U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

(Mark One)

[x]      QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999.

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934 FOR THE TRANSITION PERIOD  FROM  __________  TO __________.

Commission file number:  0-27132

                            Terrace Food Group, Inc.
                  ---------------------------------------------
              (Exact Name of Small Business Issuer in its Charter)


           Delaware                                     65-054270
----------------------------------          -----------------------------------
 (State or Other Jurisdiction of                     (I.R.S. Employer
 Incorporation or Organization)                      Identification No.)


1351 NW 22nd Street, Pompano Beach, FL                    33069
---------------------------------------     -----------------------------------
(Address of Principal Executive Officer)                (Zip Code)


                                 (954) 917-7272
             ------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


                             Terrace Holdings, Inc.
   ---------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

Applicable  only to  issuers  involved  in  bankruptcy  proceedings  during  the
preceding five years:

Check whether the  registrant  filed all  documents  and reports  required to be
filed by  Section  12 or 15(d) of the  Exchange  Act after the  distribution  of
securities under a plan confirmed by a court. Yes ___ No ___.

Applicable only to corporate issuers:

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable  date. As of the date of this report,  the
issuer had 948,342 shares of its common stock issued and outstanding.

Transitional Small Business Disclosure Format:

Check one:  Yes       No  X     
                ---      ---
                                         
               This is page 1 of 15 sequentially numbered pages.


<PAGE>




TERRACE FOOD GROUP, INC. AND SUBSIDIARIES                                       
--------------------------------------------------------------------------------
FORM 10-QSB
QUARTERLY REPORT
For the Three Months Ended March 31, 1999    
--------------------------------------------------------------------------------
INDEX                                                                           
--------------------------------------------------------------------------------

                                                                         Page
                                                                         ----
Part I.  FINANCIAL INFORMATION

Item 1:  Financial Statements

         Consolidated Balance Sheet as of March 31, 1999 (Unaudited)..    3

         Statements of Operations for the three ended March 31, 1999
         and 1998 (Unaudited).........................................    4

         Statements  of Cash Flow for the three months ended 
         March 31, 1999 and 1998 (Unaudited)..........................    5&6

         Notes to Financial Statements................................    7-11

Item 2:  Management's Discussion and Analysis.........................    12&13

Part II.  OTHER INFORMATION

Item 6:  Exhibits and Reports on Form 8-K.............................    14

         Signatures...................................................    15


                             . . . . . . . . . . . .

















                                       2

<PAGE>



Item 1.
TERRACE FOOD GROUP, INC. 
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET AT MARCH 31, 1999
(UNAUDITED)                                                                     
--------------------------------------------------------------------------------

Assets:
Current Assets:
   Accounts Receivable (Less Reserve for
       Doubtful Accounts of $152,154)                              $  4,829,286
   Inventory                                                          1,833,156
   Current Portion of Note Receivable - Stockholder                      53,000
   Other Current Assets                                                 237,945
                                                                   ------------
   Total Current Assets                                               6,953,387

Property and Equipment - At Cost,
   (Net of Accumulated Depreciation of $538,416)                      5,133,633

Cost in Excess of Net Assets of Business Acquired
(Net of Accumulated Amortization of $370,192)                         4,141,935

Other Assets - Net                                                      425,303
Note Receivable - Stockholder                                           106,000
                                                                   ------------
   Total Assets                                                    $ 16,760,258
                                                                   ============

Liabilities and Stockholders' Equity
Current Liabilities:
   Accounts Payable                                                $  3,955,406
   Cash Overdraft                                                     1,086,795
   Accrued Expenses                                                     984,223
   Current Portion of Long-Term Debt                                    606,608
   Line of Credit                                                     3,598,948
                                                                   ------------
   Total Current Liabilities                                         10,231,980

Other Non-Current Liabilities                                           169,165
Long-term Debt                                                        2,193,849
Convertible Subordinated Notes                                        2,393,000
                                                                   ------------

   Total Liabilities                                                 14,987,994
                                                                   ------------
   Commitments and Contingencies

