SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 [No Fee  Required]

For the fiscal  year ended  September  30,  1997

[ ]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 [No Fee  Required]

     For the  transition  period from  __________  to  ___________________

Commission File No. 0-4289


                               TONE PRODUCTS, INC.
                  --------------------------------------------
                 (Name of small business issuer in its charter)


           Arkansas                                         71-0390957
---------------------------------                      ----------------------
  (State or other jurisdiction                           (I.R.S. Employer
of incorporation or organization)                      Identification Number)


2129 North 15th Street
Melrose Park, Illinois                                           60160
----------------------------------------                       ---------
(Address of principal executive offices)                      (Zip Code)



Issuer's telephone number:  (708) 681-3660

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

Securities registered pursuant to Section 12(g) of the Act:

                           $.10 Par Value Common Stock
                                (Title of Class)


                                                         

<PAGE>



     Check whether the registrant (1) has filed all reports required to be filed
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.

                                     Yes   X     No
                                         -----       -----

     As of November  30, 1997,  3,692,102  shares of the  Registrant's  $.10 par
value Common Stock were  outstanding.  As of November 30, 1997, the market value
of the  Registrant's  $.10 par value  Common  Stock,  excluding  shares  held by
affiliates, was $1,394,561 based upon a closing bid price of $1.125 per share of
Common Stock on the Electronic Bulletin Board.

     Check if there is no disclosure  contained  herein of delinquent  filers in
response to Item 405 of Regulation  S-B, and will not be contained,  to the best
of the 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.[ X ]

     The registrant's revenues for its most recent fiscal year were $9,939,635.

     The following  documents are incorporated by reference into Part III, Items
9 through 12 hereof: None.



                                        2

<PAGE>



                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS
--------------------------------
 

     Except for the historical  information  contained  herein,  the matters set
forth in this Report include  forward-looking  statements  within the meaning of
the "safe harbor" provisions of the Private Securities  Litigation Reform Act of
1995. These  forward-looking  statements are subject to risks and  uncertainties
that  may  cause  actual   results  to  differ   materially.   These  risks  and
uncertainties are detailed  throughout this Report and will be further discussed
from time to time in the Company's  periodic  reports filed with the Commission.
The forward-looking statements included in this Report speak only as of the date
hereof.

Business

     The Company manufactures, distributes and markets under its own proprietary
brand names,  as well as under private  labels  developed for others,  a line of
specialty  beverages,  snack foods and condiments.  The Company's  product lines
include fruit and other drink  concentrates;  juices and juice blends; bar mixes
and cocktail bases; snow cone syrups; pancake, waffle, corn and molasses syrups;
barbeque and steak sauces, marinades and dressings;  popcorn,  cookies, nuts and
other snack foods.

     The Company's  proprietary  products are marketed under a number of its own
brand names including "Bonnie", "Hi-Tone", "Evons",  "Rainbo-Rich" and "Players'
Choice." As indicated,  the Company also manufactures products for its customers
under private label brand names  designated  by the  customers,  and also enters
into copacking  arrangements  with other  manufacturers for some of its products
and acts solely as a distributor for other products.

     The Company's  customers  include large domestic grocery store chains (such
as Aldi's,  and Von's),  domestic  mass  merchandisers  (such as Sams Club,  and
Market Day), large retail food service  distributors  (such as Marriott,  Sysco,
and Alliant),  brand name soft drink bottling  companies and federal,  state and
local government agencies including school districts, colleges and prisons.

     The Company manufactures its own products and its private label products in
a 72,000 square foot  manufacturing  and distribution  facility in Melrose Park,
Illinois,  and a 17,000 square foot  manufacturing and distribution  facility in
Las Vegas,  Nevada.  See "Item 2".  These  products  are  marketed  through  the
Company's own marketing staff consisting of six individuals.  Marketing  efforts
include direct sales calls,  attendance at trade shows,  advertisements in trade
journals, and the use of food brokers and sales representatives.

     The  Company's   business  strategy  is  to  increase  revenues  by  adding
additional regional and national  distributors,  expanding its private label and
contract packing operations, increasing its production of certain food specialty
products  including barbeque sauces and marinades and instituting a direct store
delivery  system  ("DSD") at the  Company's  Fun City Popcorn unit in Las Vegas,
Nevada.  The Company believes that existing  revenues may be increased without a


                                        3

<PAGE>


pro rata  increase in fixed  expenses,  thereby  generating  economies  of scale
(primarily  in  manufacturing  operations)  which will create  higher  levels of
earnings as a percentage of total revenues.

History

     Tone  Products,  Inc.,  an Illinois  corporation  ("TPI") was  organized in
March, 1947 to manufacture and market concentrated  beverage syrups. In May 1996
TPI was acquired by Minute Man of America, Inc., an Arkansas corporation ("MMA")
in a  reverse  merger  transaction.  Under  the  terms  of  the  reverse  merger
transaction, MMA reverse split its stock on the basis of one share for each four
shares  outstanding  (resulting  in 773,752  shares  outstanding)  and initially
issued an additional  2,275,000 shares to acquire all of the outstanding  shares
of TPI. As a result, the management and principal stockholders of TPI became the
management and principal  stockholders  of the Company.  In connection  with the
reverse merger transaction,  MMA also sold 478,850 shares of its Common Stock at
$2.00 per share in a private placement of its securities ("Private Placement").

     In May,  1996,  the Company  acquired Fun City  Popcorn,  Inc.  ("FCP") for
$875,000  in cash  generated  from  the sale of  securities  under  the  Private
Placement and the issuance of 100,000 shares of the Company's Common Stock.

Competition

     The speciality  beverage,  snack food and condiments  industries are highly
competitive, and there are numerous multinational, regional and local firms that
currently  compete,  or are capable of  competing,  with the Company.  Specialty
beverage  competitors  include  Nedlog,  Damon and Pride  Beverages;  snack food
competitors  include  Frito-Lay,  Snak-King  and  Granny  Goose;  and  condiment
competitors  include Redwing and Brooks.  Most of the Company's  competitors are
larger than the Company and have superior  financial,  marketing and  management
resources, and brand name recognition,  than the Company. Competitive factors in
these  specialty  foods  industries  include price,  product quality and product
flavor.  The Company  believes its products  compete  favorably  against similar
specialty food products.

Government Regulation

     The  Company is subject to  various  federal,  state and local  regulations
relating to cleanliness,  maintenance of food production equipment, food storage
and food handling, and the Company is subject to unannounced on-site inspections
of its food production  facilities.  As a manufacturer and distributor of foods,
the Company is subject to regulation  by the U.S.  Food and Drug  Administration
("FDA"),  state food and health  boards,  and local health  boards in connection
with  the  manufacturing,   handling,  storage,  transportation,   labeling  and
processing of food  products.  Future changes in the  regulations  may adversely
impact the Company by raising the cost to manufacture  and deliver the Company's
products  and/or by  affecting  the  perceived  healthfulness  of the  Company's
products.  A failure to comply with one or more  regulatory  requirements  could
interrupt  the  Company's  operations  and  result  in a variety  of  sanctions,
including fines and the withdrawal of the Company's products from store shelves.
The Company  holds all  material  licenses  and permits  required to conduct its
operations.

                                        4

<PAGE>


     The Company is also subject to federal and state laws establishing  minimum
wages  and  regulating  overtime  and  working  conditions.  Since  some  of the
Company's  personnel  are paid at rates not far above  federal or state  minimum
wage levels, future increases in federal or state minimum wage levels may result
in increases in the Company's labor costs.

Trade Names and Trademarks

     The  Company  has  registered  a number of its  proprietary  brand names as
trademarks or trade names in Illinois or with the United  States Patent  office,
including  "Bonnie",  "Rainbo-Rich",  and  "Players'  Choice".  There  can be no
assurance  that the  Company's  trademarks  or trade names will not be copied or
challenged by others.

Employees


     At November 30, 1997,  the Company  employed 45  individuals  including its
four executive officers, 11 administrative and clerical employees and 30 factory
and  warehouse  employees.  The Company  believes  that its  relations  with its
employees are satisfactory.

