<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                -----------------

                                   FORM 10-KSB

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE
         SECURITES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

         FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d)  OF THE
                  SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

         FOR THE TRANSITION PERIOD FROM ____TO____

                         COMMISSION FILE NUMBER 0-30301

                             ----------------------

                             SOULFOOD CONCEPTS, INC.
                 (Name of small business issuer in its charter)

                               -------------------

                 DELAWARE                          13-3585743
         (State of Incorporation)      (I.R.S. Employer Identification No.)

                           630 NINTH AVENUE, SUITE 310
                              NEW YORK, N.Y., 10036
           (Address of principal executive office, including zip code)

                                 (212) 262-8333
                (Issuer's telephone number, including area code)

              Securities registered under Section 12(b) of the Act:

                                      NONE

              Securities registered under Section 12(g) of the Act:

                          Common Stock, $.003 Par Value

Check whether the issuer (1) Filed all reports required to be filed by section
13 or 15 (d) of the securities exchange act during the preceding 12 months (or
for such a 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

     Check if there is no disclosure of delinquent filers in response to item
405 of regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, is definitive proxy or
information statements incorporated by reference in Part III of this form 10-KSB
or any amendment to this form. [X]

     The aggregate market value on December 31, 2000 of voting stock held by
non-affiliates computed by reference to the last sale price on that date was
approximately $757,376

     The issuer's revenues for the year ended December 31, 2000 were $6,047,643

As of December 31, 2000, 5,268,177 shares of common stock, par value $.003 per
share were issued and outstanding.

                       Documents incorporated by reference

                                      NONE

<PAGE>

                                     PART I

ITEM 1.   BUSINESS

GENERAL

         Soulfood Concepts, Inc., a Delaware corporation (the "Company"), owns
and operates full service, upscale soul food restaurants under the name of The
Shark Bar(R) Restaurant . We also hold a 62% interest in one other full service,
soul food restaurant operating under the name of Mekka(R) restaurant . The
flagship Shark Bar restaurant and Mekka are located in Manhattan, New York; the
others are located in Chicago, Illinois, Atlanta, Georgia and Los Angeles,
California.

         The original Shark Bar restaurant, which was opened in New York City in
1990, is a full service 95-seat restaurant. In March 1997, we opened a
three-floor 9,000 square foot Shark Bar(R) restaurant in Chicago. In September
1997, we opened a third Shark Bar(R) restaurant in Los Angeles in a 6,500 square
foot facility. In March 1998, we opened a fourth Shark Bar restaurant in a
10,000 square foot location in Atlanta.

         The corporate expansion during 1997 was financed by us through various
financing transactions as well as loans from one of our officers. See
"Business-Financing Transactions".

         In June and July 1999, we closed our Chicago and Los Angeles locations
respectively. We have entered into an escrow agreement with a prospective buyer
and hope to complete the sale of the Los Angeles lease within the next 60 days.
We intend to re-open our Chicago location by the fall of 2001.

DEVELOPMENTS

         The Los Angeles and Chicago units were closed in June and July 1999
respectively, primarily due to unsatisfactory management performance and
subsequent decline in sales. We are in the process of negotiating the sale of
the L.A. store's lease, inventory and fixed assets. As of the date of this
report, a commitment from a buyer is being finalized and we anticipate
finalizing the sale in April 2001. We will engage a turnaround plan to reopen
the Chicago location in the fall of 2001.

         We have implemented a reorganization plan that encompasses corporate as
well as store level revisions. In connection with our reorganization plan,
several completed and ongoing initiatives are as follows:

     1.  Completed initiatives:

               a)   A change in senior executive management and the board of
                    Directors.

               b)   The conversion of $500,000 of debt to Soulfood Concepts,
                    Inc. common stock (see "Business-Financing Transactions").

               c)   We have cancelled $300,000 of long term debt.

               d)   We have redeemed 500,000 issued and outstanding shares from
                    a majority shareholder.

     2.  Ongoing Initiatives:

               a)   We are in the process of negotiating the sale of the L.A.
                    store's lease, inventory and fixed assets. As of the date of
                    this report, a commitment from a buyer is being finalized
                    and we anticipate finalizing the sale in April 2001.

               b)   The Chicago unit has not yet re-opened. We must complete
                    leasehold improvements and hire a staff. Approximate costs
                    are estimated @ $250,000. Reopening is anticipated in the
                    second or third quarter of 2001).

               c)   Pay down of $200,000 of debt is subject to the completion of
                    an equity financing, which financing is not yet complete.

               d)   We are continuing efforts to reduce G&A expenses.

CORPORATE STRATEGY

         We intend to build the first national "soul food" restaurant company
throughout major urban areas in the United States with the expansion of our two
concepts - The Shark Bar Restaurant and Mekka Restaurant. We are dedicated to
excellence in the quality of our food offerings and to the creation of value for
our customers.

         We believe that we differentiate our restaurants from other restaurants
by emphasizing the following strategic elements:

o    DISTINCTIVE CONCEPT AND BRAND. The restaurants provide guests with a
     distinctive dining experience, which helps promote frequent visiting
     patterns and strong customer loyalty.

o    ENSURE HIGH QUALITY GUEST EXPERIENCE. We strive to provide a consistent,
     high quality guest experience in order to generate frequent visiting
     patterns and customer loyalty. Through extensive training, experienced
     restaurant-level management and rigorous operational and quality controls,
     we seek to provide high quality menu items and to ensure prompt, friendly
     and efficient service to guests. We believe that the restaurants are
     attractive to a wide variety of dining occasions, including weekday and
     weekend lunches and dinners for a broad range of guests, offering upscale
     Soul Food and New Southern Cuisine which provides a unique and enduring
     attraction to a broad and diverse demographic and socio-economic mix of
     customers.

                                       1
<PAGE>

o    ACHIEVE ATTRACTIVE RESTAURANT-LEVEL ECONOMICS. Our primary objective is to
     be positioned as the first national company to target the soul food
     category, which offers a fine dining experience with casual dining prices.
     We intend to achieve attractive operating results due to the broad appeal
     of the concepts, careful site selection and cost-effective site
     development, consistent application of the management and training programs
     and favorable product costs. We utilize centralized information and
     accounting systems, which allow us to monitor and control labor, food and
     other direct operating expenses, and provide us with timely access to
     financial and operating data. We believe that the culture and emphasis on
     training leads to a lower employee turnover ratio, and therefore higher
     productivity, compared to many competitors.

o    ATTRACT AND RETAIN HIGH QUALITY RESTAURANT MANAGEMENT. We believe that we
     are able to attract and retain quality restaurant management because we
     offer a competitive compensation and benefits program. In addition to
     salary and bonus, we will adopt other incentive programs that allow general
     managers to become eligible for additional benefits including equity
     incentives through our employee incentive stock option plan ("ISO").

o    UTILIZE MANAGEMENT INFORMATION SYSTEMS EFFECTIVELY. We believe that current
     management information systems have the infrastructure capacity to support
     a growth plan and to achieve attractive restaurant level economics. All of
     the restaurants have personal computer and point-of-sale systems integrated
     with centralized management information and accounting systems. The
     corporate office is able to monitor and control labor, food and other
     direct operating expenses, and maintain efficient and quality restaurant
     service with hourly guest traffic and sales volume forecasts for each
     restaurant. The systems permit restaurant and company management to manage
     sales, cost of sales and product mix on a daily basis.

o    EXECUTE DISCIPLINED EXPANSION STRATEGY OF COMPANY-OWNED RESTAURANTS. We
     believe that the restaurant concepts have broad national appeal and that,
     as a result, there may be significant opportunities to expand operations
     and generate attractive unit level economics. We intend to re-open Chicago
     with a stringent and comprehensive management-training program in place and
     capitalize on a proven market that has already shown acceptance of the
     concept. We will continue opening company-owned restaurants in primary
     metropolitan markets, i.e. Baltimore/Washington D.C., Houston, and
     Nashville.

RESTAURANT CONCEPT AND MENUS

THE SHARK BAR

         The Shark Bar restaurants were developed to appeal to a 35-50 year old,
predominantly African-American customer base, however significant cross over
appeal exists for customers seeking a full service upscale casual dining
experience in the soul food genre. Our menu and service model is also highly
conducive to family style dining. Each has a separate bar area along with
dinning rooms with tablecloth settings. The Shark Bar restaurant serves dinner 7
days a week and lunch and brunch when appropriate. The distribution between food
and beverage sales is 65% food and 35% beverages. During 1999, the average guest
check at the Shark Bar was approximately $23 (including beverages).

         During 1998 and 1999, The New York Shark Bar restaurant received a
designation from Forbes Magazine as an "All-Star Eatery", while the Chicago
restaurant was awarded "Two Stars" from the Chicago Sun-Times.



                                       2
<PAGE>

         The menu at The Shark Bar Restaurants features both upscale soul food
and New Southern Cuisine at affordable prices. The menu is organized so that
diners may choose an entree with two accompanying side orders. The entrees
featured on the menu include Blackened Catfish, Honey Dipped Fried Chicken,
Shrimp Etoufe, and Grilled Salmon in a Herb Citrus Butter Sauce. The Shark Bar
has established a reputation of quality and consistency in its food,
particularly with its side orders, which includes black-eyed peas, collard
greens, macaroni and cheese, candied yams and mashed potatoes.

MEKKA

         We are also the General Partner, holding a 60% general partner interest
and a 2% limited partner interest, of a 55-seat soul food restaurant known as
Mekka. The menu at Mekka is also based on soul food and New Southern cooking,
but also offers a selection of Caribbean dishes. Mekka was designed with
slightly lower price points than The Shark Bar and is targeted towards a
predominantly African-American customer in the 20-40 age demographic, and also
has very significant cross over appeal. Mekka serves dinner seven days a week,
does not serve lunch during the week but does offer a brunch on Sunday. The
distribution between food and beverages sales is approximately 65% for food and
35% for beverages. In 1999, the average guest check in Mekka was approximately
$20 (including alcoholic beverages). Mekka also has an outdoor cafe space that
offers an additional 30 seats in the warmer months.

RESTAURANT EXPANSION

         The first expansion outside of the New York market was The Shark Bar in
Chicago ("Shark Bar Chicago") which opened in March of 1997. On January 10,
1997, we completed the purchase of the lease, restaurant assets and licenses of
the Affair Restaurant Inc. in Chicago, Ill. from Affair, L.P. and all of the
issued and outstanding shares of capital stock of Affair Restaurant, Inc. for
the aggregate purchase of approximately $335,000 (the "Chicago Acquisition").
The Shark Bar Chicago is a 9,000 square foot unit, of which 7,000 square feet
can be used for sales space on three floors, with a 2,000 square foot outside
adjoining deck. The main dining floor contains 130 seats plus a small bar area,
while the second floor offers the larger bar space and seating for up to an
additional 75 persons, if so required. The second floor is also able to
accommodate larger private parties and catering events. We intend to re-open the
Chicago unit by the second or third quarter 2000.

         In the summer of 1997, we acquired for $375,000, the lease and
equipment of the 6,500 square foot 826 N. La Cienega Boulevard premises,
formerly the "La Mer Restaurant" (the "Los Angeles Acquisition"). This
acquisition was financed through the proceeds of a convertible debenture and a
small bridge loan from Mr. Hinchcliffe for $105,000. The Shark Bar(R)
Restaurant Los Angeles has a main dining room with 110 seats, a lounge area
which can accommodate 30 persons and a 600 square foot garden and patio area. We
closed this unit in June of 1999 and are currently in negotiations to sell the
lease.