Stockholders' Equity:
    Preferred Stock - $.001 Par Value, 10,000,000 Shares
        Authorized, None Issued and Outstanding

   Common Stock - $.001 Par Value, 25,000,000 Shares
      Authorized, 948,342 Issued and Outstanding                            948

   Additional Paid-in Capital                                        10,642,012
   Accumulated Deficit                                               (8,870,696)
                                                                   ------------
   Total Stockholder's Equity                                         1,772,264
                                                                   ------------
   Total Liabilities and Stockholders' Equity                      $ 16,760,258
                                                                   ============

See Notes to Financial Statements 











                                       3
<PAGE>

TERRACE FOOD GROUP, INC. 
--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
(UNAUDITED) 
--------------------------------------------------------------------------------

                                                       Three months ended
                                                       ------------------
                                                           March 31,
                                                           ---------
                                                      1999            1998
                                                 ------------    ------------

Net Sales                                        $ 11,096,995    $  6,955,120

Cost of Sales                                       8,183,627       4,884,252
                                                 ------------    ------------

   Gross Profit                                     2,913,368       2,070,868
                                                 ------------    ------------

Operating Expenses:
   Selling, General & Administrative                2,840,937       1,864,706
   Provision for Doubtful Accounts                     20,891           2,500
                                                 ------------    ------------
   Total Operating Expenses                         2,861,828       1,867,206
                                                 ------------    ------------

   Income from Operations                              51,540         203,662
                                                 ------------    ------------

Other Income (Expense)
Interest Income                                         3,180            --
Interest Expense                                     (312,505)        (77,182)
                                                 ------------    ------------

   Other (Expense), Net                              (309,325)        (77,182)
                                                 ------------    ------------
Income (Loss) Continuing Operations                  (257,785)        126,480

Income on Disposal Operations                            --             7,494
                                                 ------------    ------------

   Net Income (Loss)                             $   (257,785)   $    133,974
                                                 ============    ============

Income (Loss) Per Share of Common Stock
   Loss from Continuing Operations                      $(.27)           $.26
    Income (Loss) from Discontinued Operations            --              --
                                                        -----            ----

Basic Net Income (Loss) Per Share of
   Common Stock                                         $(.27)           $.26
                                                        =====            ====

Diluted Net Income (Loss)    
    Per Share Common Stock                              $(.27)           $.16
                                                        =====            ====

Weighted Average Shares of
    Common Stock Outstanding                          948,342         511,138


See Notes to Financial Statements.





                                       4
<PAGE>

TERRACE FOOD GROUP, INC.
--------------------------------------------------------------------------------
STATEMENTS OF CASH FLOW
(UNAUDITED)    
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                           Three months ended 
                                                            ------------------ 
                                                                  March 31,       
                                                                 --------- 
                                                            1999           1998
                                                        -----------    -----------
Operating Activities:
<S>                                                     <C>            <C>        
   Income (Loss) from Continuing Operations             $  (257,785)   $   126,480
                                                        -----------    -----------

   Adjustments to Reconcile (Loss) to Net Cash
   (Used For) Provided by Operating Activities
     Depreciation and Amortization                          299,098         99,407
     Provision for Doubtful Accounts                         20,891          2,500

   Changes in Assets and Liabilities:
     (Increase) Decrease in:
      Accounts Receivable                                  (842,026)      (444,853)
      Inventory                                            (205,279)      (298,903)
      Other Current Assets                                  (76,855)      (139,319)
      Due from Related Party                                               122,752
      Reduction in Restricted Cash and Other Assets                         36,661


   Increase (Decrease) in:
      Accounts Payable                                      549,306      1,365,369
      Accrued Expenses and other Current Liabilities         (7,592)      (189,625)
      Other Liabilities                                     (15,000)
                                                        -----------    -----------
   Total Adjustments                                       (277,457)       553,989

   Net Cash - Operating Activities                         (535,242)       680,469
                                                        -----------    -----------

Investing Activities:
   Acquisition of Equipment, Furniture & Fixtures           (77,917)      (274,086)
   Purchase of Business Net of Cash Acquired                              (340,814)
                                                        -----------    -----------

