<PAGE>

                                                                    EXHIBIT 99.1

                              INFORMATION STATEMENT

                              OVERHILL CORPORATION

                                 October 8, 2002

Dear Stockholder:

     This information statement is being furnished in connection with the
distribution by Overhill Corporation of all the outstanding shares of common
stock, par value $0.01 per share, of Overhill Farms, Inc. it owns to the holders
of Overhill Corporation common stock. Overhill Corporation currently owns 99% of
the issued and outstanding shares of Overhill Farms, Inc. common stock. If you
are a holder of our common stock on September 30, 2002, the record date for the
spin-off, you will receive one share of common stock of Overhill Farms, Inc. for
every two shares of common stock of Overhill Corporation that you own on that
date. The number of shares of Overhill Corporation common stock that you own
will not change as a result of the spin-off. We expect the shares to be
distributed to Overhill Corporation stockholders on or about October 30, 2002.
After the distribution, the stockholders of Overhill Corporation on the record
date will own approximately 74% of Overhill Farms, Inc. capital stock on a fully
diluted basis.

     Following the spin-off, Overhill Corporation will focus on its business as
a distributor of forestry and construction equipment and related activities.
Prior to the spin-off, Overhill Corporation intends to delist its common stock
from the American Stock Exchange and arrange for quotation of its common stock
on the OTC Bulletin Board under a symbol to be designated prior to quotation. In
connection with the spin-off, Overhill Corporation intends to change its name to
"TreeCon Resources, Inc." Overhill Corporation stockholders approved the name
change in September 2001.

     Overhill Farms, Inc. is a value-added manufacturer of quality frozen food
products and a provider of custom prepared foods. Following the spin-off,
Overhill Farms, Inc. will be a separate independent public company. There is no
current public trading market for the Overhill Farms, Inc. common stock.
Overhill Farms, Inc.'s common stock has been approved for listing on the
American Stock Exchange under the symbol "OFI."

     No vote of stockholders is required in connection with the spin-off. We are
not asking you for a proxy and you are not requested to send us a proxy. It is
anticipated that the spin-off will be tax-free to United States stockholders and
will not require any action on your part. You do not have to pay for the shares
of Overhill Farms, Inc. common stock that you will receive in the spin-off, nor
do you have to surrender or exchange shares of our common stock in order to
receive your shares of Overhill Farms, Inc. common stock. The number of shares
of TreeCon Resources, Inc. common stock that you own will not change as a result
of the spin-off.

     The enclosed information statement contains information about the spin-off
of Overhill Farms, Inc. and about its business, management and financial
performance. We encourage you to read all of these materials carefully.

                                          Sincerely,

                                          James Rudis
                                          Chairman of the Board and
                                          Chief Executive Officer

<PAGE>

                   INFORMATION STATEMENT DATED OCTOBER 8, 2002
                              FOR INFORMATION ONLY

                              INFORMATION STATEMENT

                                     ------

                              OVERHILL CORPORATION

                                   SPIN-OFF OF

                              OVERHILL FARMS, INC.

                                     ------

     Overhill Corporation is furnishing you with this information statement in
connection with the spin-off by Overhill Corporation of all of the outstanding
shares of common stock of Overhill Farms, Inc. it owns to stockholders of
Overhill Corporation. Overhill Corporation currently owns 99% of the issued and
outstanding shares of Overhill Farms, Inc. common stock. Overhill Corporation
will accomplish the spin-off by distributing to the holders of record of its
common stock all of its shares of Overhill Farms, Inc. common stock. Overhill
Corporation will distribute one share of common stock of Overhill Farms, Inc.
for every two shares of common stock of Overhill Corporation held as of the
close of business on September 30, 2002. After the distribution, the
stockholders of Overhill Corporation on the record date will own approximately
74% of Overhill Farms, Inc. capital stock on a fully diluted basis. The actual
number of our shares to be distributed will depend on the number of Overhill
Corporation shares outstanding on that date. The number of shares of Overhill
Corporation common stock that you own will not change as a result of the
spin-off.

     There is no current public trading market for the Overhill Farms, Inc.
common stock. Overhill Farms, Inc.'s common stock has been approved for listing
on the American Stock Exchange under the symbol "OFI."

     Prior to the spin-off, Overhill Corporation intends to delist its common
stock from the American Stock Exchange and arrange for quotation of its common
stock on the OTC Bulletin Board under a symbol to be designated prior to
quotation. In connection with the spin-off, Overhill Corporation intends to
change its name to "TreeCon Resources, Inc."

  OWNING SHARES OF OVERHILL FARMS, INC. COMMON STOCK WILL ENTAIL RISKS. PLEASE
                    READ "RISK FACTORS" BEGINNING ON PAGE 8.

   NO VOTE OF STOCKHOLDERS IS REQUIRED IN CONNECTION WITH THE SPIN-OFF. WE ARE
    NOT ASKING YOU FOR A PROXY AND YOU ARE NOT REQUESTED TO SEND US A PROXY.

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
    COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF
    THIS INFORMATION STATEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
                       THE CONTRARY IS A CRIMINAL OFFENSE.

     THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
                 SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

                                     ------

            The date of this information statement is October 8, 2002

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                                TABLE OF CONTENTS

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                                               Page
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Summary ......................................   1
Risk Factors .................................   8
Cautionary Statement as to Forward-Looking
  Statements .................................  17
The Spin-off .................................  18
Capitalization ...............................  23
Selected Financial Data ......................  24
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations .................................  25
Business .....................................  34
Management ...................................  38
Principal Stockholders .......................  44
Description of Capital Stock .................  46
Certain Transactions .........................  52
Where You Can Find More Information ..........  55
</TABLE>

                                        i

<PAGE>

                                     SUMMARY

     You should read this summary together with the entire information statement
including the more detailed information in the consolidated financial statements
and related notes appearing elsewhere in this information statement. References
to "we," "us," "our," "Overhill Farms, Inc." or "the Company" mean Overhill
Farms, Inc. References to "Overhill Corporation" mean Overhill Corporation and
its subsidiaries and divisions.

Who We Are

     Overhill Farms, Inc. is a value-added manufacturer of quality frozen food
products including entrees, plated meals, meal components, soups, sauces,
poultry, meat and fish specialties. We provide custom prepared foods to a number
of prominent customers such as Albertson's, Jenny Craig, Carl's Jr., Jack in the
Box, Panda Express, Schwan's and King's Hawaiian as well as most domestic
airlines, including American Airlines, United Airlines and Delta Airlines. We
manufacture products in the retail and foodservice areas with branded and
private label entrees and components. Historically, we have served four
industries: airlines, weight loss, foodservice and retail. Revenue for the
fiscal year ended September 30, 2001 was $162.2 million, compared to $145.4
million for the fiscal year ended October 1, 2000. Our operating income was $9.5
million and $10.8 million in the fiscal years ended September 30, 2001 and
October 1, 2000, respectively. Revenue and operating income for the nine month
period ended June 30, 2002 were $101.9 million and $5.3 million, respectively,
compared to revenue and operating income of $119.6 million and $7.3 million,
respectively, for the nine month period ended July 1, 2001. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business."

Our History

     In May 1995, we acquired all of the operating assets of IBM Foods, Inc. for
$31.3 million plus the assumption of certain liabilities of the acquired
business. While our business is nationwide, our headquarters are located in
Vernon, California, and we have facilities throughout Southern California.
During August 2000, we purchased the operating assets and trademarks of the
Chicago Brothers food operations from a subsidiary of Schwan's Sales
Enterprises, Inc. for $4.2 million, consisting of cash of $3.3 million and a
note from us payable to the seller for $900,000. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business."

     After a strategic review initiated in fiscal year 2001, Overhill
Corporation concluded that our company would be able to grow faster and be a
stronger competitor as a separate company. As a separate company, we believe
that we will be better able to focus on our own strategic priorities and will
have more efficient access to the financial markets than we could as part of
Overhill Corporation. See "The Spin-off--Reasons for the Spin-off."

     In connection with the spin-off, Overhill Corporation will change its name
to "TreeCon Resources, Inc."

Our Strategy

     Our strategy is to be the leading developer and manufacturer of value-added
food products and provider of custom prepared foods. We intend to create
superior value for our stockholders by continuing to execute our growth and
operating strategies. We employ the following corporate strategies:

        .   focus on sectors with attractive growth characteristics;

        .   invest in and operate efficient production facilities;

        .   provide customer service-oriented distribution;

        .   offer a broad range of products to customers in multiple channels of
            distribution; and

        .   continue to pursue growth through strategic acquisitions and
            investments.

                                        1

<PAGE>

The Spin-off

     Overhill Corporation will distribute one share of common stock of Overhill
Farms, Inc. for every two shares of common stock of Overhill Corporation held by
holders of Overhill Corporation common stock as of the close of business on
September 30, 2002. You will not pay for the shares of Overhill Farms, Inc.
common stock you will receive in the spin-off, and the spin-off should not be
taxable to you. The number of shares of Overhill Corporation common stock that
you own will not change as a result of the spin-off. We expect the shares to be
distributed to Overhill Corporation stockholders on or about October 30, 2002.

Questions and Answers About the Spin-off

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What is the spin-off? ..................  In the spin-off, Overhill Corporation will distribute to its
                                          stockholders all of the shares of Overhill Farms, Inc. that it owns.
                                          For every two shares of Overhill Corporation common stock that you
                                          own of record on September 30, 2002, you will receive one share of
                                          Overhill Farms, Inc. common stock. For example, if you own 100
                                          shares of Overhill Corporation common stock on September 30, 2002,
                                          you will receive 50 shares of Overhill Farms, Inc. common stock in
                                          the spin-off in addition to your 100 shares of Overhill Corporation
                                          stock, which you will retain. We expect the shares to be distributed
                                          to Overhill Corporation stockholders on or about October 30, 3002.

                                          Following the spin-off, Overhill Farms, Inc. will be a separate
                                          company from Overhill Corporation, no longer owned in any way by
                                          Overhill Corporation. The number of shares of Overhill Corporation
                                          common stock you own will not change as a result of the spin-off.

Why are we being spun-off by Overhill
Corporation? ...........................  After a strategic review initiated in fiscal year 2001, Overhill
                                          Corporation concluded that its food group, comprised of our company,
                                          would be able to grow faster and more effectively as a separate
                                          company. As a separate company, we believe we will be better able to
                                          focus on our own strategic priorities and have more efficient access
                                          to the financial markets than we could as part of Overhill
                                          Corporation. See "The Spin-off--Reasons for the Spin-off."

                                          We believe the spin-off will enable our business to expand and grow
                                          more quickly and efficiently in the following ways:

                                          - Our business, involving the production of high quality entrees,
                                          plated meals, meal components, soups, sauces and poultry, meat and
                                          fish specialties, has different fundamentals, growth characteristics
                                          and strategic priorities than Overhill Corporation's forestry
                                          segment, which is a distributor of forestry and construction
                                          equipment and related activities. The separation of our food
                                          business from the forestry business will enable us to focus on our
                                          own strategic priorities, increase our ability to capitalize on
                                          growth opportunities for our businesses and enhance our ability to
                                          respond more quickly to changes in the competitive markets in which
                                          we operate.

                                          - The spin-off will enable us to have direct access to the financial
                                          markets, both debt and equity. We intend to raise our own equity
                                          capital that we will use to expand our businesses by accelerating
                                          new higher-margin product introductions through increased product
</TABLE>

                                        2

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                                          development investment; to further develop our manufacturing
                                          capabilities; and to pursue selected acquisitions.

                                          - The spin-off will enable us to recruit, retain and
                                          motivate key employees by providing them with stock-based
                                          compensation incentives directly tied to the success of our
                                          businesses.

What will I receive in the spin-off? ...  For every two shares of Overhill Corporation common stock
                                          that you own of record on September 30, 2002, you will
                                          receive one share of our common stock. For example, if you
                                          own 100 shares of Overhill Corporation common stock on
                                          September 30, 2002, you will receive 50 shares of Overhill
                                          Farms, Inc. common stock in the spin-off in addition to your
                                          100 shares of Overhill Corporation common stock, which you
                                          will retain. The number of shares of Overhill Corporation
                                          common stock that you own will not change as a result of the
                                          spin-off.

What do I have to do to participate in
the spin-off? ..........................  Nothing. No stockholder vote is required for the spin-off.
                                          You do not need to mail in Overhill Corporation stock
                                          certificates to receive shares of Overhill Farms, Inc. The
                                          number of shares of Overhill Corporation common stock you
                                          own will not change as a result of the spin-off.

How will Overhill Corporation distribute
Overhill Farms, Inc. common stock to
me? ....................................  Prior to the spin-off Overhill Corporation will deliver all
                                          of the shares of our common stock owned by it to the
                                          distribution agent for distribution. On or about October 30,
                                          2002, the distribution agent will mail certificates for
                                          whole shares of our common stock to Overhill Corporation
                                          stockholders of record on September 30, 2002. However, if
                                          you sold any shares of Overhill Corporation common stock
                                          after September 30, 2002, the right to receive shares of our
                                          common stock in the spin-off transferred with the sale of
                                          those shares of Overhill Corporation common stock in
                                          accordance with the rules of the American Stock Exchange.
                                          See "The Spin-off--Manner of Effecting the Spin-off."

What if I hold my shares of Overhill
Corporation through my stockbroker,
bank or other nominee? .................  If you hold your Overhill Corporation shares through your
                                          stockbroker, bank or other nominee, you are probably not a
                                          stockholder of record. Your receipt of shares of our common
                                          stock depends on your arrangements with the nominee that
                                          holds your Overhill Corporation shares for you. We expect
                                          that stockbrokers, banks and other nominees generally will
                                          credit their customers' accounts with our common stock
                                          promptly after the effective date of the spin-off, but you
                                          should check with your stockbroker, bank or other nominee.
                                          We do not control, nor are we affiliated with, the
                                          stockbrokers, banks or other nominees that may hold your
                                          shares of Overhill Corporation common stock for you.
                                          Following the spin-off you may instruct your stockbroker,
                                          bank or other nominee to transfer your shares of our common
                                          stock into your own name.

How will you treat fractional shares? ..   If you are otherwise entitled to receive a fractional share
                                          of our common stock, you will receive cash instead of the
                                          fractional share.
</TABLE>

                                        3

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<TABLE>
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                                          Fractional shares will be aggregated and sold by the
                                          distribution agent, which will distribute to you your
                                          portion of the cash proceeds promptly after the spin-off. No
                                          interest will be paid on any cash distributed instead of
                                          fractional shares. See "The Spin-off--Manner of Effecting
                                          the Spin-off."

What is Overhill Farms, Inc.'s dividend
policy? ................................  We currently anticipate that no cash dividends will be paid
                                          on our common stock in the foreseeable future in order to
                                          conserve cash for use in our businesses, including possible
                                          future acquisitions. Our board of directors will
                                          periodically re-evaluate this dividend policy taking into
                                          account our operating results, capital needs, the terms of
                                          our existing financing arrangements and other factors. Also,
                                          our financing arrangements with our existing secured lenders
                                          prohibit us from paying dividends. See "Risk Factors--Risks
                                          Relating to the Ownership of Our Common Stock--We may not
                                          pay dividends on our common stock" and "Description of
                                          Capital Stock."

How does Overhill Farms, Inc. common
stock differ from Overhill Corporation
common stock? ..........................  Our common stock and Overhill Corporation common stock will
                                          be different securities and will not trade together or be
                                          valued alike. Our company and Overhill Corporation will be
                                          separate companies with different management, fundamentals,
                                          growth characteristics and strategic priorities. However, as
                                          with Overhill Corporation common stock, our common stock
                                          will have the following characteristics:

                                          - be fully paid and nonassessable;

                                          - have one vote per share, with no right to cumulate votes;
                                          and

                                          - carry no preemptive rights; See "The Spin-off--Results of
                                          the Spin-off" and "Description of Capital Stock."

How will Overhill Farms, Inc. common
stock trade? ...........................  Currently, there is no public trading market for the
                                          Overhill Farms, Inc. common stock. Overhill Farms Inc.'s
                                          common stock has been approved for listing on the American
                                          Stock Exchange under the symbol "OFI." See "The
                                          Spin-off--Listing and Trading of Our Common Stock."

How will Overhill Corporation common
stock trade? ...........................  Prior to the spin-off, Overhill Corporation intends to
                                          delist its common stock from the American Stock Exchange and
                                          arrange for quotation of its common stock on the OTC
                                          Bulletin Board under a symbol to be designated prior to
                                          quotation. Overhill Corporation common stock will not trade
                                          on an ex-distribution basis prior to the spin-off. In
                                          connection with the spin-off, Overhill Corporation will
                                          change its name to "TreeCon Resources, Inc." See "The
                                          Spin-off--Listing and Trading of Our Common Stock."
</TABLE>

                                        4

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Is the spin-off taxable for United
States federal income tax purposes? ....  The spin-off is conditioned upon our receipt of an opinion
                                          from Ernst & Young LLP to the effect that, among other
                                          things, the spin-off should qualify as a tax-free spin-off
                                          to Overhill Corporation stockholders and to Overhill
                                          Corporation for federal income tax purposes. See "The
                                          Spin-off--Material Federal Income Tax Consequences."

Will we be related to Overhill
Corporation in any way after the
spin-off? ..............................  Overhill Corporation will not own any of our common stock
                                          after the spin-off. James Rudis, our President, Chief
                                          Executive Officer and Chairman of the Board of Directors,
                                          will remain as a director of Overhill Corporation for a
                                          period of no greater than one year after the spin-off to
                                          facilitate the transition of Overhill Corporation and
                                          Overhill Farms, Inc. into two separate companies. See "The
                                          Spin-off--Results of the Spin-off." In addition, we
                                          currently anticipate that Harold Estes, President of Texas
                                          Timberjack, Inc., a subsidiary of Overhill Corporation, and
                                          one of our principal stockholders following the spin-off,
                                          will join our board of directors after the spin-off. See
                                          "Principal Stockholders" and "Management."

Are there any risks entailed in owning
our stock? .............................  Yes. Stockholders should consider carefully the matters
                                          discussed in the section of this information statement
                                          called "Risk Factors."

What do we intend to do in preparation for the spin-off?

   Board Appointments ..................  Our board of directors currently consists of James Rudis,
                                          Richard A. Horvath, William E. Shatley and Geoffrey A.
                                          Gerard. Additional directors may be elected or appointed to
                                          our board of directors in connection with the spin-off,
                                          including additional outside directors. We also intend to
                                          appoint directors to the Audit Committee and the
                                          Compensation Committee as described under the section
                                          entitled "Management--Board of Directors and Committees."
                                          See "Management."

   Stock Option Plan ...................  We have instituted the 2002 Employee Stock Option Plan of
                                          Overhill Farms, Inc., to be effective upon the completion of
                                          the spin-off. We intend to ask our stockholders to approve
                                          the plan at our first annual meeting of stockholders after
                                          the spin-off. See "Management--2002 Employee Stock Option
                                          Plan of Overhill Farms, Inc."

   Contracts/financing arrangements ....  Immediately prior to the completion of the spin-off, we
                                          expect to receive formal consents to the spin-off from our
                                          senior creditor and our senior subordinated creditor. At
                                          that time, we expect to enter into amendments and
                                          restatements, as appropriate, to our financing agreements
                                          and other arrangements with them. We have agreed in
                                          principle with each of these creditors on the substantial
                                          forms of these amendments and restatements. In addition, in
                                          partial payment of approximately $11.0 million in amounts
                                          owed to us by Overhill Corporation for the payment of loans
                                          we made in the context of our parent-subsidiary
                                          relationship, Overhill Corporation will transfer to us two
                                          promissory notes made in the amounts of $207,375 and
                                          $184,875, and we intend to cancel the remaining net amounts
                                          owed to us by Overhill Corporation. See "Management's
                                          Discussion and
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                                        5

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<TABLE>
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                                          Analysis of Financial Condition and Results of
                                          Operations--Liquidity and Capital Resources" and "Certain
                                          Transactions."

Who should I contact for information
regarding the spin-off: ................  Stockholders of Overhill Corporation with questions relating
                                          to the spin-off should contact:

                                              James Rudis
                                              President and Chief Executive Officer
                                              Overhill Corporation
                                              4800 Broadway, Suite A
                                              Addison, Texas 75001
                                              (972) 386-0101

                                          The distribution agent for our common stock in the spin-off
                                          and the transfer agent and registrar for our common stock
                                          after the spin-off is:

                                              American Stock Transfer and Trust Company
                                              59 Maiden Lane, Plaza Level
                                              New York, New York 10038
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                                        6

<PAGE>

Selected Financial Data

     The following table sets forth selected historical financial data of
Overhill Farms, Inc. The selected financial data as of and for each of the last
five fiscal years has been derived from the consolidated financial statements of
Overhill Farms, Inc. which have been audited by Ernst & Young LLP, independent
auditors. Selected financial data for the nine months ended June 30, 2002 and
July 1, 2001 has been derived from the unaudited consolidated financial
statements of Overhill Farms, Inc.

     The selected historical statement of income data set forth below may not
reflect the many significant changes that will occur in the operations and
capitalization of our company as a result of the spin-off. Before the spin-off,
we operated as part of Overhill Corporation. Because the data reflect periods
during which we did not operate as a separate, independent public company, the
data may not reflect the results of operations or the financial position that
would have resulted if we had operated as a separate, independent public company
during the periods shown. In addition, the data may not necessarily be
indicative of our future results of operations or financial position. The
historical data should be read in conjunction with sections entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and the related notes
included elsewhere in this information statement.

<TABLE>
<CAPTION>
                                   Nine Months Ended                            Fiscal Year Ended
                                 -------------------   ------------------------------------------------------------------------
                                 June 30,     July 1,   September 30,  October 1,  September 26,  September 27,  September 28,
                                   2002        2001          2001         2000          1999          1998           1997
                                   ----        ----          ----         ----          ----          ----           ----
                                      (unaudited)
<S>                              <C>         <C>        <C>            <C>         <C>            <C>            <C>
Income Statement Data (in
thousands, except per share
data):

Net Revenues                     $101,928    $ 119,586    $ 162,158    $ 145,418     $ 113,016      $ 93,349        $96,177

Operating Income                    5,266        7,339        9,483       10,813         7,384         4,977          4,953

Income (Loss) Before
  Extraordinary Items                 683        1,645        2,242        3,331         1,002          (136)           675

Net Income (Loss)                     683        1,645        2,242        2,492         1,002          (506)           675

Net Income (Loss) per share
  - Basic*                         873.05     2,108.19     2,870.10     3,216.04      1,293.14       (652.80)        870.85

Net Income (Loss) per share
  - Diluted*                       712.39     1,733.52     2,362.01     2,596.28        987.37       (652.80)        674.91
</TABLE>

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<CAPTION>
                               As of Nine Months Ended                         As of Fiscal Year Ended
                              ------------------------   ------------------------------------------------------------------------
                                 June 30,      July 1,   September 30,  October 1,  September 26,  September 27,  September 28,
                                   2002         2001         2001          2000         1999          1998           1997
                                   ----         ----         ----          ----         ----          ----           ----
                                      (unaudited)
<S>                              <C>           <C>       <C>            <C>         <C>            <C>            <C>
Balance Sheet Data (in
thousands):

Total Assets                      $54,843      $55,296      $54,207       $57,946      $38,987       $34,108        $30,076

Long-Term Debt                     23,979       35,003       32,951        40,860       32,355        22,308         14,982

Total Liabilities                  51,560       53,024       51,338        58,864       42,747        38,871         28,033

Retained Earnings                   7,495        6,215        6,812         4,570        2,078         1,076          1,582

Stockholders' Equity                3,243        2,272        2,869          (918)      (3,760)       (4,763)         2,043
</TABLE>

---------------------------------------------
 *   Reference is made to Note 9 to the Company's consolidated financial
     statements for the period ended June 30, 2002 and to Note 13 to the
     Company's consolidated financial statements for each of the three years
     ended September 30, 2001, for pro-forma presentations of earnings per share
     after giving retroactive effect to a 12,010 for 1 stock split expected to
     occur prior to the spin-off.

                                        7

<PAGE>

                                  RISK FACTORS

     You should carefully consider all the information we have included in this
information statement. In particular, you should carefully consider the risk
factors described below. In addition, please read "Cautionary Statement as to
Forward-Looking Statements" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" where we describe additional
uncertainties associated with our business and certain forward-looking
statements included in this information statement.

                         Risks Relating to the Spin-off

The spin-off could result in significant tax liability.

     The spin-off is conditioned on the receipt by Overhill Corporation of an
opinion from Ernst & Young LLP to the effect that, among other things, the
spin-off should qualify as a tax-free spin-off to Overhill Corporation's
stockholders and Overhill Corporation for federal income tax purposes. See "The
Spin-off--Material Federal Tax Consequences." The opinion is based upon various
factual representations and assumptions, as well as upon certain undertakings.
We are not aware of any facts or circumstances that would cause the
representations and assumptions to be untrue or incomplete in any material
respect. If, however, any of those factual representations or assumptions were
untrue or incomplete in a material respect, any undertaking was not complied
with, or the facts upon which that opinion is based were materially different
from the facts at the time of the spin-off, the spin-off may not qualify for
tax-free treatment.

     If the spin-off does not qualify for tax-free treatment for United States
federal income tax purposes, then, in general, a very substantial tax would be
payable by Overhill Corporation and Overhill Corporation stockholders. In
general, Overhill Corporation would be subject to tax as if it had sold the
common stock of our company in a taxable sale for its fair market value. The
Overhill Corporation stockholders would be subject to tax as if they had
received a taxable distribution equal to the fair market value of our common
stock that was distributed to them. See "The Spin-off--Material Federal Tax
Consequences." Although the taxes described above generally would be imposed on
Overhill Corporation and its stockholders, we would in certain circumstances be
liable for all or a portion of such taxes.

We could be liable for Overhill Corporation's tax liability if the spin-off is
taxable.

     Under United States federal income tax laws, Overhill Corporation and we
would be jointly and severally liable, and we could be required to pay for
Overhill Corporation's federal income taxes resulting from the spin-off being
taxable. This means that even if we do not have to indemnify Overhill
Corporation for any liabilities and expenses if the spin-off fails to be
tax-free, we may still be liable for any part of, including the whole amount of,
these liabilities and expenses. In certain circumstances, however, Overhill
Corporation may be required to indemnify us for such liabilities and expenses.
See "The Spin-off--Material Federal Tax Consequences."

Events subsequent to the spin-off could result in significant tax liability.

     Under United States federal income tax laws, even if the spin-off qualifies
for tax-free treatment, Overhill Corporation may, nevertheless, be subject to
tax if acquisitions or issuances of either our common stock or Overhill
Corporation stock following the spin-off cause the stockholders of Overhill
Corporation (determined as of the effective time of the spin-off) to
subsequently own less than a majority of outstanding shares of either Overhill
Corporation or us. In particular, this tax will apply if such issuances or
acquisitions occur as part of a plan or series of related transactions that
include the spin-off. For this purpose, any acquisitions or issuance of Overhill
Corporation stock or our stock within two years before or after the spin-off are
presumed to be part of such a plan, although Overhill Corporation may rebut that
presumption. If the subsequent acquisitions or issuance of either the stock of
Overhill Corporation or our stock triggers this tax, Overhill Corporation will
be subject to tax on the gain that would have resulted from a sale of our stock
distributed in the spin-off.

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Our historical financial information may not be representative of our results as
a separate, stand alone company.

     The historical financial information we have included in this information
statement may not reflect what our results of operations, financial position and
cash flows would have been had we been a separate, stand-alone public company
during the periods presented or what our results of operations, financial
position and cash flows will be in the future. This is because:

         .   the information does not reflect changes that we expect to occur in
             the future as a result of our separation from Overhill Corporation,
             including tax, employee, transitional service matters and
             establishing new offices; and

         .   as we transition into a stand-alone public company, we will incur
             new additional costs, such as transaction costs and ongoing costs
             related to being a public company.

     For additional information, see "Selected Financial Data" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

We will not be able to rely on Overhill Corporation for future capital
requirements.

     In the past, some of our borrowings have been guaranteed by Overhill
Corporation. However, following the spin-off, Overhill Corporation will no
longer provide any guarantees to finance our working capital or other cash
requirements.

     We believe that our capital requirements will vary greatly from quarter to
quarter, depending on, among other things, capital expenditures, fluctuations in
our operating results and financing activities. We believe that our current cash
and cash equivalents, our financing arrangements with our existing secured
creditors described under "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources," and cash
flows from operations after the spin-off, will be sufficient to satisfy our cash
requirements for the foreseeable future. Future equity financings could dilute
the relative percentage ownership of the then existing holders of our common
stock. Future debt financings could involve restrictive covenants that limit our
ability to take certain actions. We may or may not be able to obtain financing
with interest rates as favorable as those historically obtained using the
guarantees of Overhill Corporation, if at all. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources."

If we are unable to obtain certain third-party consents to the spin-off, our
ability to implement our business strategy as currently planned could be
materially adversely affected.

     Immediately prior to the completion of the spin-off, we expect to receive
formal consents to the spin-off from our senior creditor and our senior
subordinated creditor. At that time, we expect to enter into amendments and
restatements, as appropriate, to our financing agreements and other arrangements
with them. We have agreed in principle with each of these creditors on the
substantial forms of these amendments and restatements. These consents,
amendments and restatements are necessary to comply with certain provisions in
our existing financing agreements with each of these creditors that are affected
by the spin-off and related transactions. The forms of these amendments and
restatements contain certain conditions with respect to the completion of the
spin-off and related transactions. The consents of our senior and senior
subordinated creditors to the spin-off are conditioned upon our satisfying those
conditions. If we do not satisfy those conditions or do not obtain waivers of
those conditions, we would not have the necessary consent, and we will be
prohibited from completing the spin-off and related transactions. Although we
believe we will satisfy each of those conditions, the failure to satisfy them
would prevent us from completing the spin-off and could have a material adverse
effect on our ability to implement our business strategy. See "Summary--The
Spin-off--Questions and Answers About the Spin-off--What do we intend to do in
preparation for the spin-off?" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources."

                                        9

<PAGE>

Creditors of Overhill Corporation at the time of the spin-off may attempt to
challenge the spin-off as a fraudulent conveyance.

     If a court in a lawsuit by an unpaid creditor or representative of
creditors of Overhill Corporation, such as a trustee in bankruptcy, were to find
that, among other reasons, at the time of the spin-off, we or Overhill
Corporation,

         .   were insolvent,

         .   were rendered insolvent by reason of the spin-off,

         .   had actual intent to hinder, delay or defraud any creditors,

         .   were engaged in a business or transaction for which Overhill
             Corporation's or our remaining assets constituted unreasonably
             small capital, or

         .   intended to incur, or believed it would incur, debts beyond its
             ability to pay such debts as they matured,

the court may be asked to void the spin-off (in whole or in part) as a
fraudulent conveyance. The court could then require that the stockholders return
some or all of the shares of our common stock, or require Overhill Corporation
or us, as the case may be, to fund certain liabilities of the other company for
the benefit of creditors. The measure of insolvency for purposes of the
foregoing will vary depending upon the jurisdiction whose law is being applied.
Generally, however, each of Overhill Corporation and us, as the case may be,
would be considered insolvent if the fair value of its assets were less than the
amount of its liabilities or if it incurred debt beyond its ability to repay
such debt as it matures. Overhill Corporation believes, and we believe, that
each company will be solvent after the spin-off. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."

Overhill Corporation's ongoing litigation could cause the delay or cancellation
of the spin-off.