ITEM 2.  DESCRIPTION OF PROPERTY
--------------------------------

     The  Company   leases   72,000   square  feet  of  office,   warehouse  and
manufacturing  space in Melrose  Park,  Illinois  on a one year  lease  expiring
September 30, 1998 at a monthly  rental of $33,235 or $5.54 per square foot. The
Company  also leases  16,802  square feet of office and  warehouse  space in Las
Vegas,  Nevada on a one year lease  expiring May 31, 1998 at a monthly rental of
$8,544 or $6.10 per square foot. The Company  leases its Melrose Park,  Illinois
facility from three of its  executive  officers and directors and its Las Vegas,
Nevada facility from one of the directors.  The Company  believes that the terms
of both such  facilities  leases are fair,  reasonable,  and consistent with the
terms of leases which could be obtained from unaffiliated  parties.  The Company
believes its facilities are adequate for its needs in the foreseeable future and
that additional space is available at reasonable rates.

ITEM 3.  LEGAL PROCEEDINGS
--------------------------

     Not applicable.

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

     Not applicable.


                                        5

<PAGE>



                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
-----------------------------------------------------------------

     The Company's  Common Stock is traded  over-the-counter  on the  Electronic
Bulletin Board ("EBB") under the symbol "TNPD".

     The following table sets forth for the quarters indicated the range of high
and low bid prices of the Company's Common Stock on the EBB.

                                                        Bid Price
                                                -------------------------
By Quarter Ended:                                High                Low
-----------------                                ----                ---

September 30, 1997..........................    $1.69               $1.12
June 30, 1997...............................    $1.50               $1.25
March 31, 1997..............................    $2.00               $1.50
December 31, 1996 ..........................    $0.60               $0.75

September 30, 1996 .........................    $0.75               $0.44
June 30, 1996...............................    $0.75               $0.44
March 31, 1996 .............................    $0.75               $0.44
December 1995 ..............................    $0.75               $0.44

     As of November  30,  1997,  the Company had  approximately  600  beneficial
holders of its Common Stock.

Dividend Policy

     The Company has never paid cash  dividends  on its Common Stock and intends
to retain  earnings,  if any,  for use in the  operation  and  expansion  of its
business.  The amount of future  dividends,  if any,  will be  determined by the
Board of  Directors  based upon the  Company's  earnings,  financial  condition,
capital requirements and other conditions.

Description of Securities

Common Stock

     The  Company is  authorized  to issue  50,000,000  shares of $.10 par value
Common Stock. At November 30, 1997,  there were 3,692,102 shares of Common Stock
outstanding. The holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders, including the
election of  directors.  There is no right to cumulate  votes in the election of
directors. The holders of Common Stock are entitled to any dividends that may be

                                        6

<PAGE>



declared  by the Board of  Directors  out of funds  legally  available  therefor
subject  to any prior  rights of  holders of  Preferred  Stock.  In the event of
liquidation or dissolution of the Company,  holders of Common Stock are entitled
to share ratably in all assets  remaining  after payment of liabilities  and the
liquidation preferences of any outstanding shares of Preferred Stock. Holders of
Common Stock have no preemptive rights and have no right to convert their Common
Stock into any other securities.  All of the outstanding  shares of Common Stock
are fully paid and non-assessable.

Preferred Stock

     The Company is  authorized  to issue  500,000  shares of  Preferred  Stock,
$10.00  par  value,  none of which are  outstanding.  The  Preferred  Stock may,
without  action by the  stockholders  of the Company,  be issued by the Board of
Directors  from time to time in one or more  series for such  consideration  and
with  such  relative  rights,  privileges  and  preferences  as  the  Board  may
determine.  Accordingly, the Board has the power to fix the dividend rate and to
establish the provisions,  if any,  relating to voting rights,  redemption rate,
sinking fund,  liquidation  preferences and conversion  rights for any series of
preferred stock issued in the future.

     It is not  possible  at  this  time  to  state  the  actual  effect  of any
authorization  of  Preferred  Stock upon the  rights of holders of Common  Stock
until the Board  determines the specific  rights of the holders of any series of
preferred stock. The Board's  authority to issue Preferred Stock also provides a
convenient vehicle in connection with possible  acquisitions and other corporate
purposes,  but could  have the  effect of making it more  difficult  for a third
party to acquire a majority of the outstanding  voting stock.  Accordingly,  the
issuance of Preferred  Stock may be used as an  "anti-takeover"  device  without
further action on the part of the stockholders of the Company, and may adversely
affect the holders of the Common Stock.

Stock Transfer and Warrant Agent

     Security Transfer Corporation is the stock transfer agent for the Company's
Common Stock.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
--------------------------------------------------------------------

General

     The Company was acquired by MMA in a reverse  merger in October  1996,  and
subsequently  changed its fiscal year end to September 30 from December 31. As a
result  of the  reverse  merger  and  subsequent  fiscal  year end  change,  the
comparative  financial  statements  included in this report are  insufficient to
gain an understanding of the Company's  business and business trends.  Therefore
management has included an unaudited statement for the 12 months ended September
30, 1996 in order to help identify the key  financial  elements of the Company's
operations.



                                        7

<PAGE>



                               Tone Products, Inc.
                      Consolidated Statements of Operations
                    For the Year Ended September 30, 1997 and
                        the Year Ended September 30, 1996

                                                       Company       Unaudited
                                                        1997           1996
                                                     -----------    -----------

Net sales                                            $ 9,939,635    $ 7,315,379
Cost of sales                                          6,744,958      5,321,114
                                                     -----------    -----------
Gross profit                                           3,194,677      1,994,265
Operating costs and expenses                           2,552,672      1,842,382
                                                     -----------    -----------
Income from operations                                   642,005        151,883
                                                     -----------    -----------
Other income (expense):
         Interest expense                                (89,547)       (86,653)
         Other income                                      8,770          2,139
                                                     -----------    -----------
                                                         (80,777)       (84,514)
                                                     -----------    -----------

Income before provision for income taxes                 561,228         67,369
Provision for income taxes                               257,073         75,250
                                                     -----------    -----------
Net income                                           $   304,155    ($    7,881)
                                                     ===========    ===========

Net income per common share, share equivalent
primary                                              $      0.08    ($     0.00)
                                                     ===========    ===========
                                                                    
Net income per common share, share equivalent
fully diluted                                        $      0.08    ($     0.00)
                                                     ===========    ===========


Results of Operations-September 30, 1997 Compared to September 30, 1996

     The Company had gross  revenues of  $9,939,635  for the twelve months ended
September  30,  1997,  with net income of $304,155  for the same  period.  Gross
revenues increased by $2,624,256 during the period, which represents an increase
of 36% from 1996 gross revenues.  The revenue  increase is comprised  largely of
the  following  (i) a full year of Fun City  Popcorn  sales in 1997  versus  six
months of sales in 1996, which amounted to $1,100,000,  (ii) a $650,000 increase
in juice sales, and (iii) a $500,000 increase in sauce sales.

     Gross  margins as a percent of sales  increased  by 4.88% to 32.14%  during
fiscal 1997.  This increase in gross margin is largely due to economies of scale
in the  manufacturing  process,  primarily  related to direct labor  costs.  Net
income  increased by $312,036 or 3% of gross sales due to the revenue  increases
and economies of scale.


                                        8

<PAGE>



Liquidity and Capital Resources

     The Company has access to  traditional  lines of credit and term  financing
and has in each of the past three years  increased  its lines of credit in order
to keep pace with growth. The Company had not made any material  commitments for
capital  expenditures  as of September  30, 1997 and believes it has  sufficient
cash resources to meet its needs in calendar 1998.

Seasonality

     A significant percentage of the Company's business is seasonal. The sale of
beverage syrups, fruit juice concentrates and barbeque sauces are greater during
warm weather.  The holiday season,  Thanksgiving  through the New Year, helps to
offset this  seasonality  to some degree.  Management has  established  lines of
credit to offset  cash  shortages  during slow  periods and has also  instituted
policies and practices to manage cash flow.

