<PAGE>


                                    UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

                                     FORM 10-QSB



             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE 
                           SECURITIES EXCHANGE ACT OF 1934

                    For the quarterly period ended April 7, 1998
                                          
                                          
                                         OR
                                          
                                          
          [   ] TRANSITION RPEORT PURSUANT TO SECTION 13 OR 15(D)  OF THE
                          SECURITIES EXCHANGE ACT OF 1934
          For the transition period from    __________   to   __________
                                          
                                          
                                          
                           Commission file number 0-24788
                                          
                                          
                                          
                          MACHEEZMO MOUSE RESTAURANTS, INC.
                                          
         (Exact name of small business issuer as specified in its charter)
                                          



          Oregon                                      93-0929139
(State or other jurisdiction of          (I.R.S. Employer Identification No.)
incorporation or organization)


                          1020 SW TAYLOR STREET, SUITE 685
                               PORTLAND, OREGON 97205
                      (Address of principal executive offices)
                                          
                                    503-274-0001
                            (Issuer's telephone number)
                                          
                                          
   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 past 12 months 
(or for such shorter period that the registrant was required to file Such 
reports), and (2) has been subject to such filing requirements for the past 
90 days. Yes X  No__
                                          
                                          
Number of shares of Common Stock outstanding at April 07, 1998: 3,985,630

Transitional Small Business Disclosure Format: Yes __ No X
                                          
                                          



<PAGE>

                          MACHEEZMO MOUSE RESTAURANTS, INC
                                    FORM 10-QSB
                                       INDEX
                                          
                                          
                         PART 1 - FINANCIAL INFORMATION   

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<S>                                                                        <C>
Item 1.  Financial Statements
     
         Balance Sheets - April 7, 1998 and July 1, 1997                     2

         Statements of Operations - Twelve Weeks and Forty Weeks Ended
         April 7, 1998 and April 08, 1997.                                   3

         Statements of Cash  Flows - Forty Weeks Ended April 7, 1998
         and  April 08, 1997                                                 4
               
         Notes to Financial Statements                                       5


Item 2.  Management's Discussion and Analysis or Plan of Operation           5



                             PART II - OTHER INFORMATION



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


Item 6.  Exhibits and Reports on Form 8-K

</TABLE>

<PAGE>
                          MACHEEZMO MOUSE RESTAURANTS, INC.
                                    BALANCE SHEETS
                                    (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                             APRIL  07,      JULY  01,
                                                                1998            1997
                                                            (UNAUDITED)     (UNAUDITED)
                                                            -----------     -----------
<S>                                                         <C>             <C>
                 ASSETS 

Current assets
     Cash and cash equivalents                                  $  482       $  1,306
     Short-term investments in marketable securities               510            498
     Inventories of food and paper                                  93             98
     Non-trade receivables                                          15             95
     Other current assets                                           86             31
                                                            -----------     -----------
            Total current assets                                 1,186          2,028

Property and equipment, net of accumulated
  depreciation and amortization of $703 at
  April 08, 1998 and $582 at July 01, 1997                         690            926
Other assets                                                        33             37
                                                            -----------     -----------
                                                              $  1,909       $  2,991
                                                            -----------     -----------
                                                            -----------     -----------
      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
     Accounts payable                                           $  302         $  328
     Accrued payroll and payroll related expenses                  132            144
     Accrued expenses and other current liabilities                 56             67
     Accrued restructuring expense                                  11            261
                                                            -----------     -----------
            Total current liabilities                              501            800

Other deferred liabilities
     Deferred rent expense                                          83            108
     Other liabilities                                              45             30
                                                            -----------     -----------
            Total liabilities                                      629            938

Shareholders' equity
     Preferred stock, undesignated, 5000 shares
       authorized, none issued                                                      -
     Common stock, 10,000 shares
       authorized, 3,986 shares issued and outstanding          10,178         10,178
     Accumulated deficit                                        (8,898)        (8,125)
                                                            -----------     -----------
            Total shareholders' equity                           1,280          2,053
                                                            -----------     -----------
                                                              $  1,909       $  2,991
                                                            -----------     -----------
                                                            -----------     -----------

</TABLE>

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


                                       2

<PAGE>

                      MACHEEZMO MOUSE RESTAURANTS, INC.
                           STATEMENT OF OPERATIONS
                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                 (UNAUDITED)

