<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, 2001

                                       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, 2001 of voting stock held by
non-affiliates computed by reference to the last sale price on that date was
approximately $267,666

     The issuer's revenues for the year ended December 31, 2001 were $5,572,937

     As of December 31, 2001, 5,353,333 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".

     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 have successfully sold the Los Angeles unit's
lease, inventory and fixed assets. As of the date of this report, we have
entered into a new lease agreement with the landlords of the Chicago location
and we will engage a turnaround plan to reopen the Chicago location by the fall
of 2002.


                                       1
<PAGE>


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.

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

                                       2
<PAGE>

     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 2001, 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.

     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 2001, 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.

                                       3
<PAGE>

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 have currently
entered into a new lease agreement and intend to re-open the Chicago unit by
the fall of 2002.

     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
have successfully sold the lease inventory and assets as of December 14, 2001.

     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 will
enable us to increase name recognition and realize improved efficiencies in
marketing, management, and purchases. In fiscal 2002 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 2003 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 2003. 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,

                                       4
<PAGE>

     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.

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

                                       5
<PAGE>


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.

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.

                                       6
<PAGE>

     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, 2001, 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.

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.

                                       7
<PAGE>

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.

Events of September 11, 2001,

     The September 11, 2001 terrorist attacks on the World Trade Center in New
York City and the Pentagon have negatively impacted the United States economy,
which was experiencing a reduced level of growth prior to those attacks. Like
most consumer businesses, our business is affected by general economic,
political and public safety conditions that impact consumer confidence and
discretionary spending. Sales for all of our restaurants, were adversely
affected as a result of the September 11 attacks. While sales trends for most of
our restaurants have recovered to their pre-September 11 levels as of March 1,
2002, additional terrorist attacks or related events occurring in the future
could adversely impact all consumer businesses, including ours. It is not
possible to predict the longer-term effects of the terrorist attacks, or the
impact of actions taken in response to the attacks on general economic,
political and public safety conditions and our results of operations.

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 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

                                       8
<PAGE>

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.



                                       9
<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(1)
New York, N.Y.
The Shark Bar.............      3/97           9,000 sq. ft              200                  2009(2)
Chicago, Illinois
The Shark Bar.............      3/98          10,000 sq. ft              255                  2007
Atlanta, Georgia
</TABLE>

(1) This lease provides one five year renewal option.
(2) Currently not operating. This lease provides two five year renewal options.

     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 period
ended December 31, 2001.



                                       10
<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.

     2001                   HIGH           LOW
     ----                   ----           ---
     1st Quarter            $.05           $.05
     2nd Quarter            $.05           $.05
     3rd Quarter            $.05           $.05
     4th Quarter            $.20           $.05


     2000                   HIGH           LOW
     ----                   ----           ---
     1st Quarter            $.35           $.30
     2nd Quarter            $.40           $.35
     3rd Quarter            $.75           $.40
     4th Quarter            $.25           $.15


     Holders. As of December 31, 2001, 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".


                                       11
<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, 2001, 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. As of December 14, 2001, we have successfully sold
the lease fixed assets and inventory of our Los Angeles unit. 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 2002. 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, 2001 AND 2000

     Revenues. Revenue was generated from the sale of food and beverages for the
year ended December 31, 2001 and 2000, from restaurant units. Revenues decreased
$474,706 or 7.8% from $6,047,643 for the year ended December 31, 2000 to
$5,572,937 for the year ended December 31, 2001. This reduction in sales is due
primarily to the effect of adverse economic conditions for the second quarter
period and the adverse effect of the events of September 11th. Also the company
did not incorporate any menu price increases to offset the impact of higher
costs of products for the period. We estimate that total restaurant sales for
the twelve month period ended December 31, 2001 would have been approximately
$500,000 higher had the events of September 11 not occurred, based on sales
trends for the nine month period prior to September 11.


     Cost of Revenues. We incurred cost of revenues from continuing operations
of $1,530,709 for the year ended December 31, 2001 and $1,592,948 for the year
ended December 31, 2000. As a percentage of net revenues, cost of revenues from
continuing operations was 27.4% for the year ended December 31, 2001 and 26.3%
for year ended December 31, 2000. This increase was principally as a
proportional decrease related to the reduction in sales and as result of
slightly higher produce and other commodity costs that were not offset by menu
price increases.