Trends

     The  Company  expects  the  supply of raw  materials  in the three  largest
purchase categories to remain stable, if not increase. Liquid sweeteners,  juice
concentrates  and packaging  materials are expected to remain in adequate supply
through fiscal 1998. The Company's  purchasing power with suppliers continues to
grow,  and  cost of sales  should  not be  adversely  effected  by raw  material
purchasing calender 1998.

     The Company has begun an effort to sell its  branded  products  and private
label  packaging  services  in a  five  state  region  surrounding  the  Chicago
metropolitan  area.  This sales effort is targeting  regional and national  food
service and food  distribution  companies,  as well as large  institutional  and
private label  companies.  The Company is employing its existing  sales force in
this effort and expects  additional  expenses  related to sales to be relatively
small.  If additional  sales require the purchase of dispensing  equipment,  the
Company has ample borrowing capacity to handle such capital requirements.

     The potential  addition of direct store  delivery at the Company's Fun City
Popcorn  division may be an  opportunity to increase sales in Las Vegas by up to
$750,000 per year.  First year sales will depend upon the timely  completion  of
the proposed purchase of existing sales routes from a retiring vendor.  The cost
of the routes and additional  delivery equipment is still being negotiated.  The
total cost of adding the business  would be largely  goodwill  amortized over 15
years and is not  expected to  significantly  effect the expense  portion of the
Company's  income  statement.  The management of direct store delivery routes is
often difficult.  For instance, truck inventories must be closely maintained and
delivery route drivers must be managed to promote  sales.  Although there may be
difficulties  in  assimilating  this business,  the Company  believes it has the
necessary management and staff in place.


                                        9

<PAGE>



     The Company has brought "in house" the servicing of Chicago area dispensing
equipment  which the Company  provides to purchasers  of its beverage  products.
Previously  service of this equipment was purchased from an outside  contractor.
The Company  believes that the  additional  quality of service gained by tighter
controls in this area will provide significant returns in customer  satisfaction
without increasing service expense as a percentage of sales.

     This Form 10-KSB  specifies the forward  looking  statements of management.
Forward  looking  statements  are  statements  that estimate or  anticipate  the
happening  of  future  events.  The  forward  looking  statement  of  management
specified  in this Form  10-KSB have been  compiled on the basis of  assumptions
made by management and considered to be reasonable.  Future operating results of
the Company, however, are impossible to predict and not representation regarding
future  operating  results of the Company is to be inferred  from those  forward
looking  statements.  The  assumptions  used for purposes of the forward looking
statements  specified in this Form 10-KSB  represent  estimates of future events
and are subject to uncertainty as to possible changes in economic,  legislature,
industry,  and other  circumstances.  As a result,  the developing and selecting
assumptions  from and among  reasonable  alternatives  require  the  exercise of
judgement  to the extent that the assumed  events do not occur.  The outcome may
vary substantially from that projected, and accordingly, no opinion is expressed
regarding the achievability of particular forward looking results.  In addition,
those forward looking  statements have been compiled as of the date of this Form
10-KSB and should be evaluated with consideration of any changes occurring after
the date of this Form 10- KSB.



                                       10

<PAGE>



ITEM 7.  FINANCIAL STATEMENTS

     The financial  information required by this item is found beginning on page
F-1.




                                       11

<PAGE>

  



                               Tone Products, Inc.
                        Consolidated Financial Statements

                      As of September 30, 1997 and 1996 and
                    For the Year Ended September 30, 1997 and
                           The Nine Months Ended 1996

<PAGE>



                               Tone Products, Inc.
                   Index to Consolidated Financial Statements

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


Report of Independent Auditors . . . . . . . . . . . . . . . . .     1 

Financial Statements of Tone Products, Inc.:

     Consolidated Balance Sheets, September 30, 1997 and 1996. .     2

     Consolidated Statements of Operations for the
      Year Ended September 30, 1997 and the
       Nine Months Ended September 30, 1996. . . . . . . . . . .     4

     Consolidated Statements of Shareholders' Equity for the
      Year Ended September 30, 1997 and the
       Nine Months Ended September 30, 1996. . . . . . . . . . .     5

     Consolidated Statements of Cash Flows for the
      Year Ended September 30, 1997 and the
       Nine Months Ended September 30, 1996  . . . . . . . . . .     6

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


<PAGE>





                         REPORT OF INDEPENDENT AUDITORS
                         ------------------------------



To the Board of Directors
Tone Products, Inc.


We have audited the  accompanying  consolidated  balance sheet of Tone Products,
Inc.  and  subsidiaries  as of  September  30,  1997 and  1996  and the  related
consolidated statements of income, stockholders'  equity and cash flows for year
ended  September  30, 1997 and nine  months  ended  September  30,  1996.  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 consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial position of Tone
Products,  Inc. and its  subsidiaries as of September 30, 1997 and 1996, and the
consolidated  results  of its  operations  and its cash flows for the year ended
September  30, 1997 and the nine months ended  September  30, 1996 in conformity
with generally accepted accounting principles.



Kelly & Company
Newport Beach, California 
December 5, 1997



                                      F-1


<PAGE>


                         


                               Tone Products, Inc.
                            Consolidated Balance Sheets

                          September 30, 1997 and 1996
--------------------------------------------------------------------------------
                                     ASSETS
                                                                     Predecessor
                                                      Company          Entity
                                                    ----------        ----------
                                                       1997             1996
                                                    ----------        ----------
Current assets:
     Cash and equivalents                           $  349,617        $  155,746
     Accounts receivable                               957,117           939,332
     Inventory                                       1,050,056         1,113,177
     Prepaid expenses                                   11,481             6,685
     Deferred tax asset                                 18,108             5,230
                                                    ----------        ----------

          Total current assets                       2,386,379         2,220,170

Property and equipment, net                          1,460,863         1,464,724
Other assets                                             4,090              --
Goodwill                                               396,886           432,252
                                                    ----------        ----------

          Total assets                              $4,248,218        $4,117,146
                                                    ==========        ==========










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

                                       F-2

<PAGE>

                              Tone Products, Inc.
                          Consolidated Balance Sheets

                          September 30, 1997 and 1996
--------------------------------------------------------------------------------
                      LIABILITIES AND SHAREHOLDERS' EQUITY


                                                                     Predecessor
                                                    Company            Entity
                                                 -----------        ------------
                                                     1997               1996
                                                 -----------        -----------
Current liabilities:
     Line of credit payable                      $   200,000        $   610,927
     Accounts payable                                569,764            853,196
     Notes payable, current portion                   75,197            224,007
     Income taxes payable                            254,791             28,224
                                                 -----------        -----------

          Total liabilities                        1,099,752          1,716,354
Notes payable, long term                             140,192             14,269
Deferred tax liability                                92,778             67,882
                                                 -----------        -----------

          Total liabilities                        1,332,722          1,798,505
                                                 -----------        -----------
Commitments and contingencies

Shareholders' equity:
     Convertible  Series  A  preferred  stock;
          $10 par  value; 500,000 shares
          authorized; none issued and
          outstanding at September 30, 1997             --                 --
     Common stock; $0.10 par value;
          50,000,000 shares authorized;
          3,692,102 and 3,048,752 shares
          issued and outstanding
          at September 30, 1997 and 1996,            369,211            304,876
           respectively
     Paid-in capital                               1,012,057           (204,308)
     Stock subscription proceeds                        --              988,000
     Retained earnings                             1,534,228          1,230,073
                                                 -----------        -----------

          Total shareholders' equity               2,915,496          2,318,641
                                                 -----------        -----------

          Total liabilities and
           shareholders' equity                  $ 4,248,218        $ 4,117,146
                                                 ===========        ===========






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

                                       F-3
<PAGE>



                              Tone Products, Inc.
                     Consolidated Statements of Operations

                   For the Year Ended September 30, 1997 and
                    The Nine Months Ended September 30, 1996
--------------------------------------------------------------------------------