<TABLE>
<CAPTION>

                                                                 TWELVE WEEKS ENDED             FORTY WEEKS ENDED
                                                              ------------------------      ------------------------
                                                              April 07,      April 08,      April 07,      April 08,
                                                                 1998           1997          1998            1997
                                                              ---------      ---------      ---------      ---------
<S>                                                           <C>            <C>            <C>            <C>
Sales, net                                                    $  1,319       $  1,616       $  4,556       $  5,890

Costs and expenses
     Food, beverage and packaging costs                            389            503          1,510          1,789
     Restaurant labor                                              481            601          1,653          2,087
     Other restaurant operating, expenses                          295            419          1,029          1,436
     Depreciation and amortization                                  22             49            130            236
     Retail division expenses                                       71              -             96              -
     General and administrative expenses                           292            658            978          1,849
                                                              ---------      ---------      ---------      ---------
    Total operating costs and expenses                           1,550          2,230          5,396          7,397
                                                              ---------      ---------      ---------      ---------

Operating loss                                                 $  (231)       $  (614)       $  (840)     $  (1,507)

Other income (expense)
     Interest income                                                 9             23             46            117
     Interest expense                                                -              1
     Other                                                          21            (43)            21            (54)
                                                              ---------      ---------      ---------      ---------
Net loss                                                       $  (201)       $  (633)       $  (773)     $  (1,444)
                                                              ---------      ---------      ---------      ---------
                                                              ---------      ---------      ---------      ---------
Basic and diluted loss per common share                       $  (0.05)      $  (0.16)      $  (0.19)      $  (0.36)
                                                              ---------      ---------      ---------      ---------
                                                              ---------      ---------      ---------      ---------
Basic and Diluted weighted average
 number of Common shares outstanding                             3,986          3,974          3,986          3,974
                                                              ---------      ---------      ---------      ---------
                                                              ---------      ---------      ---------      ---------

</TABLE>

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

                                       3

<PAGE>

                      MACHEEZMO MOUSE RESTAURANTS, INC.
                           STATEMENT OF CASH FLOWS
                               (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                  FORTY WEEKS ENDED
                                                              -----------------------
                                                               APRIL 07,    APRIL 08,
                                                                 1998         1997
                                                              (UNAUDITED)  (UNAUDITED)
                                                              -----------  -----------
<S>                                                           <C>          <C>
Cash flows from operating activities:
    Net loss                                                  $   (773)     $  (1,444)
    Adjustments to reconcile net loss to
     net cash used in operating activities:
    Depreciation and amortization                                  149            270
    Discount amortization on investments                                          (15)
    Loss on disposal of equipment                                   13             11
    Net changes in operating assets and liabilities:
    Inventories                                                      5             38
    Non-trade receivables                                           80             17
    Other current assets                                           (45)           (87)
    Accounts payable, accrued payroll and expenses,
    deferred rent and other liabilities                            (60)           127
    Accrued restructuring expense                                 (136)          (126)
                                                              -----------  -----------
         Net cash used in operating activities                    (767)        (1,209)
                                                              -----------  -----------
Cash flows from investing activities:
    Acquisition of property and equipment                          (40)          (183)
    Purchase of marketable securities                             (510)        (1,719)
    Proceeds from maturity of marketable securities                498          2,482
    Increase (decrease) in other assets                             (5)           (10)
                                                              -----------  -----------
         Net cash (used in) provided by investing activities       (57)           570
                                                              -----------  -----------
Cash flows from financing activities:
    Proceeds from exercise of stock options                         -              33
                                                              -----------  -----------
         Net cash provided by financing activities                  -              33
                                                              -----------  -----------
Net decrease in cash and cash equivalents                         (824)          (606)

Cash and cash equivalents at beginning of period                 1,306          1,488

Cash and cash equivalents at end of period                      $  482            882
                                                              -----------  -----------
                                                              -----------  -----------

</TABLE>

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

                                       4

<PAGE>

MACHEEZMO MOUSE RESTAURANTS, INC
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS)

