FORM 10-KSB
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

          [X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                     For Fiscal Year Ended December 31, 1999


                         Commission File Number: 0-24058

                              ATOMIC BURRITO, INC.
             (Exact name of registrant as specified in its charter)
            Colorado                                  84-1131343
(State or other jurisdiction of            (IRS Employer Identification No.)
incorporation or organization)

                        1601 N.W. Expressway, Suite 1610
                          Oklahoma City, Oklahoma 73118
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:    (405) 848-0996

Securities to be registered under Section 12(b) of the Act:     None

Securities registered pursuant to Section 12(g) of the Act:
   Common Stock, $.001 par value

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15 (d) of the  Securities  Exchange  Act of 1934 during the past 12 months
(or for such  shorter  period  that the  Registrant  was  required  to file such
reports),  and (2) has been subject to such filing requirements for at least the
past 90 days. Yes [X] No [ ]

Check if there is no  disclosure of  delinquent  filers  pursuant to Item 405 of
Regulation  S-B  contained  herein,  and will not be  contained,  to the best of
Registrant's   knowledge,   in  definitive   proxy  or  information   statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

Revenues of registrant for year ended December 31, 1999:         $6,920,881

Aggregate market value of voting stock held by
non-affiliates as of April 12, 2000                              $4,366,616

Shares of Common Stock, $.01 par value, outstanding
as of April 12, 1999:                                             4,375,721

                       DOCUMENTS INCORPORATED BY REFERENCE

The Company's  definitive  proxy statement in connection with the Annual Meeting
of Shareholders  to be filed with the Commission  pursuant to Regulation 14A, is
incorporated by reference into Part III of this report.



<PAGE>
                              ATOMIC BURRITO, INC.

                         1999 Form 10-KSB Annual Report

                                Table of Contents

     Item

                                     Part I

           Special Note Regarding Forward Looking Statements

       1.  Description of Business

       2.  Description of Properties

       3.  Legal Proceedings

       4.  Submission of Matters to a Vote of Security Holders

                                     Part II

       5.  Market for Common Equity and Related Stockholder Matters

       6.  Management's Discussion and Analysis

       7.  Financial Statements and Supplementary Data

       8.  Changes In and Disagreements With Accountants on Accounting and
           Financial Disclosure

                                    Part III

       9.  Directors,   Executive  Officers,   Promoters  and  Control  Persons:
           Compliance with Section 16(a) of the Exchange Act

       10. Executive Compensation

       11. Security Ownership of Certain Beneficial Owners and Management

       12. Certain Relationships and Related Transactions

       13. Exhibits and Reports on Form 8-K

           Signatures


<PAGE>



                                     PART I

Special Note Regarding Forward-Looking Statements

     Certain  statements  in this Form  10-KSB  under  "Item 1.  Description  of
Business",  "Item 3. Legal  Proceedings",  "Item 6. Management's  Discussion and
Analysis"  and  elsewhere  constitute  "forward-looking  statements"  within the
meaning of the Private  Securities  Litigation  Reform Act of 1995 (the  "Reform
Act").  Such  forward-looking   statements  involve  known  and  unknown  risks,
uncertainties and other facts which may cause the actual results, performance or
achievements  of  Automic  Burrio,  Inc.  (the "Company")  and  its subsidiaries
and affiliated  partnerships to be materially different from any future results,
performance  or  achievements  expressed  or  implied  by  such  forward-looking
statements. Such factors include, among others, the following:  general economic
and  business  conditions;   competition;   success  of  operating  initiatives;
development and operating costs;  advertising and promotional  efforts;  adverse
publicity;  customer  appeal and loyalty;  availability,  locations and terms of
sites  for  nightclub  development;  the  development  of the  "Atomic  Burrito"
concept;   changes  in  business  strategy  or  development  plans;  quality  of
management;  availability,  terms and development of capital; business abilities
and judgment of personnel;  availability of qualified personnel; food, labor and
employee  benefit  costs;  changes in, or the failure to comply with  government
regulations;  regional weather  conditions;  construction  schedules;  and other
factors referenced in the Form 10-KSB. The use in this Form 10-KSB of such words
as "believes",  "anticipates",  "expects", "intends" and similar expressions are
intended to identify forward-looking statements, but are not the exclusive means
of identifying such  statements.  The success of the Company is dependent on the
efforts of the Company and its  management and personnel and the manner in which
they operate and develop stores.

Item 1.  Description of Business

General

     Atomic  Burrito, Inc.  (the "Company")  was  organized  under  the  laws of
the State of Colorado in December 1989, but had no operations  until April 1993.
The Company  completed its initial  public  offering in May 1994,  from which it
received  net  proceeds of  approximately  $1.9 million from the sale of 460,000
shares of Common  Stock.  In late 1996,  a change of control  took place,  which
resulted in the  replacement  of senior  management and changes in the Company's
operating and growth strategies.  The Company's prior strategies focused heavily
on cost  reduction  as the  preferred  means of  improving  profitability.  Such
strategies  resulted  in lean  Club-level  management  and  loss of  experienced
personnel,  low levels of physical facility  maintenance and  reinvestment,  and
reduced levels of  advertising,  promotion and  entertainment  expense.  Current
management has replaced much of the Club-level  management with more experienced
personnel,  instituted  management  training  procedures,   implemented  a  cost
management  system which  includes  daily  unit-level  accounting and reporting,
improved the sound,  light and video  systems,  increased  radio buys within the
local markets,  and implemented new advertising and in-store  promotions.  These
changes reflect current  management's belief that long-term strategies involving
greater investment in personnel and physical  facilities will produce a superior
financial performance. See Item 6."Management's Discussion and Analysis."

        During 1998, after months of searching for a viable  restaurant  concept
to acquire or merge  with,  the Company  developed  its own  restaurant  concept
"Atomic Burrito",  a quick service  "Fresh-Mex" concept featuring a Mexican menu
emphasizing  fresh  ingredients and  made-to-order  burritos.  Utilizing  senior
management's  extensive  background  in the  Mexican  segment of the  restaurant
industry,  the Company  formed a wholly owned  subsidiary  corporation,  "Atomic
Burrito,  Inc.", now "Atomic  Development,  Inc.", and developed a prototype for
the concept,  including menus, recipes,  design,  layout,  equipment,  and other
items such as signage,  logos, and an operations manual of operating procedures.
The Company  then  entered  into License  Agreements  with an  experienced  food
services operator who opened two "Atomic Burrito"  restaurants in 1998, and with
another operator who opened a restaurant in Longview, Washington. In December of
1998, the Company  entered into a joint venture  agreement with a publicly owned
company,  New York Bagel  Enterprises,  Inc.  ("New York  Bagel")  for the joint
development  of  additional  "Atomic  Burrito"  restaurants.  Pursuant  to  this
agreement,  two  "Atomic  Burrito"  restaurants  were  opened  in 1999 in Tulsa,
Oklahoma and in Wichita, Kansas. Later, in September,  1999, the Company and New
York  Bagel  agreed to  dissolve  the joint  venture  agreement  for  additional
restaurants,  and New York  Bagel  gave the  Company  the  option of buying  the
interest of New York Bagel in the two  restaurants,  which has not yet occurred.
Also in 1999,  the  Company  opened a "Atomic  Burrito"  restaurant  in Houston,
Texas, in partnership with a former employee,  and effective  December 31, 1999,

<PAGE>

the Company bought the Norman, Oklahoma restaurant from its Licensee. Subsequent
to year-end 1999, the Company opened a wholly owned restaurant in Oklahoma City,
Oklahoma. See additional discussion in Item I, "Atomic Burrito Restaurants."

        In August,  1999,  shareholders of the Company approved a change of name
from  Western  Country  Clubs,  Inc. to Atomic  Burrito,  Inc.,  and the Company
reincorporated in the State of Oklahoma.


The Company

     The Company  currently  operates  two  "country-western"  theme  nightclubs
located in St. Louis, Missouri (the "St. Louis Club") and Wichita,  Kansas, (the
"Wichita Club"). Each Club combines live entertainment, dancing, bar and food in
a country-western  atmosphere. The Wichita Club has operated as In Cahoots since
its  inception  in 1994,  and the St. Louis Club was changed to an In Cahoots in
1996, having previously  operated as A Little Bit of Texas. The Company acquired
its  interest  in the Wichita  Club,  an 80% general  partnership  interest,  in
December 1996 from a corporation  affiliated  with James E. Blacketer and Joe R.
Love,  Directors  of the  Company.  During  1997,  the Company  sold a nightclub
located in Tucson, Arizona (the "Tucson Club").  Additionally,  the Company also
operated a nightclub in Indianapolis,  Indiana (the "Indy Club") until December,
1997 when the club was closed in  anticipation  of its sale in early  1998.  See
Item 6. "Management's Discussion and Analysis."

        The  Company's  current  focus  is on the  development  of  its  "Atomic
Burrito"  concept,  as  evidenced  by  the  recent  change  of  name.  With  six
restaurants currently in operation,  including the recently-opened Oklahoma City
unit as well as the licensed unit in Longview,  Washington,  the Company intends
to continue the expansion of this concept  during 2000.  Additional  restaurants
openings during 2000 are planned in Tulsa,  Wichita,  Houston and Oklahoma City,
in order to command more of a market  presence in those areas,  along with plans
for new units in Dallas and  Austin,  Texas.  The key  element in the  Company's
strategy to develop  additional  "Atomic Burrito"  restaurants is its ability to
raise  capital  for such  expansion.  To date,  the new  restaurants  have  been
financed  primarily by bank loans and by equipment leases.  Management  believes
that  in  the  future,  expansion  capital  needs  to be  raised  to  allow  the
development of additional  restaurants  without adding  additional  debt service
requirements.  To further that end, the Company is  exploring  various  means to
raise  additional  capital,  most  likely  through  the  sale of  stock,  either
privately or publicly. The success of these efforts will have a direct effect on
the Company's  ability to continue to expand the "Atomic Burrito"  concept.  The
Company does not expect to expand its nightclub operations during 2000, since it
has  closed  and sold  two  clubs in 1997  and  1998,  and sold its  partnership
interest in another club in 1997, and since management's plan for new capital is
to expand its restaurant concept.

The St. Louis Club

     The St.  Louis Club is  located on the I-70  corridor  between  St.  Louis,
Missouri  and Kansas  City,  Kansas.  The Club  occupies  roughly  one-half of a
building which previously housed a Sam's Club wholesale  warehouse operation and
is in excess of 56,000 square feet making it the largest  nightclub in Missouri.
This mammoth nightclub  operates under the name In Cahoots and features a design
with the look and feel of an authentic  rustic  western town.  The Club,  with a
capacity  of almost  3,000,  houses a huge dance  floor,  performance  stage,  a
billiards  and video arcade area and several  retail stores  including  Sundance
Silver & Hide,  which sells wardrobe  items,  including hats and boots,  and the
Homestead  Store which sells Indian  artifacts,  clothing and jewelry.  Sundance
Silver & Hide  occupies  approximately 800 square feet of the Club, for which it
pays  $1,200 per month  pursuant  to an oral  agreement  with the  Company.  The
Homestead Store occupies approximately 600 square feet of the Club, for which it
pays $300 plus 10% of sales per month  pursuant  to an oral  agreement  with the
Company.  The Club also features a walk-up restaurant selling various food items
in  addition to its  extensive  drink  offerings.  The St.  Louis Club  featured
numerous  nationally  known  entertainers  during the past year,  including such
performers as Tracy Lawrence, Lone Star, Chris LeDoux and Willie Nelson.

     The St. Louis Club opened for business as a non-alcoholic club on April 22,
1994. It began marketing  alcoholic  beverages on May 19, 1994 upon receipt of a
liquor  license from the  Supervisor of Liquor Control of the State of Missouri.
The  customer's  average  expenditure,  exclusive  of  food  and  souvenirs,  is
approximately $11.00.

The Wichita Club

     The  Wichita  Club  opened in  February  1994,  and has been  voted the top
country-western  club in Wichita  since  opening.  It consists of  approximately
30,000 square feet and has parking for 900 cars. The Wichita Club is designed to
appeal to rodeo cowboys as well as the casual  country  western music lover.  It

<PAGE>

blends high tech,  state-of-the-art,  and "good old country boy"  entertainment.
The high tech  presentation  includes  giant 20 foot  video  screens,  double CD
players,  a roll up lighted  American flag,  neon lighting and the capability to
include a live band's sound  throughout the house speaker system.  A comfortable
ambiance is achieved through rustic wooden floors, old west photographs, antique
back  bars,  and a huge,  hand-painted  mural of past and  present  Country  and
Western entertainers. The showcase of the Club is the circular, race track style
dance floor, complete with a bar in the center allowing for more dancing room.

        In March 1999,  the Company  completed an expansion  and addition to the
Wichita Club called "Pockets  Sports Grill",  which is adjacent to the InCahoots
club.  The 8,000 square foot addition  houses a sports bar, grill and pool hall,
and features 17 full-size  pool tables,  14 big-screen  television  monitors,  a
40-foor  bar with a sports  ticker  tape  across  the top,  and  various  sports
memorabilia.  The grill  features  casual  dining  items such as tacos,  nachos,
burritos, quesadillas,  charcoaled hamburgers, grilled chicken sandwiches, onion
rings and french fries.  Pockets  Sports Grill is open seven days a week from 11
a.m. until midnight,  and allows customers of the InCahoots  nightclub to have a
place to eat before  going to the club.  Pockets  Sports  Grill also  allows for
customers of the facility to come in for lunch,  thus  attracting  new customers
who may not be familiar with the nightclub. Since the facilities are adjacent to
the  original  InCahoots,  management  gets the benefit of certain  economies of
scale and is able to operate  the grill with some of the same  personnel  as the
nightclub.  Management  believes  that  Pockets  Sports Grill has been a success
during its first year of operation,  adding  additional  revenues to the Wichita
operation on a profitable basis.

