U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

(Mark One)

[X]  Quarterly report under Section 13 or 15 (d) of the Securities  Exchange Act
     of 1934

For the quarterly period ended MARCH 31, 1999.

[_]  Transition report under Section 13 or 15 (d) of the Securities Exchange Act
     of 1934

     For the transition period from _________ to _________.

Commission file number 0-23757

                              TAM RESTAURANTS, INC.
        (Exact Name of Small Business Issuer as Specified in its Charter)

            Delaware                                              13-3905598
  (State or other Jurisdiction                                 (I.R.S. Employe
of Incorporation or Organization)                            Identification No.)

                   1163 FOREST AVENUE, STATEN ISLAND, NY 10310
                    (Address of Principal Executive Offices)

                                 (718) 720-5959
                           (Issuer's Telephone Number)


--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          If Changed Since Last Report)

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


                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the issuer's
          classes of common equity, as of the latest practicable date:
             3,503,000 shares of common stock as of March 31, 1999 .

           Transitional Small Business Disclosure Format (check one):
                                Yes [_]   No [X]



<PAGE>

                     TAM RESTAURANTS, INC. AND SUBSIDIARIES
                          QUARTER ENDED MARCH 31, 1999
                                   FORM 10-QSB
                                      INDEX


Part I.   FINANCIAL STATEMENTS                                           Page(s)



Item 1.   Financial Statements

          Condensed Consolidated Balance Sheet                                1
          as of March 31, 1999 (unaudited).

          Condensed Consolidated Statements of Operations
          For the Thirteen weeks and Twenty-Six weeks
          ended March 31, 1999 and March 29, 1998 (unaudited).                2

          Condensed Consolidated Statements of Cash flow
          For the Thirteen weeks and Twenty-Six weeks
          ended March 31, 1999 and March 29, 1998 (unaudited).                3

          Notes to unaudited Condensed Consolidated
          Financial Statements                                                4

Item 2.   Management's Discussion and Analysis of Financial
          Condition And Results of Operation                                  6

Part II.  OTHER INFORMATION

Item 2.   Changes in Securities and Use of Proceeds                          11

Item 6.   Exhibits and Reports on Form 8-K                                   11

          Signature Page                                                     12

                                       (i)

<PAGE>

                     TAM RESTAURANTS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                              March 31, 1999
                                                                              --------------
<S>                                                                            <C>        
Current Assets
     Cash                                                                      $   113,408
     Accounts receivable (net of allowance for doubtful accounts of $15,000)       494,656
     Inventory                                                                     400,689
     Prepaid and other expenses                                                    461,043
                                                                               -----------
Total Current Assets                                                             1,469,796

Property and Equipment-Net                                                       5,974,202
Due from Affiliates                                                                161,816
Other Assets                                                                       379,478
Loan Receivable - Officer                                                           30,913
                                                                               -----------
TOTAL ASSETS                                                                   $ 8,016,205
                                                                               ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
         Current portion of long-term debt                                     $ 1,045,745
         Current portion of loans payable, related parties                           1,618
         Current portion of capitalized lease obligations                           98,728
         Accounts payable                                                        1,208,572
         Contract deposits payable                                                 539,582
         Accrued expenses and other                                              1,661,015
                                                                               -----------
Total Current Liabilities                                                        4,555,260
                                                                               -----------

Long-term Liabilities
         Deferred rent expense                                                     278,893
         Long-term debt - net of current portion                                    57,264
         Loans payable-related parties - net of current portion                    290,774
         Capitalized lease obligations-net of current portion                      160,373
         Barter advances - net of current portion                                  630,159
                                                                               -----------
Total Long-term Liabilities                                                      1,417,463
                                                                               -----------
TOTAL LIABILITIES                                                                5,972,723
                                                                               -----------

Commitments and Contingencies

                              STOCKHOLDERS' EQUITY

Stockholders' Equity
         Preferred stock; $.0001 par value; 1,000,000 shares authorized,
            144,081 shares issued and outstanding                                       14

         Common stock;  $.0001 par value,  19,000,000 shares authorized;
            3,503,000 shares issued and outstanding                                    350
         Additional paid-in capital                                              7,947,366
         Accumulated deficit                                                    (5,904,248)
                                                                               -----------