   Net Cash - Investing Activities                          (77,917)      (614,900)

Financing Activities:
   Net Borrowings Under Line of Credits                     753,139       (245,921)
   Proceeds From Warrants Exercised                                        156,250
Net Long-term Debt Borrowing                               (139,980)        24,102
                                                        -----------    -----------

   Net Cash-Financing Activities                            613,159        (65,569)
                                                        -----------    -----------

   Net (Decrease) Increase in Cash & Cash Equivalents         - 0 -          - 0 -

</TABLE>



   See notes to financial statements.




                                       5
<PAGE>

TERRACE FOOD GROUP, INC. 
--------------------------------------------------------------------------------
STATEMENTS OF CASH FLOW, Sheet #2
(UNAUDITED) 
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                     Three months ended 
                                                                     ------------------ 
                                                                           March 31,       
                                                                          --------- 
                                                                     1999           1998
                                                                 -----------    -----------




   Net (Decrease) Increase in Cash and Cash Equivalents -
<S>                                                                      <C>         <C>    
   Discontinued Operations                                             - 0 -         (6,960)

   Cash and Cash Equivalents - Beginning of Period               $     - 0 -           - 0 -
                                                                  -----------    -----------

   Cash and Cash Equivalents - End of Period                     $     - 0 -          - 0 -
                                                                 ============    ===========


Supplemental Disclosures of Cash Flow Information
Cash Paid During the Periods For:

   Interest                                                      $   124,380    $    77,182
   Taxes

</TABLE>



See Notes to Financial Statements.
























                                       6
<PAGE>


TERRACE FOOD GROUP, INC.  
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) 
--------------------------------------------------------------------------------

(1)      Basis of Reporting

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and with the  instructions to Form 10-QSB and Item 310(b)
of Regulation S-B.  Accordingly,  they do not include all of the information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.

In  the  opinion  of  Management,   such  statements   include  all  adjustments
(consisting only of normal  recurring  items) which are considered  necessary in
order to make the financial statements not misleading. The results of operations
for the periods  presented are not  necessarily  indicative of the results to be
expected for the full year.

The  accompanying   unaudited  consolidated  financial  statements  include  the
accounts of Terrace  Food Group,  Inc.  and its  subsidiaries.  All  significant
intercompany balances and transactions have been eliminated in consolidation.

It is suggested that these financial  statements be read in conjunction with the
financial  statements  and notes for the period ended December 31, 1998 included
in the Terrace Food Group, Inc. Form 10-KSB.


(2)      Reverse Split of Common Stock

Effective March 15, 1999, the Shareholders of the Company approved a one for ten
reverse  split of the  Company's  common  stock  without  any other  changes  in
authorization  par value or  otherwise.  All per share and share amounts for all
periods presented have been adjusted to reflect this reverse split.


(3)      Name Change

In August 1998 the Company's  shareholders  approved the change of the Company's
name to Terrace Food Group, Inc.


(4)      Income Per Share

Income  per share of common  stock is based on the  weighted  average  number of
common shares  outstanding  for each period  presented.  There were no potential
common shares included for 1999 as they were all considered to be anti-dilutive.
Securities  that  could  potentially  dilute  earnings  per share in the  future
include warrants and options to purchase common stock representing approximately
777,000 Common Shares. The Company has 948,342 shares of Common Stock issued and
outstanding  at March 31,  1999.  In 1998 the  Company had  1,523,825  shares of
Preferred Stock  outstanding which was convertible into 304,765 shares of Common
Stock,  resulting in total weighted average of Diluted Common Stock  outstanding
of 815,903 shares.







                                       7
<PAGE>

TERRACE FOOD GROUP, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, Sheet #2
(UNAUDITED)                                              
--------------------------------------------------------------------------------


(5)      Inventories

Inventories for the Company's Food Distribution segment include produce, grocery
dry goods,  and dairy products.  Food Processing and  Manufacturing  inventories
include  raw  meat  and  seafood,  other  ingredients  and  processed  products.
Inventories are stated at the lower of cost (determined on a first-in, first-out
basis) or market.