     The Company acquired its interest in the Wichita Club on December 16, 1996,
when it acquired  Entertainment  Wichita,  Inc. ("EWI"), the general partner and
80% owner of In Cahoots, Limited Partnership,  a Kansas limited partnership.  In
exchange for the 80% interest,  the Company  issued 400,000 shares of its Common
Stock and assumed $150,000 in debt through a merger  transaction.  EWI was owned
45.5% by Shane Investments,  L.C. ("Shane Investments"),  a corporation which is
solely owned and  controlled  by Joe Robert  Love,  Jr., the adult son of Joe R.
Love, a Director of the Company.  Shane  Investments  received 250,500 shares of
the Company's Common Stock upon completion of the transaction in December 1996.

Entertainment

     The  Company  seeks  to  book  nationally  known  entertainers  as  well as
regionally-known  entertainers  and/or  bands  which  do not yet  have  national
recognition.  National name entertainers such as Willie Nelson, Jerry Lee Lewis,
Tracy Byrd and Blackhawk  have  performed at one or more of the Company's  clubs
during 1998.  The Company  currently  has Toby Keith and Chris Ledoux booked for
engagements  in 1999.  The  Company  utilizes  these  performers  to enhance its
customer  traffic and revenues in what would otherwise be less busy time periods
in the nightclub business.  Typically,  the Company charges admission fees which
approximate  the fee payable to the performers and realizes the benefit from the
increased  sales which are  generated  due to the large  numbers of customers in
attendance.

Atomic Burrito Restaurants

     During  late 1997 and the first  half of 1998,  the  Company  conducted  an
extensive search for a viable  restaurant  concept to acquire and/or merge with.
Management's  belief  was  that  expansion  of a  restaurant  concept  had  many
advantages to the Company compared to expansion of its nightclub business. Under
the guidance and  direction of Company  President and Chief  Executive  Officer,
James E. Blacketer,  and Vice-President of Operations,  Dominic W. Grimmett, the
Company decided to develop its own restaurant concept during the summer of 1998.
Blacketer and Grimmett had extensive  backgrounds in the Mexican  segment of the
restaurant  industry and they  developed a "Fresh-Mex"  burrito  concept,  which
features  fresh  ingredients  and  made-to-order  burritos.  The menu contains a
variety of Mexican items with the burrito being the featured  entre,  and with a
focus on lunch  and  dinner  business.  While  the  concept emphasizes  a family
atmosphere,  alcoholic  beverages will be an option  depending on the particular
location.

     The Company formed a wholly-owned subsidiary,  "Atomic Burrito, Inc.",  now
Atomic Development, Inc., an Oklahoma corporation, in the summer  of  1998,  for
development  of its  new restaurant  concept.  Because of its limited  financial
resources,  the  Company  opted to  develop its  prototype restaurants through a
"license agreement" whereby  an  experienced  restaurant  operator would own and
operate the restaurant,  using  the  "Atomic Burrito" name, menu, recipes, logo,
layout  and  design,  and  utilizing  the  "Atomic Burrito"  operations   manual
developed  by the  Company.   In return,  the licensee  would pay  the Company's
subsidiary  (licensor) an initial  license fee and an ongoing royalty fee.

     The prototype  restaurants,  as developed by the Company, are planned to be
located in leased  premises of  approximately  3,500  square  feet.  Remodeling,

<PAGE>

construction  and equipment costs are estimated at $300,000 to $350,000,  though
it may be possible  to convert an existing  restaurant  location  for less.  The
restaurants  are expected to be open from 11:00 a.m.  until 10:00 p.m., and will
serve a variety of Mexican menu items,  centered  around the  burrito.  The food
will be prepared on a serving  line,  made-to-order  as the customer  progresses
along the line.  Some units may offer  alcoholic  beverages  in addition to soft
drinks.

     The first two "Atomic  Burrito"  restaurants  were opened in Stillwater and
Norman,  Oklahoma in the fall of 1998 under  license  agreements.  Subsequent to
fiscal year end 1998, the Company entered into an additional  license  agreement
of an "Atomic  Burrito"  restaurant  to be opened in  Longview,  Washington.  In
addition,  in  October  of  1998,  the  Company  entered  into a  joint  venture
agreement  with New York Bagel  Enterprises,  Inc.  ("New York Bagel"),  for the
joint  development  of up to  eight  "Atomic  Burrito"  restaurants.  Under  the
agreement,  New York  Bagel was to contribute  the leased  premises,  the lease,
leasehold  improvements  and  equipment  in  certain  existing  New  York  Bagel
restaurants and the Company was to contribute  up to $150,000 per  restaurant to
pay for conversion costs and additional  equipment.  According to the agreement,
the Company would own a 60% interest in the  restaurant and New York Bagel would
own a 40%  interest in the  restaurant.  The  agreement  also  provides  for the
development of additional "Atomic Burrito"  restaurants over an 18-month period.
The first joint venture  restaurant  under the agreement opened in March 1999 in
Tulsa,  Oklahoma,  with a second  restaurant  scheduled to open in April 1999 in
Wichita, Kansas. In September,  1999,  the Company and New York Bagel  agreed to
terminate any future development under the joint venture agreement, and New York
Bagel gave the Company an option to purchase  New York  Bagel's  interest in the
Tulsa and Wichita  units, which the Company has not yet done.  New York  Bagel's
stated reasons  for  terminating  the  joint  venture  agreement was the lack of
expansion capital on the part of either party to the  agreement and their desire
to pursue  a different future direction.  Subsequently, New York Bagel filed for
Chapter 11 protection under the Federal Bankruptcy statues. The Company has been
in contact with the trustee and intends to purchase  New York  Bagel's  interest
in the two units.

        During  1999,  the  Company  entered  into an  agreement  with a  former
employee for the joint  development,  on a 50%-50% basis, of an "Atomic Burrito"
restaurant in Houston,  Texas. This restaurant subsequently opened in September,
1999.  Management and the Houston partner believe that Houston is a great market
for another "Atomic Burrito"  restaurant,  and have discussed the possibility of
opening another 50%-50% restaurant in Houston, but no agreement has been reached
at this time.  Management  does,  however,  believe  that the  Company  needs to
develop  additional  restaurants in Houston and is committed to opening at least
one additional restaurant there during 2000.

        In December 1999, the Company entered into discussions with the licensee
which owned the Norman,  Oklahoma,  "Atomic Burrito"  restaurant,  regarding the
possible purchase of the unit by the Company. The licensee's owners,  successful
restaurant  operators in both Oklahoma and Texas,  had  previously  closed their
Stillwater,  Oklahoma "Atomic  Burrito"  restaurant and were in the middle of an
expansion  of  their  other  restaurant  and  brew pub  operations,  which  were
unrelated to the Company.  The licensee  approached the Company with the idea of
selling  the  restaurant  to the  Company in  exchange  for common  stock in the
Company.  Subsequently,  an agreement was reached,  effective December 31, 1999,
whereby the Company  purchased  the assets of the licensee  and assumed  certain
liabilities.  As part of that  transaction,  the Company agreed to issue 360,000
shares of the Company's restricted common stock, to the licensee and its owners.
The parties valued the transaction,  after assumption of certain liabilities, at
$270,000.00. Thus at the end of 1999, the Company owned and operated restaurants
in Tulsa,  Wichita,  Houston,  and  Norman,  with a licensed  unit in  Longview,
Washington,  and  subsequent  to year end  opened an  additional  restaurant  in
Oklahoma City. The Oklahoma City unit is wholly owned by the Company.

Expansion Strategy

     The Company  intends to grow primarily by developing  its "Atomic  Burrito"
concept,  through license agreements,  joint venture  developments,  and through
company-owned  restaurants.   Additional  restaurants  may  be  financed through
the  formation  of  limited  partnerships,  internal funding,  bank financing or
private  and/or  public equity  or  debt offerings,   or a  combination  of  the
foregoing.   The Company may also  purchase  existing  operations,  which may be
converted into  "Atomic Burrito" restaurants through transactions  involving the
issuance  of  the  Company's stock  and/or  cash.   Several locations for future
"Atomic  Burrito" restaurants have  been identified  by  management,   including
locations  in Tulsa; Wichita; Dallas, Houston and Austin, Texas; and Kansas City
and St. Louis, Missouri.

Government Regulation

     The  Company's  business is subject to extensive  federal,  state and local
government  regulations,  including  regulations  relating to alcoholic beverage
control,  public  health and safety,  zoning and fire codes.  In addition,  each
nightclub  restaurant  and "Atomic  Burrito"  restaurant  must have food service
licenses from local health authorities.

<PAGE>

     Alcoholic  beverage  control  regulations  require  each of the  nightclubs
and/or  restaurants to apply to a state  authority,  and, in certain  locations,
county  or  municipal  authorities  for a license  or  permit to sell  alcoholic
beverages  on the  premises  and to provide  service for  extended  hours and on
Sundays.

     Alcoholic  beverage control  regulations  relate to numerous aspects of the
daily operation including advertising,  wholesale purchasing,  inventory control
and handling,  storage and dispensing of alcoholic  beverages.  Licenses to sell
alcoholic  beverages  must be renewed  annually and are subject to suspension or
revocation for cause, including violation by the Company or its employees of any
law or  regulation  pertaining  to  alcoholic  beverage  control,  such as those
regulating  the  minimum  age of patrons or  employees,  advertising,  wholesale
purchasing,  and inventory control,  handling and storage. Each nightclub and/or
restaurant  is operated in  accordance  with  stringent  procedures  designed to
assure compliance with all applicable codes and regulations.

     In recent years,  certain states have enacted "dram-shop"  statutes,  which
generally provide a person injured by an intoxicated person the right to recover
damages from an establishment,  which wrongfully  served alcoholic  beverages to
such person. Presently,  Missouri, Kansas, and Oklahoma, the states in which the
Company operates, do not have dram-shop statutes.  However,  should these states
enact such statutes, the Company would be subject to additional exposure in such
cases where judgments for damages exceeded its insurance coverage.

     The  development  and   construction   of  additional   nightclubs   and/or
restaurants will be subject to compliance with applicable  zoning,  land use and
environmental   regulations.   Management   believes   that  federal  and  state
environmental  regulations  have  not had a  material  effect  on the  Company's
operations,  but more stringent and varied  requirements  of local  governmental
bodies with respect to zoning,  land use and  environmental  factors could delay
construction of new nightclubs and/or restaurants and add to their cost.

     The  Company  is  also  subject  to  the  Fair  Labor  Standards  Act,  the
Immigration Reform and Control Act of 1986 and various state laws governing such
matters as minimum wages, overtime, tip credits and other working conditions.  A
significant  number of the Company's hourly personnel are paid at rates relating
to the federal minimum wage and,  accordingly,  increases in the minimum wage or
decrease in the allowable tip credit will increase the Company's labor cost. The
Company may also incur  labor cost  increases  as a result of certain  mandatory
medical and parental  leave  benefits  legislation  enacted by the United States
Congress.

     The Americans With Disabilities Act prohibits  discrimination in employment
and public accommodations,  such as restaurants and nightclubs,  on the basis of
disability.  Under the Act,  the Company is  required to provide  service to, or
make usable accommodations for the employment and service of, disabled persons.

Competition

     The nightclub business is highly competitive.  Most of the companies, which
own and/or operate  nightclubs are  substantially  larger than the Company,  and
have greater resources,  operating  histories and experience.  They include many
national,  regional and local chains with more locations and larger  advertising
budgets.  Nightclub  and theme  entertainment  businesses  are also  affected by
changing  customer  tastes,  local and national  economic  conditions  affecting
spending habits,  population  shifts and traffic  patterns.  Quality of service,
attractiveness  of facilities,  popularity of  entertainment  and price are also
important factors.

     The  restaurant  business  is even  more  competitive  than  the  nightclub
business,  with  restaurants  literally  on most every corner in most cities and
with new  restaurants opening every week.  The industry has many large and small
operators,  with most having greater financial  resources than the Company,  and
with many having more experience in restaurant operations. Restaurant customers'
tastes are even more fickle than those of nightclub  customers,  and most of the
same factors discussed above with regard to nightclubs and their competition are
also applicable to restaurants.  The Company, however, believes that its "Atomic
Burrito" concept will be well received and will be able to successfully  compete
in the highly competitive  restaurant industry, and believes that the experience
of senior management will give the Company more opportunity for success,  though
there are no assurances that this will be the case.

Trademarks

     The  Company  uses  the  trademark  "In Cahoots"  in  the operation  of its
business. This  mark is used by others in the operation of businesses throughout
the country,  including other nightclub operators.  Because of these  uses,  the
Company  believes  that it cannot,  nor can its  competitors,  register the mark

<PAGE>

with  the  United  States  Patent  and  Trademark  office  to  obtain exclusive,
nationwide  rights  to  the  mark.  The Company believes,  however,  that it has
enforceable common law rights to its mark for use in the immediate  trade  areas
in  which  the  Clubs operate,  and it  has  encountered  no claims of trademark
infringement.   As  the  Company  expands,  it may encounter claims of trademark
infringement requiring the Company  to  negotiate  license  agreements  with the
prior  user  or  to  use  other  non-infringing trademarks for nightclubs in the
affected areas.

