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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-K

                                  ANNUAL REPORT
                        PURSUANT TO SECTIONS 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
    [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934
             For the fiscal year ended OCTOBER 1, 2006

                                       OR

    [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934
             For the transition period from            to

                         Commission file number 1-16699
                                                -------

                              OVERHILL FARMS, INC.
             (Exact name of registrant as specified in its charter)

               NEVADA                                         75-2590292
               ------                                         ----------
   (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                       Identification Number)

       2727 EAST VERNON AVENUE
         VERNON, CALIFORNIA                                      90058
         ------------------                                      -----
(Address of principal executive offices)                      (Zip code)


       Registrant's telephone number, including area code: (323) 582-9977

           Securities registered pursuant to Section 12(b) of the Act:


     Title of each class               Name of each exchange on which registered
     -------------------               -----------------------------------------

COMMON STOCK, PAR VALUE $0.01                   AMERICAN STOCK EXCHANGE


        Securities registered pursuant to Section 12(g) of the Act: NONE

     Indicate by check mark if the registrant is a well-known  seasoned  issuer,
as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

     Indicate by check mark if the  registrant  is not  required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]




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     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large Accelerated Filer [ ]    Accelerated Filer [ ]   Non-Accelerated Filer [X]

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

     The aggregate market value of voting common equity held by non-affiliates
of the registrant, based on the closing price of such stock on March 31, 2006,
which was the last business day of the registrant's second fiscal quarter ended
April 2, 2006 (based on the closing price on such date on the American Stock
Exchange) was approximately $26.2 million. For purposes of this computation, all
executive officers, directors and 10% beneficial owners of the registrant are
deemed to be affiliates. Such determination should not be deemed an admission
that such executive officers, directors and 10% beneficial owners are
affiliates. The registrant has no non-voting common equity.

     There were 15,267,271 shares of common stock, par value $0.01, outstanding
as of November 27, 2006.

     Documents Incorporated By Reference: NONE



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                                TABLE OF CONTENTS

PART I

     Item 1      Business                                                      1
     Item 1A     Risk Factors                                                  2
     Item 1B     Unresolved Staff Comments                                     7
     Item 2      Properties                                                    7
     Item 3      Legal Proceedings                                             7
     Item 4      Submission of Matters to a Vote of Security Holders           7

PART II

     Item 5      Market for Registrant's Common Stock, Related Stockholder
                 Matters and Issuer Purchases of Equity Securities             8
     Item 6      Selected Financial Data                                       8
     Item 7      Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                          10
     Item 7A     Quantitative and Qualitative Disclosures About Market Risk   20
     Item 8      Financial Statements and Supplementary Data                  20
     Item 9      Changes in and Disagreements With Accountants on
                 Accounting and Financial Disclosure                          20
     Item 9A     Controls and Procedures                                      20
     Item 9B     Other Information                                            20

PART III

     Item 10     Directors and Executive Officers of the Registrant           21
     Item 11     Executive Compensation                                       25
     Item 12     Security Ownership of Certain Beneficial Owners and
                 Management and Related Stockholder Matters                   29
     Item 13     Certain Relationships and Related Transactions               31
     Item 14     Principal Accountant Fees and Services                       32

PART IV

     Item 15     Exhibits and Financial Statement Schedules                   34

SIGNATURES                                                                    37


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                                     PART I

ITEM 1.  BUSINESS
         --------

HISTORY

     Overhill Farms, Inc. was formed in 1995 as a Nevada corporation. We sell
our products nationwide, and our headquarters and manufacturing facilities are
located in Vernon, California.

PRODUCTS AND SERVICES

     We are 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
nationally recognized customers such as Panda Restaurant Group, Inc., Jenny
Craig, Inc., American Airlines, Inc., Safeway Inc. and Pinnacle Foods
Corporation.

SALES AND MARKETING

     Our revenues arise from one business segment - the development and
manufacture of frozen food products. We market our products through both an
internal sales force and outside food brokers. Historically, we have served
foodservice, retail and airline customers.

     A significant portion of our total net revenues during the last two fiscal
years was derived from two customers. Panda Restaurant Group and Jenny Craig,
Inc. accounted for approximately 35% and 28%, respectively, of our revenues for
the fiscal year ended October 1, 2006. We continue to work to expand our retail
and foodservice customer base with the goal of reducing our reliance on these
two accounts.

MANUFACTURING AND SOURCING

     In 2003, we completed the implementation of a major program to improve
manufacturing efficiencies. These initiatives included the consolidation of most
of our home office, manufacturing and warehousing, product development and
marketing and quality control facilities into a single manufacturing facility in
Vernon, California. We also maintain a protein cooking facility. In 2003, we
also added equipment to improve freezing capabilities and to automate some
operations in both of our facilities.

     Our ability to economically produce large quantities of our products, while
maintaining a high degree of quality, is partially dependent on our ability to
procure raw materials on an economical cost basis. We rely on several large
suppliers for products including poultry and purchase the remaining raw
materials from suppliers in the open market. We do not anticipate any particular
difficulty in acquiring these materials in the future. We store raw materials,
packaging and finished goods on-site or in public frozen food storage facilities
until shipment. When possible and practical, we negotiate supply contracts at
fixed prices to protect against market fluctuation risk.

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 our total revenues, 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.

COMPETITION

     Our products compete with products produced by numerous regional and
national firms. Many of these companies are divisions of larger highly
integrated companies such as Tyson Foods and ConAgra. Competition is intense,
with most firms producing similar products for the foodservice and retail
industries. Competitive factors include price, product quality, flexibility,
product development, customer service and, on a retail basis, name recognition.
We are competitive in this market as a result of our ability to produce
mid-sized/custom product runs within a short time frame on a cost effective
basis and our ability to provide ancillary support services such as research and
development, assistance with regulatory matters, production planning and
logistics.


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PRODUCT DEVELOPMENT AND MARKETING

     We maintain a comprehensive, fully staffed research and development
department that formulates recipes and upgrades specific products for current
and prospective customers and establishes production and quality standards. We
develop products based upon customers' specifications, conventional recipes, new
product trends or our own product initiatives. We are continuously developing
recipes as customers' tastes and client requirements change. We also maintain a
quality control department for inspection, testing, monitoring and compliance to
ensure that our products are produced in accordance with our standards.

INTELLECTUAL PROPERTY

     We have registered the trademark "Overhill Farms," among others, in the
United States Patent and Trademark Office, and previously acquired other
trademarks including, among others, "Chicago Brothers" and "Florence Pasta and
Cheese."

EMPLOYEES

     Our total hourly and salaried workforce consisted of approximately 860
employees at October 1, 2006. Most of our operations are labor intensive,
generally requiring semi-skilled employees. The manufacturing employees are
unionized with United Food & Commercial Workers Union, Local 770 under a
three-year contract renewed effective March 1, 2005. We believe our relations
with the union 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," as well as Occupational Safety and Health
Administration, or "OSHA," and the Environmental Protection Agency, or the
"EPA." Our food processing facilities are subject to continuous on-site
examination, inspection and regulation by the USDA. Compliance with the current
applicable federal, state and local environmental regulations has not adversely
affected our financial position, results of operations or competitive position.
However, we cannot predict whether regulation by various federal, state and
local governmental entities and agencies may adversely affect our future
business and financial results. To date, we have never been required to recall
any of our products. Since 1997, we have used a Hazard Analysis Critical Point
Plan to ensure proper handling of all food items.

ITEM 1A. RISK FACTORS
         ------------

OUR ABILITY TO COMPETE EFFECTIVELY IN THE HIGHLY COMPETITIVE FOOD INDUSTRY MAY
AFFECT OUR OPERATIONAL PERFORMANCE AND FINANCIAL RESULTS.

     Our continued success depends in part on our ability to be an efficient
producer in the highly competitive food 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
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 general market conditions. Our failure to match or
exceed our competitors' cost reductions through productivity gains and other
improvements could weaken our competitive position. Competition is based on
product quality, distribution effectiveness, brand loyalty, price, effective
promotional activities, the ability to identify and satisfy emerging consumer
preferences and the ability to provide ancillary support services. We may not be
able to effectively compete with these larger, more diversified companies.


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THE LOSS OR CONSOLIDATION OF ANY OF OUR KEY CUSTOMERS COULD ADVERSELY AFFECT OUR
FINANCIAL RESULTS BY DECREASING OUR EXISTING SALES OPPORTUNITIES AND PRICES AND
INCREASING OUR MARKETING AND PROMOTIONAL EXPENSES.

     The largest purchasers of our products, Panda Restaurant Group, Inc. and
Jenny Craig, Inc., accounted for approximately 35% and 28%, respectively, of our
total net revenues during the fiscal year ended October 1, 2006. Despite an
expected decline in sales to Panda Restaurant Group, Inc. in fiscal year 2007,
we continue to expect that our sales to these customers will continue to
constitute a significant percentage of our net revenues. The loss of either of
these customers as a significant outlet for our products could adversely affect
our competitive position and operating results if we do not obtain additional
customers to offset any change in these accounts.

FUTURE DECLINES IN AIR TRAVEL AND BANKRUPTCIES OR OTHER FINANCIAL DIFFICULTIES
OF OUR AIRLINE CUSTOMERS MAY ADVERSELY AFFECT OUR REVENUES, COSTS AND
COLLECTIONS.

     In fiscal year 2006, sales to airline customers were approximately $21.6
million, or 12.8% of total net revenues, as compared to sales of $30.5 million
in fiscal year 2005 and $29.2 million in fiscal year 2004, representing 18.8%
and 21.8% of total net revenues in fiscal years 2005 and 2004, respectively.
Additionally, accounts receivable from airline-related customers accounted for
approximately 14.5% and 20.8% of the total accounts receivable balance at
October 1, 2006 and October 2, 2005, respectively. The events of September 11,
2001 significantly reduced our sales to airline customers during the first half
of fiscal year 2004. Two of our airline customers, Delta Airlines and Northwest
Airlines, filed for Chapter 11 bankruptcy in fiscal year 2005. Approximately
$134,000 of our receivables from Delta Airlines were written-off in fiscal year
2005. Northwest Airlines' bankruptcy filing had no financial impact on us since
our receivables relating to that airline are due from a financially stable
independent third-party distributor. Given the financial and business challenges
facing the airline industry, we carefully monitor our receivables from all of
our customers in this sector. The ongoing effect of these events on the airline
industry, airline revenues, and on our business in particular, or the impact of
a future occurrence of a similar event, cannot be accurately determined and
could further adversely affect our financial position, results of operations or
cash flows by, among other things, decreasing our sales to and making it more
difficult to collect receivables from airline customers.

WE ARE A MAJOR PURCHASER 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.

     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. However, when necessary, we attempt to recover our commodity cost
increases by increasing prices, promoting a higher-margin product mix and
creating additional operating efficiencies. Nevertheless, the raw materials used
in our business are largely commodities that experience price fluctuations
caused by external conditions and changes in governmental agricultural programs.

     We also use paper products, such as corrugated cardboard, aluminum
products, films and plastics to package our products. Substantial increases in
prices of packaging materials or higher prices of our raw materials could
adversely affect our operating performance and financial results.

     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 adversely affect our profitability.

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 the ultimate consumers
of our products lose confidence in the safety and quality of various food
products. Adverse publicity about these types of concerns, like the publicity
about genetically modified organisms and avian influenza, 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 adversely affect our business and
financial condition.


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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. 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.

     While we have never been required to recall any of our products and we
maintain insurance that we believe is adequate to cover this type of loss, a
widespread product recall could result in changes to one or more of our business
processes, product shortages, a loss of customer confidence in our food or other
adverse effects on our business.

     If we are required to defend against a product liability claim, whether or
not we are found liable under the claim, we could incur substantial costs, our
reputation could suffer and our customers might substantially reduce their
existing or future orders from us.

OUR BUSINESS IS SUBJECT TO FEDERAL, STATE AND LOCAL GOVERNMENT REGULATIONS THAT
COULD ADVERSELY AFFECT OUR BUSINESS AND FINANCIAL POSITION.

     Food manufacturing operations are subject to regulation by various federal,
state and local government entities and agencies. 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, Drug and Cosmetic Act. We cannot predict whether
future regulation by various federal, state and local governmental entities and
agencies would adversely affect 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 that 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, though few in
number, are important to our success and competitive position. 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 manufacture products under our customers' trademarks.
While we generally require them to agree to indemnify us in connection with our
use of their trademarks, it is possible that we could face infringement actions
based upon the content provided by our customers. If any of these claims are
proved valid, through litigation or otherwise, we may be required to cease using
the trademarks and/or pay financial damages and/or expenses for which we are not
indemnified.

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 and alternative sources of supply for key items,
we cannot be sure that any of these customers or suppliers will continue to do
business with us on the same basis. Additionally, although we try to renew these


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contracts as they expire, there can be no assurance that these customers or
suppliers will renew these contracts on terms that are favorable to us, if at
all. The termination of or modification to any number of these contracts may
adversely affect our business and prospects, including our financial performance
and results of operations.

OUR COMMON STOCK PRICE IS SUBJECT TO SIGNIFICANT VOLATILITY, WHICH COULD RESULT
IN SUBSTANTIAL LOSSES FOR INVESTORS.

     During the 52-week period ended November 27, 2006, the high and low sales
prices of our common stock on the American Stock Exchange ("Amex") were $4.24
per share and $2.50 per share, respectively. Prices for our shares are
determined in the marketplace and may accordingly be influenced by many factors,
including, but not limited to:

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

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

         o    announcements about our performance as well as the announcements
              of our competitors about the performance of their businesses;

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

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

         o    our dividend policy; and

         o    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 adversely
affect the trading price of our shares.

     The price at which investors purchase shares of our common stock may not be
indicative of the price that will prevail in the trading market. Investors may
be unable to sell their shares of common stock at or above their purchase price,
which may result in substantial losses.

OUR FAILURE TO ATTRACT AND RETAIN KEY MANAGEMENT PERSONNEL COULD ADVERSELY
AFFECT 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 custom prepared
foods, we operate in a specialized industry. Our key personnel have experience
and skills specific to this industry, and there are a limited number of
individuals with the relevant experience and skills. Though we have an
employment agreement with Mr. Rudis, the agreement provides for voluntary
resignation on the part of Mr. Rudis prior to the end of the term of the
agreement. If we lose any of our key personnel, our business operations could be
adversely affected.

A CHANGE IN CONTROL COULD RESULT IN AN EVENT OF DEFAULT UNDER OUR SECURED CREDIT
FACILITY, WHICH COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION, RESULTS OF
OPERATIONS OR CASH FLOWS.

     Our secured credit facility provides that a change in control would occur
if, among other occurrences, Mr. Rudis ceases to be our chief executive officer
other than due to death or disability or if a suitable replacement chief
executive officer has not accepted appointment within 90 days after Mr. Rudis'
death or disability, any person or group becomes the beneficial owner of 35% or
more of our voting stock, or certain changes in the composition of our board
occur during any period of two consecutive years. The occurrence of a change in
control could permit the secured parties to terminate or reduce their loan


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commitments, declare all or a portion of loans then outstanding to be due and
payable, and/or exercise other available rights and remedies. Depending on our
financial condition at the time, we may not be able to raise sufficient funds to
repay this indebtedness upon an event of default. Accordingly, the occurrence of
a change in control could adversely affect our financial condition, results of
operations or cash flows.

IF WE VIOLATE OUR FINANCIAL AND OTHER COVENANTS UNDER OUR SECURED CREDIT
FACILITY, OUR FINANCIAL CONDITION, RESULTS OF OPERATIONS OR CASH FLOWS MAY BE
ADVERSELY AFFECTED BY PERMITTING SECURED PARTIES TO FORECLOSE ON OUR ASSETS OR
IMPOSING ON US DEFAULT RATES OF INTEREST.

     Our $47.5 million senior secured credit facility with a five-year maturity,
maturing in May 2011, is secured by a first priority lien on substantially all
of our assets. The facility contains covenants whereby, among other things, we
are required to maintain compliance with agreed levels of EBITDA, interest
coverage, fixed charge coverage, leverage targets, and annual capital
expenditures and incremental indebtedness limits. If we violate these covenants
and are unable to obtain waivers or renegotiate the terms of the covenants, we
could become subject to, among other things, interest rate increases and
acceleration of maturity of the loans, which could adversely affect our
financial condition, results of operations or cash flows.

A SMALL NUMBER OF STOCKHOLDERS BENEFICIALLY OWNS A SIGNIFICANT PERCENTAGE OF OUR
OUTSTANDING COMMON STOCK AND THEREFORE COULD SIGNIFICANTLY INFLUENCE OR CONTROL
MATTERS REQUIRING STOCKHOLDER APPROVAL.

     Assuming the exercise of the aggregate options issued to our executive
officers and directors to purchase shares of our common stock, our executive
officers and directors and stockholders who beneficially own greater than 5% of
our common stock were beneficial owners, in the aggregate, of approximately 52%
of our outstanding common stock as of November 27, 2006. These stockholders, if
acting together, could be able to significantly influence or control matters
requiring approval by our stockholders, including the election of directors and
the approval of mergers or other business combination transactions.

FUTURE SALES OF SHARES OF OUR COMMON STOCK BY OUR STOCKHOLDERS COULD CAUSE OUR
STOCK PRICE TO DECLINE.

     We cannot predict the effect, if any, that market sales of shares of our
common stock or the availability of shares of common stock for sale will have on
the market price prevailing from time to time. As of November 27, 2006, we had
outstanding 15,267,271 shares of common stock. An aggregate of 5,283,861 of
these shares were then included for resale under a registration statement that
was declared effective on April 13, 2006. As of November 27, 2006, there were
outstanding options to purchase up to 1,102,000 shares of common stock. All of
the shares of common stock underlying these options are covered on an existing
effective registration statement. Sales of shares of our common stock in the
public market covered under the effective registration statement, or the
perception that those sales may occur, could cause the trading price of our
common stock to decrease or to be lower than it might be in the absence of those
sales or perceptions.

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 OUR STOCKHOLDERS' BEST 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
that may discourage takeover attempts. These provisions may limit stockholders'
ability to approve a transaction that stockholders may think is in 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 also include 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 may not be effective unless we meet
certain conditions under the Nevada statute.


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     The provisions of our articles of incorporation, bylaws and Nevada law are
intended to encourage potential acquirers to negotiate with us and allow the
board of directors the opportunity to consider alternative proposals in the
interest of maximizing stockholder value. However, those provisions may also
discourage acquisition proposals or delay or prevent a change in control.

ITEM 1B. UNRESOLVED STAFF COMMENTS
         -------------------------

     Not applicable.

ITEM 2.  PROPERTIES
         ----------

     We lease two manufacturing facilities in Vernon, California. In January
2002, we entered into a ten-year lease, with an option for a five-year renewal,
for a facility, Plant No. 1, that has been expanded to 170,000 square feet. Most
of our home office, manufacturing and warehousing, product development and
marketing and quality control facilities have been consolidated into this single
location. We also maintain a facility, Plant No. 2, primarily for cooking
protein. In addition, we lease two dry goods storage facilities on a
month-to-month basis. These leased facilities include a 25,000 square foot
facility in Vernon, California and a 7,620 square foot facility in Huntington
Park, California.

     We believe that our new Plant No. 1, currently operating at approximately
60% capacity, is adequate to meet our requirements for the foreseeable future.
In fiscal year 2006, items that were processed at Plant No. 1 (some of which
included components that were processed at Plant No. 2) accounted for sales of
approximately $102,539,000. Items that were processed in Plant No. 2 that did
not require further processing in Plant No. 1 accounted for the balance of sales
in fiscal year 2006 of approximately $65,299,000. As our sales of cooked protein
grow, it may become necessary to augment the cooking capacity that we now have
at Plant No. 2. We are in the process of evaluating our cooking capacity. If we
deem additional cooking capacity to be necessary, estimated capital expenditures
for that capacity could range from $5 million to $10 million during fiscal years
2007 and 2008, depending on the amount of additional cooking capacity added, if
any. We anticipate that cash generated from operating activities and borrowing
availability under our existing credit facilities will fund capital
expenditures.

ITEM 3.  LEGAL PROCEEDINGS
         -----------------

     From time to time, we are 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 adversely affect our
financial condition, results of operations or cash flows.

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

     We held our 2006 annual meeting of stockholders on July 17, 2006. There
were 15,260,271 shares of our common stock outstanding and entitled to vote at
the meeting. Each holder of record of our common stock on the record date was
entitled to cast one vote per share on each proposal.

