SILVER STAR FOODS INC /NY/, 424B1, 2000-11-17

SILVER STAR FOODS INC /NY/
424B1, 2000-11-17
GROCERIES & RELATED PRODUCTS

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Filed pursuant to Rule 424(b)(1)
Registration Statement No. 333-42311

PROSPECTUS

SILVER STAR FOODS, INC.

5,000,000 SHARES OF COMMON STOCK
OFFERING PRICE: $1.50 PER SHARE

Silver Star Foods, Inc. (the "Company"), a New York
corporation, is offering hereby 5,000,000 shares of Common
Stock, par value $.0001 (the "Common Stock"). This
Prospectus also relates to the contemporaneous offering of
1,650,000 shares of Common Stock by 3 security holders of
the Company (the "Selling Security Holders") which are being
registered for resale pursuant to the registration statement
of which this Prospectus is a part.

Prior to this offering (the "Offering"), there has been
no public market for the Common Stock (also known as the
"Securities") and there is no assurance that such a public
market will develop or be sustained after the completion of
the Offering. The initial public offering price of the
Common Stock has been determined by the Company and bears no
relation to the Company's earnings, assets, book value, net
worth, or any other recognized criteria of value. The Common
Stock has presently received acceptance to trade on the
National Quotations Bureau Pink Sheets ("Pink Sheets").
However, it is anticipated that the Common Stock will be
traded on the OTC Electronic Bulletin Board ("OTC BB") after
this Registration Statement is declared effective by the
SEC. There can be no assurance that an active trading
market will develop. As a result an investor may find it
more difficult to dispose of, or to obtain adequate
quotations, as to the prices of the Common Stock offered
hereby. See "Risk Factors."

THESE ARE SPECULATIVE SECURITIES. SEE "RISK FACTORS"
BEGINNING ON PAGE 13 FOR A DISCUSSION OF CERTAIN FACTORS TO
BE CONSIDERED BY PROSPECTIVE INVESTORS. THESE SECURITIES
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNTS (1) COMPANY
Per Share $ 1.50 $.15 $ 1.35
Total (1) $7,500,000 $750,000 $6,750,000
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(1) Does not include 1,650,000 Common Shares to be offered
by the Selling Security holders(the "Selling Security
Holders Shares"), which are not part of the offering. The
Company will receive no proceeds from the sale of the
Selling Security Holder Shares.

PLAN OF DISTRIBUTION

We are offering the shares of Common Stock on a best effort
basis. There is no minimum number of shares that must be
sold before we can utilize the proceeds of the offering. We
are making the offering through our officers and directors
who will not be compensated for offering the shares. We
will, however, reimburse them for all expenses incurred by
them in connection with the offering. The shares may also
be offered by participating broker-dealers which are members
of the National Association of Securities Dealers, Inc. We
may, in our discretion, pay commission of up to 10% of the
offering price to participating broker-dealers and others
who are instrumental in the sale of shares.

Shares of Common Stock may be sold from time to time to
purchasers directly by the Selling Security Holders.
Alternatively, the Selling Security Holders may from time to
time offer shares through underwriting, dealers or agents,
who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling
Security Holders for whom they may act as agent. The
Selling Security Holders and any underwriters, dealers or
agents that participate in the distribution of Common Stock
may be deemed to be underwriters, and any commissions or
concessions received by any such underwriters, dealers or
agents may be deemed to be underwriting discounts and
commissions under the Securities Act. Shares may be sold
from time to time by the Selling Security Holders in one or
more transactions at a fixed offering price, which may be
changed, or at varying prices determined at the time of sale
or at negotiated prices.

We may indemnify any underwriter against specific civil
liabilities, including liabilities under the Securities Act.

We will bear all expenses of the offering of the Common
Stock by the Selling Security Holders other than payment
that they may agree to make to underwriters.

Prior to this offering, there has been no market for the
Common Stock. Accordingly, the public offering price was
determined solely by us. Among the factors we considered in
determining the public offering price were our record of
operations, current financial condition, future prospects,
the experience of management, and the general condition of
the equity securities market.

THE DATE OF THIS PROSPECTUS IS OCTOBER 4, 2000.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR
AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER
WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY
TIME DOES NOT IMPLY THAT THE INFORMATION SET FORTH HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

The Company intends to furnish its shareholders with annual
reports containing audited financial statements after the
end of each fiscal year, and make available such other
periodic reports as the Company may deem to be appropriate
or as may be required by law. The Company's fiscal year ends
on March 31 of each year.

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY,
AND SHOULD BE READ IN CONJUNCTION WITH, THE MORE DETAILED
INFORMATION, INCLUDING THE FINANCIAL STATEMENTS AND NOTES
THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS. EACH
PROSPECTIVE INVESTOR IS THEREFORE URGED TO READ THIS
PROSPECTUS IN ITS ENTIRETY. UNLESS THE CONTEXT OTHERWISE
REQUIRES, THE TERM "THE COMPANY" REFERS TO SILVER
STAR FOODS, INC., A NEW YORK CORPORATION. THIS PROSPECTUS
CONTAINS FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS IN "RISK FACTORS."

THE COMPANY

Silver Star Foods, Inc. (the "Company") is a
distributor of a wide range of pre-packaged frozen pasta
products in the New York metropolitan area. The Company
sells its products primarily to supermarkets or to
distributors who resell the products to supermarkets. The
Company's products are primarily "stuffed" pasta such as
ravioli and tortellini, which must be frozen when stored.
The Company intends to establish a manufacturing facility
with the proceeds of this Offering. The Company believes,
although there can be no assurance, that acquiring
manufacturing capacity and entering into agreements with
additional sales representatives will enable it to expand
its customer base to supermarket chains and small
distributors in other regional markets and to large volume
customers such as club stores, restaurant chains, and
customers requiring private label manufacturing. See
"Business--Expansion Strategy."

The family of the Company's Chairman, Chief Executive
Officer and Principal Shareholder, Michael Trotta, owned and
operated Silver Star Ravioli & Macaroni, Inc. ("SSRM") for
over fifty years. SSRM was engaged in the business of
selling pasta products under the Silver Star name. In 1992,
SSRM declared bankruptcy, largely due to financial problems
caused by SSRM's outdated manufacturing facilities, and was
liquidated. In March 1995, Michael Trotta, who had been an
employee at SSRM, formed the Company to distribute a select
number of food products under that label. The Company
purchased the "Silver Star" trade name in 1997 from Vincent
Trotta, the father of the Company's President. See
"Business -Background" and "Certain Transactions."

The Company has become a distributor of a variety of
pre-packaged Italian stuffed pasta food products, including
ravioli, tortellini, cavatelli, gnocchi and manicotti.
According to a report by A.C. Nielson & Co., in 1998, sales
of the Company's products accounted for approximately 7.5%
of the frozen pasta market among supermarkets in the New
York Metropolitan area. The Company promotes its products to
these supermarkets with the assistance of food brokers, who
receive commissions for such sales. The Company regularly
offers discounts or "specials," on its products and arranges
for such specials to be listed in the supermarket circular
which is available to each of the supermarket customers as
they enter the store. See "Business."

The Company also sells its products to small
distributors who resell the frozen pasta to grocery stores
and restaurants. Although this constitutes a small portion
of the Company's business, the Company has distributors in
locations such as Nevada and California. The Company
intends, although there can be no assurance it will be able
to, to establish relationships with additional distributors
in order to expand into other regions and markets. See
"Business--Sales and Distribution."

The Company's marketing efforts emphasize the Silver
Star tradition of quality. The Company also hopes to
capitalize on the growing popularity of pasta, many types of
which are lower in fat than most other frozen food products.
See "Business--Marketing."

Currently, the Company has a manufacturing agreement
with Mount Rose Ravioli and Macaroni, Inc. ("Mount Rose").
Such company manufactures and packages the products that the
Company sells under the Silver Star name. The Company
believes that this arrangement is satisfactory for sales to
its existing customer base. However, this arrangement limits
the Company's ability to increase profit margins and to
pursue certain types of customers. In order to achieve
significant sales growth and to operate profitably, the
Company's management believes it needs to establish its own
manufacturing facility or to seek better manufacturing terms
from its suppliers. See "Business--Principal Suppliers."

The Company believes, although there can be no
assurance, that establishing a manufacturing facility will
enable it to produce its products at a lower cost without
sacrificing quality. A manufacturing facility should also
allow the Company to respond to customer orders more quickly
and to allow it more flexibility in changing its product
mix. The Company intends, although there can
be no assurance, to establish a manufacturing facility. This
will be done by either: (i) acquiring land and constructing
and equipping a new facility on such land; or (ii) leasing
an existing facility (possibly with an option to buy such
facility), which is likely to require an investment to
update or improve the facility. See
"Business--Manufacturing."

The Company was incorporated in New York in March 1995
under the name Silver Star Ravioli, Inc. The Company changed
its name in July 1997. The Company maintains its principal
offices at 1000 South Avenue, Staten Island, New York, 10314
and its telephone number is (718) 763-3000.

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THE OFFERING

Securities Offered 5,000,000 Shares (1) of Common Stock offered by the
Company and 1,650,000 Selling Security Holder Shares

Common Stock Outstanding

Prior to the Offering 8,968,000

After the Offering 13,968,000(2)(3)

Offering Price $1.50 per Share of Common Stock

Use of Proceeds Purchase and/or renting of manufacturing facilities;
buying and/or leasing of equipment; repayment of bridge
loan promissory notes (4); working capital and for
general corporate purposes.

Risk Factors An investment in the Common Shares offered hereby
involves a high degree of risk and therefore the Common
Shares should not be purchased by anyone who cannot
afford the loss of their entire investment. Prospective
purchasers of the Common Shares should carefully review
and consider the factors set forth under "Risk Factors"
as well as other information contained herein, before
purchasing any of the Common Shares. See "Risk Factors."

Pink Sheet Symbol(3) Common Stock SILV

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

(1) Does not include 1,650,000 Common Shares being
registered herein on behalf of the Selling Security Holders.

(2) Does not include an aggregate of 500,000 shares of
Common Stock reserved for issuance upon the exercise of
options available for grant under the Company's 2000 Stock
Option Plan, See "Management--Option Plan."

(3) The Common Stock has presently received acceptance to
trade on the National Quotations Bureau Pink Sheets ("Pink
Sheets"). However, it is anticipated that the Common Stock
will be traded on the OTC Electronic Bulletin Board ("OTC
BB") after this Registration Statement is declared effective
by the SEC and becomes a reporting company under the
Exchange Act of 1934. There can be no assurance that an
active trading market will develop. As a result, an investor
may find it more difficult to dispose of, or to obtain
adequate quotations as to the price of the Common Stock
offered hereby. See "Risk Factors."

(4) There is presently three (3) $25,000 promissory notes
outstanding. All other promissory notes aggregating
$625,000 have been canceled and 4,000 shares of Common Stock
have been issued to the holders for each $25,000 canceled.

SUMMARY FINANCIAL INFORMATION

The following table sets forth summary historical
financial information of the Company for the years ended
March 31, 1999 and March 31, 2000.

The summary historical financial data should be read in
conjunction with the financial statements (and notes
thereto) of the Company and "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
included elsewhere in this Prospectus.

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YEARS ENDED MARCH 31,
2000 1999 1998 1997
-----------------------------------------------
STATEMENT OF OPERATIONS DATA:

Total revenues $658,775 $1,201,587 $1,343,276 $1,450,438
Operating expenses 541,934 966,756 1,198,755 972,248
Gross profit from operations 186,841 234,831 144,521 478,190
General and administrative
expenses 814,933 930,787 499,634 497,411
Income before income taxes (698,092) (695,956) (355,113) (19,221)
Net Loss ($698,092) ($695,956) ($355,113) ($19,221)

OTHER DATA:

EBITDA (1) ($310,074) ($512,036) ($341,446) ($5,503)
Net cash provided (used) by
operating activities 11,041 (88,440) (321,438) 114,383
Net cash provided (used) in
financing activities (13,471) 90,870 319,126 (137,451)
Ratio of earnings to fixed
charges - - - -
Net book value per share ($0.28) ($0.26) ($0.02) ($0.03)
Basic earnings (loss) per share ($0.21) ($0.21) ($0.08) ($0.01)

BALANCE SHEET DATA:

Cash and cash equivalents - $2,430 - $2,312
Total assets $433,865 548,917 $352,367 195,842
Stockholders' equity ($618,962) (884,859) ($67,503) (112,390)

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(1) EBIDTA is defined as income before effect of changes of
accounting plus interest, income taxes, depreciation and
amortization. EBITDA is presented here because it is a
widely accepted financial indicator of a company's ability
to service and/or incur indebtedness. However, EBITDA
should not be considered as an alternative to net income or
cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of a
company's profitability or liquidity. The Company's measure
of EBITDA may not be comparable to similarly titled measures
reported by other companies.

RISK FACTORS

AN INVESTMENT IN THE SECURITIES BEING OFFERED HEREBY
INVOLVES A HIGH DEGREE OF RISK. PRIOR TO MAKING ANY
INVESTMENT DECISION, PROSPECTIVE INVESTORS SHOULD CAREFULLY
CONSIDER THE FOLLOWING RISK FACTORS TOGETHER WITH THE OTHER
INFORMATION PRESENTED IN THIS PROSPECTUS INCLUDING THE
FINANCIAL STATEMENTS (AND NOTES THERETO).

RECENT LOSSES, GOING CONCERN LETTER IN AUDITOR'S REPORT,
WORKING CAPITAL DEFICIT

For the year ended March 31, 2000 and the year ended
March 31, 1999, the Company has recorded a net (loss) of
($698,092) and ($695,956), respectively. At March 31, 2000,
the Company had a working capital deficit of $1,039,872 and
an accumulated deficit of $618,962. The auditor's report to
the Company's financial statements for the year ended March
31, 2000, states that the working capital deficit and
stockholder equity deficit raise doubts about the Company's
ability to operate as a going concern. For at least the
current fiscal year, the Company is likely to incur losses
from operations as a result of, among other things, its
expansion strategy. There can be no assurance that the
Company will achieve profitability at any time in the future
or, if achieved, sustain such profitability. See "Financial
Statements."

