U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB


(Mark One)
 [X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                    For Fiscal Year Ended: December 31, 1998

                                       or

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

           For the transition period from                To
                                         ----------------  ----------------


                         Commission file number      33-20111
                                                -------------------

                                Eat at Joe's Ltd.
                 (Name of small business issuer in its charter)

         Delaware                                             75-2636283     
State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization                              Identification No.)

           670 White Plains Road, Suite 120, Scarsdale, New York 10583
               (Address of principal executive offices)       (Zip code)


Issuer's telephone number                      (914) 725-2700

Securities registered under Section 12(b) of the Act: NONE
Securities registered under Section 12(g) of the Act:


                         Common Stock Par Value $0.0001
                                (Title of class)

<PAGE>

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

                                                                 Total pages: 20
                                                          Exhibit Index Page: 18

     Check if there is no disclosure of delinquent  filers  pursuant to Item 405
of  Regulation  S-B is not  contained in this form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]

     State issuer's revenues for its most recent fiscal year. $2,519,255

     As of March 1,  1999,  there  were  16,776,769  shares of the  Registrant's
common stock, par value $0.0001,  issued and outstanding and 1,186,400  warrants
and 61,350  options to purchase  common  stock at $0.50 to $1.79 per share.  The
aggregate market value of the Registrant's  voting stock held by  non-affiliates
of the Registrant was approximately  $10,103,747 computed at the average bid and
asked price as of March 1, 1999.


     DOCUMENTS INCORPORATED BY REFERENCE

     If the following documents are incorporated by reference,  briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated:  (1) any annual report to security  holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"): NONE

     Transitional Small Business Disclosure Format (check one): Yes ; NO X













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                                TABLE OF CONTENTS


Item Number and Caption                                                     Page

PART I

Item 1.  Description of Business...............................................4

Item 2.  Description of Property...............................................7

Item 3.  Legal Proceedings.....................................................8

Item 4.  Submission of Matters to a Vote of Security Holders...................9


PART II

Item 5.  Market for Common Equity and Related Stockholder Matters..............9

Item 6.  Management's Discussion and Analysis or Plan of Operations...........11

Item 7.  Financial Statements.................................................13

Item 8.  Changes in and Disagreements With Accountants on Accounting and
                  Financial Disclosure........................................14

PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act...........14

Item 10. Executive Compensation...............................................16

Item 11. Security Ownership of Certain Beneficial Owners and Management.......17

Item 12. Certain Relationships and Related Transactions.......................17

Item 13. Exhibits and Reports on Form 8-K.....................................18




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                                     PART I


                         ITEM 1 DESCRIPTION OF BUSINESS



General

     The business of Eat at Joe's, Ltd. ( the "Company") is to develop,  own and
operate  theme  restaurants  called  "Eat  at  Joe's  (R)."  The  theme  for the
restaurants is an "American Diner"  atmosphere where families can eat wholesome,
home-cooked  food in a safe  friendly  atmosphere.  Eat at  Joe's,  the  classic
American grill, is a restaurant concept that takes you back to eating in the era
when  favorite old rockers were playing on  chrome-spangled  jukeboxes  and neon
signs reflected on shiny tabletops of the 1950's.

     The Company  presently  owns and  operates  eight theme  restaurants:  four
restaurants  located in  Philadelphia,  Pennsylvania;  one each in Cherry  Hill,
Moorestown and Vorhees, New Jersey and one in Baltimore,  Maryland.  The Company
is planning to open at least  three  additional  restaurants  during  1999.  All
restaurants will be located in high traffic  locations.  The restaurants will be
modest  priced  restaurants  catering  to  the  local  working  and  residential
population rather than as a tourist destination.

     The  Company's  common  stock is  traded  on the  National  Association  of
Security  Dealers,  Inc.  (the  "NASD's")  OTC  Bulletin  Board Under the symbol
"JOES."


History

     The company was incorporated as  Conceptualistics,  Inc. on January 6, 1988
in Delaware as a wholly owned subsidiary of Halter Venture Corporation  ("HVC"),
a  publicly-owned  corporation  (now known as Debbie  Reynolds Hotel and Casino,
Inc.) In 1988, HVC divested itself of  approximately  14% of its holdings in the
Company by distributing  1,777,000 shares of the issued and outstanding stock of
the Company to its shareholders. The then majority shareholder of HVC became the
majority  shareholder of the Company. Its authorized capital stock is 50,000,000
shares of common  stock,  par value $0.0001 per share and  10,000,000  shares of
preferred stock, par value $0.0001 per share.

     During the period from  September  30,  1988 to March 1, 1990,  the company
remained in the development stage while attempting to enter the mining industry.
The Company  acquired  certain  unpatented  mining claims and related  equipment
necessary  to mine,  extract,  process and  otherwise  explore for kaolin  clay,
silica,  feldspar,  precious metals, antimony and other commercial minerals from
its  majority   stockholder  and  unrelated  third  parties.   The  Company  was
unsuccessful  in these start up efforts and all activity ceased during 1992 as a
result of  foreclosure  on various loans in default  and/or  abandonment  of all
assets.

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<PAGE>

     From March 1, 1990 to January 1 , 1997,  the Company did not engaged in any
business activities.

     On January 1 , 1997, the Shareholders  adopted a plan or reorganization and
merger  between the  Company  and E. A. J.  Holding  Corp.  Inc.  ("Hold") to be
effective on or before January 31, 1997.  Under the plan,  the Company  acquired
all the issued and outstanding  shares of "Hold", a Delaware  corporation making
"Hold" a wholly owned  subsidiary of the Company for 5,505,000  common shares of
the Company.

     The Company through its wholly owned subsidiary, Hold, has ten wholly owned
subsidiaries:



<PAGE>


     -      E.A.J. PHL Airport, Inc. a Pennsylvania corporation,
     -      Eat At Joe's U. of P., Inc. a Pennsylvania corporation,
     -      E.A.J. Cherry Hill, Inc., a New Jersey corporation,
     -      Eat At Joe's Harborplace, Inc., a Maryland corporation,
     -      Eat At Joe's Neshaminy, Inc. a Pennsylvania corporation,
     -      Eat At Joe's Plymouth, Inc., a Pennsylvania corporation,
     -      E.A.J. Echelon Mall, Inc., a New Jersey corporation,
     -      E.A.J. Gallery, Inc., a Pennsylvania corporation,
     -      E.A.J. Moorestown, Inc., a New Jersey corporation,
     -      E.A.J. Shoppingtown, Inc., a New York corporation,
     -      Eat at Joe's U of P 40th Street, Inc., a Pennsylvania corporation,
     -      Eat at Joe's Owings Mills, Inc., a Maryland corporation..

     Each of the subsidiaries will operate a single restaurant. Two restaurants,
E.A.J.  Cherry Hill and Eat At Joe's U. of P. were opened  November and December
1997, two additional  restaurants,  E.A.J.  Echelon Mall and E.A.J.  PHL Airport
were opened May 1998,  Eat at Joe's U of P 40th Street opened July 1998,  E.A.J.
Gallery opened August 1998, Eat At Joe's Harborplace  opened September 1998, and
E.A.J. Moorestown opened October 1998.

     The  principal  executive  offices of the  Company are located at 670 White
Plains Road, Suite 118,  Scarsdale,  NY 10583. The Company also has an office in
Cherry Hill, New Jersey, where the restaurant operations are managed.

OPERATING LOSSES

     The  Company  has  incurred  net  losses of  approximately  $1,081,000  and
$299,000  for the fiscal  years ended  December  31, 1998 and December 31, 1997,
respectively.  Such operating  losses reflect  developmental  and other start-up
activities.  The  Company  expects  to incur  losses  in the near  future  until
profitability  is achieved.  The  Company's  operations  are subject to numerous
risks  associated  with  establishing  any new  business,  including  unforeseen
expenses,  delays and complications.  There can be no assurance that the Company
will achieve or sustain profitable  operations or that it will be able to remain
in business.

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<PAGE>

FUTURE CAPITAL NEEDS AND UNCERTAINTY OF ADDITIONAL FUNDING

     The Company was not in full  operations  during 1998 and thus, the revenues
generated are not  representative of those that will be generated once all units
are  operating.  Revenues  are not  yet  sufficient  to  support  the  Company's
operating  expenses and are not expected to reach such levels until the first or
second  quarter  of 1999.  Since the  Company's  formation,  it has  funded  its
operations and capital expenditures primarily through private placements of debt
and equity  securities.  See  "Recent  Sales of  Unregistered  Securities."  The
Company  expects  that it will be required to seek  additional  financing in the
future.  There can be no assurance  that such financing will be available at all
or available on terms acceptable to the Company.

GOVERNMENT REGULATION

     The  Company is subject to all  pertinent  Federal,  State,  and Local laws
governing its business. Each Eat at Joe's is subject to licensing and regulation
by a number of  authorities  in its  State or  municipality.  These may  include
health, safety, and fire regulations.  The Company's operations are also subject
to  Federal  and State  minimum  wage laws  governing  such  matters  as working
conditions, overtime and tip credits.

RISK OF LOW-PRICED STOCKS

     Rules 15g-1 through 15g-9 promulgated under the Securities  Exchange Act of
1934 (the "Exchange  Act") impose sales practice and disclosure  requirements on
certain  brokers  and dealers who engage in certain  transactions  involving  "a
penny stock."

