TASTY FRIES INC, SB-2/A, 1997-05-02

TASTY FRIES INC
SB-2/A, 1997-05-02
PATENT OWNERS & LESSORS

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As filed with the Securities and Exchange Commission on May 2, 1997.
Registration Statement No. 333-19239

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 2 TO
FORM SB-2

REGISTRATION STATEMENT
UNDER THE

SECURITIES ACT OF 1933

TASTY FRIES, INC.
(Name of Small Business Issuer in its Charter)
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NEVADA 2000 65-0259052
(State of Incorporation) (Primary Standard Industrial (IRS Employer Identification No.)
Classification Code Number)
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650 SENTRY PARKWAY, SUITE ONE
BLUE BELL, PENNSYLVANIA 19422
(610) 941-2109

(Address and telephone number of principal executive offices
and principal place of business)

EDWARD C. KELLY, PRESIDENT AND CHIEF EXECUTIVE OFFICER
TASTY FRIES, INC.
650 SENTRY PARKWAY, SUITE ONE
BLUE BELL, PENNSYLVANIA 19422
(610) 941-2109

(Name, address and telephone number of agent for service)

Copies to:
KIPNIS TESCHER LIPPMAN VALINSKY & KAIN, P.A.
ONE FINANCIAL PLAZA, SUITE 2308
FORT LAUDERDALE, FLORIDA 33394
ATTENTION: MICHELLE KRAMISH KAIN, ESQ.
(954) 467-1964
(954) 467-2264 (FAX)

Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Act of 1933, as
amended (the "Act"), check the following box: [X]

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

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If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Act, check the following box and list the Act registration statement number
of the earlier effective registration statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREFORE BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8 (A) OF
THE ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE
AS THE COMMISSION, ACTING PURSUANT TO SECTION 8 (A), MAY DETERMINE.

TASTY FRIES, INC.
CROSS REFERENCE SHEET

FORM SB-2 ITEM NUMBER AND CAPTION CAPTION IN PROSPECTUS
--------------------------------- ---------------------
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1. Front of Registration Statement Facing Page of Registration Statement;
and Outside Front Cover Page of Outside Front Cover Page
Prospectus

2. Inside Front and Outside Back Inside Front and Outside Back
Cover Pages of Prospectus Cover Pages

3. Summary Information and Prospectus Summary; Risk Factors;
Risk Factors The Company

4. Use of Proceeds Prospectus Summary; Use of Proceeds

5. Determination of Offering Price Outside Front Cover Page;
Price Use of Proceeds

6. Dilution Dilution

7. Selling Stockholders Selling Securityholders

8. Plan of Distribution Outside Front Cover Page; Risk Factors;
Plan of Distribution

9. Legal Proceedings Business - Litigation

10. Directors, Executive Management
Officers, Promoters
and Control Persons

11. Security Ownership Principal Securityholders
Of Certain Beneficial
Owners and Management

12. Description of Securities Prospectus Summary; Risk Factors;
Description of Securities.
3

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FORM SB-2 ITEM NUMBER AND CAPTION CAPTION IN PROSPECTUS

13. Interests of Named Legal Matters; Experts
Experts and Counsel

14. Disclosure of Commission Indemnification of
Position on Indemnification Directors and Officers
for Securities Act Liabilities

15. Organization Within Not Applicable
Last Five Years

16. Description of Business Prospectus Summary; Business

17. Management's Discussion Management's Discussion and
and Analysis or Plan of Analysis of Financial Condition and Results
Operation(s) of Operation - Plan of Operation

18. Description of Property Business - Property

19. Certain Relationships and Certain Transactions
Related Transactions

20. Market for Common Equity Outside Front Cover Page; Risk Factors;
and Related Stockholder Matters Market for Common Equity; Dividend
Policy; Description of Securities -
Shares Eligible for Future Sale

21. Executive Compensation Executive Compensation

22. Financial Statements Financial Statements

23. Changes In and Disagreements
With Accountants on Accounting
and Financial Disclosure Not Applicable
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED MAY 2, 1997

PROSPECTUS

TASTY FRIES, INC.

An Aggregate of 5,397,927 Shares of Common Stock
(par value $.001 per share)

This Prospectus relates to the sale of 5,397,927 post-split shares (the
"Shares") of Common Stock, $.001 par value per share (the "Common Stock"), which
includes 425,010 post-split shares of Common Stock to be issued upon the
exercise of warrants (the "Warrant" or "Warrants") to be issued to certain
Selling Securityholders (the "Warrant Shares") of Tasty Fries, Inc. (the
"Company" or the "Issuer"), all of which may be offered and sold from time to
time by such Selling Securityholders (the "Selling Securityholders") of the
Issuer. See "SELLING SECURITYHOLDERS" and "PLAN OF DISTRIBUTION." Following the
effective date of the Registration Statement of which this Prospectus is a part,
the Shares and the Warrant Shares may be offered for sale, in whole or in part,
in regular market transactions or through broker-dealers at prevailing market
prices. The Selling Securityholders and any broker-dealer who participates in
the distribution of the Shares or the Warrant Shares (which sometimes are
collectively referred to herein as the "Shares") may be deemed to be
underwriters ("Underwriters") within the meaning of the Securities Act of 1933,
as amended (the "Act"). The Issuer will receive the proceeds from the exercise
price of each Warrant so exercised, if any, but will not receive any proceeds
from the sale of any of the Shares. The Issuer will incur certain expenses in
connection with this offering. The Shares and the Warrant Shares involve certain
investment risks. See "RISK FACTORS."

There is currently a public trading market for the Shares on the OTC
Bulletin Board. See "RISK FACTORS", "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION - PLAN OF OPERATION" and "PLAN OF
DISTRIBUTION." There can be no assurance, however, that such a trading market
will further develop, continue or be sustained. On April 23, 1997, the reported
closing bid price of the Common Stock was $1.56. See "RISK FACTORS."

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING HEREIN CONTAINED AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH
JURISDICTION.

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

UNTIL ________________, 1997 (90 DAYS AFTER THE DATE OF THIS
PROSPECTUS) ALL BROKER-DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS WITH RESPECT TO SALES EFFECTED BY THEM.

THE ISSUER IS REQUIRED BY THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, TO FILE PERIODIC REPORTS AND OTHER INFORMATION WITH THE SECURITIES AND
EXCHANGE COMMISSION. SUCH MATERIAL MAY BE INSPECTED AT THE COMMISSION'S
PRINCIPAL OFFICES AT 450 FIFTH STREET N.W., WASHINGTON, D.C. 20459 AND COPIES
MAY BE OBTAINED ON PAYMENT OF CERTAIN FEES PRESCRIBED BY THE COMMISSION.

THE ISSUER WILL FURNISH, UPON REQUEST AND AT ITS EXPENSE, TO THE
HOLDERS OF THE SHARES AND THE WARRANT SHARES THE ISSUER'S FORM 10-KSB FOR THE
MOST RECENTLY COMPLETED FISCAL YEAR CONTAINING AUDITED FINANCIAL STATEMENTS
EXAMINED AND REPORTED UPON, AND WITH AN OPINION EXPRESSED BY, AN INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANT. THE ISSUER MAY FURNISH OTHER UNAUDITED INTERIM
REPORTS TO ITS SECURITYHOLDERS, UPON REQUEST, AS IT DEEMS APPROPRIATE.

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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION INCLUDED ELSEWHERE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE
REQUIRES OR INDICATES OTHERWISE, ALL REFERENCES IN THIS PROSPECTUS TO THE
"COMPANY" OR "TASTY FRIES" SHALL MEAN TASTY FRIES, INC., A NEVADA CORPORATION,
AND GIVE EFFECT TO THE 1 FOR 20 REVERSE STOCK SPLIT EFFECTIVE ON DECEMBER 23,
1996.

THE COMPANY

The Company was incorporated in Nevada on October 18, 1985 under the
name Y.O. Systems, Ltd. and was formed as a "blank check" company for the
purpose of seeking a business acquisition without regard to any specific
industry or business but was unsuccessful. It subsequently changed its name to
Metro Systems, Inc. in 1987. In July 1991 it acquired Adelaide Holdings, Inc., a
private Delaware corporation, and changed its name to Adelaide Holdings, Inc.
Thereafter, in September 1993, it changed its name to Tasty Fries, Inc.

The Company is a Nevada corporation with its principal executive
offices at 650 Sentry Parkway, Suite One, Blue Bell, Pennsylvania 19422. Its
telephone number is (610) 941-2109.

The Company has developed a patented french fries vending machine (the
"Machine") and the related proprietary potato powder mix for the production of
fresh french fries in the Machine (the "Potato Product") as well as other
related products (collectively, the "Products") which it plans to market,
distribute, and sell on a world-wide basis. The Company had previously received
a federally registered trademark for its former name and logo, "Adelaide". The
Company has subsequently federally registered its current name and logo, "Tasty
Fries," as a federal trademark on the Supplemental Register and has been
marketing the Machine and the Products under that name. See "RISK FACTORS-PATENT
PROTECTION AND PROPRIETARY RIGHTS" and "BUSINESS-PATENTS AND PROPRIETARY
RIGHTS." The Company's early plans were to principally market its products
through an exclusive distributorship network which then current management
believed would offer uniform and consistent products to consumers worldwide. In
furtherance of this plan, the Company sold distributorships for different
markets throughout the United States and several foreign countries. In mid-1995
a change in its marketing focus evolved which has resulted in the Company
negotiating to reacquire distributorships previously sold. One such
distributorship has been reacquired and negotiations are on-going for two
others. The Company expects, in its discretion, to market and sell on a
non-exclusive basis to companies with significant experience in the vending
business in locations where it is not deemed feasible by management, due to
costs, location and other factors, to be operated directly by the Company. The
Company may, in certain circumstances, retain the ownership of the Machines and
lease the Machines to distributors. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - PLAN OF OPERATION" AND
"BUSINESS".

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RISK FACTORS

An investment in the Shares and the Warrant Shares involves various
significant risks and prospective investors should carefully consider the
matters discussed under "RISK FACTORS" prior to any investment in the Company.
See "RISK FACTORS".

THE OFFERING

The principal terms of the Shares and the Warrant Shares offered hereby
in the offering are summarized below. For a more complete description, see
"DESCRIPTION OF SECURITIES". The Selling Securityholders will receive all the
proceeds from the sale of the Shares.

SECURITIES OFFERED
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Common Stock..................... 4,972,917 post-split shares of Common Stock which may be
sold, from time to time, in whole or in part, by the Selling
Securityholders.

Warrant Shares................... 425,010 post-split shares of Common Stock to be issued upon
the exercise, in whole or in part, of the Warrants by the
Warrantholders. The Company will receive the proceeds from
the exercise of the Warrants, if any.

Rights of Common The Shares and the Warrant Shares, once issued and
Stock............................ outstanding, share equally in all rights of the Common Stock,
including without limitation, dividend and voting rights.

Proceeds to the All proceeds from the sale of the Shares and Warrant Shares
Company.......................... (once the Warrants are exercised) will be received by the
respective Selling Securityholders. The
Company will receive the proceeds from the
exercise of the Warrants, if any. To the
extent that certain Shares being registered
hereby underlie options and other
outstanding warrants, the proceeds from such
exercise, if any, would be received by the
Company and would be utilized by the Company
primarily for working capital purposes. See
"USE OF PROCEEDS".

Quotation........................ The Common Stock is quoted on the OTC Bulletin Board.

Trading Symbol................... "FRYA"

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SELECTED FINANCIAL DATA

The selected financial data presented below for each of the two years
ended January 31, 1996 and 1995, have been derived from the audited financial
statements of the Company and give effect to the one for 20 reverse stock split
effective on December 23, 1996. The selected financial data presented below for
the nine months ended October 31, 1996 and October 31, 1995 are unaudited but,
in management's opinion, includes all adjustments consisting of normal recurring
adjustments necessary to present fairly the financial data for, and at the end
of, such period. See "FINANCIAL STATEMENTS".

NINE MONTHS ENDED YEAR ENDED
OCTOBER 31, JANUARY 31,
---------------- -----------------
1995 1996 1995 1996
---- ---- ---- ----
(unaudited) (audited)
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INCOME STATEMENT DATA:

Revenues ..................... 0 478 0 618
Loss before interest expense . (793,692) (1,607,453) (2,064,038) (1,358,030)
Interest expense ............. 25,197 6,404 14,895 26,458
Net loss ..................... (818,889) (1,613,857) (2,078,933) (1,384,488)
Net loss per share ........... (.02) (.02) (.08) (.03)
Net loss per share after ..... (.22) (.34) (1.29) (.36)
reverse stock split

BALANCE SHEET DATA:

Total assets ................. 2,635,127 172,835 99,070 155,788
Working capital (deficit) .... 1,855,975 (596,939) (904,487) (499,010)
Total liabilities ............ 779,152 1,120,686 1,410,792 980,283
Stockholders' equity (deficit) 1,885,604 (947,851) (1,311,722) (824,495)

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RISK FACTORS

THE PURCHASE OF THE SHARES AND WARRANT SHARES OFFERED HEREBY INVOLVES A
HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
FOLLOWING RISK FACTORS, TOGETHER WITH THE OTHER INFORMATION CONTAINED IN THIS
PROSPECTUS, BEFORE MAKING AN INVESTMENT DECISION.

LIMITED OPERATING HISTORY; NO REVENUES FROM OPERATIONS; NO ASSURANCE OF
SUCCESSFUL IMPLEMENTATION OF BUSINESS STRATEGY. Although the Company has
operated since July 1991 in its current business, it has had virtually no
revenues from operations. Substantially all cash received by the Company to
date has been through the sale of equity and debt securities to investors in
private placements. Limited funds have also been received from the downpayments
made by certain distributors for their distribution rights for the Machine and
the Products. As of October 31, 1996, the amount of all such downpayments
aggregated $406,000. The Company has utilized the proceeds from the sale of
securities and distributor downpayments to fund its research and development of
the Machine and the Products, repay debt, satisfy Court judgments and court
awards and for working capital purposes. The Company has incurred substantial
net losses since 1991 and is still in its development stage.

The Company continues to face all of the risks inherent in the growth
of a developing business, including among other things, limited access to
capital, and long delays in the implementation of its business plan resulting
from the need to totally redesign, develop and test a new machine and a
continuing lack of sufficient working capital to fund development and
operations. There can be no assurances that the Company's business will
ultimately be successful and/or profitable. As a result, the purchase of the
Shares and Warrant Shares offered hereby must be regarded by investors as the
placing of funds at a high and uncertain risk in a developing business with all
of the unforeseen costs, expenses, problems and difficulties to which such
businesses are subject. Investors in this offering may lose all or a substantial
part of their investment. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - PLAN OF OPERATION", "BUSINESS" and
"FINANCIAL STATEMENTS."

HISTORY OF SUBSTANTIAL LOSSES; NEED FOR ADDITIONAL CAPITAL. The Company incurred
net losses of $1,514,488 and $1,478,933 for the fiscal years ended January 31,
1996 and 1995, respectively, and a net loss for the nine months ended October
31, 1996 and 1995 of $1,613,857 and $818,889, respectively. In order to attain
any profitability, the Company must commence commercial production and delivery
of the Machine and its Products to distributors and lessees, if any, and
successfully plan and control costs so as to produce a positive operating
margin. There can be no assurance that the Company can do so, and the failure of
the Company to achieve and maintain profitability could ultimately result in the
inability of the Company to pay its financial obligations as they become due.
This would, as it has in the past, have a material adverse effect on the
Company.

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The report of the Company's independent certified public accountants
accompanying the Company's financial statements set forth elsewhere herein
contains an explanatory paragraph that there exists substantial doubt about the
Company's ability to continue as a going concern due to its continuing losses
and lack of liquidity and capital resources. Unless the Company can continue to
obtain financing from the issuance of Common Stock and/or through loans until
such time as it has sufficient revenues from operations, as to which no
assurances are given, the Company may be required to cease all operations. See
"FINANCIAL STATEMENTS".

At January 31, 1996 and 1995, the Company reported a working capital
deficit of approximately $1,236,990 and ($1,210,487), respectively. As of
October 31, 1996, the Company reported a working capital deficit of
approximately ($972,439). Presently existing capital resources are not
sufficient for the Company to maintain its current and planned operations
through the remainder of the fiscal quarter ending April 30, 1997. The Company
has historically funded its operations through a combination of the sale of
securities, issuance of stock for services or in settlement of corporate
obligations and to a much lesser extent, the downpayments of distributors. Until
such time as the Company's operating results may reach a sufficient level to
fund the Company's operations, as to which no assurances are given, the Company
must continue to seek and obtain outside financing to fund its business and to
meet its obligations as they become due. Although the Company is in discussions
with several funding sources, no assurances can be given at this time that any
will be consummated. Any debt or equity financing, to the extent available, as
to which no assurances are given, may be dilutive to the interests of investors
in this offering. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION - PLAN OF OPERATION" and "FINANCIAL
STATEMENTS".

NO MANUFACTURING FACILITIES; COMPLETION OF TOOLING. The Company has not and does
not intend to establish its own manufacturing operations. The Company has been
and will continue to be dependent upon third parties to manufacture its Machines
and Products, including the Potato Product. In June 1996, the Company entered
into a manufacturing agreement with a local Pennsylvania electronics company to
manufacture the Machines. It previously had an agreement with Premier Design,
Ltd. ("Premier"), a company owned by Mr. Edward Kelly, President and Chief
Executive Officer of the Company and a former director, Harry Schmidt, to
manufacture the Machine; however, in accordance with the terms of such
agreement, which provides for Premier to receive a royalty for all Machines
sold, the Company is negotiating with a subsidiary of Koors Industries, Inc., a
multi-billion dollar Israeli conglomerate, to manufacture the Machine in Israel
for distribution in certain territories. No assurances are given that a final
agreement will be executed, and, if executed, when such Machines will be
manufactured. See "BUSINESS - DESIGN AND MANUFACTURING" and "SELLING
SECURITYHOLDERS".

Before the Machines can be manufactured on a commercial basis, the
Company's third party unaffiliated contractor must complete the necessary
tooling of certain component parts which has been started but is now
significantly delayed due to the Company's lack of capital to fund the
completion. Once funding is received, the tooling process can be completed and
commercial production can proceed. Although the Company is in negotiations to
secure this

<PAGE>

funding from three sources, no assurances can be given that either source or
any other source of funding will ultimately be available to the Company. In such
event, the Company will be unable to complete tooling which may require it to
curtail or cease operations entirely. See "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION - PLAN OF OPERATION" and
"BUSINESS."

SIGNIFICANT LITIGATION. The Company is currently a party in several lawsuits,
both as plaintiff and defendant. Two lawsuits against the Company have been
settled and another is in the process of being settled. These settlements
involve the payment of cash in varying amounts and at varying times, some of
which has been paid and some which is to be paid in the future. Much of the
litigation involving the Company over the last several years has resulted from
the Company's inability to pay its obligations as they became due or because of
a continuing lack of working capital. Based upon discussions among the parties,
management believes that another pending material lawsuit will be settled in the
first half of the current fiscal year although no assurances are given.

The matter between the Company and California Food & Vending ("CFV")
has been in varying stages of litigation for almost four years. In May 1996, the
Company paid CFV all monies due, including all accrued interest, pursuant to the
October 1994 arbitration award confirmed by the Court. It also paid CFV an
additional $20,000 for one-half of distribution fees it received in February
1997. CFV now seeks to have a permanent receiver appointed by the Court to
ensure that any monies received by the Company in the future to which CFV may be
entitled are paid to CFV. The Company is vigorously opposing this motion on the
grounds that CFV is not currently owed any money and is only entitled to money
under certain specific circumstances. In the event a receiver is appointed by
the Court, management is currently unable to accurately predict what effect, if
any, it will have on the Company and its business. See "BUSINESS - LITIGATION".

VIABILITY OF DISTRIBUTION AGREEMENTS. Due to the Company's current inability to
complete the tooling process which results from a lack of necessary capital, the
Company is unable to deliver any of its french fry vending machines to any
distributors under existing distribution agreements. Although management has
previously anticipated that commercial production would commence, there has been
a continual inability to reach such stage. As a result, distributors who entered
into distribution agreements with the Company in the past may no longer have the
ability to meet their obligations thereunder. Accordingly, it is possible that
one or more distribution agreements may no longer be viable. In such event, the
Company does not intend to seek new distributors for such territories. Instead,
the Company intends to sell to large vending machine companies with the
financial resources to purchase Machines and the ability to service the
Machines. No assurances are given that such independent operators will be
secured. See "BUSINESS MARKETING THROUGH DISTRIBUTORSHIPS".

NO CLEARLY DEFINED MARKETING PLAN. Although the Company previously marketed its
french fry vending machine through agreements with distributors, it had never
established a clearly defined marketing plan.

<PAGE>

It had intended to utilize these exclusive distributorships to market its
Machine and Products worldwide. Through discussions with consultants and other
individuals and companies with experience in the vending business, a decision
was made in mid-1995 to change this marketing focus by limiting, if not, ceasing
all sales of exclusive distributorships to third parties and possibly
reacquiring existing distributorships. It is the Company's present intention to
market the Machines to large vending companies that have the ability to purchase
Machines or lease them from the Company's leasing company, Forrest Financial
Corp., on a long-term basis. Additionally, these companies would have the
ability to service the Machines and order large quantities of Products,
including Potato Product from the Company. See "BUSINESS - MARKETING THROUGH
DISTRIBUTORSHIPS".

PRODUCTION DEVELOPMENT RISKS. The Machines have been operated by the Company on
a limited basis at trade shows, at previews to the investment banking community,
at a limited number of beta test sites and, in certain instances, by
distributors and others the United States and in foreign countries. Operating
results have been excellent to date; however, the Machines are always subject to
refinement, adjustment and improvement by the Company and its trained technical
personnel. There is no assurance that the Machines will continue to perform in
accordance with the Company's expectations over a long period of time. See
"BUSINESS - THE MACHINE".

PATENT PROTECTION AND PROPRIETARY RIGHTS. A patent was issued by the U.S. Patent
and Trademark Office in July 1996 for the Machine to Mr. Edward C. Kelly, the
inventor, who is President, Chief Executive Officer and Chairman of the Board of
the Company. The patent, prior to issue, was assigned to Premier, a private
company jointly owned by Mr. Kelly and Harry Schmidt, a former director of the
Company, in January 1995 pursuant to the terms of an amendment ("the "Premier
Amendment") to the Manufacturing Requirements Agreement, between the Company and
Premier (the "Premier Agreement"). The Premier Amendment provides that the
patent for the Machine will be assigned one-half (1/2) to the Company upon
payment by the Company to Premier of one-half of the Machine's total development
cost. The Company and Premier have verbally agreed that the Company's share of
such development costs is $650,000 of which $100,000 has been paid to date.
Pursuant to the terms of the Premier Agreement, until such time as the Company
pays 50% of such amount ($325,000 of which $100,000 has been paid) with the
balance to be paid in 12 months thereafter, the Company's one-half ownership of
the patent will not be assigned. In the event that the Company is unable to pay
the amounts owed to Premier, it may lose its rights to the Machine. In such
event, the Company will still own its proprietary Potato Product and could
license the Machine from Premier as to which no assurances are given. The loss
of the rights to the Machine could have a materially adverse effect on the
Company and its operations.

The Company has also filed for patent protection to the Patent
Cooperation Treaty ("PCT") for the Machine in 54 foreign countries which is
currently pending. Even if the Company receives all patents applied for, there
can be no assurances given that third parties will not assert infringement
claims against the Company in the future or that others will not infringe

<PAGE>

upon such patent. The cost of defending or commencing patent infringement
litigation is expensive with no assurances as to the outcome thereof. The
Company also has a federally registered trademark for its former name and logo,
"Adelaide", and a federally registered trademark for its current name and logo,
"Tasty Fries," on the Supplemental Register and has been marketing the Machine
and its Products under that name. See "SUMMARY OF THE OFFERING", "BUSINESS" and
"CERTAIN TRANSACTIONS".

DEPENDENCE ON MANAGEMENT. The Company is wholly dependent upon the time, talent
and experience of Edward C. Kelly, its President and Chief Executive Officer,
who exercises control over the day-to-day affairs of the Company. The Company's
future success is materially dependent on the continued services of Mr. Kelly
and on its ability to attract, motivate and retain highly-qualified employees.
Mr. Kelly has an Employment Agreement, as amended, with the Company and
significant equity ownership of the Company. The loss of the services of Mr.
Kelly for any reason could have a material adverse effect on the Company. The
Company does not currently maintain key-man life insurance on Mr. Kelly or any
of its other employees. See "MANAGEMENT" and "PRINCIPAL SECURITYHOLDERS -
SECURITY OWNERSHIP OF MANAGEMENT".

ISSUANCE OF ADDITIONAL SHARES; REVERSE SPLIT OF COMMON STOCK; OUTSTANDING
OPTIONS, WARRANTS AND OTHER RIGHTS. Possible or actual sales of a substantial
number of Shares and Warrant Shares by the Selling Securityholders in the
offering could have a materially negative impact on the market price of the
Common Stock of the Company. All 4,972,917 post-split Shares and 425,010
post-split Warrant Shares (once issued upon exercise) included in the
Registration Statement of which this Prospectus is a part become transferable
upon its effectiveness subject to certain lock-up restrictions. The availability
of public trading for such a substantial number of Shares may have a material
adverse effect on the trading prices of the Common Stock. See "SELLING
SECURITYHOLDERS".

Upon consummation of the Company's reverse split of its Common Stock on
a 1 for 20 basis which was effective on December 23, 1996, and the change of its
authorized common stock to 25,000,000 post-split shares and its par value to
$.001 per share pursuant to an amendment to its Articles of Incorporation filed
on December 18, 1996, all as approved by majority consent of its stockholders of
record on December 6, 1996, the Board of Directors has the power to issue these
authorized shares. The Company is presently committed to issue (i) 702,500
post-split shares upon the exercise of certain outstanding options at various
exercise prices ranging from $2.00 to $5.00 per share, (ii) 27,000 post-split
shares upon the exercise of certain outstanding warrants (other than the
Warrants) exercisable at $2.00 per share, and (iii) 425,010 Warrant Shares
pursuant to Warrants exercisable at the present time at $1.90 per share pursuant
to the Stock Purchase Agreement between the Company, Whetstone Ventures
Corporation, Inc. and Edward C. Kelly, President and Chief Executive Officer
dated April 30, 1996 ( the "Stock Purchase Agreement"). Except as set forth
herein, there are no other present commitments to issue any additional shares to
any other persons. The Company may, in the future, issue shares for services or
other corporate purposes as it has done in the past. Any

<PAGE>

additional share issuances by the Company following the offering from its
authorized but unissued shares would have the effect of diluting the interest of
investors in this offering. See "PRINCIPAL SECURITYHOLDERS - SECURITY OWNERSHIP
OF MANAGEMENT" and "DESCRIPTION OF SECURITIES - SHARES ELIGIBLE FOR FUTURE
SALE."

COMPETITION. The Company faces competition from other suppliers of french fries,
including fast food outlets. The Company is aware of other companies which have
test marketed french fry vending machines or are in the process of developing
such machines. Certain of the companies may be currently viewed as competitors
or which may become competitors in the future, have more capital and greater
resources than the Company. Currently, the Company is aware of only one viable
competitor which is Ore-Ida, a major manufacturer and distributor of frozen
potato products. The Ore-Ida vending machine is not comparable to the Company's
Machine for many reasons, including that it only cooks frozen french fries as
contrasted to the Company's Machine which cooks french fries which are not and
have never been frozen and are made from dehydrated potatoes which are mixed
with water and cooked only when a vend is actually purchased. Management
believes, although no assurances are given, that due to current consumer demand
for french fried potatoes, that there will be strong competition in the future
in the area of french fry vending once technological problems have been solved.
See "BUSINESS - COMPETITION".

PREFERRED STOCK AUTHORIZED FOR ISSUANCE. After the termination of this offering
and regardless of the amount of securities which may be sold hereby, the Company
will have available for issuance up to 5,000,000 shares of preferred stock,
$.001 par value per share. The Company's directors are authorized to issue such
preferred stock in one or more series and to fix the voting powers and the
designations, preferences and relative participating, optional or other rights
and restrictions thereof. Accordingly, the Company may issue one or more series
of preferred stock in the future that will have preference over the Shares
offered hereby with respect to the payment of dividends and upon its
liquidation, dissolution or winding up or have voting or conversion rights which
could adversely affect the voting power and percentage ownership of the holders
of the preferred stock and Common Stock. See "DESCRIPTION OF SECURITIES -
PREFERRED STOCK".

SHARES ELIGIBLE FOR FUTURE SALE. As of the date hereof, the Company has
6,700,025 post-split shares of Common Stock issued and outstanding. Some of such
shares of Common Stock will become eligible for public sale at various times,
subject to compliance with an exemption from the registration requirements of
the Act, such as Rule 144 or Rule 144A or earlier registration under the Act. No
predictions can be made as to the effect, if any, that market sales of such
shares or the availability of such shares for sale or any shares which may be
later issued will have on the market price of the shares of Common Stock, which
may prevail from time to time. Sales of substantial amounts of shares of Common
Stock in the public market could adversely affect the market price of the Common
Stock and could impair the Company's future ability to raise capital through an
offering of equity securities. See "DESCRIPTION OF SECURITIES SHARES ELIGIBLE
FOR FUTURE SALE".

<PAGE>

LIMITED TRADING MARKET FOR COMMON STOCK AND WARRANTS. Prior to the date hereof,
there has been a limited public trading market for the Common Stock and no
market for the Warrants. The Common Stock has traded sporadically in limited
volume in the over-the-counter market. There can be no assurances that a regular
trading market for the Common Stock will develop or that, if developed, it will
be sustained. It is not anticipated that a regular trading market will develop
for the Warrants.

NO DIVIDENDS. The Company has never paid any cash dividends on its Common Stock
and the Board of Directors does not anticipate paying cash dividends in the
foreseeable future. It currently intends to retain future earnings, if any, to
finance the growth of the business. See "DIVIDEND POLICY".

PENNY STOCK REGULATION. Broker-dealer practices in connection with transactions
in "penny stocks" are regulated by certain penny stock rules adopted by the
Commission. Penny stocks generally are equity securities with a price of less
than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock held
in the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. If the Company's securities become subject to the penny stock
rules, investors may find it more difficult to sell their securities.

<PAGE>

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of the Shares
by the Selling Securityholders. The Company will receive proceeds from the
exercise of the Warrants, if any, or from the exercise of other outstanding
options and warrants, the underlying Shares of which, in some instances, are
being registered hereby, from time to time, in whole or in part, when so
exercised, if at all. Any proceeds received from the exercise of the Warrants
and such other outstanding options and warrants would be used primarily for
working capital. See "PROSPECTUS SUMMARY" and "SELLING SECURITYHOLDERS."

DIVIDEND POLICY

The Company has never paid a cash dividend on its Common Stock and does
not expect to pay a cash dividend in the foreseeable future. The Board of
Directors intends to retain all future earnings, if any, for use in the
Company's business. See "RISK FACTORS - NO DIVIDENDS".

<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company at
October 31, 1996, as adjusted to reflect the 1 for 20 reverse stock split
effective on December 23, 1996 and to reflect the exercise of 50% of the
Warrants and 100% of the Warrants. This table should be reviewed in conjunction
with the financial statements of the Company and the notes thereto included
elsewhere in this Prospectus. See "FINANCIAL STATEMENTS."

OCTOBER 31, 1996
----------------
ACTUAL AS ADJUSTED AS ADJUSTED
------ FOR REVERSE SPLIT FOR REVERSE SPLIT
AND EXERCISE OF AND EXERCISE OF
50% OF 100% OF
WARRANTS(1) WARRANTS(1)
-------- --------
<S> <C> <C> <C>
Stockholders' Equity:
Common Stock -
$.001 par value;
25,000,000 shares
authorized; 4,700,025 shares
issued and outstanding 4,700

4,912,530 shares outstanding
(50% of Warrants exercised) 4,913

5,125,035 shares outstanding
(100% of Warrants
exercised) 5,125

Additional Paid-in Capital 5,755,276 6,154,123 6,557,670
Retained Earnings (loss) (6,707,827) (6,707,827) (6,707,827)

TOTAL STOCKHOLDERS' (947,851) (548,791) (145,032)
EQUITY

TOTAL CAPITALIZATION (947,851) (548,791) 145,032

</TABLE>

- ---------------
(1) The Company will receive proceeds from the exercise of the Warrants and
from the exercise of other outstanding options and warrants, the
underlying Shares of which, in some instances, are being registered
hereby. See "SELLING SECURITYHOLDERS". The net proceeds from such
exercises, if any, to the extent not immediately necessary for working
capital purposes, may be temporarily invested in short-term obligations
of government or banks. Even if all Warrants and such other options and
warrants are exercised, the Company will still be required to seek and
obtain additional financing from conventional sources, such as banks,
or through the private sale of equity or debt securities. There can be
no assurance that the Company will be able to obtain such financing or
that such financing, if available, would be on terms and conditions
acceptable to the Company. If the Company were unable to obtain needed
funds, it could be forced to curtail or cease its activities. See "RISK
FACTORS - HISTORY OF SUBSTANTIAL LOSSES; NEED FOR ADDITIONAL
FINANCING".

<PAGE>

DILUTION

After giving effect to the 1 for 20 reverse stock split effective on
December 23, 1996, as of October 31, 1996, the Company had 4,700,025 post-split
shares of Common Stock outstanding with a net tangible book value of
approximately $.001 per share.

Assuming the exercise of all of the Warrants, giving effect to the
reverse stock split of 1 for 20, effective on December 23, 1996, and assuming no
other changes to the Company's financial position, the net tangible book value
of the Company would be $(145,032) or approximately $.03 per share. This
represents an immediate dilution of $1.93 per share to new investors and an
immediate increase in the net tangible book value of shares held by present
stockholders of $.17 per share. See "RISK FACTORS - ISSUANCE OF ADDITIONAL
SHARES; REVERSE SPLIT OF COMMON STOCK; OUTSTANDING OPTIONS, WARRANTS AND OTHER
RIGHTS".

"Net tangible book value" is the amount that results from subtracting
total liabilities, deferred costs and intangible assets of the Company from its
total assets. "Dilution" is the difference between the public offering price and
the net tangible book value of the Shares immediately after the offering.
Additionally, dilution is calculated based on book value of the Company's
assets, which may not necessarily reflect the actual market value of such
assets.
<TABLE>
<CAPTION>

The following table illustrates the per share dilution:

Assuming 50% of Warrants Assuming 100% of
Exercised(1) Warrants Exercised(1)

Public offering price per $1.90 $1.90
Share

Net tangible book value per ($.20) ($.20)
Share before Warrants
exercised

Increase per Share $.17 $.17
attributable to existing
stockholders

Net tangible book value per $(.03) $(.03)
Share after Warrants
exercised

Dilution of net tangible ----- -----
book value per Share of
Warrants exercised
</TABLE>

- -----------------
(1) There can be no assurances that any of the Warrants will be exercised.

<PAGE>

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

PLAN OF OPERATION

Since 1993 the Company has encountered significant delays in connection
with the production of its Machine which was initially caused by the necessity
to design, develop and test a totally new Machine commencing in late 1993. As a
result, the Company was unable to ship its Machine as originally anticipated by
the end of 1993 or as intended in 1994. The Company completed the initial
engineering development of the Machine during the last quarter of 1994 but
continued to experience delays in the final stages of development and testing
throughout 1995 and 1996, much of which resulted from a material lack of working
capital and the necessity to allocate a material amount of the limited capital
received from the private sales of equity and debt securities for litigation and
related expenses, including payments mandated to be paid to California Food &
Vending, Inc. ("CFV") by federal court order granting CFV's motion to assign
benefits granted on March 16, 1996 (the "Court Order"). See "BUSINESS -
LITIGATION."

The Company anticipated that it would complete the testing of the
Machine by September 1, 1995 based upon the expected delivery of the ten
pre-production Machines in late July 1995, but actual testing did not commence
until early December 1995 due to the delayed delivery of such pre-production
Machines by Premier Design, Ltd. ("Premier"). As a result of such testing,
certain modifications to and enhancements of the Machine were made. Further,
testing occurred on a more limited basis than initially expected due to the lack
of working capital discussed herein. Accordingly, no Machines were shipped to
distributors in the fiscal year ended January 31, 1996 although a demonstration
Machine was shipped to CFV in February 1996 pursuant to the Company's Settlement
Agreement with CFV. See "BUSINESS - LITIGATION." The Company expected to
commence commercial production of the Machine in September or October 1996,
although no assurances were given that this date would be met. Due to a lack of
working capital to complete the tooling of certain component parts of the
Machine for commercial production, this schedule has been delayed until mid to
late 1997. Although the Company is currently in negotiations with three funding
sources, each of which individually is capable of providing the necessary
funding to complete tooling and commence the commercial production process, no
assurances can be given that the Company will finalize satisfactory agreements
with one or more of such funding sources and secure the additional $350,000
necessary to complete the tooling process to meet such timetable. See "BUSINESS
- - DESIGN AND MANUFACTURING."

Since its inception, the Company has had no revenues from operations
and has relied almost exclusively on stockholder loans, limited distribution
deposits and private securities transactions to raise working capital to fund
operations. At October 31, 1996 the Company had approximately $27,500 in cash.
Until the investment of $1,250,000 in April and May 1996, as described below,
funding had been substantially inadequate to allow the Company to continue its
plan of operation. Accordingly, the Company secured additional funds through the
sale of restricted Common Stock to the extent and on the best terms possible in
light of its adverse financial position (see below). Despite the $1,250,000
investment, a significant amount of which was used to pay CFV and related
expenses, the Company continues to seek additional funding, primarily for
tooling expenses of approximately $350,000 and commercial production, and is in
discussion with three unrelated funding sources as discussed herein . No
assurances

<PAGE>

can be given that the Company will be able to secure adequate financing from any
source to pursue its current plan of operation, to meet its obligations or to
commence commercial production or expand marketing over the next 12 months. If
the Company is unable to obtain needed funds, it could be forced to curtail or
cease its activities. See "RISK FACTORS" and "USE OF PROCEEDS".

In connection with the development of the Machine, the Company paid
$75,000 toward the first $150,000 of development costs as provided in the
Premier Agreement. In April 1994, the Company advanced Premier $125,000 to be
applied to the aggregate cost of manufacturing ten pre-production Machines to be
placed in strategic locations for beta testing to gather data relating to, among
other things, the Machine's performance, marketing trends and customer
satisfaction. From May through July 1995, the Company paid Premier an aggregate
of an additional $250,000 ($35,000 for each of ten pre-production Machines less
the $125,000 paid in April 1994). The cost of these Machines was capitalized by
the Company for $246,600; however, the only revenue to be realized from the sale
of the ten pre-production Machines is $7,000 per Machine or $70,000 in the
aggregate. In July 1996, the Company paid Premier $100,000 toward the $650,000
owing to Premier for its one-half share of the Machine's development costs. The
remaining balance of $550,000 is still due and owed to Premier. Management
anticipates utilizing proceeds from the consummation of a transaction with one
or more of the three potential funding sources to pay Premier the $225,000
representing the amount currently necessary for one-half of the U.S. Patent on
the Machine to be assigned to the Company pursuant to the terms of the Premier
Amendment. See "RISK FACTORS - PATENT PROTECTION AND PROPRIETARY RIGHTS",
"BUSINESS - DESIGN AND MANUFACTURING," and "FINANCIAL STATEMENTS".

The ten pre-production Machines were placed at beta test sites located
at bowling alleys and corporate office centers in the greater Philadelphia area
and were monitored over a 90 day period by the Company. Testing of these
Machines was successful based upon customer acceptance and approval, taste,
price, convenience, Machine operation and the minimum down time experienced. The
testing enabled management to correct and improve the Machine in certain key
areas to enhance performance and operation. The Company's third party contractor
commenced the of tooling certain component parts of the Machine in mid-summer
1996 to then be assembled by S & H Electronics, Inc., a local Pennsylvania
manufacturer with whom the Company entered into a manufacturing agreement in
June 1996 because of Premier's inability to manufacture the Machines under the
terms of the Premier Amendment. See "BUSINESS - DESIGN AND MANUFACTURING." As
previously discussed, the tooling process has been delayed due to the
unavailability of working capital to complete same in the amount of
approximately $350,000. If the necessary funding is received, as to which no
assurances are given, then once tooling is completed and the Company is able to
order Machines from the manufacturer for delivery to purchasers, the Company
will require payment from such purchasers on terms which management believes
will cover its cash payment requirements to the manufacturer so that the Company
will not be required to advance cash for Machines or build an inventory,
although no assurances are given that this will occur. If management is
incorrect, the Company will be required to advance cash to the manufacturer.
This will require the Company to raise additional funds. There can be no
assurances given that any funding, including that which may be required to be
advanced, will be available or if available, on terms satisfactory to the
Company.

<PAGE>

The Company presently estimates, based upon current distribution
agreements, that it will provide at a minimum up to approximately 2,600 Machines
to its existing and possible new distributors during the 12 months following
delivery of the first commercial production Machines, assuming that such
distributors will be able to comply with the terms of their distribution
agreements. See "RISK FACTORS - VIABILITY OF DISTRIBUTORSHIP AGREEMENTS". This
number of Machines is subject to the Company receiving the required upfront fees
pursuant to their respective distribution agreements, as to which no assurances
are given. (See the discussion of leasing above.) Further, although management
previously anticipated that commercial production would commence in September or
October 1996, it now anticipates that this will occur in mid to late 1997. No
assurance can be given that this revised timetable will be met, when such
Machines will be shipped or the number that will ultimately be shipped in the
following 12 months. If a lesser number of Machines is purchased or leased, the
Company's financial condition and operations will be materially and adversely
effected unless it is able to sell to other operators who are not current
distributors and/or through Forrest Financial Corp. (the "Leasing Company").

In connection with the Company's decision to refocus its marketing
efforts and to secure a financing source that had the financial ability to
purchase and lease Machines, in September 1996, the Company entered into a
vendor agreement (the "Vendor Agreement") with the Leasing Company whereby the
Leasing Company will provide lease financing to distributors and others who may
wish to lease Machines rather than purchase. Pursuant to the terms of the Vendor
Agreement, approximately $15,000,000 will be made available by the Leasing
Company to qualified lessees for such purpose. The Leasing Company has since
qualified approximately 1,400 vending companies which it believes have the
financial capability and internal structure and experience to lease Machines
from the Leasing Company and place them in geographically desirable locations.
Once commercial production commences, the Leasing Company intends to contact
each of these companies with the goal of entering into lease agreements for
Machines. The Leasing Company will then purchase Machines directly from the
Company at the anticipated sales price of approximately $9,000 and lease them
for a period of three years. During this lease period, lessees will purchase
Potato Product and related Products directly from the Company. After the three
year lease term, the Leasing Company expects to take possession of the leased
Machine and return it to the Company's manufacturer for refurbishment and
modifications, if necessary, and the Company will be paid therefore. Thereafter,
the Machine will be leased once again by the Leasing Company with the lease
payment to be divided equally between the Company and the Leasing Company for
the full term of the lease for each Machine so refurbished and leased.
Management believes that the availability of financing to qualified lessees to
lease the Machine may attract more vending machine companies and operators. To
the extent that Machines are leased and funded in this manner, the Company
expects that it will no longer be required to provide initial cash funding for
production but rather will receive funding directly from the Leasing Company,
as well revenue after year three from the refurbishment of the Machines, in
addition to a continuing revenue stream for each Machine leased thereafter. This
should, although no assurances are given, enable the Company to attain greater
profit margins, and a potential cash flow source without incurring the
attendant cost of capital. See "BUSINESS - MARKETING THROUGH DISTRIBUTORSHIPS".

In addition, the Potato Product for use in the Machine was developed in
1995. Management estimates that the cost to establish a manufacturing line to
produce the Potato Product is approximately $500,000. Due to the significant
cost involved and the current

<PAGE>

availability of certain other potato products which are comparable with the
Company's Potato Product and can be used in the Machine, the Company does not
currently intend to establish a manufacturing line at this time, Rather,
management anticipates that it will enter into an exclusive license agreement
for an alternative potato product in the near future on terms expected to be
favorable to the Company. See "BUSINESS - AVAILABILITY OF RAW MATERIALS AND
PRINCIPAL SUPPLIERS".

In accordance with the terms of the Company's current distribution
agreements, deposits and other down payments are non-refundable, and the Company
has retained such fees upon termination of distribution rights in the past.
Management believes that once commercial production of Machines is commenced and
distributors notified and required to place orders for Machines, most of such
distributors will be financially unable to do so. Notwithstanding the foregoing,
as previously discussed, management shifted its marketing focus and has
discontinued its practice of selling exclusive distributorships for territories
based upon the belief that sales to experienced, well-financed vending companies
on a non-exclusive basis would be more effective and ultimately more profitable
than the existing distribution network was expected to be. No assurances can
be given that management will successfully negotiate, market and develop this
new market but management will continue to seek the most efficient and
profitable ways to market and distribute the Machines and the Products. See
"RISK FACTORS - VIABILITY OF DISTRIBUTORSHIP AGREEMENTS" and "BUSINESS -
MARKETING THROUGH DISTRIBUTORSHIPS."

As previously discussed, the Company has suffered from a continuous
lack of working capital to fund the necessary tooling and related pre-production
needs to commence commercial production of Machines. Management is currently in
negotiations with three separate funding sources to provide the capital it
requires to fully fund tooling and bring the Machine to market. Once funding is
in place, management anticipates placing purchase orders with approved suppliers
for 1,000 Machines. The Company expects to then release an order for 50 Machines
and have these Machines placed at locations in the Greater Philadelphia
metropolitan area.

Management believes that this plan can be successfully implemented and
should enable the Company to generate sufficient cash to support its operations
from the date that the first 50 Machines are placed for operation. The balance
of 950 Machines will thereafter be assembled as soon as the initial 50 Machines
are fully field tested and all modifications to the electro/mechanical
assemblies are documented and approved. Upon final submission of all tooling and
drawings, the Company will have approximately eight to ten weeks in which to
secure purchased items, set manufacturing and commence sub-assembly production.
Management bases its belief that the plan can be successfully implemented upon
the expected revenue to be received from the operation of these first 50
Machines. Specifically, management currently estimates that each of such 50
Machines strategically placed in high traffic areas such as railroad stations,
schools and universities, and airports, will average approximately 40 vends per
day six days per week which represents approximately a $2,600 net profit to the
Company for each 500 vends. Based upon the number of pounds of Potato Product
and related Products which will be used for this number of vends, their
respective cost to the Company and price to be paid by distributors, (if any),
and Machine operators, the Company should receive sufficient cash flow to
support the modest expansion of operations over the next 12 months. Although
management cannot assure the ultimate success of its plan, it is reasonably
confident that it will enable the Company to continue its business and grow
modestly.

<PAGE>

If the Company is unable to obtain the desired funding from any of the
three sources previously discussed, it is highly unlikely that it will be able
to generate a sufficient amount of cash to support its operations during the 12
months following the date hereof, unless it is able to obtain the necessary
funds from the sale of debt and/or equity during such period. Based upon its
past history, management believes that it may be able to obtain funding in such
manner but is unable to predict with any certainty the amount and terms thereof.

Pursuant to the Company's settlement agreement with CFV, CFV is to
receive certain royalty and other payments from the Company in the future only
upon the occurrence of certain events. Specifically, CFV will receive (i) $350
for each Machine sold for the first 500 Machines and thereafter an amount equal
to 35% of the difference between the price paid to the manufacturer and/or the
wholesale price to the domestic or international purchaser, of a minimum of $350
up to a maximum of $500 per Machine, (ii) $.25 per pound of all Potato Product
sold, commercially used or distributed, and (iii) an aggregate of $2,000,000
payable from domestic and international gross distribution fees and utilization
fees received by the Company payable to CFV by receipt by CFV of 50% of all such
fees received by the Company until paid in full. Thereafter, CFV will receive
25% of all distributorship fees received by the Company after the $2,000,000 is
paid to CFV as previously described. The Company has taken into account all
royalty payments to be made to CFV and others and has priced the Machine and
Potato Product accordingly. Management therefore believes that the royalty
payments to CFV, when due, will not have any material effect on its business.