     Seven nominees were presented for election and elected to our board of
directors at the meeting. The results of the vote for the election of directors
were as follows:

  Nominee                             For              Withheld
  -------                             ---              --------
  James Rudis                         10,486,693       342,859
  John L. Steinbrun                   10,382,240       447,312
  Harold Estes                        10,382,290       447,262
  Geoffrey A. Gerard                  10,692,783       136,769
  Alexander Auerbach                  10,381,803       447,749
  Louis J. Giraudo                    10,796,483        33,069
  Alexander Rodetis, Jr.              10,797,983        31,569


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                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS
         ---------------------------------------------------------------------
         AND ISSUER PURCHASES OF EQUITY SECURITIES
         -----------------------------------------

MARKET INFORMATION AND HOLDERS

     Our common stock has traded on Amex under the symbol "OFI" since November
1, 2002. At November 27, 2006, we had 179 stockholders of record. The following
table sets forth the range of high and low sales prices for our common stock on
Amex for the periods indicated:

              FISCAL 2005
              -----------
         First Quarter from September 27, 2004
              to January 2, 2005                     $   1.75           $   1.00

         Second Quarter from January 3, 2005
              to April 3, 2005                       $   3.50           $   1.25

         Third Quarter from April 4, 2005
              to July 3, 2005                        $   3.75           $   1.75

         Fourth Quarter from July 4, 2005
              to October 2, 2005                     $   4.40           $   3.00

              FISCAL 2006
              -----------
         First Quarter from October 3, 2005
              to January 1, 2006                     $   4.24           $   3.03

         Second Quarter from January 2, 2006
              to April 2, 2006                       $   3.73           $   2.79

         Third Quarter from April 3, 2006
              to July 2, 2006                        $   3.60           $   2.98

         Fourth Quarter from July 3, 2006
              to October 1, 2006                     $   3.90           $   2.50

DIVIDENDS

     We have never paid cash dividends on our common stock. 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. Our
current financing arrangements prohibit us from paying cash dividends.

RECENT SALES OF UNREGISTERED SECURITIES

     None.

ITEM 6.  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 are derived from the financial statements of Overhill Farms,
Inc., which have been audited by Ernst & Young LLP, independent registered
public accounting firm.

                                       8


<PAGE>

     Before the spin-off that occurred in October 2002, we operated as part of
TreeCon Resources, Inc. Because the prior year data for fiscal year 2002
reflects a period 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 throughout each of the periods shown. Comparability of the data
is also affected by fiscal year 2006 and fiscal years 2002 through 2004 being
52-week periods and fiscal year 2005 being a 53-week period. 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 financial statements and the related notes
included elsewhere in this Form 10-K.


<TABLE>
<CAPTION>
                                                      FISCAL YEAR ENDED
                           ------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS        OCTOBER 1,       OCTOBER 2,    SEPTEMBER 26,    SEPTEMBER 28,   SEPTEMBER 29,
 DATA                             2006             2005            2004            2003             2002
                                  ----             ----            ----            ----             ----
(IN THOUSANDS, EXCEPT
 PER SHARE DATA):

<S>                              <C>            <C>             <C>              <C>             <C>
Net revenues                     $168,310       $162,566        $133,957         $136,950        $138,901
Operating income                   14,288         11,903           6,245            1,842           7,298

Income (loss) before
   extraordinary items              5,102          3,696          (2,142)          (6,422)          1,030
Net income (loss)                   5,102          3,696          (2,142)          (6,422)          1,030

Net income (loss) per
   share - Basic (a)                $0.34          $0.25          $(0.14)          $(0.53)          $0.11

Net income (loss) per
   share - Diluted  (a)             $0.32          $0.24          $(0.14)          $(0.53)          $0.09


                                                    AS OF FISCAL YEAR ENDED
                           ------------------------------------------------------------------------------------
BALANCE SHEET DATA             OCTOBER 1,       OCTOBER 2,    SEPTEMBER 26,    SEPTEMBER 28,   SEPTEMBER 29,
(IN THOUSANDS)                    2006             2005            2004            2003             2002
                                  ----             ----            ----            ----             ----


Total assets                      $58,128        $56,221         $59,550          $56,182         $59,018
Long-term debt                     37,219         45,058          47,775           44,950          36,242
Total liabilities                  51,191         54,844          62,031           56,521          53,666
Retained (deficit)
earnings (b)                       (3,405)        (8,507)        (12,203)         (10,061)          7,842
Stockholders' equity
(deficit)                           6,937          1,378          (2,481)            (339)          5,352
</TABLE>


(a) Per share data for fiscal year ended September 29, 2002 has been
retroactively adjusted for the 12,010-shares-for-1 stock split declared by our
board of directors in October 2002 in connection with the spin-off transaction.

(b) The decline in retained earnings (deficit) from September 29, 2002 to
September 28, 2003 of $17,903 includes the fiscal year 2003 net loss of $6,422
and the offset against retained earnings (deficit) of the net receivable due
from TreeCon Resources, our former parent, in the amount of $11,481.


                                       9


<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         -----------------------------------------------------------------------
         OF OPERATIONS
         -------------

OVERVIEW

     We are a leading value-added manufacturer of high quality, prepared frozen
food products for branded retail, private label, food service and airline
customers. Our product line includes entrees, plated meals, bulk-packed meal
components, pastas, soups, sauces, poultry, meat and fish specialties, as well
as organic and vegetarian offerings. Our extensive research and development
efforts, combined with proprietary recipes and flexible manufacturing
capabilities, provide customers with a one-stop solution for new product ideas,
formulations and product manufacturing, as well as precise replication of
existing recipes. Our capabilities allow customers to outsource product
development, product manufacturing and packaging thereby avoiding significant
fixed-cost and variable investments in resources and equipment. Our customers
include such prominent nationally recognized names as Panda Restaurant Group,
Jenny Craig, Inc., American Airlines, Inc., Safeway Inc. and Pinnacle Foods
Corporation.

     Our goal is to be a 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, including:

         o    diversifying our customer base, focusing on sectors we believe
              have attractive growth characteristics, such as foodservice and
              retail;

         o    investing in and operating efficient production facilities;

         o    providing value-added ancillary support services to customers;

         o    offering a broad range of products to customers in multiple
              channels of distribution; and

         o    continuing to pursue growth through strategic acquisitions and
              investments.

     Fiscal years 2006 and 2004 were 52-week periods, and fiscal year 2005 was a
53-week period. Net revenues increased 3.5% for the fiscal year ended October 1,
2006 as compared to the fiscal year ended October 2, 2005. During fiscal year
2006, increased sales in the retail and foodservice categories offset the
decline in airline sales. We expect future sales growth to be driven primarily
by the retail and foodservice areas. We experienced a 21.4% increase in net
revenues for the fiscal year ended October 2, 2005 as compared to the fiscal
year ended September 26, 2004. The increase in net revenues during fiscal year
2005 was due to growth in all business categories.

     Our gross profit increased 8.8% during fiscal year 2006 and 38.3% during
fiscal year 2005. Operating income increased 20.0% for the fiscal year ended
October 1, 2006 and 90.6% for the fiscal year ended October 2, 2005 due to
increases in sales, manufacturing efficiencies and reductions in selling,
general and administrative expenses ("SG&A"). Cost of sales declined as a
percentage of net revenues to 87.2% in fiscal year 2006 from 87.8% in fiscal
year 2005 and 89.3% in fiscal year 2004. SG&A as a percentage of net revenues
improved to 4.3% in fiscal year 2006 from 4.8% in fiscal year 2005 and 6.0% in
fiscal year 2004.

     As described under the "Liquidity and Capital Resources" heading below,
during fiscal year 2006 we refinanced our existing debt of $44.5 million. The
new credit facility with Guggenheim Corporate Funding, LLC ("GCF") is a $47.5
million senior secured credit facility with a five-year maturity and is secured
by a first priority lien on substantially all of our assets. The facility is
structured as a $7.5 million non-amortizing revolving loan, a $25.0 million
amortizing Tranche A Term Loan and a $15.0 million non-amortizing Tranche B Term
Loan.

RESULTS OF OPERATIONS

     The tables presented below, which compare our results of operations from
one period to another, present the results for each period, the change in those
results from one period to another in both dollars and percentage change and the
results for each period as a percentage of net revenues. The columns present the
following:


                                       10


<PAGE>

         o    First two data columns in each table show the absolute results for
              each period presented.

         o    Columns entitled "Dollar Variance" and "Percentage Variance" show
              the change in results, both in dollars and percentages. These two
              columns show favorable changes as positives and unfavorable
              changes as negatives. For example, when our net revenues increase
              from one period to the next, that change is shown as a positive
              number in both columns. Conversely, when expenses increase from
              one period to the next, that change is shown as a negative in both
              columns.

         o    Last two columns in each table show the results for each period as
              a percentage of net revenues.

FISCAL YEAR ENDED OCTOBER 1, 2006 COMPARED TO FISCAL YEAR ENDED OCTOBER 2, 2005


<TABLE>
<CAPTION>
                                                                DOLLAR       PERCENTAGE     RESULTS AS A PERCENTAGE OF NET
                                    FISCAL YEAR ENDED          VARIANCE       VARIANCE    REVENUES FOR THE FISCAL YEAR ENDED
                                    -----------------          --------       --------    ----------------------------------
                                 OCTOBER 1,    OCTOBER 2,      FAVORABLE      FAVORABLE      OCTOBER 1,      OCTOBER 2,
                                   2006          2005        (UNFAVORABLE)  (UNFAVORABLE)       2006            2005
                                   ----          ----        -------------  -------------      -----           -----
                                     (IN THOUSANDS)                (IN THOUSANDS)
<S>                             <C>           <C>              <C>               <C>           <C>             <C>
  Net revenues                  $ 168,310     $ 162,566        $ 5,744           3.5%          100.0%          100.0%

  Cost of sales                   146,825       142,813         (4,012)         (2.8)          (87.2)          (87.8)
                                ---------     ---------        -------         -----          ------          ------

  Gross profit                     21,485        19,753          1,732           8.8            12.8            12.2

  Selling, general and
    administrative expenses         7,196         7,850            654           8.3            (4.3)           (4.8)
                                ---------     ---------        -------         -----          ------          ------

  Operating income                 14,289        11,903          2,386          20.0             8.5             7.3

  Other expenses                    5,731         6,371            640          10.0            (3.4)           (3.9)
                                ---------     ---------        -------         -----          ------          ------

  Income before income
    taxes                           8,558         5,532          3,026          54.7             5.1             3.4

  Income tax provision              3,456         1,835         (1,621)        (88.3)           (2.1)           (1.1)
                                ---------     ---------        -------         -----          ------          ------

  Net income                       $5,102        $3,697        $ 1,405          38.0%            3.0%            2.3%
                                =========     =========        =======         =====          ======          ======
</TABLE>

     NET REVENUES. Net revenues for the fiscal year ended October 1, 2006
increased $5,744,000 (3.5%) to $168,310,000 from $162,566,000 for the fiscal
year ended October 2, 2005.

     Retail net revenues increased $9,703,000 (13.6%) to $80,979,000 for the
fiscal year ended October 1, 2006 from $71,276,000 for the fiscal year ended
October 2, 2005. The increase in retail sales was largely due to a 53% increase
in sales to Jenny Craig and to sales generated by two new customers added in the
fiscal year ended October 1, 2006. These sales increases more than offset lost
revenues from discontinued product lines and lower sales to some retail
customers.

     Foodservice net revenues increased $4,989,000 (8.2%) to $65,761,000 for the
fiscal year ended October 1, 2006 from $60,772,000 for the fiscal year ended
October 2, 2005 due to increased sales to an existing customer, partially offset
by decreased revenue from the loss of a product for an existing foodservice
customer.

     Airline net revenues decreased $8,948,000 (29.3%) to $21,570,000 for the
fiscal year ended October 1, 2006 from $30,518,000 for the fiscal year ended
October 2, 2005. The decline in airline sales was primarily attributable to
American Airlines' decision in February 2005 to remove meals from the coach
cabins of all of its domestic flights and partly attributable to significantly
reduced sales to Delta Airlines subsequent to their bankruptcy filing.
Year-over-year comparisons will reflect the loss of sales to Delta Airlines
through the first quarter of fiscal year 2007.


                                       11


<PAGE>

         Panda Restaurant Group, Inc. ("Panda") has added a third supplier of
the products we sell to Panda and has indicated it plans to spread its orders
for calendar year 2007 among the three suppliers in order to diversify its
sources of supply as it continues to expand. We expect foodservice sales for
fiscal year 2007 to decline when Panda reallocates approximately $20 million of
previously anticipated orders from us to the other Panda suppliers. We expect
this reallocation and sales decline will occur early in the second quarter of
fiscal year 2007. However, we believe that our relationship with Panda remains
strong, and we expect to participate in its future growth.

     We expect that this anticipated decline in foodservice sales will be offset
in fiscal year 2007 by sales to new retail customers. Anticipated sales to our
largest prospective retail customer are not expected to begin until late in the
second quarter of fiscal year 2007. We are now in contract negotiations with
this prospective customer and have scheduled test runs of several of their
products for December 2006.

     We believe airline meals will continue to be a profitable part of our
overall business despite the financial and business challenges facing the
airline industry.

     GROSS PROFIT. Gross profit for the fiscal year ended October 1, 2006
increased $1,732,000 (8.8%) to $21,485,000 from $19,753,000 for the fiscal year
ended October 2, 2005. The majority of this increase is attributable to net
revenues increasing $5,744,000. The balance of the increase was the result of
improvement in gross profit as a percentage of net revenues to 12.8% for the
fiscal year ended October 1, 2006 from 12.2% for the fiscal year ended October
2, 2005. Margin improvement was attributable to better operating leverage
resulting from higher sales volume and better pricing of raw materials.

     We modified our estimate for recording inventory reserves during the first
quarter of fiscal year 2005 to apply estimated reserve percentages to aging
categories. The impact of this change in estimate resulted in a one-time
increase to cost of sales and decrease in gross profit of approximately $650,000
or a 0.4% decline in gross profit as a percentage of net revenues during fiscal
year 2005.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses decreased
$654,000 (8.3%) to $7,196,000 (4.3% of net revenues) for the fiscal year ended
October 1, 2006 from $7,850,000 (4.8% of net revenues) for the fiscal year ended
October 2, 2005. The decrease in SG&A expenses resulted from a $417,000
reduction in professional, legal and consulting fees, a $152,000 decline in
brokerage and royalty expenses due to reduced club store sales and a reduction
of $59,000 in corporate expenses. In addition, bad debt expense was reduced in
the current year as no additional allowances were added to the reserve for
doubtful accounts as compared to the addition of $170,000 in the prior year.
These reductions were partially offset by increases of $116,000 in sales
promotional activities and increases of $80,000 and $45,000 in payroll and
insurance costs, respectively. The fact that fiscal year 2006 was one week
shorter than fiscal year 2005 also contributed to the decline in SG&A expenses.
As a result of the refinancing described under the "Liquidity and Capital
Resources" heading below, we have begun to experience savings of $180,000 in
annual consulting fees that we had been paying to Levine Leichtman Capital
Partners II, L.P. ("LLCP").

     OPERATING INCOME. Operating income increased $2,386,000 (20.0%) to
$14,289,000 for the fiscal year ended October 1, 2006 from $11,903,000 for the
fiscal year ended October 2, 2005. The increase in operating income was the
result of improvements in sales, gross margins and SG&A as noted above.

     OTHER EXPENSES. Other expenses decreased $640,000 (10.0%) for the fiscal
year ended October 1, 2006 to $5,731,000 from $6,371,000 for fiscal year ended
October 2, 2005. Other expenses for fiscal year 2005 included $245,000 of loss
on disposal of fixed assets. Interest expense declined by 13.0% from $5,912,000
to $5,144,000 due to the reduction of $4,079,000 in the face amount of debt in
the past twelve months through voluntary principal payments and lower interest
rates as a result of the refinancing. A total reduction in annual interest
expense of approximately $1,000,000 is anticipated during the first twelve
months of our new credit agreement. These anticipated savings may not be fully
realized if there are future increases in market interest rates or if we fail to
meet our financial and other covenants under our secured credit facility. The
fiscal year ended October 1, 2006 included a pretax debt extinguishment charge
of approximately $176,000 in connection with the termination of the LLCP and
Pleasant Street Investors, LLC ("PSI") financing arrangements.


                                       12


<PAGE>

     INCOME TAX PROVISION. Income tax expense was $3,456,000 for the fiscal year
ended October 1, 2006 as compared to $1,835,000 for the fiscal year ended
October 2, 2005. The difference was a result of income before taxes increasing
$3,026,000 from $5,532,000 for the fiscal year ended October 2, 2005 to
$8,558,000 during the year ended October 1, 2006. The effective tax rates were
40.4% and 33.2% for fiscal years 2006 and 2005, respectively. The effective tax
rate for the fiscal year ended October 1, 2006 did not materially differ from
the statutory rate. The difference between the effective tax rate and the
statutory tax rate for the fiscal year ended October 2, 2005 was the result of
the reversal of the valuation reserve of $425,000 that was established in fiscal
year 2004.

     During the fiscal year ended October 2, 2005, as a result of improved
operating results, we concluded that it was more likely than not that our
deferred tax assets would be realized. Accordingly, we reversed $337,000 of the
previously recorded valuation allowance against a portion of our deferred tax
assets.

     NET INCOME. Net income for the fiscal year ended October 1, 2006 was
$5,102,000 or $0.34 per basic share and $0.32 per diluted share as compared to
net income of $3,697,000 or $0.25 per basic share and $0.24 per diluted share
for the fiscal year ended October 2, 2005.

     We currently expect to continue profitable operations primarily through (a)
growing revenues from profitable product lines and increasing our customer base,
(b) improving gross margins by streamlining additional costs and continuing to
leverage the manufacturing and storage facilities to improve manufacturing
efficiency, and (c) reducing future interest costs on outstanding debt through
permitted pre-payments on our debt. However, no assurance can be given that we
will be successful. As discussed in "Risk Factors" contained in Item 1A of this
report, we may be unable to improve our operating results if we suffer a decline
in our manufacturing efficiency, the loss of major customers, declines in air
travel, adverse changes in our operating costs or raw materials costs or other
adverse changes to our business.

FISCAL YEAR ENDED OCTOBER 2, 2005 COMPARED TO FISCAL YEAR ENDED SEPTEMBER 26,
2004

<TABLE>
<CAPTION>
                                                                                      RESULTS AS A PERCENTAGE
                                                          DOLLAR        PERCENTAGE    OF NET REVENUES FOR THE
                                 FISCAL YEAR ENDED       VARIANCE        VARIANCE        FISCAL YEAR ENDED
                                 -----------------       --------        --------        -----------------
                            OCTOBER 2,   SEPTEMBER 26,   FAVORABLE      FAVORABLE     OCTOBER 2,  SEPTEMBER 26,
                               2005          2004      (UNFAVORABLE)  (UNFAVORABLE)     2005          2004
                            ---------      ---------   -------------  -------------   ----------  -------------
                                 (IN THOUSANDS)                (IN THOUSANDS)
<S>                         <C>            <C>           <C>                <C>          <C>           <C>
Net revenues                $ 162,566      $ 133,957     $  28,609          21.4%        100.0%        100.0%

Cost of sales                 142,813        119,676       (23,137)        (19.3)        (87.8)        (89.3)
                            ---------      ---------     ---------       -------       -------       -------

Gross profit                   19,753         14,281         5,472          38.3          12.2          10.7

Selling, general and
  administrative expenses       7,850          8,036           186           2.3          (4.8)         (6.0)
                            ---------      ---------     ---------       -------       -------       -------

Operating income               11,903          6,245         5,658          90.6           7.3           4.7

Other expenses                  6,371          9,755         3,384          34.7          (3.9)         (7.3)
                            ---------      ---------     ---------       -------       -------       -------

Income (loss) before
  income taxes                  5,532         (3,510)        9,042         257.6           3.4          (2.6)

Income tax  (benefit)
  provision                     1,835         (1,368)       (3,203)       (234.1)         (1.1)          1.0
                            ---------      ---------     ---------       -------       -------       -------

Net income (loss)           $   3,697      $  (2,142)    $   5,839         272.6%          2.3%         (1.6)%
                            =========      =========     =========       =======       =======       =======
</TABLE>

     NET REVENUES. Net revenues for the fiscal year ended October 2, 2005
increased $28,609,000 (21.4%) to $162,566,000 from $133,957,000 for the fiscal
year ended September 26, 2004.


                                       13


<PAGE>

     Retail net revenues increased $20,925,000 (41.6%) to $71,276,000 for the
fiscal year ended October 2, 2005 as compared to $50,351,000 for the fiscal year
ended September 26, 2004. This increase was attributable to higher sales to
large national brand customers as well as to an existing club store customer.
During the fourth quarter of fiscal year 2005, sales to a national retail brand
customer declined by $1,800,000 due to a discontinued product line. Another
national retail brand customer shifted production of certain items from our
facility to the customer's own manufacturing facility, causing a $2,700,000
decline in sales in the fourth quarter of fiscal year 2005.

     Foodservice net revenues increased $6,362,000 (11.7%) to $60,772,000 from
$54,410,000 for the fiscal year ended September 26, 2004. The growth was largely
due to increased sales to an existing customer.

