SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   Form 10-Q


(Mark one)
    (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                 FOR THE QUARTERLY PERIOD ENDED MARCH 2, 1997

    ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______________________TO ______________________

                          Commission file number 1-23020

                          THE APPLETREE COMPANIES, INC.
           (Exact name of registrant as specified in its charter)

            Delaware                                 65-0205933
(State or other jurisdiction of incorporation     (I.R.S. Employer
           or organization)                      Identification No.)


           5732 Curlew Drive
           Norfolk, Virginia                          23502
(Address of principal executive offices)           (Zip Code)

                                (757) 466-9200
              (Registrant's telephone number including area code)


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

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares of the Common Stock of the issuer outstanding as of March
2, 1997 was 111,556,357.



                          THE APPLETREE COMPANIES, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                      March 2, 1997 and September 1, 1996
                     (rounded to thousands except share data)


                                                    March 2,     September 1,
                                                     1997             1996
                                                  ------------   -------------
                                                  (Unaudited)
                                       ASSETS
Current assets: 
  Cash and cash equivalents                       $   139,000     $   248,000
  Accounts receivable (net of allowance for 
   doubtful accounts and spoilage of $568,000
   in 1997 and $693,000 in 1996)                      888,000       1,431,000
  Inventories                                         491,000       1,067,000
  Prepaid expenses and other current assets            84,000          41,000
                                                  -----------     -----------

     Total current assets                           1,602,000       2,787,000

Property and equipment, net                         3,954,000       4,351,000
Deposits and other assets                             361,000         324,000
                                                  -----------     -----------

     Total assets                                 $ 5,917,000     $ 7,462,000
                                                  ===========     ===========


                LIABILITIES AND STOCKHOLDERS' EQUITY DEFICIENCY

Current liabilities:
  Notes payable                                   $    24,000     $    56,000
  Convertible debentures due on demand              3,957,000       1,050,000
  Current portion of capitalized lease obligations    213,000         176,000
  Current portion of long-term debt                   237,000         201,000
  Accounts payable                                  2,933,000       3,029,000
  Accrued expenses                                  1,287,000       2,131,000
  Reclassification of long-term debt                3,170,000       3,061,000
                                                  -----------     -----------
     Total current liabilities                     11,821,000       9,704,000

Capitalized lease obligations, net of
  current portion                                     870,000         964,000
Long-term debt, net of current portion                105,000         215,000
Convertible debentures                                400,000         500,000
                                                  -----------     -----------
     Total liabilities                             13,196,000      11,383,000
                                                  -----------     -----------


Stockholders' equity deficiency:
  Preferred stock- par value $.001 per share, 
    10,000,000 shares authorized, 85,494 shares
    issued and outstanding as of March 2, 1997 
    (liquidation preference of $3,856,140); 85,389
    shares issued and outstanding as of September
    1, 1996 (liquidation preference of $3,740,640)       -               -
  Common Stock - par value $.001 per share, 
    120,000,000 shares authorized, 111,565,122
    shares issued and 111,556,357 shares
    outstanding as of March 2, 1997;  115,089,087
    shares issued and 115,080,322 shares
    outstanding as of September 1, 1996               112,000         115,000
  Additional paid-in capital                       35,953,000      35,933,000
  Accumulated deficit                             (43,185,000)    (39,810,000)
  Less treasury stock, at cost                       (159,000)       (159,000)
                                                  -----------     -----------
     Total stockholders' equity deficiency         (7,279,000)     (3,921,000)
                                                  -----------     -----------

     Total liabilities and stockholders'
       equity deficiency                          $ 5,917,000     $ 7,462,000
                                                  ===========     ===========


    See accompanying notes to condensed consolidated financial statements.




                         THE APPLETREE COMPANIES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                for the three-month and six-month periods ended 
                        March 2, 1997 and March 3, 1996
                  (rounded to thousands except per share data)
                                  (Unaudited)

                       Three-month period ended       Six-month period ended
                         March 2,      March 3,        March 2,     March 3,
                           1997          1996            1997         1996
                       -----------   -----------     -----------  -----------
Net sales               $3,419,000    $7,230,000      $8,757,000  $15,260,000

Costs of goods sold      2,090,000     4,632,000       5,497,000    9,756,000
                       -----------   -----------     -----------  -----------
Gross profit             1,329,000     2,598,000       3,260,000    5,504,000
                       -----------   -----------     -----------  -----------
Operating expenses:
 Selling, general and
  administrative         2,548,000     4,407,000       5,959,000    8,727,000
 Professional fees         118,000        18,000         193,000      189,000
                       -----------   -----------     -----------  -----------
  Total operating 
   expenses              2,666,000     4,425,000       6,152,000    8,916,000
                       -----------   -----------     -----------  -----------
  Loss from operations  (1,337,000)   (1,827,000)     (2,892,000)  (3,412,000)
                       -----------   -----------     -----------  -----------
Other expense:
 Interest expense          242,000       278,000         402,000      535,000
 Other expense             (37,000)       29,000         (35,000)      44,000
                       -----------   -----------     -----------  -----------
  Total other expense      205,000       307,000         367,000      579,000
                       -----------   -----------     -----------  -----------
  Net loss             $(1,542,000)  $(2,134,000)    $(3,259,000) $(3,991,000)
                       ===========   ===========     ===========  ===========
Net loss per common share:
 Net loss applicable
  to common
  stockholders         $(1,623,000)  $(2,150,000)    $(3,421,000) $(4,153,000)
                       ===========   ===========     ===========  ===========
 Weighted average
  number of common
  shares outstanding   110,946,000    38,184,000      110,549,000  31,042,000
                       ===========    ==========      ===========  ==========
 Net loss per common
  share                  $ (0.01)      $ (0.06)         $ (0.03)    $ (0.13)
                         =======       =======          =======     =======

    See accompanying notes to condensed consolidated financial statements.