     The Company has,  however,  filed  trademark  applications  with the United
States Patent and Trademark  Office for the name "Atomic Burrito" and the phrase
"Out of this World!." While the applications are currently pending, and there is
no way to determine in advance the final  decision,  the Company  believes  that
there are few,  if any,  other users of the name and  expects to  eventually  be
granted the trademarks applied for.

Employees and Consultants

     As of April 10, 1999,  the  Company  had four  full time  employees  in the
corporate  office,  including James E. Blacketer,  President and Chief Executive
Officer, and Dominic W. Grimmett, Vice-President of Operations. The Company also
had  approximately  120 employees in the two nightclubs,  and  approximately 111
employees  in the  five "Atomic Burrito" restaurants in Tulsa, Wichita, Houston,
Oklahoma City and Norman.

Year 2000 Compliance

        The Company  entered 2000 with no Y2K  problems.  Neither the  Company's
nightclub operations,  its restaurant operations,  nor its corporate offices and
accounting offices experienced any type of Y2K problem. The Company,  therefore,
believes  that its  preparation  for this  potential  problem was  adequate  and
successful.

Item 2.  Description of Properties

     The Company's principal offices are located at 1601 N. W. Expressway, Suite
1610, Oklahoma City, Oklahoma, 73118. The Company's offices occupy approximately
4,200 square feet, for which it pays $2,500 per month pursuant to a lease, which
expires in July 2001.

     In August 1993, the Company entered into a lease for nightclub space in St.
Louis,  Missouri.  The lease,  which  expires in August  2003,  is for a 10 acre
parcel of land housing a 106,744  square foot  building and parking  facilities.
The rental for the first five years is $22,238 per month,  escalating to $26,686
per month for the second  five  years.  The  Company has the right to extend the
lease for two additional five year periods at increased  rental rates. The lease
is  guaranteed  by  International  Entertainment  Consultants,  Inc.,  a company
affiliated with Mr. Troy Lowrie. The Company subleases approximately 50,000 feet
of this  facility  for which it  receives  $18,312  per  month  under a one year
sublease which expires in December, 2000.

     The Wichita Club is leased from Boots,  Inc., a 20% limited  partner in the
In Cahoots Limited Partnership but otherwise  unaffiliated with the Company. The
lease is for a  ten-year  term,  expiring  in the year  2003,  with an option to
extend the term for two, five-year periods, and requires monthly payments of the
greater of $12,500 or 6% of gross sales.  The Company  during 1999  amended this
lease  to provide  for  additional  rent of  $4,333.00 per month for the Pockets
Sports Grill addition.

     On  January 1, 1999,  the  Company  entered  into a lease  agreement  for a
building in Tulsa,  Oklahoma,  for the joint  development of an "Atomic Burrito"
restaurant  with New York Bagel.  The lease is for five years with  three,  five
year options, with the rental payments being $4,600 per month during the initial
term of the lease, and with increases for the three option periods.

     On December 29, 1998,  the Company  accepted  an assignment  for a lease on
space in Wichita, Kansas from New York Bagel, its then joint  venture partner to
develop an  Atomic Burrito  in Wichita.   The origianl  lease was dated April 7,
1997, covered 2,720 square feet, expired on December 31, 2001,  and provided for
three-year options to renew at rentals of $3,000 per month, $3,500 per month and
$3,800 per month.

     On January 20, 1999,  the  Company  entered  into  a  lease  agreement  for
3,000 square feet of space in Houston, Texas  for the development of the Houston
joint venture  Atomic Burrito restaurant.  The lease rent for  five years,  with
two additional option periods, and calls for rent of $6,500.

     On October 4, 1999,  the Company  entered  into a lease agreement for 4,250
square feet  of  space in  Oklahoma City, Oklahoma,  for  a company-owned Atomic
Burrito restaurant.   The lease  is for a term of 5 years and 4 months, with two
five-year  option  periods  at prices  increased from  the intitial term rent of
$4,227.08 per month.

<PAGE>

     The Company carries general  liability  insurance for the St. Louis Club in
the amount of $2,000,000 and $850,000 in property liability coverage. In Cahoots
Limited  Partnership,  owner of the Wichita  Club,  carries  $2,000,000  general
liability  insurance and building and property  insurance coverage in the amount
of   $1,800,000  and  $800,000,  respectively.  The company maintains for all of
its  "Atomic Burrito" restaurants general liability insurance of $1,000,000. For
the Tulsa  restaurant,  the  company  carries  building  and  property insurance
coverage in the amounts of $400,000 and $300,000, respectively.  For the Wichita
restaurant, the company  carries  building and  property  insurance  coverage of
$175,000 and $300,000, respectively. The company also carries property insurance
of $450,000 each in Houston and in Oklahoma City. In Norman, the Company carries
building and property insurance of $350,000 and $300,000, respectivly.

     The Company maintains  $1,000,000 in liquor liability insurance coverage at
each of its  nightclubs,  and at  the  Atomic Burrito  restaurants having liquor
licenses,  which  includes  coverage  for  assault  and battery  and other risks
associated with the nightclub business and with liquor licenses in general

     The Company  also  maintains  various  other insurance coverages management
deems necessary for the prudent,  sound  operation  of  the  various properties,
including coverage for the loss of business income.

Item 3.  Legal Proceedings

     Special  Note:  Certain  statements  set forth  below  under  this  caption
constitute  "forward-looking  statements"  within the meaning of the Reform Act.
See "Special Note Regarding  Forward-Looking  Statements" for additional factors
relating to such statements.

     The Company is involved in various legal actions associated with the normal
conduct of its business operations.  No such actions involve known material gain
or loss contingencies not reflected in the consolidated  financial statements of
the Company.

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

        During fiscal 1999, the Company twice submitted  issues to a vote of its
shareholders.  On March 31, 1999, the Company's  shareholders voted to approve a
proposal to authorize  its Board of Directors to implement a reverse stock split
of the Company's  common stock,  giving the Directors a range of 1.5 to 5 shares
of the Company's  common stock to be combined,  converted and exchanged into one
share of the Company's  common stock.  The authority of the Board as approved by
the  shareholders  continued  through the end of 1999.  During 1999,  after such
meeting,  the Directors declined to exercise such authority and no reverse stock
split occurred.

        On August 31, 1999,  the  Company's  shareholders  approved  three items
submitted  by the Board of  Directors.  First,  the  shareholders  elected  four
directors  to serve  until the 2000 annual  meeting.  Second,  the  shareholders
approved reincorporating the Company in Oklahoma and changing the Company's name
to Atomic Burrito,  Inc. Third, the shareholders  approved the Company's Omnibus
Equity Compensation Plan, an employee stock option plan.

        No other matters were submitted to a vote of the Company's  shareholders
during 1999.


                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

Market Information

     On April 12, 2000,  there  were  approximately 99 shareholders of record of
the  Company's Common Stock.   Based upon information  received from brokers and
others in fiduciary capacity, the Company estimates that  the  total  number  of
shareholders  of the  Company's  Common Stock  exceeds 500 as of that date.  The
Company's Common Stock was approved for listing on the NASDAQ SmallCap MarketSM,
effective May 18, 1994,  under the  symbol "WCCI"  which  was  later  changed to
"ATOM" in September, 1999.  Prior  to listing  on NASDAQ,  the  Company's Common
Stock briefly traded in the pink sheets.

     The following  table sets forth,  for the periods  indicated,  the range of
high and low closing bid quotations for the Company's  Common Stock, as reported
by NASDAQ:

<PAGE>

<TABLE>
<CAPTION>

         1999 Fiscal Year                        High Bid ($)       Low Bid ($)
         -----------------                       ------------       -----------
<S>                                                  <C>               <C>
         First Quarter                               1.0625             .625
         Second Quarter                              1.50              1.00
         Third Quarter                               1.25              1.062
         Fourth Quarter                              1.125              .625

         1998 Fiscal Year
         -----------------
         First Quarter                               1.125              .625
         Second Quarter                              1.125              .5625
         Third Quarter                                .9375             .50
         Fourth Quarter                              1.375              .5625
</TABLE>

         On December  31, 1999,  the last  reported bid and asked prices for the
     Common Stock were $.8125 and $1.00, respectively.

Revised NASDAQ Listing Requirements

     Effective February 23, 1998, the NASDAQ SmallCap Market implemented revised
listing  requirements  for  companies  wishing to continue  their listing on the
exchange.  These revised requirements  included provisions that listed companies
maintain  net tangible  assets of at least $2 million,  public float of at least
500,000  shares with a market  value of at least $1  million,  and a minimum bid
price  for  the  Company's  stock  of  $1  per  share.  The  Company  maintained
compliance with these NASDAQ  listing  requirements and expects to continue such
compliance in the future.


Dividends

     The Company has never  declared a cash  dividend with respect to its Common
Stock and intends to retain  future  earnings to support the  Company's  growth.
There are no contractual restrictions on the Company's present or future ability
to pay  dividends.  Future  dividend  policy is subject to the discretion of the
Board of Directors and is dependent upon a number of factors,  including  future
earnings,  capital  requirements and the financial condition of the Company. The
Company  declared  dividends on its preferred stock totaling  $13,205 during the
year ended December 31, 1999.

Item 6.  Management's Discussion and Analysis

     Special  Note:  Certain  statements  set forth  below  under  this  caption
constitute  "forward-looking  statements"  within the meaning of the Reform Act.
See "Special Note Regarding  Forward-Looking  Statements" for additional factors
relating to such statements.

     The following  discussion and analysis  should be read in conjunction  with
the Company's  Consolidated  Financial  Statements  and Notes thereto  appearing
elsewhere in this Report.

General

     The  Company  commenced  operations  in April  1993 with a  country-western
nightclub in Indianapolis, Indiana (the "Indy Club"). In April 1994, the Company
opened a nightclub in a suburb of St. Louis,  Missouri  (the "St.  Louis Club").
The Company  financed these clubs through  limited  partnerships in which it was
the general  partner.  In May 1994,  the Company  completed  its initial  public
offering of securities  receiving net proceeds of approximately $1.9 million. In
November 1994, the Company purchased a nightclub in Tucson, Arizona (the "Tucson
Club").  At this time, the Company also increased its ownership  interest in the
Indy Club to 80% and acquired 100% of the St. Louis Club.

     In June  1995,  the  Company  participated  as a 50%  limited  partner in a
partnership  formed to acquire a nightclub  in Atlanta,  Georgia  (the  "Atlanta
Club").  The  Company  contributed  $500 in  partnership  capital  and loaned an
additional  $638,822 to the partnership.  Due to continuing  losses, the Company
wrote off its interest in the Atlanta  Club  effective  December  31,  1995.  On
January 9, 1998, the Company sold its interest in the Atlanta Club for $220,000.
Details of the sale are described more fully below.

     In September 1996, Troy H. Lowrie,  then President and largest  shareholder
of the Company,  entered into a Stock Purchase  Agreement  whereby (i) Red River
Concepts,  Inc., a Delaware  corporation  ("Red River"),  or its designees would
acquire in three  installments  1,300,000  shares of Mr.  Lowrie's Common Stock;
(ii) new management assumed control of the operations of the Company;  and (iii)
James E.  Blacketer and Joe R. Love,  directors of Red River,  were appointed to
the  Company's  Board of  Directors.  The change of control  occurred in October
1996.

<PAGE>

     Subsequently,  on December 16, 1996, new management acquired a nightclub in
Wichita,  Kansas (the "Wichita Club") for 400,000 shares of the Company's Common
Stock and  assumption of $150,000 in debt. The Wichita Club was owned in part by
entities  affiliated  with James E. Blacketer and Joe R. Love,  directors of the
Company. See Item 12, "Certain Relationships And Related Transactions."

     New management also undertook steps to improve the financial performance of
the Tucson Club, which was hampered by high acquisition, leasehold and operating
costs and declining  revenues.  During October 1996, the Club was remodeled into
two  entertainment  venues in order to attract new customers and revenues,  cost
cutting measures were instituted,  and new unit-level  management was installed.
Despite these measures,  based on the Club's continuing  decline in performance,
high  overhead and occupancy  costs,  the Tucson Club's assets were deemed to be
impaired  and were  written off as of December  31,  1996.  The Company sold the
Tucson  Club's  assets in May 1997 and  completed  an  agreement  to settle  the
leasehold  obligations in August 1997.

     In February 1997,  the Company filed a registration  statement for a public
offering of up to 460,000 shares of preferred stock and up to 1,150,000 warrants
to purchase the  Company's  Common Stock (the  "Public  Offering").  The Company
cleared all  regulatory  requirements  concerning  the Public  Offering  but the
Company's  underwriter  was not  successful  in placing  the  preferred  shares.
Therefore,  costs associated with the Public Offering, which had previously been
capitalized were written off at December 31, 1997.

     In June 1998, the Company formed a subsidiary corporation,  Atomic Burrito,
Inc., through which to develop a new restaurant  concept.  Subsequently,  Atomic
Burrito,   Inc.  entered  into  license  agreements  for  two  "Atomic  Burrito"
restaurants to be located in Stillwater and Norman, Oklahoma, and entered into a
third license agreement for a restaurant in Longview,  Washington.  In addition,
in October 1998,  the Company  entered into a joint venture  agreement  with New
York Bagel  Enterprises,  Inc., ("New York Bagel") for the joint  development of
"Atomic  Burrito"  restaurants.  The  agreement  provides  for New York Bagel to
contribute  certain of its restaurant  locations,  including  leases,  leasehold
improvements,  and  equipment  for a 40%  interest in the  operation,  while the
Company would contribute up to $150,000 for the remodel and conversion costs, as
well as for  additional  equipment.  The  agreement  also provides for the joint
development  of a minimum of four and maximum of eight  "Atomic  Burrito"  units
over an 18 month period. The first unit opened in March 1999 in Tulsa, Oklahoma,
while the second unit opened in April 1999 in Wichita, Kansas.