                                                                    Predecessor
                                                     Company           Entity
                                                   -----------      ------------
                                                      1997              1996
                                                   -----------      -----------
Net sales                                          $ 9,939,635      $ 6,245,918
Cost of sales                                        6,744,958        4,607,858
                                                   -----------      -----------

     Gross profit                                    3,194,677        1,638,060
Operating costs and expenses                         2,552,672        1,443,336
                                                   -----------      -----------

Income from operations                                 642,005          194,724
                                                   -----------      -----------
Other income (expense):
     Interest expense                                  (89,547)         (62,536)
     Other income                                        8,770            2,139
                                                   -----------      -----------

                                                       (80,777)         (60,397)
                                                   -----------      -----------

Income before provision for income taxes               561,228          134,327
Provision for income taxes                             257,073           75,250
                                                   -----------      -----------

Net income                                         $   304,155      $    59,077
                                                   ===========      ===========



Net income per common share,
     share equivalent primary                      $      0.08      $      0.02
                                                   ===========      ===========

Net income per common share,
     share equivalent fully diluted                $      0.08      $      0.02
                                                   ===========      ===========












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

                                       F-4
                                                 
<PAGE>
<TABLE>
<CAPTION>
                                                             Tone Products, Inc.
                                               Consolidated Statements of Shareholders' Equity

                                                   For the Year Ended September 30, 1997 and
                                                    The Nine Months Ended September 30, 1996
------------------------------------------------------------------------------------------------------------------------------------


                                                                Tone Products, Inc.                Tone Products, Inc.
                                                          (An Illinois Corporation)             (An Arkansas Corporation)  
                                                          ------------------------   -----------------------------------------------
                                                            Common        Common       Preferred  Preferred     Common     Common   
                                                            Shares         Stock         Shares     Stock        Shares     Stock   
                                                            ------         -----         ------     -----        ------     -----   

Balance, December 31, 1995,
<S>                                                            <C>         <C>           <C>       <C>         <C>         <C>  
   previously reported                                         600         $ 60,000         --        --             --        --
   Shares outstanding prior to reorganization                 --               --           --        --        3,093,750  $309,375
   One for four reverse stock split prior                     --               --
         to reorganization                                    --               --           --        --       (2,319,998) (231,999)
   Shares issued in the acquisition of
         Tone Products, Inc. (an Illinois
         corporation) by the Company                          (600)         (60,000)        --        --        2,275,000   227,500
                                                            ------          -------       -----     -----       ---------   -------
Balance, December 31, 1995, as restated                       --               --           --        --        3,048,752   304,876
   Distribution of a building to the
      Tone Products, Inc.  (an Illinois
      Corporation) shareholders                               --               --           --        --             --         -- 
   Shares subscribed                                          --               --           --        --             --         --
   Net income                                                 --               --           --        --             --         --
                                                            ------          -------       -----     -----       ---------   -------
Balance, September 30, 1996                                   --               --           --        --        3,048,752   304,876
   Shares issued in payment for debt                          --               --           --        --           64,500     6,450
   Shares subscribed                                          --               --           --        --             --         --
   Issuance of subscribed shares                              --               --           --        --          578,850    57,885
   Net income                                                 --               --           --        --             --         --
                                                            ------          -------       -----     -----       ---------   --------
Balance, September 30, 1997                                   --               --           --        --        3,692,102   $369,211
                                                            ======          =======       =====     =====       =========   ========



                                                                             Stock
                                                          Paid-in         Subscription       Retained           
                                                          Capital          Proceeds          Earnings            Total
                                                         ---------         --------         --------            -----     
                                                       
Balance, December 31, 1995,
   previously reported                                   $  50,127              --          $1,170,996       $ 1,281,123
   Shares outstanding prior to reorganization             (309,375)             --                --                --
   One for four reverse stock split prior
         to reorganization                                 231,999              --                --                --
   Shares issued in the acquisition of
         Tone Products, Inc. (an Illinois
         corporation) by the Company                      (117,500)          (50,000)             --                --
                                                       -----------        ----------        ----------       -----------
Balance, December 31, 1995, as restated                   (144,749)          (50,000)        1,170,996         1,281,123
   Distribution of a building to the
      Tone Products, Inc.  (an Illinois
      Corporation) shareholders                            (59,559)             --                --             (59,559)
   Shares subscribed                                          --           1,038,000              --           1,038,000
   Net income                                                 --                --              59,077            59,077
                                                       -----------        ----------        ----------       -----------
Balance, September 30, 1996                               (204,308)          988,000         1,230,073         2,318,641
   Shares issued in payment for debt                       122,550              --                --             129,000
   Shares subscribed                                          --             163,700              --             163,700
   Issuance of subscribed shares                         1,093,815        (1,151,700)             --                --
   Net income                                                 --                --             304,155           304,155
                                                       -----------        ----------        ----------       -----------
Balance, September 30, 1997                            $ 1,012,057              --          $1,534,228       $ 2,915,496
                                                       ===========        ==========        ==========       ===========




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

                                                                    F-5
</TABLE>

<PAGE>

                              Tone Products, Inc.
                     Consolidated Statements of Cash Flows

                   For the Year Ended September 30, 1997 and
                    The Nine Months Ended September 30, 1996
--------------------------------------------------------------------------------

                                                                Predecessor
                                                   Company        Entity
                                                 -----------    -----------
                                                     1997           1996
                                                 -----------    -----------

Cash flows from operating activities:
    Net  income                                  $   304,155    $    59,077
  Adjustments to reconcile income
   (loss) to net cash
   provided by operating activities:
    Depreciation and amortization                    288,386        175,766
  Decrease (increase) in assets:
    Accounts receivable                              (17,785)      (382,936)
    Inventory                                         63,121       (228,271)
    Prepaid expenses                                  (4,796)        16,601
    Deferred tax asset                               (12,878)          (317)
    Other assets                                      (4,090)          --
  Increase (decrease) in liabilities:
    Accounts payable and accrued expenses           (154,432)        53,330
    Advances to shareholders                            --          (26,913)
    Income taxes payable                             226,567        (36,154)
    Deferred tax liabilities                          24,896        (78,657)
                                                 -----------    -----------

    Cash provided by (used in) operating
     activities                                      713,144       (448,474)  
                                                 -----------    -----------
Cash flows used in investing activities:
  Purchases of property and equipment               (195,270)       (92,549)
  Acquisition of Fun City Popcorn, Inc.                 --         (770,254)
                                                 -----------    -----------
    Cash used in investing activities               (195,270)      (862,803)
                                                 -----------    -----------
Cash flows provided by (used in)
 financing activities:
  Net (reductions on) proceeds from
   line of credit                                   (410,927)       610,927
  Repayment of notes payable                        (250,235)      (271,756)
  Proceeds from notes payable                        173,459        221,441
  Subscription of common stock                       163,700        788,000
                                                 -----------    -----------
    Cash provided by (used in)
     financing activities                           (324,003)     1,348,612
                                                 -----------    -----------
Net increase in cash                                 193,871         37,335
Cash at beginning of period                          155,746        118,411
                                                 -----------    -----------

Cash at end of period                            $   349,617    $   155,746
                                                 ===========    ===========

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

                                       F-6

<PAGE>

                              Tone Products, Inc.
                     Consolidated Statements of Cash Flows

                   For the Year Ended September 30, 1997 and
                    The Nine Months Ended September 30, 1996
--------------------------------------------------------------------------------

                Supplemental Disclosure of Cash Flow Information

                                                                    Predecessor
                                                     Company           Entity
                                                   -----------      -----------
                                                       1997             1996
                                                   -----------      -----------
    Interest                                       $    89,547      $    64,983
    Income taxes                                         5,610           33,064



Supplemental Schedule of Non-Cash Investing and Financing Activities

Distribution of building to shareholder
    Equity distributed                                    --        $    59,559
    Liability satisfied                                   --            625,000
    Net book value of asset distributed                   --           (684,559)


Acquisition of Fun City Popcorn, Inc. 
 (non-cash portion):
    Assets acquired                                       --            300,000
    Liabilities incurred                                  --            (50,000)
    Subscribed shares                                     --           (250,000)

Acquisition of equipment
    Assets acquired                                $    53,889             --
    Liabilities incurred                               (53,889)            --

Satisfaction of debt through issuance
  of stock
    Liabilities satisfied                              129,000             --
    Shares issued                                     (129,000)            --

Issuance of subscribed stock
    Reduction of subscribed stock                    1,151,700             --
    Shares issued                                   (1,151,700)            --


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


                                       F-7
<PAGE>



                               Tone Products, Inc.
                   Notes to Consolidated Financial Statements


1.   Summary of Significant Accounting Policies
--   ------------------------------------------


     Basis of Presentation

     The  consolidated   financial  statements  include  the  accounts  of  Tone
     Products,  Inc.  and  subsidiaries,   Fun  City  Popcorn,  Inc.  (a  Nevada
     corporation)  and  Tone  Products,  Inc.  (an  Illinois  corporation)  (the
     "Company"). All significant intercompany transactions have been eliminated.
     Prior to October 15,  1996,  the  Company was named  Minute Man of America,
     Inc.