(6) Line of Credit and Term Loan

The Company and its  subsidiaries  maintain a financing  arrangement with a bank
under which the bank provides a line of credit  subject to available  collateral
to a maximum of  $4,000,000  and a term loan.  The loans are  collateralized  by
virtually  all assets of the Company.  All cash  received by the Company must be
remitted to the bank so long as there is an  outstanding  balance under the line
of credit  which  will  expire  on July 15,  2001.  The line of  credit  accrues
interest at .5% over the bank's prime lending rate.  The term loan is payable in
thirty-six monthly  installments of $23,810 plus annual interest of 1% above the
bank's  prime rate through July 2001,  with the  remaining  balance then due. At
March 31, 1999 the outstanding balance on the loan was $1,809,520.


(7) Convertible Subordinated Notes

In 1998, the Company issued to a private investor $2,625,000 principal amount of
Convertible Subordinated Notes ("Notes"), and warrants to purchase 40,000 shares
of Common Stock of the Company.  The exercise  price of the Warrants is the same
as the conversion rate of the Notes.  The Notes could be converted at the option
of the Company,  into  Redeemable  Convertible  8%  Cumulative  Preferred  Stock
("Preferred Stock") of the Company. The Notes,  Warrants and any Preferred Stock
issued  to the  private  investor  are  subject  to  anti-dilution  adjustments,
registration  rights,  interest  and  dividend  adjustments  and  payment by the
Company of certain fees and expenses in  connection  with the  transaction.  The
Company  received  proceeds  of  $2,500,000,  with  $281,000  attributed  to the
Warrants and Option and $2,219,000 to the Note. The Note discount of $406,000 is
being amortized over the term of the Note.

The Note agreement required the Company to attain a specified earnings level for
1998, which was not attained. Accordingly, the Company is obligated to issue the
private investor  additional  warrants to purchase 25,000 shares of Common Stock
of the Company that are exercisable at $6.00 per share and the interest rate was
increased to 14%.

On April 13,  1999,  the Company and the  private  investor  agreed to amend the
terms of the Notes. The maturity date extended to March 31, 2000, the Conversion
Price of the Notes to either Common or Preferred  Shares and the Exercise  Price
of the  Warrants  was set at $6.00 per share  through  the  maturity  date.  Any
default which may have occurred  under the agreement was waived or deemed cured.
The Company will issue  additional  $621,000 in Notes as payment for accrued and
unpaid interest on the Notes through April 13, 1999 and other  consideration  to
the  private  investor.  The  Company  will  also  issue  the  private  investor
additional 25,000 Warrants to purchase the Company's Common Stock at an exercise
price of $9.00 per share.





                                       8
<PAGE>

TERRACE FOOD GROUP, INC.    
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, Sheet #3
(UNAUDITED)      
--------------------------------------------------------------------------------


(8)      Commitments

In connection with the  acquisition of A-One-A  Produce & Provisions,  Inc., the
Company  entered into 5-year  employment  agreements  with two of its  officers,
effective  July 1, 1997.  The employment  agreements  call for aggregate  annual
compensation of $240,000.

In connection with the acquisition of Banner Beef and Seafood, Inc., the Company
entered into a 5-year employment agreement with its Operations Vice President at
an annual base salary of $200,000.

The Company has an employment  agreement with Jonathan S. Lasko,  Executive Vice
President,  through  August 31,  2000,  for a base salary of $125,000  per year.
Additionally,  the  agreement  provides  that  certain  other  benefits  be made
available to the Executive.


(9)      Segment Data

The  Company's  two  business   units  have   distinct   management   teams  and
infrastructures,  offer  different  products  and are  evaluated  separately  in
assessing performance and allocating  resources.  These units are being reported
as two segments:  Food Distribution and Food Processing and Manufacturing.  Each
segment  is  managed  separately,  has a  distinct  customer  base and  requires
different  strategic  and  marketing  efforts.  Food  Distribution  includes the
operations of the Company's A-One-A Produce and Provisions, Inc. and Fresh, Inc.
subsidiaries and Food Processing and Manufacturing is represented by Banner Beef
and Seafood Co. Inc.

