
based on market conditions. Such sales of common stock were executed at
significant discounts to market quotations of the OTC:BB. In connection with
these issuances, the Company recorded an expense of $1,326,876 arising from the
sale of stock at less than fair value. The fair value was determined by
management based on the average trading ask prices on the OTC:BB in the month
the transaction was effected, less a discount of 10% for transferability
restrictions. All such sales of unregistered securities were made to unrelated
parties. Management has relied on exemptions available under the Securities Act
of 1933. In the event these exemptions are not available, management may be
required to offer a rescission of such sales.

As more detailed in the accompanying statement of stockholders' deficit, the
Company issued 778,354 shares of common stock for services rendered in 2000.
Services rendered consisted of financial consulting, legal and business
management consulting. The fair value was determined by management based on the
average trading ask prices on the OTC:BB in the month the transaction was
effected, less a discount of 10% for transferability restrictions. The monthly
average closing ask prices ranged from $0.18 per share to $0.45 per share during
the service periods. As a result, the Company charged operations $193,387 in
connection with services.

                                      F-21


<PAGE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

In July 2000, the Company issued 94,643 shares of restricted common stock in
satisfaction of debt to a related party at $0.36 per share based on market
quotations including a 10% discount for trading restrictions.

In June 2000, the Company issued 1,062,500 shares of common stock to two former
officers at $0.01 per share. At the date of the arrangement, the quoted market
value averaged $0.34 per share. Compensation expense charges to operations in
2000 from this transaction amounted to $350,625.

See below for stock transactions under the Company's Incentive Stock Plan.

INCENTIVE STOCK PLANS

In 1999, the Board of Directors adopted the 1999 Incentive Stock Option Plan
(the "Plan"), which authorizes the granting of options to key employees,
directors, and/or consultants to purchase 10,000,000 shares of unissued common
stock. During 1999, options to purchase 3,400,000 and 1,600,000 shares of the
Company's common stock were granted to two officers, respectively, and
immediately exercised at $0.15 per share.

Options to purchase 3,400,000 shares were exercised for employment services
rendered. The Company recorded compensation expense during 1999 of $680,000 for
the value of these options granted below fair value based on the difference
between the estimated fair value of $0.35 per share and the exercise price of
$0.15 per share. In connection with the exercise of options to purchase
3,400,000 shares, a promissory note bearing interest at six (6) percent, per
annum and due in 2009 was issued to the Company. No payments have been received
on the note during 1999.

Options to purchase 1,600,000 shares were exercised for employment services
rendered and future services to be rendered for a total of three years. The
Company recorded compensation expense of $320,000 in 1999 for the value of these
options granted below the fair value based on the difference between the
estimated fair value of $0.35 per share and the exercise price of $0.15 per
share. The officer exercised the options in February 1999 and subsequently
resigned from the Company in September 1999. Prior to his resignation, the
officer sold the shares to third parties. The Company maintains that
consideration in exchange for such options was not complete and is currently
seeking cancellation of a portion of those shares. Upon exercise of the options,
the Company charged $240,000 as compensation expense in 1999 for the exercise
price of $0.15 per share not remitted to the Company.

                                      F-22


<PAGE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

On February 18, 2000, the board of directors and stockholders adopted the 2000
Incentive Stock Plan (the "2000 Plan"), which authorizes the granting of options
to key employees, directors, and/or consultants to purchase 10,000,000 shares of
unissued common stock. On February 18, 2000, the board of directors approved an
aggregate of 4,550,000 shares of the Company's common stock to three officers
for $0.1875 per share. Of such, 2,850,000 were purchased. The balance of
1,700,000 shares were not acquired by two officers. The purchase price was
determined by the board of directors based on the fair value of the Company's
common stock on the date of grant. No additional shares have been issued in
connection with the 2000 Plan. In connection with the purchase of the 2,850,000
shares, a promissory note totaling $534,375, bearing interest at six (6) percent
per annum and due in 2009 was issued to the Company. Principal is payable in one
lump sum in February, 2009.

On June 26, 2000, the Company issued 1,062,500 to the two officers which did not
acquire shares (see preceding paragraph) for $0.01 per share or $10,625. At the
time the shares were issued, the fair value of the Company's common stock was
approximately $0.34 per share, based on market quotations. Additional
compensation expense in connection with these purchases was $350,625, and was
charged to operations during 2000.