                                       12
<PAGE>

     Restaurant Labor and Related Costs. Labor expenses and the related taxes,
are restaurant level labor costs and they decreased $104,566 or 5.8% to
$1,682,797 for the year ended December 31, 2001 from $1,787,363, for the period
ended December 31, 2000. Due to the adverse effect of September 11th and the
resulting decline in sales, we effectively reduced labor costs by using
management staff whenever possible and reducing working hours of employees. As a
percentage of revenue labor costs increased slightly to 30.1% for the period
ended December 31, 2001 compared to 29.5% for year ended December 2000. The
fixed cost component of our labor expenses and minimum wage and other wage
increases were negatively impacted by the decline in sales and the events of
September 11th.

     Other Operating Expenses. Other operating expenses consists of, occupancy
costs, i.e. rent, insurance, licenses and utilities. Other operating costs
increased $55,308 or 3.2% to $1,728,152 for the year ended December 31, 2001
compared to $1,672,844 for the year ended December 31, 2000. This overall
increase was due primarily to security deposits forwarded to the landlord in
Chicago upon entering a new lease agreement, and due to higher costs for
electric, natural gas services and base rent increases. Another factor was the
increased costs for our insurance arrangements, which reflected the general
increase in such costs resulting from the terrorist attacks of September 11,
2001. We expect the costs for all of our insurance arrangements to continue to
increase during fiscal 2002. As a percentage of revenues restaurant operating
expenses increased to 31% for the year ended December 31, 2001, from 27.6% for
the year ended December 31, 2000.

     General and Administrative Expense. General and administrative expenses
consist of restaurant corporate support costs, travel, manager training and
field supervision. General and administrative expenses from continuing
operations decreased $90,341 or 10.2% to $792,068 for the year ended December
31, 2001 compared to $882,409 for the year ended December 31, 2000. This
decrease is attributable to the completion of management training in our Atlanta
unit and the termination of the related costs and travel expenses. This decrease
is attributable to the completion of management training in our Atlanta unit and
the termination of the related costs and travel expenses. Also we reduce
corporate salary expenses as a strategy to reduce the G&A expense in
anticipation of the negative effects on revenue of the attacks of September
11th. As a percentage of revenues, general and administrative expense for the
year ended December 31, 2001 were slightly decreased to 14.2% compared to 14.5%
for the year ended December 31, 2000.

         Depreciation and Amortization Expense. Depreciation and amortization
expense decreased to $142,101 for the year ended December 31, 2001 from $157,365
for the year ended December 31, 2000. As a percentage of revenues depreciation
and amortization were 2.5% for the year ended December 31, 2001 and 2.6% for
year ended December 31, 2000.

         Interest Income, Other (Expense) Income and Income Taxes. We had
interest expense of $172,533 for the year ended December 31, 2001 compared to
interest expense of $142,548 for year ended December 31, 2000. Interest expense
for year ended December 31, 2001 and 2000 related primarily to long-term notes.
In December 2001 we sold the lease, inventory and assets of the Los Angeles and
took a loss on disposition of assets of $286,326. 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, 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.


                                       13
<PAGE>

         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.

         Other Operating Expenses. Other operating expenses consists of,
occupancy costs, i.e. rent, insurance, licenses and utilities. Other operating
costs decreased $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").

FINANCIAL CONDITION AND LIQUIDITY

     Cash and Cash Equivalents as of December 31, 2001 decreased by $79,124 to
$4236 from $83,360 from as of December 31, 2000. Overall, Total Current Assets
decreased by $88,976 as of December 31, 2001 to $86,972 from to $175,948 as of
December 31, 2000. This decrease in cash and all other current assets was
primarily due to the decrease in cash flow from operations and the reduction in
inventory from the sale of our Los Angeles unit.

     Our current liabilities increased $163,045 as of December 31, 2001 to
$1,686,750 from $1,523,705 as of December 31, 2000. This increase was due
primarily to the increase of accounts payables.