     Currently,  the  Company's  Common  Stock is  considered  a penny stock for
purposes of the  Exchange  Act. The  additional  sales  practice and  disclosure
requirements imposed on certain brokers and dealers could impede the sale of the
Company's  Common  Stock  in the  secondary  market.  In  addition,  the  market
liquidity for the Company's securities may be severely adversely affected,  with
concomitant adverse effects on the price of the Company's securities.

     Under the penny stock  regulations,  a broker or dealer selling penny stock
to  anyone  other  than  an  established   customer  or  "accredited   investor"
(generally,  an  individual  with net worth in excess  of  $1,000,000  or annual
incomes  exceeding  $200,000,  or $300,000 together with his or her spouse) must
make a special suitability  determination for the purchaser and must receive the
purchaser's  written consent to the transaction prior to sale, unless the broker
or dealer or the transaction is otherwise exempt.  In addition,  the penny stock
regulations  require the broker or dealer to deliver,  prior to any  transaction
involving a penny stock,  a disclosure  schedule  prepared by the Securities and
Exchange  Commission (the "SEC") relating to the penny stock market,  unless the
broker or dealer or the transaction is otherwise  exempt.  A broker or dealer is
also  required to disclose  commissions  payable to the broker or dealer and the
registered   representative  and  current  quotations  for  the  Securities.  In
addition,  a broker or dealer is required to send monthly statements  disclosing
recent  price  information  with respect to the penny stock held in a customer's
account and information with respect to the limited market in penny stocks.


                                       6
<PAGE>


LACK OF TRADEMARK AND PATENT PROTECTION

     The  Company  relies  on a  combination  of  trade  secret,  copyright  and
trademark  law,  nondisclosure  agreements  and technical  security  measures to
protect its  products.  Notwithstanding  these  safeguards,  it is possible  for
competitors  of the  company to obtain  its trade  secrets  and to  imitate  its
products.  Furthermore,  others may  independently  develop  products similar or
superior to those developed or planned by the Company.

COMPETITION

     The Company  faces  competition  from a wide variety of food  distributors,
many of which have substantially greater financial,  marketing and technological
resources than the Company.

EMPLOYEES

     As of March 25, 1999, the Company had approximately 160 employees,  none of
whom is represented by a labor union.


                         ITEM 2 DESCRIPTION OF PROPERTY



     Since 1992 all administrative activities of the Company have been conducted
by corporate  officers  from either their home or business  offices.  Currently,
there  are no  outstanding  debts  owed by the  Company  for  the  use of  these
facilities and there are no commitments for future use of the facilities.

     The company's wholly-owned  subsidiary,  E.A.J.  Shoppingtown,  Inc. leases
approximately  2,453  square  feet in the  Shoppington  Mall,  DeWitt,  New York
pursuant to a shopping center lease dated January 1, 1998.  E.A.J.  Shoppingtown
pays $4,167 per month rent under the lease which expires December 21, 2012.

     The  Company's  wholly-owned  subsidiary,  Eat At Joe's Cherry  Hill,  Inc.
leases  approximately  660 square feet in the Cherry Hill Mall, Cherry Hill, New
Jersey  pursuant to a shopping  center lease dated October 1, 1997. Eat At Joe's
Cherry Hill pays $4,400 per month rent under the lease which  expires  September
30, 2007.

     The Company's  wholly-owned  subsidiary,  Eat At Joe's Gallery, Inc. leases
approximately  2,000  square feet in the Gallery at Market  East,  Philadelphia,
Pennsylvania  pursuant to a shopping  center lease dated August 1, 1997.  Eat At
Joe's Gallery pays $4,167 per month rent under the lease which expires  December
31, 2007.

     The Company's  wholly-owned  subsidiary,  E.A.J.  Moorestown,  Inc.  leases
approximately 3,683 square feet in the Moorestown Mall,  Moorestown,  New Jersey
pursuant to a shopping  center lease dated July 1, 1997. The Company pays $6,250
per month rent under the lease which expires June 30, 2012.

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<PAGE>


     The Company's  wholly-owned  subsidiary Eat At Joe's U. of P., Inc.  leases
approximately 456 square feet in the Shoppes at Penn, Philadelphia, Pennsylvania
pursuant  to a prime lease dated  October 30,  1997.  Eat at Joe's U. of P. pays
$1,710 per month rent under the lease which expires December 31, 2008.

     The Company's  wholly-owned  subsidiary  E.A.J.  Echelon Mall,  Inc. leases
approximately 470 square feet in the Echelon Mall, Vorhees,  New Jersey pursuant
to a shopping  center  lease dated  February 3, 1998.  E.A.J.  Echelon Mall pays
$1,950 per month rent under the lease which expires January 2006.

     The Company's  wholly-owned  subsidiary  E.A.J.  PHL Airport,  Inc.  leases
approximately  845  square  feet  in  the  Philadelphia  Airport,  Philadelphia,
Pennsylvania  pursuant to a lease dated April 30, 1997.  E.A.J. PHL Airport pays
$7,100 per month rent under the lease which expires April 2007.

     The Company's wholly-owned subsidiary Eat at Joe's U of P 40th Street, Inc.
leases  approximately  4,000  square  feet in the Eat at Joe's  University  City
Diner, Philadelphia,  Pennsylvania pursuant to a lease dated April 21, 1998. Eat
at Joe's U of P 40th  Street  pays  $6,667 per month rent under the lease  which
expires December 2008.

     The Company's wholly-owned subsidiary Eat at Joe's Harborplace, Inc. leases
approximately  2,530  square  feet in the  Gallery at Harbor  Place,  Baltimore,
Maryland  pursuant to a lease dated November 6, 1997.  Eat at Joe's  Harborplace
pays $8,333 per month rent under the lease which expires March 2008.

     The Company's wholly-owned  subsidiary Eat at Joe's Neshaminy,  Inc. leases
approximately  4,500 square feet in the Neshaminy Mall,  Bensalom,  Pennsylvania
pursuant to a lease dated December 23, 1997. Eat at Joe's  Neshaminy pays $7,500
per month rent under the lease which expires July 2013.

     The Company's  wholly-owned  subsidiary Eat at Joe's Plymouth,  Inc. leases
approximately  4,540 square feet in the Plymouth Meeting Mall, Plymouth Meeting,
Pennsylvania  pursuant to a lease dated October 29, 1997.  Eat at Joe's Plymouth
pays $12,500 per month rent under the lease which expires March 2008.

     The Company's  wholly-owned  subsidiary  E.A.J.  Holding Corp,  Inc. leases
approximately  3,020 square feet in the Danbury Fair Mall,  Danbury,  Conneticut
pursuant to a lease dated May 5, 1997.  Eat at Joe's  Owings  Mills pays $11,080
per month rent under the lease which expires December 2013.



                            ITEM 3 LEGAL PROCEEDINGS


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<PAGE>


     The Company is not engaged in any legal proceedings other than the ordinary
routine litigation incidental to its business operations, which the Company does
not  believe,  in the  aggregate,  will have a  material  adverse  effect on the
Company, or its operations.



                        ITEM 4 SUBMISSION OF MATTERS TO A
                            VOTE OF SECURITY HOLDERS



     No matters were subject to a vote of security holders during the year 1998.


                                     PART II


                       ITEM 5 MARKET FOR COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS



MARKET INFORMATION

     The Company's Common Stock is traded on the NASD's OTC Bulletin Board under
the symbol "JOES." The following  table presents the high and low bid quotations
for the Common  Stock as reported by the NASD for each  quarter  during the last
two years. Such prices reflect  inter-dealer  quotations without adjustments for
retail markup,  markdown or commission,  and do not necessarily represent actual
transactions.


                                   1997:     High       Low
                         First Quarter    $   5.63   $   4.00
                         Second Quarter   $   4.50   $   2.00
                         Third Quarter    $   3.50   $   1.50
                         Fourth Quarter   $   2.75   $   0.82

                                   1998:
                         First Quarter    $   2.04   $   1.06
                         Second Quarter   $   3.38   $   1.40
                         Third Quarter    $   1.78   $   0.72
                         Fourth Quarter   $   1.21   $   0.41

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<PAGE>

DIVIDENDS

     The  Company  has  never  declared  or paid any cash  dividends.  It is the
present  policy of the  Company to retain  earnings  to  finance  the growth and
development  of the business  and,  therefore,  the Company does not  anticipate
paying dividends on its Common Stock in the foreseeable future.

     The number of  shareholders  of record of the Company's  Common Stock as of
March 1, 1999 was approximately 432.

RECENT SALES OF UNREGISTERED SECURITIES

     In November 1996, the Company raised $60,000  through the issuance  600,000
shares of its Common Stock and warrants to acquire 2,000,000 shares at an excise
price of $1.00 per share. The offering was exempt from registration  pursuant to
Regulation D Section  504. In 1997,  900,000  warrants  were  exercised  against
payment of $900,000.  During 1998,  40,000  warrants  were  exercised  against a
payment of $40,000.