                         THE APPLETREE COMPANIES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
        for the six-month periods ended March 3, 1997 and March 2, 1996
                            (rounded to thousands)


                                                    1997              1996
                                                ------------     -------------

Cash flows from operating activities:            $(3,259,000)     $(3,991,000)
  Net loss 
  Adjustments to reconcile net loss to net
    cash used in operating activities:
      Depreciation                                   427,000          439,000
      Amortization expense                              -              21,000
      Bad debt expense                                48,000          (32,000)
      Loss on sale of property and equipment           3,000            9,000
      Common stock issued as payment of finance 
       costs                                          22,000             -
      Gain on settlement of debt                     (17,000)            -
      Changes in operating assets and liabilities,
       net of effects of acquisition:
        Accounts receivable                          495,000          417,000
        Inventories                                  576,000         (155,000)
        Prepaid expenses and other current assets    (43,000)        (114,000)
        Other assets                                 (37,000)         (65,000)
        Accounts payable and accrued expenses       (884,000)      (1,165,000
                                                 -----------       ----------
        Net cash used in operating activities     (2,669,000)      (4,636,000)
                                                 -----------       ----------
Cash flows from investing activities:
  Payments for acquisition                              -             (55,000)
  Capital expenditures                               (25,000)        (264,000)
  Proceeds from sale of property and equipment        10,000            5,000
                                                 -----------       ----------
        Net cash used in investing activities        (15,000)        (314,000)
                                                 -----------       ----------
Cash flows from financing activities:
  Proceeds from issuance of convertible debentures 2,657,000        1,705,000
  Proceeds from issuance of note payable                -             603,000
  Payments on note payable, long-term debt 
    and capitalized lease obligations                (72,000)        (243,000)
  Deferred financing costs                              -             (34,000)
  Proceeds from issuance of preferred 
    and common stock                                 (10,000)       3,158,000
                                                 -----------       ----------

        Net cash provided by financing activities  2,575,000        5,189,000
                                                 -----------       ----------
        Net increase (decrease) in cash 
        and cash equivalents                        (109,000)         239,000

Cash and cash equivalents at beginning of year       248,000             -
                                                 -----------       ----------
Cash and cash equivalents at end of period       $   139,000       $  239,000
                                                 ===========       ==========


    See accompanying notes to condensed consolidated financial statements.


                       THE APPLETREE COMPANIES, INC. 
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
         Three-Month and Six-Month Periods Ended March 2, 1997
                           and March 3, 1996
                              (Unaudited)


Note 1       PETITION IN BANKRUPTCY

On April 4, 1997, the Company's Board of Directors authorized the filing 
of a voluntary petition for The AppleTree Companies, Inc. and its 
subsidiary, Americas Foods, Inc., (collectively, the "Petitioner") in the 
United States Bankruptcy Court for the Eastern District of Virginia 
seeking to reorganize under Chapter 11 of the Federal Bankruptcy Code.  
On April 4, 1997, the Company filed its petition requesting to continue 
in the management and control of its business and property as debtor-in-
possession under the Bankruptcy Code.  The Company has not yet drafted a 
Plan of Reorganization, but has entered into agreements with real estate 
agents offering certain of its real estate for sale in an effort to 
improve its financial position and cash flows.

The consolidated financial statements of The AppleTree Companies, Inc. 
and subsidiaries (the "Company") have been prepared in accordance with 
generally accepted accounting principles applicable to a going concern 
which contemplate, among other things, realization of assets and payment 
of liabilities in the normal course of business and do not purport to 
reflect or provide for all consequences of the Petitioner's ongoing 
Chapter 11 proceedings.  The consolidated financial statements do not 
include any adjustments relating to the recoverability and classification 
of asset carrying amounts or the amount and classification of liabilities 
or the effects on existing stockholders' equity that may result from any 
plans, arrangements or other actions arising from the aforementioned 
proceedings, or the inability of the Company to continue as a going 
concern, because the eventual outcome of the matter referred to in the 
preceding paragraph is not presently determinable.

The continuation of operations of the Company is dependent upon its 
ability to operate profitably and generate sufficient cash from 
operations or other sources to effectuate a Plan of Reorganization that 
will meet ongoing obligations over a sustained period, continue normal 
credit terms with its suppliers, obtain adequate financing for future 
needs and obtain the required approvals of creditors and the Bankruptcy 
Court of a Plan of Reorganization.

The Bankruptcy Code allows the debtor-in-possession to either assume or 
reject certain liabilities, leases or other executory contracts subject 
to court approval.  In addition, upon the formation of a Plan of 
Reorganization, other potential adjustments to asset values or accruals 
of liabilities could result from potential asset sales or liquidation of 
liabilities at amounts different than amounts reflected in historical 
financial statements.  At the present time it is not possible to estimate 
with any degree of certainty the ultimate adjustment to assets or 
liabilities which may result from any such potential adjustments.


Note 2       BASIS OF PRESENTATION

In the opinion of management of the Company, the accompanying condensed 
consolidated financial statements contain all adjustments, which consist 
only of normal and recurring adjustments, necessary for a fair 
presentation of results for the periods indicated.  The results of any 
interim period are not necessarily indicative of results for the full 
year.  The September 1, 1996 condensed consolidated balance sheet was 
derived from audited financial statements.  Certain information and 
footnote disclosures normally included in financial statements prepared 
in accordance with generally accepted accounting principles have been 
condensed or omitted.  These condensed consolidated financial statements 
should be read in conjunction with the consolidated financial statements 
and related notes thereto for the year ended September 1, 1996.


Note 3 -      CESSATION OF WESTERN OPERATIONS

As part of its ongoing efforts to reduce operating expenses and achieve 
profitability, effective at the close of business on February 14, 1997, 
the Company ceased its manufacturing operations in Salt Lake City, Utah
and eliminated routes emanating from that location.  The Company is seeking
a buyer for this manufacturing facility.

Also, effective at the close of business on that date, Paul Mitchell, the 
Company's vice president of sales resigned, and, through MICCIO 
Enterprises, Inc., an entity he created, took over the Company's 
Phoenix, Arizona manufacturing and distribution operations.  The 
Company acquired those operations, together with the Sandwich Maker 
name, in October 1995 from entities owned by Mr. Mitchell.  This 
transaction is the subject of a letter of intent dated February 14, 1997 
and the terms of this transaction have not been finalized and are subject 
to the Bankruptcy Court, Board of Directors and a lender's approval.  The 
Company will continue production under the Sandwich Maker name and 
expects to enter into a license agreement with MICCIO Enterprises, Inc. 
relating to the Sandwich Maker name.  No accounting recognition has been 
given to this transaction due to its current pending status.

Pro forma results of operations for the year ended September 1, 1996 and 
the three-month period ended December 1, 1996 reflect the results of 
operations without those operations as though the transaction occurred on 
September 4, 1995.  The net book value of assets held for sale is 
approximately $669,000; and net assets being sold to MICCIO Enterprises, 
Inc. are approximately $59,000 (net of estimated liabilities of 
approximately $155,000).