RISKS RELATED TO EXPANSION STRATEGY

The Company's expansion strategy and the opening and
success of its proposed manufacturing facilities will depend
on various factors (which factors will vary depending on how
the Company implements its expansion strategy), including,
the availability of a manufacturing plant and equipment, the
negotiation of acceptable lease terms, licensing and
regulatory compliance, the ability to meet production and
construction schedules, the general ability to manage
successfully its anticipated growth (including monitoring
its production facilities, controlling costs, and
maintaining effective quality control), and general economic
and business conditions. Not all of the foregoing factors
are in control of the Company. The implementation of the
Company's expansion strategy will increase operating costs
which, in turn, could adversely affect its business,
financial condition or results of operations. Having
recently embarked on its expansion strategy, there can be no
assurance that the Company will successfully implement its
strategy or that its strategy will result in profitability.
Consistent with its expansion strategy, the Company
anticipates entering into new geographic regions in which it
has no previous operating experience. No assurance can be
given that the Company will be successful in new geographic
regions. See "Business-- Expansion Strategy" and
"Business--Suppliers."

LIMITED OPERATING HISTORY, NEW BUSINESS ACTIVITIES

The Company has operated only since 1995. The Company
has never engaged in the manufacturing of food products or
sold significant quantities of products outside the New York
area or to institutional customers. The Company will be
required to incur additional fixed costs, which could limit
the Company's ability to reduce expenses in an economic
downturn or a slow seasonal period.

Additionally, the Company will need to locate suppliers and
other service products for its manufacturing facility, the
availability of which there can be no assurance. Therefore,
the Company's prospects must be considered in light of the
risks, expenses and difficulties frequently encountered by a
new small business in a highly competitive industry. See
"Business."

BANKRUPTCY OF PREVIOUS BUSINESS

The Company's management participated in the management
of SSRM. In 1992, SSRM declared bankruptcy and was
liquidated. SSRM had experienced financial problems largely
brought on by its outdated manufacturing plant. Competitors
with newer facilities were able to offer products at lower
prices and on a more flexible schedule. SSRM's attempts to
upgrade the facility were ineffective and the debts incurred
in connection with the attempted upgrade eventually caused
SSRM to go bankrupt. Although the Company will be
establishing a new, modern manufacturing facility, the
Company is engaged in the same business operating under the
same trade name as SSRM. Therefore, the Company's prospects
for success must be evaluated in light of the factors which
led to the failure of SSRM. See "Business--Historical
Background."

COMPETITION

The food industry is highly competitive. Competition for
shelf space in grocery stores and supermarkets is intense
and poses great difficulty for smaller companies. The
Company competes with numerous companies in the New York
area, including the Company's supplier. The Company will
likely encounter similar competition as it enters new
markets. Many of these competitors are larger and have
greater financial and other resources, including production
and distribution facilities, than the Company. The Company's
products compete with frozen food products, other pasta
products and all food products in general. Increased
competition could result in price reductions, reduced
margins or loss of market share, any of which could
materially adversely affect the Company's
business, prospects, financial condition and results of
operations. Further, there can be no assurance that the
Company will be able to compete successfully against current
and future competitors or that competitive pressures faced
by the Company will not have a material adverse effect on
its business, prospects, financial condition and results of
operations. See "Business--Competition."

DEPENDENCE ON KEY CUSTOMERS, DEPENDENCE ON KEY SALES
REPRESENTATIVES

For the years ended March 31, 2000 and 1999, the
Company's five largest customers accounted for an aggregate
of approximately 96.5% and 96.5% of its total sales,
respectively. The Company has no long term arrangements with
any of these customers. While the Company generally believes
its relationships with its customers are good, there can be
no assurance that these or any other customers will continue
to purchase the Company's products. See "Business--Sales and
Distribution."

The Company sells its products through sales
representatives who are known in the industry as food
brokers. For the years ended March 31, 2000 and 1999,
approximately 97% of its sales in the New York market were
undertaken by either M.W. Houck, Inc. or Douglas Sales
Associates, Inc. See "Business--Sales and Distribution."

The loss of the Company's relationships with these or
other key customers or food brokers could adversely affect
the Company's business, prospects, financial condition and
results of operations.

DEPENDENCE ON KEY SUPPLIERS, RISK OF PRICE FLUCTUATIONS,
TERMINABLE CONTRACTS

The Company purchases all of its products from one
supplier, Mount Rose. The prices of products purchased from
Mount Rose are revised every six months. The Company has
historically been able to pass significant price increases
through to its customers. However, no assurance can be given
that it will be able to do so in the future. The Company has
entered into a 1 year self-renewing agreement with Mount
Rose, expiring February 2001. Mount Rose sells products that
compete with the Company's products directly to supermarkets
and distributors. There can be no assurance that such
agreements will not be terminated, particularly since Mount
Rose is aware of the Company's plans to establish its own
manufacturing facility. The loss of any of its current
suppliers would have a material adverse effect on its
business, financial condition or results of operations until
a relationship could be established with new suppliers or a
manufacturing facility could be established.
See "Business--Suppliers" and "Business--Competitors."

DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL EXECUTIVE
OFFICERS

The Company is dependent to a great extent upon the
experience, abilities and continued services of Michael
Trotta, the Company's President, Chief Executive Officer and
Chief Financial Officer. The loss of services of Mr. Michael
Trotta could have a material adverse effect on the Company's
business, financial condition or results of operation. The
Company has entered into a three year employment agreement
with Michael Trotta, and is purchasing Key man life
insurance on the life of Michael Trotta. The Company intends
to purchase Key man life insurance on Michael Trotta in the
amount of $750,000, upon receipt of the proceeds of this
Offering. In order to implement the Company's expansion
strategy, the Company will need to hire additional executive
officers, including an experienced chief financial officer.
There can be no assurance that the Company will be able to
identify the proper individuals or that such individuals
would be willing to be employed by the Company on terms
acceptable to the Company. See "Management."

ABSENCE OF TRADEMARK REGISTRATION, ABSENCE OF PATENT
PROTECTION

The Company acquired the Silver Star trademark from
Vincent Trotta in 1997. Mr. Trotta had acquired the
trademark from SSRM, who had registered the trademark with
the US Patent and Trademark Office ("USPTO"). The Company
failed to renew its registration of the trademark. Although
it does maintain certain rights in the trademark, it
currently does not have the protection against infringement
offered by registration. In the next month, the Company will
submit a trademark application with the USPTO to obtain
trademark registration of the "Silver Star" tradename. If
the Company were required to cease using "Silver Star", it
could have a material adverse effect on the Company. There
can be no assurance that the Company's application will be
accepted. Although registration affords the Company the
protection of federal trademark laws against the
unauthorized use of the protected mark or a use deemed
"confusingly similar" under federal trademark law, there can
be no assurance that third parties will not infringe on the
Company's current or future trademark registrations or that
the Company will have sufficient resources to defend against
any such infringement successfully or at all. See
"Business--Proprietary Rights."

The Company does not have any patents on its recipes or
production processes or trademarks on the names of its
products. Because it currently uses other businesses in the
industry to manufacture it products, competitors are
familiar with the Company's recipes, production processes
and products. There can be no assurance that these
competitors will not be able to utilize this information to
gain a competitive advantage over the Company.

POTENTIAL LIABILITY; AVAILABILITY OF INSURANCE

The Company, from time to time, is subject to lawsuits
as a result of its business and currently maintains
insurance relating to personal injury in amounts that it
considers adequate and customary for the food industry. No
assurance can be given that the Company will be able to
obtain insurance policies in the future. In addition, any
successful claim against the Company, in an amount exceeding
its insurance coverage, could have a material adverse
effect on its business, financial condition or results of
operation.

DEPENDENCE ON EFFECTIVE DELIVERY SYSTEM

The Company's success depends upon an effective system
of delivery for its products for which the Company currently
uses common carriers. The dependence on other companies for
delivery of its products poses a risk to the Company,
particularly as the Company increases its delivery to the
eastern United States. There can be no assurance that the
Company will continue to be able to negotiate acceptable
freight rates in the future or that delivery will not be
disrupted for reasons including, but not limited to, adverse
weather, natural disasters or labor disputes in the trucking
industry. See "Business."

CONTROL BY MANAGEMENT

Upon completion of the Offering (assuming the maximum
offering is sold), Michael Trotta, the Company's Chairman,
President, CEO and CFO will beneficially own at least
approximately 46% of the Company's then outstanding Common
Stock. Accordingly, Mr. Trotta will not be in a position to
exert actual or effective control over the business and
operations of the Company, including the election of all
directors of the Company and approval of significant
corporate transactions. Currently, members of the Trotta
family hold two of the four seats on the Company's Board of
Directors. In 1996, due to debts incurred with the failure
of SSRM, Michael Trotta filed for bankruptcy. See "Principal
Stockholders" and "Management."

MANAGEMENT'S BROAD DISCRETION IN APPLICATION OF THE
PROCEEDS.

15.24% of the net proceeds of the offering has been
allocated to Working Capital and General Corporate Purposes.
An additional 60.96% has been allocated for the
establishment of a manufacturing facility and the
acquisition or leasing of the equipment to be used in the
facility. Although the Company has obtained quotes and
investigated establishing such a facility, it has not yet
identified the location of its planned facility.
Accordingly, the Company's management and the board of
directors, will have broad discretion as to the allocation
and use of such proceeds. See "Use of Proceeds."

CONTEMPORANEOUS OFFERINGS BY THE COMPANY AND THE SELLING
SECURITY HOLDERS MAY ADVERSELY AFFECT THE MARKET PRICE OF
THE COMPANY'S COMMON STOCK, IF A MARKET DEVELOPS.

Approximately 25% of the Common Stock being offered by
this prospectus is being offered by the Selling Security
Holders. If a public market develops for the Common Stock,
the market may not be able to absorb the Common Stock being
contemporaneously offered. Accordingly, the market price of
the Common Stock, if any, may be substantially lower than it
would be if Common Stock were not being offered by the
Selling Security Holders. The Company will not receive any
proceeds from the sale of the Common Stock made by the
Selling Security Holders. In addition, the ability of
shareholders who purchase shares in this offering who resell
those shares could adversely be effected by offers and sales
of Common Stock by the Company and selling security holders.

GOVERNMENT REGULATION

The Company is subject to numerous state regulations
relating to the preparation and sale of food. It is also
subject to federal and state laws governing the Company's
relationship with its employees, including minimum wage
requirements, overtime, working and safety conditions, and
citizenship requirements. Commencement of manufacturing of
food would subject the Company to numerous other regulations
of the U.S. Food and Drug Administration and the U.S.
Department of Agriculture including unannounced on site
inspections. The failure to obtain or retain required food
licenses or to be in compliance with applicable governmental
regulations, or any increase in the minimum wage rate,
employee benefits costs (including costs associated with
mandated health insurance coverage) or other costs
associated with employees, could adversely
affect the business, results of operations or financial
condition of the Company. Proposals are under consideration
at the federal level to introduce a system of mandated
health insurance. This and other initiatives could adversely
affect the Company's operations as well as the food industry
in general. A failure to comply with one or more regulatory
requirements could result in a variety of sanctions,
including fines and the withdrawal of the Company's products
from store shelves. The Company is not aware of any
currently existing facts or circumstances that would cause
it to fail to comply with any of the regulations to which it
is currently subject.

RISKS INHERENT IN THE FOOD INDUSTRY

The results of operations in the food industry can be
affected by, among other things, changes in consumer tastes,
national, regional and local economic conditions and
demographic trends. The Company believes that the pasta
market is a growing market, but there can be no assurance
that changes in the market will not occur which would
adversely affect the Company.

The Company faces all of the risks inherent in the
production and distribution of frozen food products,
including contamination, adulteration and spoilage, and the
associated risks of product liability litigation. Such risks
will be increased if the Company establishes a manufacturing
facility. There can be no assurance that the Company's
procedures will be adequate to prevent the occurrence of
such events. See "Business."

SHARES ELIGIBLE FOR FUTURE SALE

The Company has outstanding 8,968,000 shares of common
stock all of which were issued and sold by the Company in
private transactions in reliance upon exemptions from
registration under the Securities Act. Other than the shares
of common stock included in the 1,650,000 Selling Security
Holder Shares such shares may be sold only pursuant to an
effective registration statement filed by the Company or an
applicable exemption, including the exemption contained in
Rule 144 promulgated under the Securities Act. In general,
under Rule 144 as currently in effect, a shareholder,
including an affiliate of the Company, may sell shares of
common stock after at least one year has elapsed since such
shares were acquired from the Company or an affiliate of the
Company. The number of shares of common stock which may be
sold within any three-month period is limited to the greater
of one percent of the then outstanding number of shares of
common stock or the average weekly trading volume in the
common stock during the four calendar weeks preceding the
date on which notice of such sale was filed under Rule 144.
Certain other requirements of Rule 144 concerning
availability of public information, manner of sale and
notice of sale must also be satisfied. In addition, a
shareholder who is not an affiliate of the Company (and who
has not been an affiliate of the Company for 90 days prior
to the sale) and who has beneficially owned shares acquired
from the Company or an affiliate of the Company for over two
years may resell the shares without compliance with the
foregoing requirements under Rule 144.

The Selling Security Holder Shares are being registered
for resale pursuant to the registration statement of which
this Prospectus is a part.

No predictions can be made as to the effect, if any,
that future sales of shares, or the availability of shares
for future sale, will have on the market price of the common
stock prevailing from time to time. Nevertheless, sales of
substantial amounts of common stock, or the perception that
such sales may occur, could have a material adverse effect
on prevailing market prices. See "Description of
Securities--Shares Eligible for Future Sale."

IMMEDIATE AND SUBSTANTIAL DILUTION OF 27%

The investors in this Offering will suffer immediate
dilution of $.41 per share or 27%. See "Dilution."

ADDITIONAL FINANCING

The Company anticipates that the proceeds from the
Offering, together with projected cash flow from operations,
will be sufficient to fund its operations, including its
proposed expansion, for at least the next 12 months.
Thereafter, the Company may need to raise additional funds
to continue to implement its expansion strategy. There can
be no assurance that additional financing will be available
or if available will be on favorable terms.