         In the first quarter of 1998, we acquired a lease, together with
furniture and fixtures thereon, of a 10,000 square foot, two level restaurant
located in mid-town Atlanta for a purchase price of $250,000. We opened these
premises into the fourth Shark Bar(R) Restaurant during the first quarter of
1998.

         We still believe that significant opportunities to expand company-owned
restaurants exists, and will implement an accelerated expansion strategy. We
intend to seek to develop new restaurants in geographic areas and primary
metropolitan markets that are readily receptive to our concept and which


                                       3
<PAGE>

will enable us to increase name recognition and realize improved efficiencies in
marketing, management, and purchases. In fiscal 2001 we plan to reopen Shark Bar
restaurant Chicago with an extensive "turnaround" plan that involves a focus on
operations and management training, and in fiscal 2002 we intend to open two
additional restaurants.

         Approximate costs for the Chicago unit's reopening are $250,000.
Additional expansion efforts will not begin until second or third quarter 2002.
Typically, the cost to open a unit is approximately $400,000 to $600,000. The
foregoing represents the Company's best estimate of the funds required for these
openings. This estimate is based on certain assumptions, including, primarily
that interior improvements and equipment installation can be commenced and, in
some cases, completed at projected costs. Future events, including the problems,
delays, expenses and complications frequently encountered by companies as well
as changes in economic, regulatory or competitive conditions or changes in the
Company's planned business and the success or lack thereof may make shifts in
the allocation of funds necessary or desirable. There can be no assurance that
the Company's estimates will prove to be accurate, that unforeseen expenses will
not occur, or that the Company will successfully realize its objectives.

         We intend to expand our business through the development and "branding"
of our full service restaurants, namely The Shark Bar Restaurant(R) and Mekka
Restaurant(R). We believe that our overall business objectives will be better
met through the expansion of full service units in the larger urban markets
within the United States. These large markets can accommodate 125 seat plus
establishments, which in turn will help build our cash flow and establish the
name brands of our restaurants in the important US markets.

         While pursuing our expansion program of developing a chain of
restaurants under the Shark Bar & Mekka brands, we intend to also seek to
develop strategic alliances through joint ventures, acquisitions or mergers,
augmenting our growth plan. The Company will act as principal fundraiser, and
operator for all future restaurants.

The success of the Company's planned expansion will depend upon a number of
factors, including:

     -  the cost and availability of suitable locations and the negotiation of
        acceptable leases;
     -  the ability to meet development and construction schedules;
     -  the securing or required government permits, licenses, and other
        regulatory approvals;
     -  the hiring and training of management and other personnel;
     -  the terms and availability of financing; and
     -  other general economic and business conditions.

         We will prepare for duplication of our restaurant concept and
operations by developing operating systems, training and operating manuals,
recipes and cooking procedures, menu format and new menu items, costing and
pricing standards, financing and accounting controls, quantity and quality
controls, and preventive maintenance programs.

         Our proposed expansion plans will require additional management,
operational and financial resources. Consultants will be hired if necessary.

         We have had continuing discussions with brokers, agents and landlords
regarding new sites for additional Shark Bars in major urban markets, however,
there can be no assurance that additional restaurants will be opened.



                                       4
<PAGE>

FINANCING TRANSACTIONS

         During 1997, in order to finance our acquisitions and to facilitate our
expansion strategy, we entered into various financing transactions:

         During January 1997, we issued 100,000 unregistered shares of our
common stock for an aggregate purchase price of $20,000.

         During January, 1997, we issued 100,000 unregistered shares of our
common stock and a warrant to purchase up to 10,000 shares of common stock to an
institutional investor for an aggregate purchase price of $100,000.

         During February, 1997, we borrowed $100,000 pursuant to the terms of a
promissory note bearing interest at the rate of 10%, payable semi-annually until
February 4, 1999. During February of 1999, subject to repayment terms under the
note purchase agreement we repaid $100,000 of the 1997 Notes.

         During May, 1997, we entered into a note purchase agreement, pursuant
to which we issued 8% convertible secured notes (the "Notes") to institutional
investors, in the aggregate principal amount of $350,000 together with warrants
to purchase up to 35,000 shares of common stock. The Notes bear interest at 8%
and are due on May 21, 1999. The Notes provide that the holder is entitled at
any time to convert any or all of the original principal amount of the Note into
shares of common stock. The shares of common stock underlying the Notes and the
warrants bear certain demand and "piggyback" registration rights. On June 30,
2000, the notes were converted for 864,000 shares of common stock at a
conversion price of $0.50 per share.

         On June 6, 1997, we issued 100,000 unregistered shares of our common
stock and a warrant to purchase up to 10,000 shares of common stock to an
institutional investor for an aggregate purchase price of $100,000.

         During 1997, in order to help finance our acquisitions, among other
things, Mr. Brian Hinchcliffe, our Chief Executive Officer at the time, loaned
us approximately $476,038. On June 30, 2000, $300,000 of these advances were
forgiven by the major stockholder and officer, and contributed to capital.

         During January 26, 1998, we entered into a note purchase agreement,
pursuant to which we issued 8% convertible secured notes ("1998 Notes") to
institutional investors, in the aggregate principal amount of $265,000, together
with warrants to purchase shares of common stock. The 1998 Notes provide that
the holder is entitled at any time to convert any or all of the original
principal amount of the Note into shares of common stock. The shares of common
stock underlying the 1998 Notes and the warrants bear certain demand and
"piggyback" registration rights. On June 30, 2000, $150,000 of the notes were
converted for 318,000 shares of common stock at a conversion price of $0.50 per
share for $50,000 of the notes and $0.33 per share for $100,000.

SITE SELECTION AND DESIGN

         We are seeking to locate our new restaurants in locations that offer
demographic and economic factors that can support a profitable operation. We
have established parameters with respect to "Sales vs. Investment ratios" and
"rent as a percentage of sales" that we will use in order to evaluate the
feasibility of additional sites. At this time, we intend to use the design,
methods and mode of operations developed at "The Shark Bar" and "Mekka"
restaurants in New York as models for additional sites in other locations.


                                       5
<PAGE>

RESTAURANT MANAGEMENT AND SYSTEMS

         Management. A typical unit staff consists of a general manager, an
assistant manager, one or two restaurant managers, a Head Chef and approximately
22-25 hourly employees, many of whom are part time personnel. The general
manager is responsible for the day-to-day operations of the restaurant,
including service, staffing and front of the house ("FOH") as well as back of
the house ("BOH") quality control. The head chef is responsible for food quality
and kitchen management. We intend to hire experienced managers and staff and to
motivate and retain them by providing opportunities for increased
responsibilities and advancement, as well as performance-based cash incentives.
These performance incentives are tied to sales, profitability and qualitative
measures such as mystery shoppers, who anonymously evaluate individual
restaurants.

         Each restaurant manager is required to comply with an operations manual
that contains detailed standards and specifications for all elements of
operations. We employ a vice president of operations to monitor system-wide
compliance and field supervision including duties such as regular visits to
stores, detailed inspections of quality, service and sanitation.

         Training. We strive to maintain quality and consistency in each of our
units through the careful training and supervision of personnel and the
establishment of, and adherence to, high standards relating to personnel
performance, food and beverage preparation and maintenance of facilities. We
have implemented a training program that is designed to teach new managers the
technical and supervisory skills necessary to direct the operations of its
restaurants in a professional and profitable manner. Each manager must
successfully complete a four-week training course, which includes hands-on
experience in both the kitchen and dining areas. There are prepared operations
manuals relating to food and beverage handling, preparation and service. In
addition, we will maintain a continuing education program to provide unit
managers with ongoing training and support.

         Quality Control. We maintain an emphasis on excellent customer service
enhanced by our quality control programs. We welcome comments on the quality of
service and food at units by distributing customer survey. Senior operation
managers are directly responsible for ensuring that these comments are addressed
to achieve a high level of customer satisfaction. We also engage from time to
time a third-party service whereby an anonymous customer or mystery shopper
evaluates and reports to management key elements of the restaurants experience,
including product quality, cleanliness and customer service.

         We require all appropriate personnel to participate in an independent
nationally recognized training program to ensure the sanitary and responsible
service of food and alcohol. Financial and management control is maintained
through the use of a standardized POS system.

EMPLOYEES

         As of December 31, 2000, we employed 120 persons. Of our employees, 65
are full time and 55 are employed on a part time basis. None of our employees
are covered by a collective bargaining agreement. We have not experienced any
work stoppages and consider our relationship with employees to be good.




                                       6
<PAGE>


TRADEMARK

         We filed a Trademark application with the United States Patent and
Trademark Office for The Shark Bar(R) on September 25, 1996 and for Mekka(R) on
or about October 16, 1996. We have been granted trademarks for both The Shark
Bar(R) and Mekka(R).

         In addition, The United States Patent and Trademark office has issued a
Certificate of Registration on the Supplemental Register for SOUL TO GO(R). A
trademark registered on the Supplemental Register is not considered to be
inherently distinctive but is considered to be "capable" of becoming
distinctive. Once the trademark becomes distinctive (acquired secondary
meaning), it can be transferred to the Principal Register.

TRADE SECRETS

         We have developed and currently own trade secrets with respect to its
food products, its preparation and sources. There is no assurance that
confidentiality relating to the protection of our trade secrets can or will be
obtained or that such trade secrets will afford us meaningful competitive
advantages.

COMPETITION

         The restaurant business throughout the United States, and particularly
in Manhattan (New York), is intensely competitive and involves a high degree of
risk. We believe that a large number of new restaurants open each year in the
New York city metropolitan area and the other urban markets in which we own
restaurants, a significant number of which do not succeed. Even successful
restaurants can rapidly lose popularity due to changes in customer tastes,
economic conditions, population and traffic patterns. We compete with
locally-owned restaurants and bars as well as with national and regional
restaurant chains, which have substantially greater financial and marketing
resources and longer operating histories than us. There is active competition
for management personnel and attractive commercial real estate sites suitable
for restaurants.

         In the past we have not generally incurred significant expenses for
advertising and promotion, relying instead on word-of-mouth to bring our
restaurant establishments to the attention of new customers.

FORMATION AND HISTORY

         The company was initially organized on August 23rd, 1984 in the State
of Delaware under the name Empire Ventures, Inc. On December 14, 1992, the
company entered into an ("agreement") and plan of re-organization with Soul To
Go, Inc. for 5,031,250 shares of the common stock of Empire Ventures, Inc. As a
result of the transactions consummated pursuant to the agreement, Soul to Go,
Inc. has become the wholly owned subsidiary of Empire Ventures, Inc. and the
stockholders of Soul To Go, Inc. became the owners of approximately 92% of the
issued and outstanding shares of common stock of Empire Ventures, Inc.

         Soul to Go, Inc. was a New York based holding company controlling a
group of operating subsidiaries consisting of the Shark Restaurant Corp., which
operated a 90-seat restaurant called the Shark Bar and Shark Catering Corp.,
which operated a quick service business called Soul To Go. On January 25th 1993,
Empire Ventures Inc. changed its name to STG International Inc. Subsequent to
the re-organization, STG International Inc. opened a second Soul to Go operation
in Jamaica, Queens, and


                                       7
<PAGE>

through its wholly owned subsidiary 7 West Rest. Corp. became the General
Partner of "Mekka". See "Business-General". Due to operating losses, both Soul
to Go stores were closed in 1995.

