FORM 10-K

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                   UNDER REPORT UNDER SECTION 13 or 15(d) OF 
                    THE SECURITIES AND EXCHANGE ACT OF 1934

For the Fiscal Year Ended: June 30, 1997      Commission File No. 
                                                  2-78287-NY

                              FOOD CONCEPTS, INC.
              exact name of registrant as specified in its charter

                NEVADA                               13-3124057
     (State or other jurisdiction of              (I.R.S. Employer           
      incorporation or organization)             Identification No.)

                               6601 Lyons Road
                                  Suite C-12
                          Coconut Creek, Florida 33073
                     address of principal executive office

                       Registrant's telephone number,
                       including area code:                   (954) 420-0882

Indicate by check mark whether the registrant has filed all annual, quarterly 
and other reports required to be filed with the Commission within the past 
ninety days and in addition, has filed the most recent annual report required 
to be filed.
Yes      x          No                

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check marks whether the registrant has filed all documents and 
reports required to be filed by Sections 2, 13 or 15(d) of the Securities 
Exchange Act of 1934 subsequent to the distribution of securities under a plan 
confirmed by a court.
Yes                  No                  

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date.

Common Stock $.0001 par value,                    19,861,744
     (Title of Class)              (Shares outstanding at June 30, 1997)

<PAGE>
Item 1.  BUSINESS

General

     Food Concepts, Inc., the Company, formerly known as Granite, Ltd. and 
then Savon Coffee, Inc. was incorporated under the law of the State of Nevada 
on June 16, 1982.  

     The Company was founded to provide gourmet and specialty coffees to 
consumers.  Food Concepts is a roaster, packer and seller of roasted coffees 
and produces over 70 flavored coffees.  It distributes it's products through 
sales representatives advertising specialty companies and the United States 
Army.  In addition, the Company sells orders obtained directly from customers 
such as restaurants, coffee houses and retailers.  

     The Company has approximately 700 accounts and a market that is very 
diversified.  Two customers account for more than 10 percent of the Company's 
present revenues.  They are Christmas Tree Shop and Anron Coffee and Tea, 
Inc.  

     The Company purchases its coffee beans through coffee importers and 
agents.  The principal sources for such raw materials are South America, 
Central America and Africa as well as any other areas where coffee beans are 
grown and exported.  It is the Company's opinion that sources of raw materials 
while their prices do fluctuate are plentiful on the world market.  The 
Company faces a great deal of competition within this area especially over the 
last three years due to the immense growth of the coffee market of wholesale 
and retail.  

     The Company however has been able to compete successfully by offering 
very competitive prices and service to its customers.  

     The Company presently employs seven individuals, two in management, one 
clerical and four warehouse personnel.  The Company considers their labor 
relations to be excellent and none of the persons presently employed are 
represented by organized labor.  

     Food Concepts owns the registered intellectual property right charters 
listed as follows:

     "Coffee Lovers Six Pack" (registered mark number 151,553,926, said mark 
having been registered with United States Patent Office and the mark was 
issued on August 29, 1989 and is valid for 20 years).

     "Coffee Lovers Coffee" (registered mark number 1,673566 registered in the 
United States Patent Office and issued on January 28, 1992 and valid for 10 year
s).  

     The above marks have been registered in applicable states where 
necessary.   


Item 2. PROPERTIES

     The Company presently leases 6800 square feet of warehouse and office 
space at 6601 Lyons Road, Suite C-12, Coconut Creek, Florida 33073.  The term 
of said lease is for five years and two months commencing the 12th day of 
February, 1996.  The rent for the first 26 months is fixed and the remaining 
36 months is subject to a formula which is provided in the lease.  Included 
within the warehouse facilities are coffee roasters and packaging equipment to 
prepackage and customize the packaging seventy flavored coffees.  


Item 3. LEGAL PROCEEDINGS

     Coffee House Holding Company has filed a law suit against Savon Coffee in 
the amount of $7,524 plus a percentage of gross profit for not fulfilling an 
agreement to purchase coffee exclusively from Coffee House Holding. This 
action was instituted against Savon Coffee, Inc. on March 16, 1994 in the 
Supreme Court of the State of New York, County of Kings, for not fulfilling an 
agreement to purchase coffee exclusively from Coffee Holding Company. The 
Company expects to be successful in this matter.