The drain on the limited capital available to the Company has adversely
effected the Company. Since February 1995, the Company has been required to pay
CFV in excess of $700,000 pursuant to the Court Order. In addition, there have
also been increases in certain line item expenses as the Company has prepared
for beta testing and commercial production. From fiscal 1995 to 1996, travel and
entertainment expense increased from approximately $39,000 in 1995 to $101,000
in 1996 primarily due to costs incurred in connection with the Company's
attendance at trade shows and travel to and attendance at meetings with
investment bankers and potential investors. Expenses related to the research and
development of the Machine increased from $47,400 in fiscal 1995 to
approximately $276,000 in fiscal 1996 due to beta testing and the $225,000 paid
during such period for the beta test machines. Consulting expenses increased
from approximately $43,000 in fiscal 1995 to approximately $252,000 in fiscal
1996 and payroll and payroll tax increased from approximately $122,000 in
fiscal 1995 to approximately $260,000 in fiscal 1996. The increase in consulting
fees was primarily due to the Company's increased dependence on consultants to
provide marketing and business expertise. The increased payroll and payroll tax
expenses resulted from the Company paying Mr. Kelly's entire salary, one half of
which had previously been paid by H&R Industries as part of the Machine's
development costs. Management believes, although it cannot be assured, that it
has made significant inroads in stabilizing its operating and overhead costs and
should be able to move forward with its business plan as discussed herein. The
Company has completed all marketing and warranty materials and the necessary
technical manuals relative to the operation of the Machine. Further, it has
finalized its training program and completed an instructional video for
distributors, operators and the technicians who will ultimately service the
Machine. Several technicians representing distributors have already attended the
Company's training program.

As of April 1, 1996 the Company had a total of six (6) full-time
employees, including Leonard Klarich, who has served as Executive Vice President
and Secretary since June 1996,

<PAGE>

is a Company director and has previously provided consulting services to the
Company during the current fiscal year. Mr. Klarich, experienced in operating
larger companies than the Company, is responsible for marketing, distribution
and administrative matters which has enabled Mr. Kelly to focus on tooling,
production and assembly of the Machine and to seek regulatory approvals and
design enhancements. Although preliminary matters have already been addressed
for the necessary approvals, only commercial production Machines can obtain
final approval. See "BUSINESS - EMPLOYEES" AND "MANAGEMENT". Additional
employees are expected to be hired during the next 12 months if the Company's
proposed plan of operation is successful and there is sufficient cash flow from
operations, if any, which remains constant to support such additional expense.
There can be no assurances that additional employees will be hired or that there
will be sufficient income generated from operations to fund such additional
expenses. If hired, such additional employees may include a food technician, a
chief operating officer with significant experience in the vending machine
business, a chief financial officer, and sales and marketing personnel. At the
present time, management is unable to estimate how many employees will be needed
during the next 12 months, if any.

In the past, the Company had retained and may in the future retain
consultants with significant experience in marketing and advertising and in the
food vending business to assist the Company with its marketing efforts as well
as other related matters. On May 23, 1996 the Company entered into a consulting
agreement with LBI Group, Inc. ("LBI") to provide certain business consulting
services, including marketing, for a 12 month period, subject to prior
termination by either party upon at least 30 days prior notice. In consideration
thereof, the Company granted an option to employees of LBI involved in providing
such consulting services to the Company to purchase on a pro-rata basis an
aggregate of 4,000,000 pre-split shares of free-trading Common Stock at an
exercise price of $.05 per share. Such free-trading shares were issued by the
Company upon exercise of the option by these LBI employees for $200,000 in July
1996. In August 1996 the Company, by letter, terminated the agreement with LBI
for alleged non-performance. Prior thereto, the employees of LBI returned an
aggregate of 1,000,000 pre-split shares to the Company which were canceled and
returned to treasury. The Company has been negotiating with LBI for the return
of additional shares. No assurances are given that any additional shares will be
returned or what action, if any, the Company may take in connection therewith.

In September 1995, the Company entered into an agreement with Acumen
Services, Ltd. an off-shore Abaco, Bahamas company ("Acumen"), to purchase an
aggregate of 21,500,000 pre-split shares of Common Stock of the Company for a
purchase price of no less than $.10 per share payable pursuant to the terms of a
Promissory Note from Acumen providing for payment of the purchase price on the
earlier to occur of (i) the date that commercial production of the Machine
commences or (ii) January 2, 1996. In late November 1995, when it was apparent
that the delayed beta testing was about to commence, management and Acumen
agreed to provide for payment of the purchase price to occur solely upon
commercial production of the Machine. The 21,500,000 pre-split shares were held
in escrow until October 1995 when the Company

<PAGE>

agreed to the transfer of 3,900,000 pre-split shares from Acumen to its Trustee
(an off-shore, non-U.S. person pursuant to Regulation S) and subject to payment
in full for all shares so transferred as agreed. The Trustee and Acumen executed
Regulation S representation letters and the Trustee also executed a Guaranty and
Indemnity in favor of the Company agreeing to return the shares or pay for them
upon the written request of the Company. In January 1996 the Company agreed to
the transfer of an additional 3,000,000 pre-split shares by Acumen to the
Trustee in the same manner and new Regulation S representation letters were
executed by both parties and a Guaranty and Indemnity relative to such shares
was executed by the Trustee. During the last quarter of the fiscal year ended
January 31, 1996, Acumen transferred 2,000,000 pre-split of such shares to two
non-U.S. persons in two separate off-shore transactions in conformity with
Regulation S. Such non-U.S. persons thereafter directly paid the Company for
these shares, in the aggregate amount of $100,000 (USD), representing a decrease
in the price to be paid by Acumen to $.05 per share, based upon the then current
market price of the Company's Common Stock. The Company believes that
approximately 1,000,000 pre-split shares of the 3,000,000 pre-split shares
transferred from Acumen to the Trustee were thereafter transferred to U.S.
citizens in violation of Regulation S. The balance of the shares issued to
Acumen were canceled and returned to the Company's treasury in late May 1996. A
written request for either the return of 3,900,000 pre-split shares transferred
to the Trustee or payment therefore was sent to the Trustee on May 30, 1996 but
as of the date hereof, the shares have not been returned or paid for. On June 26
the Company instituted a lawsuit against the Trustee in the Circuit Court of the
Eleventh Judicial Circuit in and for Dade County, Florida alleging breach of the
Guaranty and Indemnity Agreement based upon the failure of the Trustee to return
the 3,900,000 pre-split shares plus interest and attorneys' fees. On September
4, 1996, the Company obtained a Default against the Trustee. On October 28,
1996, the Trustee filed a Motion to Vacate Default. On October 29, 1996, the
Company filed a Motion for Final Default Judgment. Pursuant to an Agreed Order
dated March 5, 1997, the Company filed an Amended Complaint on March 28, 1997.
Defendant's answer is due on or before April 28, 1997.

On April 30, 1996 the Company entered into the Stock Purchase Agreement
with an accredited investor to purchase an aggregate of 25,000,000 pre-split
shares of restricted Common Stock at a purchase price of $.05 per share for
aggregate gross proceeds to the Company of $1,250,000 payable (i) $500,000 on
April 30, 1996 for 10,000,000 pre-split shares and (ii) the balance of $750,000
payable on or before May 30, 1996. An aggregate of $1,250,000 was paid to the
Company on or before May 31, 1996. The investor also received 250,000 post-split
shares and will receive Warrants to purchase 119,143 post-split shares. Although
the Company entered into the Stock Purchase Agreement with one investor, certain
other individuals provided a portion of the $1,250,000 used to fund such
investor's purchase of the Company's Common Stock. In addition, a portion of the
25,000,000 pre-split shares issued to the investor were later transferred by
such investor to the individuals who provided such funds on a pro-rata basis. As
a result of requests by certain of these individuals who acquired shares from
the investor, the Company returned an aggregate of $225,000 to these individuals
in exchange for the shares of the Company's Common Stock held by them. These
funds were replaced by the purchase of an equivalent number of shares of Common
Stock by other investors for the same amount. The

<PAGE>

purchaser and transferees of these shares of Common Stock, who have also
received Warrants to purchase Warrant Shares on a pro-rata basis are listed
herein as Selling Securityholders and their Shares and the Warrant Shares, once
issued, among others, are being registered for sale hereby. See "PRINCIPAL
SECURITYHOLDERS" and "SELLING SECURITYHOLDERS".

The Stock Purchase Agreement, among other things, also provides for (i)
the investor to receive 250,000 post-split shares of restricted Common Stock in
consideration for the investment after the reverse split is effective, (ii) the
appointment of a nominee to the Board of Directors, and (iii) the purchase of up
to an additional $1,000,000 in value of restricted Common Stock promptly after a
reverse stock split is approved by a majority of the Company's issued and
outstanding shares of voting stock. The number of post-split shares to be
purchased by the investor for the $1,000,000 shall be determined by dividing
$1,000,000 by the average of the bid and asked price of the Common Stock on
December 23, 1996, the effective date of the reverse split. To date, these
shares have not been purchased. Further, the Stock Purchase Agreement provides
that Edward C. Kelly, President of the Company, shall be issued 1,500,000
post-split shares of Common Stock for past, present and future services to the
Company, exclusive of any salary, bonus or other compensation in any form
received or to be received by Mr. Kelly, based upon a reverse split resulting in
no greater than 6,000,000 post-split shares of the Company's Common Stock to be
outstanding. All shares received will be restricted and will be registered in
the Registration Statement of which this Prospectus is a part, together with the
shares underlying the Warrants described below, to be filed with the Commission
within 60 days from the date of payment for all 25,000,000 pre-split shares.
Both the investor (and its transferees) and Mr. Kelly have agreed not to sell
such shares for 60 days from the effective date of the Registration Statement.
The investor and Mr. Kelly shall also receive Warrants to purchase the lesser of
(i) 5,000,000 pre-split shares of restricted Common Stock or (ii) such amount of
post-split shares to ensure that each of them shall maintain ownership of no
less than 25% of the issued and outstanding Common Stock of the Company at any
time for a period of three years from May 29, 1996 at an exercise price equal to
the average of the bid and asked price per share on the effective date of the
reverse split which is $1.90 per share. It was further agreed that the Warrant
Shares would also be registered. These Warrants have been issued to the
investors on a pro rata basis based upon the aggregate amount of their
respective purchase. See "BUSINESS", "PRINCIPAL SECURITYHOLDERS", "CERTAIN
TRANSACTIONS" and "SELLING SECURITYHOLDERS".

On December 16, 1996, a majority of the issued and outstanding voting
securities of the Company, by written consent, approved a 1 for 20 reverse stock
split of the Company's Common Stock effective on December 23, 1996 and
authorized an amendment to the Company's Articles of Incorporation to change its
authorized common shares to 25,000,000 shares of Common Stock and its par value
to $.001 per share. The Amendment was filed with the Nevada Secretary of State
on December 18, 1996 and the reverse stock split was effective on December 23,
1996. See "DESCRIPTION OF SECURITIES".

<PAGE>

BUSINESS

GENERAL

The Company has developed its own patented french fries vending machine
(the "Machine") and the related proprietary potato powder mix for the production
of french fries in the Machine (the "Potato Product") for marketing on a
worldwide basis. The Company had previously received a federally registered
trademark for its former name and logo,"Adelaide". The Company has subsequently
federally registered its name and logo, "Tasty Fries", as a federal trademark on
the Supplemental Register and has been marketing the Machine and its Products
under that name. See "PATENTS AND PROPRIETARY RIGHTS" herein. The Company's
early plans were to principally market its Products through an exclusive
distributorship network which then current management believed would offer
uniform and consistent Products to consumers worldwide. In furtherance of this
plan, the Company sold distributorships for different markets throughout the
United States and foreign countries. In 1995, under current management, the
Company redirected its marketing focus by commencing to reacquire and negotiate
the reacquisition of certain distributorships and sell Machines and Products on
a non-exclusive basis to established well-financed vending companies. The
Machines are expected to be located in high traffic locations such as airports,
bus and train stations, universities, schools, military bases, theaters, work
areas and recreational venues.

The Company completed the final stages of beta testing of its Machines
in the last quarter of the fiscal year ended January 31, 1996 and completed
certain modifications to and enhancements of the Machine based upon such tests.
Further, although the development of the Potato Product has been completed, due
to the cost of establishing a manufacturing line to produce it, the Company
anticipates entering into an exclusive license agreement for a comparable potato
product for use in the Machine. Management originally anticipated that the beta
site testing and development would be completed and Machines would be delivered
by the end of the 1994 calendar year and then possibly by the end of the 1995
calendar year. This did not occur because (i) of the unanticipated amount of
additional time necessary to completely design, develop and test a totally new
Machine, (ii) the continuous lack of working capital available to fund the
testing of the Machine and its commercial production, and (iii) the substantial
time and funds necessary to satisfy the arbitration award in favor of California
Food & Vending, Inc. ("CFV"). See "LITIGATION" herein.

Further, beta site testing did not commence until early December 1995
which was longer than originally anticipated and therefore delayed even further
the commercial production of Machines. See "MARKETING THROUGH DISTRIBUTORSHIPS"
herein, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION - PLAN OF OPERATION" and "FINANCIAL STATEMENTS".

<PAGE>

HISTORY

In 1992, persons then associated with the Company filed a U.S. patent
application with respect to a device for the vending of fresh french fried
potatoes which was assigned to the Company on October 9, 1992. Substantial
testing and test-marketing of the device resulted in the device failing to
perform as anticipated and significant and numerous mechanical and design
imperfections were encountered. Then current management of the Company decided
to abandon the original device and retained the services of an expert engineer
through Premier, Edward C. Kelly, to design and develop a completely new machine
with totally different technology. At the time, Mr. Kelly had no affiliation
with the Company. Production of such a device did not proceed as originally
scheduled due to the unanticipated significant amount of time needed to design,
engineer and test the new Machine and the continual lack of working capital to
adequately fund the process. See "LITIGATION" herein, "MANAGEMENT" and
"FINANCIAL STATEMENTS."

DESIGN AND MANUFACTURING

In January 1993, the Company entered into the Premier Agreement with
Premier, a manufacturer based in Warminster, Pennsylvania which was formed by
Harry Schmidt and Edward C. Kelly, for the purpose of designing and
manufacturing a completely new french fries vending machine in a joint venture
with the Company. The President of Premier is Harry Schmidt who subsequently was
appointed to the Company's Board of Directors in May 1993 but did not stand for
re-election to the Board in September 1995. Edward C. Kelly, an owner of Premier
but not an officer or director of the Company at that time, was subsequently
appointed by the Company's Board of Directors at that time as Executive Vice
President from January 1994 to June 1994, President and Treasurer in June 1994,
and has been a member of its Board of Directors since February 1994 and its
Chairman since June 1996. See "MANAGEMENT" AND "SELLING SECURITYHOLDERS"

The Premier Agreement provided that the manufacturer, Premier, would
refine and manufacture the Machine which dispenses hot french fried potatoes;
however, due to the substantial design and engineering flaws in the original
licensed device, Premier, through Edward C. Kelly, in February 1993, recommended
that the Company abandon said device and undertake the design and engineering of
a totally new Machine. The Company and Premier then agreed to equally share the
first $150,000 of development costs, which such costs included design,
engineering and initial manufacturing costs projected over the initial 500
production machines or a lesser number as would be jointly determined by Premier
and the Company. Development costs, if any, in excess of $150,000 would be
advanced by Premier and reimbursed on the basis of $500 per Machine up to the
first 200 Machines produced or $100,000, whichever was less. The first 500
Machines were to be priced at a cost to the Company not to exceed $7,000 plus
$500 reimbursement for excess development costs, if any, with a goal of reducing
the cost of the Machine in the future as feasible. After the first 500 Machines,
the Premier Agreement required that the Company purchase the Machines from
Premier based on

<PAGE>

manufacturing cost plus 20%. The Premier Agreement could not be terminated by
either party so long as Premier provided the Machines as required by the
Company. Pursuant to the terms of the Premier Agreement, the first initial
production of Machines was to be delivered by June 15, 1993, but due to the
unanticipated amount of additional time necessary to completely design, develop
and test a totally new Machine, the Machines were not delivered as planned. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION - PLAN OF OPERATION," "MANAGEMENT" and "CERTAIN TRANSACTIONS."

On December 30, 1994, the Company and Premier amended the Premier
Agreement (the "Premier Amendment") to provide that Premier supply the Company
with ten pre-production Machines to be used at beta test sites for testing by
Premier at a total cost of $35,000 per Machine for an aggregate purchase price
of $350,000 to be paid by the Company. This amount was to be offset by the
$125,000 advanced by the Company in April 1994 which amount was originally
intended to be for development costs. In addition, Premier agreed to field test
the Machines and, upon the Company receiving satisfactory results, agreed to
manufacture the Machines exclusively for the Company. The Premier Amendment
further provides, among other things, that (i) the first 500 Machines
manufactured for distributors after the pre-production Machines, will be sold to
the Company for $7,000 each, after which the price per Machine will be
manufacturer's cost plus 20%, (ii) delivery of the Machines will take place
within 180 days after receipt of a purchase order from the Company, (iii) any
foreign or U.S. patents issued on the Machine or any aspects thereof shall be
jointly owned by the Company and Premier upon delivery to the Company of an
audited accounting of development costs from Premier and tender by the Company
to Premier of 25% of such costs, with an additional 25% payable to Premier
within 12 months thereof, (iv) Premier and the Company will seek independent
bids on the manufacturing costs of the Machine from independent manufacturers,
and if the parties agree to the terms (a lower manufacturing cost), Premier will
purchase Machines from such manufacturer at the lower cost and be permitted to
add its 20% mark-up to such price, and (v) the Company cannot license any party
to manufacture the Machine without written consent from Premier.

The Company, through Mr. Kelly as inventor, in good faith assigned the
patent rights for the Machine to Premier solely in consideration for and
reliance upon Premier's specific representations in the Premier Amendment, with
the express understanding that Premier would immediately assign to the Company
its one-half interest in the patent upon delivery to the Company of the audited
accounting of development costs to be provided by Premier and payment by the
Company thereof in accordance with the terms of the Premier Amendment. Premier
did not provide the Company with an audited accounting as required by the
Premier Amendment but with a spread sheet of costs. Further, Premier did not
conduct the beta testing of the pre-production Machines as required by the
Premier Amendment and the Company incurred the additional costs of such testing.
Because no audited accounting of development costs was provided by Premier to
the Company as required, the Company retained its independent auditors to audit
the spreadsheet of development costs received from Premier. Based upon such
audit,

<PAGE>

the Company estimated that its share of the development costs was approximately
$417,500 after adjustment for certain charges which were applied to the
development costs by Premier but were unrelated to the development of the
Machine and other duplicative billing, but not including the beta testing costs.
After payment of $350,000 between May and July 1995 for the ten pre-production
beta test Machines and other payments made, the Company's independent auditors
estimated that the Company paid virtually all of its share of the development
costs. Subsequently, after several months of discussion with Premier, the
Company and Premier verbally agreed that the Company will pay an aggregate of
$650,000 to Premier as its one-half share of all development costs of which
$100,000 was paid in July 1996. Premier will also receive $250 per Machine
manufactured by a third party. Management and the Board of Directors agreed to
these terms based upon the potentially prohibitive costs to the Company
resulting from protracted litigation (monetary and otherwise), additional delays
in the commercial production of the Machine and the agreement of Premier to
waive any rights it may have to manufacture the Machine. Upon payment of an
additional $225,000 to Premier (representing payment of an aggregate of 50% of
the Company's total share of development costs as required by the Premier
Amendment), Premier will assign a one-half interest in the patent for the
Machine to the Company in accordance with the terms of the Premier Amendment.
See "RISK FACTORS - PATENT PROTECTION AND PROPRIETARY RIGHTS" AND "PATENTS AND
PROPRIETARY RIGHTS" herein.

As commencement of commercial production is a Company priority and
Premier cannot manufacture the Machine pursuant to the terms of the Premier
Amendment, on June 17, 1996, the Company announced its intention to award the
manufacturing contract for the Machine to S&H Electronics of Robesonia,
Pennsylvania ("S&H"), an unaffiliated third party, and subsequently entered into
manufacturing agreement with S&H for such purpose. S&H is a contract
manufacturer which specializes in the assembly and testing of electro-mechanical
assemblies and equipment. The Company's central procurement station is expected
to be located within the manufacturing site with initial manufacturing
procedures to be supervised by Company personnel to insure strict compliance
with NAMA (as defined herein) and U.S. Food & Drug Administration (FDA)
regulations. The Company is currently in negotiations with a subsidiary of Koors
Industries, a multi-billion dollar Israeli conglomerate, to manufacture
Machines for the European, Middle Eastern and Asian markets. No final agreement
has been reached and no assurances are given that this will occur. See "RISK
FACTORS - NO MANUFACTURING FACILITIES; COMPLETION OF TOOLING".

Although the Premier Amendment provides for delivery of the
pre-production Machines within 180 days of a purchase order from the Company,
Premier agreed to use its best efforts to complete these pre-production Machines
on or before July 14, 1995 although no assurances were given. In connection
therewith, the Company and Premier entered into an Escrow Agreement through
which Premier was paid the balance of $175,000 for the ten pre-production
Machines (after deduction of the $50,000 down payment made on May 5, 1995), in
weekly increments of $17,500 over a ten week period commencing in May 1995 and
ending in July 1995, provided that Premier meet certain pre-production schedule
benchmarks during such time

<PAGE>

period. The pre-production Machines were not completed by Premier within the
intended time period and were not delivered to the Company until mid-November
1995. As a result, beta testing did not begin until early December 1995 which
further delayed the opportunity for the commercial production of the Machine.
See "CERTAIN TRANSACTIONS."

THE MACHINE

The Machine is designed to produce quality freshly made french fried
potatoes utilizing a unique method that automatically converts a specifically
formulated dehydrated Potato Product, with approximately an 18 to 24 month shelf
life, into rehydrated potato mix, delivers this mix into a proprietary forming
and cooking cycle, and finally into complete high-quality freshly made french
fried potatoes. The Potato Product can be stored at room temperature, requires
no refrigeration or freezing, and occupies less storage space than frozen fries,
thereby offering greater storage capacity. The french fried potatoes are
delivered to the consumer in a 10 ounce cup of 32 french fries. This is
accomplished from the dehydrated mix to a completed order of quality fresh
french fried potatoes in approximately 90 seconds. The utilization of a
state-of-the-art combination of computer driven mechanics makes this possible.
Also attached to the bottom of the vended cup are individually prepackaged
portions of ketchup and salt. The attachment device currently has a patent
pending before the U.S. Patent and Trademark office. See "PATENTS AND
PROPRIETARY RIGHTS" herein.

The design of the Machine permits the use of a vegetable oil so that it
delivers a cholesterol-free product. Each vend contains french fries which are
crisp and golden. The quality of the product is consistently uniform in each
vend. The Machine has the capacity to produce 500 vends before any refill is
required. The Machine is computer controlled and communicates with the consumer
from the time the money is deposited into it until the time the vended cup of
fresh french fried potatoes is delivered. The Machine can accept dollar bills,
coins or any combination thereof, depending on the vend charge, which can be
changed at anytime by simply reprogramming the dollar bill/coin component.

The Machine requires a 220 volt electrical connection and is equipped
with up-to-date computer technology using microprocessors and sensors, thus
making it possible to continuously monitor all vending parts and report any
potential problems. The Machine can report to a central data base, if required,
to make this information available to the service company/refill operator. The
Machine monitors the amount of vends, and simultaneously provides cash reports.
Based upon the results of the beta testing and the operation of beta test
machines in the field, the Company has no maintenance and repair track records
to date, as the Machines have required no replacement parts. The Machines have
been designed to be repaired on-site without the necessity of being returned to
the manufacturer. It is anticipated that ongoing maintenance will be limited,
and labor will involve the resupply of the Machines once Potato Product is
required to be replenished. At such time oil will be replaced and additional
cups and condiments will be restocked. Water will also be changed at such time
unless the Machine is attached to a plumbing supply which is not necessary for
the Machine's operation. The frequency with

<PAGE>

which the Machine must be restocked depends completely upon the number of vends
dispensed daily and how often the Machine's coin box is emptied. Normally,
operators empty coin boxes frequently to reduce the potential for theft.
Management anticipates that coin boxes will be emptied on average every three
days for a moderately busy location.

Management currently expects that the commercial sales price for the
Machine will be approximately $9,000 per unit. Currently, the anticipated price
per vend is $1.25, although the actual price may vary greatly from location to
location based upon several factors, including supply and demand and local costs
for electricity, labor, transportation, etc.

MARKETING THROUGH DISTRIBUTORSHIPS

The Company had, until late 1995, exclusively marketed the Machines and
the Products through exclusive territorial distributorships. Although it has
continued to market on a very limited basis through distributorships, current
management has shifted its marketing focus to ultimately place Machines in
locations not covered by exclusive distributorship agreements and reacquire
certain existing distributorships, although no assurances are given that this
marketing plan will be followed or not be revised in some manner. This shift
occurred when management realized that exclusive distributorships for
territories would not be ultimately practical or profitable. Management learned
that major vending companies do not want to be sub-distributors but want to
deal directly with the factory that manufactures the equipment. Additionally,
these same companies have the established infrastructure which enable them to
service the equipment that they purchase or lease. Such companies enter into
their own agreements to place vending units at different locations and require
the ability to use their discretion as to where to place machines. Furthermore,
the Company's own internal research indicated that the largest profit margins
and the greatest long-term area of profitability would be from the sale of
Products. Accordingly, limiting to whom Machines could be sold and ultimately
limiting their number through the sale of exclusive distributorships, could be
financially detrimental to the Company's long-term operations, revenues and
potential cash flow. See "MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION".

In contemplation of selling Machines on a non-exclusive basis, the Company
entered into the Vendor Agreement with Forrest Financial Corp. (the "Leasing
Company") to provide lease financing to operators of the Machines who may wish
to lease Machines rather than purchase. The Vendor Agreement provides that up to
approximately $15,000,000 will be available to qualified lessees for this
purpose. Management anticipates, but cannot assure, that operators will
ultimately be established, experienced vending companies with significant
financial resources and infrastructures that will enable them to place and
service their Machines in their sole discretion. See "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION".

<PAGE>

The existing distributorship agreements vary from territory to
territory, but essentially require a non-refundable down payment and minimum
annual payments usually over a five to ten year period. Most distributors must
also pay $200 to $500 per Machine purchased as a credit toward the minimum
annual payments. Most distributorship agreements require a minimum number of
Machines to be purchased per year. The total price of the distributorship will
vary substantially based on the estimated market potential of the particular
territory which is usually based upon population and other relevant criteria.

The Company has, to date, sold or granted an aggregate of 15
territorial distributorships, one of which has been reacquired by the Company
and some of which were terminated by the Company for breach of the terms of the
respective distributorship agreement. There are currently 10 distributorships
which have not been terminated or reacquired. The distributor's obligations to
make further payments, after tendering the initial deposit required upon
execution of the distributorship agreement, are conditioned on the Company's
ability to ship its Machines and related Products.

The currently existing territories are listed as follows:

<TABLE>
<CAPTION>
MINIMUM
DEPOSIT YEARLY
TERRITORY TOTAL PRICE RECEIVED PURCHASE(E)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

1.(a) DE, D.C., $ 750,000 $ 50,000 100 machines
MD & VA

2. Texas $ 750,000 $ 25,000 200 machines

3.(b) Israel $ 200,000 $ 40,000 100 machines

4. Pennsylvania $ 750,000 $ -0- 200 machines

5. AR, AZ, CO $1,500,000 $ 65,000 300 machines
KS, LA, MI,
MN, MS, MO,
MT, NE, NV,
NM, ND, OK,
OR, UT, WA,
WI & WY

6. Austria, $1,550,000 $ 60,000 500 machines
Germany,
Switzerland,
Luxembourg,
Belgium,
Holland &
Lichenstein

7.(c) Bulgaria, $4,000,000 $175,000 400 machines
Czechoslovakia, (year one)
(former),Denmark,
Finland, France, 800 machines
Greece, Italy, (years 2-9)

34
<PAGE>

Norway, Poland,
Portugal, Romania, 850 machines
Spain, Sweden, (year 10)
Turkey

8.(c) AL, AK, GA, IL, IN $1,000,000 $175,000 100 Machines
KY, MS, NC, OH, SC, (year one)
TN, WV

9. Dade, Broward, $ 250,000 $1,000 down 150 machines
Monroe & Palm & $4,000 upon
Beach County, delivery of
Florida first machine

10. Brazil $ 250,000 $100,000 250 machines

11.(d) California - - -

</TABLE>

(a) Assigned to a group which includes Harry Schmidt, a former director of
the Company and President of Premier. See "CERTAIN TRANSACTIONS."

(b) Deposit forfeited in August 1994 for non-performance and a new
distributor paid an aggregate deposit of $40,000 for this territory.

(c) Granted to International Tasty Fries, Inc., a publicly traded Nevada
corporation. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION PLAN OF OPERATION," "PRINCIPAL
SECURITYHOLDERS - SECURITY OWNERSHIP OF MANAGEMENT", "SELLING
SECURITYHOLDERS" and "FINANCIAL STATEMENTS".

(d) Granted to CFV by agreement and confirmed by the award of the
arbitrator and subsequent Court Order. See "LITIGATION" herein.

(e) No Machines have been purchased as of the date hereof. See "RISK
FACTORS - VIABILITY OF DISTRIBUTORSHIP AGREEMENTS".

The exclusive territorial distributorship agreements generally have a
term of five to ten years, require the distributor to purchase all supplies for
the Machines directly from the Company, and set forth uniform standards of
operation. The agreements are transferable under certain conditions as uniformly
established in the respective agreements and require the prior approval of the
Company for sub-licensing and for sub-distributors. The majority of the
agreements can be terminated by 30 day written notice from the Company in the
event of default. In September 1993, December 1993, August 1994 and April 1995
the Company terminated distribution rights for Georgia, New Jersey, Israel and
the United Kingdom, respectively, due to a failure to fulfill certain
contractual obligations pursuant to the terms of the distributorship agreements
and the respective deposits were forfeited. In September 1995 the Company
repurchased the Canadian distributorship from Adelaide Vending (Canada) Ltd. for
the original purchase price plus costs aggregating $100,000 (USD) for 1,000,000
shares of Common Stock at its then current market value and an option to acquire
50,000 post-split shares of Common Stock for two years at $5.00 (USD) per
share, all pursuant to Regulation

<PAGE>

S. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION - PLAN OF OPERATION", "PRINCIPAL
SECURITYHOLDERS - SECURITY OWNERSHIP OF MANAGEMENT" and "CERTAIN
TRANSACTIONS."

Pursuant to the award of the arbitrator on October 25, 1994 and
subsequent Court Order, CFV was granted distribution rights to California. There
is no formal written distribution agreement between the Company and CFV. All
terms and conditions related thereto would require negotiation between the
parties which has not occurred to date. CFV has previously expressed an interest
in returning the distributorship to the Company for a to-be-agreed upon price
but no further discussions have taken place. No assurances are given that the
Company will determine to reacquire this territory from CFV in the future. See
"LITIGATION" herein.

COMPETITION

The Company faces competition from other suppliers of french fries,
including fast food outlets. The Company is aware of other companies which have
test marketed french fry vending machines or are in the process of developing
such machines. Certain of the companies which are viewed as competitors or which
may become competitors in the future, have more capital and greater resources
than the Company. Currently, the Company is aware of only one viable competitor
which is Ore-Ida, a major manufacturer and distributor of frozen potato
products. The Ore-Ida vending machine is not comparable to the Company's Machine
for many reasons, including that it only hot air cooks frozen french fries which
must be kept frozen in the unit thereby requiring refrigeration. This contrasts
with the Company's Machine which cooks only freshly made french fries and
requires no refrigeration, thereby eliminating spoilage and potential loss from
a power shortage.

Management believes, although no assurances are given, that due to
current consumer demand for french fried potatoes, it is anticipated that there
will be strong competition in the future in the area of french fry vending once
technological problems have been solved. See "RISK FACTORS - COMPETITION".

AVAILABILITY OF RAW MATERIALS AND PRINCIPAL SUPPLIERS

The Machine was initially intended to be manufactured by Premier
pursuant to the Premier Agreement and the Amendment; however, Premier is not
able to manufacture the Machine at a competitive price or even the first 500
Machines at $7,000 as required by the Amendment. See "DESIGN AND MANUFACTURING"
herein. Certain individual components of the Machine are in the process of being
tooled from custom made molds owned by the Company and produced by independent
manufacturers or suppliers together with other parts including those which are
custom designed. The tooling process has been delayed due to the lack of capital
available to complete the process. Management believes there are several
alternative sources of supplies and manufacturers for such items and that the
loss of any one supplier would

<PAGE>

have no material adverse effect upon the Company, although no assurance can be
given. If substantial demand for the Machines develops then management believes,
although no assurance is given, that it has or can readily locate and secure
sources for subcontract manufacturing. See "RISK FACTORS - NO MANUFACTURING
FACILITIES; COMPLETION OF TOOLING" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION - PLAN OF OPERATION".

Management believes that the Company's consumable Products used in the
dispensing of french fries are widely available from numerous suppliers. The
Company has located and secured one alternative source for the potatoes which
are compatible for use in the Machine from a major supplier and is aware of at
least one other supplier of potatoes that can be used in the Machine. Until the
Company determines to establish a manufacturing line to produce its Potato
Product, as to which no assurance is given, it expects to enter into an
exclusive license agreement to purchase potatoes from one of these suppliers on
terms which are expected to be favorable to the Company.

PATENTS AND PROPRIETARY RIGHTS

The Machines inventor, Edward C. Kelly, President and Chief Executive
Officer of the Company, was issued a patent by the U.S. Patent and Trademark
office in July 1996. That patent is assigned to Premier as required by the
Amendment in consideration for and with the express requirement, agreement and
understanding that upon payment by the Company of its proportionate share of the
Machine's audited development costs as required by the Amendment, the patent
will be jointly owned by the Company and Premier. See "DESIGN AND MANUFACTURING"
herein. The Company currently has applied for a patent for the attachment to the
bottom of the vend cup with the United States Patent and Trademark Office. In
addition, the Company is seeking but has not yet received patent protection in
Japan, Israel and in those countries which are parties to the Patent
Cooperation Treaty (PCT), specifically as follows:

Albania Georgia Republic of Moldavia Slovakia
Armenia Germany Macedonia Spain
Austria Hungary Madagascar Sudan
Australia Iceland Mongolia Sweden
Barbados Kenya Malawi Tajikistan
Bulgaria Mexico Turkmenistan
Brazil Democratic Peoples' Norway Trinidad & Tobago
Belarus Republic of Korea
Canada Kjagyzstan New Zealand Uganda
China Kazakhstan Poland Ukraine
Czech Republic Latvia Portugal United Kingdom
Denmark Liberia Romania Uzbekistan
Estonia Lichtenstein Russian Federation Vietnam
Finland Lithuania Singapore
Luxembourg Slovenia

<PAGE>

The Company also has obtained a federally registered trademark on the
Supplemental Register for its name and logo, "Tasty Fries."

Management intends to seek patent, trademark and related legal
protection in the future where it deems the same to be beneficial. No assurances
can be given that the Company will ultimately receive a patent on the vend cup
attachment in the United States or elsewhere. In addition, such legal
protections and precautions do not prevent third party development of
competitive products or technologies. There can be no assurance; however, that
the legal precautions and other measures taken by the Company will be adequate
to prevent misappropriation of the Company's proprietary technology.
Notwithstanding the foregoing, the Company does not intend to be solely
dependent upon patent protection for any competitive advantage. The Company
expects to rely on its technological expertise and early entry into the
marketplace with respect to its Products. See "RISK FACTORS - PATENT PROTECTION
AND PROPRIETARY RIGHTS."

GOVERNMENTAL APPROVALS AND REGULATIONS

The Machine was designed and developed in consideration of applicable
governmental and industry rules and regulations. Management believes that the
Machine complies with National Food Sanitation guidelines as well as
Underwriter's Laboratory ("U.L.") procedures. The Machine must receive U.L. and
National Food Standards (N.F.S.) approvals prior to sale and installation. The
Company has requested that the Machine be inspected and expects to have the
Machine inspected by various regulatory agencies during the production process
but prior to sale and installation. In this regard, management has forwarded to
U.L. a listing of all individually numbered parts used in the Machine. The
Company is also seeking certification from the National Automatic Merchandising
Association (NAMA). NAMA has previously informally inspected the Machine, the
result of which was the subsequent installation of a sanitation cycle.
Management has been advised that all certifications and approvals should be
applied for upon commercial production and would not issue until such time.
Management believes, although no assurance is given, that the required approvals
from U.L., NAMA and the various regulatory agencies are obtainable and is not
currently aware of anything that will delay the necessary approvals.

Management is not aware of and does not believe that there are any
specifically applicable compliance requirements under state or federal
environmental or related laws relating to the manufacture and operation of the
Machine.

LITIGATION

The following table sets forth the current status of the litigation in
which the Company is a party:

<PAGE>

<TABLE>
<CAPTION>
NAME OF CASE COURT CLAIMS & AMOUNTS STATUS
- ------------ ----- ---------------- ------
<S> <C> <C> <C>

1. California Food & Vending, U.S. District Court Central a) CFV's Motion to Show Cause Continued to June 1997
Inc. v. Adelaide Holdings, Inc.; District of California Why Tasty Fries Should Not Be
et al. (Company is defendant) Found In Contempt For Failure
To Compaly With Judgements

b) CFV's Motion For Sanctions Continued to June 1997
For Failure To Provide Complete
Discovery Responses

c) CFV's Motion for Appointment Hearing held April 21,
of a Permanent Receiver 1997, taken under
submission by Court

d) CFV's Motion to Compel Court to order Company to
Further Production of Documents comply with production of
and for Sanctions documents which are to be
decided by the Court

2. California Food & Vending, U.S. States District Court Claims by cross-claimant Samuel Settled
Inc. v. Adelaide Holdings, Central District of California Balan for issuance of 1,000,000
Inc; et al. (Company is defendant) pre-split shares of unrestricted
Common Stock pursuant to
Arbitration Award confirmed by
Court

3. Richard Michael v. Tasty Circuit Court Orange County,
Fries, Inc. F/K/A Adelaide Florida 1) Breach of Contract Discovery with no
Holdings, Inc., et al. (Company 2) Accounting activity since
is defendant) 3) Quantum Meuit December 1996
4) Breach of Verbal Agreements

4. Robert Portman, et al v. Tasty Superior Court of New Jersey, 1) Breach of Contract Settled
Fries, Inc., et al. (Company is Monmouth County 2) Fradulent Inducement
defendant) and Misrepresentation
3) Violation of NJ law
re: consumer contracts

<PAGE>

5. Prize Frize, Inc., William U.S. Court Central District 1) Misappropriation of trade Case removed to Federal
Bartfield, Larry Wirth v. Matrix of California secrets Court for Patent
(U.S.), Inc., Tasty Fries, Inc., 2) Unfair competition Infringement Claims;
et al. (Company is defendant) 3) Conversion Discovery
4) Conspiracy

6. Gary J. Arzt and Threadneedle Circuit Court Dade County, Money lent by Plaintiffs to Summary judgment in
Holdings v. Tasty Fries, Inc. Florida Company and default by Company favor of Plaintiff Artz
(Company is defendant) on promissory note on promissory note
for $59,000

7. Tasty Fries, Inc, v. E.P. Circuit Court Dade County, 1) Breach of Warranty and Answer due from Defendant
Toothe, Trustee (Company is Florida Indemnity Agreements April 28, 1997
plaintiff) 2) Specific performance
</TABLE>

<PAGE>

DISCUSSION

In March 1993, CFV filed a suit against the Company, its then-serving
management (not including Edward C. Kelly and Leonard J. Klarich or any other
current members of the Board of Directors) and others, in federal court in
California alleging: a) breach of contract, b) fraud, c) securities fraud, d)
constructive trust, and seeking an accounting and declaratory relief. CFV sought
to prove its damages at trial, obtain an accounting and a declaration that it
was entitled to all inventions, processes and improvements relating to any
french fry machine developed by the Company. The lawsuit was stayed on July 6,
1993 pending the outcome of arbitration regarding the matter because the
original agreement among the parties provided that the exclusive resolution of
disputes among the parties was to be determined by binding arbitration.
Arbitration of this matter took place in September 1994. On October 25, 1994 an
award (the "Award") was rendered against the Company in the aggregate amount of
$279,500 for domestic and international distribution fees owed to CFV pursuant
to a March 17, 1992 Memorandum of Understanding (the "Memorandum") and a May 14,
1991 international joint venture agreement between the Company and CFV (the
"Joint Venture Agreement"), and an additional $249,500 in compensatory damages,
jointly and severally, as among the Company and Edward Abramson and Martin
Balan, two former officers and directors of the Company. The award and
compensatory damages totaling $529,000 were recorded in the Company's financial
statements as of October 31, 1994.

The Award also ordered (a) the enforcement of the terms of the
Memorandum and the Joint Venture Agreement which, generally, provided for the
payment by the Company of certain royalties, fees and profits to CFV in
connection with future sales by the Company of the Company's vending machines
and related products, and (b) the issuance by the Company to CFV of an option to
purchase 2,000,000 pre-split shares of the Company's restricted Common Stock at
an exercise price of $2.00 per share through March 17, 1997.

In connection with the foregoing, an award was also entered on October
25, 1994 in favor of the cross-claimant, Samuel Balan who is the brother of
Martin Balan, one of the former officers and directors of the Company. It
requires, among other things, that the Company issue Samuel Balan 1,000,000
pre-split shares of unrestricted Common Stock. The financial statements do not
reflect the issuance of these shares for the fiscal year ended January 31, 1996.
Such shares, with restriction, were issued to him in June 1996. These previously
issued 1,000,000 shares are included for registration in the Registration
Statement of which this Prospectus is a part as further discussed below.

On December 23, 1994, a Supplemental Award of Arbitrator ("Supplemental
Award") was issued in connection with certain motions, oppositions, requests and
replies. In connection therewith, CFV was awarded (i) attorneys' fees of
$94,962.50 against the Company and (ii) costs of $29,896.43 against the Company
and Edward Abramson and Martin Balan, its two former officers and directors,
jointly and severally. In addition, the cross-claimant, Samuel

<PAGE>

Balan, was awarded $4,099.34 for certain specific costs against the Company. The
Company's Request for Clarification Re Fraud Damages was reviewed by the
Arbitrator and denied.

In February 1995, the Company, through the efforts of Mr. Kelly,
President of the Company at the time, and CFV entered into a Settlement
Agreement which supersedes the Award and Supplemental Award. The Settlement
Agreement, which was subsequently amended on February 22, 1995 and February 23,
1995 (collectively the "Settlement Agreement"), provides, in pertinent part,
among other things that (i) the Company shall pay to CFV the sum of $25,000 on
or before February 28, 1995 and an additional $175,000 to be applied against the
Supplemental Award as partial payment for past due royalties (which was paid),
the balance payable over three (3) years commencing six (6) months after
February 1, 1995 and shall bear interest at 10% per annum. The payment of the
$175,000 originally due by March 10, 1995 was extended by agreement between the
Company and CFV to March 15, 1995 and was paid by the Company, (ii) a royalty to
CFV of $350 per machine for the first 500 Machines and thereafter a royalty
equal to 35% of the difference between the price paid to the manufacturer and/or
the wholesale price to the purchaser, domestic or international, of a minimum of
$350 up to a maximum of $500 per Machine (the Award provides for $500 for every
Machine and a 50% joint venture interest); (iii) $.25 per pound of all Potato
Product sold, commercially used or distributed (the Award provides for 25%
profit of all domestically related sales and 50% of all internationally related
sales of all Products). CFV expressly waives any and all rights to profit
participation in any other ancillary products of the Company upon timely payment
of the royalty by the Company; (iv) CFV shall receive $2,000,000 payable from
domestic and international gross distribution fees and utilization fees received
by the Company as consideration for the reduction by CFV of its international
distribution fee rights from 50% to 25% which shall be payable to CFV by receipt
by CFV of 50% of all such fees until paid in full; and (v) an option to purchase
2,000,000 pre-split shares of the Company's restricted Common Stock at $.10 per
share exercisable for four (4) years from February 1, 1995.

The aggregate amount of $200,000 to be paid by the Company to CFV was
paid in February and March 1995 as agreed. An additional payment of $80,000 was
made in August 1995. The Company thereafter defaulted in the payment of
$84,745.75 due February 1, 1996. As a result, CFV filed a Motion for a Temporary
Protective Order ("TPO") in February 1996 in the Federal District Court for the
Central District of California seeking an injunction freezing certain assets of
the Company until such time as CFV's Motion for Assignment of Benefits could be
heard by the Court on March 18, 1996. The TPO was issued by the Court on
February 21, 1996 and the Motion for Assignment of Benefits was granted by the
Court ex parte on March 15, 1996 (the "Court Order"). The Court Order provided,
among other things, that the Company assign any monies it had in its possession
at such time or received from third parties for investment, royalties,
distribution fees or other sources be kept in a segregated account for the
benefit of CFV and paid to CFV until the entire sum due, including accrued
interest from August 1995 and attorney's fees incurred in connection with
enforcement of the judgment, were paid in full. During April and May 1996, the
Company paid CFV an aggregate of approximately $452,000 representing payment in
full of all such amounts due and in satisfaction

<PAGE>

of the Court Order. CFV filed a Partial Satisfaction of Judgment in June 1996
with the appropriate tribunals. The Company expensed $7,000 and $1,098,062 in
fiscal year 1995 and 1996, respectively, in connection with this litigation.

In February 1997, CFV sought and obtained a Temporary Protective Order
in connection with the failure of the Company to pay CFV $20,000 of a
distributorship fee which was extinguished when the $20,000 was paid. Also in
February 1997, CFV also filed certain motions with the Court seeking a Temporary
and Permanent Receiver to ensure that monies owed to CFV in the future would be
paid to CFV due to the failure of the Company to pay to the CFV $20,000. In
addition, CFV filed motions seeking sanctions against the Company for failure to
provide complete discovery responses to interrogations, motions to compel
further production of documents and for sanctions in connection therewith, and a
Motion to Show Cause why the Company should not be held in contempt for failure
to comply with the judgement of the Court due to the Company's failure to pay
CFV the $20,000 of the distributorship downpayment received. The Court denied
CFV's Motion to Appoint a Temporary Receiver and scheduled a hearing on the
other Motions for March 24, 1997 and March 31, 1997. These hearings were
continued until April 21, 1997 during which time the Company filed affidavits of
Edward Kelly, President of the Company, and William Bartfield, President of
Prize Frize, Inc., in support of the Company's opposition to CFV's Motions. CFV
filed affidavits of its counsel, Ronald Palmieri, Esq. and Gary Arzt, former
President and Chairman of the Board of the Company. Based upon the statements
made in these affidavits, the Court continued the hearing on the Motion to Show
Cause and the Motion for Sanctions until either June 9 or June 23, 1997. The
Court has taken CFV's Motion to Appoint a Permanent Receiver under submission
and will determine which documents it will compel the Company to produce by
Order, in response to CFV's Motion to Compel Further Production of Documents.

In connection with the award to Samuel Balan, on June 24, 1994, a
lawsuit was instituted against the Company and a shareholder of the Company in
Circuit Court for the 11th Judicial Circuit in and for Dade County, Florida by
Samuel Balan, brother of Martin Balan, the former Chairman of the Board of the
Company, alleging breach of contract, quantum meruit and seeking a declaratory
judgment for entitlement to 1,100,000 pre-split shares of the Company's Common
Stock and in excess of $300,000 for past due wages and expenses. This action was
heard by the arbitrator as part of the arbitration between the Company and CFV.
An award was entered in Mr. Balan's (cross-claimant's) favor on October 25,
1994. The Company paid the award in May 1996 and issued to him 1,000,000
pre-split restricted shares of Common Stock in June 1996. Such shares are
included in the Registration Statement of which this Prospectus is a part.
Counsel to Mr. Balan filed a motion with the Federal District Court for the
Southern District of Florida on July 1, 1996 requesting that the Court convert
the award of stock into a cash award. The Motion was heard on August 13, 1996
and on August 19, 1996, the Magistrate issued his report recommending dismissal
of the Motion (without prejudice) for lack of jurisdiction. Mr. Balan filed a
Motion to Show Cause in the Federal District Court for the Central District of
California and the Court has stated that it will issue an Order to Show Cause
Why the Company Should Not Be Held in Contempt for its alleged failure to abide
by the judgment. This matter was settled by the parties on March 4, 1997.
Pursuant thereto, the Company has (i) issued 43,750 shares of Common Stock being
registered hereby, certain of which shares are subject to a lock-up agreement,
and (ii) paid $60,000 of $70,000, the balance of which is due in May 1997.