TOTAL STOCKHOLDERS' EQUITY                                                       2,043,482
                                                                               -----------

TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                                                         $ 8,016,205
                                                                               ===========
</TABLE>

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

                                       (1)

<PAGE>

                     TAM RESTAURANTS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                            Thirteen Weeks Ended          Twenty-six Weeks Ended

                                           March 29,     March 31,       March 29,      March 31,
                                             1998           1999           1998           1999
                                         -----------    -----------    -----------    -----------
<S>                                      <C>            <C>            <C>            <C>        
Sales                                    $ 1,512,613    $ 2,145,607    $ 3,891,440    $ 6,100,158

Cost of Sales                              1,432,002      1,530,544      2,957,998      3,855,370
                                         -----------    -----------    -----------    -----------

     Gross Profit                             80,611        615,063        933,442      2,244,788

Operating and Administrative Expenses      1,290,066      1,105,842      2,360,535      2,611,945
                                         -----------    -----------    -----------    -----------

Loss from Operations                      (1,209,455)      (490,779)    (1,427,093)      (367,157)
                                         -----------    -----------    -----------    -----------

Other Expense
     Interest expense                        109,213        145,664        216,529        303,272
     Barter Expense                           97,366         72,006        198,840        152,475
                                         -----------    -----------    -----------    -----------

          Total Other Expense                206,579        217,670        415,369        455,747
                                         -----------    -----------    -----------    -----------

     Net Loss                            $(1,416,034)   $  (708,449)   $(1,842,462)   $  (822,904)
                                         ===========    ===========    ===========    ===========

Net loss per share:
Basic and Diluted                        $      (.47)   $      (.20)   $      (.67)   $      (.23)
                                         ===========    ===========    ===========    ===========
Weighted average number of common
shares outstanding - basic and diluted     2,994,505      3,503,000      2,747,252      3,503,000
                                         ===========    ===========    ===========    ===========
</TABLE>

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

                                       (2)

<PAGE>

                     TAM RESTAURANTS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                            Twenty-Six weeks Ended
                                                        March 29, 1998  March 31, 1999
                                                        --------------  --------------
<S>                                                       <C>            <C>         
Cash Flows from Operating Activities:
     Net loss                                             $(1,842,462)   $  (822,904)
     Adjustments to reconcile net loss
     to net cash provided by operating activities:
              Depreciation and amortization expense           188,586        574,958
              Deferred rent expense                            33,596          6,724
              Amortization of original issue discount              --        154,170
              Deferred income                                 297,490         (6,000)
     (Increase) decrease in:
              Accounts receivable                              11,569        165,866
              Inventory                                        14,228        (18,931)
              Prepaid and other expenses                      (38,060)      (111,618)
              Other assets                                   (227,602)        (6,450)
     Increase (decrease) in:
              Accounts payable                                139,219        245,869
              Contract deposits payable                            --        169,290
              Accrued expenses                               (714,389)      (467,621)
                                                          -----------    -----------

Net Cash used in Operating Activities                      (2,137,825)      (116,647)
                                                          -----------    -----------

Cash Flows from Investing Activities:
     Acquisition of property and equipment                 (1,207,334)      (309,302)
                                                          -----------    -----------

Cash Flows from Financing Activities:
     Net repayments  of officer's loans                        11,745          8,216
     Loans receivable                                         (24,761)            --
     Proceeds from long-term debt                           1,000,000             --
     Proceeds from barter advances                                 --        650,000
     Principal payments on long-term
        and capitalized lease obligations                    (352,307)      (395,277)
     Net repayments (advances) of affiliates and others      (278,889)        54,934
     Deferred stock offering costs                            128,322             --
     Proceeds from initial public offering                  3,644,587             -- 
                                                          -----------    -----------

Net Cash provided by Financing Activities                   4,128,697        317,873
                                                          -----------    -----------
Net increase (decrease) in cash                               783,538       (108,076)
Cash, Beginning of year                                       281,625        221,484
                                                          -----------    -----------
Cash, End of period                                       $ 1,065,163    $   113,408
                                                          ===========    ===========
</TABLE>