     On July 3, 1996, the Company commenced an action in the Circuit Court of 
the Seventeenth Judicial Circuit in and for Broward County, Florida bearing 
docket number 96-09431-11 entitled Food Concepts, Inc. vs. Lasorda's Dug Out, 
Inc., a Florida corporation, et al.  The Company is seeking damages in the 
amount of $200,000 resulting from the non payment of outstanding loans and 
other payments assigned to the Company under the rights of an oral contract.  
The Company expects to be successful in this matter.


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

     Not Applicable.


                                 PART II

Item 5.     MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER 
MATTERS

     On October 25, 1995 Granite, Ltd. the predecessor of Food Concepts, Inc. 
acquired all of the outstanding stock of Savon Coffee, Inc. for 20,000,000 
shares of Granite common stock $.0001 par value which was subsequently reverse 
split one for ten leaving 2,000,000 shares $.001 par value which then 
constituted approximately 85.6 percent of the corporation Granite reserved or 
issued outstanding securities in consideration for the conveyance of all 
shares of Savon stock which then constituted 100 percent of Savon's authorized 
issued and outstanding securities.  In conjunction therewith the Certificate 
of Incorporation of Granite was amended affecting a one for ten reverse split 
of the corporations common stock $.0001 par value (converting the 50,000,000 
shares then authorized into 5,000,000 shares, $.001 par value, and the 
3,327,300 then outstanding into 332,700 shares, $.0001 par value, followed by 
an increase in the resulting authorized capitalization of Granite from 
5,000,000 shares, $.0001 par value to 20,000,000, $0001 par value.  Subsequent 
thereto the name of the Company was changed from Granite, Ltd. to Savon 
Coffee, Inc. a Nevada corporation and said Savon subsequently had its name 
changed to Food Concepts, Inc. a Nevada corporation on March 26, 1996.  The 
common stock and warrants are traded in the over the counter market on a 
National Association of Security Dealers Automatic Quotation System (NASDAQ).  
There is no other established market for the Company's securities.  The 
following table sets forth the range of high and low bid prices for the 
Company's common stock as quoted by NASDAQ.  These quotations set forth below 
represent prices between dealers in securities and do not reflect retail 
markups, markdowns, or commissions and do not necessarily represent actual 
transactions.  

                                          SHARES OVER THE COUNTER

                                          BID                OFFER

Quarter Ending                            High .968 cent     .9375 cent
June 30, 1996                             Low .85 cent       .83 cent

Quarter Ending                            High 6 cent         6 cent
October 31, 1996                          Low 4 cent          4 cent

Quarter Ending                            High 7 cents        7 cents
February 28, 1997                         Low 4 cents         4 cents

Quarter Ending                            High 6 cents        6 cents
June 30, 1997                             Low 4 cents         4 cents

Number of Shareholders    -   396
Dividends     -       None

     As of June 30, 1997 there were in excess of 350 shareholders (based on 
the number of shareholders of record and an approximation of the number of 
beneficial owners of common stock).  Holders of common stock are entitled to 
dividends when, as, and if declared by the Board of Directors out of funds 
legally available therefore.  The Company has not paid any cash dividends on 
its common stock and, for the immediate future, intends to retain earnings, if 
any, to finance development and expansion of its business.  Future dividends 
policy is subject to the discretion of the Board of Directors.


ITEM 6.  SELECTED FINANCIAL DATA

         Operating Income                        $(47,065.00)
         Income from Continuing Operations       $(47,065.00)
         Total Income                            $(47,065.00)
         Loss per Share                          $(.003)
         Total Assets                            $312,842.00
         Current Liabilities                     $100,416.00
         Long Term Obligations                   $-0-
         Dividends                               $-0-



ITEM 7.   MANAGEMENTS DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AS A 
RESULT OF OPERATIONS.