Note 4 -      INVENTORIES

      Inventories consist of the following:

                                          March 2, 1997   September 1, 1996
                                          -------------   -----------------
                                           (Unaudited)

      Raw materials and supplies             $  229,000       $  467,000
      Finished goods                            262,000          600,000
                                             ----------      -----------
                                             $  491,000       $1,067,000
                                             ==========       ==========


Note 5 - PROPERTY AND EQUIPMENT
      
      Property and equipment consist of the following:

                                          March 2, 1997   September 1, 1996
                                          -------------   -----------------
                                           (Unaudited)

      Land                                   $  472,000       $  472,000
      Buildings and improvements              1,225,000        1,215,000
      Furniture, fixtures and equipment       1,162,000        1,154,000
      Machinery and equipment                 1,820,000        1,820,000
      Transportation and delivery equipment   1,343,000        1,340,000
                                             ----------       ----------
                                              6,022,000        6,001,000
      Accumulated depreciation and 
       amortization                          (2,068,000)      (1,650,000)
                                             ----------       ----------
                                             $3,954,000       $4,351,000
                                             ==========       ==========


Note 6 - CONVERTIBLE DEBENTURES

The Company issued $2,807,200 of 8% debentures in the first six months of 
fiscal 1997, and $85,750 of 8% debentures in March 1997.  The outstanding 
principal balance of each debenture is payable on demand.  Interest for 
the first year is waived, and thereafter, interest is payable monthly.  
New debentures may be converted into common stock at conversion prices 
ranging from $.0075 to $.0125 per share.  The Company, however, currently 
does not have sufficient authorized and unissued shares of common stock 
to issue upon the conversion of any debentures.  The Company may redeem 
the debentures at any time prior to maturity for the principal amount 
outstanding including accrued interest.

The Company issued 3,776,000 shares of its common stock during the first 
quarter of fiscal 1997 in partial satisfaction of a convertible 
debenture ($100,000) and accrued interest of $18,000.  The Company also 
issued 2 million shares of its common stock in the second quarter as 
payment of $22,000 of a $25,000 financing fee.

In January 1997, an investor rescinded a $100,000 common stock 
transaction for 8 million shares in exchange for a convertible debenture 
for the same amount effective at August 16, 1996, the date of the 
original transaction.


Note 7 - PREFERRED STOCK TRANSACTIONS

The Company's 11% Convertible Preferred Stock ("COPS") has a dividend or 
payment in lieu thereof, payable quarterly commencing June 30, 1996.  In 
September 1996, the Company issued 105 shares of COPS in payment of the 
June 30, 1996 dividend.  Through April 21, 1997, the Company had not 
fulfilled the dividend requirements of the COPS for subsequent quarterly 
dividends.

Note 8 - CASH FLOW DISCLOSURES

Non cash financing activities:

In connection with its acquisition of Sandwich Maker in October 1995, 
the Company acquired assets and assumed liabilities as follows:

                                               1995
                                            ----------
Fair value of assets acquired                 $931,000
Liabilities assumed                           (593,000)
Issuance of note to seller                    (263,000)
                                             ---------
Net consideration paid                          75,000
Net other purchase price adjustments and
 amounts paid after December 3, 1995           (20,000)
                                             ---------
Cash paid for acquisition                    $  55,000
                                             =========

During the six-month period ended March 2, 1997, $100,000 of convertible 
debentures and accrued interest of $18,000 were converted into 3,776,000 
shares of common stock.  Further, in the second quarter, the Company 
issued 2 million shares of common stock as payment of $22,000 of a 
$25,000 financing fee.

During the six-month period ended March 2, 1997, the Company issued 105 
shares of its convertible preferred stock valued at approximately 
$116,000 as payment for dividends accrued through June 30, 1996 on 2,575 
shares of its convertible preferred stock.  The Company has not yet 
declared dividends for the three-month periods ended September 30, 1996, 
December 31, 1996 or March 31, 1997.


ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION       
AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

      Six-Month Period Ended March 2, 1997 compared to March 3, 1996

Net sales decreased $6,503,000 (approximately 43%) from $15,260,000 for 
the six-month period ended March 3, 1996 to $8,757,000 for the six-month 
period ended March 2, 1997.  The principal reason for the decrease was 
the Company's cash flow problems resulting in a general lack of product.  
Further, another factor in the decrease in net sales was the elimination 
of unprofitable routes which accounted for approximately $1,749,000 of 
the decrease.  Food service sales reductions resulting principally from 
the discontinuation of the institutional beef business accounted for 
approximately $790,000 and approximately $994,000 was due to reduced 
vending sales.

Cost of goods sold as a percentage of net sales for the six-month period 
ended March 2, 1997 was approximately 63% compared with approximately 64% 
for the six-month period ended March 3, 1996.

Operating expenses decreased $2,764,000 (approximately 31%) to $6,152,000 
(approximately 70% of net sales) for the six-month period ended March 2, 
1997 from $8,916,000 (approximately 58% of net sales) for the six-month 
period ended March 3, 1996.  This decrease was attained by management's 
elimination of duplicative expenses, consolidation of departments, 
elimination of unprofitable routes during the latter part of fiscal 1996, 
relocation of home office from Florida to Virginia, reduction of 
executive and other salaries and professional fees.  Payroll and related 
expenses declined by approximately $1.7 million from 1996 to 1997;  
travel and entertainment and utilities declined approximately $345,000 
and $200,000, respectively, due to fewer employees traveling and the 
closure of the patty plant.  Lease expense decreased approximately 
$303,000 due to the closure of the Company's corporate offices in Florida 
and reduced vehicle leases resulting from closure of unprofitable routes.

Other expenses decreased to $367,000 for the six-month period ended March 
2, 1997 compared with $579,000 for the six-month period ended March 3, 
1996.  The principal factor in this decrease was reduced interest expense 
in 1997, caused by the issuance of convertible debt which is noninterest 
bearing in its first year and conversion of amounts outstanding during 
the six-month period ended March 3, 1996 into common stock during fiscal 
1996.  This reduction was offset by default interest charged by the 
Company's lender commencing in January 1997.

The Company's net loss per common share decreased from $.13 in fiscal 
1996 to $.03 in fiscal 1997.  The principal cause for the decrease was 
the significant number of shares issued during the year ended September 
1, 1996 and subsequent thereto through conversions of convertible 
debentures and additional sales of common stock.


      Three-Month Period Ended March 2, 1997 compared to March 3, 1996

Net sales decreased $3,811,000 (approximately 53%) from $7,230,000 for 
the three-month period ended March 3, 1996 to $3,419,000 for the three-
month period ended March 2, 1997.  The principal reason for the 
decrease was the Company's cash flow problems resulting in a general lack 
of product.  Further, another factor in the decrease in net sales was the 
elimination of unprofitable routes which accounted for approximately 
$676,000 of the decrease.  Food service sales reductions resulting 
principally from the discontinuation of the institutional beef business 
accounted for approximately $435,000 and approximately $670,000 was due 
to reduced vending sales.