1. BASIS OF PRESENTATION

The accompanying unaudited financial statements as of and for the twelve and 
forty week periods ended April 7, 1998 and April 08, 1997 have been prepared 
in conformity with generally accepted accounting principles. The financial 
information as of July 1. 1997 is derived from the Macheezmo Mouse 
Restaurants, Inc. (the "Company") financial statements included in the 
Company's Annual Report on Form 10-KSB for the year ended July 1, 1997 
(fiscal 1997). Certain information or footnote disclosures normally included 
in financial statements prepared in accordance with generally accepted 
accounting principles have been condensed or omitted, pursuant to the rules 
and regulations of the Securities and Exchange Commission. In the opinion of 
management, the accompanying unaudtied financial statements include all 
adjustments necessary (which are of a normal and recurring nature) for the 
fair presentations of the results of the interim period presented.  The 
accompanying unaudited financial statements should be read in conjunction 
with the Company's audited financial statements for fiscal 1997, as included 
in the Company's Annual Report on Form 10-KSB for the year then ended.  
Operating results for the twelve and Forty week periods ended April 7, 1998 
and April 08, 1997 are not necessarily indicative of the results that may be 
expected for the entire fiscal year ending June 30, 1998 (fiscal 1998), or 
any portion thereof.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS. 

INTRODUCTION

The Company commenced operations in 1981 with the opening of the first 
restaurant in Portland, Oregon.  As of April 07, 1998 the Company owned and 
operated 13 restaurants. Four restaurants were closed in Fiscal 1997 and one 
restaurant was closed in the first quarter of fiscal 1998. In February 1998 
the Company closed one additional restaurant in Portland, Oregon. The closing 
of restaurants affects the comparability of results of operations from period 
to period.

The company prepares statements of operations for 13 periods each year. The 
first fiscal quarter, Generally consisting of the months of July through 
mid-October, includes four periods (sixteen weeks) and each of the following 
three-quarters includes three such periods (twelve or thirteen weeks). 
Because of the longer first fiscal quarter and the seasonality of its 
business, the Company's sales and operating income are typically highest in 
the first fiscal quarter. The Company's fiscal year ends on the Tuesday 
closet to June 30: June 30, 1998 for fiscal 1998. Fiscal 1997 was a 52-week 
period and fiscal 1998 will also be a 52-week period.

QUARTERLY VARIABILITY

The Company's restaurants have historically experienced higher average weekly 
sales in the first and fourth fiscal quarters. Accordingly, operating income 
margins and net income margins have been and are expected to continue to be 
higher in each of those quarters than in second and third fiscal quarters. In 
addition, the first quarter includes 16 weeks of operations, compared with 12 
or 13 weeks for each of the remaining three-

                                       5

<PAGE>

quarters. Consequently, consecutive quarter-to-quarter comparisons of the 
company's results of operations may not be meaningful and results of any 
quarter are not necessarily indicative of the actual results for a full 
fiscal year.

FORWARD - LOOKING INFORMATION.  

The statements concerning expected future financing requirements, cost 
reduction and retail activities and the Year 2000 issue constitutes forward 
-looking statements that are subject to risks and uncertainties. Factors that 
could materially affect future financing in the event of lower than expected 
retail and restaurant sales, increased competitive factors ( including 
increased competition, new product offerings by competitors and price 
pressures), in sales volume, changes in menu offerings, a longer than 
expected period to achieve market acceptance of any new menu or retail 
offerings, a longer than expected period to achieve market acceptance of any 
new menu or retail offerings and difficulties implementing new menu and 
retail offerings, as well as unfavorable business conditions and disruptions 
in the restaurant industry and general economy. Factors that could adversely 
affect cost reduction and retail activities include, but are not limited to, 
the industry factors and general business conditions noted above. Factors 
that could materially impact the Year 2000 issue include, but are not limited 
to, unanticipated cost associated with any required modification to the 
Company's computer systems and associated software.


                                       6

<PAGE>

RESULTS OF OPERATIONS

The following is a discussion of the results of operations for the 12 and 40 
week periods ended April 07, 1998 and April 08, 1997. The Statement of 
Operations table sets forth the percentage relationship to net sales, unless 
otherwise indicated, of certain statement of operations data. The Restaurant 
Operating Data table sets forth certain restaurant data for the periods 
indicated.