     In September 2002, two of the plaintiffs in the ongoing litigation
involving Overhill Corporation and certain of its current and past officers and
directors, including James Rudis and William E. Shatley, filed a second
application with the United States District Court for the District of Nevada to
enjoin the spin-off. The district court denied the motions to enjoin the
spin-off. Overhill Corporation has indicated that it will continue to vigorously
defend against any additional actions or claims advanced by the plaintiffs.
However, an adverse resolution of the application or other court action could
result in the delay or cancellation of the spin-off or in a court imposing other
requirements on us that could have a material adverse effect on our business and
financial condition. See "Legal Proceedings."

If the spin-off is not a legal dividend, it could be held invalid by a court.

     The dividend which effects the spin-off is subject to the Nevada corporate
law. We have reviewed Nevada law with counsel; however, we cannot assure you
that a court will not later determine that the spin-off was invalid under Nevada
law and reverse the spin-off. The resulting complications and costs could have a
material adverse effect on our financial condition and results of operations.

The combined post-spin-off value of Overhill Corporation shares and our shares
may not equal or exceed the pre-spin-off value of Overhill Corporation shares.

     Prior to the spin-off, Overhill Corporation will delist its common stock
from the American Stock Exchange and arrange for quotation of its common stock
on the OTC Bulletin Board. Our common stock has been approved for listing on the
American Stock Exchange and, following the spin-off, we expect that our common
stock will be listed and will trade on the American Stock Exchange. We cannot
assure you that after the distribution of one share of our common stock for
every two shares of issued and outstanding Overhill Corporation common stock,
the combined values of Overhill Corporation common stock and our common stock
after the spin-off will be equal to or greater than the trading price of
Overhill Corporation common stock prior to the spin-off. Until the market has
fully evaluated the business of Overhill Corporation without our business, the
price at which Overhill Corporation common stock trades may fluctuate
significantly. Similarly, until the market has fully evaluated our business, the

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<PAGE>

price at which our common stock trades may fluctuate significantly. See "--Our
historical financial information may not be representative of our results as a
separate, stand alone company" and "The Spin-off--Listing and Trading of Our
Common Stock."

                   Risks Related to Our Business and Industry

Our ability to compete effectively in the highly competitive food industry may
affect our operational performance and financial results.

     The food industry is highly competitive, and our continued success depends
in part on our ability to be an efficient producer in a highly competitive
industry. We face competition in all of our markets from large, national
companies and smaller, regional operators. Some of our competitors, including
other diversified food companies, are larger and may have greater financial
resources than we do. From time to time we experience price pressure in certain
of our markets as a result of competitors' promotional pricing practices as well
as market conditions generally. Our ability to reduce costs is limited to the
extent efficiencies have already been achieved. Our failure to reduce costs
through productivity gains or by eliminating redundant costs resulting from
acquisitions would weaken our competitive position. Competition is based on
product quality, distribution effectiveness, brand loyalty, price, effective
promotional activities and the ability to identify and satisfy emerging consumer
preferences. We may not be able to effectively compete with these larger, more
diversified companies. See "Business--Competition."

The loss or consolidation of any of our key customers could have a significant
negative impact on our financial results.

     The largest purchasers of our products, Panda Express, Jenny Craig, King's
Hawaiian, Albertson's and American Airlines, accounted for approximately 21%,
15%, 11%, 9% and 7%, respectively, of our sales during the nine months ended
June 30, 2002. We expect that our sales to these customers will continue to
constitute a significant percentage of our revenues. The loss of any of these
customers as an outlet for our products could significantly harm our competitive
position and operating results. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Overview" and "Business--Sales
and Marketing."

     In addition, the continued consolidation of food retailers and foodservice
distributors has somewhat reduced the number of customers for our products. The
additional consolidation of customers for our products could have a significant
adverse impact on our financial results. The resulting companies may choose to
terminate their relationship with us and purchase products from our competitors.
See "Business--Competition." Additionally, if our customers consolidate and grow
larger, our customers may demand lower pricing and more favorable terms.
Further, these customers may reduce inventories and increase their use of other
suppliers. If we fail to use our sales, marketing and manufacturing expertise to
respond to these trends, our volume growth could slow or we may need to lower
our prices or increase promotional support of our products, any of which would
adversely affect our profitability.

Decline in air travel may negatively impact our revenues and costs.

     A significant portion of our business is derived from the airline industry.
For fiscal year 2001, $54.7 million, or approximately 34% of our revenues, were
derived from our airline customers. For the nine months ended June 30, 2002,
$24.3 million, or approximately 24% of our revenues were derived from our
airline customers. The terrorist attacks on the World Trade Center in New York
and the Pentagon in Washington, D.C. using hijacked commercial aircraft have
been highly publicized. The tragic events of September 11, 2001 have
significantly adversely impacted our sales to airline-related customers. Though
the long-term effect of these events on the airline industry, airline revenues,
and on our business in particular, cannot be accurately determined at this time,
we estimate that sales to airline-related customers in fiscal 2002 will decrease
by 35% to 40% from 2001 levels. The impacts that these events may have on the
airline industry in general, and on our business in particular, are not known at
this time. The effects of these tragic events have included, among other things,
a decreased demand for air travel due to fears regarding additional acts of
terrorism and increased costs and reduced operations, including meal service, by
airlines due to cost reductions in response to a decline in air travel. In fact,
American Airlines and Delta Airlines, two of our largest airline customers
representing 10% and 12% of our sales during fiscal year 2001, respectively, and
7% and 8% of our sales for the nine months ended June 30, 2002, respectively,
have already reduced meal service on certain domestic flights. A significant
portion of our business focuses on the airline industry, and these effects,
depending

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<PAGE>

on their scope and duration, which we cannot predict at this time, could
negatively impact our financial position, results of operations or cash flows.
See "Business--Sales and Marketing."

We are subject to cost fluctuations in our operations that may adversely affect
our profitability.

     Our business operations may experience operating cost volatility caused by
external conditions, market fluctuations and changes in governmental policies.
For example, increases in our manufacturing costs and a decrease in our gross
profits and operating income in 2001 compared to 2000 were attributable in part
to expenses related to increased energy costs in our California-based
facilities. In addition, we use refrigerants in our business extensively, and
the cost of refrigerants has increased substantially over the past fiscal year.
Any substantial fluctuation in our manufacturing or operating costs, if not
offset by product price increases, hedging activities or improved efficiencies,
may have an adverse impact on our operating performance, business and financial
condition. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business--Manufacturing and Sourcing."

We are major purchasers of many commodities that we use for raw materials and
packaging, and price changes for the commodities we depend on may adversely
affect our profitability.

     The raw materials used in our business are largely commodities that
experience price volatility caused by external conditions, commodity market
fluctuations, currency fluctuations and changes in governmental agricultural
programs. Commodity price changes may result in unexpected increases in raw
material and packaging costs, and we may be unable to increase our prices to
offset these increased costs without suffering reduced volume, revenue and
income. Any substantial fluctuation in the prices of raw materials, if not
offset by increases in our sales prices, could have an adverse impact on our
profitability.

     We attempt to recover our commodity cost increases by increasing prices,
promoting a higher-margin product mix and obtaining additional operating
efficiencies. We may not be able to continue to offset raw material price
increases to the same extent in the future. We enter into contracts for the
purchase of raw materials at fixed prices, which are designed to protect us
against raw material price increases during their term. We also use paper
products, such as corrugated cardboard, aluminum products, and films and
plastics to package our products. Substantial fluctuations in prices of
packaging materials or continued higher prices of our raw materials could
adversely affect our operating performance and financial results. See
"Business--Manufacturing and Sourcing."

Concerns with the safety and quality of food products could cause customers to
avoid our products.

     We could be adversely affected if our customers and their customers lose
confidence in the safety and quality of certain food products. Adverse publicity
about these types of concerns, like the recent publicity about genetically
modified organisms, "mad cow disease" and foot and mouth disease in Europe,
whether or not valid, may discourage our customers from buying our products or
cause production and delivery disruptions. Any negative change in customer
perceptions about the safety and quality of our products could cause a material
adverse effect on our business and financial condition.

If our food products become adulterated or misbranded, we would need to recall
those items and may experience product liability claims if consumers are injured
as a result.

     Food products occasionally contain contaminants due to inherent defects in
those products or improper storage or handling. We have never been required to
recall any of our products. Under adverse circumstances food manufacturers may
need to recall some of their products if they become adulterated or misbranded
and may also be liable if the consumption of any of their products causes
injury. See "Business--Regulation." A widespread product recall or a significant
product liability judgment against us could cause products to be unavailable for
a period of time and a loss of customer confidence in our food products and
could have a material adverse effect on our business. If we are required to
defend against a product liability claim, whether or not we are found liable
under such a claim, we could incur substantial costs, our reputation could
suffer and our customers might substantially reduce their orders or ordering
from us. While we maintain insurance that we believe is adequate to cover this
type of loss, liability of this sort could require us to implement measures to
reduce our exposure to this liability, which may require us, among other things,
to expend substantial resources or to modify our product offerings or to make
changes to one or more of our business processes.

                                       12

<PAGE>

Any acquisitions that we undertake could be difficult to integrate, disrupt our
business, dilute our stockholder value and adversely affect our operating
results.

     Although we have no currently identified acquisition plans, we intend to
acquire or make investments in complementary businesses, technologies, services
or products from time to time as part of our long term business strategy.
Expansion of our operations in this manner would require significant additional
expenses and resources. Expansion also could strain our management, financial
and operational resources. If we acquire a company, we could have difficulty in
assimilating that company's personnel, operations, technology and software. In
addition, the key personnel of the acquired company may decide not to work for
us. We could also have to incur indebtedness to pay for any future acquisitions.
We also may issue equity securities to pay for any future acquisitions, which
could be dilutive to our existing stockholders.

Our business is subject to federal, state and local government regulations, the
impact of which could have a negative impact on our business and financial
position.

     Food manufacturing operations are subject to regulation by various federal,
state and local government entities and agencies. See "Business--Regulation." As
a producer of food products for human consumption, our operations are subject to
stringent production, packaging, quality, labeling and distribution standards,
including regulations mandated by the Federal Food and Drug Act. We cannot
predict whether future regulation by various federal, state and local
governmental entities and agencies would harm our business and financial
results.

     In addition, our business operations and the past and present ownership and
operation of our properties are subject to extensive and changing federal, state
and local environmental laws and regulations pertaining to the discharge of
materials into the environment, the handling and disposition of wastes
(including solid and hazardous wastes) or otherwise relating to protection of
the environment. We cannot assure you that additional environmental issues
relating to presently known matters or identified sites or to other matters or
sites will not require additional, currently unanticipated investigation,
assessment or expenditures.

We may not be able to protect our intellectual property and proprietary rights,
which could harm our competitive position, resulting in decreased revenue.

     We believe that our trademarks and other proprietary rights are important
to our success and competitive position. See "Business--Intellectual Property."
Accordingly, we devote what we believe are adequate resources to the
establishment and protection of our trademarks and proprietary rights. We have
taken actions to establish and protect our trademarks and other proprietary
rights. However, these actions may be inadequate to prevent imitation of our
products by others or to prevent others from claiming violations of their
trademarks and proprietary rights by us.

     From time to time we license content from third parties. While we generally
require adequate indemnifications, in the future and it is possible that we
could face infringement actions based upon the content licensed from these third
parties. If any of these claims are proved valid, through litigation or
otherwise, we may be required to do any of the following, which could adversely
affect our business:

         .   cease using the third party trademarks;

         .   acquire other licenses;

         .   develop our own proprietary marks; or

         .   pay financial damages.


Some of our significant customer and supplier contracts are short-term.

     Some of our customers and suppliers operate through purchase orders or
short-term contracts. Though we have long-term business relationships with many
of our customers and suppliers, we cannot assure you that any of these

                                       13

<PAGE>

customers or suppliers will continue to do business with us on the same basis.
Additionally, though we try to renew these contracts as they come due, there can
be no assurance that these customers or suppliers will renew the contracts on
terms that are favorable to us, if at all. The termination of any number of
these contracts may have a material adverse effect on our business and
prospects, including our financial performance and results of operations.

               Risks Relating to the Ownership of Our Common Stock

Because there has been no prior trading market for our common stock, our stock
price may be volatile.

     There is no current trading market for our common stock. Subject to our
compliance with the applicable listing standards on the date we intend our
common stock to begin trading, our common stock has been approved for listing on
the American Stock Exchange and, following the spin-off, we expect that our
common stock will trade on the American Stock Exchange under the symbol "OFI."

     Our shares may not be actively traded, and the prices at which our shares
trade could be volatile. Some Overhill Corporation stockholders who receive our
common stock may decide that they do not want to remain invested in us and may
sell their shares following the spin-off. This may delay the development of an
orderly trading market for our common stock for a period of time following the
spin-off. Prices for our shares will be determined in the marketplace and may be
influenced by many factors, including, but not limited to:

         .   the depth and liquidity of the market for the shares;

         .   quarter-to-quarter variations in our operating results;

         .   announcements about our performance as well as the announcements of
             our competitors about the performance of their business;

         .   investors' evaluations of our future prospects and the food
             industry generally;

         .   changes in earnings estimates by, or failure to meet the
             expectations of, securities analysts;

         .   our dividend policy; and

         .   general economic and market conditions.

     In addition, the stock market often experiences significant price
fluctuations that are unrelated to the operating performance of the specific
companies whose stock is traded. These market fluctuations could have a material
adverse effect on the trading price of our shares.

The loss of certain of our executive officers would constitute a change in
control and, therefore, an event of default under our securities purchase
agreement with Levine Leichtman Capital Partners II, L.P. and would likely have
an adverse effect on our financial condition.

     Our future success depends to a significant extent on the continued
services of our senior management, particularly James Rudis, our President and
Chief Executive Officer, Richard A. Horvath, our Senior Vice President and
Secretary and William E. Shatley, our Senior Vice President and Treasurer.
Though we have employment agreements with Mr. Rudis, Mr. Horvath and Mr.
Shatley, each of these agreements provides for voluntary resignation prior to
the end of the term of the agreement. See "Management--Employment Agreements."

     The loss of the services of Mr. Rudis, Mr. Horvath or Mr. Shatley would
likely have an adverse effect on our business, results of operations and
financial condition. In addition, our amended and restated securities purchase
agreement with Levine Leichtman Capital Partners II, L.P., our senior
subordinated creditor, provides that a change in control would occur if Mr.
Rudis, Mr. Horvath or Mr. Shatley ceases to have certain management
responsibilities in our business, or Mr. Rudis and Mr. Shatley do not continue
to hold a minimum number of shares of our common stock. The occurrence of a
change in control would permit our senior subordinated creditor to accelerate
all indebtedness owing under the senior subordinated note we issued to it and
constitute an event of default under the securities purchase agreement. Our
senior subordinated creditor would then have the right to require us to

                                       14

<PAGE>

immediately repay all of our obligations then owing to it. We may not have
sufficient funds to repay this indebtedness upon an event of default.
Accordingly, the occurrence of a change in control could have a material adverse
effect on our financial condition and results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

Our failure to attract and retain key management personnel could harm our
business.

     Our business requires managerial, financial and operational expertise and
our future success depends upon the continued service of key personnel. As a
value-added manufacturer of quality frozen food products and customer prepared
foods, we operate in a specialized industry. Our key personnel have experience
and skills specific to this industry, and there is a limited number of
individuals with the relevant experience and skills. Though we have employment
agreements with Mr. Rudis, Mr. Horvath and Mr. Shatley, each of these agreements
provides for voluntarily resignation on the part of the executive prior to the
end of the term of the agreement. If we lose any of our key personnel, our
business operations could suffer. See "Business" and "Management--Employment
Agreements."

A small group of stockholders controls a significant amount of our common stock.

     Immediately following the spin-off, after giving effect to the shares of
our common stock issuable upon the exercise of warrants and conversion of shares
of our Series A Convertible Preferred Stock described below, our executive
officers and directors and stockholders who own greater than 5% of our common
stock will own, in the aggregate, approximately 50% of our outstanding common
stock. These stockholders, if acting together, could be able to significantly
influence matters requiring approval by the stockholders, including the election
of directors and the approval of mergers or other business combination
transactions. In addition, in connection with our financing arrangements with
our senior subordinated creditor, we issued to it:

     .    in November 1999, a warrant to purchase 166.04 shares of our common
          stock. The warrant will be immediately exercisable for 1,994,141
          shares of our common stock following the contemplated 12,010 for 1
          stock split at an exercise price of $0.0000008 per share, which would
          then represent approximately 17.5% of our issued and outstanding
          common stock, assuming 9,400,828 shares of our common stock
          outstanding immediately before the exercise;

     .    in March 2002, 23.57 shares of our Series A Convertible Preferred
          Stock convertible into 283,076 shares of our common stock following
          the contemplated 12,010 for 1 stock split, which would then represent
          approximately 2.9% of our issued and outstanding common stock,
          assuming 9,400,828 shares of our common stock outstanding at that
          time. These shares currently vote with our common stock on an
          as-converted basis; and

     .    in September 2002, a warrant to purchase 57.57 shares of our common
          stock. The warrant will be exercisable for 691,416 shares of our
          common stock following the contemplated 12,010 for 1 stock split at an
          exercise price of $0.0000008 per share, which would then represent
          approximately 6.9% of our issued and outstanding common stock,
          assuming 9,400,828 shares of our common stock outstanding immediately
          before the exercise. See "Management's Discussion and Analysis of
          Financial Condition and Results of Operations--Liquidity and Capital
          Resources," "Description of Capital Stock" and "Certain Transactions."

     In addition, we granted to our senior subordinated creditor, as an equity
holder, the right to nominate a designee to our board of directors. If it
exercises its warrants, our senior subordinated creditor will control no less
than 24.0% of the voting power of our outstanding capital stock and may have the
ability to influence matters requiring approval of the stockholders. See
"Principal Stockholders."

Our articles of incorporation, our bylaws and provisions of Nevada law could
make it more difficult for a third party to acquire us, even if doing so could
be in your interest.

     Provisions of our articles of incorporation and bylaws could make it more
difficult for a third party to acquire us, even if doing so might be in the best
interest of our stockholders. It could be difficult for a potential bidder to
acquire us because our articles of incorporation and bylaws contain provisions
which may discourage takeover attempts. These provisions may limit stockholders'
ability to approve a transaction that stockholders may think is in

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<PAGE>

their best interests. These provisions include a requirement that certain
procedures must be followed before matters can be proposed for consideration at
meetings of our stockholders and the ability of our board of directors to fix
the rights and preferences of an issue of shares of preferred stock without
stockholder action.

     Provisions of Nevada's business combinations statute also restrict certain
business combinations with interested stockholders. We have elected not to be
governed by these provisions in our amended and restated articles of
incorporation. However, this election is not effective until 18 months after the
approval of our amended and restated articles of incorporation in September 2002
and may not be effective at that time unless we meet certain conditions under
the Nevada statute.

     The provisions of our articles of incorporation, bylaws and Nevada law are
intended to encourage potential acquirors to negotiate with us and allow the
board of directors the opportunity to consider alternative proposals in the
interest of maximizing stockholder value. However, such provisions may also
discourage acquisition proposals or delay or prevent a change in control. See
"Description of Capital Stock--Business Combinations."

We may not pay dividends on our common stock.

     The payment of dividends on our common stock is subject to the discretion
of our board of directors. We currently anticipate that no cash dividends will
be paid on our common stock in the foreseeable future in order to conserve cash
for use in our businesses, including possible future acquisitions. Our board of
directors will periodically re-evaluate this dividend policy taking into account
our operating results, capital needs, the terms of our financing arrangements
and other factors. Also, our current financing arrangements prohibit us from
paying dividends. As a result, our stockholders should not rely on the payment
of dividends to receive cash benefits for holding shares of our common stock.

                                       16

<PAGE>

              CAUTIONARY STATEMENT AS TO FORWARD-LOOKING STATEMENTS

     We caution you that this document contains disclosures which are
forward-looking statements. All statements regarding Overhill Corporation's or
our expected future financial position, results of operations, cash flows,
dividends, financing plans, business strategy, budgets, projected costs or cost
savings, capital expenditures, competitive positions, continuation or expansion
of government programs, growth opportunities for existing products or products
under development, benefits from new technology, plans and objectives of
management for future operations and markets for stock are forward-looking
statements. In addition, forward-looking statements include statements in which
we use words such as "expect," "believe," "anticipate," "intend," "strategy,"
"plan," "will," "estimate," "project," "goal," "target" or similar expressions.
Although we believe the expectations reflected in such forward-looking
statements are based on reasonable assumptions, we cannot assure you that these
expectations will prove to have been correct, and actual results may differ
materially from those reflected in the forward-looking statements. Factors that
could cause our actual results to differ from the expectations reflected in the
forward-looking statements in this document include those set forth in "Risk
Factors."

     Neither Overhill Corporation nor Overhill Farms, Inc. has any intention or
obligation to update the forward-looking statements, even if new information,
future events or other circumstances make them incorrect or misleading.

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<PAGE>

                                  THE SPIN-OFF

Reasons for the spin-off

     After a strategic review initiated in fiscal year 2001, Overhill
Corporation concluded that its food group, comprised of our company, would be
able to grow faster and more effectively as a separate company. As a separate
company, we will be better able to focus on our own strategic priorities and
have more efficient access to the financial markets than we could as part of
Overhill Corporation.

     We believe the spin-off will enable our business to expand and grow more
quickly and efficiently in the following ways:

     .    Our business, involving the production of high quality entrees, plated
          meals, meal components, soups, sauces and poultry, meat and fish
          specialties, has different fundamentals, growth characteristics and
          strategic priorities than Overhill Corporation's forestry segment,
          which distributes, leases and provides financing for forestry and
          construction equipment and related activities.

          The separation of our food business from the forestry business will
          enable us to focus on our own strategic priorities, increase our
          ability to capitalize on growth opportunities for our businesses and
          enhance our ability to respond more quickly to changes in the
          competitive markets in which we operate. As an independent public
          company, our management should be better able to organize our company
          in a manner more appropriate to the markets in which it competes. As a
          result the spin-off should enhance our position as an effective
          competitor, and we should be better able to capitalize quickly on
          changes in the rapidly changing food industries.

     .    The spin-off will enable us to have direct access to financial
          markets. We may raise our own equity capital that we will use to
          expand our businesses by accelerating new higher-margin product
          introductions through increased product development investment; to
          further develop our manufacturing capabilities; and to use our own
          capital stock to pursue selected acquisitions.

          The separation of Overhill Corporation's food and forestry businesses
          will cause the two entities to be recognized by the financial
          community as distinct businesses. As a result, we should develop our
          following in the financial community primarily as a value-added
          manufacturer of quality frozen food products including entrees, plated
          meals, meal components, soups, sauces, poultry, meat and fish
          specialties. In addition, current stockholders and potential investors
          will be able to direct their investments to their specific areas of
          interest.

     .    The spin-off will enable us to recruit, retain and motivate key
          employees by providing them with stock-based compensation incentives
          directly tied to the success of our businesses.

Manner of Effecting the Spin-off

     Overhill Corporation will effect the spin-off by distributing all of the
outstanding shares of our common stock it owns to holders of record of Overhill
Corporation common stock as of the close of business on September 30, 2002, the
record date. Overhill Corporation currently owns 99% of the issued and
outstanding shares of our common stock. The spin-off will be made on the basis
of one share of our common stock for every two shares of Overhill Corporation
common stock held by Overhill Corporation stockholders as of the record date.
The actual number of shares of our common stock to be distributed will depend on
the number of shares of Overhill Corporation common stock outstanding as of the
record date. As of the date of this information statement, there were 782.75
shares of our common stock outstanding, of which Overhill Corporation owns 775
shares. To effect the spin-off, we intend to authorize a 12,010 for 1 stock
split such that there will be 9,400,828 shares of our common stock outstanding
and 9,307,750 shares of our common stock distributed to the stockholders of
Overhill Corporation on the effective date of the spin-off. After the
distribution, the stockholders of Overhill Corporation on the record date will
own approximately 74% of Overhill Farms, Inc. capital stock on a fully diluted
basis assuming no employee options are outstanding and after giving effect to:

                                       18

<PAGE>

     .    the distribution of 9,307,750 shares of our common stock in the
          spin-off;

     .    2,685,557 shares of our common stock issuable upon exercise of two
          warrants to purchase our common stock;

     .    283,076 shares of our common stock issuable upon conversion of our
          outstanding shares of our Series A Convertible Preferred Stock; and

     .    252,632 shares of our common stock issuable pursuant to contractual
          anti-dilution provisions.

See "Principal Stockholders, "Description of Capital Stock" and "Certain
Transactions."

     Prior to the spin-off, Overhill Corporation will deliver all of the shares
of our common stock owned by it to the distribution agent for distribution. On
or about October 30, 2002, the distribution agent will mail certificates for
whole shares of our common stock to Overhill Corporation stockholders of record
on September 30, 2002. However, if an Overhill Corporation stockholder sold any
shares of Overhill Corporation common stock after September 30, 2002, the right
to receive shares of our common stock in the spin-off transferred with the sale
of those shares of Overhill Corporation common stock in accordance with the
rules of the American Stock Exchange.

     If a stockholder is otherwise entitled to receive a fractional share of our
common stock, that stockholder will instead receive cash. The distribution agent
will, promptly after the date of the spin-off, aggregate all fractional share
interests in our common stock with those of other similarly situated
stockholders and sell those fractional share interests in our common stock in
open market transactions at then-prevailing prices. The distribution agent will
have sole discretion regarding when, how, through which broker (which will not
be affiliated with us or Overhill Corporation) and at what prices to make such
sales. The distribution agent will distribute the cash proceeds to stockholders
entitled to such proceeds pro rata based upon their fractional interests in our
common stock. No interest will be paid on any cash distributed instead of
fractional shares. The distribution agent is the transfer agent and registrar
for us and Overhill Corporation but is not otherwise affiliated with us or
Overhill Corporation.

     No owner of Overhill Corporation common stock will be required to pay any
cash or other consideration for shares of our common stock received in the
spin-off. Additionally, no owner of Overhill Corporation common stock will be
required to surrender or exchange any shares of Overhill Corporation common
stock to receive shares of our common stock. The number of shares of Overhill
Corporation common stock that you own will not change as a result of the
spin-off.

Results of the Spin-off

     After the spin-off, we will be a separate public company, independent from
Overhill Corporation. Our management, fundamentals, growth characteristics and
strategic priorities will be different from those of Overhill Corporation.
Overhill Corporation will not own any interest in us after the spin-off. Our
common stock and Overhill Corporation common stock will be different securities
and will not trade together or be valued alike.

     However, as with Overhill Corporation common stock, our common stock will
have the following characteristics:

     .    be fully paid and nonassessable;

     .    have one vote per share, with no right to cumulate votes; and

     .    carry no preemptive rights.

     Following the spin-off, James Rudis, our President, Chief Executive Officer
and Chairman of the Board of Directors, will remain as a director of Overhill
Corporation for a period of no greater than one year after the spin-off to
facilitate the transition of Overhill Corporation and Overhill Farms, Inc. into
two separate companies.

     Our common stock and Overhill Corporation common stock, however, will be
different securities and will not trade together or be valued alike. There is no
current public trading market for our common stock.

                                       19

<PAGE>

     Our common stock has been approved for listing on the American Stock
Exchange under the symbol "OFI." Prior to the spin-off, Overhill Corporation
intends to delist its common stock from the American Stock Exchange and arrange
for quotation of its common stock on the OTC Bulletin Board under a symbol to be
designated prior to quotation. In connection with the spin-off, Overhill
Corporation will change its name to "TreeCon Resources, Inc."

     The spin-off will not, in and of itself, affect the number of outstanding
shares of Overhill Corporation common stock or the rights associated with those
shares. The number of shares of Overhill Corporation common stock that you own
will not change as a result of the spin-off. Following the spin-off, Overhill
Corporation will continue to own and operate its other businesses.

Material Federal Income Tax Consequences

     The following is a summary of the material United States federal income tax
consequences to you on the receipt of the shares of our common stock pursuant to
the spin-off. The following discussion is based upon the Internal Revenue Code,
existing and proposed regulations thereunder, reports of congressional
committees, judicial decisions and current administrative rulings and practices.
Any of these authorities could be repealed, overruled or modified at any time
after the date hereof. Any such change could be retroactive and, accordingly,
could modify the tax consequences discussed herein. This summary deals only with
stockholders who are citizens or residents of the United States.

     The spin-off is conditioned upon receipt by Overhill Corporation of an
opinion from Ernst & Young LLP to the effect that, among other things, the
spin-off should qualify as a tax-free spin-off to Overhill Corporation's
stockholders and Overhill Corporation for federal income tax purposes. The
Company cannot waive the receipt of the opinion as a condition of the spin-off.
Our senior and senior subordinated creditors could waive our receipt of the
opinion as a condition of the spin-off; however, we do not intend to request
this waiver nor do we believe these creditors would grant such a waiver. See
"Risk Factors--Risks Relating to the Spin-off-If we are unable to obtain certain
third party consents to the spin-off, our ability to implement our business
strategy as currently planned could be materially adversely affected."

     The opinion of Ernst & Young LLP relies on customary representations made
by Overhill Corporation and us and applicable factual assumptions. If any of the
factual assumptions or representations relied upon in the opinion of Ernst &
Young LLP are inaccurate, the opinion may not accurately describe the tax
treatment to you as a result of the receipt of our common stock pursuant to the
spin-off. In addition, a tax opinion is not binding on the Internal Revenue
Service and we do not intend to request a ruling from the Internal Revenue
Service with respect to these matters. Furthermore, there is no assurance that
the Internal Revenue Service would agree with the conclusions set forth in this
discussion.

     The following discussion is for general information only and may not apply
to particular categories of holders subject to special tax treatment under the
federal income tax laws, such as insurance companies, financial institutions,
broker-dealers, estates, trusts, tax-exempt organizations, real estate
investment trusts, regulated investment companies, non-United States holders, or
persons that will hold their shares of Overhill Corporation common stock as a
position in a straddle, as part of a synthetic security or hedge, or as part of
a conversion transaction or other integrated investment, or as other than a
capital asset. This summary also does not address the tax consequences to
stockholders, partners or beneficiaries of a holder of shares of Overhill
Corporation common stock. Further, it does not include any description of any
alternative minimum tax consequences or the tax laws of any state or local
government or of any foreign government that may be applicable to the receipt of
our shares pursuant to the spin-off. This summary assumes that you hold your
shares of Overhill Corporation common stock as a capital asset within the
meaning of section 1221 of the Internal Revenue Code.

     Accordingly, to the extent not addressed in this summary, you should
consult your own tax advisors in analyzing the federal, state, local and foreign
tax consequences of the receipt of our shares of common stock pursuant to the
spin-off, with regard to the personal tax consequences specific to you, which
may vary for stockholders in different tax situations.

                                       20

<PAGE>

     Assuming, consistent with the opinion of Ernst & Young LLP, the spin-off
qualifies as a tax-free spin-off for federal income tax purposes, the following
would be the tax consequences generally applicable to you as Overhill
Corporation stockholders as a result of the spin-off:

         .   No gain or loss would be recognized by Overhill Corporation upon
             the distribution of our common stock to Overhill Corporation
             stockholders.

         .   You would not recognize any income, gain or loss upon the receipt
             of our common stock in the spin-off.

         .   Your tax basis in your Overhill Corporation common stock on which
             our common stock is distributed would be apportioned among the
             Overhill Corporation common stock and our common stock you receive
             in the spin-off on the basis of the relative fair market values of
             Overhill Corporation common stock and our common stock on the date
             of the spin-off.