                 The accompanying notes are an integral part of
                these condensed consolidated financial statements

                                       (3)

<PAGE>

                     TAM RESTAURANTS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with generally accepted  accounting  principles
     for interim financial  information and with the instructions to Form 10-QSB
     and Item 310(b) of Regulation S-B. Accordingly,  they do not include all of
     the information  and footnotes  required by generally  accepted  accounting
     principles for complete financial statements. In the opinion of management,
     all adjustments  (consisting of only normal recurring accruals)  considered
     necessary for a fair presentation have been included.  It is suggested that
     the  financial  statements  be  read  in  conjunction  with  the  Company's
     consolidated  audited financial  statements and footnotes thereto contained
     in the Company's Form 10-KSB for the fiscal year ended  September 27, 1998.
     Operating  results for the thirteen and twenty-six week periods ended March
     31, 1999 are not necessarily indicative of the results that may be expected
     for the full fiscal year ended September 29, 1999.

2.   Accounting Period

     The Company  reports on a 52/53 year.  For fiscal 1999 the Company  changed
     its period end day from Sunday to Wednesday in order to  facilitate  better
     cost controls and streamline its reporting systems.  As a result, the first
     twenty-six  weeks of fiscal 1999 include three  additional days of revenues
     and expenses when  compared to fiscal 1998.  The net effect of which had no
     material  effect on the revenues and expenses  reported in the period ended
     March 31, 1999.

3.   Long-Term Debt

     In October 1997, the Company obtained $1,000,000 in a secured loan from two
     entities.  The loan bears interest at 10% per annum,  payable quarterly and
     matures  September  30,  1999.  The  loan  is  guaranteed  by  a  principal
     stockholder  of the  Company  and the  guarantee  is secured by a pledge of
     200,000 shares of common stock held by such stockholder.

     Additionally, as partial consideration for the loan, the Company granted to
     the  entities  warrants to purchase  200,000  shares of common  stock at an
     exercise price of $5.00 per share expiring in October 2002. The issuance of
     these  warrants  gave rise to an  original  issue  discount  which has been
     valued at  $482,000.  As of March  31,  1999  $154,170  of  original  issue
     discount expense remains to be amortized.

     In October 1997,  the Company issued to Mr.  Cretella a promissory  note in
     the original  principal amount of $720,405 which bears interest at the rate
     of 10% per annum.  Interest is payable in monthly  installments  of $6,003,
     with the  outstanding  principal  balance  payable  in  November  2002 upon
     maturity of the note.  On December 30, 1998,  Mr.  Cretella  converted  the
     $720,405 of indebtedness  owed to him by the Company into 144,081 shares of
     Series A Preferred Stock. As further  inducement to Mr. Cretella to convert
     the debt to equity the Company also issued to Mr.  Cretella 72,040 warrants
     to purchase  the  Company's  Common  Stock at $6.00 per share.  The Company
     received a fairness opinion with respect to this transaction.

4.   Loss Per Share

     For the  calculation of the loss per share for the  twenty-six  weeks ended
     fiscal 1999 and 1998, all of the Company  options and warrants are excluded
     for basic and diluted loss per share as they are anti-dilutive.

                                       (4)

<PAGE>

5.   Preferred Stock

     The Company's  Board of Directors  authorized  the  designation  of 150,000
     shares of preferred  stock,  of the  1,000,000  previously  authorized  and
     unallocated, to be a series of preferred stock ("Series A Preferred Stock")
     bearing a 10% cumulative  dividend payable  quarterly in cash,  convertible
     into Common Stock at anytime after issuance, at the holder's option, at the
     rate of one share of  Common  Stock  for each  share of Series A  Preferred
     Stock,  subject to  adjustment  under certain  circumstances.  The Series A
     Preferred  Stock is senior in rights and  preferences  to any  subsequently
     designated  series  and/or class of preferred  stock and is entitled to one
     vote per share of Common Stock into which the issued and outstanding shares
     of Series A Preferred Stock is then  convertible,  on all matters submitted
     to a vote of the  Company's  stockholders.  Outstanding  shares of Series A
     Preferred  Stock are redeemable at any time by the Company,  at its option,
     at the  redemption  price of $5.00 per  share,  upon  timely  notice of its
     intent to redeem.