Cost of goods sold as a percentage of net sales for the three-month 
period ended March 2, 1997 was approximately 61% compared with 
approximately 64% for the three-month period ended March 3, 1996.  The 
decrease in cost for the 1997 period was attributable to reduced vending 
sales and reduced availability of resale products for DSD routes, both of 
which have a higher cost percentage.

Operating expenses decreased $1,759,000 (approximately 40%) to $2,666,000 
(approximately 78% of net sales) for the three-month period ended March 
2, 1997 from $4,425,000 (approximately 61% of net sales) for the three-
month period ended March 3, 1996.  This decrease was attained by 
management's elimination of duplicative expenses, consolidation of 
departments, elimination of unprofitable routes during the latter part of 
fiscal 1996, relocation of home office from Florida to Virginia, 
reduction of executive and other salaries, and a reduction of 
professional fees and electricity.  Payroll and related expenses declined 
by approximately $1.18 million from 1996 to 1997;  travel and 
entertainment and utilities declined approximately $188,000 and $136,000, 
respectively, due to fewer employees traveling and the closure of the 
patty plant.  Lease expense decreased approximately $281,000 due to the 
closure of the Company's corporate offices in Florida and reduced vehicle 
leases resulting from closure of the Company's western and other 
unprofitable routes.  The increase of operating expenses as a percentage 
of net sales was due to lower sales levels for 1997 compared with 1996.

Other expenses decreased to $205,000 for the three-month period ended 
March 2, 1997 compared with $307,000 for the three-month period ended 
March 3, 1996.  The principal factor in this decrease was reduced 
interest expense in 1996, caused by the issuance of convertible debt 
which is noninterest bearing in its first year and conversion of amounts 
outstanding into common stock during fiscal 1996.  This reduction was 
offset by default interest charged by the Company's lender commencing in 
January 1997.

The Company's net loss per common share decreased from $.06 in fiscal 
1996 to $.01 in fiscal 1997.  The principal cause for the decrease was 
the significant number of shares issued during the year ended September 
1, 1996 and subsequent thereto through conversions of convertible 
debentures and additional sales of common stock.


FINANCIAL CONDITION

The Company has experienced significant losses from operations since its 
inception.  The Company has had numerous demands on its capital through 
the fiscal year ended September 1, 1996 and the six-month period ended 
March 2, 1997 and it has a working capital deficit of $10,219,000 as of 
March 2, 1997.  Net cash used in operating activities was $2,669,000 for 
the six-month period ended March 2, 1997 compared with $4,636,000 in the 
six-month period ended March 3, 1996.  These matters precipitated the 
filing of the Company's bankruptcy petitions on April 4, 1997.

The Pendency of the Bankruptcy proceedings makes any discussion of 
financial condition speculative.  The Company's financial condition will 
be entirely dependent on the provisions of, and its ability to have 
approved, a Plan of Reorganization.  It is anticipated, however, that the 
Company will continue to seek to raise additional capital.  As 
substantially all of the Company's assets are pledged to secure the 
Company's indebtedness to Strategica and secured convertible debenture 
holders, the Company believes the consent of Strategica and the secured 
convertible debenture holders will be required to consummate the Plan of 
Reorganization or any sale of assets or of its securities.

In an effort to achieve profitability, the Company examined its gross 
profit by product and eliminated the unprofitable items, and revised 
sales prices during the first quarter of fiscal 1997 and increased prices 
commencing in the third quarter of fiscal 1997.  In February 1997, the 
Company closed its Salt Lake City and Phoenix manufacturing facilities 
and routes emanating from those locations to reduce its losses.  Further, 
the Company relocated the Company's home office to its Norfolk operations 
center in August 1996, dismissed several executive and administrative 
employees, reduced administrative overhead, eliminated unprofitable 
routes, reduced distribution costs, and further consolidated certain 
departments to reduce selling, general and administrative expenses.  
Management expects these changes will reduce the Company's losses and 
help achieve profitability and annual operating cash flows.  In addition, 
management continues to explore other opportunities to increase food 
service and vending sales revenues.  Further, the Company restructured 
its route system effective in September 1996 to eliminate unprofitable 
sales centers which will result in reduced payroll and overhead costs.  
The Company's viability as a going concern is dependent upon the 
successful implementation of these plans and obtaining a significant 
increase in working capital.

Net cash used in investing activities was $15,000 for the six-month 
period ended March 2, 1997 compared with $314,000 in comparable period of 
fiscal 1996.  Of the fiscal 1996 amount, $55,000 was used to fund an 
acquisition.  Capital expenditures were $25,000 and $264,000 during 
fiscal 1997 and 1996, respectively.  Management has evaluated the 
Company's current facilities and equipment and anticipates that 
additional capital expenditures may be necessary in the near future.  
Further, in the event that the Company is unable to comply with the 
provisions of the United States Food & Drug Administration Modified 
Consent Decree of Permanent Injunction pertaining to its Norfolk, 
Virginia manufacturing facility, dated February 28, 1997 (See Item 1 - 
Legal Proceedings), the Company may be forced to locate an alternative 
manufacturing location.  No material contractual commitments for capital 
expenditures existed at April 18, 1997.  There is no assurance that 
financing or equity capital will be available at terms acceptable to the 
Company to fund any significant capital expenditures.

During fiscal 1996, the Company financed its investments and operating 
deficits through funds obtained by the issuance of common stock and 
convertible debentures, and an additional $604,000 loan from Strategica 
Capital Corporation ("Strategica").  The Company received $4.7 million 
from the issuance of common stock during fiscal 1996.  The Company also 
received $3.3 million from the issuance of convertible debentures during 
fiscal 1996.  Most of the debentures are payable on demand and are 
noninterest bearing for the first year of the instrument.  During the 
six-month period ended March 2, 1997, the Company issued $2.807,200 of 
convertible debentures.