Liquidity and capital resources

OPERATIONS.  The operating entities of the company, Savon Coffee, Inc. and 
Palm Beach Coffee, Inc., represents 100 percent of the total revenue of the 
Company with Savon contributing 80 percent and Palm Beach 20 percent.  The 
cost of operating both companies is similar and neither one results in any 
disparate expense to the Company.  The Company, Food Concepts, Inc., which 
evolved from Savon Coffee, Inc. was originally founded by its now president 
and vice president Herbert Glaubman and Francis Resnick respectively in August 
of 1986.  The Company was originally located at 5197 Northwest 15th Street, 
Margate, Florida.  The Company has maintained various locations from August 
1986 through 1993 during which time the Company was a development stage 
enterprise funded primarily by the founders.  On October 27, 1995 the Company 
by virtue of a reorganization agreement wherein Granite, Ltd., a publically 
traded Nevada corporation, acquired Savon Coffee, Inc. which subsequently 
changed its name to Food Concepts, Inc. became a public company trading its 
stock on the OTC bulletin board.

     The Company does not presently have any specific plan or arrangement for 
alternate financing and there is no assurance that any will be available to 
the Company.  The Company is presently indebted to the First Union Bank in the 
approximate amount of $ 7,000.  Said note is secured by the inventory and 
equipment of the Company.  The Company does not now have any specific need to 
arrange for additional credit lines.

     Due to the nature of the Company's business, a large amount of inventory 
is necessary.  The Company presently roasts and ships approximately 70 
different types of flavored coffees.  This in and of itself necessitates a 
large inventory.  In addition, substantial inventory is also necessary as the 
Company is dependent upon foreign growers for coffee beans.  Management sees 
no detriment to the maintaining of a large inventory as it pertains to their 
cash flow and working capital.  

ACQUISITIONS

     On October 27, 1995, the Company acquired all of the issued and 
outstanding common stock of Savon Coffee, Inc. whose principal business 
consists of manufacture and direct sales distributing of Gourmet Coffee, for 
20,000,000 shares (pre-split) of common stock.

     On January 1, 1996, the Company acquired all of the issued and 
outstanding common stock of Palm Beach Gourmet Coffee, Inc., whose principal 
business is direct sales of Gourmet Coffee, in exchange for 50,000 shares of 
common stock of the Company.

     On October 21, 1997 the Company intends to acquire Tri-Star Medical 
Group, Inc.  The transaction will be executed through a reverse acquisition.

     Tri-Star Medical Group, Inc. is a holding company that acquires and 
manages businesses in the medical service industry.

ITEM 8. SELECTED FINANCIAL DATA

         See Item 14 herein.


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

             Not applicable.

<PAGE>PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Directors and Executive Officers

     Directors of the Company hold office until the next annual meeting of 
Stockholders (which is expected to be held in July, 1997) and until their 
successors have been elected and shall qualify or until their death, 
resignation or removal from office. The officers of the Company are elected by 
the Board of Directors at the first meeting after each annual meeting of the 
Company's Stockholders, and hold office until their successors are chosen and 
qualified, or until their death, resignation or removal from office. The 
directors and officers of the Company are as follows:

NAME                              TITLE

Herbert Glaubman
Director since October 1995       Director, President and CEO

Francis Glaubman
Director since October 1995       Director and Secretary

Harold Strulowitz
Director since March 1996         Director

     The following information is provided with respect to the directors.

HERBERT GLAUBMAN
Age 67                            Founder of the Company

FRANCIS GLAUBMAN
Age 53                            Co-founder of the Company

HAROLD STRULOWITZ
Age 54                            Certified public account and president
                                  of Palm Beach Gourmet

     Officer-Directors do not presently receive compensation for serving on 
the Board. At present, there are no pension, profit sharing or other forms of 
deferred compensation presently available to any employee of the Company. 





Item     11.     EXECUTIVE COMPENSATION

     The following table sets forth the aggregate cash compensation paid by 
the Company during the fiscal year ended June 30, 1996 to all executive 
officers of the Company as a group and to all executive officers of the 
Company each of whose total cash compensation exceeded $60,000.00 for services 
in all capacities.