ABSENCE OF PUBLIC MARKET; QUARTERLY FLUCTUATIONS;
SEASONALITY; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this offering there has been no public market
for the Securities, and there can be no assurance that any
active trading market therefor will develop or, if any such
market develops, that it will be sustained. The Company's
business is somewhat seasonal. Although there exists a
steady market for the Company's products from September
through June, with sales rising during the Christmas
holidays, sales usually decline in July and August. As a
result, the Company believes that period-to-period
comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as any indication
of future performance. In the event the Company's operating
results fall below the expectations of public market
analysts and investors, the market price of the Securities
would likely be materially adversely affected. Additionally,
quarterly operating results of the Company or other
developments affecting the Company, such as announcements by
the Company or its competitors regarding acquisitions or
dispositions, new procedures or technology, changes in
general conditions in the economy, and general market
conditions could cause the market price of the Securities to
fluctuate substantially. The equity markets have, on
occasion, experienced significant price and volume
fluctuations that have affected the market prices for many
companies' securities and have often been unrelated to the
operating performance of these companies. See "Selected
Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

ABSENCE OF DIVIDENDS

The Company has never declared or paid any cash
dividends on its Common Stock. The Company intends to retain
its earnings, if any, to finance the growth and development
of its business and therefore does not anticipate paying any
cash dividends on its Common Stock in the foreseeable
future. Although dividends are not limited currently by any
agreements, it is anticipated that future agreements, if
any, with institutional lenders or others may limit the
Company's ability to pay dividends on the Common Stock. Any
future determination to pay cash dividends will be at the
discretion of the Board of Directors and will be dependent
upon the Company's financial condition, results of
operations, capital and legal requirements and such other
factors as the Board of Directors deems relevant. See
"Dividend Policy."

FORWARD LOOKING STATEMENTS

This Prospectus includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act, and
Section 21E of the Exchange Act. The actual results of the
Company may differ significantly from the results discussed
in such forward-looking statements. Certain factors which
may cause such differences include, but are not limited to,
the factors discussed in this "Risk Factors" section. The
safe harbors contained in Section 27A of the Securities Act
and Section 21E of the Exchange Act, which apply to certain
forward-looking statements, are not applicable to this
Offering.

OFFERING PRICE ARBITRARILY DETERMINED

The offering price of the Securities has been
determined by the Company and is not necessarily related to
the Company's assets, earnings, book value or any other
objective standard of value.

LIMITED LIABILITY OF DIRECTORS

As permitted by the New York Business Corporation Law,
the Company's certificate of incorporation eliminates
personal liability of a director to the Company and its
stockholders for monetary damages for breach of fiduciary
duty as a director, except in certain circumstances.
Accordingly, stockholders may have limited rights to recover
monetary damages against the Company's directors for breach
of fiduciary duty.

AUTHORIZATION AND DISCRETIONARY ISSUANCE OF PREFERRED STOCK

The Company's Certificate of Incorporation authorizes
the issuance of 1,000,000 shares of "blank check" preferred
stock, par value $.001, with such designations, rights and
preferences as may be determined from time to time by the
Board of Directors. Accordingly, the Board of Directors is
empowered, without stockholder approval, to issue preferred
stock with dividend, liquidation, conversion, voting or
other rights which could adversely affect the voting power
or other rights of the holders of the Company's Common
Stock. In the event of issuance, the preferred stock could
be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of
the Company. Although the Company has no present intention
to issue any shares of its preferred stock, there can be no
assurance that the Company will not do so in the future. See
"Description of Securities--Preferred Stock."

POSSIBLE ISSUANCE OF ADDITIONAL COMMON STOCK AND OPTIONS

Although there are no present plans, agreements,
commitments or undertakings with respect to the issuance of
additional shares or securities convertible into any such
shares by the Company, any shares issued would further
dilute the percentage ownership of the Company held by the
public stockholders.

PENNY STOCK RULES

The Commission has adopted regulations which generally
define a "penny stock" to be any equity security that has a
market price less than $5.00 per share or an exercise price
less than $5.00 per share, subject to certain exceptions,
including that the Company have net tangible assets of a
minimum of $2,000,000. Thus, the Common Stock may become
subject to rules that impose additional sales practice
requirements on broker-dealers who sell such securities to
persons other than established customers and accredited
investors (generally institutions with assets in excess of
$5,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000
jointly with their spouse). For transactions covered by the
rule, the broker-dealer must make a special suitability
determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale.
Additionally, for any transaction involving a penny stock,
unless exempt, the rules require the delivery, prior to the
transaction, of a disclosure schedule prepared by the
Commission relating to the penny stock market. The
broker-dealer also must disclose the commissions payable to
both the broker-dealer and the registered representative,
current quotations for the securities and, if the
broker-dealer is the sole market maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed
control over the market. Finally, monthly statements must be
sent disclosing recent price information for the penny stock
held in the account and information on the limited market in
penny stocks. The above-described rules may adversely effect
the liquidity of the market for the Company's Common Stock
and may also adversely effect the ability of the Company's
shareholders to sell the Common Stock in the secondary
market.

USE OF PROCEEDS

Assuming the sale of the securities offered hereby
(based on an assumed offering price of $1.50 per share, the
net proceeds to the Company, after estimated expenses
payable by the Company in connection with the Offering
(including maximum commissions of 10%), are estimated to be
approximately $6,562,000. The Company expects to use the
net proceeds as follows:
<TABLE>
<S> <C> <C>
PERCENTAGE
OF NET
PURPOSE AMOUNT PROCEEDS
-------- --------- ----------
Purchase and/or Renting of
a Manufacturing Facility(1) $2,000,000 30.48%
Buying and/or Leasing of Equipment(2) $2,000,000 30.48%
Repayment of Balance of Bridge Loan (4) $ 75,000 1.14%
Working Capital and
General Corporate Purposes(3) $1,000,000 15.24%
Expansion and Advertising $ 737,000 11.23%
Mergers and Acquisitions (5) $ 750,000 11.43%
----------- -----------
Total $6,562,000 100.0%
----------- -----------
</TABLE>

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

(1) Includes purchase of production equipment for the
Manufacturing Facility. The Company intends to either: (i)
acquire land in the New York metropolitan area and construct
and equip a new facility; or (ii) lease an existing
facility, which is likely to require an investment to update
or improve the facility.

(2) The Company intends to lease its equipment. Such leases
generally require a fifty percent (50%) down payment based
on the purchase price and include an option to purchase at
the end of the lease term for a nominal amount. The Company
requires certain equipment which shall include, but not be
limited to, the following: filling and processing machine,
dough extruders, assorted ravioli machines, mechanical
spiral freezers, general conveyor work, vertical form and
fill machines, blanchers (pre-cook products), other
miscellaneous machinery, trucks for delivery (which shall
include a 24 foot reefer and a tractor-trailer).

(3) Included as part of this category, the Company shall
purchase a new computer system and a new telephone system
and intends to increase its marketing efforts to
supermarkets through circulars and slotting fees.

(4) The Bridge Financing in the amount of $700,000 consisted
in part of twenty eight $25,000 Promissory Notes. Only three
Promissory Notes remain outstanding. All other promissory
notes aggregating $625,000 have been canceled and 4,000
shares of Common Stock have been issued to the holders for
each $25,000 canceled.

(5) Although the Company does not have any plans, proposals,
arrangements or understandings with respect to mergers or
acquisitions, the Company intends to actively seek to
identify merger and acquisition candidates. Any proceeds
not expended in connection with mergers and acquisitions
will be reallocated to working capital and general corporate
purposes.

Pending application of the proceeds of this Offering,
the Company intends to invest the net proceeds in
certificates of deposit, money market accounts, United
States government obligations or other short-term interest
bearing obligations of investment grade.

The foregoing represents the Company's best estimate of
its allocation of the net proceeds of the sale of the Common
Stock based upon the Company's currently contemplated
operations, the Company's business plan and current economic
and industry conditions and is subject to reapportionment
among the categories listed above in response to, among
other things, changes in its plans, regulations, industry
conditions and future revenues and expenditures. Any such
reapportionment will be made based upon the recommendations
of the Company's Board of Directors. The amount and timing
of expenditures will vary depending on a number of factors,
including changes in the Company's contemplated operations
or business plan and changes in economic and industry
conditions.

Based on the Company's operating and expansion plans,
the Company believes that the net proceeds of this offering,
together with available cash and anticipated revenues from
operations, will be sufficient to satisfy its capital and
legal requirements and finance its plans for expansion for
at least the next 12 months. Such beliefs are based upon
assumptions and there can be no assurance that the
assumptions underlying the Company's plans will prove to be
correct. After such 12-month period, or sooner if the
Company's assumptions prove to be incorrect, the Company may
require additional capital in order to meet its then current
plans for expansion and capital requirements. Such financing
may take the form of ordinary or preferred equity securities
or debt securities, or may involve bank financing. There can
be no assurance that the Company will be able to obtain
additional capital on a timely basis, on favorable terms, or
at all. In any of such events, the Company may be unable to
implement its current plans for expansion. See
"Capitalization" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

The Company will receive no proceeds from the sale of
the Selling Security Holder Shares.

DIVIDEND POLICY

The Company has never paid dividends on its Common
Stock and does not anticipate paying such dividends in the
foreseeable future. The payment of future cash dividends by
the Company on its Common Stock will be at the discretion of
the Board of Directors and will depend on its earnings,
financial condition, cash flows, capital requirements and
other considerations as the Board of Directors may consider
relevant. Although dividends are not limited
currently by any agreements, it is anticipated that future
agreements, if any, with institutional lenders or others may
limit the Company's ability to pay dividends on the Common
Stock.

DILUTION

As of March 31, 2000, the pro forma net tangible book
value of the Company's Common Stock was ($1,039,617) or
($.31) per share of Common Stock outstanding. The net
tangible book value of the Company's Common Stock is the
tangible assets less total liabilities. The Company has net
intangible assets amounting to $420,910 at March 31, 2000.
Dilution per share represents the difference between the
amount paid per share by purchasers in this Offering and the
pro-forma net tangible book value per share after the
Offering.

After giving effect to the sale by the Company of
5,000,000 shares of Common Stock and the application of the
net proceeds thereof, the pro-forma net tangible book value
of the Company's Common Stock at March 31, 2000 would have
been approximately $6,460,383 or $.78 per share. This
represents an increase in the net tangible book value per
share of $1.09 to the Company's existing shareholders and an
immediate dilution of $.41 or 27% per share to the
purchasers of Common Stock in this Offering.

The following table illustrates this dilution on a per
share basis:

<TABLE>
<S> <C>
Assumed public offering price per share $ 1.50
Pro forma net tangible book value per share before
Offering......................................... $(.31)
Increase per share attributable to payments by new
stockholders...................................... $1.09
----------
Pro forma net tangible book value per share
after Offering $.78
----------
Dilution per share............................... $ (.41)
----------
</TABLE>

The following table summarizes as of March 31, 2000 the
total consideration paid and the average price per share
paid by existing stockholders and by purchasers of Common
Stock in this Offering:
<TABLE>
<S> <C> <C> <C> <C> <C>
Shares of % of Total Percent of Average Price
Common Outstanding Consideration Total per Share of
Stock Shares of Paid Consideration Common
Common Stock Paid Stock
--------------------------------------------------------------------------
Existing Stockholders
3,331,000 39.98% 733,920 0% $ .22

New Investors
5,000,000 60.02% $7,500,000 100% $1.50

</TABLE>

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

(1) Does not include:(i) 500,000 shares of Common Stock
issuable upon exercise of options available for grant under
the 1998 Stock Option Plan; and (v) 56,000 shares of Common
Stock reserved for issuance pursuant to options and warrants
issued in connection with the Company's Bridge Financing.

As of June 6, 2000, the Company completed a 2-for-1 forward
stock split with respect to its common stock and also issued
the above referenced shares in connection with the Company's
bridge financing. In addition, the Company sold 131,000
shares of its common stock. The following table summarizes
as of June 6, 2000 the total consideration paid and the
average price per share paid by existing stockholders and by
purchasers of common stock in this offering.
<TABLE>
<S> <C> <C> <C> <C> <C>
Shares of % of Total Percent of Average Price
Common Outstanding Consideration Total per Share of
Stock Shares of Paid Consideration Common
Common Stock Paid Stock
--------------------------------------------------------------------------
Existing
Stockholders
8,968,000 64.20% $ 799,420 0% $ .09

New Investors
5,000,000 35.80% $7,500,000 100% $ 1.50
</TABLE>

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

GENERAL
Silver Star Foods, Inc. ("the Company") is a
manufacturer and wholesaler of stuffed and other frozen
pasta products which it markets under the "Silver Star"
trade name. The Company commenced operations in May, 1995.

A substantial portion of the Company's sales to
supermarkets are made during promotions or "specials" during
which the Company advertises in the chain's store circular.
These specials are typically booked by the Company's food
brokers eight weeks in advance of the scheduled sale. The
Company can typically expect to generate greater volume from
the supermarkets in periods in which they are participating
in the store circulars. During the year ended March 31, 2000
("fiscal 1999"), the Company changed food brokers due to the
departure of their primary contact at the broker. During the
transition period between brokers, which spanned June
through October 1999, the Company had a lapse of promotion
sales which resulted in a decline in overall sales volume.
The Company is dependent on its food brokers to promote
sales of its products to supermarkets, however, the Company
has no obligation to use food brokers other than existing
contractual agreements and has, in fact, established many
relationships in the industry based on the industry
experience of its principal.

The Company does not presently have its own
manufacturing facility, but plans to construct one from a
portion of the proceeds of the Offering. Management believes
that manufacturing its own products would enable the Company
to increase its profit margins and participate more fully in
"price competitive" marketing which is common in the retail
market. The Company also hopes to pursue other distribution
channels for its product as a result of its own
manufacturing capabilities. Concurrent with the
establishment of a facility, the Company anticipates that
both its direct costs and operating costs will increase as
the Company adds a full-time workforce, increases insurance
coverage and increases marketing efforts. However, there are
no assurances that the Company will be
able to increase revenue, increase its gross profit or
attain and sustain profitability as a result of these
expenditures.

The Company's independent accountants have issued a
going concern opinion in their report as of March 31, 2000,
citing the Company's working capital deficiency and
stockholders' deficiency of $1,039,872 and $618,962,
respectively. Those conditions raise substantial doubts
about the Company's ability to continue as a going concern.
Management's plans with respect to these issues include and
are primarily based upon the Offering contemplated herein.