<PAGE>

On May 23, 1995, a lawsuit was instituted against the Company and Mr.
Gary Arzt, former President, Secretary and Chairman of the Board of the Company,
individually, by an alleged former agent of the Company in the Circuit Court in
the Ninth Judicial Circuit in and for Orange County, Florida alleging (i) breach
of contract, (ii) quantum meruit, (iii) breach of verbal contract, and (iv)
requesting an accounting and seeking damages in excess of $15,000 for alleged
commissions due on the sale of certain distributorships that he allegedly sold.
The Company's and Mr. Arzt's answer denying the allegations and affirmative
defenses to the complaint were filed on September 29, 1995. To date, preliminary
discovery has been exchanged but the matter has not been set for trial.
Management intends to vigorously defend this matter and believes, based upon the
allegations in the complaint, that it will ultimately prevail; however, no
assurances can be given at this time that this will be the result.

On January 15, 1996, a lawsuit was instituted in New Jersey against the
Company, Edward C. Kelly and Michelle Kramish Kain, individually, who is a
shareholder of the law firm of Kipnis Tescher Lippman Valinsky & Kain, counsel
to the Company, by a former consultant and current shareholder and his related
companies alleging among other things: 1) breach of contract, 2) fraudulent
inducement and misrepresentation and 3) violation of a New Jersey law relating
to consumer contracts. The action related to an agreement entered into by the
Company and to the individual plaintiff to file a registration statement with
the Commission in October 1995 to register certain securities of the plaintiff.
The Company and Kelly, through their independent counsel, answered the complaint
and filed separate defenses. Thereafter, they filed a Motion for Partial Summary
Judgment to dismiss the consumer fraud claims as a matter of law and sought
leave to amend the answer to assert counterclaims, both of which were granted on
May 20, 1996. Defendant Kain, through her counsel, answered the complaint by
general denial and filed a Motion to vacate the service of summons and complaint
and dismiss the complaint for lack of in personam jurisdiction. A hearing on the
Motion was heard on May 10, 1996 and the Court entered an order on May 20, 1996
dismissing the action against Ms. Kain for lack of personal jurisdiction. This
suit was settled in July 1996 and releases were executed. Pursuant to the
settlement agreement, the Company is registering hereby the plaintiff's shares
of the Company's Common Stock. See "SELLING SECURITYHOLDERS."

On August 28, 1996, the Company and Edward C. Kelly, its President,
Chief Executive Officer and Chairman of the Board were added as defendants to a
Second Amended Complaint in litigation pending in the Riverside County Branch of
the Superior Court of the State of California, between Prize Frize, Inc.,
William Bartfield and Larry Wirth, Plaintiffs, and Matrix (U.S.), Inc; Matrix,
Inc.; Peter Fisher; International Tasty Fries, Inc.; Fry Factor, Inc.; Edward
Trent; Xavier Castro; Marcellino Menendez; MXI, Inc.; Inter Trade Exchange Co.;
Baltkor International; Sanad Company; Michael Krakow; Andrei Lutikov; Griffin
Financial Management Corporation, Inc.; EZ Fries, Inc.; Samuel Hepburn; Dudley
Muth; Richard O. Wahlgren; Gene Fruhling; Eurofrize, Inc.; Laszlo Kovacs; Seek,
Inc.; Fresh Fries UK Ltd; Tega, S.A.; Tasty Fries, Inc; Premier Design, Ltd.;
H&R Industries; and Edward C. Kelly as defendants. The causes of action alleged
against the Company and Mr. Kelly include misappropriation of trade secrets,
unfair competition, conversion and conspiracy. A Fourth Amended Complaint was
filed by the plaintiffs against each of the named defendants alleging the same
causes of action against the Company and Mr. Kelly. The plaintiffs have granted
the Company and Mr. Kelly an extension of time to respond to the Fourth Amended
Complaint. The lawsuit was removed to

<PAGE>

the United States District Court for the Central District of California in March
1997 due to the patent infringement claims.

On September 25, 1996, a lawsuit was instituted by Mr. Arzt against the
Company in the Circuit Court of the 11th Judicial Circuit in and for Dade
County, Florida for breach of a promissory note and reimbursement of certain
alleged expenses incurred by Mr. Arzt as former Chairman of the Board of the
Company. A judgment was entered by the Court in favor of Mr. Arzt in the amount
of $59,000 in April 1997 and the parties are negotiating the payment of this
judgement.

See "MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION - PLAN OF OPERATION" for information regarding the
Company's lawsuit against the Trustee of Acumen, which information regarding
this lawsuit is hereby incorporated by reference.

EMPLOYEES

As of April 1, 1997, the Company had six full-time employees
including Edward C. Kelly, President and Chief Executive Officer of the
Company, Irene Kelly, his wife, who manages the Company's executive office, and
Leonard J. Klarich who serves as Executive Vice President. Mr Klarich is also a
director on the Company's Board of Directors. The Company expects to hire
additional new employees during the next 12 months. Any other new employees
would be hired upon commercial production and delivery of Machines, as to which
no assurances can be given at this time. See "MANAGEMENT'S DISCUSSION OF
FINANCIAL CONDITION AND RESULTS OF OPERATION - PLAN OF OPERATION" and
"MANAGEMENT."

None of the Company's employees are covered under a collective
bargaining agreement.

PROPERTIES

The Company owns no significant properties. Since June 1994 it has
leased executive office space at the premises located at 650 Sentry Parkway,
Suite One, Blue Bell, Pennsylvania 19422. The lease, renewed for an additional
24 months commencing in June 1995, is for 1,020 square feet at a monthly rental
of $1,650 plus additional base rent of $175. At the present time, management
believes that this office space is sufficient but may require additional space
if additional administrative personnel are hired during the next 12 months.

In April 1996, the Company leased approximately 468 square feet of
working space and 400 square feet of storage space located at 320 Elm Avenue,
North Wales, Pennsylvania at $600 per month on a month to month basis for
technical support purposes and storage of Machines. The lease may be terminated
any time after January 1, 1997 on 60 days prior notice by the lessor and 30 days
prior notice by the Company.

<PAGE>

MARKET FOR COMMON EQUITY

The Common Stock of the Company is quoted on the OTC Bulletin Board,
under the symbol "FRYA". The following table sets forth the highest and lowest
bid prices for the Common Stock for each calendar quarter during the last two
years and subsequent interim periods as reported by the National Quotation
Bureau.

The prices set forth below represent interdealer quotations, without
retail markup, markdown or commission and may not be reflective of actual
transactions.

FISCAL 1995 HIGH BID LOW BID
----------- -------- -------

First Quarter $.44 $.14
Second Quarter .21 .10
Third Quarter .21 .10
Fourth Quarter .17 .05

FISCAL 1996
-----------

First Quarter .52 .04
Second Quarter .41 .10
Third Quarter .27 .17
November 1 - December 22 .19 .11
December 23 - January 31(1) 2.88 1.75

FISCAL 1997
-----------

February 1 through April 23(1) 2.19 1.25

- ---------------
(1) High and low bid prices from December 23, 1996 through April 23, 1997 give
effect to the 1 for 20 reverse stock split effective on December 23, 1996.

<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The current directors of the Company will serve until the next annual
(or special in lieu of annual) meeting of shareholders at which directors are
elected and qualified. Names, age, period served and positions held with the
Company are as follows:

POSITIONS
NAME AGE WITH COMPANY
---- --- ------------
Edward C. Kelly 61 President, Chief Executive
Officer, Treasurer and
Chairman of the Board*

Leonard J. Klarich 61 Executive Vice President,
Secretary and Director**

Jurgen A. Wolf 62 Director**

Ian D. Lambert 51 Director

Kurt R. Ziemer 41 Director

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

* Mr. Gary J. Arzt was removed as Chairman of the Board of Directors on
June 1, 1996 by consent of two-thirds of the shares entitled to vote
in accordance with Nevada law and was removed as Secretary by the
Board of Directors on June 3, 1996. Mr. Kelly was appointed Chairman
of the Board by the Board of Directors on June 3, 1996. Mr. Kelly also
serves on the Executive Committee of the Board of Directors.

** Member of the Executive Committee of the Board of Directors. Mr.
Klarich was also appointed Secretary by the Board of Directors on
June 3, 1996.

EDWARD C. KELLY, Blue Bell, Pennsylvania. Mr. Kelly has been President
of the Company since June 10, 1994, and a director since April 1994. He was
appointed a member of the Executive Committee on September 18, 1995, and
Chairman of the Board of Directors after the removal of Mr. Arzt in June 1996.
From January 1994 until June 10, 1994 he was Executive Vice President of the
Company. Mr. Kelly was President and a Director of Mega Manufacturing Co., Inc.,
a private manufacturing company from 1980 to 1994. Mega Manufacturing filed for
bankruptcy under Chapter 7 of the U.S. Bankruptcy Code on November 19, 1993. Mr.
Kelly has been involved in the engineering and design of the Machine and is part
owner of Premier Design, Ltd. Mr. Kelly received a degree in Mechanical
Engineering from Penn State University and is a member of the American
Association of Professional Engineers and the American Federation of Engineers.
See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION - PLAN OF OPERATION", "BUSINESS - DESIGN AND MANUFACTURING," "CERTAIN
TRANSACTIONS", "PRINCIPAL SECURITYHOLDERS - SECURITY OWNERSHIP OF MANAGEMENT"
and "SELLING SECURITYHOLDERS".

<PAGE>

LEONARD J. KLARICH, Knoxville, Tennessee. Since September 1995, Mr.
Klarich has been a director of the Company and also was a consultant to
management from March through May 1996. Mr. Klarich was retained as Executive
Vice President of the Company in June 1996 to assist in the day to day
operations of the Company, with specific emphasis on distribution networks,
distributors and marketing. He was also appointed Secretary in June 1996. Mr.
Klarich was Chairman of the Board of K & D, a high-tech graphic design company
located in Woodland Hills, California until early 1996. From 1976 to 1989 he
owned and operated Avecor, Inc., a color for plastics manufacturing company with
yearly sales in 1976 of $3,000,000. He sold Avecor in 1989 when its sales
exceeded $40,000,000. Prior thereto, he spent a number of years as a chief
operating officer of companies in need of turnaround due to financial concerns.
He received a Bachelor of Arts from Hofstra University in 1967 and a Masters
Degree in Marketing Research from the City College of New York. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION - PLAN OF OPERATION", "BUSINESS - EMPLOYEES" and PRINCIPAL
SECURITYHOLDERS - SECURITY OF OWNERSHIP OF MANAGEMENT".

JURGEN A. WOLF, Vancouver, British Columbia, Canada. Mr. Wolf has been
a director of the Company and a member of the Executive Committee of the Board
of Directors since September 18, 1995. Since 1983, he has been President of J.A.
Wolf Projects Ltd., a private Vancouver company engaged in commercial and
industrial contracting. He was a director of Yukon Spirit Mines and is a
director and the controlling stockholder of Adelaide Vending (Canada) Ltd., both
of which are and were distributors, respectively, of the Company's Machine. He
also was a co-distributor of the Machine in the United Kingdom but those rights
were terminated in April 1995 for non-payment of part of the distribution
deposit by his co-distributor. Mr. Wolf also serves on the Board of Directors
as a director of five (5) Canadian public companies, which include OJ Oil and
Gas Corporation, Gulfside Industries, Ltd., Shoreham Resources, Ltd., Zeus Oil
and Gas Corporation and Key Capital Group, Inc. See "BUSINESS - MARKETING
THROUGH DISTRIBUTORSHIPS", "PRINCIPAL SECURITYHOLDERS - SECURITY OWNERSHIP OF
MANAGEMENT", and "CERTAIN TRANSACTIONS".

IAN D. LAMBERT, North Vancouver, British Columbia, Canada. Mr. Lambert
was appointed as a director of the Company in July 1995 and was re-elected to
the Board in September 1995. He is the President of International Tasty Fries,
Inc. ("ITF"), a major stockholder in the Company whose shares are being
registered hereby, and, until November 1996, was President of Yukon Spirit Mines
Ltd., both of which are affiliates of the other and each of which have
distributorship agreements with the Company for territories in North America and
Europe. Mr. Lambert has been involved with the financing and management of
numerous resource and industrial based public companies, both in Canada and the
U.S., since the early 1980's, and currently is on the Board of Directors of six
(6) publicly-traded companies of which only the Company is a reporting company.
Prior to that time, he was an Information Systems executive with MacMillan
Bloedel Ltd. and also the Manager, Systems Consulting for the Vancouver office
of Deloitte Haskins & Sells. Mr. Lambert received a Bachelor of Commerce and
Quantitative Analysis from the University of Saskatchewan in Canada in 1970.

<PAGE>

See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION - PLAN OF OPERATION", "BUSINESS - MARKETING THROUGH DISTRIBUTORSHIPS",
"PRINCIPAL SECURITYHOLDERS - SECURITY OWNERSHIP OF MANAGEMENT" and "SELLING
SECURITYHOLDERS".

KURT R. ZIEMER, New Holland, Pennsylvania. Mr. Ziemer was appointed
to the Board of Directors on October 4, 1996 as the board designee of Whetstone
Ventures Corporation, Inc. pursuant to the April 30, 1996 Stock Purchase
Agreement with the Company. Since 1989 he has owned and operated Ziemer
Buick-Pontiac-GMC Truck, Inc. located in New Holland, Pennsylvania. From 1977
until 1989, he served in several capacities for the auto dealership. Mr. Ziemer
graduated from Penn State University in 1977 with a business degree in marketing
and management. See "PRINCIPAL SECURITYHOLDERS - SECURITY OWNERSHIP OF
MANAGEMENT" AND "SELLING SECURITYHOLDERS".

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ----------------------
AWARDS PAYOUTS
NAME FISCAL OTHER ALL
AND YEAR ANNUAL RESTD. OTHER
PRINCIPAL ENDED COMPEN- STOCK LTIP COMPEN-
POSITION JANUARY 31 SALARY BONUS SATION AWARDS OPTIONS PAYOUTS SATION
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Edward C. 1996 (1) 0.00 0 None (1) None (1)
Kelly(3) 1995 (1) 0.00 0 None (1) None (1)
President 1994 (1) 0.00 0 None (1) None (1)
and Chief
Executive
Officer
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Mr. Kelly has served as President and Treasurer of the Company since
June 10, 1994, a director since April 1994, Chairman of the Board since
June 3, 1996, and was Executive Vice President from January 1994 to
June 10, 1994. Mr. Kelly received $20,000 on February 1, 1994 for
services rendered to the Company since October 1993. He was granted an
option in April 1994 for 250,000 pre-split shares of restricted Common
Stock exercisable at $.50 per share which was subsequently rescinded on
July 8, 1994 by the Board and granted an option for 1,000,000 shares of
restricted Common Stock exercisable at $.10 per share at any time until
March 15, 1997. Pursuant to the terms of his October 1, 1994 employment
agreement, Mr. Kelly received 960,000 pre-split shares of Common Stock
issued pursuant to a registration statement on Form S-8 filed with the
Commission in November 1994 for services rendered to the Company from
February 1994 to June 1994. For the fiscal year ended January 31, 1995,
Mr. Kelly received an aggregate of $49,000 in cash payments and Mr.
Kelly or his assigns received an aggregate of 75,000 pre-split shares
of restricted Common Stock in accordance with the terms of his
employment agreement. For the fiscal year ended January 31, 1996, Mr.
Kelly received an aggregate salary of $180,000, consisting of $160,000
in cash and 2,184,127 pre-split shares of restricted Common Stock
pursuant to the terms of his employment agreement which was amended
effective as of May 1, 1995 and provides (i) for salary of $20,000 per
month of which $10,000 accrues until the Company is financially able to
pay the accrued amount or Mr. Kelly elects to convert all or part of
such accrued amount into restricted Common Stock at a conversion price
of $.20 per share, (ii) an annual bonus or bonuses, if any, in an
amount to be determined by the Board of Directors in its sole
discretion, (iii) 2,000,000 pre-split shares of Common Stock as
additional compensation for all services provided to the Company from
June 4, 1994 through April 30, 1995 to be registered on Form S-8. He
received the 2,000,000 pre-split shares of Common Stock issued pursuant
to a registration statement on Form S-8 filed with the Commission on
September 28, 1995 for services rendered to the Company from June 4,
1994 through April 30, 1995.

This table does not include (i) $10,000 paid each month by H&R
Industries, Inc., an affiliate of Premier pursuant to the Premier
Agreement, from January 1994 through September 1995, which amount is
included in the total development costs of the Machine, (ii) accrued
director compensation of approximately $833.33 per month since
September 1995, (iii) 1,500,000 post-split shares issued to Mr. Kelly
pursuant to the Stock Purchase Agreement with Whetstone Ventures
Corporation, Inc., which are being registered hereby, and (iv) options
granted to each of Messrs. Kelly, Klarich, Wolf and Lambert on October
1 1996 by the Board of Directors for 50,000 post-split shares of
restricted Common Stock exercisable for three years at $4.00 per share
which are being registered hereby. See "BUSINESS - DESIGN AND
MANUFACTURING", "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION - PLAN OF OPERATION," "MANAGEMENT",
"PRINCIPAL SECURITYHOLDERS - SECURITY OWNERSHIP OF MANAGEMENT" and
"CERTAIN TRANSACTIONS."

<PAGE>

OPTION GRANTS IN THE FISCAL YEAR ENDED JANUARY 31, 1997

On October 1, 1996, the Board of Directors granted options to Messrs.
Kelly, Klarich, Wolf and Lambert, all members of the Board of Directors. Messrs.
Kelly and Klarich are also executive officers of the Company. Such options are
for each of them to purchase 50,000 post- split shares of Common Stock for a
period of three years commencing October 1, 1996 at $4.00 per share. The shares
underlying such options are being registered hereby. See "EXECUTIVE
COMPENSATION." Pursuant to the 1995 Stock Option Plan adopted by the Board of
Directors on July 1, 1995 and approved by the stockholders on September 18,
1995, non-employee directors receive options under a formula set forth in such
Stock Option Plan determined by dividing the annual director's fee paid or
accrued (accrued $10,000 per director for the fiscal year ended January 31,
1997) by the fair market value per share of Common Stock on the date of the
grant ($.1225 at December 15, 1996). Each of Messrs. Klarich, Wolf, and Lambert
received an option to purchase 4,082 post-split shares of Common Stock under the
1995 Stock Option Plan at an exercise price of $2.45 per share (representing
fair market value per share as of December 15, 1996 giving effect to the reverse
stock split), which options expire December 15, 2006. Mr. Ziemer received an
option to purchase 680 post-split shares of Common Stock under the 1995 Stock
Option Plan at an exercise price of $2.45 per share as of December 15, 1996,
which expires December 15, 2006. This grant was prorated to reflect his
appointment to the Board on October 4, 1996.

COMPENSATION OF DIRECTORS

The Directors were not entitled to compensation for their services
prior to September 18, 1995. At the Board of Directors meeting held on September
18, 1995, the Board voted to approve payment of annual directors' fees of
$10,000 per director plus reasonable expenses commencing as of such date.
Payments for the fiscal year ending January 31, 1996 were accrued on a pro rata
basis for the year and were accrued for the fiscal year ended January 31, 1997.
These accrued fees will be paid when the Company is financially able to do so.
All such accrued compensation for Messrs. Arzt (up to June 1996 when he was
removed from the Board), Kelly, Wolf, Lambert and Klarich will be included in
the audited financial statements for the fiscal year ended January 31, 1997. See
"OPTION GRANTS IN THE FISCAL YEAR ENDED JANUARY 31, 1997" herein and "FINANCIAL
STATEMENTS".

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS

On October 1, 1994 the Company entered into an employment agreement
with Edward C. Kelly, its then President and Treasurer. The employment agreement
was for a three year term commencing retroactively to October 1, 1993 (the date
on which Mr. Kelly began providing design, engineering and consulting services
to the Company) and was automatically renewable for additional one year terms
after expiration on September 30, 1996. Compensation was $10,000 per month
commencing on October 1, 1994, of which $4,000 was payable in cash and

<PAGE>

the balance of $6,000 accrued until the Company was financially able to pay the
balance or Mr. Kelly converted the unpaid amount into restricted Common Stock at
a conversion price of $.20 per share. Mr. Kelly received additional compensation
of $10,000 per month paid by H&R Industries, Inc., a company owned by Harry
Schmidt, a former director of the Company, which such payments were included in
the development costs of the Machine. See "BUSINESS DESIGN AND MANUFACTURING",
"EXECUTIVE COMPENSATION" and "CERTAIN TRANSACTIONS".

In addition, Mr. Kelly received 960,000 pre-split shares of Common Stock
registered on a Form S-8 registration statement filed with the Commission in
November 1994 for services provided to the Company from October 1, 1993 through
February 28, 1994 and 2,000,000 pre-split shares of Common Stock registered on a
Form S-8 registration statement filed with the Commission on September 28, 1995.
The employment agreement was subsequently amended but effective as of May 1,
1995 to provide the following changes: (i) salary of $20,000 (replacing $10,000
per month no longer being paid by H&R Industries, Inc.) per month payable
$10,000 in cash with $10,000 accruing until the Company is financially able to
pay such amount or Mr. Kelly elects to convert all or any part of such amount
into restricted Common Stock based on a conversion ratio of $.20 per share; (ii)
an employment term until April 30, 2001; (iii) an annual bonus or bonuses, if
any, in an amount to be determined by the Board of Directors in its sole
discretion; (iv) 2,000,000 pre-split shares of Common Stock registered on a Form
S-8 registration statement as additional compensation for all services provided
by Mr. Kelly to the Company from June 4, 1995 to April 30, 1995. All other terms
and conditions of the October 1, 1994 employment agreement remain in full force
and effect. The employment agreement, as amended, is automatically renewable for
additional one (1) year terms without any further action by the Company or Mr.
Kelly. The employment agreement, as amended, may be terminated by the Company
for certain enumerated causes or upon written notice of the Company to Mr. Kelly
60 days prior to the end of any term or renewal thereof. See "EXECUTIVE
COMPENSATION".

The Company has from time to time entered into consulting agreements
with outside consultants relating to different aspects of its business; however,
it did not enter into any such agreements with current or former employees,
officers or directors during the fiscal year ended January 31, 1996. Commencing
in March 1996, Leonard Klarich, a director of the Company since September 1995,
provided consulting services to the Company through May 31, 1996 and received as
compensation for such services in June 1996 an option for 1,000,000 pre-split
shares of Common Stock, immediately exercisable at an exercise price of $.05 per
share for an aggregate of $50,000 paid by Mr. Klarich to the Company in August
1996. The option was exercised and the shares were registered in and issued
pursuant to a registration statement on Form S-8 filed with the Commission in
July 1996. See "PRINCIPAL SECURITYHOLDERS - SECURITY OWNERSHIP OF MANAGEMENT".

<PAGE>

PRINCIPAL SECURITYHOLDERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth, as of April 1, 1997, the ownership of
Common Stock by persons known to the Company who own beneficially more than 5%
of the outstanding shares of Common Stock, as adjusted to give effect to the 1
for 20 reverse stock split effective on December 23, 1996:
<TABLE>
<CAPTION>

NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ---------------- -------------------- --------
<S> <C> <C>
International Tasty 515,000 7.7%
Fries, Inc.
Suite 602
595 Howe Street
Vancouver, B.C. V6C 2T5(1)

Usis International Capital 350,501 5.2%
Corp.
2806 N. Clark Street
Chicago, IL 60657(1)

Whetstone Ventures 720,343 10.7%
Corporation, Inc.
11 Waterfront Estates
Estates Drive
Lancaster, PA 17602(2)

</TABLE>
- --------------------------------------

(1) All of these shares are shown of record as of April 1, 1997, pursuant
to the Company's stock transfer records, all of which are being
registered hereby.

(2) Includes (i) all 351,000 post-split of the original 1,250,000
post-split shares sold to Whetstone Ventures Corporation, Inc., the
balance of which were transferred to others listed herein as Selling
Securityholders, (ii) 250,000 additional post-split shares, and (iii)
119,143 Warrant Shares underlying the Warrant to be issued to Whetstone
Ventures Corporation, Inc., all of which are being registered hereby.
Does not include 250,000 post-split shares of Common Stock to be issued
to Whetstone Ventures Corporation, Inc. for consulting services
pursuant to its April 30, 1996 Agreement with the Company, and an
additional 37,500 post-split shares to be issued each year for five
years commencing upon the effective date of the Registration
Statement.

<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of April 1, 1997, the beneficial
Common Stock ownership of all directors, executive officers, and of all
directors and officers as group, as adjusted to give effect to the 1 for 20
reverse stock split effected on December 23, 1996:

NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ---------------- -------------------- --------
<S> <C> <C>

Edward C. Kelly 1,807,950 27.0%
650 Sentry Parkway
Suite One
Blue Bell, PA 19472(1)

Jurgen A. Wolf 155,124 2.6%
1285 West Pender Street
Vancouver, B.C. Canada(2)

Leonard J. Klarich 92,624 1.4%
839 Claybrook Court
Knoxville, TN 37923(3)

Ian D. Lambert 55,124 *
1220 Eastview Road
North Vancouver, B.C.(4)

Kurt R. Ziemer 67,680 1.0%
599 Valley View Drive
New Holland, PA 17557(5)

All Officers and Directors 2,178,502 32.0%
as a group (5 persons)
</TABLE>

- ----------------------------------
* less than 1%

<PAGE>

(1) Includes (i) an option for 50,000 post-split shares of restricted
Common Stock presently exercisable at $2.00 per share until March 15,
1998, (ii) 57,450 post-split shares of Common Stock held by Irene
Kelly, his wife, as to which Mr. Kelly claims beneficial ownership,
(iii) an option for 50,000 post-split shares of Common Stock granted by
the Board of Directors on October 1, 1996 exercisable until October 1,
1999 at for $4.00 per share, the shares underlying which are being
registered hereby; and (iv) 1,500,000 post-split shares issued
pursuant to the terms of the April 30, 1996 Stock Purchase Agreement
as calculated in accordance with Rule 13d-3. being registered hereby.

(2) Includes (i) an option to purchase 1,042 post-split shares of Common
Stock exercisable at $2.40 per share until December 15, 2005,
automatically granted to each non-employee director under the 1995
Stock Option Plan on December 15, 1995, (ii) an option to purchase
4,082 post-split shares of Common Stock exercisable at $2.45 per share
until December 15, 2006, automatically granted to each non-employee
director under the 1995 Stock Option Plan; (iii) an option to purchase
50,000 post-split shares of Common Stock granted by the Board of
Directors on October 1, 1996 exercisable at $4.00 per share until
October 1, 1999, the shares underlying which are being registered
hereby; (iv) 50,000 post-split shares of Common Stock issued to
Adelaide Vending (Canada) Ltd. for the reacquisition by the Company of
the Canadian distributorship and an option granted to Adelaide Vending
for 50,000 post-split shares of Common Stock exercisable at $5.00 per
share until September 1, 1997, all as calculated in accordance with
Rule 13d-3. Mr. Wolf is a director and the controlling stockholder of
Adelaide Vending (Canada), Ltd.. See "BUSINESS - MARKETING THROUGH
DISTRIBUTORSHIPS", "MANAGEMENT" and "SELLING SECURITYHOLDERS".

(3) Includes (i) an option to purchase 1,042 post-split shares of Common
Stock exercisable at $2.40 per share until December 15, 2005,
automatically granted to each non-employee director under the 1995
Stock Option Plan on December 15, 1995, (ii) an option to purchase
4,082 post-split shares of Common Stock exercisable at $2.45 per share
until December 15, 2006, automatically granted to each non-employee
director under the 1995 Stock Option Plan; (iii) an option for 50,000
post-split shares of Common Stock granted by the Board of Directors on
October 1, 1996 exercisable for $4.00 per share until October 1, 1999,
as calculated in accordance with Rule 13d-3, the shares underlying
which are being registered hereby.

(4) Includes (i) 515,000 post-split shares issued to International Tasty
Fries, Inc. in 1995 for an aggregate of $800,000 including a $175,000
loan converted into equity, (ii) an option to purchase 1,042 of Common
Stock exercisable at $2.40 per share until December 15, 2005 granted to
each non-employee director under the 1995 Stock Option Plan on December
15, 1995, (iii) an option to purchase 4,082 post-split shares of Common
Stock exercisable at $2.45 per share until December 15, 2006,
automatically granted to each non-employee director under the 1995
Stock Option Plan; and (iv) an option for 50,000 post-split shares of
Common Stock granted by the Board of Directors on October 1, 1996
exercisable at $4.00 per share until October 1, 1999, as calculated in
accordance with Rule 13d-3, which shares underlying such option are
being registered hereby. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION - PLAN OF OPERATION",
"MANAGEMENT", "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS" HEREIN,
AND "SELLING SECURITYHOLDERS".

(5) Includes Shares being registered hereby. Does not include 680
post-split shares underlying an option exercisable at $2.45 per share
until December 15, 2006, automatically granted to each non-employee
director under the 1995 Stock Option Plan. Mr. Ziemer's option has been
prorated to reflect the date he was appointed to the Board of Directors
on October 4, 1996.

<PAGE>

CERTAIN TRANSACTIONS

In April 1993, the Company issued a promissory note to Mr. Gary Arzt,
then President, Secretary and Chairman of the Board of the Company, for up to
$300,000 in funds which may be advanced to the Company. Such note was superseded
on October 31, 1993 by a new promissory note in the amount of $129,946.55 (the
"Note"). The Note, which bears interest at 8% per annum payable in quarterly
installments, was due on or before November 1, 1994. In April 1995, the Note was
partially repaid in the amount of $79,947. See "FINANCIAL STATEMENTS". Mr. Arzt
filed a lawsuit against the Company for payment of the Note and other alleged
expenses and a judgment was entered in his favor by the court in April 1997 for
$59,000. See "BUSINESS - LITIGATION".

In January 1993 the Company entered into the Premier Agreement which
was subsequently amended in December 1994. Premier is owned by Edward Kelly,
President, Chief Executive Officer and Chairman of the Board of Directors of the
Company, and Harry Schmidt, a former director of the Company. At the time of the
Premier Agreement, neither Mr. Kelly nor Mr. Schmidt were affiliated with the
Company. At the time of the Premier Amendment, Mr. Kelly was President of the
Company and both were serving on the Board of Directors. See "RISK FACTORS - NO
MANUFACTURING FACILITIES; COMPLETION OF TOOLING, PATENT PROTECTION, AND
PROPRIETARY RIGHTS", "BUSINESS - DESIGN AND MANUFACTURING", "MANAGEMENT",
"EXECUTIVE COMPENSATION", and "SELLING SECURITYHOLDERS".

In September 1995 the Company reacquired the Canadian distribution
rights from Adelaide Vending (Canada) Ltd. for 1,000,000 pre-split shares
(50,000 post-split shares) of Common Stock and an option to purchase 1,000,000
pre-split shares (50,000 post-split shares) of Common Stock at $.25 (US)($5.00
(US) post-split exercise price) for two years until September 1997. Mr. Wolf, a
member of the Company's Board of Directors since September 18, 1995, is a major
stockholder of Adelaide Vending (Canada) Ltd. Adelaide Vending (Canada) Ltd. had
made a downpayment of $75,000 (US) for the Canadian distribution rights plus had
incurred certain other organizational expenses in connection therewith which,
totalled $100,000 (US) in the aggregate. As part of the Company's desire to
operate the Machines directly and limit its dependence on third party operators,
the Board of Directors determined to offer Adelaide Vending the opportunity to
return the distributorship for 1,000,000 pre-split shares of Common Stock, the
fair market value of which at the time was $100,000 (US) or $.10 per share and
the option. See "PRINCIPAL SECURITYHOLDERS" and "SELLING SECURITYHOLDERS".

In May 1995, the Company loaned Mr. Kelly $50,000 at 10% interest per
annum. This loan is being repaid in accordance with a payment plan over the
current fiscal year.

In April 1996, the Company, Edward Kelly and Whetstone Ventures
Corporation, Inc. entered into the Stock Purchase Agreement. Pursuant to the
terms thereof, Mr. Kelly will receive a substantial number of Shares and Warrant
Shares to ensure his ownership of no less than 25% of the outstanding Common
Stock of the Company until May 1999. See

<PAGE>

"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION - PLAN OF OPERATION", "PRINCIPAL SECURITYHOLDERS"
and "SELLING SECURITYHOLDERS".

<PAGE>

SELLING SECURITYHOLDERS

The following tables provide the names of and the number of Shares and
Warrant Shares offered for sale by each Selling Securityholder in the offering.
After giving effect to the 1 to 20 reverse stock split approved by the written
consent of the holders of a majority of the Company's outstanding Common Stock
effective on December 23, 1996. Since the Selling Securityholders may sell all,
some or none of their Shares or Warrant Shares, no estimate can be made of the
number or percentage of Shares or Warrant Shares that each Selling
Securityholder will own upon completion of the offering. Assuming that all of
the Shares and Warrant Shares offered hereby are sold, no Selling Securityholder
would own more than 1% of any outstanding class of stock unless otherwise
indicated. See "PRINCIPAL SECURITYHOLDERS."

The Shares offered by this Prospectus may be offered from time to time
by the Selling Securityholders named below. Unless otherwise noted, no Selling
Securityholder is an executive officer of the Company, or has had any material
relationship with the Company or any of its affiliates within the past three
years.

<TABLE>
<CAPTION>
SHARES OWNED
SHARES AFTER OFFERING
OWNED BEFORE SHARES IF ALL SHARES
NAME OF SECURITYHOLDER OFFERING OFFERED HEREBY SOLD (*)
- ---------------------- -------- -------------- --------
<S> <C> <C> <C>

Elizabeth A. Adams(1) 670 670 *
Richard Adeelar(2) 10,051 10,051 *
Daniel Amar(3) 14,070 14,070 *
Michel Amar(4) 10,380 10,380 *
Arcon Trade
Development, Inc.(5) 250,000 250,000 *
Don Arons(6) 1,340 1,340 *
Samuel Balan(7) 43,750 43,750 *
Donna Baron(8) 6,700 6,700 *
Kuldep Bhargava(9) 33,500 33,500 *
Richard J. Brown(10) 3,350 3,350 *
Marilyn J. Butzer(11) 670 670 *
Carlinde, Inc. 62,500 62,500 *
Joseph Ceasar(12) 14,070 14,070 *
Eric Cohen 52,188 52,188 *
Robert Crowder 50,000 50,000 *
Yaacov Cynamon(13) 10,051 10,051 *
Stacey Zoto Desmond 1,250 1,250 *
Jerry Dodd(14) 5,770 5,770 *
Audrey A. Doerr(15) 16,750 16,750 *
Debra A. Doerr(16) 16,750 16,750 *
Danny Figa(17) 16,750 16,750 *
Gary Fowler(18) 26,800 26,800 *

<PAGE>

Richard Frank(19) 670 670 *
David Gold(20) 6,700 6,700 *
David Greenberg(21) 6,700 6,700 *
Charlie Gregor(22) 2,010 2,010 *
Jonathan Gross(23) 10,051 10,051 *
Anne Guarra(24) 6,700 6,700 *
Daryl Hagler(25) 33,550 33,550 *
Carolyn Hallinan 45,938 45,938 *
Chester A. Harberson 67,500 67,500 *
Scott Hess(26) 670 670 *
International Tasty Fries, Inc.(27) 515,000 515,000 *
Iris Trading Develp(28) 67,000 67,000 *
Diane Johnson(29) 6,700 6,700 *
Tony Jones 10,067 10,067 *
Elliot Kahan(30) 13,400 13,400 *
Clifford Katz(31) 13,400 13,400 *
Ron Katz(32) 67,000 67,000 *
Edward C. Kelly(33) 1,807,950 1,600,000 207,950
Leonard Klarich(34) 92,624 50,000 42,624
Albert Kofsky 5,000 5,000 *
Ian D. Lambert(27) 55,124 50,000 5,124
Eli Lavi(35) 16,750 16,750 *
Yossef Lavi(36) 16,750 16,750 *
Aizik Leibovitch(37) 13,400 13,400 *
Jack Lonsdale 15,313 15,313 *
Richard MacHenry, Jr.(38) 10,051 10,051 *
Yechiel Meiteles(39) 13,400 13,400 *
Daniel O'Connor &
Juliana O'Connor JTTEN 5,000 5,000 *
Albert & Irene Porambo 42,750 42,750 *
PMGM, Inc. 50,000 50,000 *
Robert Portman 33,334 33,334 *
Angela Porto(40) 3,350 3,350 *
David E. Ranalli(41) 10,051 10,051 *
J.A. Rizzo(42) 16,750 16,750 *
Francesca Roda(43) 3,350 3,350 *
Francesca M J Roda &
Darrell La Dow JTTEN(44) 3,350 3,350 *
Joseph F. Roda(45) 150,751 150,751 *
Melina Roda(46) 6,700 6,700 *
Penelope Roda(47) 150,751 150,751 *
Saverio B. Roda(48) 10,051 10,051 *
Vitorio Roda(49) 6,700 6,700 *
Harry Schmidt 34,375 34,375 *
Amos Shamama(50) 6,030 6,030 *
Dominic Spadea(51) 6,700 6,700 *
Vincent Spadea(52) 3,350 3,350 *

<PAGE>

Jim Speilman(53) 16,750 16,750 *
Jim & Janet Speilman, JTTEN(54) 16,750 16,750 *
Richard L. Stone(55) 6,700 6,700 *
Tasty Fries, Israel(56) 100,000 100,000 *
Al Thierman(57) 6,700 6,700 *
Usis International Capital Corp(58) 350,501 350,501 *
Larry Usner(59) 2,010 2,010 *
J. Charles Walter, Jr.(60) 2,010 2,010 *
Philip J V Watts(61) 8,710 8,710 *
Steven Winfield(62) 10,051 10,051 *
Whetstone Ventures Corp.(63) 720,343 720,343 *
Charles L. Whetstone(64) 26,800 26,800 *
Bradley Whittemore 15,625 15,625 *
Jurgen A. Wolf(65) 155,124 150,000 5,124
Martin G. Young(66) 16,750 16,750 *
Lewis Ziegler(67) 23,450 23,450 *
Kurt R. Ziemer(68) 67,680 67,000 680
Mildred Ziemer(69) 2,010 2,010 *
Richard D. Ziemer(70) 12,060 12,060 *
Jody L. Zoto 1,250 1,250 *
Louis Zoto 5,000 5,000 *
Thomas M. Zoto 3,750 3,750 *
</TABLE>

- ---------------------
* Assumes (i) no sales are effected by the Selling Securityholders during
the offering period other than pursuant to this Registration Statement,
(ii) ownership of less than one percent unless otherwise indicated, and
(iii) for purposes of this table, ownership with respect to a
Securityholder does not include shares beneficially owned but held by
other persons. For such information relating to directors and officers
of the Company, see "PRINCIPAL SECURITYHOLDERS."

(1) Includes 170 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(2) Includes 2,551 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(3) Includes 3,570 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(4) Includes 2,380 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(5) Includes (i) 17,000 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999, (ii) a
warrant to purchase 50,000 shares of common stock exercisable at $1.00
per share until October 30, 1999, and (iii) 100,000 shares to be issued
only upon the execution of a final agreement between the Company and
Soltam, a subsidiary of Koors Industries, Israel.

(6) Includes 340 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(7) See "BUSINESS - LITIGATION".

<PAGE>

(8) Includes 1,700 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(9) Includes 8,500 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(10) Includes 850 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(11) Includes 170 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(12) Includes 3,570 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(13) Includes 2,551 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(14) Includes 1,770 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(15) Includes 4,250 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(16) Includes 4,250 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(17) Includes 4,250 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(18) Includes 6,800 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(19) Includes 170 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(20) Includes 1,700 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(21) Includes 1,700 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(22) Includes 510 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(23) Includes 2,551 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(24) Includes 1,770 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

<PAGE>

(25) Includes 8,550 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(26) Includes 170 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(27) Ian D. Lambert, President of International Tasty Fries, Inc., is a
member of the Company's Board of Directors. The Shares being registered
listed for Mr. Lambert do not include (i) 515,000 post-split shares
owned by International Tasty Fries, Inc. which are being registered
hereby but do include (ii) 50,000 post-split shares of Common Stock
issuable upon exercise of an option granted on October 1, 1996
exercisable at $4.00 per share until October 1, 1999, as calculated in
accordance with Rules 13d-3. See "MANAGEMENT" and "PRINCIPAL
SECURITYHOLDERS - SECURITY OWNERSHIP OF MANAGEMENT".

(28) Includes 17,000 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(29) Includes 1,700 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(30) Includes 3,400 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(31) Includes 3,400 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(32) Includes 17,000 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(33) Mr. Kelly is the current President, Treasurer, Chief Executive Officer
and Chairman of the Board of the Company. The Shares being registered
hereby include (i) 1,500,000 post-split shares issued to Mr. Kelly
pursuant to the Stock Purchase Agreement between the Company and
Whetstone Ventures Corporation, Inc., and (ii) 50,000 post-split shares
of Common Stock issuable upon exercise of an option granted on October
1, 1996 exercisable at $4.00 per share until October 1, 1999, as
calculated in accordance with Rule 13d-3. See "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION - PLAN OF
OPERATION", "BUSINESS", "MANAGEMENT" and "PRINCIPAL SECURITYHOLDERS -
SECURITY OWNERSHIP OF MANAGEMENT".

(34) Includes 50,000 post-split shares of Common Stock issuable upon
exercise of an option granted on October 1, 1996 at $4.00 per share
until October 1, 1999, as calculated in accordance with Rule 13d-3,
being registered hereby.

(35) Includes 4,250 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(36) Includes 4,250 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(37) Includes 3,400 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

<PAGE>

(38) Includes 2,551 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(39) Includes 3,400 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(40) Includes 850 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(41) Includes 2,551 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(42) Includes 3,400 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(43) Includes 850 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(44) Includes 850 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(45) Includes 38,251 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(46) Includes 1,700 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(47) Includes 38,251 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(48) Includes 2,551 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(49) Includes 1,700 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(50) Includes 1,530 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(51) Includes 1,700 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(52) Includes 850 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(53) Includes 4,250 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(54) Includes 4,250 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

<PAGE>

(55) Includes 1,700 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(56) Includes 100,000 shares being registered hereby which are issuable only
upon the execution of a final agreement by the Company and Soltam, a
subsidiary of Koors Industries, Israel.

(57) Includes 1,700 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(58) Includes 25,501 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(59) Includes 510 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(60) Includes 510 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(61) Includes 2,210 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(62) Includes 2,551 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(63) Includes (i) 351,000 post-split Shares owned by Whetstone Ventures
Corporation, Inc., (ii) 250,000 post-split shares issued to
Whetstone Ventures Corporation, Inc., and (iii) 119,143 Warrant Shares
to be issued upon exercise of a Warrant to be issued pursuant to the
terms of the Stock Purchase Agreement between the Company and Whetstone
Ventures Corporation, Inc. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION - PLAN OF OPERATION",
"BUSINESS" and "PRINCIPAL SECURITYHOLDERS - SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS".

(64) Includes 6,800 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(65) Includes (i) 50,000 post-split shares of Common Stock listed in the
name of Adelaide Vending (Canada), Ltd. of which Mr. Wolf is a major
stockholder, (ii) 50,000 post-split shares of Common Stock issuable
upon exercise of an option granted on October 1, 1996 at $4.00 per
share until October 1, 1999, and (iii) 50,000 post-split shares of
Common Stock issuable upon exercise of an option issued to Adelaide
Vending (Canada) Ltd., at $5.00 per share until September 1, 1997, all
as calculated in accordance with Rule 13d-3.

(66) Includes 4,250 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(67) Includes 5,950 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(68) Mr. Ziemer is a director of the Company. See "MANAGEMENT". Includes
17,000 Warrant Shares being registered hereby underlying a warrant
exercisable at $1.90 per share until May 31, 1999.

<PAGE>

(69) Includes 510 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

(70) Includes 3,060 Warrant Shares being registered hereby underlying a
warrant exercisable at $1.90 per share until May 31, 1999.

<PAGE>

DESCRIPTION OF SECURITIES

THE COMPANY

The authorized capital stock of the Company consists of 25,000,000
shares of Common Stock, $.001 par value, of which 6,700,025 post-split shares
are issued and outstanding as of the date hereof. The Company has also
authorized for issuance 5,000,000 shares of preferred stock, $.001 par value
(the "Preferred Stock"), of which no shares are issued and outstanding as of the
date hereof.

COMMON STOCK

Each outstanding share of Common Stock is fully paid and nonassessable.
Holders of the Common Stock are entitled to one vote per share on each matter
submitted to a vote at any meeting of stockholders or consent in lieu thereof
under Nevada General Corporation Law. The Common Stock does not carry any
cumulative voting rights and, therefore, a majority of the outstanding Common
Stock will be able to elect the entire Board of Directors and, if they do so,
minority stockholders would not be able to elect any members to the Board of
Directors.

The Common Stock is not subject to redemption and carries no
preemptive, subscription or conversion rights. In the event of liquidation of
the Company, the shares of Common Stock are entitled to share equally in
corporate assets after satisfaction of all liabilities. There are no outstanding
options, warrants or rights to purchase shares of the Company's Common Stock
other than as offered hereby and/or as referred to herein.

PREFERRED STOCK

There are no plans to issue any shares of Preferred Stock at the
present time. The relative rights, preferences, designations, rates, conditions,
privileges, limitations, dividend rates, conversion rights, preemptive rights
and terms of redemption, liquidation preferences and sinking terms thereof are
to be determined by the Board of Directors, without any further vote or action
by stockholders. The Board of Directors, without stockholder approval, may issue
Preferred Stock in such series as it determines, with dividend rights,
liquidation preferences or other rights that are superior to the rights of
holders of Common Stock. The issuance of one or more series of Preferred Stock
could adversely affect the voting power of the holders of the Common Stock and
could have the effect of discouraging or making more difficult any attempt by a
person or a group to attain control of the Company. See "RISK FACTORS -
PREFERRED STOCK AUTHORIZED FOR ISSUANCE".

WARRANTS

The Company is registering 425,010 shares of Common Stock issuable up
the exercise of an equal amount of Warrants. Each Warrant entitles the holder to
purchase one share of the Company's Common Stock at any time for a period of
three years commencing May 29, 1996 and ending May 29, 1999 at an exercise price
per share equal to the average of the bid and asked price per share on December
23, 1996, the effective date of the reverse stock split. That exercise price is
$1.90 per share. The Warrants are not entitled to any voting, dividend,

<PAGE>

liquidation or other rights to which the Common Stock is entitled. In the event
of any dissolution or winding up of the Company, the holders of the Warrants
will not be entitled to participate in a distribution of the Company's assets.

The Company may call for redemption all or any portion of the Warrants
at $.001 per Warrant at any time upon a minimum of 30 days prior written notice
mailed to the registered holders of the Warrants. The Company's right to redeem
is subject to the right of the holders of the Warrants to exercise their
purchase rights between the date of any notice of redemption date given by the
Company. Any holders who do not exercise their Warrants prior to the redemption
date will receive the redemption price of $.001 per Warrant and will forfeit
their rights to purchase the Warrant Shares underlying the Warrants.

The Warrants are subject to adjustment in the event of a stock split,
reverse stock split, merger, reclassification or similar event.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the offering, the Company will have 6,912,930
post-split shares of Common Stock outstanding if 50% of the Warrants are
exercised and 7,125,435 post-split shares of Common Stock outstanding if 100% of
the Warrants are exercised without giving effect to the possible exercise of
other outstanding options or warrants disclosed in this Prospectus. The 425,010
Warrant Shares, issuable upon the exercise of the Warrants to be issued, will be
freely tradeable without restriction or further registration under the Act.

In general, under the new provisions of Rule 144, which has been
amended effective April 29, 1997, a person (or persons whose shares are
aggregated) who has satisfied a one (1) year holding period may sell in ordinary
market transactions through a broker or with a market maker, within any three
(3) month period, a number of shares which does not exceed the greater of one
percent (1%) of the number of outstanding shares of Common Stock or the average
of the weekly trading volume of the Common Stock during the four (4) calendar
weeks prior to such sale. Sales under Rule 144 require the filing of Form 144
with the Commission. If the shares of Common Stock have been held for more than
two (2) years by a person who is not an affiliate, there is no limitation on the
manner of sale or the volume of shares that may be sold and no Form 144 is
required. An "affiliate" of the Company is any person who directly or indirectly
controls, is controlled by or is under common control with, the Company.
Affiliates of the Company may include its directors, executive officers and
persons, directly or indirectly owning 10% or more of the outstanding Common
Stock. No prediction can be made as to the effect, if any, that sales of shares
of Common Stock or the availability of such shares for sale will have on the
market prices prevailing from time to time. Nevertheless, the possibility that
substantial amounts of Common Stock may be sold in the public market would
likely have a material adverse effect on prevailing market prices for the Common
Stock and could impair the Company's ability to raise capital through the sale
of its equity securities. See "RISK FACTORS - SHARES ELIGIBLE FOR FUTURE SALE"
and "PLAN OF DISTRIBUTION".