     In  January,  1997 the  shareholders  of the Company  adopted an  agreement
whereby  5,505,000 shares of the Company's Common Stock was exchanged for a 100%
interest in E.A.J.  Holding  Corporation,  Inc. Messrs.  Joseph Fiore and Andrew
Cosenza,  Jr., the Company's Chairman and President,  were the owners of all the
outstanding shares of E.A.J.  Holding  Corporation,  Inc. The Company issued its
shares upon an exemption from registration  under Section 4(2) of the Securities
Act.

     In March,  1998,  the  Company  sold 51 shares of its Series A  Convertible
Preferred  Stock to a total of 8 accredited  investors  pursuant to an exemption
from  registration  under  the  Section  4(2)  and/or  Regulation  D  or  as  an
alternative,  Regulation  S  of  the  Act.  The  Company  received  proceeds  of
approximately  $797,000 from the sale of the securities.  As of the date of this
prospectus the shares are  convertible  and warrants  (issued in connection with
the offering) exercisable into 1,700,725 shares of Common Stock of the Company.

     On May 5 1998,  the  Company  sold 30  shares of its  Series B  Convertible
Preferred  Stock to a total of 3 accredited  investors  pursuant to an exemption
from  registration  under the  Section  4(2)  and/or  Regulation  D. The Company
received proceeds of approximately $484,,000 from the sale of the securities. As
of the date of this prospectus the shares are  convertible and warrants  (issued
in connection with the offering) exercisable into 990,064 shares of Common Stock
of the Company.

     On May 21,  1998,  the Company  sold 34 shares of its Series B  Convertible
Preferred  Stock to a total of 2 accredited  investors  pursuant to an exemption
from  registration  under the  Section  4(2)  and/or  Regulation  D. The Company
received proceeds of approximately $549,000 from the sale of the securities.  As
of the date of this prospectus the shares are  convertible and warrants  (issued
in connection with the offering) exercisable into 433,916 shares of Common Stock
of the Company.  During  September  1998 the company  repurchased  19 shares for
$450,000.

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<PAGE>

     In September,  1998, the Company sold 14 shares of its Series C Convertible
Preferred  Stock  to 2  accredited  investors  pursuant  to  an  exemption  from
registration  under the Section 4(2) and/or  Regulation D. The Company  received
proceeds of  approximately  $239,000 from the sale of the securities.  As of the
date of this  prospectus  the shares are  convertible  and  warrants  (issued in
connection  with the  offering)  into  395,733  shares  of  Common  Stock of the
Company.

     On July 31, and  September  2, 1998,  the Company  sold its 8%  convertible
debenture in the  aggregate  principal  amount of  $1,500,000  to an  accredited
investor  pursuant to an exemption from  registration  under Section 4(2) and/or
Regulation D. The Company retained  proceeds of approximately  $933,000 from the
sale of the  securities  and $450,000 was applied to the repurchase of 19 shares
of Series B Convertible  Preferred Stock sold to an investor on May 21, 1998. As
of the date of this  prospectus,  the  debentures are  convertible  and warrants
(issued in connection with the offering)  exercisable  into 2,064,000  shares of
Common Stock of the Company.

     In September,  1998, the Company sold 20 shares of its Series D Convertible
Preferred  Stock  to an  accredited  investors  pursuant  to an  exemption  from
registration  under the Section 4(2) and/or  Regulation D. The Company  received
proceeds of  approximately  $350,000 from the sale of the securities.  As of the
date of this  prospectus  the shares are  convertible  and  warrants  (issued in
connection  with the issuance of the shares) into 539,000 shares of Common Stock
of the Company.


                       ITEM 6 MANAGEMENT'S DISCUSSION AND
                         ANALYSIS OR PLAN OF OPERATIONS



Plan of  Operations  - Eat at  Joe's  Ltd.  Intends  to open and  operate  theme
restaurants  styled in an "American  Diner"  atmosphere  where  families can eat
wholesome,  home cooked food in a safe friendly  atmosphere.  Eat at Joe's,  the
classic American grill, is a restaurant concept that takes you back to eating in
the era when favorite old rockers were playing on chrome-spangled  jukeboxes and
neon signs reflected on shiny tabletops of the 1950's. Eat at Joe's fulfills the
diner dream with homey ambiance  that's  affordable  while  providing food whose
quality and variety is such you can eat there over and over, meal after meal. To
build on the diner experience, a retail section in each Eat at Joe's would allow
customers  to take  the  good  feelings  home  with  them,  in the  form of 50's
memorabilia.

     The Company's  expansion  strategy is to open  restaurants  either  through
Joint  Venture  agreements  or  Company  owned  units.  Units may  consist  of a
combination  of full service  restaurants  or food court  locations.  Restaurant
construction will take from 90-150 days to complete on a leased site.

     In  considering   site  locations,   the  Company   concentrates  on  trade
demographics,  such  as  traffic  volume,  accessibility  and  visibility.  High
Visibility Malls and Strip Malls in densely  populated suburbs are the preferred
locations.  The Company  also  scrutinizes  the  potential  competition  and the

                                       11
<PAGE>

profitability of national  restaurant  chains in the target market area. As part
of the expansion program,  the Company will inspect and approve each site before
approval of any joint venture or partnership.

     A typical food court unit is approximately  500 square feet,  whereas for a
full  service  operation  it is  approximately  3,500  square  feet.  Food court
operation  consists of a limited  menu.  A full service  restaurant  consists of
30-35 tables  seating  about 140- 150 people.  The bar area will hold 6-8 tables
and seats 30-35 people.

     The  restaurant  industry is an  intensely  competitive  one,  where price,
service,  location,  and food quality are critical factors. The Company has many
established  competitors,  ranging  from  similar  casual-style  chains to local
single unit operations.  Some of these  competitors have  substantially  greater
financial resources and may be established or indeed become established in areas
where the Eat at Joe's Company operates. The restaurant industry may be affected
by changes  in  customer  tastes,  economic,  demographic  trends,  and  traffic
patterns.   Factors  such  as  inflation,   increased  supplies  costs  and  the
availability of suitable employees may adversely affect the restaurant  industry
in general and the Eat at Joe's Company  Restaurant in  particular.  Significant
numbers of the Eat at Joe's  personnel  are paid at rates related to the federal
minimum wage and  accordingly,  any changes in this would  affect the  Company's
labor costs.

Results of  Operations - From March 1, 1990 to December 12, 1995 the Company was
an inactive corporation. From December 12, 1995 to November 1997 the Company was
a  development  stage  company and had not begun  principal  operations.  During
November and December,  1997 two restaurants  were opened and began  operations.
Accordingly, comparisons with prior periods are not meaningful.

Total Revenues - For the years ended December 31, 1998 and 1997, the Company had
total sales of approximately $2,519,000 and $85,000 respectively.

Costs and Expenses - For the years ended December 31, 1998 and 1997, the Company
had a net loss of approximately  $1,081,000 and $299,000  respectively.  The net
loss for 1998 and 1997 is largely  attributable to additional  expenses incurred
as the Company increases its Corporate overhead structure for the development of
additional  locations  supported by revenues from  operating  units two of which
were open for business  during  November and  December  1997,  two of which were
opened  during May 1998,  three were opened during the third quarter 1998 (1 per
month),  and one was opened during  October 1998.  Given the limited  operations
which took place in 1997, any  discussion of operating  expenses as a percentage
of sales would not be meaningful and might be misleading.


LIQUIDITY AND CAPITAL RESOURCES

     The Company has met its capital requirements through the sale of its Common
Stock and  borrowings.  In 1997,  $900,000  was raised  through the  exercise of
900,000  warrants.  The warrants are  exercisable at $1 per share and expired in
November 1998. Also, the Company has borrowed $995,000  including  $690,000 from
Messrs.  Fiore  and  Cosenza.  The net  proceeds  to the  Company  were used for

                                       12
<PAGE>

additional unit development and working capital.

     For the year 1997 the Company provided  $138,000 in cash flow for operating
activities  and during the year 1998, the Company used $599,000 in cash flow for
operating activities.

     Since the Company's re-activation in January, 1997, the Company's principal
capital requirements have been the funding of (i) the development of the Company
and its 1950's diner style concept,  (ii) the construction of its existing units
and the acquisition of the furniture,  fixtures and equipment  therein and (iii)
towards the  development of additional  units.  During 1998 and 1997 the company
paid  approximately  $4,628,000 and  $1,795,000,  respectively  for property and
equipment..

     During  1998,  the  Company  has raised  approximately  $3,539,000  (net of
issuance  costs)  through the sale of preferred  stock and  debentures,  both of
which are  convertible  into Common Stock of the Company.  Also, the Company has
borrowed $2,509,000  including $114,000 from Mr. Fiore. As of December 31, 1998,
$452,000  remained due to Mr.  Fiore.  The net proceeds to the Company were used
for additional unit development and working capital.

     After the completion of these expansion  plans,  the Company expects future
development and expansion will be financed through cash flow from operations and
other  forms  of  financing  such as the  sale of  additional  equity  and  debt
securities,  capital leases and other credit facilities. There are no assurances
that such  financing  will be available on terms  acceptable or favorable to the
Company.

Government  Regulations  - The  Company is  subject  to all  pertinent
Federal,  State,  and Local laws  governing its  business.  Each Eat at Joe's is
subject to licensing and  regulation by a number of  authorities in its State or
municipality.  These may  include  health,  safety,  and fire  regulations.  The
Company's  operations  are also  subject to Federal and State  minimum wage laws
governing such matters as working conditions, overtime and tip credits.