The Strategica loan agreement, originated in May 1995, has been declared 
to be in default by Strategica.  It requires monthly default interest 
payments at 25% (12.5% pursuant to the agreement) and contains 
substantial restrictions on the conduct of business and other activities 
of the Company other than in the ordinary course of business without the 
prior consent of the lender.  The loan is collateralized by substantially 
all the Company's tangible and intangible assets.  The loan agreement 
also limits the Company's ability to encumber assets or borrow additional 
funds without prior consent of the lender.  Pursuant to the agreement the 
Company may not declare or pay any dividends or make distributions of any 
kind in cash or stock.  The lender also has the right to nominate at 
least two members of the Company's board of directors (or three members 
if the board is expanded to seven members).  In connection with this 
financing, the Company also issued warrants to purchase common stock.  On 
November 22, 1995, the Company and its lender amended this loan agreement 
to provide for an additional future advance of up to $1 million, of which 
$604,000 was advanced to the Company.  The balance of the advance is not 
expected to be disbursed by the lender.  During 1996, the Company repaid 
$194,000 of this note from the proceeds of a sale of property.  Since 
September 3, 1995, the Company has classified the loan as a current 
liability due to the agreement's burdensome and ambiguous terms.

As of April 18, 1997, the Company is obligated under Convertible 
Debentures aggregating $4,442,950.  Of this balance, $400,000 is 
uncollateralized and due in 1998 with interest at 10%, and $4,042,950 is 
due on demand with interest at 8% after the first year and collateralized 
by a security agreement junior to the lien granted Strategica discussed 
above.

As a result of its severe liquidity problems, the Company frequently has 
been unable to make timely payments to its trade and other creditors.  As 
of April 16, 1997, the Company had past due accounts payable (greater 
than 30 days) totaling approximately $2.85 million.  Certain vendors have 
suspended deliveries to the Company and have agreed to make deliveries 
only on a cash basis.  As a result, the Company was not always able to 
make product shipments on a timely basis, and although no significant 
orders have been canceled to date, lack of product has had an adverse 
effect on sales.  Should the Company experience a significant volume of 
suspended vendor deliveries resulting in reduced sales volume, the 
Company's ability to maintain its current level of operations would be 
jeopardized.

The Company has considered a number of alternatives to improve its 
liquidity and cash positions.  The Company is closely monitoring its 
liquidity position to ensure that existing cash is employed in a way 
management believes will be most effective.  In order to conserve cash, 
management has postponed certain capital expenditures for plant and 
facility improvements and instituted other cost-saving measures, some of 
which may adversely impact the Company's future operating results.

The Company recognizes that additional funds will be required to pay 
trade payables, purchase products and make payments for materials.  
Accordingly, management continues to seek additional capital to maintain 
its current reduced scale of operations and achieve the needed growth in 
revenues.  The Company acknowledges there can be no assurance that the 
Company will be able to obtain additional capital or other financing when 
it is needed, or that such financing will be available on acceptable 
terms. In the event the Company is unable to generate the necessary 
revenues to support ongoing operations, or raise additional capital, 
there could be a serious adverse impact on the Company's future 
operations and further impact on the Company's status as a "going 
concern."



                                  PART II

                             OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

(a)     On April 4, 1997, the Company's Board of Directors authorized the 
filing of a voluntary petition for The AppleTree Companies, Inc. and its 
subsidiary, Americas Foods, Inc., (collectively, the "Petitioner") in the 
United States Bankruptcy Court for the Eastern District of Virginia 
seeking to reorganize under Chapter 11 of the Federal Bankruptcy Code.  
On April 4, 1997, the Company filed its petition requesting to continue 
in the management and control of its business and property as debtor-in-
possession under the Bankruptcy Code.  The Company has not yet drafted a 
Plan of Reorganization, but has entered into agreements with real estate 
agents offering certain of its real estate for sale in an effort to 
improve its financial position and cash flows.

        Under the Bankruptcy Code, the Bankruptcy Court has certain 
supervisory powers over the operations of a debtor during its 
reorganization and over transactions considered to be outside of the 
ordinary course of business.  The Bankruptcy Court may exercise 
supervisory review over certain business operations or transactions in 
connection with various phases of the Bankruptcy Proceedings.  The 
Bankruptcy court also exercises supervisory powers in connection with the 
employment of attorneys, accountants and other professionals.

        In the Bankruptcy Proceedings, an official unsecured creditor's 
committee is formed and approved by the Bankruptcy Court to represent the 
interest of all of the Company's unsecured creditors.  The Company 
expects to consult with such committee concerning the development of a 
plan of reorganization and expects to regularly inform such committee 
concerning the operation of its business.  the Company is required to pay 
certain expenses of this committee, including attorneys fees and certain 
other professional fees, to the extent allowed by the Bankruptcy Court.

        The Bankruptcy Code allows the debtor-in-possession to either 
assume or reject certain liabilities, unexpired leases or other executory 
contracts subject to court approval.  If it assumes an executory contract 
or lease, it must continue to perform its obligations under that contract 
or lease and cure any existing defaults.  In contrast, if it rejects a 
contract or lease, it will cease performing under that contract or lease.  
However, the Company may be subject to a claim for damages by the other 
party to a contract or lease that is rejected.

        Generally, a debtor seeking reorganization under Chapter 11 has 
until confirmation of a plan of reorganization to decide whether to 
assume or reject its executory contracts and unexpired leases with the 
exception of leases on real property.  Leases on real property must be 
assumed or rejected within 60 days after the date of the debtor's 
bankruptcy petition is filed.

        Generally, claims against a debtor seeking reorganization under 
Chapter 11 fall into two categories:  secured and unsecured ( including 
certain creditor's collateral, with the balance of such creditor's claim 
being treated as unsecured.  Unsecured and partially secured claims do 
not accrue interest after the date of debtor's bankruptcy petition is 
filed.  A fully secured claim, however, does accrue interest after such 
date up to the value of the collateral securing such claim or as 
authorized by the Bankruptcy Court.  The amount and validity of pre-
petition contingent or unliquidated claims against the Company ultimately 
may be established by the Bankruptcy Court or by agreement of the 
Parties.

        The Company expects to conduct asset valuations and cash flow 
studies precedent to the development and analysis of proposed plans of 
reorganization and expects to pursue a number of options as part of its 
efforts to achieve a consensual plan that maximizes the value of the 
Company's assets for the benefits of its stockholders and its creditors 
in accordance with the priority and other requirements of the Bankruptcy 
Code.  The Company also expects to file a disclosure statement.  A 
hearing to consider the adequacy of the information contained in the 
disclosure statement will be scheduled.  If the disclosure statement is 
approved, the Bankruptcy Court will thereafter set hearings on plan 
confirmation.