<PAGE>

TRANSFER AGENT

The Company's transfer agent for the Common Stock and Warrants is
StockTrans, Inc. located at 7 East Lancaster Avenue, Ardmore, Pennsylvania
19003-2318; telephone number (610) 649-7300.

PLAN OF DISTRIBUTION

The Shares and Warrant Shares offered hereby may be sold from time to
time by the Selling Securityholders on the OTC Bulletin Board on terms to be
determined at the times of such sales. The Selling Securityholders may also make
private sales directly or through a broker or brokers. Alternatively, the
Selling Securityholders may from time to time offer Shares and Warrant Shares
offered hereby to or through underwriters, dealers or agents, who may receive
consideration in the form of discounts and commissions. Such compensation, which
may be in excess of ordinary brokerage commissions, may be paid by the Selling
Securityholders and/or the purchasers of the Shares or Warrant Shares offered
hereby for whom such underwriters, dealers or agents may act. The Selling
Securityholders and any dealers or agents that participate in the distribution
of the Shares or Warrant Shares offered hereby may be deemed to be
"underwriters" as defined in the Act and any profits on the sale of such Shares
or Warrant Shares offered hereby by them may be deemed discounts and commissions
under the Act. The aggregate proceeds to the Selling Securityholders from sales
of the Shares or Warrant Shares offered by Selling Securityholders will be the
purchase price of such Shares or Warrant Shares less any broker's commissions.

To the extent required, the specific Shares or Warrant Shares to be
sold, the names of the Selling Securityholders, the respective purchase prices
and public offering prices, the names of any such agent, dealer or underwriter,
and any applicable commissions or discounts with respect to a particular offer
will be set forth in an accompanying Prospectus Supplement or, if appropriate, a
post-effective amendment to the Registration Statement of which this Prospectus
is a part.

In order to comply with the securities laws of certain states, if
applicable, the Shares and Warrant Shares offered hereby will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states Shares or Warrant Shares may not be sold unless they
have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirements is available and
is complied with.

Under applicable rules and regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), any person engaged in the
distribution of the Shares or Warrant Shares offered hereby may not
simultaneously engage in market making activities with respect to the Shares or
Warrant Shares for a period of two business days prior to the commencement of
such distribution. In addition, and without limiting the foregoing, the Selling
Securityholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Rules
10b-2, 10b-6 and 10b-7, which provisions may

<PAGE>

limit the timing of purchases and sales of Shares or Warrant Shares by the
Selling Securityholders.

The Company will pay substantially all the expenses incurred by the
Selling Securityholders and the Company incident to the offering and sale of the
Shares and Warrant Shares offered hereby to the public, but excluding any
underwriting discounts, commissions or transfer taxes. These offering expenses
are estimated to be approximately $95,000.

The Company has agreed to indemnify the Selling Securityholders against
certain liabilities, including liabilities under the Act.

LEGAL MATTERS

Certain legal matters will be passed upon for the Company by Kipnis
Tescher Lippman Valinsky & Kain, Attorneys at Law, Fort Lauderdale, Florida.

EXPERTS

The financial statements of Tasty Fries, Inc. as of January 31, 1996
and 1995, and for each of the years in the two-year period ended January 31,
1996 have been included herein and in the Registration Statement in reliance
upon the report of Schiffman Hughes Brown, independent public accountants,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing. The January 31, 1996 and 1995 financial statements of
Tasty Fries, Inc. included in this Prospectus have been certified by Schiffman
Hughes Brown, independent public accountants, upon the authority of said firm as
experts in giving said reports.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form SB-2 under the Act with respect
to the Shares and Warrant Shares offered hereby. This Prospectus, which
constitutes part of the Registration Statement, does not contain all the
information contained in the Registration Statement and the exhibits thereto on
file with Commission pursuant to the Act and the rules and regulations of the
Commission thereunder. For further information with respect to the Company and
the Shares and Warrant Shares offered hereby, reference is made to the
Registration Statement and such exhibits. Statements contained in this
Prospectus as to the contents of any contract or other document referred to are
not necessarily complete, and in each instance reference is made to the company
of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by reference to
the full text of such contract or document.

The Company is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports and other information
with the Commission. Such reports,

<PAGE>

other information and the Registration Statement, including exhibits thereto,
may be inspected and copied at the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices at 7 World Trade Center, 13th Floor, New York, New York 10048, and
Northwestern Atrium Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such materials can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains a web
site that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the Commission. The
Commission's web site can be accessed at http://www.sec.gov.

<PAGE>

INDEX TO FINANCIAL STATEMENTS

For the years ended January 31, 1996 and 1995 PAGE
and for the period October 18, 1985 (inception) ----
to January 31, 1996

Report of Independent Auditors......................................F-1

Balance Sheets......................................................F-2

Statements of Operations............................................F-3

Statements of Changes in Stockholders' Equity.......................F-4

Statements of Cash Flows............................................F-5

Notes to Financial Statements................................F-6 - F-11

For the three and nine months ended October 31, 1996 and 1995

Balance Sheets.....................................................F-12

Statements of Operations...........................................F-13

Statements of Changes in Stockholder's Equity......................F-14

Statements of Cash Flows...........................................F-15

Notes to Financial Statements...............................F-16 - F-19

<PAGE>

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
of Tasty Fries, Inc.

We have audited the accompanying balance sheets of Tasty Fries, Inc. (a
development stage company) (formerly Adelaide Holdings, Inc.) as of January 31,
1996 and 1995, and the related statements of operations, stockholder's equity
(deficiency), and cash flows for the years then ended and for the period from
October 18, 1985 (inception) to January 31, 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tasty Fries, Inc. as of January
31, 1996 and 1995, and the results of its operations and its cash flows for the
years then ended and from October 18, 1985 (inception) to January 31, 1996, 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 shown in the financial statements,
the Company has incurred net losses since its inception and has experienced
liquidity problems. Unless the Company can continue to obtain financing from the
issuance of common stock and/or through loans, substantial doubt arises about
the Company's ability to continue as a going concern (Note 1). The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

Schiffman Hughes Brown
Blue Bell, Pennsylvania
June 10, 1996

F-1

<PAGE>
<TABLE>
<CAPTION>
TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS AS OF JANUARY 31, 1996 AND 1995

ASSETS

1996 1995
---- ----
<S> <C> <C>
Current assets:
Cash $ 5,273 $ 305
Vending machines (Note 3) 70,000 70,000
Loan receivable, officer (Note 4) 50,000
------------------------
Total current assets 125,273 70,305

Property and equipment, net of
accumulated depreciation of
$16,834 in 1996 and $10,280 in 1995 30,515 28,765
------------------------

$ 155,788 $ 99,070
========================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:
Note payable (Note 5) $ 25,000 $ 50,000
Note payable, shareholder/officer (Note 6) 50,000 129,947
Accounts payable and accrued expenses 106,269 166,783
Litigation settlements payable (Note 11) 443,014 628,062
------------------------
Total current liabilities 624,283 974,792
------------------------

Unearned revenue (Note 7) 356,000 436,000
------------------------

Commitments and contingencies (Note 9)

Stockholders' equity (deficiency):
Common stock, $.01 par value;
authorized 100,000,000 shares;
issued and outstanding 77,000,495
shares at January 31, 1996 and
32,226,993 at January 31, 1995 770,005 322,270
Additional paid-in capital 5,591,470 2,075,490
Deficit accumulated in development stage (5,093,970) (3,709,482)
------------------------
1,267,505 (1,311,722)

Subscriptions receivable (Note 12) (2,092,000)
------------------------
(824,495) (1,311,722)
------------------------

$ 155,788 $ 99,070
========================
</TABLE>
See independent auditor's report
and notes to financial statements
F-2

<PAGE>
<TABLE>
<CAPTION>
TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JANUARY 31, 1996 AND 1995
AND FOR THE PERIOD OCTOBER 18, 1985 (INCEPTION) TO JANUARY 31, 1996

CUMULATIVE
SINCE
INCEPTION 1996 1995
----------- ---- ----
<S> <C> <C> <C>
Revenues $ 618 $ 618 $ 0
------------- ------------ ------------

Costs and expenses:

Research, machine
and product development 752,104 265,615 177,400
Selling, general and administrative 3,196,723 1,086,033 798,576
--------------------------------------------------------

3,948,827 1,351,648 975,976
--------------------------------------------------------

Net loss before other income (expense) (3,948,209) (1,351,030) (975,976)

Other income (expense):
Forfeited distributor deposits (Note 7) 15,000 10,000
Interest expense (55,699) (26,458) (14,895)
Litigation settlement (Note 11) (1,105,062) (7,000) (1,098,062)
--------------------------------------------------------
(1,145,761) (33,458) (1,102,957)
--------------------------------------------------------

Net loss $(5,093,970) $(1,384,488) $(2,078,933)
=======================================================

Net loss per share of common stock ($.07) ($.03) ($.08)
==================================================

Weighted average shares outstanding 46,498,559 27,401,329
===============================
</TABLE>
See independent auditor's report
and notes to financial statements
F-3

<PAGE>
<TABLE>
<CAPTION>
TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR THE PERIOD FEBRUARY 1, 1993 TO JANUARY 31, 1996

PAID TOTAL
COMMON IN RETAINED STOCKHOLDER
STOCK CAPITAL EARNINGS EQUITY
<S> <C> <C> <C> <C>
Balance, February 1, 1993 $212,704 $450,796 $(971,729) $(308,229)

Issued 7,600,000 shares 76,000 464,000 540,000

Issued 220,000 shares for services 2,200 2,200

Redeemed 3,145,000 shares (31,450) 31,450

Net loss for the year ended
January 31, 1994 (658,820) (658,820)
--------------------------------------------------------------------

Balance, January 31, 1994 259,454 946,246 (1,630,549) (424,849)

Issued 3,129,999 shares 31,300 547,950 579,250

Issued 2,151,622 shares for services 21,516 121,294 142,810

Issued 1,000,000 shares for
litigation settlement 10,000 460,000 470,000

Net loss for year ended
January 31, 1995 (2,078,933) (2,078,933)
--------------------------------------------------------------------

Balance, January 31, 1995 322,270 2,075,490 (3,709,482) (1,311,722)

Issued 36,415,000 shares 364,150 3,000,350 3,364,500

Issued 6,733,502 shares for services 67,335 381,880 449,215

Issued 625,000 shares for
loan conversion 6,250 43,750 50,000

Issued 1,000,000 shares for
repurchase of distributorship 10,000 90,000 100,000

Net loss for the year ended
January 31, 1996 (1,384,488) (1,384,488)
-------- ---------- ---------- ----------

Balance, January 31, 1996 $770,005 $5,591,470 $(5,093,970) $1,267,505
====================================================================
</TABLE>
See independent auditor's report
and notes to financial statements
F-4

<PAGE>
<TABLE>
<CAPTION>
TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JANUARY 31, 1996 AND 1995
AND FOR THE PERIOD OCTOBER 18, 1985 (INCEPTION) TO JANUARY 31, 1996

CUMULATIVE
SINCE
INCEPTION 1996 1995
------------- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(5,093,970) $(1,384,488) $(2,078,933)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation 16,834 6,554 4,500
Common stock issued for services 631,725 449,215 142,810
Common stock issued for litigation settlement 470,000 470,000
Changes in assets and liabilities:
Other assets (70,000) 5,000
Accounts payable and accrued expenses 549,284 (245,562) 682,889
Unearned revenue 356,000 (80,000) 80,000
------------------------------------------------
Net cash used by operating activities (3,140,127) (1,254,281) (693,734)
------------------------------------------------

Net cash flows used in investing activities:
Purchase of property and equipment (47,350) (8,304) (14,544)
------------------------------------------------

Cash flows from financing activities:
Issuance of common stock 3,167,750 1,422,500 579,250
Loan receivable, officer (50,000) (50,000)
Note payable, current 25,000 (25,000)
Shareholder note 50,000 (79,947)
------------------------------------------------
Net cash provided by financing activities 3,192,750 1,267,553 579,250
------------------------------------------------

Net increase (decrease) in cash 5,273 4,968 (129,028)
Cash, beginning balance 0 305 129,333
------------------------------------------------

Cash, ending balance $ 5,273 $ 5,273 $ 305
================================================

Supplemental disclosure of cash flow information:
Cash paid for interest $ 35,351 $ 22,636 $ 11,620
================================================

Supplemental disclosures of non-cash financing activities:
Issuance of common stock for services $ 629,525 $ 449,215 $ 142,810
================================================
Issuance of common stock for
conversion of note payable $ 75,000 $ 50,000 $
================================================
Issuance of common stock for
repurchase of distributorship $ 100,000 $ 100,000 $
================================================
Issuance of common stock for
litigation settlement $ 470,000 $ 470,000
================================================
</TABLE>
See independent auditor's report
and notes to financial statements
F-5

<PAGE>
TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 AND 1995

1. Description of Business:

On July 31, 1991 Metro Systems Inc., a Nevada Corporation, acquired 100%
of the outstanding stock of Adelaide Holdings, Inc., a Delaware
Corporation, for 13,500,000 shares of its common stock. The acquisition
has been accounted for as a reverse acquisition. Metro Systems Inc. was a
shell company having no assets or liabilities at the time of the reverse
acquisition and changed the name of Metro Systems Inc. to Adelaide
Holdings, Inc. Effective October 1, 1993 its name was changed to Tasty
Fries, Inc.

The Company is a development stage company since it has not completed
designing, testing, and manufacturing its sole product, a vending machine
which will cook and dispense french fries. The Company has entered into a
manufacturing requirements agreement with a company which manufactures
and assembles a variety of high technology equipment. The Company has
received ten machines and it is anticipated that each machine can be sold
for approximately $7,000. The difference between the anticipated selling
price and the cost to obtain the machines has been charged to research,
machine and product development costs. The president of the manufacturing
company is a Director of Tasty Fries, Inc. and the president of Tasty
Fries, Inc. owns 50% of the manufacturing company. From the corporation's
date of inception, October 18, 1985, to date it has engaged in various
business activities that were unprofitable. The Company had no revenues
from operations since inception and its ability to continue as a going
concern is dependent on the continuation of equity financing to fund the
expenses related to successfully marketing the vending machine and
resolving existing litigation (Note 10). Management is currently in
negotiations with three separate funding sources to provide the working
capital necessary to pay Premier and fund the tooling of the Machine.
These funding sources will also assist the Company in manufacturing the
first 50 machines and bring them to market, at which time the Company
believes that sufficient cash will be generated to support its
operations. Although management cannot assure the ultimate success of the
above plan, it is reasonably confident that it will enable the Company to
continue its business and grow modestly.

2. Significant accounting policies:

Property and equipment:

Property and equipment are carried at cost. Depreciation is calculated
using the straight-line method over their estimated useful lives ranging
from 3 to 7 years. Depreciation expense for January 31, 1996 and 1995 was
$6,554 and $4,500, respectively.

F-6

<PAGE>

TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JANUARY 31, 1996 AND 1995

2. Significant accounting policies (continued):

Research, machine and product development:

Research and development costs consist of expenditures incurred by the
Company during the course of planned search and investigation aimed at
the discovery of new knowledge which will be used to develop and test a
vending machine and potato product for the formation of french fries.
Research and development costs also include costs for significant
enhancements or improvements to the machine and/or potato product. The
Company expenses all such research and development costs as they are
incurred.

Unearned revenue:

Represents monies received for distribution rights of the vending
machines which the Company is still in the process of developing and
testing. The Company records these monies as unearned revenue upon
receipt. These deferrals will be recognized as income over the life of
the machine upon commercial production of machines or upon forfeiture by
distributors as a result of breach of contract. Since commercial
production of the machine has not commenced, the unearned revenue is
classified as a non-current liability.

3. Vending machines:

Vending machines are carried at the lower of cost or market. During the
year ended January 31, 1995, the Company paid to Premier, $246,600, for
the production of ten reproduction machines. In the year ended January
31, 1995, the Company charged $176,600 to research and development
expense.

4. Loan receivable, officer:

Represent monies borrowed from the Company by an officer in May, 1995.
The loan is due on demand, along with interest at 10% per annum.

5. Note Payable:

Represents a single unsecured note from a third party shareholder which
bears interest at the rate of 8% per annum. The note was due June 4, 1993
but has been extended indefinitely. The Company issued to the noteholder,
options for 400,000 shares of its common stock on December 22, 1994, with
an exercise price of 35 cents per share. The Company issued 180,000 and
90,000 shares of its common stock on December 22, 1994 and May 4, 1995,
respectively, to the noteholder in addition to paying $30,600 on May 5,
1995. This payment of $30,600 on May 5, 1995 includes a principal payment
of $25,000 and interest covering the period June, 1992 to March, 1995 in
the amount of $5,600. The 180,000 and 90,000 shares issued to the
noteholder at $.01 were consideration for indefinitely extending the
repayment and recorded as a financing expense which is included in
selling, general and administrative expense.

F-7

<PAGE>

TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JANUARY 31, 1996 AND 1995

6. Note Payable, Shareholder/Officer:

Represents the unsecured note from an existing shareholder/officer of the
Company which bears interest at the rate of 8% per annum and is due and
payable on demand. The Company reduced this note to $50,000 with a
principal payment of $79,947 on May 1, 1995. In addition to the principal
payment on May 1, 1995 of $79,947, the Company also paid interest in the
amount of $9,576.14.

7. Unearned Revenue:

During the year ended January 31, 1995, a distributor who had paid
$10,000 to the Company for the rights to a distributorship, forfeited its
rights in the distributorship. The remaining $5,000 in forfeited
distributor deposits since inception of the Company occurred during the
year ended January 31, 1994 when a distributor forfeited its rights to a
distributorship. On September 5, 1995, the Company issued 1,000,000
shares of its common stock to repurchase the Canadian distributorship
rights which the Company has shown as unearned revenue in the amount of
$100,000.

8. Related Party Transactions:

The Company paid salary to Mr. Edward Kelly, the president and director,
during the fiscal year ended January 31, 1996 totaling $160,000. The
Company also issued an aggregate of 2,184,127 shares of common stock (in
lieu of cash compensation) to Mr. Edward Kelly during September, 1995 and
October, 1996 for his services totaling $20,000. During the year ended
January 31, 1995, the Company paid consulting fees to Mr. Edward Kelly of
$49,000. The Company also issued 960,000 and 500,000 shares of common
stock to Mr. Edward Kelly and Mr. Gary Arzt, respectively, for their
services. These shares of common stock amounted to $9,600 for Mr. Edward
Kelly for his services during the period prior to his becoming president
in June, 1994 and $22,500 for Mr. Gary Arzt for his services as president
from September, 1992 to June, 1993. Mr. Gary Arzt was the Company's
chairman of the board until June 1, 1996.

During the year ended January 31, 1994, the Company settled a lawsuit
with Mr. Abramson and Mr. Balan, former officers of Adelaide Holdings,
Inc., whereby they returned 3,145,000 shares of previously issued common
stock to the Company.

9. Commitments and Contingencies:

During the years ended January 31, 1996 and 1995, the Company paid
$17,400 and $9,600, respectively, for the rental of office space. The
Company represented that they will continue leasing this office space at
a monthly rental of $1,650 until May 31, 1997.

F-8

<PAGE>

TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JANUARY 31, 1996 AND 1995

10. Issuance of Common Stock:

44,773,502 total shares of common stock were issued during the year ended
January 31, 1996. 36,415,000 shares were sold in private placements by
the Company, 6,733,502 shares were issued for payment of advertising,
marketing, consulting and legal services totaling $449,215, 625,000
shares were issued for a $50,000 loan conversion to common stock and
1,000,000 shares were issued for the repurchase of the Canadian
distributorship rights (see Note 6).

5,281,621 total shares of common stock were issued during the year ended
January 31, 1995. 3,129,999 shares were sold in private placements by the
Company and 2,151,622 shares were issued for payment of advertising,
marketing, consulting and legal services totaling $143,310.

11. Litigation:

Former officers of the Company caused the Company to guarantee a lease
for another corporation owned by them. The other corporation breached its
lease obligation causing the landlord to assert a claim against the
Company as guarantor for an amount due approximating $110,000. In
October, 1994 the Company, without admitting any liability, settled the
litigation assessment by paying the landlord $76,000. Upon payment of the
$76,000, the Company was released as guarantor of the lease.

On October 25, 1994 the Company received a copy of the award of the
arbitrator in the American Arbitration Association matter of California
Food & Vending, Inc. (CFV) vs. Tasty Fries, Inc. et.al. An award was
rendered against the Company in the aggregate amount of $279,500 for
domestic and international distribution fees owed to the plaintiff and
$249,500 in compensatory damages. The award and compensatory damages
totaling $529,000 have been recorded in the financial statements as of
October 31, 1994. Payment (pursuant to a settlement agreement which
supersedes the award) began in February, 1995 and was satisfied in full
in May, 1996.

The arbitration award also ordered (a) the enforcement of the terms of
the Memorandum of Understanding dated March 17, 1992 and Joint Venture
Agreement dated May 14, 1991 and (b) the issuance of an option to CFV for
the purchase of 2,000,000 shares of the Company's common stock at a
exercise price of $2.00 per share through March 17, 1997. In general, the
terms provide for the payment by the Company of certain royalties, fees
and profits to CFV in connection with future sales of Company vending
machines and related products. The royalties, fees and profits payable in
the future to CFV could become material, but there is no way to assign a
dollar figure to this payable since it will be based on future Company
sales. The Company is required to pay to CFV royalties of $350 per
machine for the first 500 machines sold and 35% of the gross profit for
machines sold thereafter. The Company will also have to pay CFV $.25 for
each pound of potato product sold. These royalties will be expensed by
the Company when incurred.

F-9

<PAGE>

TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JANUARY 31, 1996 AND 1995

11. Litigation (continued):

In connection with the foregoing, an award was entered in favor of
cross-claimant, which requires, among other things, that the Company
issue 1,000,000 shares of unrestricted common stock to the
cross-claimant. These 1,000,000 shares of common stock were accounted for
in the financial statements at market value at the time of the award
(October 25, 1994). The shares were not issued by the Company until June,
1996.

On January 5, 1995, the arbitrator in the case of California Food and
Vending, Inc. (CFV) vs. the Company awarded CFV and cross-claimant legal
fees amounting to $94,963 and $4,099, respectively. In addition, CFV was
awarded one proto-type vending machine, which had a value of $7,000. The
legal fees and the proto-type machine, totaling $106,062 were recorded in
the financial statements. Payment pursuant to a settlement agreement
which supersedes the award began in February, 1995 and was satisfied in
full in May, 1996.

On March 15, 1996, the Federal District Court for the Central District of
California issued a Temporary Protective Order (TPO) against the Company
since the Company defaulted on their February, 1996 installment payment
to CFV. The TPO provided that any monies received by the Company
currently, were to be paid to CFV until all monies due CFV were paid in
full. The Company satisfied, in full, the CFV judgment in April and May,
1996 and rendered the TPO void.

On May 23, 1995, an alleged former agent of the Company instituted a
lawsuit against the Company and its former president Gary Arzt for breach
of contract, quantum meruit, breach of verbal contract and requested
damages in excess of $15,000 for unpaid commissions. The Company and Mr.
Arzt responded to the lawsuit on September 29, 1995 denying the
allegations. No date for trial has been set and the Company believes that
the lawsuit is without merit and intends to vigorously defend this
matter. Management and legal counsel believe that there will be no
liability arising from this lawsuit.

On January 15, 1996, a lawsuit was instituted alleging breach of
contract, fraudulent inducement and misrepresentation, and violation of
New Jersey law relating to consumer contracts. A settlement of this
lawsuit occurred in July, 1996 and the Company agreed to register shares
of the Company's common stock. This registration has not occurred and
these shares will be recorded in the financial statements at fair market
value at time of issuance. No provision has been recorded at the balance
sheet date since the value of these shares to be issued is undeterminable
and will not materially affect the Company's financial position.

F-10

<PAGE>

TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JANUARY 31, 1996 AND 1995

12. Subscriptions receivable:

In September, 1995, the Company entered into an agreement with Acumen
Services, Ltd., an off-shore Abaco, Bahamas company, to purchase an
aggregate of 21,500,000 shares of common stock at $.10 per share payable
pursuant to a promissory note providing for payment upon the commencement
of commercial production of the machine. The Company received $80,000 in
December, 1995 from an unrelated third party who was issued shares of
common stock. The balance of the remaining shares were canceled and
returned to the Company's treasury in May, 1996 as a result of a dispute
between the Company and Acumen.

In January, 1996, the Company issued 1,000,000 shares to a third party
individual investor for $50,000 with $28,000 cash received in late
January, 1996 and the remaining $22,000 cash received in the middle of
February, 1996.

13. Subsequent Events:

In April, 1996 the Company borrowed $100,000 from M. Shankman Comm., Inc.
and subsequently forwarded this money to CFV in partial satisfaction of
the TPO. These borrowed monies are intended to be repaid by the Company
during the fiscal year ending January 31, 1997 including interest at 10%
per annum.

On April 30, 1996, the Company received $500,000 in financing from an
investor, which enabled the Company to satisfy the CFV Temporary
Protective Order and will allow the Company to facilitate the production
of its vending machine. Additional financing of $750,000 was obtained on
May 31, 1996. In May, 1996, 10,000,000 shares of the Company's restricted
common stock were issued to an investor at $.05 per share for $500,000.
The Company issued an additional 15,000,000 shares of its restricted
common stock at $.05 per share upon receipt of $750,000.

14. Common Stock Option Plan:

The Company adopted incentive and nonqualified stock option plans for
employees effective as of September 18, 1995. The plan also provides for
stock options to be issued to non-employee directors based upon a formula
set forth in the document. The incentive stock option plan is intended to
qualify under Section 422 of the Internal Revenue Code. Under the terms
of the plan, options to purchase common stock are granted at not less
than the estimated fair market value at the date of the grant and are
exercisable during specified future periods. There were no options
granted as of January 31, 1996 to any executive officers, but
non-employee directors received options to purchase 83,332 shares of
common stock at an exercise price of $.12 per share.

Adoption of SFAS 123 by the Company would require an expense of $9,999 in
directors fees to be accrued for the 83,332 options at the fair value of
$.12 on grant date.

F-11

<PAGE>
<TABLE>
<CAPTION>
TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS

ASSETS

OCTOBER 31, JANUARY 31,
1996 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
Current Assets:
Cash $ 27,747 $ 5,273
Machine 70,000 70,000
Loans receivable - officer 50,000 50,000
------------------------------------
Total current assets 147,747 125,273

Property and equipment, net 25,088 30,515
------------------------------------

$ 172,835 $ 155,788
=========== ==========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
Note payable $ 25,000 $ 25,000
Note payable, shareholder/officer 50,000 50,000
Accounts payable and accrued expenses 669,686 106,269
Litigation settlements payable 443,014
------------------------------------
Total current liabilities 744,686 624,283
------------------------------------

Unearned revenue 376,000 356,000
----------- ----------

Stockholders' Deficiency:
Common stock, $.01 par value; authorized
100,000,000 shares; issued and outstanding
93,963,594 shares at October 31, 1996 and
77,000,495 at January 31, 1996 939,636 770,005
Additional paid-in capital 4,820,340 5,591,470
Deficit accumulated in development stage (6,707,827) (5,093,970)
-------------------------------------
(947,851) 1,267,505
Subscriptions receivable (2,092,000)
(947,851) (824,495)
-------------------------------------

$ 172,835 $ 155,788
====================================
</TABLE>

F-12

<PAGE>
<TABLE>
<CAPTION>
TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(Unaudited)

THREE MONTHS ENDED NINE MONTHS ENDED
1995 1996 1995 1996
---- ---- ---- ----

<S> <C> <C> <C> <C>
Revenues $ 0 $ 0 $ 0 $ 478
------------ ------------ ------------ -------------

Costs and expenses:

Research, machine
and product development 17,385 7,384 22,113 587,006
Selling, general and administrative 314,025 364,068 771,579 1,020,925
-------------------------------------------------------------------
331,410 371,452 793,692 1,607,931
-------------------------------------------------------------------

Net loss before interest (331,410) (371,452) (793,692) (1,607,453)

Interest expense 1,621 1,910 25,197 6,404
--------------------------------------------------------------------

Net loss $(333,031) $(373,362) $(818,889) $(1,613,857)
============================= ========= ===========

Net loss per share of common stock $(.01) $(.01) $(.02) $( .02)
====== ====== ====== =======

Weighted average shares outstanding 55,625,617 93,963,594 41,151,847 83,068,472
============ ============ ============ ===========
</TABLE>

F-13

<PAGE>
<TABLE>
<CAPTION>
TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR THE NINE MONTHS ENDED OCTOBER 31, 1996
(Unaudited)

TOTAL
STOCKHOLDERS'
COMMON PAID-IN RETAINED EQUITY
STOCK CAPITAL EARNINGS (DEFICIENCY)
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, February 1, 1996 $770,005 $5,591,470 $(5,093,970) $1,267,505

Redemption of 20,700,000 shares
issued to Acumen Services, Ltd.
in September, 1995 (207,000) (1,863,000) (2,070,000)

Issued 37,163,100 shares 361,631 1,031,870 1,393,501

Issued 1,500,000 shares
for services 15,000 60,000 75,000

Net loss for nine months (1,613,857) (1,613,857)
-----------------------------------------------------------------------

$939,636 $4,820,340 $(6,707,827) $ (947,851)
====================================================================
</TABLE>

F-14

<PAGE>
<TABLE>
<CAPTION>
TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(Unaudited)

THREE MONTHS ENDED NINE MONTHS ENDED
1995 1996 1995 1996
----------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (333,031) $(373,362) $ (818,889) $(1,613,857)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 1,580 1,809 4,740 5,427
Issuance of common stock for services 246,960 421,714 75,000
Changes in assets and liabilities:
Other assets (225,000)
Unearned revenue (100,000) (80,000) 20,000
Accounts payable and accrued expenses (222,448) 99,902 (446,692) 120,404
----------------------------------------------------------------
Net cash used by operating activities (406,939) (271,651) (1,144,127) (1,393,026)
----------------------------------------------------------------

Net cash flows used by investing activities:
Purchase of property and equipment -0- -0- (5,604) -0-
----------------------------------------------------------------

Cash flows from financing activities:
Issuance of common stock 415,000 1,314,500 1,415,500
Loan receivable, officer (50,000)
Repayment of note payable (25,000)
Note payable shareholder/officer (79,947)
----------------------------------------------------------------
Net cash provided by financing activities 415,000 1,159,553 1,415,500
----------------------------------------------------------------

Net increase (decrease) in cash 8,061 (271,651) 9,822 22,474
Cash, beginning balance 2,066 299,398 305 5,273
----------------------------------------------------------------

Cash, ending balance $ 10,127 $ 27,747 $ 10,127 $ 27,747
================================================================

Supplemental disclosure of cash flow information:
Cash paid for interest $ 360 $ 20 $ 22,636 $ 1,363
================================================================

Supplemental disclosures of non-cash financing activities:
Issuance of common stock for services $ 246,960 $ -0- $ 421,714 $ 75,000
================================================================
Conversion of loan to common stock $ -0- $ -0- $ 50,000 $ -0-
================================================================
</TABLE>

F-15

<PAGE>

TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(Unaudited)

1. Basis of presentation:

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the nine months ended October 31, 1996 are not
necessarily indicative of the results that may be expected for the year
ended January 31, 1997. The unaudited financial statements should be
read in conjunction with the financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the year ended
January 31, 1996.

2. Description of Business and Significant Accounting Policies:

The Company is a development stage company since it has not completed
designing, testing, and manufacturing its sole product, a vending
machine which will cook and dispense french fries. The Company has
incurred research and development costs from inception to October 31,
1996 totaling $1,346,110. The Company had entered into a manufacturing
requirements agreement with Premier Design, Inc., a company which
manufactures and assembles a variety of high technology equipment. The
Company has determined that Premier will be unable to meet production
requirements. The Company entered into an agreement with Premier to pay
them $650,000 in research and development costs ($100,000 paid July,
1996; $550,000 due as of October 31, 1996). In exchange for 25% of
research and development costs paid with the remaining balance paid
over twelve months, Premier will assign one-half interest of the
patents associated with the machine to Tasty Fries, Inc. This new
agreement was executed by the Company to avoid significant costs from
potential litigation proceedings and further delays in production of
the machine. The additional research and development costs are
reflected in the nine months loss figure. The President of the
manufacturing company is a former Director of Tasty Fries, Inc. and the
President of Tasty Fries, Inc. owns 50% of the manufacturing company.
In June, 1996, the Company entered into a new manufacturing agreement
with S&H Electronics, Inc. (a Pennsylvania corporation) to assemble the
machines after the tooling phase is completed. From the corporation's
date of inception, October 18, 1985, to date it has engaged in various
business activities that were unprofitable. The Company has no revenues
from operations, but does have immaterial revenues from operation of
beta test machines. Its ability to continue as a going concern is
dependent on the continuation of equity financing to fund the expenses
related to successfully marketing the vending machine and resolving
existing litigation (Note 5).

F-16

<PAGE>

TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(Unaudited)

2. Description of Business and Significant Accounting Policies
(continued):

Management is currently in negotiations with three separate funding
sources to provide the working capital necessary to pay Premier and
fund the tooling of the Machine. These funding sources will also assist
the Company in manufacturing the first 50 machines and bring them to
market, at which time the Company believes that sufficient cash will be
generated to support its operations. Although management cannot assure
the ultimate success of the above plan, it is reasonably confident that
it will enable the Company to continue its business and grow modestly.

3. Unearned Revenue:

In May 1996 the Company received payments totaling $20,000 for the
rights to distribute its machines in Israel, Egypt and Jordan.

4. Issuance of Common Stock:

There were no additional shares of common stock issued during the
quarter ended October 31, 1996.

5. Litigation:

Former officers of the Company caused the Company to guarantee a lease
for another corporation owned by them. The other corporation breached
its lease obligation causing the landlord to assert a claim against the
Company as guarantor for an amount due approximating $110,000. In
October, 1994, the Company, without admitting any liability, settled
the litigation assessment by paying the landlord $76,000. Upon payment
of the $76,000, the Company was released as guarantor of the lease.

On October 25, 1994, the Company received a copy of the award of the
arbitrator in the American Arbitration Association matter of California
Food & Vending, Inc. (CFV) vs. Tasty Fries, Inc. et.al. An award was
rendered against the Company in the aggregate amount of $279,500 for
domestic and international distribution fees owed to the plaintiff and
$249,500 in compensatory damages. The award and compensatory damages
totaling $529,000 have been recorded in the financial statements as of
October 31, 1994. Payment (pursuant to a settlement agreement which
supersedes the award) began in February 1995 and was satisfied in full
in May, 1996.

F-17

<PAGE>

TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(Unaudited)

5. Litigation (continued):

The arbitration award also ordered (a) the enforcement of the terms of
the Memorandum of Understanding dated March 17, 1992 and Joint Venture
Agreement dated May 14, 1991 and (b) the issuance of on option to CFV
for the purchase of 2,000,000 shares of the Company's common stock at
an exercise price of $2.00 per share through March 17, 1997. In
general, the terms provide for the payment by the Company of certain
royalties, fees and profits to CFV in connection with future sales of
Company vending machines and related products. The royalties, fees and
profits payable in the future to CFV could become material, but there
is no way to assign a dollar figure to this payable since it will be
based on future Company sales. The Company is required to pay to CFV
royalties of $350 per machine for the first 500 machines sold and 35%
of the gross profit for machines sold thereafter. The Company will also
have to pay CFV $.25 for each pound of potato product sold. These
royalties will be expensed by the Company when incurred.

In connection with the foregoing, an award was entered in favor of
cross-claimant, which requires, among other things, that the Company
issue 1,000,000 shares of unrestricted common stock to the
cross-claimant. These 1,000,000 shares of common stock were accounted
for in the financial statements at market value at the time of the
award (October 25, 1994). The shares were not issued by the Company
until June, 1996.

On January 5, 1995 the arbitrator in the case of California Food and
Vending, Inc. (CFV) vs. the Company awarded CFV and cross-claimant
legal fees amounting to $94,963 and $4,099, respectively. In a
addition, CFV was awarded one proto-type vending machine, which had a
value of $7,000. The legal fees and the proto-type machine, totaling
$106,062 were recorded in the financial statements. Payment pursuant to
a settlement agreement which supersedes the award began in February,
1995 and was satisfied in full in May, 1996.

On March 15, 1996, the Federal District Court for the Central District
of California issued a Temporary Protective Order (TPO) against the
Company since the Company defaulted on their February, 1996 installment
payment to CFV. The TPO provided that any monies received by the
Company currently, were to be paid to CFV until all monies due CFV were
paid in full. The Company satisfied, in full, the CFV judgment in April
and May, 1996 and rendered the TPO void.

On May 23, 1995, an alleged former agent of the Company instituted a
lawsuit against the Company and its former president, Gary Arzt, for
breach of contract, quantum meruit, breach of verbal contract and
requested damages in excess of $15,000 for unpaid commissions. The
Company and Mr. Arzt responded to the lawsuit on September 29, 1995
denying the allegations. No date for trial has been set and the Company
believes that the lawsuit is without merit and intends to vigorously
defend this matter. Management believes that there will be no liability
arising from this lawsuit.

F-18

<PAGE>

TASTY FRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(Unaudited)

5. Litigation (continued):

On January 15, 1996, a lawsuit was instituted alleging breach of
contract, fraudulent inducement and misrepresentation and violation of
New Jersey law relating to consumer contracts. A settlement of this
lawsuit occurred in July, 1996 and the Company agreed to register
shares of the Company's common stock. This registration has not
occurred and these shares will be recorded in the financial statements
at fair market value at time of issuance. No provision has been
recorded at the balance sheet date since the value of these shares to
be issued is undeterminable and will not materially affect the
Company's financial position.

In September 1995, the Company entered into an agreement with Acumen
Services, Ltd., an off-shore Abaco, Bahamas company, to purchase an
aggregate of 21,500,000 shares of common stock at $.10 per share
payable pursuant to a promissory note providing for payment upon the
commencement of commercial production of the machine. The Company
received $80,000 in December, 1995 from an unrelated third party who
was issued shares of common stock. The balance of the remaining shares
were canceled and returned to the Company's treasury in May, 1996 as a
result of a dispute between the Company and Acumen.

F-19

<PAGE>
===============================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION IN CONNECTION WITH THE OFFERING BEING MADE HEREBY NOT CONTAINED
IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.

--------------------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUMMARY..............................................................
SELECTED FINANCIAL DATA.........................................................
RISK FACTORS....................................................................
USE OF PROCEEDS.................................................................
DIVIDEND POLICY.................................................................
CAPITALIZATION..................................................................
DILUTION........................................................................
MANAGEMENT'S DISCUSSION AND ANALYSIS -
PLAN OF OPERATION.............................................................
BUSINESS........................................................................
LITIGATION......................................................................
EMPLOYEES.......................................................................
PROPERTIES......................................................................
MARKET FOR COMMON EQUITY........................................................
MANAGEMENT......................................................................
EXECUTIVE COMPENSATION..........................................................
PRINCIPAL SECURITYHOLDERS.......................................................
CERTAIN TRANSACTIONS............................................................
SELLING SECURITYHOLDERS.........................................................
DESCRIPTION OF SECURITIES.......................................................
PLAN OF DISTRIBUTION............................................................
LEGAL MATTERS...................................................................
EXPERTS.........................................................................
ADDITIONAL INFORMATION..........................................................
INDEX TO FINANCIAL STATEMENTS................................................F-1

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
===============================================================================
===============================================================================

5,397,927 SHARES

TASTY FRIES, INC.

COMMON STOCK

==========
PROSPECTUS
==========

, 1997
===============================================================================
<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article XVI of the Company's Articles of Incorporation, as amended,
provides that no director or officer shall be liable to the Company or its
stockholders for monetary damages for any breach of fiduciary duty by such
person as a director or officer. Notwithstanding the foregoing sentence, a
director or officer shall be liable to the extent provided by applicable law,
(i) for acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law, or (ii) for the payment of dividends in violation of
Section 78.300 of the Nevada General Corporation Law ("NRS"). The provisions
hereof shall not apply to or have any effect on the liability of any officer or
director of the Company for or with respect to any acts or omissions of such
person occurring prior to such amendment on July 29, 1991.

The NRS provide for indemnification where a person who was or is a
party or is threatened to be made a party to any threatened, pending or
contemplated action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than action by or in right of a corporation), by reason
of fact he is or was a Director, Officer, employee or agent of a corporation or
serving another corporation at the request of the corporation, against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement,
actually and reasonably incurred by him if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the corporation and, with respect to criminal action or proceeding, had no
reasonable cause to believe his conduct unlawful. Lack of good faith is not
presumed from settlement or nolo contendere plea. Indemnification of expenses
(including attorneys' fees) allowed in derivative actions except in the case of
misconduct in performance of duty to the corporation unless the Court decides
indemnification is proper. To the extent any such person succeeds on the merits
or otherwise, he shall be indemnified against expenses (including attorneys'
fees). Determination that the person to be indemnified met applicable standards
of conduct, if not made by the Court, is made by the Board of Directors by
majority vote of a quorum consisting of the Directors not party to such action,
suit or proceeding or, if a quorum is not obtainable or a disinterested quorum
so directs, by independent legal counsel or by the stockholders. Expenses may be
paid in advance upon receipt of undertakings to repay unless it shall ultimately
be determined that he is entitled to be indemnified by the corporation. The
Corporation may purchase indemnity insurance.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act") may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing provisions, or
otherwise, the Company has been informed 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. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

II-1

<PAGE>

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

SEC Filing Fee $ 235.96
---------
NASD Filing Fee $ 577.87
---------
Transfer Agent Fee* $ 750.00
---------
Printing Costs (including stock certificates)* $ 2,500.00
---------
Legal fees and expenses* $70,000.00
---------
Accounting fees and expenses* $20,000.00
---------
Blue Sky fees and expenses* $ 0.00
---------

TOTAL $94,063.83
=========

- ------------
* Indicates expenses that have been estimated for the purpose of this filing.

II-2

<PAGE>

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

The following securities were sold by the Company within the past three
(3) years and prior to the date of filing of this Registration Statement. There
were no underwriting discounts or commissions paid in connection with the
issuance of any of these securities. The following share amounts give effect
to the 1 for 20 reverse stock split effective December 23, 1996.
<TABLE>
<CAPTION>

NAME SHARES SOLD AMOUNT OF DATE OF
---- ----------- CONSIDERATION SALE
CASH/OTHER ----
----------
<S> <C> <C> <C>
Acumen Services, Ltd.(1) 1,075,000 (1) 9/5/95

Samuel Balan 50,000 Court Award 10/24/94

Bundy & Associates, Inc. 5,000 $35,000 7/19/94

Eric Cohen 9,000 Loan to Company 12/21/94

Eric Cohen 4,500 Loan to Company 5/4/95

Robert Crowder 50,000 $100,000 11/20/94

Warren Dean 6,667 $35,000 7/20/94

Echo Partnership 6,667 $35,000 7/18/94

G.D. Fader 6,667 $35,000 7/19/94

Peter R. Fader 12,500 $20,000 7/19/94

Chester A. Harberson 5,000 Loan to Company 2/7/95

Chester A. Harberson 31,250 $50,000 5/10/95

Chester A. Harberson 31,250 $50,000 8/8/95

International Tasty Fries, Inc. 15,000 Loan to Company 3/16/95

International Tasty Fries, Inc. 500,000 Conversion of Loan 4/12/95
and $625,000

Tony Jones 8,824 Consulting Services 11/20/94

Dr. Albert Kofsky 5,000 $20,000 9/15/94

Daniel & Juliana O'Connor, 5,000 $87,500 9/6/94
JTWROS

Mickey Ogden(2) 50,000 $50,000 10/10/95

John L. Patten 5,000 $15,000 9/27/94

PMGN, Inc. 50,000 $100,000 10/3/95

Jennifer Portman 2,567 Consulting Services 9/30/94

Jennifer Portman 5,715 Consulting Services 10/31/94

II-3

<PAGE>

T. Kent Rainey 6,650 $22,500 1/18/94

Morton J. Robinson & Jane 5,000 $35,000 4/26/94
Robinson, TE

Whetstone Ventures Corp., Inc. 500,000 $500,000 4/30/96

Whetstone Ventures Corp., Inc. 750,000 $750,000 5/31/96

Jurgen A. Wolf(2)(3) 50,000 Reacquisition of 9/5/96
Distributorship

Jody L. Zoto 1,250 $5,000 9/15/94

Louis Zoto 5,000 $20,000 9/15/94

Stacey Desmond Zoto 1,250 $5,000 9/15/94

Thomas M. Zoto 3,750 $15,000 9/25/94
</TABLE>
- ------------
(1) The consideration for these shares was a minimum of $.10 per share;
however, only 150,000 post-split shares were sold. Of the balance,
730,000 post-split shares were canceled in May 1996 and the balance of
195,000 post-split shares are the subject of ongoing litigation.

(2) Sold pursuant to Regulation S of the Securities Act of 1933, as
amended.

(3) Transferred to Adelaide Vending (Canada) Ltd. for reacquisition by the
Company of the Canadian distributorship. Mr. Wolf is a director of
Adelaide Vending and its majority stockholder.

Unless otherwise indicated, the sales set forth above are claimed to be
exempt from registration with the Securities and Exchange Commission pursuant to
Section 4(2) of the Securities Act of 1933, as amended, as transactions by an
issuer not involving any public offering, because (i) said transactions involved
the issuance and sale by the Company of securities to financially sophisticated
individuals who at the time of purchase were fully aware of the Company's
activities, as well as its business and financial condition, (ii) there was no
advertising for or general solicitation of investors, and (iii) when said
securities were acquired for investment purposes, investors understood the
ramifications of same. All certificates representing the shares issued by the
Company as set forth herein, which are currently outstanding, have been properly
legended.

II-4

<PAGE>

ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
3.0 Articles of Incorporation, as amended**

3.1 Articles of Amendment to Articles of Incorporation of Tasty Fries, Inc. dated
December 16, 1996 changing the authorized common shares and the par value*

3.2 By-Laws**

4.0 Form of Warrant Agreement**

5.0 Opinion of Kipnis Tescher Lippman Valinsky & Kain as to the legality of the
securities being registered for sale**

10.0 Employment Agreement dated as of October 1, 1994 by and between Tasty Fries,
Inc. and Edward C. Kelly*

10.1 Amendment to Employment Agreement between Tasty Fries, Inc. and Edward
C. Kelly, effective as of May 1, 1995*

10.2 Forrest Financial Corporation Vendor Agreement, as amended, dated November
20, 1996 with Tasty Fries, Inc.**

10.3 Manufacturing Agreement between Tasty Fries, Inc. and S&H Electronics, Inc.
dated August 22, 1996**

10.4 1995 Stock Option Plan*

10.5 Stock Purchase Agreement between Whetstone Ventures Corporation, Inc. and
Tasty Fries, Inc. dated April 30, 1996*

10.6 Agreement between the Company and Whetstone Ventures Corporation, Inc.
dated April 30, 1996**

10.7 Distribution Agreements**

23.0 Consent of Schiffman Hughes & Brown**

24.1 Consent of Kipnis Tescher Lippman Valinsky & Kain (included in Exhibit 5.0)**

27.0 Financial Data Schedule*
</TABLE>
- ------------
* Previously filed
** Filed herewith

II-5

<PAGE>

ITEM 28. UNDERTAKINGS.

The undersigned Company hereby undertakes:

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:

(a) To include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Act");

(b) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement; and

(c) To include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement.

(2) That, for the purpose of determining any liability under
the Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

(4) For purposes of determining any liability under the Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form of
Prospectus filed by the Company pursuant to Rule 424(b)(i) or (4) or 497(h)
under the Act shall be deemed to be part of this Registration Statement as of
the time it was declared effective.

(5) For the purpose of determining any liability under the
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-6

<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this Amendment No. 2
to the Registration Statement to be signed on its behalf by the undersigned in
the City of Blue Bell, State of Pennsylvania, on April 28, 1997.

TASTY FRIES, INC.

By /S/ EDWARD C. KELLY
---------------------------------------
Edward C. Kelly, Chief Executive
Officer and Principal Financial Officer

In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement was signed by the following
persons in the capacities and on the dates stated.