Terrace  evaluates  performance  based on operating  profit before  interest and
taxes. Accordingly, interest has not been allocated to the operating segments.


Quarter ended March 31, 1999
----------------------------
<TABLE>
<CAPTION>
                                                                 Food
                                                Food        Processing and
                                          Distribution       Manufacturing         Total
                                          ------------       -------------         -----
<S>                                       <C>                  <C>              <C>        
Sales                                     $10,015,395          $1,081,600       $11,096,995
Depreciation and amortization                 133,345              55,981           191,206
Operating income (loss)                       532,652            (291,461)          241,191
Segment assets                              9,434,332           5,715,787        15,150,119
Expenditures for segment property
and equipment                                  51,811              26,107            77,918

</TABLE>








                                       9
<PAGE>


TERRACE FOOD GROUP, INC. 
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, Sheet #4
(UNAUDITED) 
--------------------------------------------------------------------------------


 (9) Segment Data - continued

Reconciliation of segment amounts to consolidated amounts:

Loss from continuing operations: 
   Total segments                                            $   241,191
   Interest expense                                             (312,505)
   Amortization of deferred financing costs                     (107,892)
   Interest income                                                 3,180
   Corporate expenses                                            (81,759)
                                                             ----------- 
     Total                                                   $  (257,785)
                                                             =========== 
                                                               

Assets:
    Total segments                                          $ 15,150,119
    Note Receivable                                              159,000
    Other Assets                                                 377,267
    Other current assets                                          87,077 
                                                            ------------ 
                                                            $ 15,773,463
                                                            ============



Quarter ended March 31, 1998
----------------------------
                                                         Food
                                                  Distribution           Total
                                                  ------------     -----------
Sales                                              $ 6,955,120     $ 6,955,120
Depreciation and amortization                           99,407          99,407
Operating income                                       361,880         361,880
Segment assets                                       8,247,136       8,247,136
Expenditures for segment property
and equipment                                          274,086         274,086



Reconciliation of segment amounts to consolidated amounts:

Income (Loss) from continuing operations:
   Segment                                                          $  361,880
   Interest expense                                                    (77,182)
   Corporate expenses                                                 (158,218)
                                                                    ---------- 
                                                                    $  126,480
                                                                    ==========

Assets:
    Segment                                                          8,247,136
    Other Assets                                                        40,920
    Restricted cash                                                     65,439
    Other current assets                                               189,291
                                                                    ----------
Total                                                               $8,542,786
                                                                    ==========








                                       10
<PAGE>

TERRACE FOOD GROUP, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, Sheet #5
(UNAUDITED) 
--------------------------------------------------------------------------------


(10) Subsequent Event

In April and May 1999,  the Company  issued 19,618 shares of a newly  authorized
Series C Preferred  Stock  together with Warrants to purchase  340,000 shares of
the Company's  Common Stock. The shares and warrants were purchased by a private
investor  group that  included  three of the  Company's  Directors.  The Company
received proceeds of approximately  $1,700,000 in this transaction which will be
used for operating purposes.

The Preferred Stock provides for a cumulative  annual coupon dividend of 13% and
the issue was priced to yield an effective annual dividend of 15%. The Preferred
Stock is  redeemable,  in cash,  at the option of the Company  through March 30,
2000,  when  it  becomes  mandatorily  redeemable  either  in  cash  or  through
conversion into 17% Senior Notes which would mature on March 31, 2003. The stock
purchase warrants, which expire four years from their date of issue, provide for
the purchase of Company's Common Stock at a price of $9.00 per share.