         During 1996, the company changed its name from STG International Inc.
to Soulfood Concepts, Inc., reorganized its Board of Directors, effected a
one-for-three reverse stock split and adopted an expansion campaign for 1997 and
1998.

GOVERNMENT REGULATIONS

         We are subject to various federal, state and local laws affecting our
employees and guests, our owned and leased properties and the operation of our
restaurants. The restaurants are subject to licensing and/or regulations by
various fire, health, sanitation and safety agencies in the applicable state
and/or municipality. In particular, we have adopted extensive procedures
designed to meet the requirements of applicable food handling and sanitation
laws and regulations. To date, we have not experienced any material problems
resulting from its sanitation and food handling procedures.

         Our restaurants are subject to state and local licensing and
regulations with respect to the sale and service of alcoholic beverages.
Typically, alcoholic beverage licenses must be renewed annually and may be
revoked or suspended for cause. Alcoholic beverage control regulations relate to
numerous aspects of the daily operations of the purchasing, inventory control
and the handling, storage and dispensing of alcoholic beverages. We have not
encountered material problems relating to alcoholic beverage licenses to date,
but the failure of a restaurant to obtain or retain a liquor license would
adversely affect that restaurant's operations.

         In certain states, we are subject to "dram shop" statutes, which
generally give a person injured by an intoxicated person the right to recover
damages from the establishment that wrongfully served alcoholic beverages to the
intoxicated person. We carry liquor liability coverage as part of its existing
comprehensive general liability insurance.

         We are subject to federal and state fair labor standards, statutes and
regulations that govern such matters as minimum wages, overtime, tip credits,
child labor and other working conditions. A good number of our food service
personnel are paid at rates based on applicable federal and state minimum wages.


                                       8
<PAGE>


ITEM 2.    DESCRIPTION OF PROPERTY

         The following tables sets forth certain information with respect to our
facilities currently in operation (unless otherwise noted):

<TABLE>
<CAPTION>
Name and Location              Date Opened      Restaurant Size       Seating Capacity      Lease Expiration
-----------------              -----------      ---------------       ----------------      ----------------
<S>                            <C>              <C>                   <C>                   <C>
The Shark Bar...............      11/90           2,500 sq. ft               90                   2009
New York, N.Y.
Mekka.......................      12/94           1,500 sq. ft.              65                   2002
New York, N.Y.
The Shark Bar...............       3/97           9,000 sq. ft              200                   2003(1)
Chicago, Illinois
The Shark Bar...............       9/97           6,500 sq. ft              130                   2010(2)
Los Angeles, California
The Shark Bar...............       3/98          10,000 sq. ft              255                   2007
Atlanta, Georgia
</TABLE>

(1)  Currently not operating. This lease provides two five year renewal options.
(2)  Currently not operating. This restaurant is on the market to be sold

     Our headquarters are located in an office building located in New York
City, where we lease approximately 2,500 sq. ft. The lease expires in August
2005. We believe that the space is adequate for our needs through the term of
the lease.

ITEM 3.   LEGAL PROCEEDINGS

         We are not a party to any pending material legal proceeding.

ITEM 4 SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of our shareholders during the fourth
quarter ended December 31, 2000.




                                       9
<PAGE>

                                     PART II

ITEM  5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

                  On June 12, 1997 our common stock commenced trading on the OTC
Bulletin Board under the symbol "SLFD". Set forth below are the range of
reported high and low bid and ask quotations for our common stock for each of
the quarters indicated as reported on the OTC Bulletin Board. All
over-the-counter market price quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission, and may not necessarily represent
actual transactions.

<TABLE>
<CAPTION>
         2000                           HIGH                       LOW
         ----                           ----                       ---
         <S>                            <C>                        <C>
         1st Quarter                    $.35                       $.30
         2nd Quarter                    $.40                       $.35
         3rd Quarter                    $.75                       $.40
         4th Quarter                    $.25                       $.15

         1999                           HIGH                       LOW
         ----                           ----                       ---
         1st Quarter                    $1.06                      $.56
         2nd Quarter                    $.75                       $.37
         3rd Quarter                    $.62                       $.12
         4th Quarter                    $.75                       $.12
</TABLE>

         Holders. As of December 31, 2000, to our knowledge, we had
approximately 69 shareholders of record of our Common Stock

         Dividends. We have not paid dividends on our common stock since its
inception and have no intention to pay any dividends to our shareholders in the
foreseeable future. We currently intend to reinvest earnings, if any, in the
development and expansion of its business. The declaration of dividends in the
future will be at the election of the Board of Directors, and will depend upon
our earnings, capital requirements and financial position, plans for expansion,
general economic conditions and other pertinent factors.

         During 2000 we issued approximately 269,000 shares of common stock
pursuant to and in accordance with our 1997 stock incentive plan. We also issued
shares of common stock upon the conversion of previously issued Notes. See
"Business-Financing Transactions." The transactions were private transactions
not involving a public offering and were exempt from the registration provisions
of the securities act pursuant to Sec 4 (2) thereof. At the time of issuance,
all of the foregoing securities of our common stock were deemed to be restricted
securities for purposes of the securities act, and the certificates representing
the securities bore or will bear legends to that effect.

         Also see "Business -- Financing Transactions".



                                       10
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND REVIEW
RESULTS OF OPERATIONS.

GENERAL
         The following discussion and analysis of Soulfood Concepts, Inc. (the
"Company"), should be read in conjunction with the Company's Financial
Statements and Notes thereto included elsewhere in the Form 10-KSB.

         As of December 31, 2000, we operated three full service restaurants in
locations in New York City, and Atlanta. The Company is engaged in developing
full service "Soul Food" restaurants in the major urban markets of the United
States. We have traditionally funded our growth through sales of equity,
convertible notes and debt financing

         Our Los Angeles and Chicago units were closed in June and July 1999
respectively, primarily due to unsatisfactory management performance and
subsequent decline in sales. We have entered into an escrow agreement with a
prospective buyer and hope to complete the sale of the Los Angeles lease within
the next 60 days. We will engage a turnaround plan to reopen the Chicago
location, which showed high receptivity to the concept and produced overwhelming
initial trial. Chicago will be reopened in late fall 2001. The flagship Shark
Bar(R) and Mekka(R) Restaurants are located in Manhattan, New York. The third
operating unit, a Shark Bar Restaurant, is located in Atlanta, Georgia.

RESULTS OF OPERATIONS

Comparison of Years Ended December 31, 2000 and 1999

         Revenues. Revenue was generated from the sale of food and beverages for
the year ended December 31, 2000 and 1999, from restaurant units. Revenues
decreased $1,417,587 from $7,465,231 for the year ended December 31, 1999 to
$6,047,643 for the year ended December 31, 2000 primarily due to the closing of
the Chicago and Los Angeles and the corresponding loss of revenue.

         Cost of Revenues. We incurred cost of revenues from continuing
operations of $1,592,948 for the year ended December 31, 2000 and $2,234,650 for
the year ended December 31, 1999. As a percentage of net revenues, cost of
revenues from continuing operations was 26.3% for year ended December 31, 2000
and 30% for the year ended December 31, 1999. This marked decrease in cost of
revenues was a result of a combination of increased training of management and
kitchen staff and more effective purchasing strategy.

         Gross Profit. We had gross profit from continuing operations of
$4,454,696 for the year ended December 31, 2000 and $5,230,581 for the year
ended December 31, 1999. As a percentage of revenues, gross profit from
continuing operations was 73.6% for the year ended December 31, 2000 and 70% for
the year ended December 31, 1999.

         Use of EBITDA. This discussion includes, among other factors, an
analysis of operating income before depreciation and amortization ("EBITDA") in
order to eliminate the effect on the operating performance of the business of
significant amounts of amortization. Financial analysts generally consider
EBITDA to be an important measure of comparative operating performance for the
business, and when used in comparison to debt levels or the coverage of interest
expense, as a measure of liquidity. However, EBITDA should be considered in
addition to, not as a substitute for, operating income, net income, cash flow
and other measures of financial performance and liquidity reported in
accordance with generally accepted accounting principles. For the year ended
December 31, 2000 we realized EBITDA income of $112,079 or 1.8% of revenue
compared to EBITDA loss of $352,661 or (4.7%) of revenue for the year ended
December 31, 1999.

         Restaurant Labor and Related Costs. Labor expenses and the related
taxes, are restaurant level labor costs and they decreased $786,947 or 30% to
$1,787,363 for the year ended December 31, 2000 from $2,574,310 for the period
ended December 31, 1999. This decrease is due primarily to the closing of the
Chicago and the Los Angeles units. As a percentage of revenue labor costs
decreased to 29.5% for year ended December 2000 compared to 34.4% for year ended
December 1999.



                                       11
<PAGE>

         Other Operating Expenses. Other operating expenses consists of,
occupancy costs, i.e. rent, insurance, licenses and utilities. Other operating
costs $409,203 or 19.6% to $1,672,844 for the year ended December 31, 2000
compared to $2,082,047 for the year ended December 31, 1999. This overall
decrease was principally attributable to the closing of the Chicago and Los
Angeles units and the corresponding reduction in operations and expenses. As a
percentage of revenues restaurant operating expenses decreased slightly to 27.6%
for the year ended December 31, 2000 from 27.8% from the year ended December 31,
1999.

         General and Administrative Expense. General and administrative expenses
consist of restaurant corporate support costs, travel, manager training and
field supervision. We incurred general and administrative expenses from
continuing operations of $882,409 for the year ended December 31, 2000 compared
to $926,885 for the year ended December 31, 1999. As a percentage of revenues,
general and administrative expense for the year ended December 31, 2000 were
increased slightly to 14.5% compared to 12.4% for the year ended December 31,
1999. This increase was due primarily to the field support efforts given to the
Atlanta unit and the travel and relocation costs associated with this task.

         Depreciation and Amortization Expense. Depreciation and amortization
expense decreased to $157,365 for the year ended December 31, 2000 from $288,039
for the year ended December 31, 1999 as a result of the closing of the two
units. As a percentage of revenues depreciation and amortization were 2.6% for
year ended December 31, 2000 and 3.8% for year ended December 31, 1999.

         Interest Income, Other (Expense) Income and Income Taxes. We had
interest expense of $142,548 for year ended December 31, 2000 compared to
interest expense of $165,127 for the year ended December 31, 1999. Interest
expense for year ended December 31, 2000 and 1999 related primarily to long-term
notes. On June 30, 2000 we converted Notes in the aggregate amount of $350,000
for 864,000 shares of common stock at a conversion price of $0.50 per share
and $150,000 for 318,000 shares of common stock at a conversion price of
$0.50 per share for $50,000 of the notes and $0.33 per share for $100,000
of the notes. We incurred a debt conversion expense of $601,512 in year ended
December 31, 2000 as a result of these conversions. (See "Notes to Consolidated
Financial Statements -- Note 10 -- Convertible Notes Payable").


Comparison of Years Ended December 31, 1999 and 1998

         Revenues. During the year ended December 31, 1999 we recorded revenues
of $7,465,231 which included revenues of $1,452,027 from the fourth quarter. We
incurred a net loss of $888,549 for the year ending December 31, 1999 or $.22
per share. During the year ended December 31, 1998, we recorded net sales of
$9,689,207, which included net sales of $2,392,307 from the fourth quarter. We
incurred a net loss of $80,572 for the year ending December 31, 1998 or $.02 per
share.