     In September 1999  the  Company  and New York Bagel agreed to terminate the
joint  venture agreement  as it related  to additional development, and New York
Bagel  agreed to sale its interest in the two operations in Tulsa and Wichita to
the Company. New York Bagel's stated reasons for the termination wre the lack of
expansion  capital  on  the part  of  either of the parties, and their desire to
move  in  a  defferent  direction.   Subsequently,  New  York  Bagel  filed  for
protection  under  Chapter 13  of the  Federal Bankruptcy Statutes.  The Company
has been in communication with the Trustee, and intends to purchase the interest
of New York Bagel in the Tulsa and Wichita Atomic Burrito units.

     In  December,  the  original  licensees  who  had  previously opened Atomic
Burrito  units in Stillwater and Norman, Oklahoma, approached the Company with a
plan to sell their Norman restaurant to the Company.  They had previously closed
their  Stillwater  restaurant  and were  in the process of expanding their other
restaurant and  brew pub operations in both Oklahoma and Texas.  Thereafter, the
Company entered  into an agreement, effective December 31, 1999, to purchase the
Norman restaurant  from  the  licensee  for  the  issuance of 360,000 (valued at
$270,000) shares of  the  Company's  common stock  as  well as the assumption of
certain liabilities  totaling  $60,967, giving  the transaction a total value of
$330,967.

Liquidity and Capital Resources

     Historically,   the  Company  has  funded  its  capital   needs  through  a
combination  of cash flows from  operations,  proceeds  from  public and private
securities issuance,  and loans from commercial banks, principal shareholders or
related persons or entities.  During 1999, the Company  obtained three different
bank  loans  to help  fund  its  growth  and  expansion  of the  Atomic  Burrito
restaurants.  In February  1999,  the Company  obtained a loan from a commercial
bank in Oklahoma City in the amount of $600,000.  Part of the proceeds were used
to finance the Tulsa Atomic Burrito restaurant and part were used to finance the
Houston  Atomic  Burrito  restaurant.  The balance of the proceeds  were used to
retire  the  Series B issue of  Preferred  Stock in the  approximate  amount  of
$145,000, with the balance being used for working capital.

     Later in 1999,  the  Company  borrowed  $200,000  from Bank of  America  in
Wichita,  Kansas for the construction of the Wichita Atomic Burrito  restaurant.
In October,  the Company  borrowed  $300,000 from Guaranty Bank in Oklahoma City
for the  construction of the Oklahoma City Atomic Burrito  restaurant.  Guaranty
Bank also made the earlier $600,000 loan to the Company described above.

<PAGE>

     During 1999 the Company  increased its inventories  and deposits  primarily
due to the  addition  during 1999 of the Atomic  Burrito  restaurants  in Tulsa,
Wichita  and  Houston,  and  the  partial  construction  of  the  Oklahoma  City
restaurant, which opened in February, 2000. The Company's investment in property
and equipment  increased  substantially for the same reason, and bank borrowings
increased as set forth above. In addition,  the Company reduced note receivables
by $313,495 during 1999, reflecting substantial debt reduction at the commercial
banks, as well as other notes being reduced or paid in full.

     Net cash provided by operating activities increased during 1999 to $267,967
from $108,620 in 1998 as set forth above. Net cash used in investing  activities
was  $1,244,890  for 1999 as compared to $77,546 net cash  provided by investing
activities  in 1998,  when the  Company  did not expand or build any  additional
facilities or properties.  Financing activities provided a net of $944,134 cash,
primarily because of the bank borrowings,  and reduced by the debt repayment and
preferred  stock  retirement.  For the  year,  net cash  decreased  slightly  to
$172,622 from  $205,411 at the end of 1998.  The Company's net cash flow for the
year reflected a deficit of $32,789,  which reflects the  construction  activity
and the costs associated  therewith during the year, as compared to the previous
year when there was no such  activity.  While the Company  incurred  substantial
debt to finance  such  construction,  typically  the actual  costs  exceeded the
borrowings  by about 20%,  not  including  the other costs  associated  with the
opening  of  the  restaurants,  such  as  training,  marketing  and  pre-opening
expenses.  Management  believes  that the negative  cash flow for the year is an
expected  result of its  development  of Atomic Burrito  restaurants  during the
year.

     As of December 31, 1999, the Company's  working capital  position  (current
assets  minus  current  liabilities)  was a negative  $669,659  compared  with a
positive $126,983 at the end of 1998. This resulted  primarily from increases in
accounts payable, accrued liabilities and the current portion of long-term debt.
Accounts  payable more than doubled  from  $262,084 to $624,442,  an increase of
$362,358.  Accrued liabilities  increased to $318,557 from $283,439 during 1998,
and the current portion of long-term debt and leases  increased by $229,482 from
the  prior  year to  $459,386.   These  increases  are all  attributable  to the
construction  and  opening of the three new  restaurants  during  1999 in Tulsa,
Wichita and Houston.  The increases in accounts payable and accrued  liabilities
reflect  the additional  units  operating  in a  normal manner.  The Company  is
current with all of its bank payment obligations  and expects  those notes which
have not been paid in full at maturity, to be renewed by the lenders.

     Property and equipment is made up primarily of assets  required to open and
operate the St. Louis and Wichita clubs, as well as the Tulsa, Wichita,  Houston
and Norman restaurants.  Leasehold  improvements total $2,365,157,  increased by
$845,295 or 55% from 1998.  Equipment,  furniture and fixtures total $1,601,405,
an increase of $933,090 from 1998, and land and improvements  remain at $77,011.
These increases occurred as a result of the addition during the year of the four
new  restaurants operations.  Goodwill  increased  slightly   to  $38,374   from
$11,130 in 1998 as a result of the  acquisition  of the Norman restaurant by the
Company.

        The  deferred  income tax asset  decreased  by  $267,740  during 1999 to
$100,000 due to a decision to write down the asset at the end of the year.  This
asset  resulted from the net operating loss  carryforwards  from the loss on the
write-off  of the  Tucson  nightclub  in a prior  year,  as  well as from  other
operating  losses  contributing to the net operating loss  carryforward.  Future
realization  of this asset is dependent upon the Company  generating  sufficient
future  taxable income  against which  its loss  carryforwards  can be  used  to
offset.  The  amount  of the  deferred  tax  asset at  December  31,  1999  does
not include  $1,192,969  reserved  as  a  deferred  tax  income  tax   valuation
allowance, due to the  uncertainty  of  the  Company  being  able to realize the
benefit from such losses in future  periods.  In addition, management recognizes
that while the Company is developing and growing the Atomic  Burrito  restaurant
concept,  it will be  difficult  to generate  substantial  earnings until enough
additional  restaurants  are built,  opened and operating at a profit to provide
the Company with earnings  from  the combined  restaurants.  Current  accounting
treatment  requirement for  pre-opening expenses, including training, marketing,
and other pre-opening items cause such items to be  charged as an expense in the
period  incurred,  and such  expenses generally amount to $35,000 to $40,000 per
restaurant. Management does, however, expect the Atomic  Burrito  restaurants to
contribute to the Company's  earnings in  the future,  and  expects  to  receive
benefit from the amount reserved in future periods.

<PAGE>

     The  Company's  current  liabilities  reflect an  increase  of  $604,058 to
$1,402,385,  up from $798,327 from 1998.  This increase  results  primarily from
increases in accounts payables,  accrued  liabilities and the current portion of
long-term debt, as discussed  above.  These  increases  result from the expanded
operations  of the Company  during 1999 which  include  the  restaurants  opened
during the year in Tulsa,  Wichita and Houston, as well as the short maturity on
the bank  debt  obtained  by the  Company  for the  construction  of  these  new
restaurants.

     The  Company  continues  to  develop  its new  restaurant  concept,  Atomic
Burrito.  It opened a  company-owned  restaurant  in Oklahoma  City in February,
2000, and expects to open additional  restaurants  during 2000.  Management does
not at the  present  time  intend to  license  additional  restaurants  to third
parties,  but does intend to develop additional  restaurants  jointly with other
operators and/or investors. The Company's ability to obtain additional financing
for such  expansion is critical to the expansion  plans,  and the success of the
restaurants  will  dictate in part the  Company's  ability to obtain  additional
financing.   Management  believes  that  the  Atomic  Burrito  concept  will  be
successful in the future and will be a viable asset of the Company.

Results of Operations -  Year Ended December 31, 1999 Compared to the Year Ended
December 31, 1998

The  Company's  revenues  from  operations  during 1999  increased to $6,735,651
compared to $4,755,064 in 1998, an increase of $1,980,587 or 41% compared to the
prior period. Total revenues for 1999 were $6,920,881, an increase of $1,809,957
or 34% compared to 1998. These  substantial  increases were primarily the result
of the  Atomic  Burrito  openings  during the year and the  addition  of Pockets
Sports  Grill to the Wichita  nightclub.  While no  restaurants  were  operation
during all of 1999, Tulsa opened in March,  1999,  Wichita opened in April, 1999
and  Houston  opened in  September,  1999 and all  contributed  revenues  to the
Company once they opened. In addition,  the Pockets Sports Grill addition to the
Wichita opened in March, 1999 and generated increasing revenues during the year.
Both the St.  Louis and Wichita  nightclub  experienced  an increase in business
during the year,  and  management  believes  that the  Company's  revenues  will
continue to increase during 2000.

Total costs and expenses  increased  during 1999 to  $7,206,060,  an increase of
$2,463,007 or 52% from 1998, when total costs and expenses were $4,743,053. This
increase  is  primarily  the result of the  opening of the  Tulsa,  Wichita  and
Houston Atomic Burrito restaurants, as well as the opening of the Pockets Sports
Grill during the year. Cost of products and services  increased by $1,895,850 or
46% during 1999 to $6,029,124  compared to 1998 comparable  costs of $4,133,274.
General and  administrative  expense increased from $147,320 in 1998 to $766,728
due  to  a reallocation  of  certain  personnel  from operations  to  management
personnel, and other increases in administrative costs incurred as a result of
expanding the Companys operation.   Depreciation and amortization  increased  by
24% or $64,672  during  1999 to $335,305 as compared with a  total  depreciation
and  amortization  during 1998 of $270,633.  This resulted  from  the  increased
investment  in  depreciable  assets,   primarily  leasehold   improvements   and
equipment, furniture and fixtures for  the new restaurants  opened and purchased
during 1999 as well as the  investment in  the  Pockets Sports Grill in Wichita.
Interest expense  increased only $4,943 during  1999  to  $76,903  during   1999
compared  to  $71,968  in  1998.  There  were no write-down  of  investments  or
litigation  losses during 1999 compared to 1998  totals of  $57,400  for  write-
down  of  investments  and a  litigation  loss of $62,458.  Management  believes
there are  savings  to  achieve  in the cost  and  expense  area,  and  believes
that  improvements  will be seen  during  2000 as  management is able to operate
mature  restaurants  without  opening  expenses or training expenses involved in
the restaurants which opened during 1999.

For the year ended December 31, 1999, the Company had a consolidated loss before
income taxes and minority  interests  of $285,179,  compared  with a gain during
1998 of  $367,871,  a  difference  of  $653,050.  The  primary  reason  for this
difference is the opening expenses  involved in the restaurant  openings and the
Pocket  Sports  Grill  opening,   as  well  as  the  associated   costs  of  the
infrastructure  the Company put  together  to assist in the  development  of the
Atomic Burrito restaurants.  In addition,  during 1998 the Company had a gain on
the sale of assets, including the Atlanta partnership interest, in the amount of
$284,861, which was a non-recurring item of income. In addition, during 1999 the
Company  had a  write-down  on its  Deferred  Income Tax Asset from  $367,871 to
$100,000.  This write-down,  as discussed above,  results from the fact that the
Company  failed to make a profit during 1999.  While  the  Company  continues to
develop its Atomic Burrito restaurant concept,  current accounting and financial
statement  regulations  require that all  pre-opening  expenses  involved in the
restaurant openings be expensed immediately and not amortized.  This requirement
puts a company in a growth stage with a minimum of units already  open,  such as
Atomic  Burrito,  in a position of expanding with apparent losses in operations.
The decision to write down the deferred tax asset is a  conservative  one, since
<PAGE>

management believes the restaurants will be profitable. Management believes that
it can deliver profitable  restaurants within a short time, usually in the third
or fourth month,  but with all pre-opening  expenses (which include training and
pre-opening   marketing,   among  other  items)  being  charged  as  an  expense
immediately,  it is difficult to make an overall profit on the operations  until
the Company has at least ten to twelve units  operating.  Management  expects to
reach that level of operations during the next eighteen months, at which time it
believes the Company will be able to absorb the opening  expenses.  In addition,
management believes the Atomic Burrito concept will continue to improve and gain
additional consumer acceptance. The concept is just getting started, and has yet
to penetrate  even the markets  where its  restaurants  are located.  Management
believes that the concept is strong enough to grow into first a regional  chain,
and then later a national  one.  But  management  also  recognizes  that it will
require  increasing amounts of capital to adequately grow and develop the Atomic
Burrito  concept.  Management  believes  that it needs to finance its  expansion
through capital infusions instead of debt, especially as the Company grows. With
that in mind,  management  intends to be cautious in incurring  additional  debt
until it can satisfy itself that the Company's  existing  operations can support
the existing debt level.  Management believes the future for the concept and the
Company is bright,  and is  optimistic  of its  ability to return the Company to
profitability in the future.