     Airline net revenues were $30,518,000 for the fiscal year ended October 2,
2005 as compared to $29,196,000 for the fiscal year ended September 26, 2004, an
increase of $1,322,000 (4.5%). The increase generated from the addition of new
airline customers and improvements in air travel from early fiscal year 2004
levels were partially offset by a large airline carrier's decision to offer
meals on only long-haul and international flights.

     GROSS PROFIT. Gross profit for the fiscal year ended October 2, 2005
increased $5,472,000 (38.3%) to $19,753,000 from $14,281,000 for the fiscal year
ended September 26, 2004. The majority of this increase was attributable to net
revenues increasing $28,609,000. The balance of the increase was the result of
improvement in gross profit as a percentage of net revenues to 12.2% for the
fiscal year ended October 2, 2005 from 10.7% for the fiscal year ended September
26, 2004. Margin improvement was attributable to better leveraging of
manufacturing overhead costs (which represented $40,392,000 and $34,302,000 or
24.8% and 25.6% of sales in fiscal years 2005 and 2004, respectively) and
efficiencies due to the plant consolidation and better pricing of raw materials.

     We modified our estimate for recording inventory reserves during the first
quarter of fiscal year 2005 to apply estimated reserve percentages to aging
categories. The impact of this change in estimate resulted in a one-time
increase to cost of sales and decrease in gross profit of approximately $650,000
or a 0.4% decline in gross profit as a percentage of net revenues during fiscal
year 2005.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A for the fiscal year
ended October 2, 2005 decreased $186,000 (2.3%) to $7,850,000 (4.8% of net
revenues) from $8,036,000 (6.0% of net revenues) for the fiscal year ended
September 26, 2004. Demonstration and promotional expenses declined from
previous levels as a result of a decline in sales to a customer who required us
to pay a portion of those costs. These declines were offset by $152,000 of costs
associated with our exploration of strategic financial alternatives to improve
stockholder value, increases in insurance costs and approximately $134,000 in
provision for bad debt related to the write-off of Delta Airlines receivables.

     OPERATING INCOME. Operating income increased $5,658,000 (90.6%) to
$11,903,000 for the fiscal year ended October 2, 2005 from $6,245,000 for the
fiscal year ended September 26, 2004. The increase in operating income was the
result of improvements in sales, gross margins and SG&A as noted above.

     OTHER EXPENSES. Other expenses for the fiscal year ended October 2, 2005,
which consisted primarily of various financing-related charges, decreased
$3,384,000 (34.7%) to $6,371,000 from $9,755,000 for the fiscal year ended
September 26, 2004. The decrease was attributable to savings realized from
refinancing our debt with LLCP and PSI. In particular, amortization of deferred
financing costs decreased $283,000 (56.0%). Additionally, interest expense
declined $447,000 (7.0%) due to the early pay-off of the Term B Loan with PSI on
June 30, 2005. Included in other expenses for the fiscal year ended September
26, 2004 was a charge of $2,778,000 (primarily non-cash) for debt extinguishment
expenses related to the write-off of deferred financing costs and debt issue
costs in connection with the October 2003 refinancing with LLCP and PSI.

     INCOME TAX PROVISION. Income tax expense was $1,835,000 for fiscal year
ended October 2, 2005 compared to a benefit of $1,368,000 for fiscal year ended
September 24, 2004. We generated net income before taxes during the fiscal year
ended October 2, 2005, thus creating an income tax expense. We had a tax benefit
in the fiscal year ended September 26, 2004 due to operating losses generated
during the year. The effective tax rates were 33.2% and (38.9%) for fiscal years
2005 and 2004, respectively. The difference between the effective tax rate and
the statutory tax rate for the fiscal year ended October 2, 2005 was the result
of the reversal of the valuation reserve of $425,000 that was established in
fiscal year 2004. The effective tax rate for the fiscal year ended September 26,
2004 did not materially differ from the statutory tax rate.


                                       14


<PAGE>

     During fiscal year 2004, we recorded a $425,000 valuation allowance against
a portion of our deferred tax assets, since, at that time, it was believed that
such assets did not meet the more likely than not criteria to be recoverable
through projected future profitable operations in the foreseeable future.
However, in fiscal year 2005, as a result of improved operating results, we
concluded that it was more likely than not that our deferred tax assets would be
realized. Accordingly, we reversed $337,000 of the previously recorded valuation
allowance.

     NET INCOME (LOSS). The net result for the fiscal year ended October 2, 2005
was net income of $3,697,000 or $0.25 per basic share and $0.24 per diluted
share as compared to a net loss of $2,142,000 or ($0.14) per basic and diluted
share for the fiscal year ended September 26, 2004.

LIQUIDITY AND CAPITAL RESOURCES

     We believe that the items in our financial statements that are most
relevant to assessing our liquidity are our cash and cash equivalents and cash
generated from our operating activities. Our cash and cash equivalents decreased
$544,000 to $2,111,000 at October 1, 2006 from $2,655,000 at October 2, 2005.
Our principal sources of liquidity are cash generated from our operating
activities and availability under the GCF revolving loan. During the fiscal year
ended October 1, 2006, our operating activities provided cash of $7,229,000 as
compared to cash provided of $8,320,000 during the fiscal year ended October 2,
2005. Cash generated from operations before working capital changes for the
fiscal year ended October 1, 2006 was $10,221,000 as compared to $7,745,000 for
the fiscal year ended October 2, 2005. We used operating cash flows to finance
working capital needs of $2,991,000 primarily as a result of increasing sales
during fiscal year 2006. Working capital needs during the fiscal year ended
October 1, 2006 resulted from a $1,016,000 increase in accounts payable, offset
by increases of $2,267,000 and $1,535,000 in accounts receivable and
inventories, respectively. As of October 1, 2006, we had working capital of
$17,673,000.

     During the fiscal year ended October 1, 2006, our investing activities,
comprising capital expenditures and proceeds from the sale of shares of TreeCon
Resources, resulted in a net use of cash of approximately $2,196,000, as
compared to a net use of cash of approximately $1,644,000 during the fiscal year
ended October 2, 2005. Current year additions to property and equipment relate
to the purchase of new machinery to replace aging equipment and to automate
certain manufacturing processes. We are in the process of evaluating our cooking
capacity. If we deem additional cooking capacity to be necessary, estimated
capital expenditures for that capacity could range from $5 million to $10
million during fiscal years 2007 and 2008, depending on the amount of additional
cooking capacity added, if any. We anticipate that cash generated from operating
activities and borrowing availability under our existing credit facilities will
fund capital expenditures.

     During the fiscal year ended October 1, 2006, our financing activities
resulted in a use of cash of $5,576,000 as compared to a use of cash of
$5,631,000 during the fiscal year ended October 2, 2005. The use of cash during
the fiscal year ended October 1, 2006 consisted primarily of $4,403,000 of
principal payments that reduced our outstanding debt. The principal payments
consisted of $858,000 under our previous financing arrangements, $3,500,000
under our new facility and $45,000 to retire other previously outstanding debt.
Financing activities for the fiscal year ended October 1, 2006 also included
payment of $1,632,000 of debt issue costs that partially were offset by $324,000
of borrowings under equipment loans.

     On April 17, 2006, we executed a senior secured credit agreement with GCF.
Under the credit agreement, GCF acts as collateral agent, administrative agent,
arranger and syndication agent in connection with loans made by various lenders,
including affiliates of GCF.

     The facility with GCF is a $47.5 million senior secured credit facility
with a five-year maturity, maturing in May 2011, and is secured by a first
priority lien on substantially all of our assets. The facility is structured as
a $7.5 million non-amortizing revolving loan, a $25.0 million amortizing Tranche
A Term Loan and a $15.0 million non-amortizing Tranche B Term Loan. The facility
bears interest, adjustable quarterly, at LIBOR plus the Applicable Margin
(listed below) for LIBOR loans or, at our option in the case of the revolving
loans, an alternate base rate equal to the greater of the prime rate and the
federal funds effective rate plus 0.50%, plus an applicable margin, as follows:


                                       15


<PAGE>

<TABLE>
<CAPTION>
                                           Applicable
                                           Margin for
                        Total Debt to    Alternate Base                   Applicable Margin for
                         EBITDA Ratio      Rate Loans                          LIBOR Loans
                          for Last       --------------     --------------------------------------------------
                           Twelve                                                Tranche A          Tranche B
                           Months        Revolving Loan     Revolving Loan       Term Loan          Term Loan
                         -----------     --------------     --------------       ---------          ---------
<S>                       <C>  <C>            <C>                <C>                <C>                <C>
Greater than              3.00:1.00           2.50%              3.50%              3.75%              6.25%

Greater than or
equal to but less         2.00:1.00
than or equal to          3.00:1.00           2.25%              3.25%              3.50%              6.00%

Less than                 2.00:1.00           2.00%              3.00%              3.25%              5.75%
---------------------------------------------------------------------------------------------------------------
</TABLE>

     Initial funding under the GCF credit facility was made on May 17, 2006 in
the amount of $44.5 million through the issuance of Tranche A Term Loans in the
principal amount of $25.0 million, Tranche B Term Loans in the principal amount
of $15.0 million and LIBOR revolving loans in the principal amount of $4.5
million. As of October 1, 2006, our principal balances on these loans totaled
$41.0 million, consisting of $24.0 million in Tranche A Term Loans, $15.0
million in Tranche B Term Loans and $2.0 million in LIBOR revolving loans. At
October 1, 2006, interest rates on the Tranche A Term Loans, Tranche B Term
Loans and LIBOR revolving loans were 8.8%, 11.3% and 8.6%, respectively.

     Initial proceeds from the GCF facility were used to repay approximately
$44.5 million in existing debt and related fees and expenses of LLCP and PSI in
connection with the termination of our financing arrangements with them
comprising a secured senior subordinated note payable to LLCP and a senior Term
A note payable to PSI and to pay approximately $1.6 million in fees and expenses
relating to the new financing. Of these fees, $1.4 million is recorded as debt
discount, net of accumulated amortization, on the accompanying balance sheet as
of October 1, 2006. We recorded a pretax charge of approximately $176,000 in
connection with the termination of the LLCP and PSI financing arrangements in
the third quarter of fiscal year 2006.

      The GCF facility contains covenants whereby, among other things, we are
required to maintain compliance with agreed levels of EBITDA, interest coverage,
fixed charge coverage, leverage targets, and annual capital expenditures and
incremental indebtedness limits. Mandatory prepayments under the facility are
required based on excess cash flow as defined in the agreement and upon receipt
of proceeds from a disposition or payment from a casualty or condemnation of the
collateralized assets and voluntary prepayments under the facility are generally
permitted as provided in the agreement. The facility also contains customary
restrictions on incurring indebtedness and liens, making investments, paying
dividends and making loans or advances.

     On September 21, 2006, we entered into a 5-year loan in the principal
amount of $324,000 at a fixed interest rate of 7.5% to finance the purchase of
machinery used for manufacturing processes.

     As of October 1, 2006, we were in compliance with the covenant requirements
of the agreement with GCF. We believe it is probable that we will remain in
compliance with all of those covenant requirements for the foreseeable future.
However, if we fail to achieve certain revenue, expense and profitability
levels, a violation of the financial covenants under our financing arrangements
could result and interest rate increases and acceleration of maturity of the
loans could occur, which could adversely affect our financial condition, results
of operations or cash flows.

     We believe that funds available to us from operations and existing capital
resources will be adequate for our capital requirements for at least the next
twelve months.


                                       16


<PAGE>

     Following is a summary of our contractual obligations at October 1, 2006:

<TABLE>
<CAPTION>
                                                                       PAYMENTS DUE BY PERIOD
                                                                       ----------------------


            CONTRACTUAL                                        WITHIN                                          MORE THAN
            OBLIGATIONS                       TOTAL            1 YEAR          2-3 YEARS       4-5 YEARS        5 YEARS
            -----------                       -----            ------          ---------       ---------        -------
<S>                                       <C>               <C>               <C>            <C>              <C>
         Debt maturities (1)              $ 42,166,070      $  2,997,421      $ 4,958,112    $ 34,210,537     $         -

         Interest expense (2)               18,185,842         4,319,602        7,956,809       5,909,431               -

         Operating lease
            obligations                     13,234,687         1,980,891        3,657,470       2,640,358       4,955,968

         Other obligations                     633,858           610,272           23,586               -               -

         Open purchase orders               16,170,036        16,170,036                -               -               -
                                          ------------      ------------     ------------     ------------    -----------

         Total contractual
            obligations                   $ 90,390,493      $ 26,078,222     $ 16,595,977     $ 42,760,326    $ 4,955,968
                                          ============      ============     ============     ============    ===========
</TABLE>

         (1) Includes General Electric Capital Corporation lease of $842,168
         that was amended on October 2, 2006 as described below.
         (2) Assumes only mandatory principal pay-downs and the use of the LIBOR
         rate as of September 29, 2006 on the GCF debt and fixed rate interest
         payments on equipment loans.

     In January 2002, we entered into a lease for a 170,000 square foot facility
in Vernon, California, and we have consolidated certain of our home office,
manufacturing and warehousing, product development, and marketing and quality
control facilities into this single location. See "Business-Manufacturing and
Sourcing" in Part I, Item 1 of this report.

     We amended our existing operating lease agreements with General Electric
Capital Corporation on October 2, 2006. The amended lease results in a
three-year capital lease in the principal amount of $842,168 at a fixed interest
rate of 8.15% with a $1 bargain purchase option at the expiration of the lease.

     Rent payments on the previous operating lease agreements have been charged
to expense on a straight-line basis resulting in a deferred rent asset balance
of $532,000 at October 1, 2006. This balance will be amortized over the
remaining term of the lease in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 13, "Accounting for Leases."

RECENT ACCOUNTING PRONOUNCEMENTS

     In October 2006, the Financial Accounting Standards Board ("FASB") issued
FASB Staff Position No. 123R-5, "Amendment of FASB Staff Position FAS 123(R)-1"
("FSP 123(R)-5"). FSP 123(R)-5 amends FSP 123(R)-1 for equity instruments that
were originally issued as employee compensation and then modified, with such
modification made solely to reflect an equity restructuring that occurs when the
holders are no longer employees. We do not expect the adoption of FSP 123(R)-5
to have a material impact on our financial condition, results of operations or
cash flows.


                                       17


<PAGE>

     In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS 157"), which defines fair value, establishes a framework for measuring
fair value and requires enhanced disclosures about fair value measurements. SFAS
157 requires companies to disclose the fair value of their financial instruments
according to a fair value hierarchy (i.e., levels 1, 2, and 3, as defined).
Additionally, companies are required to provide enhanced disclosure regarding
instruments in the level 3 category, including a reconciliation of the beginning
and ending balances separately for each major category of assets and
liabilities. SFAS 157 will be effective for fiscal years beginning after
November 15, 2007 and interim periods within those fiscal years. We are
currently evaluating the impact adoption may have on our financial condition or
results of operations.

     In September 2006, the staff of the Commission issued Staff Accounting
Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements" ("SAB 108"). SAB
108 provides interpretive guidance on how the effects of the carryover or
reversal of prior year misstatements should be considered in quantifying a
current year misstatement. The Commission staff have stated that registrants
should quantify errors using both a balance sheet and income statement approach
and evaluate whether either approach results in quantifying a misstatement that,
when all relevant quantitative and qualitative factors are considered, is
material. SAB 108 will be effective for fiscal years ending on or after November
15, 2006. We do not expect that SAB 108 will have a material impact on our
financial condition, results of operations or cash flows.

     In July 2006, the FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109" ("FIN
48"), which prescribes accounting for and disclosure of uncertainty in tax
positions. This interpretation defines the criteria that must be met for the
benefits of a tax position to be recognized in the financial statements and the
measurement of tax benefits recognized. The provisions of FIN 48 became
effective for us as of the beginning of our 2007 fiscal year, with the
cumulative effect of the change in accounting principle recorded as an
adjustment to opening retained earnings. We are currently evaluating the impact
of adopting FIN 48 on our financial condition, results of operations or cash
flows.

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections," which, under most circumstances, requires retrospective
application of a change in accounting principle. SFAS No. 154 also requires the
restatement of previously issued financial statements when reporting the
correction of an error. SFAS No. 154 is effective for fiscal years beginning
after December 15, 2005. The adoption did not have a material impact on our
financial statements.

CRITICAL ACCOUNTING POLICIES

     Management's discussion and analysis of our financial condition and results
of operations is based upon our 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 financial statements contained elsewhere in this
report for a summary of our significant accounting policies. Management believes
the following critical accounting policies are related to its more significant
estimates and assumptions used in the preparation of our 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. A bankruptcy or other
significant financial deterioration of any customers could impact their future
ability to satisfy their receivables with us. Our allowance for doubtful
accounts is calculated based primarily upon historical bad debt experience and
current market conditions. Until fiscal 2003, bad debt expense and accounts
receivable write-offs, net of recoveries, were immaterial as we generally
transact the substantial portion of our business with large, established food or
service related businesses. For the fiscal years ended October 1, 2006, October
2, 2005 and September 26, 2004, our write-offs, net of recoveries, to the
allowance for doubtful accounts were approximately $181,000, $99,000 and
$95,000, respectively.

     A significant portion of our total net revenues during the last two fiscal
years was derived from two customers. Panda Restaurant Group, Inc. and Jenny
Craig, Inc. accounted for approximately 35% and 28%, respectively, of our
revenues for the fiscal year ended October 1, 2006 and approximately 34% and
38%, respectively, of our total accounts receivable balance at October 1, 2006.
Panda Restaurant Group, Inc. and Jenny Craig, Inc. accounted for approximately
31% and 19% respectively, of our revenues for the fiscal year ended October 2,
2005 and approximately 39% and 25%, respectively, of our total accounts
receivable balance at October 2, 2005.


                                       18


<PAGE>

     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
periodically review our inventory for excess items, and we establish a valuation
reserve based upon the age of specific items in inventory and the expected
recovery from the disposition of the items.

     A reserve is established for the estimated aged surplus, spoiled or damaged
products, and discontinued inventory items and components. The amount of the
reserve is determined by analyzing inventory composition, expected usage,
historical and projected sales information, and other factors. Changes in sales
volume due to unexpected economic or competitive conditions are among the
factors that could result in material increases or decreases to the reserve.
During the quarter ended January 2, 2005, we revised our method to apply reserve
estimation percentages to aging categories. The effect of this change in
estimate resulted in one-time higher cost of sales and lower gross profit of
approximately $650,000 and lowered net income by approximately $370,000 for the
three months ended January 2, 2005.

     EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED. We evaluate the
excess of cost over fair value of net assets acquired (goodwill) at least
annually for impairment in accordance with SFAS No. 142. We have one reporting
unit and estimate fair value based on a variety of market factors, including
discounted cash flow analysis, market capitalization, and other market-based
data. At October 1, 2006, we had goodwill of $12.2 million. A deterioration of
our operating results and the related cash flow effect could decrease the
estimated fair value of our business and, thus, cause our goodwill to become
impaired and cause us to record a charge against operations in an amount
representing the impairment.

     INCOME TAXES. We evaluate the need for a valuation allowance on our
deferred tax assets based on whether we believe that it is more likely than not
that all deferred tax assets will be realized. We consider future taxable income
and on-going prudent and feasible tax planning strategies in assessing the need
for valuation allowances. In the event we were to determine that we would not be
able to realize all or part of our deferred tax assets, we would record an
adjustment to the deferred tax asset and a charge to income, at that time.

FORWARD-LOOKING STATEMENTS

     This report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations or beliefs, including, but not
limited to, statements concerning our operations and financial performance and
condition. For this purpose, statements of historical fact may be deemed to be
forward-looking statements. Forward-looking statements include statements which
are predictive in nature, which depend upon or refer to future events or
conditions, which include words such as "expects," "anticipates," "intends,"
"plans," "believes," "estimates," "projects," "forecasts," or similar
expressions. In addition, any statements concerning future financial performance
(including future revenues, earnings or growth rates), ongoing business
strategies or prospects, and possible future company actions, which may be
provided by management, are also forward-looking statements. We caution that
these statements by their nature involve risks and uncertainties, and actual
results may differ materially depending on a variety of important factors,
including, among others:

         o    the impact of competitive products and pricing;

         o    market conditions that may affect the cost of raw material as well
              as the market for our products;

         o    changes in our business environment, including actions of
              competitors and changes in customer preferences, as well as
              disruptions to our customers' businesses;

         o    natural disasters that can impact, among other things, costs of
              fuel and raw materials;

         o    the occurrence of acts of terrorism, such as the events of
              September 11, 2001, or acts of war;

         o    changes in governmental laws and regulations, including income
              taxes; and

                                       19


<PAGE>

         o    other factors as may be discussed in this report, including those
              risk factors described under Item 1A of this report and in other
              reports we file with the Securities and Exchange Commission
              ("Commission").

