MIKES ORIGINAL INC, SB-2/A, 1999-01-22

MIKES ORIGINAL INC
SB-2/A, 1999-01-22
ICE CREAM & FROZEN DESSERTS

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As filed with the Securities and Exchange Commission on January 22, 1999

Registration No. 333-67227

- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------

Amendment No. 1 to
Form SB-2/A

Registration Statement Under The Securities Act of 1933

MIKE'S ORIGINAL, INC.
---------------------
(Exact name of small business issuer as specified in its charter)

Delaware 2024 11-3214529
---------- ------ ------------
(State or Jurisdiction (Primary Standard Industrial (IRS Employer
of Incorporation or Classification Code Number) Identification Number)
Organization)
Arthur G. Rosenberg, President
Mike's Original, Inc.
366 N. Broadway 366 N. Broadway
Jericho, NY 11753 Jericho, NY 11753
(516) 942-8068 (516) 942-8068
- -------------------------------- -----------------------------------
(Address and telephone number of (Name, address and telephone number
principal executive offices and of agent for service)
principal place of business)

Copies to:

David H. Lieberman, Esq. Michael Beckman, Esq.
Blau, Kramer, Wactlar & Lieberman, P.C. Beckman, Millman & Sanders, P.C.
100 Jericho Quadrangle, Suite 225 116 John Street
Jericho, New York 11753 New York, New York 10038
(516) 822-4820 (212) 227-6777
(516) 822-4824 Fax (212) 227-1486 Fax

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the 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 Securities Act of
1933, 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, please check the following box and list
the Securities Act registration statement for the same offering.
[ ]___________________

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities 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 [X].
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================
Proposed Proposed Maximum
Title of Each Class of Amount to be Maximum Offering Aggregate Offering Amount of
Securities to be Registered Registered(1) Price Per Security Price (1) Registration Fee
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock, $.001 par value 5,060,000 shs. $.625 $3,162,500 $882.00
- ---------------------------------------------------------------------------------------------------------
<FN>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 under the Securities Act of 1933, as amended.
</FN>
</TABLE>
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 thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities in any state where the offer or sale is not permitted.
<PAGE>

SUBJECT TO COMPLETION, DATED JANUARY 22, 1999

Preliminary Prospectus

5,060,000 Shares

Mike's Original, Inc.

Common Stock

This is an offering of shares of common stock of Mike's Original, Inc.
Mike's is offering to sell 3,500,000 shares of its common stock and certain of
Mike's stockholders are offering to sell 1,560,000 shares of common stock.
Mike's will not receive any of the proceeds from the selling stockholders' sale
of shares.

Mike's common stock is quoted on the OTC Bulletin Board. On January 19,
1999, the last reported sale price of the common stock was $.875 per share. See
"Price Range of Common Stock."

Investing in the common stock involves certain risks and immediate substantial
dilution in the common stock. See "Risk Factors" on page 4 and "Dilution" on
page 8.
<TABLE>
<CAPTION>
Total Assuming Exercise of
Per Share Total Over-Allotment Option (1)
--------- ----- --------------------------
<S> <C> <C> <C>
Public Price . . . . . . . . . . . . . . $ $ $
Underwriting Discounts (2) . . . . . . . $ $ $
Proceeds to the Company. . . . . . . . . $ $ $
Proceeds to Selling Stockholders . . . . $ $ $

<FN>
(1) This is a firm commitment offering. The Underwriters have a 30-day option to
purchase an additional 525,000 shares of common stock solely to cover any
over-allotments.
(2) All of which is payable by Mike's.
</FN>
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

FAIRCHILD SECURITIES CORP. MILLENNIUM SECURITIES CORP.