Item 7.  Financial Statements and Supplementary Data

     The Company's  audited  financial  statements,  together with the report of
auditors, are included in the report after the signature page.

Item  8. Changes  In  and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure

Not Applicable

                                    PART III

Item 9. Directors,  Executive Officers Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act

     The information required in response to this Item is incorporated herein by
reference to the Company's  proxy  statement to be filed with the Securities and
Exchange  Commission  pursuant to Regulation  14A, not later than 120 days after
the end of the fiscal year covered by this report.

Item 10. Executive Compensation

     The information required in response to this Item is incorporated herein by
reference to the Company's  proxy  statement to be filed with the Securities and
Exchange  Commission  pursuant to Regulation  14A, not later than 120 days after
the end of the fiscal year covered by this report.

Item 11. Security Ownership Of Certain Beneficial Owners And Management

     The information required in response to this Item is incorporated herein by
reference to the Company's  proxy  statement to be filed with the Securities and
Exchange  Commission  pursuant to Regulation  14A, not later than 120 days after
the end of the fiscal year covered by this report.

Item 12. Certain Relationships And Related Transactions

     The information required in response to this Item is incorporated herein by
reference to the Company's  proxy  statement to be filed with the Securities and
Exchange  Commission  pursuant to Regulation  14A, not later than 120 days after
the end of the fiscal year covered by this report.

<PAGE>

Item 13.  Exhibits and Reports on Form 8-K

(a) The following documents are filed as part of this report:

     1.  Financial  statements:  See index to consolidated  financial statements
         immediately following the signature page of this report.

     2.  Financial statement schedules:  Financial statement schedules have been
         omitted because they are not required or the information is included in
         the financial statements and notes thereto.

     3.  Exhibits:  Exhibits  required  to be filed  with this Form  10-KSB  are
         identified by the numbers indicated,  and, except where incorporated by
         reference, immediately follow the financial statements.



     Number                            Description

     3.1     Articles of Incorporation, dated December 20, 1989 (1)

     3.2     Amendment to Articles of Incorporation, dated November 30, 1993 (1)

     3.2     Bylaws of Western Country Clubs, Inc. (1)

     4.0     Agreement  to  convert  notes  to  Series  A Preferred  Stock dated
             January 1, 1998 between Troy H. Lowrie and  Western  Country Clubs,
             Inc. (12)

     4.1     Agreement  to  convert  note  to  Series  B  Preferred Stock  dated
             February 18, 1998 between Ceres, L.L.C.  and Western Country Clubs,
             Inc. (12)

     9.0     Voting Trust Agreement, dated September 20, 1996, between Red River
             Concepts, Inc. and Troy H. Lowrie (7)

     10.1    Lease  Agreement, dated  August  26, 1993, between Wal-Mart Stores,
             Inc. and Inc. and Western Country Clubs, Inc. (1)

     10.2    License Agreement, dated  January 20, 1993, between Western Country
             Clubs, Inc. and Western Country Club I, Ltd. (1)

     10.3    Option for Limited Partnership Interest,  dated September 23, 1993,
             between Western Country Clubs, Inc. and Merrill E. Roberts (1)

     10.4    Stock Option Agreement, dated December 16, 1993 (1)

     10.5    Lease with Option to Purchase, dated December 26, 1993, between and
             among Edward L. and Barbara L. Benshoof and Western Country  Clubs,
             Inc. (1)

     10.6    Agreement  to  Purchase  and  Sale  of  Business  and  Assets, with
             exhibits, dated November 1, 1994 (2)

     10.7    Bill  of  Sale, dated  November  1, 1994, transferring  Arizona Bar
             Liquor License No. 06100208 to Western (2)

     10.8    Amendment to Covenant Not To Compete,  updated, between Western and
             Clarance O. Bond, Jack E. McMurrough and Ada L. Bond (9)

     10.9    Agreement and Plan of  Merger,  dated  October  10,  1995,  between
             Western  Country Clubs,  Inc.,  Western  Newco,  Inc., and  Cowboys
             Concert Hall - Arlington, Inc. (6)

     10.10   Lease with Option to Purchase, dated October 14, 1992, between Expo
             Bowl, Inc. and Texas of Indy, Inc. (1)

     10.11   Guaranty  of Lease with Option to Purchase, dated October 14, 1992,
             by Troy H. Lowrie (1)

     10.12   First Amendment to Lease with Option to Purchase, dated January 20,
             1993, between Expo Bowl Inc. and Texas of Indy, Inc. (1)

     10.13   Warranty Deed, dated February 28, 1993,  in  the  name  of  Western
             Country Club I, Ltd. (1)

<PAGE>

     10.14   State of Indiana,  Certificate of Trade  Mark  Registration,  dated
             August 18, 1993, in  the  name of Texas of Indy, Inc. for "A Little
              Bit of Texas" and Design (1)

     10.15   Lease, dated  April 2, 1993, between  Texas of Indy, Inc. and Great
             Western Boot Company (1)

     10.16   Operating  Agreement  dated  March 17, 1993, between Texas of Indy,
             Inc. and Taco Bell Corp. (1)

     10.17   Option Agreement, dated January 20, 1993, between and among Western
             Country Club I, Ltd.,  Troy H. Lowrie and Merrill Roberts (1)

     10.18   Amended Limited Partnership Agreement  of  Western  Country Club I,
             Ltd. (1)

     10.19   Consulting  Agreement  dated  January  20,  1993,  between  Western
             Country Club I, Ltd. and Texas of Indy, Inc. (1)

     10.20   Security  Agreement, dated  March 18, 1993, between Western Country
             Club I, Ltd. and Texas of Indy, Inc. (1)

     10.21   Option to Purchase Assets, dated  January 20, 1993, between Western
             Country Club I, Ltd. and Texas of Indy, Inc. (1)

     10.22   Promissory  Note,  dated  January  31, 1994, from  Western  Country
             Club I, Ltd. to Expo Bowl, Inc. in the amount of $150,000 (1)

     10.23   Guaranty, dated January 31, 1994, of Promissory Note to  Expo Bowl,
             Inc. by Troy H. Lowrie (1)

     10.24   Promissory  Note, dated  January  31, 1994,  from  Western  Country
             Club I, Ltd. to Dulaney National Bank (1)

     10.25   Articles of Incorporation of  WCWW  Acquisition  Corporation, dated
             January 20, 1995 (4)

     10.26   Interim Permit, dated February 9, 1995, from the Arizona Department
             of Liquor Licenses and Control for the Wild Wild West nightclub (5)

     10.27   Stock Purchase  Agreement,  dated September 21, 1996,  between  and
             among Troy H. Lowrie,  Western  Country Clubs, Inc. and  Red  River
             Concepts, Inc. (7)

     10.28   Lease  Agreement, dated  July  30, 1993, by and between Boots, Inc.
             and In Cahoots Limited Partnership (9)

     10.29   Agreement  and  Plan of  Merger,  dated  December 16, 1996,  by and
             between  Western Country  Clubs, Inc., Entertainment Wichita, Inc.,
             and WCCI Acquisition Corp. (8)

     10.30   Contract of sale dated December 26, 1997, and note dated January 9,
             1998,   between   Western   Country   Clubs,  Inc.  and   Backstage
             Entertainment. (11)

     10.31   Contract  of  sale  dated  November 25, 1997,  along  with addendum
             numbers  1  through  3  thereto,  and note dated February 19, 1998,
             between Western Country Clubs, Inc. and A Little Bit of Texas, Ltd.
             (11)

     10.32   Agreement and Covenant Not to Execute dated February 18, 1998,
             between In Cahoots Limited Partnership, Western Country Clubs, Inc.
             and Jana Oelkers. (11)

     10.33   Form of License Agreement for Atomic Burrito, Inc. restaurants

     10.34   Joint Venture Agreement between Western Country Clubs, Inc. and New
             York Bagel Enterprises, Inc. dated October 27, 1998
<PAGE>

  Exhibits

     11      Calculation of Earnings Per Share

     21      Subsidiaries of the Registrant

     27      Financial Data Schedule

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

     (1)     Incorporated  by  reference  from the like numbered  exhibits filed
             with  the  Registrant's  Registration  Statement on Form SB-2,  No.
             33-72942.

     (2)     Incorporated  by  reference from  Western's  Current Report on Form
             8-K,  dated  November 1, 1994,  attached  as Exhibits 10.1 and 10.2
             thereto.

     (3)     Incorporated  by  reference  from  Western's  Annual Report on Form
             10-KSB,  dated February 27, 1995,  attached as Exhibit 21 thereto.

     (4)     Incorporated   by  reference from  Western's  Annual Report on Form
             10-KSB, dated February 27, 1995, attached as Exhibit 28.16 thereto.

     (5)     Incorporated  by  reference  from  Western's  Annual Report on Form
             10-KSB, dated February 27, 1995, attached as Exhibit 28.17 thereto.

     (6)     Incorporated  by  reference  from Western's  Current Report on Form
             8-K, dated October 19, 1995,  attached as Exhibit 10.1 thereto.

     (7)     Incorporated  by  reference  from  Western's Current Report on Form
             8-K, dated October 10, 1996, attached as Exhibit 9 thereto.

     (8)     Incorporated  by reference  from  Western's  Current Report on Form
             8-K, dated October 10, 1996, attached as Exhibit 2 thereto.

     (9)     Incorporated  by reference  from  the like numbered  exhibits filed
             with the Registrant's  Registration  Statement  on Form SB-2, dated
             February 11, 1997, No. 333-21547.

     (10)    Incorporated  by  reference from  Western's  Current Report on Form
             8-K, dated February 6, 1998, attached  as  Exhibits 10.0, 10.1  and
             10.2 thereto.

     (11)    Incorporated  by reference  from the like  numbered  exhibits filed
             with  Western's Current Report on Form 8-K, dated February 6, 1998.

(b)      During the last quarter of 1999,  the Company  filed one Report on Form
         8-K the same being  filed  on  October 12,  1999,  reporting a material
         transaction  wherein the  previously  disclosed Joint Venture Agreement
         with New York Bagel Enterprises, Inc.  was terminated.   The  Agreement
         also provided for the Company to purchase New York Bagel's  interest in
         the  Tulsa  and  Wichita  Atomic  Burrito   restaurants  for  $175,000.
         Attached to the Form  8-K were  Exhibits 10.0 (the Agreement)  and 99.1
         (the accompanying press  release).   No other  filings were made during
         the last quarter of 1999 by the Company.
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

April 14, 2000

                                    Atomic Burrito, Inc.


                                    By: /s/ James E. Blacketer
                                    -----------------------------
                                    James E. Blacketer, President


    Pursuant to the  requirements  of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

Name                              Title                               Date

/s/  James E. Blacketer     President, Principal
                            Executive Officer, Principal
                            Financial Officer and Director        April 14, 2000

/s/  Joe R. Love            Director                              April 14, 2000



<PAGE>


                              ATOMIC BURRITO, INC.

                      FORMERLY WESTERN COUNTRY CLUBS, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1999 AND 1998

























<PAGE>



                                TABLE OF CONTENTS


                                                                        Page No.

     INDEPENDENT AUDITORS' REPORT
        ON FINANCIAL STATEMENTS..........................................   1

     FINANCIAL STATEMENTS

        Consolidated Balance Sheets.....................................    2

        Consolidated Statements of Income...............................    4

        Consolidated Statement of Stockholders' Equity..................    5

        Consolidated Statements of Cash Flows...........................    6

        Notes to Consolidated Financial Statements......................    8


<PAGE>








                          Independent Auditors' Report
                          ----------------------------



To the Board of Directors
Atomic Burrito, Inc.

We have audited the  accompanying  consolidated  balance sheets ATOMIC  BURRITO,
INC., an Oklahoma  corporation,  survivor  corporation  in a merger with Western
Country Clubs, Inc., a Colorado  corporation,  as of December 31, 1999 and 1998,
and the related consolidated statements of income, stockholders' equity and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Atomic Burrito,  Inc., as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the years ended in conformity with generally accepted accounting principles.