Name of Individual            Capacities in            Cash
or Group                      which served             Compensation
                                                                         
Herbert Glaubman              President and CEO        $-0-

Francis Glaubman              Vice President and 
                              Secretary                $55,000.00

All executive officers
as a group including
individuals named above 
(2 persons) 
                                                        $55,000.00

     All executive officers are not covered by the Company's major medical 
insurance and disability plans. The officers of the Company presently have use 
of an automobile leased by the Company.


Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth the number and percentage, as of June 30, 
1996 of the company's Common Shares owned of record and/or beneficially by 
each person owning more than 5% of such Common Shares, by each Director who 
owns any shares of the Company and by all officers and directors as a group.

Name                             Percentage Owned       Number of Shares Owned

Herbert and Francis Glaubman     22.657%                4,500,000


Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None.

<PAGE>PART IV


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

     I. Financial Statements and Schedules

     Report of Independent Certified Public Accountants.

     Consolidated Financial Statements:

     Balance Sheets
     Statements of Operations
     Statements of Changes in Stockholders Equity 
     Statements of Cash Flow
     Notes to Financial Statements

     II. Reports on Form 8-K:

     One report on Form 8-K was filed during the second quarter of the fiscal 
year covered by this report.


                                 SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Company has duly caused this report to be signed on 
its behalf by the undersigned thereunto duly authorized.

FOOD CONCEPTS, INC.                           FOOD CONCEPTS, INC.



BY:/s/ Francis Glaubman                       BY:/s/ Herbert Glaubman
   FRANCIS GLAUBMAN                              HERBERT GLAUBMAN
   Vice President                                President

Dated: October 29, 1997                          Dated: October 29, 1997<PAGE>














                               FOOD CONCEPTS, INC.
                                AND SUBSIDIARIES

                           AUDITED FINANCIAL STATEMENTS

                             JUNE 30, 1997 AND 1996















<PAGE>



                   FOOD CONCEPTS, INC. AND SUBSIDIARIES





 
                             TABLE OF CONTENTS


                                                                  PAGE


Report of Certified Public Accountants
  on the Financial Statements                                         1

Financial Statements

     Consolidated Balance Sheet                                       2
     Consolidated Statement of Operations                             3
     Consolidated Statement of Shareholders' Equity (Deficiency)      4
     Consolidated Statement of Cash Flows                             5
     Notes to Consolidated Financial Statements                       6-10










<PAGE>

                             Joel S. Baum and Company, P.A.
                                    University Avenue
                                  Coral Springs, Florida






INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
     Food Concepts, Inc. and Subsidiaries


We have audited the accompanying consolidated balance sheet of Food Concepts, 
Inc. and Subsidiaries as of June 30, 1997 and the related consolidated 
statements of operations, stockholders' equity (deficiency) and cash flows for 
the years ended June 30, 1997 and 1996.  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 audit.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit 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 audit provides a reasonable basis 
for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects the financial position of Food Concepts, Inc. and 
Subsidiaries as of June 30, 1997  and the results of its operations and cash 
flows for the years ended June 30, 1997 and 1996 in conformity with generally 
accepted accounting principles.

                                              /s/ Joel S. Baum




Coral Springs, Florida
October 14, 1997





<PAGE>

                        FOOD CONCEPTS, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEET
                                   JUNE 30, 1997
                                   
ASSETS

Current Assets
  Cash overdraft                                    $     (269)
  Accounts Receivable (Note 3)                          110,654
  Inventory (Note 1)                                    152,776
  Loans Receivable                                          750 
        Total Current Assets                            263,911
      
Property, Plant & Equipment (Note 2)
 (Net of Accumulated Depreciation of
  $38,385)                                               29,930 

Other Assets
  Refundable Deposits                                    19,001 
     
        Total Assets                                 $  312,842 

LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities
  Accounts Payable                                   $   88,316
  Accrued Expenses                                        4,855
  Notes Payable - Short-Term (Note 3)                     7,245
       Total Current Liabilities                        100,416        
            Total Liabilities                           100,416      

Shareholders' Equity
     Common Stock - $.001 par value;
      authorized 20,000,000; issued and
      outstanding - 19,861,744 shares at
      June 30, 1997                                      19,862      
     Additional Paid-In-Capital                       1,004,253 