     Accounts payable expenses are primarily due to the closing of the Chicago
units. Arrangements have been made with vendors to settle outstanding amounts
and 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, 2001, net cash used by operating activities
were $(517,330) compared to net cash provided for operating activities of
$168,303 for the year ended December 31, 2000. This change was primarily due to
the accounting entry taken in 2000 of $601,513 for the conversion of debt to
common stock of the company. Cash provided by investing activities as of
December 31 2001, were $133,135 compared with cash used of $10,525 for period
ended December 31, 2000. This was attributable to the disposition of assets in
the Los Angeles unit in December 2001 along with the net proceeds received in
conjunction with said disposition. Net cash provided by financing activities in
2001 were $2,215 compared with net cash used of $83,634 in 2000.

                                       14
<PAGE>

     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. A sale of the lease and fixed assets for
         this location, was completed December 14, 2001.

     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. The Company is in the process of
         reopening in Chicago by the third quarter 2002.

     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.

     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, 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.


                                       15
<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, 41, 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.
Mr. Campbell was a founder and 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.

                                       16
<PAGE>

ITEM 10:  EXECUTIVE COMPENSATION

     (a) Cash Compensation.

     The following table sets forth all compensation 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, 2001, 2000, and 1999.

                           SUMMARY COMPENSATION TABLE

                                           FISCAL
NAME AND PRINCIPAL POSITION                 YEAR     ANNUAL SALARY
MARK CAMPBELL                               2001        $73,000
PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                            2000         80,000

                                            1999          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 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.

                                       17
<PAGE>

     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.


             Name and Address          Amount and Nature of         Percent
          of Beneficial Owner        Beneficial Ownership(1)(2)     of Class

         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%

                                       18
<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.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K


                                      None


                                       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 15, 2002                  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 15, 2002
----------------------------------
Mark Campbell, Chief
Executive Officer, President,
Director and Accounting Officer


   /s/  Brian A. Hinchcliffe                               April 15, 2002
----------------------------------
Brian A. Hinchcliffe, Director


    /s/ Michael D. Vann                                    April  15, 2002
----------------------------------
Michael D. Vann, Director



----------------------------------                         April, 2002
Keith Clinkscales, Director



                                       20
<PAGE>









                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000


<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

                                      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, 2001 and 2000, 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 auditing standards generally accepted
in the United States of America. 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, 2001 and 2000, 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
April 9, 2002



<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                    December 31,
                                                              -------------------------
                                                                 2001           2000
                                                              ----------     ----------
<S>                                                           <C>            <C>
      ASSETS
CURRENT ASSETS
   Cash and cash equivalents                                  $    4,236     $   83,360
   Accounts receivable                                             5,763          2,060
   Inventory                                                      53,387         67,942
   Prepaid expenses and other current assets                      23,586         22,586
                                                              ----------     ----------

      TOTAL CURRENT ASSETS                                        86,972        175,948

PROPERTY AND EQUIPMENT, net of accumulated
 depreciation of $1,705,526 and $1,563,425 respectively          723,104      1,301,196

SECURITY DEPOSITS                                                103,549        103,374
                                                              ----------     ----------

      TOTAL ASSETS                                            $  913,625     $1,580,518
                                                              ==========     ==========
</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,
                                                                    -----------------------------
                                                                       2001              2000
                                                                    -----------       -----------

<S>                                                                 <C>               <C>
         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
   Accounts payable                                                 $   726,765       $   545,118
   Accrued expenses                                                     753,096           831,892
   Obligation under capital lease                                        17,881            31,695
   Current portion of long-term debt                                    115,000           115,000
   Due to related party                                                  74,004              --
                                                                    -----------       -----------

      TOTAL CURRENT LIABILITIES                                       1,686,750         1,523,705

DUE TO RELATED PARTY                                                    522,612           580,680

OBLIGATIONS UNDER CAPITAL LEASE - LONG-TERM                                --                 761
                                                                    -----------       -----------

      TOTAL LIABILITIES                                               2,209,362         2,105,146
                                                                    -----------       -----------

