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The following is an excerpt from a 10QSB/A SEC Filing, filed by ICY SPLASH FOOD & BEVERAGE INC on 11/26/2003.
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ICY SPLASH FOOD & BEVERAGE INC - 10QSB/A - 20031126 - NOTES_TO_FINANCIAL_STATEMENT

NOTES TO FINANCIAL STATEMENTS
March 31, 2003
(UNAUDITED)

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

In the opinion of management, the accompanying unaudited interim financial statements of Icy Splash Food and Beverage, Inc. contain all adjustments necessary to present fairly the Company's financial position as of March 31, 2003 and December 31, 2002 (audited) and the results of operations for the three months ended March 31, 2003 and 2002 and cash flows for the three months ended March 31, 2003 and 2002.

The results of operations for the three months ended March 31, 2003 and 2002 are not necessarily indicative of the results to be expected for the full year.

The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements included in its Annual Report on Form 10-KSB for the year ended December 31, 2002, which is incorporated herein by reference. Certain notes included in Form 10-KSB have been condensed or omitted from this report in accordance with the rules for Forms 10-Q and 10-QSB.

NOTE 2 - GOING CONCERN:

As shown in the accompanying financial statements, the Company has incurred a net operating profit of $9,435 for the three month period ending March 31, 2003 and has an accumulated deficit of $796,709 as of March 31, 2003 as well as negative working capital. The ability of the Company to continue as a going concern is dependent on obtaining additional capital and financing and operating at a profitable level. Management is actively pursuing additional capital and has initiated new distribution agreements with established distributors of its products. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 - LOANS PAYABLE - SHAREHOLDER:

At March 31, 2003 and December 31, 2002 the Company owed an aggregate of $91,213 and $59,297, respectively to one of its shareholders. The loan is non-interest bearing and has no formal repayment terms.

NOTE 4 - RELATED PARTY TRANSACTIONS:

(a) The Company has transactions with one corporate entity owned by one of the Company's shareholders:

During September 1999, the Company initiated sales of product to the corporation which is owned by one of the Company's shareholders. For the year ended December 31, 2002, approximate sales to the distributor and accounts receivable were $34,420 and $0, respectively. There were no sales for the three months ended March 31, 2003.

Since the third quarter of 2002, the Company has borrowed from the corporation which is owned by one of the Company's shareholders. The loan outstanding is $37,285 at March 31, 2003. This loan which is unsecured and non-interest bearing is payable upon demand. Accordingly, it has been reflected as a current liability on the Company's balance sheet.

During the third quarter of 2002, the Company issued 2,000,000 shares of common stock to the corporation which is owned by one of the Company's shareholders. The stock issuance is compensation for consulting, marketing, distribution and product development assistance services rendered (see Note 5).

(b) During the third quarter of 2002, the Company issued 200,000 shares of common stock to a related party for marketing and consulting services. (see Note 5).

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NOTE 5 - CAPITAL STOCK:

During the year ended December 31, 2001, the Company issued 265,500 shares of common stock upon exercise of outstanding common stock purchase warrants. The Company was to receive $235,375 on exercise of such warrants which represented the exercise price of $1.00 per share less direct offering costs of $3,575 and less $.10 per share which were required to be paid to Southern Financial Services, Inc. ("Southern"), the Company's financial consultant and escrow agent. To date, the Company received only $92,275 in connection with such exercise and 78,050 shares have been recovered by a successor escrow agent. At December 31, 2001 the difference between the amount due and the amount received had been recorded as equity and a subscription receivable. As funds are received from recoveries, subscriptions receivable will be reduced until all recoveries have been made, at which time equity and subscriptions receivable will be adjusted accordingly. As of December 31, 2002 it appears that recoveries will be limited to the sale of shares held in escrow. During 2002, 25,000 of the shares held in escrow were transferred to an internet information vendor to provide information about the Company to investors. At December 31, 2002 the 53,050 shares remaining in escrow were written-down to $0.25 per share to reflect the market value of the common stock at that time.

On February 19, 2002, the Company signed a nine month consulting agreement with a financial services group to review and analyze the Company's formal and informal financial, strategic and business plans, prepare and update a formal business plan, along with the appropriate financial projections, and perform other financial services requested by the Company. Compensation is 330,000 shares of the Company's common stock, to be paid as follows: 100,000 upon execution of the agreement, 75,000 shares on March 15, 2002, 75,000 shares on May 15, 2002 and 80,000 shares on July 15, 2002. In March 2002, the Company issued 330,000 registered shares of common stock to this consultant as compensation for services rendered and to be rendered. The shares were valued at $0.30 per share. At March 31, 2003, with the agreement of the financial services group, 80,000 shares of stock, recorded as $24,000 of unearned compensatory stock, was still held by the Company for the total value of services still to be rendered.

In March 2002, the Company issued 690,000 shares of common stock, which were granted in 2001, to the Company's officers and consultants as compensation for services rendered. These shares were valued at prices varying from $0.08 to $0.16 per share, which were the market prices at the time of grant.

During the third quarter of 2002, the Company issued 2,000,000 Section 144 restricted common shares of stock for services rendered to a corporation which is owned by one of the Company's shareholders. The shares were valued at $.14 per share, the market price at the time of the grant.

Additionally, during the third quarter of 2002, 350,000 Section 144 restricted shares of common stock were issued to an entity and 200,000 Section 144 restricted shares of common stock were issued to a related party, for marketing and financial consulting services pursuant to verbal consulting agreements entered into by the Company. The consulting agreements have no specific terms and can be terminated by either party at any time. The total 350,000 shares issued to the entity, which were valued at $.12 per share, are being held in escrow by management until certain performance criteria are met.

During the third quarter of 2002, 1,000,000 shares of Section 144 restricted common stock were issued to an individual for $60,000.

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