                                       (5)

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:  The  statements   which  are  not  historical   facts  contained  in  the
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  and  elsewhere  in this  report on Form  10-QSB are  forward-looking
statements that involve a number of known and unknown risks,  uncertainties  and
other factors which may cause the actual results, performance or achievements of
the Company to be materially  different from any future results,  performance or
achievements  expressed  or implied  by such  forward-looking  statements.  Such
factors include, but are not limited to, the risks related to the opening of new
restaurants,  including capital  requirements,  continued popularity of existing
and new  restaurants,  seasonality  and other risks  detailed  in the  Company's
filings  with the  Securities  and  Exchange  Commission.  The words  "believe",
"expect",  "anticipate",  "intend" and "plan" and similar  expressions  identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements,  which speak only as of the date the statement
was made.

Overview

     The Company  operates Lundy Bros.  Restaurant  ("Lundy's"),  a high-volume,
casual,  upscale seafood restaurant located in Brooklyn, New York, The Boathouse
in Central Park ("The  Boathouse"),  a multi-use  facility  featuring an upscale
restaurant and catering pavilion, located on the lake in New York City's Central
Park, and American Park at the Battery  ("American  Park"), a multi-use facility
featuring an upscale  restaurant,  catering floor, two outside patios and a fast
food  kiosk,  located  at the  water's  edge in  Battery  Park,  a New York City
landmark.

Results of Operations

     Sales for the  twenty-six  weeks ended March 31, 1999 were  $6,100,158,  an
increase of $2,208,718 or 56.8%,  as compared to $3,891,440  for the  twenty-six
weeks ended March 29, 1998.  The  Company's  sales for the thirteen  weeks ended
March 31, 1999 were $2,145,607, an increase of $632,994 or 41.8%, as compared to
$1,512,613  for the thirteen  weeks ended March 29, 1998.  The increase in sales
for both the thirteen week period and  twenty-six  week period was primarily due
to the addition of American  Park , which opened in the third  quarter of fiscal
1998 and  increased  sales at The  Boathouse.  American  Park's sales during the
thirteen and twenty-six  weeks ended March 31, 1999 were $529,651 and $1,343,633
respectively.  Beginning in fiscal 1999, the Company changed its period end from
Sunday to  Wednesday  the result of which added three  additional  days of sales
into the  twenty-six  weeks ended March 31, 1999 when compared to the twenty-six
weeks ended March 29,  1998.  A total of $65,897 in sales were  generated by the
additional three days included in the twenty-six weeks ended March 31,1999.

     Cost of sales for the twenty-six weeks ended March 31, 1999 were $3,855,370
or 63.2% of sales as compared to $2,957,998 or 76.0% of sales for the twenty-six
weeks ended March 29, 1998. Cost of sales for the thirteen weeks ended March 31,
1999 were  $1,530,544  or 71.3% of sales as compared to  $1,432,002  or 94.7% of
sales for the thirteen  weeks ended March 29, 1998.  The decrease in the cost of
sales relative to overall sales can be attributed to the Company's tightening of
purchasing  specifications and the implementation of menu changes and labor cost
controls  at all of the units,  which were  initiated  in the fourth  quarter of
fiscal 1998.

                                       (6)

<PAGE>

     As a result of the foregoing,  gross profit for the twenty-six  weeks ended
March 31, 1999 was $2,244,788 or 36.8% of sales as compared to $933,442 or 24.0%
of sales  for the  twenty-six  weeks  ended  March  29,  1998,  an  increase  of
$1,311,346 or 140%. Gross profit for the thirteen weeks ended March 31, 1999 was
$615,063  or 28.7% of sales as  compared  to  $80,611  or 5.3% of sales  for the
thirteen weeks ended March 29, 1998.