Prospectus dated ___________, 1999

<PAGE>
TABLE OF CONTENTS

PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . 1

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . 4

USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . 7

DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . 8

CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . 9

PRICE RANGE OF COMMON STOCK. . . . . . . . . . . . . . . . 10

DIVIDEND POLICY. . . . . . . . . . . . . . . . . . . . . . 10

SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . 11

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. . . . . . . . . . . . . . 12

BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . 15

MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . 19

PRINCIPAL STOCKHOLDERS . . . . . . . . . . . . . . . . . . 25

CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . 26

SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . 28

DESCRIPTION OF SECURITIES. . . . . . . . . . . . . . . . . 29

SHARES ELIGIBLE FOR FUTURE SALE. . . . . . . . . . . . . . 32

UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . 33

LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . 34

EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . 35

WHERE TO FIND ADDITIONAL INFORMATION . . . . . . . . . . . 35

<PAGE>

PROSPECTUS SUMMARY

This summary highlights selected information from elsewhere in this
prospectus. It is not complete and may not contain all of the information that
is important to you. To understand this offering fully, you should read the
entire prospectus carefully, including the risk factors and financial
statements.

Mike's Original, Inc.

Offices: 366 N. Broadway, Suite 410, Jericho, New York 11753 and its
telephone number is (516) 942-8068.

The Business: Mike's and its predecessors initially marketed, sold and
distributed Mike's Original Cheesecake Ice Cream, an all natural
blend of ice cream with cheesecake ingredients. Mike's ice cream
was offered in a variety of flavors mainly to supermarkets and
grocery stores and, to a lesser extent, to convenience stores and
food service outlets. Since March 1998, sales of Mike's ice cream
have been nominal. In June 1998, sales of Mike's ice cream were
reduced and Mike's began distributing Veryfine Frozen Juice Bars
under an agreement with Veryfine.

Strategy: Initially, Mike's manufactured, marketed and distributed its own
line of ice cream products. Mike's wants to change its operations
to marketing and distributing a variety of ice cream products and
other frozen desserts, including nationally known brands of
super-premium ice cream products and possibly its own ice cream
products. Mike's plans to change its operations by buying
distribution companies in large metropolitan areas. Mike's
expects these purchases to provide new brands and customers,
distribution expertise and an operations center that can absorb
any future acquisitions. As part of this plan, Mike's recently
acquired the rights to purchase the assets of New Yorker Ice
Cream Corp. and Jerry's Ice Cream Co., Inc. New Yorker and
Jerry's distribute and market ice cream and frozen novelties
including Haagen-Dazs, Good Humor, and Edy's. These companies had
combined 1997 revenues of approximately $6,800,000 (See Pro Forma
Financial Statements). Mike's intends to use part of the offering
proceeds to buy these assets.

<PAGE>
The Offering

Common Stock
Offered by Mike's. 3,500,000 shares

Common Stock
Offered by the
Selling
Stockholders . . . 1,560,000 shares

Price Per Share
of Common Stock . $___

Shares Outstand-
ing Prior to
Offering . . . . 5,152,908 shares

Shares to be
Outstanding
after the
Offering . . . . 11,802,908 shares. This includes all transactions after
September 30, 1998 as if they occurred on that date,
including the acquisitions of New Yorker and Jerry's. This
does not include 1,669,999 shares of common stock issuable
upon the exercise of outstanding stock options at an average
exercise price of approximately $1.43 per share and
1,400,000 shares issuable upon the exercise of warrants at
an exercise price of $5.00 per share. It also assumes the
Underwriter does not exercise its over-allotment option,
which is described in "Underwriting."

This prospectus gives effect to the .153846-for-1 reverse
stock split of the common stock effective in June 1996 and
the .667-for-1 reverse stock split of the common stock
effective in February 1997. This prospectus does not give
effect to a reverse stock split voted on at Mike's annual
meeting of stockholders held in December, 1998. As approved
by stockholders, the ratio of the reverse stock split will
be either 1-for-4 or 1-for-5, and result in shares of common
stock outstanding of 2,950,727 or 2,360,582, respectively,
after giving effect to this offering.

Over-allotment. . . Up to 525,000 shares; if the full over-allotment option is
exercised, the total public offering price will be $____,
the total underwriting discount will be $____, the total
proceeds to Mike's will be $______ and the total price to
the selling stockholders will be $_____________.