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
         ----------------------------------------------------------

     INTEREST RATE RISK - OBLIGATIONS. We are subject to interest rate risk on
variable interest rate obligations. A hypothetical 10% increase in average
market interest rates would increase by approximately $403,000 the annual
interest expense on our debt outstanding as of October 1, 2006. We are also
subject to interest rate risk on our fixed interest rate obligations. Based upon
outstanding amounts of fixed rate obligations as of October 1, 2006, a
hypothetical 10% decrease in average market interest rates would increase the
fair value of outstanding fixed rate debt by approximately $6,000.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         -------------------------------------------

     See the index to financial statements included in Part IV, Item 15. The
supplementary financial information required by Item 302 of Regulation S-K is
contained in Note 13 of the notes to financial statements included in this
report.

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

     None.

ITEM 9A. CONTROLS AND PROCEDURES
         -----------------------

     Our Chief Executive Officer and Chief Financial Officer (our principal
executive officer and principal financial officer, respectively) have concluded,
based on their evaluation as of October 1, 2006, that the design and operation
of our "disclosure controls and procedures" (as defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934, as amended ("Exchange Act")) are effective
to ensure that information required to be disclosed by us in the reports filed
or submitted by us under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission's rules and forms,
including to ensure that information required to be disclosed by us in the
reports we file or submit under the Exchange Act is accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding whether or not
disclosure is required.

     During the quarter ended October 1, 2006, there were no changes in our
"internal controls over financial reporting" (as defined in Rule 13a-15(f) under
the Exchange Act) that have materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION
         -----------------

     As described under the subheading "Employment Contracts and Termination of
Employment and Change-in-Control Arrangements - Executive Bonus Program"
contained in Item 11 of Part III of this report, on August 17, 2006, upon
recommendation of the compensation committee, our board of directors approved
bonus programs for fiscal year 2006 for our named executive officers. The
bonuses will be paid in fiscal year 2007.


                                       20


<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
         --------------------------------------------------

     The following table sets forth certain information regarding our directors
and executive officers as of November 27, 2006.

<TABLE>
<CAPTION>
                                              PRESENT POSITIONS HELD             DIRECTOR
            NAME               AGE                 IN OUR COMPANY                 SINCE
---------------------------    ---    ---------------------------------------    --------
<S>                            <C>    <C>                                          <C>
James Rudis                    56     Chairman of the Board, President, Chief      1995
                                      Executive Officer and Director
John L. Steinbrun              43     Senior Vice President, Chief Financial       2003
                                      Officer, Chief Operating Officer and
                                      Director
Richard A. Horvath             60     Senior Vice President and Secretary            -
Harold Estes                   66     Director                                     2002
Geoffrey A. Gerard(1)(2)(3)    61     Director                                     2002
Alexander Auerbach(2)(3)       62     Director                                     2004
Louis J. Giraudo(1)(2)         60     Director                                     2004
Alexander Rodetis, Jr.(1)      64     Director                                     2004

-----------------------------------------------------------------------------------------
</TABLE>

(1) Member of audit committee.
(2) Member of compensation committee.
(3) Member of nominating and governance committee.

     The following information regarding the principal occupations and other
employment of our directors and executive officers during the past five years
and their directorships in certain companies is as reported to us by each of
them.

     JAMES RUDIS was elected to our board of directors in April 1995 and has
served as President since June 1997. He also served as a director of TreeCon
Resources from December 1992 to December 2003, and until December 2003 had
served as President of TreeCon Resources since July 1997 and Chairman and Chief
Executive Officer of TreeCon Resources since February 1998. He served as
Executive Vice President of TreeCon Resources from March 1994 until July 1997.
Prior to his employment with us and with TreeCon Resources, 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.

     JOHN L. STEINBRUN was elected to our board of directors in August 2003 and
has served as our Senior Vice President and Chief Financial Officer since April
2003 and as our Chief Operating Officer since May 2005. Mr. Steinbrun has been
President of The Steinbrun Group, a business and financial consulting firm,
since April 2000. He served as Chief Financial Officer and Chief Operating
Officer of Metropolitan Provisions LLC, a foodservice distribution company, from
November 2000 to June 2001. From September 1996 to March 2000, Mr. Steinbrun was
Chief Financial Officer and Vice President of Operations of Ancra International
LLC, an aerospace and transportation equipment manufacturer. From February 1992
to August 1996, he was Director of Finance and Operations for Davis Wire
Corporation, a manufacturer of steel wire and wire products. Mr. Steinbrun, a
certified public accountant, served as a senior accountant with Touche Ross and
Co. from 1985 to 1988. He holds a B.S. in Accounting from Loyola Marymount
University and an M.B.A. in Finance from The University of Chicago.


                                       21


<PAGE>

     RICHARD A. HORVATH has served as our Senior Vice President and Secretary
since November 1997. Mr. Horvath also served as our Chief Financial Officer from
November 1997 through March 2003 and as a member of our board of directors from
November 1999 to September 2004. Mr. Horvath has been in the food industry for
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.

     HAROLD ESTES was appointed to our board of directors in October 2002. Mr.
Estes is the President of Texas Timberjack, Inc. ("TTI"), a wholly-owned
subsidiary of TreeCon Resources. He was elected as a director of TreeCon
Resources in February 1996 and resigned from the TreeCon Resources 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 ten years until the sale of the bank in October 2001.

     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 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 currently serves on the board of directors
of Viseon, Inc. Mr. Gerard received a B.S. in Business-Finance and a J.D. from
Indiana University.

     ALEXANDER AUERBACH was appointed to our board of directors in September
2004. Mr. Auerbach is President of Alexander Auerbach & Co., Inc., a public
relations and marketing services firm that he founded in 1986. Prior to
establishing Alexander Auerbach & Co., Inc., Mr. Auerbach served as Chief
Operating Officer of two magazine publishing companies. Earlier in his career,
Mr. Auerbach was a senior member of the business and financial news staff of The
Los Angeles Times and a financial writer for The Boston Globe. Mr. Auerbach
holds a B.A. from Columbia University and an M.B.A. from the University of
California at Los Angeles.

     LOUIS J. GIRAUDO was appointed to our board of directors in September 2004.
Mr. Giraudo is a Co-Founder and Principal of GESD Capital Partners, a private
equity firm. Prior to co-founding GESD Capital Partners in January 1999, Mr.
Giraudo was Chief Executive Officer of Preferred Capital Markets from January
1999 to December 2002, where he co-directed the development of Preferred Trade,
Inc., an online brokerage business. Mr. Giraudo served as Chairman and Chief
Executive Officer of the Pacific Coast Baking Company from 1986 to 1993 and as
Chairman of Mother's Cake & Cookie Company from 1990 to 1993. Mr. Giraudo has
practiced corporate, business and labor law since 1974 and has been a partner at
the law firm of Coblentz, Patch, Duffy & Bass, LLP since 1983. In addition, Mr.
Giraudo has held several appointed public service positions throughout his
career, including Chairman of the Board of Trustees of the University of San
Francisco, President of the San Francisco Police Commission, President of the
San Francisco Public Utilities Commission and President of the San Francisco
Board of Permit Appeals. Mr. Giraudo currently serves on the boards of directors
of Andre-Boudin Bakeries, Inc., Golden County Foods, Inc., SoCal Bakeries, Inc.,
Pabst Brewing Company and Suburban House Furniture Company. Mr. Giraudo holds a
B.A. in Political Science, a J.D. from the University of San Francisco and a
Doctorate of Humane Letters in Education (Honoris Causa) from the University of
San Francisco. Mr. Giraudo was awarded the title of Papal Knight of the Order of
St. Gregory the Great by Pope John Paul II in September 2000.

     ALEXANDER RODETIS, JR. was appointed to our board of directors in September
2004. Mr. Rodetis has been in the financial services community for over thirty
years. Mr. Rodetis has been the Marketing and Strategic Planning Coordinator of
The Daley-Hodkin Group, a business valuation, asset disposition and consulting
organization, since March 2004. In addition, he previously held the position of
Inventory Appraisal Business Head for the Group. He served as Senior Vice
President of General Motors Acceptance Corporation's Commercial Finance Division
from 2002 to 2003, where he co-founded the Special Assets Group. From 1998 to
2002, Mr. Rodetis served as Executive Vice President of The Merchants Bank of
New York where he co-founded the asset-based lending corporation for that bank.
Prior to that, he served as Vice President of Fremont Financial Corp. and of
National Westminster Bancorp and held various credit and marketing positions at
other banking institutions, including The Chase Manhattan Bank and Citibank
North America, Inc. Most recently, Mr. Rodetis co-founded Fairway Financial
Services LLC to provide financial and due diligence guidance to bank and
non-bank lending institutions as well as to companies seeking solutions to their
corporate finance requirements. Mr. Rodetis earned a B.S. in Accounting, a B.A.
in Business Administration and an M.B.A. in finance from Fairleigh Dickinson
University. He has also completed financial analysis and corporate finance
courses at The Harvard School of Business.


                                       22


<PAGE>

TERM OF OFFICE AND FAMILY RELATIONSHIPS

     Our directors are elected at each annual stockholders' meeting or at such
other times as reasonably determined by our board of directors. Each of our
directors is to hold office until his successor is elected and qualified or
until his earlier death, resignation or removal. Each of our executive officers
serves at the discretion of our board of directors. There are no family
relationships among our executive officers, directors and director nominees.

BOARD OF DIRECTORS AND COMMITTEES

     During the fiscal year ended October 1, 2006, our board of directors held
six meetings and took action by unanimous written consent on eight occasions.
During fiscal year 2006, no incumbent director attended fewer than 75% of the
aggregate of: (1) the total number of meetings of the board of directors; and
(2) the total number of meetings held by all committees of the board on which he
served.

     Our board of directors has standing audit, compensation and nominating and
governance committees. Our bylaws provide that stockholders may also nominate
persons for election to our board of directors.

     John E. McConnaughy, Jr. voluntarily resigned from his position on our
board, effective as of the close of business on July 14, 2006. There was no
disagreement between Mr. McConnaughy and us on any matter relating to our
operations, policies, practices or otherwise.

     AUDIT COMMITTEE

     From September 18, 2004 to July 14, 2006, the audit committee was composed
of Messrs. McConnaughy, Gerard and Rodetis, with Mr. McConnaughy serving as the
committee chairman. The board of directors appointed Mr. Giraudo to the audit
committee to replace Mr. McConnaughy and appointed Mr. Rodetis as committee
chairman, both effective as of the close of business on July 14, 2006. Seven
audit committee meetings were held during fiscal year 2006.

     Our board of directors has determined that Mr. Rodetis is an "audit
committee financial expert" and that each of Messrs. Rodetis, Gerard and Giraudo
is "independent" as defined in Sections 121(A) and 803 of the Amex listing
standards.

     The audit committee operates pursuant to a charter approved by our board of
directors and audit committee, according to the rules and regulations of the
Commission and Amex. The committee's principal functions are to monitor our
financial reporting process and internal control system, review and appraise the
audit efforts of our independent auditors and provide an open avenue of
communication among our independent accountants, financial and senior management
and our board of directors. We filed a copy of the charter as Appendix A to our
definitive proxy statement for our 2004 annual stockholders' meeting.

     COMPENSATION COMMITTEE

     From October 28, 2004 to July 14, 2006, the compensation committee was
composed of Messrs. McConnaughy, Gerard, and Giraudo, with Mr. McConnaughy
serving as the committee chairman until the close of business on July 14, 2006.
Our board of directors appointed Mr. Auerbach to the compensation committee to
replace Mr. McConnaughy and to serve as committee chairman effective as of the
close of business on July 14, 2006. Our board of directors has determined that
Messrs. Auerbach, Gerard and Giraudo are independent under Section 121(A) of the
Amex listing standards.


                                       23


<PAGE>

     The compensation committee's primary functions are to administer our stock
option and stock plans, approve grants of securities under those plans, review
forms of compensation to be provided to our officers and employees, and review
and make recommendations to our board of directors regarding all forms of
compensation to be provided to our directors. The entire board of directors also
may perform these functions with respect to our stock option and stock plans.
The compensation committee operates pursuant to a charter approved by our board
of directors and compensation committee. A copy of the charter was filed as
Appendix B to our definitive proxy statement for our 2004 annual stockholders'
meeting. One compensation committee meeting was held during fiscal year 2006.

     NOMINATING AND GOVERNANCE COMMITTEE

     Amex rules require that board of director nominations must be either
selected, or recommended for the board's selection, by either a nominating
committee comprised solely of independent directors or by a majority of our
independent directors. Effective as of September 17, 2004, we formed the
nominating and governance committee to be composed entirely of non-employee
directors who meet Amex independence standards under Section 121(A). From
September 17, 2004 to July 14, 2006, the committee was composed of Messrs.
Gerard and McConnaughy, with Mr. Gerard serving as committee chairman. The board
of directors appointed Mr. Auerbach to the nominating and governance committee
to replace Mr. McConnaughy effective as of the close of business on July 14,
2006.

     The nominating and governance committee assists our board of directors with
its nominating function and with reviewing and evaluating our compliance with
corporate governance requirements as described in the committee's charter
referenced below. The committee utilizes a variety of methods for identifying
and evaluating nominees for director, including candidates that may be referred
by our stockholders. Stockholders who desire to recommend candidates for the
board for evaluation may do so by contacting us in writing, identifying the
potential candidate and providing background information. Candidates may also
come to the attention of the committee through current board members,
professional search firms and other persons. In evaluating potential candidates,
the committee will take into account a number of factors, including among
others, the following:

o        independence from management;

o        whether the candidate has relevant business experience;

o        judgment, skill, integrity and reputation;

o        existing commitments to other businesses;

o        corporate governance background;

o        financial and accounting background, to enable the nominating committee
         to determine whether the candidate would be suitable for audit
         committee membership; and

o        the size and composition of our board.

     The committee operates pursuant to a charter approved by our board of
directors and the committee. A copy of the charter was filed as APPENDIX C to
our definitive proxy statement for our 2004 annual stockholders' meeting. The
nominating and governance committee selected all of the director nominees for
re-election to our board of directors at our 2006 annual meeting of
stockholders. No nominating and governance committee meetings were held during
fiscal year 2006.

SECURITY HOLDER COMMUNICATIONS WITH OUR BOARD OF DIRECTORS

     Our board of directors has established a process to receive communications
from security holders. Security holders and other interested parties may contact
any member (or all members) of our board of directors, or the independent
directors as a group, any committee of our board of directors or any chair of
any such committee, by mail or electronically. To communicate with our board of
directors, any individual directors or any group or committee of directors,
correspondence should be addressed to our board of directors or any such
individual directors or group or committee of directors by either name or title.
All such correspondence should be sent "c/o Secretary" at 2727 East Vernon
Avenue, Vernon, California 90058. To communicate with any of our directors
electronically, security holders should send an e-mail "c/o Secretary," at
info@overhillfarms.com.


                                       24


<PAGE>

     All communications received as set forth in the preceding paragraph will be
opened by our Secretary for the sole purpose of determining whether the contents
represent a message to our directors. Any contents that are not in the nature of
advertising, promotions of a product or service, patently offensive material or
matters deemed inappropriate for our board of directors will be forwarded
promptly to the addressee. In the case of communications to our board of
directors or any group or committee of directors, our Secretary will make
sufficient copies (or forward such information in the case of e-mail) of the
contents to send to each director who is a member of the group or committee to
which the envelope or e-mail is addressed.

POLICY WITH REGARD TO BOARD MEMBERS' ATTENDANCE AT ANNUAL MEETINGS

     It is our policy that our directors are invited and encouraged to attend
all of our annual meetings. At the time of our 2006 annual meeting of
stockholders, we had seven directors, all of whom were in attendance at our 2006
annual meeting.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act") and the regulations thereunder, require the directors, executive officers
and persons who beneficially own more than 10% of a registered class of our
equity securities ("reporting persons") to file with the Commission initial
reports of ownership and reports of changes in ownership of our common stock and
other equity securities and to furnish us with copies of all reports that they
file. Director Harold Estes filed one late Form 4 to report eleven transactions
that were reportable on three separate Form 4s. Former Director John E.
McConnaughy, Jr. filed one late Form 4 to report one transaction.

CODES OF CONDUCT AND ETHICS

     Amex rules require that we adopt one or more codes of conduct and ethics
that are applicable to all of our directors, officers and employees, meet the
definition of a "code of ethics" as set forth in Item 406(b) of Regulation S-K
of the Commission and otherwise comply with Amex rules.

     We have adopted codes of conduct and ethics that meet the Amex and
Commission requirements. We will provide a copy of the codes of conduct and
ethics to any person without charge, upon written request to Overhill Farms,
Inc., Attention: Investor Relations, 2727 East Vernon Avenue, Vernon, California
90058.

ITEM 11. EXECUTIVE COMPENSATION
         ----------------------

SUMMARY COMPENSATION TABLE

     The following table sets forth for fiscal years 2006, 2005 and 2004
compensation awarded or paid to Mr. James Rudis, our Chairman, Chief Executive
Officer and President, Mr. John L. Steinbrun, our Senior Vice President, Chief
Financial Officer and Chief Operating Officer, and Mr. Richard A. Horvath, our
Senior Vice President and Secretary, for services rendered to us. Mr. Rudis, Mr.
Steinbrun 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 2006.


                                       25


<PAGE>

<TABLE>
<CAPTION>
                                                                            LONG-TERM
                                                                          COMPENSATION
                                                                          ------------
                                    ANNUAL COMPENSATION                       AWARDS
                                    -------------------                       ------
                                                               OTHER        SECURITIES
       NAME AND                                                ANNUAL       UNDERLYING       ALL OTHER
  PRINCIPAL POSITIONS    YEAR      SALARY          BONUS    COMPENSATION     OPTIONS       COMPENSATION
  -------------------    ----      ------          -----    ------------     -------       ------------
                                                                 (1)

<S>                      <C>     <C>             <C>              <C>        <C>            <C>
James Rudis,             2006    $ 303,446       $ 131,720        --            --          $ 12,106 (3)
 Chief Executive         2005    $ 293,536       $ 137,500        --         100,000        $ 13,744 (3)
 Officer and President   2004    $ 283,449           --           --            --          $ 10,143 (3)

John L. Steinbrun,       2006    $ 257,200       $ 101,600        --            --             --
  Senior Vice            2005    $ 262,008 (2)   $  25,000        --         200,000           --
  President,             2004    $ 254,796           --           --            --             --
  Chief Financial
  Officer and Chief
  Operating Officer

Richard A. Horvath,      2006    $ 147,191       $  25,016        --            --             --
  Senior Vice            2005    $ 149,883       $  14,000        --           7,000           --
  President,             2004    $ 147,192           --           --            --             --
  Secretary and Former
  Chief Financial
  Officer

____________

(1)    The named executive officers each received certain perquisites and other
       personal benefits that did not equal or exceed 10% of the named executive
       officers' respective salary and bonus during fiscal years 2006, 2005 or
       2004.

(2)    Mr. Steinbrun was named our Chief Operating Officer effective May 1,
       2005.

(3)    Represents premium paid for term life insurance for the benefit of Mr.
       Rudis' spouse.


OPTION GRANTS IN LAST FISCAL YEAR

     None.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

     The following table provides information regarding the number of shares of
common stock underlying options held by the named executive officers at October
1, 2006. An option is in-the-money if the fair market value for the underlying
securities exceeds the exercise price of the option. No options were exercised
by the named executive officers during fiscal year 2006.

                                                           NUMBER OF
                                                     SECURITIES UNDERLYING           VALUE OF UNEXERCISED
                                                    UNEXERCISED OPTIONS AT          IN-THE-MONEY OPTIONS AT
                          SHARES                        OCTOBER 1, 2006               OCTOBER 1, 2006 (1)
                         ACQUIRED       VALUE    -----------------------------   ------------------------------
NAME                    ON EXERCISE   REALIZED   EXERCISABLE     UNEXERCISABLE   EXERCISABLE      UNEXERCISABLE
----                    -----------   --------   -----------     -------------   -----------      -------------
James Rudis...........       -            -        400,000             -          $ 636,642             -
John L. Steinbrun.....       -            -        250,000             -          $ 438,284             -
Richard A. Horvath....       -            -         27,000             -          $  44,110             -
____________
</TABLE>

(1) Based on the last reported sale price of our common stock of $3.20 on
    September 29, 2006 (the last trading day during fiscal year 2006) as
    reported by Amex, minus the exercise price of the options.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

     We are a party to an employment agreement with James Rudis, our Chief
Executive Officer and President. We do not maintain employment agreements with
any of our other personnel.


                                       26


<PAGE>

     JAMES RUDIS EMPLOYMENT AGREEMENT

     Mr. Rudis' employment agreement, as amended, ran through October 31, 2006.
Pursuant to a termination option extension agreement we entered into with Mr.
Rudis on November 30, 2006, we and Mr.Rudis chose not to terminate the
employment agreement. Accordingly, the employment agreement term automatically
extended to October 31, 2007. The employment agreement will automatically renew
thereafter from year-to-year unless terminated by Mr. Rudis or us upon giving to
Mr. Rudis minimum notice of at least 90 days prior to the expiration of the
initial term or the anniversary or renewal date of the beginning of the next
annual extension period.