        After a plan of reorganization has been filed and the Bankruptcy 
Court has approved a disclosure statement in connection with that plan, 
the plan and disclosure statement will be provided to all creditors and 
those parties entitled to vote will be asked to vote to accept or reject 
the plan.  Under the Bankruptcy Code, acceptance of a plan occurs when it 
is approved by the holders of a majority in number and two-thirds in 
dollar amount of the claims in such class who vote on the plan.  Classes 
of claims which are not impaired are conclusively deemed to have accepted 
the plan and do not vote.  In addition, acceptance of a plan of 
reorganization by a class of "interests" (i.e., in this case the common 
stockholders) occurs when the holders of two-thirds in dollar amount of 
the interests voted (i.e., two-thirds of the shares voted) approve it.  
In addition, approval of the plan will require approval by any regulatory 
bodies to the extent that their jurisdiction is not pre-empted by the 
Bankruptcy Code.  Following the vote on the plan, the Bankruptcy Court 
will hold a hearing to consider whether to confirm the plan.

        In order to confirm the plan, the Bankruptcy Court, among other 
things, is required to find that (i) the plan and the proponent of the 
plan have complied with all applicable provisions of the Bankruptcy Code; 
(ii) the plan has been proposed in good faith and not by means forbidden 
by law; (iii) with respect to each impaired class of claims or interest, 
each holder of a claim or interest in such class has accepted the plan or 
will receive at least the amount that such holder would receive in a 
liquidation under Chapter 7 of the Bankruptcy Code;  (iv) all impaired 
classes of claims have voted to accept the plan;  and (v) confirmation of 
the plan is not likely to be followed by a liquidation or the need for 
further financial reorganization of the debtor.  Furthermore, in certain 
instances specified in the Bankruptcy Code, the Bankruptcy Court may 
confirm the plan over the rejection of impaired classes of claims or 
interests, provided that at least one impaired class of claims has 
accepted the plan.  In the event that the Bankruptcy Court finds that 
more than one proposed reorganization plan meets the requirement of the 
Bankruptcy Court, the Bankruptcy Court will decide what plan to confirm 
after considering the preferences of parties entitled to vote.

        Confirmation of any reorganization plan is likely to require a 
substantial period of time during which the Company will remain under the 
jurisdiction of the Bankruptcy Court.  The Company is unable to predict 
the amount of recovery if any, which will ultimately be achieved by the 
Company's creditors and stockholders, the likelihood that any plan 
proposed for the Company will be accepted by the Company's creditors and 
stockholders or will be confirmed by the Bankruptcy Court or approved by 
any other regulatory bodies (to the extent their jurisdiction is not pre-
empted by the Bankruptcy Code), or the length of time it will take to 
receive such confirmation and approvals and implement the plan.

(b)     On March 30, l994, the Company filed an action in the Circuit 
Court of Broward County, Florida, to seek recovery against Michael Salit, 
a former director and the Company's former Chairman, Chief Executive 
Officer and Secretary; Donna Salit, wife of Salit (collectively the 
"Salits"); David Lobel ("Lobel"), the Company's former Chief Financial 
Officer and a former Director; and Lola Lobel, wife of Lobel 
(collectively the "Lobels"), for an alleged diversion of the Company's 
assets and for any other damages resulting from certain alleged 
improprieties and misstatements made by Messrs. Salit and Lobel. The 
Company believes it will be successful in this litigation. Salit has 
filed a counterclaim against the Company and certain individual officers. 
In addition, Salit and Lobel have filed certain affirmative defenses 
against the Company's claim.  All of these actions have been consolidated 
in the Circuit Court of Broward County, Florida ("State Actions").  The 
individual officers and directors have retained their own independent 
counsel.  The Company believes it will be successful on the merits of its 
claims and will be successful in defending the counterclaim.  Pursuant to 
its by-laws, the Company is indemnifying the fees and costs of the 
officers named in the counterclaim.

(c)     The Company and certain executive officers and former executive 
officers, including Mr. Lobel and Mr. Salit, have been named as 
defendants in four actions filed in March 1994 in the United States 
District Court for the Southern District of Florida by certain 
individuals ("Federal Actions").  The complaints, which are similar, 
allege violations of various sections of the state and federal securities 
laws including Sections 10(b) and 20(a) of the Securities Exchange Act of 
1934 and the rules promulgated thereunder, as well as common law claims 
of fraud, misrepresentation and breach of fiduciary duty.  The Federal 
Actions allege that the Company and certain executive officers made 
untrue statements of material facts and omitted to state material facts 
necessary to make statements made not misleading in its public disclosure 
documents relating in particular to the matters complained of by the 
Company against Mr. Salit and Mr. Lobel.  The Federal Actions have been 
consolidated.  However, at this time, the attorneys for the Company and 
the attorneys for the Company's directors (which include those who have 
been named in the Federal Actions, which include Paul B. Kravitz, but 
which do not include Messrs. Salit and Lobel (referred to herein as the 
"Company's Directors")) have tentatively agreed with the attorneys for 
the plaintiffs in the Federal Actions, on a settlement to resolve the 
claims against the Company and the Company's Directors arising out of the 
Federal Actions.  The terms and details of the proposed settlement 
contemplate that the Company will issue warrants ("Settlement Warrants") 
to enable the plaintiffs ("Federal Action Plaintiffs") and their 
attorneys to obtain 228,280 shares of the Company's common stock at an 
exercise price of 75% of the market price of the Company's common stock 
as of the date of the Settlement Order and, in addition to the Settlement 
Warrants, 228,280 shares of common stock ("Settlement Shares") and pay 
certain administrative costs associated with the settlement.

(d)     Based on information supplied to the Securities and Exchange 
Commission by the Company, on April 26, 1994, the SEC issued an order for 
a private investigation of the Company and certain of its former officers 
and directors to determine whether violations of the securities laws may 
have occurred and so as to enable the SEC to issue subpoenas and obtain 
documents.  In November 1996, the Company consented to the entry of a 
final judgment of permanent injunction and other relief in the United 
States District Court Southern District of Florida relating to this 
matter, neither admitting nor denying the allegations of the complaint.  
The consent has been submitted to the court for final affirmation and 
approval by the judge.

(e)     On December 23, 1996, Steven Bazsuly and Global Foods, Ltd. 
(collectively, the "Plaintiffs") filed a complaint against the Company in 
the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach 
County, State of Florida General Civil Division alleging breach of 
contract.  The Plaintiffs claim that, pursuant to certain contracts, they 
are entitled to an 8% commission on amounts received from alleged 
referrals of certain investors and lenders.  On February 27, 1997, the 
Circuit Court Judge entered a Default Judgment against the Company in the 
amount of $502,539.39, including interest and court costs totaling 
$62,539.39.  On March 19, 1997, the Company filed a Motion For Relief 
From And To Vacate Final Judgment After Entry Of Default And To Set Aside 
Default requesting that the default judgment be vacated and that the 
Court enter its order authorizing the filing of the Answer and 
Affirmative Defenses filed therewith.  The Company's Answer denied the 
Plaintiffs' allegations and submitted Affirmative Defenses.