         .   Your holding period for our common stock you receive in the
             spin-off would include the period during which you held the
             Overhill Corporation common stock on which our common stock is
             distributed, provided that you held the Overhill Corporation common
             stock as a capital asset on the date of the spin-off.

     If the spin-off does not qualify as a tax-free distribution within the
meaning of Section 355 of the Internal Revenue Code of 1986, Overhill
Corporation would recognize taxable gain generally equal to the amount by which
the fair market value of our common stock distributed to Overhill Corporation's
stockholders exceeds the tax basis in our stock. In addition, each Overhill
Corporation stockholder who receives our common stock in the spin-off would
generally be treated as having received a taxable distribution in an amount
equal to the fair market value of our common stock.

     Under United States federal income tax laws, Overhill Corporation and we
will be jointly and severally liable, and we could be required to pay for
Overhill Corporation's federal income taxes resulting from the spin-off being
taxable. This means that even if we do not have to indemnify Overhill
Corporation for any liabilities and expenses if the spin-off fails to be
tax-free, we may still be liable for any part of, including the whole amount of,
these liabilities and expenses. In certain circumstances, however, Overhill
Corporation may be required to indemnify us for such liabilities and expenses.
See "Risk Factors--Risks Relating to the Spin-off--We could be liable for
Overhill Corporation's tax liability if the spin-off is taxable."

     In addition, under United States federal income tax laws, even if the
spin-off qualifies for tax-free treatment, Overhill Corporation may,
nevertheless, be subject to tax if acquisitions or issuances of either our
common stock or Overhill Corporation stock following the spin-off cause the
stockholders of Overhill Corporation (determined as of the effective time of the
spin-off) to subsequently own less than a majority of outstanding shares of
either Overhill Corporation or us. In particular, this tax will apply if such
issuances or acquisitions occur as part of a plan or series of related
transactions that include the spin-off. For this purpose, any acquisitions or
issuance of Overhill Corporation stock or our stock within two years before or
after the spin-off are presumed to be part of such a plan, although Overhill
Corporation may rebut that presumption. If the subsequent acquisitions or
issuance of either the stock of Overhill Corporation or our stock triggers this
tax, Overhill Corporation will be subject to tax on the gain that would have
resulted from a sale of our stock distributed in the spin-off. However, the
spin-off would generally continue to be tax-free to each Overhill Corporation
stockholder as described in the preceding paragraph. See "Risk Factors--Risks
Relating to the Spin-off--The spin-off could result in significant tax
liability."

     The summary of federal income tax consequences set forth above is for
general reference only and does not purport to cover all federal income tax
consequences that may apply to you. You should consult your own tax advisors
regarding the particular federal, foreign, state and local tax consequences of
the spin-off to you.

                                       21

<PAGE>

Listing and Trading of Our Common Stock

     Prior to the spin-off, Overhill Corporation intends to delist its common
stock from the American Stock Exchange and arrange for quotation of its common
stock on the OTC Bulletin Board under a symbol to be designated prior to
quotation. In connection with the spin-off, Overhill Corporation will change its
name to "TreeCon Resources, Inc."

     Currently, there is no public market for our common stock. Subject to our
compliance with the applicable listing standards on the date we intend our
common stock to begin trading, our common stock has been approved for listing on
the American Stock Exchange under the trading symbol "OFI." The American Stock
Exchange has established certain quantitative and qualitative standards for
initial listing. These include standards regarding shareholders' equity, pre-tax
income, public distribution of our shares of common stock, minimum per share
price and an aggregate market value of publicly held shares, not including
shares held by any officer, director, controlling shareholder or 10% or greater
holder. In addition, the American Stock Exchange also considers qualitative
factors such as the nature of a company's business, market for its products,
reputation of its management, historical record and pattern of growth, financial
integrity, demonstrated earnings power and future outlook. We can give no
assurance that the American Stock Exchange will determine that we meet all of
their requirements, waive any requirements it determines that we do not meet on
the date we intend our common stock to begin trading.

     Until our common stock is fully distributed and an orderly market develops,
the prices at which trading in our common stock occurs may fluctuate
significantly and may be lower or higher than the price that would be expected
for a fully distributed issue. The prices at which our common stock will trade
following the spin-off will be determined by the marketplace and may be
influenced by many factors, including:

         .   the depth and liquidity of the market for our common stock;

         .   investor perceptions of us, our businesses and the industries in
             which we operate;

         .   our dividend policy;

         .   our financial results; and

         .   general economic and market conditions.

     Substantially all of the shares of our common stock that are distributed in
the spin-off will be eligible for immediate resale. In transactions similar to
the spin-off, it is not unusual for a significant redistribution of shares to
occur during the first few weeks or even months following completion of the
transaction because of the differing objectives and strategies of investors who
acquire shares of our common stock in the transaction. We are not able to
predict whether substantial amounts of our common stock will be sold in the open
market following the spin-off or what effect these sales may have on prices at
which our common stock may trade. Sales of substantial amounts of our common
stock in the public market during this period, the perception that any
redistribution has not been completed or the prospect of our having to undertake
a public offering of our common stock following the spin-off could materially
adversely affect the market price of our common stock.

     Generally, the shares of our common stock that will be distributed to
Overhill Corporation common stockholders in the spin-off will be freely
transferable, except for securities received by persons deemed to be our
"affiliates" under the Securities Act of 1933, as amended. Persons who may be
deemed to be our affiliates after the spin-off generally include individuals or
entities that control, are controlled by, or are in common control with us,
including our directors. Persons who are our affiliates will be permitted to
sell shares of our common stock they receive in the spin-off only pursuant to an
effective registration statement under the Securities Act of 1933 or an
exemption from the registration requirements of the Securities Act of 1933, such
as in accordance with the requirements of Rule 144 under the Securities Act of
1933. Under Rule 144, an affiliate is entitled to sell a number of shares within
any three-month period that does not exceed the greater of 1% of the then
outstanding shares of common stock or the average weekly trading volume of the
common stock on the American Stock Exchange during the four calendar weeks
preceding the sale. The holder may only sell such shares through unsolicited
brokers' transactions. Sales under Rule 144 are also subject to certain
requirements pertaining to the manner of such sales, notices of such sales and
the availability of current public information about us.

                                       22

<PAGE>

                                 CAPITALIZATION

     The following table sets forth the actual capitalization of Overhill Farms,
Inc. as of June 30, 2002 and the pro-forma capitalization of Overhill Farms,
Inc. as of June 30, 2002 after giving effect to (a) the proposed 12,010 for 1
stock split expected to occur prior to the spin-off, and (b) the receipt of a
partial payment, in the form of notes receivable assigned to us by Overhill
Corporation in the principal amounts of $207,375 and $184,875, of our net
intercompany amounts receivable from Overhill Corporation and (c) the planned
cancellation of all remaining intercompany amounts between us and Overhill
Corporation of approximately $11.0 million. You should read this table in
conjunction with the information under the headings "Selected Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Index to Consolidated Financial Statements" included elsewhere
in this information statement.

<TABLE>
<CAPTION>
                                                            June 30, 2002     June 30, 2002
                                                            -------------     -------------
                                                               (Actual)       (Pro-Forma)
<S>                                                         <C>               <C>
Long-term debt (including current portion)                  $ 38,297,303      $ 38,297,303
Income taxes payable to Overhill Corporation                   1,043,636                 -
Shareholders' Equity
     Preferred stock(1)                                                -                 -
     Common stock(2)                                                   8            94,008
     Additional paid-in capital                                4,574,614         4,480,614
     Receivable from Overhill Corporation                    (11,196,683)                -
     Warrants to purchase common stock                         2,370,000         2,370,000
     Retained earnings (accumulated deficit)                   7,495,161        (2,265,636)
                                                            ------------      ------------
          Total Shareholders' Equity                           3,243,100         4,678,986
                                                            ------------      ------------

Total Capitalization                                        $ 42,584,039      $ 42,976,289
                                                            ============      ============
</TABLE>

------------------------------------------
(1) Represents 23.57 shares of Series A Convertible Preferred Stock outstanding
at June 30, 2002 and convertible into 283,076 common shares on a pro-forma basis
at June 30, 2002, after giving effect to the proposed 12,010 for 1 common stock
split expected to occur prior to the spin-off.

(2) Represents 782.75 actual common shares outstanding at June 30, 2002 and
9,400,828 common shares outstanding on a pro-forma basis at June 30, 2002, after
giving effect to the proposed 12,010 for 1 stock split expected to occur prior
to the spin-off.

                                       23

<PAGE>

                             SELECTED FINANCIAL DATA

     The following table sets forth selected historical financial data of
Overhill Farms, Inc. The selected financial data as of and for each of the last
five fiscal years has been derived from the consolidated financial statements of
Overhill Farms, Inc. which have been audited by Ernst & Young LLP, independent
auditors. Selected financial data for the nine months ended June 30, 2002 and
July 1, 2001 has been derived from the unaudited consolidated financial
statements of Overhill Farms, Inc.

     The selected historical statement of income data set forth below may not
reflect the many significant changes that will occur in the operations and
capitalization of our company as a result of the spin-off. Before the spin-off,
we operated as part of Overhill Corporation. Because the data reflect periods
during which we did not operate as an independent public company, the data may
not reflect the results of operations or the financial position that would have
resulted if we had operated as a separate, independent public company during the
periods shown. In addition, the data may not necessarily be indicative of our
future results of operations or financial position. The historical data should
be read in conjunction with sections entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements and the related notes included elsewhere in this
information statement.

<TABLE>
<CAPTION>
                                   Nine Months Ended                            Fiscal Year Ended
                                 -------------------   ------------------------------------------------------------------------
                                 June 30,     July 1,   September 30,  October 1,  September 26,  September 27,  September 28,
                                   2002        2001         2001          2000         1999           1998           1997
                                   ----        ----         ----          ----         ----           ----           ----
                                      (unaudited)
<S>                              <C>         <C>        <C>            <C>         <C>            <C>            <C>
Income Statement Data
(in thousands, except per share
information):

Net Revenues                     $101,928   $ 119,586     $ 162,158    $ 145,418     $ 113,016      $ 93,349        $96,177

Operating Income                    5,266       7,339         9,483       10,813         7,384         4,977          4,953

Income (Loss) Before
  Extraordinary Items                 683       1,645         2,242        3,331         1,002          (136)           675

Net Income (Loss)                     683       1,645         2,242        2,492         1,002          (506)           675

Net Income (Loss) per
  share - Basic*                   873.05    2,108.19      2,870.10     3,216.04      1,293.14       (652.80)        870.85

Net Income (Loss) per
  share - Diluted*                 712.39    1,733.52      2,362.01     2,596.28        987.37       (652.80)        674.91
</TABLE>

<TABLE>
<CAPTION>
                               As of Nine Months Ended                          As of Fiscal Year Ended
                              ------------------------   ------------------------------------------------------------------------
                                 June 30,     July 1,     September 30,  October 1,  September 26,  September 27,  September 28,
                                   2002        2001           2001          2000         1999           1998           1997
                                   ----        ----           ----          ----         ----           ----           ----
                                      (unaudited)
<S>                              <C>         <C>          <C>            <C>         <C>            <C>            <C>
Balance Sheet Data (in
thousands):

Total Assets                     $ 54,843     $55,296        $54,207       $57,946      $38,987        $34,108        $30,076

Long-Term Debt                     23,979      35,003         32,951        40,860       32,355         22,308         14,982

Total Liabilities                  51,560      53,024         51,338        58,864       42,747         38,871         28,033

Retained Earnings                   7,495       6,215          6,812         4,570        2,078          1,076          1,582

Stockholders' Equity                3,243       2,272          2,869          (918)      (3,760)        (4,763)         2,043
</TABLE>

----------------------------------------
 *   Reference is made to Note 9 to the Company's consolidated financial
     statements for the period ended June 30, 2002 and to Note 13 to the
     Company's consolidated financial statements for each of the three years
     ended September 30, 2001, for pro-forma presentations of earnings per share
     after giving retroactive effect to a 12,010 for 1 stock split expected to
     occur prior to the spin-off.

                                       24

<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

     Overhill Farms, Inc. is a value-added manufacturer of quality frozen food
products including entrees, plated meals, meal components, soups, sauces,
poultry, meat and fish specialties. We provide custom prepared foods to a number
of prominent customers such as Albertson's, Jenny Craig, Carl's Jr., Jack in the
Box, Panda Express, Schwan's and King's Hawaiian as well as most domestic
airlines, including American Airlines, United Airlines and Delta Airlines. We
manufacture products in the retail and foodservice areas with branded and
private label entrees and components. Historically, we have served four
industries: airlines, weight loss, foodservice and retail.

     In May 1995, we acquired all the operating assets of IBM Foods, Inc. for
$31.3 million plus the assumption of certain liabilities of the acquired
business. Our headquarters are located in Vernon, California, and we have
operations throughout Southern California. During August 2000, we purchased the
operating assets and trademarks of the Chicago Brothers food operations from a
subsidiary of Schwan's Sales Enterprises, Inc. for $4.2 million, consisting of
cash of $3.3 million and a note payable to the seller for $900,000.

     After a strategic review initiated in fiscal year 2001, Overhill
Corporation concluded that its food group, comprised of our company, would be
able to grow faster and be a stronger competitor as a separate company. We
believe the spin-off will enable our business to expand and grow more quickly
and efficiently in the following ways:

         .   Our business, involving the production of high quality entrees,
             plated meals, meal components, soups, sauces and poultry, meat and
             fish specialties, has different fundamentals, growth
             characteristics and strategic priorities than Overhill
             Corporation's forestry segment, which is a distributor of forestry
             and construction equipment and related activities. The separation
             of our food business from the forestry business will enable us to
             focus on our own strategic priorities, increase our ability to
             capitalize on growth opportunities for our businesses and enhance
             our ability to respond more quickly to changes in the competitive
             markets in which we operate.

         .   The spin-off will enable us to have direct access to the financial
             markets, both debt and equity. We intend to raise our own equity
             capital that we will use to expand our businesses by accelerating
             new higher-margin product introductions through increased product
             development investment; to further develop our manufacturing
             capabilities; and to pursue selected acquisitions.

         .   The spin-off will enable us to recruit, retain and motivate key
             employees by providing them with stock-based compensation
             incentives directly tied to the success of our businesses.

     Our strategy is to be the leading developer and manufacturer of value-added
food products and provider of custom prepared foods. We intend to create
superior value for our stockholders by continuing to execute our growth and
operating strategies. We employ the following corporate strategies:

         .   focus on sectors with attractive growth characteristics;

         .   invest in and operate efficient production facilities;

         .   provide customer service-oriented distribution;

         .   offer a broad range of products to customers in multiple channels
             of distribution; and

         .   continue to pursue growth through strategic acquisitions and
             investments.

                                       25

<PAGE>

Results of Operations

Nine Months Ended June 30, 2002 Compared to Nine Months Ended July 1, 2001

     Net Revenues. For the nine months ended June 30, 2002, our net revenues
decreased $17,658,000 (14.8%) to $101,928,000 as compared to $119,586,000 for
the nine months ended July 1, 2001. This revenue decrease is substantially all
the result of a decrease in airline sales during the period of approximately
40%.

     The tragic events of September 11, 2001 have significantly impacted our
sales to airline-related customers. Though the long-term effect of these events
on the airline industry, airline revenues, and on our business in particular,
cannot be accurately determined at this time, we are estimating that sales to
airline-related customers in fiscal 2002 will decrease by 35% to 40% from 2001
levels.

     Gross Profit. Gross profit for the nine months ended June 30, 2002
decreased $5,394,000 to $16,182,000 from $21,576,000 for the nine months ended
July 1, 2001. Gross profit as a percentage of net revenues for the nine months
ended June 30, 2002 was 15.9% compared to 18.0% in the comparable prior period.
The decrease in gross profit as a percentage of net revenues is primarily
attributable to the significant decrease in sales to airline-related customers.

     We have begun to consolidate certain of our home office, manufacturing and
warehousing, product development, and marketing and quality control facilities
into a single location. Though we are currently in the process of implementing
various stages of this plan, management believes that when the plan is fully
implemented, we should expect to achieve significant operating efficiencies as
well as a reduction of our dependence on outside cold storage facilities.

     Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the nine months ended June 30, 2002 decreased
$3,322,000 (23.3%) to $10,915,000 from $14,237,000 in the year earlier period.
This decrease is primarily due to lower freight expenditures associated with the
decrease in airline revenues. For the nine months ended June 30, 2002, selling,
general and administrative expenses were 10.7% of net revenues as compared to
11.9% for the nine months ended July 1, 2001.

     Interest Expense. Interest expense for the nine months ended June 30, 2002
decreased $580,000 to $3,481,000 from $4,061,000 for the nine months ended July
1, 2001. This decrease is primarily the result of lower average interest rates
on outstanding borrowings.

     Income Tax Provision. For the nine months ended June 30, 2002 and July 1,
2001, our income tax provision was $458,000 and $1,103,000, respectively, or
40.1% of income before income taxes.

     Net Income. Our net income for the nine-month period ended June 30, 2002
amounted to $683,000 as compared to $1,645,000 for the nine-month period ended
July 1, 2001.

Fiscal Year Ended September 30, 2001 Compared to Fiscal Year Ended October 1,
2000

     Net Revenues. For the fiscal year ended September 30, 2001, our revenues
increased $16,740,000 (11.5%) to $162,158,000 as compared to $145,418,000 for
the fiscal year ended October 1, 2000. Compared to the prior fiscal year, we
experienced a 34.4% growth rate in foodservice sales and a 4.6% growth rate in
airline sales. These revenue increases are primarily the result of our capturing
greater market share across several of our key product lines, as well as
achieving increases in volume with several significant customers.

     Gross Profit. For the fiscal year ended September 30, 2001, our gross
profit increased $354,000 to $28,516,000 as compared to $28,162,000 for the
fiscal year ended October 1, 2000. Gross profit as a percentage of net revenues
for the fiscal year ended September 30, 2001 was 17.6% compared to 19.4% in the
comparable prior year period. The 2001 decrease is primarily the result of
startup expenses incurred throughout 2001 related to our Chicago Brothers
acquisition in late 2000 (approximately 33%) and competitive airline pricing,
particularly in the fourth quarter of fiscal 2001 (approximately 67%).

                                       26

<PAGE>

     Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the fiscal year ended September 30, 2001 increased
$1,684,000 (9.7%) to $19,033,000 as compared to $17,349,000 for the fiscal year
ended October 1, 2000. This increase is primarily attributable to increased
selling expenses (approximately $910,000), higher freight costs (approximately
$623,000) and additional costs associated with the Chicago Brothers acquisition
(approximately $152,000). For the fiscal year ended September 30, 2001, selling,
general and administrative costs as a percentage of sales were 11.7% as compared
to 11.9% in fiscal 2000.

     Other Expenses. For the fiscal year ended September 30, 2001, net other
expenses increased $389,000 from the comparable 2000 period due primarily to an
increase in interest expense.

     Income Taxes. For the fiscal year ended September 30, 2001, our income tax
provision was $1,168,000, or 34.3% of income before income taxes and
extraordinary item, compared to $1,798,000 for the fiscal year ended October 1,
2000, or 35.1% of income before income taxes and extraordinary item.

     Net Income. Our net income for the fiscal year ended September 30, 2001
amounted to $2,242,000 as compared to $2,492,000 after an extraordinary charge
of $838,000 related to early extinguishment of debt, for the fiscal year ended
October 1, 2000.

Fiscal Year Ended October 1, 2000 Compared to the Fiscal Year Ended September
26, 1999

     Net Revenues. For the fiscal year ended October 1, 2000, our revenues
increased $32,402,000 (28.7%) to $145,418,000 as compared to $113,016,000 for
the fiscal year ended September 26, 1999. Compared to the prior fiscal year, we
experienced a 68.5% growth rate in airline sales, 42.7% growth in foodservice
sales and 19.3% growth in retail sales.

     Gross Profit. Gross profit for the fiscal year ended October 1, 2000
increased $7,443,000 to $28,162,000 as compared to $20,719,000 for the fiscal
year ended September 26, 1999. Gross profit as a percentage of net revenues for
the fiscal year ended October 1, 2000 was 19.4% compared to 18.3% in the
comparable prior year period. The increase is primarily attributable to improved
purchasing practices, including the outsourcing of certain production
(approximately 70%), a more effective pricing strategy (approximately 9%),
together with manufacturing improvements and efficiencies (approximately 21%).

     Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the fiscal year ended October 1, 2000 increased
$4,014,000 (30.1%) to $17,349,000 as compared to $13,335,000 for the fiscal year
ended September 26, 1999, consisting of selling expenses (12%), storage and
distribution expenses (64%) and general and administrative expenses (24%). For
the fiscal year ended October 1, 2000, selling, general and administrative
expenses were 11.9% of net revenues as compared 11.8% of net revenues for the
fiscal year ended September 26, 1999.

     Interest Expense. For the fiscal year ended October 1, 2000, interest
expense increased $351,000 to $5,142,000 as compared to $4,791,000 for the
fiscal year ended September 26, 1999. The increase in interest expense is
primarily the result of increased average borrowings during 2000 offset by
slightly lower interest rates.

     Income Tax Provision. For the fiscal year ended October 1, 2000, our income
tax provision was $1,798,000, or 35.1% of income before income taxes and
extraordinary item, compared to $645,000 for the fiscal year ended September 26,
1999, or 39.1% of income before income taxes.

Liquidity and Capital Resources

     Our principal sources of liquidity are cash flow from operations, cash
balances and additional financing capacity. Our cash and cash equivalents
decreased $73,000 to $8,000 as of June 30, 2002, compared to $81,000 at
September 30, 2001.

     During the nine months ended June 30, 2002, our operating activities
provided cash of approximately $980,000, as compared to cash provided of
$7,224,000 during the comparable period in fiscal 2001. The cash provided in the
current period is primarily due to our operations, with reductions in
receivables and inventories having been generally offset by reductions in trade
accounts payable.

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<PAGE>

     During the nine months ended June 30, 2002, our investing activities
resulted in a use of cash of approximately $2,451,000, as compared to $830,000
during the comparable period in fiscal 2001. The use of cash in the current
period consisted exclusively of additions to property and equipment.

     During the nine months ended June 30, 2002, our financing activities
resulted in cash provided of approximately $1,398,000, as compared to a use of
cash of $6,537,000 during the comparable period in fiscal 2001. The cash
provided in the current period resulted primarily from borrowings on our line of
credit.

     Immediately prior to the completion of the spin-off, we expect to receive
formal consents to the spin-off from our senior creditor, Union Bank of
California, N.A. (the "Bank"), and our senior subordinated creditor. At that
time, we expect to enter into amendments and restatements, as appropriate, to
our financing agreements and other arrangements with them. We have agreed in
principle with each of these creditors on the substantial forms of these
amendments and restatements. These consents, amendments and restatements are
necessary to comply with certain provisions in our existing financing agreements
with each of these creditors that are affected by the spin-off and related
transactions. The forms of these amendments and restatements contain certain
conditions with respect to the completion of the spin-off and related
transactions. The consents of our senior and senior subordinated creditors to
the spin-off are conditioned upon our satisfying those conditions. If we do not
receive the consent of these creditors, we will be prohibited from completing
the spin-off and related transactions. See "Risk Factors--Risks Relating to the
Spin-off--If we are unable to obtain certain third-party consents to the
spin-off, our ability to implement our business strategy as currently planned
could be materially adversely affected."

     We have a term loan with the Bank evidenced by a note in the original
principal amount of $2,400,000, with an outstanding principal balance of
$1,300,000 on June 30, 2002. The term loan bears interest at a reference rate
announced by the Bank plus one percent. We pay the principal amount of the term
loan in monthly installments of $50,000. We used the term loan to finance the
acquisition of Chicago Brothers from Schwan's Sales Enterprises, Inc.

     The line of credit with the Bank expires on November 24, 2002. As of June
30, 2002, we had approximately $1.3 million available under our revolving line
of credit with the Bank. Borrowings under the revolving line of credit bear
interest at a rate, as selected by us at the time of borrowing, of prime plus
..50% or LIBOR plus 3.00%. The loan agreement provides, among other things, that
we are subject to an unused line of credit fee of on the revolving line of
credit of .25% per annum. The agreement contains various covenants including
restrictions on capital expenditures, specified net worth levels and debt
service ratios. In addition, the terms of the agreement generally prohibit
loans, dividends or advances from us to Overhill Corporation and limit payments
of taxes and other expenses to Overhill Corporation to specified levels. The
line of credit is collateralized by all of our assets. In connection with the
spin-off, the Bank intends to provide a limited release to Overhill Corporation
from its guaranty of the credit facility and release our common stock owned by
Overhill Corporation as collateral for its guaranty, thereby allowing Overhill
Corporation to consummate the spin-off. Additionally, in connection with the
spin-off, we have agreed in principle to an amended and restated loan agreement,
and amendments and restatements of various related documents that provide for,
among other things, a revolving line of credit to provide for borrowings limited
to the lesser of $16 million or an amount determined by a defined borrowing base
consisting of our eligible receivables and eligible inventory. In January 2002,
the Bank charged us $120,000 for the amendments and waivers to the credit
facility that were agreed to at that time.

     Subsequent to the spin-off, we intend to seek an extension of the maturity
of our revolving line of credit agreement with the Bank. Additionally, we are
currently seeking alternative arrangements with other lenders in the event we do
not receive this extension from the Bank. We believe that this extension, or
replacement of our arrangements with the Bank, will be obtained on similar terms
and conditions to our current agreement, though no assurances can be made, and
the Bank has made no assurances to us, in this regard. Failure to secure an
extension of our revolving line of credit or obtain alternative methods of
financing prior to the maturity of our existing agreement could have a material
adverse effect on our business and operations.

     Our senior subordinated creditor is the holder of a secured senior
subordinated note which it purchased from us in November 1999 pursuant to a
securities purchase agreement. We expect to amend and restate the securities
purchase agreement, the note and various related agreements in connection with
the spin-off. We have agreed in principle with our senior subordinated creditor
on the substantial forms of these amendments and restatements. The

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<PAGE>

note bears interest at a base rate per annum of 13.25%, with interest payable
monthly. However, if we achieve specified EBITDA tests for fiscal year ending
September 2003, the base rate will be reduced to 12.5%. The note matures on
October 31, 2004. We are required to make mandatory principal payments each
fiscal year in an amount equal to 50% of the excess cash flow, as defined, for
the previous fiscal year. The amount of the principal prepayment for the fiscal
year ended September 30, 2001 was approximately $781,000. We may make voluntary
principal prepayments at any time, subject to prepayment premiums. The amended
and restated securities purchase agreement will contain various covenants
similar to those in our existing securities purchase agreement, including
financial covenants covering restrictions on capital expenditures, minimum
EBITDA and net worth levels, and specified debt service and debt to equity
ratios. In addition, the terms of the amended and restated securities purchase
agreement will prohibit changes in control, including ownership and management
personnel, and contains customary restrictions on incurring indebtedness and
liens, making investments, paying dividends and making loans or advances. The
note and all other obligations owing by us to our senior subordinated creditor
are secured by subordinated liens on substantially all of our assets and by a
guaranty of Overhill Corporation and Overhill L.C. Ventures, Inc., our
subsidiary. In connection with the spin-off, our senior subordinated creditor
intends to release Overhill Corporation from its guaranty and release its lien
on our common stock held by Overhill Corporation which secures Overhill
Corporation's guaranty. See "Certain Transactions."

     In connection with the original securities purchase agreement, we issued to
our senior subordinated creditor a warrant to purchase 166.04 shares of our
common stock exercisable immediately at an exercise price of $0.01 per share.
The warrant will be exercisable for 1,994,141 shares of our common stock
following the contemplated 12,010 for 1 stock split, at an exercise price of
$0.0000008 per share. At the date of issuance, the warrant granted to our senior
subordinated creditor was estimated to have a fair value of $2.37 million.

     In 1999 when we entered into these transactions with the Bank and our
senior subordinated creditor, we repaid in full the $22.7 million senior
subordinated notes payable and the $9.6 million revolving line of credit
outstanding to our previous lenders. Additionally, we repurchased for $3.7
million the warrants held by the previous subordinated lender to purchase 30% of
our common stock. Also in connection with the refinancing, we were permitted to
make a one-time advance of $1.25 million to Overhill Corporation for working
capital and other specified purposes. We incurred costs and expenses in
connection with the refinancing totaling approximately $1.9 million,
substantially all of which was paid to the lenders. The early extinguishment of
the previous indebtedness resulted in an extraordinary loss of approximately
$1.3 million (net of a $500,000 refund for early payment of the senior
subordinated notes), which was recognized during the fiscal year ended October
1, 2000.

     In 2002, we entered into various amendments to our securities purchase
agreement with our senior subordinated creditor with respect to, among other
things, the consolidation of our facilities and amendments to our financial
covenants with it. In exchange for our senior subordinated creditor's consent
and agreement to amend the securities purchase agreement and other investment
documents and certain other consideration, we issued to it 23.57 shares of our
Series A Convertible Preferred Stock and a warrant to purchase 57.57 shares of
our common stock and agreed to pay a restructuring fee in an aggregate amount of
$423,000 payable in three installments ending in March 2003. Following the
contemplated 12,010 for 1 stock split, the shares of Series A Convertible
Preferred Stock will be convertible into 283,076 shares of our common stock, and
the warrant will be exercisable for 691,416 shares of our common stock at an
exercise price of $0.0000008 per share. The designations for the Series A
Convertible Preferred Stock provide the holder with, among other things, a
liquidation preference per share of $31,820.11, plus declared and unpaid
dividends, voting rights along with holders of common stock, protective
provisions, conversion rights and anti-dilution protection.

     Our existing securities purchase agreement with our senior subordinated
creditor provides that, immediately following the spin-off, it is entitled to
anti-dilution protection so that the shares of common stock issuable upon
exercise of its warrants and conversion of its shares of our Series A
Convertible Preferred Stock will represent in the aggregate not less than 24.0%
of our outstanding shares of capital stock, determined on a fully diluted basis
and including the reservation of shares of common stock for issuance under our
2002 Employee Stock Option Plan. See "Risk Factors--Risks Relating to the
Ownership of Our Common Stock--A small group of stockholders controls a
significant amount of our common stock," "Principal Stockholders," "Description
of Capital Stock" and "Certain Transactions."

     As of June 30, 2002, we were in violation of certain financial covenants
with respect to our financing arrangements with the Bank and our senior
subordinated creditor. As of September 11, 2002, we had received a

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<PAGE>

waiver of these violations from the Bank and an amendment to our financial
covenants with our senior subordinated creditor, effective as of June 30, 2002.
Additionally, we entered into further amendments to our financing arrangements
with both creditors, whereby, among other things, future financial covenant
requirements were modified to levels more consistent with the our current and
future expected results of operations. We expect, based upon historical
performance, current results of operations through August 2002 and forecasted
performance throughout the remainder of fiscal 2002 and all of fiscal 2003, that
it is probable that we will be in compliance with all of our revised financial
and other covenant requirements. Accordingly, we have classified our outstanding
senior subordinated debt, which matures in November 2004, as long-term in the
accompanying unaudited consolidated balance sheet as of June 30, 2002. In the
future, our failure to achieve certain revenue, expense and profitability
forecasts could result in a violation of our amended financial covenants under
our financing arrangements, which could have a material adverse effect on our
financial condition, results of operations or cash flows.