SIGNATURE TITLE DATE
--------- ----- ----

/S/EDWARD C. KELLY President, Chief April 28, 1997
- ---------------------------- Executive Officer,
Edward C. Kelly Treasurer, and
Chairman of the Board

/S/LEONARD J. KLARICH Executive Vice April 28, 1997
- ---------------------------- President, Secretary
Leonard J. Klarich and Director

/S/JURGEN A. WOLF Director April 28, 1997
- ----------------------------
Jurgen A. Wolf

/S/IAN LAMBERT Director April 28, 1997
- ----------------------------
Ian Lambert

/S/KURT R. ZIEMER Director April 28, 1997
- ----------------------------
Kurt R. Ziemer

II-7

<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
3.0 Articles of Incorporation, as amended

3.2 By-Laws

4.0 Form of Warrant Agreement

5.0 Opinion of Kipnis Tescher Lippman Valinsky & Kain as to the legality of the
securities being registered for sale

10.2 Forrest Financial Corporation Vendor Agreement, as amended, dated November
20, 1996 with Tasty Fries, Inc.

10.3 Manufacturing Agreement between Tasty Fries, Inc. and S&H Electronics, Inc.
dated August 22, 1996

10.6 Agreement between the Company and Whetstone Ventures Corporation, Inc.
dated April 30, 1996

10.7 Distribution Agreements

23.0 Consent of Schiffman Hughes & Brown

</TABLE>

EXHIBIT 3.0
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE
STATE OF NEVADA
OCT 18 1985
NO. 7014-85

ARTICLES OF INCORPORATION
OF
Y.O. SYSTEMS, LTD.

We the undersigned, being each of the original incorporators herein
named, for the purpose of forming a corporation to do business both within and
without the State of Nevada, and in pursuance of the corporation laws of the
State of Nevada, being Chapter 78 of the Nevada Revised Statutes, do make and
file these Articles of Incorporation hereby declaring and certifying that the
facts herein stated are true:

1. The name of the corporation is Y. O. SYSTEMS, LTD.

2. Its principal office in the County of Washoe, State of Nevada is located at
350 South Center Street, Suite 404, Reno, Nevada 89501. The name and address of
its Resident Agent is Elliott R. Pearson, 350 South Center Street, Suite 404,
Reno, Nevada 89501.

3. The purposes for which the corporation is organized are to engage in any
activity or business not in conflict with the laws of the State of Nevada or of
the United States of America, and without limiting the generality of the
foregoing, specifically:

1. To have and to exercise all the powers now or hereafter conferred by
the laws of the State of Nevada upon corporations organized pursuant to the laws
under which the corporation is organized and any and all acts amendatory thereof
and supplemental thereto.

2. To discount and negotiate promissory notes, drafts, bill of exchange
and other evidence of debts, and to collect for other money due them on notes,
checks, drafts, bill of exchange, commercial paper and other evidence of
indebtedness.

<PAGE>

3. To purchase or otherwise acquire, own, hold, lease, sell, exchange,
assign, transfer, mortgage, pledge or otherwise dispose of, to guaranty, to
invest, trade, and deal in and with personal property of every class and
description.

4. To enter into any kind of contract or agreement, cooperative or
profit sharing plan with its officers or employees that the corporation may deem
advantageous or expedient or otherwise to reward or pay such persons for their
services as the directors may deem fit.

5. To purchase, lease, or otherwise acquire, in whole or in part, the
business, the good will, rights, franchises and property of every kind, and to
undertake the whole or any part of the assets or liabilities, of any person,
firm, association, non-profit or profit corporation, or own property necessary
or suitable for its purposes, and to pay the same in cash, in the stocks or
bonds of this company or otherwise, to hold or in any manner dispose of the
whole or any part of the business or property so acquired and to exercise all of
the powers necessary or incidental to the conduct of such business.

6. To lend or borrow money and to negotiate and make loans, either on
its own account or as agent, or broker for others.

7. To enter into, make, perform and carry out contracts of every kind
and for any lawful purpose, without limit as to amount with any person, firm,
association, cooperative profit or non-profit corporation, municipality, State
or Government or any subdivision, district or department thereof.

8. To buy, sell, exchange, negotiate, or otherwise deal in, or
hypothecate securities, stocks, bonds, debentures, mortgages, notes or other
collaterals or securities, created or issued by any corporation wherever
organized including this corporation, within such limits as may be provided by
law, and while owner of any such stocks or other collaterals to exercise all
rights, powers and privileges of ownership, including the right to vote the
same; to subscribe for stock of any corporation to be organized, other than to
promote the organization thereof.

<PAGE>

9. To purchase or otherwise acquire, own, hold, lease, sell, exchange,
assign, transfer, mortgage, pledge, license, or otherwise dispose of any
letters, patents, copyrights, or trademarks of every class and description.

10. To do any and all other such acts, things, business or businesses
in any manner connected with or necessary, incidental, convenient or auxiliary
to do any of these objects hereinbefore enumerated, or calculated, directly or
indirectly, to promote the interest of the corporation; and in carrying on its
purposes, or for the purpose of obtaining or furthering any of its business, to
do any and all acts and things, and to exercise any and all other powers which a
co-partnership or natural person could do or exercise, and which now or
hereafter may be authorized by law, here and in any other part of the world.

11. The several clauses contained in this statement of powers shall be
construed as both purposes and powers. And the statements contained in each of
these clauses shall be in no way limited or restricted, by reference to or
inference from, the terms of any other clauses, but shall be regarded as
independent purposes and powers: and no recitations, expression or declaration
of specific or special powers or purposes herein enumerated shall be deemed to
be exclusive; but is hereby expressly declared that all other lawful powers not
inconsistent herewith, are hereby included.

<PAGE>

4. The aggregate number of shares which the corporation shall have
authority to issue is 200,000,000. Each share will have a par value of .001.

5. The governing board shall be styled "Directors", and the first
Board shall be two (2) in number.

So long as all of the shares of the corporation are owned beneficially
and of record by either one or two shareholders, the number of directors may be
less than three, but not less than the number of shareholders. Otherwise, the
number of directors shall not be less than three.

Subject to the foregoing limitations, the number of directors shall not
be reduced to less than one, and may, at any time or times, be increased or
decreased by a duly adopted amendment to these Articles of Incorporation, or in
such manner as shall be provided in the By-Laws of the corporation duly adopted
by either the Board of Directors or the shareholders.

The names and addresses of the first Board of Directors are as follows:

DIRECTORS ADDRESS

Yolanda Oyler 10056 Suncrest Drive
Ogden, Utah 84404

Rebecca Marsh c/o Yolanda Oyler
10056 Suncrest Drive
Ogden, Utah 84404

<PAGE>

6. All shares are to be non-assessable.

7. The names and addresses of the incorporators of the Corporation
are as follows:

NAME ADDRESS

Elliott R. Pearson 350 S. Center Street, Suite 404
Reno, Nevada 89501

8. The period of its duration is perpetual.

9. Provisions for the regulation of the internal affairs of the
corporation are contained in the By-Laws of this Corporation.

DATED this 18 day of Oct., 1985.

/S/ELLIOTT R. PEARSON
---------------------
ELLIOTT R. PEARSON

STATE OF NEVADA )
) ss
County of Washoe )

On this 18th day of October, 1985, personally appeared before me, a
notary public ELLIOTT R. PEARSON , who acknowledged that he executed the above
instrument.

/S/NOTARY PUBLIC
---------------------
Notary Public

<PAGE>

FILED FILING FEE: $ 50.00
IN THE OFFICE OF THE BY: CALVO & GREENE
SECRETARY OF STATE OF THE GATEWAY CENTRE
STATE OF NEVADA PENTHOUSE SUITE 800
FEB 27 1987 1975 EAST SUNRISE BLVD.
[illegible] FORT LAUDERDALE, FL 33304
[illegible]
No. 7014-85

Certificate of Amendment
of
Articles of Incorporation
of
Y.O. Systems, Ltd.

Pursuant to the provisions of Nevada Revised Statutes, Title 7, Chapter
78, the undersigned officers do hereby certify:

FIRST: The name of the Corporation is Y.O. Systems, Ltd.

SECOND: The Board of Directors of the Corporation duly adopted the
following resolutions on February 20, 1987.

RESOLVED, that it is advisable in the judgment of the Board of
Directors of the Corporation that the name of the Corporation that the name of
the Corporation be changed, and that, in order to accomplish the same, Article
"1" of the Articles of Incorporation be amended to read as follows:

"1. The name of the Corporation is Metro Systems, Inc."

FURTHER RESOLVED, that notice and special meeting of stockholders
having been waived, that a special meeting of stockholders having been waived,
and Written Consent in Lieu of Special Shareholder's Meeting by a majority of
the stockholders entitled to vote having adopted the above Resolution pursuant
to Nevada Revised Statutes, Title 7, Chapter 78, and

FURTHER RESOLVED, that, because the said stockholders adopted the
aforesaid proposed amendment by a written consent in favor thereof signed by the
majority of stockholders, without a meeting, the Corporation is hereby
authorized to make by the hands of it President or a Vice President and by its
Secretary or an Assistant Secretary, a certificate setting forth the said
amendments and to cause the same to be filed pursuant to the provisions of
Nevada Revised Statutes, Title 7, Chapter 78.

<PAGE>

THIRD: The total number of outstanding shares having voting power of
the Corporation is 32,000,000, and the total number of voted entitled to be cast
by the holders of all of said outstanding shares is 32,000,000.

FOURTH: By the written consent of the majority of stockholders of Y.O.
Systems, Ltd., notice of a special meeting was duly waived, the amendment herein
certified was adopted by the holders of 24,160,000 shares, which represent
24,160,000 votes, and which constitute at least a majority of all of the voting
power of the holders of shares having voting power.

Signed on Feb. 24, 1987.

Y.O. Systems, Ltd.

By: /S/JAMES E. FARRELL
------------------------------
James Farrell - President

/S/SHERRIE SCHMIDMAYER
------------------------------
Sherrie Schmidmayer - Secretary

STATE OF NEVADA :
: ss.:
COUNTY OF WASHOE :

On Feb. 24, 1987, personally appeared before me, a Notary Public, for
the State and County aforesaid, James E. Farrell, as President of the Y.O.
Systems, Ltd., who acknowledged that they executed the above instrument.

/S/NOTARY PUBLIC
------------------------------
NOTARY PUBLIC

My Commission Expires:

<PAGE>

FILED FILING FEE: $425.00 DF C16138
IN THE OFFICE OF THE EXPEDITE #E014649
SECRETARY OF STATE OF THE THOMAS G. KIMBLE & ASSOCIATES
STATE OF NEVADA ATTN: THOMAS G. KIMBLE
JUL 30 1991 311 SO. STATE ST., STE. 440
[illegible] SALT LAKE CITY, UT 84111
[illegible]
No. 7014-85

ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
METRO SYSTEMS, INC.

Pursuant to the applicable provisions of the Nevada Business
Corporations Act, the undersigned Corporation adopts the following Articles of
Amendment to its Articles of Incorporation by stating the following:

FIRST: The present name of the Corporation is Metro Systems, Inc.

SECOND: The following amendments to its Articles of Incorporation were
adopted by majority vote of shareholders of the Corporation on July 29, 1991 in
the manner prescribed by Nevada law.

1. Article I, is amended as follows:

ARTICLE I - NAME

The name of the corporation (hereinafter called the Corporation) is
Adelaide Holdings, Inc.

<PAGE>

ARTICLE IV - STOCK

a. COMMON STOCK.

The aggregate number of common shares which the corporation shall have
authority to issue is 100,000,000 shares at a par value of $.01 per share. All
common stock when issued shall be fully paid and non-assessable.

No holder of shares of common stock of the corporation shall be
entitled, as such, to any pre-emptive or preferential rights to subscribe to any
unissued stock or any other securities which the corporation may now or
thereafter be authorized to issue. The Board of Directors of the corporation
may, however, at its discretion, by resolution determine that any unissued
securities of the corporation shall be offered for subscription solely to the
holders of common stock of the corporation or solely to the holders of any class
or classes of such stock, in such proportions based on stock ownership as said
board at its discretion may determine.

Each share of common stock shall be entitled to one vote at
stockholders meetings, either in person or by proxy. Cumulative voting in
elections of Directors and all other matters brought before stockholders
meetings, whether they be annual or special, shall not be permitted.

<PAGE>

b. PREFERRED STOCK.

The Corporation shall have authority to issue 5,000,000 shares of
Preferred Stock, $.001 par value per share, with such rights preferences and
designations and to be issued in such series as determined by the Board of
Directors of the corporation.

2. The Corporation has effectuated a 50 to 1 reverse stock split of its
shares of common stock outstanding as of May 10, 1991 reducing said shares from
167,268,600 shares to 3,345,372 shares. Said reverse split to be effective with
the commencement of business on July 31, 1991.

3. Article XVI is added as follows:

LIABILITY OF OFFICERS AND DIRECTORS: No director or officer
shall be liable to the Corporation or its stockholders for monetary
damages for any breach of fiduciary duty by such person as a director
or officer. Notwithstanding the foregoing sentence, a director or
officer shall be liable to the extent provided by applicable law, (i)
for acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law, or (ii) for the payment of dividends in
violation of NRS 78.300. The provisions hereof shall not apply to or
have any effect on the liability or alleged liability of any officer or
director of the corporation for or with respect to any acts or
omissions of such person occurring prior to such amendment.

THIRD: The number of shares of the Corporation outstanding and
entitled to vote at the time of the adoption of said amendment was 167,268,600.

<PAGE>

FOURTH: The number of shares voted for such amendments was 148,500,000
(89%) and the number voted against such amendment was ___________.

Dated this 29th day of July, 1991.

METRO SYSTEMS, INC.

By: /S/LYNN DIXON
------------------------------
Lynn Dixon,
President and Secretary

VERIFICATION

STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )

The undersigned being first duly sworn, deposes and states: that the
undersigned is the Secretary of Metro Systems, Inc., that the undersigned has
read the Articles of Amendment and knows the contents thereof and that the same
contains a truthful statement of the Amendment duly adopted by the stockholders
of the Corporation.

/S/LYNN DIXON
------------------------------
Lynn Dixon, Secretary

STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )

Before me the undersigned Notary Public in and for the said County and
State, personally appeared the President and Secretary of Metro Systems, Inc., a
Nevada corporation, and signed the foregoing Articles of Amendment as their own
free and voluntary act and deed pursuant to a corporate resolution for the uses
and purposes set forth.

IN WITNESS WHEREOF, I have set my hand and seal this 29th day of July,
1991.

My Commission Expires: /S/THOMAS G. KIMBLE
-----------------------------
NOTARY PUBLIC, residing at
NOV. 1, 1993

SLC, UT
------------------------------

<PAGE>

Received
July 30, 1991
Secretary of State
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
SEP 28 1992
[illegible]
[illegible]
No. 7014-85

ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
ADELAIDE HOLDINGS, INC.

Pursuant to the applicable provisions of the Nevada Business
Corporations Act, Adelaide Holdings, Inc. (the "Corporation") adopts the
following Articles of Amendment to its Articles of Incorporation by stating the
following:

FIRST: The present name of the Corporation is Adelaide Holdings, Inc.

SECOND: The following amendment to its Articles of Incorporation was
adopted by majority vote of shareholders of the Corporation on September 23rd,
1993 in the manner prescribed by Nevada law.

1. Article I, is amended as follows:

NAME. The name of the corporation shall be: Tasty Fries, Inc.

THIRD: The number of shares of the Corporation outstanding and entitled
to vote at the time of the adoption of said amendment was 18,148,954.

FOURTH: The number of shares voted for such amendment was 9,923,206
(55%) and no shares votes against such amendment.

<PAGE>

DATED this 23rd day of September, 1993.

ADELAIDE HOLDINGS, INC.

By: /S/JONATHAN DE YOUNG By: /S/CHARLES HALLINAN
-------------------------------- ----------------------------
Jonathan De Young, Secretary Charles Hallinan, President

STATE OF PENNSYLVANIA )
: ss.
COUNTY OF MONTGOMERY )

The undersigned being first duly sworn, deposes and states: that the
undersigned are the President and Secretary of Adelaide Holdings, Inc., that the
undersigned have read the Articles of Amendment and know the contents thereof
and that the same contains a truthful statement of the Amendment duly adopted by
the directors and stockholders of the Corporation.

/S/JONATHAN DEYOUNG
----------------------------
Jonathan DeYoung, Secretary

STATE OF PENNSYLVANIA )
: ss.
COUNTY OF MONTGOMERY )

On this 23rd day of September, 1993, personally appeared before me,
Charles Hallihan as President and Jonathan DeYoung as Secretary of Adelaide
Holdings, Inc., the signers of the foregoing instrument, whose identity is
personally known to me or proven on the basis of satisfactory evidence, who
voluntarily signed the document in my presence on behalf of said corporation and
has taken an oath or affirmation before me duly attesting to the truthfulness of
its contents.

/S/NOTARY PUBLIC
-------------------------
Notary Public

EXHIBIT 3.2

BYLAWS

TASTY FRIES, INC.

ARTICLE I - OFFICES

The office of the Corporation shall be located in any City and State designated
by the Board of Directors. The Corporation may also maintain other offices at
such other places within or without the United States as the Board of Directors
may, from time to time, determine.

ARTICLE II - STOCKHOLDERS

1. ANNUAL MEETING.

The annual meeting of the shareholders shall be held if called by the
Board of Directors within five months after the close of the fiscal year of the
Corporation for the purpose of electing directors, and transacting such other
business as may properly come before the meeting.

2. SPECIAL MEETINGS.

Special meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the president or by the
directors, and shall be called by the president at the request of the holders of
not less than 10 per cent of all the outstanding shares of the corporation
entitled to vote at the meeting.

3. PLACE OF MEETING.

The directors may designate any place, either within or without the State
unless otherwise prescribed by statute, as the place of meeting for any annual
meeting or for any special meeting called by the directors. A waiver of notice
signed by all stockholders entitled to vote at a meeting may designate any
place, either within or without the state unless otherwise prescribed by
statute, as the place for holding such meeting. If no designation is made, or if
a special meeting be otherwise called, the place of meeting shall be the
principal office of the corporation.

4. NOTICE OF MEETING.

Written or printed notice stating the place, day and hour of the meeting
and, in case of a special meeting, the purpose or purposes for which the meeting
is called, shall be delivered not less than 10 nor more than 50 days before the
date of the meeting, either personally or by mail, by or at the direction of the
president, or the secretary, or the officer or persons calling the meeting, to
each stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the stockholder at his address as it appears on the stock transfer
books of the corporation, with postage thereon prepaid.

<PAGE>

5. CLOSING OF TRANSFER BOOKS OR FIXING OR RECORD DATE.

For the purpose of determining stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or stockholders
entitled to receive payment of any dividend, or in order to make a determination
of stockholders for any other proper purpose, the directors of the corporation
may provide that the stock transfer books shall be closed for a stated period
but not to exceed, in anycase, 30 days. If the stock transfer books shall be
closed for the purpose of determining stockholders entitled to notice of or to
vote at a meeting of stockholders, such books shall be closed for at least 15
days immediately preceding such meeting. In lieu of closing the stock transfer
books, the directors may fix in advance a date as the record date for any such
determination of stockholders, such date in any case to be not more than 45 days
and, in case of a meeting of which the particular action requiring such
determination of stockholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of stockholders
entitled to notice of or to vote at a meeting of stockholders, or stockholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the directors declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination of stockholders. When a determination of stockholders entitled to
vote at any meeting of stockholders has been made as provided in this section,
such determination shall apply to any adjournment thereof.

6. QUORUM.

At any meeting of stockholders 50% of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than said number of
the outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.

7. PROXIES.

At all meetings of stockholders, a stockholder may vote byproxy executed
in writing by the stockholder or by his duly authorized attorney in fact. Such
proxy shall be filed withthe secretary of the corporation before or at the time
of the meeting.

8. VOTING.

Each stockholder entitled to vote in accordance with theterms and
provisions of the certificate of incorporation and these by-laws shall be
entitled to one vote, in person or by proxy, for each share of stock entitled to
vote held by such stockholders. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by

<PAGE>

ballot. All elections for directors shall be decided by majority vote; all other
questions shall be decided by majority vote except as otherwise provided by the
Certificate of Incorporation or the laws of this State.

ARTICLE III - POWER OF DIRECTORS

1. GENERAL POWERS.

The business and affairs of the corporation shall be managed by its board
of directors. The directors shall in all cases act as a board, and they may
adopt such rules and regulations for the conduct of their meetings and the
management of the corporation, as they may deem proper, not inconsistent with
these by-laws and the laws of this State.

2. NUMBER, TENURE AND QUALIFICATIONS.

The number of directors of the corporation shall be a minimum of three and
a maximum of twenty-five. Each director shall hold office until the next annual
meeting of stockholders and until his successor shall have been elected and
qualified.

3. REGULAR MEETINGS.

A regular meeting of the directors, shall be held without other notice
than this by-law immediately after, and at the same place as, the annual meeting
of stockholders. The directors may provide, by resolution, the time and place
for the holding of additional regular meetings without other notice than such
resolution.

4. SPECIAL MEETINGS.

Special meetings of the directors may be called by or at the request of
the president or any two directors. The person or persons authorized to call
special meetings of the directors may fix the place for holding any special
meeting of the directors called by them.

5. NOTICE.

Notice of any special meeting shall be given at least 5 days previously
thereto by written notice delivered personally, or by telegram or mailed to each
director at his business address. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed, with postage
thereon prepaid. If notice be given by telegram, such notice shall be deemed to
be delivered when the telegram is delivered to the telegraph company. The
attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened.

6. QUORUM.

<PAGE>

At any meeting of the directors a majority of the directors shall
constitute a quorum for the transaction of business, but if less than said
number is present at a meeting, a majority of the directors present may adjourn
the meeting from time to time without further notice.

7. MANNER OF ACTING.

The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the directors.

8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.

Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of a majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without causeshall be filled by
vote of the stockholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the unexpired
term of his predecessor.

9. REMOVAL OF DIRECTORS.

Any or all of the directors may be removed for cause by vote of the
stockholders or by action of the board. Directors may be removed without cause
only by vote of the stockholders.

10. RESIGNATION.

A director may resign at any time by giving written notice to the board,
the president of the secretary of the corporation. Unless otherwise specified in
the notice, the resignation shall take effect upon receipt thereof by the board
of such officer, and the acceptance of the resignation shall not be necessary to
make it effective.

11. COMPENSATION.

No compensation shall be paid to directors, as such, for their services,
but by resolution of the board a fixed sum and expenses for actual attendance as
each regular or special meeting of the board may be authorized. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.

12. PRESUMPTION OF ASSENT.

A director of the corporation who is present at a meeting of the directors
at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his dissent shall be entered in the minutes
of the meeting or unless he shall file his written dissent to such action with
the person acting as the secretary of the meeting before the adjournment thereof
or shall forward such dissent by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.

<PAGE>

13. EXECUTIVE AND OTHER COMMITTEES.

The board, by resolution, may designate from among its members an
executive committee and other committees, each consisting of three or more
directors. Each such committee shall serve at the pleasure of the board.

ARTICLE IV - OFFICERS

1. NUMBER.

The officers of the corporation shall be a president, a vice-president, a
secretary and a treasurer, each of whom shall be elected by the directors. Such
other officers and assistant officers as may be deemed necessary may be elected
or appointed by the directors. Any two or more offices may be held by the same
person.

2. ELECTION AND TERM OF OFFICE.

The officers of the corporation to be elected by the directors shall be
elected at a meeting of the directors held when determined by the directors.
Each officer shall holdoffice until his successor shall have been duly elected
and shall have qualified or until his death or until he shall resign or shall
have been removed in the manner hereinafter provided.

3. REMOVAL.

Any officer or agent elected or appointed by the directors may be removed
by the directors whenever in their judgment the best interests of the
corporation would be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed.

4. VACANCIES.

A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the unexpired
portion of the term.

5. SALARIES.

The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.

ARTICLE V - CONTRACTS, LOANS, CHECKS & DEPOSITS

1. CONTRACTS.

The directors may authorize any officer or officers, agent or agents, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation, and such authority may be general or confined to
specific instances.

<PAGE>

2. LOANS.

No loans shall be determined on behalf of the corporation and no evidence
of indebtedness shall be issued in its name unless authorized by a resolution of
the directors. Such authority may be general or confined to specific instances.

3. CHECKS, DRAFTS, ETC.

All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation, shall be
signed by such officer or officers, agent or agents of the corporation and in
such manner as shall from time to time be determined by resolution of the
directors.

4. DEPOSITS.

All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the directors may select.

ARTICLE VI - CERTIFICATES FOR SHARES AND THEIR TRANSFER

1. CERTIFICATES FOR SHARES.

Certificates representing shares of the corporation shall be in such form
as shall be determined by the directors. Such certificates shall be signed by
the president and by the secretary or by such other officers authorized by law
and by the directors. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the stockholders, the
number of shares and date of issue, shall be entered on the stock transfer books
of the corporation. All certificates surrendered to the corporation for transfer
shall be canceled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefor upon such terms and indemnity to the corporation
as the directors may prescribe.

2. TRANSFER OF SHARES.

(a) Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate; every such transfer shall be entered on
the transfer books of the corporation which shall be kept at its principal
office.

(b) The corporation shall be entitled to treat the holder of record of any
share as the holder in fact thereof, and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of this state.

<PAGE>

ARTICLE VII - FISCAL YEAR

The fiscal year of the corporation shall end on the 31st day of January in
each year.

ARTICLE VIII - DIVIDENDS

The directors may from time to time declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.

ARTICLE IX - SEAL

The directors shall provide a corporate seal which shall be circular in
form and shall have inscribed thereon the name of the corporation and the words,
"Corporate Seal".

ARTICLE X - WAIVER OF NOTICE

Unless otherwise provided by law, whenever any notice is required to be
given to any stockholder or director of the corporation under the provisions of
these by-laws or under the provisions of the articles of incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.

ARTICLE XI - ADMENDMENTS

These by-laws may be altered, amended or repealed and new by-laws may be
adopted by a vote of the stockholders representing a majority of all the shares
issued and outstanding, at any annual stockholders' meeting or at any special
stockholders' meeting when the proposed amendment has been set out in the notice
of such meeting.

EXHIBIT 4.0

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK WHICH MAY BE ISSUED ON ITS
EXERCISE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND NEITHER THIS WARRANT NOR ANY SUCH SHARES MAY BE OFFERED,
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (1) THEY ARE
REGISTERED UNDER THE SECURITIES ACT OR (2) THE HOLDER HAS DELIVERED TO THE
ISSUER AN OPINION OF COUNSEL, WHICH OPINION SHALL BE SATISFACTORY TO THE ISSUER,
TO THE EFFECT THAT THERE IS AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THAT REGISTRATION
OTHERWISE IS NOT REQUIRED.

TASTY FRIES, INC.

WARRANT TO PURCHASE _________ SHARES OF COMMON STOCK

FOR VALUE RECEIVED, _______________________________________ or his
transferees or assigns (the "Holder"), is entitled to purchase, subject to the
provisions hereof, from TASTY FRIES, INC., a Nevada corporation (the "Issuer"),
__________ fully paid, validly issued and non-assessable shares of common stock,
par value $.001 per share (the "Common Stock"), of the Issuer (the "Shares") at
an exercise price of $1.90 which will entitle the holder to receive one share of
Common Stock, subject to adjustment as provided below. The right to purchase the
Shares under this Warrant is exercisable, in whole or in part, at any time after
the date of this Warrant and prior to 5:00 p.m., New York City time, on May 31,
1999. The Shares deliverable upon exercise of this Warrant (including any
adjusted number of Shares issuable pursuant to the provisions of this Warrant)
are hereinafter sometimes referred to as "Warrant Shares" and the exercise price
per Share in effect at any time and as adjusted from time to time is hereinafter
sometimes referred to as the

1 of 8
<PAGE>

"Exercise Price." This Warrant and all warrants issued upon transfer, division
or in substitution thereof are hereinafter sometimes referred to as the
"Warrants."

(a) EXERCISE OF WARRANT. This Warrant may be exercised by presentation
and surrender to the Issuer at its principal office, with the Purchase Form
annexed hereto duly executed and accompanied by payment of the Exercise Price
for the Warrant Shares. Payment shall be made by wire transfer or by certified
or official bank check. As soon as practicable after the exercise of this
Warrant, and in any event within five New York Stock Exchange, Inc. trading
days, the Issuer shall issue and deliver to the Holder a certificate or
certificates representing the number of Shares issuable upon the exercise of
this Warrant (or such lesser number as shall be indicated on the Purchase Form),
registered in the name of the Holder or its designee(s). If this Warrant is
exercised only in part, the Issuer also shall issue and deliver to the Holder a
new Warrant, substantially in the form of this Warrant, covering the number of
Warrant Shares which then are issuable hereunder. Upon receipt by the Issuer of
this Warrant at its office, in proper form for exercise, the Holder shall as of
that date be deemed to be the holder of record of the number of Warrant Shares
specified in the Purchase Form. The Issuer shall pay any and all documentary
stamps or similar issue or transfer taxes payable in respect of the issue or
delivery of Warrant Shares on the exercise of this Warrant.

(b) RESERVATION OF SHARES. The Issuer shall at all times reserve and
keep available, free from pre-emptive rights, out of its authorized but unissued
capital stock, for issuance on the exercise of this Warrant, such number of
Shares as shall be required for issuance and delivery upon the exercise of this
Warrant.

2 of 8
<PAGE>

be issued upon the exercise of this Warrant. With respect to any fraction of a
Share called for upon any exercise hereof, the Issuer shall pay to the Holder
an amount in cash equal to such fraction multiplied by the Current Market Price
per Share.

As used in this Warrant, the "Current Market Price" of the Warrant
Shares at any date shall be the last reported sale price per share on the New
York Stock Exchange, Inc. trading day preceding that date. The "last reported
sale price" for any day shall be (i) the last reported sale price of the Common
Stock on the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System (the "NASDAQ" National Market System"),
or any similar system of automated dissemination of quotations of securities
prices then in common use, if so quoted, or (ii) if not quoted as described in
clause (c)(i), the last bid quotation for the Common Stock as reported by the
National Quotation Bureau Incorporated if at least two securities dealers have
inserted bid quotations for the Common Stock, or (iii) if the Common Stock is
listed or admitted for trading on any national securities exchange, the last
sale price, or the closing bid price if no sale occurred, of the Common Stock on
the principal securities exchange on which the Common Stock is listed. If none
of the conditions set forth above is met, the Current Market Price shall be the
last sale price for a share of the Issuer's restricted Common Stock as sold by
the Issuer in an offering exempt from registration under Regulation D of the
Securities Act or similar exemption.

(d) TRANSFER OF WARRANT. This Warrant may be transferred in whole or in
part at any time; provided, however, that the Holder shall not transfer this
Warrant to more than five persons or entities. Any such assignment shall be
effectuated by the Holder executing the Assignment Form annexed hereto and
surrendering this Warrant for cancellation to the Issuer at its principal
office,

3 of 8
<PAGE>

whereupon the Issuer shall issue in the name or names specified by the Holder
(including the Holder) a new Warrant or Warrants of like tenor and representing
in the aggregate rights to purchase the same number of Shares as are purchasable
hereunder. Notwithstanding the foregoing, neither this Warrant nor the Warrant
Shares shall be transferable unless (i) a registration statement under the
Securities Act covering the Warrant Shares is in effect at such time or (ii) the
Issuer has received at the Holder's sole expense an opinion from Issuer's
counsel or from the Holder's counsel (which such counsel and opinion shall be
reasonably satisfactory to the Issuer and its counsel) to the effect that such
registration is not required and that the transfer being requested complies with
applicable federal and state securities laws. In the event that the Holder seeks
an opinion as to the transfer without registration from the Holder's counsel,
the Issuer shall provide to the extent it is available without unreasonable
effort or expense, such factual information to the Holder's counsel as may
reasonably be requested for the purpose of rendering such opinion.

(e) LOSS OR DESTRUCTION OF WARRANT. Upon receipt by the Issuer of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, including, in the Issuer's sole discretion, the
posting of a security bond or similar instrument at the Holder's sole expense,
and upon surrender and cancellation of this Warrant, if mutilated, the Issuer
will execute and deliver a new Warrant of like tenor and date. Any such new
Warrant executed and delivered shall not constitute an additional contractual
obligation on the part of the Issuer, whether or not this Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.

(f) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights

4 of 8
<PAGE>

of a stockholder in the Issuer, either at law or equity, and the rights of the
Holder are limited to those expressed in this Warrant and are not enforceable
against the Issuer except to the extent set forth herein.

(g) ANTI-DILUTION RIGHTS.

(i) If at any time after the date hereof the Issuer declares
or authorizes any dividend (other than a cash dividend), stock split, reverse
stock split, combination, exchange of Shares, or there occurs any
recapitalization, merger, consolidation, sale or acquisition of property or
stock, reorganization or liquidation, or if the outstanding Shares are changed
into the same or a different number of Shares of the same or another class or
classes of stock of the Issuer, then the Issuer shall cause effective provision
to be made so that the Holder shall, upon exercise of this Warrant following
such event, be entitled to receive the number of shares of stock or other
securities or the cash or property of the Issuer (or of the successor
corporation or other entity resulting from any consolidation or merger) to which
the Warrant Shares (and any other securities) deliverable upon the exercise of
this Warrant would have been entitled if this Warrant had been exercised
immediately prior to the earlier of (i) such event and (ii) the record date, if
any, set for determining the stockholders entitled to participate in such event,
and the Exercise Price shall be adjusted appropriately so that the aggregate
amount payable by the Holder hereof upon the full exercise of this Warrant
remains the same. The Issuer shall not effect any recapitalization,
consolidation or merger unless, upon the consummation thereof, the successor
corporation or entity shall assume by written instrument the obligation to
deliver to the Holder hereof the shares of stock, securities, cash or property
that the Holder shall be entitled to acquire in accordance with the foregoing
provisions,

5 of 8
<PAGE>

which instrument shall contain provisions calculated to ensure for the Holder,
to the greatest extent practicable, the benefits provided for in this Warrant.

(ii) If pursuant to the provisions of this Section (g) the
Holder would be entitled to receive shares of stock or other securities upon the
exercise of this Warrant in addition to the Shares issuable upon exercise of
this Warrant, then the Issuer shall at all times reserve and keep available
sufficient shares of other securities to permit the Issuer to issue such
additional shares or other securities upon the exercise of this Warrant.

(iii) The Issuer shall at any time if so requested by the
Holder furnish a written summary of all adjustments made pursuant to this
paragraph (g) promptly following any such request.

(h) SURVIVAL. Any obligation of the Issuer under this Warrant, the
complete performance of which may require performance beyond the term of this
Warrant, shall survive the expiration of such term.

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<PAGE>

(i) AMENDMENTS AND WAIVERS. The respective rights and obligations of
the Issuer and the Holder may be modified or waived only by a writing executed
by the party against whom the amendment or waiver is to be enforced.

IN WITNESS WHEREOF, the Issuer has caused this Warrant to be duly
executed and delivered as of May 31, 1996.

TASTY FRIES, INC.

By:
-----------------------------
Edward C. Kelly, President

7 of 8
<PAGE>

PURCHASE FORM

The undersigned hereby irrevocably elects to exercise the within
Warrant as to ______________ shares and hereby makes payment of $______________
in payment of the actual exercise price thereof.

INSTRUCTIONS FOR ISSUANCE OF COMMON STOCK CERTIFICATES

Name: _______________________________________________________
(Please typewrite or print in block letters)

Address: _______________________________________________________

_______________________________________________________

Signature:____________________

ASSIGNMENT FORM

FOR VALUE RECEIVED, ________________________________________
hereby sells, assigns and transfer unto

Name: _______________________________________________________
(Please typewrite or print in block letters)

Address: _______________________________________________________

_______________________________________________________

the right to purchase Common Stock represented by this Warrant to the extent of
__________ Common Stock as to which such right is exercisable and does hereby
irrevocably constitute and appoint ____________ Attorney, to transfer the same
on the books of the Issuer with full power of substitution in the premises.

Dated: ______________, 199_

Signature:____________________

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EXHIBIT 5.0

Kipnis Tescher Lippman Valinsky & Kain
One Financial Plaza, Suite 2308
Fort Lauderdale, Florida 33394
Telephone: (954) 467-1964

April 29, 1997

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Tasty Fries, Inc. (the "Company")/Registration Statement on Form SB-2

Gentlemen:

The undersigned has acted as special securities counsel to Tasty Fries,
Inc., a Nevada corporation (hereinafter referred to as the "Company"), in
connection with the registration of 5,397,927 shares of the Company's Common
Stock, par value $.001 per share ("Shares"), as set forth in the above-mentioned
Registration Statement. In our capacity as such counsel to the Company, we have
examined the original or a copy of documents as we have deemed appropriate as
the basis for the opinions herein expressed. In such examination we have assumed
the genuineness of all of the signatures on original documents and the
conformity to original documents of all copies submitted to us as conformed or
photostatic copies. As to various questions of fact material to such opinions,
we have relied upon the statements or certificates of officials and
representatives of the Company and others.

Based upon the foregoing, it is our opinion that:

1. The Company is a corporation incorporated under the general
corporation laws of the State of Nevada and its status is active.

2. When (i) the Registration Statement has become effective under the
Securities Act of 1933, as amended, and (ii) the Shares have been issued and
sold as contemplated in the Registration Statement, such Shares will be legally
issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the use of our name under "Legal Matters" in the
Prospectus constituting a part of the Registration Statement.

Very truly yours,

KIPNIS TESCHER LIPPMAN
VALINSKY & KAIN

EXHIBIT 10.2

Vendor Provides Credit Application Only; Vendor has
No Documentation or Credit Evaluation Responsibility

Forrest Financial Corporation
VENDOR ACREEMENT

This Vendor Agreement is entited into as of the 20th day of Nov., 1996
by and between Forrest Financial Corporation ("FFC") and Tasty Fries, Inc.
("Vendor") and sets forth the terms and conditions which will apply to any
leases, installment sale contracts or other chattel paper that FFC may elect to
purchase from Vendor or to otherwise fund.

1. DEFINITIONS. The following terms, wherever used in this Agreement, have
the meanings ascribed to them in this section:

(a) "Advance Payments" shall mean any payment made to Vendor
subsequent to execution and delivery of the Contract but prior
to written confirmation from Lessee of Delivery and Acceptance
of Collateral.

(b) "Contract" means either (i) a non-cancelable full pay-out
lease or rental agreement arising out of a lease or rental of
Equipment or (ii) an installment sale contract or other
chattel paper arising out of a sale of equipment.

(c) "Equipment" means any tangible or intangible personal property
sold or leased by Vendor under a Contract, together with all
additions, replacements. substitutions, parts, repairs,
accessories, accessions or attachments thereto. ("Equipment"
as used herein shall include all financed property, including
but not limited to, Software (as defined herein) and other
intangible property.)

(d) "Lessee" means that party (as well as guarantor if any) who is
obligated to pay under a Contract.

(e) "Lessee Default" means: (i) failure of a Lessee under any
Contract to make a Payment within ninety (90) days of the due
date of that Payment; (ii) failure of any Lessee to perform
any of its material obligations under any Contract; (iii)
insolvency of any Lessee, inability of any Lessee to pay its
debts as they mature, the making by any Lessee of an
assignment for the benefit of creditors, or institution of any
proceeding by or against any Lessee alleging that the Lessee
is insolvent or unable to pay its debts as they mature.

(f) "Obligor Guaranty" means any guaranty given by any person or
entity guaranteeing the payment and/or performance of a
Contract purchased by FFC.

(g) "Payment" means any payment, whether or not earned by
performance, receivable by FFC on account of a Contract
funded by FFC.

<PAGE>

2. DOCUMENTATLON. Vendor may submit to FFC a Credit Application for a
prospective Contract. If FFC for any reason declines to proceed, it
shall so notify Vendor as soon as is practicable. If FFC approves the
transaction, it shall provide a completed Contract and completed
supporting documents necessary to fulfill the transaction. Said
Contract and Documents shall be forwarded to the Vendor or Lessee as
the parties from time to time determine.

3. REPRESENTATION AND WARRANTIES. Vendor represents and warrants that
(each representation and warranty shall be considered as having been
made concurrently with each sale of a Contract to FFC as an inducement
to purchase the Contract);

(a) Vendor is a corporation duly organized, validly existing and
in good standing under the laws of the state or province of
its incorporation, duly qualified and in good standing as a
domestic or foreign corporation authorized to do business in
each jurisdiction where such qualification is necessary.

(b) Vendor is duly authorized to execute and deliver this
Agreement.

(c) During the term of any Contract, Vendor agrees that it may
enhance, but will not seek or attempt to displace, or displace
Lessee's Equipment or any other product.

4. ELIGIBILITY REQUIREMENTS. In order for a Contract to be an Eligible
Contract, all of the following must be true and correct:

(a) The Contract arises from a bona fide lease, rental or sale of
the Equipment described in the Contract; the Equipment is in
all respects in accord with the requirements of the Contract
and has been delivered to and unqualifiedly accepted by the
lessee or vendee thereunder; none of the Equipment is or will
be a fixture under the laws of any jurisdiction where the
Equipment is or may be located;

(b) The Equipment subject to the proposed lease is in compliance
with all applicable laws and regulations. The Equipment which
is the subject of the Lease are not subject to any lien, claim
or security interest except the interest of the Lessee or
Vendee of the Equipment and a lien on the Equipment in FFC's
favor; and the Contract is one which FFC is and will continue
to be authorized by law to purchase and hold;

(c) At the time of FFC's funding of the Contract, Vendor had good
title to the related Equipment, subject only to the interest
of the Lessee;

(d) There exists no setoffs, counterclaims or defenses on the part
of any Lessee under the Contract or any Lessee Guaranty which
may be raised against FFC;

5. COVENANTS. Until the termination of this Agreement and for as long as
any Contract purchased hereunder is unpaid, Vendor agrees that it will
notify FFC promptly upon Vendor's learning of (i) any change in the
name of the vendee or lessee under any

<PAGE>

Contract entered into by FFC; (ii) any adverse credit information which
Vendor may acquire or have knowledge of with respect to any Lessee of
any Contract funded by FFC; (iii) any and all litigation or other
matters or events concerning Vendor or any Obligor which might
reasonably be construed to affect adversely FFC's interest in a
Contract, Payments under the Contract or related Equipment or Software
or any of FFC's rights under this Agreement. Notwithstanding anything
to the contrary, Forrest shall be entitled to a right of first refusal
("ROF") during the term of this Vender Agreement and for one year
thereafter in the event of termination under paragraph 7. Accordingly,
if within that tune. Vendor secures alternative lease service, or
elects to provide an alternative lease service ("ALS"), then Forrest
shall have 45 days to match the written verified terms of the ALS. FFC
shall remit funds due to the vendor under the Contract within three
business day upon receipt of all properly executed Contract and lease
documents, and upon oral confirmation of delivery and acceptance by the
lessee/licensee. "Acknowledgment by the Lessee of delivery and
acceptance of Vendor's product" shall be defined as the written
execution by an authorized and designated officer of Lessee, at the
designated portion of Forrest's Lease, confirming delivery and
acceptance of the Vendor's product and shall be referred to as
"Acknowledgment". In the event Forrest makes an "Advance Payment" to
Vendor under terms outlined in and Advance Payment Rider ("APR"), for
each Contract, and the written confirmation from Lessee of Delivery and
Acceptance is not received by Forrest within sixty (60) days ofthe
payment (or as otherwise stated in the APR), then upon rcquest by
Forrest, all Payments therefore made by Forrest to Vendor shall
immediately become due and owing from the Vendor, including interest on
the daily outstanding balance at an annualized rate equal to the Prime
Rate plus 2%. In the event of a dispute, the parties stipulate that
venue and jurisdiction shall be fixed in DuPage County, Illinois.

6. COLLECTIONS. If, Vendor receives a Payment on account of a Contract
funded by FFC, Vendor agrees to hold the amount in trust for FFC and
immediately forward the Payment to FFC, Vendor hereby authorizes FFC to
endorse, in writing or by stamp, in Vendor's name or otherwise any and
all checks, drafts, notes, bills of exchange and orders, howsoever
received by FFC, representing any Payment under any Contract funded by
FFC.

7. AGREEMENT PERIOD/TERMINATION. This Agreement shall continue in effect
for three (3) consecutive years commencing upon the execution date as
shown on the first page hereof, after which the Agreement shall
automatically renew for three (3) year periods. This Agreement may be
terminated by either party at any time upon thirty (30) days' written
notice to the other, provided,

<PAGE>

however, that all of the rights and obligations of the parties,
including Vendor's warranties and representations, applicable to
Contracts funded by FFC prior to such termination shall survive such
termination.

IN WITNESS WHEREOF, FFC and Vendor have executed this
Agreement as of the date set forth on the first page hereof.

TASTY FRIES, INC. FORREST FlNANCIAL
("Vendor") CORPORATION ("FFC")

By:/S/ EDWARD C. KELLY By:/S/
------------------------------ ---------------------------
Title:PRESIDENT Title:PRESIDENT
--------------------------- ------------------------
Address: 650 Sentry Parkway, Address: One Forrest Financial Place
Suite One 2009 Warrenville Road
Blue Bell, PA 19422 Lisle, IL 60532-0810

<PAGE>

Term Sheet Addendum to Vendor Agreement

The following amends and is part of the Vendor Agreement between Tasty
Fries, Inc. ("Vendor") and Forrest Financial Corporation ("FFC").

PROJECTIONS: Vendor's projections are that it will generate
fifteen million dollars ($15 million) of funding
requirements under its program for the lease of
equipment.

FUNDING: Funding by FFC to Vendor shall be subject to FFC's
credit standards and shall be predicated on a cost
per unit from Vendor of no more than $15,000. The
monthly rate factor to be charged customer is as
follows:

36 months .036555
48 months .029930
60 months .026060

Plus applicable taxes, if any.

MARKET
CONDlTIONS: The parties recognize that market conditions,
including the prevailing interest rates, may require
either party to amend the forecasted pricing herein.
In those instances where conditions require pricing
modification, each party shall notify the other in
writing, and shall reasonably cooperate in amending
the pricing set forth herein. Failure to agree to any
modifications shall cause this agreement to
terminate.

MISCELLANEOUS: The construction of Addendum shall govern and control
over the Vendor Agreement where and if there is a
conflict between the documents.

AGREED:
TASTY FRIES, INC. FORREST FINANCIAL
CORPORATION CORPORATION ("FFC")

By: /S/EDWARD C. KELLY By: /S/PRESIDENT
------------------------ ------------------------
Its: PRESIDENT Its: PRESIDENT
----------------------- ------------------------

EXHIBIT 10.3

===============================================================================
MANUFACTURING AGREEMENT
===============================================================================

THIS AGREEMENT, made this 22 day of August, 1996, by and between S & H
ELECTRONICS, INC, a Pennsylvania Corporation having its principal place of
business at 13 North Linden Street, P.O. Box 86, Robesonia, PA 19551,
(hereinafter referred to as "S&H")

AND

TASTY FRIES, INC. a Pennsylvania Corporation having its principal place of
business at 650 Sentry Parkway, Suite One, Blue Bell, PA, 19422, (hereinafter
referred to as "Tasty Fries").

CONSIDERATION: In consideration of the mutual promises contained herein
and INTENDING TO LEGALLY BOUND the parties hereto hereby agree as follows:

1. BACKGROUND OF THIS AGREEMENT. Tasty Fries has developed and is the
owner of certain patents, registered trademarks, manufacturing trade secrets,
technical know how and engineering designs relating to the manufacture of a
certain type of french fry vending machine ("The Product"), more specifically
set forth on Exhibit "A" which is attached hereto and incorporated herein.
Included in Exhibit "A" is the design of machinery that S & H will manufacture,
and the engineering drawings, patents, trademarks, specifications, instructions
and other documentary descriptive matter identified in Exhibit "A". S & H
desires to obtain the right to use such information contained in the documents
identified in Exhibit "A" and to manufacture at its principal place of business
the vending machine product described therein.

2. PERMISSION. Tasty Fries does hereby grant to S & H the right to use
all of the information provided to it by Tasty Fries and the license to
manufacture the product at it's manufacturing location in Robesonia,
Pennsylvania. This right to manufacture shall be for the initial quantity of
7,500 product units.

3. PRODUCT. S & H shall manufacture for Tasty Fries a certain French
Fry vending machine as more particularly described in Exhibit "A".

4. FEES. After careful consideration, S & H has estimated that each
vending machine product will require 40 man hours to assemble. S & H will charge
Tasty Fries at a rate between $32.00 and $35.00 per hour per machine. Each
product vending machine will be invoiced to Tasty Fries at a price not to exceed
$1,400.00 for the first 7,500 machines and if built at $32.00 per hour then at
the price of $1,280.00. These figures include internal sub assembly, total
assembly, final testing and preparation for shipment. The parties hereto agree
that this is a fair and reasonable estimated cost and that this estimated cost
may be adjusted, within the perimeter set forth above, based upon the actual
time required to manufacture a single vending machine product by further mutual
agreement of the parties.