(f)     Food manufacturing facilities are subject to inspections by 
various regulatory authorities, including the Food and Drug 
Administration ("FDA") and US Department of Agriculture ("USDA").  A 
finding of a failure to comply with one or more regulatory requirements 
can result in the imposition of sanctions including closing all or a 
portion of a company's production facilities.

        A previous owner of the Company's Norfolk, Virginia, operations 
center is subject to a Consent Decree of Permanent Injunction dated June 
19, 1990 (the "June 19, 1990 Decree") entered in a case in the United 
States District Court for the Eastern District of Virginia, Norfolk 
Division, Civil No. 90-1344-N, styled as United States of America v. 
Stewart Sandwiches, Inc. a corporation, and Theodore J. Broecker and 
Donald R. Beard, individuals (the "Stewart Defendants").  The June 19, 
1990 Decree, among other things, permanently enjoined the Stewart 
Defendants "from directly or through any subsidiary shipping or 
introducing into interstate commerce any finished product that is 
adulterated within the meaning of 21 U.S.C. 342(a)(1) because it contains 
Listeria Monocytogenes" and permanently enjoined the Stewart Defendants 
"from failure to comply with a written plan which has been prepared by 
outside independent expert consultants covering [specific points 
described in the June 19, 1990 Decree], and presented to and approved by 
the FDA on June 13, 1990 as complying with good manufacturing practices, 
which plan is designed to be a program for adequate preparing, packing, 
or holding any articles of food at the [Stewart Defendants'] facilities 
while such food is held for sale after shipment in interstate commerce."  
On November 27, 1996, counsel for the US Department of Justice (the 
"Justice Department") wrote to the Company d.b.a. Americas Foods and 
advised of the Justice Department's intent to apply the June 19, 1990 
Decree to AFI and to seek a court order requiring AFI to show cause why 
it should not be held in contempt of court for violation of the June 19, 
1990 Decree.  The Justice Department offered to settle based on terms of 
a proposed Consent Decree of Permanent Injunction which accompanied the 
Justice Department's letter.

        In a transaction which was the subject of an Order Approving Sale 
dated December 12, 1993, a predecessor of the Company purchased certain 
assets from Stewart Foods, Inc. a.k.a. Stewart Sandwiches, which was in 
bankruptcy at the time of the sale.  The Justice Department claims that 
AFI is simply the successor of Stewart Sandwiches, Inc.  The Company does 
not believe that the June 19, 1990 Decree is applicable to AFI.

        Pursuant to an FDA proposed Modified Consent Decree of Permanent 
Injunction, the Company, among other things, would be restrained and 
enjoined from receiving, manufacturing, processing, preparing, packing, 
labeling, holding, or distributing any article of food unless and until 
(i) the Company has submitted, and received FDA approval of, a Hazard 
Analysis Critical Control Point ("HACCP") plan; (ii) the Company has 
received independent expert certification that an adequate HACCP plan has 
been established and implemented; (iii) the Company has certified in 
writing to FDA that it has implemented i. and ii.;  (iv) FDA notifies the 
Company in writing that it is in compliance with the requirements set 
forth in i. through iii.; and (v) articles of food on hand at the 
facilities or under the Company's control on the date of the modified 
Decree have been or will be tested for contamination by Listeria 
Monocytogenes bacteria and reports submitted to FDA, and such food could 
not be distributed without written approval from FDA and such additional 
analyses as FDA deems necessary to assure that such food is not 
contaminated.  The Company has not yet signed the Modified Consent Decree 
of Permanent Injunction.  The Company is investigating alternatives for 
its sandwich production.

        The Board of Directors, by resolution effective March 31, 1997, 
voted unanimously to "discontinue all production operations at its 
Norfolk, Virginia, plant effective as of March 31, 1997, or as soon 
thereafter as is reasonably possible."

(g)     The Company is a party to certain other proceedings arising in 
the normal course of business which it believes will not have a material 
adverse impact on its financial condition or results of operations.


ITEM 3- DEFAULTS UPON SENIOR SECURITIES

As further discussed in Item 1 - Legal Proceedings, on April 4, 1997, , 
the Company filed its petition requesting to continue in the management 
and control of its business and property as debtor-in-possession under 
the Bankruptcy Code.  Pursuant to the terms of the Company's agreements 
with Strategica, its convertible debenture holders, and certain other 
loans and leases, a filing of a voluntary or involuntary petition under 
the Bankruptcy Code constitutes an event of default.  Accordingly, such 
agreements are currently in default;  notwithstanding the defaults, the 
Company previously classified its loan with Strategica as a current 
liability due to the agreement's burdensome and ambiguous terms, and all 
but $400,000 of the convertible debentures were classified as current 
liabilities according to their terms.

The Company's 11% Convertible Preferred Stock ("COPS") has a dividend or 
payment in lieu thereof, payable quarterly commencing June 30, 1996.  In 
September 1996, the Company issued 105 shares of COPS in payment of the 
June 30, 1996 dividend.  Through April 14 1997, the Company had not 
fulfilled the dividend requirements of the COPS for subsequent quarterly 
dividends.  As of March 31, 1997, the amount in arrears totaled 
approximately $241,000, of which $161,000 was more than 30 days in 
arrears.

The Company has a $3,053,000 loan payable to Strategica which requires 
monthly interest payments at 12 1/2%.  On January 10, 1997, Strategica 
advised the Company that it considered the loan in default due to the 
results of operations reported in this Form 10-Q.  The Company has 
classified this loan as a current liability since September 3, 1995.  See 
also Management's Discussion and Analysis of Financial Condition and 
Results of Operations in Part I, Item 2 and Note 8 to the Company's 
consolidated financial statements for the fifty-two week period ended 
September 1, 1996 included in the Company's Form 10-KSB.


ITEM 6- EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

Exhibit No.