RESULTS OF OPERATIONS
YEAR ENDED MARCH 31, 2000 AS COMPARED TO MARCH 31, 1999

The Company had net sales of $658,775 for the year ended
March 31, 2000 as compared to $1,201,587 for the year ended
March 31, 1999, a decrease of $542,812 (55%). The decrease
is attributable to the Company's change of sales brokers in
the New York market which created a 4 month lapse of
promotional activity and the Company's lack of working
capital.

Costs of sales decreased during the year ended March 31,
2000 to $541,934 from $966,756 for the year ended March 31,
1999, a decrease of $424,822 (56%). The decrease corresponds
to the Company's decrease in sales for the comparative
periods. As a percentage of net sales, costs of sales were
approximately 82% and 80% for the years ended March 31, 2000
and 1999, respectively.

Operating expenses decreased to $710,904 from $746,867
for the year ended March 31, 2000 as compared to 1999, a
decrease of $35,963 (5%). Approximately $89,000 of such
decrease is attributable to less expenditures for slotting
fees for shelf space for the Company's products.

Amortization expense for the comparative periods was
$13,667 in each of the years ended March 31, 2000 and 1999
in relation to the trade name. Amortization of deferred
registration costs in the amount of $283,989 were incurred
for the year ended March 31, 2000. The Company incurred
approximately $90,362 and $170,253 in amortized finance
costs for the years ended March 31, 2000 and 1999
respectively, relating to the bridge financing which was
completed in August 1998.

The Company had a net loss for the year ended March 31,
2000 of $698,092 as compared to a net loss of $695,956 for
the year ended March 31, 1999, an increase of $2,136.

YEAR ENDED MARCH 31, 1999 AS COMPARED TO MARCH 31, 1998

The Company had net sales of $1,201,587 for the year
ended March 31, 1999 as compared to $1,343,276 for the year
ended March 31, 1998, a decrease of $141,689 (11%). The
decrease is attributable to the Company's lack of working
capital. Additionally, the Company was unable to
participate in many store promotions due to the temporary
loss of its food broker during the fiscal year ended March
31, 1999.

Costs of sales decreased $231,999 or 19% to $966,756 for
year ended March 31, 1999 from $1,198,755 for year ended
March 31, 1998. As a percentage of net sales, cost of sales
decreased to 80% for year ended March 31, 1999 from 89% from
year ended March 31, 1998. These decreases are attributed
to product price increases by the Company during year ended
March 31, 1999.

Operating expenses were $746,867 for year ended March
31, 1999 as compared to $442,317 for year ended March 31,
1998, an increase of $304,550. Amortization expense was
approximately $14,000 for each of year ended March 31, 1999
and year ended March 31, 1998, respectively. Approximately
$170,000 of the increase in operating expenses for year
ended March 31, 1999 is attributable to amortization expense
of finance cost relating to the bridge financing completed
in August 1998.

YEAR 2000

Prior to January 1, 2000, the Company examined the costs
to upgrade its systems with systems which were year 2000
compliant, and determined that the cost to do so was
immaterial in relation to the Company's operations. The
Company computer hardware currently meets compliance
standards. Since January 1, 2000, the Company has not
experienced any year 2000 problems. The Company employs
software programs which are readily available in the
marketplace, known as "canned" software applications and has
not had any problems with such programs since January 1,
2000.

BUSINESS

THE COMPANY

Silver Star Foods, Inc. (the "Company") is a distributor
of a wide range of pre-packaged frozen pasta products in the
New York metropolitan area. The Company sells its products
such as ravioli and tortellini, primarily to supermarkets.
The Company intends to raise additional equity in order to
establish a manufacturing facility. The Company believes,
although there can be no assurance, that acquiring
manufacturing capacity and entering into agreements
with additional sales representatives will enable it to
expand its customer base to supermarket chains and small
distributors in other regional markets and to large volume
customers such as club stores, restaurant chains and
customers requiring private label manufacturer.

HISTORICAL BACKGROUND

In 1930, the grandfather of the Company's President
opened a pasta shop in Brooklyn, New York under the name
Silver Star Ravioli & Macaroni Co., Inc., ("SSRM"). During
the next twenty years, SSRM developed an excellent
reputation for its hand-made pasta around New York. In the
early 1950's, SSRM expanded by opening a 25,000 square foot
factory with one of the first mechanized ravioli machines.
With increased production capabilities, SSRM was able to
supply large supermarket chains with its food products.
During this time, SSRM distributed its food products to a
number of grocery chains and numerous independent stores in
the five boroughs of New York and Long Island. In addition
to retail outlet stores, SSRM opened institutional accounts
that included airlines and cruise ships. SSRM also expanded
its geographic area and, with a select network of brokers,
began to distribute its food products to the tri-state area,
in addition to upstate New York, Philadelphia, Baltimore,
Florida, Arizona and California. During this time, SSRM was
owned and operated by members of the Trotta family,
including Michael Trotta, the Company's President and
Vincent Trotta, who serves as an advisor to the Company.

By the late 1980's, SSRM's manufacturing equipment was
outdated. Competitors with newer factories and equipment
were able to produce products at lower cost and on a more
flexible schedule. As a result, sales margins suffered.
SSRM's attempts to upgrade the facility, which was over
thirty years old, were ineffective. Debts incurred in
connection with the attempted upgrade eventually led to the
bankruptcy of SSRM.

In 1995, Michael Trotta formed the Company under the
name Silver Star Ravioli. The Company changed its name to
Silver Star Foods, Inc. in July 1997. The Company, which had
been using the Silver Star trademark since it was formed,
acquired the trademark from Vincent Trotta in 1997 for
$205,000 and acquired the right to use Vincent Trotta's name
in connection with its promotions in April 1998.

INDUSTRY OVERVIEW

Today, retail pasta products sales in the United States
total over $500 million, as published in the trade magazine,
Modern Grocer. Management believes that the appeal of frozen
pasta products to American consumers has increased since the
1980's and shows no sign of abating.

The Company believes that the U.S. retail market for
frozen pasta is growing and fragmented. The Company believes
that the growth in the frozen pasta category has been aided
by several factors including both the growth in popularity
of frozen foods and the changing consumer taste preferences
to favor distinctive, high quality, healthy foods. The
Company further believes that consumers are demanding more
healthful food products as they learn more about
the importance of one's diet in a healthy lifestyle. For
example, the U.S. Surgeon General has recommended that
consumers lower the percentage of calories from fat in their
diets at no more than 30% (from the existing 37% average)
and the U.S. Department of Agriculture recommends that
60-70% of Americans' daily caloric intake come from complex
carbohydrates. Consequently, much of consumers' demand for
more healthful food products is focused on lowering the fat
content of their diets and increasing their intake of
complex carbohydrates. The Company believes that the sale of
pasta, which is generally low in fat and high in complex
carbohydrates, is benefitting from the trend towards
healthier eating.

No assurance can be given that the frozen pasta market
will continue to expand. Nor can there be any assurance that
current levels of public attention to personal health,
fitness and diet or current perceptions of healthfulness
associated with pasta and pasta sauces will continue in the
future. In particular, the public perception of the
healthfulness associated with pasta-based meals may decline
due to a recent study by the Center for Science in the
Public Interest finding high fat content in cheese and
cream-based pastas and pasta sauces. Similarly, sales of
beef ravioli will not be aided by the increased demand for
healthy foods.

Additionally, as the Company expands to different
regions of the United States, the Company may encounter
differing public perceptions and concerns about health and
diet. This may adversely impact the Company's marketing and
expansion strategy and cause it to incur greater expenses in
promoting its products.

SALES AND DISTRIBUTION

The Company primarily sells it products through sales
representatives, known in the industry as food brokers. The
Company currently has representative agreements with four
food brokers. The Company pays its food brokers a commission
which ranges from 3-5% of the net amount received from
customers on all sales in the respective brokers territory.
The Company's brokers service the New York City metropolitan
area, New Jersey/Eastern Pennsylvania/Maryland and Florida.
The broker for the New York area served as broker on 97% of
the Company's sales. The agreement with the New York broker
can be terminated by either party at any time. The other
agreements contain termination provisions as well. Although
the Company believes it could replace its food brokers, the
loss of a food broker could have a material adverse effect
on the Company, particularly in the short term.

The primary function of the food broker is to act as a
liaison between the manufacturer and the Company's
customers. Working with Company management, the broker will
place advertisements in the supermarket circular and arrange
"specials" or discounts on the Company's products. If the
Company determines that it desires to place its product in a
supermarket chain, the broker will negotiate for the payment
by the Company of a "slotting fee," which is a fee
that a potential supplier must pay to obtain shelf space for
a product in the supermarket chain. The Company believes
that such "slotting fee" has a beneficial life of three (3)
years. However, payment of a slotting fee does not ensure
continued shelf space availability for the Company's
product. The Company intends, although there can be no
assurance it will be able to, to establish
relationships with additional food brokers in order to
expand into other regions. Food brokers are particularly
helpful when expanding into new geographic markets because a
single broker may have existing relationships with numerous
supermarkets.

The Company recently entered into an agreement with
Kelly Clarke, Inc., a food broker that works with club
stores such as Costco and Price Club. The Company plans to
package its products in a manner that would be suitable to
club stores. However, the Company believes that it will not
be able to effectively service club store customers until it
has established a manufacturing facility.

The Company has no plans to make any sales to club store
customers at this time, and there can be no assurance that
the Company will be able to sell its products to club store
customers in the future, even if it established a
manufacturing facility.

The food brokers generally arrange sales to supermarket
chains. These supermarkets then either place an order with
the broker or with distributors, who then immediately place
orders with the Company. There is not a significant
difference in pricing or delivery procedures based on
whether the supermarket uses a distributor.

According to a report by A.C. Nielson & Co., 1998 sales
of the Company's products accounted for approximately 7.5%
of the frozen pasta market among supermarkets in the New
York Metropolitan area. Sales to these supermarket chains
(directly or through distributors) account for virtually all
of the Company's revenue. For the nine months ended December
31, 1998, the Company's five largest customers accounted for
approximately 98% of its sales. These customers consist of
two supermarket chains and three distributors who resell the
Company's products primarily to other supermarket chains.
During 1997, one of the two supermarkets, Pathmark Stores,
Inc. changed the way they place orders and are now utilizing
one of the three distributors. The Company's management does
not anticipate that this change will affect the price or
quantity of the Company's products purchased by Pathmark
supermarkets. The Company has no long term agreements with
any of its customers, and the loss of any of these large
customers could have a material adverse affect on the
Company.

The Company sells to a number of supermarkets chains
that have stores (operating under the same name or through
affiliated companies) in other regions. These supermarkets
have buying departments in each region. The Company would
have to establish relationships with different buyers to
sell its products in these regions. However, Company
management believes that its relationships in the New York
region with these supermarket chains will aide it in
establishing relationships with supermarket buyers in other
regions.

Generally, competition for shelf space in supermarkets
is intense. Companies that supply to supermarkets, are often
required to pay large slotting fees in order to commence
business with a supermarket chain. The Company believes that
such slotting fees have a beneficial life of three (3)
years. Food suppliers may attempt to use their relationship
with the supermarket or pricing arrangements to obtain the
optimum shelf space. This usually creates an advantage for
larger companies who are able to obtain the most visible
shelf space. The Company's management believes that this
advantage is reduced in frozen products, all of which must
be stored in a freezer section. Additionally, the Company
believes that its use of coupons and store circulars, along
with customer loyalty, will enable it to overcome the
advantage of the larger companies in obtaining optimum shelf
space.

The Company also sells its products to distributors who
resell the frozen pasta to delicatessens, grocery stores and
restaurants. Currently, these customers make up
approximately 2% of the Company's business. In the past
year, the Company has sold frozen pasta to four different
small distributors, located in California, New York, Nevada,
Arizona and Florida. The Company intends, although there can
be no assurance that it will be able to do so, to establish
relationships with additional distributors in order to
expand into other regions and markets.

If the Company is able to acquire a manufacturing
facility, it intends to pursue institutional customers, such
as hotels, restaurants, schools, nursing homes, hospitals
and prisons. These institutional customers buy products in
large volumes. Without a manufacturing facility, the Company
does not have the flexibility or the cost structure to
pursue such customers.

Initially, the company intends to rely primarily on food
brokers to establish relationships with these institutional
customers. Upon obtaining additional financing, the Company
intends to employ a marketing and sales director. This
individual will be in charge of establishing relationships
with additional food brokers and distributors, and for
pursuing institutional customers and other retail customers.

The Company's success depends upon an effective system
of distribution for its products. The Company utilizes
central warehouse delivery for all its supermarket
customers. In central warehouse delivery, the products are
delivered to a warehouse for a chain of supermarkets for
later delivery by the chain to its stores. To distribute its
products to other parts of the country (which is a small
part of the Company's business at the present time), the
Company uses local and regional distributors. In any event,
the Company uses common carriers to deliver its products to
these distributors. The dependence on other companies for
delivery of its products poses a risk to the Company. While
this method of delivery has been reliable and available at
acceptable rates thus far, there can be no assurance that
the Company will continue to be able to negotiate acceptable
freight rates in the future and that delivery will not be
disrupted for reasons including, but not limited to, adverse
weather, natural disasters or labor disputes in the trucking
industry.

MARKETING

An emphasis of the Company's marketing to both its
customers and consumers is on the association of the Silver
Star name with a quality pasta product produced by a family
operated business. The Company's promotional materials and
packaging for some of its products contain a short statement
from Vincent Trotta, Sr. which, among other things, offers a
personal guarantee of quality, thanks customers for loyalty,
and explains the Silver Star's products are "true to a
family tradition." On all products, the Company has begun to
use the name "Aversa Silver Star" after the founder of SSRM
and the grandfather of the Company's President. The Company
expects to continue to use the Aversa Silver Star name as it
enters new markets because management believes that
customers are more likely to associate that name with
Italian food products from a family operated business.

The Company hopes to use advertising, primarily in
supermarket circulars, to familiarize customers with the
Silver Star name. The Company hopes positive experiences
with the Company's product will create customer loyalty and
promote repeat business.

The Company also intends to capitalize on the
nutritional value of its products. As is now required by
law, the Company discloses the nutritional information about
its products on the packaging. The Company believes that the
nutritional value of some of its frozen pasta compares
favorably with many other alternatives among frozen foods.