Year 2000 Compliance - The Company  utilizes  software and related  technologies
which have been  programmed  to  recognize  and  properly  process  data  fields
containing a two digit year and commonly referred to as the Year 2000 Compliance
issue.  Management  has  concluded  that a  material  effect  on  the  Company's
financial  condition is not reasonably  likely to occur as a result of Year 2000
issues.  While the  Company  has little  communication  with the  systems of its
vendors  and  suppliers,  it cannot  measure the impact that the Year 2000 issue
will have on such parties with which it conducts business.



                           ITEM 7 FINANCIAL STATEMENTS



     The financial statements of the Company and supplementary data are included
beginning  immediately  following the signature page to this report. See Item 13
for a  list  of the  financial  statements  and  financial  statement  schedules
included.

                                       13
<PAGE>

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



     There are not and have not been any  disagreements  between the Company and
its accountants on any matter of accounting  principles,  practices or financial
statements disclosure.


                                    PART III

               ITEM 9 DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
                CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
                                THE EXCHANGE ACT




Executive Officers and Directors

     The  following  table  sets  forth  the name,  age,  and  position  of each
executive officer and director of the Company:


Director's Name       Age      Office                             Term Expires

Joseph Fiore           38      Chief Executive officer,            Next
                               Chairman of the Board of            Annual
                               Directors/Secretary                 Meeting

James Mylock, Jr.      32      Director                            Next
                                                                   Annual
                                                                   Meeting

Andrew Cosenza, Jr.    30      Director, Vice Chairman             Next
                                                                   Annual
                                                                   Meeting

Tim Matula             38      Director                            Next
                                                                   Annual
                                                                   Meeting

Gino Naldini           47      President and Chief Operating       Next
                               Officer                             Annual


                                       14
<PAGE>


                                                                   Meeting

Gary Usling            39      Chief Financial Officer             Next
                                                                   Annual
                                                                   Meeting

     Joseph Fiore has been Chairman and Chief  Executive  Officer since October,
1996. In 1982,  Mr. Fiore formed East Coast  Equipment  and Supply Co.,  Inc., a
restaurant  supply company that he still owns.  Between 1982 and 1993, Mr. Fiore
established 9 restaurants  (2 owned and 7  franchised)  which  featured a 1959's
theme restaurant concept offering a traditional American menu.

     James  Mylock,  Jr. has worked with Joseph Fiore in marketing  and business
development since graduating from the State University of New York at Buffalo in
1990.

     Andrew Cosenza,  Jr. was formerly the President and Chief Operating Officer
since October, 1996. Since 1990 he has been the owner of Cozco Management Corp.,
an operator of 35 mall food court restaurants in the Philadelphia area.

     Tim Matula joined  Shearson  Lehman  Brothers as a financial  consultant in
1992. In 1994 he joined  Prudential  Securities  and when he left  Prudential in
1997, he was Associate Vice President, Investments, Quantum Portfolio Manager.

     Gino Naldini became President and Chief Operating Officer of the Company in
December,  1998.  From 1967  through  1998,  Mr.  Naldini  held  various  senior
executive  positions with Toronto-based  CARA Operations,  operator or more than
400 restaurants. The restaurants operated by CARA include Swiss Chalet, operator
of  chicken  rotisserie  restaurants  and  Harvey's,   Canada's  second  largest
hamburger  chain.  Mr. Naldini's last held position with CARA was that of Senior
Director of Operations.

     Mr. Usling has been Chief Financial  Officer since January,  1999.From 1993
to 1998, he was employed with Penreal Capital Management, Inc. and his last held
position as a Vice President.  Peneral is a pension/real  estate fund management
company. From 1989 to 1993 he was Vice President of Acquisitions and Development
for Co-operators Development Corporation, a real estate and insurance firm. From
1984 to 1989 was employed by The Canada Life Assurance Company as an accountant.

     The  Company's  Certificate  of  Incorporation  provides  that the board of
directors  shall  consist  of  from  one  to  nine  members  as  elected  by the
shareholders.  Each director  shall hold office until the next annual meeting of
stockholders and until his successor shall have been elected and qualified.

Board Meetings and Committees

     The Directors and Officers will not receive  remuneration  from the Company
until a subsequent offering has been successfully  completed,  or cash flow from

                                       15
<PAGE>

operating  permits,  all in the discretion of the Board of Directors.  Directors
may be paid their  expenses,  if any, of attendance at such meeting of the Board
of Directors,  and may be paid a fixed sum for attendance at each meeting of the
Board of  Directors  or a stated  salary  as  Director.  No such  payment  shall
preclude any Director  from serving the  Corporation  in any other  capacity and
receiving compensation therefor. No compensation has been paid to the Directors.
The Board of  Directors  may  designate  from  among its  members  an  executive
committee  and one or  more  other  committees.  No such  committees  have  been
appointed.

Compliance with Section 16(a) of the Exchange Act

     Based  solely  upon a review of forms 3, 4, and 5 and  amendments  thereto,
furnished to the Company during or respecting its last fiscal year, no director,
officer,  beneficial owner of more than 10% of any class of equity securities of
the  Company  or any other  person  known to be  subject  to  Section  16 of the
Exchange  Act of 1934,  as  amended,  failed to file on a timely  basis  reports
required by Section 16(a) of the Exchange Act for the last fiscal year.



                         ITEM 10 EXECUTIVE COMPENSATION



     None of the executive  officer's salary and bonus exceeded  $100,000 during
any of the Company's last two fiscal years.

Employment Agreements

     Effective January 1, 1997, the Company entered into an employment Agreement
with Joseph Fiore (the "Fiore  Employment  Agreement")  under which Joseph Fiore
serves as  chairman  of the board and chief  executive  officer of the  Company.
Pursuant to the Fiore Employment Agreement,  Mr. Fiore was to be paid $50,000 in
1997.  He deferred  $50,000 of his salary for the year 1997.  Mr.  Fiore will be
paid a salary of $75,000 in 1998.  In addition,  Mr.  Fiore will receive  family
health insurance  coverage until age 70 and life insurance coverage until age 70
with a death  benefit  of  $1,000,000  and the use of an  automobile,  with  all
expenses associated with the maintenance and operation of the automobile paid by
the Corporation. Mr. Fiore deferred these benefits until after 1997.

     Effective January 1, 1997, the Company entered into an employment agreement
with Andrew A. Cosenza,  Jr.  (The"Cosenza  Employment  Agreement")  under which
Andrew A. Cosenza,  Jr. serves as president  and chief  operating  office of the
Company as well as serve as a member of the  Corporation's  board of  directors.
Pursuant to the Cosenza Employment  Agreement,  Mr. Cosenza was paid $12,500. He
deferred  $37,500 of his salary for the year 1997.  Mr.  Cosenza  will be paid a
salary of $75,000 in 1998. In addition,  Mr.  Cosenza will receive the use of an
automobile,  with all expenses  associated with the maintenance and operation of
the automobile paid by the Corporation,  family health insurance coverage to age
70 and life insurance  coverage until age 70 with a death benefit of $1,000,000.

                                       16
<PAGE>

Mr. Cosenza deferred some of these benefits until after 1997 but did receive the
use of the  automobile  for  part  of the  year  at a  cost  to the  Company  of
approximately $16,000 .



                 ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
                                 AND MANAGEMENT




Principal Shareholders

     The table below sets forth  information  as to each person owning of record
or who  was  known  by the  Company  to own  beneficially  more  than  5% of the
16,776,769  shares of issued and  outstanding  Common Stock of the Company as of
March 1, 1999 and information as to the ownership of the Company's Stock by each
of its  directors  and  executive  officers and by the  directors  and executive
officers  as a group.  Except  as  otherwise  indicated,  all  shares  are owned
directly,  and the persons  named in the table have sole  voting and  investment
power with respect to shares shown as beneficially owned by them.

                                                      # of
Name and Address            Nature of                 Shares
of Beneficial Owners        Ownership                 Owned              Percent
Directors

Joseph Fiore               Common Stock              2,879,384             17%
Andrew Cosenza, Jr.        Common Stock              2,591,000             15%

All Executive Officers     Common Stock              5,550,384             33%
and Directors as a Group
  (3 persons)



             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



     The Company utilized office space that is shared with companies  controlled
by two officers of the Company.  During 1998 and 1997 Cozco Management  received
$36,387  and  $546,574  respectively,  as  reimbursement  for  rent,  telephone,
equipment,  travel,  automotive salaries and other shared expenses.  During 1998
and 1997 the two officers and/or  companies  controlled by the two officers paid
expenses  and made  advances  to the  Company  totaling  $113,825  and  $690,422


                                       17
<PAGE>

respectively.  During  1998 the  Company  repaid  advances  of  $364,292.  As of
December 31, 1998, $452,455 in advances was due to Mr. Fiore.



                   ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K



     (a)  The following documents are filed as part of this report.

1.   Financial Statements                                                   Page

Report of Robison, Hill & Co., Independent Certified Public Accountants......F-1

Consolidated Balance Sheets as of December 31, 1998, and 1997................F-2

Consolidated Statements of Operations for the years ended
     December 31, 1998, and 1997.............................................F-4

Consolidated Statement of Stockholders' Equity for the years ended
     December 31, 1998, and 1997.............................................F-5

Consolidated Statements of Cash Flows for the years ended
     December 31, 1998, and 1997.............................................F-8

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

2.   Financial Statement Schedules

     The following  financial statement schedules required by Regulation S-X are
included herein.