Use of Proceeds . . Mike's intends to use its portion of the proceeds to repay
indebtedness, to acquire New Yorker and Jerry's, and for
working capital and general corporate purposes.

OTC Bulletin Board
Symbols . . . . . MIKS, MIKSW

Risk Factors. . . . For a discussion of the risks you should consider before
investing in the common stock, see "Risk Factors."

<PAGE>
Summary Financial Information

The following financial information has been derived from Mike's
consolidated financial statements included elsewhere in this prospectus. This
data should be read in conjunction with those consolidated financial statements
and the related notes. See "Financial Statements".

Statement of Operations Data:
<TABLE>
<CAPTION>

Fiscal Year Ended Nine Months Ended
December 31, September 30,
1997 1996 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $384,348 $2,392,258 $130,403 $361,660
Net loss (4,502,645) (4,050,547) (582,511) (4,089,395)
Loss per Common Share (1) $ (1.69) $ (2.54) $ (.17) $ (1.65)
Weighted Average Common
Shares Outstanding (1) 2,662,013 1,592,106 3,441,927 2,471,455
</TABLE>
Balance Sheet Data:
<TABLE>
<CAPTION>
As of September 30, 1998
Pro Forma
Actual Pro Forma (3) As Adjusted (4)
------ ------------ --------------
<S> <C> <C> <C>
Total assets $765,463 $ 411,463 $ 4,234,877
Current liabilities (2) 1,656,334 1,356,334 1,113,498
Long-term liabilities
net of current portion - - 371,250
Stockholders' equity (deficit) (890,871) (944,871) 2,750,129
- -------
<FN>
(1) Does not include 3,069,999 shares of common stock reserved for issuance
upon the exercise of outstanding stock options and warrants at a weighted
average exercise price of $3.06 per share.
(2) Reflects the repayment of the private placement notes. See "Use of
Proceeds."
(3) Includes certain transactions subsequent to September 30, 1998 as if they
occurred on September 30, 1998. Specifically included are the issuance of
private placement notes, shares issued for services rendered and the
settlement and restructure of certain debt obligations.
(4) Reflects Mike's sale of 3,500,000 shares of common stock at an assumed
offering price of $1.00 per share, after deducting the underwriting
discount, estimated offering expenses and the application of the net
proceeds as described in "Use of Proceeds," including the acquisition of
New Yorker and Jerry's.
</FN>
</TABLE>
Unless otherwise stated, this prospectus does not give effect to the approved
reverse stock split voted on by stockholders at Mike's annual meeting in
December, 1998. The ratio of the reverse stock split will be either 1-for-4 or
1-for-5, which will result in shares of common stock outstanding of 1,288,227 or
1,030,581, respectively as of September 30, 1998 and 2,950,727 or 2,360,582,
respectively, after giving effect to this offering.

<PAGE>

RISK FACTORS

Investing in Mike's shares is very risky. You should be able to bear a
complete loss of your investment . Before making an investment, you should
carefully read this prospectus and consider, along with other matters discussed
in this prospectus, the following risk factors:

Losses Since Start of Operations. Mike's has had limited revenue since its
incorporation in May 1994. For the nine months ended September 30,1998 and the
years ended December 31, 1997 and 1996, Mike's had net losses of $582,511,
$4,502,645 and $4,050,547, respectively. Mike's recognized $130,403, $384,348
and $2,392,258 in revenue for the nine months ended September 30, 1998 and the
years ended December 31, 1997 and 1996, respectively. As of September 30, 1998,
Mike's had total assets of $765,463, a working capital deficit of $1,006,104 and
stockholders' deficit of $890,871. Mike's continues to experience losses and
depends upon the acquisitions of New Yorker and Jerry's to continue its
business. Even after these acquisitions, there is no guarantee that Mike's will
become profitable.