March 24, 2000


<PAGE>

                              ATOMIC BURRITO, INC.
                     (FORMERLY WESTERN COUNTRY CLUBS, INC.)
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1999 AND 1998
                                   Page 1 of 2


                                     ASSETS
<TABLE>
<CAPTION>

                                                        1999           1998
                                                    -----------    -----------
CURRENT ASSETS:
<S>                                                 <C>            <C>
 Cash                                               $   172,622    $   205,411
 Accounts receivable                                     68,354         67,803
 Accounts receivable due from related party              10,000              -
 Current portion of notes due from affiliate            319,441        263,340
 Current portion of notes and loans receivable           28,642        124,696
 Inventories                                             95,648         56,514
 Prepaid expenses                                        38,019        105,546
 Deferred income taxes                                        -        102,000
                                                    -----------    -----------
  Total current assets                                  732,726        925,310
                                                    -----------    -----------
PROPERTY AND EQUIPMENT:
 Land and improvements                                   77,011         77,011
 Leasehold improvements                               2,365,157      1,519,862
 Equipment                                            1,057,426        388,477
 Furniture and fixtures                                 543,979        279,838
                                                    -----------    -----------
                                                      4,043,573      2,265,188
 Accumulated depreciation and reserve for
   impairment                                        (1,452,412)    (1,128,236)
                                                    -----------    -----------
                                                      2,591,161      1,136,952
                                                    -----------    -----------
OTHER ASSETS:
 Notes from affiliate, net of current portion
  shown above (Note 3)                                  460,000        480,000
 Notes and loans receivable, net of current
  portion shown above                                         -        103,542
 Deferred income taxes                                  100,000        265,740
 Goodwill, net of accumulated amortization of
  $80,199 and $69,069 in 1999 and 1998,
  respectively                                           38,374         11,130
 Deposits and other                                     139,003         41,139
 Investment                                              57,400         57,400
                                                    -----------    -----------
                                                        794,777        958,951
                                                    -----------    -----------
                                                    $ 4,118,664    $ 3,021,213
                                                    ===========    ===========
</TABLE>




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


<PAGE>

                              ATOMIC BURRITO, INC.
                     (FORMERLY WESTERN COUNTRY CLUBS, INC.)
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1999 AND 1998
                                   Page 2 of 2


                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                        1999           1998
                                                    -----------    -----------
CURRENT LIABILITIES:
<S>                                                 <C>            <C>
 Accounts payable                                   $   589,103    $   262,084
 Accounts payable - affiliates                           35,339              -
 Accrued liabilities                                    318,557        283,439
 Dividends payable                                            -         22,900
 Current portion of notes payable -
  related parties                                        45,082         55,300
 Current portion of long-term debt                      403,609        174,604
 Current portion of capital leases                       10,695              -
                                                    -----------    -----------
  Total current liabilities                           1,402,385        798,327
                                                    -----------    -----------
NOTES PAYABLE - related parties, net of current
 portion shown above                                          -         20,438
                                                    -----------    -----------
LONG-TERM DEBT                                          587,325          7,843
                                                    -----------    -----------
OBLIGATION UNDER CAPITAL LEASE                           69,722              -
                                                    -----------    -----------
MINORITY INTERESTS                                      327,272        176,389
                                                    -----------    -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
 10% convertible  preferred  stock,
  $10 par value,  500,000 shares authorized,
  40,000 shares issued and outstanding
  at December 31, 1999 and 1998                         400,000        400,000
 12% convertible preferred stock, $10 par value,
  100,000 shares authorized, no shares issued
  and outstanding at December 31, 1999 and
  14,500 shares issued and outstanding at
  December 31, 1998                                           -        145,000
 Common stock, $.001 par value, 25,000,000
  shares authorized; 4,235,721 shares issued
  and outstanding at December 31, 1999 and
  3,734,721 shares issued and outstanding
  at December 31, 1998                                    4,236          3,735
 Additional paid-in capital                           4,754,851      4,397,351
 Accumulated deficit                                 (3,427,127)    (2,927,870)
                                                    -----------    -----------
  Total stockholders' equity                          1,731,960      2,018,216
                                                    -----------    -----------
                                                    $ 4,118,664    $ 3,021,213
                                                    ===========    ===========
</TABLE>




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


<PAGE>

                              ATOMIC BURRITO, INC.
                     (FORMERLY WESTERN COUNTRY CLUBS, INC.)
                       CONSOLIDATED STATEMENTS OF INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998



<TABLE>

                                                        1999           1998
                                                    ----------    ------------

REVENUES:
<S>                                                 <C>            <C>
 Beverage and food sales                            $ 5,789,414    $ 3,364,637
 Admission fees                                         946,237      1,390,427
 Gain on sale of assets                                 100,000        284,861
 Other income                                            85,230         70,999
                                                    -----------    -----------
                                                      6,920,881      5,110,924
                                                    -----------    -----------
COSTS AND EXPENSES:
 Cost of products and services                        6,029,124      4,133,274
 General and administrative expense                     764,728        147,320
 Depreciation and amortization                          335,305        270,633
 Interest expense                                        76,903         71,968
 Write-down of investments                                    -         57,400
 Litigation loss                                              -         62,458
                                                    -----------    -----------
                                                      7,206,060      4,743,053
                                                    -----------    -----------
INCOME (LOSS) BEFORE INCOME TAXES
 AND MINORITY INTERESTS                                (285,179)       367,871

INCOME TAX (EXPENSE)                                   (267,740)       (49,670)
                                                    -----------    -----------
INCOME (LOSS) BEFORE MINORITY INTERESTS                (552,919)       318,201

MINORITY INTERESTS IN (INCOME) LOSS OF
 CONSOLIDATED SUBSIDIARIES                               66,867        (42,494)
                                                    -----------    -----------
NET INCOME (LOSS)                                      (486,052)       275,707

PREFERRED STOCK DIVIDENDS                               (13,205)       (56,350)
                                                    -----------    -----------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCK        $  (499,257)   $   219,357
                                                    ===========    ===========
BASIC EARNINGS PER SHARE                            $     (0.13)   $      0.06
                                                    ===========    ===========
DILUTED EARNINGS PER SHARE                              N/A        $      0.04
                                                    ===========    ===========
AVERAGE COMMON AND COMMON EQUIVALENT:
 BASIC SHARES                                         3,870,665      3,775,522
                                                    ===========    ===========
 DILUTED SHARES                                       6,423,665      5,427,522
                                                    ===========    ===========
</TABLE>

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


<PAGE>


                              ATOMIC BURRITO, INC.
                     (FORMERLY WESTERN COUNTRY CLUBS, INC.)
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
                     10% Convertible    12% Convertible
                     Preferred Stock    Preferred Stock      Common Stock
                     ----------------------------------------------------
                     Number    Value    Number    Value     Number   $0.001     Additional                     Total
                       of        of       of       of         of       par        Paid-In   Accumulated   Stockholders'
                      Shares    Shares   Shares    Shares    Shares  Value(1)   Capital(1)     Deficit        Equity
                     --------------------------------------------------------------------------------------------------
Balance,
<S>                  <C>      <C>       <C>       <C>       <C>        <C>     <C>         <C>           <C>
  December 31, 1997        -  $      -         -  $     -   3,634,721  $3,635  $4,347,451  $(3,147,227)  $1,203,859

Preferred stock
  issued for note
  payable             40,000   400,000         -        -           -       -           -            -      400,000

Preferred stock
  issued for note
  payabe                   -         -     16,000  160,000          -       -           -            -     160,000

Common stock issued
  in settlement of
  litigation               -         -        -         -     100,000     100      49,900            -       50,000

Redemtpion of
  preferred stock          -         -    (1,500)  (15,000)         -       -           -            -      (15,000)

Cash dividends:
  Preferred -
    $1 per share           -         -        -         -           -       -           -       (40,000)    (40,000)
    $1.20 per share        -         -        -         -           -       -           -       (16,350)    (16,350)

Net income for the
  year ended
  December 31, 1998        -         -        -         -           -       -           -       275,707     275,707
                      ---------------------------------------------------------------------------------------------

Balance,
  December 31, 1998   40,000   400,000    14,500  145,000   3,734,721  $3,735   4,397,351    (2,927,870)  2,018,216

Redeption of
  preferred stock          -         -   (14,500)(145,000)          -       -           -             -    (145,000)

Common stock
  issued in
  settlement of
  accounts payable         -         -         -        -     111,000     111      65,390             -      65,501

Exercise of stock
  options                  -         -         -        -      30,000      30      22,470             -      22,500

Common stock
  issued to
  acquire restaurant       -         -         -        -     360,000     360     269,640             -     270,000

Cash dividends:
  Preferred -
    $1 per share           -         -         -        -           -       -           -       (10,000)    (10,000)
    $1.20 per share        -         -         -        -           -       -           -        (3,205)     (3,205)

Net loss for the
  year ended
  December 31, 1999        -         -         -        -           -       -           -      (486,052)   (486,052)
                     ----------------------------------------------------------------------------------------------

Balance,
  December 31, 1999   40,000  $400,000         -  $     -   4,235,721  $4,236  $4,754,851  $(3,427,127)  $1,731,960
                     ==============================================================================================
</TABLE>

(1) The  common  stock  and  additional  paid-in   capital  have  been  adjusted
retroactively to relect the change in par value from $0.1 to $.001.

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


<PAGE>



                             ATOMIC BURRITO, INC.
                     (FORMERLY WESTERN COUNTRY CLUBS, INC.)
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
                                  Page 1 of 2

<TABLE>
<CAPTION>

                                                           1999         1998
                                                       ----------   -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                    <C>          <C>
 Net income (loss)                                     $ (486,052)  $   275,707
 Adjustments to reconcile net loss to net cash
  provided by operating activities -
  Depreciation and amortization                           335,305       267,297
  Write-off of note receivable                                  -        55,000
  Write-down of investment                                      -        57,400
  Gain on sale of assets                                 (100,000)     (284,861)
  Minority interests in earnings (loss)
    of subsidiaries                                       (66,867)       42,494
  Settlement of litigation                                      -        50,000
  Deferred tax provisions                                 267,740        49,670
  Changes in assets (increase) decrease -
   Accounts receivable                                        215       (27,090)
   Inventories                                            (36,257)       (1,617)
   Prepaid expenses                                        69,138       (74,223)
   Deposits and other assets                              (84,364)       26,841
  Changes in liabilities increase (decrease) -
   Accounts payable                                       374,427      (104,387)
   Accrued expenses                                        17,582      (246,511)
   Dividends payable                                      (22,900)       22,900
                                                        ---------     ---------
    Net cash provided by operating activities             267,967       108,620
                                                        ---------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Sale of property and equipment                                 -       255,109
 Notes and loans receivable                               (50,000)     (304,129)
 Repayments of notes receivable                           313,495       144,570
 Acquisition of property and equipment                 (1,508,385)      (18,004)
                                                       ----------     ---------
  Net cash provided by (used in) investing activities  (1,244,890)       77,546
                                                       ----------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Partnership distributions to minority interests          217,750       (13,750)
 Sale of common stock                                      26,340             -
 Retirement of preferred stock                           (145,000)            -
 Payments of dividends                                    (13,205)      (56,350)
 Borrowings under notes payable                         1,160,663             -
 Repayments of notes payable                             (352,175)      (66,270)
 Borrowings under notes payable, related parties                -       178,456
 Repayments of notes payable, related parties             (30,656)     (108,790)
 Borrowing under capital lease                             82,500             -
 Repayments of capital lease                               (2,083)            -
                                                       ----------   -----------
  Net cash provided by (used in) financing activities     944,134       (66,704)
                                                       ----------   -----------

NET INCREASE (DECREASE) IN CASH                           (32,789)      119,462

CASH, BEGINNING OF YEAR                                   205,411        85,949
                                                       ----------   -----------

CASH, END OF YEAR                                      $  172,622   $   205,411
                                                       ==========   ===========
</TABLE>



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

<PAGE>

                              ATOMIC BURRITO, INC.
                     (FORMERLY WESTERN COUNTRY CLUBS, INC.)
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
                                  Page 2 of 2

<TABLE>

                                                          1999         1998
                                                       ----------   ----------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<S>                                                    <C>          <C>
 Cash paid for interest                                $   76,903   $   71,638
                                                       ==========   ==========
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
 On  January  1,  1998,  two notes  payable  from a major  stockholder  totaling
 $378,276  with accrued  interest of $21,725 were  converted to 40,000 shares of
 the Company's Series A 10% cumulative convertible preferred stock.

 On February 18, 1998, a note payable of $160,000 was converted to 16,000 shares
 of the Company's Series B 12% cumulative convertible preferred stock.

 On February  19, 1998,  the Company  issued  100,000  shares of common stock in
 settlement of an obligation of $50,000.

 During 1998, the Indianapolis club was sold to an affiliated  partnership for a
 $600,000 note receivable.  Also, the affiliated  partnership  assumed two notes
 payable totaling $490,425.

 During 1999, the Company issued 111,000 shares of common stock in settlement of
 accounts payable totaling $65,500.

 On December  31, 1999,  the Company  issued  360,000  shares of common stock to
 acquire the operations of a restaurant located in Norman.   The assets acquired
 include 3,840 in cash.

 During  March  1999,  the  Company  sold its rights to  receivable,  previously
 written off, for a $100,000 note receivable due from the affiliate.



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

<PAGE>

                              ATOMIC BURRITO, INC.
                      FORMERLY WESTERN COUNTRY CLUBS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998


(1)     DESCRIPTION OF BUSINESS

        Atomic Burrito,  Inc.  (the "Company"),  was  incorporated  on  July 19,
        1999 as Western Oklahoma,  Inc. On September 3, 1999,  Western Oklahoma,
        Inc., a shell corporation,  was  merged  with   Western  Country  Clubs,
        Inc.,   a   Colorado  corporation,  incorporated  on  December 19, 1989.
        Western Oklahoma, Inc. became the surviving  corporation in this merger.
        On September 3, 1999, Western Oklahoma,  Inc. changed its name to Atomic
        Burrito, Inc. These financial statements include the activity of Western
        Country Clubs, Inc. prior to its merger with Western Oklahoma, Inc.