                          STATEMENT OF OPERATIONS DATA

<TABLE>
<CAPTION>
                                                                  TWELVE WEEKS ENDED             FORTY WEEKS ENDED
                                                               ------------------------      ------------------------
                                                               April 07,      April 08,      April 07,      April 08,
                                                                  1998           1997           1998           1997
                                                               ---------      ---------      ---------      ---------
<S>                                                            <C>            <C>            <C>            <C>
Sales, net                                                        100%           100%           100%           100%

Costs and expenses
     Food, beverage and packaging costs                           29.5           31.1           33.1           30.4
     Restaurant labor                                             36.5           37.1           36.3           35.4
     Other restaurant operating, expenses                         22.4           25.9           22.6           24.3
     Depreciation and amortization                                 1.7            3.0            2.9            4.0
     Retail division expenses                                      5.4              -            2.1              -
     General and administrative expenses                          22.1           40.7           21.5           31.3
                                                               ---------      ---------      ---------      ---------
           Total operating costs and expenses                    117.6          137.8          118.5          125.4
                                                               ---------      ---------      ---------      ---------
Operating loss                                                   (17.6)      $  (37.8)         (18.5)      $  (25.4)

Other income (expense)
     Interest income                                               0.8           15.0            1.0            2.0
     Interest expense                                                -              -
     Other expense                                                 1.6           (2.7)           0.5           (0.9)
                                                               ---------      ---------      ---------      ---------
Net loss                                                         (15.2)         (25.5)           (17)         (24.3)
                                                               ---------      ---------      ---------      ---------
                                                               ---------      ---------      ---------      ---------
</TABLE>



                           RESTAURANT OPERATING DATA

<TABLE>
<CAPTION>
                                                  FOR THE FORTY WEEKS ENDED
                                                  -------------------------
                                                   APRIL 07,      APRIL 08,
                                                     1998           1997
                                                  ----------      ----------
<S>                                               <C>             <C>
Number of restaurants:
    Open at the beginning of the period                14             19
    Opened during the period                            -              -
    Closed during the period                           (1)            (1)
                                                  ----------      ----------
    Open at the end of period                          13             18
                                                  ----------      ----------
                                                  ----------      ----------

</TABLE>

                                       7

<PAGE>

TWELVE WEEKS (THIRD QUARTER) AND FORTY WEEKS (THREE QUARTERS) ENDED APRIL 07,
1998 COMPARED TO TWELVE WEEKS (THIRD QUARTER) AND FORTY WEEKS (THREE QUARTERS)
ENDED APRIL 08, 1997.


SALES, NET.  Restaurant sales decreased in the third quarter of fiscal 1998 
and three quarters ending in fiscal 1998 in comparison to third quarter of 
fiscal 1997 and three quarters ending in fiscal 1997. There were 13 
Restaurants operating at the end of the three-quarters ending in fiscal year 
of 1998 compared to 19 restaurants operating in the same fiscal period of 
1997. Same store sales comparisons of the Company's restaurants are more 
favorable in third quarter fiscal 1998 than same period in fiscal 1997. The 
Company managed to halt the precipitous same store sales decline that they 
had experienced in previous quarters.

COSTS AND EXPENSES.

Food, beverage and packaging costs decreased in the third quarter of fiscal 
1998 in comparison to same quarter in fiscal 1997.  These costs were also 
decreased for three-quarters ending in fiscal 1998 compared to three quarters 
ending in fiscal  1997. The Company is aggressively managing its cost of 
sales and purchasing relationships with our vendors. This aggressive 
management has resulted in greatly improved COS numbers. In the fourth 
quarter of 1997 the company introduced new menu items, including grilled 
steaks, chicken and pork, which have higher food costs than items previously 
on the menu.

Restaurant labor expenses consist primarily of restaurant management and 
hourly employee wages, payroll taxes, worker's compensation and group 
insurance. Labor expenses decreased in both third and three quarters ending 
in fiscal 1998. The decreases were due to efficiencies in operations and 
salary and hourly management. As reflected in the management of COS, the 
Company is aggressively managing store level labor costs while at the same 
time improving the level of customer service for our patrons. The Company's 
current stores are located in the Portland, Oregon metropolitan area where 
unemployment is low, which has the effect of increasing wage levels required 
to attract and retain qualified employees.

Other restaurant operating expenses consist primarily of rent, utilities and 
miscellaneous supplies and services. Other restaurant operating expenses have 
decreased in the third quarter of fiscal 1998 compared to third quarter of 
fiscal 1997. These expenses also decreased for three-quarters ending in 
fiscal 1998 compared to same period in fiscal 1997.  The decrease is 
primarily due to efficiencies in operating systems and management.