     Accumulated Deficit                               (811,689)      
          Total Shareholders' Equity (Deficiency)       212,426 
 
               Total Liabilities & Shareholders'
                Equity (Deficiency)                   $ 312,842      


       See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
                FOOD CONCEPTS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEARS ENDED JUNE 30,
               
                                                                                
                                                  1997           1996 

Sales                                       $  903,316      $  745,671
Cost of Sales                                  371,367         363,061 
Gross Profit                                   531,949         382,610
      
Operating Expenses:

     Selling, General
      and Administrative                       567,394         457,506
          
Income (Loss) Before Interest Expense          (35,445)        (74,896)     

Interest Expense                                11,620          20,586      
Income (Loss) Before Income Taxes              (47,065)        (95,482)     
Provision for Income Taxes (Note 1)              - 0 -           - 0 -      
Net Income (Loss)                            $ (47,065)      $ (95,482)     



Income (Loss) Per Common Share (Note 1)          (.003)          (.041)     
Weighted Average Common Shares
 Outstanding (Note 1)  13,750,911  2,308,900, respectively

        See Accompanying Notes to Consolidated Financial Statements.
<PAGE>

                   FOOD CONCEPTS, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIENCY)
             FOR THE YEARS ENDED JUNE 30, 1996 AND JUNE 30, 1997


                                              ADDITIONAL     
                                  COMMON      PAID-IN          ACCUMULATED
                                  STOCK       CAPITAL          DEFICIT  


Balance June 30, 1995             $   333     $  455,810       $ (620,464)
Additional Stock Issued
 For Acquisition of
 Subsidiary 
 October 27, 1995                   1,900          - 0 -             - 0 - 

Additional Stock Issued
 for Acquisition of
 Subsidiary
 January 1, 1996                       50          - 0 -          (48,677)

Additional Stock Issued
 for S-8 Offering                   1,500          - 0 -            - 0 - 
Additional Stock Issued
 For Shareholders'
 Contribution                         112        439,409            - 0 - 

Net Loss June 30, 1996              - 0 -          - 0 -          (95,482)

Balance June 30, 1996               3,895        895,219         (764,623)

Additional Stock Issued          
 For S-8 Offering                  15,967        109,034          (47,066)

New Loss June 30, 1997              - 0 -          - 0 -            - 0 - 

Balance June 30, 1997            $ 19,862     $1,004,253        $(811,689)







            See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
                     FOOD CONCEPTS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF CASH FLOWS
                         FOR THE YEARS ENDED JUNE 30,
          
                                                       1997             1996   

Cash Flows From Operations:
     Net Loss                                    $  (47,065)     $   (95,482)
Adjustments to Reconcile Net Income To
 Net Cash Used for Operating Activities:

     Depreciation                                    11,801            9,876
     Excess Liabilities over 
     Assets of Acquired Subsidiary                    - 0 -          (48,584)

 Changes in Assets and Liabilities:
 
     (Increase) Decrease in Prepaid Expenses            375            - 0 - 
     (Increase) Decrease in Accounts Receivable      16,733          (44,305)
     (Increase) Decrease in Inventory                28,170         (112,959)
     (Increase) Decrease in Loans Receivable           (750)           - 0 - 
     (Increase) Decrease in Other Assets            (12,341)            (525)
     Increase (Decrease) in Accounts Payable        (46,672)          82,115
     Increase (Decrease) in Accrued Expenses         (6,888)         (33,675)
     Increase (Decrease) in Notes Payable           (52,366)         (59,947)
         Net Cash Used in Operations               (109,003)        (303,486)
     
Cash Flows From Investing Activities:

     Purchase of Property, Plant & Equipment        (5,066)          (21,565)
     Issuance of Common Stock                       15,967             3,562 
     Additional Paid-In Capital generated as a
      result of issuance of Common Stock           109,034           439,409 

          Net Cash Provided By 
            Investing Activities                   119,935           421,406
     
Cash Flows from Financing Activities:
     Increase (Decrease) in Loan Payable
      Affiliated Company                             - 0 -           (79,774)
     Increase (Decrease) in Officer Loans
      Payable                                        - 0 -           (39,600)
   
          Net Cash Used in
           Financing Activities                      - 0 -          (119,374)
     