     Operations

     The  Company  is  engaged  in  the  purchase,  manufacture,  and  wholesale
     distribution of food products in the beverage,  snack,  syrup,  condiments,
     and sauce categories.

     Business Combination

     On October 15, 1996, the Company acquired, in a reverse merger transaction,
     Minute Man of America, Inc. The effective purchase price was 773,752 shares
     of the  Company's  common  stock,  and the  transaction  was  treated  as a
     purchase.  Minute  Man of  America,  Inc.  had no  operations,  assets,  or
     liabilities  at the  acquisition  date.  No goodwill has been recorded as a
     result of this transaction.

     Recognition of Revenue

     Revenues are recognized when the Company's products are shipped.

     Cash and Equivalents

     The Company  classifies all highly liquid  investments  with  maturities of
     three months or less as cash equivalents.

     Inventory

     Inventories  are stated at the lower of cost or market.  Cost is determined
     on a first-in,  first-out basis. The Company regularly  monitors  inventory
     for excess or obsolete items and makes any valuation  corrections when such
     adjustments are needed.

                                       F-8

Continued


<PAGE>

                              Tone Products, Inc.
             Notes to Consolidated Financial Statements, Continued

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


1.   Summary of Significant Accounting Policies, Continued
--   -----------------------------------------------------


     Property and Equipment

     Property and equipment are recorded at cost and are  depreciated  using the
     straight-line   method  over  the   expected   useful  lives  noted  below.
     Expenditures for normal  maintenance and repairs are charged to income, and
     significant improvements are capitalized.  The cost and related accumulated
     depreciation  of assets are removed from the accounts  upon  retirement  or
     other  disposition,  and  resulting  profit  or  loss is  reflected  in the
     statement of operations.

                                               Estimated Useful
                                                     Life
                                                --------------

            Leasehold improvements                    39 years
            Machinery and equipment                    7 years
            Furniture and fixtures                 5 - 7 years
            Vehicles                               5 - 7 years

     Goodwill

     Goodwill  is the  excess of the cost of net  assets  acquired  in  business
     combinations  over their fair value.  It is amortized  over  fifteen  years
     utilizing the  straight-line  method.  The Company  evaluates  goodwill for
     impairment at least annually.  In completing this  evaluation,  the Company
     compares its best estimate of future cash flows,  excluding  interest cost,
     with the carrying value of goodwill.  The Company determined that there was
     no impairment at September 30, 1997 and 1996.  Amortization expense for the
     year and the nine months ended  September 30, 1997 and 1996 was $35,366 and
     $9,824, respectively.

     Income Taxes

     The Company accounts for deferred income taxes using the liability  method.
     Deferred income taxes are computed based on the tax liability or benefit in
     future years of the reversal of temporary differences in the recognition of
     income  or  deduction  of  expenses  between  financial  and tax  reporting
     purposes.  Deferred tax assets and/or liabilities are classified as current
     and  noncurrent  based  on the  classification  of  the  related  asset  or
     liability  for  financial  reporting  purposes,  or based  on the  expected
     reversal  date  for  deferred  taxes  that are not  related  to an asset or
     liability.  The Company files a consolidated  federal income tax return and
     reports  results from  operations  on a unitary  basis for state income tax
     purposes.

                                       F-9

Continued

<PAGE>

                              Tone Products, Inc.
             Notes to Consolidated Financial Statements, Continued

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


1. Summary of Significant Accounting Policies, Continued
--------------------------------------------------------

     Stock Split

     All  common  shares  and per  share  amounts  have  been  adjusted  to give
     retroactive effect, where applicable, to a one for four reverse stock split
     that occurred during 1997.

     Disclosures About Fair Value of Financial Investments

     The Company accounts for the value of financial  instruments using the fair
     value method.

     Advertising Costs

     Advertising  costs are expensed as they are incurred.  Advertising  expense
     was $61,401 and $32,594 for the year ended  September 30, 1997 and the nine
     months ended September 30, 1996, respectively.

     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
     consolidated  financial statements and the reported amounts of revenues and
     expenses  during the  reporting  period.  Actual  results could differ from
     those estimates.

2.  Accounts Receivable
--  --------------------

     Accounts receivable consists of the following:

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

       Trade accounts receivable                    $935,347          $909,332
       Due from a related party                       21,770            30,000
                                                    --------          --------
     Total accounts receivable                      $957,117          $939,332
                                                    ========          ========


     During  the  year  ended  September  30,  1997 and the  nine  months  ended
     September 30, 1996, respectively, the Company charged to operations $12,254
     and $46,364, in uncollectible accounts receivable.

                                      F-10

Continued

<PAGE>

                              Tone Products, Inc.
             Notes to Consolidated Financial Statements, Continued

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


3.  Inventory
--  ---------

     Inventory consists of the following:

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

       Raw materials                              $  602,252        $  782,623
       Finished goods                                447,804           330,554
                                                  ----------        ----------
     Total inventory                              $1,050,056        $1,113,177
                                                  ==========        ==========

4.  Property and Equipment
--  ----------------------

     Property and equipment consist of the following:

                                                   1997               1996
                                                 ----------        ----------
       Leasehold improvements                    $  402,011        $  369,890
       Machinery and equipment                    2,432,422         2,261,941
       Furniture and fixtures                       101,410            95,178
       Vehicles                                     311,789           271,464
                                                 ----------        ----------
                                                  3,247,632         2,998,473
       Less: accumulated depreciation            (1,786,769)       (1,533,749)
                                                 ----------        ----------
     Total property and equipment                $1,460,863        $1,464,724
                                                 ==========        ==========

     Depreciation  expense for the year and nine months ended September 30, 1997
     and 1996, was $253,020 and $165,942, respectively.