                                       11
<PAGE>





Item 2.
TERRACE FOOD GROUP, INC.
--------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS 
--------------------------------------------------------------------------------

The  Company  operates  in two  distinct  segments  of the Food  Industry.  It's
distribution and produce  processing  subsidiary A-One-A Produce and Provisions,
Inc.  distributes  fresh produce and dairy products to the  foodservice,  cruise
ship and export  customers in South  Florida.  The Company's  manufacturing  and
processing  subsidiary  Banner Beef and Seafood  Company,  Inc.  operates in the
value added Home Meal Replacement sector and sells to the retail and foodservice
distribution  channels. The Company's consolidated revenues for the three months
ended March 31, 1999 is approximately $11, 096,000 compared to $6,955,00 for the
same period in 1998 or an increase of  approximately  71%. The Company's  income
from operations  decreased to  approximately  $51,500 for the three months ended
March 31, 1998 as a result of its  integration  and  start-up as Banner Beef and
Seafood subsidiary.

Management  believes  that  as  its  plan  for  growth  in  its  newly  acquired
manufacturing subsidiary continues to be implemented profitable operating levels
should be obtained for each company.

SEGMENT ANALYSIS
----------------

Food Distribution
-----------------

The  Company's  food  distribution  segment is comprised  of  companies  A-One-A
Produce and Provisions,  Inc. and Fresh,  Inc.  operations  which distribute and
process fresh  produce and dairy  products  throughout  South Florida as well as
export and cruise ship customers for the local ports.  Revenues for this segment
were  $10,000,000  for the  three  months  ended  March  31,  1999  compared  to
$6,955,000   for  the  three  months  ended  March  31,  1998  and  increase  of
approximately  43%.  Operating income was $530,000 for the first three months of
1999  compared  to  $361,000  for the same  period  in 1998.  This  increase  of
approximately  47% is reflective of management's  plan for increased  volume and
cost  controls in the segment.  Management  believes that with its current sales
opportunities  as well as further  reduction of its operating  expenses  through
continued utilization of its capital investment into the facility and technology
in prior  periods  consistent  sales and  operating  income  growth  from  prior
comparable period should be attained.


Food Processing and Manufacturing
---------------------------------

The Company's  food  processing  and  manufacturing  segment is comprised of its
recently  acquired  Banner Beef and Seafood  subsidiary.  The company  purchased
Banner to enter the value  added  higher  margin  segment of the food  industry.
Management saw a strong  opportunity to enter the fastest  growing  segment Home
Meal Replacement in the industry.  Revenues for the three months ended March 31,
1999 were $1,081,000 and on operating loss of $291,400.  There are no comparable
results for 1998 as the Company  did not own Banner Beef and  Seafood.  The test
marketing  that the  Company  has been  through  in the first  quarter  has been
successful with major chains around the Country.  Management believes that as it
continues its aggressive sales effort, further success with the products will be
achieved. In addition, the Company continues its sales








                                       12
<PAGE>



Item 2.
TERRACE FOOD GROUP, INC. 
--------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS, Sheet #2  
--------------------------------------------------------------------------------

effort to Banner's  historic  core  customers in the  foodservice  arena.  These
products offer growth  opportunities  for the Company as well.  Initial feedback
from the Company's sales and marketing prospects has been extremely positive and
management  believes as its plan continues to take shape with increasing  volume
through further market  exposure.  Management  believes the Company will realize
positive results from this segment.














































                                       13
<PAGE>




Part II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits - None

=========================================


Reports on Form 8-K

The Registrant filed a Report on Form 8-K dated April 26, 1999 to report a press
release announcing the completion of its $1.6 million preferred equity financing
and issuance of its Series C Preferred Stock.













































                                       14
<PAGE>




SIGNATURES                    
--------------------------------------------------------------------------------


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.


                            TERRACE FOOD GROUP, INC.
                                  (Registrant)



Dated: May 18, 1999                     By: /s/Jonathan S. Lasko             
                                            ---------------------------------
                                               Jonathan S. Lasko, 
                                               Executive Vice President &
                                               Chief Operating Officer


Dated:  May 18, 1999                    By: /s/William P. Rodrigues, Jr.     
                                            ---------------------------------
                                               William P. Rodrigues, Jr.,
                                               Principal Financial Officer



































                                       15