3.1            Certificate of Incorporation, as amended(1)

3.2            Bylaws of the Company, as amended(2)

3.3            Certificate of Amendment of Certificate of Incorporation 
dated September 28, 1995(3)

3.4            Certificate of Correction of Certificate of Incorporation 
dated January 25, 1996(3)

3.5            Certificate of Amendment of Certificate of Incorporation 
dated February 23, 1996(3)

3.6            Certificate of Designation for 11% Convertible Preferred 
Stock(3)

3.7            Amended Certificate of Designation for 11% Convertible 
Preferred Stock(3)

4.1            Form of Common Stock Certificate(4)

4.2             Limited Secured Convertible Debenture, dated as of November 
22, l994, issued by the Company to Europe American Capital 
Corp.(5)

4.3            Amendment, dated January 17, 1995, to the Limited Secured 
Convertible Debenture, dated as of November 22, 1994 issued by 
the Company to Europe American Capital Corp.(6)

4.4            Convertible Debenture, dated January 17, 1995 issued by the 
Company to Abikon, Ltd.(6)

4.5            Promissory Note dated January 31, 1995 issued by the Company 
to TransAtlantic Commerce Corp. (6)

4.6            Loan Agreement and Warrant Agreement dated May 22, 1995, 
between the Company and Strategica Capital Corp. (7)

4.7            Promissory Note dated May 22, 1995, issued by the Company to 
Strategica Capital Corp.(7)

4.8            Amendment to Loan Agreement and Warrant Agreement dated 
November 22, 1995, between the Company and Strategica Capital 
Corp. (8)

4.9            Promissory Note dated November 22, 1995, issued by the 
Company to Strategica Capital Corp. (8)

4.10            Convertible Debenture dated August 23, 1995 issued by the 
Company to Liba Developments, Inc. (8)

4.11            Convertible Debenture dated September 14, 1995 issued by 
the Company to LaSalle Investments Ltd. (8)

4.12            Convertible Debenture dated October 2, 1995 issued by the 
Company to International Future Holdings Corporation, Ltd. (8)

4.13            Convertible Debenture dated November 8, 1995 issued by the 
Company to Amarante S.A. (8)

4.14            Convertible Debenture dated October 30, 1995 issued by the 
Company to Flurina Developments Inc. (8)

4.15            Letter Agreement from Strategica Capital Corporation dated 
December 1, 1995 modifying Loan Agreement (3)

4.16            Form of Convertible Debenture issued by the Company in 1996 
(14)

4.17            Form of Security Agreement issued by the Company in 1996 
(14)

4.18            Form of Warrant Agreement issued by the Company in 1996 (14)

4.19            Form of Subscription Agreement issued by the Company in 
1996 (14)

10.1            Lease dated August 21, 1992 between Glades Road Associates 
and the Company.(2)

10.2            Order Approving Sale of Assets to Modami Stewart Foods, 
Inc., dated December 12, l993.(9)

10.3            Exercise of Conversion Rights Agreement, dated November 30, 
l993, between Optical Express, Inc. and the Company. (10)

10.4            Stock Exchange Agreement, dated January 31, l994, between 
the Company and certain officers of Optical Express, Inc. (11)

10.5            Stock Exchange Agreement, dated February 9, l994, between 
Modami Stewart Foods Inc., the Company, and Robert W. Lackey(11)

10.6            Share Purchase Agreement, dated as of November 22, l994, 
between Americas Foods, Inc. and Pepperidge Farm, Incorporated. 
(5)

10.7            Letter Agreement, dated as of November 22, l994, between 
the Company and Europe American Capital Corp. re: issuance of 
Americas Foods and The AppleTree Companies, Inc. warrants.(1)

10.8            1993 Stock Option Plan(1)

10.9      Consulting Agreement, dated as of July 31, 1994, between the 
Company and Michael Lapp.(1)

10.10      1995 Key Employees Stock Option Plan(6)

10.11      1995 Executive Stock Option Plan(6)

10.12      1995 Directors Stock Option Plan(6)

10.13      Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A. Legal 
Fee Agreement dated March 20, 1995(6)

10.14      Employment Agreement dated March 30, 1995 between the Company 
and Paul Kravitz(6)

10.15      Employment Agreement dated March 30, 1995 between the Company 
and Justin A. DiMacchia(6)

10.16      Consulting and Financial Advisory Services Agreement dated May 
22, 1995 between the Company and Strategica Capital Corp.(7)

10.17      Asset Purchase Agreement between the Company and Sandwich Makers 
of Arizona, Inc. and Sandwich Makers of California, Inc. (8)

10.18      Consulting Agreement dated as of September 23, 1994 between the 
Company and Alan Berkun.(13)

10.19      Amendment to Asset Purchase Agreement between the Company and 
Sandwich Makers of California, Inc. dated January 23, 1996(3)

21.1            Subsidiaries of the Company(6)

23.1            Consent of Coopers & Lybrand, L.L.P. (14)

27.1            Financial Data Schedule
______________________

(1) Incorporated by reference to the Company's Form 10-KSB for the year ended 
August 31, 1994
(2) Incorporated by reference to the Company's Form 10-K for the year ended 
August 31, 1992
(3) Incorporated by reference to the Company's Form 10-QSB for the quarterly 
period ended March 3, 1996
(4) Incorporated by reference to the Company's Registration Statement on Form 
S-18, File No. 33-44902-A
(5) Incorporated by reference to the Company's Form 8-K, dated November 22, 
l994
(6) Incorporated by reference to the Company's Form 10-QSB for the quarterly 
period ended February 28, 1995
(7) Incorporated by reference to the Company's proxy statement dated July 7, 
1995
(8) Incorporated by reference to the Company's Form 10-KSB for the year ended 
September 3, 1995
(9) Incorporated by reference to the Company's Form 8K, dated on December 30, 
1993
(10) Incorporated by reference to the Company's Form 10-QSB for the quarterly 
period ended November 30, 1993
(11) Incorporated by reference to the Company's Form 10-QSB for the quarterly 
period ended February 28, l994
(12) Incorporated by reference to the Company's Registration Statement on Form 
S-8, File No. 33-83076
(13) Incorporated by reference to the Company's Registration Statement on Form 
S-8, File No. 33-84668
(14) Incorporated by reference to the Company's Form 10-KSB for the year ended 
September 1, 1996
 


(b)      Reports on Form 8-K

February 14, 1997
______________________





                                  SIGNATURES


Pursuant to the requirement of the Securities Exchange Act of 1934, the 
registrant has duly caused this report be signed on its behalf by the 
undersigned thereunto duly authorized.




                                      THE APPLETREE COMPANIES, INC.


April 21, 1997                         /s/ John W. Donlevy
                                      ----------------------------
                                      John W. Donlevy
                                      President/C.E.O.
                                       (Principal Executive Officer)




April 21, 1997                         /s/ Justin A. DiMacchia
                                      ----------------------------
                                      Justin A. DiMacchia
                                      Vice President/C.F.O.
                                       (Principal Finance and
                                       Accounting Officer)

15


27