5.  Bank Line of Credit
--  -------------------

     The Company has operating lines of credit with a bank as follows:

     Line  of  credit  with a  maximum  amount  of
     $800,000  available,  secured by the  Company
     and three  officers  of the  Company  who are
     also its largest shareholders.  The bank line
     of credit has an interest  rate of bank prime
     (8.50% at September 30, 1997), due in January
     1998.                                                  --         $610,927


                                      F-11

Continued
<PAGE>

                              Tone Products, Inc.
             Notes to Consolidated Financial Statements, Continued

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


5.  Bank Line of Credit, Continued
--  ------------------------------

     Line  of  credit  with a  maximum  amount  of
     $200,000  available,   secured  by  Fun  City
     Popcorn,  Inc.'s assets and guaranteed by the
     Company and three officers of the Company who
     are also its largest  shareholders.  The bank
     line of credit has an  interest  rate of bank
     prime (8.50% at September 30,  1997),  due in
     February 1998.                                      $200,000          --
                                                         --------      --------

                                                         $200,000      $610,927
                                                         ========      ========

6.  Notes Payable
--  -------------

     Notes payable consist of the following:

                                                            1997         1996
                                                            ----         ----

     Note  payable  to  a  bank,  secured  by  the
     Company's   assets,    payable   in   monthly
     principal installments of $3,690 plus accrued
     interest,  due in  April  2001.  Interest  is
     calculated  at the  bank's  prime  rate  plus
     three-quarters of a point (8.50% at September
     30, 1997).                                           $158,697     $199,289


     Notes payable  consisting  of eight  separate
     promissory   notes  are  secured  by  Company
     vehicles.  The notes payable call for monthly
     installments  of  principal  and  interest of
     $3,847 for terms  which do not  exceed  three
     years.  At September 30, 1997, the promissory
     notes bear  interest  rates between 1.95% and
     10.50%                                                 56,692       38,987
                                                          --------     --------
     Total notes payable                                   215,389      238,276
           Less: current maturities                        (75,197)    (224,007)
                                                          --------     --------
     Long term portion of notes payable                   $140,192     $ 14,269
                                                          ========     ========



                                      F-12
Continued

<PAGE>

                              Tone Products, Inc.
             Notes to Consolidated Financial Statements, Continued

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

6.  Notes Payable, Continued
--  ------------------------

     Maturities of notes payable for the years ending September 30:

           1998                                             $75,197
           1999                                              58,334
           2000                                              51,894
           2001                                              29,964
           2002 and thereafter                                 --


7.  Deferred Income Taxes
--  ---------------------

     The components of the provision for income taxes are as follows:

                                                        1997           1996

       Current tax expense:
           Federal                                    $215,079        $48,292
           State                                        49,332         12,656
                                                      --------        -------
                                                       264,411         60,948
                                                      --------        -------
       Deferred tax expense (benefit):
           Federal                                      (8,380)        11,775
           State                                         1,042          2,527
                                                      --------        -------
                                                        (7,338)        14,302
                                                      --------        -------
       Total provision                                $257,073        $75,250
                                                      ========        =======

     Significant  components  of the  Company's  deferred  income tax assets and
     liabilities at September 30, 1997 and 1996, are as follows:

       Deferred income tax asset:
           State taxes                                 $21,816         $ 8,584
           Other                                           987             986
                                                       -------         -------
       Total deferred income tax asset                  22,803           9,570
       Valuation allowance                                 --              --
                                                       -------         -------
           Total deferred income tax assets             22,803           9,570
                                                       -------         -------

       Deferred income tax liability:
           Depreciation                                 78,117          72,222
                                                       -------         -------
       Total deferred income tax liability              78,117          72,222
                                                       -------         -------
       Net deferred income tax liability               $55,314         $62,652
                                                       =======         =======

                                      F-13

Continued

<PAGE>

                              Tone Products, Inc.
             Notes to Consolidated Financial Statements, Continued

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


7.  Deferred Income Taxes, Continued
--  --------------------------------


     Reconciliation  of the effective tax rate to the U.S.  statutory rate is as
     follows:

       Tax expense at U.S. statutory rate           34.0%           34.0%
       State tax provision                           5.9             7.5
       Non-deductible expenses                       6.2            10.8
       Other                                         (.3)            3.8
                                                    ----            ----
       Effective income tax rate                    45.8%           56.1%
                                                    ====            ==== 

8.  Commitments
--  -----------

     The  Company  has  operating  leases  for  certain of its  facilities.  The
     operating leases are with entities owned by officers of the Company who are
     also its three  largest  shareholders.  The leases are annual in nature and
     have been renewed in the past.  It is  management's  belief that the leases
     will continue to be renewed into the  foreseeable  future.  Future  minimum
     lease payments at September 30, 1997, are as follows:

                                                                    Due to
                                                        Total   Related Parties
                                                      --------  ---------------

           1998                                       $390,132      $375,012
           1999                                           --            --
                                                      --------      --------
     Total future minimum lease payments              $390,132      $375,012
                                                      ========      ========


     Rental expense  resulting from operating lease  agreements was $364,828 and
     $172,012  for the year ended  September  30, 1997 and the nine months ended
     September 30, 1996, respectively.

     The Company is a guarantor  on a $300,000  promissory  note with a bank for
     the benefit of the  Company's  three  largest  shareholders.  All terms and
     conditions of the loan agreement are being met by the shareholders.

9.  Concentration of Credit Risk
--  ----------------------------

     The Company  sells  products  to private  companies,  certain  governmental
     entities,  and public institutions primarily with a 300-mile radius of each
     of their two  locations.  Credit is extended  based on an evaluation of the
     customer's financial  condition.  Exposure to losses on accounts receivable
     is  principally  dependant  on each  customer's  financial  condition.  The
     Company  monitors its  exposure  for credit  losses and writes off accounts
     receivable that it deems are not collectible.

                                      F-14

Continued

<PAGE>

                              Tone Products, Inc.
             Notes to Consolidated Financial Statements, Continued

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

9.  Concentration of Credit Risk, Continued
--  ---------------------------------------

     The  Company  maintains  its cash in bank  deposit  accounts  which  exceed
     federally  insured limits by $240,341 and $55,746 at September 30, 1997 and
     1996, respectively;  however, the Company has not experienced any losses in
     such accounts.

10.  Disclosures about Fair Values of Financial Instruments
---  ------------------------------------------------------

     The estimated fair value amounts of all financial instruments,  both on and
     off the Company's  balance sheet,  have been  determined by using available
     market  information  and  appropriate  valuation  methodologies.   However,
     considerable  judgment is necessarily  required in interpreting market data
     to  develop  the  estimates  of  fair  value.  Accordingly,  the  estimates
     presented  herein are not  necessarily  indicative  of the amounts that the
     Company could realize in a current  market  exchange.  The use of different
     market  assumptions  and/or  estimation  methodologies  may have a material
     effect on the estimated fair value amounts.

     The  following  methods  and  assumptions  were  used  by  the  Company  in
     estimating fair value disclosures for financial statements:

     Cash and equivalents,  accounts receivable,  inventory,  prepaids, accounts
     payable,  line of credit  payable,  current  portion of notes payable,  and
     certain other current  liability  amounts are reported in the balance sheet
     at  approximate  fair  value  due to the  short  term  maturities  of these
     instruments.

     The fair value of the notes  payable is  estimated by  determining  the net
     present value of future payments.  The carrying amount on the balance sheet
     approximates  the fair  value as the  interest  rates  approximate  current
     market rates.

11.  Profit-Sharing Plan
---  -------------------

     Effective   January  1,  1989,   the  Company   amended   and   restated  a
     noncontributory  profit sharing retirement plan covering  substantially all
     employees.  Annual  employer  contributions  to the  plan  are  made at the
     discretion of management.  No employer  contribution  was made for the year
     ended September 30, 1997 and the nine months ended September 30, 1996.

12.  Related Party Transactions
---  --------------------------

     The Company  leases from entities  owned by its three largest  shareholders
     certain operating facilities. For the year ended September 30, 1997 and the
     nine months ended  September 30, 1996,  respectively,  the Company paid the
     entities $325,530 and $161,849 in rent.

                                      F-15

Continued

<PAGE>

                              Tone Products, Inc.
             Notes to Consolidated Financial Statements, Continued

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

12.  Related Party Transactions, Continued
---  -------------------------------------

     On February 2, 1996, the predecessor company made an election and adopted a
     corporate  reorganization  and  disposed of certain  assets and the related
     liability to the Company's  shareholders.  This transaction  resulted in no
     gain or loss to the predecessor company and resulted in a distribution from
     shareholders' equity of $59,559 to its shareholders.

     During  the  year  ended  September  30,  1997 and the  nine  months  ended
     September 30, 1996, respectively,  the Company had sales of $0 and $39,316,
     respectively,  to a related  entity.  Included  in accounts  receivable  at
     September  30, 1997 and 1996,  was $21,770 and $30,000,  respectively,  due
     from this entity.

13.  Common Stock
---  ------------


     Transactions Prior to the One for Four Reverse Stock Split

          Stock Subscription
          ------------------

          During the nine months ended  September 30, 1996,  the Company  raised
          $838,000 through a private  placement.  The 419,000 shares involved in
          the stock  subscription  were not issued until subsequent to September
          30, 1996. The shares involved were post stock split shares.