The Company's most effective advertising to consumers is
by placing advertisements in supermarket circulars, which
are available to customers of a supermarket upon entering a
store. Occasionally, supermarkets distribute the circular
via direct mail or as in enclosure in newspapers. The
advertisements in the circular inform the consumer of any
specials or discounts that are available on the Company's
products and may contain coupons. The advertisement in the
circular is arranged by the food broker and generally are
placed approximately eight weeks in advance.

THE COMPANY'S PRODUCTS

The Company specializes in stuffed pasta, a form of
pasta that includes stuffing such as ricotta, eggs and
cheese, among others. The products that the Company
currently distributes are: jumbo cheese round 13 oz.
ravioli; mini cheese round 16 oz. ravioli; mini square
cheese 16 oz. ravioli; mini square meat 16 oz. ravioli;
tortellini, including meat and cheese, 16 oz.; cavatelli, 16
oz.; gnocchi 16 oz.; six count manicotti, 19 oz.; and twelve
count stuffed shells, 21 oz. The Company's most popular
product, mini square cheese ravioli should provide a meal
for 5 people and is sold at a suggested retail price of
$3.19.

Like plain pasta, the Company's products must be boiled
before they should be eaten. The Company does not sell its
products with ready-made pasta sauce, although it may do so
in the future.

The Company's products are packaged in polyethylene
bags. The Company may in the future market its ravioli in a
box, which was the packaging method utilized by SSRM for its
most popular ravioli products. The current packaging
includes the nutritional information, ingredients and
cooking directions. Also prominently featured is the Silver
Star trademark. The packaging for some of the Company's
products contains a statement from Vincent Trotta Sr.
guaranteeing the quality of the Company's products. The
packaging design is based on SSRM's packaging. The
manufacturer of the polyethylene bags ships them directly to
the Company's suppliers.

The Company has no current plans to introduce new
products, and is unlikely to do so in the near future. If
the Company is able establish a manufacturing facility, it
intends to introduce new products and new packaging of
existing products. For example, the Company intends to
create packaging aimed at club stores, including a "bulk
pack," which will be a single oversize pack weighing
approximately 3 lbs. Additionally, the Company may sell its
products with a ready made sauce. The sauce could be
produced by a private manufacturer to the Company's
specifications, or the Company could enter into a joint
venture arrangement with an existing pasta sauce
manufacturer.

PRINCIPAL SUPPLIERS AND INGREDIENTS

Currently, the Company uses one private label
manufacturer to prepare and package all of its products. The
Company provides the manufacturer with recipes for its
products. The manufacturer uses a quick freeze process to
ensure that the product is frozen while it is still fresh.
The Company believes that it could replace its supplier on
similar terms, however the loss of the supplier could have a
material adverse affect on the Company, particularly in the
short term.

The ingredients used by the Company's supplier is
primarily flour, eggs and water. Depending on the type of
stuffed pasta the Company is producing, the ingredients may
include whole milk ricotta, eggs, Romano cheese, mozzarella,
parsley, salt, pepper, meat filling chopped meat, onions and
spices. The Company's supplier buys flour from Congra and
Ricotta from either Pollyo or Sorrento. Other ingredients
come from local distributors and manufactures. If the
Company establishes a manufacturing facility, it intends to
purchase directly from these suppliers.

The Company's production agreement is with Mount Rose
Ravioli and Macaroni Co. Such supplier is able to fill the
Company's product orders in approximately seven days.

MOUNT ROSE RAVIOLI AND MACARONI CO. The Company
executed an agreement which provides that Mount Rose will
manufacture and package the following "Silver Star"
products:

Square Meat and Cheese Ravioli--bag
Square Meat and Cheese Ravioli--box
Round Cheese Ravioli
Cavatelli
Cheese and Meat Tortellini
Gnocchi
Six Count Manicotti
Twelve Count Stuffed Shells

The agreement is terminable at any time by either
party. The agreement provides that the product is to be paid
for by either cashiers or certified check at the time the
order is placed. The above prices, in accordance with the
agreement, are to be reviewed every six months with respect
to raw material and packaging costs. An increase or decrease
in such costs will be passed on to the Company. The
agreement further provides that in the event that the
agreement is terminated the Company gives Mount Rose
permission to use any packaging left on hand at the time of
termination in any way it chooses.

MANUFACTURING

Currently, the Company does not have any manufacturing
ability. The Company intends to establish a manufacturing
facility. The Company has no present plans for the
establishment of a facility but is considering either (i)
acquiring through merger or acquisition a company with an
existing facility, which may require an investment to update
the facility, (ii) constructing and equipping a new facility
or (iii) leasing an existing facility, which is likely to
require an investment to update or improve the facility.

The Company's intends to establish a facility that would
be 20,000-25,000 square feet. The Company requires a
facility with capability for drainage and refrigeration. The
facility will be built with the intent on receiving a USDA
plant number with the capability of processing meat and
chicken, in addition to cheese. Only after USDA inspection
and approval will it be able to process meat and chicken.
However, it does not require USDA approval to process
cheese. The Company would like to locate the facility in the
New York area to be near the majority of its customers. The
Company intends to equip the facility with new equipment
that has the capacity to produce its specialized products
quickly and efficiently.

Management believes that manufacturing capacity will
allow the Company to produce its goods at a lower cost,
particularly if it is able to increase volume. Furthermore,
manufacturing capacity is likely to allow the Company
greater flexibility in its product mix and enable it to
require less advance notice of its orders.

COMPETITION

In the pasta market, the Company competes with national,
regional, and local pasta manufacturers and specialty
stores. Many of these competitors are larger, more
established and have greater financial and other resources
than the Company. Competition in the pasta industry is based
on product quality, brand name awareness, brand loyalty and
price. Non-frozen, non-stuffed pasta, such as spaghetti is
significantly less expensive then the Company's products and
is less expensive to ship and to store. The Company also
faces competition from fresh, refrigerated pasta, which is
sold by, among others, Contadina, produced by Nestle Fresh
Foods, Co., and DiGorno, produced by Kraft General Foods,
Inc. Such companies have significantly more resources than
the Company. Refrigerated pasta is significantly more
expensive than frozen pasta.

The Company competes directly with a number of regional
and national frozen pasta producers, including Celentano and
Italian Village, who are in most markets nationwide. In the
New York market, the Company competes with these national
and several regional pasta makers. The following table,
which is based on reports prepared by A.C. Nielson and Co.,
sets forth the market share in the New York retail frozen
pasta market based on sales in supermarkets.
<TABLE>
<S> <C> <C> <C>
MARKET SHARE PERCENTAGE OF
COMPANY(1) (%)(2) CHAINS(3) ITEMS(4)

Italian Village 26.0 100 12
Celantano 24.0 100 15
Andrea (Savignano) 8.5 100 8
SILVER STAR 7.5 80 3
Severoli 5.0 100 6
Mount Rose 4.5 50 6
</TABLE>

(1) Among the Company's competitors is Mount Rose who is the
Company's supplier.

(2) Market share is based on sales of frozen pasta products
in the New York City metropolitan area, which includes Long
Island, parts of New Jersey, and other surrounding counties.

(3) This is the percentage of the supermarket chains in the
New York area that carry each listed company's products.
Currently, King Cullen, Shop Rite, Pathmark, Grand Union and
Key Food, all of the five chains with over fifty stores,
carry the Company's products.

(4) Items are the number of items that each company has on
sale in the supermarkets.

Competition for shelf space in grocery stores is intense
and poses great difficulty for smaller food companies. Other
Competitors with significant economic and other resources
could, at any time, enter the frozen pasta industry.
Supermarkets could choose to carry such companies products
in addition to or instead of the Company's products due to
existing relationships with the
makers of such products.

TRADEMARK

The Company purchased the "Silver Star" trademark from
Vincent Trotta in 1997 for $205,000. Mr. Trotta had acquired
the trademark from SSRM. SSRM had registered the trademark
with the U.S. Patent and Trademark Office, however, the
Company failed to renew the application and the trademark
protection has lapsed. In the next month the Company will
file a new application for registration. Even if the
application is approved, there can be no assurance as to the
degree of protection its registered trademark may afford the
Company.

EXPANSION STRATEGY

The Company's expansion strategy is dependant on
obtaining additional financing to establish a manufacturing
facility. The Company's management believes that it will be
able to produce its products at a lower cost, which will
allow it more flexibility in pricing. Management believes
that discount pricing is often necessary to gain customers
and establish market share.

Management believes that the manufacturing facility will
also allow the Company greater flexibility in adjusting its
product mix or packaging because the Company has direct
control of the allocation of labor and machinery at its
facilities. Similarly, the management expects to be able to
respond to customer orders more quickly. There can be no
assurance that establishing a facility will be a more cost
effective, efficient or quicker way for the Company to
acquire its products.

Management believes that the advantages of the
manufacturing facility will allow the Company to pursue
institutional customers such as hotels, nursing homes,
schools and hospitals, and discount buyers such as club
stores. The Company may also offer to manufacture pasta
products for other companies on a private label basis. There
can be no assurance that institutional or private label
markets for the Company's products will develop.

The Company intends to establish relationships with
additional food brokers and small distributors. Food brokers
are particularly helpful when expanding into new geographic
markets because a single broker may have existing
relationships with numerous supermarkets. The Company
intends to expand into areas where pasta products are
popular. Initially, the Company intends to focus expansion
in the Northeast, in markets such as Philadelphia and
Boston, where it already has some customers, and then expand
into cities such as Washington, Baltimore and Chicago.

Presently, the Company has no plans or intentions to
make acquisitions. However, the Company believes that a
number of opportunities exist for the Company to accelerate
growth by acquiring a complementary or competitive business.
The Company could acquire an entity that has (i) a
manufacturing facility suitable for the Company's products,
(ii) sells complementary products, or (iii) has established
name recognition or distribution lines in regional markets
where the Company does not currently operate.

The Company believes that the frozen pasta market is a
growing market, and that the market for stuffed pasta is
likely to grow as well. The Company believes, although there
can be no assurance, that its marketing will put it in
position to take advantage of this growth.

EMPLOYEES

As of November 1, 2000, the Company had 1 full-time
employee.

LEGAL PROCEEDINGS

The Company is not currently subject to any material
legal proceedings.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with
respect to the directors and executive officers of the
company:
<TABLE>
<S> <C> <C>
NAME AGE POSITION
--------------- -- --------------------
Michael Trotta 36 President/CEO/CFO/
Secretary/Director
Vincent Trotta 73 Director
Barry Sherman 56 Director
Dennis Lore 51 Director
</TABLE>

Each director is elected for a period of one (1) year
at the Company's annual meeting of shareholders and serves
until the next such meeting and until his or her successor
is duly elected and qualified. Directors may be re-elected
annually without limitation. Officers are appointed by, and
serve at the discretion of, the Board of Directors. The
Company's directors do not presently receive any
compensation for their services as directors' but it is
contemplated that directors will be granted options pursuant
to the Plan.

Set forth below is a biographical description of each
director and executive officer of the Company based on
information supplied by each of them.

MICHAEL TROTTA has served as the Company's Chairman,
Chief Executive Officer, President, Chief Financial Officer,
Secretary and Director since its formation in 1995. Prior to
founding the Company, Mr. Trotta served as
Vice-President--Manufacturing of Little Italy Frozen Foods,
Inc. from 1993 to 1994. Mr. Trotta worked for SSRM from 1987
to 1992 in various positions including Plant Manager and
Vice President. Initially, Mr. Trotta was employed in the
Shipping and Receiving department. Shortly thereafter, Mr.
Trotta was named Plant Manager where he supervised over 30
employees and was responsible for all the plant's daily
operations. Mr. Trotta was Vice-President of SSRM when it
filed bankruptcy and was subsequently liquidated in 1992. In
December 1996, Mr. Trotta filed for personal bankruptcy,
primarily as a result of debts incurred personally in
connection with SSRM. Mr. Trotta emerged from bankruptcy
protection in March 1997. Mr. Trotta is Vincent Trotta's
son.

VINCENT TROTTA has served as a director of the Company
since September 1998. He has been involved in the food
business since 1949 when he became SSRM's production
manager. Mr. Trotta has also served as SSRM's Plant Manager
and President. He retired from SSRM in 1979. Mr. Trotta is
the father of Michael Trotta.

BARRY SHERMAN has served as a director of the Company
since September 1998. Mr. Sherman has been involved in the
retail sales and brokerage business for nearly fifty years.
For 32 years, Mr. Sherman was employed by Waldbaum's, where
he served as Vice President of Merchandising for 15 years.
Mr. Sherman is currently Vice President of Red Apple
Supermarkets. He commenced employment with Red Apple
Supermarkets in July, 1997. From 1993 until his employment
with Red Apple Supermarkets, he was a principal of
RDI/Enterprise Marketing, which was involved in the food
brokerage industry.

DENNIS LORE has served as a director of the Company
since September 1998. Presently, Mr. Lore is the owner and
operator of Pineview Development Company, a developer of
real estate in Upstate New York. Mr. Lore was the principal
owner of RDO Brokerage from 1987 to 1993. RDO Brokerage
specializes in frozen food sales and marketing in the New
York metropolitan area. From 1985 to 1987, he was a partner
in Norlen Futuran Brokerage Co., specializing in dairy and
fast food accounts in the New York metropolitan area. Prior
to such time, he worked for M.W. Houck food brokers in such
capacities as Director of Sales and Marketing, Liaison
between manufacturers, brokers and customers and account
manager.

COMMITTEES OF THE BOARD

In November 1998, the Board of Directors created the
Compensation Committee, which is comprised of Barry Sherman
and Dennis Lore. The Compensation Committee has (i) full
power and authority to interpret the provisions of, and
supervise the administration of, the Plan and (ii) the
authority to review all compensation matters relating to the
Company. The Compensation Committee has not yet formulated
compensation policies for senior management and executive
officers. However, it is anticipated that the Compensation
Committee will develop a company-wide program covering all
employees and that the goals of such program will be to
attract, maintain, and motivate the Company's employees. It
is further anticipated that one of the aspects of the
program will be to link an employee's compensation to his or
her performance, and that the grant of stock options or
other awards related to the price of the Common Shares will
be used in order to make an employee's compensation
consistent with shareholders' gains. It is expected that
salaries will be set competitively relative to the frozen
food industry and that individual experience and performance
will be considered in setting salaries.