COMMITMENTS AND CONTINGENCIES                                              --                --

MINORITY INTEREST                                                       176,657           126,630
                                                                    -----------       -----------

STOCKHOLDERS' (DEFICIT)
   Common stock, par value $.003; authorized
   14,500,000 shares; issued and outstanding
   5,353,333 and 5,268,177 shares, respectively                          16,060            15,805

   Additional paid-in capital                                         2,435,747         2,435,152

   Accumulated deficit                                               (3,921,001)       (3,099,015)

   Less cost of treasury stock - 10,000 common
      shares                                                             (3,200)           (3,200)
                                                                    -----------       -----------

      TOTAL STOCKHOLDERS' (DEFICIT)                                  (1,472,394)         (651,258)
                                                                    -----------       -----------

      TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY (DEFICIT)                                              $   913,625       $ 1,580,518
                                                                    ===========       ===========
</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,
                                                                 -----------------------------
                                                                    2001              2000
                                                                 -----------       -----------
<S>                                                              <C>               <C>
SALES                                                            $ 5,572,937       $ 6,047,643
                                                                 -----------       -----------

COSTS AND EXPENSES
   Cost of sales                                                   1,530,709         1,592,948
   Restaurant labor and related costs                              1,682,797         1,787,363
   Depreciation and amortization of restaurant
    property and equipment                                           142,101           157,365
   Other operating expenses                                        1,728,152         1,672,844
                                                                 -----------       -----------
      Total restaurant operating expenses                          5,083,759         5,210,520
                                                                 -----------       -----------

GENERAL AND ADMINISTRATIVE EXPENSES                                  792,068           882,409
                                                                 -----------       -----------

LOSS FROM OPERATIONS                                                (302,890)          (45,286)
                                                                 -----------       -----------
OTHER EXPENSES
   Interest expense                                                  172,533
                                                                                       142,548
   Debt conversion expense                                              --             601,513
   Loss on disposition of fixed assets                               286,326              --
                                                                 -----------       -----------
      Total other expense                                            458,859           744,061
                                                                 -----------       -----------

LOSS BEFORE INCOME TAXES,
 AND MINORITY INTEREST                                              (761,749)         (789,347)

PROVISION FOR INCOME TAXES                                            10,210              --
                                                                 -----------       -----------

LOSS BEFORE MINORITY INTEREST                                       (771,959)         (789,347)

MINORITY INTEREST IN THE INCOME OF CONSOLIDATED
   SUBSIDIARY                                                        (50,027)          (45,238)
                                                                 -----------       -----------

NET LOSS                                                         $  (821,986)      $  (834,585)
                                                                 ===========       ===========
</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,
                                             ----------------------
                                               2001           2000
                                             -------        -------
LOSS PER COMMON SHARE
    BASIC AND DILUTED:

       Loss per common share                 $  (.16)       $  (.18)
                                             =======        =======






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                       Treasury Stock           Total
                                -----------------------     Paid-in    Accumulated      -------------------     Stockholders'
                                  Shares      Amount        Capital       Deficit       Shares      Amount        Deficit
                                ---------   -----------   -----------   -----------     ------   -----------    -----------
<S>                             <C>         <C>           <C>           <C>             <C>      <C>            <C>
Balance - January 1, 2000       3,998,177        11,995       980,949    (2,217,663)      --            --       (1,224,719)

Issuance of Common Stock        1,270,000         3,810     1,454,203          --         --            --        1,458,013

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

Partner Distributions                --            --            --         (46,767)      --            --          (46,767)

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

Balance - December 31, 2000     5,268,177        15,805     2,435,152    (3,099,015)    10,000        (3,200)      (651,258)

Issuance of Common Stock           85,167           255           595          --         --            --              850

Net loss                             --            --            --        (821,986)      --            --         (821,986)
                                ---------   -----------   -----------   -----------     ------   -----------    -----------