         Cost of Sales. During the year ended December 31, 1999, we recorded a
Cost of Sales, primarily food and beverage, of $2,234,650 or 29.9% of sales,
increasing from 29.4% Cost of Sales figure for 1998.

         Gross Profit. Our Gross Profit decreased from $6,839,165 for the year
ending December 31, 1998 to $5,230,581 for the year ending December 1999. This
decrease is directly related to the closing of two of its units in June and July
of 1999.

         Restaurant Operating Expenses. Our restaurant operating expenses for
the year ending December 31, 1999 were $ 4,656,363 compared to $5,565,041 for
1998, which represents 62% and 57% respectively. This decrease is directly
related to the closing of two of its units during 1999, and the related costs
carried as a result of these closings.



                                       12
<PAGE>

         General and Administrative Expenses. Our general and administrative
expenses ("G&A") increased from $605,013 6.2 % of sales in 1998 to $926,879 or
12.4% or of sales in 1999. In 1999 we incurred additional legal and other
expenses in our restructuring strategy, the hiring, training and retraining of
our management personnel, and the closing of our two units.

 FINANCIAL CONDITION AND LIQUIDITY

         Cash and Cash Equivalents as of December 31, 2000 increased by $74,144
to $83,360 from $9,216 as of December 31, 1999. Overall, Total Current Assets
increased by $14,430 as of December 31, 2000 to $175,948 from $161,518 as of
December 31, 1999. The increase in cash and all other assets was primarily due
the increase in cash flow from operations.

         Our current liabilities decreased $409,291 as of December 31, 2000 to
$1,523,705 from $1,932,996 as of December 31, 1999. This decrease was due
primarily to the reduction of current portion of long-term debt as a result an
exchange agreement for conversion these Notes to an equity interest in the
company.

         Accounts payable expenses are primarily due to the closing of the
Chicago and the Los Angeles units. Arrangements have been made with vendors to
settle outstanding amounts or, in the case of Chicago to wait until the
reopening of the store, to work out terms and payment. In all cases, there has
been no action taken against the company and there have been no adverse effects
on operations.

         Accrued expenses include payroll, sales, other taxes with penalties and
interest, professional fees and other operating expenses. A settlement for all
tax liabilities is being negotiated with each taxing authority relative to the
claim. All outstanding payable are being negotiated and/or paid down from
operating funds.

         For the year ended December 31, 2000, net cash provided by operating
activities increased to $168,303 from $164,832 for the year ended December 31,
1999. This increase was primarily due to an decrease in net loss of $834,585 for
the year ended December 2000 compared to a loss of $888,549 for the same period
in 1999. There was a significant decrease in cash used in investing activities
as of December 2000, $10,525 from $56,065 for period ended December 31, 1999
because there were no material property and equipment purchases during the year
ended December 2000 as compared with the previous year. Net cash used in
financing activities in 1999 changed from $131,872 to $83,634 in 2000 primarily
due to the repayment of $100,000 of long-term debt in 1999.

         The effect of inflation has not been a factor upon either the
operations or the financial condition of the company. Our business is not
seasonal in nature.

Forward-looking Information

         Statements contained in this Form 10-KSB that are not historical facts,
including, but not limited to, statements found in this Item 6, Management's
Discussion and Analysis of financial Condition and Results of Operations, are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 that involve a number of risks
and uncertainties. The actual result of the future events described in this Form
10-KSB could differ materially from those stated in such forward-looking
statements. Among the factors that could cause actual results to differ
materially are: our ability to operate existing restaurants profitably, changes
in economic conditions are concentrated, increasingly intense competition in the
restaurant industry,


                                       13
<PAGE>

increases in food, labor, and employee benefits and similar costs, as well as
the risks and uncertainties discussed in this form 10-KSB


 ITEM 7  FINANCIAL STATEMENTS.

         The information required under this item is set forth on pages F-1
through F-12 of this Annual Report on Form 10-KSB.

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


                                      None.

























                                       14
<PAGE>

                                    PART III

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

         The name, age, principal occupation, other business affiliations and
other information (relating to the past five or more years) concerning each
director, and, where applicable, the year each was first elected a director of
the company, are set forth below:

         MARK CAMPBELL, 40, was appointed President, CEO and Director on
November 3, 1999. As the current CEO and President of SoulFood Concepts, Inc.,
Mark Campbell oversees operations of the Shark Bar and Mekka restaurants, a
national chain in five locations across the United States.

Campbell's foray into the restaurant business began in 1996 when he opened the
Soul Cafe', a 125 seat upscale casual dining restaurant in midtown Manhattan
with partners actor Malik Yoba, and restaurateur Michael Vann. Mr. Campbell was
a managing partner in the venture.

Prior to his entrance into the restaurant business, Campbell had an eight-year
career as a Wall Street investment banker. He began his career in finance in
1989 and focused on private and public venture capital projects in the equities
markets, primarily with start-up and small to mid-sized companies in the high
technology and entertainment industries.

In 1995, Campbell parlayed his valuable banking experience from Wall Street, and
successfully formed Kova Capital, LLC., a venture capital concern that provided
strategic advisory services to entrepreneurs, and financed properties in the
entertainment industry.

         BRIAN HINCHCLIFFE, Director, 44, was our financial founder in 1990 and
assumed management responsibility in 1995. Mr. Hinchcliffe was a Vice President
at Goldman Sachs for ten years before launching an entrepreneurial career. Mr.
Hinchcliffe also serves as a member of the Board of Directors of Jordex
Resources, Inc.

         MICHAEL VANN, 43 , Director , was our co-founder in 1990 and has served
as a director since 1992. He also has served as our Vice President from 1992
through November 1996. Mr. Vann graduated from Western Michigan University in
April 1979, earning a Bachelor's degree in marketing and retailing.

         KEITH T. CLINKSCALES, 36, has served as one of our directors since
January 1997. Mr. Clinkscales is currently the Chairman and Chief Executive
Officer of Vanguard Media. Mr. Clinkscales was the former President and CEO of
VIBE Ventures, the urban music magazine and television show, since its inception
in September 1993. Mr. Clinkscales is a magna cum laude graduate of Florida A&M
University. He was the first student speaker for the prestigious School of
Business and Industry Forum series, and the President of Kappa Alpha Psi
fraternity.



Compliance with Section 16(a) of the Exchange Act

None of the directors have filed timely reports under Sec. 16(a) of the Exchange
Act. The Company understands that it is the intention of such directors to file
these reports promptly.




                                       15
<PAGE>

ITEM 10:  EXECUTIVE COMPENSATION

(a)      Cash Compensation.

         The following table sets forth all compensation in excess of $100,000
awarded to, earned by or paid to our Chief Executive Officer and the four other
most highly compensated executive officers (the "named executive officers") for
the years ended December 31, 2000, 1999, and 1998.


                           SUMMARY COMPENSATION TABLE

                                                     Fiscal
Name and Principal position                          Year     Annual   Salary
---------------------------                          ----     ---------------
Mark Campbell                                        2000        $75,000
President and Chief Executive Officer

                                                     1999              0
                                                     1998              0


Directors' Fee and Other Remuneration

                  Directors received no compensation for services as a member of
the Board of Directors or of any committee of the Board of Directors in respect
of 1999. However, at this time, we have established a stock option plan which
will allow both directors, employees and consultants to participate.

1997 Stock Incentive Plan
         Administration and Eligibility. We have adopted the 1997 Stock
Incentive Plan (the "1997 Plan") for officers, directors, employees, and
consultants of the company or any of our subsidiaries. The 1997 Plan, as
originally adopted, authorizes the issuance of up to 500,000 shares of common
stock upon the exercise of stock options or in connection with the issuance of
restricted stock. The 1997 Plan authorizes the granting of stock options and
restricted stock to employees, officers, directors and consultants of the
company and our subsidiaries and non-discretionary automatic awards of stock
options to our non-employee directors. The 1997 Plan provides for its
administration by either a committee of two or more outside directors or the
Board of Directors (the "Administrator"). In general, the Administrator, in its
sole discretion, determines which eligible employees, officers, directors and
consultants of the Company and our subsidiaries may participate in the 1997 Plan
and the type, extent and terms of the equity-based awards to be granted to them.
In the event of a change in control, as defined in the 1997 Plan, all options
will become immediately vested and exercisable and the restrictions with regard
to restricted stock will lapse unless the Administrator provides otherwise.

         Options. Options granted to employees may either be ISOs or non-ISOs.
Each option has a maximum term of ten years from the date of the grant, subject
to early termination. The Administrator may determine the exercise price
provided that such price may not be less than the fair market value of the
common stock on the date of grant. At the discretion of the Administrator, the
exercise price of the


                                       16
<PAGE>

options may be paid in cash, by tendering of shares of common stock having a
fair market value equal to the exercise price of such option.

         Restricted Stock. The Administrator may make grants of restricted stock
for cash or other consideration, as the Administrator determines. The number of
shares of common stock granted to each grantee will be determined by the
Administrator. Grants of restricted stock will be made subject to such
restrictions and conditions as the Administrator may determine in its sole
discretion, including periods of restriction on transferability (the
"Restriction Period") during which time the grant may be required to be
deposited with an escrow agent, if the Administrator so determines. During the
Restriction Period, if any, a grantee may be given the right, at the discretion
of the Administrator, to vote the shares subject to the grant and the right to
receive any regular cash dividends paid thereon. If a grantee's employment or
service with us terminates, or in the event of the occurrence of certain other
events determined by the Administrator, the grant will terminate with respect to
all shares as to which the restrictions have not lapsed and those shares must be
returned to us.

         Amendment. The Board has the right to amend, suspend or terminate the
1997 Plan at any time, provided, however, that unless approved by our
stockholders in general, no amendment or change in the 1997 Plan will be
effective: (i) materially increasing the total number of shares of common stock
which may be issued under the 1997 Plan; (ii) changing the minimum option
exercise price; (iii) extending the term of the 1997 Plan or the period during
which any option may be granted or exercised; or (iv) altering in any way the
class of persons eligible to participate in the 1997 Plan.

ITEM 11:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF MANAGEMENT

         The following table sets forth certain information, as of December 31,
2000, regarding the beneficial ownership of our common stock, which is our only
class of outstanding voting securities, by each shareholder who owns more than
5% of outstanding shares, by each director and nominee for election as director,
by each of our named executive officers and by all of our directors and
executive officers as a group. The information set forth in the table and
accompanying footnotes has been furnished by the named beneficial owners . Since
the table reflects beneficial ownership determined pursuant to the applicable
rules of the Securities and Exchange Commission, the information is not
necessarily indicative of beneficial ownership for any other purpose.

<TABLE>
<CAPTION>
            Name and Address           Amount and Nature of
          of Beneficial Owner         Beneficial Ownership(1)(2)        Percent of Class
         <S>                           <C>                              <C>
         Brian A. Hinchcliffe                1,052,523                         21%
         Mark Campbell                         400,000                        7.9%
         Michael D. Vann                       158,209                        3.1%
         Keith Clinkscales                     100,000                        1.9%
         Aton Ventures                         540,000                       10.7%
         Clarion Finanz AG                     424,000                        8.4%
         US Global Investors (Guernsey)LTD     318,000                        6.3%

            All Executive Officers and
            Directors as a group
            (4 persons)                      1,710,732                         34%

</TABLE>


                                       17
<PAGE>

(1)  Beneficial ownership is determined in accordance with the rules of the
     Securities and Exchange Commission and includes voting and investment power
     with respect to the shares shown as beneficially owned. Shares of common
     stock subject to options currently exercisable or exercisable within 60
     days are deemed outstanding for computing the percentage ownership of the
     person holding such options, but such shares are not deemed outstanding for
     computing the percentage ownership of any other person.
(2)  The amount of ownership takes into account the reverse stock split of our
     outstanding common stock as of November 6, 1996.

ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Pursuant to an arrangement between the company and Hinchcliffe, during
the period of 1993 through end of 1996, we borrowed in excess of $285,266 from
Hinchcliffe at an interest rate of 10% per annum. On December 30, 1996 it was
determined by our Board of Directors to be in our best interest that we accept
Hinchcliffe's offer to (i) convert $125,000 of said loans into 125,000 shares of
Series A Convertible Preferred Stock, which stock contains the designations,
rights and preferences which were filed in the Certificate of Designations with
the Secretary of State of the State of Delaware and (ii) to convert an
additional $80,000 of loans into 400,000 shares of common stock. See "Financial
Statements and Notes Thereto."

                  In addition, during January 1997, in order to finance our
acquisitions, among other things, Mr. Hinchcliffe loaned us approximately
$476,038, which loans bear interest at the rate of 10% per annum. See "Business
- Financing Transactions." On June 30, 2000, $300,000 of these advances were
forgiven by the major stockholder and officer, and contributed to capital.


                                       18
<PAGE>


ITEM 13.              EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS.

THE FOLLOWING DOCUMENTS HERETOFORE FILED BY US WITH THE SECURITIES AND EXCHANGE
COMMISSION ("SEC") ARE HEREBY INCORPORATED BY REFERENCE:

Exhibit No.     Document

2.1  (2)        Agreement and plan of Reorganization

3.1  (1)        Certificate of Incorporation

3.2  (1)        By-Laws of the Company

3.3  (4)        Amended Certificate of Incorporation

3.4  (4)        Amended and Restated By-Laws of the company

3.5  (4)        Amended Certificate of Incorporation

3.6  (4)        Certificate of Designation relating to the Series A Convertible
                Preferred Stock

10.1 (1)        Escrow Agreement between the Company and New Jersey National
                Bank

10.2 (2)        Warrant Agreement between the Company and Interest Transfer
                Co., Inc.

10.3 (3)        Lease Agreement relating to the New York Shark Bar Restaurant

10.4 (3)        Sublease Agreement for Mekka

10.5 (5)        Warrant Agreement by and among Soulfood Concepts, Inc. and
                Commonwealth Associates

10.6 (5)        Note Purchase Agreement, dated May 21, 1997, by and among
                Soulfood Concepts, Inc., Aton Ventures Fund, Ltd. and Aton
                Balanced Fund Ltd.

10.7 (5)        Agreement, dated May 20, 1999 by and among Soulfood Concepts,
                Inc., Aton Ventures Fund, Ltd. and Aton Balanced Fund Ltd.

10.8 (5)        $250,000.00 10% Convertible Secured Note, dated May 20, 1999,
                by and among Soulfood Concepts, Inc. and Roycan & Co.

10.9 (5)        $100,000.00 10% Convertible Secured Note, dated May 20, 1999,
                by and among Soulfood Concepts, Inc. and Roycan & Co.

10.10 (5)       Form of Warrant Agreement, dated May 20, 1999, issued by
                Soulfood Concepts, Inc.

10.11 (5)       Stock Purchase Agreement, dated June 6, 1997, by and among
                Soulfood Concepts, Inc. and Clarion Finanz AG

10.12 (5)       Warrant Agreement, dated June 6, 1997, by among Soulfood
                Concepts, Inc. and Clarion Finanz AG

10.13 (5)       Note Purchase Agreement, dated January 26, 1998, by and among
                Soulfood Concepts, Inc. and the purchaser parties thereto

10.14 (5)       Form of 8% Convertible Secured Note, dated January 26, 1998

10.15 (5)       Form of Warrant Agreement, dated January 26, 1998, issued by
                Soulfood Concepts, Inc.

21 (5)          Subsidiaries of the Registrant

(1)  Incorporated by reference from registrants registration statements on Form
     S-18, File No. 22-382321- N.Y

(2)  Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the year ended December 31, 1992.

(3)  Incorporated by reference to the Company's Quarterly Report on Form for the
     quarter ended September 30, 1994.

(4)  Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the year ended December 31, 1996.

(5)  Incorporated by reference to the Company's annual report on Form 10-KSB/A
     for the year ended December 31, 1999.

     (b) REPORTS ON FORM 8-K. The Company did not file any Current Reports on
     Form 8-k during the fourth quarter ended December 31, 1999.


                                       19
<PAGE>

                                   Signatures

In accordance with section 13 or 15(d) of the Exchange act, the registrant
caused this report to be signed on its' behalf by the undersigned, thereunto
duly authorized.

                                Soulfood Concepts Inc.

Date: April 13, 2001             By: /s/ Mark Campbell
                                    ------------------------------------------
                                    Mark Campbell, Chief Executive Officer
                                    and President

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.




Signature and Title                                              Date





/s/ Mark Campbell                                            April 13, 2001
---------------------------
Mark Campbell, Chief
Executive Officer, President,
Director and Accounting Officer



/s/ Brian A. Hinchcliffe                                     April 13, 2001
-----------------------------------------
Brian A. Hinchcliffe, Director



/s/ Michael D. Vann                                          April 13, 2001
------------------------------------------------
Michael D. Vann, Director




                                                             April, 2000
--------------------------------------------
Keith Clinkscales, Director



                                       20


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999





                                INDEX                                   PAGE

Independent auditors' report                                              1


Consolidated balance sheets                                             2 - 3


Consolidated statements of operations                                   4 - 5


Consolidated statement of stockholders' equity (deficit)                  6


Consolidated statements of cash flows                                   7 - 8


Notes to consolidated financial statements                              9 - 24






<PAGE>

                          INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
SOULFOOD CONCEPTS, INC.

We have audited the accompanying consolidated balance sheets of SOULFOOD
CONCEPTS, INC. AND SUBSIDIARIES as of December 31, 2000 and 1999 and the related
consolidated statements of operations, stockholders' deficit, 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 SOULFOOD CONCEPTS,
INC. AND SUBSIDIARIES as of December 31, 2000 and 1999 and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring net losses, negative
working capital, stockholders' capital deficiency and its limited capital
resources raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 1. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


                                        MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
                                        Certified Public Accountants

New York, New York
March 26, 2001


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS




<TABLE>
<CAPTION>
                                                                              December 31,
                                                               -----------------------------------
                                                                     2000                  1999
                                                               ---------------        ------------
<S>                                                             <C>                    <C>
      ASSETS
CURRENT ASSETS
   Cash and cash equivalents                                    $     83,360           $     9,216
   Accounts receivable                                                 2,060                56,894
   Inventory                                                          67,942                69,120
   Prepaid expenses and other current assets                          22,586                26,288
                                                               -------------         -------------

      TOTAL CURRENT ASSETS                                           175,948               161,518


PROPERTY AND EQUIPMENT, net of accumulated
 depreciation of $1,563,425 and $1,406,060 respectively            1,301,196             1,448,036


SECURITY DEPOSITS                                                    103,374                90,874
                                                                ------------        --------------

      TOTAL ASSETS                                                $1,580,518           $ 1,700,428
                                                                  ==========           ===========
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.

                                      - 2 -

<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS



<TABLE>
<CAPTION>
                                                                         December 31,
                                                                 ---------------------------
                                                                       2000         1999
                                                                 --------------- -----------
<S>                                                              <C>             <C>
         LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
   Bank overdraft                                                $           -   $    60,849
   Accounts payable                                                    545,118       404,339
   Accrued Expenses                                                    831,892       821,113
   Obligation under capital lease                                       31,695        31,695
   Current portion of long-term debt                                   115,000       615,000
                                                                 -------------   -----------

      TOTAL CURRENT LIABILITIES                                      1,523,705     1,932,996

DUE TO RELATED PARTY                                                   580,680       878,383

OBLIGATIONS UNDER CAPITAL LEASE - LONG-TERM                                761        32,376

LONG-TERM DEBT                                                               -             -
                                                                 -------------   -----------

      TOTAL LIABILITIES                                              2,105,146     2,843,755
                                                                  ------------   -----------

COMMITMENTS AND CONTINGENCIES                                                -            -

MINORITY INTEREST                                                      126,630        81,392
                                                                 -------------   -----------

STOCKHOLDERS' DEFICIT
   Common stock, par value $.003; authorized
    14,500,000 shares; issued and outstanding
    5,268,177 and 3,998,177 shares, respectively                        15,805        11,995

   Additional paid-in capital                                        2,435,152       980,949

   Accumulated deficit                                              (3,099,015)   (2,217,663)

   Less cost of treasury stock - 10,000 common
    Shares in 2000                                                      (3,200)            -
                                                                 -------------   -----------

      TOTAL STOCKHOLDERS' DEFICIT                                     (651,258)   (1,224,719)
                                                                 -------------   -----------

      TOTAL LIABILITIES AND STOCKHOLDERS'
       DEFICIT                                                     $ 1,580,518   $ 1,700,428
                                                                   ===========   ===========
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.

                                     - 3 -


<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                     For The Year Ended
                                                                                          December 31,
                                                                           -----------------------------------
                                                                                 2000                  1999
                                                                           ---------------       -------------


<S>                                                                          <C>                   <C>
SALES                                                                        $ 6,047,643           $ 7,465,231

COSTS AND EXPENSES
   Cost of sales                                                               1,592,948             2,234,650
   Restaurant labor and related costs                                          1,787,363             2,574,310
   Depreciation and amortization of restaurant
    property and equipment                                                       157,365               288,039
   Other operating expenses                                                    1,672,844             2,082,047
                                                                            ------------          ------------
      Total restaurant operating expenses                                      5,210,520             7,179,046
                                                                            ------------          ------------

GENERAL AND ADMINISTRATIVE EXPENSES                                              882,409               926,885
                                                                           -------------         -------------

LOSS FROM OPERATIONS                                                             (45,286)             (640,700)
                                                                           -------------         --------------

OTHER EXPENSES
   Interest expense                                                              142,548               165,127
   Debt conversion expense                                                       601,513                     -
   Loss on abandonment of assets                                                       -                47,165
                                                                           -------------        --------------
      Total other expense                                                        744,061               212,292

LOSS BEFORE INCOME TAXES,
 AND MINORITY INTEREST                                                          (789,347)             (852,992)

PROVISION FOR INCOME TAXES                                                             -                     -
                                                                           -------------  --------------------

LOSS BEFORE MINORITY INTEREST                                                   (789,347)             (852,992)

MINORITY INTEREST IN THE INCOME OF CONSOLIDATED
   SUBSIDIARY                                                                    (45,238)              (35,557)
                                                                           -------------        --------------

NET LOSS                                                                   $    (834,585)       $     (888,549)
                                                                           =============        ==============
</TABLE>




The accompanying notes are an integral part of the consolidated financial
statements.

                                      - 4 -

<PAGE>






                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                              For The Year Ended
                                                   December 31,
                                    -----------------------------------
                                        2000                  1999
                                    -------------         -------------
LOSS PER COMMON SHARE
    BASIC AND DILUTED:
       Loss per common share           $(.18)                 $(0.22)
                                       =====                  ======









The accompanying notes are an integral part of the consolidated financial
statements.