     Mr. Rudis' base salary, as most recently adjusted as of November 1, 2005,
is $296,214 per year, and we will review his compensation annually and increase
it in a percentage not less than that of the annual increase in the cost of
living. The employment agreement contains a covenant by Mr. Rudis not to compete
with us during the term of his employment and for a period of one year
thereafter. We have agreed to provide at our expense a $1 million life insurance
policy on Mr. Rudis' life, payable to a beneficiary of his choice, and to pay to
him up to $800 per month for an automobile lease and to reimburse him for all
operating expenses relating to the leased automobile. On February 1, 2005, Mr.
Rudis was granted options to purchase up to 100,000 shares of common stock at
per share exercise prices ranging from $1.47 to $2.50. The options vested and
became exercisable on May 23, 2005.

     The employment agreement also provides that if Mr. Rudis is terminated by
reason of his death or disability, he or his estate is entitled to receive:

         o    his base salary, bonuses earned and reimbursement for business
              expenses, all through date of termination;

         o    all rights to which he or his estate is entitled under our life
              insurance policy; and

         o    all amounts to which he is entitled under any profit sharing plan.

     If Mr. Rudis voluntarily resigns prior to the end of the term, he will not
be entitled to receive any bonus payments. If he is terminated other than for
cause, he will be entitled to receive his salary for the remainder of the term
of the agreement, monthly payments for one year equal to the monthly premium
required to maintain his life and health insurance benefits pursuant to COBRA
under our group insurance plan, to have all indebtedness by him to us forgiven
and to use the car provided to him in his employment agreement for one year
following the date of termination.

     JOHN L. STEINBRUN EMPLOYMENT ARRANGEMENT

     Mr. Steinbrun's employment agreement expired April 30, 2006. The agreement
provided Mr. Steinbrun with a base salary of $250,000 and a discretionary bonus
based on performance, as determined by our board of directors. Mr. Steinbrun was
granted an immediately vested and exercisable five-year option to purchase up to
50,000 shares of common stock at an exercise price of $0.70 per share under our
2002 Employee Stock Option Plan. On February 1, 2005, Mr. Steinbrun was granted
options to purchase up to 200,000 shares of common stock at per share exercise
prices ranging from $1.47 to $2.50. The options vested and became exercisable on
May 23, 2005. The employment agreement provided that Mr. Steinbrun was entitled
to an automobile allowance of $600 per month. Since the expiration of Mr.
Steinbrun's employment agreement on April 30, 2006, Mr. Steinbrun's employment
with us has been continued at-will under substantially the same terms as his
expired employment agreement.

     RICHARD A. HORVATH EMPLOYMENT ARRANGEMENT

     Mr. Horvath receives an annual base salary of $140,000 and an automobile
allowance of $600 per month. Our board of directors determines Mr. Horvath's
discretionary bonus based on performance and his contributions to our success.


                                       27


<PAGE>

     EXECUTIVE BONUS PROGRAM

     Upon recommendation of the compensation committee, our board of directors
approved bonus programs for fiscal year 2006 for the named executive officers.
The bonuses will be paid in fiscal year 2007.

     The bonus program approved for James Rudis would permit a bonus of $6,600
in the form of a 401(k) contribution and a performance bonus payable in cash
equal to approximately 20% of Mr. Rudis' base salary based upon our achievement
of certain net income targets and Mr. Rudis' contribution to our success during
fiscal year 2006. Mr. Rudis would receive additional cash bonus payments, each
of which would be equal to 2% of Mr. Rudis' base salary, for each specified
increment by which we exceed net income targets for fiscal year 2006. Under the
2006 bonus plan, Mr. Rudis is expected to receive a total bonus of $131,720,
consisting of $125,120 in cash and a $6,600 401(k) contribution.

     The bonus program approved for John L. Steinbrun would permit a bonus of
$6,600 in the form of a 401(k) contribution and a performance bonus payable in
cash equal to approximately 16% of Mr. Steinbrun's base salary based upon our
achievement of certain net income targets and Mr. Steinbrun's contribution to
our success during fiscal year 2006. Mr. Steinbrun would receive additional cash
bonus payments, each of which would be equal to 2% of Mr. Steinbrun's base
salary, for each specified increment by which we exceed net income targets for
fiscal year 2006. Under the 2006 bonus plan, Mr. Steinbrun is expected to
receive a total bonus of $101,600, consisting of $95,000 in cash and a $6,600
401(k) contribution.

     The bonus program approved for Richard A. Horvath would permit a
discretionary bonus equal to 3% of Mr. Horvath's gross W-2 earnings payable in
the form of a 401(k) contribution and a discretionary performance bonus payable
in cash equal to approximately 14% of Mr. Horvath's base salary based upon our
achievement of certain net income targets and Mr. Horvath's contribution to our
success during fiscal year 2006. Under the 2006 bonus plan, Mr. Horvath is
expected to receive a total bonus of $25,016, consisting of $20,000 in cash and
a $5,016 401(k) contribution.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     From April 2003 to October 28, 2004, our compensation committee was
composed of Messrs. Gerard, McConnaughy and Estes. Our board of directors
appointed Messrs. McConnaughy, Gerard and Giraudo to our compensation committee
effective immediately following our 2004 annual stockholders' meeting on October
28, 2004, with Mr. McConnaughy serving as committee chairman until the close of
business on July 14, 2006. The board of directors has appointed Mr. Auerbach to
the compensation committee to replace Mr. McConnaughy and to serve as committee
chairman effective as of the close of business on July 14, 2006.

     No director who was a member of the compensation committee during fiscal
year 2006 was an officer or employee of our company during fiscal year 2006, was
formerly an officer of our company, or had any relationship requiring disclosure
pursuant to Item 404 of Regulation S-K under the Securities Act of 1933
("Securities Act"), except that as disclosed in Item 13 of this report, Mr.
Auerbach is a stockholder, director and officer of a company that provided us
with public relations and marketing services in exchange for fees that
constituted more than 5% of that company's gross revenues for its fiscal year
ended January 31, 2006. 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 our compensation committee. None of our executive officers
serves as a director of another corporation, one of whose executive officers
served on our 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.

DIRECTOR COMPENSATION

     Directors who are also employees of the company receive no additional
compensation for services as directors. Non-employee directors are entitled to
$2,500 per month in consideration for their service on our board of directors.


                                       28


<PAGE>

     Messrs. McConnaughy, Auerbach and Rodetis, who were members of the special
committee of the board that were appointed May 3, 2005 to evaluate strategic
financial alternatives to optimize stockholder value, were entitled to
compensation of $2,500 per month each in addition to their regular board
compensation of $2,500 per month. Mr. Rodetis, who was the chairman of the
committee, was entitled to receive an additional $3,000 per month (for a total
of $5,500 per month in addition to his regular board compensation of $2,500 per
month). Compensation was paid to special committee members until the special
committee disbanded on April 25, 2006.

     We may also periodically award options to our directors under our existing
stock option plan or otherwise. To date, we have granted options to purchase an
aggregate of 1,154,000 shares of our common stock to our directors and to
executive officers who also serve or served as directors. All of those options
were granted prior to fiscal year 2006.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         ------------------------------------------------------------------
         RELATED STOCKHOLDER MATTERS
         ---------------------------

     As of November 10, 2006, a total of 15,267,271 shares of our common stock
were outstanding. The following table sets forth certain information as of that
date regarding the beneficial ownership of our common stock by:

         o    each of our directors;

         o    each of our named executive officers;

         o    all of our directors and executive officers as a group; and

         o    each person known by us to beneficially own more than 5% of the
              outstanding shares of our common stock as of the date of the
              table.

     Beneficial ownership is determined in accordance with Rule 13d-3
promulgated by the Commission and generally includes voting or investment power
with respect to securities. Except as indicated below, we believe each holder
possesses sole voting and investment power with respect to all of the shares of
common stock owned by that holder, subject to community property laws where
applicable. In computing the number of shares beneficially owned by a holder and
the percentage ownership of that holder, shares of common stock subject to
options held by that holder that are currently exercisable or are exercisable
within 60 days after the date of the table are deemed outstanding. Those shares,
however, are not deemed outstanding for the purpose of computing the percentage
ownership of any other person or group.

     The inclusion of shares in this table as beneficially owned is not an
admission of beneficial ownership. Except as indicated below, the address for
each named beneficial owner is the same as ours.


<TABLE>
<CAPTION>
                                                       BENEFICIAL OWNERSHIP OF VOTING STOCK
                                                       ------------------------------------
                                                            NUMBER            PERCENTAGE
               NAME OF BENEFICIAL OWNER                    OF SHARES           OF CLASS
 ----------------------------------------------------- ----------------     ---------------
<S>                                                       <C>                    <C>
 William Blair & Company, L.L.C.......................    2,199,904(1)           14.4%
 Harold Estes.........................................    2,127,250(2)           13.9%
 LB I Group Inc.......................................    1,348,700(3)            8.8%
 Trustman c/o STI Classic Small Cap Growth Fund.......    1,155,000(4)            7.6%
 James Rudis..........................................      678,950(5)            4.3%
 John L. Steinbrun....................................      571,600(6)            3.7%
 Geoffrey A. Gerard...................................       77,000(7)             *
 Richard A. Horvath...................................       32,750(8)             *
 Alexander Auerbach...................................       30,000(9)             *
 Louis J. Giraudo.....................................       25,000(7)             *
 Alexander Rodetis, Jr................................       25,000(7)             *
 All directors and executive officers as a group
   (8 persons)........................................    3,567,550(10)          22.1%
</TABLE>


                                       29


<PAGE>

-----------

*    Less than 1.0%.

(1)  Based on ownership information provided to us by William Blair & Company,
     L.L.C. as of November 10, 2006. Includes 1,903,720 shares owned of record
     by William Blair Small Cap Growth Fund, over which power to vote or dispose
     of the shares is held by Colin Williams, portfolio manager to the Fund and
     Karl Brewer, portfolio manager to the Fund and principal of William Blair &
     Company, L.L.C. The address for William Blair & Company, L.L.C. is 222 W.
     Adams Street, Chicago, Illinois 60606.

(2)  Mr. Estes' address is 6004 South US Highway 59, Lufkin, Texas 75901.
     Includes 75,000 shares of common stock underlying options

(3)  Based on ownership information provided to us by Lehman Brothers Inc. as of
     November 10, 2006. Lehman Brothers Inc. is the parent company of LB I Group
     Inc. Lehman Brothers Holdings Inc., a public reporting company, is the
     parent company of Lehman Brothers Inc. The address for this holder is c/o
     Lehman Brothers Inc., 399 Park Avenue, New York, New York 10022, Attention:
     Henry Klein and Eric Salzman.

(4)  To our knowledge based upon information provided to us by the holder as of
     April 13, 2006. Power to vote or dispose of the shares is held by Mark
     Garfinkel, as managing director and portfolio manager of Trusco Capital
     Management. The address for this holder is c/o Trusco Capital Management,
     50 Hurt Plaza, Suite 1400, Atlanta, Georgia 30303.

(5)  Includes 400,000 shares of common stock underlying options.

(6)  Includes 250,000 shares of common stock underlying options.

(7)  Represents shares of common stock underlying options.

(8)  Includes 27,000 shares of common stock underlying options.

(9) Includes 25,000 shares of common stock underlying options.

(10) Includes 904,000 shares of common stock underlying options.

EQUITY COMPENSATION PLAN INFORMATION

     The following table gives information about our common stock that may be
issued upon the exercise of options, warrants and rights under all of our
existing equity compensation plans as of October 1, 2006.


                                       30


<PAGE>

<TABLE>
<CAPTION>
                                                                                            NUMBER OF SECURITIES
                                                                                          REMAINING AVAILABLE FOR
                                     NUMBER OF SECURITIES TO       WEIGHTED-AVERAGE        FUTURE ISSUANCE UNDER
                                     BE ISSUED UPON EXERCISE        EXERCISE PRICE          EQUITY COMPENSATION
                                         OF OUTSTANDING         OF OUTSTANDING OPTIONS,       PLANS (EXCLUDING
                                        OPTIONS, WARRANTS              WARRANTS             SECURITIES REFLECTED
     PLAN CATEGORY                         AND RIGHTS                 AND RIGHTS               IN COLUMN (a))
     -------------                         ----------                 ----------               --------------
                                               (a)                        (b)                        (c)

<S>     <C>
Equity compensation plans approved
  by security holders                      1,102,000 (1)                 $1.47                    139,000 (2)

Equity compensation plans not
  approved by security holders                     -                      -                             -

     Total                                 1,102,000                     $1.47                    139,000

---------
</TABLE>

(1)  Represents shares of common stock underlying options granted under our 2002
     Employee Stock Option Plan and 2005 Stock Plan.

(2)  Represents shares of common stock authorized for issuance under our 2002
     Employee Stock Option Plan, which plan was adopted by our board of
     directors and then majority stockholder on September 25, 2002, to be
     effective as of October 29, 2002; the plan was further approved by our
     stockholders at our 2003 annual meeting. Also represents shares of common
     stock authorized for issuance under our 2005 Stock Plan, which was adopted
     by our board of directors on February 1, 2005, approved by then majority
     stockholder on February 24, 2005 and approved by our stockholders at our
     2005 annual meeting. Our 2002 Employee Stock Option Plan and 2005 Stock
     Plan each provide that if, at any time while that plan is in effect or
     unexercised options granted under that plan are outstanding, there is an
     increase or decrease in the number of issued and outstanding shares of
     common stock of our company through the declaration of a stock dividend or
     through a recapitalization that results in a stock split, combination or
     exchange of shares, then appropriate adjustment shall be made in the
     maximum number of shares authorized for issuance under that plan so that
     the same proportion of our issued and outstanding shares of common stock
     will continue to be subject to being optioned under the plan and
     appropriate adjustment will be made in the number of shares and the
     exercise price per share then subject to outstanding options so that the
     same proportion of our issued and outstanding shares will remain subject to
     purchase at the same aggregate exercise price.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
         ----------------------------------------------

     In connection with the spin-off from our former parent, Overhill
Corporation (now TreeCon Resources), we received from Overhill Corporation a
non-recourse promissory note in the principal amount of $207,375 made on
September 25, 2001 by Mr. Rudis, our President, Chief Executive Officer and
Chairman of the Board and a similar note in the principal amount of $184,875 by
Mr. Shatley, who served as an officer of the former parent company and later
served as an officer and director of our company. These notes became due and
payable on September 24, 2003. Mr. Rudis' note was collateralized solely by
276,500 shares of common stock of TreeCon Resources. Mr. Shatley's note was
collateralized solely by 246,500 shares of common stock of TreeCon Resources.
Based on our assessment of the collectibility of these notes, including the
value of the subject collateral, we assigned no value to the notes upon their
receipt. During the quarter ended April 2, 2006, Mr. Rudis tendered the 276,500
shares of TreeCon Resources common stock that had served as collateral for the
note receivable. Mr. Shatley tendered the 246,500 shares of TreeCon Resources
common stock that had served as collateral for the note receivable during the
quarter ended July 2, 2006.

     On December 23, 2005, LLCP, a principal stockholder and secured creditor of
ours at the time, resold to 15 institutional investors in a private transaction
all of the 5,771,661 shares of our common stock that LLCP owned of record as of
that date, including shares of common stock that LLCP received upon exercise of
warrants and conversion of shares of Series A Convertible Preferred Stock in
connection with the resale transaction (collectively, "Transferred Shares"). To
facilitate LLCP's sale of the Transferred Shares, we made various


                                       31


<PAGE>

representations and warranties as a party to a stock purchase agreement with
LLCP and the investors. In addition, we entered into a registration rights
agreement with the investors that required us to register for resale the
Transferred Shares and to maintain the effectiveness of the registration
statement for a maximum of 24 months following the closing date. The
registration statement was declared effective by the Commission on April 13,
2006. If we are unable to meet our obligations under the registration rights
agreement to maintain the effectiveness of the registration statement, we will
be required to pay to each investor liquidated damages equal to 1% of the amount
paid by the investor for the Transferred Shares still owned by the investor on
the date of the default and 1% of the amount paid by the investor for the
Transferred Shares still owned by the investor on each monthly anniversary of
the date of the default that occurs prior to the cure of the default. There were
no material relationships between us and any of the investors who purchased the
Transferred Shares from LLCP. However, William Blair Small Cap Growth Fund, LB I
Group Inc., and Trustman c/o STI Classic Small Cap Growth Fund each became
beneficial owners of more than 5% of our outstanding common stock at the closing
of the transaction with LLCP.

     On December 23, 2005, we, LLCP and James Rudis entered into a Third
Amendment to the Amended and Restated Investor Rights Agreement. The primary
purposes of the amendment were to remove James Rudis as a party to that
agreement and to eliminate LLCP's board member designation rights, co-sale
rights, right of first refusal, anti-dilution protection provisions and stock
option related approval rights and limitations. Also, the amendment deleted from
the February 24, 2005 letter agreement between LLCP and us (previously described
in our Form 8-Ks for February 24, 2005 and May 18, 2005) the provision
restricting the price of future awards that may be made under our 2005 Stock
Plan. The Amended and Restated Investor Rights Agreement terminated in
connection with the refinancing of our indebtedness to LLCP and PSI in May 2006.

     The stock purchase agreement described above provides that the Amended and
Restated Registration Rights Agreement, dated as of October 29, 2002, between
LLCP and us was terminated on December 23, 2005.

     In February 2004, we engaged Alexander Auerbach & Co., Inc. ("AAPR") to
provide us with public relations and marketing services. AAPR provides public
relations, media relations and communications marketing services to support our
sales activities. Alexander Auerbach, who is a director of our company, is a
stockholder, director and officer of AAPR. We paid to AAPR $28,682 for services
rendered under this engagement during fiscal year 2006. These fees totaled more
than 5% of AAPR's gross revenues for its fiscal year ended January 31, 2006.

     We are or have been a party to employment and compensation arrangements
with related parties, as more particularly described above under the heading
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements," "Executive Bonus Program" and "Director Compensation." On
November 28, 2005, then-director John E. McConnaughy, Jr. exercised his options
to purchase 75,000 shares of our common stock through payment of $11,589 cash
and surrender of 14,200 shares of our common stock, as permitted by the terms of
the options agreements.

     The interest of the particular director, executive officer or security
holder in each matter described above was disclosed to our board of directors
before our board of directors approved the matter.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
         --------------------------------------

AUDIT AND NON-AUDIT FEES

     The following table presents fees for professional audit services rendered
by Ernst & Young LLP for the audit of our annual financial statements for fiscal
years 2006 and 2005. No non-audit services were rendered to us by Ernst & Young
LLP during fiscal years 2006 and 2005:

                                                2006                      2005
                                              --------                 --------
        Audit Fees                            $382,768                 $334,250
        Audit-Related Fees                          --                       --
        Tax Fees                                    --                       --
        All Other Fees                              --                       --


                                       32


<PAGE>

     Audit Fees included fees associated with the annual audit and the reviews
of our quarterly reports on Form 10-Q and services that are normally provided in
connection with statutory and regulatory filings or engagements.

PRE-APPROVAL POLICY

     Our audit committee's policy is to pre-approve all auditing services and
permitted non-audit services to be performed for us by our independent auditors,
subject to the de minimis exceptions for non-audit services described in Section
10A(i)(1)(B) of the Exchange Act that are approved by the audit committee prior
to the completion of the audit.