Balance - December 31, 2001     5,353,333   $    16,060   $  2435,747   $(3,921,001)    10,000   $    (3,200)   $(1,472,394)
                                =========   ===========   ===========   ===========     ======   ===========    ===========
</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,
                                                                 -------------------------------
                                                                   2001                   2000
                                                                 ---------             ---------
<S>                                                              <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                      $(821,986)            $(834,585)
   Adjustments to reconcile net loss to
    Net cash provided (used) by operating activities:
      Depreciation and amortization                                142,101               157,365
      Loss in disposition of fixed assets                          286,326
      Loss attributed to minority interest                          50,027                45,238
      Debt conversion                                                 --                 601,513
      (Increase) Decrease in:
      Accounts receivable                                           (3,704)               54,834
      Inventory                                                     14,555                 1,178
      Prepaid expenses and other current assets                     (1,000)                3,702
      Other assets                                                    (175)              (12,500)
      (Decrease) Increase in:
      Accounts payable and accrued expenses                        119,381               151,558
                                                                 ---------             ---------

NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES                  (517,330)              168,303
                                                                 ---------             ---------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                              (16,865)              (10,525)
   Proceeds from disposition of assets                             150,000                  --
                                                                 ---------             ---------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES                   133,135               (10,525)
                                                                 ---------             ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Bank overdraft                                                     --                 (60,849)
   Repayment of debt                                                  --                    --
   Repayment of capital leases                                     (14,575)              (31,615)
   (Decrease) increase in due to related party                      15,940              (297,703)
   Partner distributions                                              --                 (46,767)
   Increase in common stock                                            255                   264
   Increase in additional paid-in capital                              595               356,236
   Purchase of treasury stock                                         --                  (3,200)
                                                                 ---------             ---------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES                     2,215               (83,634)
                                                                 ---------             ---------

NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS                                          (79,124)               74,144

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                       83,360                 9,216
                                                                 ---------             ---------

CASH AND CASH EQUIVALENTS - END OF YEAR                          $   4,236             $  83,360
                                                                 =========             =========
</TABLE>


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

                                      -7-
<PAGE>

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

                                                          For The Year Ended
                                                              December 31,
                                                        -----------------------
                                                          2001          2000
                                                        ---------     ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the year for:
      Interest expense                                  $  69,175     $  70,271
                                                        =========     =========
      Income taxes                                      $  10,970     $  12,738
                                                        =========     =========


NON-CASH INVESTING AND FINANCING ACTIVITIES:

December 31, 2001
-----------------

On December 31, 2001, the Company took a write off of $16,530 of accrued
expenses involving the closing of the Los Angeles operations


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, 2001 AND 2000

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 Note 14:

         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, and sold its lease and related
             property and equipment on December 10, 2001.

         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. (see Note 14).

         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, 2001 AND 2000

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, 2001, the Company has a working capital deficit of $1,599,778 and
         an accumulated deficit of $3,921,001. 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. A sale of the lease and fixed assets
             for this location, was completed December 14, 2001.

         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. The Company is in
             the process of reopening in Chicago by the third quarter 2002.

         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, 2001 AND 2000

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, 2001 and 2000, 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, 2001 and 2000,
         advertising expense amounted to $1,523 and $13,253, respectively.

                                      -11-
<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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, 2001 and 2000.

     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, 2001 AND 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (Continued)

     o)  Loss per share (continued)

         The shares used in the computation were as follows:

                                                       December 31,
                                               --------------------------
                                                 2001             2000
                                               ---------        ---------
         Basic and Diluted                     5,353,333        4,557,944
                                               =========        =========

     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, 2001 and
         2000, 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
         2001 and 2000 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, 2001.

         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, 2001 AND 2000

NOTE 2 - INVENTORY

         Inventory consisted of the following:

                                                         December 31,
                                                 ------------------------
                                                    2001          2000
                                                 ----------    ----------
         Food                                    $   15,831    $   15,535
         Beverage                                    37,556        52,407
                                                 ----------    ----------
                                                 $   53,837    $   67,942
                                                 ==========    ==========

NOTE 3 - PROPERTY AND EQUIPMENT

         Property and equipment is summarized as follows:

                                                         December 31,
                                                 ------------------------
                                                    2001          2000
                                                 ----------    ----------
         Furniture, Fixtures and Equipment       $1,871,683    $2,119,401
         Leasehold Improvement                      556,947       745,220
                                                 ----------    ----------
                                                  2,428,630     2,864,621

         Less: Accumulated Depreciation           1,705,526     1,563,425
                                                 ----------    ----------
         Property and equipment, net             $  723,104    $1,301,196
                                                 ==========    ==========

         Depreciation expense for the years ending December 31, 2001 and 2000
         was $142,101 and $157,365, respectively.