     All schedules are omitted  because they are not  applicable or the required
information is shown in the financial statements or notes thereto.

3.   Exhibits

     The following exhibits are included as part of this report:

Exhibit
Number   Title of Document


3.1     Articles of Incorporation(1)
3.2     By-laws(1)

                                       18
<PAGE>

4.1     Certificate of Designations-Series A Convertible Preferred Stock(1)
4.2     Certificate of Designations-Series B Convertible Preferred Stock(1)
4.3     Form of Warrant Agreement(1)
4.4     Certificate of Designations-Series C Convertible Preferred Stock(1)
4.5     Certificate of Designations-Series D Convertible Preferred Stock(1)
10.1    Consulting Agreement-Wall Street Group, Ltd.(1)
10.2    Indenture of Lease between University of Pennsylvania and Eat at Joe's
        U. of P., Inc.(1)
10.3    Lease Abstract between Cherry Hill Center, Inc.and Eat at Joe's Cherry
        Hill, Inc.(1)
10.4    Lease Abstract between Echelon Mall, Inc. and E.A.J. Eachelon Mall, 
        Inc.(1)
10.5    Lease  Information  Form between  E.A.J.  PHL,  Airport,  Inc. and
        Marketplace  Redwood  Limited  Partnership(1)
10.6    Lease Abstract between Eat at Joe's U. of P., Inc. and UCA Realty Group,
        Inc.(1)
10.7    Lease Abstract between Rouse Philadelphia, Inc. and Eat at Joe's
        Gallery, Inc.(1)
10.8    Lease Information Form between E.A.J. Enterprises, Inc. and First
        Fidelity Bank, N.A(1)
10.9    Lease Abstract between Eat at Joe's Harbor Place, Inc. and Baltimore
        Center, Inc.(1)
10.10   Lease Abstract between E.A.J. Shoppington, Inc. and Wilmorite, Inc.(1)
10.11   Lease Abstract between Eat at Joe's Neshaminy, Inc. and General Growth
        Properties, Inc.(1)
10.12   Lease Abstract between Eat at Joe's Plymouth Incorporate and Plymouth
        Meeting, Inc.(1)
10.13   Lease Abstract between E.A.J. Danbury, Inc. and Wilmorite, Inc.(1)
10.14   Registration of trade name for Eat at Joe's(1)
10.15   Registration Rights Agreement(1)
21      Subsidiaries of the Company(1)
23.1    Consent of Robison, Hill & Co.
27.1    Financial Data Schedule

(1) Incorporated by reference.



     (b)  No reports on Form 8-K were filed.



                                       19
<PAGE>

                                   SIGNATURES



     Pursuant  to the  requirements  of  section  13 or 15(d) of the  Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.

                                                 EAT AT JOE'S LTD.


Dated: March 31, 1999                     By  /S/     Joseph Fiore        
                                          -----------------------------------
                                          Joseph Fiore,
                                          C.E.O., Chairman, Secretary, Director

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 31st day of March 1999.

Signatures                                Title

/S/     Joseph Fiore                                                
---------------------------------
Joseph Fiore                              C.E.O., Chairman, Secretary, Director
                                          (Principal Executive, Financial
                                          and Accounting Officer)

/S/     James Mylock, Jr.                                        
---------------------------------
James Mylock, Jr.                         Director


/S/     Andrew Cosenza, Jr.                                    
---------------------------------
Andew Cosenza, Jr.                        Director, Vice Chairman


/S/     Tim Matula                                                  
---------------------------------
Tim Matula                                Director


/S/     Gino Naldini                                                 
---------------------------------
Gino Naldini                              President, Chief Operating Officer and
                                          Director

/S/     Gary Usling                                                  
---------------------------------
Gary Usling                               Chief Financial Officer and Director


                                       20
<PAGE>









               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Stockholders
Eat At Joe's Ltd.


We have audited the  accompanying  consolidated  balance  sheets of Eat At Joe's
Ltd., and  subsidiaries  (a Delaware  corporation)  as of December 31, 1998, and
1997  and  the  related  consolidated  statements  of  operations,   changes  in
stockholders'  equity and cash flows for the years then ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of Eat At Joe's Ltd.,
and  subsidiaries  as of December  31,  1998,  and 1997,  and the results of its
operations  and its cash  flows for the years then  ended,  in  conformity  with
generally accepted accounting principles.

                                            Respectfully submitted,


                                            /s/ Robison, Hill & Co.      
                                            ----------------------------- 
                                            Certified Public Accountants

Salt Lake City, Utah
March 25, 1999






                                     F - 1
<PAGE>


                       EAT AT JOE'S LTD., AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997



                                                       1998             1997
                                                   -----------      -----------
ASSETS
Current Assets:
Cash and cash equivalents ....................     $   133,957      $   232,601
Receivables ..................................          25,861             --
Inventory ....................................         184,115            7,488
Other ........................................          21,310              400
Prepaid expense ..............................           8,333           30,993
Deposits .....................................          41,046           12,701
                                                   -----------      -----------

     Total Current Assets ....................         414,622          284,183
                                                   -----------      -----------

Property and equipment:
Equipment ....................................       1,632,055          279,667
Office furniture .............................          76,255            1,000
Leasehold improvements .......................       4,767,308        1,527,099
                                                   -----------      -----------
                                                     6,475,618        1,807,766
Less accumulated depreciation ................        (303,316)         (11,546)
                                                   -----------      -----------

                                                     6,172,302        1,796,220
                                                   -----------      -----------

Other Assets:
Intangible and other assets net of
amortization of $13,400 and $2,150 for
1998 and 1997, respectively ..................         141,437          234,569
                                                   -----------      -----------

     Total Assets ............................     $ 6,728,361      $ 2,314,972
                                                   ===========      ===========















                                     F - 2
<PAGE>


                       EAT AT JOE'S LTD., AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997
                                   (Continued)



                                                        1998            1997
                                                    -----------     -----------
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities .......    $   488,632     $   474,795
Short-term notes payable .......................        635,000         264,940
Shareholders loans .............................        452,455         702,922
                                                    -----------     -----------

     Total Current Liabilities .................      1,576,087       1,442,657
                                                    -----------     -----------

Convertible Debentures, Net of Issue Costs .....      1,343,449            --
                                                    -----------     -----------

     Total Liabilities .........................      2,919,536       1,442,657
                                                    -----------     -----------

STOCKHOLDERS EQUITY
Preferred stock - $0.0001 par value ............
  10,000,000 shares authorized; 113
  shares issued and outstanding ................           --              --
Common Stock - $0.0001 par value ...............
   50,000,000 shares Authorized ................
   16,440,755 and 12,733,805 issued
   and Outstanding, respectively ...............          1,644           1,273
Common Stock To Be Issued ......................            131            --
Additional paid-in capital .....................      7,213,400       2,244,299
Retained deficit ...............................     (3,406,350)     (1,373,257)
                                                    -----------     -----------

     Total Stockholders' Equity ................      3,808,825         872,315
                                                    -----------     -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .....    $ 6,728,361     $ 2,314,972
                                                    ===========     ===========











   The accompanying notes are an integral part of these financial statements.
                                     F - 3

<PAGE>
<TABLE>
<CAPTION>

                       EAT AT JOE'S LTD., AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997



                                                               1998            1997
                                                           ------------    ------------
<S>                                                        <C>             <C>         
Revenues ...............................................   $  2,519,255    $     84,781
Cost of Revenues .......................................        702,481          38,009
                                                           ------------    ------------
Gross Margin ...........................................      1,816,774          46,772

Expenses
   Labor and Related Expenses ..........................      1,168,225         106,346
   Rent ................................................        288,639          15,860
   Other General and Administrative ....................        890,131         205,588
                                                           ------------    ------------
Income (Loss) Before Depreciation and Amortization .....       (530,221)       (281,022)
   Depreciation and Amortization .......................        305,170          13,696
                                                           ------------    ------------

Net Loss from Continuing Operations ....................       (835,391)       (294,718)
                                                           ------------    ------------

Other Income (Expense)
   Interest income .....................................            576           3,759
   Interest expense ....................................       (158,525)         (7,311)
   Loss on sale of assets ..............................           --              (752)
                                                           ------------    ------------
Net Other Income (Expense) .............................       (157,949)         (4,304)
                                                           ------------    ------------

Net Loss Before Income Taxes ...........................       (993,340)       (299,022)
Income Tax Expense (Benefit) ...........................          2,725            --
                                                           ------------    ------------

Net Loss Before Cumulative Effects of Accounting Change        (996,065)       (299,022)

Cumulative Effect of Accounting Change on Years Prior to
1998, Net of Taxes
                                                                (84,732)           --

Net Loss ...............................................     (1,080,797)       (299,022)
                                                           ------------    ------------

Less: Preferred Dividends ..............................        952,296            --
                                                           ------------    ------------
Net Loss To Common Stockholders ........................   $ (2,033,093)   $   (299,022)
                                                           ============    ============

Basic Loss Per Common Share: ...........................   $      (0.16)   $      (0.02)
                                                           ============    ============

Weighted Average Number of Common Shares ...............     13,062,921      11,729,107
                                                           ============    ============
</TABLE>