Net Increase (Decrease) in Cash                     10,932            (1,454) 

Cash Overdraft - Beginning of Period               (11,201)           (9,747)
   
Cash Overdraft - End of Period                  $     (269)        $ (11,201)
     
          See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
                       FOOD CONCEPTS, INC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              JUNE 30, 1997 AND 1996

NOTE 1 -BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A. Organization and Business
        Food Concepts, Inc. was organized under the laws of the State of Nevada
on June 16, 1982.  On October 27, 1995 the Company reorganized and acquired 
Savon Coffee, Inc. as a wholly owned subsidiary. On January 1, 1996, the Company
acquired Palm Beach Gourmet Coffee, Inc. as a wholly owned subsidiary.  The 
principal business of the Company is direct sales distributing of Gourmet 
Coffee, offering more than seventy coffee blends as well as gift coffee 
packages, private label coffee and special coffee roasting services.

     B. Significant Accounting Policies

        Basis of Accounting
        The Company policy is to prepare its financial statements using the 
accrual basis of accounting in accordance with generally accepted accounting
principles. 

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

        Cash and Cash Equivalents
        Cash and cash equivalents include cash on hand, cash in banks, and any
highly liquid investments with a maturity of three months or less at the time of
purchase.

        The Company and its Subsidiaries maintain cash and cash equivalent 
balances at several financial institutions which are insured by the Federal
Deposit Insurance Corporation up to $100,000.  At June 30, 1997 and 1996 there 
is no concentration of credit risk from uninsured bank balances.

        Inventory
        Inventory is valued at the lower of cost or market determined by the 
weighted average method.  At June 30, 1997, the Company's inventory is largely 
held in various coffee blends, flavorings and supplies, approximately as 
follows:
                                                1997 
               Raw Materials                $117,843
               Finished Goods                 34,933
                                            $152,776
     
<PAGE>
                      FOOD CONCEPTS, INC AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           JUNE 30, 1997 AND 1996



NOTE 1 -BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con't)

        Property, Equipment and Depreciation
        Property and equipment are recorded at cost.  The Company charges 
expenditures for additions or major replacements to the asset accounts.  The 
Company provides for depreciation using the straight-line method over the 
estimated useful lives of the assets (5-10 years).

        Income Taxes
        In February 1992, the Financial Accounting Standards Board issued 
Statement on Financial Accounting Standards 109 of "Accounting for Income 
Taxes."  Under Statement 109, deferred tax assets and liabilities are recognized
for the estimated future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and 
their respective tax basis.

         Deferred tax assets and liabilities are measured using enacted tax 
rates in effect for the year in which those temporary differences are expected 
to be recovered or settled.  Under Statement 109, the effect on deferred tax 
assets and liabilities of a change in tax rates is recognized in income in the 
period that includes the enactment date.

          Net Income (Loss) Per Common Share
          Net income (loss) per common share is computed by dividing net  income
(loss) by the weighted average number of common shares outstanding during the 
period.  For the year ended June 30, 1997 and 1996, the Company's weighted 
average common shares outstanding were 13,750,911 and 2,308,900 respectively. 

NOTE 2 -PROPERTY, PLANT AND EQUIPMENT
                                                    1997  
Consists of the Following:

                   Equipment                    $ 59,062 
                   Office Furniture and
                      Equipment                    1,235 
                   Leasehold Improvements          8,018 
                      Total                     $ 68,315 
                   Less:  Accumulated                
                          Depreciation           (38,385)

                                                $ 29,930 

         Depreciation expense for the year ended June 30, 1997 and 1996 amounted
to $11,801 and $9,876, respectively.
<PAGE>
                     FOOD CONCEPTS, INC AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 1997 AND 1996

NOTE 3 -     NOTES PAYABLE
                                                    1997 
             Loan factor                        $  7,245 
                 Total Notes Payable            $  7,245 

NOTE 4 -MAJOR CUSTOMERS

Major customer sales are presented in tabular form as follows:

             Period Ended     Christmas Tree Shop    Anron Coffee & Tea Inc.
             June 30, 1997     $ 13,103     20%       $   - 0 -     0%
             June 30, 1996     $208,800     28%       $ 186,400    25%

NOTE 5 -LEGAL PROCEEDINGS

        Coffee Holding Company, Inc. has filed a lawsuit against Savon Coffee,
Inc. in the amount of $7,524 plus a percentage of gross profit in the amount of
18% for the period from January 1993 to August, 1993.  This action was 
instituted against Savon Coffee, Inc. on March 16, 1994 in the Supreme Court of
the State of New York, County of Kings, for not fulfilling an agreement to
purchase coffee exclusively from Coffee Holding Company.