         Cost of assets acquired pursuant to capital leases included above are
         as follows:
                                                         December 31,
                                                 ------------------------
                                                    2001          2000
                                                 ----------    ----------
         Furniture, Fixtures and Equipment       $   42,151    $   42,151
                                                 ==========    ==========

NOTE 4 - ACCRUED EXPENSES

         The Company had the following accrued expenses:

                                                         December 31,
                                                 ------------------------
                                                    2001          2000
                                                 ----------    ----------
         Payroll and Sales Taxes                 $  430,447    $  452,621
         Professional Fees                                -        20,000
         Other Operating Expenses                   105,293       228,345
         Interest                                   147,356        95,926
         Penalties                                   70,000        35,000
                                                 ----------    ----------
                                                 $  753,096    $  831,892
                                                 ==========    ==========


                                      -14-
<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 5 - RELATED PARTY TRANSACTION

         Due to related parties consists of the following:
                                                        December 31,
                                                 ------------------------
                                                    2001          2000
                                                 ----------    ----------
         Advances for the president of the
         Company payable on demand, with
         no interest                             $   15,940             -

         Advances from a major stockholder
         and officer of the Company, to be
         repaid in ten equal installments
         over a five-year period beginning
         with the fist payment on August 31,
         2002. Interest has been accrued on
         these advances At 8% per annum             580,680       580,680
                                                 ----------    ----------
                                                    596,620       580,680
         Less:  Current potion                      74,008              -
                                                 ----------    ----------
         Long-term portion                       $  522,612    $  580,680
                                                 ==========    ==========

NOTE 6 - LONG-TERM DEBT

         Long-term debt consists of the following:

                                                        December 31,
                                                 ------------------------
                                                    2001          2000
                                                 ----------    ----------
         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).                  $        -    $        -



                                      -15-
<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 6 - LONG-TERM DEBT (Continued)

                                                            December 31,
                                                      ------------------------
                                                        2001          2000
                                                      ---------     ----------
         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       115,000
                                                      ---------     ----------

                  Total                                 115,000       115,000

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

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

NOTE 7 - INCOME TAXES

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

                                                            December 31,
                                                      -----------------------
                                                        2001          2000
                                                      ---------     ---------
         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                                $       -     $       -
                                                      =========     =========


                                      -16-
<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 7 - INCOME TAXES (Continued)

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

                                                            December 31,
                                                          ---------------
                                                           2001     2000
                                                          ------   ------
         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 %
                                                          ======   ======

         At December 31, 2001 and 2000 the Company had net carryforward losses
         of approximately $3,900,000 and 3,190,000 respectively. 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, 2001 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, 2001 AND 2000

NOTE 8 - COMMITMENTS AND CONTINGENCIES (Continued)

                                                        Operating     Capital
                                                          Leases       Leases
                                                        -----------   ---------
         2002                                           $   468,903   $  18,493
         2003                                               413,055           -
         2004                                               413,055           -
         2005                                               413,055
         2006 and thereafter                              1,527,516           -
                                                        -----------   ---------
         Total minimum lease payments                   $ 3,235,584      18,493
                                                        ===========
         Less: Amounts representing interest                               (612)
                                                                      ---------
         Present value of future minimum lease payments                  17,881
         Less:  Current maturities                                      (17,881)
                                                                      ---------
         Total                                                        $       -
                                                                      =========

         Rent expense under operating leases for the years ended December 31,
         2001 and 2000 was $542,080 and $597,814, respectively.

     b)  The Company is a party to claims and lawsuits arising in the normal
         course of operations. Management has resolved all of these claims and
         lawsuits and none had any material effect on the financial position of
         the Company.