                                      - 5 -


<PAGE>




                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT


<TABLE>
<CAPTION>
                                                    Common Stock           Additional
                                               --------------------         Paid-in        Accumulated
                                               Shares        Amount         Capital           Deficit
                                               ------        ------        ----------      -----------
<S>                                           <C>           <C>            <C>            <C>

Balance - December 31, 1998                   3,998,177     $  11,995      $ 980,949      $(1,264,129)

Partner Distributions                                 -             -              -          (64,985)

Net loss                                              -             -              -         (888,549)
                                             ----------     ---------      ---------      -----------

Balance - December 31, 1999                   3,998,177        11,995        980,949       (2,217,663)

Issuance of Common Stock                      1,270,000         3,810      1,454,203                -

Purchase of Treasury Stock                            -             -              -                -

Partner Distributions                                 -             -              -          (46,767)

Net loss                                              -             -              -         (834,585)
                                             ----------     ---------      ---------      -----------

Balance - December 31, 2000                   5,268,177   $    15,805     $2,435,152      $(3,099,015)
                                              =========   ===========     ==========      ===========

<CAPTION>


                                                                               Total
                                              Treasury Stock               Stockholders'
                                           Shares         Amount              Deficit
                                       ------------   --------------       -------------
<S>                                                       <C>           <C>

Balance - December 31, 1998                    -          $        -       $  (271,185)

Partner Distributions                          -                   -           (64,985)

Net loss                                       -                   -          (888,549)
                                          -------         ----------         ---------

Balance - December 31, 1999                    -                   -        (1,224,719)

Issuance of Common Stock                       -                   -         1,458,013

Purchase of Treasury Stock                10,000              (3,200)           (3,200)

Partner Distributions                          -                   -           (46,767)

Net loss                                       -                   -          (834,585)
                                          ------          ----------         ---------

Balance - December 31, 2000               10,000          $   (3,200)      $  (651,258)
                                          ======           =========        ==========
</TABLE>






The accompanying notes are an integral part of the consolidated financial
statements.

                                      - 6 -



<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                For The Year Ended
                                                                                                   December 31,
                                                                                    -----------------------------------

                                                                                          2000                  1999
                                                                                    ---------------       -------------
<S>                                                                                   <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                                           $  (834,585)          $  (888,549)
   Adjustments to reconcile net loss to
    Net cash provided (used) by operating activities:
      Depreciation and amortization                                                       157,365               288,039
      Loss attributed to minority interest                                                 45,238                35,557
      Debt conversion                                                                     601,513                     -
      Loss on abandonment of equipment                                                          -                47,165
      (Increase) Decrease in:
      Accounts receivable                                                                  54,834                (7,090)
      Inventory                                                                             1,178                51,655
      Prepaid expenses and other current assets                                             3,702                 4,285
      Other assets                                                                        (12,500)                    -
      (Decrease) Increase in:
      Accounts payable and accrued expenses                                               151,558               633,770
                                                                                      -----------           -----------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                                 168,303               164,832
                                                                                      -----------           -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                                                     (10,525)             (117,929)
   Disposition of fixed assets                                                                  -                61,864
                                                                                      -----------           -----------
NET CASH USED BY INVESTING ACTIVITIES                                                     (10,525)              (56,065)
                                                                                      -----------           -----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Bank overdraft                                                                         (60,849)              (76,976)
   Repayment of debt                                                                            -              (101,826)
   Repayment of capital leases                                                            (31,615)              (19,353)
   (Decrease) increase in due to related party                                           (297,703)              131,268
   Partner distributions                                                                  (46,767)              (64,985)
   Increase in common stock                                                                   264                     -
   Increase in additional paid-in capital                                                 356,236                     -
   Purchase of treasury stock                                                              (3,200)                    -
                                                                                      -----------           -----------

NET CASH (USED) BY FINANCING ACTIVITIES                                                   (83,634)             (131,872)
                                                                                      -----------           ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                       74,144               (23,105)

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                                               9,216                32,321
                                                                                      -----------           -----------

CASH AND CASH EQUIVALENTS - END OF YEAR                                               $    83,360           $     9,216
                                                                                      ===========           ===========

The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>

                                      - 7 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS




<TABLE>
<CAPTION>
                                                                     For The Year Ended
                                                                        December 31,
                                                          ----------------------------------

                                                               2000                  1999
                                                          --------------       -------------

<S>                                                       <C>                   <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the year for:
      Interest expense                                    $     70,271          $     69,060
                                                          ============          ============
      Income taxes                                        $     12,738         $       6,130
                                                          ============         =============
</TABLE>



NON-CASH INVESTING AND FINANCING ACTIVITIES:

December 31, 2000
On June 30, 2000, several notes payable to outside parties (see Notes 10 and 11)
were converted to 1,182,000 shares of stock.

On December 31, 2000, warrants were exercised in exchange for a payable of
188,000 shares of common stock.

























The accompanying notes are an integral part of the consolidated financial
statements.

                                      - 8 -

<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

         a)       Nature of Operations
                  The accompanying consolidated financial statements include the
                  accounts of Soulfood Concepts, Inc. ("the Company"), organized
                  under the laws of the state of Delaware on December 14, 1992
                  and its subsidiaries. The Company operates restaurants in New
                  York, NY, Los Angeles, CA, Chicago, IL and Atlanta, GA,
                  specializing in Southern cuisine (see Note 15):

                  1)       Shark Restaurant Corp. ("SRC"), incorporated under
                           the laws of New York on June 7, 1990 (owned 100% by
                           the Company);

                  2)       Shark Restaurant California, Inc. ("LA"),
                           incorporated under the laws of California on June 23,
                           1997 (owned 100% by the Company); ceased operations
                           in June 1999.

                  3)       Affair Restaurant, Inc. ("Chicago"), d/b/a Shark Bar
                           Restaurant Chicago, purchased on January 10, 1997
                           (owned 100% by the Company); temporarily ceased
                           operations in July 1999.

                  4)       Shark Bar, Inc. ("Atlanta"), incorporated under the
                           laws of Georgia on January 29, 1998 (owned 100% by
                           the Company);

                  5)       7 West Restaurant Corp. ("7 West"), incorporated
                           under the laws of New York on February 1, 1994 (owned
                           100% by the Company);

                  6)       Avenue A Restaurants Associates, L.P. ("Avenue A"),
                           organized as a limited partnership under the laws of
                           New York on September 22, 1994 (owned 62% by 7 West);

                  7)       Shark Catering Corp. ("Catering"), incorporated under
                           the laws of New York on May 14, 1992 (owned 100% by
                           the Company) - currently inactive; and

                  8)       TWS Restaurant Corp. ("TWS"), incorporated under the
                           laws of New York on May 1, 1995 (owned 100% by the
                           Company) - currently inactive.

                  All significant intercompany accounts and transactions have
                  been eliminated in consolidation.



                                      - 9 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (Continued)

         b)       Basis of presentation
                  The accompanying consolidated financial statements have been
                  prepared assuming the Company will continue as a going
                  concern. As of December 31, 2000, the Company has a working
                  capital deficit of $1,347,757 and an accumulated deficit of
                  $3,099,015. Additionally, the Company has defaulted on certain
                  notes; however, the note holders have agreed to not seek
                  relief as the Company attempts to restructure the debt. These
                  matters raise substantial doubt about the Company's ability to
                  continue as a going concern.

                  The Company's near and long-term operating strategies focus on
                  an administrative restructuring, aggressive closing of
                  under-performing locations, debt-restructuring and seeking
                  additional equity financing. Several completed and ongoing
                  initiatives are as follows:

                  o        The Company closed its Los Angeles operation in June
                           1999. LA experienced an operating loss in 1999
                           approximating $111,000 before any corporate overhead
                           burden. Negotiations are in process to sell the lease
                           and fixed assets for this location.

                  o        The Company temporarily closed its Chicago operation
                           in July 1999. Chicago experienced an operating loss
                           in 1999 approximating $222,000 before any corporate
                           overhead burden. Negotiations are in process to lease
                           the restaurant to a hotel chain.

                  o        The Company, in late 1999, effectuated a change in
                           senior management personnel and its Board of
                           Directors.

                  o        The Company is pursuing an equity financing via a
                           private placement; if successful, the proceeds of the
                           financing will be used, in part, to pay down certain
                           current obligations.

                  o        The Company has and is pursuing aggressive cost
                           cutting of general and administrative expenses with a
                           goal of an overall 30% reduction.

                  Management believes that the aforementioned plan to revise the
                  Company's operations along with the additional funds raised
                  through the equity financing raised by the private placement
                  will be sufficient to support its operations during the twelve
                  month period following December 31, 2001, and will provide the
                  opportunity to continue as a going concern.

                                     - 10 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (Continued)

         c)       Use of estimates

                  The preparation of financial statements in conformity with
                  generally accepted accounting principles requires management
                  to make estimates and assumptions that affect the reported
                  amounts of assets and liabilities and 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.

         d)       Reclassifications

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

         e)       Cash and cash equivalents

                  The Company considers all highly liquid investments purchased
                  with original maturities of three months or less to be cash
                  equivalents.

         f)       Accounts receivable
                  Accounts receivable consist of charges due from credit card
                  companies and others. As of December 31, 2000 and 1999, no
                  allowance for doubtful accounts is necessary.

         g)       Inventory

                  Inventory is valued at the lower of cost or market under the
                  first in first out method of costing.

         h)       Property and equipment

                  Property and equipment is valued at cost and is depreciated
                  over the asset's estimated useful lives, utilizing the
                  straight line method. Leasehold improvements are amortizable
                  over the life of the lease or estimated useful lives,
                  whichever is shorter.

         i)       Concentration of credit risk

                  The Company places its cash in what it believes to be
                  credit-worthy financial institutions. However, cash balances
                  exceed FDIC insured levels at various times during the year.

         j)       Advertising costs
                  Advertising costs are expensed as incurred and included in
                  restaurant operating expenses. For the years ended December
                  31, 2000 and 1999, advertising expense amounted to $13,253 and
                  $36,737, respectively.



                                     - 11 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (Continued)

         k)       Income taxes

                  Income taxes are provided for based on the liability method of
                  accounting pursuant to Statement of Financial Accounting
                  Standards (SFAS) No. 109, "Accounting for Income Taxes". The
                  liability method requires the recognition of deferred tax
                  assets and liabilities for the expected future tax
                  consequences of temporary differences between the reported
                  amount of assets and liabilities and their tax basis.

         l)       Fair value of financial instruments

                  The Company's financial instruments consist of cash, accounts
                  receivable, accounts payable and accrued expenses, and
                  long-term debt. The carrying amounts of cash, accounts
                  receivable and accounts payable and accrued expenses
                  approximate fair value due to the highly liquid nature of
                  these short-term instruments. The fair value of long-term
                  borrowings was determined based upon interest rates currently
                  available to the Company for borrowings with similar terms.
                  The fair value of long-term borrowings approximates the
                  carrying amounts as of December 31, 2000 and 1999.

           m)     Long-lived assets

                  Long-lived assets and certain identifiable intangibles to be
                  held and used are reviewed for impairment whenever events or
                  changes in circumstances indicate that the related carrying
                  amount may not be recoverable. When required, impairment
                  losses on assets to be held and used are recognized based on
                  the fair value of the assets and long-lived assets to be
                  disposed of are reported at the owner's carrying amount or
                  fair value less cost to sell.

           n)     Stock-based compensation

                  The Company has adopted the intrinsic value method of
                  accounting for stock-based compensation in accordance with
                  Accounting Principles Board Opinion ("APB") No. 25,
                  "Accounting for Stock Issued to Employees" and related
                  interpretations.

           o)     Loss per share

                  The computation of basic earnings per share ("EPS") is
                  computed by dividing income available to common stockholders
                  by the weighted average number of outstanding common shares
                  during the period. Diluted EPS gives effect to all dilutive
                  potential common shares outstanding during the period. The
                  computation of diluted EPS does not assume conversion,
                  exercise or contingent exercise of securities that would have
                  an anti-dilutive effect.