     Pursuant to our equity repurchase option agreement with our senior
subordinated creditor, we have the right to repurchase from it, in whole but not
in part, the shares of our common stock issuable upon exercise of the warrants
and conversion of the shares of our Series A Convertible Preferred Stock it
holds and the shares of our Series A Convertible Preferred Stock it holds. We
may exercise this option if:

     .   a default occurs under the securities purchase agreement and the holder
         provides written notice to us requesting that we make payments in
         addition to those which we are then obligated to make under our then
         existing financing arrangement or declares all of our obligations to
         the holder under the securities purchase agreement to be immediately
         due and payable, or

     .   if we notify the holder that we intend to merge, sell all or a
         significant portion of our assets, reorganize or recapitalize or enter
         into a bona fide transaction valued at more than $8.0 million and it
         does not consent to the transaction.

     If we exercise our repurchase option, we may repurchase its shares of our
common stock for:

     .   if our common stock is publicly traded, the greater of the current
         market price per share or an amount per share based on a predetermined
         formula, or

     .   if our common stock is not publicly traded, an amount based on the
         predetermined formula.

     We may repurchase its shares of our Series A Convertible Preferred Stock
for an amount equal to the greater of:

     .   the number of shares of our common stock issuable upon conversion of
         the shares of Series A Convertible Preferred Stock being repurchased
         multiplied by the per share amount determined with respect to our
         common stock, and

     .   $540,000.

See "Principal Stockholders," "Description of Capital Stock" and "Certain
Transactions."

                                       30

<PAGE>

     Below is a summarization of our contractual obligations at June 30, 2002.

                  Maturities of long-term debt at June 30, 2002

                    Fiscal Year
                -------------------
                Remainder of 2002                    $   310,732
                2003                                  14,022,677
                2004                                      50,202
                2005                                  25,254,790
                2006 and thereafter                       46,069
                                                     -----------
                Total                                 39,684,470
                Less unamortized debt
                    discount                          (1,387,167)
                                                     -----------
                                                     $38,297,303

                 Future minimum lease payments at June 30, 2002

                    Fiscal Year
                -------------------
                Remainder of 2002                    $   485,375
                2003                                   1,751,951
                2004                                   1,323,000
                2005                                   1,209,680
                2006 and thereafter                    4,777,534
                                                     -----------
                Total                                $ 9,547,540

     In January 2002, we entered into a lease for a 147,210 square foot facility
in Vernon, California, and we have begun to consolidate certain of our home
office, manufacturing and warehousing, product development, and marketing and
quality control facilities into a single location. See "Business--Facilities."

     From time to time, we have made advances to Overhill Corporation for
various purposes in the context of our parent-subsidiary relationship. We have
approximately $11.2 million in receivables from Overhill Corporation and $1.0
million of payables to Overhill Corporation as of June 30, 2002. In connection
with the spin-off, Overhill Corporation will transfer to us as partial payment
of these advances two promissory notes made in the amounts of $207,375 and
$184,875, made by James Rudis, our President and Chief Executive Officer, and
William E. Shatley, our Senior Vice President and Treasurer, respectively. We
intend to cancel the remaining amounts owed to us by Overhill Corporation in
connection with the spin-off after obtaining the appropriate consents under our
financing arrangements.

     A significant portion of our business is derived from the airline industry.
The tragic events of September 11, 2001 have significantly impacted our sales to
airline-related customers. Though the long-term effect of these events on the
airline industry, airline revenues, and on our business in particular, cannot be
accurately determined at this time, we are estimating that sales to
airline-related customers in fiscal 2002 will decrease by 35% to 40% from 2001
levels. For the nine months ended June 30, 2002, $24.3 million, or approximately
24% of our revenues, as compared to $40.7 million, or approximately 34% of our
revenues, for the same period in fiscal 2001, were derived from our airline
customers.

     The terrorist attacks on the World Trade Center in New York and the
Pentagon in Washington, D.C. using hijacked commercial aircraft have been highly
publicized. The impacts that these events may have on the airline industry in
general, and on our business in particular, are not known at this time. The
effects of these tragic events have included, among other things, a decreased
demand for air travel due to fears regarding additional acts of terrorism and
increased costs and reduced operations, including meal service, by airlines due
to new security directives adopted by the Federal Aviation Administration. In
addition, airlines may continue to reduce meal service as a cost saving measure
in response to a decline in air travel. In fact, American Airlines and Delta
Airlines, two of our largest airline customers, have already reduced meal
service on certain domestic flights. A significant portion of our business
focuses on the airline industry, and these effects, depending on their scope and
duration, which we cannot predict at this time, could negatively impact our
financial position, results of operations or cash flows. See

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<PAGE>

"Risk Factors--Risks Related to Our Business and Industry--Decline in air travel
may negatively impact our revenues and costs" and "Business--Sales and
Marketing."

     Subject to our receipt of the extension from Union Bank or an alternative
method of financing, as discussed above, we believe that the funds available to
us from operations and existing capital resources will be adequate for our
capital requirements for the next 12 months.

Quantitative and Qualitative Disclosures about Market Risk

     Our interest expense is affected by changes in prime and LIBOR rates as a
result of our revolving line of credit facility and term loan with the Bank. If
these market and reference rates increase by an average of 1 percent, our
interest expense for the next twelve months would increase by approximately
$140,000 based on the outstanding loan balances at June 30, 2002. We do not own,
nor do we have an interest in any other market risk sensitive instruments. See
"Business."

Recent Accounting Pronouncements

     In November 2001, the Financial Accounting Standards Board issued Statement
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
(Statement 144). These rules supersede FASB Statement No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
providing a single accounting model for long-lived assets to be disposed of.
Although retaining many of the fundamental recognition and measurement
provisions of Statement 121, the new rules significantly change the criteria
that would have to be met to classify an asset as held-for-sale. SFAS 144 also
supersedes the provisions of APB Opinion 30 with regard to reporting the effects
of a disposal of a segment of a business and requires expected future operating
losses from discontinued operations to be displayed in discontinued operations
in the period(s) in which the losses are incurred (rather than as of the
measurement date as previously required by APB 30). SFAS 144 is effective for
fiscal years beginning after December 15, 2001 and interim periods within those
fiscal years, although earlier application is encouraged. We have adopted SFAS
144 as of October 1, 2001. The adoption of SFAS 144 did not have a material
effect on our financial position, results of operations or cash flows.

     In June 2001, the Financial Accounting Standards Board issued Statement No.
142, Goodwill and Other Intangible Assets (SFAS 142), which requires that
goodwill no longer be amortized but instead be tested at least annually for
impairment by reporting unit. We are required to adopt SFAS 142 effective as of
October 1, 2002, though early adoption as of October 1, 2001 is permitted. We
have adopted SFAS 142 as of October 1, 2001 and no impairment of goodwill was
recorded upon adoption. Had we been accounting for goodwill under SFAS 142, our
income before income taxes and extraordinary item would have increased for
fiscal years 2001, 2000 and 1999 by $830,000, $650,000 and $513,000,
respectively, and net income would have increased by $548,000 ($577.45 per
share), $429,000 ($446.88 per share) and $339,000 ($333.99 per share),
respectively. Also, had we been accounting for goodwill under SFAS 142, our
income before income taxes and net income would have increased $623,000 and
$411,000 ($428.13 per share), respectively, for the nine months ended July 1,
2001.

Critical Accounting Policies

     Management's discussion and analysis of its financial condition and results
of operations are based upon our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
those estimates. See Note 2 to the Consolidated Financial Statements. Management
believes the following critical accounting policies are related to its more
significant estimates and assumptions used in the preparation of its
consolidated financial statements.

     Concentrations of Credit Risk. Our financial instruments that are exposed
to concentrations of credit risk consist primarily of trade receivables. We
perform ongoing credit evaluations of our customers' financial condition and
generally require no collateral from our customers. For the fiscal years ended
September 30, 2001, October 1, 2000 and September 26, 1999, revenues from
airline-related customers accounted for approximately 34%, 35% and 27% of total
revenues, respectively. Additionally, accounts receivable from airline-related
customers accounted for approximately 33% of the total accounts receivable
balance at September 30, 2001. Our allowance for doubtful

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<PAGE>

accounts is calculated based primarily upon historical bad debt experience and
current market conditions. Historically, bad debt expense and accounts
receivable write-offs, net of recoveries, have been immaterial. The results of
the tragic events of September 11, 2001 have significantly impacted our sales to
airline-related customers. The long-term effect of these events on the airline
industry, airline revenues, and on our business in particular, still cannot be
accurately determined at this time. These effects, depending upon their scope
and duration, which we cannot predict at this time, could negatively impact our
financial position, results of operations, or cash flows.

     Inventories. Inventories, which include material, labor and manufacturing
overhead, are stated at the lower of cost, which approximates the first-in,
first-out (FIFO) method, or market. We use a standard costing system to estimate
our FIFO cost of inventory at the end of each reporting period. Historically,
standard costs have been materially consistent with actual costs. We determine
the market value of our raw ingredients, finished product and packaging
inventories based upon references to current market prices for such items as of
the end of each reporting period and record a write down of inventory standard
cost to market, when applicable.

     Excess of Cost Over Fair Value of Net Assets Acquired. The excess of cost
over fair value of net assets acquired (goodwill) at the date of acquisition is
amortized on a straight-line basis over 20 years. We determine the period to be
benefited by using qualitative measuring factors such as competition, demand and
obsolescence, as well as legal, regulatory and contractual provisions. In
addition, we evaluate the existence of goodwill impairment on the basis of
whether the goodwill is fully recoverable from projected, undiscounted cash
flows of the related business unit. On October 1, 2001, we adopted the
provisions of SFAS No. 142, "Goodwill and Other Intangible Assets", which
requires that goodwill no longer be amortized, but be tested at least annually
for impairment by reporting unit. Our adoption of SFAS No. 142 on October 1,
2001 resulted in no impairment of goodwill being recorded upon adoption.

     Income Taxes. Deferred income taxes recorded using the liability method
reflect the net tax effects of temporary differences between the carrying amount
of assets and liabilities for financial reporting purposes and the amounts used
for income tax purposes. We are included in the consolidated federal tax return
of Overhill Corporation and have provided for federal taxes on a separate
company basis in accordance with SFAS No. 109, "Accounting for Income Taxes."
Historically, with respect to our state income taxes, primarily in California,
we have been able to reduce our tax liability by offsetting otherwise taxable
income with other losses under the Overhill Corporation entity. On a separate
company basis, we would have an approximate effective state tax rate of 5%.

                                       33

<PAGE>

                                    BUSINESS

History

     Overhill Farms, Inc. was formed in 1995 as a Nevada corporation. In May
1995, we acquired all of the operating assets of IBM Foods, Inc. for a cash
payment of $31.3 million, plus the assumption of certain liabilities. While our
business in nationwide, our headquarters are located in Vernon, California, and
we have facilities throughout Southern California. During August 2000, we
purchased the operating assets and trademarks of the Chicago Brothers food
operations from a subsidiary of Schwan's Sales Enterprises, Inc. for total
consideration of $4.2 million, consisting of cash of $3.3 million and a note
payable to the seller for $900,000.

Products and Services

     Overhill Farms, Inc. is a value-added manufacturer of quality frozen food
products including entrees, plated meals, meal components, soups, sauces,
poultry, meat and fish specialties. We are positioned as a provider of custom
prepared foods to a number of prominent customers such as Albertson's, Jenny
Craig, Carl's Jr., Jack in the Box, Panda Express, Schwan's and King's Hawaiian
as well as most domestic airlines, including American Airlines, United Airlines
and Delta Airlines. Historically, we have served four industries: airlines,
weight loss, foodservice and retail.

Sales and Marketing

     We market our products through an internal sales force and outside food
brokers. Prior to September 11, 2001, we believed that the airline industry,
while mature, represented an area for moderate growth potential in the future.
We have refocused our attention on domestic carriers not currently being served
to any great extent by us and on foreign carriers who are increasingly choosing
frozen entrees as part of their in-flight feeding programs. Additionally, we
estimated that the weight loss industry, predominantly our sales to Jenny Craig,
would have little or no growth in the near term. Accordingly, we have realigned
our sales force and redirected our marketing efforts to concentrate on the
foodservice and retail markets.

     Approximately two-thirds of our sales for the nine months ended June 30,
2002 were derived from five customers, Panda Express, Jenny Craig, King's
Hawaiian, Albertson's and American Airlines, representing approximately 21%,
15%, 11%, 9% and 7% of sales, respectively. Although our relationships with
these customers continue to remain strong, there can be no assurance that these
relationships will continue. As in the previous year, we have made a concerted
effort to sign multi-year supply agreements with our major customers. Major
contracts that were signed or extended in fiscal 2000 include American Airlines,
Delta Airlines, Panda Express, and Schwan's. A decline in sales of our products
to these customers or the loss of, or a significant change in the relationship
between us and any of these key customers, could have a material adverse effect
on our business and operating results. It is our objective to continue to reduce
the reliance on a small concentration of accounts by further expansion into
custom products for retail and foodservice customers nationwide.

Manufacturing and Sourcing

     Our manufacturing operations are located in six separate facilities with
three in the Los Angeles area and three in the San Diego area. With the addition
of the San Diego facilities and the outsourcing of certain products, management
estimates that the combined facilities are operating at approximately 70% of
capacity based on current product mix. We are currently in the process of
implementing programs to improve manufacturing efficiencies including the
consolidation of facilities and the addition of equipment to improve freezing
capabilities and to automate some operations. We have entered a lease for a new
facility in Vernon, California and are currently in the process of consolidating
certain of our manufacturing, home office, warehousing, product development and
marketing and quality control facilities. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources" and "Business--Facilities."

     Our ability to economically produce large quantities of our products, while
at the same time maintaining a high degree of quality, depends on our ability to
procure raw materials on a reasonable basis. We rely on a few large suppliers
for our poultry products and purchase the remaining raw materials from suppliers
in the open market. We do not anticipate any difficulty in acquiring these
materials in the future. See "Risk Factors--Risks Related to Our

                                       34

<PAGE>

Business and Industry--We are subject to cost fluctuations in our operations
that may adversely affect our profitability" and "--We are major purchasers of
many commodities that we use for raw materials and packaging, and price charges
for the commodities we depend on may adversely affect our profitability." Raw
materials, packaging for production and finished goods are stored on site or in
public frozen food storage facilities until shipment. During the three months
ended December 30, 2001, we continued our program of outsourcing certain
production where it proved economically efficient. We consider this program a
success and plan to continue this program and expand it, where practicable. See
"Risk Factors--Risks Related to Our Business and Industry--Our ability to
compete effectively in the highly competitive food industry may affect our
operational performance and financial results."

Backlog

     We typically deliver products directly from finished goods inventory. As a
result, we do not maintain a large backlog of unfilled purchase orders. While at
any given time there may be a small backlog of orders, our backlog is not
material in relation to total sales, nor is it necessarily indicative of trends
in our business. Some orders are subject to changes in quantities or to
cancellation with 30 days' notice without penalties to customers. See "Risk
Factors--Risks Related to Our Business and Industry--Some of our significant
customer and supplier contracts are short-term."

Competition

     Our food products, consisting primarily of poultry, pasta, beef and
assorted related products, compete with products produced by numerous regional
and national firms. Many of these companies are divisions of larger fully
integrated companies such as Tyson Foods and ConAgra, which have greater
financial, technical, human and marketing resources than we have. Competition is
intense with most firms producing similar products for the foodservice and
retail industries. Competitive factors include price, product quality, product
development, customer service and, on a retail basis, name recognition. We are
competitive in this market by our ability to produce mid-sized/custom product
runs, within a short time frame and on a cost effective basis. We can give no
assurance that we will compete successfully against existing companies or new
entrants to the marketplace. See "Risk Factors--Risks Related to Our Business
and Industry--Our ability to compete effectively in the highly competitive food
industry may affect our operational performance and financial results."

Product Development and Marketing

     We manufacture products in the retail and food service areas with branded
and private label entrees. We maintain a comprehensive, fully staffed test
kitchen which formulates recipes and upgrades specific products for current
customers and establishes production and quality standards. We develop products
based upon either customers' specifications, conventional recipes or new product
developments. We are continuously developing recipes as customers' tastes and
client requirements change. We also maintain a quality control department for
testing and quality control.

Intellectual Property

     We have registered the trademark "Overhill Farms," among others, in the
United States Patent and Trademark Office. In addition, we recently acquired
from Schwan's Sales Enterprises, Inc. several trademarks relating to the
acquired operations, including, among others, "Chicago Brothers" and "Florence
Pasta and Cheese." See "Risks Factors--Risks Related to Our Business and
Industry--We may not be able to protect our intellectual property and
proprietary rights, which could harm our competitive position, resulting in
decreased revenue."

Facilities

     We lease three manufacturing facilities in the Los Angeles, California
area. Plant No. 1 is located in Inglewood, California and has 39,000 square feet
of manufacturing area. Plants No. 2 and No. 3 are located in Vernon, California
and have 49,000 and 27,000 square feet of manufacturing area, respectively. In
addition to the manufacturing facilities, we also lease two warehouse facilities
in Inglewood, California, one of which consists of 13,500 square feet of dry
goods storage and the other consisting of 11,500 feet of dry goods storage and
7,700 square feet of frozen storage. Our recently acquired Chicago Brothers
operations are conducted in leased facilities

                                       35

<PAGE>

in San Diego, California consisting of a manufacturing facility of 33,300 square
feet and a 9,400 square foot warehouse and administration facility. We believe
that the existing facilities are adequate to meet our requirements in the
foreseeable future. However, we entered into a ten-year lease for a 147,210
square foot facility in Vernon, California, and we have begun to consolidate
certain of our home office, manufacturing and warehousing, product development,
and marketing and quality control facilities into a single location. Though we
are currently in the process of implementing various stages of this plan,
management believes that when the plan is fully implemented, we should expect to
achieve operating efficiencies as well as a reduction of our dependence on
outside cold storage facilities. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources."

Legal Proceedings

     In June 2002, the United States Court of Appeals for the Ninth Circuit
issued a ruling in an appeal involving the case entitled "Peltz, et al. v.
Polyphase Corporation, et al." originally filed in fiscal 1997 against Overhill
Corporation and certain of its officers and directors based on alleged
misrepresentations that the plaintiffs claimed resulted in the market price of
Overhill Corporation's stock being artificially inflated. Overhill Corporation
is a named defendant in the Peltz action. We are not a named defendant in the
Peltz action. The plaintiffs have not pleaded specific damages, but they have
advanced damage estimates for the named plaintiffs ranging from approximately
$27,000 to approximately $600,000. The plaintiffs in the Peltz action have never
filed a motion for class certification and a class has never been certified;
however, if a class is certified, damages for the putative class could be
substantial and could have a material adverse effect on Overhill Corporation's
business and financial condition which could have a material adverse effect on
us if the plaintiffs in the Peltz action again try to delay or cancel the
spin-off or file an action for damages directly against us.

     On November 12, 2000, the United States District Court for the District of
Nevada granted summary judgment in favor of Overhill Corporation and certain of
its current and former officers and directors on all of plaintiffs' claims and
dismissed the case. The appeals court affirmed several of the district court's
rulings, including the rejection of all claims against two defendants. The Court
of Appeals reversed other portions of the lower court's judgment and remanded
those aspects of the case back to the same district court for further review.
Both sides filed petitions for rehearing, and in July 2002, the Court of Appeals
revised certain statements in its original opinion. In September 2001, the
plaintiffs requested the appeals court to enjoin the proposed spin-off of
Overhill Farms. The appeals court denied the plaintiffs' request and directed
them to address their request to the district court. The plaintiffs thereafter
filed an application with the district court, which restrained the spin-off for
a few days until a hearing could be conducted with respect to the proposed
spin-off. Following an October 11, 2001 hearing at which counsel for all parties
appeared, the district court dissolved its temporary restraining order, thereby
allowing Overhill Corporation to proceed with the proposed spin-off. In
September 2002, two of the five named plaintiffs in the Peltz action filed a
second application with the district court to enjoin the spin-off. The district
court denied the motions to enjoin the spin-off. Overhill Corporation has
indicated that it would continue to vigorously defend against what it believes
are unsupportable claims advanced by the plaintiffs' attorneys. An adverse
resolution of any court action relating to the Peltz action could result in the
delay or cancellation of the spin-off or in a court imposing other requirements
on us that could have a material adverse effect on our business and financial
condition.

     From time to time, we become involved in various lawsuits, claims and
proceedings related to the conduct of our business. Management does not believe
that the disposition of any pending claims is likely to have a material adverse
effect on our financial condition, results of operations or cash flows.

Employees

     As of June 30, 2002, we had approximately 864 full time employees. Most of
our operations are labor intensive, generally requiring semi-skilled employees.
Also, the Los Angeles manufacturing employees are unionized with contracts
through 2003 and 2004 covering each of the three plants. Our union contract with
Teamsters Local 986, which represents our Plant No. 1 employees, was renewed as
of December 1, 2000 through November 30, 2003. The union for our other Los
Angeles operations ratified a renewal of their union contract on March 1, 2002.
We believe relations with the unions are good.

     Manufacturing processes in San Diego are more machine intensive, requiring
more skilled machine operators, mechanics, and supervision. The workforce in San
Diego is not unionized and labor relations have continued to be

                                       36

<PAGE>

supportive of the recent management change following our purchase of the Chicago
Brothers operations. We consider our relations with all of our employees to be
good.

Regulation

     Food manufacturers are subject to strict government regulation,
particularly in the health and environmental areas, by the United States
Department of Agriculture, also called the "USDA," the Food and Drug
Administration, or the "FDA," Occupational Safety and Health Administration and
the Environmental Protection Agency. Our food processing facilities are subject
to on-site examination, inspection and regulation by the USDA. Compliance with
the current applicable federal, state and local environmental regulations has
not had, and we do not believe that in the future such compliance will have, a
material adverse effect on our financial position, results of operations,
expenditures or competitive position. To date, we have never been required to
recall any of our products. See "Risk Factors--Risks Related to Our Business and
Industry--If our food products become adulterated or misbranded, we would need
to recall those items and may experience product liability claims if consumers
are injured as a result." During 1997, we implemented a Hazard Analysis Critical
Point Plan to ensure proper handling of all food items. This plan is currently
in use by us as well. See "Risk Factors--Risks Related to Our Business and
Industry--Our business is subject to federal, state and local government
regulations, the impact of which could have a negative impact on our business
and financial position."

                                       37

<PAGE>

                                   MANAGEMENT

     Immediately following the spin-off, our board of directors is expected to
consist of the individuals named below, who will hold office until the next
annual meeting of stockholders, or until their respective successors are duly
elected and qualified.

<TABLE>
<CAPTION>
                                                                           Present
                                                                       Office(s) Held                    Director
                    Name                          Age                  In the Company                      Since
                    ----                          ---                  --------------                      -----
<S>                                               <C>    <C>                                             <C>
James Rudis ..................................     52    President, Chief Executive Officer and Chairman   1995
                                                         of the Board of Directors

Richard A. Horvath. ..........................     56    Senior Vice President, Secretary, Chief           1999
                                                         Financial Officer and Director

William E. Shatley ...........................     56    Senior Vice President, Treasurer and              1998
                                                         Director

Robert W. Schleizer ..........................     48    Director                                          2002

Harold Estes .................................     62    Director                                          2002

Geoffrey A. Gerard ...........................     57    Director                                          2002

John E. McConnaughy, Jr. .....................     73    Director                                          2002
</TABLE>

     The following information regarding the principal occupations and other
employment of our directors during the past five years and their directorships
in certain companies is as reported by the respective directors:

     James Rudis was elected to our board of directors in April 1995 and has
served as President since June 1997. He has also served as a director of
Overhill Corporation since December 1992, Chairman and Chief Executive Officer
of Overhill Corporation since February 1998 and President of Overhill
Corporation since July 1997. He served as Executive Vice President of Overhill
Corporation from March 1994 until July 1997. Mr. Rudis will remain as a director
of Overhill Corporation for a period of no greater than one year after the
spin-off to facilitate the transition of Overhill Corporation and Overhill
Farms, Inc. into two separate companies. Prior to his employment with us and
with Overhill Corporation, Mr. Rudis was President of Quorum Corporation, a
private consulting firm involved in acquisitions and market development. From
1970 until 1984, he held various executive positions in CIT Financial
Corporation, including Vice President and Regional Manager of that company's
Commercial Finance Division.

     Richard A. Horvath was elected to our board of directors in November 1999
and has served as our Senior Vice President and Secretary since November 1997.
Mr. Horvath has been in the food industry for almost 30 years. Prior to his
employment at Overhill Farms, Mr. Horvath served as the Chief Financial Officer
of Martino's. During the period of 1973 to 1996, he held various positions with
the Carnation Company, Star Kist Foods, and Mission Foods.

     William E. Shatley was elected to our board of directors and was named as
our Senior Vice President and Treasurer in February 1998. Mr. Shatley has served
as Senior Vice President of Overhill Corporation since March 1994 and as a
director of Overhill Corporation since February 1998. He joined Overhill
Corporation in an executive capacity in October 1993, having previously served
on an advisory basis since the relocation of its corporate offices to Texas in
1992. Mr. Shatley, a certified public accountant since 1970, previously
conducted his own consulting and accounting practice from 1982 to 1993, after
having served as Vice President and Chief Financial Officer of Datotek, Inc.
from 1977 to 1982 and in an executive capacity with Arthur Andersen from 1968 to
1977.

     Geoffrey A. Gerard was elected to our board of directors in February 2002.
Mr. Gerard served as Secretary and General Counsel of Equivest, Inc. from 1975
to 1977. Mr. Gerard then served as Secretary and General Counsel for

                                       38

<PAGE>

two privately-held oil and gas exploration companies until 1978. Mr. Gerard has
been in the private practice of law in Dallas County, Texas since 1978
specializing in business transactions. Mr. Gerard received his B.S. in
Business-Finance and his J.D. from Indiana University.

     Additional directors may be elected or appointed in connection with the
spin-off, and we intend to add additional outside directors to our board of
directors. Currently, we anticipate that the following individuals will be
appointed to our board of directors prior to the effective date of the spin-off:

     .  Robert W. Schleizer. Mr. Schleizer has been a partner with Tatum CFO
        Partners, LLP, a national firm of Chief Financial Officers, since
        October 1999. Mr. Schleizer also served as Chief Financial Officer and
        Chief Operating Officer of Barber Trucking, a privately held national
        trucking company, from January 1998 to November 1999. From 1995 to 1997,
        Mr. Schleizer was President, Treasurer and a director of Pegasus
        Industries, Inc., a retail and financial services firm. Mr. Schleizer
        has been Executive Vice President, Chief Financial Officer, Treasurer
        and Director of PawnMart, Inc. since January 2001. PawnMart, Inc. filed
        for bankruptcy in July 2001 and its plan of reorganization was confirmed
        by the bankruptcy court in May 2002. From 1987 to 1997, Mr. Schleizer
        served as a business and financial consultant with Pegasus Financial
        Services, Inc. Mr. Schleizer previously served as a director of Overhill
        Farms, Inc. from July 2000 until December 2001.

     .  Harold Estes. Mr. Estes is the President of Texas Timberjack, Inc.
        ("TTI"), a wholly owned subsidiary of Overhill Corporation. He was
        elected as a director of Overhill Corporation in February 1996 and
        resigned from the Overhill Corporation board of directors in April 1997.
        TTI is a distributor of industrial and commercial timber and logging
        equipment and is also engaged in certain related timber and sawmill
        operations. Mr. Estes has been President of TTI since 1984, when he
        acquired TTI from Eaton Corporation. Mr. Estes previously served as a
        director of Newton Bancshares, Inc., the parent of First National Bank
        of Newton (Texas) for approximately 10 years until the sale of the bank
        in October 2001.

     .  John E. McConnaughy, Jr. Mr. McConnaughy has served as Chairman and
        Chief Executive Officer of JEMC Corporation, a personal holding company
        since he founded it in 1985. His career includes positions of management
        with Westinghouse Electric and the Singer Company, as well as service as
        a director of numerous public and private companies. In addition, he
        previously served as Chairman and CEO of Peabody International Corp. and
        Chairman and CEO of GEO International Corp. He retired from Peabody in
        February 1986 and GEO in October 1992. Mr. McConnaughy served as
        Chairman of Excellence Group, LLC, which filed a petition for bankruptcy
        under Chapter 11 in January 1999, and currently serves on the boards of
        five other public companies (Wave Systems, Inc., Mego Financial Corp.,
        Riddell Sports, Inc., Levcor International, Inc., and DeVlieg Bullard,
        Inc.), and one private company (PetsChoice, Ltd.). He also serves on the
        Board of Trustees and Executive Committee of the Strang Cancer
        Prevention Center and as Chairman of the Board for the Harlem School of
        the Arts. Mr. McConnaughy holds a B.A. of Economics from Denison
        University, and an M.B.A. in Marketing and Finance from Harvard's
        Graduate School of Business Administration.

Board of Directors and Committees

     Our board of directors did not hold regularly scheduled meetings during the
fiscal year ended September 30, 2001. Following the spin-off, our board of
directors may use working committees with functional responsibility in the more
complex recurring areas where disinterested oversight is required. In addition
to other committees established by our board of directors from time to time, in
connection with the spin-off our board of directors intends to establish the
Audit Committee and the Compensation Committee.

Audit Committee

     In connection with the spin-off, we intend to form the Audit Committee to
be composed of three independent outside directors. The Audit Committee will
operate pursuant to a charter approved by our board of directors, according to
the rules and regulations of the Securities and Exchange Commission and the
American Stock Exchange. Its functions will be to monitor our financial
reporting process and internal control system, review and appraise the audit
efforts of our independent auditors and provide an avenue of communication among
our

                                       39

<PAGE>

independent accountants, financial and senior management and our board of
directors. We anticipate that the Audit Committee will consist of Mr. Gerard,
Mr. Schleizer and Mr. McConnaughy.

Compensation Committee

     In connection with the spin-off, we intend to form the Compensation
Committee to be composed entirely of disinterested non-employee directors. The
Compensation Committee functions will be to administer our employee stock option
plans and approve the granting of stock options and approve compensation for
officers. We anticipate that the Compensation Committee will consist of Mr.
Gerard, Mr. Schleizer and Mr. McConnaughy.

Director Compensation

     We have never paid any compensation to our directors for their services as
directors. However, we intend to pay director compensation following the
spin-off, though we have not yet determined the director compensation.

     The compensation of our employee directors is discussed under "Historical
Compensation of Executive Officers" below.

Employment Agreements

     James Rudis, our President, and William E. Shatley, our Senior Vice
President and Treasurer, have each entered into an employment agreement with us
and Overhill Corporation. We may replace these agreements with Mr. Rudis and Mr.
Shatley in connection with the spin-off, and Overhill Corporation would not be a
party to the replacement agreements. Richard A. Horvath, our Senior Vice
President and Secretary, also has entered into an employment agreement with us.
We do not maintain employment agreements with any of our other personnel.

        James Rudis and William E. Shatley Employment Agreements

     Mr. Rudis' and Mr. Shatley's current employment agreements each have an
initial term of five years, commencing November 1, 1999, automatically renewing
from year to year thereafter unless terminated by either party thereto. These
agreements provide that we will review their compensation annually and may
increase it in a percentage not less than that of the annual increase in the
cost of living. Each employment agreement contains a covenant by the executive
not to compete with us during the term of his employment and for a period of one
year thereafter.

     These employment agreements also provides that if the executive is
terminated by reason of his death or disability, he or his estate is entitled to
receive:

     .  his base salary through the date of termination;

     .  all bonuses earned through the date of termination, paid in accordance
        with the terms of the bonus plan pursuant to which the bonus was earned;

     .  accrued but unused vacation and sick leave pay;

     .  reimbursement for reasonable and necessary business expenses incurred
        before termination;

     .  all rights to which he is granted under our life insurance policy; and

     .  all amounts to which he is entitled under any profit sharing plan of our
        company.