<PAGE>

5. SCHEDULE: The parties agree that the schedule for production of the
Tasty Fries vending machine product will be as follows:

First month of production.......................100 units
Second month of production......................200 units
Third month of production.......................300 units
Fourth month of production......................500 units
Fifth month of production.......................800 units

After the fifth month S & H will manufacture 800 units per month until
the total requirement of 7,500 units have been manufactured. It is agreed
between the parties that the date for first month of production will be set
between the parties at a mutual agreeable date and time.

After S & H has performed this Agreement to Tasty Fries' satisfaction,
in accordance with established specifications as attached hereto, Tasty Fries
will offer S & H additional purchase orders for the manufacture of 12,000 Tasty
Fries vending machine product units annually. basis in accordance with the terms
and conditions contained herein.

6. RESPONSIBILITY OF PARTIES: Tasty Fries shall supply all materials to
S & H from suppliers of Tasty Fries choice. Said materials shall be purchased
with Tasty Fries purchase orders and shipped directly to S & H without charge to
S & H. S & H shall be responsible for inspecting and verifying the quantity,
count and quality of all incoming parts and shall inform Tasty Fries within five
(5) business days of any deficiency in the quantity, count or quality of any
incoming parts. S & H shall be responsible for all manufacturing functions
however shall not be responsible for purchasing, ordering and delivering the
specified component parts.

7. OFFICES: S & H agrees to provide Tasty Fries with sufficient office
space for a source inspector who will inspect the manufacturing process for
efficiency and quality. The source inspector will have the authority to review
any and all source documents, procedures or techniques employed by S & H in the
manufacturing of the Tasty Fries french fry vending machines product. The
primary function of the source inspector is to inspect the product for quality
and to assure that each unit meets the standards required by Tasty Fries. Said
standards will be developed by Tasty Fries and delivered in writing to S & H.

8. DELIVERY: S & H shall not be responsible for the delivery of the
finished manufactured product to its final destination. Tasty Fries distributors
shall be responsible for the delivery of the Tasty Fries french fry vending
machine to its final destination including payment of all freight charges in
accordance with the terms of the Tasty Fries Distribution agreements.

9. PAYMENT: Tasty Fries shall pay S & H invoices within thirty days of
receipt.

10. ASSIGNMENT: This Agreement shall not be assignable by either party
without the written consent of the other party.

<PAGE>

11. SECTION HEADING: All section headings herein are inserted for
convenience of reference only and shall not control, affect or modify the
meaning or construction of any of the terms or provisions hereof.

12. NOTICES: All Notices required by this Agreement to be given to
either party hereto shall be in writing and shall be personally served upon the
duly authorized representative of such party listed below or shall be mailed, by
registered or certified mail, return receipt requested, to the addresses shown
below or such other addresses as are specified by similar Notice:

Tasty Fries, Inc.
650 Sentry Parkway, Suite One
Blue Bell, PA 19422
Attn: President

S & H Electronics, Inc.
13 North Linden Street
P.O. Box 86
Robesonia, Pa 19551
Attn: President
A Notice shall be effective upon receipt.

13. GOVERNING LAW: This Agreement shall be governed in accordance with
the Laws of the Commonwealth of Pennsylvania.

14. ENTIRE AGREEMENT: This instrument states the entire Agreement
between the parties hereto with respect to the subject matter hereof, and may
not be amended except by written instrument executed by the parties hereto. It
is anticipated that in the course of initially manufacturing the products
involved herein, an additional Agreement may be necessary for purposes of
attending to or working out additional details. Those Agreements must be duly
signed and executed by each party hereto.

IN WITNESS WHEREOF, the parties hereto intending to be legally bound by the
terms and conditions set forth above have executed this Agreement this of
August, 1996

Tasty Fries, Inc.: (SEAL) Attest:

By: /S/EDWARD C. KELLY /S/LEONARD J. KLARICH
----------------------------- ----------------------------
Edward C. Kelly Secretary
President & C.E.O

S & H Electronics, Inc.: (SEAL) Attest:

By: /S/JEFFREY W. HAAG /S/JOHN HAAG
----------------------------- ----------------------------
Jeffrey Haag Secretary
President

EXHIBIT 10.6

AGREEMENT

This Agreement is between Tasty Fries, Incorporated, 650 Sentry Parkway, Suite
One, Blue Bell, Pennsylvania 19422, and Whetstone Ventures Corporation, Inc., a
Pennsylvania Corporation, located at 11 Waterfront Estates, Estates Drive,
[E.W][ECK] Lancaster, Pennsylvania 17602 executed this April day of 30th, 1996.
In consideration of the mutual covenants herein and intending to be legally
bound hereby, the parties agree as follows:

WHETSTONE VENTURES CORPORATION. INC. DUTIES

Tasty Fries, Inc., hereby authorizes whetstone Ventures Corporation,
Inc. on a non-exclusive basis to: a) sell shares of its common stock, b) promote
the sale of Tasty Fries Inc. common stock, c) act as a market analyst d) assist
in the promotion and good will of Tasty Fries, Inc. e) act as a consultant in
business matters f) act as a consultant in the development of an investor base.
Whetstone Ventures Corporation, Inc. will use its best efforts to represent,
introduce and present the products, interests and goals of Tasty Fries, Inc. to
the general public and investment community. Additionally, Whetstone Ventures
Corporation, Inc. will promote Tasty Fries Inc., through any publications,
seminars, conventions and media which would be mutually agreeable to both
parties.

TERM

The initial term of this Agreement shall be for the time period
required for Whetstone Ventures Corporation, Inc., to complete and comply with
the terms of the Stock Purchase Agreement executed between Tasty Fries, Inc.,
and Whetstone Ventures Corporation, Inc., dated and executed on the 30th day of
April, 1996 including the registration of all common stock contemplated by the
aforesaid Stock Purchase Agreement. Thereafter, this Agreement shall be in
effect for a period of five (5) years from the date of the registration of all
stock contemplated by the aforementioned Stock Purchase Agreement.

EQUITY COMPENSATION

In consideration for the services to be provided by Whetstone Ventures
Corporation, Inc., those contemplated by this Agreement and the aforementioned
Stock Purchase Agreement, and if Whetstone Ventures Corporation, Inc., is
successful in retaining investors to purchase Tasty Fries, Inc., restricted
common stock and providing Tasty Fries, Inc. with working capital, Tasty Fries,
Inc., agrees to pay Whetstone Ventures Corporation, Inc. equity compensation in
the form of restricted shares of common stock. The number of shares to be
received by Whetstone Ventures Corporation, Inc. shall be as follows:

i) 5,000,000 shares of restricted pre reverse split common stock to be
paid upon the registration of all common restricted stock contemplated by the
Stock Purchase Agreement executed on the 30th day of April, 1996.

ii) Thereafter, Whetstone Ventures Corporation, Inc. shall receive
750,000 shares of restricted common stock each year for a term of five (5)
years. Such stock shall be subject to

<PAGE>

the pending reverse split contemplated by the Stock Purchase Agreement executed
on the 30th day of April, 1996. (i.e.) 10 to 1 reverse split would result in
Whetstone Ventures Corporation, Inc., receiving 75,000 shares of restricted
common stock per year for a term of five (5) years.

APPLICABLE LAW

This Agreement is governed by and constructed under the laws of the
Commonwealth of Pennsylvania. Any action brought by either party to enforce or
interpret this Agreement or any part thereof shall be brought in an appropriate
Federal Court.

CONFIDENTIALITY

In consideration of the execution of this Agreement, Whetstone Venture
Corporation, Inc. agrees that, during the term of the Agreement and for a period
of on year following its termination, they will abide by all of the following
provisions:

1) For the purposes of this section of the Agreement, the term Confidential
Information shall mean information about Tasty Fries, Inc.'s business,
marketing, advertising, promotion, publicity, research, finances, accounting,
trade secrets, business plans or the name of one or any group listing of actual
or potential Tasty Fries, Inc., customers or any customer-specific information
or that of Whetstone Ventures Corporation, Inc. which: a) has been disclosed or
otherwise become known to Whetstone Venture Corporation, Inc. or Tasty Fries,
Inc. as a result of providing consulting services to Tasty Fries, Inc. under
this section of the Agreement; and b) is not otherwise information available to
the public and c) is maintained as confidential by Tasty Fries, Inc. and/ or
Whetstone Venture Corporation, Inc..

2) Whetstone Venture Corporation, Inc. and Tasty Fries, Inc. shall not
directly or indirectly divulge, furnish, use, publish or otherwise make
accessible to any person or entity, any Confidential Information except in the
performance of providing consulting and other services in accordance with the
terms and conditions of this Agreement. Any confidential Information prepared by
Whetstone Venture Corporation, Inc. or coming into Whetstone Venture
Corporation, Inc.'s possession as a result of providing services, as required by
this Agreement, are and shall remain Tasty Fries, Inc.'s Confidential
Information, shall be protected as such by Whetstone Venture Corporation, Inc.
and shall be returned to Tasty Fries, Inc. upon termination of this Agreement.
Any Confidential Information prepared by Tasty Fries, Inc.. or coming into Tasty
Fries, Inc.'s possession as a result of Whetstone Ventures Corporation, Inc.
services are and shall remain Whetstone Venture Corporation, Inc.'s Confidential
Information, shall be protected as such by Tasty Fries, Inc. and shall be
returned to Whetstone Venture Corporation, Inc. upon termination of this
Agreement.

<PAGE>

By signing this Agreement whetstone Venture Corporation, Inc.
acknowledges complete understanding of said Agreement and will comply with the
terms and conditions set forth in this Agreement.

Whetstone Ventures Corporation, Inc.

By: /S/L. ERIC WHETSTONE /S/IRENE T. KELLY
----------------------------- ----------------------------
L. Eric Whetstone [President] Witness

Tasty Fries, Inc.

By: /S/EDWARD C. KELLY /S/JAMES L. SPEILMAN
----------------------------- ----------------------------
Edward C. Kelly Witness

EXHIBIT 10.7

DISTRIBUTORSHIP AGREEMENT

This Agreement made this 2nd day of May, 1995 by and

BETWEEN: TASTY FRIES, INC.
(hereinafter referred to as "TFRY")

with principal executive offices at:
650 Sentry Parkway, Suite One,
Blue Bell, Pennsylvania 19422

and TASTY FRIES, ISRAEL, LTD.
(hereinafter referred to as "Distributor")

with principal executive offices at:

WITNESSETH:

WHEREAS, TFRY is engaged in the development, production, distribution
and sale of a fully automated french fry vending machine; and

WHEREAS, TFRY has developed and adopted for its own use and for the use
of its Distributors a unique system of TFRY product preparation and vending
machine sale, consisting in part of the unique french fry vending machines
("TFRY French Fry Vending Machine" or "Machines"), distinctive advertising,
signs, dehydrated potato pellets, food presentation and formula secret recipes
(collectively the "Products"); and

WHEREAS, in addition to valuable goodwill, TFRY owns the valuable trade
name and design of TFRY in addition to various patents, trademarks, service
marks, copyrights, tradenames, slogans, designs, insignia, emblems, symbols,
package designs, logos and other proprietary identifying characteristics
(collectively, the "TFRY Marks") used in relation to and in connection with the
Products, and

WHEREAS, DISTRIBUTOR wishes, upon the terms and conditions hereinafter
set forth, to become a distributor of TFRY Products on an exclusive basis in the
territories of Israel, Jordan and Egypt (the "Territory"), as more specifically
set forth in Schedule A to this Agreement incorporated herein by this reference
and made a part hereof ("Schedule A"); and

WHEREAS, TFRY is willing to permit Distributor to use TFRY Marks as
aforesaid, together with the retail sale of TFRY French Fry Vending Machines and
TFRY Products upon the terms and conditions hereinafter set forth.

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NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, receipt of
which is hereby acknowledged, TFRY and Distributor (collectively referred to
herein as the "Parties") agree as follows:

ARTICLE I
DISTRIBUTORSHIP

(a) Subject to the provisions of this Agreement and the performance of
its covenants and obligations, TFRY hereby appoints Distributor as its exclusive
distributor to distribute all TFRY Products and Machines (both of which may
collectively be referred to herein as the "Products" unless the context or
language otherwise requires), and to use the TFRY Marks in the retail sale
thereof within the territorial boundaries set forth and more particularly
described in Schedule "A" on the "Effective Date." The "Effective Date" is the
ten (10) year period of the exclusive distributorship in the Territory which
shall commence on the earlier of (i) the date on which TFRY demonstrates its
capacity to ship Machines for use by consumers, other than a demonstrator
Machine for use by the Distributor, or (ii) the date on which Distributor places
its first order for a Machine or Machines.

(b) A demonstration Machine (the "Demonstration Machine") shall be
shipped to Distributor by TFRY within 30 days of the execution of this Agreement
by TFRY and the Distributor. The trial period for such Demonstration Machine
shall be three (3) months (the "Trial Period") from the date of delivery of the
Demonstration Machine. The purchase price of such Demonstration Machine is
$7,000 payable by Distributor to TFRY in U.S. cleared funds prior to shipment
thereof or a lease price of $500 per month payable immediately following
delivery of the Demonstration machine and on the first business day of each
month thereafter until the earlier of (i) the return of the Demonstration
Machine to TFRY in good working condition or (ii) the payment of $7,000.
Freight, insurance, duty and related charges shall be borne solely by
Distributor and shall be paid PRIOR to shipment. All prices referred to in this
Agreement shall refer to U.S. Dollars only.

(c) The Distributor may commence placing orders for Machines (other
than the Demonstration Machine) and Products commencing in May, 1996.

(d) The Parties specifically acknowledge and agree that the restriction
of operation to the Territory identified herein is an essential and
indispensable term of this Agreement.

(e) The initial down payment for the Distributorship is $40,000, of
which TFRY acknowledges that it has received $20,000. The balance of $20,000 is
due and payable upon execution of this Agreement by the Parties. The balance of
$160,000 for the Territory shall be payable in accordance with Schedule "A."

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ARTICLE II
SPECIFIC TERRITORIAL RIGHTS

(a) TFRY agrees to sell to the Distributor and the Distributor agrees
to purchase and shall have the exclusive right in its Territory to sell the TFRY
French Fry Vending Machine and Products to all users in the Territory.

(b) In the event that Machines are sold by TFRY for use in the
Distributor's Territory, the Distributor shall earn its full Distributors's
profit. This provision is contingent upon Distributor's agreement by this
Agreement to supply and service these Machines as required.

(c) The Distributor shall receive its full profit if Machines are sold
to clients in its Territory for installation in areas outside of its Territory,
except that in the event Machines are sold into another Distributor's Territory,
the Distributor profit shall be seventy (70%) percent to the originating
Distributor and thirty (30%) percent to the Territorial Distributor.

(d) TFRY and Distributor will continue good faith negotiations to allow
for a three phase implementation in the Territory: 1) direct export of Machines
and potato to the Distributor, as provided herein; 2) technology transfer
(potato pellet dehydration) and fabrication of potato product in Territory; and
3) Machine parts exported to Distributor for assembly of same.

(e) Distributor shall have the right to adapt operating procedures to
the reasonable conditions prevailing in the Territory, subject to the prior
written approval by TFRY, including, but not limited to, coin operation
mechanisms, use of tokens instead of coins or paper currency, electrical current
and different methods of handling materials and components.

(f) Distributor shall have the right to assign the rights and delegate
the duties herein to sub-distributors within the Territory subject to prior
written approval of TFRY in it sole and absolute discretion. Distributor shall
at all times be obligated to supervise the operations of all such
sub-distributors and such sub-distributors shall be required to execute any and
all documents which TFRY, in its sole and absolute discretion, deems necessary
prior to approval being granted by TFRY.

ARTICLE III
OBLIGATIONS OF TFRY

TFRY agrees to assist Distributor in distributing Products by way of
retail sale in the following manner:

(a) TFRY will conduct, at no charge, certain preliminary sales and
maintenance training programs in its headquarters training school which
Distributor and one key employee

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may attend. All costs and expenses incurred by Distributor in traveling to
and/or attending the training program shall be borne by Distributor.

(b) TFRY agrees to provide to Distributor, as and when it is available
from time to time, information relating to the Products and additional types of
products as may be authorized by TFRY from time to time for sale pursuant to
this Agreement, and which, when authorized, will also constitute "Products" for
all purposes herein, at such times and in such detail as TFRY shall, in its sole
discretion, deem appropriate.

(c) If TFRY, in its sole discretion, provides credit or financing to
Distributor, TFRY may, in its sole discretion, take a security interest in all
TFRY Products sold to Distributor, and Distributor shall take such actions and
execute and deliver such documents as TFRY may request in order to perfect and
protect such security interest.

ARTICLE IV
CONFIDENTIAL INFORMATION

(a) The Parties hereto covenant and agree that any confidential
information disclosed to the Distributor relating directly or indirectly to the
Machines and their component parts, including but not limited to the
ingredients, preparation or sale of any of the Products and any other
information which is proprietary in nature and has been disclosed to Distributor
in connection with this Agreement (collectively the "Confidential Information"),
will remain the property of TFRY at all times and will, if disclosed in any
tangible format, together with any and all originals, copies and duplications
thereof in any manner made, be returned to TFRY upon demand and, in any event,
immediately upon termination of this Agreement.

(b) It is expressly understood and agreed by Distributor that the
Confidential Information described above constitutes highly confidential trade
secrets and Distributor agrees that neither it nor any of its employees, agents,
representatives or affiliates will at any time reveal any of such Confidential
Information being disclosed or produced.

ARTICLE V
STANDARDS OF OPERATION AND SUPERVISION BY TFRY

(a) Distributor agrees to conduct its business in a manner consistent
with the standards set forth in this Agreement. It is expressly understood that
these standards may change from time to time, and are in addition to and not in
substitution of any standards set forth in this Agreement.

(b) In order to preserve the value and goodwill of TFRY and related
goodwill of other TFRY Distributors and to promote the purpose of this
Agreement, the Parties hereto agree as follows:

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(i) Distributor will use and distribute the Products as
herein contemplated strictly in accordance with the terms of this Agreement.

(ii) Unless earlier approved in writing by TFRY,
Distributor will not develop, produce, sell, advertise for sale or give away any
product which might reasonably compete with the Products and all food Products
will be prepared in accordance with the specific formulas and/or utilizing the
ingredients purchased from or specified by TFRY. It is expressly understood that
the conditions and restrictions expressed herein are for the purposes of
ensuring quality control, health and safety standards and uniformity of Products
sold in conjunction with the TFRY Marks.

(iii) TFRY may from time to time offer guidance to
Distributor relative to retail prices for Products offered for retail sale that
in the judgment of TFRY constitute good business practice.

(iv) Distributor will use its best efforts ensure the
compliance of its customers with the maintenance of suitable signs (the use of
which signs shall be subject to prior written approval by TFRY) at, on or near
the front of any premises within which its French Fry Vending Machines are
located, describing the premises having Products available for retail sale. Any
translation from the English language or deviation from TFRY approved designs
contained in such sign shall require the prior written approval of TFRY.

(v) Distributor shall be responsible for ensuring that all
food Products sold by Distributor hereunder will be of the highest and safest
quality, and the service relating to any such sale hereunder will strictly
comply with the instructions and standards provided by TFRY in preparing the
food Products, or with any other further written requirements of TFRY as they
are communicated to Distributor from time to time.

(vi) Distributor shall be responsible for ensuring that it
will maintain all French Fry Vending Machines in conformity with the standards
required by TFRY in connection with TFRY Marks and shall ensure that the
operation of such Machines by its customers be conducted in a clean, orderly,
legal and respectable manner of business including, without limitation, cleaning
and sanitation of the French Fry Vending Machines, disposal of stale, spoiled or
unmerchantable food Products, replacement of cooking oil at specified intervals,
replacement or repair of display merchandise, replacement of outdated or
obsolete Machines (including its component parts), equipment and signs.
Distributor shall ensure that its customers comply with all applicable
ordinances, health and safety regulations, laws and statutes governing the
operation of such premises and the sale of Products, including all criminal and
quasi-criminal laws and regulations.

(vii) Distributor's exclusive remedy for any damage to or
defect in any TFRY Product sold hereunder shall be limited to the repair or the
replacement of the damaged article, as determined by TFRY in its sole
discretion. In no event shall TFRY be liable for any

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incidental or consequential loss or damage, including but not limited to, loss
of profits or any other economic loss suffered or incurred by Distributor as a
result of or in connection with any defective or damaged Product sold hereunder.

(viii) Except as provided hereby, TFRY warrants that title
to all TFRY Products transferred hereunder will be free and clear of all liens,
security interests or other claims, and that such Products shall comply with the
terms and conditions of the limited warranty certificate included with each TFRY
Product and issued to original purchasers by TFRY.

(c) TFRY or TFRY supervisory personnel shall have the right to enter
upon any premises in which Distributor conducts its business at any reasonable
time for the purposes of examining, inspecting and checking perishable and
non-perishable food supplies, Machines, and other equipment and conferring with
Distributor's employees to determine whether the distribution of Products is
being conducted in accordance with the aforesaid standards and in accordance
with the terms of this Agreement. In the event any such inspection indicates a
deficiency or unsatisfactory condition or conditions, Distributor shall, correct
or repair the deficiency or unsatisfactory condition within forty-eight (48)
hours or, commence the correction and/or repair of same to be completed in as
expeditious manner as possible. In the event of the failure of Distributor to
comply with the foregoing obligations to correct and repair, TFRY, in addition
to any other remedies conferred in this Agreement, shall have the right to
promptly make or cause to be made, such corrections or repairs. The expenses of
such repairs, including but not limited to, board, lodging, wages and
transportation of TFRY personnel, attorneys' fees and other reasonable expenses,
shall be paid by the Distributor immediately upon billing by TFRY. Nothing in
this paragraph shall in any way limit any other rights of TFRY hereunder.

ARTICLE VI
COMMENCEMENT OF BUSINESS

(a) Distributor agrees to obtain, prior to commencement of its
distribution business, pursuant to this Agreement, all licenses, approvals,
inspections, permits or any other certification which may be required by any
competent public authority for the lawful operation of its business and to keep
the same in good standing during the term hereof.

ARTICLE VII
USE OF TFRY NAME, MARKS AND ADVERTISING

(a) During the term of this Agreement, and any renewals hereof,
Distributor shall advertise sale of the Products under the trade name of "Tasty
Fries Hot French Fries" or other name approved in writing by TFRY, or one or
more mutually agreed-upon non-English language substitutes within the Territory,
and will diligently promote and make every reasonable effort to steadily
increase sales of the Products by proper use of all advertising media.

(b) No design, advertisement, sign or form of publicity, including
form, color, number, location and size, shall be used by Distributor in
connection with sale of the Products

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unless the same shall have been first submitted to TFRY and approved prior
thereto in writing. Upon notification from TFRY, Distributor will promptly cause
to be removed any objectionable advertising material and, if required, cause to
be published any retraction in a form and manner consistent with that of the
objectionable advertising materials. In the event said materials are not removed
within seven (7) days after receipt of said notice, TFRY or its authorized
agents, may at any time, enter upon Distributor's premises, or elsewhere and
remove any objectionable advertising material and may keep or destroy such
materials without paying therefore and without being guilty of trespass or other
civil or criminal wrongdoing.

(c) All printed materials, including, but not limited to, product
carrying bags, product wrapping, cups, napkins, posters or other printed
material used in connection with the distribution by retail sale of the Products
shall bear TFRY Marks as suggested by TFRY, and such use will indicate that TFRY
Marks are registered Marks.

(d) Distributor shall act prudently and in conformity with all laws,
regulations, ordinances, or other requirements which may affect the utilization
of the Machine to ensure that the Marks are not jeopardized, diminished or
damaged in any manner and Distributor agrees to indemnify and save harmless TFRY
for any damage or expense occasioned directly or indirectly by Distributor's
improper use of said TFRY Marks.

(e) Any contractual arrangement of any kind for advertising under the
trade name "Tasty Fries Hot French Fries" or other approved name, or utilizing
the name "Tasty Fries", entered into by Distributor, shall expressly provide for
termination upon no greater than then (10) days prior written notice.

ARTICLE VIII
TFRY MARKS

(a) TFRY hereby grants to Distributor for the term of this Agreement
the exclusive right and license to use the TFRY Marks within the Territory but
only in connection with the distribution of TFRY Products which Distributor is
permitted to sell hereunder and the extent and manner of use of the TFRY Marks
shall (i) be subject to TFRY approval and (ii) the extent that such TFRY Marks
can be used legally in the Territory.

(b) Distributor shall be entitled to assign or sublicense its rights to
use the TFRY Marks only with the prior written consent and approval of TFRY in
its sole discretion.

(c) Upon execution of this Agreement, Distributor shall cooperate with
TFRY and shall do all things reasonably required in making whatever application,
if any, as required by law in the Territory, to register the TFRY Marks and/or
to register Distributor as a "Registered User" of the TFRY Marks, and
Distributor shall sign any and all documents necessary for such purpose.

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(d) Distributor shall promptly notify TFRY in writing of any
counterfeiting or infringement of the TFRY Marks which may come to Distributor's
attention. Should any such infringement or alleged infringement occur:

(i) The commencement, defense, and conduct of any such
proceedings shall be initiated by Distributor. If requested by TFRY, Distributor
will furnish all reasonable assistance to TFRY in such proceedings and agrees to
share equally with TFRY in the costs of any such proceedings.

(e) Distributor agrees not to use the words "TFRY" or any other work,
design or device forming any part of any of the TFRY Marks:

(i) During the term of this Agreement, otherwise than as
herein authorized; or

(ii) After termination of this Agreement, in any manner.

ARTICLE IX
UNIFORMITY OF PRODUCTS

(a) Distributor agrees that all food Products offered for sale in the
Machines shall be purchased directly from TFRY unless advised otherwise in
writing by TFRY. However, paper goods, packaging, cooking oil and other supplies
and materials utilized in connection with the food Products may be purchased by
Distributor from any supplier in the Territory with the prior written approval
of TFRY.

(b) In order to establish uniformity of taste and quality of the
Products, TFRY has developed and will continue to develop recipes and formulas
of ingredients, which ingredients will be made available to Distributor. Such
products will be purchased by Distributor at the prevailing prices from time to
time, FOB Shipping Point as TFRY determines, and will be utilized by Distributor
exclusively as specified by TFRY, unless such products are not supplied by TFRY
but are pre-approved in writing by TFRY and TFRY is compensated for its loss of
profit on such product.

(c) Distributor agrees that it will not offer any food Products or
utilize any equipment, signage, display cases or other items which may compete
with the TFRY Products and which are not purchased from TFRY or any supplier
that is not currently approved by TFRY except as may be set forth herein.

ARTICLE X
FEES AND FINANCIAL OBLIGATIONS

(a) In consideration of the right to distribute Products granted
herein, Distributor agrees to pay to TFRY the sum of $200,000.00 as
consideration solely for the right to distribute Products (less $20,000 which
has been previously paid and an additional $20,000 which shall be paid upon
execution of this Agreement). These amounts specifically exclude payment for the

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Demonstration Machine as more specifically described in Article I(b) herein.
Such fee shall be deemed fully earned and shall be non-refundable under any and
all circumstances and subject to the fee payment terms set forth on Schedule
"A." In addition, upon the written request of TFRY, at any time or from time to
time, Distributor shall provide any and all information related to Distributor's
creditworthiness to act as a Distributor which such creditworthiness shall be
determined by TFRY in its sole and absolute discretion. In this regard, credit
worthiness shall be determined by TFRY in accordance with but not solely by: (i)
evidence provided by Distributor in writing of its ability to meet its financial
obligations and commitments to TFRY, including, but not limited to, credit
reports, audited or similarly prepared financial statements of Distributor (as
is customary in Israel), certified by its accountants, (ii) bank and business
references, and (iii) written statement(s) by Distributor as to any pending or
threatened litigation and/or any judgment which could materially impair
Distributor's ability to conduct its business and/or have a material adverse
effect on its financial condition.

(b) In the event that Distributor is unable to meet TFRY's criteria to
establish creditworthiness, TFRY shall have the right to terminate Distributor
as a distributor, upon 30 days prior written notice without any liability.

(c) It is expressly agreed by and between the Parties that as
consideration for the grant of distribution rights hereunder by TFRY to
Distributor and as an express condition of such grant, Distributor shall
purchase from TFRY a minimum number of French Fry Vending Machines upon the
terms and conditions set forth on Schedule "A."

(d) All payments shall be made in U.S. Dollars and in such manner as is
specified from time to time by TFRY but may include, without limiting the
generality of the foregoing, bank wire transfer, or certified check delivered to
TFRY accounts at such place as TFRY may from time to time designate.

(e) Payment terms for the Machines and Products shall be quoted F.O.B.
from any shipping point that TFRY may determine. The exact terms of payment will
be mutually agreed to by the Parties before each Machine and/or Product order is
shipped. The Distributor shall pay the invoice according to terms set by TFRY.
Distributor shall also pay any and all applicable sales, use, import duties,
excise taxes, or any other taxes arising from the sale or transfer of TFRY
Products. All shipments are at Distributor's risk from the time of TFRY
conveyance to Distributor's shipper. Notwithstanding the forgoing, TFRY
specifically reserves the right to act at any time in accordance with the
provisions of the Uniform Commercial Code to protect its interests when
necessary. Any claim of discrepancies in shipments made by Distributor shall be
made in writing and sent to TFRY within ten (10) business days after receipt of
the shipment.

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ARTICLE XI
DISTRIBUTOR

(a) Distributor acknowledges that the TFRY Products are unique and
distinctive and have been developed by TFRY at great effort, time and expense;
that Distributor has regular and continuing access to valuable and Confidential
Information, training and trade secrets regarding the Products; and that
Distributor recognizes his obligation to fully develop his territory for sales
of the Products and accordingly agrees as follows:

(i) During the term of this Agreement and any renewal
thereof, Distributor shall not, in any capacity whatsoever, either directly or
indirectly, individually or as a member of any business organization, except
with the prior written consent of TFRY, engage in the sale of any Machines or
Products therefore, other than with TFRY.

(ii) During the term of this Agreement, or at any time
subsequent thereto upon expiration or termination of this Agreement, divulge any
aspect of the Products whether expressly stated to be confidential or otherwise
to any person.

(iii) Distributor shall at all times maintain an inventory
of TFRY Products sufficient to satisfy the reasonably anticipated demands of
customers located within the Territory. TFRY shall supply all of Distributor's
reasonable requirements of TFRY Products for distribution in the Territory,
subject to available supplies. TFRY shall not be liable for any delay in
shipment arising from or caused by any fire, flood, war, riot, civil
disturbance, labor dispute, act of God, material shortage, government regulation
or action, or any other cause beyond TFRY's reasonable control. TFRY reserves
the right to allocate its available supply of Products in such manner as it may,
in its sole discretion, from time to time, determine.

(iv) During the term of this Agreement and any renewal
thereof, Distributor shall maintain a sufficient inventory of parts to properly
maintain, repair, and service TFRY Machines and Products. Distributor shall only
use parts which meet the standards of quality established by TFRY from time to
time.

(v) Distributor shall provide prompt and courteous service
to all TFRY customers located within the Territory regardless of whether such
customers purchased TFRY Products from Distributor.

ARTICLE XII
TRANSFER OF INTEREST

(a) This Agreement shall enure to the benefit of the successors and
assigns of TFRY and may be so assigned at any time in TFRY's sole and absolute
discretion.

(b) TFRY shall not unreasonably withhold its consent to any full
transfer or assignment of this Agreement by Distributor, which is subject to the
restrictions of this Article,

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provided, however, that TFRY shall not be required to give its consent unless,
in addition to the requirements of Article V hereof, the following conditions
are met prior to the date of the assignment:

(i) For any such proposed full transfer or assignment:

1. Distributor shall not be in default under any
provision of the terms of this Agreement or any other agreement ancillary to
this Agreement, and shall have continuously distributed Products for a period of
not less than twelve (12) consecutive months;

2. Distributor has executed a general release in a
form prescribed by TFRY of any and all claims against TFRY;

3. The proposed assignee executes such other
documents as TFRY may require in order to assume all of the obligations of this
Agreement, to the same extent, and with the same effect, as previously assumed
by Distributor, including but not limited to proof of credit worthiness to act
as a Distributor, which such credit worthiness shall be determined by TFRY in
its sole and absolute discretion.

4. A transfer fee has been paid to TFRY in an amount
equal to five percent (5%) of the aggregate cash or cash value consideration
paid by the assignee to Distributor (assignor) for the distribution rights, to
defray its reasonable costs and expenses in connection with the transfer,
including without limitation, the cost of legal and accounting fees, credit and
investigation charges, evaluations, retraining and additional supervision. It is
agreed that the original cost of the Territory will be deducted from this
amount.

(i) TFRY shall have the right, within thirty (30) days of
the date upon which TFRY is notified of such death or incapacity not to exceed
thirty (30) days from such date (if consistent with applicable local laws) to
purchase the interest or any part thereof for cash at the appraised value, such
purchase to be completed within sixty (60) days. Such appraised value shall be
determined by an independent appraiser selected by TFRY.

(ii) If TFRY declines to elect to purchase the interest,
within thirty (30) days of the date upon which TFRY is notified of such death or
incapacity, the interest may be transferred within a further sixty (60) days by
sale to a third party meeting TFRY's then current criteria for new distributors,
provided that the requirements of paragraph (b) of this Article are met. If a
transfer to an approved transferee cannot be effected within a further one
hundred and twenty (120) days, this Agreement shall terminate automatically and
TFRY shall have no obligations whatsoever to the Distributor, his successors,
heirs, assigns or transferees.

(iii) No sale or transfer of the interest shall be approved
by TFRY unless the incapacitated Distributor or, in the case of the deceased
Distributor, its personal representative

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has agreed to reimburse TFRY for the reasonable costs and expenses it has
incurred or may incur in providing, at TFRY's option, one or more interim
Distributors to manage the business until a transfer of the interest is
effected, if TFRY determines, in its sole and absolute discretion, that such
supervision is necessary or desirable.

(d) TFRY's consent to a transfer of any interest subject to the
restrictions of this Article XII shall not constitute a waiver by TFRY of the
right to distribute Products granted herein, nor shall it be deemed a waiver of
TFRY's right to demand exact compliance with any of the terms of this Agreement
by the transferee or assignee. The document effecting the transfer or assignment
of any interest subject to the restrictions of this Article XII shall
specifically provide that Distributor's obligations hereunder shall continue in
full force and effect notwithstanding any such disposition.

(e) If Distributor has received and desires to accept any bona fide
offer to purchase his or its distribution rights hereunder, Distributor or such
person shall notify TFRY in writing of the purchase price and terms of such
offer, and TFRY shall have the right and option, subject to any limitations of
applicable local laws exercisable within thirty (30) days after receipt of such
written notification, to send written notice to Distributor or such persons that
TFRY or its designee intends to purchase Distributor's interest on the same
terms and conditions offered by the third party. Any material change in the
terms of an offer prior to closing shall result in a new notification as in the
case of the initial offer.

ARTICLE XIII
DEFAULT

(a) In addition to those events hereinbefore stated to be events of
default, it is agreed that the rights granted to Distributor pursuant to this
Agreement may be terminated immediately with notice upon the happening of any
one or more of the following events:

(i) If the Distributor fails to comply with any of the
terms and conditions of this Agreement and such failure to comply continues for
a period of thirty (30) days after written notice thereof has been given to the
Distributor.

(ii) If the Distributor fails to comply with any of the
terms and conditions of any other agreements entered into pursuant to or
collateral to this Agreement, which shall, for the purposes of this Article
XIII, be deemed a part thereof.

(iii) If the Distributor shall be adjudicated a bankrupt or
become insolvent, or if a receiver or other person with like powers shall be
appointed (whether temporary or permanent) to take charge of all or
substantially all of the Distributor's assets, or if the Distributor shall make
a general assignment for the benefit of creditors or a proposal under the
Bankruptcy Act (or any similar or successor act), or commence any proceedings to
wind-up, liquidate, or dissolve the Distributor's business.

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(iv) If any final judgement or judgments in excess of
Twenty-five Thousand Dollars ($25,000.00) or any legal tax lien against the
Distributor remains unsatisfied or unbonded of record in excess of thirty (30)
days, or if the Distributor shall commit or suffer any default under any
security instrument.

(v) Other than amounts to be paid to TFRY wherein the
provisions of subsections (i) and/or (ii) above respecting default shall apply,
if the Distributor does not pay any other indebtedness incurred in connection
with the operation of the business contemplated hereby through which the
Products are maintained and sold and such indebtedness is not paid within seven
(7) calendar days of notice from TFRY.

(vi) If the Distributor fails for a period of more than ten
(10) calendar days to continuously and actively operate its distributorship
throughout the Territory in accordance with the terms of this Agreement as may
be amended in accordance herewith.

(vii) If the Distributor falsifies any statement or report
furnished to TFRY or otherwise deliberately provides false information to TFRY;
or if the Distributor is convicted of a felony or other crime or impairs the
goodwill associated with TFRY Marks.

(viii) If the Distributor does any act which constitutes an
event of default hereunder for which notices of default have been previously
served more than four times in any one calendar year during the term of this
Agreement, notwithstanding that any of such events of default may have been
cured.

(ix) If the Distributor does not order and complete the
purchase of the French Fry Vending Machines it is required to purchase pursuant
to the terms of this Agreement including any and all schedules attached hereto
and made a part hereof, in the manner and at the times therein specified.

(x) If the Distributor does not complete the training
course to be taken by the Distributor to the satisfaction of TFRY prior to
distributing food Products to the public.

(xi) If the Distributor fails to maintain the mandatory
insurance coverage as set forth in Article XV herein.

(b) Distributor agrees to pay all reasonable attorney's fees and costs
as between an attorney and his own client, and reasonable attorney and/or
accounting fees and court costs incurred by TFRY in the event of a violation by
Distributor of this Agreement.

(c) Distributor agrees that in the event of a default hereunder, it
shall immediately cease using the name Tasty Fries, Israel, Ltd. throughout the
Territory and any other geographic area in which such name is being used by
Distributor at which time such name shall immediately revert back to TFRY.
Distributor agrees to take any and all action and to execute any and all

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documents which may be required to facilitate the relinquishment and reversion
of the name Tasty Fries, Israel, Ltd. to TFRY.

(d) In case of a default or breach or a threatened default or breach of
the terms of this Agreement by Distributor, TFRY shall, in addition to any other
remedy it may have, and notwithstanding any other provision hereof, be entitled
to an injunction restraining Distributor from committing or continuing to commit
any breach of or default under this Agreement, without showing or proving any
actual damage sustained by TFRY, which damage is hereby conclusively
acknowledged.

ARTICLE XIV
RIGHTS AND OBLIGATIONS OF PARTIES
ON TERMINATION OR EXPIRATION

(a) Upon termination or expiration of this Agreement for any reason
whatsoever, including the events of default set forth herein, Distributor will
immediately discontinue use of all trade names, trademarks, signs, forms of
advertising, printed material (collectively referred to herein as the "TFRY
Marks") and all other indicia of operation as a TFRY Distributor from its
operations. In addition, Distributor will discontinue use of the TFRY color
scheme. If the Distributor shall fail or omit to make or cause to be made such
discontinuance within seven (7) calendar days after termination or expiration of
this Agreement, then TFRY, in addition to any other remedy it may have, shall
have the right to enter upon premises and to make or cause to be made such
removal of signs, trademarks, trade names and other indicia of operation subject
to removal and such removal shall be conducted at the sole expense of
Distributor (without being deemed guilty of trespass or any civil wrong), which
expense the Distributor agrees to pay on demand.

(b) TFRY shall retain all fees paid pursuant hereto.

(d) In no event shall termination or expiration of this Agreement for
any reason whatsoever affect Distributor's obligation to take or abstain from
taking action in accordance with this Agreement.

(e) It is understood by Distributor that rights in and to TFRY Marks
and any part thereof or addition thereto and the use thereof shall be and remain
the property of TFRY. Distributor shall confirm same in writing and shall
further assign, transfer and convey to TFRY by such instrument in writing as may
be requested, all additional rights which may be acquired, if any, by reason of
the use of said name of Distributor.

(f) TFRY shall have the option to purchase, at Distributor's cost less
twenty-five (25%) percent, all or any portion of inventory of any kind bearing
the TFRY Marks, including,

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but not limited to, French Fry Vending Machines, equipment, vehicles, and any
other items Distributor may have in stock at the time of such termination or
expiration.

(g) Distributor shall cause immediate discontinuance of all advertising
or other public display or publication of the words "Tasty Fries" or other
approved language and, in the event that such action is not taken by Distributor
as provided hereby, Distributor hereby irrevocably appoints TFRY as
Distributor's attorney in-fact to carry out such acts at Distributor's sole
expense.

(h) Distributor will immediately pay any and all amounts owing to TFRY
and its subsidiaries and affiliates.

(i) Distributor shall not, in any capacity whatsoever, either directly
or indirectly, individually or as a member of any business organization, engage
in the preparation or sale of any TFRY or other approved TFRY Product, or have
any employment or interest in a firm engaged in the preparation or sale of such
Products within the Territory or within thirty (30) miles of any other
Distributor's exclusive or non-exclusive territory for a period of three (3)
years following such termination. Distributor acknowledges and agrees that this
restriction upon subsequent activities is necessary in view of the Confidential
Information and expertise Distributor will acquire pursuant to the terms of the
Agreement and will cause TFRY irreparable and substantial damage in the event of
breach of these provisions. The Distributor has the option to cancel this
Agreement by giving six (6) months prior written notice. Notwithstanding such
notice, no refund shall be given of any payments made by Distributor to TFRY.

ARTICLE XV
INSURANCE

(a) Distributor agrees to place and keep in effect during the term of
this Agreement, with an insurance company approved by TFRY, public liability
insurance in an amount in U.S. dollars of no less than One Million Dollars
($1,000,000), in case of damage or injury to one person, no less than One
Million Dollars ($1,000,000), in case of damage or injury to more than one
person, property damage insurance of One Million Dollars ($1,000,000) in case of
damage or injury to one person. Proof of the requisite insurance coverage shall
be furnished to TFRY prior to the delivery of the first Machine. This insurance
requirement may be amended by TFRY in its sole and absolute discretion based on
the feasibility of obtaining such insurance in the Territory at reasonable
rates.

(b) Distributor shall secure and maintain workers' compensation and
employer's liability insurance covering all of its employees or similar
insurance as may be available in the Territory.

(c) It is specifically agreed that the insurance coverage required by
paragraph (c) be kept in effect and shall be subject to review by TFRY in order
to ensure adequate insurance protection throughout the term of this Agreement.
TFRY may, from time to time, and in its sole

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discretion, require Distributor upon thirty (30) days written notice, to obtain
additional insurance beyond the requirements of paragraph (a).

(d) All insurance shall be in amounts and with carriers acceptable to
TFRY, and shall be evidenced by certificates of insurance showing TFRY as a
named insured (or loss payee as the case may be) and providing that coverage
shall not be terminated or canceled without thirty (30) days prior written
notice to TFRY.

ARTICLE XVI
INDEMNIFICATION OF TFRY

(a) Distributor agrees to protect, indemnify, and save TFRY, its
affiliates, subsidiaries, partners, stockholders, directors, officers, agents
(other than Distributor) and employees of its partners harmless from any and all
loss, damage, liability, expenses, attorney's fees and costs incurred by any of
them because of any action, matter, thing, or conduct of Distributor and/or
Distributor's business or its agents, servants, employees, customers and guest
in, on, or connected with the storage, transport, installation, sale or
servicing, preparation, and cooking of Products.

ARTICLE XVII
APPEARANCE OF MACHINES

(a) Distributor shall see to it that all Machines in the Distributor's
Territory are in good repair, and shall refurbish, repair, and maintain each
French Fry Vending Machine as necessary or as required by TFRY in order to
ensure that at all times and in all instances, safe and reputable Products are
provided to the public.

ARTICLE XVIII
RENEWAL OF AGREEMENT

(a) Unless terminated as provided herein, Distributor shall have the
option, pursuant to such procedures as may be required by TFRY at the expiration
of the initial term of this Agreement, to renew the license granted hereunder at
each ten (10) year expiration date as long as all contractual conditions of such
new distributorship agreement are met in the sole and absolute discretion of
TFRY, by executing TFRY's then current form of Distributorship Agreement
provided that:

(i) Distributor gives TFRY written notice of its election
to renew not less than three (3) months nor more than nine (9) months prior to
the expiration of the then current term and, Distributor executes a general
release under seal, in a form prescribed by TFRY, of any and all claims against
TFRY, its affiliates, stockholders, directors, officers and employees, and

(ii) Distributor at the time of notice of election to renew
and at the end of the then-current term is not in default of any of the terms or
conditions of this Agreement or any

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other agreement between Distributor and TFRY or its affiliates, and has
materially complied with the terms and conditions of all such agreements during
the term of this Agreement, and

(iii) All of Distributor's accrued monetary obligations to
TFRY and its subsidiaries and affiliates have been satisfied prior to renewal,
and timely met throughout the term of this Agreement.

(b) Upon renewal of this Agreement, no additional distributorship fee
will be due; however, it is specifically agreed that Distributor will, upon
renewal, be charged by TFRY a sum which shall be equal to TFRY's estimated costs
incurred in connection with such renewal plus an administrative fee equal to
fifteen (15%) percent of such costs.

ARTICLE XIX
RELATIONSHIP OF PARTIES

(a) The relationship between TFRY and Distributor is that of vendor and
purchaser and Distributor is an independent contractor and shall not have
authority to act for or to bind TFRY in any way or to in any way represent that
TFRY is responsible for any act of Distributor. TFRY and Distributor are not and
shall not be considered as joint venturers, partners, or agents of each other,
or anything other than manufacturer and Distributor and neither shall have the
power to bind or obligate the other than as set forth in this Agreement.
Distributor shall bear sole responsibility for any statements or claims of
Distributor regarding the Products which have not been authorized in advance and
in writing by TFRY. Distributor shall indemnify TFRY and save TFRY harmless from
and against any and all liability, loss, damages, costs or expenses which TFRY
may incur in the event Distributor does not comply with the obligations
specified in this Article XIX.

(b) The Parties further agree that the relationship created by this
Agreement is not a fiduciary, employer-employee, or franchisor-franchisee
relationship.

ARTICLE XX
DISTRIBUTOR'S RESPONSIBILITY

(a) Distributor acknowledges that his success in the distribution of
Products contemplated to be undertaken by Distributor pursuant to this Agreement
is speculative and depends primarily upon the ability of Distributor as an
independent business organization. Distributor acknowledges that neither TFRY
nor any other person has guaranteed or warranted that Distributor will succeed
in the operation of this business venture.

(b) Distributor further acknowledges that there have been no
representations, promises, or guarantees of warranties of any kind made by TFRY
or its agents or representatives to induce Distributor to execute this
Agreement, except as specifically set forth in this Agreement and further, that
Distributor has received all information which he has requested

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concerning the business operation of TFRY which, in the opinion of Distributor,
is necessary to decide whether to enter into this Agreement.

(d) Distributor further acknowledges that the Distributor warrants and
represents that it is duly organized under the laws of the jurisdiction in which
it will do business and the person executing this Agreement has the authority to
do so.

ARTICLE XXI
NOTICES

(a) All notices to TFRY required by the terms of this Agreement shall
be sent by registered mail, addressed to TFRY at its office at:

650 Sentry Parkway, Suite One
Blue Bell, PA 19422

(or such other address as TFRY shall designate in writing) or
by telefax, telecopy or other electronic means of communication to such address.

(b) All notices to Distributor required by the terms of this Agreement
shall be personally delivered to or sent by registered mail, addressed to the
Distributor at:

or such other address as Distributor shall designate in
writing) or by telefax, telecopy or other electronic means of communication to
such address.

(i) in the case of hand delivery or telefax, telecopy or
other electronic communication, upon actual receipt thereof and not the date of
receipt of confirming mail); and

(ii) in the case of notice sent by registered mail, ten
(10) business days after the date of mailing.

ARTICLE XXII
INTERPRETATION AND EXECUTION OF AGREEMENT

(a) This Agreement shall be construed and interpreted in accordance
with the laws of the State of Pennsylvania.

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(b) This Agreement (inclusive of any and all schedules attached hereto
and made a part hereof) contains the entire Agreement of the Parties and no
representations, inducements, promises, or agreements, oral or otherwise, not
embodied herein, were made by TFRY and none shall be of any force or effect.

(d) Distributor, by execution of this Agreement, submits itself and its
officers, directors and/or principals to the jurisdiction of the state and
federal courts of Montgomery County, Pennsylvania and waives any and all claims
of lack of jurisdiction, whether in personam,in rem or other.