                                     - 12 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (Continued)

           o)     Loss per share (continued)

                  The shares used in the computation were as follows:
                                                       December 31,
                                               ----------------------------
                                                  2000             1999
                                               -----------     -----------
                  Basic and Diluted             4,557,944        3,998,177
                                               ==========        =========

           p)     Comprehensive income

                  SFAS No. 130, "Reporting Comprehensive Income", establishes
                  standards for the reporting and display of comprehensive
                  income and its components in the financial statements. As of
                  December 31, 2000 and 1999, the Company has no items that
                  represent comprehensive income, and therefore has not included
                  a schedule of comprehensive income in the financial
                  statements.

           q)     Recent accounting pronouncements

                  Additionally, during 1998, SFAS No. 131, "Disclosure About
                  Segments of an Enterprise and Related Information" was issued,
                  which changes the way public companies report information
                  about segments. SFAS No. 131, which is based on the selected
                  segment information, requires quarterly and entity-wide
                  disclosures about products and services, major customers, and
                  the material countries in which the entity holds assets and
                  reports revenues. This statement is effective for the
                  Company's 2000 and 1999 fiscal years.

                  SFAS No. 132, "Employers' Disclosures about Pension and Other
                  Post Employment Benefits," was issued in February 1998 and
                  specifies amended disclosure requirements regarding such
                  obligations. SFAS No. 132 does not effect the Company as of
                  December 31, 2000.

                  In June 1998, the FASB issued SFAS No. 133, "Accounting for
                  Derivative Instruments and for Hedging Activities". This new
                  pronouncement requires that certain derivative instruments be
                  recognized in balance sheets at fair value and for changes in
                  fair value to be recognized in operations. Additional guidance
                  is also provided to determine when hedge accounting treatment
                  is appropriate whereby hedging gains and losses are offset by
                  losses and gains related directly to the hedged item. While
                  the standard, as amended, must be adopted in the fiscal year
                  beginning after June 15, 2000, its impact on the Company's
                  consolidated financial statements is not expected to be
                  material as the Company has not historically used derivative
                  and hedge instruments.






                                     - 13 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 2 - INVENTORY

                  Inventory consisted of the following:
<TABLE>
<CAPTION>
                                                                                            December 31,
                                                                                  ------------------------------
                                                                                        2000             1999
                                                                                  ---------------  ----------------
<S>                                                                               <C>              <C>
                  Food                                                            $      15,535    $      18,059
                  Beverage                                                               52,407           51,061
                                                                                 --------------   --------------
                                                                                  $      67,942    $      69,120
                                                                                  =============    =============
</TABLE>

NOTE 3 - PROPERTY AND EQUIPMENT

                  Property and equipment is summarized as follows:
<TABLE>
<CAPTION>
                                                                                             December 31,
                                                                                 -------------------------------
                                                                                      2000               1999
                                                                                --------------      ---------------
<S>                                                                                <C>               <C>
                  Furniture, Fixtures and Equipment                                $ 2,119,401       $ 2,108,876
                  Leasehold Improvement                                                745,220           745,220
                                                                                 -------------     -------------
                                                                                     2,864,621         2,854,096
                  Less: Accumulated Depreciation                                     1,563,425         1,406,060
                                                                                  ------------      ------------
                  Property and equipment, net                                      $ 1,301,196       $ 1,448,036
                                                                                   ===========       ===========

                  Depreciation expense for the years ending December 31, 2000
                  and 1999 was $157,365 and $288,039, respectively.

                  Cost of assets acquired pursuant to capital leases included
                  above are as follows:

                                                                                              December 31,
                                                                                  ------------------------------
                                                                                      2000               1999
                                                                                  -------------     ------------
                  Furniture, Fixtures and Equipment                                $    42,151       $    42,151
                                                                                   ===========       ===========
</TABLE>

NOTE 4 - ACCRUED EXPENSES

                  The Company had the following accrued expenses:
<TABLE>
<CAPTION>

                                                                                              December 31,
                                                                                 -------------------------------
                                                                                      2000               1999
                                                                                 -------------      ------------
<S>                                                                               <C>             <C>
                  Payroll and Sales Taxes                                          $   452,621      $    323,839
                  Professional Fees                                                     20,000           200,076
                  Other Operating Expenses                                             228,345           197,353
                  Interest                                                              95,926            68,980
                  Penalties                                                             35,000            30,865
                                                                                 -------------    --------------
                                                                                   $   831,892      $    821,113
                                                                                   ===========      ============
</TABLE>


                                     - 14 -



<PAGE>


                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



<TABLE>
<CAPTION>
NOTE 5 -          RELATED PARTY TRANSACTION

                  Due to related parties consists of the following:
                  (See Note 15)                                                              December 31,
                                                                                ----------------------------------
                                                                                      2000               1999
                                                                                ---------------     ---------------
<S>             <C>                                                              <C>               <C>
                 Advances from a major shareholder and officer of the Company,
                  payable on demand. Principal payments commence in March 2002.
                  Interest has been accrued on these advances at 10% per annum.    $  543,383        $  543,383

                  Advances from a major shareholder and officer of the Company.
                  These advances are convertible into preferred stock. Interest
                  has been accrued on these advances at 10% per annum. On June
                  30, 2000, $300,000 of these advances were forgiven by the
                  major stockholder and officer, and
                  contributed to capital.                                              37,297           335,000
                                                                                   -----------       -----------

                                                                                   $  580,680        $  878,383
                                                                                    ==========        ==========
NOTE 6 - LONG-TERM DEBT

                  Long-term debt consists of the following:
                                                                                              December 31,
                                                                                 -------------------------------

                                                                                      2000               1999
                                                                                ---------------     ---------------

                  The Company received $350,000 from the sale of convertible
                  secured notes to two entities on May 21, 1997 with interest
                  payable at 8% per annum. The notes were converted
                  on June 30, 2000 (see Notes 10 and 11).                                  -         $  350,000
</TABLE>





                                     - 15 -


<PAGE>


                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



<TABLE>
<CAPTION>
NOTE 6 - LONG-TERM DEBT (Continued)

                                                                                                  December 31,
                                                                                     ------------------------------
                                                                                         2000             1999
                                                                                     -------------   --------------
<S>              <C>                                                                 <C>              <C>
                  The Company received $265,000 from the sale of three
                   convertible secured notes to two entities and an individual
                   in January 1998 with interest payable at 8% per annum. The
                   notes were due January 26, 2000. $150,000 of these notes were
                   converted into common stock on June 30, 2000. Interest is due
                   semi-annually and any unpaid amounts have been accrued
                   (see Notes 10 and 11).                                                115,000         265,000
                                                                                      -----------      ----------

                  Total                                                                  115,000         615,000

                  Less:  Current Portion                                                (115,000)       (615,000)
                                                                                      -----------      ---------

                  Long-Term Debt                                                      $        -      $       -
                                                                                      ==========      ==========

NOTE 7 - INCOME TAXES

                  The components of the provision (benefit) for income taxes is
as follows:

                                                                                              December 31,
                                                                                 -------------------------------

                                                                                      2000               1999
                                                                                ---------------     --------------
                  Current tax expense
                    U.S. federal                                                $             -     $            -
                    State and local                                                           -                  -
                                                                                ---------------     --------------
                  Total current                                                               -                  -

                  Tax benefit of net operating loss carryforwards                             -                  -
                                                                                ---------------     --------------
                  Provision for income taxes                                                  -                  -
                                                                                ---------------     --------------

                  Deferred tax expense
                    U.S. federal                                                              -                  -
                    State and local                                                           -                  -
                                                                                ---------------     --------------
                  Total deferred                                                              -                  -
                                                                                ---------------     --------------

                  Total provision from continuing operations                    $             -     $            -
                                                                                ===============     ==============
</TABLE>


                                     - 16 -


<PAGE>


                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 7 - INCOME TAXES (Continued)

                  The reconciliation of the effective income tax rate to the
Federal statutory rate is as follows:

<TABLE>
<CAPTION>
                  <S>                                                           <C>                     <C>
                  Federal income tax rate                                         (34.0)%               (34.0)%
                  Deferred tax charge (credit)                                        -                     -
                  Effect on valuation allowance                                    34.0 %                34.0 %
                  State income tax, net of federal benefit                            -                     -
                  Effective income tax rate                                      ---------               -------
                                                                                     0.0%                 0.0 %
</TABLE>

                  At December 31, 2000, the Company had net carryforward
                  losses of approximately $2,369,000. Because of the current
                  uncertainty of realizing the benefit of the tax carryforward,
                  a valuation allowance equal to the tax benefit for deferred
                  taxes has been established. The full realization of the tax
                  benefit associated with the carryforward depends
                  predominantly upon the Company's ability to generate taxable
                  income during the carryforward period.

                  Deferred tax assets and liabilities reflect the net tax effect
                  of temporary differences between the carrying amount of assets
                  and liabilities for financial reporting purposes and amounts
                  used for income tax purposes. Significant components of the
                  Company's deferred tax assets and liabilities at December 31,
                  2000 are as follows:

                  Deferred tax assets
                  Loss carryforwards                         $   425,000
                  Less:  Valuation allowance                    (425,000)
                                                             -----------
                  Net deferred tax assets                    $         -
                                                             ===========

                  Net operating loss carryforwards expire starting in 2008
                  through 2015. Per year availability is subject to change of
                  ownership limitations under Internal Revenue Code Section 382.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

         a)       The Company's future minimum annual aggregate rental payments
                  required under operating and capital leases that have initial
                  or remaining non-cancelable lease terms in excess of one year
                  are as follows:




                                     - 17 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 8 - COMMITMENTS AND CONTINGENCIES (Continued)

<TABLE>
<CAPTION>
                                                                                   Operating          Capital
                                                                                    Leases              Leases
                                                                               --------------       --------------
<S>               <C>                                                            <C>                <C>
                  2001                                                           $    601,118       $     23,016
                  2002                                                                594,271             12,437
                  2003                                                                512,005                  -
                  2004                                                                512,055                  -
                  2005 and thereafter                                               3,202,126                  -
                                                                                 ------------       ------------
                  Total minimum lease payments                                    $ 5,421,575             35,453
                                                                                  ===========
                  Less: Amounts representing interest                                                     (2,997)
                                                                                                    ------------
                  Present value of future minimum lease payments                                          32,456
                  Less:  Current maturities                                                              (31,695)
                                                                                                    ------------
                  Total                                                                              $       761
                                                                                                    ============
</TABLE>

                  Rent expense under operating leases for the years ended
                  December 31, 2000 and 1999 was $597,814 and $538,049,
                  respectively.

         b)       The Company is a party to claims and lawsuits arising in the
                  normal course of operations. Management is of the opinion that
                  these claims and lawsuits will not have a material effect on
                  the financial position of the Company. The Company believes
                  these claims and lawsuits should not exceed $50,000, and
                  accordingly, has established a reserve included in accounts
                  payable and accrued expenses.