     Operating and administrative  expenses for the twenty-six weeks ended March
31, 1999 were $2,611,945 or 42.8% of sales as compared to $2,360,535 or 60.7% of
sales  for  the   twenty-six   weeks  ended  March  29,  1998.   Operating   and
administrative  expenses  for the  thirteen  weeks  ended  March  31,  1999 were
$1,105,842 or 51.5% of sales as compared  with  $1,290,066 or 85.3% of sales for
the thirteen weeks ended March 29, 1998.  For the  twenty-six  weeks ended March
31, 1999 operating and administrative expenses increased by $251,410,  primarily
as a result of the  operation of American Park which opened in the third quarter
of fiscal 1998.  For the thirteen six weeks ended March  31,1999  operating  and
administrative  expenses decreased by $184,224 primarily as a result of improved
operating  efficiencies.  The decrease in operating and administrative  expenses
relative to overall sales during the thirteen and twenty-six  week periods ended
March 31, 1999, can be attributed to operating efficiencies accomplished through
contract negotiations with significant vendors,  reduction in corporate overhead
and the overall increase in revenues generated.

     Other expenses for the twenty-six weeks ended March 31, 1999 were $455,747,
an increase of $40,378 or 9.7%, as compared to $415,369 for the twenty-six weeks
ended March 29, 1998. Other expenses for the thirteen weeks ended March 31, 1999
were  $217,670,  an increase of $11,091 or 5.4%, as compared to $206,579 for the
thirteen weeks ended March 29, 1998.  Other  expenses for the  twenty-six  weeks
ended March 31,  1999  consisted  of  $152,475 of barter  expense as compared to
$198,840 in fiscal 1998. The decrease in barter expense,  however, was offset by
an increase in interest  expense related to a charge of $154,170 for an original
issue discount resulting from the issuance of the Kayne Anderson warrants.

     As a result of the  foregoing,  net loss  amounted  to $822,904 or $.23 per
share for the  twenty-six  weeks ended March 31, 1999, as compared to a net loss
of $1,842,462 or $.67 per share for the  twenty-six  weeks ended March 29, 1998.
For the thirteen  weeks ended March 31, 1999,  net loss  amounted to $708,449 or
$.20 per share,  as compared to a net loss of  $1,416,034  or $.47 per share for
the thirteen weeks ended March 29, 1998.

Liquidity and Capital Resources

     The  Company's  capital  requirements  have  been and will  continue  to be
significant  and its cash  requirements  have been  exceeding its cash flow from
operations  (at March 31,  1999,  the Company had a working  capital  deficit of
$3,085,464),  due to, among other things,  costs  associated  with  development,
opening and start-up  costs of American  Park and Park View at The Boathouse and
building  a  corporate  infrastructure   sufficient  to  support  the  Company's
operations. As a result, the Company has been substantially dependent upon sales
of its equity  securities,  loans from financial  institutions and the Company's
officers,  directors and  stockholders  and bartering  transactions  with member
dining clubs to finance a portion of its working capital requirements.

     During the  twenty-six  weeks ended March 31, 1999,  net cash  decreased by
$108,076.  Net cash used in operating activities was $116,647.  Net cash used in
investing activities was $309,302, relating primarily to the additional catering
space at Lundy's, the renovation of the indoor dining

                                       (7)

<PAGE>

space at The Boathouse and  investment in the Company's  management  information
systems in connection with Year 2000 requirements. The net increase in cash from
financing activities was $317,873.

     The Company  enters into  bartering  agreements  with member  dining  clubs
whereby  member  dining  clubs  advance  cash to the Company in exchange for the
Company's  agreement to provide to the clubs'  members  food and  beverages at a
designated Company restaurant.  The restaurant must permit the clubs' members to
purchase  food and  beverages  at  rates  between  160%  and 200% of the  amount
advanced.  Upon entering into the agreement,  the Company records its obligation
to provide food and  beverages at the amount of the advance it receives.  Upon a
guest  purchasing food or beverages,  the Company records revenue for the amount
of food and beverage purchased by the guest, and the barter discount as a barter
expense.