                                       33


<PAGE>

                                     PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
         ------------------------------------------

(a) The following financial statements are filed as part of this report:

         Report of Independent Registered Public Accounting Firm

         Balance Sheets -- October 1, 2006 and October 2, 2005

         Statements of Operations -- Years Ended October 1, 2006, October 2,
         2005 and September 26, 2004

         Statements of Shareholders' Equity -- Years Ended October 1, 2006,
         October 2, 2005 and September 26, 2004

         Statements of Cash Flows -- Years Ended October 1, 2006, October 2,
         2005 and September 26, 2004

         Notes to Financial Statements

(b) The following exhibits are attached to or incorporated by reference herein:

 EXHIBIT
 -------
 NUMBER                          EXHIBIT TITLE
 ------                          -------------

 3.1 (1)        Form of Amended and Restated Articles of Incorporation of
                Overhill Farms, Inc. (Exhibit 3.1)

 3.2 (1)        Form of Amended and Restated Bylaws of Overhill Farms, Inc.
                (Exhibit 3.2)

 3.3 (2)        Action with Respect to Bylaws of Overhill Farms, Inc., certified
                by the Secretary of Overhill Farms, Inc. as of June 13, 2003
                (Exhibit 3.1)

 3.4 (3)        Certificate of Amendment to Articles of Incorporation of
                Overhill Farms, Inc. filed August 12, 2003 with the Nevada
                Secretary of State (Exhibit 3.4)

 4.1 (1)        Form of the specimen common stock certificate of Overhill Farms,
                Inc. (Exhibit 4.1)

 10.1 (1) #     2002 Employee Stock Option Plan for Overhill Farms, Inc.
                (Exhibit 10.1)

 10.2 (3)       Letter agreement dated June 24, 2002 between U.S. Growers Cold
                Storage, Inc. and Overhill Farms, Inc. and Lease dated December
                2, 1983 between Eastcase Company and Overhill Foods Corp.
                regarding premises located at 3055 E. 44th Street, Vernon,
                California (Exhibit 10.2)

 10.3 (3)       Master Lease Agreement dated as of August 1, 2002 between
                General Electric Capital Corporation and Overhill Farms, Inc.
                and related documentation regarding freezers and various other
                equipment (Exhibit 10.35)

 10.4 (3)       Industrial Real Estate Lease (Single-Tenant Facility) dated
                April 22, 1994 between Vernon Associates and Ernest Paper
                Products, Inc. and related addendum regarding premises located
                at 2727 E. Vernon Avenue, Vernon, California (Exhibit 10.86)

 10.5 (3)       Sublease dated as of January 1, 2002 by and between Ernest Paper
                Products, Inc. and Overhill Farms, Inc. and related documents
                regarding premises located at 2727 E. Vernon Avenue, Vernon,
                California (Exhibit 10.87)

 10.6 (3)       Standard Industrial/Commercial Single-Tenant Lease - Net dated
                January 1, 2002 by and between Vernon Associates, LLC and
                Overhill Farms, Inc. regarding premises located at 2727 E.
                Vernon Avenue, Vernon, California (Exhibit 10.88)


                                       34


<PAGE>


 EXHIBIT
 -------
 NUMBER                          EXHIBIT TITLE
 ------                          -------------

 10.7 (3)       Addendum to Standard Industrial/Commercial Single-Tenant Lease -
                Net regarding premises located at 2727 E. Vernon Avenue, Vernon,
                California (Exhibit 10.89)

 10.8 (4) #     Employment Agreement, entered into as of November 1, 1999
                between Polyphase Corporation and Overhill Farms, Inc., jointly
                and severally, and James Rudis (Exhibit 10.36)

 10.9 (5) #     Amendment to Employment Agreement dated October 30, 2003 between
                Overhill Farms, Inc. and James Rudis (Exhibit 10.1)

 10.10 (6)      Consulting agreement dated February 18, 2004 between Overhill
                Farms, Inc. and Alexander Auerbach & Co., Inc. (Exhibit 10.1)

 10.11 (2)      Promissory Note dated September 25, 2001 in the principal amount
                of $207,375 made by James Rudis in favor of Overhill Corporation
                (Exhibit 10.27)

 10.12 (2)      Promissory Note dated September 25, 2001 in the principal amount
                of $184,875 made by William Shatley in favor of Overhill
                Corporation (Exhibit 10.28)

 10.13 (2)      Security Agreement dated September 25, 2001 between James Rudis
                and Overhill Corporation (Exhibit 10.29)

 10.14 (2)      Security Agreement dated September 25, 2001 between William
                Shatley and Overhill Corporation (Exhibit 10.30)

 10.15 (2) #    2005 Stock Plan of Overhill Farms, Inc. (Exhibit 10.1)

 10.16 (7) #    Form of Restricted Stock Purchase Agreement Under 2005 Stock
                Plan (Exhibit 10.3)

 10.17 (8) #    Form of Stock Option Agreement Under 2005 Stock Plan
                (Exhibit 10.2)

 10.18 (9) #    Form of Stock Option Agreement under 2002 Employee Stock
                (Exhibit 4.7)

 10.19 (10)     Senior Secured Credit Facility, dated April 17, 2006 by and
                among Overhill Farms, Inc., the Lenders party thereto from time
                to time and Guggenheim Corporate Funding, LLC (Exhibit 10.1)

 10.20 (10)     First Amendment to Senior Secured Credit Facility, dated May 16,
                2006, by and among Overhill Farms, Inc., Midland National Life
                Insurance Company, North American Company for Life and Health
                Insurance and Orpheus Holdings LLC and Guggenheim Corporate
                Funding, LLC (Exhibit 10.2)

 10.21 (10)     Pledge and Security Agreement, dated as of May 17, 2006 by and
                among Overhill Farms, Inc., as Grantor and Guggenheim Corporate
                Funding, LLC as Collateral Agent (Exhibit 10.3)

 10.22 #**      Summary of Director Compensation

 10.23 #**      Description of Bonus Programs for Named Executive Officers for
                Fiscal Year 2006

 10.24 #**      Description of Employment Arrangement between Overhill Farms,
                Inc. and John L. Steinbrun

 10.25 #**      Description of Employment Arrangement between Overhill Farms,
                Inc. and Richard A. Horvath

 10.26 #**      Termination Option Extension dated November 30, 2006 between
                Overhill Farms, Inc. and James Rudis

 23**           Consent of Independent Registered Public Accounting Firm


                                       35


<PAGE>

 EXHIBIT
 -------
 NUMBER                          EXHIBIT TITLE
 ------                          -------------

 31.1**         Certification of Chief Executive Officer Required by Rule
                13a-14(a) of the Securities Exchange Act of 1934, as amended, as
                Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002 (2)

 31.2**         Certification of Chief Financial Officer Required by Rule
                13a-14(a) of the Securities Exchange Act of 1934, as amended, as
                Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002 (2)

 32**           Certification of Chief Executive Officer and Chief Financial
                Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
                to Section 906 of the Sarbanes-Oxley Act of 2002

_____________________________

     (1)      Incorporated by reference to the exhibit shown in parentheses
              included in the Overhill Farms, Inc.'s Registration Statement on
              Form 10 (File No. 1-16699)

     (2)      Incorporated by reference to the exhibit shown in parentheses
              included in Overhill Farms, Inc.'s Current Report on Form 8-K for
              August 7, 2003 regarding the amendment of Overhill Farms, Inc.'s
              bylaws and various agreements entered into by Overhill Farms, Inc.

     (3)      Incorporated by reference to the exhibit shown in parentheses
              included in the Overhill Farm, Inc.'s Annual Report on Form 10-K
              for the fiscal year ended September 28, 2003

     (4)      Incorporated by reference to the exhibit shown in parentheses
              included in Overhill Corporation's Annual Report on Form 10-K for
              the fiscal year ended September 30, 2001, filed by Overhill
              Corporation (subsequently known as TreeCon Resources, Inc.) with
              the Securities and Exchange Commission (File No. 1-9083)

     (5)      Incorporated by reference to the exhibit shown in parentheses
              included in the Overhill Farms, Inc.'s Current Report on Form 8-K
              for October 31, 2003 relating to the refinancing of its senior
              term loans and senior subordinated debt

     (6)      Incorporated by reference to the exhibit shown in parentheses
              included in the Overhill Farms, Inc.'s Current Report on Form 8-K
              for September 17, 2004

     (7)      Incorporated by reference to the exhibit shown in parentheses
              included in the Overhill Farms, Inc.'s Current Report on Form 8-K
              for February 1, 2005

     (8)      Incorporated by reference to the exhibit shown in parentheses
              included in the Overhill Farms, Inc.'s Current Report on Form 8-K
              for February 24, 2005

     (9)      Filed as an exhibit to Levine Leichtman Capital Partners II, L.P.
              Schedule 13D/A No. 10 and incorporated herein by reference.

     (10)     Incorporated by reference to the exhibit shown in parentheses
              included in the Overhill Farms, Inc.'s Current Report on Form 8-K
              for May 17, 2006

**       Filed herewith

#        Management contract or compensatory plan or arrangement

(c) The following schedule is included herein:

         Schedule II - Valuation and Qualifying Accounts and Reserves

         Schedules for which provision is made in the applicable rules and
         regulations of the Securities and Exchange Commission and are not
         required under the related instructions or are inapplicable have been
         omitted.


                                       36


<PAGE>

                                   SIGNATURES

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


                              By:  /s/ James Rudis
                                   ---------------------------------------------
                                   Name: James Rudis
                                   Title: President and Chief Executive Officer
                                   Date: November 30, 2006


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S>     <C>
Signature                      Title                                       Date
---------                      -----                                       ----

/s/ James Rudis                President, Chief Executive Officer          November 30, 2006
--------------------------     (principal executive officer) and
James Rudis                    Chairman of the Board of Directors

/s/ John L. Steinbrun          Senior Vice President, Chief Financial      November 30, 2006
--------------------------     Officer (principal financial and
John L. Steinbrun              accounting officer), Chief Operating
                               Officer and Director

/s/ Alexander Auerbach         Director                                    November 30, 2006
--------------------------
Alexander Auerbach

/s/ Harold Estes               Director                                    November 30, 2006
--------------------------
Harold Estes

/s/ Geoffrey A. Gerard         Director                                    November 30, 2006
--------------------------
Geoffrey A. Gerard

/s/ Louis J. Giraudo           Director                                    November 30, 2006
--------------------------
Louis J. Giraudo

/s/ Alexander Rodetis, Jr.     Director                                    November 30, 2006
--------------------------
Alexander Rodetis, Jr.
</TABLE>


                                       37


<PAGE>

                              OVERHILL FARMS, INC.

                          INDEX TO FINANCIAL STATEMENTS

Audited Financial Statements: .............................................Page:
-----------------------------                                              -----

     Report of Independent Registered Public Accounting Firm.................F-2

     Balance Sheets as of October 1, 2006 and October 2, 2005................F-3

     Statements of Operations for the Years Ended October
         1, 2006, October 2, 2005 and September 26, 2004.....................F-5

     Statements of Shareholders' Equity for the Years
         Ended October 1, 2006, October 2, 2005 and
         September 26, 2004..................................................F-6

     Statements of Cash Flows for the Years Ended October
         1, 2006, October 2, 2005 and September 26, 2004.....................F-7

     Notes to Financial Statements..........................................F-10

     Schedule II - Valuation and Qualifying Accounts and Reserves...........F-25



                                      F-1


<PAGE>


             Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Overhill Farms, Inc.

We have audited the accompanying balance sheets of Overhill Farms, Inc. (the
Company) as of October 1, 2006 and October 2, 2005, and the related statements
of operations, shareholders' equity, and cash flows for each of the three years
in the period ended October 1, 2006. Our audits also included the financial
statement schedule listed in the Index at Item 15(a). These financial statements
and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (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. We were not engaged to perform an
audit of the Company's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Overhill Farms, Inc. at October
1, 2006 and October 2, 2005, and the results of its operations and its cash
flows for each of the three years in the period ended October 1, 2006 in
conformity with U.S. generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.



                                                          /s/  Ernst & Young LLP


Los Angeles, California
November 20, 2006


                                      F-2


<PAGE>

<TABLE>
<CAPTION>
                              OVERHILL FARMS, INC.

                                 BALANCE SHEETS

                                     ASSETS


                                                                October 1,      October 2,
                                                                   2006            2005
                                                               ------------    ------------

<S>                                                            <C>             <C>
Current assets:
   Cash                                                        $  2,111,251    $  2,654,563
   Accounts receivable, net of allowance for doubtful
     accounts of $15,000 and $196,000 in 2006 and
     2005, respectively                                          14,901,680      12,634,648
   Inventories                                                   10,968,346       9,433,578
   Prepaid expenses and other                                     1,486,811       1,039,431
   Deferred income taxes                                          1,014,749         995,659
                                                               ------------    ------------
           Total current assets                                  30,482,837      26,757,879
                                                               ------------    ------------

Property and equipment, at cost:
   Fixtures and equipment                                        14,546,122      12,625,530
   Leasehold improvements                                        10,018,384       9,652,741
   Automotive equipment                                              50,854          50,854
                                                               ------------    ------------
                                                                 24,615,360      22,329,125
   Less accumulated depreciation and amortization               (11,547,747)     (9,890,025)
                                                               ------------    ------------
                                                                 13,067,613      12,439,100
                                                               ------------    ------------
Other assets:
   Excess of cost over value of net assets acquired              12,188,435      12,188,435
   Deferred financing costs, net of accumulated amortization
     of $178,000 and $421,000 in 2006 and 2005, respectively        406,482         492,219
   Deferred income taxes                                                 --       1,954,117
   Other                                                          1,982,848       2,389,678
                                                               ------------    ------------
                                                                 14,577,765      17,024,449
                                                               ------------    ------------

Total assets                                                   $ 58,128,215    $ 56,221,428
                                                               ============    ============


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


                                      F-3


<PAGE>

                              OVERHILL FARMS, INC.

                           BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                               October 1,      October 2,
                                                                 2006             2005
                                                              ------------    ------------

Current liabilities:
   Accounts payable                                           $  7,463,263    $  6,447,543
   Accrued liabilities                                           2,607,013       2,725,751
   Current maturities of long-term debt                          2,739,167         344,828
                                                              ------------    ------------
           Total current liabilities                            12,809,443       9,518,122

Long-term accrued liabilities                                      307,580         267,614
Deferred tax liabilities                                           854,692              --
Long-term debt, less current maturities, net of
   unamortized debt discount of $1,365,470 and
   $0 in 2006 and 2005, respectively                            37,219,265      45,058,000
                                                              ------------    ------------
           Total liabilities                                    51,190,980      54,843,736
                                                              ------------    ------------


Commitments and contingencies

Shareholders' equity:
   Preferred stock, $0.01 par value, authorized
     50,000,000 shares, 4.43 designated as Series
     A convertible preferred stock (2006) and 28
     designated as Series A convertible preferred
     stock (2005), issued and outstanding 0 shares
     (2006) and 23.57 shares (2005) (2005 liquidation
     preference of $750,000)                                            --              --
   Common stock, $0.01 par value, authorized
     100,000,000 shares, issued and outstanding
     15,267,271 shares (2006) and 14,916,197 shares (2005)         152,673         149,162
   Additional paid-in capital                                   10,189,545       9,735,098
   Warrants to purchase common stock                                    --             400
   Accumulated deficit                                          (3,404,983)     (8,506,968)
                                                              ------------    ------------
           Total shareholders' equity                            6,937,235       1,377,692
                                                              ------------    ------------

Total liabilities and shareholders' equity                    $ 58,128,215    $ 56,221,428
                                                              ============    ============

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


                                      F-4


<PAGE>

                                      OVERHILL FARMS, INC.

                                    STATEMENTS OF OPERATIONS

                                                              For the Years Ended
                                                -----------------------------------------------
                                                 October 1,       October 2,      September 26,
                                                    2006             2005             2004
                                                -------------    -------------    -------------

Net revenues                                    $ 168,309,591    $ 162,565,512    $ 133,957,475
Cost of sales                                     146,824,919      142,813,053      119,676,464
                                                -------------    -------------    -------------
Gross profit                                       21,484,672       19,752,459       14,281,011

Selling, general and administrative expenses        7,196,309        7,849,537        8,035,676
                                                -------------    -------------    -------------

Operating income                                   14,288,363       11,902,922        6,245,335

Other expense:
  Interest expense                                 (5,144,474)      (5,911,525)      (6,359,245)
  Amortization of deferred financing costs           (275,391)        (222,480)        (504,821)
  Debt extinguishment expenses                       (175,766)              --       (2,778,374)
  Other expense                                      (135,047)        (237,321)        (112,575)
                                                -------------    -------------    --------------

Total other expenses                               (5,730,678)      (6,371,326)      (9,755,015)
                                                -------------    -------------    --------------

Income (loss) before income taxes                   8,557,685        5,531,596       (3,509,680)

Income tax provision (benefit)                      3,455,700        1,835,431       (1,368,024)
                                                -------------    -------------    --------------

Net income (loss)                               $   5,101,985    $   3,696,165    $  (2,141,656)
                                                =============    =============    ==============


Net income (loss) per share - basic             $        0.34    $        0.25    $       (0.14)
                                                =============    =============    ==============

Net income (loss) per share - diluted           $        0.32    $        0.24    $       (0.14)
                                                =============    =============    ==============

Weighted average shares outstanding - basic        15,204,424       14,863,716       14,805,556
                                                =============    =============    =============

Weighted average shares outstanding - diluted      15,880,507       15,575,459       14,805,556
                                                =============    =============    =============


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


                                              F-5


<PAGE>

                                                        OVERHILL FARMS, INC.

                                                 STATEMENTS OF SHAREHOLDERS' EQUITY

                                                                                               Warrants
                                                              Additional                      To Purchase
                      Preferred Stock       Common Stock        Paid-In      Treasury Stock     Common     Accumulated
                      Shares   Amount    Shares      Amount     Capital     Shares    Amount     Stock      Deficit        Total
                      ------  -------  -----------  --------  -----------  --------  --------  ---------  ------------  -----------

Balance,
  September 28,2003       24  $    --   14,805,556  $148,056  $ 9,573,562        --  $     --  $     400  $(10,061,477) $  (339,459)

  Net loss
    (comprehensive
    loss)                 --       --           --        --           --        --        --         --    (2,141,656)  (2,141,656)
                      ------  -------  -----------  --------  -----------  --------  --------  ---------  ------------  -----------

Balance,
  September 26,2004       24       --   14,805,556   148,056    9,573,562        --        --        400   (12,203,133)  (2,481,115)

  Issuance of dilution
    protection shares     --       --       83,641       836      122,116        --        --         --            --      122,952
  Exercise of stock
    options               --       --       27,000       270       39,420        --        --         --            --       39,690
  Net income
    (comprehensive
    income)               --       --           --        --           --        --        --         --     3,696,165    3,696,165
                      ------  -------  -----------  --------  -----------  --------  --------  ---------  ------------  -----------

Balance,
  October 2,2005          24       --   14,916,197   149,162    9,735,098        --        --        400    (8,506,968)   1,377,692

  Share repurchase        --       --           --        --           --    14,200   (53,250)        --            --      (53,250)
  Cancellation of
    shares                --       --      (14,200)     (142)     (53,108)  (14,200)   53,250         --            --           --
  Exercise of stock
    options               --       --       82,000       820       74,309        --        --         --            --       75,129
  Warrant exercise        --       --          198         2          398        --        --       (400)           --           --
  Preferred stock
    conversion           (24)      --      283,076     2,831       (2,831)       --        --         --            --           --
  Tax deduction from
    option exercises      --       --           --        --      112,980        --        --         --            --      112,980
  Receipts of marketable
    securities for notes
    written-off at
    spin-off              --       --           --        --      322,699        --        --         --            --      322,699

  Net income
    (comprehensive
    income)               --       --           --        --           --        --        --         --     5,101,985    5,101,985
                      ------  -------  -----------  --------  -----------  --------  --------  ---------  ------------  -----------

Balance,
  October 1,2006          --  $    --   15,267,271  $152,673  $10,189,545        --  $     --  $      --  $ (3,404,983) $ 6,937,235
                      ======  =======  ===========  ========  ===========  ========  ========  =========  ============  ===========



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


                                                                 F-6



<PAGE>

                                      OVERHILL FARMS, INC.

                                    STATEMENTS OF CASH FLOWS

                                                                     For the Years Ended
                                                          -----------------------------------------
                                                           October 1,     October 2,   September 26,
                                                             2006           2005           2004
                                                          -----------    -----------    -----------

Operating Activities:
  Net income (loss)                                       $ 5,101,985    $ 3,696,165    $(2,141,656)
  Adjustments to reconcile net income (loss) to net
       cash provided by (used in) operating activities:
     Depreciation and amortization                          1,746,469      1,585,649      1,592,405
     Amortization of debt discount and deferred
       financing costs                                        275,390        222,480        743,863
     Loss on asset disposals                                    2,424        272,213        135,969
     Provision for doubtful accounts                               --        169,498        108,694
     Noncash debt extinguishment expenses                     175,766             --      2,558,374
     Noncash interest expenses                                     --        122,952             --
     Deferred income taxes                                  2,789,719      1,675,846     (1,369,624)
     Loss on sale of marketable securities                     38,886             --             --
     Impairment of marketable securities                       90,284             --             --
     Changes in:
       Accounts receivable                                 (2,267,032)      (198,024)    (2,687,273)
       Inventories                                         (1,534,768)     1,794,970       (168,625)
       Prepaid expenses and other                             (86,653)       533,738       (584,599)
       Accounts payable                                     1,015,720     (1,545,657)       558,255
       Accrued liabilities                                   (118,738)       (10,220)      (383,995)
                                                          -----------    -----------    -----------
Net cash provided by (used in) operating activities         7,229,452      8,319,610     (1,638,212)
                                                          -----------    -----------    -----------

Investing Activities:
  Additions to property and equipment                      (2,337,440)    (1,643,909)    (1,065,070)
  Sale of marketable securities                               140,967             --             --
                                                          -----------    -----------    -----------
Net cash used in investing activities                      (2,196,473)    (1,643,909)    (1,065,070)
                                                          -----------    -----------    -----------


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


                                              F-7


<PAGE>

                                      OVERHILL FARMS, INC.