     If the executive voluntarily resigns prior to the end of the term, he is
entitled to receive all amounts that he would receive as if he was terminated as
a result of death or disability and accrued but unused personal business days
paid at a per diem rate equivalent to the executive's then current salary,
provided, however, that he will not be entitled to receive any bonus payments.
In the event the executive is terminated for cause, he is entitled to receive
all amounts that he would receive as if he was terminated as a result of death
or disability. If he is terminated other than for cause, he is entitled to
receive:

                                       40

<PAGE>

     .  in a lump sum, the remainder of his salary for the remainder of the term
        of the agreement;

     .  any bonus earned through the date of termination, paid in accordance
        with the terms of the bonus plan pursuant to which any bonus may have
        been earned;

     .  accrued but unused vacation and sick leave pay;

     .  reimbursement for reasonable and necessary business expenses incurred
        prior to termination;

     .  all rights to which he is granted under our life insurance policy;

     .  all amounts to which he is entitled under any profit sharing plan of our
        company; and

     .  monthly payments for one year equal to the monthly premium required to
        maintain his life and health insurance benefits pursuant to the
        Consolidated Omnibus Budget Reconciliation Act of 1985 under our group
        insurance plan.

If he is terminated other than for cause, he is also entitled to have all
indebtedness by him to us and Overhill Corporation forgiven and to use the car
provided to him in his employment agreement for one year following the date of
termination.

        Richard A. Horvath Employment Agreement

     Mr. Horvath's employment agreement has an initial term of three years,
commencing November 1, 1999, automatically renewing from year to year thereafter
unless terminated by either party thereto. Compensation is set in his agreement,
subject to our review on an annual basis. His agreement contains a covenant by
him not to compete with us during the term of his employment and for a period of
one year thereafter. His employment agreement also provides that if he is
terminated by reason of his death or disability, he or his estate is entitled to
receive:

     .  his base salary through the date of termination;

     .  all bonuses earned through the date of termination, paid in accordance
        with the terms of the bonus plan pursuant to which the bonus was earned;

     .  accrued but unused vacation and sick leave pay;

     .  reimbursement for reasonable and necessary business expenses incurred
        before termination; and

     .  all amounts to which he is entitled under any profit sharing plan of our
        company.

     If Mr. Horvath voluntarily resigns prior to the end of the term, he is
entitled to receive all amounts that he would receive as if he was terminated as
a result of death or disability and accrued but unused personal business days,
provided, however, that he will not be entitled to receive any bonus payments.
In the event Mr. Horvath is terminated for cause, he is entitled to receive all
amounts that he would receive as if he was terminated as a result of death or
disability, provided, however, that he will not be entitled to receive any bonus
payments or any reimbursement expenses. If he is terminated other than for
cause, he is entitled to receive:

     .  in a lump sum, an amount equal to the greater of the remainder of his
        salary for the current year or $200,000;

     .  any bonus earned through the date of termination, paid in accordance
        with the terms of the bonus plan pursuant to which any bonus may have
        been earned;

     .  accrued but unused vacation and sick leave pay;

                                       41

<PAGE>

     .  reimbursement for reasonable and necessary business expenses incurred
        prior to termination;

     .  all amounts to which he is entitled under any profit sharing plan of our
        company; and

     .  monthly payments for one year equal to the monthly premium required to
        maintain his life and health insurance benefits pursuant to the
        Consolidated Omnibus Budget Reconciliation Act of 1985 under our group
        insurance plan.

2002 Employee Stock Option Plan of Overhill Farms, Inc.

     Prior to the spin-off, our board of directors adopted the 2002 Employee
Stock Option Plan of Overhill Farms, Inc. to become effective after the
spin-off, and our stockholders will be asked to approve the plan at our next
annual meeting of stockholders following the spin-off. We have reserved 800,000
shares of our common stock, on a post-stock split basis, for issuance under the
plan. The plan is intended to advance our best interests to attract, retain and
motivate directors, officers, key employees and consultants by providing them
with additional incentives through the award of incentive stock options and
non-qualified stock options.

     Eligibility

     Our employees, directors and consultants will be eligible to be granted
awards under the plan. However, only our employees will be eligible to receive
incentive stock options.

     Administration

     The plan will be administered by the Compensation Committee of our board of
directors or another committee appointed by our board of directors composed of
outside directors. The committee will have the discretion and the authority to
adopt rules and regulations for carrying out the purposes of the plan.

     Stock Options

     The stock option plan will provide for the grant of both options intended
to qualify as "incentive stock options" under Section 422 of the Internal
Revenue Code, as well as non-qualified stock options. The maximum term of a
stock option granted under the stock option plan is ten years, except that with
respect to incentive stock options granted to a person who owns stock having
more than 10% of the voting power of our stock, the term of an option shall not
exceed five years.

     Options will be issued at an exercise price determined by the committee
except that the exercise price of incentive stock options granted under the
stock option plan must be at least equal to the fair market value of our common
stock on the date of the grant. However, for any optionee who owns stock
possessing more than 10% of the voting power of our stock, the exercise price
for incentive stock options must be at least 110% of the fair market value of
our common stock on the date of the grant. The exercise price of non-qualified
stock options will be determined by the committee and may be less than, equal to
or greater than the fair market value of our common stock on the date of the
grant. The aggregate fair market value on the date of grant of the common stock
for which incentive stock options are exercisable by an optionee during any
calendar year may not exceed $100,000.

     Options granted under the proposed stock option plan may be exercised in
whole or in part as specifically set forth in the option agreement, and, except
as provided by law, no incentive stock options may be transferred except by will
or by the laws of descent and distribution. The committee may provide in an
agreement granting non-qualified options that the non-qualified options are
transferable and the extent to which the non-qualified options are transferable.
The board of directors may terminate the stock option plan after its adoption in
whole or in part at any time and may amend the stock option plan after its
adoption from time to time without stockholder approval so long as no stock
option award is revoked or altered in a manner unfavorable to the holder. The
stock option plan is expected to terminate on the tenth anniversary of the
effective date of the stock option plan, unless terminated earlier by the board
of directors.

                                       42

<PAGE>

Historical Compensation of Executive Officers

     The following table sets forth for fiscal 2001, 2000 and 1999 compensation
awarded or paid to Mr. James Rudis, our Chairman, Chief Executive Officer and
President, Mr. William E. Shatley, our Senior Vice President and Treasurer, for
services rendered to Overhill Corporation and its subsidiaries (including our
company). Mr. Rudis and Mr. Shatley are the only individuals who served as
executive officers of Overhill Corporation for the year ended September 30, 2001
who also will serve as our executive officers. The following table also sets
forth for fiscal 2001, 2000 and 1999 compensation awarded to Mr. Richard A.
Horvath, our Senior Vice President and Secretary, for services rendered to
Overhill Farms, Inc. The compensation described in this table for Mr. Rudis and
Mr. Shatley was paid by Overhill Corporation or Overhill Farms. The table does
not reflect the compensation to be paid to our executive officers in the future.
Mr. Rudis, Mr. Shatley and Mr. Horvath are also referred to in this section as
"named executive officers." Other than as indicated in the table below, none of
our executive officers received salary plus bonus in excess of $100,000 for
fiscal year 2001.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                               Annual Compensation
                                                      --------------------------------------
            Name and Principal              Fiscal                              Other Annual
                 Position                    Year        Salary        Bonus    Compensation
                 --------                  --------   ------------   ---------  ------------
<S>                                          <C>       <C>           <C>         <C>
James Rudis .............................    2001      $ 230,000     $ 40,000    $   - (1)
Chairman, Chief                              2000      $ 225,769     $ 25,000    $   - (1)
Executive Officer,                           1999      $ 180,000     $      0    $   - (1)
President and
Director of Overhill Corporation and
Overhill Farms, Inc.

William E. Shatley ......................    2001      $ 168,000     $ 15,000    $   - (1)
Senior Vice                                  2000      $ 165,000     $ 15,000    $   - (1)
President,                                   1999      $ 132,000     $      0    $   - (1)
Treasurer and
Director of Overhill Corporation and
Overhill Farms, Inc.

Richard A. Horvath ......................    2001      $ 140,000     $ 20,000    $   - (1)
Senior Vice President, Secretary and         2000      $ 140,000     $ 15,000    $   - (1)
Director of Overhill Farms, Inc.             1999      $ 127,600     $      0    $   - (1)
</TABLE>

-----------------------------------------------
(1)    The named executive officers each received certain perquisites and other
       personal benefits from Overhill Corporation or Overhill Farms during
       fiscal 2001, 2000 and 1999. These perquisites and other personal
       benefits, however, did not equal or exceed 10% of the named executive
       officers' salary and bonus during fiscal 2001, 2000 or 1999.

Compensation Committee Interlocks and Insider Participation

     No member of the Compensation Committee will be an officer or employee of
our company or any of our subsidiaries or has had any relationship requiring
disclosure pursuant to Item 404 of Regulation S-K under the Securities Act of
1933, as amended. None of our executive officers serves as a member of a
compensation committee of another corporation (or other board committee of such
company performing similar functions or, in the absence of any such committee,
the entire board of directors of such corporation), one of whose executive
officers serves on the Compensation Committee. None of our executive officers
serves as a director of another corporation, one of whose executive officers
served on the Compensation Committee. None of our executive officers serves as a
member of a compensation committee of another corporation (or other board
committee of such corporation performing similar functions or, in the absence of
any such committee, the entire board of directors), one of whose executive
officers serves as one of our directors.

                                       43

<PAGE>

                             PRINCIPAL STOCKHOLDERS

     Prior to the spin-off, Overhill Corporation owned 99% of our issued and
outstanding common stock. The following table sets forth certain information
with respect to beneficial ownership of our common stock as of September 19,
2002 after giving pro forma effect to the spin-off, for:

         .  each person who is known by us to beneficially own more than 5% of
            our common stock,

         .  each of our directors and named executive officers, and

         .  all directors and officers as a group.

     The percentage of ownership is based on 9,400,828 shares of common stock
outstanding as of September 19, 2002. As of the date of this information
statement, there were outstanding 782.75 shares of our common stock. To effect
the spin-off, we intend to authorize a 12,010 for 1 stock split such that there
will be 9,307,750 shares of our common stock distributed to the stockholders of
Overhill Corporation on the effective date of the spin-off. Except as otherwise
indicated below, the persons named in the table have sole voting and investment
power with respect to all shares of common stock held by them. Unless otherwise
indicated, the principal address of each of the parties listed below is c/o
Overhill Farms, Inc., 2727 East Vernon Avenue, Vernon, California 90058.

<TABLE>
<CAPTION>
                                                                  Shares Beneficially Owned (1)(2)
                                                                  --------------------------------
           Name of Beneficial Owner                                  Number             Percent
           ------------------------                                  ------             -------
           <S>                                                      <C>                   <C>
           James Rudis .......................................       278,950              3.0
           William E. Shatley (3) ............................       202,350              2.2
           Richard A. Horvath ................................         5,750                *
           Harold Estes (4). .................................     2,007,750             21.4
           John E. McConnaughy, Jr. (5) ......................       610,300              6.5
           Levine Leichtman Capital Partners II, L.P. (6) ....     3,221,260             24.0(6)
           All directors and officers as a group
              (6 persons)(3)(4)(5) ...........................     3,105,100             33.0
</TABLE>

------------------------------------------------------------
* Indicates ownership of less than 1% of our common stock

(1)  Beneficial ownership as reported in the above table has been determined in
     accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
     amended. The persons and entities named in the table have sole voting and
     investment power with respect to all shares shown as beneficially owned by
     them, except as noted below. Amounts shown include shares of common stock
     issuable upon exercise of certain outstanding options within 60 days after
     September 19, 2002.

(2)  Except for the percentages of certain parties that are based on presently
     exercisable options which are indicated in the following footnotes to the
     table, the percentages indicated are based on 9,400,828 shares of common
     stock issued and outstanding on September 19, 2002.

(3)  Includes 79,100 shares that Mr. Shatley may be deemed to beneficially own
     as a general partner in a family limited partnership.

(4)  Mr. Estes' address is Highway 59 South, Route 15, Box 9475, Lufkin, Texas
     75901.

(5)  Mr. McConnaughy's address is 1011 High Ridge Road, Stamford, Connecticut
     06905.

(6)  Consists of, following the contemplated 12,010 for 1 stock split, (a)
     2,685,557 shares of our common stock issuable upon exercise of two warrants
     owned by Levine Leichtman Capital Partners II, L.P. ("LLCP"), (b) 23.57
     shares of our Series A Convertible Preferred Stock convertible into 283,076
     shares of our common stock owned by LLCP and (c) an additional 252,632
     shares of our common stock issuable to LLCP upon the reservation of 800,000
     shares of our common stock under our 2002 Employee Stock Option Plan of
     Overhill Farms, Inc. pursuant to the anti-dilution protection granted to
     LLCP in the amendments to our securities purchase agreement whereby the
     number of shares of our capital stock beneficially owned by LLCP on a fully
     diluted basis immediately following the spin-off shall not be less than
     24.0% of our capital stock. See "Risk Factors--Risks Relating to the
     Ownership of Our Common Stock--A small group of stockholders controls a
     significant amount of our common stock" and "Certain Transactions." LLCP
     California Equity Partners II, L.P., a California limited partnership, is
     the sole general partner of LLCP. Levine Leichtman Capital Partners, Inc.,
     a California corporation,

                                       44

<PAGE>

is the sole general partner of the LLCP California Equity Partners II, L.P.
Arthur E. Levine is a director, the President and a shareholder of Levine
Leichtman Capital Partners, Inc. Lauren B. Leichtman is a director, the Chief
Executive Officer and a shareholder of Levine Leichtman Capital Partners, Inc.
The address of each of LLCP, LLCP California Equity Partners II, L.P., Levine
Leichtman Capital Partners, Inc., Mr. Levine and Ms. Leichtman is c/o Levine
Leichtman Capital Partners II, L.P., 335 North Maple Drive, Suite 240, Beverly
Hills, California 90210.

                                       45

<PAGE>

                          DESCRIPTION OF CAPITAL STOCK

     Our authorized capital stock consists of 100,000,000 shares of common
stock, par value $0.01 per share and 50,000,000 shares of preferred stock, par
value $0.01 per share. Prior to the spin-off, we intend to amend and restate our
articles of incorporation and bylaws and the following descriptions assume the
amended and restated articles of incorporation and bylaws are in effect.

Common Stock

     As of the date of this information statement, there were outstanding 782.75
shares of our common stock and approximately 190 stockholders of record of
Overhill corporation common stock. To effect the spin-off, we intend to
authorize a 12,010 for 1 stock split such that there will be 9,400,828 shares of
our common stock outstanding and 9,307,750 shares of our common stock
distributed to the stockholders of Overhill Corporation immediately after the
spin-off.

     The holders of our common stock are entitled to one vote upon each matter
submitted to the stockholders for consideration for each share held of record
and in such manner as may be provided by law. Holders of our common stock do not
have cumulative voting rights and are entitled to one vote per share on all
matters on which the holders of common stock may vote. The common stock does not
have preemptive rights and is not subject to redemption or conversion. There are
no redemption or sinking fund provisions applicable to our common stock. All
outstanding shares of common stock are fully paid and nonassessable. Our common
stock has been approved for listing on the American Stock Exchange under the
symbol "OFI." See "The Spin-off - Listing and Trading of Our Common Stock."

Preferred Stock

     General

     Our board of directors has the authority, without further action by the
stockholders, to issue from time to time the preferred stock in one or more
series and to fix the number of shares, designations, preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions on the preferred stock. The preferences, rights and
restrictions may differ with respect to the number of shares constituting a
series or the designation of a series, voting rights, dividend rights, dividend
rates, redemption provisions, liquidation preferences, sinking fund provisions,
conversion rights, and other matters. The issuance of preferred stock could
decrease the amount of earnings and assets available for distribution to holders
of common stock or affect adversely the rights and powers, including voting
rights, of the holders of common stock, and may have the effect of delaying,
deferring or preventing a change in control of Overhill Farms, Inc. Except as
described under "--Series A Convertible Preferred Stock" below, we currently do
not plan to issue any shares of preferred stock.

     Series A Convertible Preferred Stock

     Background. In March 2002, we created a series of preferred stock
designated as "Series A Convertible Preferred Stock," par value $0.01 per share.
We authorized 28 shares of Series A Convertible Preferred Stock, and 23.57
shares are outstanding as of the date of this information statement. "See
Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

     Dividends. The holders of shares of our Series A Convertible Preferred
Stock are entitled to receive, out of any assets legally available therefor,
when, as and if declared by our board of directors, dividends in an amount equal
to any dividends payable to holders of our common stock, based on the largest
number of full shares of common stock into which the holders' shares of our
Series A Convertible Preferred Stock could be converted on the record date for
payment of each such dividend.

     Liquidation Preference. In the event of our liquidation, dissolution or
winding up, the holders of our Series A Convertible Preferred Stock will be
entitled to receive, prior and in preference to any distribution of our assets
to the holders of our common stock or other junior capital stock, an amount per
share equal to $31,820.11, plus an amount equal to declared but unpaid dividends
for each share of our Series A Convertible Preferred Stock. The merger,
exchange, consolidation, reorganization or sale of all or substantially all of
our assets or other transaction in which

                                       46

<PAGE>

control of Overhill Farms, Inc. is transferred shall be deemed to be a
liquidation, dissolution or winding up. The spin-off is not deemed to be a
liquidation, dissolution or winding up.

     Conversion. Each share of our Series A Convertible Preferred Stock is
convertible at the option of the holder at any time into the number of shares of
common stock determined by dividing $31,820.11 by the then effective conversion
price, which is currently $31,820.11. The outstanding shares of our Series A
Convertible Preferred Stock are currently convertible into 23.57 of common
stock. Following the contemplated 12,010 for 1 stock split, the outstanding
shares of Series A Convertible Preferred Stock will be convertible into 283,076
shares of our common stock. The conversion price and the number of shares of our
common stock into which the shares of Series A Convertible Preferred Stock are
convertible are subject to adjustment from time to time, subject to certain
exceptions, in the case of:

     .  the issuance of additional shares of our common stock for a price per
        share less than the conversion price in effect on the date of the
        issuance of the additional shares of common stock;

     .  the declaration or payment of any dividend or other distribution on our
        common stock, without consideration, payable to one or more stockholders
        in additional shares of common stock or other securities or rights
        convertible into, or entitling the holder thereof to receive, directly
        or indirectly, additional shares of our common stock;

     .  a subdivision, by stock split, reclassification or otherwise, of the
        outstanding shares of our common stock into a greater number of shares
        of our common stock;

     .  a combination or consolidation by reverse stock split of the outstanding
        shares of our common stock into a smaller number of shares of our common
        stock; or

     .  the common stock issuable upon the conversion of the Series A
        Convertible Preferred Stock is changed into the same or a different
        number of shares of any class or classes of stock, whether by
        recapitalization, reclassification, reorganization, merger, exchange,
        consolidation, sale of assets or otherwise.

     Voting Rights. The holders of our Series A Convertible Preferred Stock will
vote with the holders of common stock on all matters and will vote together with
the holders of common stock, and not as a separate class based on the number of
shares of our common stock into which the shares of Series A Convertible
Preferred Stock could be converted. In addition, for so long as at least 20% of
the total number of shares of our Series A Convertible Preferred Stock issued
remain outstanding, the vote of at least at least a majority of the shares of
our Series A Convertible Preferred Stock, voting as a separate class, is
required for us to:

     .  increase or decrease the authorized number of shares of our Series A
        Convertible Preferred Stock;

     .  alter or change the rights, preferences, privileges or powers of the
        shares of our Series A Convertible Preferred Stock; or

     .  create, authorize or designate any new class or series of capital stock
        having rights, preferences or privileges ranking senior to, or on parity
        with, the shares of our Series A Convertible Preferred Stock, or
        increase the rights, preferences or privileges, or the authorized number
        of shares of any class or series or our capital stock having rights,
        preferences or privileges ranking senior to, or on a parity with, the
        shares of our Series A Convertible Preferred Stock.

     Special Meeting. The holders of at least a majority of the shares of
outstanding Series A Convertible Preferred Stock have the right to call one
special meeting of stockholders in any calendar year.

     Registration Rights. In connection with our financing arrangements with our
senior subordinated creditor, we entered into a registration rights agreement in
November 1999 with it, as the holder of the warrant we issued to it, whereby we
agreed to register under the Securities Act of 1933, as amended, shares of our
common stock it holds or acquires, which includes shares of our common stock it
acquires upon exercise of its warrants to purchase our common stock, conversion
of its shares of our Series A Convertible Preferred Stock and any other
acquisition of our common stock. In addition, we agreed under certain
circumstances, upon the request of the holder, to include its

                                       47

<PAGE>

shares of our common stock in a securities registration that we undertake on our
behalf or on behalf of others. We expect to amend and restate the registration
rights agreement on similar terms in connection with the spin-off.

     Preemptive Rights. Under the investor rights agreement with our senior
subordinated creditor, it has a right of first refusal to purchase its pro rata
share of certain issuances of our capital stock. The shares of our common stock
issuable upon the exercise of the warrants and upon conversion of the shares of
our Series A Convertible Preferred Stock held by it are included in the
calculation to determine their pro rata share.

Certain Provisions of Governing Documents

     Amendment to Articles of Incorporation

     Subject to the voting rights of the holders of our Series A Convertible
Preferred Stock, our articles of incorporation may be amended by our board of
directors and a majority of our stockholders entitled to vote on such amendment.
See "-- Preferred Stock-Series A Convertible Preferred Stock--Voting Rights."

     Amendment to Bylaws

     Our board of directors may amend our bylaws or adopt additional bylaws, but
may not alter or repeal any bylaws adopted by our stockholders.

Business Combinations

     Nevada's business combinations statute, Nevada Revised Statutes Sections
78.411-78.444 prohibits an "interested stockholder" from entering into a
"combination" with the corporation, unless certain conditions are met. An
"interested stockholder" is a person who:

     .  directly or indirectly beneficially owns 10% or more of the voting power
        of the outstanding voting shares of the corporation, or

     .  is an affiliate or associate of the corporation and at any time within
        three years before the date in question was the beneficial owner,
        directly or indirectly, of 10% or more of the voting power of the then
        outstanding shares of the corporation.

     Under certain circumstances, a corporation may not engage in a combination
within three years after the interested stockholder acquired its shares, unless
the combination or the interested stockholder's acquisition of shares was
approved by the board of directors before the interested stockholder acquired
the shares. If this approval was not obtained, then after the three-year period
expires, the combination may be consummated if all the requirements in the
corporation's articles of incorporation are met and if approvals of the board of
directors or non-interested stockholders are obtained. We have elected not to be
governed by these provisions in our amended and restated articles of
incorporation. However, this election is not effective until 18 months after the
approval of our amended and restated articles of incorporation in September 2002
and may not be effective at that time unless we meet certain conditions under
the Nevada statute.

Limitation of Liability and Indemnification

     Under Nevada law, a corporation may indemnify any director, officer, or
other person who was, is or is threatened to be made a party to any proceeding,
whether civil, criminal, administrative or investigative, except an action by or
in the right of the corporation due to his or her corporate role. Nevada law
extends this protection against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by him or
her in connection with the proceeding if he or she acted

                                       48

<PAGE>

     .   in good faith,

     .   in a manner which he or she reasonably believed to be in or not opposed
         to the best interests of the corporation, and

     .   with respect to any criminal action or proceeding, had no reasonable
         cause to believe his or her conduct was unlawful.

     Under Nevada law, the corporation may advance an officer's or director's
expenses incurred in defending any action or proceeding. Regardless of whether a
director, officer, employee or agent has the right to indemnity, Nevada law
allows the corporation to purchase and maintain insurance on his or her behalf
against liability resulting from his or her corporate role.

     Our articles of incorporation provide that none of our directors or
officers will be personally liable to our company or any of our stockholders for
damages for breach of fiduciary duty as a director or officer or for any act or
omission of any such director or officer. However, our articles of incorporation
do not limit the liability of our directors and officers for acts or omissions
involving intentional misconduct, fraud or a knowing violation of law or the
payment of dividends in violation of Section 78.300 of the Nevada Revised
Statutes.

     Our bylaws provide that we will indemnify our current or former directors
or officers or any person who may have served at our request as a director or
officer of another corporation in which our company owns shares of capital stock
or of which our company is a creditor, against expenses actually and necessarily
incurred by them in connection with the defense of any action, suit or
proceeding in which they, or any of them, are made parties, or a party, by
reason of being or having been directors or officers or a director or officer of
our company, or of such other corporation. This obligation to indemnify does not
apply to matters as to which any such director or officer or person is adjudged
in the action, suit or proceeding to be liable for negligence or misconduct in
the performance of duty.

Recent Sales of Unregistered Securities

     In connection with the refinancing of certain indebtedness in December
1997, warrants to purchase 7.75 shares of our common stock, exercisable for a
total consideration of $50,000, were issued to Durham Capital Corporation, an
unrelated consulting firm. These warrants were exercised in December 2000.

     In November 1999, in connection with the purchase of a $28 million secured
senior subordinated note by our senior subordinated creditor, we issued to it a
warrant to purchase 166.04 shares of our common stock exercisable immediately at
an exercise price of $0.01 per share. The warrant will be exercisable for
1,994,141 shares of our common stock at an exercise price of $0.0000008 per
share following the contemplated 12,010 for 1 stock split. At the date of
issuance, the warrant was estimated to have a fair value of $2.37 million.

     Our senior subordinated creditor is the holder of a secured senior
subordinated note which it purchased from us in November 1999 pursuant to a
securities purchase agreement. We expect to amend and restate the securities
purchase agreement, the note and various related agreements in connection with
the spin-off. We have agreed in principle with our senior subordinated creditor
on the substantial forms of these amendments and restatements. The note bears
interest at a base rate per annum of 13.25%, with interest payable monthly.
However, if we achieve specified EBITDA tests for fiscal year ending September
2003, the base rate will be reduced to 12.5%. The note matures on October 31,
2004. We are required to make mandatory principal payments each fiscal year in
an amount equal to 50% of the excess cash flow, as defined, for the previous
fiscal year. The amount of the principal prepayment for the fiscal year ended
September 30, 2001 was approximately $781,000. We may make voluntary principal
prepayments at any time, subject to prepayment premiums. The amended and
restated securities purchase agreement will contain various covenants similar to
those in our existing securities purchase agreement, including financial
covenants covering restrictions on capital expenditures, minimum EBITDA and net
worth levels, and specified debt service and debt to equity ratios. In addition,
the terms of the amended and restated securities purchase agreement will
prohibit changes in control, including ownership and management personnel, and
contains customary restrictions on incurring indebtedness and liens, making
investments, paying dividends and making loans or advances. The note and all
other obligations owing by us to our senior subordinated creditor are secured by
subordinated liens on substantially all of our assets and by a guaranty of
Overhill Corporation and Overhill L.C.

                                       49

<PAGE>

Ventures, Inc., our subsidiary. In connection with the spin-off, our senior
subordinated creditor intends to release Overhill Corporation from its guaranty
and release its lien on our common stock held by Overhill Corporation which
secures Overhill Corporation's guaranty. See "Certain Transactions."

     In connection with the original securities purchase agreement, we issued to
our senior subordinated creditor a warrant to purchase 166.04 shares of our
common stock exercisable immediately at an exercise price of $0.01 per share.
The warrant will be exercisable for 1,994,141 shares of our common stock
following the 12,010 for 1 stock split, at an exercise price of $0.0000008 per
share. At the date of issuance, the warrant granted to our senior subordinated
creditor was estimated to have a fair value of $2.37 million.

     In 2002, we entered into various amendments to our securities purchase
agreement with our senior subordinated creditor with respect to, among other
things, the consolidation of our facilities and amendments to our financial
covenants with it. In exchange for our senior subordinated creditor's consent
and agreement to amend the securities purchase agreement and other investment
documents and certain other consideration, we issued to it 23.57 shares of our
Series A Convertible Preferred Stock and a warrant to purchase 57.57 shares of
our common stock and agreed to pay a restructuring fee in an aggregate amount of
$423,000 payable in three installments ending in March 2003. Following the
contemplated 12,010 for 1 stock split, the shares of our Series A Convertible
Preferred Stock will be convertible into 283,076 shares of our common stock, and
the warrant will be exercisable for 691,416 shares of our common stock at an
exercise price of $0.0000008 per share. The designations for the Series A
Convertible Preferred Stock provide the holder with, among other things, a
liquidation preference per share of $31,820.11, plus declared and unpaid
dividends, voting rights along with holders of common stock, protective
provisions, conversion rights and anti-dilution protection.

     Our existing securities purchase agreement with our senior subordinated
creditor provides that, immediately following the spin-off, it is entitled to
anti-dilution protection so that the shares of common stock issuable upon
exercise of its warrants and conversion of its shares of our Series A
Convertible Preferred Stock will represent in the aggregate not less than 24.0%
of our outstanding shares of capital stock, determined on a fully diluted basis
and including the reservation of shares of common stock for issuance under our
2002 Employee Stock Option Plan. See "Risk Factors--Risks Relating to the
Ownership of Our Common Stock--A small group of stockholders controls a
significant amount of our common stock," "Principal Stockholders," and "Certain
Transactions."

     Pursuant to our equity repurchase option agreement with our senior
subordinated creditor, we have the right to repurchase from it, in whole but not
in part, the shares of our common stock issuable upon exercise of the warrants
and conversion of the shares of our Series A Convertible Preferred Stock it
holds and the shares of our Series A Convertible Preferred Stock it holds. We
may exercise this option if:

     .   a default occurs under the securities purchase agreement and the holder
         provides written notice to us requesting that we make payments in
         addition to those which we are then obligated to make under our then
         existing financing arrangement or declares all of our obligations to
         the holder under the securities purchase agreement to be immediately
         due and payable, or

     .   if we notify the holder that we intend to merge, sell all or a
         significant portion of our assets, reorganize or recapitalize or enter
         into a bona fide transaction valued at more than $8.0 million and it
         does not consent to the transaction.

     If we exercise our repurchase option, we may repurchase its shares of our
common stock for:

     .   if our common stock is publicly traded, the greater of the current
         market price per share or an amount per share based on a predetermined
         formula, or

     .   if our common stock is not publicly traded, an amount based on the
         predetermined formula.

                                       50

<PAGE>

     We may repurchase its shares of our Series A Convertible Preferred Stock
for an amount equal to the greater of:

     .   the number of shares of our common stock issuable upon conversion of
         the shares of Series A Convertible Preferred Stock being repurchased
         multiplied by the per share amount determined with respect to our
         common stock, and

     .   $540,000.

     None of the transactions described above involved any underwriters,
underwriting discount or commissions, or any public offering, and we believe
that the transactions were exempt from the registration requirements of the
Securities Act of 1933, as amended, by virtue of Section 4(2) thereof or
Regulation D promulgated thereunder. Both investors represented their intentions
to acquire the securities for investment purposes only and not with a view to or
for sale in connection with any distribution thereof, and appropriate legends
were affixed to the instruments issued to them. Both investors had adequate
access, through their relationships with us, to information about us. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

                                       51

<PAGE>

                              CERTAIN TRANSACTIONS

     Overhill Corporation, in prior years, charged us management fees for
various expenses related to the oversight of our business. Management fees
totaled $0 for the fiscal year ending September 30, 2001 and $350,000 for each
of the fiscal years ended October 1, 2000, and September 26, 1999.