Going Concern Opinion. As indicated in Mike's 1997 Annual Report on Form
10-KSB, Mike's financial statements assume that it will continue as a going
concern. However, Mike's has had losses since it started operations and requires
additional working capital. These matters raise substantial doubt about Mike's
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

Pledge of All Assets. Mike's presently owes a former manufacturer
approximately $211,000. Pursuant to agreements, as amended, the debt to this
manufacturer is secured by all of Mike's assets. Mike's didn't pay approximately
$135,000 which was due in December 1997. The balance is payable in December
1998. If Mike's doesn't pay the debt, this manufacturer could foreclose on all
of Mike's assets which would materially adversely affect Mike's business plans
and financial condition.

Reliance on One Supplier. For the year ended December 31, 1997 and for the
nine months ended September 30, 1998, approximately 30% of the combined revenues
of New Yorker and Jerry's were from the sale of Haagen-Dazs products. While
these companies enjoy long term relationships with Haagen-Dazs, the loss of
Haagen-Dazs as a supplier could have a material adverse effect upon the business
of New Yorker and Jerry's.

Management's Discretion Over Use of Proceeds. Mike's expects to use
approximately $970,000 of the net proceeds from this offering to purchase all of
the assets of New Yorker and Jerry's and $491,600 to repay certain indebtedness.
Mike's expects to use the balance of the proceeds for general corporate
purposes, including working capital and capital expenditures in the operations
of New Yorker and Jerry's. Consequently, Mike's management will have broad
discretion to allocate the proceeds of the offering, and the amounts actually
expended for working capital or capital expenditures may vary significantly
depending on a number of factors, including the amount of cash generated or used
by Mike's operations.

Well-Established Competitors. Mike's business is highly competitive. There
are also several other distributors of ice cream and related products which
compete with New Yorker and Jerry's in the New York Metropolitan area. Many
companies who are or will be Mike's competitors are well established and have
much more money and other resources than Mike's.

Seasonality. The ice cream industry generally experiences its highest
volume during the spring and summer months and its lowest volume in the winter
months.

<PAGE>

Product Liability. Since Mike's markets and distributes food products, it
may be liable if the consumption of any of its products causes injury, illness
or death. Mike's currently maintains $2,000,000 of product liability insurance.
Mike's also maintains $1,000,000 of general and personal injury insurance per
occurrence and $5,000,000 in the aggregate. Any product liability judgement
against Mike's which is not covered by insurance could have a material adverse
effect on Mike's business and prospects.

Limitations on Potential Acquisitions of Mike's. Certain provisions of
Delaware law and Mike's certificate of incorporation and by-laws could make more
difficult a merger, tender offer or proxy contest involving Mike's, even if
those events could benefit Mike's stockholders.

These provisions include:

. Section 203 of the Delaware General Corporation Law,
. the fact that Mike's Board of Directors is divided into three classes,
and
. the requirement that certain transactions, including mergers and sales
or transfers of all or substantially all Mike's assets, must be
approved by two-thirds of the stockholders of Mike's.

These provisions could limit the price that certain investors might be
willing to pay in the future for shares of Mike's common stock or preferred
stock.

Limitations on Potential Changes in Control of Mike's. Mike's certificate
of incorporation permits the Board of Directors to issue up to 500,000 shares of
preferred stock. The Board of Directors can issue the preferred stock without
stockholder approval and may determine the terms of the preferred stock. The
issuance of preferred stock could have the effect of delaying or preventing
someone from taking control of Mike's, even though the ability to issue other
classes of preferred stock may provide flexibility in possible acquisitions.
Your rights as a holder of common stock and the rights of holders of preferred
stock will be subject to the rights of the holders of additional or other
classes of preferred stock that may be issued in the future. Your rights as a
holder of common stock may be adversely affected by the issuance of additional
or other classes of preferred stock that may be issued in the future . Mike's
has not issued any shares of preferred stock and has no current plans to issue
any shares of any classes of capital stock other in connection with this
offering and upon the exchange of securities described in this prospectus.