In November 1998, the Board of Directors created an
Audit Committee, which is comprised of Barry Sherman and
Dennis Lore. The Audit Committee is charged with reviewing
the following matters and advising and consulting with the
entire Board of Directors with respect thereto: (i) the
preparation of the Company's annual financial statements in
collaboration with the Company's independent accountants;
(ii) annual review of the financial statements and annual
report of the Company; and (iii) all contracts between the
Company and the officers, directors and other affiliates
thereof. The Audit Committee, like most independent
committees of public companies, does not have explicit
authority to veto any actions of the entire Board of
Directors relating to the foregoing or other matters;
however, the Company's senior management, recognizing their
own fiduciary duty to the Company and its stockholders, is
committed not to take any action contrary to the
recommendation of the Audit Committee in any matter within
the scope of its review.

EXECUTIVE COMPENSATION

The following table sets forth the annual and long-term
compensation for services in all capabilities to the
Company.
<TABLE>
<S> <C> <C> <C>
NAME AND PRINCIPAL POSITION YEAR SALARY OTHER COMPENSATION
Michael Trotta, Chief Executive Officer,
President, Chief Financial Officer
and Secretary 2000 NONE NONE
1999 NONE NONE
</TABLE>

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

(1) For the fiscal years ended March 31, 2000 and 1999,
respectively

The Company has no retirement, pension or profit
sharing program for the benefit of its directors, officers
or other employees but the Board of Directors may recommend
one or more such programs for adoption in the future.

DIRECTOR COMPENSATION

Directors of the Company who are not salaried officers
will receive no fee for attending each Board meeting or
meeting of a committee of the Board. All directors will be
reimbursed for their reasonable out-of-pocket expenses
incurred in connection with attending Board and committee
meetings. In the future, the Company reserves the right to
issue shares of the Company's common stock to non-officer
Board members for their agreement to become a Board member.

EMPLOYMENT AGREEMENTS

Michael Trotta entered into a three (3) year employment
agreement with the Company on September 15, 1998. Mr.
Trotta's compensation under the Agreement is $104,000 during
the initial annual term with increases in the succeeding two
(2) years of the term equal to the greater of 10% from the
previous year's salary or the cost of living adjustment
recognized in the area where Mr. Trotta resides. Mr. Trotta
is also entitled to reimbursement of substantiated expenses,
a monthly car expense equal to $750 per month and options to
acquire 100,000 shares of Common Stock at $6.00 per share.
Notwithstanding the employment agreement, Mr. Trotta did not
take a salary in fiscal years ending March 31, 1999 and
March 31, 2000.

2000 STOCK OPTION PLAN

The Plan will be administered by the Compensation
Committee or the Board of Directors, which will determine
among other things, those individuals who shall receive
options, the time period during which the options may be
partially or fully exercised, the number of Common Shares
issuable upon the exercise of the options and the option
exercise price.

The Plan is effective for a period for ten years,
expiring in 2010. Options to acquire 500,000 Common Shares
may be granted to officers, directors, consultants, key
employees, advisors and similar parties who provide their
skills and expertise to the Company. The Plan is designed to
enable management to attract and retain qualified and
competent directors, employees, consultants and independent
contractors. Options granted under the Plan may be
exercisable for up to ten years, generally require a minimum
two year vesting period, and shall be at an exercise price
all as determined by the Board of Directors provided that,
pursuant to the terms of the Underwriting Agreement between
the Company and the Underwriters, the exercise price of any
options may not be less than the fair market value of the
Common Shares on the date of the grant. Options are
non-transferable, and are exercisable only be the
participant (or by his or her guardian or legal
representative) during his or her lifetime or by his or her
legal representatives following death. Upon a change in
control of the Company, the acceleration date of any options
that were granted but not otherwise exercisable accelerates
to the date of the Change in Control. Change in control
includes (i) the sale of substantially all of the assets of
the Company and merger or consolidation with another
Company, or (ii) a majority of the members of the Board of
Directors changes other than by, election by the
Shareholders pursuant to Board of Directors solicitation or
by vacancies filled by the Board of Directors caused by
death or resignation of such person.

If a participant ceases affiliation with the Company,
by reason of death, permanent disability or retirement at or
after age 65, the option remains exercisable for one year
from such occurrence but not beyond the option's expiration
date. Other types of termination allow the participant 90
days to exercise the option, except for termination for
cause which results in immediate
termination of the option.

The Company has agreed with the Representative not to
grant any options under the Plan at less than 100% of the
fair market value of the Common Shares at the date of the
grant of the option.

Any unexercised options that expire or that terminate
upon an employee's ceasing to be employed by the Company
become available again for issuance under the Plan, subject
to applicable securities regulation.

The Plan may be terminated or amended at any time by the
Board of Directors, except that the number of Common Shares
reserved for issuance upon the exercise of options granted
under the Plan may not be exercised without the consent of
the shareholders of the Company.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In June 1997, two unaffiliated investors each invested
$200,000 in the Company. In consideration of their
investment, each received a sixteen and two thirds (16 2/3%)
percent share of the Company at the time of such
investments. In April 1998 and May, 1998, respectively, the
Company repurchased such shares and agreed to repay such
investors a total of $400,000 within six (6) months of
the date of each repurchase. Such $400,000 amount has been
paid from the proceeds of the bridge financing.

In July 1997, the Company purchased the Silver Star
trademark from Vincent Trotta, the father of the Company's
President and majority shareholder. The purchase price was
$205,000. Of such amount, it included a payment of $55,000
to Michael Trotta, an officer, director and majority
shareholder of the Company; and an assignment of accounts
receivable of the Company equaling $82,000 to his brother,
Louis Trotta, and his brother, Vincent Trotta Jr.

As of September 1998, the Company raised $700,000
pursuant to a Confidential Private Offering Memorandum.
There were twenty (20) investors in such Private Placement.
The Offering consisted of twenty-eight (28) units, with each
Unit consisting of a $25,000 Promissory Note, 2,000 shares
of Common Stock (56,000 shares in the aggregate) and 2,000
Redeemable Common Stock Purchase Warrants (56,000 Warrants
in the aggregate). Each Unit sold for $25,000. The Offering
was made solely to persons who qualified as accredited
investors as defined under Regulation D Rule 501 under the
Act. The Shares and Warrants offered in the Confidential
Private Placement Memorandum are not to be registered under
this Registration Statement.

In April and May 2000, the Company raised $65,500
pursuant to a Section 4(2) Offering of its Common Stock.
There were nine (9) investors in such Offering. The Offering
consisted of the sale of 131,000 shares of the Company's
Common Stock at $.50 per share. The Offering was made solely
to persons who qualified as accredited investors as defined
under Regulation D Rule 501 under the Act. The Shares sold
in the Offering are not to be registered under this
Registration Statement.

In the future, the Company will present all proposed
transactions between the Company and its officers, directors
or 5% stockholders, and their affiliates to the Board of
Directors for its consideration and approval. Any such
transaction will require approval by a majority of the
disinterested directors and such transactions will be on
terms no less favorable than those available to
disinterested third parties.

LIMITATIONS ON PERSONAL LIABILITY OF DIRECTORS AND OFFICERS

The New York Business Corporation Law, in general,
allows corporations to indemnify their directors and
officers against expenses (including attorney's fees),
judgments, fines and settlement amounts actually and
reasonably incurred by such person in connection with suits
or proceedings, if the person acted in good faith and in a
manner the person reasonably believed to be in or not
opposed to the best interests of the corporation. In the
case of a criminal action, the director or officer must have
had no reasonable cause to believe that person's conduct was
unlawful. Under current law, no indemnification may be made
if in connection with a proceeding or in the right of the
corporation in which the director or officer was adjudged to
be liable to the corporation or that person derived an
improper personal benefit.

The Company's Certificate of Incorporation and By-Laws
provided that the Company shall indemnify its directors and
officers to the fullest extent permitted by New York Law.
The Company will enter into an indemnification agreement
with each of its directors and officers.

Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors,
officers and controlling persons of the Company pursuant to
the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information
regarding beneficial ownership of the Company's Common Stock
as of the date of this Prospectus by (i) each person known
by the Company to be the beneficial owner of more than 5% of
the outstanding Common Stock, (ii) by each officer and
director of the Company, and (iii) by all officers and
directors of the Company as a group. Unless otherwise
indicated, each of the following persons has sole voting and
investment power with respect to the shares of Common Stock
set forth opposite his name.
<TABLE>
<S> <C> <C> <C>
AMOUNT AND NATURE OF PERCENT OF PERCENT OF
BENEFICIAL OWNERSHIP(1) CLASS BEFORE CLASS AFTER
OFFERING OFFERING
---------------------- --------------- ------------
Michael Trotta (2) 6,400,000 71.36% 45.82%

All Officers and
Directors as a Group 6,400,000 71.36% 45.82%
</TABLE>

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

(1) The persons named in the table have sole voting and
investment power with respect to all shares of Common Stock.

(2) The address for Michael Trotta is 7520 Avenue V,
Brooklyn, New York 11234.

DESCRIPTION OF SECURITIES

The following summary description of the Securities is
qualified in its entirety by reference to the Company's
Certificate of Incorporation, as amended, and its By-laws,
copies of which have been filed as Exhibits to the
Registration Statement of which this Prospectus is a part.

The Company is authorized to issue 50,000,000 shares of
Common Stock, $.0001 par value per share and 1,000,000
shares of blank check preferred stock, $.001 par value per
share (the "Preferred Stock"). As of the date of this
Prospectus, prior to giving effect to the securities to be
issued in the Offering, there are 8,968,000 shares of Common
Stock outstanding and no shares of Preferred Stock
outstanding. An additional 556,000 shares of Common Stock
are reserved for issuance upon the exercise of various
options and warrants outstanding as of the date of this
Prospectus.

COMMON STOCK

Holders of shares of Common Stock are entitled to one
vote per share of Common Stock on all matters submitted to a
vote of stockholders of the Company and to receive dividends
when declared by the Board of Directors from funds legally
available therefor. Upon the liquidation, dissolution or
winding up of the Company, holders of shares of Common Stock
are entitled to share ratably in any assets available for
distribution to stockholders after payment of all
obligations of the Company and after provision has been made
with respect to each class of stock, if any, having
preference over the Common Stock. Holders of shares of
Common Stock do not have cumulative voting rights or
preemptive, subscription or conversion rights. See "Risk
Factors--Dividend Policy."

In May 2000, the Company declared a 2 for 1 forward
stock split of its Common Shares.

PREFERRED STOCK

The Company's Certificate of Incorporation authorizes
the issuance of 1,000,000 shares of "blank check" preferred
stock, par value $.001, with such designations, rights and
preferences as may be determined from time to time by the
Board of Directors. Accordingly, the Board of Directors is
empowered, without stockholder approval, to issue preferred
stock with dividend, liquidation, conversion, voting or
other rights which could adversely affect the voting power
or other rights of the holders of the Company's Common
Stock. In the event of issuance, the preferred stock could
be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of
the Company. Although the Company has no present intention
to issue any shares of its preferred stock, there can be no
assurance that the Company will not do so in the future.

SHARES ELIGIBLE FOR FUTURE SALE

All Shares of common stock will be immediately tradable
without restriction or further registration under the
Securities Act. The outstanding Shares of common stock
include 6,762,000 Shares of common stock outstanding deemed
to be "restricted securities," as that term is defined under
Rule 144 promulgated under the Securities Act, in that such
Shares were purchased or acquired by such stockholders of
the Company in transactions not involving a public offering,
and, as such, may only be sold pursuant to a registration
statement under the Securities Act, in compliance with the
exemption provisions of Rule 144, or pursuant to another
exemption under the Securities Act. Substantially all of
such restricted Shares of common stock are eligible for sale
under Rule 144, subject to the volume limitations prescribed
by the Rule. The outstanding shares also include 1,650,000
shares of Common Stock held by the Selling Security Holder.
Such shares have been registered for resale pursuant to the
registration statement to which this prospectus is a part.

In general, under Rule 144 as currently in effect, a
shareholder, including an affiliate of the Company, may sell
shares of Common Stock after at least one year has elapsed
since such shares were acquired from the Company or an
affiliate of the Company. The number of shares of Common
Stock which may be sold within any three-month period is
limited to the greater of one percent of the then
outstanding Common Stock or the average weekly trading
volume in the Common Stock during the four calendar weeks
preceding the date on which notice of such sale was filed
under Rule 144. Certain other requirements of Rule 144
concerning availability of public information, manner of
sale and notice of sale must also be satisfied. In addition,
a shareholder who is not an affiliate of the Company (and
who has not been an affiliate of the Company for 90 days
prior to the sale) and who has beneficially owned shares
acquired from the Company or an affiliate of the Company for
over two years may resell the shares of Common Stock without
compliance with the foregoing requirements under Rule 144.

No predictions can be made as to the effect, if any,
that future sales of shares, or the availability of shares
for future sale, will have on the market price of the Common
Stock prevailing from time to time. Nevertheless, sales of
substantial amounts of Common Stock, or the perception that
such sales may occur, could have a material adverse effect
on prevailing market prices and could impair the Company's
ability to raise capital through the sale of its equity
securities.

TRANSFER AGENT

The Transfer agent for the Common Stock is North
American Co., 147 W. Merick Road, Freeport, New York 11520.

SELLING SECURITY HOLDERS

The Selling Security Holders are: (1) Results
Consulting Corp., 1,500,000 Common Shares, a consultant to
the Company that provides analysis and assessment of
alternatives for raising capital for the Company including
the use of private and public offerings of securities,
recommendations and other advice pertaining to the selection
and potential engagement of legal counsel and accountants
for the Company and shareholder relations for the Company;
(2)Richard I. Anslow, 100,000 Common Shares, counsel to the
Company; and (3) John Reisman, 50,000 Common Shares, special
counsel to the Company. The Selling Security Holder Shares
were issued to Mr. Anslow and Mr. Reisman as compensation
for services rendered in connection with this Offering. The
company will not receive any proceeds from sales of the
Selling Security Holder Shares.

LEGAL MATTERS

The validity of the Securities offered hereby will be
passed upon for the Company by Richard I. Anslow, Esq.,
Freehold, New Jersey 07728. Mr. Anslow owns 125,000 Shares
of the Company's Common Stock, of which 100,000 shares are
being registered hereby.