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

                                     F - 4
<PAGE>

<TABLE>
<CAPTION>

                       EAT AT JOE'S LTD. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 1998, AND 1997


                                                     Common Stock                                      Additional
                            Preferred Stock          To Be Issued                Common Stock            Paid-in       Retained
                           -----------------   ------------------------   --------------------------   -----------   ------------
                             Shares   Amount       Shares        Amount       Shares        Amount       Capital        Deficit
                           --------   ------   -----------   ----------   ------------   -----------   -----------   ------------
<S>                        <C>        <C>      <C>           <C>          <C>            <C>           <C>           <C>

Balances at
December 31, 1996              --     $ --            --     $      --      11,833,805   $     1,183   $ 1,344,389    $(1,074,235)

March 1997, shares
issued on exercise
of warrants                    --       --            --            --         400,000            40       399,960           --

April 1997, shares
issued on  exercise
of warrants                    --       --            --            --         300,000            30       299,970           --

November 1997 shares
issued on exercise
of warrants                    --       --            --            --         200,000            20       199,980           --

Net loss for the year          --       --            --            --            --            --            --         (299,022)
                           --------   ------   -----------   -----------   -----------   -----------   -----------   ------------

Balance at
December 31, 1997              --       --            --            --      12,733,805         1,273     2,244,299     (1,373,257)

March 1998, Series A
Convertible Preferred
shares                           51     --            --            --            --            --         725,803           --

May 1998, Series B
Convertible Preferred
shares                           64     --            --            --            --            --         967,903           --

May 1998, Series B
Convertible Preferred
shares canceled                 (19)    --            --            --            --            --        (450,000)          --

</TABLE>

                                     F - 5
<PAGE>

<TABLE>
<CAPTION>
                                                     Common Stock                                      Additional
                            Preferred Stock          To Be Issued                Common Stock            Paid-in       Retained
                           -----------------   ------------------------   --------------------------   -----------   ------------
                             Shares   Amount       Shares        Amount       Shares        Amount       Capital        Deficit
                           --------   ------   -----------   ----------   ------------   -----------   -----------   ------------
<S>                        <C>        <C>      <C>           <C>          <C>            <C>           <C>           <C>

September 1998, Series C
Convertible Preferred
shares                           14     --            --            --            --            --         183,165           --

September 1998, Series B
Preferred shares
converted                        (7)    --            --            --         211,737            22           (22)          --

September 1998, Series D
Convertible Preferred
shares                           20     --            --            --            --            --         293,625           --

December 1998, Series B
Preferred shares
converted                        (5)    --            --            --         330,782            33           (33)          --

December 1998, Series A
Preferred shares
converted                        (5)    --            --            --         284,230            28           (28)          --

December 1998, shares
issued in cancellation
of short-term debt and
associated interest            --       --            --            --         500,000            50       269,629           --

December 1998, shares
issued in cancellation
of short-term debt and
associated interest            --       --       1,312,500           131     2,187,500           219     1,822,568           --

</TABLE>

                                      F - 6
<PAGE>
<TABLE>
<CAPTION>

                                                     Common Stock                                      Additional
                            Preferred Stock          To Be Issued                Common Stock            Paid-in       Retained
                           -----------------   ------------------------   --------------------------   -----------   ------------
                             Shares   Amount       Shares        Amount       Shares        Amount       Capital        Deficit
                           --------   ------   -----------   ----------   ------------   -----------   -----------   ------------
<S>                        <C>        <C>      <C>           <C>          <C>            <C>           <C>           <C>
January through
December 1998, shares
issued in exchange
for Leasehold                  --
Improvements                   --                     --            --            --          38,200             4         40,184

January through
December 1998, shares
issued in exchange
for Services                   --
                                        --            --            --            --         154,501            15        164,011

Preferred dividend
due to discounted
conversion rates               --       --            --            --            --            --         952,296       (952,296)

Net loss for the year          --       --            --            --            --            --            --       (1,080,797)
                           --------   ------   -----------   -----------   -----------   -----------   -----------   ------------


Balance at
December 31, 1998               113     --       1,312,500   $       131    16,440,755   $     1,644   $ 7,213,400    $(3,406,350)
                           ========   ======   ===========   ===========   ===========   ===========   ===========   ============

</TABLE>








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

                                     F - 7

<PAGE>
<TABLE>
<CAPTION>


                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997

                                                                1998           1997
                                                            -----------    -----------
<S>                                                         <C>            <C>
Cash Flows From Operating Activities
   Net loss for the period ..............................   $(1,080,797)   $  (299,022)
Adjustments to reconcile net loss to net cash
   Provided by operating activities
     Loss from sale of marketable securities ............          --              752
     Depreciation and Amortization ......................       305,170         13,696
     Cumulative Effect of Accounting Change .............        84,732           --
     Stock issued for services and expenses .............       246,623           --
     Payment of organization costs ......................          --          (78,124)
     Decrease (Increase) in Receivables .................       (25,861)        70,000
     Increase in inventory ..............................      (176,627)        (7,488)
     Increase in other assets ...........................       (20,910)          (400)
     Increase in prepaid expense ........................        22,660        (27,018)
     Decrease (increase) in deposits ....................       (28,345)        (1,710)
     Increase in accounts payable and accrued liabilities        (1,103)       467,560
                                                            -----------    -----------
Net Cash Provided by (Used in) Operating Activities .....      (674,458)       138,246
                                                            -----------    -----------

Cash Flows From Investing Activities
   Purchase of property and equipment ...................    (4,627,664)    (1,795,271)
   Purchase of intangible assets ........................        (5,000)          --
   Proceeds from sale of marketable securities ..........          --          143,248
   Purchase of marketable securities ....................          --         (144,000)
                                                            -----------    -----------
Net Cash Provided by Investing Activities ...............    (4,632,664)    (1,796,023)
                                                            -----------    -----------

Cash Flows From Financing Activities
   Issuance of common stock .............................          --          900,000
   Issuance of convertible preferred stock ..............     2,170,496           --
   Purchase of convertible preferred stock ..............      (450,000)          --
   Proceeds from convertible debenture ..................     1,343,449           --
   Advances from majority stockholders ..................       113,825        690,422
   Repayments of majority stockholders advances .........      (364,292)          --
   Proceeds from short-term notes payable ...............     2,395,000        264,940
                                                            -----------    -----------

Net Cash Provided by Financing Activities ...............     5,208,478      1,855,362
                                                            -----------    -----------

Increase (Decrease) in Cash .............................       (98,644)       197,585
Cash at beginning of period .............................       232,601         35,016
                                                            -----------    -----------

Cash at End of Period ...................................   $   133,957    $   232,601
                                                            ===========    ===========


</TABLE>
                                     F - 8
<PAGE>


                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                            STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997
                                   (Continued)



                                                                1998        1997
                                                          ----------    --------
Supplemental Disclosure of Interest and
 Income Taxes Paid
   Interest paid during the period ...................    $      295    $   --
                                                          ==========    ========

   Income taxes paid during the period ...............    $    4,225    $   --
                                                          ==========    ========

Supplemental Disclosure of Non-cash Investing
 and Financing Activities

   Leasehold Improvements Acquired with Issuance
     of Common Stock .................................    $   40,188    $   --
                                                          ==========    ========

   Short-term Notes Settled with Issuance of
      Common Stock ...................................    $2,010,000    $   --
                                                          ==========    ========

   Intangible Assets Acquired with Issuance of
      Common Stock ...................................    $     --      $149,832
                                                          ==========    ========

   Organization Costs Acquired with Issuance
      Common Stock ...................................    $     --      $    200
                                                          ==========    ========
















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

                                     F - 9

<PAGE>


                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     This summary of accounting policies for Eat At Joe's, Ltd. And subsidiaries
is presented to assist in understanding the Company's financial statements.  The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.

Organization and Basis of Presentation

     Eat At Joe's Ltd.  (Company) was incorporated on January 6, 1988, under the
laws of the State of Delaware,  as a wholly-owned  subsidiary of Debbie Reynolds
Hotel and Casino,  Inc. (DRHC)  (formerly  Halter Venture  Corporation or Halter
Racing Stables, Inc.) a publicly-owned  corporation.  DRHC caused the Company to
register  1,777,000  shares of its  initial  12,450,000  issued and  outstanding
shares of common stock with the Securities and Exchange Commission on Form S-18.
DRHC then distributed the registered shares to DRHC stockholders.

     During the period  September  30, 1988 to December  31,  1992,  the Company
remained in the development stage while attempting to enter the mining industry.
The Company  acquired  certain  unpatented  mining claims and related  equipment
necessary  to mine,  extract,  process and  otherwise  explore for kaolin  clay,
silica,  feldspar,  precious metals, antimony and other commercial minerals from
its majority  stockholder  and other  unrelated  third-parties.  The Company was
unsuccessful  in these start-up  efforts and all activity was ceased during 1992
as a result of foreclosure on various loans in default and/or the abandonment of
all assets.

     From  1992  until  1996  the  Company  has  had no  operations,  assets  or
liabilities.