                              STATEMENTS OF CASH FLOWS (CONTINUED)


                                                                  For the Years Ended
                                                      --------------------------------------------
                                                       October 1,      October 2,     September 26,
                                                         2006             2005            2004
                                                      ------------    ------------    ------------

Financing Activities
  Borrowings under previous financing arrangements    $         --    $         --    $  5,000,000
  Borrowings under new financing arrangements           44,500,000              --              --
  Borrowings under equipment loans                         323,902              --              --
  Principal payments on previous financing
    arrangements                                       (45,358,000)     (5,665,843)       (744,094)
  Principal payments on previous other debt                (44,828)             --              --
  Principal payments on new financing arrangements      (3,500,000)             --              --
  Cash paid in association with amendments to
    previous financing arrangements                             --          (4,402)       (456,829)
  Cash paid in association with new financing
    arrangements                                        (1,632,223)             --              --
  Exercise of stock options, including tax benefit         134,858              --              --
  Issuance of common stock                                      --          39,690              --
                                                      ------------    ------------    ------------
Net cash (used in) provided by financing activities     (5,576,291)     (5,630,555)      3,799,077
                                                      ------------    ------------    ------------

Net increase in cash                                      (543,312)      1,045,146       1,095,795
Cash at beginning of year                                2,654,563       1,609,417         513,622
                                                      ------------    ------------    ------------
Cash at end of year                                   $  2,111,251    $  2,654,563    $  1,609,417
                                                      ============    ============    ============

Supplemental Schedule of Cash Flow Information:
Cash paid during the year for:
  Interest                                            $  5,150,961    $  6,369,677    $  6,146,585
                                                      ============    ============    ============
  Income taxes                                        $    726,000    $         --    $         --
                                                      ============    ============    ============

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


                                              F-8
</TABLE>


<PAGE>

                              OVERHILL FARMS, INC.

                      STATEMENTS OF CASH FLOWS (CONTINUED)



SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

     On December 23, 2005, Levine Leichtman Capital Partners II, L.P. ("LLCP")
received 283,076 shares of the Company's common stock upon surrender and
conversion in full of the 23.57 shares of Series A Convertible Preferred Stock
it then held. In addition, LLCP received 198 shares of the Company's common
stock upon cashless exercise in full of the two warrants it held to purchase an
aggregate of 200 shares of the Company's common stock at an exercise price of
$0.0000008 per share, for a rounded aggregate exercise price of $0.01.

     During fiscal year 2006, the Company received a total of 523,000 shares of
TreeCon Resources common stock, which served as collateral for a note receivable
and were tendered by Mr. Rudis, the Company's President, Chief Executive Officer
and Chairman of the Board and Mr. Shatley, who served as an officer of the
former parent company and formerly served as an officer and director of the
Company. Such notes were made on September 25, 2001 and were allocated to
Overhill Farms, Inc. in the spin-off transaction on October 29, 2002.


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


                                      F-9


<PAGE>

                              OVERHILL FARMS, INC.

                          NOTES TO FINANCIAL STATEMENTS

                                 OCTOBER 1, 2006



1. COMPANY AND ORGANIZATIONAL MATTERS

   NATURE OF BUSINESS AND BASIS OF PRESENTATION

     Overhill Farms, Inc. (the Company or Overhill Farms) is a value-added
manufacturer of quality frozen food products including entrees, plated meals,
meal components, soups, sauces, and poultry, meat and fish specialties.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   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. The fiscal years
ended October 1, 2006 and September 26, 2004 were 52-week periods and the fiscal
year ended October 2, 2005 was a 53-week period.

   DEFERRED FINANCING COSTS

     Debt financing costs are deferred and amortized as additional interest
expense over the term of the related debt. Amortization of these costs totaled
$451,000, $222,000 and $505,000 for the fiscal years ended October 1, 2006,
October 2, 2005 and September 26, 2004, respectively.

   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. The Company charges off uncollectible accounts
at the point in time when no recovery is expected.

     Panda Restaurant Group, Inc. and Jenny Craig, Inc. accounted for
approximately 34% and 38%, respectively, of the Company's total accounts
receivable balance at October 1, 2006 and approximately 39% and 25%,
respectively, of the Company's total accounts receivable balance at October 2,
2005.

     For the fiscal years ended October 1, 2006, October 2, 2005 and September
26, 2004, the Company's write-offs, net of recoveries, to the allowance for
doubtful accounts were approximately $181,000, $99,000 and $95,000,
respectively.


                                      F-10


<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   SIGNIFICANT CUSTOMERS

     Significant customers accounted for the following percentages of the
Company's revenues during the fiscal years ended:

                                       October 1,    October 2,    September 26,
                                          2006          2005            2004
                                       -----------------------------------------

   Panda Restaurant Group, Inc.            35%          31%             29%
   Jenny Craig, Inc.                       28%          19%             18%
   American Airlines, Inc.                  5%           7%             10%

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

   FINANCIAL INSTRUMENTS

     The fair value of financial instruments is determined by reference to
market data and by other valuation techniques as appropriate. The Company
believes the carrying value of the debt approximates fair value at October 1,
2006 as the debt bears interest at variable rates based on prevailing market
conditions. The debt at October 2, 2005 was deemed to have no market; therefore,
it was impractical to estimate the fair value of that debt. Unless otherwise
disclosed, the fair values of financial instruments approximate their recorded
values due to their short-term nature.

   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. The Company uses a standard costing system to estimate its
FIFO cost of inventory at the end of each reporting period. Historically,
standard costs have been materially consistent with actual costs. The Company
periodically reviews its inventory for excess items, and it establishes a
valuation reserve based upon the age of specific items in inventory and the
expected recovery from the disposition of the items.

     A reserve is established for the estimated aged surplus, spoiled or damaged
products, and discontinued inventory items and components. The amount of the
reserve is determined by analyzing inventory composition, expected usage,
historical and projected sales information, and other factors. Changes in sales
volume due to unexpected economic or competitive conditions are among the
factors that could result in material increases or decreases to the reserve.

     Inventory write-offs were $602,000, $204,000, and $205,000 for the years
ended October 1, 2006, October 2, 2005 and September 26, 2004, respectively.

   CONCENTRATION OF SOURCES OF LABOR

     The Company's total hourly and salaried workforce consisted of
approximately 860 employees at October 1, 2006. Approximately 83% of the
Company's workforce is covered by a three-year collective bargaining agreement
renewed effective March 1, 2005.


                                      F-11


<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   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 ten years. Leasehold
improvements to the Company's Plant #1 in Vernon, California are amortized over
the lesser of the initial lease term plus one lease extension period, initially
totaling 15 years, or the estimated useful life of the assets. Other 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.

     Expenditures for maintenance and repairs are charged to expense as
incurred. The cost of materials purchased and labor expended in betterments and
major renewals are capitalized. The fixtures and equipment balances included
$1,894,000 and $1,083,600 of construction in process at October 1, 2006 and
October 2, 2005, respectively. 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) is
evaluated at least annually for impairment in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible
Assets." The Company has one reporting unit and estimates fair value based upon
a variety of factors, including discounted cash flow analysis, market
capitalization and other market-based information. The Company performed its
evaluation of goodwill for impairment as of October 1, 2006, which indicated
that no impairment charge was necessary.

   STOCK OPTIONS

         In December 2004, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 123R, Share-Based Payment, which requires the Company to measure
the cost of all employee stock-based compensation awards based on the grant date
fair value of those awards and to record that cost as compensation expense over
the period during which the employee is required to perform service in exchange
for the award (generally over the vesting period of the award). Accordingly,
with the adoption of SFAS No. 123R, any future option awards will have an impact
on the Company's results of operations, although awards will have no impact on
the Company's overall financial position. The Company adopted SFAS No. 123R on
October 3, 2005 utilizing the modified prospective method. The Company's
adoption of SFAS 123R did not impact the Company's income before income tax
expense, net income and basic and diluted earnings per share since no options
were granted during the fiscal year ended October 1, 2006 and all of the
Company's outstanding options were fully vested at the date of adoption of this
standard. Accordingly, no stock compensation expense related to the adoption of
this standard was recorded.


                                      F-12


<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Prior to fiscal year 2006, the Company determined stock-based compensation
expense using the intrinsic value method of APB 25, "Accounting for Stock Issued
to Employees," and the Company provided the disclosure required by SFAS No. 123,
"Accounting for Stock-Based Compensation," as amended by SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure." The
following table provides the pro forma effects on the Company's net income and
earnings per share for the fiscal years ended October 2, 2005 and September 26,
2004 as if the fair value recognition provisions of SFAS No. 123R had been
applied:

                                                   For the Fiscal Years Ended
                                                 ------------------------------
                                                   October 2,     September 26,
                                                     2005             2004
                                                 -------------    -------------

Net income (loss):
        As reported                              $   3,696,165    $  (2,141,656)
        Add: Stock-based compensation
             expense included in reported
             net income, net of related
             tax effects                                    --               --
        Deduct: Total stock-based
             compensation expense
             determined under fair value
             method for all awards, net
             of related tax effects                   (279,657)              --
                                                 -------------    -------------
        Pro forma                                $   3,416,508    $  (2,141,656)
                                                 -------------    -------------

        Basic earnings (loss) per share:
             As reported                         $        0.25    $       (0.14)
             Pro forma                           $        0.23    $       (0.14)

        Diluted earnings (loss) per share:
             As reported                         $        0.24    $       (0.14)
             Pro forma                           $        0.22    $       (0.14)


   REVENUE RECOGNITION

     The Company's revenues arise from one business segment - the development
and manufacture of frozen food products. Revenues are recognized when title and
risk of loss of product pass to the customer, which is either at point of
shipping or at destination, depending on customer terms. The Company provides
for estimated returns and allowances, which have historically been immaterial,
at the time of sale. Shipping and handling revenues are included as a component
of net revenue.

     The Company classifies customer rebate costs as a reduction in net
revenues. Customer rebate costs were immaterial for the fiscal years ended
October 1, 2006, October 2, 2005 and September 26, 2004, respectively.

   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.

                                      F-13


<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   ASSET RETIREMENT OBLIGATIONS

     The Company records liabilities related to asset retirement obligations in
the period in which they are incurred and measures them at the net present value
of the future estimated cost. The offset to the liability is capitalized as part
of the carrying amount of the related long-lived asset. Changes in the liability
due to the passage of time are recognized over the operating term in the income
statement as accretion expense.

   RECENT ACCOUNTING PRONOUNCEMENTS

     In October 2006, the Financial Accounting Standards Board ("FASB") issued
FASB Staff Position No. 123R-5, "Amendment of FASB Staff Position FAS 123(R)-1"
("FSP 123(R)-5"). FSP 123(R)-5 amends FSP 123(R)-1 for equity instruments that
were originally issued as employee compensation and then modified, with such
modification made solely to reflect an equity restructuring that occurs when the
holders are no longer employees. The Company does not expect the adoption of FSP
123(R)-5 to have a material impact on its financial condition, results of
operations or cash flows.

     In September 2006, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 157, "Fair Value Measurements" ("SFAS 157"), which
defines fair value, establishes a framework for measuring fair value and
requires enhanced disclosures about fair value measurements. SFAS 157 requires
companies to disclose the fair value of their financial instruments according to
a fair value hierarchy (i.e., levels 1, 2, and 3, as defined). Additionally,
companies are required to provide enhanced disclosure regarding instruments in
the level 3 category, including a reconciliation of the beginning and ending
balances separately for each major category of assets and liabilities. SFAS 157
will be effective for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years. The Company is currently evaluating the
impact adoption may have on its financial condition or results of operations.

     In September 2006, the staff of the Securities and Exchange Commission
("Commission") issued Staff Accounting Bulletin No. 108, "Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements" ("SAB 108"). SAB 108 provides interpretive guidance
on how the effects of the carryover or reversal of prior year misstatements
should be considered in quantifying a current year misstatement. The Commission
staff have stated that registrants should quantify errors using both a balance
sheet and income statement approach and evaluate whether either approach results
in quantifying a misstatement that, when all relevant quantitative and
qualitative factors are considered, is material. SAB 108 will be effective for
fiscal years ending on or after November 15, 2006. The Company does not expect
that SAB 108 will have a material impact on its financial condition, results of
operations or cash flows.

     In July 2006, the FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109" ("FIN
48"), which prescribes accounting for and disclosure of uncertainty in tax
positions. This interpretation defines the criteria that must be met for the
benefits of a tax position to be recognized in the financial statements and the
measurement of tax benefits recognized. The provisions of FIN 48 will be
effective as of the beginning of the Company's 2007 fiscal year, with the
cumulative effect of the change in accounting principle recorded as an
adjustment to opening retained earnings. The Company is currently evaluating the
impact of adopting FIN 48 on its financial condition, results of operations or
cash flows.

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections," which, under most circumstances, requires retrospective
application of a change in accounting principle. SFAS No. 154 also requires the
restatement of previously issued financial statements when reporting the
correction of an error. SFAS No. 154 is effective for fiscal years beginning
after December 15, 2005. The adoption has not had a material impact on the
Company's financial statements.

    RECLASSIFICATIONS

     Certain prior year amounts have been reclassified to conform to the current
period presentation.


                                      F-14


<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    USE OF ESTIMATES

     The preparation of financial statements in conformity with U.S. generally
accepted accounting principles 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. RELATED PARTY TRANSACTIONS

     In connection with the spin-off from the Company's former parent, Overhill
Corporation (now TreeCon Resources, Inc. ("TreeCon")), the Company received from
Overhill Corporation a non-recourse promissory note in the principal amount of
$207,375 made on September 25, 2001 by Mr. Rudis, the Company's President, Chief
Executive Officer and Chairman of the Board and a similar note in the principal
amount of $184,875 by Mr. Shatley, who served as an officer of the former parent
company and later served as an officer and director of the Company. These notes
became due and payable on September 24, 2003. Mr. Rudis' note was collateralized
solely by 276,500 shares of common stock of TreeCon. Mr. Shatley's note was
collateralized solely by 246,500 shares of common stock of TreeCon. Based on the
Company's assessment of the collectibility of these notes, including the value
of the subject collateral, the Company assigned no value to the notes upon their
receipt. During the quarter ended April 2, 2006, Mr. Rudis tendered to the
Company the 276,500 shares of TreeCon common stock that had served as collateral
for the note receivable. Mr. Shatley tendered to the Company the 246,500 shares
of TreeCon common stock that had served as collateral for the note receivable
during the quarter ended July 2, 2006.

     During fiscal year 2006, LLCP was a principal stockholder and secured
creditor of the Company. As described in Note 5, the Company repaid
approximately $44.5 million in existing debt and related fees expenses of LLCP
and its affiliate, Pleasant Street Investors, LLC ("PSI") in connection with the
termination of Company's financing arrangements with them. In addition, as
described in Note 10, on December 23, 2005, LLCP resold to 15 institutional
investors in a private transaction all of the 5,771,661 shares of the Company's
common stock that it owned of record as of that date and the Company made
various representations and warranties as a party to a stock purchase agreement
with LLCP and the investors. Also, on December 23, 2005, the Company, LLCP and
James Rudis entered into a Third Amendment to the Amended and Restated Investor
Rights Agreement. This agreement was terminated in connection with the
refinancing of the Company's indebtedness to LLCP and PSI in May 2006.

     The Company maintains an employment agreement with its Chief Executive
Officer, James Rudis. Mr. Rudis' employment agreement, as amended, ran through
October 31, 2006. Pursuant to a termination option extension agreement the
Company entered into with Mr. Rudis on November 30, 2006, the Company and Mr.
Rudis chose not to terminate the employment agreement. Accordingly, the
employment agreement term automatically extended to October 31, 2007. Mr. Rudis'
employment agreement will thereafter automatically renew from year-to-year
unless terminated by Mr. Rudis or the Company upon giving to Mr. Rudis minimum
notice of at least 90 days prior to the expiration of the initial term or the
anniversary or renewal date of the beginning of the next annual extension
period.

     In February 2004, the Company engaged Alexander Auerbach & Co., Inc.
("AAPR") to provide the Company with public relations and marketing services.
AAPR provides public relations, media relations and communications marketing
services to support the Company's sales activities. Alexander Auerbach, who is a
director of the Company, is a stockholder, director and officer of AAPR. The
Company paid to AAPR $28,682 for services rendered under this engagement during
fiscal year 2006. These fees totaled more than 5% of AAPR's gross revenues for
its fiscal year ended January 31, 2006.


                                      F-15


<PAGE>

4. INVENTORIES

     Inventories are summarized as follows:

                                                  October 1,          October 2,
                                                    2006                2005
                                                 -----------         -----------
        Raw ingredients                          $ 4,031,162         $ 3,125,427
        Finished product                           5,429,298           5,262,877
        Packaging                                  1,507,886           1,045,274
                                                 -----------         -----------
                                                 $10,968,346         $ 9,433,578
                                                 ===========         ===========

     During the year ended October 2, 2005, the Company revised its method to
apply reserve estimation percentages to aging categories. The effect of this
change in estimate resulted in lowered net income of approximately $370,000 and
$0.02 per diluted share for the fiscal year ended October 2, 2005.

5. LONG-TERM DEBT

     On April 17, 2006, the Company executed a senior secured credit agreement
with Guggenheim Corporate Funding, LLC ("GCF"). Under the credit agreement, GCF
acts as collateral agent, administrative agent, arranger and syndication agent
in connection with loans made by various lenders, including affiliates of GCF.

     The facility with GCF is a $47.5 million senior secured credit facility
with a five-year maturity, maturing in May 2011, and is secured by a first
priority lien on substantially all of the Company's assets. The facility is
structured as a $7.5 million non-amortizing revolving loan, a $25.0 million
amortizing Tranche A Term Loan and a $15.0 million non-amortizing Tranche B Term
Loan. The facility bears interest, adjustable quarterly, at the London Inter
Bank Offering Rate ("LIBOR") plus the Applicable Margin (listed below) for LIBOR
loans or, at the Company's option in the case of the revolving loans, an
alternate base rate equal to the greater of the prime rate and the federal funds
effective rate plus 0.50%, plus an applicable margin, as follows:

<TABLE>
<CAPTION>
                                            Applicable
                                            Margin for
                          Total Debt to   Alternate Base         Applicable Margin for
                          EBITDA Ratio      Rate Loans                LIBOR Loans
                            for Last      --------------  ------------------------------------
                             Twelve                                       Tranche A  Tranche B
                             Months       Revolving Loan  Revolving Loan  Term Loan  Term Loan
                          ------------    --------------  --------------  ---------  ---------
<S>                        <C>                 <C>             <C>          <C>        <C>
Greater than               3.00:1.00           2.50%           3.50%        3.75%      6.25%

Greater than or
equal to but less          2.00:1.00
than or equal to           3.00:1.00           2.25%           3.25%        3.50%      6.00%

Less than                  2.00:1.00           2.00%           3.00%        3.25%      5.75%
----------------------------------------------------------------------------------------------
</TABLE>

     Initial funding under the GCF credit facility was made on May 17, 2006 in
the amount of $44.5 million through the issuance of Tranche A Term Loans in the
principal amount of $25.0 million, Tranche B Term Loans in the principal amount
of $15.0 million and LIBOR revolving loans in the principal amount of $4.5
million. As of October 1, 2006, the Company's principal balances on these loans
totaled $41.0 million, consisting of $24.0 million in Tranche A Term Loans,
$15.0 million in Tranche B Term Loans and $2.0 million in LIBOR revolving loans.
At October 1, 2006, interest rates on the Tranche A Term Loans, Tranche B Term
Loans and LIBOR revolving loans were 8.8%, 11.3% and 8.6%, respectively.


                                      F-16


<PAGE>

5. LONG-TERM DEBT (CONTINUED)

     Initial proceeds from the GCF facility were used to repay approximately
$44.5 million in existing debt and related fees and expenses of LLCP and PSI in
connection with the termination of its financing arrangements with them
comprising a secured senior subordinated note payable to LLCP and a senior Term
A note payable to PSI and to pay approximately $1.6 million in fees and expenses
relating to the new financing. Of these fees, $1.4 million is recorded as debt
discount, net of accumulated amortization, on the accompanying balance sheet as
of October 1, 2006. The Company recorded a pretax charge of approximately
$176,000 in connection with the termination of the LLCP and PSI financing
arrangements in the third quarter of fiscal year 2006.

     The GCF facility contains covenants whereby, among other things, the
Company is required to maintain compliance with agreed levels of EBITDA,
interest coverage, fixed charge coverage, leverage targets, and annual capital
expenditures and incremental indebtedness limits. Mandatory prepayments under
the facility are required based on excess cash flow as defined in the agreement
and upon receipt of proceeds from a disposition or payment from a casualty or
condemnation of the collateralized assets and voluntary prepayments under the
facility are generally permitted as provided in the agreement. The facility also
contains customary restrictions on incurring indebtedness and liens, making
investments, paying dividends and making loans or advances.

     On September 21, 2006, the Company entered into a 5-year loan in the
principal amount of $324,000 at a fixed interest rate of 7.5% to finance the
purchase of machinery used for manufacturing processes.

     As of October 1, 2006, the Company was in compliance with the covenant
requirements of the agreement with GCF. The Company believes it is probable that
it will remain in compliance with all of those covenant requirements for the
foreseeable future. However, if the Company fails to achieve certain revenue,
expense and profitability levels, a violation of the financial covenants under
its financing arrangements could result and interest rate increases and
acceleration of maturity of the loans could occur, which could adversely affect
its financial condition, results of operations or cash flows.