NOTE 6 - PROVISION FOR INCOME TAXES

The Company's net deferred tax assets at December 31, 2000, consist of net
operating loss carryforwards for federal and state income tax reporting
amounting to approximately $__ million and $__ million, respectively. At
December 31, 2000, the Company provided a 100% valuation allowance for these net
operating loss carryforwards totaling approximately $__ million. The Company's
net operating loss carryforwards will begin to expire in 2020 and 2005 for
federal and state income tax purposes, respectively. The Company recorded no
benefit for income taxes during the periods presented. During the years ended
December 31, 2000 and 1999, the Company's total valuation allowance increased
approximately $____ million and $1.1 million, respectively.

The difference between the tax benefit assuming a Federal income tax rate of 34%
and amounts recorded in the financial statements of zero percent is the result
of the Company recording a 100% valuation allowance for its deferred tax assets.

As a result of changes in ownership, the Company's use of net operating loss
carryforwards may be limited by section 382 of the Internal Revenue Code until
such net operating loss carryforwards expire. Deferred tax assets have been
computed using the maximum expiration terms of 20 and 5 years for federal and
state tax purposes, respectively.

NOTE 7 - RELATED PARTY TRANSACTIONS

From time to time, the Company borrows funds from shareholders and other related
parties to fund working capital requirements. During 2000, the Company borrowed
a total of $95,800 and at December 31, 2000, had an unpaid balance of $74,546.
In connection with these borrowings from related parties, the Company paid a
total of $18,245 in interest expense of which $7,072 was paid with the issuance
of restricted common stock at $0.36 per share.

                                      F-23


<PAGE>
                    LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
                          (A DEVELOPMENT-STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 8 - QUARTERLY FINANCIAL INFORMATION AND FOURTH QUARTER ADJUSTMENTS
           (UNAUDITED)

The Company determined it was necessary to revise its unaudited results of
operations in 2000. The revisions to the Company's unaudited quarterly financial
information reflect (i) an additional charge to operations of $838,504 for
differences arising from the valuation of stocks issued for services; (ii) an
expense of $1,050,000 in connection with the acquisition of Sorisole and; (iii)
an expense of $1,319,769 arising from the sales of stock at less than fair
value.

The effects of such adjustments on the Company's previously reported quarters
are as follows:
<TABLE>
<CAPTION>

                                  Unaudited (in thousands, except per share information)
                    ------------------------------------------------------------------------------
                                                                                            THREE MONTHS
                        THREE MONTHS ENDED    THREE MONTHS ENDED     THREE MONTHS ENDED         ENDED
                          MARCH 31, 2000        JUNE 30, 2000         SEPTEMBER 30, 2000   DECEMBER 31, 2000
                        As                     As                     As
                    Originally     As      Originally      As      Originally       As
                     Reported   Restated    Reported    Restated    Reported     Restated
<S>                 <C>         <C>         <C>         <C>         <C>         <C>         <C>
Total operating
 expenses           $    205    $    725    $    250    $    547    $    253    $    275    $    463
Other expenses             -       1,168           -         885           -         317          25
Net loss            $   (202)   $ (1,890)   $   (246)   $ (1,428)   $   (250)   $   (589)   $   (506)
                    =========   =========   =========   =========   =========   =========   =========

Basic and diluted
 loss per share     $  (0.01)   $  (0.08)   $  (0.01)   $  (0.05)   $  (0.01)   $  (0.02)   $  (0.02)
                    =========   =========   =========   =========   =========   =========   =========

Basic and diluted
 weighted average
 common shares
 outstanding          24,748      24,748      30,500      28,610      33,791      29,628      30,882

</TABLE>

NOTE 9 - SUBSEQUENT EVENTS

In January 2001, the Company issued a total of 1,207,320 shares of restricted
common stock at $0.17 per share based on market quotations including a 10%
discount for trading restrictions for total proceeds of $86,745. In connection
with these issuances, the Company will record in 2001 an expense of $118,499
arising from the sale of stock at less than fair value.

In February 2001, the Company issued a total of 500,000 shares of restricted
common stock at $0.10 per share based on market quotations including a 10%
discount for trading restrictions for total proceeds of $50,000.

In March 2001, the Company issued a total of 315,909 shares of restricted common
stock at $0.06 per share based on market quotations including a 10% discount for
trading restrictions for total proceeds of $27,000.

In January and February 2001, the Company issued 285,000 shares of restricted
common stock for consulting services rendered at prices ranging from $0.10 to
$0.17 per share based on market quotations including a 10% discount for trading
restrictions.

In March 2001, the Company issued 712,500 shares of restricted common stock to
two officers of the Company for employment services rendered and to be rendered
at $0.06 per share based on market quotations including a 10% discount for
trading restrictions. In addition, the Company granted to one of these officers
an option to purchase 500,000 shares of restricted common stock at an exercise
price of $0.08 per share.

                                      F-24