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, 2001
         and 2000, the minority interest equals $176,657 and $126,630,
         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, 2001 AND 2000


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.


                                      -19-
<PAGE>
                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 11 - WARRANTS (Continued)

         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.

         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 2001 and 2000, 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)   Avenue A
               f)   7 West (management company)

         Soulfood Concepts, Inc. and Subsidiaries:

                                                       Year Ended
                                                      December 31,
                                             -----------------------------
                                                2001              2000
                                             -----------      ------------
               Sales:
                  SRC                        $ 2,504,873      $  2,647,873
                  LA                                   -                 -
                  Chicago                              -                 -
                  Atlanta                      1,768,091         2,080,132
                  7 West                               -                 -
                  Avenue A                     1,299,973         1,319,638
                                             -----------      ------------
               Total sales                   $ 5,572,937      $  6,047,643
                                             ===========      ============



                                      -20-
<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 12 -  SEGMENT INFORMATION (Continued)

                                                            Year Ended
                                                            December 31,
                                                     --------------------------
                                                         2001          2000
                                                     -----------    -----------
            Cost of sales:
                   SRC                               $   651,248    $   691,875
                   LA                                    (17,320)       (13,365)
                   Chicago                                  --          (26,062)
                   Atlanta                               577,657        591,496
                   7 West                                   --             --
                   Avenue A                              319,124        349,004
                                                     -----------    -----------
            Total cost of sales                      $ 1,530,709    $ 1,592,948
                                                     ===========    ===========

            Restaurant operating expenses:
                   SRC                               $ 1,297,494    $ 1,292,943
                   LA                                     90,113        108,588
                   Chicago                                63,733        152,428
                   Atlanta                             1,170,511      1,113,907
                   7 West                                   --             --
                   Avenue A                              789,098        792,341
                   Corporate                                --             --
                                                     -----------    -----------
            Total restaurant operating expenses      $ 3,410,949    $ 3,460,207
                                                     ===========    ===========

            Other corporate expenses:
                   SRC                               $      --      $      --
                   LA                                       --             --
                   Chicago                                  --             --
                   Atlanta                                  --             --
                   7 West                                   --             --
                   Avenue A                                 --             --
                   Corporate                             792,068        882,409
                                                     -----------    -----------
            Total other corporate expenses           $   792,068    $   882,409
                                                     ===========    ===========

            Depreciation and amortization expense:
                   SRC                               $    20,467    $    21,867
                   LA                                       --             --
                   Chicago                                  --             --
                   Atlanta                                88,396        107,598
                   7 West                                   --             --
                   Avenue A                               28,431         26,379
                   Corporate                               4,807          1,521
                                                     -----------    -----------
            Total depreciation and amortization
              expense                                $   142,101    $   157,365
                                                     ===========    ===========

                                      -21-
<PAGE>

                             SOULFOOD CONCEPTS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 12 - SEGMENT INFORMATION (Continued)

                                                    Year Ended
                                                    December 31,
                                             --------------------------
                                                2001            2000
                                             -----------    -----------
            Income (loss) from operations:
                   SRC                       $   535,664    $   641,188
                   LA                            (72,793)       (95,223)
                   Chicago                       (63,733)      (126,366)
                   Atlanta                       (68,473)       267,131
                   7 West                           --             --
                   Avenue A                      163,320        151,914
                   Corporate                    (796,875)      (883,930)
                                             -----------    -----------
            (Loss) income from operations:   $  (302,890)   $   (45,286)
                                             ===========    ===========

            Identifiable assets:
                   SRC                          $13,2058    $   115,694
                   LA                               --          482,128
                   Chicago                       359,669        363,336
                   Atlanta                       298,855        415,863
                   7 West                             60          2,228
                   Avenue A                       73,265        148,033
                   Corporate                      48,571         53,236
                                             -----------    -----------
            Total assets                     $   913,625    $ 1,580,518
                                             ===========    ===========

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, 2001 AND 2000

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 -  SUBSEQUENT EVENTS

         The Company is in the process of restructuring a new lease for its
         Chicago based operation along with new renovations with anticipated
         reopening by the third quarter 2002.





                                      -23-