NOTE 9 - MINORITY INTEREST

                  The Company, through its subsidiary 7 West, is the general
                  partner in Avenue A. 7 West owns a 60% general partnership
                  interest and a 2% limited partnership interest. Accordingly,
                  the minority interest represents a 38% limited partnership
                  interest. As of December 31, 2000 and 1999, the minority
                  interest equals $126,630 and $81,392, respectively.

NOTE 10 -         CONVERTIBLE NOTES PAYABLE

                  On May 21, 1997, Chicago sold an aggregate of $350,000 of 10%
                  Convertible Secured Notes (the "10% Notes"). The 10% Notes
                  bear interest at the rate of 10% per annum on the principal
                  sum outstanding. Interest was payable semi-annually on June 30
                  and December 31. The holders of the 10% Notes are entitled, at
                  their option at any time, to convert any or all of the
                  original principal amount of the 10% Notes into Common Stock
                  of the Company at a conversion price equal to the lessor of i)
                  $3.00 or ii) 70% of the offering price per share of the
                  Company's Common Stock as established in a public offering of
                  the Company's Common Stock. On June 30, 2000, the notes were
                  converted for 864,000 shares of common stock at a conversion
                  price of $0.50 per share. The Company has recorded a financing
                  cost attributable to the beneficial conversion feature in the
                  amount of $446,288.

                                     - 18 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 10 -         CONVERTIBLE NOTES PAYABLE (Continued)

                  On January 26, 1998, Atlanta sold an aggregate of $265,000 of
                  8% Convertible Secured Notes (the "8% Notes"). The 8% Notes
                  bear interest at the rate of 8% per annum on the principal sum
                  outstanding. Interest was payable semi-annually on June 30 and
                  December 31. The holders of the 8% Notes are entitled, at
                  their option at any time, to convert any or all of the
                  original principal amounts of the 8% Notes into Common Stock
                  of the Company at a conversion price equal to the lessor of i)
                  $2.20 or ii) 70% of the offering price per share of the
                  Company's Common Stock as established in a public offering of
                  the Company's Common Stock. On June 30, 2000, $150,000 of the
                  notes were converted for 318,000 shares of common stock at a
                  conversion price of $0.50 per share for $50,000 of the notes
                  and $0.33 per share for $100,000. The Company has recorded a
                  financing cost attributable to the beneficial conversion
                  feature in the amount of $155,225.

                  The Notes were secured by all assets held by Chicago and
                  Atlanta, with the exception of the point of sale computer
                  systems.

NOTE 11 -         WARRANTS

                  The Company has issued outstanding warrants to purchase up to
                  289,741 shares of common stock.

                  On February 4, 1997, the Company sold 100,000 shares of Common
                  Stock, along with a warrant to purchase up to 10,000 shares of
                  Common Stock. The warrant was exercisable on or before
                  February 4, 2000 at an exercise price of $1.00 per share
                  (subject to customary anti-dilution adjustments). The warrant
                  was not exercised.

                  On June 6, 1997, the Company sold 100,000 shares of Common
                  Stock, along with a warrant to purchase up to 10,000 shares of
                  Common Stock. The warrant was exercisable on or before June 6,
                  2000 at an exercise price of $1.00 per share (subject to
                  customary anti-dilution adjustments). The warrant was not
                  exercised.

                  On May 21, 1997, in connection with the sale of $350,000 of
                  10% Convertible Secured Notes described in Note 6, the Company
                  issued warrants to purchase up to 35,000 shares of Common
                  Stock. The warrants were exercisable on or before May 21, 2000
                  at an exercise price of $1.00 per share (subject to customary
                  anti-dilution adjustments). The warrants were not exercised.

                  On January 28, 1998, in connection with the sale of $265,000
                  of 8% Convertible Secured Notes described in Note 6, the
                  Company issued warrants to purchase up to 26,500 shares of
                  Common Stock. The warrants were exercisable on or before
                  January 26, 2000 at an exercise price of $2.20 per share
                  (subject to customary anti-dilution adjustments). The warrant
                  was not exercised.

                                     - 19 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 11 -         WARRANTS (Continued)

                  Pursuant to the terms of an Engagement Letter dated February
                  5, 1997, between the Company and Commonwealth Associates
                  ("CA"), whereby CA was engaged to render corporate finance and
                  other financial service matters, the Company granted to CA
                  warrants to purchase 208,241 shares of Common Stock at an
                  exercise price of $.01 per share. On December 31, 2000, CA
                  exercised the warrants to purchase 188,000 shares of Common
                  Stock at $0.10 per share as a settlement for their services.

NOTE 12 -         SEGMENT INFORMATION

                  During 2000 and 1999, the Company had six reportable
                  restaurant segments and one management company;

                           a)      SRC
                           b)      LA (ceased operations - July 1999)
                           c)      Chicago (ceased operations - July 1999)
                           d)      Atlanta
                           e)      Avenur A
                           f)      7 West (management company)

                  Soulfood Concepts, Inc. and Subsidiaries:
<TABLE>
<CAPTION>
                                                                          Year Ended
                                                                          December 31,
                                                               --------------------------------
                                                                   2000               1999
                                                               ---------------   --------------
                             <S>                               <C>                 <C>
                             Sales:

                                    SRC $  2,647,873            $ 2,586,266
                                    LA                                    -             666,516
                                    Chicago                               -             754,985
                                    Atlanta                       2,080,132           2,216,290
                                    7 West                                -                   -
                                    Avenue A                      1,319,638           1,241,174
                                                               ------------        ------------
                             Total sales                       $  6,047,643         $ 7,465,231
                                                               ============         ===========

                             Cost of sales:
                                    SRC                        $    691,875         $   683,623
                                    LA                              (13,365)            215,631
                                    Chicago                         (26,062)            281,813
                                    Atlanta                         591,496             709,322
                                    7 West                                -                   -
                                    Avenue A                        349,004             344,261
                                                               ------------       -------------
                             Total cost of sales               $  1,592,948         $ 2,234,650
                                                               ============         ===========
</TABLE>

                                     - 20 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 12 -         SEGMENT INFORMATION (Continued)

<TABLE>
<CAPTION>
                                                                                   Year Ended
                                                                                   December 31,
                                                                      ----------------------------------
                                                                            2000               1999
                                                                       ----------------   --------------
                             <S>                                       <C>                   <C>
                             Restaurant operating expenses:
                                    SRC                                 $  1,292,943         $ 1,288,075
                                    LA                                       124,834             562,053
                                    Chicago                                  152,428             696,029
                                    Atlanta                                1,113,907           1,354,048
                                    7 West                                         -                   -
                                    Avenue A                                 792,341             756,158
                                    Corporate                                      -                   -
                                                                        ------------         -----------
                             Total restaurant operating expenses        $  3,476,453         $ 4,656,363
                                                                        ============         ===========

                             Other corporate expenses:
                                    SRC                                 $          -         $         -
                                    LA                                             -                   -
                                    Chicago                                        -                   -
                                    Atlanta                                        -                   -
                                    7 West                                         -                   -
                                    Avenue A                                       -                   -
                                    Corporate                                873,660             974,044
                                                                       -------------       -------------
                             Total other corporate expenses            $     873,660        $    974,044
                                                                       =============        ============

                             Depreciation and amortization expense:
                                    SRC                                $       21,867       $     19,210
                                    LA                                             -              31,073
                                    Chicago                                        -              75,415
                                    Atlanta                                  107,598             126,892
                                    7 West                                         -                   -
                                    Avenue A                                  26,379              21,245
                                    Corporate                                  1,521              14,204
                                                                      --------------      --------------
                             Total depreciation and amortization
                               expense                                 $     157,365        $    288,039
                                                                       =============        ============
</TABLE>








                                     - 21 -


<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 12 -         SEGMENT INFORMATION (Continued)
<TABLE>
<CAPTION>
                                                                                                Year Ended
                                                                                                December 31,
                                                                                   ----------------------------------
                                                                                         2000               1999
                                                                                    ----------------   --------------
                             <S>                                                   <C>                 <C>
                             Income (loss) from operations:
                                    SRC                                             $     641,188        $    595,359
                                    LA                                                   (111,468)           (142,241)
                                    Chicago                                              (126,366)           (298,271)
                                    Atlanta                                               267,132              26,028
                                    7 West                                                      -              24,823
                                    Avenue A                                              151,914              94,685
                                    Corporate                                            (883,932)           (988,248)
                                                                                   --------------       -------------
                             (Loss) income from operations:                        $      (61,532)       $   (687,865)
                                                                                   ==============        ============

                             Identifiable assets:
                                    SRC                                            $      115,694       $      35,237
                                    LA                                                    482,128             513,966
                                    Chicago                                               363,336             385,603
                                    Atlanta                                               415,863             480,796
                                    7 West                                                  2,228                  60
                                    Avenue A                                              148,033             136,620
                                    Corporate                                              53,236             148,146
                                                                                 ----------------       -------------
                             Total assets                                           $   1,580,518         $ 1,700,428
                                                                                    =============         ===========
</TABLE>

NOTE 13 -   STOCK PLANS

a)       Incentive Plan
         In 1997, the Company adopted the 1997 Stock Incentive Plan (the "1997
         Plan") for officers, directors, employees, and consultants of the
         Company or any of its subsidiaries. The 1997 Plan, as originally
         adopted, authorizes the issuance of up to 500,000 shares of common
         stock upon the exercise of stock options or in connection with the
         issuance of restricted stock. The 1997 Plan authorizes the granting of
         stock options and restricted options and restricted stock to employees,
         officers, directors and consultants of the Company and its subsidiaries
         and non-discretionary automatic awards of stock options to its
         non-employee directors. Each option has a maximum term of ten years
         from the date of the grant, subject to early termination. The Company
         may determine the exercise price, provided that such price may not be
         less than the fair market value of the common stock on the date of
         grant. No options have been granted to date.





                                     - 22 -

<PAGE>



                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999



NOTE 13 -   STOCK PLANS (Continued)

b)       Restricted Stock
         The Company may make grants of restricted stock for cash or
         other consideration. The number of shares of common stock
         granted to each grantee will be determined by the Company.
         Grants of restricted stock will be made subject to such
         restrictions and conditions as the Company may determine in its
         sole discretion, including periods of restriction on
         transferability (the "Restriction Period") during which time the
         grant may be required to be deposited with an escrow agent, if
         the Company so determines. No grants of restricted stock have
         been issued to date.

NOTE 14 -   EARNINGS PER SHARE

         Securities that could potentially dilute basic earnings per
         share in the future that were not included in the computation of
         diluted earnings per share because their effect would have been
         antidilutive are as follows:

                                                  December 31,
                                      ---------------------------------
                                           2000               1999
                                      ----------------   --------------
              Warrants                $             -     $    289,741
                                      ================    =============

NOTE 15 -  SUBSEQUENT EVENTS

          The Company is in the process of negotiating the sale of the
          L.A. store's lease, inventory and fixed assets. As of the date
          of this report, a commitment from a buyer is being finalized and
          the Company anticipates finalizing the sale in April 2001.

          The Company is in the process of negotiating with a hotel chain
          regarding leasing a new restaurant in Chicago.








                                     - 23 -