EXPERTS

The reviewed balance sheet of the Company as at June 30,
2000, and the related Statement of Operations and Statement
of Cash Flows of Zeller, Weiss & Kahn LLP, independent
certified public accountants, have been included herein. In
addition, the audited balance sheets of the Company as at
March 31, 2000 and March 31, 1999, and the related
Statements of Operations, Statements of Stockholders' Equity
and Statements of Cash Flows have been included herein and
in the Registration Statement in reliance upon the report,
appearing elsewhere herein, of Zeller, Weiss & Kahn LLP,
independent certified public accountants, and upon the
authority of said firm as experts in accounting and
auditing.

On or about December 28, 1999, the Company changed its
auditors's from its prior independent certified public
accountants, Weinick Sanders Leventhal & Co., LLP to Zeller,
Weiss & Kahn LLP. The Company's prior auditors did not have
any disagreement on any matter of accounting principles or
practices, financial statement disclosure or auditing scope
or procedure. Such auditor's reports for the years ended
March 31, 1996, 1987 and 1998 did not contain an adverse
opinion or a disclaimer of opinion, and were not qualified
or modified as to uncertainty, audit scope or accounting
principles, except for uncertainties about the Company's
ability to continue as a going concern.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration
Statement under the Act with respect to the Common Shares
offered hereby. This Prospectus omits certain information
contained in the Registration Statement and the exhibits
thereto, and references are made to the Registration
Statement and the exhibits thereto for further information
with respect to the Company and the Common Shares offered
hereby. Statements contained herein concerning the
provisions of any documents are not necessarily complete,
and in each instance reference is made to the copy of such
document filed as an exhibit to the Registration Statement.
Each such statement is qualified in its entirety by such
reference. The Registration Statement, including exhibits
and schedules filed therewith, may be inspected without
charge at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549 and at the regional offices of
the Commission located at 7 World Trade Center, Suite 1300,
New York, New York 10048, and Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such materials may be obtained from the
Public Reference Section of the Commission, Judiciary Plaza,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
and its public reference facilities in New York, New York
and Chicago, Illinois upon payment of the prescribed fees.
Electronic registration statements (as well as proxy reports
and other information when filed) filed through the
Electronic Data Gathering, Analysis, and Retrieval System
are publicly available through the Commission's Website
(http://www.sec.gov). At the date hereof, the Company was
not a reporting company under the Exchange Act.

-----------------------
SILVER STAR FOODS, INC.

FINANCIAL STATEMENTS
-----------------------

SILVER STAR FOODS, INC.

FOR THE THREE MONTHS ENDED JUNE 30, 2000

CONTENTS
<TABLE>
<S> <C>
Page
Financial statements:

Condensed balance sheet F-1

Condensed statement of operations F-2

Condensed statement of stockholders equity (deficiency) F-3

Condensed statement of cash flows F-4

Notes to condensed financial statements F-5 - F-8

</TABLE>
SILVER STAR FOODS, INC.

CONDENSED BALANCE SHEET - JUNE 30, 2000
(Unaudited)

ASSETS
<TABLE>
<S> <C>
Current assets:
Cash$ 2,768
Accounts receivable 69,789
----------
72,557
----------
Other assets:
Tradename, less accumulated
amortization of $71,751 133,249
Deposits 255
-----------
Total other assets 133,504
-----------
$ 206,061
===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:
Bridge loan payable $ 75,000
Notes payable - tradename 17,092
Accounts payable 522,758
Payroll taxes payable 78,314
Loans payable - other 26,000
Accrued expenses 332,102
Stockholder loan 5,658
-----------
Total current liabilities 1,056,924
------------
Commitments and contingencies

Stockholders' equity (deficiency):
Preferred stock - $.001 par value
authorized and unissued - 1,000,000
shares
Common stock - $.0001 par value,
authorized - 15,000,000 shares,
issued - 6,662,000 493
Common stock subscriptions, unissued 705,500
Paid in capital 733,427
Deficit ( 1,890,283)
-------------
( 450,863)
-------------
Less: Treasury stock at cost -
1,600,000 shares 400,000
-------------
Total stockholders' equity
(deficiency) ( 850,863)
--------------
$ 206,061
==============

See notes to financial statements.
F-1
</TABLE>
SILVER STAR FOODS, INC.

CONDENSED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2000
(Unaudited)
<TABLE>
<S> <C>
Net sales $ 166,408
--------------
Costs and expenses:
Cost of sales 110,740
Operating expenses 80,663
Amortization 3,417
--------------
Total of costs and
expenses 194,820
--------------
Net loss ($ 28,412)
==============
Basic earnings (loss) per
share ($ .01)
==============
Weighted average number
of shares outstanding 5,014,802
==============

See notes to financial statements.
F-2
</TABLE>
<TABLE>
SILVER STAR FOODS, INC.

CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

FOR THE THREE MONTHS ENDED JUNE 30, 2000
(Unaudited)
<S> <C> <C> <C> <C>
Retained
COMMON STOCK Paid-In Earnings
Shares Value Capital (Deficit)
-------------------------------------------------------
Balance at March 31, 2000 4,931,000 $493 $733,427 ($1,861,871)

2 for 1 stock split 3,331,000

Common stock subscriptions, unissued

Net loss for the three months
ended June 30, 2000 (28,412)
------------------------------------------------------
Balance at June 30, 2000 8,262,000 $493 $733,427 (1,890,283)
=======================================================

See notes to financial statements.

F-3
</TABLE>
<TABLE>
SILVER STAR FOODS, INC.

CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

FOR THE THREE MONTHS ENDED JUNE 30, 2000
(Unaudited)
CONTINUED
=========
<S> <C> <C> <C>
Total
Common Share-
Stock holders
Treasury Subscriptions Equity
Stock Unissued (Deficiency)
-------------------------------------------------------
Balance at March 31, 2000 ($400,000) $625,000 ($902,951)

2 for 1 stock split3,331,000

Common stock subscriptions, unissued 80,500 80,500

Net loss for the three months
ended June 30, 2000 (28,412)
------------------------------------------------------
Balance at June 30, 2000 ($400,000) $705,500 ($850,863)
------------------------------------------------------

See notes to financial statements.

F-3 (Continued)
</TABLE>
SILVER STAR FOODS, INC.

CONDENSED STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED JUNE 30, 2000
(Unaudited)
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss ($ 28,412)
------------
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 3,417
Increase (decrease) in cash flows as a
result of changes in asset and liability
account balances:
Accounts receivable ( 56,834)
Accounts payable 19,495
Accrued expenses ( 6,865)
------------
Total adjustments ( 40,787)
------------
Net cash used in operating activities ( 69,199)
------------
Cash flows from financing activities:
Cash overdraft ( 2,859)
Stockholder loan ( 5,674)
Proceeds from common stock subscriptions 80,500
------------
Net cash provided by financing activities 71,967
------------
Net increase in cash 2,768

Cash, beginning of period 0
------------
Cash, end of period $ 2,768
============

See notes to financial statements.
F-4
</TABLE>

SILVER STAR FOODS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2000

1. Going concern:

The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles,
which contemplate continuation of the Company as a going
concern. The Company has incurred continuing losses and has
a working capital deficiency of $984,367 June 30, 2000, and
a stockholders' equity deficiency of $850,863.

The Company is currently preparing to file a registration
statement with the Securities and Exchange Commission in
order to register 6,600,000 shares to raise capital of
approximately $13,000,000. As of June 30, 2000, the
Company's registration statement filing has not been made
effective with the Securities and Exchange Commission.

Based on these events, management believes that the Company
has the ability to continue operations during the subsequent
fiscal year. The accompanying financial statements do not
include any adjustments relating to the recoverability and
classification of asset values or the amount and
classification of liabilities that might result should the
Company be unable to continue as a going concern.

2. Description of business:

The Company was incorporated in the State of New York on
March 28, 1995 under the name of Silver Star Ravioli Co.,
Inc. On July 21, 1997, the Company filed a Certificate of
Amendment of Incorporation authorizing the Company to issue
an aggregate of up to 15,000,000 shares, $.0001 par value.
On July 28, 1997, the Board of Directors resolved to change
the name of the Company to Silver Star Foods, Inc. and filed
a Certificate of Amendment of the Certificate of
Incorporation to that effect.

The Company is a distributor of frozen pasta food products
which it markets under the "Silver Star" name. The Company
initially acquired its prepared pre-packaged products from
two local manufacturers.

3. Summary of significant accounting policies:

Cash:

The Company places its temporary cash investments with
high credit quality financial institutions, which at times
may be in excess of the FDIC insurance limit.

F-5

SILVER STAR FOODS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2000

3. Summary of significant accounting policies
(continued):

Intangible assets:

The intangible asset, consisting of a tradename is
periodically reviewed by management to evaluate its future
economic benefits or potential impairment which may affect
its recorded value to the Company. The tradename is being
amortized on a straight-line basis over 15 years.

Income taxes:

The Company has adopted Statement of Financial
Accounting Standards No 109 ("SFAS 109"), "Accounting for
Income Taxes" at its inception. Under SFAS 109, the
deferred tax provision is determined under the liability
method. Under this method, deferred tax assets and
liabilities are recognized based on the differences between
the financial statement carrying amount and the tax bases of
assets and liabilities using presently enacted tax rates.

Earnings per share:

The loss per share for the three months ended June 30, 2000
has been calculated based on the weighted average number of
common shares outstanding. During the period the Company
had no common stock equivalents issued or outstanding.
Therefore, basic and diluted earnings per share are the
same.

Use of Estimates:

The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those
estimates.

4. Accounts receivable:

Accounts receivable consist of trade receivables
arising in the ordinary course of business and are presented
net of estimated discounts and allowances of $8,082.
Management continually reviews its trade receivable credit
risk and has adequately allowed for potential losses.

5. Tradename:

The Company acquired the rights to the "Silver Star"
tradename from a related party of the principal stockholder
pursuant to an agreement which was formalized in July 1997
at a cost of $205,000. The Company has been using the
tradename since it's inception. As of June 30, 2000 the
balance on the note payable for the tradename is $17,092.

F-6

SILVER STAR FOODS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2000

6. Income taxes:

At June 30, 2000, the Company has a net operating loss
carryforward amounting to approximately $1,890,000 available
to reduce future taxable income which expire in the years
2010 through 2015, which upon recognition may result in
future tax benefits of approximately $512,451. At June 30,
2000 management is unable to determine if the utilization of
the future tax benefit is more likely than not and
accordingly, the asset of approximately $512,451 has been
fully reserved.

A reconciliation of the statutory income tax effective
rate is as follows:
<TABLE>
<S> <C>
2000
----
Federal statutory rate (34.0%)
State and local taxes 0.2
Creation (utilization) of net operating
loss carryforward 34.0
--------
Effective tax rate 0.2%
========
</TABLE>

7. Transactions with major customers and suppliers:

During the three months ended June 30, 2000, the
Company had sales to five customers amounting to
approximately 96.5%, of the Company's net sales for the
period. The loss of any of these customers could be
expected to have a material impact on the Company's results
of operations in future periods.

Since its inception, the Company has purchased all of
its products from two suppliers and is currently utilizing a
single supplier. The loss of this supplier could have a
material impact on the Company's ability to obtain product
for resale to its customers in future periods.

8. Bridge loan payable:

In August, 1998, the Company obtained bridge financing,
whereby it raised an aggregate of $700,000 and received net
proceeds of $616,000 after underwriter's commissions and
before other related expenses. The Company used $400,000 of
the proceeds to satisfy the notes payable incurred in the
purchase of 1,600,000 shares of the Company's common stock
in April and May, 1998.

F-7

SILVER STAR FOODS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2000

8. Bridge loan payable (continued):

In addition to the promissory note in the principal sum
of $25,000, each of the 28 units sold includes 2,000 shares
of the Company's common stock and 2,000 redeemable common
stock purchase warrants. The promissory notes bear no
interest.

In February 2000, holders of the bridge loan promissory
notes totaling $625,000 agreed to exchange their respective
notes payable for 25,000 shares of the Company's common
stock. As of June 30, 2000 the shares had not been issued.
The shares have been recorded in the equity section of the
financial statements as stock subscriptions, unissued.

9. Stock option plan:

The Company has an incentive stock option plan covering
all existing employees. As of June 30, 2000 no options have
been granted.

10. Common stock issued:

The Company effected a two for one forward stock split
in May 2000. The weighted average number of shares for the
three months ended June 30, 2000 including the stock split,
if used, would have an anti-dilutive effect on loss per
share. Therefore, the number of shares used in the
calculation of the loss per share for the three month period
does not include the additional shares from the stock split.

-----------------------
SILVER STAR FOODS, INC.

FINANCIAL STATEMENTS
-----------------------

SILVER STAR FOODS, INC.

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999

CONTENTS
<TABLE>
<S> <C>
Page

Independent auditors' report F-1

Financial statements:

Balance sheet F-2
Statement of operations F-3
Statement of stockholders equity (deficiency) F-4
Statement of cash flows F-5 - F-6
Notes to financial statements F-7 - F-11
</TABLE>

Page 68

INDEPENDENT AUDITORS' REPORT

To The Board of Directors
Silver Star Foods, Inc.
Brooklyn, New York

We have audited the accompanying balance sheet of
Silver Star Foods, Inc. as of March 31, 2000 and 1999 and
the related statements of operations, stockholders' equity
(deficiency), and cash flows for the years then ended.
These financial statements are the responsibility of the
Company's Board of Directors. Our responsibility is to
express an opinion on these financial statements based on
our audit.

We conducted our audit 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
the Company, as well as evaluating the overall financial
statement presentation. We believe that our audit provides
a reasonable basis for our opinion.

In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of Silver Star Foods, Inc. as of March
31, 2000, and 1999, and the results of its operations and
cash flows for the year then ended in conformity with
generally accepted accounting principles.

The accompanying financial statements have been
prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the financial
statements, the Company has incurred continuing losses and
has a working capital deficiency and a stockholders' equity
deficiency. Those conditions raise substantial doubt about
its ability to continue as a going concern. Management's
plans regarding those matters are also described in Note 1.
The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

Zeller Weiss & Kahn, LLP

May 25, 2000
Mountainside, New Jersey
F-1

SILVER STAR FOODS, INC.