Principles of Consolidation

     The consolidated financial statements include the accounts of Eat At Joe's,
LTD. And its wholly-owned  subsidiary,  E.A.J. Holding  Corporation,  a Delaware
corporation  ("Holding").  Holding  includes  the  accounts of its  wholly-owned
subsidiaries,  E.A.J. PHL Airport, Inc. a Pennsylvania corporation, Eat At Joe's
U. of P., Inc. a  Pennsylvania  corporation,  E.A.J.  Cherry  Hill,  Inc., a New
Jersey corporation, Eat At Joe's Harborplace,  Inc., a Maryland corporation, Eat
At Joe's  Neshaminy,  Inc. a Pennsylvania  corporation,  Eat At Joe's  Plymouth,
Inc.,  a  Pennsylvania  corporation,  E.A.J.  Echelon  Mall,  Inc., a New Jersey
corporation,   E.A.J.  Gallery,   Inc.,  a  Pennsylvania   corporation,   E.A.J.
Moorestown, Inc., a New Jersey corporation, E.A.J. Shoppingtown,Inc., a New York
corporation,  Eat at Joe's U of P 40th Street, Inc., a Pennsylvania corporation,
and Eat at Joe's Owings Mills,  Inc., a Maryland  corporation.  All  significant
intercompany accounts and transactions have been eliminated.


                                     F - 10
<PAGE>


                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997
                                   (Continued)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Nature of Business

     The Company is developing, owns and operates theme restaurants styled in an
"American Diner" atmosphere.

Inventories

     Inventories  consist of food,  paper  items and related  materials  and are
stated at the lower of cost (first-in, first-out method) or market.

Income Taxes

     The Company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting  for Income  Taxes." SFAS No.109  requires  recognition  of deferred
income  tax  assets  and   liabilities   for  the  expected  future  income  tax
consequences,  based on enacted tax laws, of temporary  differences  between the
financial reporting and tax bases of assets and liabilities.

Depreciation

     Office furniture, equipment and leasehold improvements, are stated at cost.
Depreciation and amortization are computed using the  straight-line  method over
the estimated economic useful lives of the related assets as follows:

                  Office furniture                   5-10 years
                  Equipment                          5- 7 years
                  Leasehold improvements             8-15 years


     Maintenance  and  repairs  are  charged  to  operations;   betterments  are
capitalized.  The  cost  of  property  sold  or  otherwise  disposed  of and the
accumulated  depreciation  thereon are eliminated  from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.

Amortization

     Intangible assets are amortized over useful life of 7 - 13 years.


                                     F - 11
<PAGE>


                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997
                                   (Continued)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

     The Company has adopted the Financial  Accounting Standards Board SFAS No.,
121,  "Accounting  for the  Impairment  of  Long-lived  Assets."  SFAS  No.  121
addresses  the  accounting  for (i)  impairment of  long-lived  assets,  certain
identified  intangibles and goodwill  related to assets to be held and used, and
(ii) long-live lived assets and certain identifiable  intangibles to be disposed
of.  SFAS No. 121  requires  that  long-lived  assets and  certain  identifiable
intangibles  be held and used by an entity be reviewed for  impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be  recoverable.  If the sum of the expected  future cash flows from the
used of the  asset  and  its  eventual  disposition  (undiscounted  and  without
interest  charges) is less than the carrying  amount of the asset, an impairment
loss is recognized.

Recent Accounting Pronouncements

     During  1998,  the Company  changed its method of  accounting  for costs of
start up  activities to conform with new  requirements  of Statement of Position
98-5 "Reporting on the Costs of Start-Up  Activities"  (SOP 98-5). The effect of
this change was to  increase  net loss for the year ended  December  31, 1998 by
$84,732. Financial Statements for 1997 have not been restated in accordance with
the provisions of SOP 98-5.

Pervasiveness of Estimates

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

Concentration of Credit Risk

     The Company has no significant  off-balance-sheet  concentrations of credit
risk such as foreign  exchange  contracts,  options  contracts or other  foreign
hedging  arrangements.  The Company  maintains the majority of its cash balances
with one financial institution, in the form of demand deposits.





                                     F - 12
<PAGE>


                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997
                                   (Continued)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Reverse Stock Split

     Effective May 3, 1997 the Stockholders  approved a 50 to 1 reverse split of
the common stock and effective October 7, 1997 the Stockholders  approved a 4 to
1 reverse split. The financial  statements have been  retroactively  restated to
reflect  the  reverse  stock  split  as if it had  been  effective  prior to the
earliest date presented.

Cash and Cash Equivalents

     For purposes of the  statement  of cash flows,  the Company  considers  all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Earnings (Loss) Per Share

     In 1997,  the  Financial  Accounting  Standards  Board issued SFAS No. 128,
"Earnings per Share" (EPS). SFAS No. 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.

     Diluted net income per common  share was  calculated  based on an increased
number of shares  that  would be  outstanding  assuming  that the  warrants  are
converted to common shares.  The effect of outstanding  common stock equivalents
are anti-dilutive for 1998 and 1997 and are thus not considered.

     The  reconciliations  of the  numerators  and  denominators  of  the  basic
earnings per share computations are as follows:

                                                   For the Year Ended 1998
                                       ----------------------------------------
                                                                      Per Share
                                          Income         Shares        Amount
                                       -----------    -----------  ------------

     Basic EPS
     Net Loss to common shareholders   $(2,033,093)    13,062,921  $      (0.16)
                                       ===========    ===========  ============

                                     F - 13
<PAGE>

                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997
                                   (Continued)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Earnings (Loss) Per Share (continued)

                                                   For the Year Ended 1997
                                       ----------------------------------------
                                                                      Per Share
                                          Income         Shares        Amount
                                       -----------    -----------  ------------

     Basic EPS
     Net Loss to common shareholders   $  (299,022)    11,729,107  $      (0.02)
                                       ===========    ===========  ============


Reclassifications

     Certain  reclassifications  have been made in the 1997 financial statements
to conform with the 1998 presentation.

NOTE 2 - SHORT-TERM NOTES PAYABLE

     Short-Term  Notes Payable  consist of loans from  unrelated  entities as of
December  31,  1998 and 1997.  The notes are  payable  one year from the date of
issuance together with interest at 6.50% A.P.R.

NOTE 3 - INCOME TAXES

     Deferred  taxes result from  temporary  differences  in the  recognition of
income and expenses for income tax reporting and financial  statement  reporting
purposes. Deferred benefits of $349,000 and $71,000 for the years ended December
31, 1998 and 1997 respectively, are the result of net operating losses.

     The  Company  has  recorded  net  deferred  income  taxes in the  accompany
consolidated balance sheets as follows:

                                     F - 14
<PAGE>


                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997
                                   (Continued)

NOTE 3 - INCOME TAXES (Continued)

                                                           As at December 31,
                                                         ---------    ---------
                                                            1998         1997
                                                         ---------    ---------
Future deductible temporary differences related to
   Reserves, accruals, and net operating losses          $ 736,000    $ 387,000
Valuation allowance                                       (736,000)    (387,000)
                                                         ---------    ---------
Net Deferred Income Tax                                  $    --      $    --
                                                         =========    =========


     As of December 31, 1998, the Company had a net operating loss ("NOL") carry
forward for income tax reporting purposes of approximately  $2,165,000 available
to offset future taxable  income.  This net operating loss carry forward expires
at various  dates  between  December  31, 2003 and 2013.  A loss  generated in a
particular  year will expire for federal tax purposes if not utilized  within 15
years.  Additionally,  the Internal Revenue Code contains provisions which could
reduce  or limit the  availability  and  utilization  of these  NOLs if  certain
ownership  changes have taken place or will take place.  In accordance with SFAS
No. 109, a valuation  allowance is provided when it is more likely than not that
all or some portion of the  deferred tax asset will not be realized.  Due to the
uncertainty  with respect to the ultimate  realization  of the NOLs, the Company
established a valuation  allowance for the entire net deferred  income tax asset
of $736,000 as of  December  31,  1998.  Also  consistent  with SFAS No. 109, an
allocation  of the  income  (provision)  benefit  has been made to the loss from
continuing operations.

     The  difference  between  the  effective  income  tax rate and the  federal
statutory  income tax rate on the loss from continuing  operations are presented
below:

                                                           As at December 31,
                                                        ---------     ---------
                                                           1998          1997
                                                        ---------     ---------

Benefit at the federal statutory rate of 34%            $ 349,000     $  71,000
Nondeductible expenses                                       --          (1,000)
                                                        ---------     ---------
Utilization of net operating loss carryforward          $(349,000)    $ (70,000)
                                                        ---------     ---------
                                                        $    --       $    --
                                                        =========     =========





                                     F - 15
<PAGE>

                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997
                                   (Continued)

NOTE 4 - PURCHASE OF SUBSIDIARIES

     On January 1, 1997 the  shareholders  of the Company  approved an agreement
whereby  5,505,000 shares of the Company's common stock was exchanged for a 100%
interest  in  E.A.J.  Holding   Corporation,   Inc.   ("Holding"),   a  Delaware
corporation. Holding, which was organized on February 14, 1997, had total assets
with a historical  cost value of $150,037,  consisting of the Eat at Joe's trade
mark, business plan, graphics, illustrations/renderings,  corporate brochure and
website with a historical value of $149,837,  organization  costs of $200 and no
liabilities on the date of the exchange.