          Acquisition of Fun City Popcorn, Inc.
          -------------------------------------

          As part of the acquisition price of Fun City Popcorn, Inc., its former
          owner,  who is  now on the  Company's  Board  of  Directors,  received
          100,000 shares at $2.00 per share value. The shares involved were post
          stock split shares.

     Stock Split

     In October  1996,  concurrent  with a business  combination,  the Company's
     shareholders  approved a one for four reverse  stock split of the Company's
     common stock.  Accordingly,  $231,999 was transferred  from common stock to
     paid in capital  representing  the par value of the shares  canceled in the
     reverse split.

                                      F-16

Continued

<PAGE>

                              Tone Products, Inc.
             Notes to Consolidated Financial Statements, Continued

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

13.  Common Stock, Continued
---  -----------------------

     Transactions Subsequent to the One for Four Reverse Stock Split

          Acquisition of Tone
          -------------------

          On October 15, 1996,  the Company sold ( in a reverse  acquisition)  a
          70.5%  interest  in  Minute  Man  of  America,  Inc.  ("MMA")  to  the
          shareholders  of TPI. The  shareholders  of TPI exchanged all of their
          stock  in TPI for  2,275,000  common  shares  of MMA.  As part of this
          transaction:
               1.   MMA changed its name to Tone Products, Inc.
               2.   The board of  directors  of MMA was  expanded  from three to
                    seven members.  Tone has placed six members on the board and
                    one former MMA board member will remain.

          Common Stock Issued in Exchange for Debt
          ----------------------------------------

               In 1997 the  Company  issued  64,500  shares of  common  stock in
               payment of debt of $129,000.

          Issuance of Subscribed Stock
          ----------------------------

               In 1997 the Company  issued 578,850 shares of stock that had been
               subscribed during a private placement.

14.  Earnings per Common Share
---  -------------------------

     The  computation of both primary and fully diluted  earnings per common and
     common  equivalent  share are computed based on the weighted average number
     of shares of common stock and common stock equivalents  outstanding  during
     each year. The primary and fully diluted weighted average common and common
     equivalent  shares,  as  applicable,  outstanding  during  the  year  ended
     September 30, 1997 was 3,677,082 and was used in  calculating  the earnings
     per share for the year and nine months  ended  September  30, 1997 and 1996
     respectively.


                                      F-17




<PAGE>




ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
----------------------------------------------------------

     On October 3, 1996, the Audit Committee of the Board of Directors of Minute
Man of  America,  Inc.  ("MMA")  approved  the  dismissal  of Samson,  Robbins &
Associates,  P.L.L.C.,  ("SRA"),  Dallas,  Texas,  independent  auditors and the
retention of Kelly & Company, Newport Beach, California,  as MMA's new principal
independent   auditors.   The   change   was   implemented   due  to   budgetary
considerations.

     Neither of SRA's  reports on MMA's  financial  statements  for the past two
fiscal years  contained an adverse  opinion or a disclaimer  of opinion,  or was
qualified or modified as to uncertainty,  audit scope or accounting  principles.
In connection with the audits of MMA's financial  statements for each of the two
fiscal  years  ended  September  30, 1995 and  September  30,  1994,  and in the
subsequent  interim period,  there were no disagreements with SRA on any matters
of accounting  principles  or  practices,  financial  statement  disclosure,  or
auditing scope and procedures  which if not resolved to the  satisfaction of SRA
would have cause SRA to make reference to the matter in their report.

     SRA furnished a letter to the Commission  confirming the above  information
with the exception of an explanatory  paragraph  included in its January 4, 1996
Report regarding the consolidated financial statements of MMA.




                                       12

<PAGE>



                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
--------------------------------------------------------------

Directors and Executive Officers

     The following table sets forth certain information  regarding the Company's
executive officers and directors:

<TABLE>
<CAPTION>
                                                                                        Officer or
       Name                   Age                      Office                        Director Since(1)
       ----                   ---                      ------                        -----------------
<S>                           <C>               <C>                                   <C>
Timothy E. Evon               43                 President, Chief Executive            October, 1996
                                                 Officer, and Director

Michael W. Evon               37                 Vice-President - Sales and            October, 1996
                                                 Marketing, and Director

Thomas J. Evon                42                 Vice-President - Special              November, 1996
                                                 Accounts, and Director

William H. Hamen              37                 Secretary, Treasurer, and Chief
                                                 Financial Officer                     November, 1996

Jack T. Cory                  56                 Director                              October, 1996

Charles A. Ehemann            45                 Director                              October, 1996

Edward R. Jancauskas          56                 Director                              November, 1997

</TABLE>


(1)  Reflects the date TPI was acquired by the Company.  Messrs.  Evon, Evon and
     Evon had been directors of TPI, the Company's  predecessor,  from September
     1978.

     Directors  hold office for a period of one year from their  election at the
annual meeting of stockholders  and until their  successors are duly elected and
qualified.  Officers of the Company are elected by, and serve at the  discretion
of, the Board of Directors. Directors not employed by the Company do not receive
fees  for  attending  Board  of  Directors'  meetings  but  are  reimbursed  for
out-of-pocket  expenses,  and each is granted stock  options to purchase  25,000
shares of the Company's Common Stock after one year of service. Timothy E. Evon,
Michael W. Evon and Thomas J. Evon are brothers.

Background

     The  following is a summary of the business  experience  of each  executive
officer and director of the Company for at least the last five years:


                                       13

<PAGE>



     Timothy E. Evon has been  President of TPI, and  subsequently  the Company,
since  1989  and is  responsible  for the  Company's  overall  operations,  with
emphasis upon management of production facilities and sauce operations.

     Michael W. Evon has been a  Vice-President  of TPI,  and  subsequently  the
Company, since 1989 and its National Sales Manager since 1993.

     Thomas J. Evon has been an executive  officer of TPI, and  subsequently the
Company,  since 1989 with principal  responsibility  for marketing the Company's
products primarily to government agencies, including school districts,  colleges
and prisons.

     William H. Hamen has been the Company's controller since 1996 and was named
its  Secretary,  Treasurer  and Chief  Financial  Officer in November  1997 with
principal responsibility for accounting and related functions.  Previously,  Mr.
Hamen was an  independent  systems  consultant and a computer  network  engineer
since 1992.

     Jack T. Cory founded Fun Foods, a California  based popcorn and snack foods
manufacturer  in 1967 and sold the  company  in  1982.  In 1985 he  founded  and
subsequently  managed Fun City  Popcorn,  Inc.  ("FCP") until he sold FCP to the
Company in May 1996.

     Charles  A.  Ehemann  has  been  employed  by  Wixon/Fontarome,   a  spice,
seasoning,  flavors, and food chemicals manufacturer since 1974 and has acted as
its Executive Vice President since 1991.

     Edward R.  Jancauskas  has been employed by Coca-Cola  Bottling  Company of
Chicago  since 1968 and has been its  Director of  Immediate  Consumption  since
1988. He is an elected  trustee of Mokena,  Illinois.  Mr.  Jancauskas  earned a
Bachelor's Degree in Management form of St. Joseph Calumet College.

ITEM 10.  EXECUTIVE COMPENSATION
--------------------------------

     The following table sets forth certain information concerning  compensation
paid to the Company's Chief Executive  Officer for the years ended September 30,
1996 and 1997.  Timothy  E. Evon,  Michael W. Evon and Thomas J. Evon  currently
receive annual salaries of $92,300 each.