     In October 1997, Kayne Anderson Non-Traditional Investments, L.P. and ARBCO
Associates,  L.P.,  affiliates of Kayne  Anderson  Investment  Management,  Inc.
(collectively, "Kayne Anderson"), loaned the Company an aggregate of $1,000,000.
The loans bear  interest at the rate of 10% per annum,  payable  quarterly,  and
were originally due May 31, 1999. Upon an event of default under the loans,  the
interest  rate  increases to 15% per annum and the Company  would be required to
pay to Kayne  Anderson  50% of the  operating  profits from  American  Park on a
monthly  basis until the loan is fully  repaid.  The loan is guaranteed by Frank
Cretella,  President,  Chief  Executive  Officer,  a  director  and a  principal
stockholder of the Company,  and the guarantee is secured by a pledge of 200,000
shares of  Common  Stock  owned by Frank  Cretella  and  Jeanne  Cretella,  Vice
President,  a director and  principal  stockholder  of the  Company.  As partial
consideration  for the loans, the Company issued to Kayne Anderson warrants (the
"KA Warrants") to purchase  200,000 shares of Common Stock.  The KA Warrants are
exercisable at a price of $5.00 per share  (subject to adjustment  under certain
circumstances)  and are  exercisable  at any time until  October 31,  2002.  The
Company  will incur a non-cash  interest  charge of  $482,000  representing  the
original issue discount  relating to the KA Warrants  issued to Kayne  Anderson,
over the life of the promissory  notes. In connection with the loan, the Company
agreed to use its best  efforts to cause a  representative  designated  by Kayne
Anderson to be elected to the Company's  Board of Directors.  Kenneth Harris has
been elected a director as Kayne Anderson's  initial  designee.  In August 1998,
the Company and Kayne Anderson  agreed to amend the loan agreement to extend the
maturity  date of the  loans to  September  30,  1999.  Under  the  terms of the
amendment  the  Company  agreed to pay 50% of The  Boathouse  operating  profits
rather  than 50% of American  Park  operating  profits if the Company  failed to
repay the loan by September 30, 1999.

     In February 1998, the Company  consummated an initial public offering ("the
Public  Offering") of 1,000,000  shares of Common Stock and 500,000 Warrants for
gross proceeds of $5,050,000.  After payment of the  underwriters  discounts and
commissions and expenses of the Public  Offering,  net proceeds  realized by the
Company were $3,637,249.

     The  Company  will  need to  raise  additional  capital  to  implement  its
expansion  plans.  Other than the ability to enter into  bartering  transactions
with member dining clubs, the Company has no current  arrangements  with respect
to, or potential  sources of,  additional  financing,  and it is not anticipated
that any officers,  directors or stockholders  will provide any additional loans
to the Company.

     On November  19,  1998 the  Company's  Board of  Directors  authorized  the
designation  of  150,000  shares  of a series  of  preferred  stock  ("Series  A
Preferred  Stock") bearing a 10% cumulative  dividend payable quarterly in cash,
convertible into Common Stock at anytime after issuance, at the holder's

                                       (8)

<PAGE>

option,  at the rate of one  share of Common  Stock  for each  share of Series A
Preferred Stock, subject to adjustment under certain circumstances. The Series A
Preferred  Stock  is  senior  in  rights  and  preferences  to any  subsequently
designated  series  and/or class of preferred  stock and is entitled to one vote
per share of Common Stock into which the issued and outstanding shares of Series
A Preferred Stock is then convertible, on all matters submitted to a vote of the
Company's  stockholders.  Outstanding  shares  of Series A  Preferred  Stock are
redeemable at any time by the Company, at its option, at the redemption price of
$5.00 per share, upon timely notice of its intent to redeem.

     In December 1998, Frank Cretella converted $720,405 of indebtedness owed by
the Company to him into  shares of Series A Preferred  Stock at the ratio of one
share of Series A Preferred Stock for each $5.00 of indebtedness outstanding. As
an  inducement to Mr.  Cretella to convert the debt to equity,  the Company also
issued Mr. Cretella  72,040  warrants to purchase the Company's  Common Stock at
$6.00 per share.

Seasonality and Fluctuations in Quarterly Operating Results.

     The  Company's  business is  seasonal.  The  bicycle,  rowboat  rentals and
outdoor  dining at The  Boathouse  are open only  March  through  November.  The
catering  facilities,  indoor  section of the Park View  restaurant and the fast
food operation are open year round, but at a substantially  reduced sales volume
during the winter due to the Boathouse's location in the middle of Central Park.

     The two outdoor  patios at  American  Park and the fast food kiosk are only
open March  through  November and its  location in Battery  Park also  restricts
winter sales potential.  The indoor  restaurant and catering level are open year
round.