BALANCE SHEET - MARCH 31, 2000 AND 1999

ASSETS
<TABLE>
<S> <C> <C>
2000 1999
----------------------
Current assets:
Cash $ 2,430
Accounts receivable $ 12,955 15,999
Other current assets 550
------------------------
Total current assets 12,955 18,979
------------------------
Other assets:
Deferred registration costs 283,989
Deferred finance costs, less
accumulated amortization of$260,615
And $170,253 90,362
Tradename, less accumulated
amortization of $68,334 and $54,668 136,666 150,332
Deposits 255 5,255
------------------------
Total other assets 136,921 529,938
------------------------
$ 149,876 $ 548,917
========================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:
Cash overdraft $ 2,859
Bridge loan payable 75,000 $ 700,000
Notes payable - tradename 17,092 17,092
Accounts payable 503,263 330,250
Payroll taxes payable 78,314 78,314
Loans payable - other 26,000 26,000
Accrued expenses 338,967 254,458
Stockholder loan 11,332 27,662
-----------------------
Total current liabilities 1,052,827 1,433,776
-----------------------
Commitments and contingencies

Stockholders' equity (deficiency):
Preferred stock - $.001 par value
authorized 1,000,000 shares, none
issued
Common stock - $.0001 par value,
authorized - 15,000,000 shares,
issued - 4,931,000 and 4,876,000
shares, respectively 493 488
Common stock subscriptions, unissued 625,000
Paid in capital 733,427 678,432
Deficit (1,861,871) ( 1,163,779)
--------------------------
(502,951) ( 484,859)
Less: Treasury stock at cost -
1,600,000 shares 400,000 400,000
--------------------------
Total stockholders' equity
(deficiency) ( 902,951) ( 884,859)
--------------------------
$ 149,876 $ 548,917
==========================
See notes to financial statements.
F-2
</TABLE>
SILVER STAR FOODS, INC.

STATEMENT OF OPERATIONS

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999

<TABLE>
<S> <C> <C>
2000 1999
-----------------------------
Net sales $ 658,775 $1,201,587
-----------------------------
Costs and expenses:
Cost of sales 541,934 966,756
Operating expenses 710,904 746,867
Amortization 13,667 13,667
-----------------------------
Total of costs and expenses 1,266,505 1,727,290
-----------------------------
Loss from operations ( 607,730) ( 525,703)
------------------------------
Other expense:
Amortization of deferred finance costs 90,362 170,253
------------------------------
Total other expenses 90,362 170,253
------------------------------
Net loss ($ 698,092) ($ 695,956)
==============================
Basic earnings (loss) per share ($ .21) ($ .21)
==============================
Weighted average number of shares
outstanding 3,277,339 3,384,186
==============================
</TABLE>
See notes to financial statements.
F-3
SILVER STAR FOODS, INC.

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<S> <C> <C> <C> <C>
Retained
COMMON STOCK Paid-In Earnings
Shares Value Capital (Deficit)
-------------------------------------------------------
Balance at March 31, 1998 4,800,000 $480 $399,840 ($ 467,823)

Purchase of treasury stock at
cost - 1,600,000 shares

Issuance of common stock and
warrants for services rendered in
connection with public offering 20,000 2 104,998

Issuance of common stock and warrants
in connection with bridge financing 56,000 6 173,594

Net loss for the year ended
March 31, 1999 ( 695,956)
------------------------------------------------------
Balance at March 31, 1999 4,876,000 488 678,432 ( 1,163,779)

Issuance of common stock and warrants
for legal services rendered 30,000 3 29,997

Issuance of common stock and warrants
for goods and services 25,000 2 24,998

Common stock subscriptions, unissued

Net loss for the year ended
March 31, 2000 ( 698,092)
-------------------------------------------------------
Balance at March 31, 2000 4,931,000 $493 $733,427 ($1,861,871)
=======================================================
</TABLE>
See notes to financial statements.
F-4

SILVER STAR FOODS, INC.

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999

CONTINUED
=========
<TABLE>
<S> <C> <C> <C> <C>
Total
Common Share-
Stock Stock holders
Treasury Subscriptions Subscriptions Equity
Stock Unissued Receivable (Defici-
ency
-------------------------------------------------------
Balance at March 31, 1998 ($ 67,503)

Purchase of treasury stock at
cost - 1,600,000 shares ($400,000) ( 400,000)

Issuance of common stock and
warrants for services rendered in
connection with public offering 105,000

Issuance of common stock and warrants
in connection with bridge financing 173,600

Net loss for the year ended
March 31, 1999 ( 695,956)
------------------------------------------------------
Balance at March 31, 1999 (400,000) ( 884,859)

Issuance of common stock and warrants
for legal services rendered 30,000

Issuance of common stock and warrants
for goods and services 25,000

Common stock subscriptions, unissued $625,000 625,000

Net loss for the year ended
March 31, 2000 ( 698,092)
-------------------------------------------------------
Balance at March 31, 2000 400,000 $625,000 $25,000 ($ 902,951)
=======================================================
</TABLE>
See notes to financial statements.

F-4

SILVER STAR FOODS, INC.

STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999

<TABLE>
<S> <C> <C>
2000 1999
-----------------------------
Cash flows from operating activities:
Net loss ($698,092) ($695,956)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Amortization 388,017 183,920
Stock issued for professional goods
and services 55,000
Increase (decrease) in cash flows as a
result of changes in asset and liability
account balances:
Accounts receivable 3,044 87,428
Other current assets 550 ( 550)
Deposits 5,000
Accounts payable 173,013 82,717
Accrued expenses 84,509 175,687
Payroll taxes payable 78,314
----------------------------
Total adjustments 709,133 607,516
----------------------------
Net cash provided by (used in) operating
activities 11,041 ( 88,440)
----------------------------

Cash flows from financing activities:
Cash overdraft 2,859 ( 20,937)
Stockholder loan ( 16,330) ( 27,875)
Expenditures for registration costs ( 99,303)
Proceeds of loans payable - other 26,000
Proceeds from bridge loan 700,000
Purchase of treasury stock ( 400,000)
Expenditures for financing costs ( 87,015)
-----------------------------
Net cash provided by (used in) financing
activities ( 13,471) 90,870
-----------------------------
Net increase (decrease) in cash ( 2,430) 2,430

Cash, beginning of year 2,430
-----------------------------
Cash, end of year $ 0 $ 2,430
=============================
</TABLE>
See notes to financial statements.

F-5

SILVER STAR FOODS, INC.

STATEMENT OF CASH FLOWS (CONTINUED)

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<S> <C> <C>
2000 1999
-----------------------------
Supplemental schedule of non-cash operating
and financing transactions:

Issuance of common stock for services:

Deferred registration costs $105,000
=========
Deferred financing costs $173,600
=========
Goods and services $ 55,000
=========

Common stock subscriptions, unissued, in
exchange for cancellation of bridge loan
notes payable $625,000
=========
</TABLE>

See notes to financial statements.

F-6

SILVER STAR FOODS, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999

1. Going concern:

The accompanying financial statements have been
prepared in conformity with generally accepted accounting
principles, which contemplate continuation of the Company as
a going concern. The Company has incurred continuing losses
and has a working capital deficiency of $1,039,872 and
$1,439,897 at March 31, 2000 and 1999, respectively, and a
stockholders' equity deficiency of $618,962 and $884,859,
respectively.

The Company is currently preparing to file a
registration statement with the Securities and Exchange
Commission in order to register 6,650,000 shares to raise
capital of approximately $13,000,000. As of May 25, 2000,
the Company's registration statement filing has not been
made effective with the Securities and Exchange Commission.

Based on these events, management believes that the
Company has the ability to continue operations during the
subsequent fiscal year. The accompanying financial
statements do not include any adjustments relating to the
recoverability and classification of asset values or the
amount and classification of liabilities that might result
should the Company be unable to continue as a going concern.

2. Description of business:

The Company was incorporated in the State of New York
on March 28, 1995 under the name of Silver Star Ravioli Co.,
Inc. On July 21, 1997, the Company filed a Certificate of
Amendment of Incorporation authorizing the Company to issue
an aggregate of up to 15,000,000 shares, $.0001 par value.

On July 28, 1997, the Board of Directors resolved to
change the name of the Company to Silver Star Foods, Inc.
and filed a Certificate of Amendment of the Certificate of
Incorporation to that effect.

The Company is presently a distributor of frozen pasta
food products which it markets under the "Silver Star" name.
The Company initially acquired its prepared pre-packaged
products from two local manufacturers.

Use of Estimates:
The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those
estimates.

F-7

SILVER STAR FOODS, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999

3. Summary of significant accounting policies:

Cash:
The Company places its temporary cash investments
with high credit quality financial institutions, which at
times may be in excess of the FDIC insurance limit.

Slotting fees:
The accompanying financial statements reflect
slotting fee expenditures as charges to operations when
incurred because (i) none of the slotting fees were
supported by written agreements and (ii) management was
unable to forecast the future economic benefits, if any, of
the expenditures primarily due to the Company's limited
operating history. Slotting fees charged to operations for
the years ended March 31, 2000 and 1999 were $44,590 and
$133,500, respectively.

Intangible assets:
The intangible asset, consisting of a tradename is
periodically reviewed by management to evaluate its future
economic benefits or potential impairment which may affect
its recorded value to the Company. The tradename is being
amortized on a straight-line basis over 15 years.

Deferred financing costs:
In August 1998, the Company completed a bridge
financing (as more fully described in Note 12) whereby it
raised gross proceeds of $700,000. The Company incurred
related costs totalling $260,615, including; underwriters
commissions of $84,000, legal fees of $3,015, and the
issuance of 56,000 shares of common stock and 56,000 common
stock purchase warrants valued at $168,000 and $5,600,
respectively. The effective annual interest rate on the
notes is approximately 27%. The notes are non-interest
bearing.

Income taxes:
The Company has adopted Statement of Financial
Accounting Standards No 109 ("SFAS 109"), "Accounting for
Income Taxes" at its inception. Under SFAS 109, the
deferred tax provision is determined under the liability
method. Under this method, deferred tax assets and
liabilities are recognized based on the differences between
the financial statement carrying amount and the tax bases of
assets and liabilities using presently enacted tax rates.

Earnings per share:
The income (loss) per share for the years ended
March 31, 2000 and 1999 has been calculated based on the
weighted average number of common shares outstanding.
During the periods presented the Company had no common stock
equivalents issued or outstanding. Therefore, basic and
diluted earnings per share are the same.

F-8

SILVER STAR FOODS, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999

4. Accounts receivable:

Accounts receivable consist of trade receivables
arising in the ordinary course of business and are presented
net of estimated discounts and allowances of $12,955 and
$20,157 as at March 31, 2000 and 1999, respectively.
Management continually reviews its trade receivable credit
risk and has adequately allowed for potential losses.

5. Trade name:

The Company acquired the rights to the "Silver Star"
tradename from a related party of the principal stockholder
pursuant to an agreement which was formalized in July 1997
at a cost of $205,000. The Company has been using the
tradename since it's inception. As of March 31, 2000 the
balance on the note payable for the tradename is $17,092.

6. Income taxes:

At March 31, 2000, the Company has a net operating loss
carryforward amounting to approximately $1,552,882 available
to reduce future taxable income which expire in the years
2010 through 2015, which upon recognition may result in
future tax benefits of approximately $512,451. At March 31,
2000 management is unable to determine if the utilization of
the future tax benefit is more likely than not and
accordingly, the asset of approximately $512,451 has been
fully reserved.

A reconciliation of the statutory income tax effective
rate is as follows:

<TABLE>
<S> <C> <C>
1999 1998
----------------
Federal statutory rate (34.0%) (34.0%)
State and local taxes 0.2 0.3
Creation (utilization)
of net operating
loss carryforward 34.0 34.0

Effective tax rate 0.2% 0.3%

</TABLE>

F-9

SILVER STAR FOODS, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999

7. Commitments and contingencies:

The Company leases office space from its principal
shareholder on a month to month basis at a cost of $1,000
per month.

The Company has entered into two manufacturing
agreements for the procurement of product. The first
agreement calls for price adjustments semiannually based on
cost increases if any, relating to raw materials. The
second agreement requires the Company to meet certain
minimum annual purchase quantities. Failure to meet these
minimums could result in price increases to the Company.
The Company has never achieved the minimum quantities
required. The second agreement was terminated in mid-1999.

8. Transactions with major customers and suppliers:

During the years ended March 31, 2000 and 1999, the
Company had sales to five customers amounting to
approximately 96.5% and 96.5%, respectively, of the
Company's net sales for the period. The loss of any of
these customers could be expected to have a material impact
on the Company's results of operations in future periods.

Since its inception, the Company has purchased all of
its products from two suppliers and is currently utilizing a
single supplier. The loss of this supplier could have a
material impact on the Company's ability to obtain product
for resale to its customers in future periods.

9. Bridge loan payable:

In August, 1998, the Company obtained bridge financing,
whereby it raised an aggregate of $700,000 and received net
proceeds of $616,000 after underwriter's commissions and
before other related expenses. The Company used $400,000 of
the proceeds to satisfy the notes payable incurred in the
purchase of 1,600,000 shares of the Company's common stock
in April and May, 1998.

In addition to the promissory note in the principal sum
of $25,000, each of the 28 units sold includes 2,000 shares
of the Company's common stock and 2,000 redeemable common
stock purchase warrants. The promissory notes bear no
interest.

In February 2000, holders of the bridge loan promissory
notes totaling $625,000 agreed to exchange their respective
notes payable for 25,000 shares of the Company's common
stock. As of March 31, 2000 the shares had not been issued.
The shares have been recorded in the equity section of the
financial statements as stock subscriptions, unissued.

F-10

SILVER STAR FOODS, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2000 AND 1999

10. Issuance of stock:

In November 1998 and March 2000, the Company issued
20,000 and 30,000 shares, respectively of its common stock
valued at $105,000 and $30,000 to its attorney in payment of
services rendered in connection with the Company's
registration statement.

In March 2000, the Company issued 25,000 shares of its
common stock valued at $25,000 to its supplier in payment of
goods received.

11. Stock option plan:

The Company has an incentive stock option plan covering
all existing employees. As of March 31, 2000 no options
have been granted.

12. Subsequent Events:

In May 2000, the Company effected a 2 for 1 stock split
which increased outstanding shares from 3,331,000 shares to
6,662,000 shares. The effect of this transaction is not
reflected on the balance sheet as of June 30, 2000.
F-11