Depreciation and amortization expenses decreased in the third quarter and 
three quarters ending in fiscal 1998 compared to third quarter and three 
quarters ending in fiscal 1997. In the fourth quarter of both fiscal 1997 and 
1996 the company wrote down closed and existing restaurant assets to their 
estimated fair market values in accordance with the adoption of Statement of 
Financial Accounting Standards No. 121, "ACCOUNTING FOR THE IMPAIRMENT OF 
LONG-LIVED ASSETS TO BE DISPOSED OF" (SFAS No. 121), thereby decreasing the 
amount of related Depreciation expenses.

The Company incurred expenses of approximately $25,000 in the second quarter 
of fiscal 1998 related to the start-up of retail operations, which primarily 
consisted of recipe development and sales related activities.  The Company, 
as originally planned, launched its first retail contract in third quarter of 
fiscal 1998. The Company initially supplied local Costco's with the Company's 
branded retail products in the third quarter of fiscal 1998. Additionally the 
Company began to supply burritos to Oregon school lunch programs; it began 
with the Beaverton, Oregon school district. The Company plans to expand its 
retail operation in fourth quarter of fiscal 1998. There is no assurance that 
the Company will be successful in attaining or sustaining a level of retail 
sales sufficient to cover the expenses related to such sales.

                                       8

<PAGE>

General and administrative expenses decreased in the third and three quarters 
ending in fiscal 1998 compared to fiscal 1997. The decreases were primarily 
attributable to the reduction in the number of general and administrative 
employees, reduction in corporate spending and increased corporate operating 
efficiencies.

INCOME TAXES

The Company is in a net deferred tax position and has generated 100% net 
operating losses in fiscal 1998.  Accordingly, no provision for benefit from 
income taxes has been recorded in the accompanying statements of operations. 
The Company will continue to provide a valuation allowance for it's deferred 
tax assets until it becomes more likely than not, in management's assessment, 
that the Company's deferred tax assets will be realized.

NASDAQ MATTERS

On October 1,  1997 the Company's Common Stock was deleted from listing on 
the Nasdaq National Market System ("Nasdaq NMS") for failure to maintain the 
minimum bid price requirement for continued listing of $1.00 per share.

Since October 1, 1997 trading in the Company's Common Stock has been 
conducted in the over the counter market on an electronic bulletin board 
established for securities that do not meet Nasdaq requirements, or in what 
are commonly referred to as "Pink Sheets".  As a result, an investor may 
likely find it more difficult to dispose of or to obtain accurate quotations 
as to the price of the Company's Common Stock than was the case when the 
Company's Common Stock was listed on the Nasdaq NMS.  In addition, after 
October 1, 1997, the Company's Common Stock is subject to "Penny Stock" rules 
that impose additional sales practice requirements on broker-dealers who sell 
such securities.  The delisting of the Company's Common Stock from Nasdaq NMS 
could adversely affect the ability or willingness of broker-dealers to sell 
the Company's Common Stock and the ability of purchasers of the Company's 
Common Stock to sell their securities in the secondary market.

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

On November 6, 1997 at the Company's annual meeting, the holders of the 
Company's outstanding common stock took the action described below.  At the 
Company's annual meeting, 3,985,630 shares of common stock were eligible to 
vote.

1.   The shareholders elected each of William S. Warren, Jack B. Schwartz
     and Dara Dejbakhsh to Company's board of directors, by the votes
     indicated below, to serve for ensuing year.  There were no abstentions
     or broker non-votes.

<TABLE>
<CAPTION>
                                            VOTES FOR        VOTES WITHHELD
          <S>                               <C>              <C>
          William S. Warren                 3,508,091            77,575
          Jack B. Schwartz                  3,512,052            73,614
          Dara Dejbakhsh                    3,512,641            73,025

</TABLE>

                                       9

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  The exhibit filed as part of this report is listed below:

                    EXHIBIT NO.
                    -----------
                        27         Financial Date Schedule

     (b)  Reports on Form 8-K:

          Change of independent auditors from Price Waterhouse LLP to
          Cacciamatta Accountancy Corporation.
     
     
                                       10

<PAGE>

     In accordance with the requirements of the Exchange Act, the registrant 
caused this report to be signed on its behalf by the undersigned thereunto 
duly authorized.


Dated:    May 26th, 1998
     
                                               MACHEEZMO MOUSE RESTAURANTS, INC
     
                                               By:  /s/ SCOTT FISHER
                                                    Vice President




                                       11