        The  Company's  current  focus  is on the  development  of  its  "Atomic
        Burrito"  restaurants.  In June 1998,  the Company  formed a  subsidiary
        corporation,  Atomic  Burrito,  Inc.,  through  which to  develop  a new
        restaurant  concept.  In October 1998, the Company  entered into a joint
        venture  agreement  with New York Bagel  Enterprises,  Inc.,  ("New York
        Bagel") for the joint development of "Atomic Burrito"  restaurants.  The
        agreement  provides  for New York  Bagel to  contribute  certain  of its
        restaurant  locations,  including leases,  leasehold  improvements,  and
        equipment for a 40% interest in the  operation,  while the Company would
        contribute  up to $150,000 per  location for the remodel and  conversion
        costs,  as well as for additional  equipment.  Two  restaurants,  one in
        Tulsa  and  one  in  Wichita,  were  opened  under  this  joint  venture
        agreement.  In September of 1999,  the Company and New York Bagel agreed
        to terminate any future  development  under the joint  venture,  and New
        York Bagel gave the Company an option to purchase  its interest in these
        two restaurants for $175,000.

        The Company's subsidiaries and divisions are as follows:

           Western Country Club 1, Ltd. ("Indy") is a limited partnership formed
           on  January  19,  1993.  Indy  owned  and  operated  a  nightclub  in
           Indianapolis,  Indiana  which was sold in early 1998.  As of December
           31,  1999  and  1998,  this   partnership   owns  $600,000  in  notes
           receivable, $480,000 of which are to be distributed to the Company in
           liquidation of its 80% ownership interest in this partnership.

           The  St. Louis  division  of  the company  was acquired on October 7,
           1994.  This  division  operates a nightclub in St. Louis, Missouri.

           Entertainment  Wichita,  Inc.  ("EWI"),  a  wholly-owned  subsidiary,
           owns an 80% interest in In Cahoots, Ltd. ("In  Cahoots"). In  Cahoots
           is  a  limited  partnership  that  owns and  operates  a nightclub in
           Wichita, Kansas (Notes 6).

           Atomic Development,  Inc.  ("Development"),  formerly known as Atomic
           Burrito, Inc., a wholly-owned  subsidiary formed in 1998 to develop a
           "Fresh-Mex"  restaurant  featuring a Mexican menu  emphasizing  fresh
           ingredients and made-to-order burritos (Note 11).

<PAGE>

           AB of  Tulsa-I,  L.L.C.,  was  formed  in 1998 to  operate  an Atomic
           Burrito restaurant in Tulsa,  Oklahoma.  The Company owns 57% of this
           limited liability company.

           AB of  Wichita-I,  L.L.C.  was  formed in 1998 to  operate  an Atomic
           Burrito  restaurant in Wichita,  Kansas.  The Company owns 60% of the
           limited liability company.

           AB of  Houston-I,  L.L.C.  was  formed in 1999 to  operate  an Atomic
           Burrito  restaurant  in Houston,  Texas.  The Company owns 50% of the
           limited liability company.

           AB of OKC-I,  L.L.C.  was formed in 1999 to operate an Atomic Burrito
           restaurant in Oklahoma City,  Oklahoma.  The Company owns 100% of the
           limited liability company.

(2)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        The following is a summary of significant  accounting  policies followed
by the Company:

               Cash and cash  equivalents  - The  company  considers  all highly
               liquid  investments  with original  maturities of three months or
               less to be cash equivalents.

               Estimates - The preparation of financial statements in conformity
               with generally accepted accounting principles requires management
               to make  estimates  and  assumptions  that  affect  the  reported
               amounts of assets and  liabilities  and  disclosure of contingent
               assets and  liabilities  at the date of the financial  statements
               and the  reported  amounts or revenues  and  expenses  during the
               reporting   period.   Actual  results  could  differ  from  these
               estimates.

               Consolidation - The consolidated financial statements include the
               accounts of the Company and all of its  wholly-owned and majority
               owned subsidiaries,  limited liability companies and partnerships
               as  described  in  Note 1  above.  All  significant  intercompany
               accounts and transactions have been eliminated in consolidation.

               Investments - Investments  in  partnerships  in which the company
               owns less than a 20% interest are accounted for on the cost basis
               reduced by any permanent  impairments in the investments carrying
               value.

               Inventories - Inventories consist of liquor, wine, beer, boutique
               items,  and food  items.  Inventories  are stated at the lower of
               cost (first-in, first-out) or market.

               Depreciation and amortization - Property and equipment are stated
               at cost.  Depreciation is provided using the straight-line method
               over  the  assets'  estimated  useful  lives  as  follows:   land
               improvements,  10-15  years;  building  and  improvements,  10-30
               years; leasehold improvements, 7-10 years; equipment, 7-10 years;
               furniture and fixtures, 7-10 years.

<PAGE>

               Intangibles  -  Organization  costs,  liquor  license  costs  and
               goodwill  are  amortized  over five years.  The  covenant  not to
               compete is amortized over 15 years.

               Measurement  of  impairment  - At each  balance  sheet date,  the
               Company reviews the amount of recorded goodwill,  covenant not to
               compete,  related  nightclub  assets and the  related  restaurant
               assets  (separately  by  club  and  restaurant)  for  impairment.
               Whenever  events or changes in  circumstances  indicate  that the
               carrying  amount of the expected  cash flows from these assets is
               less than the carrying  amount of these assets,  the Company will
               recognize  an  impairment  loss in such  period in the  amount by
               which the carrying amount of the assets exceeds the fair value of
               the assets.

               Repairs and  maintenance  - Normal  costs  incurred to repair and
               maintain  fixed  assets are charged to  operations  as  incurred.
               Repairs  and  betterments  which  extend the life of an asset are
               capitalized and subsequently depreciated on a straight-line basis
               over the remaining useful life of the asset. When assets are sold
               or retired,  the cost and  accumulated  depreciation  are removed
               from the accounts and any  resulting  gain or loss is included in
               operations.

               Income  taxes - Income  taxes  are  provided  based  on  earnings
               reported  in  the  financial  statements.   The  company  follows
               Statement  of  Financial  Accounting  Standards  No. 109  whereby
               deferred  income  taxes are  provided  on  temporary  differences
               between  reported  earnings and taxable  income.  See note 10 for
               further detail.

               Earnings  (Loss)  Per  Share - Basic  earnings  (loss)  per share
               computations  are  calculated on the  weighted-average  of common
               shares and common share equivalents  outstanding during the year.
               Common stock  options and warrants  are  considered  to be common
               share  equivalents and are used to calculate diluted earnings per
               common  and  common  share  equivalents   except  when  they  are
               anti-dilutive.

               Concentration  of  credit  risk  -  Financial  instruments  which
               potentially  subject the Company to concentrations of credit risk
               are primarily  cash and temporary cash  investments.  The Company
               places   its  cash   investments   in  highly   rated   financial
               institutions.  At times,  the Company  may have bank  deposits in
               excess of Federal Deposit Insurance  Commission (FDIC) limits. At
               December 31, 1999, the Company had no uninsured  deposits.  As of
               December 31, 1998,  the Company had uninsured  deposits  totaling
               $11,916.

(3)     NOTES AND LOANS RECEIVABLE

        The Company had the following notes and loans receivable at December 31,
1999 and 1998:

<PAGE>
<TABLE>
<CAPTION>

                                                         1999            1998
                                                        ------         --------

        8%  note   receivable  due  from  an
        individual,   payable  in  monthly
        installments of $7,500, including
<S>                                                    <C>             <C>
        interest, due April 1999                       $  75,642       $111,363

        8%  note   receivable  due  from  a
        corporation,   payable  in  monthly
        installments of $5,000, including
        interest                                              -         153,086
                                                      ---------       ---------

           Total notes receivable                        75,642        264,449
               Less allowance for doubtful
               accounts                                  47,000         36,211
                                                      ---------      ---------
                                                      $  28,642      $ 228,238
                                                      =========      =========

           Current portion                            $  28,642      $ 124,696
                                                      =========      =========

           Long-term portion                          $       -      $ 103,542
                                                      =========      =========
</TABLE>

        In addition,  the Company had the following  notes  receivable  due from
        affiliates as of December 31, 1999 and 1998:
<TABLE>
<CAPTION>

                                                       1999              1998
                                                      ------           --------


        6% note receivable due from a
<S>                                                  <C>             <C>
        corporation in March 2001                    $ 100,000       $      -

        6% note receivable due from a corporate
        officer in December 1999                       149,441        143,340

        6% note receivable due from
        a corporation                                   50,000              -

        8% note receivable due from a
        corporation                                    480,000              -

        8% note receivable due from a
        Trust, due December 31, 1999                         -        600,000
                                                     ---------      ---------

           Total notes receivable - affiliates       $ 769,441      $ 743,340
                                                     =========      =========

           Current portion                           $ 319,441      $ 263,000
                                                     =========      =========

           Long-term portion                         $ 460,000      $ 480,000
                                                     =========      =========
</TABLE>


(4)     FAIR VALUE OF FINANCIAL INSTRUMENTS

        The carrying amounts of cash,  short-term notes  receivable,  commercial
        paper  and  accounts  payable  approximate  fair  value  because  of the
        short-term maturity of these instruments.

        The carrying value of long-term  debt,  including the current portion in
        the financial statements, approximates fair value.


<PAGE>

(5)     IMPAIRMENT OF LONG-LIVED ASSETS

        During  1998,  the  Company  recognized  a reserve  of  $57,400  for the
        investment in the stock of Cowboys Concert Hall Arlington, Inc.

(6)     NOTES PAYABLE

        As of December  31, 1999 and 1998,  the Company had a note  payable to a
        related  party at 1% over  prime,  payable  in monthly  installments  of
        $6,250  plus  interest  through  July  2000,  secured  by the  ownership
        interest of a stockholder  and the guarantee of a financial  corporation
        totaling $45,082 and $75,748, respectively.

        Long-term debt consists of the following at December 31, 1999 and 1998:
<TABLE>
<CAPTION>

                                                        1999              1998
                                                       ------           --------

        8.25% note  payable to a bank,  due in
        monthly  installments  of $12,000
        including interest through February 2002,
        secured by personal guarantees
<S>                                                   <C>                 <C>
        of stockholders, and equipment                $ 507,092           $ -

        8.25% note  payable to a bank,  due in
        monthly  installments  of $6,172
        including interest through February 2001,
        secured by personal guarantees
        of stockholders, and equipment                  242,500             -

        8.5% note  payable  to a bank,
        due in  monthly  installments  of $4,116
        including interest through August 2000,
        secured by personal  guarantees
        of stockholders, and equipment                  184,972             -

        11% note payable to a partnership,
        due in monthly installments of
        $1,663 through July 2000, secured
        by equipment                                     10,663             -

        10% note payable to a limited
        partnership, due in monthly installments
        of $7,500 through September 2000                 38,209             -

        18% note payable to a financial
        institution, due in monthly installments
        of $3,744, through March 2000, secured
        by Wichita-furniture, fixtures,
        inventory and accounts receivable                 7,498        47,047

        10% note payable to a limited
        partnership, due in monthly installments
        of $7,500 through June 1999                           -        38,900

        10% note payable to an individual,
        due in monthly installments of $5,000,
        plus interest, through May 1999                      -        52,500
</TABLE>

<PAGE>
<TABLE>

        Non-interest  bearing  note  payable
        to a  Corporation,  due in monthly
        installments of $1,000, through July
<S>                                                   <C>           <C>
        1999, secured by equipment                           -         8,000

        Non-interest  bearing  note
        payable  to an  individual,  due in
        monthly installments   of   $3,000
        through December 1999, secured  by
        Wichita-furniture, fixtures and
        equipment                                             -        36,000
                                                      ---------      --------

               Total long-term debt                     990,934       182,447
               Less current portion                     403,609       174,604
                                                      ---------      --------
               Noncurrent portion                     $ 587,325      $  7,843
                                                      =========      ========
</TABLE>

               Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>

        Year ending December 31,                                       Amount
        ------------------------                                       ------

<S>                                                                  <C>
               2000                                                  $ 403,609
               2001                                                    301,562
               2002                                                    285,763
                                                                     ---------
                                                                     $ 990,934
                                                                     =========
</TABLE>

(7)     RELATED PARTY TRANSACTIONS

        On July 3, 1993 In Cahoots signed a ten-year lease.  The lessor is a 20%
        limited  partner of In Cahoots.  Rent  expense  under this lease for the
        years  ended  December  31,  1999 and 1998,  amounted  to  $167,831  and
        $150,000, respectively.

        On  October 1,  1996,  EWI  assumed  $150,000  of debt when it  acquired
        control of In Cahoots.  The remaining balance of $45,082 at December 31,
        1999 is due to a former limited partner of the Company.

        Effective  January 9, 1998,  the Company  sold its interest in a limited
        partnership  for $10,000 in cash and a $210,000  note. The sale resulted
        in a gain of $192,869, net of the tax effect of $27,131.

        On February 6, 1998, the Company sold its  Indianapolis  club to a major
        stockholder  of the Company for a $600,000  note and the  assumption  of
        $490,426 of  long-term  debt and $60,078 of accrued  interest and taxes,
        less  $13,000  to  be  refunded  to  the  buyer.   The  Company  remains
        contingently liable  for these debts  until they are paid in full by the
        purchaser. The sale resulted in a gain of $47,931, net of the tax effect
        of $8,735  and  minority  interest of $14,166.  As of December 31, 1999,
        the note  receivable  balance was $480,000.

        During  March  1999,  the  Company  sold its rights to a fully  reserved
        receivable  to an  affiliate  for a $100,000  note  receivable  from the
        affiliate.