     In September 2001, James Rudis, our President, Chief Executive Officer and
a director, exercised options to purchase 276,500 shares of Overhill Corporation
common stock, and William E. Shatley, our Senior Vice President, Treasurer and a
director, exercised options to purchase 246,500 shares of Overhill Corporation
common stock, each of which were granted under individual option agreements in
1993 and Overhill Corporation's 1994 Employee Stock Option Plan in 1996. These
options were exercised with the issuances of two-year promissory notes to
Overhill Corporation bearing interest at 3.82% and collateralized by the shares
issued. The outstanding principal amounts of the notes are $207,375 for Mr.
Rudis and $184,875 for Mr. Shatley. From time to time, we have made advances to
Overhill Corporation for various purposes in the context of our
parent-subsidiary relationship. In connection with the spin-off, we decided with
Overhill Corporation to cancel all intercompany amounts owed to us by Overhill
Corporation, primarily in order to reduce the future connection of the
companies' respective future results of operations, financial condition and cash
flows of each separate company on each other. Net advances outstanding from
Overhill Corporation totaled $11.2 million at June 30, 2002, $10.1 million at
September 30, 2001 and $11.6 million at October 1, 2000. In connection with the
spin-off, in partial payment of approximately $11.0 million in amounts owed to
us, Overhill Corporation will transfer to us the two promissory notes made by
Mr. Rudis and Mr. Shatley, and we intend to cancel the remaining amounts owed to
us by Overhill Corporation.

     Following the spin-off, Mr. Rudis will remain as a director of Overhill
Corporation for a period of no greater than one year after the spin-off to
facilitate the transition of Overhill Corporation and Overhill Farms, Inc. into
two separate companies. Additional directors may be elected or appointed in
connection with the spin-off, and we intend to add additional outside directors
to our board of directors. Among the additional outside directors we expect to
appoint to our board of directors, we currently anticipate that Harold Estes
will be appointed to our board of directors prior to the effective date of the
spin-off. Mr. Estes is the President of Texas Timberjack, Inc., a wholly owned
subsidiary of Overhill Corporation. He was elected as a director of Overhill
Corporation in February 1996 and resigned from the Overhill Corporation board of
directors in April 1997. Mr. Estes has been President of Texas Timberjack, Inc.
since 1984, when he acquired Texas Timberjack, Inc. from Eaton Corporation. See
"Principal Stockholders" and "Management."

     Mr. Rudis and Mr. Shatley have entered into employment agreements with us
and Overhill Corporation. Richard A. Horvath, our Senior Vice President and
Secretary, also has entered into an employment agreement with us. We do not
maintain employment agreements with any of our other personnel. Mr. Rudis' and
Mr. Shatley's employment agreements provide for, among other things, an initial
term of five years, commencing November 1, 1999, automatically renewing from
year to year thereafter unless terminated by either party thereto. These
agreements provide that we will review their compensation annually and may
increase it in a percentage not less than that of the annual increase in the
cost of living. Each employment agreement contains a covenant by the executive
not to compete with us during the term of his employment and for a period of one
year thereafter. Prior to the spin-off, the compensation for Mr. Rudis and Mr.
Shatley was paid by Overhill Corporation or an affiliate of Overhill
Corporation. Mr. Horvath's employment agreement provides for, among other
things, an initial term of three years, commencing November 1, 1999,
automatically renewing from year to year thereafter unless terminated by either
party thereto. Compensation is set in his agreement, subject to our review on an
annual basis. His agreement contains a covenant by him not to compete with us
during the term of his employment and for a period of one year thereafter. See
"Management--Employment Agreements" and "Management--Historical Compensation of
Executive Officers."

     Our senior subordinated creditor is the holder of a secured senior
subordinated note which it purchased from us in November 1999 pursuant to a
securities purchase agreement. We expect to amend and restate the securities
purchase agreement, the note and various related agreements in connection with
the spin-off. We have agreed in principle with our senior subordinated creditor
on the substantial forms of these amendments and restatements. The note bears
interest at a base rate per annum of 13.25%, with interest payable monthly.
However, if we achieve specified EBITDA tests for fiscal year ending September
2003, the base rate will be reduced to 12.5%. The note matures on October 31,
2004. We are required to make mandatory principal payments each fiscal year in
an amount equal to 50% of the excess cash flow, as defined, for the previous
fiscal year. The amount of the principal

                                       52

<PAGE>

prepayment for the fiscal year ended September 30, 2001 was approximately
$781,000. We may make voluntary principal prepayments at any time, subject to
prepayment premiums. The amended and restated securities purchase agreement will
contain various covenants similar to those in our existing securities purchase
agreement, including financial covenants covering restrictions on capital
expenditures, minimum EBITDA and net worth levels, and specified debt service
and debt to equity ratios. In addition, the terms of the amended and restated
securities purchase agreement will prohibit changes in control, including
ownership and management personnel, and contains customary restrictions on
incurring indebtedness and liens, making investments, paying dividends and
making loans or advances. The note and all other obligations owing by us to our
senior subordinated creditor are secured by subordinated liens on substantially
all of our assets and by a guaranty of Overhill Corporation and Overhill L.C.
Ventures, Inc., our subsidiary. In connection with the spin-off, our senior
subordinated creditor intends to release Overhill Corporation from its guaranty
and release its lien on our common stock held by Overhill Corporation which
secures Overhill Corporation's guaranty.

     In connection with the original securities purchase agreement, we issued to
our senior subordinated creditor a warrant to purchase 166.04 shares of our
common stock exercisable immediately at an exercise price of $0.01 per share.
The warrant will be exercisable for 1,994,141 shares of our common stock
following the contemplated 12,010 for 1 stock split, at an exercise price of
$0.0000008 per share. At the date of issuance, the warrant granted to our senior
subordinated creditor was estimated to have a fair value of $2.37 million.

     In 2002, we entered into various amendments to our securities purchase
agreement with our senior subordinated creditor with respect to, among other
things, the consolidation of our facilities and amendments to our financial
covenants with it. In exchange for our senior subordinated creditor's consent
and agreement to amend the securities purchase agreement and other investment
documents and certain other consideration, we issued to it 23.57 shares of our
Series A Convertible Preferred Stock and a warrant to purchase 57.57 shares of
our common stock and agreed to pay a restructuring fee in an aggregate amount of
$423,000 payable in three installments ending in March 2003. Following the
contemplated 12,010 for 1 stock split, the shares of Series A Convertible
Preferred Stock will be convertible into 283,076 shares of our common stock, and
the warrant will be exercisable for 691,416 shares of our common stock at an
exercise price of $0.0000008 per share. The designations for the Series A
Convertible Preferred Stock provide the holder with, among other things, a
liquidation preference per share of $31,820.11, plus declared and unpaid
dividends, voting rights along with holders of common stock, protective
provisions, conversion rights and anti-dilution protection. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "Description of Capital Stock."

     Our existing securities purchase agreement with our senior subordinated
creditor provides that, immediately following the spin-off, it is entitled to
anti-dilution protection so that the shares of common stock issuable upon
exercise of its warrants and conversion of its shares of our Series A
Convertible Preferred Stock will represent in the aggregate not less than 24.0%
of our outstanding shares of capital stock, determined on a fully diluted basis
and including the reservation of shares of common stock for issuance under our
2002 Employee Stock Option Plan. See "Risk Factors--Risks Relating to the
Ownership of Our Common Stock--A small group of stockholders controls a
significant amount of our common stock," "Principal Stockholders," and
"Description of Capital Stock."

     Overhill Corporation and we are party to an investor rights agreement with
our senior subordinated creditor, as the holder of our equity securities. We
expect to enter into an amendment and restated investor rights agreement in
connection with the spin-off. We have agreed in principle on the substantial
form of this agreement, which includes James Rudis and William E. Shatley as
parties to the agreement. Overhill Corporation will not be a party to the
amended and restated investor rights agreement. Under the amended and restated
investor rights agreement, we expect that:

     .   the holder will continue to have the right to designate a nominee to
         our board of directors, and Mr. Rudis and Mr. Shatley will each agree
         to vote their shares of our common stock for that nominee;

     .   the holder will have co-sale rights with respect to shares of our
         common stock owned by Mr. Rudis and Mr. Shatley such that it will have
         the right to participate in certain proposed sales of those shares by
         Mr. Rudis or Mr. Shatley;

     .   Mr. Rudis and Mr. Shatley will each be permitted to sell up to 50,000
         shares of our common stock in open market transactions during any
         fiscal year without complying with the co-sale procedures, but a change
         in

                                       53

<PAGE>

          control will occur if Mr. Rudis does not continue directly or
          beneficially to own or hold 300,000 shares and Mr. Shatley does not
          continue directly or beneficially to own or hold 150,000 shares;

     .    the holder will have a right of first refusal to purchase its pro rata
          share of certain issuances of our capital stock;

     .    we will continue to pay to the holder, or one of its affiliate,
          installments of a consulting fee of $180,000 in each of January 2003
          and 2004 for its review and analysis of financial matters and
          participation in the operating committee. The consulting fees are
          subject to acceleration in the event of a change in control or the
          payment in full of all of our obligations under the senior
          subordinated note we issued to the holder; and

     .    the agreement will contain certain restrictions regarding our ability
          to grant options to our directors, executive officers, consultants and
          key employees and to amend any existing stock option plans or adopt or
          approve any new stock option or stock purchase plans.

     Pursuant to our equity repurchase option agreement with our senior
subordinated creditor, we have the right to repurchase from it, in whole but not
in part, the shares of our common stock issuable upon exercise of the warrants
and conversion of the shares of our Series A Convertible Preferred Stock it
holds and the shares of our Series A Convertible Preferred Stock it holds and
the shares of our Series A Convertible Preferred Stock it holds. We may exercise
this option if:

     .    a default occurs under the securities purchase agreement and the
          holder provides written notice to us requesting that we make payments
          in addition to those which we are then obligated to make under our
          then existing financing arrangement or declares all of our obligations
          to the holder under the securities purchase agreement to be
          immediately due and payable, or

     .    if we notify the holder that we intend to merge, sell all or a
          significant portion of our assets, reorganize or recapitalize or enter
          into a bona fide transaction valued at more than $8.0 million and it
          does not consent to the transaction.

     If we exercise our repurchase option, we may repurchase its shares of our
common stock for:

     .    if our common stock is publicly traded, the greater of the current
          market price per share or an amount per share based on a predetermined
          formula, or

     .    if our common stock is not publicly traded, an amount based on the
          predetermined formula.

     We may repurchase its shares of our Series A Convertible Preferred Stock
for an amount equal to the greater of:

     .    the number of shares of our common stock issuable upon conversion of
          the shares of Series A Convertible Preferred Stock being repurchased
          multiplied by the per share amount determined with respect to our
          common stock, and

     .    $540,000.

     In connection with our financing arrangements with our senior subordinated
creditor, we entered into a registration rights agreement in November 1999 with
it, as the holder of the warrant we issued to it, whereby we agreed to register
under the Securities Act of 1933, as amended, shares of our common stock it
holds or acquires, which includes shares of our common stock it acquires upon
exercise of its warrants to purchase our common stock, conversion of its shares
of our Series A Convertible Preferred Stock and any other acquisition of our
common stock. In addition, we agreed under certain circumstances, upon the
request of the holder, to include its shares of our common stock in a securities
registration that we undertake on our behalf or on behalf of others. We expect
to amend and restate the registration rights agreement on similar terms in
connection with the spin-off.

                                       54

<PAGE>

                       WHERE YOU CAN FIND MORE INFORMATION

     We have filed a registration statement on Form 10 to register our shares
being issued to you in the spin-off. This information statement is a part of
that registration statement and, as allowed by Securities and Exchange
Commission rules, does not include all of the information you can find in the
registration statement or the exhibits to the registration statement. For
additional information relating to us and the spin-off, reference is made to the
registration statement and the exhibits to the registration statement. Whenever
a reference is made in this information statement to one of our contracts or
other documents, please be aware that this reference is not necessarily complete
and that you should refer to the exhibits that are a part of the registration
statement for a copy of the contract or other document.

     After the spin-off, we will file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission. We intend to furnish our stockholders with annual reports containing
consolidated financial statements certified by an independent public accounting
firm. The registration statement is, and any of these future filings with the
Securities and Exchange Commission will be, available to the public over the
Internet at the Securities and Exchange Commission's website at
http://www.sec.gov. You may read and copy any filed document at the Securities
and Exchange Commission's public reference rooms in Washington, D.C. at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D. C. 20549, and at the
Securities and Exchange Commission's regional offices in New York at Woolworth
Building, 233 Broadway, New York, NY 10279, and in Chicago at Suite 1400,
Northwestern Atrium Center, 14th Floor, 500 W. Madison Street, Chicago, IL
60661. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information about the public reference rooms.

                                       55

<PAGE>

                              OVERHILL FARMS, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Audited Financial Statements:
----------------------------

   Report of Independent Auditors ......................................    F-2
   Consolidated Balance Sheets .........................................    F-3
   Consolidated Statements of Operations ...............................    F-5
   Consolidated Statements of Shareholders' Equity .....................    F-7
   Consolidated Statements of Cash Flows ...............................    F-8
   Notes to Consolidated Financial Statements ..........................   F-11

Interim Financial Statements (Unaudited):
----------------------------------------

   Consolidated Condensed Balance Sheets ...............................   F-32
   Consolidated Condensed Statements of Operations .....................   F-34
   Consolidated Condensed Statements of Cash Flows .....................   F-36
   Notes to Consolidated Condensed Financial Statements ................   F-38

                                      F-1

<PAGE>

                         Report of Independent Auditors

The Board of Directors and Shareholders
Overhill Farms, Inc.

We have audited the accompanying consolidated balance sheets of Overhill Farms,
Inc. and subsidiary (the Company), a subsidiary of Overhill Corporation
(formerly Polyphase Corporation), as of September 30, 2001 and October 1, 2000,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for the years ended September 30, 2001, October 1, 2000 and September
26, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Overhill Farms,
Inc. and subsidiary as of September 30, 2001 and October 1, 2000, and the
consolidated results of their operations and their cash flows for the years
ended September 30, 2001, October 1, 2000 and September 26, 1999, in conformity
with accounting principles generally accepted in the United States.

                                             /s/ Ernst & Young LLP


Dallas, Texas
November 17, 2001,
except for the last paragraph of Note 5,
as to which the date is
January 11, 2002

                                      F-2

<PAGE>

                              OVERHILL FARMS, INC.

                          CONSOLIDATED BALANCE SHEETS


                                     Assets

<TABLE>
<CAPTION>
                                                                               September 30, 2001        October 1, 2000
                                                                               ------------------        ---------------
<S>                                                                            <C>                       <C>
Current assets:
   Cash                                                                         $       81,414            $     558,960
   Accounts receivable, net of allowance for doubtful accounts of $25,000
     and $55,000 in 2001 and 2000, respectively
                                                                                    16,537,116               18,045,456
   Inventories                                                                      17,634,092               18,793,836
   Prepaid expenses and other                                                        1,544,330                1,345,586
   Deferred taxes                                                                       11,256                  273,322
                                                                                --------------            -------------
           Total current assets                                                     35,808,208               39,017,160
                                                                                --------------            -------------

Property and equipment:
   Fixtures and equipment                                                           10,474,403                9,374,329
   Leasehold improvements                                                            1,144,898                1,148,517
   Automotive equipment                                                                 62,028                   63,495
                                                                                --------------            -------------
                                                                                    11,681,329               10,586,341
   Less accumulated depreciation                                                    (6,862,237)              (6,376,867)
                                                                                --------------            -------------
                                                                                     4,819,092                4,209,474
                                                                                --------------            -------------
Other assets:
   Excess of cost over fair value of net assets acquired,
     net of accumulated amortization of $3,746,363
     and $2,916,593 in 2001 and 2000, respectively                                  12,188,435               12,985,967
   Deferred financing costs, net of accumulated amortization of $747,085
     and $313,045 in 2001 and 2000, respectively                                     1,184,037                1,619,862
   Deferred taxes                                                                      133,670                        -
   Other                                                                                73,609                  113,603
                                                                                --------------            -------------
                                                                                    13,579,751               14,719,432
                                                                                --------------            -------------

Total assets                                                                    $   54,207,051            $  57,946,066
                                                                                ==============            =============
</TABLE>

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

                                      F-3

<PAGE>

                              OVERHILL FARMS, INC.

                     CONSOLIDATED BALANCE SHEETS (continued)


                      Liabilities and Shareholders' Equity

<TABLE>
<CAPTION>
                                                                                 September 30,           October 1, 2000
                                                                                      2001
                                                                             ---------------------     -------------------
<S>                                                                          <C>                       <C>
Current liabilities:
   Accounts payable, primarily trade                                              $  13,301,410          $  10,495,545
   Accrued liabilities                                                                3,063,531              4,433,258
   Current maturities of long-term debt                                               2,021,600              2,769,652
                                                                                  -------------          -------------
           Total current liabilities                                                 18,386,541             17,698,455
                                                                                  -------------          -------------

Deferred taxes                                                                                -                306,328
Long-term debt, less current maturities                                              32,951,294             40,859,612
                                                                                  -------------          -------------
           Total liabilities                                                         51,337,835             58,864,395
                                                                                  -------------          -------------

Commitments and contingencies

Shareholders' equity:
   Common stock, $0.01 par value, authorized 1,000,000 shares, issued
     and outstanding 782.75 and 775 shares
     in 2001 and 2000, respectively                                                           8                      8
   Additional paid-in capital                                                         3,824,614              3,774,614
   Receivable from Parent                                                           (10,137,187)           (11,633,187)
   Warrants to purchase common stock                                                  2,370,000              2,370,000
   Retained earnings                                                                  6,811,781              4,570,236
                                                                                  -------------          -------------
           Total shareholders' equity                                                 2,869,216               (918,329)
                                                                                  -------------          -------------

Total liabilities and shareholders' equity                                        $  54,207,051          $  57,946,066
                                                                                  =============          =============
</TABLE>

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

                                       F-4

<PAGE>

                             OVERHILL FARMS, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                 For the Years Ended
                                                         ---------------------------------------------------------------------
                                                          September 30, 2001        October 1, 2000        September 26, 1999
                                                         --------------------     -------------------     --------------------
<S>                                                      <C>                      <C>                     <C>
Net revenues                                              $     162,158,070        $     145,417,999       $     113,015,991
Cost of sales                                                   133,642,074              117,256,375              92,296,522
                                                          -----------------        -----------------       -----------------
Gross profit                                                     28,515,996               28,161,624              20,719,469

Selling, general and administrative expenses                     19,033,214               17,348,632              13,335,082
                                                          -----------------        -----------------       -----------------

Operating income                                                  9,482,782               10,812,992               7,384,387

Other income (expense):
  Interest expense                                               (5,372,023)              (5,141,739)             (4,790,719)
  Amortization of deferred financing costs                         (435,825)                (409,375)               (954,252)
  Other income (expense)                                           (265,580)                (133,812)                  7,499
                                                          -----------------        -----------------       -----------------

Total other expenses                                             (6,073,428)              (5,684,926)             (5,737,472)
                                                          -----------------        -----------------       -----------------

Income before income taxes and extraordinary item
                                                                  3,409,354                5,128,066               1,646,915

     Income tax provision                                         1,167,809                1,797,502                 644,734
                                                          -----------------        -----------------       -----------------

Income before extraordinary item                                  2,241,545                3,330,564               1,002,181

Extraordinary item - early extinguishment of debt, net
  of income tax benefit of $452,296 in 2000                               -                 (838,135)                      -
                                                          -----------------        -----------------       -----------------

Net income                                                $       2,241,545        $       2,492,429       $       1,002,181
                                                          =================        =================       =================
</TABLE>

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

                                      F-5

<PAGE>


                             OVERHILL FARMS, INC.

                CONSOLIDATED STATEMENTS OF OPERATIONS (continued)

<TABLE>
<CAPTION>
                                                                                    For the Years Ended
                                                           -----------------------------------------------------------------
                                                               September 30,             October 1,          September 26,
                                                                    2001                   2000                   1999
                                                           --------------------    -------------------    ------------------
<S>                                                        <C>                     <C>                    <C>
Per share data - basic and diluted:

  Net income per common share - basic and diluted:

       Income before extraordinary item                           $ 2,870.10              $ 4,297.50             $ 1,293.14

       Extraordinary item                                                  -               (1,081.46)                     -
                                                             ---------------         ---------------         --------------

  Net income per common share - basic                             $ 2,870.10              $ 3,216.04             $ 1,293.14
                                                             ===============         ===============         ==============

  Net income per common share - diluted                           $ 2,362.01              $ 2,596.28             $   987.37
                                                             ===============         ===============         ==============

Weighted average shares outstanding - basic                              781                     775                    775
                                                             ===============         ===============         ==============

Weighted average shares outstanding - diluted                            949                     960                  1,015
                                                             ===============         ===============         ==============
</TABLE>

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

                                      F-6

<PAGE>

                              OVERHILL FARMS, INC.

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                              Additional   Warrants to
                                          Common Stock         Paid-in      Purchase        Receivable     Retained
                                       Shares     Amount       Capital    Common Stock     From Parent     Earnings        Total
                                     --------   ----------  ------------  ------------    -------------  ------------  ------------
<S>                                  <C>        <C>         <C>           <C>             <C>            <C>           <C>
Balance, September 27, 1998            775.00   $        8  $  3,999,992  $  1,200,000    $(11,038,187)  $  1,075,626  $ (4,762,561)
   Net income (comprehensive income)                     -             -             -               -      1,002,181     1,002,181
                                     --------   ----------  ------------  ------------    ------------   ------------  ------------
Balance, September 26, 1999            775.00            8     3,999,992     1,200,000     (11,038,187)     2,077,807    (3,760,380)

   Repurchase of warrants                                -      (225,378)   (1,200,000)              -              -    (1,425,378)
   Issuance of warrants                                  -             -     2,370,000               -              -     2,370,000
   Net increase in receivable from
     Parent                                              -             -             -        (595,000)             -      (595,000)
   Net income (comprehensive income)                     -             -             -               -      2,492,429     2,492,429
                                     --------   ----------  ------------  ------------    ------------   ------------  ------------
Balance, October 1, 2000               775.00            8     3,774,614     2,370,000     (11,633,187)     4,570,236      (918,329)

   Exercise of warrants                  7.75            -        50,000             -               -              -        50,000
   Net decrease in receivable from
     Parent                                              -             -             -       1,496,000              -     1,496,000
   Net income (comprehensive income)                     -             -             -               -      2,241,545     2,241,545
                                     --------   ----------  ------------  ------------    ------------   ------------  ------------
Balance at September 30, 2001          782.75   $        8  $  3,824,614  $  2,370,000    $(10,137,187)  $  6,811,781  $  2,869,216
                                     ========   ==========  ============  ============    ============   ============  ============
</TABLE>

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

                                      F-7

<PAGE>

                              OVERHILL FARMS, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       For the Years Ended
                                                          -------------------------------------------------
                                                          September 30,      October 1,      September 26,
                                                              2001             2000              1999
                                                          -------------     ------------     -------------
<S>                                                       <C>               <C>              <C>
Operating Activities
Net income                                                $  2,241,545      $  2,492,429      $  1,002,181
Adjustments to reconcile net income to net cash
  provided by operating activities:
     Depreciation                                              587,213           754,552         1,245,461
     Amortization                                            1,879,589         1,609,546         1,869,660
     Early extinguishments of debt                                   -         1,290,431                 -
     Provision for doubtful accounts                                 -            30,000                 -
     Deferred income taxes                                    (177,932)          178,662          (290,509)
     Changes in:
       Accounts receivable                                   1,508,340        (4,429,925)       (3,631,467)
       Inventories                                           1,159,744        (5,167,968)       (3,417,797)
       Prepaid expenses and other                             (198,744)         (970,547)          (64,873)
       Accounts payable                                      2,805,865         2,963,125         3,601,439
       Accrued liabilities                                     626,273         1,432,955         1,228,988
                                                          ------------      ------------      ------------
Net cash provided by operating activities                   10,431,893           183,260         1,543,083
                                                          ------------      ------------      ------------

Investing Activities
Net additions to property and equipment                     (1,196,831)       (1,021,167)         (295,405)
Acquisition of Chicago Brothers                                (32,238)       (4,221,551)                -
                                                          ------------      ------------      ------------
Net cash used in investing activities                       (1,229,069)       (5,242,718)         (295,405)
                                                          ------------      ------------      ------------
</TABLE>

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

                                      F-8

<PAGE>

                              OVERHILL FARMS, INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

<TABLE>
<CAPTION>
                                                                               For the Years Ended
                                                        ----------------------------------------------------------------
                                                          September 30,                                  September 26,
                                                              2001               October 1, 2000              1999
                                                        -----------------        ----------------       ----------------
<S>                                                     <C>                      <C>                    <C>
Financing Activities
Net borrowings (principal payments) on line of credit
  arrangements                                          $      (6,571,152)       $      4,846,962       $       (312,420)
Principal payments on long-term debt                           (2,659,218)            (22,730,639)            (1,000,000)
Proceeds from long-term debt                                            -              30,682,504                      -
Deferred financing costs                                                -              (1,932,907)                     -
Repurchase of stock warrants                                            -              (3,700,000)                     -
Exercise of stock warrants                                         50,000                       -                      -
Cash payments to Parent                                          (500,000)             (1,575,000)                     -
                                                        -----------------        ----------------       ----------------
Net cash provided by (used in) financing activities
                                                               (9,680,370)              5,590,920             (1,312,420)
                                                        -----------------        ----------------       ----------------

Net increase (decrease) in cash                                  (477,546)                531,462                (64,742)
Cash at beginning of year                                         558,960                  27,498                 92,240
                                                        -----------------        ----------------       ----------------
Cash at end of year                                     $          81,414        $        558,960       $         27,498
                                                        =================        ================       ================

Supplemental Schedule of Cash Flow Information
Cash paid during the year for:

  Interest                                              $       4,940,893        $      4,764,516       $      3,761,913
                                                        =================        ================       ================
  Income taxes                                          $          16,326        $          2,000       $              -
                                                        =================        ================       ================
</TABLE>

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

                                       F-9

<PAGE>

                              OVERHILL FARMS, INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Supplemental Schedule of Noncash Investing and Financing Activities:

Periodically, the Company has netted accumulated federal income tax liabilities
payable to the Parent against the receivable from Parent balance. During the
fiscal years ended September 30, 2001, October 1, 2000 and September 26, 1999,
the amounts of the accumulated federal income tax liability netted against the
receivable from parent were approximately $2.0 million, $1.0 million, and $0,
respectively.

In connection with the Company's refinancing in November 1999, warrants to
purchase 17.5% of the Company's common stock at a nominal exercise price were
issued having an estimated fair market value of $2,370,000.

In connection with the Company's refinancing in November 1999, the Company
accrued a $500,000 liability related to a cash payment obligation of the Company
in the event the Company does not repurchase the warrants to purchase 17.5% of
its common stock, which were issued in connection with the refinancing.

In connection with the Company's acquisition of Chicago Brothers during fiscal
2000, $900,000 of the purchase price was represented by a note payable to the
seller.

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

                                      F-10

<PAGE>

                              OVERHILL FARMS, INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)


1. COMPANY AND ORGANIZATIONAL MATTERS

     Nature of Business

     Overhill Farms, Inc. (the Company or Overhill Farms) is a producer of
     high-quality entrees, plated meals, meal components, soups, sauces, and
     poultry, meat and fish specialties. Since May 5, 1995, the Company has been
     a majority-owned subsidiary of Overhill Corporation, formerly Polyphase
     Corporation (the Parent), subject to warrants outstanding to purchase
     Overhill Farms' common stock (see Note 6).

     On May 5, 1995, the Company purchased substantially all of the operating
     assets and assumed certain liabilities of IBM Foods, Inc. (IBM), for $31.3
     million. Prior to its acquisition by the Company, IBM was engaged in the
     business of producing high-quality entrees, plated meals, soups, sauces,
     and poultry, meat and fish specialties primarily for customers in the
     airline, weight loss, and restaurant chain industries in the United States.
     The Company is using the net assets acquired in substantially the same
     business.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation

     The consolidated financial statements include the accounts of Overhill
     Farms and its wholly owned subsidiary, Overhill L.C. Ventures, Inc. All
     material intercompany accounts and transactions are eliminated. Certain
     prior year amounts have been reclassified to conform with the current
     period presentation.

     Fiscal Year

     The Company utilizes a 52- to 53-week accounting period, which ends on the
     last Sunday of September in each fiscal year if September 30 does not fall
     on a Saturday, or October 1 if September 30 falls on a Saturday. In fiscal
     2000, the Company had a 53-week accounting period.

     Deferred Financing Costs

     Debt financing costs are deferred and amortized as additional interest
     expense using the straight-line method over the term of the related debt.
     Amortization of these costs totaled $435,825, $409,375 and $954,252 for the
     years ended September 30, 2001, October 1, 2000, and September 26, 1999,
     respectively. As a result of the November 1999 refinancing related to

                                      F-11

<PAGE>


                              OVERHILL FARMS, INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    the Union Bank line of credit and LLCP debt (see Note 5), the Company
    recorded an extraordinary charge of $838,135, net of income tax benefit of
    $452,296, to write off certain of these deferred costs related to previous
    financings.

    Concentrations of Credit Risk

    The Company's financial instruments that are exposed to concentrations of
    credit risk consist primarily of trade receivables. The Company performs
    ongoing credit evaluations of its customers' financial condition and
    generally requires no collateral from its customers.

    For the fiscal years ended September 30, 2001, October 1, 2000 and September
    26, 1999, revenues from airline-related customers accounted for
    approximately 33.7%, 35.0% and 27.3% of total net revenues, respectively.
    Additionally, accounts receivable from airline-related customers accounted
    for approximately 33.0% of the total accounts receivable balance at
    September 30, 2001. The results of the tragic events of September 11, 2001
    have significantly impacted the Company's sales to airlines. The effect of
    these events on the airline industry, airline revenues, and on Overhill
    Farms' business in particular, cannot be accurately determined at this time.
    The September events have resulted in a decreased demand for air travel and
    a reduction in the number of meals served as a result of airlines' cost
    savings measures. These effects, depending upon their scope and duration,
    which we cannot predict at this time, could negatively impact the Company's
    financial position, results of operations or cash flows.

    For the years ended September 30, 2001, October 1, 2000 and September 26,
    1999, the Company's write-offs, net of recoveries, to the allowance for
    doubtful accounts were immaterial.

    Financial Instruments

    The fair value of financial instruments is determined by reference to market
    data and by other valuation techniques as appropriate. Unless otherwise
    disclosed, the fair value of financial instruments approximates their
    recorded values.

                                      F-12

<PAGE>

                              OVERHILL FARMS, INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     Inventories

     Inventories, which include material, labor, and manufacturing overhead, are
     stated at the lower of cost, which approximates the first-in, first-out
     (FIFO) method, or market. For the years ended September 30, 2001, October
     1, 2000 and September 26, 1999, the Company's inventory write-offs were
     immaterial.

     Concentration of Sources of Labor

     The Company's total hourly and salaried workforce consists of approximately
     1,050 employees at September 30, 2001. Approximately 67% of the Company's
     workforce is covered by collective bargaining agreements expiring in fiscal
     years 2002 and 2003.

     Property and Equipment

     The cost of property and equipment is depreciated over the estimated useful
     lives of the related assets, which range from three to eight years.
     Leasehold improvements are amortized over the lesser of the term of the
     related lease or the estimated useful lives of the assets. Depreciation is
     generally computed using the straight-line method. Depreciation expense and
     amortization of leasehold improvements totaled $587,213, $754,552, and
     $1,245,461 for the years ended September 30, 2001, October 1, 2000 and
     September 26, 1999, respectively.