     Lundy's is a waterside  location and  attracts  more guests  during  warmer
months. As a result, the Company's average weekly restaurant sales and operating
cash flow  generally  increases  from April through  October and decreases  from
November through March.

     The Company  also  expects  that future  quarterly  operating  results will
fluctuate as a result of the timing of and  expenses  related to the openings of
new  restaurants  (as the Company  will incur  significant  expenses  during the
months  preceding  the  opening  of a  restaurant),  as well  as due to  various
factors,  including the seasonal nature of its business,  weather  conditions in
New York City,  the health of New York City's economy in general and its tourism
industry in  particular.  Accordingly,  the  Company's  sales and  earnings  may
fluctuate  significantly  from quarter to quarter and operating  results for any
quarter will not  necessarily  be indicative of the results that may be achieved
for a full year.

Year 2000

     The Company has  evaluated  and is in the process of updating  its internal
Management  Information  Systems to ensure that it will have the  capability  to
manage and  manipulate  data in the year 2000 and beyond.  As the Company  takes
measures to be in  compliance,  new programs are currently  being tested.  It is
anticipated  that the Company's  information  technology  ("IT") systems will be
substantially compliant by the end of the third quarter of the fiscal year ended
September 29, 1999.  Costs incurred by the Company to date to implement its plan
have not been  material  and are not  expected to have a material  effect on the
Company's financial condition or results of operations.

                                       (9)

<PAGE>

     The Company has begun to assess the compliance of its non-IT systems. It is
anticipated that these systems will be compliant by December 31, 1999.

     The Company has addressed year 2000 compliance with its major customers and
service  providers and anticipates that those key vendors and service  providers
who are not yet compliant will be prior to year end.

Inflation
     The effect of inflation on the Company has not been significant  during the
last two fiscal years.


                                      (10)

<PAGE>

                                     PART II

                                OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds.

(a)  On November  19,  1998 the  Company's  Board of  Directors  authorized  the
     designation  of 150,000  shares of a series of preferred  stock  ("Series A
     Preferred  Stock") bearing a 10% cumulative  dividend payable  quarterly in
     cash,  convertible  into Common  Stock at anytime  after  issuance,  at the
     holder's option, at the rate of one share of Common Stock for each share of
     Series  A   Preferred   Stock,   subject  to   adjustment   under   certain
     circumstances.  The  Series A  Preferred  Stock is  senior  in  rights  and
     preferences to any subsequently designated series and/or class of preferred
     stock and is entitled to one vote per share of Common  Stock into which the
     issued  and  outstanding  shares  of  Series  A  Preferred  Stock  is  then
     convertible,   on  all  matters  submitted  to  a  vote  of  the  Company's
     stockholders. Outstanding shares of Series A Preferred Stock are redeemable
     at any time by the Company, at its option, at the redemption price of $5.00
     per share, upon timely notice of its intent to redeem.

(b)  In December 1998, Frank Cretella converted $720,405 of indebtedness owed by
     the Company to him into shares of Series A Preferred  Stock at the ratio of
     one  share of  Series A  Preferred  Stock  for each  $5.00 of  indebtedness
     outstanding.  As an  inducement  to Mr.  Cretella  to  convert  the debt to
     equity,  the Company also issued Mr.  Cretella  72,040 warrants to purchase
     the Company's Common Stock at $6.00 per share.

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

(a)  Exhibits.

     27   Financial Data Schedule

(b)  Reports on Form 8-K

     No  reports  on Form 8-K were filed by the  Company  during the  twenty-six
     weeks ended March 31, 1999.

                                      (11)

<PAGE>

                     TAM RESTAURANTS, INC. AND SUBSIDIARIES
                                   Signatures


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



                                       TAM RESTAURANTS, INC.
                                       -----------------------------------------
                                                  (Registrant)



Dated: May 17, 1999                    /s/ Frank Cretella                       
                                       -----------------------------------------
                                       Frank Cretella
                                       President and Chief Executive officer



Dated: May 17, 1999                    /s/ Anthony B. Golio                     
                                       -----------------------------------------
                                       Anthony B. Golio
                                       Vice President


                                      (12)