(8)     STOCKHOLDERS' EQUITY

        The  underwriter  was issued warrants as compensation to purchase 40,000
        shares of common stock.  The warrants are exercisable at $6.30 per share
        commencing  April 25, 1995 until April 25, 1999. The Company has granted
        the holders of the warrants certain customary  registration  rights. The
        underwriter  did not  exercise  any of the  issued  warrants  for common
        stock.
<PAGE>


        Warrants  granted - Effective July 1, 1994, the Company granted warrants
        to purchase 60,000 shares of the Company's  common stock  exercisable at
        $6.00 per share until June 30, 1999, in exchange for consulting services
        to be  performed  over a  one-year  period.  None of the  warrants  were
        exercised.

        Omnibus  Equity  Compensation  Plan - On March  9,  2000,  the  Board of
        Directors approved an Omnibus Equity Compensation Plan for employees and
        consultants.  The aggregate  number of common shares as to which options
        and  awards  may be granted  shall not  exceed  572,208.  At the time of
        grant,  the Company will  determine  the exercise  price and the vesting
        period. The Company's existing equity-based  compensation plans shall be
        incorporated into this Plan.

        During 1998, the Company converted the notes payable to a former officer
        of the Company and a shareholder and the related accrued interest in the
        amount of $400,000 into 40,000 shares of Series A Convertible  Preferred
        Stock.  The Series A Preferred Stock provides for a par value of $10 per
        share; a 10% cumulative annual dividend,  payable quarterly;  conversion
        into  the  Company's  common  stock  at the  rate of $1 per  share;  and
        redemption by the Company at the rate of up to 10,000 shares annually on
        each anniversary date for four years.

        During 1998, the Company agreed to convert the Company's note payable to
        a limited  partnership  in the amount of $160,000  into 16,000 shares of
        Series B Cumulative  Convertible Preferred Stock. The Series B Preferred
        provides  for a par  value of $10 per  share;  a 12%  cumulative  annual
        dividend, payable quarterly;  conversion into the Company's common stock
        at the rate of $1 per  share;  and  redemption  of the  preferred  stock
        funded  in the  amount of  $5,000  monthly.  During  1999,  the  Company
        redeemed the Series B Cumulative Convertible Preferred Stock.

        During  1998,  the  Company  settled a lawsuit  for  $92,808 in cash,  a
        payment  agreement  totaling $74,000 and 100,000 shares of the Company's
        stock valued at $50,000.

        During 1999, the Company issued 111,000 shares of stock in settlement of
        payables totaling $65,501.

        Also  during  1999,  stock  options for 30,000  shares of the  Company's
        common stock were exercised at $0.75 per share.

        During  December of 1999,  the Company  acquired  certain assets and the
        operations of an Atomic Burrito restaurant  located in Norman,  Oklahoma
        in exchange for 360,000 shares of the Company's  restricted common stock
        and the  assumption of $60,967 in debt.  The voting rights to this stock
        were placed in a voting trust for a period of one year. This acquisition
        was treated as a purchase for financial reporting purposes.

        The break down on this purchase is as follows:
<TABLE>


<S>                                          <C>
               Current Assets                $  19,093
               Property and Equipment          270,000
</TABLE>
<PAGE>

<TABLE>

<S>                                             <C>
               Other Assets                     13,500
               Goodwill                         38,374
                                             ---------
                                             $ 340,967
                                             =========

               Accounts payable              $  70,967
               Capital stock issued            270,000
                                             ---------
                                             $ 340,967
                                             =========
</TABLE>

Subsequent to year end,  on April 6, 2000,  the dividends  in arrears on the 10%
convertible preferred stock of $30,000  were waived.   Therefore, no accrual for
dividends payable was recorded as of December 31, 1999.


(9)     INCOME TAXES

        As of December 31, 1999 and 1998, the Company's deferred tax assets were
as follows:
<TABLE>
<CAPTION>

                                                         1999            1998
                                                     ----------      ----------

        Tax over book basis of fixed and
<S>                                                  <C>             <C>
           intangible assets                         $  295,262      $  209,635
        Leases with scheduled rent increases             36,293          48,391
        Net operating loss carryforwards                959,865         935,972
        Charitable contribution carryforwards             1,549           1,549
                                                     ----------      ----------
                                                      1,292,969       1,195,547
        Valuation allowance                          (1,192,969)       (827,807)
                                                     ----------      ----------
           Net deferred tax asset                       100,000         367,740
        Current asset                                         -        (102,000)
                                                     ----------      ----------
           Long-term asset                           $  100,000      $  265,740
                                                     ==========      ==========
</TABLE>

        Realization  of the  deferred  tax asset is  dependent  upon the Company
        generating  sufficient  future  taxable  income  against  which its loss
        carryforward  and loss  from  impairment  of  long-lived  assets  can be
        offset. Management has determined that it is not likely that the Company
        will be able to realize all the tax benefits from the net operating loss
        carryforward  and  impairment  of  long-lived  assets and has  therefore
        reduced the  deferred tax asset by a valuation  allowance.  During 1999,
        the Company revised  downward by $267,740 its estimate of the realizable
        portion of its  deferred tax asset,  resulting  in a $267,740  charge to
        current year income tax expense.

        Changes in the components of the Company's  deferred tax assets for 1999
        and 1998, respectively, are as follows:
<TABLE>
<CAPTION>

                                                           1999           1998
                                                           ----           ----

<S>                                                   <C>             <C>
           Deferred tax asset - beginning of year     $ 367,740       $ 417,410
           Difference between book and
               tax depreciation                          85,628         (71,101)
           Impairment of long-lived assets                    -         (92,601)
           Leases with scheduled rent increases         (12,098)          5,604
           Charitable contribution carryforwards              -            (107)
           Change in valuation allowance                (73,530)        158,205
                                                      ---------       ---------
                                                        367,740         417,410
           Charge against current year earnings               -         (49,670)
           Valuation allowance charged against
               current operations                      (267,740)              -
                                                      ---------       ---------

           Deferred tax asset - end of year           $ 100,000       $ 367,740
                                                      =========       =========
</TABLE>

<PAGE>
<TABLE>

<S>                                                   <C>             <C>
           Current portion of deferred tax asset      $       -       $ 102,000

           Long-term portion of deferred
               tax asset                                100,000         265,740
                                                      ---------       ---------

                                                      $ 100,000       $ 367,740
                                                      =========       =========
</TABLE>

        The difference  between the Company's  effective income tax rate and the
        United States  statutory  rate is  reconciled  below for the years ended
        December 31, 1999 and 1998:
<TABLE>
<CAPTION>

                                                         1999             1998
                                                         ----             ----

<S>                                                      <C>            <C>
        United States statutory rate                     0.0%           (34.0)%
        State income taxes, net of federal
           income tax benefit (cost)                     0.0             (3.0)
        Increase in valuation allowance                  0.0             44.5
        Other                                            0.0              (.1)
                                                      -------            -----
                                                         0.0%             7.4%
                                                      =======            =====

</TABLE>

        At December 31, 1999, the Company has a net operating loss  carryforward
        of approximately $2,823,133, which expires in 2013.

(10)    EARNINGS PER SHARE

        Basic  earnings  per share  amounts are  computed  based on the weighted
        average number of shares actually outstanding plus the shares that would
        be outstanding  assuming  conversion of the Series A Preferred Stock and
        the Series B Preferred  Stock,  which are  considered to be common stock
        equivalents.   Net  income  has  been  adjusted  for  dividends  on  the
        convertible   preferred   stock.  The  number  of  shares  used  in  the
        computations were 4,290,221 in 1999 and 4,266,022 in 1998.

(11)    LEASE COMMITMENTS

        Capital Leases

        The Company is the lessee of restaurant  equipment under a capital lease
        expiring in 2004. The assets and liabilities under the capital lease are
        recorded at the fair value of the asset.  The assets are amortized  over
        the estimated productive lives. Amortization of assets under the capital
        lease is included in depreciation expenses for 1999.

        Minimum  future lease  payments  under capital leases as of December 31,
        1999 for each of the next five years and in the aggregate are:

<PAGE>
<TABLE>
<CAPTION>

        Years ending December 31,                                      Amount
        -------------------------                                     --------

<S>                                                                  <C>
               2000                                                  $  24,999
               2001                                                     24,999
               2002                                                     24,999
               2003                                                     24,999
               2004                                                     24,811
               Subsequent to 2004                                            -
                                                                      --------
               Total minimum lease payments                            124,807
               Less amount representing interest                       (44,390)
                                                                      --------
                                                                      $ 80,417
                                                                      ========
</TABLE>

        Interest rate on the capital lease is 18.9% and is based on the lessor's
        implicit rate of return.

        The capital lease  provides for a purchase price of $1 at the expiration
        of the lease term.

        Operating Leases

        On July 30,  1993,  In Cahoots  entered  into a building  lease for club
        operations in Wichita,  Kansas,  with a 20% limited  partner.  The lease
        term is ten years  commencing  October 15, 1993.  In addition to minimum
        rental  payments  of  $12,500,  In  Cahoots is  obligated  to pay to the
        landlord,  as  additional  rent,  a  percentage  of  gross  sales  after
        deductions for alcohol and sales taxes. The lease agreement contains two
        five-year renewal options at the primary  lease  term rental  rate.  The
        Company, during 1999,  amended this lease to provide for additional rent
        of $4,333 per month for the Pockets Sports Grill addition.

        In December  1993,  the Company  entered into a building  lease for club
        operations in St. Louis,  Missouri. The lease term is ten years with two
        five-year  renewal options.  Minimum rent per month is $22,238 for years
        one through  five and $26,686 per month for years six through  ten.  The
        lease  requires a $25,000  security  deposit,  and is  guaranteed  by an
        affiliated company.

        On March 15, 1997, the Company entered into a 51.5-month lease agreement
        for an  office  building  to  serve  as the  corporate  headquarters  in
        Oklahoma  City,  Oklahoma.  From March 15, 1997 to August 31, 1998,  the
        base rent will be $36,900 per year.  From  September  1, 1998 to January
        31, 2000, the rent increases to $39,360 per year.  From February 1, 2000
        to June 30, 2001, the base rent will be $41,820.

        On January 1, 1999, the Company  entered  into a lease  agreement  for a
        building in Tulsa,   Oklahoma,  for the joint  development of an "Atomic
        Burrito"  restaurant  with New York Bagel.  The  lease is for five years
        with  three,  five  year  options, with the rental payments being $4,600
        per month during the initial term  of the  lease, and with increases for
        the three option periods.

        On December 29, 1998,  the Company  accepted  an assignment  for a lease
        on space in Wichita, Kansas from New York Bagel, its then joint  venture
        partner to develop an  Atomic Burrito  in Wichita.   The origianl  lease
        was dated April 7,  1997, covered 2,720 square feet, expired on December
        31, 2001,  and provided for  three-year options  to renew at  rentals of
        $3,000 per month, $3,500 per month and $3,800 per month.

        On  January 20, 1999, the Company entered  into a  lease  agreement  for
        3,000 square feet of space in Houston for the development of the Houston
        joint venture Atomic Burrito restaurant.  The lease rent for five years,
        with two additional option periods, and calls for rent of $6,500.

        On  October 4, 1999, the  Company  entered  into a  lease  agreement for
        4,250 square feet of space in  Oklahoma City, Oklahoma,  for  a company-
        owned Atomic Burrito  restaurant.   The  lease  is for a term of 5 years
        and 4 months, with two  five-year  option  periods  at prices  increased
        from  the intitial term rent of $4,227 per month.

        Rent expense for the years ended  December 31, 1999 and 1998 amounted to
        $560,657 and $358,815,  respectively.  Rent expense for 1999 and 1998 is
        net of $139,607 and 168,000, respectively, of rental income received.

        Minimum future rental  payments under  non-cancelable  operating  leases
        having remaining terms in excess of one year as of December 31, 1999 for
        each of the next five years and in the aggregate are:
<TABLE>
<CAPTION>

        Years ending December 31,                                      Amount
        -------------------------                                      ------

<S>                                                                  <C>
               2000                                                  $  793,788
               2001                                                     796,043
               2002                                                     760,878
               2003                                                     732,003
               2004                                                      61,020
               Subsequent to 2004                                       155,820
                                                                     ----------

                                                                     $3,299,552
                                                                     ==========
</TABLE>

(12)    Litigation

        The Company is involved in various other claims and legal proceedings of
        a nature considered normal to its business,  principally personal injury
        claims  resulting  from  incidents  occurring  on  the  premises  of the
        Company's  nightclubs.  While it is not feasible to predict or determine
        the financial outcome of these proceedings,  management does not believe
        that they will result in a materially  adverse  effect on the  Company's
        financial position, results of operations or liquidity.

(13)    RECLASSIFICATIONS

        Certain amounts on the 1998 financial  statements have been reclassified
        in order to be consistent with the 1999 presentation.

(14)    SUBSEQUENT EVENTS

        On March 9, 2000,  the Board of  Directors  approved  an Omnibus  Equity
        Compensation Plan for employees and consultants. The aggregate number of
        common  shares as to which  options and awards may be granted  shall not
        exceed  572,208.  At the time of grant,  the Company will  determine the
        exercise  price  and  the  vesting   period.   The  Company's   existing
        equity-based compensation plans shall be incorporated into this Plan.

        On March  29,  2000,  the  Company  entered  into a letter  of intent to
        acquire a privately held Nevada  corporation for 1,500,000 shares of the
        Company's  common  stock.  In addition to the common shares to be issued
        for the  corporation,  the Company will issue 2,500,000 common shares to
        the shareholders of the Nevada corporation,  plus 3,000,000 common stock
        warrants  over the next  three  years.  Subsequent  to the  merger,  the
        Company  anticipates  receiving  $3,000,000 in new equity,  from sources
        other than the exercise of the outstanding stock options.