                                       14

<PAGE>
<TABLE>
<CAPTION>


                                         Summary Compensation Table

                                                    Annual                               Long-Term
                                                 Compensation                          Compensation
                                                 ------------                          ------------
     Name and                                                          Other Annual       Awards         All Other
Principal Position                Year        Salary        Bonus      Compensation       Options      Compensation
------------------                ----        ------        -----      ------------       -------      ------------
<S>                               <C>         <C>          <C>              <C>             <C>             <C>
Timothy E. Evon,                  1996        $69,923      $10,000          $0              $0              $0
Chief Executive Officer
                                  1997        $92,300          500           0               0               0
</TABLE>

Stock Option Plan

     In  November  1997,  the Company  adopted  its 1997 Stock  Option Plan (the
"Plan"),  which  provides for the grant to  employees,  officers,  directors and
consultants  of  options  to  purchase  up to  350,000  shares of Common  Stock,
consisting of both "incentive  stock options" within the meaning of Section 422A
of  the  United  States   Internal   Revenue  Code  of  1986  (the  "Code")  and
"non-qualified" options.  Incentive stock options are issuable only to employees
of the  Company,  while  non-qualified  options  may be issued  to  non-employee
directors, consultants and others, as well as to employees of the Company.

     The Plan is administered by the Board of Directors,  which determines those
individuals who shall receive options,  the time period during which the options
may be partially or fully  exercised,  vesting periods  required for issuance of
options,  the number of shares of Common Stock that may be purchased  under each
option and the option price.

     The per share  exercise  price of the Common Stock  subject to an incentive
stock  option may not be less than the fair market  value of the Common Stock on
the date the option is granted. The per share exercise price of the Common Stock
subject to a non-qualified option is established by the Board of Directors.  The
aggregate fair market value (determined as of the date the option is granted) of
the Common Stock that any employee may purchase in any calendar year pursuant to
the exercise of incentive stock options may not exceed  $100,000.  No person who
owns, directly or indirectly,  at the time of the granting of an incentive stock
option to him, more than 10% of the total  combined  voting power of all classes
of stock of the Company is eligible to receive any incentive stock options under
the Plan unless the option  price is at least 110% of the fair  market  value of
the  Common  Stock  subject  to the  option,  determined  on the date of  grant.
Non-qualified options are not subject to these limitations.

     No incentive  stock option may be  transferred by an optionee other than by
will or the laws of descent  and  distribution,  and during the  lifetime  of an
optionee,  the option  will be  exercisable  only by him or her. In the event of
termination of employment  other than by death or disability,  the optionee will
have three months after such termination during which he or she can exercise the


                                       15

<PAGE>


option.  Upon  termination  of  employment  of an optionee by reason of death or
permanent total disability,  his or her option remains exercisable for 12 months
thereafter to the extent it was exercisable on the date of such termination.  No
similar limitation applies to non-qualified options.

     Options under the Plan must be granted  within ten years from the effective
date of the Plan. The incentive  stock options  granted under the Plan cannot be
exercised more than ten years from the date of grant except that incentive stock
options  issued to 10% or greater  stockholders  are limited to five year terms.
All options granted under the Plan provide for the payment of the exercise price
in cash or by delivery to the Company of shares of Common Stock already owned by
the  optionee  having a fair  market  value equal to the  exercise  price of the
options  being  exercised,  or by a  combination  of such  methods  of  payment.
Therefore,  an optionee may be able to tender shares of Common Stock to purchase
additional  shares of Common  Stock and may  theoretically  exercise  all of his
stock options with no additional  investment other than his original shares. Any
unexercised options that expire or that terminate upon an optionee ceasing to be
an officer,  director or an employee of the Company become  available once again
for issuance.

     As of the date of this Report, options to purchase 235,000 shares have been
granted  under the  Plan,  of which  200,000  options  have  been  issued to the
Company's executive officers and directors. All options are exercisable at $1.75
per share until November 2007, and none of such options have been exercised.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------

     The following table sets forth certain  information as of November 30, 1997
concerning stock ownership of the Company's Common Stock by all persons known to
the Company to own  beneficially 5% or more of the outstanding  shares of Common
Stock, by each director and by all directors and officers as a group.

     Except as otherwise  noted,  the persons  named in the table own the shares
beneficially  and of record  and have sole  voting  and  investment  power  with
respect  to all  shares  of  Common  Stock  shown as owned by them,  subject  to
community property laws, where applicable. Each stockholder's address is in care
of the Company at 2129 North 15th Street,  Melrose  Park,  Illinois  60160.  The
table also  reflects all shares of Common Stock which may be acquired  within 60
days from the date  hereof  upon  exercise  of stock  options  or  common  stock
purchase warrants.


                                       16

<PAGE>


                                        Number of
                                        Shares of
                                         Common
                                       Stock Owned                   Percent of
                                        of Record                   Common Stock
       Name                        and Beneficially(1)                 Owned
       ----                        -------------------                 -----

Timothy E. Evon                           738,166                       18.8%
Michael W. Evon                           738,166                       18.8%
Thomas J. Evon                            738,166                       18.8%
Jack T. Cory                              125,000                        3.1%
Charles A. Ehemann                         12,500                        0.3%
Edward R. Jancauskas                        1,000                          0%
Cede & Co.                                703,384                       17.9%
All officers and directors              2,377,998                       60.5%
as a group (7 persons)
----------

(1)  Includes Stock Options exercisable within 60 days from the date hereof.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

     The  Company  believes  that the  transactions  described  below were fair,
reasonable and consistent with the terms of transactions which the Company could
have entered into with nonaffiliated third parties. All future transactions with
affiliates  will  be  approved  by a  majority  of the  Company's  disinterested
directors.

     The Company  leases  office,  warehouse  and factory space in Melrose Park,
Illinois  and Las Vegas,  Nevada  from  certain of its  executive  officers  and
directors. See "Item 2 - Description of Property."

     In December  1997 the Company  agreed to purchase  from Tone Juices,  Inc.,
("TJ") an  affiliated  company  owned by Timothy E.  Evon,  Thomas J. Evon,  and
Michael W. Evon,  the trade name "Balboa Bay" which was owned by TJ, but used by
the  Company as the brand name for fruit  juices  sold by the Company to certain
Coca-Cola bottlers. The purchase price of $300,000 will be paid by the Company's
assumption of a promissory  note in like amount payable to a commercial bank and
executed by Timothy E. Evon, Thomas J. Evon, and Michael W. Evon.  Management of
the Company  believes that it was in the Company's  best interest to acquire the
trade  name in order  for the  Company  to  continue  sales of its  fruit  juice
products under the "Balboa Bay" label to the Coca- Cola bottlers.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K
------------------------------------------

     a. Exhibits: None
     b. Reports on Exhibit 8K: None


                                       17

<PAGE>




                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the Registrant
has duly  caused  this  Report to be signed  on its  behalf by the  undersigned,
hereunto duly authorized, in Melrose Park, Illinois, on December 24, 1997.
               
                                               TONE PRODUCTS, INC.



                                               By /s/ Timothy E. Evon
                                                  ------------------------------
                                                      Timothy E. Evon
                                                         President

     Pursuant to the  requirements  of the  Securities  Act of 1933, as amended,
this  Report  has  been  signed  below by the  following  persons  on the  dates
indicated.

<TABLE>
<CAPTION>


       Signature                        Title                                      Date
       ---------                        -----                                      ----

<S>                             <C>                                           <C>   
 /s/ Timothy E. Evon            President Chief Executive Officer,         December 24, 1997
---------------------------     and Director
Timothy E. Evon                 


 /s/ Michael W. Evon            Vice-President - Sales and                 December 24, 1997
---------------------------     Marketing, and Director
Michael W. Evon                 


 /s/ Thomas J. Evon             Vice-President - Special Accounts          December 24, 1997
---------------------------     and Director
Thomas J. Evon                  


 /s/ William H. Hamen           Secretary, Treasurer and Chief             December 24, 1997
---------------------------     Financial Officer (Principal
William H. Hamen                Accounting Officer)

                               
 /s/ Jack T. Cory               Director                                   December 24, 1997
---------------------------
Jack T. Cory


 /s/ Charles A. Ehemann         Director                                   December 24, 1997
---------------------------
Charles A. Ehemann


 /s/ Edward R Jancauskas        Director                                   December 24, 1997
---------------------------
Edward R. Jancauskas
</TABLE>

                                       18