ARTICLE XXIII
SEVERABILITY AND CONSTRUCTION

(a) Each section, part, term and provision of this Agreement, and any
portion thereof shall be considered severable, and if, for any reason, any
portion of this Agreement is determined to be invalid, contrary to or in
conflict with any applicable present or future law, rule, or regulation in a
final unappealable ruling issued by any court, agency, or tribunal with valid
jurisdiction in a proceeding to which TFRY is a party, that ruling shall not
impair the operation of, or have any other effect upon, such other portions of
this Agreement as may remain otherwise valid and which shall remain binding on
the Parties and continue to be given full force and effect.

ARTICLE XXIV
WRITTEN APPROVALS AND WAIVERS

(a) TFRY shall not be deemed to have waived or impaired any right,
power or option reserved by this Agreement (including, without limitation, its
right to demand Distributor's exact compliance with every term, condition, and
covenant herein, or to declare any breach thereof a default and to terminate
this license prior to the expiration of its term), by virtue of any custom or
practice of the Parties at variance with the terms hereof, any failure by TFRY
to demand strict compliance with this Agreement, any forbearance, delay, failure
or omission by TFRY to exercise any right, power or option, whether of the same,
similar or different nature, against Distributor or other Distributorships, or
the acceptance by TFRY of any payments due from Distributor after any breach of
this Agreement.

ARTICLE XXV
NON-PERFORMANCE DUE TO FORCE MAJEURE

(a) If the performance of any of the obligations set out in this
Agreement by any one of the Parties is interrupted or prejudiced by:

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(i) fire, explosion, collapse, strike, lockout, labor
dispute, failure or lack of transport, fortuitous or accidental, as well as,
floods, failure or lack of manpower or raw material; or

(ii) war, revolution, civil war, public calamity; or

(iii) any law, decree-law, regulation, government order or
other Government act; or

(iv) any other cause beyond the control of the parties, as
determined by TFRY in its sole and absolute discretion.

(b) The Party affected will be free of responsibility for not
fulfilling its obligation to the extent of the impediment it has suffered,
provided that the other Party is promptly notified of same in writing.

AS WITNESS the hands and seals of the duly authorized representatives
of the Parties hereto as of the day and year first above written.

TASTY FRIES, INC.

By:/S/
------------------------------------
Edward Kelly, President

DISTRIBUTOR: TASTY FRIES, ISRAEL, LTD.

By:/S/
------------------------------------

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SCHEDULE A

TERRITORY: Israel, Jordan and Egypt1

PRICE: $200,000.00
DOWN PAYMENT: $ 40,000.00

BALANCE $160,000.00

To maintain Distributorship, Distributor must purchase a minimum of one hundred
(100) Machines per year for three (3) years with an option thereafter to
purchase additional Machines during the remaining seven (7) years of the
Agreement at the then current cost per Machine. This minimum purchase
requirement begins on the Effective Date as defined in Article I(a) hereof.

Any and all payments made to TFRY, Inc. are payable in U.S. Dollars only.
Payments will be issued by bank wire or certified cashiers' checks only. Payment
terms shall be in accordance with Article X(e) hereof.

An additional Five Hundred ($500.00) Dollars will be added to the cost of each
Machine sold into the Territory for the first three hundred (300) Machines. This
will reduce the cost of the Territory accordingly. The balance of $10,000 shall
thereafter be made by Distributor either (i) in one lump sum payment on the
first business day of the month preceding the purchase of the last Machine or
Machines, or (ii) by adding $500 to the cost of the next 20 Machines ordered if
the option to purchase additional Machines is exercised. If less than 20
Machines are ordered, any balance shall be paid in cash by Distributor prior to
shipment of such additional Machines.

- --------
1

Such Territory currently includes the Golan Heights, the Gaza Strip and the West
Bank. If any one or more of such areas becomes one or more independent sovereign
states during the term of this Agreement or any renewal thereof, TFRY will
determine whether such independent sovereign state or states will be included as
part of the Territory going-forward based upon the investment made by the
Distributor in each of such areas during the term of the Agreement.

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DISTRIBUTORSHIP AGREEMENT

This Agreement made this 19th day of October, 1994.

BETWEEN: TASTY FRIES, INC.
(hereinafter referred to as "TFRY")
located at 11098 Biscayne Boulevard,
Suite 403,
Miami, Florida 33161

with principal executive offices at:
650 Sentry Parkway, Suite One,
Blue Bell, Pennsylvania 19422

and

MOYSES FERMAN REPRESENTACOES INTERNACIONAIS LTDA., a Brazilian
limited company with principal offices at:
Rua da Cevada, 93, Conj. 614
21011 Rio de Janeiro, RJ, Brazil

(hereinafter referred to as "Distributor"):

WITNESSETH:

WHEREAS, TFRY owns the rights to manufacture, distribute and sell a
fully automated french fry vending machine;

WHEREAS, TFRY is the owner of a distinctive type of marketing,
preparation and vending machine sale of TFRY french fry food products; and;

WHEREAS, TFRY has developed and adopted for its own use and for the use
of its Distributors a unique system of TFRY product preparation and vending
machine sale, consisting in part of the unique french fry vending machines,
distinctive advertising, signs, food presentation and formula secret recipes
(collectively the "Products"); and

WHEREAS, DISTRIBUTOR wishes, upon the terms and conditions hereinafter
set forth, to enter into the business of distributing TFRY Products on an
exclusive basis in the Territory of BRAZIL and to benefit from the expertise and
experience of TFRY in its field; and

WHEREAS, TFRY is willing to permit Distributor to use TFRY Marks as
aforesaid, together with the retail sale of TFRY French Fry Vending Machine and
its products upon the terms and conditions hereinafter set forth.

<PAGE>

NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants herein contained and promises herein expressed for other good and
valuable consideration, receipt whereof is hereby acknowledged, do hereby agree
as follows:

ARTICLE I
DISTRIBUTORSHIP AGREEMENT

A. Subject to the provisions of this Agreement and the performance of
its covenants and obligations, TFRY hereby grants Distributor an exclusive right
and license to distribute all TFRY Products and to use the TFRY Marks in the
retail sale thereof within the territorial boundaries set forth and more
particularly described in Schedule "A" attached hereto and forming part of this
Agreement (the "Territory") for a term of ten (10) years commencing on the
"Effective Date". The "Effective Date" is defined as the date on which TFRY
demonstrates its capacity to ship machines for use by consumers, other than
demonstrator machines for use by the Distributor.

The parties specifically acknowledge and agree that the
restriction of operation to the Territory identified herein is an essential and
indispensable term of this Agreement.

DISTRIBUTORS'S SPECIFIC TERRITORIAL RIGHTS

1. The Distributor shall have the exclusive right in his Territory to
sell the TFRY French Fry Vending Machine and TFRY's attendant Products to all
users in the Territory.

2. In the event that TFRY machines are sold by the parent company for
use in the Distributor's Territory, the Distributor shall earn its full
Distributors's profit. This provision is contingent upon his consent to supply
and service these machines.

3. The Distributor shall receive its full profit if machinery is sold
to clients in his Territory for installation in areas outside of his Territory.
Except that in the event the machinery is sold into another Distributor's
Territory, the Distributor profit shall be seventy (70%) percent to the
originating Distributor and thirty (30%) percent to the Territorial Distributor.

4. The Distributor in his exclusive Territory will receive thirty
percent (30%) of the full Distributor's profit in such event that there are
installed in his Territory TFRY machines resulting from any other type of sale
other than directly by Distributor. The Distributor, in order to earn the
Distributor's profit, is obligated to supply and service these machines.

5. TFRY and Distributor will continue good faith negotiations to allow
for a three phase implementation in the Territory: 1) direct export of machines
and potato to Brazil, as provided herein; 2) technology transfer (potato pellet
dehydration) and fabrication of potato product in Brazil; and 3) machine parts
export to Brazil for Brazilian assembly of same.

6. Distributor shall have the right to adapt operating procedures to
the conditions prevailing in the Territory, subject to approval by TFRY,
including, but not limited to, coin

<PAGE>

operation mechanisms, use of tokens instead of coins or paper currency,
electrical current and different methods of handling materials and components.

7. Distributor shall have the right to assign the rights and delegate
the duties herein to sub-distributors within the Territory. Distributor shall
maintain at all times the duty to supervise the operations of all such
sub-distributors.

ARTICLE II
OBLIGATIONS OF TFRY

TFRY agrees to assist Distributor in distributing Products by way of
retail sale in the following manner:

A. TFRY will conduct, at no charge, certain sales and maintenance
training programs in its headquarters training school which Distributor and one
key employee may attend. All costs and expenses incurred by Distributor in
traveling to or attending the training program shall be borne by Distributor.

B. TFRY agrees to provide to Distributor, as it is available from time
to time, exchange of information relating to the Products and additional types
of products as may be authorized by TFRY from time to time for sale pursuant to
this Agreement, and which, when authorized, will also constitute "Products" for
all purposes herein, at such times and in such detail as TFRY shall deem
appropriate.

C. If TFRY provides credit or financing to Distributor, the TFRY may
take a security interest in all TFRY products sold to Distributor, and
Distributor shall take such actions and execute and deliver such documents as
TFRY may request in order to perfect or protect such security interest.

ARTICLE III
CONFIDENTIAL INFORMATION

A. The parties hereto covenant and agree that any Confidential
Information disclosed to the Distributor relating directly or indirectly to the
vending machines and their component parts of the ingredients, preparation or
sale of any of the Products will remain the property of TFRY at all times and
will, if disclosed in any tangible format, be returned to TFRY upon demand and,
in any event, upon termination of this Agreement.

B. It is expressly understood and agreed by Distributor that the
confidential Information described above constitutes highly confidential trade
secrets and Distributor agrees that neither he nor any of his employees will
reveal any of such Confidential Information being revealed or reproduced.

<PAGE>

ARTICLE IV
STANDARDS OF OPERATION AND SUPERVISION BY TFRY

Distributor agrees to conduct its business in a manner consistent with
the standards set forth in this Agreement. It is expressly understood that these
standards may change from time to time, and are in addition to and not in
substitution for any standards set forth in this Agreement.

In order to preserve the value and goodwill of TFRY and related
goodwill of other TFRY Distributors and to promote the purpose of this
Agreement, the parties hereto agree as follows:

1. Distributor will use and distribute the Products as herein
contemplated strictly in accordance with the terms of this Agreement.

2. Unless approved in writing by TFRY, Distributor will not develop,
produce, sell, advertise for sale or give away any product which might
reasonably compete with the Products and all food Products will be prepared in
accordance with the specific formulas or utilizing the ingredients purchased
from or specified by TFRY. It is expressly understood that the conditions and
restrictions expressed herein are for the purposes of ensuring quality control,
health and safety standards and uniformity of Products sold in conjunction with
the TFRY Marks.

3. TFRY may from time to time of her guidance to Distributor relative
to retail prices for Products offered for retail sale that in TFRY judgment
constitute good business practice.

4. Distributor will use its best efforts to see to it that its
customers maintain suitable signs (which signs shall be approved by TFRY) at, on
or near the front of any premises within which its french fry vending machines
are located, describing the premises having Products available for retail sale.

Any translation from the English language or deviation from
TFRY approved designs contained in such sign shall require the prior written
approval of TFRY.

5. It is the Distributor's responsibility to ensure that all food
products sold by Distributor hereunder will be of the highest and safest
quality, and the service relating to any such sale hereunder will comply with
the instructions and standards provided by TFRY in preparing the food Products,
or with any other further written requirements of TFRY as they are communicated
to Distributor from time to time.

6. It is the Distributor's responsibility to ensure that it will
maintain all french fry vending machines by which its business is conducted in
conformity with the high quality, style and cleanliness required of similar
french fry vending machines now operated in connection with TFRY Marks and will
be responsible that the operation of such machines by its customers be conducted
in a clean, orderly, legal and respectable standard of business including.
without limitation, cleaning and sanitation of the french fry vending machines,
disposal of stale, spoiled or unmerchantable food Products, replacement of
cooking oil at specified intervals, replacement

<PAGE>

or repair of display merchandise, replacement of outdated or obsolete machines
(including its component parts), equipment and signs. Distributor shall see that
its customers comply with all applicable ordinances, health and safety
regulations, laws and statutes governing the operation of such premises and the
sale of products, including all criminal and quasi-criminal laws and
regulations.

7. Distributor's exclusive remedy for any damage to or defect in any
TFRY Product sold hereunder shall be limited to the repair or the replacement of
the damaged article, as determined by TFRY at its sole discretion. In no event
shall TFRY be liable for any incidental or consequential loss or damage,
including but, not limited to, loss of profits or any other economic loss,
suffered or incurred by Distributor as a result of or in connection with any
defective or damaged product sold hereunder.

8. TFRY warrants that title to all TFRY Products transferred hereunder
will be free and clear of all liens, security interests or other claims, and
that such products shall comply with the terms and conditions of the limited
warranty certificate included with each TFRY Product and issued to original
purchasers by TFRY.

C. TFRY or TFRY supervisory personnel shall have the right to enter
upon any premises in which Distributor conducts its business at any reasonable
time for the purposes of examining, conferring with Distributor's employees,
inspecting and checking perishable and nonperishable food supplies, vending
machines, and other equipment and in determining whether the distribution of
Product is being conducted in accordance with the aforesaid standards and within
the terms of this Agreement. In the event any such inspection indicates a
deficiency or unsatisfactory condition or conditions, Distributor shall, within
forty-eight (48) hours and, if not capable of being corrected or repaired within
such time, shall within such period of time commence such correction or repair
and thereafter diligently pursue the same to completion. In the event of failure
of Distributor to comply with the foregoing obligations to correct and repair,
TFRY, in addition to any other remedies conferred in this Agreement, shall have
the right to forthwith make or cause to be made, such corrections or repairs,
the expenses thereof, including board, lodging, wages and transportation of TFRY
personnel, attorneys' fees and other living expenses, shall be paid by the
Distributor immediately upon billing by TFRY. Nothing in this paragraph shall in
any way limit TFRY other rights hereunder.

ARTICLE V
COMMENCEMENT OF BUSINESS

A. Distributor agrees to obtain, prior to commencement of its
distribution business, pursuant to this Agreement, all licenses, approvals,
inspections, permits or any other certification which may be required by any
competent public authority for the lawful operation of its business and to keep
the same in good standing during the term hereof.

<PAGE>

ARTICLE VI
USE OF TFRY NAME, MARKS AND ADVERTISING

A. During the term of this Agreement, and any renewals hereof,
Distributor shall advertise sale of the Products under the trade name of "Tasty
Fries Hot French Fries" or one or more mutually agreed-upon non-English language
substitutes within the Territory, and will diligently promote and make every
reasonable effort to steadily increase sales of the Products by proper use of
all advertising media.

B. No design, advertisement, sign or form of publicity, including form,
color, number, location and size, shall be used by Distributor in connection
with sale of the Products unless the same shall have been first submitted to
TFRY and approved in writing. Upon notification from TFRY, Distributor will
cause to be removed any objectionable advertising material and, if required,
cause to be published any retraction in a form and manner consistent with that
of the objectionable advertising materials. In the event said materials are not
removed within seven (7) days after notice, TFRY or its authorized agents, may
at any time, enter upon Distributor's premises, or elsewhere and remove any
objectionable advertising material and may keep or destroy such materials
without paying therefore and without being guilty of trespass or other civil or
criminal wrong.

C. All printed materials, including, but not limited to, product
carrying bags, product wrapping, cups, napkins, posters or other printed
material used in connection with the distribution by retail sale of the Products
shall bear TFRY Marks as suggested by TFRY, and such use will indicate that TFRY
Marks are registered Marks.

D. Distributor shall act prudently and in conformity with all laws,
regulations, ordinances, or other requirements which may affect the utilization
of the TFRY to ensure that the Marks are not jeopardized, diminished or damaged
in any manner and Distributor agrees to indemnity and save harmless TFRY for any
damage or expense occasioned directly or indirectly by Distributor's improper
use of said Marks.

E. Any contractual arrangement of any kind for advertising under the
trade name "Tasty Fries Hot French Fries" or utilizing the TFRY Name, entered
into by Distributor shall expressly provide for termination with no greater than
then (10) days written notice.

ARTICLE VII
TFRY MARKS

A. TFRY hereby grants to Distributor for the term of this Agreement the
exclusive right and license to use the TFRY Marks within the Territory but only
in connection with the distribution of TFRY Products which Distributor is
permitted to sell hereunder and the extent and manner of use of the TFRY Marks
shall be subject to TFRY approval and to the extent that such Marks can be used
legally in the Territory.

<PAGE>

B. Distributor shall be entitled to assign or sublicense his rights to
use the TFRY Marks without the written consent and approval of TFRY.

C. Upon execution of this Agreement, Distributor shall cooperate with
TFRY and shall do all things reasonably required in making whatever application,
if any, as required by law in the Territory, to register the TFRY Marks and/or
to register Distributor as a "Registered User" of the TFRY Marks and Distributor
shall sign any document necessary for the purpose.

D. Distributor shall notify TFRY forthwith in writing of any
counterfeiting or infringement of the TFRY Marks which may come to Distributor's
attention. Should any such infringement or alleged infringement occur:

1. The commencement, defense, and conduct of any such
proceedings shall be initiated by Distributor. If requested by TFRY, Distributor
will furnish all reasonable assistance to TFRY in such proceedings and agrees to
share equally with TFRY in the costs of any such proceedings.

E. Distributor agrees not to use the words "TFRY" or any other work,
design or device forming or forming any part of any of the TFRY Marks:

1. During the term of this Agreement, otherwise than as
herein authorized; or

2. After termination of this Agreement, in any manner.

ARTICLE VIII
UNIFORMITY OF PRODUCTS

A. The reputation and goodwill of TFRY products is based upon, and can
be maintained and enhanced, only by the sale of consistently high quality
Products to the satisfaction of customers who rely upon the uniformly high
quality of such products. Distributor therefore agrees that all food Products
offered for sale in the vending machines shall be, initially, purchased directly
from TFRY. However, paper goods, packaging, cooking oil and other supplies and
materials utilized in connection with the food products may be purchased by
Distributor from any supplier in the Territory with TFRY approval.

B. In order to establish uniformity of taste and quality of the
Products, TFRY has developed and will continue to develop recipes and formulas
of ingredients, which ingredients will be made available to Distributor. Such
products will be purchased by Distributor at the prevailing prices from time to
time, FOB Shipping Point as TFRY determines, and will be utilized by Distributor
exclusively as specified by TFRY, unless products are not supplied by TFRY but
are approved by TFRY and TFRY is compensated for its loss of profit on such
product.

C. Distributor agrees that he will not offer any food product or
utilize any equipment, signage, display cases or other items which may compete
with the Products and which are not purchased from TFRY or any supplier that is
not currently approved by TFRY.

<PAGE>

ARTICLE IX
FEES AND FINANCIAL OBLIGATIONS

A. In consideration of the right to distribute Products granted herein,
Distributor agrees upon execution of this Agreement, to pay to TFRY, the sum of
TWO HUNDRED FIFTY THOUSAND ($250.000.00), as consideration solely for the right
to distribute Products. Such right shall be acquired, in full, upon the
Effective Date of this Agreement, whereupon such fee shall be fully earned and
non-refundable under any circumstances whatsoever and subject to the fee payment
in Schedule "A".

B. It is expressly agreed b.;tween the parties that as consideration
for the grant of distribution rights hereunder by TFRY to Distributor and as an
express condition of such grant, that Distributor purchase from TFRY a minimum
number of french fry vending machines upon the terms and conditions set forth on
Schedule "A" attached hereto and forming a part of this Agreement.

C. Unless otherwise specified herein, all amounts stated herein or
payments to be made to TFRY under this Agreement shall be in U.S. Dollars. Such
payments shall be made in such manner as is specified from time to time by TFRY
but may include, but without limiting the generality of the foregoing, bank wire
transfer, or certified check delivered to TFRY accounts at such place as TFRY
may from time to time designate.

D. During the term of this Agreement and any renewal thereof,
Distributor agrees that all payments will be made in United States (U.S.)
Dollars. TFRY products shall be quoted F.O.B. from any shipping point that TFRY
may determine. Dealer shall pay the invoice according to terms set by TFRY.
Distributor shall also pay any and all applicable sales, use, import duties,
excise taxes, or any other taxes arising from the sale or transfer of TFRY
Products. All shipments are at Distributors risk from the time of TFRY
conveyance to Distributors shipper. Notwithstanding the forgoing, TFRY
specifically reserves the right to act at any time in accordance with the
provisions of the Uniform Commercial Code to protect its interests when
necessary. Any claim of discrepancies in shipments made by Distributor shall be
made in writing and sent to TFRY within ten (10) business days after receipt of
the shipment.

ARTICLE X
DISTRIBUTOR

A. Distributor acknowledges that the TFRY Products are unique and
distinctive and have been developed by TFRY at great effort, time and expense;
that Distributor has regular and continuing access to valuable and confidential
information, training and trade secrets regarding the Products; and that
Distributor recognizes his obligation to fully develop his territory for sales
of the Products and accordingly agrees as follows:

<PAGE>

1. During the term of this Agreement and any renewal thereof,
Distributor shall not, in any capacity whatsoever, either directly or
indirectly, individually or as a member of any business organization, except
with the prior written consent of TFRY, engage in the sale of any french fries
vending machine or supplies therefore, other than TFRY.

2. During the term of this Agreement, or upon expiration or termination
of this Agreement, divulge any aspect of the Products whether expressly stated
to be confidential or otherwise to any person.

3. Distributor shall at all times maintain an inventory of TFRY
Products sufficient to satisfy the reasonably anticipated demands of customers
located within the Territory. TFRY shall supply all of Distributors reasonable
requirements of TFRY Products for distribution in the Territory, subject to
available supplies. TFRY shall not be liable for any delay in shipment arising
from or caused by any fire, flood, war, riot, civil disturbance, labor dispute,
act of God, material shortage, government regulation or action, or any other
cause beyond TFRY reasonable control.

4. During the term of this Agreement and any renewal thereof,
Distributor shall maintain a sufficient inventory of parts to properly maintain,
repair, and service TFRY Products. Distributor shall only use parts which meet
the standards of quality established by TFRY from time to time. Distributor
shall provide prompt and courteous service to all TFRY customers located within
the Territory regardless of whether such customers purchased TFRY products from
Distributor.

ARTICLE XI
TRANSFER OF INTEREST

This Agreement shall enure to the benefit of the successors and assigns
of TFRY and may be so assigned at any time.

TFRY shall not unreasonably withhold its consent to any full transfer
or assignment of this Agreement, which is subject to the restrictions of this
Article, provided, however, that TFRY shall not be required to give its consent
unless, in addition to the requirements of Article IV hereof, the following
conditions are met prior to the date of the assignment:

1. For any such proposed full transfer or assignment:

(a) Distributor shall not be in default under any provision of
the terms of this Agreement or any other agreement ancillary to this Agreement,
and shall have continuously distributed products for a period.of not less than
twelve (12) months;

(b) Distributor has executed a general release in a form
prescribed by TFRY of any and all claims against TFRY;

<PAGE>

(c) The proposed assignee executes such other documents as
TFRY may require in order to assume all of the obligations of this Agreement, to
the same extent, and with the same effect, as previously assumed by distributor;

(d) The proposed assignee executes such other documents as
TFRY may require in order to assume all of the obligations of this Agreement, to
the same extent, and with the same effect, as previously assumed by distributor;

(e) A transfer fee has been paid to TFRY in an amount equal to
five percent (5%) of the aggregate cash or cash valued consideration paid by the
assignee to assignor for the distribution rights, to def ray its reasonable
costs and expenses in connection with the transfer, including without
limitation, the cost of legal and accounting fees, credit and investigation
charges, evaluations, retraining and additional supervision. It is agreed that
the original cost of the territory will be deducted.

C. Upon the death or permanent incapacity of a Distributor the
following shall apply:

1. TFRY shall have the right, within thirty (30) days of the
date upon which TFRY is notified of such death or incapacity (if consistent with
applicable local laws) to purchase the interest or any part thereof for cash at
the appraised value, such purchase to be completed within sixty (60) days.

2. If TFRY declines to elect to purchase the interest, within
thirty (30) days of the date upon which TFRY is notified of such death or
incapacity, the interest may be transferred within a further sixty (60) days by
sale to a third party meeting TFRY's then current criteria for new distributors,
provided that the requirements of paragraph D of this Article are met. If a
transfer to an approved transferee cannot be effected within a further one
hundred and twenty (120) days, this Agreement shall terminate and automatically.

3. No sale or transfer of the interest shall be approved by
TFRY unless the incapacitated Distributor or personal representative has agreed
to reimburse TFRY for the reasonable costs and expenses it has incurred or may
incur in providing fat TFRY option) one or more interim Distributors to manage
the business until a transfer of the interest is effected, if TFRY determines,
in its discretion, that such supervision is necessary or desirable.

D. TFRY's consent to a transfer of any interest subject to the
restrictions of this Article shall not constitute a waiver by TFRY of the right
to distribute products granted herein, nor shall it be deemed a waiver of TFRY
right to demand exact compliance with any of the terms of this Agreement by the
assignee. The document effecting the transfer or assignment of any interest
subject to the restrictions of this Article shall specifically provide that
Distributor's obligations hereunder shall -continue in full -force and effect
notwithstanding any such disposition.

E. If Distributor has received and desires to accept any bona fide
offer to purchase his or its distribution rights hereunder, Distributor or such
person shall notify TFRY in writing

<PAGE>

of the purchase price and terms of such offer, and TFRY shall have the right and
option subject to any limitations of applicable local laws exercisable within
thirty (30) days after receipt of such written notification), to send written
notice to Distributor or such persons that TFRY or its designee intends to
purchase Distributor's interest on the same terms and conditions offered by the
third party. Any material change in the terms of an offer prior to closing shall
result in a new notification as in the case of the initial offer.

ARTICLE XII
DEFAULT

A. In addition to those events herein before stated to be events of
default, it is agreed that the rights granted to Distributor pursuant to this
Agreement may be terminated forthwith with notice upon the happening of any one
or more of the following events, except that TFRY must be in compliance with the
terms and conditions of this distribution agreement:

1. If the Distributor fails to comply with any of the terms
and conditions of this Distributorship Agreement and such failure to comply
continues for a period of thirty (30) days after written notice thereof has been
given to the Distributor.

2. If the Distributor fails to comply with any of the terms
and conditions of any other agreements entered into pursuant to or collateral
to this Agreement.

3. If the Distributor shall be adjudicated a bankrupt or
become insolvent, or if a receiver or other person with like powers shall be
appointed (whether temporary or permanent) to take charge of all or
substantially all of the Distributor's assets, or if the Distributor shall make
a general assignment for the benefit of creditors or a proposal under the
Bankruptcy Act for any similar or successor Act), or commence any proceedings to
wind-up, liquidate, or dissolve the distributor's business.

4. If any judgement or judgments in excess of ONE THOUSAND
DOLLARS ($1,000.00) or any legal tax lien against the Distributor remains
unsatisfied or unbonded of record in excess of thirty (30) days, or if the
Distributor shall commit or suffer any default under any security instrument.

5. Other than amounts to be paid to TFRY wherein the
provisions of subsections (a) and (b) above respecting default shall apply, if
the Distributor does not pay any other indebtedness incurred in connection with
the operation of the business through which the products are maintained and sold
and such indebtedness is not paid within seven (7) days of notice from TFRY.

6. If the Distributor fails to continuously and actively
operate its distributorship throughout the Territory.

7. If the Distributor falsifies any statement or report
furnished to TFRY or otherwise deliberately provides false information to TFRY;
or if the Distributor is convicted of a felony or other crime or impairs the
goodwill associated with TFRY Marks.

<PAGE>

8. If the Distributor commits acts of default for which
notices of default have been served more than four times in any one calendar
year during the term, notwithstanding that such defaults may have been cured.

9. If the Distributor does not order and complete the purchase
of the french fry vending machines it is required to purchase pursuant to the
terms of this Agreement in the manner and at the times therein specified.

10. If the Distributor does not complete the training course
to be taken by the Distributor prior to distributing food product to the public
to the satisfaction of TFRY.

11. Distributor will pay all attorney's fees as between an
attorney and his own client, accounting fees and court costs incurred by TFRY in
the event of a violation by Distributor of this agreement.

12. In case of a breach or a threatened breach of the terms of
this Agreement by Distributor, TFRY shall, in addition to any other remedy it
may have, and notwithstanding any other provision hereof, be entitled to an
injunction restraining Distributor from committing or continuing to commit any
breach of this Agreement, without showing or proving any actual damage sustained
by TFRY, which damage is hereby conclusively acknowledged.

ARTICLE XIII
RIGHTS AND OBLIGATIONS OF PARTIES
ON TERMINATION OF EXPIRATION

A. Upon termination or expiration of this Agreement for any reason
whatsoever, Distributor will immediately discontinue use of all trade names,
trademarks, signs, forms of advertising, printed material and all other indicia
of operation as an TFRY Distributor from its operations. In addition,
Distributor will discontinue use of the TFRY color scheme. If the Distributor
shall fail or omit to make or cause to be made such discontinuance within seven
(7) days after termination or expiration of this Agreement, then TFRY, in
addition to any other remedy it may have, shall have the right to enter upon
premises and to make or cause to be made such removal of signs, trademarks,
trade names and other indicia of operation subject to removal and such removal
shall be conducted at the sole expense of Distributor (without being deemed
guilty of trespass or any civil wrong) which expense the Distributor agrees to
pay on demand.

B. TFRY may retain all fees paid pursuant hereto.

C. Any and all obligations of TFRY to Distributor under this Agreement
shall immediately cease and terminate.

D. In no event shall termination or expiration of this Agreement for
any reason whatsoever affect Distributor's obligation to take or abstain from
taking action in accordance with this Agreement.

<PAGE>

E. It is understood by Distributor that rights in and to TFRY Marks and
any part thereof or addition thereto and the use thereof shall be and remain the
property of TFRY and Distributor shall confirm same in writing and shall further
assign, transfer and convey to TFRY by such instrument in writing as may be
requested, all additional rights which may be acquired, if any, by reason of the
use of said name of Distributor.

F. TFRY shall have the option to purchase, at Distributor's cost less
twenty-five (25) percent, all or any portion of inventory of any kind bearing
the TFRY Marks, including, but not limited to, french fry vending machines,
equipment, vehicles, and any other items Distributor may have in stock at the
time of such termination or expiration.

G. Distributor shall cause immediate discontinuance of all advertising
or other public display or publication of the words "Tasty Fries" and, in the
event that such action is not taken by Distributor, Distributor hereby
constitutes irrevocably TFRY as Distributor's attorney to carry out such acts at
Distributor's sole expense.

H. Distributor will immediately pay any and all amounts owing to TFRY
and its subsidiaries and affiliates.

I. Distributor shall not, in any capacity whatsoever, either directly
or indirectly, individually or as a member of any business organization, engage
in the preparation or sale of any TFRY or other approved TFRY product, or have
any employment or interest in a firm engaged in the preparation or sale of such
products within the Territory or within thirty (30) miles of any other
Distributor's exclusive or non-exclusive territory for a period of three (3)
years following such termination. Distributor acknowledges and agrees that this
restriction upon subsequent activities is necessary in view of the Confidential
Information and expertise Distributor will acquire pursuant to the terms of the
Agreement and will cause TFRY irreparable and-substantial damage in the event of
breach of these provisions. The Distributor has the option to cancel this
Agreement by giving notice of six (6) months without refund if payments for
Distributorship already paid.

ARTICLE XIV
INSURANCE

A. Distributor agrees to place and keep in effect during the life of
this Agreement, with an insurance company approved by TFRY, public liability
insurance in amounts no less than One Million Dollars ($1,000,000.00), in case
of damage or injury to one person, no less than One Million Dollars
($1,000,000.00), in case of damage or injury to more than one person, property
damage insurance of One Million Dollars ($1.000.000.00) in case of damage or
injury to one person (Proof of insurance coverage will be furnished to TFRY
prior to the delivery of the first machine). This insurance requirement may be
altered based on the feasibility of obtaining such insurance in Brazil at
reasonable rates.

B. Distributor shall secure and maintain workers compensation and
employer's liability insurance covering all of its employees.

<PAGE>

C. It is specifically agreed that insurance coverage required to be
kept in effect by the terms of this paragraph shall be subject to review by TFRY
in order to ensure adequate insurance protection throughout the term of this
Agreement. TFRY may, from time to time, and in its sole discretion, require
Distributor upon thirty (30) days written notice to obtain additional insurance
beyond the aforementioned requirements of this paragraph.

All insurance shall be in amounts and with carriers acceptable
to TFRY, and shall be evidenced by certificates of insurance showing TFRY as a
named insured and providing that coverage shall not be terminated or canceled
without thirty (30) days prior written notice to TFRY.

ARTICLE XV
INDEMNIFICATION OF COMPANY

Distributor agrees to protect, indemnify, and save TFRY, its
affiliates, subsidiaries, partners, stockholders, directors, officers and
employees of its partners harmless from any and all loss, damage, liability,
expenses, attorney's fees and costs incurred by any of them because of any
action, matter, thing, or conduct relating to Distributor and Distributor's
business or its agents, servants, employees, customers and guest in, on, or
connected with the storage, transport, installation, sale or servicing,
preparation, and cooking of Products.

ARTICLE XVI
APPEARANCE OF MACHINES

Distributor shall see to it that all machines in the Distributor's
Territory are in good repair, and shall refurbish, tidy, and maintain each TFRY
french fry vending machine as necessary or as required by TFRY in order to
ensure that at all times a first class, safe and reputable Product is provided
to the public.

ARTICLE XVII
RENEWAL OF AGREEMENT

Unless terminated as herein otherwise provided, Distributor shall have
the option, pursuant to such procedures as may be required by TFRY at the
expiration of the initial term of this Agreement, to renew the license granted
hereunder at each ten (10) year expiration date as long as all contractual
conditions are met hereof by executing TFRY then-current form of Distributorship
Agreement provided that:

1. Distributor gives TFRY written notice of its election to renew not
less than three (3) months nor more than nine (9) months prior to the expiration
of the then current term and, Distributor executes a general release under seal,
in a form prescribed by TFRY, of any and all claims against TFRY, its
affiliates, stockholders, directors, officers and employees, and

2. Distributor at the time of notice of election to renew and at the
end of the then- current term is not in default of any of the terms or
conditions of this Agreement or any other

<PAGE>

Agreement between Distributor and TFRY or its affiliates, and has substantially
complied with the terms and conditions of all such agreements during the term of
this Agreement, and

3. All of Distributor's accrued monetary obligations to TFRY and its
subsidiaries and affiliates have been satisfied prior to renewal, and timely met
throughout the term of this Agreement.

Upon renewal of this Agreement, no additional distributorship fee will
be due. However, it is specifically agreed that Distributor will, upon renewal,
be charged by TFRY a sum which shall be equal to TFRY estimated costs incurred
in connection with such renewal plus an administrative fee equal to fifteen
(15%) percent of such costs. Furthermore, Distributor acknowledges the terms of
the TFRY then current form of Distributorship Agreement.

ARTICLE XVIII
RELATIONSHIP OF PARTIES

A. TFRY and Distributor are not and shall- not be considered as joint
venturers, partners, or agents of each other, or anything other than
Manufacturer and Distributor and neither shall have the power to bind or
obligate the other as set forth in this Agreement.

B. The parties further agree that their relationship created by this
Agreement is not a Fiduciary relationship.

ARTICLE XIX
DISTRIBUTOR'S RESPONSIBILITY

A. Distributor acknowledges that his success in the distribution of
products contemplated to be undertaken by Distributor pursuant to this Agreement
is speculative and depends primarily upon the ability of Distributor as an
independent business organization. Distributor acknowledges that neither TFRY
nor any other person has guaranteed or warranted that Distributor will succeed
in the operation of this business venture.

B. Distributor further acknowledges that there have been no
representations, promises, or guarantees of warranties of any kind made by TFRY
or its agents or representatives to induce Distributor to execute this
Agreement, except as specifically set forth in this Agreement and further that
Distributor has received all information which he has requested concerning the
business operation of TFRY which, in the opinion of Distributor, is necessary to
decide whether to enter into this Agreement.

C. Distributor further acknowledges that independent legal advice had
been sought in the preparation of this Agreement.

D. Distributor further acknowledges that nothing contained within this
Agreement shall be construed or interpreted as creating an employer/employee,
agency, joint venture, or any other such relationship between the parties, and
the only relationship created hereunder is

<PAGE>

that of independent contractor. Distributor shall not have the authority, and
shall not represent itself as having the authority, to bind or to obligate TFRY
in any manner.

E. Distributor further acknowledges that the Distributor warrants and
represents that it is duly organized under the laws of the jurisdiction in which
it will do business and the person executing the agreement has the authority to
execute this Agreement.

ARTICLE XX
NOTICES

A. All notices to TFRY required by the terms of this Agreement shall be
sent by registered mail, addressed to TFRY at its office at:

11098 Biscayne Boulevard
Suite #403
Miami, Florida 33161

and

650 Sentry Parkway, Suite One
Blue Bell, PA 19422

(or such other address as TFRY shall designate in writing) or by
telefax, telecopy or other electronic means of communication to such address.

B. All notices to Distributor required by the terms of this Agreement
shall be personally delivered to or sent by registered mail, addressed to the
Distributor at:

Rua da Cevada, 93, Conj. 614
21011 Rio de Janeiro, RJ, Brazil

and

Garry Nelson, attorney at law
801 Brickell Avenue, 9th Floor
Miami, Florida 33131

for such other address as Distributor shall designate in writing) or by
telefax, telecopy or other electronic means of communication to such address.

C. All notices to either party required by the terms of the Agreement
shall be deemed to have been received:

(i) in the case of hand delivery or telefax, telecopy or
other electronic communication, upon actual receipt thereof and not the date
of receipt of confirming mail); and

(ii) in the case of notice sent by registered mail, ten (10)
business days after the date of mailing.

<PAGE>

ARTICLE XXI
INTERPRETATION AND EXECUTION OF AGREEMENT

A. This Agreement shall be construed and interpreted in accordance with
the laws of the State of Pennsylvania.

B. This instrument contains the entire Agreement of the parties and no
representations, inducements, promises, or agreements, oral or otherwise, not
embodied herein, were made by TFRY and none shall be of any force or effect.

C. Nothing in this Agreement shall bar or restrict TFRY right to obtain
injunctive relief under applicable law.

ARTICLE XXII
SEVERABILITY AND CONSTRUCTION

Each section, part, term and provision of this Agreement, and any
portion thereof shall be considered severable, and if, for any reason, any
portion of this Agreement is determined to be invalid, contrary to or in
conflict with any applicable present or future law, rule, or regulation in a
final unappealable ruling issued by any court, agency, or tribunal with valid
jurisdiction in a proceeding to which TFRY is a party, that ruling shall not
impair the operation of, or have any other effect upon, such other portions of
this Agreement as may remain otherwise intelligible fall of which shall remain
binding on the parties and continue to be given full force and agreement as of
the date upon which the ruling becomes final).

ARTICLE XXIII
WRITTEN APPROVALS AND WAIVERS

A. TFRY shall not be deemed to have waived or impaired any right, power
or option reserved by this Agreement (including, without limitation, its right
to demand Distributor's exact compliance with every term, condition, and
covenant herein, or to declare any breach thereof a default and to terminate
this license prior to the expiration of its term), by virtue of any custom or
practice of the parties at variance with the terms hereof, any failure by TFRY
to demand strict compliance with this Agreement, any forbearance, delay, failure
or omission by TFRY to exercise any right, power or option, whether of the same,
similar or different nature, against Distributor or other Distributorships, or
the acceptance by TFRY of any payments due from Distributor after any breach of
this Agreement.

ARTICLE XXIV
NON-PERFORMANCE DUE TO FORCE MAJEURE

If the performance of any of the obligations set out in this Agreement
by any one of the parties is interrupted or prejudiced by:

<PAGE>

i fire, explosion, collapse, strike, lockout, labor dispute, failure or
lack of transport, fortuitous or accidental, as well as, floods, failure or lack
of manpower or raw material; or

ii war, revolution, civil war, public calamity; or

iii any law, decree-law, regulation, Government order
or other Government act; or

iv any other cause beyond the control of the parties,

the party affected will be free of responsibility for not fulfilling its
obligation to the extent of the impediment it has suffered, provided that the
other party is promptly notified.

AS WITNESS the hands and seats of the duly authorized representatives
of the parties hereto as of the day and year first above written.

TASTY FRIES, INC.

By: /S/
-----------------------------
Gary J. Arzt
Chairman of the Board

By:/S/
-----------------------------
Edward Kelly, President

MOYSES FERMAN REPRESENTACOES INTERNACIONAIS LTDA.

By:/S/
-----------------------------
Moyses Ferman
Managing Quotaholder

<PAGE>

SCHEDULE A

TERRITORY: Brazil

PRICE: $250,000.00
DOWN PAYMENT: $100,000.00

BALANCE $150,000.00

To maintain Distributorship, Distributor must sell a minimum of two hundred
fifty (250) machines per year. This minimum begins on the Effective Date.

Any and all payments made to TFRY, Inc. are payable in U.S. Dollars only.
Payments will be issued by bank wire or certified cashiers' checks only.

An additional Five Hundred ($500.00) Dollars will be added to the cost of each
machine sold into the Territory for the first three hundred (300) machines. This
will reduce the cost of the Territory accordingly.

<PAGE>

DISTRIBUTORSHIP AGREEMENT

This Agreememt made this 4th day of April, 1995

BETWEEN:

TASTY FRIES, INC.
650 Sentry Parkway, Suite One
Blue Bell, PA, U.S.A. 19422

(hereinafter referred to as "TFI")

AND :

CANADIAN TASTY FRIES, INC.
#8 West Dry Creek Circle, Suite #110
Littleton, CO, U.S.A. 80120

(hereinafter referred to as "Distributor")

WITNESSETH:

WHEREAS, TFI owns rights to manufacture, distribute and sell a fully
automated french fry vending machine;

WHEREAS, TFI is the owner of a distinctive type of marketing,
preparation and vending machine sale of TFI french fry food products; and;

WHEREAS, TFI has developed and adopted for its own use and for the use
of its Distributors a unique system of TFI product preparation and vending
machine sale, consisting in part of the unique french fry vending machines,
distinctive advertising, signs, food presentation and formula secret recipes
(collectively the "Products"); and

WHEREAS, in addition to valuable goodwill, TFI owns the valuable trade
name and design of TFI in addition to various patents, trademarks, service
marks, copyrights, tradenames, slogans, designs, insignia, emblems, symbols,
package designs, logos and other proprietary characteristics (collectively, the
"TFI Marks") used in relation to and in connection with the Products; and

WHEREAS, Distributor wishes, upon the terms and conditions hereinafter
set forth, to enter into the business of distributing TFI Products on an
exclusive basis in the Territory herein defined and more particularly described
in Schedule "A" attached hereto and forming part ofthis Agreement (the
"Territory") and to benefit from the expertise of TFI in its field; and

<PAGE>

WHEREAS, TFI is willing to permit Distributor to use TFI Marks as
aforesaid together with the retail sale of TFI French Fry Vending Machine and it
products upon the terms and conditions hereinafter set forth; and

WHEREAS, TFT is willing to permit Distributor to register the TFI Marks
to secure their exclusive use in that Territory.

NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants herein contained and promises herein expressed for other good and
valuable consideration, receipt whereofis hereby acknowledged, do hereby agree
as follows:

ARTICLE 1
DISTRIBUTORSHIP AGREEMENT

A. Subject to the provisions of this Agreement and the performance of its
covenants and obligations, TFI hereby grants Distributor an exclusive right and
license to distribute all present and future:TFI Products and to use the TFI
Marks in the retail sale thereof within the territorial boundaries set forth as
described in Schedule "A" attached hereto (the "Territory") for a term of ten
(10) years.

The parties specifically acknowledge and agree that the restriction of
operation to the Territory identified herein is an essential and indispensable
term of this Agreement.

DISTRIBUTOR'S SPECIFIC TERRITORIAL RIGHTS

1. The Distributor shall have the exclusive right in its Territory to sell
the TFI French Fry Vending Machine and TFI attendant Products to all users in
the Territory.

2. The Distributor shall have the right to subdivide its Territory as
Distributor in its sole discretion sees ftt and to grant additional
distributorships for these subdivided areas on similar terms as contained in
this Agreement and all compensation for said additional distributorships shall
be for the benefit of Distributor without any fee, royalty or deduction to be
paid to TFI.

ARTICLE II
OBLIGATIONS OF TFI

TFI agrees to assist Distributor in distributing Products by way of
retail sale in the following manner:

A. TFI will conduct, at no charge, certain sales and maintenance training
programs in its headquarters training school which Distributor and one key
employee may attend and up to two individuals from each additional
distributorship granted by Distributor in its Territory may attend.

B. TFI agrees to provide to Distributor, as it is available from time to time,
exchange of information relating to the Products and additional types of
products as may be authorized by

<PAGE>

TFI from time to time for sale pursuant to this Agreement, and which, when
authorized, will also constitute "Products" for all purposes herein, at such
times and in such detail as TFI shall deem appropriate.

C. TFI will take all steps necessary to ensure the Products meet the
standards of the Territory for import and resale therein and if necessary will
license the Products in the Territory for that purpose.

ARTICLE III
CONFIDENTIAL INFORMATION

A. The parties hereto covenant and agree that any Confidential Information
disclosed to the Distributor relating directly or indirectly to the vending
machines and their component parts of the ingredients, preparation or sale of
any of the Products will remain the property of TFI at all times and will, if
disclosed in any tangible format, be returned to TFI upon demand and, in any
event, upon termination ofthis Agreement.

B. It is expressly understood and agreed by Distributor that the Confidential
Information described above constitutes highly confidential trade secrets and
Distributor agrees that neither he nor any of his employees will reveal or
reproduce any of such Conftdential Information except as is necessary to
describe the operations to employees and staff and additional distributors
within the Territory so they can safely use the vending machines and Products.
Such employees, staff and additional Distributors shall be required to execute
appropriate confidentiality agreements.

ARTICLE IV
STANDARDS OF OPERATION
AND SUPERVISION BY TFI

A. Distributor agrees to conduct its business in a manner consistent with the
standards set forth in this Agreement. It is understood that these standards may
change from time to time, and are in addition to and not in substitution for any
standard as set forth in this Agreement.

B. In order to preserve the value and goodwill of TFI and related goodwill of
other TFI Distributors and to promote the purpose ofthis Agreement, the parties
hereto agree as follows:

1. Distributor will use and distribute the Products as herein
contemplated strictly in accordance with the terms of this Agreement.

2. Unless approved in writing by TFI, Distributor will not
develop, produce, sell, advertise for sale or give away any products
under the TFI Marks which might reasonably compete with the Products
and all food Products will be prepared in accordance with the specific
formulas or utilizing the ingredients purchased from or specified by
TFI.

<PAGE>

3. TFI may from time to time offer guidance to Distributor relative
to retail prices for Products offered for retail sale that in TFI's
judgment constitute good business practice.

4. Distributor will use its best efforts to see it that its
customers maintain suitable signs (which signs shall be approved by
TFI), at, on or near the front of any premises within which its french
fry vending machines are located, describing the premises having
Products available for retail sale.

Any translation from the English language or deviation from
TFI approved designs contained in such sign shall required the prior
written approval of TFI.

5. It is the Distributor's responsibility to ensure that all food
products sold by Distributor hereunder will be of the highest and
safest quality, and the service relating to any such sale hereunder
\iill comply with the instructions and standards provided by TFI in
preparing the food Products, or with any other further written
requirements of TFI as they are communicated to Distributor from time
to time.

6. It is the Distributor's responsibility to ensure that it will
maintain all french fry Vending machines by which its business is
conducted in conformity with the high duality, style and cleanliness
required of similar french fry vending machines now operated in
connection with the TFI Marks, component parts, equipment and signs.
Distributor shall see that its customers comply with all applicable
ordinances, health and safety regulations, laws and statutes governing
the operation of such premises and the sale of products, including all
criminal and quasi-criminal laws and regulations.

C. TFI or TFI's supervisory personnel shall have the right to enter upon any
premises in which Distributor conducts its business at any reasonable time for
the purposes of examining, conferring with Distributor's employees, inspecting
and checking perishable and non-perishable food supplies, vending machines, and
other equipment and in determining whether the distribution of Product is being
conducted in accordance with the aforesaid standards and within the terms of
this Agreement.

ARTICLE V
COMMENCEMENT OF BUSINESS

A. Distributor agrees to obtain, prior to commencement ofits distribution
business, pursuant to this Agreement, all licenses, approvals, inspections,
permits or any other certification which may be required by any competent public
authority for the lawful operation of its business and to keep the same in good
standing during the term hereof.

ARTICLE VI
USE OF TFI NAME, MARKS AND ADVERTISING

A. During the term of this Agreement, and any renewals hereof, Distributor
shall advertise sale of the Products under the trade name "Tasty Fries" and
will diligently promote and make

0137\95-1005

<PAGE>

every reasonable effort to steadily increase sale of the Products by proper use
of all advertising media.