     During  March,  1997 Holding  acquired  100% of the issued and  outstanding
stock of E.A.J.: PHL, Airport Inc. ("PHL Airport"),  a Pennsylvania  corporation
organized  August  19,  1996 for  $25,000.  At the time of the  acquisition  PHL
Airport  had assets  with a  historical  cost value of  $37,500,  consisting  of
developmental costs and organizational costs and liabilities of $12,500.

     These transactions have been accounted for as a reorganization of ownership
interests  between  related  parties  as if it  were a  "Pooling  of  Interest."
Accordingly,  assets and liabilities are reflected at their  historical  values.
The accompanying  financial statements for 1997 are based on the assumption that
the companies were combined for the full year.

NOTE 5 - RENT AND LEASE EXPENSE

     The Company occupies various retail restaurant space under operating leases
beginning October 1997 and expiring at various dates through 2012.

     The minimum  future  lease  payments  under these  leases for the next five
years are:

              Year Ended December 31,               Real Property      Equipment
         ----------------------------------         -------------      --------
                     1999                              $  486,912      $   --
                     2000                                 486,912          --
                     2001                                 486,912          --
                     2002                                 486,912          --
                     2003                                 486,912          --
                     Thereafter                         2,338,721          --
                                                       ----------      --------

Total minimum future lease payments                    $4,773,281      $   --
                                                       ==========      ========

     The leases generally provides that insurance,  maintenance and tax expenses
are  obligations  of the Company.  It is expected  that in the normal  course of
business,  leases  that  expire  will be renewed or  replaced by leases on other
properties.

                                     F - 16
<PAGE>


         EAT AT JOE'S LTD. AND SUBSIDIARIES
                                           NOTES TO FINANCIAL STATEMENTS
                                      YEARS ENDED DECEMBER 31, 1998, AND 1997
         (Continued)

NOTE 6 - RELATED PARTY TRANSACTIONS

     The Company utilized office space that is shared with companies  controlled
by two officers of the Company.  During 1998 and 1997 Cozco Management  received
$36,387 and $546,574 as reimbursement for rent,  telephone,  equipment,  travel,
automotive  salaries  and other  shared  expenses.  During 1998 and 1997 the two
officers and/or companies  controlled by the two officers paid expenses and made
advances to the Company totaling $113,825 and $690,422 respectively. During 1998
the Company repaid  advances of $364,292.  As of December 31, 1998,  $452,455 in
advances was due to Mr. Fiore.

NOTE 7 - CONVERTIBLE PREFERRED STOCK, DEBENTURES, WARRANTS & OPTIONS

     In  January,  1997 the  shareholders  of the Company  adopted an  agreement
whereby  5,505,000 shares of the Company's Common Stock was exchanged for a 100%
interest in E.A.J.  Holding  Corporation,  Inc. Messrs.  Joseph Fiore and Andrew
Cosenza,  Jr., the Company's Chairman and President,  were the owners of all the
outstanding shares of E.A.J.  Holding  Corporation,  Inc. The Company issued its
shares upon an exemption from registration  under Section 4(2) of the Securities
Act.

     In March,  1998,  the  Company  sold 51 shares of its Series A  Convertible
Preferred  Stock to a total of 8 accredited  investors  pursuant to an exemption
from  registration  under  the  Section  4(2)  and/or  Regulation  D  or  as  an
alternative,  Regulation  S  of  the  Act.  The  Company  received  proceeds  of
approximately  $797,000 from the sale of the securities.  As of the date of this
prospectus the shares are  convertible  and warrants  (issued in connection with
the offering) exercisable into 1,700,725 shares of Common Stock of the Company.

     On April 1, 1998, pursuant to a consulting  agreement,  the Company granted
options to purchase  61,350 shares of Common Stock of the Company at an exercise
price of $1.63. The options expire on March 31, 2003.

     On May 5 1998,  the  Company  sold 30  shares of its  Series B  Convertible
Preferred  Stock to a total of 3 accredited  investors  pursuant to an exemption
from  registration  under the  Section  4(2)  and/or  Regulation  D. The Company
received proceeds of approximately $484,,000 from the sale of the securities. As
of the date of this prospectus the shares are  convertible and warrants  (issued
in connection with the offering) exercisable into 990,064 shares of Common Stock
of the Company.

     On May 21,  1998,  the Company  sold 34 shares of its Series B  Convertible
Preferred  Stock to a total of 2 accredited  investors  pursuant to an exemption
from  registration  under the  Section  4(2)  and/or  Regulation  D. The Company
received proceeds of approximately $549,000 from the

                                     F - 17
<PAGE>


                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997
                                   (Continued)

NOTE 7 - CONVERTIBLE PREFERRED STOCK, DEBENTURES , WARRANTS, & OPTIONS
Continued)

sale of the  securities.  As of the  date  of this  prospectus  the  shares  are
convertible and warrants  (issued in connection  with the offering)  exercisable
into 433,916  shares of Common Stock of the Company.  During  September 1998 the
company repurchased 19 shares for $450,000.

     In September,  1998, the Company sold 14 shares of its Series C Convertible
Preferred  Stock  to 2  accredited  investors  pursuant  to  an  exemption  from
registration  under the Section 4(2) and/or  Regulation D. The Company  received
proceeds of  approximately  $239,000 from the sale of the securities.  As of the
date of this  prospectus  the shares are  convertible  and  warrants  (issued in
connection  with the  offering)  into  395,733  shares  of  Common  Stock of the
Company.

     On July 31, and  September  2, 1998,  the Company  sold its 8%  convertible
debenture in the  aggregate  principal  amount of  $1,500,000  to an  accredited
investor  pursuant to an exemption from  registration  under Section 4(2) and/or
Regulation D. The Company retained  proceeds of approximately  $933,000 from the
sale of the  securities  and $450,000 was applied to the repurchase of 19 shares
of Series B Convertible  Preferred Stock sold to an investor on May 21, 1998. As
of the date of this  prospectus,  the  debentures are  convertible  and warrants
(issued in connection with the offering)  exercisable  into 2,064,000  shares of
Common Stock of the Company.

     In September,  1998, the Company sold 20 shares of its Series D Convertible
Preferred  Stock  to an  accredited  investors  pursuant  to an  exemption  from
registration  under the Section 4(2) and/or  Regulation D. The Company  received
proceeds of  approximately  $350,000 from the sale of the securities.  As of the
date of this  prospectus  the shares are  convertible  and  warrants  (issued in
connection  with the issuance of the shares) into 539,000 shares of Common Stock
of the Company.

     The following  table sets forth the options and warrants  outstanding as of
December 31, 1998 and 1997.

                                                          1998          1997
                                                       ----------    ----------

Options & warrants outstanding, beginning of year       1,100,000     2,000,000

         Granted                                        1,247,750          --
         Expired                                       (1,060,000)         --
         Exercised                                        (40,000)     (900,000)
                                                       ----------    ----------

Options & warrants outstanding, end of year             1,247,750     1,100,000
                                                       ==========    ==========

Exercise price for options & warrants outstanding,
end of year                                        $0.50 to $1.79    $     1.00
                                                   ==============    ==========


                                     F - 18
<PAGE>


                       EAT AT JOE'S LTD. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1998, AND 1997
                                   (Continued)


NOTE 8 - SELECTED FINANCIAL DATA (Unaudited)

     The  following  table  set  forth  certain  unaudited  quarterly  financial
information:
<TABLE>
<CAPTION>

                                                                1998 Quarters Ended
                                      ------------------------------------------------------------------------------  
                                            Mar 31              Jun 30              Sep 30              Dec 31
                                      ------------------  ------------------ ------------------- -------------------
<S>                                   <C>                 <C>                <C>                 <C>
Income statement data:
   Net sales                                   $147,347            $316,397            $817,129          $1,238,382
   Gross profit                                  85,312             157,461             613,654             960,347
   Income (loss) from
     operations before
     depreciation & amortization              (372,638)           (289,480)              31,447             100,450
   Loss from operations                       (394,589)           (329,038)            (47,858)            (63,906)
Other income                                    (8,931)             (4,941)            (78,235)            (65,842)
Loss before taxes                             (403,520)           (333,979)           (126,093)           (129,748)
Income tax (provision) benefit                    (682)               (681)               (681)               (681)
Net Income (Loss)                            $(488,934)          $(334,660)          $(126,774)          $(130,429)
                                      ==================  ================== =================== ===================


                                                                 1997 Quarters Ended
                                      ------------------------------------------------------------------------------   
                                            Mar 31              Jun 30              Sep 30              Dec 31
                                      ------------------  ------------------ ------------------- -------------------
Income statement data:
   Net sales                                   $      -            $      -            $      -             $84,781
   Gross profit                                       -                   -                   -              46,772
   Income (loss) from
     operations before
     depreciation & amortization               (60,733)           (152,046)            (68,971)                 728
   Loss from operations                        (60,733)           (152,046)            (68,971)            (12,968)
Other income                                          6               1,926               1,075             (7,311)
                                      ------------------  ------------------ ------------------- -------------------
Loss before taxes                              (60,727)           (150,120)            (67,896)            (20,279)
Income tax (provision) benefit                        -                   -                   -                   -
                                      ------------------  ------------------ ------------------- -------------------
Net Income (Loss)                             $(60,727)          $(150,120)           $(67,896)           $(20,279)
                                      ==================  ================== =================== ===================

</TABLE>



                                     F - 19