         On July 3, 1996 the Company commenced an action in the Circuit Court 
of the Seventeenth Judicial Circuit in and for Broward County, Florida bearing 
docket number 96-09431-11 entitled Food Concepts, Inc. vs Lasorda's Dug Out, 
Inc., a Florida corporation, et al.  The Company is seeking damages in the 
amount of $200,000 resulting from the non-payment of outstanding loans and 
other payments assigned to the Company under the rights of an oral contract.

NOTE 6 -ACQUISITIONS

        A.  On October 27, 1995, the Company acquired all of the issued and 
outstanding common stock of Savon Coffee, Inc., whose principal business 
consists of manufacture and direct sales distributing of Gourmet Coffee, for 
20,000,000 shares (pre-split) of common stock (85.6% of the Company's 
shares).  This business combination has been treated as a reverse acquisition 
that was accounted for as a recapitalization of Savon Coffee, Inc. using 
purchase method accounting.

        B.  On January 1, 1996, the Company acquired all of the issued and 
outstanding common stock of Palm Beach Gourmet Coffee, Inc., whose principal 
business is direct sales of Gourmet Coffee, in exchange for 50,000 shares of 
common stock of the Company.  The acquisition was accounted for under the 
purchase method of accounting.  Under the purchase method of accounting the 
acquired company's activity is included in the financial statements from the 
date of acquisition.
<PAGE>

                   FOOD CONCEPTS, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           JUNE 30, 1997 AND 1996


NOTE 7 -LEASING ARRANGEMENTS

        Operating Lease

        The Company conducts its operation from facilities that are leased 
under a five year lease ending April 3, 2001.  The lease calls for monthly 
rent payments starting in February, 1996 of $2,692.00 per month plus a 
pro-rata share of real property taxes.  The Company also has various leases 
with various expiration dates.

         Future Minimum Lease Payments

         Future minimum lease payments for operating leases at June 30, 1997
are:

         Year Ended                          Operating 
          June 30                            Leases  
            1998                              50,391  
            1999                              45,663  
            2000                              41,789  
            2001                              30,758  

            Total Minimum Payments          $168,601  

NOTE 8 - COMMITMENTS AND CONTINGENCIES

         A Subsidiary of the Company has incurred approximately $5,210 plus 
interest and penalties of unpaid payroll tax liabilities to the Internal 
Revenue Service.  A payment plan of $500 per month has been worked out with 
the government on the satisfaction of this outstanding liability.  It is to 
begin September 15, 1996.

NOTE 9 - DEFERRED INCOME TAXES

         As discussed in Note 1, the Company has applied the provision of 
Statement 109.  The significant components of deferred income tax benefit 
arising from net operating loss curry forwards of approximately $200,000 is as 
follows at June 30, 1997:

               Deferred Tax Benefit         $ 18,355 
               Valuation Allowance           (18,355)
                                            $  - 0 -


               The valuation allowance has been estimated at 100%


<PAGE>
                    FOOD CONCEPTS, INC. AND SUBSIDIARIES
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 1997 AND 1996


NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION
                         
                                       Year Ended           Year Ended 
                                    June 30, 1997        June 30, 1996

                    Taxes Paid          $  - 0 -              $  - 0 -

                    Interest Paid       $ 11,620              $ 20,586


NOTE 11 - SUBSEQUENT EVENT

          On October 21, 1997 the Company intends to acquire Tri-Star Medical 
Group, Inc.  The transaction will be executed through a reverse acquisition.

          Tri-Star Medical Group, Inc. is a holding company that acquires and 
manages businesses in the medical service industry.