C. All printed materials, including, but not limited to, Product carrying
bags, product wrapping, cups, napkins, posters or other printed material used in
connection with the distribution by retail sale ofthe Products shall bear TFI
Marks as suggested by TFI, and such use will indicate that TFI Marks are
registered Marks.

D. Distributor shall act prudently and in conformity with all laws,
regulations, ordinances, or other requirements which may affect the utilization
ofthe TFT Marks to ensure that the Marks are not jeopardized, diminished or
damaged in any manner and Distributor agrees to indemnify and save harmless TFI
for any damage or expense occasioned directly or indirectly by Distributor's
improper use of said Marks.

E. Any contractual arrangement of any kind for advertising under the trade
name "Tasty Fries" or utilizing the TFI Marks, entered into by Distributor shall
expressly provide for termination with no greater than ten (10) days written
notice.

ARTICLE VII
TFI MARKS

A. TFI hereby grants to Distributor for the term of this Agreement the
exclusive right to register the TFI Marks for use by the Distributor in the
Territory but only in connection with the distribution of TFI Products which
Distributor is permitted to sell hereunder, and the extent and manner ofuse
ofthe TFI Marks shall be subject to TFI approval. The cost of such registration
to be born by the Distributor.

B. TFI hereby agrees to provide all necessary consents and original artwork
for the TFI Marks to assist the Distributor in the registration thereof in the
Territory.

C. Upon registration of the TFI Marks by Distributor, Distributor shall be
responsible for pursuing any counterfeiting or infringement of the TFI Marks
which may come to Distributor's attention.

ARTICLE VIII
UNIFORMITY OF PRODUCTS

A. Distributor agrees that all food Products offered for sale in the vending
machines and paper goods, supplies and other materials utilized in connection
with the food products shall be purchased directly from TFI or suppliers
specified by TFI.

<PAGE>

B. In order to establish uniformity of taste and quality of the Products, TFI
has developed and will continue to develop recipes and formulas of ingredients,
which ingredients will be made available to Distributor. Such Products will be
purchased by Distributor at the prevailing prices from time to time, and will be
utilized by Distributor exclusively as specified by TFI. TFI may from time to
time agree with Distributor on an alternate supplier of Products, in which case,
TFI shall be entitled to a reasonable royalty on any Products so produced to
compensate TFI for loss of profit.

C. Distributor agrees that he will not offer any food product or utilize any
paper goods, supplier or other materials, or any equipment, signage, display
cases or other items under the TFI Marks which may compete with the Products and
which are not purchased from TFI or any supplier that is not currently approved
by TFI.

D. Should at any time TFI be unable to supply the Products to Distributor as
contemplated in this Agreement and as required by Distributor to conduct its
business, Distributor shall be entitled with the consent of TFI, such consent
not to be unreasonably withheld, to arrange for its own alternate supply of the
Products, in which case, TFI shall be entitled to a reasonably royalty on any
Products so produced to compensate it for loss of protit.

ARTICLE IX
FEES AND FINANCIAL OBLIGATIONS

A. In consideration of the right to distribute Products granted herein, and
subject to TFI satisfying the requirements of Article II C. herein concerning
acceptability of the Products for import and resale in the Territory and further
subject to the Distributor being able to register the TFI Marks for exclusive
use in the territory, Distributor shall purchase from TFI, and TFI supply to
Distributor, a minimum number of french fry vending machines upon the terms and
conditions set forth on Schedule "B" attached hereto and forming a part ofthis
Agreement.

B. Unless otherwise specified herein, all amounts stated herein or payments to
be made to TFI under this Agreement shall be in U.S. Dollars.

ARTICLE X
DISTRIBUTOR

A. Distributor acknowledges that the TFI Products are unique and distinctive
and have been developed by TFI at great effort, time and expense; that
Distributor has regular and continuing access to valuable and confidential
information, training and trade secrets regarding the Products; and that
Distributor recognizes his obligation to fully develop its Territory for sales
of the Products and accordingly agrees as follows:

1. During the term of this Agreement and any renewal thereof,
Distributor shall not, in any capacity whatsoever, either directly or
indirectly, individually or as a member of any business organization,
except with the prior written consent of TFI, engage in the sale of any
french fries vending machine or supplies therefore, other than TFI's.

<PAGE>

2. During the terms of this Agreement, or upon expiration or
termination of this Agreement, divulge any aspect of the Products
whether expressly stated to be confidential or otherwise to any person.

ARTICLE XI
TRANSFER OF WHOLE INTEREST

A. This Agreement shall enure to the benefit of the successors of TFI and may
be so assigned at any time.

B. For purposes of clarity, the provisions of this Article XI apply solely to
the transfer by Distributor or its personal representatives of the whole of the
Distributor's interest in this Agreement and shall have no application to the
granting of additional distributorships by Distributor for subdivided areas
within its Territory, as previously described in Article II paragraph 2.

C. TFI shall not unreasonably withhold its consent to any transfer or
assignment which is subject to the restrictions ofthis Article, provided,
however, that TFI shall not be required to give its consent unless, in addition
to the requirements of Article IV hereof, the following conditions are met prior
to the effective date ofthe assignment:

1. For all proposed transfers or assignments:

(a) Distributor shall not be in default under any
provision of the terms of this Agreement or any other
agreement ancillary to this Agreement, and shall have
continuously distributed products for a period of not less
than three (3) months;

(b) Distributor has executed a general release in a form
prescribed by TFI of any and all claims against TFI;

(c) The proposed assignee executes such other documents as
TFI may require in order to assume all of the obligations of
this Agreement, to the same extent, and with the same effect,
as previously assumed by Distributor;

(d) A transfer fee has bee paid to TFI in an amount equal
to five percent (5%) of the aggregate cash or cash valued
consideration paid by the assignee to assignor for the
distribution rights, to defray its reasonable costs and
expenses in connection with the transfer, including without
limitation, the cost of legals and accounting fees, credit and
investigation charges, evaluations, retraining and additional
supervision. It is agreed that the original cost ofthe
Territory will be deducted.

D. Upon the death or permanent incapacity of a Distributor the following shall
apply:

1. TFI shall have the right, within thirty (30) days of the date upon
which TFI is notified of such death or incapacity (if consistent with
applicable local laws) to purchase

<PAGE>

the interest or any part thereof for cash at the appraised value, such
purchase to be completed within sixty (60) days.

2. If TFI declines to elect to purchase the interest, within thirty
(30) days of the date upon which TFI is notified of such death or
incapacity, the interest may be transferred within a further sixty (60)
days by sale to a third party meeting TFI's then current criteria for
new distributors, provided that the requirements of paragraph D of this
Article are met. If a transfer to an approved transferee cannot be
effected within a further one hundred and twenty (120) days, this
Agreement shall terminate automatically.

3. No sale or transfer of the interest shall be approved by TFI
unless the incapacitated Distributor or personal representative has
agreed to reimburse TFI for the reasonable costs and expenses it has
incurred or may incur in providing (at TFI's option) one or more
interim Distributors to manage the business until a transfer of the
interest is effected, if TFI determines, in its discretion, that such
supervision is necessary or desirable.

E. TFI's consent to a transfer of any interest subject to the restrictions of
this Article shall not constitute a waiver by TFI of the right to distribute
Products granted herein, nor shall it be deemed a waiver of TFI's right to
demand exact compliance with any of the terms of this Agreement by the assignee.
The document effecting the transfer or assignment of any interest subject to the
restrictions of this Article shall specifically provide that Distributor's
obligations hereunder shall continue in full force and effect notwithstanding
any such disposition.

F. If Distributor has received and desires to accept any bona fide offer to
purchase his or its distribution rights hereunder, Distributor or such person
shall notifl TFI in writing ofthe purchase price and terms of such offer, and
TFI shall have the right and option (subject to any limitations of applicable
local laws exercisable within thirty (30) days after receipt of such written
notification), to send written notice to Distributor or such persons that TFI or
its assignee intend to purchase Distributor' s interest on the same terms and
conditions offered by the third party.

Any material change in the terms of any offer prior to closing shall
result in a new notification as in the case of the initial offer. TFI's failure
to exercise the option afforded by this paragraph F of this Article shall not
constitute a waiver of any other provision of this Agreement, including any of
the requirements of this Article with respect to the proposed transfer.

G. Provided always that TFT's consent shall be required, not to be
unreasonably withheld, and no fee shall be chargeable in respect of a transfer
to:

(a) a subsidiary or affiliate;

(b) a corporate successor resulting from merger, amalgamation,
consolidation or other corporate re-organization.

<PAGE>

ARTICLE XII
DEFAULT

A. In addition to those events hereinbefore stated to be events of default,
it is agreed that the rights granted to Distributor to this Agreement may be
terminated forthwith with notice upon the happening of any one or more of the
following events, except that TFI must be in compliance with the terms and
conditions ofthis Distribution Agreement:

1. If the Distributor fails to comply with any of the terms and
conditions of this Distributorship Agreement and such failure to comply
continues for a period of thirty (30) days after written notice thereof
has been given to the Distributor.

2. If the Distributor fails to comply with any of the terms and
condition of any other agreements entered into pursuant to or
collateral to this agreement and such failure to comply continues for a
period of thirty (30) days after written notice thereof has been given
to the Distributor.

3. If the Distributor shall be adjudicated a bankrupt or become
insolvent, or if a receiver or other person with like powers shall be
appointed (whether temporary or permanent) to take charge of all or
substantially all of the Distributor's assets, or if the Distributor
shall make a general assignment for the benefit of creditors or a
proposal under the Bankruptcy Act (or any similar or successor Act), or
commence any proceedings to wind-up, liquidate, or dissolve the
Distributor's business.

4. If the Distributor knowingly falsifies any statement or report
furnished to TFI or otherwise deliberately provides false information
to TFI; or if the Distributor is convinced of a felony or other crime
or impairs the goodwill associated with the TFI Marks.

5. If the Distributor does not order and complete the purchase of
the french fry Vending machines it is required to purchase pursuant to
the terms of this Agreement in the manner and at the time therein
specified or pay the cash payment required in lieu thereof as set out
in Schedule B hereto.

6. Distributor will pay all attorney's fees as between an attorney
and his own client, accounting fees and court fees incurred by TFI in
the event of a violation by Distributor of this Agreement.

7. In case of a breach of the terms of this Agreement by
Distributor, TFI shall, in addition to any other remedy it may have,
and notwithstanding any other provision hereof, be entitled to an
injunction restraining Distributor from committing or continuing to
commit any breach of this Agreement, without showing or providing any
actual damaged sustained by TFI, which damage is hereby conclusively
acknowledged.

8. If the Distributor fails to continuously and actively operate
its distributorship throughout the Territory.

<PAGE>

ARTICLE XIII
RIGHTS AND OBLIGATIONS OF PARTIES
ON TERMINATION OR EXPIRATION

B. TFI may retain all fees paid pursuant hereto.

C. Any and all obligations of TFI to Distributor under this Agreement shall
immediately cease and terminate.

D. In no event shall termination or expiration of this Agreement for any
reason whatsoever affect Distributor's obligation to take or abstain from taking
action in accordance with this Agreement .

E. It is understood by Distributor that rights in and to the TFI Marks and
any part thereof or addition thereto and the use thereof shall be and remain the
property of TFI and Distributor shall further assign, transfer and convey to TFI
all additional rights which may be acquired, if any, by reason of the use of
said name of Distributor. As Distributor has registered the TFI Marks at
Distributor's own expense in the Territory, if requested to assign the rights to
the mark to TFI during the term and under the conditions set forth in this
Agreement, TFI will compensate Distributor for all its costs of registration,
protection, defense and maintenance of the TFI Marks in the Territory.

F. TFI shall have the option to purchase, at Distributor's cost less
twenty-five (25) percent. all or any portion of inventory of any kind bearing
the TFI Marks, including, but not limited to, french fry vending machines,
equipment, vehicles, and any other items Distributor may have in stock at the
time of such termination or expiration.

G. Distributor shall cause immediate discontinuance of all advertising or
other public display or publication of the words "Tasty Fries" and, in the event
that such action is not taken by Distributor and after a period of six (6)
months has elapsed, Distributor hereby constitutes irrevocably TFI as
Distributor's attorney to carry out such acts at Distributor' s sole expense.

H. Distributor will immediately pay any and all amounts owing to TFI and its
subsidiaries and affiliates.

I. Distributor shall not, in any capacity whatsoever, either directly or
indirectly. individually or as a member of any business organization, engage in
the preparation or sale of any TFI or other approved TFI Product, or have any
employment or interest in a firm engaged in the preparation or sale of such
products within the Territory or within thirty (30) miles of any other
Distributor's exclusive or nonexclusive territory for a period of three (3)
years following such termination. Distributor acknowledges and agrees that this
restriction upon subsequent activities is necessary in view of the Confidential
Information and expertise Distributor will

<PAGE>

acquire pursuant to the terms of the Agreement and will cause TFI irreparable
and substantial damage in the event of breach of these provisions.

ARTICLE XIV
INSURANCE

A. Distributor agrees to place and keep in effect during the life of this
Agreement with an insurance company approved by TFI, public liability in amounts
no less than One Million Dollars ($1.000.000.00) U. S., in case of damage or
injury to one person, no less than One Million Dollars ($1.000,000.00) U.S., in
case if damaged or injury to more than one person, property damage insurance of
One Million Dollars ($1,000.000.00) U.S. in case of damage or injury to one
person (proof of insurance coverage shall be furnished to TFI prior to the
delivery of the first machine).

B. It is specifically agreed that insurance coverage required to be kept in
effect by the terms of this paragraph shall be subject to review by TFI in order
to ensure adequate insurance protection throughout the term of this Agreement.
TFI may, from time to time, and in its sole discretion, require Distributor upon
thirty (30) days notice to obtain reasonable amounts of additional insurance
beyond the aforementioned requirements of this paragraph.

ARTICLE XV
INDEMNIFICATION OF COMPANY

A. Distributor agrees to protect, indemnify, and save TFI, its affiliates,
subsidiaries, partners, stockholders, directors, officers and employees of its
partners harmless from any and all loss, damages, liability, expenses,
attorney's fees and costs incurred by any of them because of any action, matter,
thing, or conduct relating to Distributor and Distributor's business or its
agents, servants, employees, customers and guests in, on, or connected with the
preparation, cooking and sale ofProducts.

B. TFI agrees to protect, indemnify and save Distributor its stockholders,
directors, officers and employees harmless from any and all loss, damage,
liability expenses, attorney's fees and costs incurred by any of them as a
result of any defect in the design, construction or operation of any of the
french fry vending machines supplied by TFI or as a result of any defect in and
of the other Products supplied by TFI.

ARTICLE XVI
APPEARANCE OF MACHINES

Distributor shall see to it that all machines in the Distributor's
Territory are in good repair, and shall refurbish, tidy, and maintain each TFI
french fry vending machine as necessary or as required by TFI in order to ensure
that at all times a first class, safe and reputable Product is provided to the
public.

<PAGE>

ARTICLE XVII
RENEWAL OF AGREEMENT

Unless terminated as herein otherwise provided, Distributor shall have
the option, pursuant to such procedures as may be required by TFI at the
expiration of the initial term of this Agreement, to renew the license granted
hereunder at each ten (10) year expiration date as long as all contractual
conditions are met hereof by executing TFI's then-current form of
Distributorship Agreement provided that:

1. Distributor gives TFI written notice of its election to renew no
less than three (3) months nor more than nine (9) months prior to the
expiration of the then current term and, Distributor executes a general
release under seal, in a form prescribed by TFI, of any and all claims
against TFI, its affiliates, stockholders, directors, officers and
employees; and

2. Distributor at the time of notice of election to renew and at the
end of the then current term is not in default of any of the terms or
conditions of this Agreement or any other Agreement between Distributor
and TFI or its affiliates, and has substantially complied with the
terms and conditions of all such agreements during the term of this
Agreement; and

3. All of the Distributor's accrued monetary obligations to TFI and its
subsidiaries and affiliates have been satisfied prior to renewal, and
timely met throughout the terms of this Agreement.

Upon renewal of this Agreement, no additional distributorship
fee will be due. However, it is specifically agreed that Distributor
will, upon renewal, be charged by TFI a sum which shall be equal to
TFI's estimated costs incurred in connection with such renewal plus an
administrative fee equal to fifteen (15%) percent of such costs.
Furthermore, Distributor acknowledges the terms of the TFI's then
current form of Distributorship Agreement .

ARTICLE XVIII
RELATIONSHIP OF PARTIES

A. TFI and Distributor are not and shall not be considered as joint
venturers, partners, or agents of each other, or anything other than
Manufacturer and Distributor and neither shall have the power to bind or
obligate the other than as set forth in this Agreement.

B. The parties further agree that their relationship created by this
Agreement is not a fiduciary relationship .

<PAGE>

ARTICLE XIX
DISTRIBUTOR' SRESPONSIBILITY

A. Distributor acknowledges that his success in the distribution of products
contemplated to be undertaken by Distributor pursuant to this Agreement is
speculative and depends primarily upon the ability of Distributor as an
independent business organization. Distributor acknowledges that neither TFI nor
any other person has guaranteed or warranted that Distributor will succeed in
the operation of this business venture.

B. Distributor further acknowledges that there have been no representations,
promises, or guarantees or warranties of any kind made by TFI or its agents or
representatives to induce Distributor to execute this Agreement, except as
specifically set forth in this Agreement and further that Distributor has
received all information which he has requested concerning the business
operation of TFI which, in the opinion of Distributor, is necessary to decide
whether to enter into this Agreement.

ARTICLE XX
NOTICES

A. All notices to TFI required by the terms of this Agreement shall be sent
to TFI at its office at:

TASTY FRIES, INC.
650 Sentry Parkway, Suite One
Blue Bell, PA, U.S.A. 19422

(or such other address as TFI shall designate in writing) or by telefax,
telecopy, or other electronic means of communication to such address.

B. All notices to Distributor required by the terms of this Agreement shall
be sent to Distributor at its office at:

CANADIAN TASTY FRIES, INC.
#8 West Dry Creek Circle, Suite #110
Littleton, CO, U.S.A. 80120

(or such other address as Distributor shall designate in writing) or by telefax,
telecopy, or other electronic means of communication to such address.

C. All notices to either party required by the terms of the Agreement
shall be deemed to have been received:

(i) in the case of hand delivery or telefax, telecopy or other
electronic communication, upon actual receipt thereof(and not the date
of receipt of confirming mail); and

<PAGE>

(ii) in the case of notice sent by registered mail, ten (10)
business days after the date of mailing.

ARTICLE XXI
INTERPRETATION AND EXECUTION
OF AGREEMENT

A. This Agreement shall be construed and interpreted in accordance with the
laws of the State of Florida.

B. This instrument contains the entire Agreement of the parties and no
representation, inducements, promises, or agreement, oral or otherwise, not
embodied herein, were made by TFI and none shall be of any force or effect.,

C. Nothing in this Agreement shall bar or restrict TFI's right to obtain
injunctive relief under applicable law.

ARTICLE XXII
SEVERABILITY AND CONSTRUCTION

A. Each section, part, term and provision of this Agreement, and any portion
thereof shall be considered severable, and if for any reason, any portion of
this Agreement is determined to be invalid to or in conflict with any applicable
present or future law, rule, or regulation in a final unappealable ruling issued
by any court, agency, or tribunal with valid jurisdiction in a proceeding to
which TFI is a party, that ruling shall not impair the operation of, or have any
other affect upon, such other portions of this Agreement as may remain otherwise
intelligible (all of which shall remain binding on the parties and continue to
be given full force and agreement as of the date upon which the ruling becomes
final).

ARTICLE XXIII
WRITTEN APPROVALS AND WAIVERS

<PAGE>

strict compliance with this Agreement, any forbearance, delay, failure or
omission by TFI to exercise any right, power or option, whether of the same,
similar or different nature, against Distributor or other Distributorships, or
the acceptance by TFI of any payments due from Distributor after any breach of
this Agreement.

AS WITNESS the hands and seals of the duly authorized representatives
of the parties hereto as of the day and year first above written.

TASTY FRIES, INC.

/S/ /S/
---------------------------- ----------------------
Authorized Signatory Witness

CANADIAN TASTY FRIES, INC.

/S/ /S/
---------------------------- ----------------------
Authorized Signatory Witness

<PAGE>

SCHEDULE"A"

TO THE DISTRIBUTORSHIP AGREEMENT

BETWEEN: TASTY FRIES, INC.
AND: CANADIAN TASTY FRIES, INC.

DESCRIPTION OF TERRITORY
ARTICLE 1.

For the purposes of this Distributorship Agreement (the "Agreement") the
territorial boundaries to which this Agreement applied are the internationally
recognized boundaries of the countries listed herein (referred to in this
Agreement as the "Territory").

Denmark

Finland

France

Greece

Hungary

Italy

Nonvay

Portugal

Spain

Sweden

<PAGE>

SCHEDULE "B"

TO THE DISTRIBUTORSHIP AGREEMENT

BETWEEN: TASTY FRIES, INC.
AND: CANADIAN TASTY FRIES, TNC.

FEE PAYMENT SCHEDULE
ARTICLE IX

The purchase price for the grant of distributorship made in this Agreement is
$4,000,00000 U.S. to be paid as follows:

A. On the acceptance and signing of this Agreement by TFI $ 1 75,000.00;

B. (a) The balance of the purchase price shall be tied to the order and
delivery of french fry vending machines (the "Machines") which Machines
the Distributor shall be obliged to order in the quantity set out in
Column TT below for each year specified in Column I below following the
Start Date and shall make the associated payment against the purchase
price set out in Column III below which payment is based on and paid at
a rate of $500.00 per Machine delivered:

COLUMN I COLUMN II COLUMN III
-------- --------- ----------
YEAR MINIMUM NO OF MACHINES MINIMUM PAYMENT
---- ---------------------- ---------------

1 400 $ 200,000
2-9 800 $ 400,000
10 850 $ 425,000

(b) The Start Date shall be the first day of the month immediately
following the first six month (180 day) period in which TFI delivers a
minimum of ten (10) Machines suitable for distribution in Europe to
Distributor.

(c) In any year that Distributor does not order the minimum number of
Machines set out in Column II above, Distributor shall make a cash
payment to TFI on the last day of that year equal to the shortfall from
the required payment set out in Column III above for that year.

(d) If in any year Distributor orders the required minimum number of
Machines but TFJ is unable or fails to deliver the minimum number of
Machines to Distributor, then Distributor for that year shall only be
obliged to make a payment equal to $500.00 times the number of Machines
delivered to it. The balance of the payment for that year shall be made
on the basis of $500.00 per Machine when TFI finally delivers the
remainder of the minimum of Machines to Distributor.

<PAGE>

AMENDMENT TO DISTRIBUTION AGREEMENT
BETWEEN TASTY FRIES, INC. AND
CANADIAN TASTY FRIES, INC.
DATED APRIL 5, 1995

WHEREAS, Tasty Fries, Inc. and Canadian Tasty Fries, Inc. desire to
amend the Distributorship Agreement dated April 5, 1995 (the "Distributorship
Agreement) to include additional European countries in the defined Territory;

NOW, THEREFORE, the parties hereto for good and valuable consideration,
receipt whereof is hereby acknowledged, do hereby agree to amend the
Distributorship Agreement as follows:

1. Schedule "A to the Distributorship Agreement, attached
thereto and made a part thereof, is amended as follows:

SCHEDULE "A"
TO THE DISTRIBUTORSHIP AGREEMENT
BETWEEN: TASTY FRIES, INC.
AND: CANADIAN TASTY FRIES, INC.

DESCRIPTION OF TERRITORY
ARTICLE 1.

For the purposes of this Distributorship Agreement (the "Agreement")
the territorial boundaries to which this Agreement applies are the
internationally recognized boundaries of the countries listed herein (referred
to in this Agreement as the "Territory").

Bulgaria
Czechoslovakia
Denmark
Finland
France
Greece
Hungary
Italy
Norway
Poland
Portugal
Romania
Spain
Sweden
Turkey

2. Schedule "B" to the Distributorship Agreement, attached
thereto and made a part thereof, is amended to include a new paragraph B.(e)
to read as follows:

<PAGE>

(e) TFI agrees to use its best efforts to maintain a 12%
mark-up on all machines it delivers for distribution
in Europe to Distributor.

IN WITNESS WHEREOF, the undersigned have executed this Amendment on the
date written above.

TASTY FRIES, INC.

By:/S/
------------------------------
Edward C. Kelly, President

CANADIAN TASTY FRIES, INC.

By:/S/
------------------------------
Ian Lambert, President

<PAGE>

DISTRIBUTORSHIP AGREEMENT (U.S.A.)

This Agreement made this ____ day of ___________, 1995.

BETWEEN :

TASTY FRIES, INC.
650 Sentry Parkway, Suite One
Blue Bell, PA, U.S.A. 19422

(hereinafter referred to as "TFI")

AND :

CANADIAN TASTY FRIES, INC.
#8 West Dry Creek Circle, Suite #110
Littleton, CO, U.S.A. 80120

(hereinafter referred to as "Distributor")

WITNESSETH:

WHEREAS, TFI owns rights to manufacture, distribute and sell a fully
automated french fry vending machine;

WHEREAS, TFI is the owner of a distinctive type of marketing, preparation
and vending machine sale of TFI french fry food products; and;

WHEREAS, TFI has developed and adopted for its own use and for the use of
its Distributors a unique system of TFI product preparation and vending machine
sale, consisting in part of the unique french fry vending machines, distinctive
advertising, signs, food presentation and formula secret recipes (collectively
the "Products"); and

WHEREAS, in addition to valuable goodwill, TFI owns the valuable trade name
and design of TFI in addition to various patents, trademarks, service marks,
copyrights, trade names, slogans, designs, insignia, emblems, symbols, package
designs, logos and other proprietary characteristics (collectively, the "TFI
Marks") used in relation to and in connection with the Products; and

WHEREAS, Distributor wishes, upon the terms and conditions hereinafter set
forth, to enter into the business of distributing TFI Products on an exclusive
basis in the Territory herein defined and more particularly described in
Schedule "A" attached hereto and forming part of this Agreement (the
"Territory") and to bene~t from the expertise of TFI in its field; and

<PAGE>

WHEREAS, TFI is willing to permit Distributor to use TFI Marks as aforesaid
together with the retail sale of TFI French Fry Vending Machine and it products
upon the terms and conditions hereinafter set forth; and

WHEREAS, TFI is willing to permit Distributor to register the TFI Marks to
secure their exclusive use in that Territory.

NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants
herein contained and promises herein expressed for other good and valuable
consideration, receipt whereof is hereby acknowledged, do hereby agree as
follows:

ARTICLE 1
DISTRIBUTORSHIP AGREEMENT

A. Subject to the provisions of this Agreement and the performance of its
covenants and obligations, TFI hereby grants Distributor an exclusive right and
license to distribute all present and future TFI Products and to use the TFI
Marks in the retail sale thereof within the territorial boundaries set forth as
described in Schedule "A" attached hereto (the "Territory") for a term of ten
(10) years.

The parties specifically acknowledge and agree that the restriction of
operation to the Territory identified herein is an essential and indispensable
term of this Agreement.

DISTRIBUTOR'S SPECIFIC TERRITORIAL RIGHTS

1. The Distributor shall have the exclusive right in its Territory to sell
the TFI French Fry Vending Machine and TFI attendant Products to all users in
the Territory.

2. The Distributor shall have the right to subdivide its Territory as
Distributor in its sole discretion sees fit and to grant additional
distributorships for these subdivided areas on similar terms as contained in
this Agreement and all compensation for said additional distributorships shall
be for the benefit of Distributor without any fee, royalty or deduction to be
paid to TFI.

3. In the event that TFI machines are sold by the parent company for use in
the Distributor's Territory, the Distributor shall earn its full Distributor's
profit. This provision is contingent upon his consent to supply and service the
machines.

4. The Distributor shall receive its full profit if machinery is sold to
clients in his Territory in areas outside of his Territory. Except that in the
event the machinery is sold into another Distributor's Territory, the
Distributor profit shall be seventy (70%) percent of the originating Distributor
and thirty (30%) percent of the Territorial Distributor.

5. The Distributor in his exclusive Territory will receive thirty (30%)
percent of the full distributors profit in such event that there are installed
in his Territory TFI machines resulting from international accounts having
locations in various areas throughout North America.

<PAGE>

An international account is defined for the purposes of clarity as an
international theater chain, an international retail chain or any entity that
has locations in more than four states and the Territory. The Distributor in
order to earn the national account Distributor's profit is obligated to supply
and service these locations.

ARTICLE II
OBLIGATIONS OF TFI

TFI agrees to assist Distributor in distributing Products by way of
retail sale in the following manner:

B. TFI agrees to provide to Distributor, as it is available from time to
time, exchange of information relating to the Products and additional types of
products as may be authorized by TFI from time to time for sale pursuant to this
Agreement, and which, when authorized, will also constitute "Products" for all
purposes herein, at such times and in such detail as TFI shall deem appropriate.

ARTICLE III
CONFIDENTIAL INFORMATION

A. The parties hereto covenant and agree that any Confidential Information
disclosed to the Distributor relating directly or indirectly to the vending
machines and their component parts of the ingredients, preparation or sale of
any of the Products will remain the property of TFI at all times and will, if
disclosed in any tangible format, be returned to TFI upon demand and, in any
event, upon termination of this Agreement.

B. It is expressly understood and agreed by Distributor that the Confidential
Information described above constitutes highly confidential trade secrets and
Distributor agrees that neither he nor any of his employees will reveal or
reproduce any of such Confidential Information except as is necessary to
describe the operations to employees and staff and additional distributors
within the Territory so they can safely use the vending machines and Products.
Such employees, staff and additional Distributors shall be required to execute
appropriate confidentiality agreements.

<PAGE>

ARTICLE IV
STANDARDS OF OPERATION
AND SUPERVISION BY TFI

B. In order to preserve the value and goodwill of TFI and related goodwill of
other TFI Distributors and to promote the purpose of this Agreement, the parties
hereto agree as follows:

1. Distributor will use and distribute the Products as herein
contemplated strictly in accordance with the terms of this Agreement.

2. Unless approved in writing by TFI, Distributor will not develop,
produce, sell, advertise for sale or give away any products under the
TFI Marks which might reasonably compete with the Products and all food
Products will be prepared in accordance with the specific formulas or
utilizing the ingredients purchased from or specified by TFI.

3. TFI may from time to time offer guidance to Distributor relative
to retail prices for Products offered for retail sale that in TFI's
judgement constitute good business practice.

Any translation from the English language or deviation from
TFI approved designs contained in such sign shall required the prior
written approval of TFI.

5. It is the Distributor's responsibility to ensure that all food
products sold by Distributor hereunder will be of the highest and
safest quality, and the service relating to any such sale hereunder
will comply with the instructions and standards provided by TFI in
preparing the food Products, or with any other further written
requirements of TFI as they are communicated to Distributor from time
to time.

6. It is the Distributor's responsibility to ensure that it will
maintain all french fry vending machines by which its business is
conducted in conformity with the high quality, style and cleanliness
required of similar french fry vending machines now operated in
connection with the TFI Marks, component parts, equipment and signs.
Distributor shall see that its customers comply with all applicable
ordinances, health and safety regulations, laws and statutes governing
the operation of such premises and the sale of products, including all
criminal and quasi-criminal laws and regulations.

<PAGE>

ARTICLE V
COMMENCEMENT OF BUSINESS

A. Distributor agrees to obtain, prior to commencement of its distribution
business, pursuant to this Agreement, all licenses, approvals, inspections,
permits or any other certification which may be required by any competent public
authority for the lawful operation of its business and to keep the same in good
standing during the term hereof.

ARTICLE VI
USE OF TFI NAME, MARKS AND ADVERTISING

A. During the term of this Agreement, and any renewals hereof, Distributor
shall advertise sale of the Products under the trade name "Tasty Fries" and will
diligently promote and make every reasonable effort to steadily increase sale of
the Products by proper use of all advertising media.

C. All printed materials, including, but not limited to, product carrying
bags, product wrapping, cups, napkins, posters or other printed material used in
connection with the distribution by retail sale of the Products shall bear TFI
Marks as suggested by TFI, and such use will indicate that TFI Marks are
registered Marks.

D. Distributor shall act prudently and in conformity with all laws,
regulations, ordinances, or other requirements which may affect the utilization
of the TFI Marks to ensure that the Marks are not jeopardized, diminished or
damaged in any manner and Distributor agrees to indemnify and save harmless TFI
for any damage or expense occasioned directly or indirectly by Distributor's
improper use of said Marks.

<PAGE>

ARTICLE VII
TFI MARKS

A. TFI hereby grants to Distributor for the term of this Agreement the
exclusive right to register the TFI Marks for use by the Distributor in the
Territory but only in connection with the distribution of TFI Products which
Distributor is permitted to sell hereunder, and the extent and manner of use of
the TFI Marks shall be subject to TFI approval. The cost of such registration to
be born by the Distributor.

B. TFI hereby agrees to provide all necessary consents and original art work
for the TFI Marks to assist the Distributor in the registration thereof in the
Territory.

C. Upon registration of the TFI Marks by Distributor, Distributor shall be
responsible for pursuing any counterfeiting or infringement of the TFI Marks
which may come to Distributor's attention.

ARTICLE VIII
UNIFORMITY OF PRODUCTS

D. Should at any time TFI be unable to supply the Products to Distributor as
contemplated in this Agreement and as required by Distributor to conduct its
business, Distributor shall be entitled with the consent of TFI such consent not
to be unreasonably withheld, to arrange for its own alternate supply of the
Products, in which case, TFI shall be entitled to a reasonably royalty on any
Products so produced to compensate it for loss of profit.

<PAGE>

ARTICLE IX
FEES AND FINANCIAL OBLIGATIONS

B. Unless otherwise specified herein, all amounts stated herein or payments
to be made to TFI under this Agreement shall be in U. S. Dollars.

ARTICLE X
DISTRIBUTOR

1. During the term of this Agreement and any renewal thereof, Distributor
shall not, in any capacity whatsoever, either directly or indirectly,
individually or as a member of any business organization, except with the prior
written consent of TFI, engage in the sale of any french fries vending machine
or supplies therefore, other than TFI's.

2. During the terms of this Agreement, or upon expiration or termination of
this Agreement, divulge any aspect of the Products whether expressly stated to
be confidential or otherwise to any person.

ARTICLE XI
DISTRIBUTORS MARKUP

A. TFI contracts for manufacturing of the machines based on competitive bids.
TFI agrees use its best efforts to maintain no greater than a 12 % markup on all
machines delivered for distribution in the Territory of the Distributor. Should
TFI be required to charge more than 12% markup in order to maintain satisfactory
operating margins, TFI agrees to notify Distributor no less than ninety (90)
days prior to the increase in markup.

ARTICLE XII
TRANSFER OF WHOLE INTEREST

A. This Agreement shall enure to the benefit of the successors of TFI and may
be so assigned at any time.

<PAGE>

B. For purposes of clarity, the provisions of this Article XII apply solely
to the transfer by Distributor or its personal representatives of the whole of
the Distributor's interest in this Agreement and shall have no application to
the granting of additional distributorships by Distributor for subdivided areas
within its Territory, as previously described in Article II paragraph 2.

C. TFI shall not unreasonably withhold its consent to any transfer or
assignment which is subject to the restrictions of this Article, provided,
however, that TFI shall not be required to give its consent unless, in addition
to the requirements of Article IV hereof, the following conditions are met prior
to the effective date of the assignment:

1. For all proposed transfers or assignments:

(a) Distributor shall not be in default under any provision of
the terms of this Agreement or any other agreement ancillary to this
Agreement, and shall have continuously distributed products for a
period of not less than three (3) months;

(b) Distributor has executed a general release in a form
prescribed by TFI of any and all claims against TFI;

(c) The proposed assignee executes such other documents as TFI
may require in order to assume all of the obligations of this
Agreement, to the same extent, and with the same effect, as previously
assumed by Distributor;

(d) A transfer fee has bee paid to TFI in an amount equal to
five percent (5%) of the aggregate cash or cash valued consideration
paid by the assignee to assignor for the distribution rights, to defray
its reasonable costs and expenses in connection with the transfer,
including without limitation, the cost of legal and accounting fees,
credit and investigation charges, evaluations, retraining and
additional supervision. It is agreed that the original cost of the
Territory will be deducted.

D. Upon the death or permanent incapacity of a Distributor the following
shall apply:

1. TFI shall have the right, within thirty (30) days of the date
upon which TFI is notified of such death or incapacity (if consistent
with applicable local laws) to purchase the interest or any part
thereof for cash at the appraised value, such purchase to be completed
within sixty (60) days.

2. If TFI declines to elect to purchase the interest, within thirty
(30) days of the date upon which TFI is notified of such death or
incapacity, the interest may be transferred within a further sixty (60)
days by sale to a third party meeting TFI's then current criteria for
new distributors, provided that the requirements of paragraph D of this
Article are met. If a transfer to an approved transferee cannot be
effected within a further one hundred and twenty (l20) days, this
Agreement shall terminate automatically.

<PAGE>

F. If Distributor has received and desires to accept any bona fide offer to
purchase his or its distribution rights hereunder, Distributor or such person
shall notify TFI in writing of the purchase price and terms of such offer, and
TFI shall have the right and option (subject to any limitations of applicable
local laws exercisable within thirty (30) days after receipt of such written
notification), to send written notice to Distributor or such persons that TFI or
its assignee intend to purchase Distributor' s interest on the same terms and
conditions offered by the third party.

G. Provided always that TFI's consent shall be required, not to be
unreasonably withheld, and no fee shall be chargeable in respect of a transfer
to:

(a) a subsidiary or affiliate;

(b) a corporate successor resulting from merger, amalgamation,
consolidation or other corporate re-organization.

ARTICLE XIII
DEFAULT

<PAGE>

1. If the Distributor fails to comply with any of the terms and
conditions of this Distributorship Agreement and such failure to comply
continues for a period of thirty (30) days after written notice thereof
has been given to the Distributor.

3. If the Distributor shall be adjudicated a bankrupt or become
insolvent, or if a receiver or other person with like powers shall be
appointed (whether temporary or permanent) to take charge of all or
substantially all of the Distributor's assets, or if the Distributor
shall make a general assignment for the benefit of creditors or a
proposal under the Bankruptcy Act (or any similar or successor Act), or
commence any proceedings to wind-up, liquidate, or dissolve the
Distributor's business.

5. If the Distributor does not order and complete the purchase of
the french fry vending machines it is required to purchase pursuant to
the terms of this Agreement in the manner and at the time therein
specified or pay the cash payment required in lieu thereof as set out
in Schedule B hereto.

6. Distributor will pay all attorney's fees as between an attorney
and his own client, accounting fees and court fees incurred by TFI in
the event of a violation by Distributor of this Agreement.

7. In case of a breach of the terms of this Agreement by Distributor,
TFI shall, in addition to any other remedy it may have, and
notwithstanding any other provision hereof, be entitled to an
injunction restraining Distributor from committing or continuing to
commit any breach of this Agreement, without showing or providing any
actual damaged sustained by TFI, which damage is hereby conclusively
acknowledged.

8. If the Distributor fails to continuously and actively operate its
distributorship throughout the Territory.

<PAGE>

ARTICLE XIV
RIGHTS AND OBLIGATIONS OF PARTIES
ON TERMINATION OR EXPIRATION

B. TFI may retain all fees paid pursuant hereto.

C. Any and all obligations of TFI to Distributor under this Agreement shall
immediately cease and terminate.

D. In no event shall termination or expiration of this Agreement for any
reason whatsoever affect Distributor's obligation to take or abstain from taking
action in accordance with this Agreement .

F. TFI shall have the option to purchase, at Distributor's cost less
twenty-five (25) percent, all or any portion of inventory of any kind bearing
the TFI Marks, including, but not limited to, french fry vending machines,
equipment, vehicles, and any other items Distributor may have in stock at the
time of such termination or expiration.

G. Distributor shall cause immediate discontinuance of all advertising or
other public display or publication of the words "Tasty Fries" and, in the event
that such action is not taken by Distributor and after a period of six (6)
months has elapsed, Distributor hereby constitutes irrevocably TFI as
Distributor's attorney to carry out such acts at Distributor's sole expense.

H. Distributor will immediately pay any and all amounts owing to TFI and its
subsidiaries and affiliates.

<PAGE>

acquire pursuant to the terms of the Agreement and will cause TFI irreparable
and substantial damage in the event of breach of these provisions.

ARTICLE XV
INSURANCE

A. Distributor agrees to place and keep in effect during the life of this
Agreement with an insurance company approved by TFI, public liability in amounts
no less than One Million Dollars ($1.000.000.00) U. S., in case of damage or
injury to one person, no less than One Million Dollars ($1.000.000.00) U.S., in
case if damaged or injury to more than one person, property damage insurance of
One Million Dollars ($1.000,000.00) U.S. in case of damage or injury to one
person (proof of insurance coverage shall be furnished to TFI prior to the
delivery of the first machine).

ARTICLE XVI
INDEMNIFICATION OF COMPANY

ARTICLE XVII
APPEARANCE OF MACHINES

Distributor shall see to it that all machines in the Distributor's
Territory are in good repair and shall refurbish, tidy, and maintain each TFI
french fry vending machine as necessary or as required by TFI in order to ensure
that at all times a first class, safe and reputable Product is provided to the
public.

<PAGE>

ARTICLE XVIII
RENEWAL OF AGREEMENT

1. Distributor gives TFI written notice of its election to renew no
less than three (3) months nor more than nine (9) months prior to the
expiration of the then current term and Distributor executes a general
release under seal, in a form prescribed by TFI, of any and all claims
against TFI, its affiliates, stockholders, directors, officers and
employees; and

2. Distributor at the time of notice of election to renew and at
the end of the then current term is not in default of any of the terms
or conditions of this Agreement or any other Agreement between
Distributor and TFI or its affiliates, and has substantially complied
with the terms and conditions of all such agreements during the term of
this Agreement; and

3. All of the Distributor's accrued monetary obligations to TFI and
its subsidiaries and affiliates have been satisfied prior to renewal,
and timely met throughout the terms of this Agreement.

Upon renewal of this Agreement, no additional distributorship
fee will be due. However, it is specifically agreed that Distributor
will, upon renewal, be charged by TFI sum which shall be equal to TFI's
estimated costs incurred in connection with such renewal plus an
administrative fee equal to fifteen (15%) percent of such costs.
Furthermore, Distributor acknowledges the terms of the TFI's then
current form of Distributorship Agreement.

XVIX
RELATIONSHIP OF PARTIES

A. TFI and Distributor are not and shall not be considered as joint venturers,
partners, or agents of each other, or anything other than Manufacturer and
Distributor and neither shall have the power to bind or obligate the other than
as set forth in this Agreement.

B. The parties further agree that their relationship created by this
Agreement is not a fiduciary relationship.

<PAGE>

ARTICLE XX
DISTRIBUTOR'S RESPONSIBILITY

A. Distributor acknowledges that his success in the distribution of products
contemplated to be undertaken by Distributor pursuant to this Agreement is
speculative and depends primarily upon the ability of Distributor as an
independent business organization. Distributor acknowledges that neither TFI nor
any other person has guaranteed or warranted that Distributor will succeed in
the operation of this business venture.

ARTICLE XXI
NOTICES

A. All notices to TFI required by the terms of this Agreement shall be sent
to TFI at its office at:

TASTY FRIES, INC.
650 Sentry Parkway, Suite One
Blue Bell, PA, U.S.A. 19422

(or such other address as TFI shall designate in writing) or by telefax,
telecopy, or other electronic means of communication to such address.

B. All notices to Distributor required by the terms of this Agreement shall
be sent to Distributor at its office at:

CANADIAN TASTY FRIES, lNC.
#8 West Dry Creek Circle, Suite #110
Littleton, CO, U.S.A. 80120

(or such other address as Distributor shall designate in writing) or by telefax,
telecopy, or other electronic means of communication to such address.

C. All notices to either party required by the terms of the Agreement shall
be deemed to have been received:

(i) in the case of hand delivery or telefax, telecopy or other
electronic communication, upon actual receipt thereof (and not the date
of receipt of confirming mail); and

<PAGE>

(ii) in the case of notice sent by registered mail, ten (10) business
days after the date of mailing.

ARTICLE XXII
INTERPRETATION AND EXECUTION
OF AGREEMENT

A. This Agreement shall be construed and interpreted in accordance with the
laws of the State of Florida.

C. Nothing in this Agreement shall bar or restrict TFI's right to obtain
injunctive relief under applicable law.

ARTICLE XXIII
SEVERABILITY AND CONSTRUCTION

ARTICLE XXIV
WRITTEN APPROVALS AND WAIVERS

A. TFI shall not be deemed to have waived or impaired any right, power or
option
reserved by this Agreement (including, without limitation, its rights to demand
Distributor's exact compliance with every term, condition, and covenant herein,
or to declare any breach thereof a default and to terminate this license prior
to the expiration of its term), by virtue of any custom or practice of the
parties at variance with the terms hereof, any failure by TFI to demand strict
compliance with this Agreement, any forbearance, delay, failure or omission by
TFI to exercise any right, power or option, whether of the same, similar or
different nature, against Distributor or other Distributorships, or the
acceptance by TFI of any payments due from Distributor after any breach of this
Agreement.

<PAGE>

AS WITNESS the hands and seals of the duly authorized representatives
of the parties hereto as of the day and year first above written.

TASTY FRIES, INC. CANADIAN TASTY FRIES, INC.

----------------------------- --------------------------
Authorized Signatory Witness

<PAGE>

SCHEDULE"A"

TO THE DISTRIBUTORSHIP AGREEMENT

BETWEEN: TASTY FRIES, INC.
AND: CANADIAN TASTY FRIES, INC.

DESCRIPTION OF TERRITORY
ARTICLE 1.

For the purposes of this Distributorship Agreement (the "Agreement") the
territorial boundaries to which this Agreement applies are the internationally
recognized boundaries of the states of the United States of America listed
herein (referred to in this Agreement as the "Territory").

Alabama

Alaska

Georgia

Illinois

Indiana

Kentucky

Mississippi

North Carolina

Ohio

South Carolina

Tennessee

West Virginia

<PAGE>

SCHEDULE "B"

TO THE DISTRIBUTORSHIP AGREEMENT

BETWEEN: TASTY FRIES, INC.
AND: CANADIAN TASTY FRIES, INC.

FEE PAYMENT SCHEDULE
ARTICLE IX

The purchase price for the grant of distributorship made in this Agreement is
$1,000,000.00 U.S. to be paid as follows:

A. On the acceptance and signing of this Agreement by TFI: $ Nil;

B. (a) The balance of the purchase price shall be tied to the order and delivery
of french fry vending machines (the "Machines") which Machines the Distributor
shall be obliged to order in the quantity set out in Column II below for each
year specified in Column I below following the Start Date and shall make the
associated payment against the purchase price set out in Column III below which
payment is based on and paid at a rate of $500.00 per annual minimum number of
machines delivered:

COLUMN I COLUMN II COLUMN III
-------- --------- ----------
YEAR MINIMUM NO OF MACHINES MINIMUM PAYMENT
---- ---------------------- ---------------

1 100 $ 50,000
2-8 200 $ 100,000
9-10 250 $ 125,000

(c) In any year that Distributor does not order the minimum number
of Machines set out in Column II above, Distributor shall make a cash
payment to TFI on the last day of that year equal to the shortfall from
the required payment set out in Column III above for that year.

(d) If in any year Distributor orders the required minimum number of
Machines but TFI is unable or fails to deliver the minimum number of
Machines to Distributor, then Distributor for that year shall only be
obliged to make a payment equal to $500.00 times the number of Machines
delivered to it. The balance of the payment for that year shall be made
on the basis of $500.00 per Machine when TFI finally delivers the
remainder of the minimum of Machines to Distributor.

EXHIBIT 23.0

SCHIFFMAN HUGHES BROWN
790 PENNLYN PIKE, SUITE 302
BLUE BELL, PENNSYLVANIA 19422
(215)646-2000; (215)646-1937 (FAX)

ACCOUNTANTS' CONSENT

To the Shareholders and Board of Directors of
Tasty Fries, Inc.

We consent to the use of our Independent Auditor's Report dated June 10, 1996
and accompanying financial statements of Tasty Fries, Inc. for the year ended
January 31, 1996 and 1995. This Report will be included in the Form SB-2 which
is to be filed with the Securities and Exchange Commission for Tasty Fries, Inc.

SCHIFFMAN HUGHES BROWN
Certified Public Accountants
Blue Bell, Pennsylvania
April 28, 1997