     Expenditures for maintenance and repairs are charged to expense as
     incurred. Betterments and major renewals are capitalized. Costs and related
     accumulated depreciation of properties sold or otherwise retired are
     eliminated from the accounts, and gains or losses on disposals are included
     in other income (expense).

     Excess of Cost Over Fair Value of Net Assets Acquired

     The excess of cost over fair value of net assets acquired (goodwill) at the
     date of acquisition is amortized on a straight-line basis over 20 years.
     The Company determines the period to be benefited by using qualitative
     measuring factors such as competition, demand and obsolescence, as well as
     legal, regulatory and contractual provisions. In addition, the Company
     evaluates the existence of goodwill impairment on the basis of whether the
     goodwill is fully recoverable from projected, undiscounted cash flows of
     the related business unit.

                                      F-13

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     Revenue Recognition

     Sales are recognized when products are shipped, which is when title and
     risk of loss pass to the customer. The Company provides for estimated
     returns and allowances at the time of sale.

     Income Taxes

     Deferred income taxes recorded using the liability method reflect the net
     tax effects of temporary differences between the carrying amounts of assets
     and liabilities for financial reporting purposes and the amounts used for
     income tax purposes.

     Income Per Share

     Included in the income per share calculation for the periods presented, the
     Company had 166.04 weighted average potential dilutive common shares, which
     were related to the warrants issued and outstanding to Levine Leichtman
     Capital Partners II, L.P. during all of fiscal 2001 and the last ten months
     of fiscal 2000; 232.5 weighted average potential dilutive common shares,
     which were related to the warrants issued and outstanding to The Long
     Horizons Fund, L.P. for the first two months of fiscal 2000 and all of
     fiscal 1999; and 7.75 weighted average potential dilutive common shares
     which were related to the warrants issued and outstanding to Durham Capital
     for the first quarter of fiscal 2001 and all of fiscal 2000 and 1999.

     Shipping and Handling Costs

     The Company classifies shipping and handling costs as a component of
     selling, general and administrative expenses. Shipping and handling costs
     were approximately $9.2 million, $7.8 million and $5.2 million for the
     fiscal years ended September 30, 2001, October 1, 2000 and September 26,
     1999, respectively.

                                      F-14

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     Recent Accounting Pronouncements

     In November 2001, the Financial Accounting Standards Board issued Statement
     No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
     (SFAS 144). These rules supersede FASB Statement No. 121, Accounting for
     the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
     Disposed Of, providing a single accounting model for long-lived assets to
     be disposed of. Although retaining many of the fundamental recognition and
     measurement provisions of Statement 121, the new rules significantly change
     the criteria that would have to be met to classify an asset as
     held-for-sale. SFAS 144 also supersedes the provisions of APB opinion 30
     with regard to reporting the effects of a disposal of a segment of a
     business and requires expected future operating losses from discontinued
     operations to be displayed in discontinued operations in the period(s) in
     which the losses are incurred (rather than as of the measurement date as
     previously required by APB 30). SFAS 144 is effective for fiscal years
     beginning after December 15, 2001 and interim periods within those fiscal
     years, although earlier application is encouraged. The Company has adopted
     SFAS 144 as of October 1, 2001. The adoption of SFAS 144 did not have a
     material effect on the Company's financial position, results of operations
     or cash flows.

     In June 2001, the Financial Accounting Standards Board issued Statement No.
     142, Goodwill and Other Intangible Assets (SFAS 142), which requires that
     goodwill no longer be amortized but instead be tested at least annually for
     impairment by reporting unit. The Company is required to adopt SFAS 142
     effective as of October 1, 2002, though early adoption as of October 1,
     2001 is permitted. The Company has adopted SFAS 142 as of October 1, 2001
     and no impairment of goodwill was recorded upon adoption. Had the Company
     been accounting for goodwill under SFAS 142 for all periods presented, the
     Company's income before income taxes and extraordinary item would have
     increased by $830,000, $650,000, and $513,000 for fiscal years 2001, 2000
     and 1999, respectively, and the Company's net income would have increased
     by $548,000 ($577.45 per share), $429,000 ($446.88 per share), and $339,000
     ($333.99 per share) for fiscal years 2001, 2000 and 1999, respectively.

                                      F-15

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     In June 1998, the Financial Accounting Standards Board issued Statement No.
     133, Accounting for Derivative Instruments and Hedging Activities (SFAS
     133), as amended, which was required to be adopted by the Company on
     October 2, 2000. SFAS 133 requires that all derivatives be recorded on the
     balance sheet at fair value. Changes in derivatives that are not hedges are
     adjusted to fair value through income. Changes in derivatives that meet the
     Statement's hedge criteria will either be offset through income or
     recognized in other comprehensive income until the hedged item is
     recognized in earnings. The adoption of SFAS 133 on October 2, 2000 did not
     have a material impact on the Company's financial condition, results of
     operations or cash flows.

     Effective as of October 2, 2000, the Company adopted the provisions of
     Emerging Issues Task Force Issue No. 00-22, Accounting for "Points" and
     Certain Other Time-Based or Volume-Based Sales Incentive Offers, and Offers
     for Free Products or Services to Be Delivered in the Future. The Company
     classifies customer rebate costs as a reduction in net revenues. Customer
     rebate costs were approximately $375,000, $0 and $0 for the fiscal years
     ended September 30, 2001, October 2, 2000 and September 26, 1999,
     respectively.

     Use of Estimates

     The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States requires management to
     make estimates and assumptions that affect the amounts reported in the
     financial statements and accompanying notes. Actual results could differ
     from those estimates.

3.   RECEIVABLE FROM PARENT

     From time to time, Overhill Farms has made advances to the Parent for
     various purposes. These advances totaled approximately $10.1 million at
     September 30, 2001 and $11.6 million at October 1, 2000. No interest is
     being charged to the Parent on net amounts outstanding. As there is
     substantial doubt as to its collectibility at September 30, 2001 and
     October 1, 2000, the Company has classified this receivable from Parent as
     a reduction in shareholders' equity. See Note 13 to consolidated financial
     statements.

                                      F-16

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


4. INVENTORIES

   Inventories are summarized as follows:

<TABLE>
<CAPTION>
                                                                 September 30,      October 1,
                                                                     2001              2000
                                                                --------------------------------
   <S>                                                          <C>               <C>
   Raw ingredients                                              $   7,662,980     $    7,819,621
   Finished product                                                 8,334,363          9,504,475
   Packaging                                                        1,636,749          1,469,740
                                                                --------------------------------
                                                                $  17,634,092     $   18,793,836
                                                                ================================
</TABLE>

5. LONG-TERM DEBT

   Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                 September 30,      October 1,
                                                                     2001              2000
                                                                ----------------  --------------
   <S>                                                          <C>               <C>
   Revolving credit agreement with Union Bank of
    California, N.A. (Union Bank), bearing
    interest at prime plus 0.25% or LIBOR plus
    2.75% (approximately 5.28% at September 30,
    2001), guaranteed by the Parent and
    collateralized by certain assets of Overhill
    Farms and the Overhill Farms common stock
    owned by the Parent.

                                                                 $  7,922,815     $   14,493,967

   Secured senior subordinated note payable to
    Levine Leichtman Capital Partners II, L.P.
    (LLCP), net of discount of $1,817,667 and
    $2,391,667 at September 30, 2001 and October
    1, 2000, respectively, bearing interest
    payable monthly at 12.63% until maturity in
    October 2004, guaranteed by the Parent and
    collateralized by certain assets of Overhill
    Farms.
                                                                   24,162,333         25,608,333

   Term loan payable to Union Bank, bearing
    interest at prime plus 1% (approximately
    7.28% at September 30, 2001), payable in
    monthly installments of $50,000 plus interest
    until November 24, 2002, at which time the
    remaining principal balance of $1,050,000
    plus interest is due and payable, guaranteed
    by the Parent and collateralized by certain
    assets of Overhill Farms.
                                                                    1,750,000          2,350,000
</TABLE>

                                      F-17

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


5. LONG-TERM DEBT (continued)

<TABLE>
<CAPTION>
                                                                          September 30,       October 1,
                                                                              2001               2000
                                                                         ---------------     ------------
<S>                                                                      <C>                 <C>
      Unsecured promissory note, bearing interest
  at 9%, payable quarterly through June 2001 and
  thereafter in quarterly installments of
  $150,000 plus interest through maturity in
  December 2002. This note was issued in
  connection with the Chicago Brothers purchase
  and is subordinated to all indebtedness to
  Union Bank and to LLCP described above.
                                                                         $       900,000     $    900,000
   Other                                                                         237,746          276,964
                                                                         ---------------     ------------
                                                                              34,972,894       43,629,264
   Less current maturities                                                    (2,021,600)      (2,769,652)
                                                                         ---------------     ------------

           Total long-term debt                                          $    32,951,294     $ 40,859,612
                                                                         ===============     ============
<CAPTION>
   Scheduled maturities of long-term debt are summarized as follows:
<S>                                                                                <C>
          2002                                                                      $      2,021,600
          2003                                                                             9,417,900
          2004                                                                                50,202
          2005                                                                            25,254,790
          2006 and thereafter                                                                 46,069
                                                                                    ----------------
          Total                                                                           36,790,561
          Less unamortized debt discount                                                  (1,817,667)
                                                                                    ----------------
                                                                                    $     34,972,894
                                                                                    ================
</TABLE>

In November 1999, Overhill Farms refinanced substantially all of its existing
debt. The total facility amounted to $44 million, consisting of a $16 million
line of credit provided by Union Bank together with $28 million in the form of a
five-year term loan provided by LLCP.

                                      F-18

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. LONG-TERM DEBT (continued)

   The line of credit with Union Bank expires in November 2002 and provides for
   borrowings limited to the lesser of $16.0 million or an amount determined by
   a defined borrowing base consisting of eligible receivables and inventories
   ($20.5 million at September 30, 2001). Borrowings under the line of credit
   bear interest at a rate, as selected by Overhill Farms at the time of
   borrowing, of prime plus 0.25% or LIBOR plus 2.75%. The Union Bank agreement
   provides, among other things, that Overhill Farms will be subject to an
   unused line of credit fee of 0.25% per annum. The agreement contains various
   covenants including restrictions on capital expenditures, specified net worth
   levels and debt service ratios. In addition, the terms of the agreement
   generally prohibit loans, dividends or advances from Overhill Farms to the
   Parent and limit payments of taxes and other expenses to the Parent to
   specified levels.

   The term loan with LLCP provides for principal payments in an amount equal to
   50% of the excess cash flow, as defined, for Overhill Farms' previous fiscal
   year, payable annually commencing in January 2001. The amount of such
   principal payment, based on excess cash flows, as defined, for the year ended
   September 30, 2001 was approximately $781,000. Such amount has been included
   in current maturities of long-term debt on the September 30, 2001
   consolidated balance sheet. Voluntary principal payments are also permitted
   after October 31, 2001, subject to certain prepayment penalties. Upon making
   approximately $1.1 million in voluntary payments, the interest rate on the
   Company's LLCP debt will decrease to 12.5% per annum. Any unpaid balance will
   be payable at maturity in October 2004. The agreement contains various
   covenants, including restrictions on capital expenditures, minimum EBITDA and
   net worth levels, and specified debt service and debt-to-equity ratios. In
   addition, the terms of the agreement restrict changes in control, generally
   prohibit loans, dividends, or advances by Overhill Farms to the Parent, and
   limit payments of taxes and other expenses to the Parent to specified levels.
   The agreement also requires Overhill Farms to pay to LLCP, during each
   January, annual consulting fees of $180,000.

                                      F-19

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. LONG-TERM DEBT (continued)

   In connection with the agreement, LLCP was granted warrants to purchase 17.5%
   of the common stock of Overhill Farms, exercisable immediately at a nominal
   exercise price. During the first two years following the date of the
   agreement, Overhill Farms has the right to repurchase 5% of Overhill Farms'
   shares from LLCP for $3.0 million and/or to repurchase all 17.5% of the
   Overhill Farms shares subject to the LLCP warrant within five days of the
   term loan being repaid at their then determined fair market value. If such
   shares are not repurchased, LLCP will be entitled under the agreement to
   receive a cash payment of $500,000 from Overhill Farms, which amount is being
   charged to expense over the term of the facility. At the date of issuance,
   the warrants granted to LLCP were estimated to have a fair value of $2.37
   million.

   As a result of these transactions, Overhill Farms repaid in full the $22.7
   million senior subordinated notes payable and the $9.6 million revolving line
   of credit that were outstanding at September 26, 1999. Additionally, Overhill
   Farms repurchased for $3.7 million the warrants held by the previous
   subordinated lender to purchase 30% of Overhill Farms' common stock. This
   transaction was treated as a reacquisition of minority interest, resulting in
   approximately $2.2 million of goodwill being recorded. Also in connection
   with the refinancing, Overhill Farms was permitted to make a one-time advance
   of $1.25 million to its Parent for working capital and other specified
   purposes. Overhill Farms incurred costs and expenses in connection with the
   refinancing totaling approximately $1.9 million, substantially all of which
   was paid to the lenders. The early extinguishment of the previous
   indebtedness resulted in an after-tax, extraordinary charge to operations of
   $838,135 during the year ended October 1, 2000.

   As of September 30, 2001, the Company was in violation of one of its
   financial covenants under its Union Bank and LLCP loan agreements. In January
   2002, the Company obtained waivers for such violations from Union Bank and
   LLCP. Additionally, in January 2002, the Company amended its credit
   facilities with Union Bank and LLCP to provide for revised financial
   covenants, including the financial covenant which was violated as of
   September 30, 2001. As part of its amendment with Union Bank, the Company
   also agreed to certain additional covenants and interest rate increases and
   amended the Union Bank agreement to accommodate a lease of a new facility,
   which the Company entered into effective in January 2002. The Company
   believes it will be in compliance with all of its financial and other debt
   covenants, including the additional covenants agreed to in its Union Bank
   amendment, during the fiscal year ending September 29, 2002. See Note 13 to
   the consolidated financial statements.

                                      F-20

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. SHAREHOLDERS' EQUITY

     In connection with the financing provided by LLCP in November 1999 (see
     Note 5), the Company granted stock purchase warrants that entitle LLCP to
     immediately acquire 17.5% of its common stock at a nominal exercise price.
     Such warrants were valued at $2.37 million, which has been recorded as a
     debt discount and is being amortized over the term of the LLCP loan. During
     the first two years following the date of the agreement, Overhill Farms has
     the right to repurchase 5% of Overhill Farms' shares from LLCP for $3.0
     million and/or to repurchase all 17.5% of the Overhill Farms' shares
     subject to the LLCP warrant within five days of the loan being repaid at
     their then determined fair market value. If such shares are not
     repurchased, LLCP will be entitled under the agreement to receive a cash
     payment of $500,000 from Overhill Farms.

     In connection with the Company's fiscal 1998 refinancing (see Note 5), the
     Company granted stock purchase warrants that entitled the holder to
     immediately acquire, at $0.01 per share, 30% of the common stock of
     Overhill Farms. Such warrants were valued at $1,200,000, which was recorded
     as debt discount and which was being amortized during the period such loan
     was outstanding. The agreement provided that warrants for the purchase of
     25% of Overhill Farms could be repurchased by the Company for $2,000,000
     during the two-year period following the date of the agreement. In June
     1998, in connection with amending certain covenants and restrictions, the
     percentage of Overhill Farms that the Company could repurchase for
     $2,000,000 was reduced to 20% from 25%. In connection with the November
     1999 refinancing discussed above, Overhill Farms repurchased all warrants
     held by the previous subordinated lender for a total consideration of $3.7
     million. This transaction was treated by the Company's Parent, and thus the
     Company, as a reacquisition of minority interest, resulting in
     approximately $2.2 million of goodwill being recorded in connection with
     this repurchase transaction.

     Also, in connection with the refinancing in December 1997, an unrelated
     consultant was issued a warrant to purchase 1% of Overhill Farms' common
     stock at a purchase price of $50,000. The warrant was exercised during the
     fiscal year ended September 30, 2001.

     See Note 13 to the consolidated financial statements.

                                      F-21

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. ACCRUED LIABILITIES

   Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                                            September 30,           October 1,
                                                                                 2001                  2000
                                                                        ----------------------------------------
   <S>                                                                  <C>                     <C>
   Compensation                                                            $      1,023,451      $     1,215,547
   Taxes other than income taxes                                                    218,706              422,787
   Interest payable                                                                  57,419              200,289
   Income taxes payable to Parent                                                   595,194            1,261,779
   Other                                                                          1,168,761            1,332,856
                                                                        ----------------------------------------
                                                                           $      3,063,531      $     4,433,258
                                                                        ========================================
</TABLE>

8. INCOME TAXES

   Income tax expense (benefit) consists of the following:

<TABLE>
<CAPTION>
                                                                      For the Years Ended
                                               -----------------------------------------------------------------
                                                  September 30,          October 1, 2000         September 26,
                                                      2001                                            1999
                                               -------------------     -------------------     -----------------
   <S>                                         <C>                     <C>                     <C>
   Current:
     Federal                                   $         1,344,141     $         1,164,944     $         706,009
     State                                                   1,600                   1,600               229,234
                                               -------------------     -------------------     -----------------
                 Total current                           1,345,741               1,166,544               935,243

   Deferred:
     Federal                                              (177,932)                178,662              (246,072)
     State                                                       -                       -               (44,437)
                                               -------------------     -------------------     -----------------
   Total deferred                                         (177,932)                178,662              (290,509)
                                               -------------------     -------------------     -----------------

   Total income tax provision                  $         1,167,809     $         1,345,206     $         644,734
                                               ===================     ===================     =================
</TABLE>

   The Company is included in the consolidated federal tax return of its Parent
   and has provided for federal taxes on a separate company basis in accordance
   with SFAS No. 109, Accounting for Income Taxes. Historically, with respect to
   state income taxes, primarily in California, the Company has been able to
   reduce its tax liability by offsetting otherwise taxable income with other
   losses under the Parent entity. On a separate company basis, the Company
   would have an approximate effective state tax rate of 5%.

                                      F-22

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. INCOME TAXES (continued)

     The total income tax provision was 34.3%, 35.1% and 39.1% of pretax income
     for the years ended September 30, 2001, October 1, 2000 and September 26,
     1999, respectively. A reconciliation of income taxes with the amounts
     computed at the statutory federal rate follows:

<TABLE>
<CAPTION>
                                                   For the Years Ended
                                     ----------------------------------------------
                                      September 30,     October 1,    September 26,
                                           2001            2000           1999
                                     ----------------  ------------  --------------
     <S>                               <C>             <C>              <C>
     Computed tax provision at
       federal statutory rate (34%)    $ 1,159,181     $ 1,304,796      $ 559,952
     State income tax provision,
       net of federal benefit                1,024           1,024        101,121
     Permanent items                        33,846          12,032         56,194
     Other                                 (26,242)         27,354        (72,533)
                                       -----------     -----------      ---------
                                       $ 1,167,809     $ 1,345,206      $ 644,734
                                       ===========     ===========      =========
</TABLE>

     The deferred tax assets and deferred tax liabilities recorded on the
     balance sheet are as follows:

<TABLE>
<CAPTION>
                                           September 30, 2001                   October 1, 2000
                                    --------------------------------    -------------------------------
                                       Deferred         Deferred           Deferred         Deferred
                                         Tax              Tax                Tax              Tax
                                        Assets        Liabilities           Assets        Liabilities
                                    --------------  ----------------    --------------  ---------------
     <S>                             <C>               <C>               <C>             <C>
     Current:
       Other (A/R, inventory)        $   225,240       $        -        $   222,871     $          -
       Accrued liabilities               212,414                -            314,041                -
       Prepaid expenses                        -         (426,398)                 -         (263,590)
                                     -----------       ----------        -----------     ------------
                                         437,654         (426,398)           536,912         (263,590)

     Noncurrent:
       Depreciation                      613,461                -            465,815                -
       Goodwill                                -         (479,791)                 -         (772,143)
                                     -----------       ----------        -----------     ------------
                                         613,461         (479,791)           465,815         (772,143)
                                     -----------       ----------        -----------     ------------
     Total deferred taxes            $ 1,051,115       $ (906,189)       $ 1,002,727     $ (1,035,733)
                                     ===========       ==========        ===========     ============
</TABLE>

                                      F-23

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

9. COMMITMENTS AND CONTINGENCIES

     Commitments

     Future minimum lease payments for all operating leases at September 30,
     2001     are as follows:

                2002                              $ 1,088,880
                2003                                  475,604
                2004                                   88,875
                2005                                   55,241
                2006 and thereafter                    55,241
                                                  -----------
                                                  $ 1,763,841
                                                  ===========

     The Company leases substantially all of its facilities under operating
     leases expiring through November 2004. Certain of the leases provide for
     renewal options for periods from 2002 to 2005 at substantially the same
     terms as the current leases.

     Rent expense, including monthly equipment rentals, was approximately $2.4
     million, $2.1 million and $1.8 million for the years ended September 30,
     2001, October 1, 2000 and September 26, 1999, respectively.

     Significant Customers

     Significant customers accounted for the following percentages of the
     Company's sales:

                                    September 30,   October 1,   September 26,
                                        2001           2000           1999
                                  ----------------------------------------------

     Jenny Craig, Inc.                  12%            13%            16%
     American Airlines, Inc.            10%            13%            17%
     Delta Airlines                     12%            11%            14%
     Panda Express                      14%            12%            14%
     King's Hawaiian                    14%            15%            14%

     No other customer accounted for sales of 10% or more in the periods
     presented.

                                      F-24

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

9. COMMITMENTS AND CONTINGENCIES (continued)

     Contingencies

     The Company is involved in certain legal actions and claims arising in the
     ordinary course of business. Management believes (based, in part, on advice
     of legal counsel) that such contingencies will be resolved without material
     effect on the Company's financial position, results of operations or cash
     flows.

10.  RELATED PARTY TRANSACTIONS

     The Company's Parent charges management fees for various expenses related
     to the oversight of the Company. Management fees totaled $0, $350,000 and
     $350,000 for each of the years ended September 30, 2001, October 1, 2000
     and September 26, 1999, respectively, and are included in selling, general
     and administrative expenses.

11.  EMPLOYEE BENEFIT PLANS

     In April 1997, Overhill Farms introduced a retirement savings plan under
     Section 401(k) of the Internal Revenue Code. The plan covers substantially
     all non-union employees meeting minimum service requirements. Under the
     plan, contributions are voluntarily made by employees. Overhill Farms does
     not provide for a match to the employees' contributions, and its expenses
     related to the plan have not been significant.

                                      F-25

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12.  ASSETS ACQUIRED

     In August 2000, Overhill Farms purchased certain assets of the Chicago
     Brothers food operations from SSE Manufacturing, Inc., a subsidiary of
     Schwan's Sales Enterprises, Inc. (Schwan's). Under the terms of the
     agreement, Overhill Farms acquired the production and food processing
     equipment, together with certain leasehold interests and improvements in
     two plants, and an administrative facility in San Diego, California. The
     transaction was accounted for using the purchase method of accounting. The
     purchase price of the assets amounted to a total of $4.2 million,
     consisting of cash of $3.3 million, a significant portion of which was
     provided by a term loan from Union Bank, and a $900,000 note payable to the
     seller (see Note 5). The Company recorded approximately $3.3 million of
     goodwill on the transaction, which is being amortized using a 20-year life
     (see Note 2). In addition, Overhill Farms also entered into a three-year
     renewable agreement to provide Schwan's with a specified number of pounds
     of meals and meal components. Results of the acquired operations have been
     combined with the Company's results for the periods subsequent to the
     acquisition date. As this acquisition was not material, the Company has not
     presented any pro forma financial information.

13.  SPIN-OFF TRANSACTION AND SUBSEQUENT EVENTS (Unaudited)

     On August 14, 2001, Overhill Corporation's Board of Directors approved a
     plan to spin off Overhill Farms, Inc. to stockholders of the Parent.
     Overhill Corporation intends to accomplish the spin-off by distributing, in
     the form of a dividend, 100% of its ownership of Overhill Farms, Inc.
     common stock, representing 99% of the issued and outstanding common stock
     of Overhill Farms, Inc., to Overhill Corporation stockholders of record as
     of a date to be designated by the Parent's Board of Directors. Overhill
     Corporation stockholders will each receive one share of Overhill Farms,
     Inc. common stock for every two shares of Overhill Corporation common stock
     they own as of the date of record. If a stockholder is otherwise entitled
     to receive a fractional share of Overhill Farms, Inc. common stock, that
     stockholder will instead receive cash.

     The spin-off is intended to separate Overhill Farms, Inc. and its Parent's
     subsidiary, Texas Timberjack, Inc., so that each company's management team
     can focus on its specific industry. The spin-off is also intended to enable
     both companies to attract and retain key employees and to reward them with
     compensation plans directly tied to the success of each business. Also, the
     assets, debts, liabilities, and organizational structure of the two
     post-spin-off companies will be more clearly defined. Immediately after the
     spin-off transaction becomes effective, Overhill Corporation will not own
     any shares of Overhill Farms, Inc. common stock. Following the spin-off,
     Overhill Farms, Inc. will become an independent public company, and it is
     in the process of registering its common stock with the Securities and
     Exchange Commission.

                                      F-26

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13.  SPIN-OFF TRANSACTION AND SUBSEQUENT EVENTS (Unaudited) (continued)

     The Company is currently in the process of completing the various steps
     necessary to effect the spin-off transaction, which is now expected to
     occur effective September 30, 2002, including, among other things,
     obtaining final lender approvals, making necessary changes to Overhill
     Farms' capital structure to effect the distribution of the dividend, and
     updating and refiling information with the Securities and Exchange
     Commission.

     Stock Split and Income Per Share

     To facilitate the proposed spin-off, the Company's Board of Directors is
     authorized a stock split of approximately 12,010-shares-to-1, which would
     increase outstanding common shares, based upon outstanding common shares as
     of June 30, 2002, to approximately 9.4 million shares. Shares issuable
     pursuant to outstanding warrants and conversion rights of preferred stock
     would be similarly increased.

                                      F-27

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13.  SPIN-OFF TRANSACTION AND SUBSEQUENT EVENTS (Unaudited) (continued)

     Pro forma net income per share for the periods presented, after giving
retroactive effect to the 12,010-shares-to-1 stock split, are summarized as
follows:

<TABLE>
<CAPTION>
                                                                             For the Years Ended
                                                                -----------------------------------------------
                                                                September 30,     October 1,      September 26,
                                                                    2001             2000              1999
                                                                -------------    -----------      -------------
<S>                                                             <C>              <C>              <C>
Per share data - basic and diluted:

   Net income per common share - basic and diluted:

     Income before extraordinary item                           $        0.24    $      0.36      $        0.11

     Extraordinary item                                                     -    $     (0.09)                 -
                                                                -------------    -----------      -------------

  Net income per common share - basic                           $        0.24    $      0.27      $        0.11
                                                                =============    ===========      =============

  Net income per common share - diluted                         $        0.20    $      0.22      $        0.08
                                                                =============    ===========      =============

Weighted average shares outstanding - basic                         9,377,558      9,307,750          9,307,750
                                                                =============    ===========      =============

Weighted average shares outstanding - diluted                      11,394,968     11,527,999         12,193,153
                                                                =============    ===========      =============
</TABLE>

     Stock Option Plan

     In connection with the proposed spin-off, the Company's Board of Directors
     also expects to adopt a stock option plan for eligible employees. It is
     currently anticipated that a total of 800,000 post spin-off shares of the
     Company's common stock would be reserved for issuance under this plan. This
     reservation of shares would be expected to give effect to the dilution
     protection for LLCP as described below and result in an increase in the
     amount of common shares subject to the LLCP's warrant and preferred
     conversion options.

                                      F-28

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13.  SPIN-OFF TRANSACTION AND SUBSEQUENT EVENTS (Unaudited) (continued)

     Intercompany Accounts

     The Company has approximately $11.2 million of receivables from and $1.0
     million of payables to its parent, Overhill Corporation, as of June 30,
     2002. In connection with the proposed spin-off, Overhill Corporation is
     expected to make a partial payment on amounts due by Overhill Corporation
     to the Company by transferring to the Company certain notes receivable
     totaling approximately $400,000. These notes receivable are due from
     certain officers of both the parent and the Company who, subsequent to the
     proposed spin-off, will remain officers of the Company and will no longer
     be employed by the Parent. Simultaneously with the proposed spin-off, after
     giving effect to the partial payment described above, the net intercompany
     amounts due to the Company by its parent will be charged to retained
     earnings.

     Subsequent Events

     Effective January 31, 2002, the Company and LLCP reached agreement relative
     to further amendment of the credit arrangement with LLCP to accommodate the
     consolidation of the Company's facilities and to permit additional
     indebtedness to be incurred by the Company in connection therewith. As
     consideration for the consent provided by this amendment and for the
     additional investment monitoring costs and expenses to be incurred by LLCP
     over the remaining term of the term of the credit arrangement, the value of
     which was agreed to be a total of $750,000, the Company agreed to issue to
     LLCP 23.57 shares of a newly created Series A Preferred Stock. These shares
     were issued in March 2002. The designations for the new preferred stock
     provide the holder with, among other things, a liquidation preference
     totaling $750,000, voting rights along with holders of common stock,
     conversion rights into a like number of common shares, subject to
     adjustment, and provide for adjustment to prevent dilution of the holders'
     interests. The agreement in January with LLCP also provides that, after the
     issuance of the Series A Preferred Stock and following the contemplated
     spin-off, LLCP shall be entitled to dilution protection so that its
     warrants plus its conversion rights for preferred stock amount to a minimum
     of 19.5% of total issuable shares. The Company has recorded the $750,000 of
     Series A Preferred Stock issued to LLCP as deferred financing costs, which
     will be amortized as additional interest expense over the remaining life of
     the LLCP agreement.

                                      F-29

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13.  SPIN-OFF TRANSACTION AND SUBSEQUENT EVENTS (Unaudited) (continued)

     As of June 30, 2002, the Company was in violation of certain financial
     covenants with respect to its financing arrangements with its senior
     secured and subordinated creditors. As of September 11, 2002, the Company
     had received a waiver of these violations from its senior secured lender
     and an amendment to its financial covenants with its senior subordinated
     lender. Additionally, the Company entered into further amendments with each
     of its senior secured and subordinated lenders whereby, among other things,
     future financial covenant requirements were modified to levels more
     consistent with the Company's current and future expected results of
     operations. The Company expects, based upon historical performance, current
     results of operations through August 2002, and forecasted performance
     throughout the remainder of fiscal 2002 and all of fiscal 2003, that it is
     probable the Company will be in compliance with all of its revised
     financial and other covenant requirements. In the future, failure of the
     Company to achieve certain revenue, expense or profitability levels could
     result in a violation of the Company's amended financial covenants under
     its lending arrangements, which could have a material adverse effect on the
     Company's financial condition, results of operations or cash flows.

     In connection with, and as consideration for, the September 11, 2002
     amendment to its senior subordinated loan agreement, the Company agreed to
     issue LLCP warrants to purchase 57.57 shares of the Company's common stock
     at $0.01 per share. Under this agreement, these warrants are intended to
     bring the total equity ownership of the Company by the senior subordinated
     lender, on a fully diluted basis, to 24.0%. The warrants have certain
     anti-dilution protection provisions and were convertible immediately upon
     issuance. Additionally, the Company agreed to pay LLCP a restructuring fee
     of approximately $423,000 payable at various installments over a
     seven-month period and increase the base interest rate under the loan
     agreement to 13.25% per annum, however, this rate will be reduced to 12.50%
     per annum in fiscal 2004 and thereafter if certain specific EBITDA tests
     are met. The previous agreement for an interest rate reduction upon the
     Company making voluntary principal payments of approximately $1.1 million
     was terminated.