     Long-term debt of the Company as of October 1, 2006 and October 2, 2005 is
summarized as follows:


                                              OCTOBER 1, 2006    OCTOBER 2, 2005
                                                ------------      ------------

Tranche A Term Loans payable to GCF             $ 24,000,000      $         --
Tranche B Term Loans payable to GCF               15,000,000                --
LIBOR revolving loans payable to GCF               2,000,000                --
Equipment loan                                       323,902                --
Tem A Note payable to LLCP affiliates                     --        16,500,000
Note payable to LLCP                                      --        28,858,000
Other                                                     --            44,828
                                                ------------      ------------
                                                  41,323,902        45,402,828

Less current maturities                           (2,739,167)         (344,828)
Less debt discount                                (1,365,470)               --
                                                ------------      ------------
                                                $ 37,219,265      $ 45,058,000
                                                ============      ============

     Mandatory payments on the Company's long-term debt as of October 1, 2006 is
as follows:

2007                                                      $ 2,997,421
2008                                                        2,339,885
2009                                                        2,618,227
2010                                                        2,819,421
2011                                                       31,391,116
                                                          -----------
Total payments (1)                                        $42,166,070
                                                          ===========

(1) Includes General Electric capital lease of $842,168 as amended commencing on
October 2, 2006.


                                      F-17


<PAGE>

6. SHAREHOLDERS' EQUITY

     On December 23, 2005, LLCP received 283,076 shares of the Company's common
stock upon surrender and conversion in full of the 23.57 shares of Series A
Convertible Preferred Stock it then held.

     In addition, LLCP received 198 shares of the Company's common stock upon
cashless exercise in full of the two warrants it held to purchase an aggregate
of 200 shares of the Company's common stock at an exercise price of $0.0000008
per share, for a rounded aggregate exercise price of $0.01.

   STOCK OPTIONS

     The Company adopted stock option plans in October 2002 and May 2005. The
Company reserved 800,000 and 550,000 shares of common stock under the plans
adopted in October 2002 and May 2005, respectively, for the issuance to eligible
directors and employees of, and consultants to, the Company under the plans. The
plans provide for the grant of both incentive stock options (at exercise prices
no less than fair value at the date of grant) and non-qualified stock options
(at exercise prices as determined by the Compensation Committee). Such options
may be exercisable as determined by such Committee. The plans will expire in ten
years following their adoption.

     Pro forma information regarding net income and earnings per share is
required by SFAS No. 123R, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of that
Statement. No options were granted in fiscal years 2006 and 2004. The fair value
for the options granted in fiscal year 2005 was estimated at the date of grant
using a Black-Scholes option pricing model with the following assumptions:
weighted average risk-free interest rate of 3.38%; dividend yields of 0%;
weighted average volatility factor of the expected market price of the Company's
common stock of 0.955; and a weighted average expected life of the options of 3
years. The weighted average fair value of options granted during fiscal year
2005 was $0.88.

     A summary of the Company's stock option activity and related information
follows:

<TABLE>
<CAPTION>
                                                     For the Fiscal Years Ended
                                -------------------------------------------------------------------
                                      October 1,             October 2,            September 26,
                                        2006                    2005                   2004
                                --------------------    --------------------   --------------------
                                            Weighted                Weighted               Weighted
                                            Average                 Average                Average
                                            Exercise                Exercise               Exercise
                                 Options     Price       Options     Price      Options      Price
                                ---------   --------    ---------   --------   ---------   --------
<S>                             <C>         <C>           <C>       <C>          <C>       <C>
   Outstanding at beginning
   of year                      1,184,000   $   1.43      672,000   $   1.28     672,000   $   1.28
   Granted                             --   $    --       539,000   $   1.61          --   $    --
   Exercised                       82,000   $   0.92       27,000   $   1.47          --   $    --
   Canceled                            --   $    --            --   $    --           --   $    --
   Outstanding at end of year   1,102,000   $   1.47    1,184,000   $   1.43     672,000   $   1.28
   Exercisable at end of year   1,102,000   $   1.47    1,184,000   $   1.43     672,000   $   1.28


                                      F-18


<PAGE>

6. SHAREHOLDERS' EQUITY (CONTINUED)

     Exercise prices for the 1,102,000 options outstanding as of October 1, 2006
ranged from $0.48 to $2.50. The weighted average contractual life of those
options is 6.4 years. The following table summarizes information about stock
options outstanding as of October 1, 2006:


                                   Options Outstanding                               Options Exercisable
                    -------------------------------------------------      -------------------------------------
                                  Weighted
                                   Average      Weighted                                  Weighted
                                  Remaining     Average      Aggregate                     Average     Aggregate
                      Number     Contractual    Exercise     Intrinsic        Number      Exercise     Intrinsic
                    Outstanding     Life         Price       Value(1)      Exercisable      Price       Value(1)
                    -----------     ----         -----       --------      -----------      -----       --------
   $2.50                46,296       8           $ 2.50        32,407           46,296     $ 2.50         32,407
   $2.00                46,296       8           $ 2.00        55,555           46,296     $ 2.00         55,555
   $1.60               472,000       6           $ 1.60       755,200          472,000     $ 1.60        755,200
   $1.50                46,296       8           $ 1.50        78,703           46,296     $ 1.50         78,703
   $1.47               341,112       8           $ 1.47       590,124          341,112     $ 1.47        590,124
   $0.70                50,000       1           $ 0.70       125,000           50,000     $ 0.70        125,000
   $0.48               100,000       2           $ 0.48       272,000          100,000     $ 0.48        272,000
                   ---------------------------------------------------------------------------------------------
   $0.48 - $2.50     1,102,000      6.4          $ 1.47     1,908,989        1,102,000     $ 1.47      1,908,989

(1) Based on the last reported sale price of our common stock of $3.20 on
   September 29, 2006 (the last trading day during fiscal year 2006).

     The total intrinsic value of options exercised during the fiscal year ended
October 1, 2006 was $227,191 at the time of exercise.

7. NET INCOME (LOSS) PER SHARE

     The following table sets forth the calculation of income (loss) per share
for the periods presented:

                                                        For the Fiscal Years Ended
                                                ------------------------------------------
                                                 October 1,     October 2,    September 26,
                                                    2006           2005           2004
                                                ------------   ------------   ------------

Basic EPS Computation:
Numerator:
  Net income (loss)                             $  5,101,985   $  3,696,165   $ (2,141,656)
Denominator:
  Weighted average common shares outstanding      15,204,424     14,863,716     14,805,556
                                                ------------   ------------   ------------
       Total shares                               15,204,424     14,863,716     14,805,556
                                                ============   ============   ============
Basic EPS                                       $       0.34   $       0.25   $      (0.14)
                                                ============   ============   ============

Diluted EPS Computation:
Numerator:
  Net income (loss)                             $  5,101,985   $  3,696,165   $ (2,141,656)
Denominator:
  Weighted average common shares outstanding      15,204,424     14,863,716     14,805,556
   Incremental shares from assumed conversion
     of preferred stock and exercise of stock
     option and warrants                             676,083        711,743             --
                                                ------------   ------------   ------------
       Total shares                               15,880,507     15,575,459     14,805,556
                                                ============   ============   ============
Diluted EPS                                     $       0.32   $       0.24   $      (0.14)
                                                ============   ============   ============


                                      F-19


<PAGE>

7. NET INCOME (LOSS) PER SHARE (CONTINUED)

     At September 26, 2004, 672,000 shares attributable to outstanding stock
options, warrants exercisable for 200 shares and 283,076 shares of convertible
preferred stock were excluded from the computation of diluted EPS because their
inclusion would have been anti-dilutive.

8. ACCRUED LIABILITIES

     Accrued liabilities consist of the following:

                                                   October 1,      October 2,
                                                     2006             2005
                                                   ----------      ----------

     Compensation                                  $1,905,144      $1,748,516
     Taxes other than income taxes                     93,514          25,970
     Interest                                          23,140          29,627
     Other                                            892,795       1,189,252
                                                   ----------      ----------
                                                   $2,914,593      $2,993,365
                                                   ==========      ==========
9. INCOME TAXES

     Income tax provision consists of the following:

                                              For the Fiscal Years Ended
                                      -----------------------------------------
                                      October 1,     October 2,    September 26,
                                        2006           2005           2004
                                     -----------    -----------    -----------
   Current:
     Federal                         $   233,823    $   120,362    $        --
     State                               432,158         39,223          1,600
                                     -----------    -----------    -----------
   Total current                         665,981        159,585          1,600

   Deferred:
     Federal                           2,454,692      1,384,900     (1,254,128)
     State                               335,027        290,946       (115,496)
                                     -----------    -----------    -----------
   Total deferred                      2,789,719      1,675,846     (1,369,624)
                                     -----------    -----------    -----------

   Total income tax provision        $ 3,455,700    $ 1,835,431    $(1,368,024)
                                     ===========    ===========    ===========

     During fiscal year 2004, the Company recorded a $425,000 valuation
allowance against a portion of its deferred tax assets, since at that time it
was believed that such assets did not meet the more likely than not criteria to
be recoverable through projected future profitable operations in the foreseeable
future. However, in consideration of the Company's improved financial
performance in fiscal year 2005 and anticipated profitable operations, the
Company reversed $337,000 of the previously recorded valuation allowance. The
remaining $88,000 was utilized against deferred tax assets. In fiscal year 2006,
the Company recorded a $17,000 valuation allowance against a capital loss
carryforward that the Company does not anticipate utilizing.

     Failure by the Company to successfully maintain improved margins, grow
revenues and/or maintain anticipated savings on future interest costs, and
maintain profitable operating results in the near term, could adversely affect
the Company's expected realization of some or all of its deferred tax assets and
could require the Company to record a valuation allowance against some or all of
such assets, which could adversely affect the Company's financial position and
results of operations.


                                      F-20


<PAGE>

9. INCOME TAXES (CONTINUED)

     The total income tax provision (benefit) was 40.4%, 33.2% and (38.9%) of
pretax income (loss) for the fiscal years ended October 1, 2006, October 2, 2005
and September 26, 2004, respectively. A reconciliation of income taxes with the
amounts computed at the statutory federal rate follows:

                                                      For the Fiscal Years Ended
                                             -----------------------------------------
                                              October 1,     October 2,   September 26,
                                                 2006          2005            2004
                                             -----------    -----------    -----------

Computed tax provision (benefit) at
   federal statutory rate (34%)              $ 2,930,873    $ 1,880,743    $(1,193,817)
State income tax provision,
   net of federal benefit                        503,824        281,953       (105,337)
Permanent items                                   34,669         28,257         35,049
Tax (benefit) expense attributed to parent            --             --       (528,919)
Valuation allowance                               17,195       (337,000)       425,000
Other                                            (30,861)       (18,522)            --
                                             -----------    -----------    -----------
                                             $ 3,455,700    $ 1,835,431    $(1,368,024)
                                             ===========    ===========    ===========

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

                                       October 1, 2006               October 2, 2005
                                 --------------------------    --------------------------
                                   Deferred      Deferred       Deferred       Deferred
                                     Tax            Tax            Tax            Tax
                                    Assets      Liabilities      Assets       Liabilities
                                 -----------    -----------    -----------    -----------

   Current:
      Inventory, accounts
        receivable               $   391,394    $        --    $   449,388    $        --
      Accrued liabilities            827,631             --        751,393             --
      Prepaid expenses                    --       (207,263)            --       (218,731)
      Other                            2,987             --         13,609             --
                                 -----------    -----------    -----------    -----------
                                   1,222,012       (207,263)     1,214,390       (218,731)

   Noncurrent:
      Net operating loss carry
        forwards & AMT credit    $   534,547    $        --    $ 3,300,130    $        --
      Deposits and deferrals          84,164             --        144,999             --
      Depreciation                    88,756             --             --       (238,552)
      Goodwill                            --     (1,544,964)            --     (1,252,460)
      Valuation Allowance            (17,195)            --             --             --
                                 -----------    -----------    -----------    -----------
                                     690,272     (1,544,964)     3,445,129     (1,491,012)
                                 ===========    ===========    ===========    ===========
   Total deferred taxes net of
      valuation allowance        $ 1,912,284    $(1,752,227)   $ 4,659,519    $(1,709,743)
                                 ===========    ===========    ===========    ===========

     As of October 1, 2006, the Company had net operating losses and alternative
minimum tax credits available for carryforward for federal tax purposes of
approximately $802,000 and $262,000 respectively expiring beginning in 2023.
These carryforward benefits may be subject to annual limitations due to the
ownership change limitations imposed by the Internal Revenue Code and similar
state provisions. The annual limitation, if imposed, may result in the
expiration of net operating losses before utilization.


                                      F-21


<PAGE>

10. COMMITMENTS AND CONTINGENCIES

   COMMITMENTS

     The Company enters into monthly and long-term leases. Future minimum lease
payments for all long-term operating leases, including facilities and equipment,
at October 1, 2006 are as follows:

                2007                                                $  1,980,891
                2008                                                   1,879,692
                2009                                                   1,777,778
                2010                                                   1,603,215
                2011                                                   1,037,143
                2012 and thereafter                                    4,955,968
                                                                    ------------
                                                                    $ 13,234,687
                                                                    ============

     The Company leases its facilities under operating leases expiring through
September 2011, with an option for a five-year extension on the Plant #1
operating facility in Vernon. Certain of the other leases provide for renewal
options at substantially the same terms as the current leases.

     The Company's lease of its primary operating facility requires the premises
to be restored to its original condition upon the termination of the lease.
Accordingly, the Company has recorded a liability of $308,000 representing the
present value of the estimated restoration costs at October 1, 2006. The
corresponding asset is being depreciated over 13 years, and the present value of
the liability is being accreted over the term in order to establish a reserve at
the end of the lease equal to the refurbishment costs.

     Certain of the Company's equipment leases provide for declining annual
rental amounts. Rent expense is recorded on a straight-line basis over the term
of the lease. Accordingly, deferred rent is recorded in the accompanying balance
sheets in other assets as the difference between rent expense and amounts paid
under the terms of the lease agreements.

     Rent expense, including monthly equipment rentals, was approximately $2.7
million, $2.5 million and $2.4 million, for the fiscal years ended October 1,
2006, October 2, 2005 and September 26, 2004, respectively.

     The Company maintains an employment agreement with its Chief Executive
Officer, James Rudis. Mr. Rudis' employment agreement expired on October 31,
2006 and extended for an additional one-year period. The value of the remaining
obligations under Mr. Rudis' employment agreement as of October 1, 2006 was
$532,000.

     The Company's open purchase orders for raw materials and contractual
obligations to purchase raw protein within the next year totals $16,170,000.

   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 adversely
affecting the Company's financial position, results of operations or cash flows.

   LIQUIDATED DAMAGES

     On December 23, 2005, LLCP resold to 15 institutional investors in a
private transaction all of the 5,771,661 shares of the Company's common stock
that LLCP owned of record as of that date ("Transferred Shares"). To facilitate
LLCP's sale of the Transferred Shares, the Company made various representations
and warranties as a party to a stock purchase agreement with LLCP and the
investors. In addition, the Company entered into a registration rights agreement
with the investors that required the Company to register for resale the
Transferred Shares and to maintain the effectiveness of the registration
statement for a maximum of 24 months following the closing date. The
registration statement was declared effective by the Securities and Exchange
Commission on April 13, 2006. If the Company is unable to meet its obligations


                                      F-22


<PAGE>


 10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

under the registration rights agreement to maintain the effectiveness of the
registration statement, the Company will be required to pay to each investor
liquidated damages equal to 1% of the amount paid by the investor for the
Transferred Shares still owned by the investor on the date of the default and 1%
of the amount paid by the investor for the Transferred Shares still owned by the
investor on each monthly anniversary of the date of the default that occurs
prior to the cure of the default.

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.

     Effective March 1, 2005, Overhill Farms executed a new three year contract
with the UFCW Union, Local 770, that eliminated the need for a previous
provision in its 401(k) plan established in January 2002 for its union employees
that required an annual contribution to be made by the Company in the event that
revenues exceeded specific revenue thresholds.

     Employees voluntarily make contributions under both plans. The Company does
not provide for a match to the employees' contributions, and its expenses
related to the plans have not been significant. The Company's 2005 bonus program
permitted a discretionary bonus equal to 2% of non-union employees' gross W-2
earnings in the form of a 401(k) contribution. The total contribution under the
2005 bonus program of $161,000 was made during fiscal year 2006. The Company's
2006 bonus program permits a discretionary bonus equal to 3% of non-union
employees' gross W-2 earnings in the form of a 401(k) contribution to be made
during fiscal year 2007.

12. SUBSEQUENT EVENTS

     The Company amended its existing operating lease agreements with General
Electric Capital Corporation on October 2, 2006. The amended lease results in a
three-year capital lease in the principal amount of $842,168 at a fixed interest
rate of 8.15% with a $1 bargain purchase option at the expiration of the lease.

     Rent payments on the previous operating lease agreements have been charged
to expense on a straight-line basis resulting in a deferred rent asset balance
of $532,000 at October 1, 2006. This balance will be amortized over the
remaining term of the lease in accordance with SFAS No. 13, "Accounting for
Leases."


                                      F-23


<PAGE>

13.      QUARTERLY FINANCIAL DATA (UNAUDITED)

                                             For the Fiscal Year Ended October 1, 2006
                                     -----------------------------------------------------------
                                     January 1         April 2        July 2        October 1
                                     -------------    ------------   ------------   ------------

  Net revenues                        $39,588,808     $43,693,519    $43,957,858    $41,069,406

  Gross profit                          4,393,397       5,202,825      6,244,478      5,643,972

  Operating income                      2,544,179       3,460,619      4,450,415      3,833,150

  Net income                              607,149       1,212,764      1,718,981      1,563,091

  Net income per share - basic             $0.04           $0.08          $0.11        $0.10

  Net income per share - diluted           $0.04           $0.08          $0.11        $0.10

                                             For the Fiscal Year Ended October 2, 2005
                                     -----------------------------------------------------------
                                     January 2         April 3        July 3        October 2
                                     -------------    ------------   ------------   ------------

  Net revenues                        $40,218,835     $43,338,647    $42,280,698    $36,727,332

  Gross profit                          4,414,408       5,596,002      5,338,306      4,403,743

  Operating income                      2,630,346       3,581,654      3,213,494      2,477,428

  Net income                              601,023       1,061,565      1,077,112        956,465

  Net income per share - basic             $0.04           $0.07          $0.07        $0.06

  Net income per share - diluted           $0.04           $0.07          $0.07        $0.06


                                      F-24


<PAGE>

                                                                     Schedule II

                              OVERHILL FARMS, INC.

                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES


                                        Balance at
                                        Beginning                               Balance at
                 Description             of Year     Additions   Deductions(1)  End of year
--------------------------------------  ---------    ---------    -----------   -----------
ALLOWANCE FOR DOUBTFUL ACCOUNTS
  2006                                  $(196,000)   $      --    $   181,000   $   (15,000)
  2005                                   (125,000)    (170,000)        99,000      (196,000)
  2004                                   (111,000)    (109,000)        95,000      (125,000)

INVENTORY EXCESS AND OBSOLETE RESERVE
  2006                                  $(814,000)   $(608,000)   $   602,000   $  (820,000)
  2005                                   (216,000)    (802,000)       204,000      (814,000)
  2004                                   (270,000)    (151,000)       205,000      (216,000)

INCOME TAX VALUATION ALLOWANCE
  2006                                  $      --    $ (17,000)   $        --   $   (17,000)
  2005                                   (425,000)          --        425,000            --
  2004                                         --     (425,000)            --      (425,000)
                                               --           --             --            --
</TABLE>


(1) Deductions to the allowance for doubtful accounts consist of write-offs net
of recoveries.


                                      F-25


<PAGE>

 EXHIBIT
 -------
 NUMBER                   INDEX OF EXHIBITS ATTACHED TO THIS REPORT
 ------                   -----------------------------------------

10.22         Summary of Director Compensation

10.23         Description of Bonus Programs for Named Executive Officers for
              Fiscal Year 2006

10.24         Description of Employment Arrangement between Overhill Farms, Inc.
              and John L. Steinbrun

10.25         Description of Employment Arrangement between Overhill Farms, Inc.
              and Richard A. Horvath

10.26         Termination Option Extension dated November 30, 2006 between
              Overhill Farms, Inc. and James Rudis

23            Consent of Independent Registered Public Accounting Firm

31.1          Certification of Chief Executive Officer Required by Rule
              13a-14(a) of the Securities Exchange Act of 1934, as amended, as
              Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2          Certification of Chief Financial Officer Required by Rule
              13a-14(a) of the Securities Exchange Act of 1934, as amended, as
              Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32            Certification of Chief Executive Officer and Chief Financial
              Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
              Section 906 of the Sarbanes-Oxley Act of 2002


                                      F-26