     Also in connection with the September 11, 2002 amendment to its senior
     subordinated loan agreement, the Company and LLCP entered into an equity
     repurchase option agreement whereby, among other things, the Company has
     the right, upon the occurrence of certain conditions, to purchase from LLCP
     in whole but not in part, all shares of the Company's common stock owned by
     LLCP or issuable to LLCP upon exercise of any warrants or shares of Series
     A preferred stock it holds. Generally, the repurchase price under the
     equity repurchase option agreement is the greater of an amount based upon
     the current market price of the Company's publicly traded common stock or
     based upon a predetermined formula or minimum stated amount. In connection
     with this amendment, the Company agreed with its senior subordinated lender
     to eliminate the Company's obligation to make a $500,000 cash payment in
     the event the Company did not repurchase the warrant or warrant shares upon
     repayment of the loan.

                                      F-30

<PAGE>

                              OVERHILL FARMS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

14.  QUARTERLY FINANCIAL DATA (Unaudited)

<TABLE>
<CAPTION>
                                                                  For the Year Ended September 30, 2001
                                           -----------------------------------------------------------------------------------
                                              December 31            April 1              July 1              September 30
                                           -----------------     ---------------      --------------       -------------------
<S>                                        <C>                   <C>                  <C>                  <C>
 Net revenues                                $38,478,489           $40,437,492          $40,669,972          $42,572,117

 Gross profit                                  6,646,054             7,239,960            7,689,599            6,940,383

 Operating income                              2,151,114             2,544,268            2,623,314            2,164,086

 Net income                                      324,662               605,803              702,307              608,773

 Net income per share - basic                     418.92                773.94               897.23               777.74

 Net income per share - diluted                   342.19                638.50               740.21               641.63

<CAPTION>
                                                                 For the Year Ended October 1, 2000
                                           -----------------------------------------------------------------------------------
                                               January 2             April 2               July 2               October 1
                                           -----------------     ---------------       -----------------   -------------------
<S>                                        <C>                   <C>                  <C>                  <C>
 Net revenues                                $ 34,162,058          $ 32,580,559         $ 37,203,156         $ 41,095,442

 Gross profit                                   7,066,854             6,240,762            7,227,381            7,249,843

 Operating income                               2,837,488             2,448,588            2,917,771            2,609,145

 Extraordinary item                              (838,135)                    -                    -                    -

 Net income                                       120,630               603,137              909,232              859,430

 Net income per share - basic                      155.65                778.24             1,173.20             1,108.94

 Net income per share - diluted                    121.47                635.69               958.31               905.82
</TABLE>

                                      F-31

<PAGE>

                              OVERHILL FARMS, INC.

                     CONSOLIDATED CONDENSED BALANCE SHEETS

                                     Assets
<TABLE>
<CAPTION>
                                                                                    June 30,            September 30,
                                                                                      2002                  2001
                                                                             -------------------   -------------------
                                                                                    (Unaudited)           (Note 1)
<S>                                                                          <C>                  <C>
Current assets:
   Cash                                                                       $          8,115      $         81,414
   Accounts receivable, net of allowance for doubtful accounts of $16,500
     and $25,000 at June 30, 2002
     and September 30, 2001, respectively                                           15,145,905            16,537,116
   Inventories                                                                      16,723,484            17,634,092
   Prepaid expenses and other                                                        1,849,698             1,544,330
   Deferred taxes                                                                       11,256                11,256
                                                                             -------------------   -------------------
           Total current assets                                                     33,738,458            35,808,208
                                                                             -------------------   -------------------
Property and equipment:
   Fixtures and equipment                                                           11,540,150            10,474,403
   Leasehold improvements                                                            2,493,211             1,144,898
   Automotive equipment                                                                 52,669                62,028
                                                                             -------------------   -------------------
                                                                                    14,086,030            11,681,329
   Less accumulated depreciation                                                    (7,331,353)           (6,862,237)
                                                                             -------------------   -------------------
                                                                                     6,754,677             4,819,092
                                                                             -------------------   -------------------
Other assets:
   Excess of cost over fair value of net assets acquired,
     net of accumulated amortization of $3,746,363                                  12,188,435            12,188,435
   Deferred financing costs, net of accumulated amortization of $1,388,748
    and $747,085 at June 30, 2002 and September 30, 2001, respectively               1,954,192             1,184,037
   Deferred taxes                                                                      133,670               133,670
   Other                                                                                73,609                73,609
                                                                             -------------------   -------------------
                                                                                    14,349,906            13,579,751
                                                                             -------------------   -------------------
Total assets                                                                  $     54,843,041      $     54,207,051
                                                                             ===================   ===================
</TABLE>

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

                                      F-32

<PAGE>

                              OVERHILL FARMS, INC.

                CONSOLIDATED CONDENSED BALANCE SHEETS (continued)


                      Liabilities and Shareholders' Equity

<TABLE>
<CAPTION>

                                                                                    June 30,            September 30,
                                                                                      2002                  2001
                                                                             -------------------    -------------------
                                                                                  (Unaudited)             (Note 1)
<S>                                                                         <C>                     <C>
Current liabilities:
   Accounts payable, primarily trade                                          $     10,737,602       $     13,301,410
   Accrued liabilities                                                               2,565,036              3,063,531
   Current maturities of long-term debt                                             14,318,192              2,021,600
                                                                             -------------------    -------------------
           Total current liabilities                                                27,620,830             18,386,541


Long-term debt, less current maturities                                             23,979,111             32,951,294
                                                                             -------------------    -------------------

           Total liabilities                                                        51,599,941             51,337,835
                                                                             -------------------    -------------------

Commitments and contingencies


Shareholders' equity:
   Series A Preferred stock, $0.01 par value, authorized 50,000,000 shares,
     issued and outstanding, 23.57 shares at June 30, 2002 and
     none at September 30, 2001
                                                                                             -                      -
   Common stock, $0.01 par value, authorized 100,000,000 shares, issued
     and outstanding 782.75 shares                                                           8                      8
   Additional paid-in capital                                                        4,574,614              3,824,614
   Receivable from Parent                                                          (11,196,683)           (10,137,187)
   Warrants to purchase common stock                                                 2,370,000              2,370,000
   Retained earnings                                                                 7,495,161              6,811,781
                                                                             -------------------    -------------------
           Total shareholders' equity                                                3,243,100              2,869,216
                                                                             -------------------    -------------------

Total liabilities and shareholders' equity                                    $     54,843,041       $     54,207,051
                                                                             ===================    ===================
</TABLE>


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

                                      F-33

<PAGE>

                              OVERHILL FARMS, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                         For the Nine Months Ended
                                                        ----------------------------------------
                                                            June 30,                July 1,
                                                             2002                    2001
                                                        ---------------         ----------------
<S>                                                    <C>                  <C>
Net revenues                                             $ 101,927,639            $ 119,585,953
Cost of sales                                               85,745,966               98,010,340
                                                        ---------------         ----------------
Gross profit                                                16,181,673               21,575,613

Selling, general and administrative expenses                10,915,275               14,236,917
                                                        ---------------         ----------------


Operating income                                             5,266,398                7,338,696

Other income (expense):
  Interest expense                                          (3,481,196)              (4,060,789)
  Amortization of deferred financing costs                    (416,338)                (326,869)
  Other income (expense)                                      (227,267)                (203,477)
                                                        ---------------         ----------------

Total other expenses                                        (4,124,801)              (4,591,135)
                                                        ---------------         ----------------


Income before income taxes                                   1,141,597                2,747,561


     Income tax provision                                     (458,217)              (1,102,816)
                                                        ---------------         ----------------

Net income                                              $      683,380            $   1,644,745
                                                        ===============         ================
</TABLE>


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

                                      F-34

<PAGE>

                              OVERHILL FARMS, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (continued)

                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                    For the Nine Months Ended
                                                                --------------------------------
                                                                   June 30,          July 1,
                                                                     2002             2001
                                                                --------------   ---------------
<S>                                                             <C>             <C>
Per share data - basic and diluted:

  Net income per common share - basic and diluted:

                    Net income per common share - basic            $  873.05       $  2,108.19
                                                                ==============   ===============

     Net income per common share - diluted                         $  712.40       $  1,733.52
                                                                ==============   ===============

Weighted average shares outstanding - basic                           782.75            780.17
                                                                ==============   ===============

Weighted average shares outstanding - diluted                         959.27            948.79
                                                                ==============   ===============
</TABLE>


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

                                      F-35

<PAGE>

                              OVERHILL FARMS, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                           For the Nine Months Ended
                                                                     ------------------------------------
                                                                         June 30,             July 1,
                                                                           2002                2001
                                                                     ---------------      ---------------
<S>                                                                  <C>                  <C>
Operating Activities
Net income                                                           $       683,380      $     1,644,745
Adjustments to reconcile net income to net cash provided by
     operating activities:
       Depreciation                                                          515,801              428,166
       Amortization                                                          846,838            1,379,924
       Provision for doubtful accounts                                             -               15,000
       Changes in:
         Accounts receivable                                               1,391,211            1,964,544
         Inventories                                                         910,608              416,889
         Prepaid expenses and other                                         (305,368)            (437,801)
         Accounts payable                                                 (2,563,808)           1,156,214
         Accrued liabilities                                                (498,495)             656,283
                                                                     ---------------      ---------------
Net cash provided by operating activities                                    980,167            7,223,964
                                                                     ---------------      ---------------
Investing Activities
Net additions to property, plant and equipment                            (2,451,386)            (830,113)
                                                                     ---------------      ---------------
Net cash used in investing activities                                     (2,451,386)            (830,113)
                                                                     ---------------      ---------------
</TABLE>

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

                                      F-36

<PAGE>

                              OVERHILL FARMS, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (continued)

                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                           For the Nine Months Ended
                                                                        ------------------------------
                                                                          June 30,           July 1,
                                                                            2002              2001
                                                                        ------------      ------------
<S>                                                                     <C>               <C>
Financing Activities

Net borrowings (principal payments) on line of credit arrangements
                                                                        $  4,604,777      $ (3,787,510)
Principal payments on long-term debt                                      (1,710,868)       (2,499,758)
Deferred financing costs                                                    (436,493)                -
Exercise of stock warrants                                                         -            50,000
Cash payments to and on behalf of Parent                                  (1,059,496)         (300,000)
                                                                        ------------      ------------
                                                                           1,397,920        (6,537,268)
Net cash provided by (used in) financing activities
                                                                        ------------      ------------
Net decrease in cash                                                         (73,299)         (143,417)
Cash at beginning of period                                                   81,414           558,960
                                                                        ------------      ------------
Cash at end of period                                                   $      8,115      $    415,543
                                                                        ============      ============
Supplemental Schedule of Cash Flow Information
Cash paid during the period for:
  Interest                                                              $  3,032,989      $  3,560,378
                                                                        ============      ============
  Income taxes                                                          $         -       $          -
                                                                        ============      ============
</TABLE>

Supplemental schedule of non-cash investing and financing activities:

During the nine months ended June 30, 2002, the Company issued 23.57 shares of a
newly created Series A Preferred Stock having an estimated value of $750,000 as
consideration for certain consents and additional monitoring costs and expenses
to be incurred by the Company's lender, LLCP.

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

                                      F-37

<PAGE>
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


1.   COMPANY AND ORGANIZATIONAL MATTERS

     Nature of Business and Basis of Presentation

     Overhill Farms, Inc. (the Company or Overhill Farms) is a producer of
     high-quality entrees, plated meals, meal components, soups, sauces, and
     poultry, meat and fish specialties. Since May 5, 1995, the Company has been
     a majority-owned subsidiary of Overhill Corporation, formerly Polyphase
     Corporation (the Parent), subject to warrants outstanding to purchase
     Overhill Farms' common stock.

     The financial statements included herein have been prepared by the Company,
     without an audit, pursuant to the rules and regulations of the Securities
     and Exchange Commission. Certain information and footnote disclosures
     normally included in financial statements prepared in accordance with
     accounting principles generally accepted in the United States have been
     condensed or omitted pursuant to such rules and regulations. The Company
     believes that the disclosures are adequate to make the information
     presented not misleading. The information presented reflects all
     adjustments, consisting solely of normal recurring adjustments, which are,
     in the opinion of management, necessary for a fair statement of the results
     for the interim periods when read in conjunction with the audited financial
     statements and notes thereto included in this Information Statement for the
     fiscal years ended September 30, 2001.

     The consolidated balance sheet at September 30, 2001 has been derived from
     the audited financial statements at that date but does not include all of
     the information and footnotes required by accounting principles generally
     accepted in the United States for complete financial statements.

2.   INCOME PER SHARE

     Included in the income per share calculation for the periods presented, the
     Company had 166.04 weighted average potential dilutive common shares, which
     were related to the warrants issued and outstanding to Levine Leichtman
     Capital Partners II, L.P. ("LLCP") during the periods ended June 30, 2002
     and July 1, 2001; 23.57 weighted average potential dilutive common shares,
     which were related to preferred shares issued to LLCP in March 2002; and
     7.75 weighted average potential dilutive common shares which were related
     to the warrants issued and outstanding to Durham Capital for the initial
     three months of the nine months ended July 1, 2001.

                                      F-38

<PAGE>

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)


3.   RECEIVABLE FROM PARENT

     From time to time, Overhill Farms has made advances to the Parent for
     various purposes. These advances totaled approximately $11.2 million at
     June 30, 2002 and $10.1 million at September 30, 2001. No interest is being
     charged to the Parent on nets amount outstanding. As there is substantial
     doubt as to its collectibility, the Company has classified this receivable
     from Parent as a reduction in shareholders' equity.

4.   INVENTORIES

     Inventories are summarized as follows:

<TABLE>
<CAPTION>
                                                   June 30,              September 30,
                                                     2002                     2001
                                            --------------------    -------------------
<S>                                            <C>                   <C>
     Raw ingredients                           $      6,498,269      $      7,662,980
     Finished product                                 8,462,229             8,334,363
     Packaging                                        1,762,986             1,636,749
                                            --------------------    -------------------
                                               $     16,723,484      $     17,634,092
                                            ====================    ===================
</TABLE>

5.   LONG-TERM DEBT

     In November 1999, the Company refinanced substantially all of its existing
     debt. The total facility amounted to $44 million, consisting of a $16
     million line of credit provided by Union Bank of California, N.A. (Union
     Bank), together with $28 million in the form of a five-year term loan
     provided by Levine Leichtman Capital Partners II, L.P. (LLCP).

     The line of credit with Union Bank expires on November 24, 2002 and
     provides for borrowings limited to the lesser of $16.0 million or an amount
     determined by a defined borrowing base consisting of eligible receivables
     and inventories. Borrowings under the line of credit bear interest at a
     rate, as selected by Overhill Farms at the time of borrowing, of prime plus
     0.25% or LIBOR plus 2.75%. The Union Bank agreement provides, among other
     things, that Overhill Farms will be subject to an unused line of credit fee
     of 0.25% per annum. The agreement contains various covenants including
     restrictions on capital expenditures, specified net worth levels and debt
     service ratios. In addition, the terms of the agreement generally prohibit
     loans, dividends or advances from Overhill Farms to its Parent and limit
     payments of taxes and other expenses to its Parent to specified levels.

                                      F-39

<PAGE>

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)


5.   LONG-TERM DEBT (continued)

     The term loan with LLCP provides for principal payments in an amount equal
     to 50% of the excess cash flow, as defined, for Overhill Farms' previous
     fiscal year, payable annually commencing in January 2001. The amount of
     such principal payment, based on excess cash flows, as defined, for the
     year ended September 30, 2001 was approximately $781,000. Such amount has
     been included in current maturities of long-term debt on the September 30,
     2001 consolidated balance sheet. Voluntary principal payments are also
     permitted after October 31, 2001, subject to certain prepayment penalties.
     Upon making approximately $1.1 million in voluntary payments, the interest
     rate on the Company's LLCP debt will decrease to 12.5% per annum. Any
     unpaid balance will be payable at maturity in October 2004. The agreement
     contains various covenants including restrictions on capital expenditures,
     minimum EBITDA and net worth levels, and specified debt service and
     debt-to-equity ratios. In addition, the terms of the agreement restrict
     changes in control; generally prohibit loans, dividends, or advances by
     Overhill Farms to the Parent and limit payments of taxes and other expenses
     to the Parent to specified levels. The agreement also requires Overhill
     Farms to pay to LLCP, during each January, annual consulting fees of
     $180,000.

     In connection with the agreement, LLCP was granted stock warrants to
     purchase 17.5% of the common stock of Overhill Farms, exercisable
     immediately at a nominal exercise price. During the first two years
     following the date of the agreement, Overhill Farms has the right to
     repurchase 5% of Overhill Farms' shares from LLCP for $3.0 million and/or
     to repurchase all 17.5% of the Overhill Farms' shares subject to the LLCP
     warrant within five days of the term loan being repaid at their then
     determined fair market value. If such shares are not repurchased, LLCP will
     be entitled under the agreement to receive a cash payment of $500,000 from
     Overhill Farms, which amount is being charged to expense over the term of
     the facility. At the date of issuance, the warrants granted to LLCP were
     estimated to have a fair value of $2.37 million.

                                      F-40

<PAGE>

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)

5.   LONG-TERM DEBT (continued)

     As a result of these transactions, Overhill Farms repaid in full the $22.7
     million senior subordinated notes payable and the $9.6 million revolving
     line of credit that were outstanding at September 26, 1999. Additionally,
     Overhill Farms repurchased for $3.7 million the warrants held by the
     previous subordinated lender to purchase 30% of Overhill Farms' common
     stock. This transaction was treated as a reacquisition of minority
     interest, resulting in approximately $2.2 million of goodwill being
     recorded. Also in connection with the refinancing, Overhill Farms was
     permitted to make a one-time advance of $1.25 million to its Parent for
     working capital and other specified purposes. Overhill Farms incurred costs
     and expenses in connection with the refinancing totaling approximately $1.9
     million, substantially all of which was paid to the lenders. The early
     extinguishment of the previous indebtedness resulted in an after-tax,
     extraordinary charge to operations of $838,135 during the year ended
     October 1, 2000.

     In January 2002, the Company entered into amendments to its loan agreements
     with Union Bank and with LLCP to provide for revised financial covenants,
     including one covenant which had been violated as of September 30, 2001. As
     part of its amendment with Union Bank, the Company also agreed to certain
     additional covenants, increased the interest rate to prime rate plus .50%
     or LIBOR plus 3.00%, and amended the Union Bank agreement to accommodate a
     lease of a new facility, which the Company entered into effective in
     January 2002.

     As of June 30, 2002, the Company was in violation of certain financial
     covenants with respect to its financing arrangements with its senior
     secured and subordinated creditors. As of September 11, 2002, the Company
     had received a waiver of these violations from its senior secured lender
     and an amendment to its financial covenants with its senior subordinated
     lender. Additionally, the Company entered into further amendments with each
     of its senior secured and subordinated lenders whereby, among other things,
     future financial covenant requirements were modified to levels more
     consistent with the Company's current and future expected results of
     operations. The Company believes, based upon historical performance,
     current results of operations through August 2002, and forecasted
     performance throughout the remainder of fiscal 2002 and all of fiscal 2003,
     that it is probable the Company will be in compliance with all of its
     revised financial and other covenant requirements. Accordingly, the Company
     has classified its outstanding senior subordinated debt, which matures in
     November 2004, as long-term in the accompanying unaudited consolidated
     balance sheet as of June 30, 2002. In the future, failure of the Company to
     achieve certain revenue, expense or profitability levels could result in a
     violation of the Company's amended financial covenants under its lending
     arrangements, which could have a material adverse effect on the Company's
     financial condition, results of operations or cash flows.

                                      F-41

<PAGE>

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)

5.   LONG-TERM DEBT (continued)

     In connection with, and as consideration for, the September 11, 2002
     amendment to its senior subordinated loan agreement, the Company agreed to
     issue LLCP warrants to purchase 57.57 shares of the Company's common stock
     at $0.01 per share. Under this agreement, these warrants are intended to
     bring the total equity ownership of the Company by the senior subordinated
     lender, on a fully diluted basis, to 24.0%. The warrants have certain
     anti-dilution protection provisions and were exercisable immediately upon
     issuance. Additionally, the Company agreed to pay LLCP a restructuring fee
     of approximately $423,000 payable at various installments over a
     seven-month period and increase the base interest rate under the loan
     agreement to 13.25% per annum. The previous agreement for an interest rate
     reduction upon the Company making voluntary principal payments of
     approximately $1.1 million was terminated.

     Also in connection with the September 11, 2002 amendment to its senior
     subordinated loan agreement, the Company and LLCP entered into an equity
     repurchase option agreement whereby, among other things, the Company has
     the right, upon the occurrence of certain conditions, to purchase from LLCP
     in whole but not in part, all shares of the Company's common stock owned by
     LLCP or issuable to LLCP upon exercise of any warrants or shares of Series
     A preferred stock it holds. Generally, the repurchase price under the
     equity repurchase option agreement is the greater of an amount based upon
     the current market price of the Company's publicly traded common stock or
     based upon a predetermined formula or minimum stated amount. In connection
     with this amendment, the Company agreed with its senior subordinated lender
     to eliminate the Company's obligation to make a $500,000 cash payment in
     the event the Company did not repurchase the warrant or warrant shares upon
     repayment of the loan.

     The Company's senior secured debt matures on November 24, 2002. Subsequent
     to the spin-off, the Company intends to seek an extension of the maturity
     of its revolving line of credit agreement with Union Bank. Additionally,
     the Company is currently in the process of actively seeking alternative
     lending arrangements with other lenders in the event a maturity extension
     of the existing revolving credit facility cannot be reached on acceptable
     terms and conditions, or at all. Management believes that the Company will
     either receive an extension of the maturity of its existing revolver on
     terms and conditions materially consistent with the current agreement, or
     will be able to replace such facility with a new lending agreement on
     similar terms, prior to the current maturity of its existing revolving line
     of credit on November 24, 2002. Failure to secure an extension of the
     revolving line of credit or obtain alternative methods of financing prior
     to the maturity of the existing agreement could have a material adverse
     effect on the Company's business and operations.

                                      F-42

<PAGE>

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)

6.   CONTINGENCIES

     The Company is involved in certain legal actions and claims arising in the
     ordinary course of business. Management believes (based, in part, on advice
     of legal counsel) that such contingencies will be resolved without material
     effect on the Company's financial condition, results of operations or cash
     flows.

7.   SHAREHOLDERS' EQUITY

     Amendments to Articles of Incorporation

     During February 2002 the stockholders and Board of Directors of the Company
     unanimously approved an amendment to the Company's Articles of
     Incorporation to increase the number of shares which the Company shall have
     authority to issue to a total of 150,000,000, consisting of (i) 50,000,000
     shares of preferred stock, $.01 par value and (ii) 100,000,000 shares of
     common stock, $.01 par value. Such shares may be issued in one or more
     series from time to time, without action by the stockholders, and for such
     consideration as may be fixed by the Board of Directors. Additionally, the
     Board of Directors is authorized to fix the designations, preferences, and
     relative participating, option or other special rights of the shares of
     each such series of preferred stock, and the qualifications, limitations or
     restrictions thereon.

     Issuance of Preferred Stock

     Effective January 31, 2002, the Company and LLCP reached agreement relative
     to further amendment of the credit arrangement with LLCP to accommodate the
     consolidation of the Company's facilities and to permit additional
     indebtedness to be incurred by the Company in connection therewith. As
     consideration for the consent provided by this amendment and for the
     additional investment monitoring costs and expenses to be incurred by LLCP
     over the remaining term of the term of the credit arrangement, the value of
     which was agreed to be a total of $750,000, the Company agreed to issue to
     LLCP 23.57 shares of a newly created Series A Preferred Stock. These shares
     were issued in March 2002. The designations for the new preferred stock
     provide the holder with, among other things, a liquidation preference
     totaling $750,000, voting rights along with holders of common stock,
     conversion rights into a like number of common shares, subject to
     adjustment, and provide for adjustment to prevent dilution of the holders'
     interests. The agreement with LLCP also provides that, after the issuance
     of the Series A Preferred Stock and following the contemplated spin-off,
     LLCP shall be entitled to dilution protection so that its warrants plus its
     conversion rights for preferred stock amount to a minimum of 19.5% of total
     issuable shares. The Company has recorded the $750,000 of Series A
     Preferred Stock issued to LLCP as deferred financing costs which will be
     amortized as additional interest expense over the remaining life of the
     LLCP agreement.

7.   SHAREHOLDERS' EQUITY (continued)

     Warrant Exercise

     In connection with a refinancing in December 1997, an unrelated consultant
     was issued a warrant to purchase 1% of Overhill Farms' common stock at a
     purchase price of $50,000. The warrant was exercised during the nine-month
     period ended July 1, 2001.

                                      F-43

<PAGE>

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)


8.   RECENT ACCOUNTING PRONOUNCEMENTS

     In November 2001, the Financial Accounting Standards Board issued Statement
     No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
     (Statement 144). These rules supersede FASB Statement No. 121, Accounting
     for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
     Disposed Of, providing a single accounting model for long-lived assets to
     be disposed of. Although retaining many of the fundamental recognition and
     measurement provisions of Statement 121, the new rules significantly change
     the criteria that would have to be met to classify an asset as
     held-for-sale. SFAS 144 also supersedes the provisions of APB Opinion 30
     with regard to reporting the effects of a disposal of a segment of a
     business and requires expected future operating losses from discontinued
     operations to be displayed in discontinued operations in the period(s) in
     which the losses are incurred (rather than as of the measurement date as
     previously required by APB 30). SFAS 144 is effective for fiscal years
     beginning after December 15, 2001 and interim periods within those fiscal
     years, although earlier application is encouraged. The Company has adopted
     SFAS 144 as of October 1, 2001. The adoption of SFAS 144 did not have a
     material effect on the Company's financial position, results of operations
     or cash flows.

     In June 2001, the Financial Accounting Standards Board issued Statement No.
     142, Goodwill and Other Intangible Assets (SFAS 142), which requires that
     goodwill no longer be amortized but instead be tested at least annually for
     impairment by reporting unit. The Company has adopted SFAS 142 as of
     October 1, 2001 and no impairment of goodwill was recorded upon adoption.
     Had the Company been accounting for goodwill under SFAS 142 for all periods
     presented, the Company's income before income taxes would have increased by
     $623,000 and the Company's net income would have increased by $411,000
     ($428.13 per share) for the nine months ended July 1, 2001.

9.   SPIN-OFF TRANSACTION AND SUBSEQUENT EVENTS

     On August 14, 2001, Overhill Corporation's Board of Directors approved a
     plan to spin off Overhill Farms, Inc. to stockholders of the Parent.
     Overhill Corporation intends to accomplish the spin-off by distributing, in
     the form of a dividend, 100% of its ownership of Overhill Farms, Inc.
     common stock, representing 99% of the issued and outstanding common stock
     of Overhill Farms, Inc., to Overhill Corporation stockholders of record as
     of a date to be designated by the Parent's Board of Directors. Overhill
     Corporation stockholders will each receive one share of Overhill Farms,
     Inc. common stock for every two shares of Overhill Corporation common stock
     they own as of the date of record. If a stockholder is otherwise entitled
     to receive a fractional share of Overhill Farms, Inc. common stock, that
     stockholder will instead receive cash

                                      F-44

<PAGE>

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)


9.   SPIN-OFF TRANSACTION AND SUBSEQUENT EVENTS (continued)

     The spin-off is intended to separate Overhill Farms, Inc. and its Parent's
     subsidiary, Texas Timberjack, Inc., so that each company's management team
     can focus on its specific industry. The spin-off is also intended to enable
     both companies to attract and retain key employees and to reward them with
     compensation plans directly tied to the success of each business. Also, the
     assets, debts, liabilities, and organizational structure of the two
     post-spin-off companies will be more clearly defined. Immediately after the
     spin-off transaction becomes effective, Overhill Corporation will not own
     any shares of Overhill Farms, Inc. common stock. Following the spin-off,
     Overhill Farms, Inc. will become an independent public company, and it is
     in the process of registering its common stock with the Securities and
     Exchange Commission.

     The Company is currently in the process of completing the various steps
     necessary to effect the spin-off transaction, which is now expected to
     occur effective September 30, 2002, including, among other things,
     obtaining final lender approvals, making necessary changes to Overhill
     Farms' capital structure to effect the distribution of the dividend, and
     updating and refiling information with the Securities and Exchange
     Commission.

                                      F-45

<PAGE>

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)


9.   SPIN-OFF TRANSACTION AND SUBSEQUENT EVENTS (continued)

     Stock Split and Income Per Share

     To facilitate the proposed spin-off, the Company's Board of Directors is
     expected to authorize a stock split of approximately 12,010-shares-to-1,
     which would increase outstanding common shares, based upon outstanding
     common shares as of June 30, 2002, to approximately 9.4 million shares.
     Shares issuable pursuant to outstanding warrants and conversion rights of
     preferred stock would be similarly increased.

     Pro forma net income per share for the periods presented, after giving
     retroactive effect to the proposed 12,010-shares-to-1 stock split, are
     summarized as follows:

<TABLE>
<CAPTION>
                                                                                       For the Nine Months Ended
                                                                                -----------------------------------
                                                                                    June 30,               July 1,
                                                                                     2002                   2001
                                                                                ---------------        -------------
<S>                                                                             <C>                    <C>
  Per share data - basic and diluted:

    Net income per common share - basic and diluted:

         Income before extraordinary item                                         $      0.07          $      0.17

         Extraordinary item                                                                 -                    -
                                                                                ---------------        --------------

    Net income per common share - basic                                           $      0.07          $      0.17
                                                                                ===============        ==============

    Net income per common share - diluted                                         $      0.06          $      0.14
                                                                                ===============        ==============

  Weighted average shares outstanding - basic                                       9,400,828            9,369,842
                                                                                ===============        ==============

  Weighted average shares outstanding - diluted                                    11,520,833           11,394,968
                                                                                ===============        ==============
</TABLE>

                                      F-46

<PAGE>

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)

9.   SPIN-OFF TRANSACTION AND SUBSEQUENT EVENTS (continued)

     Stock Option Plan

     In connection with the proposed spin-off, the Company's Board of Directors
     also expects to adopt a stock option plan for eligible employees. It is
     currently anticipated that a total of 800,000 post spin-off shares of the
     Company's common stock would be reserved for issuance under this plan. This
     reservation of shares would be expected to give effect to the dilution
     protection for LLCP as described in Notes 5 and 7 above and result in an
     increase in LLCP's warrant and/or conversion shares.

     Intercompany Accounts

     The Company has approximately $11.2 million of receivables from and $1.0
     million of payables to its parent, Overhill Corporation, as of June 30,
     2002. In connection with the proposed spin-off, Overhill Corporation is
     expected to make a partial payment on amounts due by Overhill Corporation
     to the Company by transferring to the Company certain notes receivable
     totaling approximately $400,000. These notes receivable are due from
     certain officers of the both the parent and the Company who, subsequent to
     the proposed spin-off, will remain officers of the Company and will no
     longer be employed by the Parent. Simultaneously with the proposed
     spin-off, after giving effect to the partial payment described above, the
     net intercompany amounts due to the Company by its parent are expected to
     be charged to retained earnings.

                                      F-47