Dilution From Additional Issuances of Stock Without Shareholder Approval.
After this offering, Mike's will have approximately 5,127,093 shares of common
stock authorized but unissued and not reserved for specific purposes, an
additional 1,669,999 shares and 1,400,000 shares of common stock unissued but
reserved for issuance under Mike's option plans and warrants, respectively. All
of such shares may be issued without any action or approval by Mike's
stockholders. Mike's has no present plans, agreements, commitments or
undertakings to issue additional common stock or securities convertible into
common stock. Any issuance of these additional shares of common stock would
further dilute the percentage ownership of Mike's held by the investors in this
offering. See "Description of Securities" and "Shares Eligible for Future Sale."

<PAGE>

Limits on Directors' Liability. Mike's certificate of incorporation and
by-laws have provisions which reduce the potential personal liability of
directors for certain monetary damages. They also provide for indemnification of
directors and other persons. Mike's does not know of any pending or threatened
litigation against Mike's or its directors that would result in any liability
for which a director would want indemnification. Mike's has entered into
indemnification agreements with certain of its officers and directors. The
indemnification agreements provide for reimbursement for all direct and indirect
costs of any type (including attorneys' fees and related disbursements) actually
and reasonably incurred in connection with the investigation, defense or appeal
of a proceeding, (as defined in the indemnification agreements) including
amounts paid in settlement by or on behalf of the person indemnified.

Common Stock Could Become "Penny Stock". The SEC has adopted rules that
regulate broker-dealer practices in transactions in "penny stocks." 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 regarding
transactions in such securities is provided by the exchange or system). The
penny stock rules require a broker-dealer to deliver to the customer a
standardized risk disclosure document prepared by the SEC that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with other
information. The penny stock rules require that prior to a transaction in a
penny stock, the broker-dealer must determine in writing 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 reduce the level
of trading activity in the secondary market for a stock that becomes subject to
the penny stock rules. Mike's common stock is currently trading at less than
$5.00 per share. If it becomes subject to the penny stock rules, investors in
this offering may find it more difficult to sell their common stock.

Forward Looking Statements. Some of the statements in this prospectus
discuss future expectations, contain projections of results of operations or
financial condition or contain other forward-looking statements. Words such as
"anticipate," "believe," "estimate," "expect," "intend" and similar expressions
identify forward-looking statements. Forward-looking statements are based on the
beliefs of Mike's management, as well as assumptions made by and information
currently available to Mike's management. Such statements reflect Mike's current
views with respect to future events and are subject to risks, uncertainties and
assumptions relating to Mike's operations, results of operations, growth
strategy and liquidity. Actual results could differ materially from those
contemplated by the forward-looking statements as a result of certain factors,
including but not limited to:

. competitive factors and pricing pressures;
. relationships with its manufacturers;
. distributors and vendors;
. legal and regulatory requirements;
. general economic conditions; and
. other risk factors which may be described in Mike's future filings
with the SEC. Mike's does not promise to update forward-looking
information to reflect actual results or changes in assumptions or
other factors that could affect those statements.

All written and oral forward-looking statements by Mike's or persons acting on
its behalf are expressly qualified by this paragraph.

<PAGE>
USE OF PROCEEDS

The net proceeds to Mike's from the sale of the common stock offered by the
prospectus (after deducting underwriting discounts and estimated offering
expenses) are estimated to be $2,800,000 ($3,256,750 if the Underwriter's
over-allotment is exercised in full). Mike's will not receive any of the
proceeds of the sale of common stock by the selling stockholders. Mike's intends
to use its proceeds substantially as follows:

Approximate Approximate
Application of Proceeds Amount Percentage
----------------------- ----------- -----------
<S> <C> <C>
Repayment of Indebtedness (1) .......................... $ 491,600 17.6%
Acquisition of the assets of New Yorker ................. 715,000 25.5
Acquisition of the assets of Jerry's .................... 255,000 9.1
Acquisition of inventory from New Yorker and
Jerry's ................................................ 100,000 3.6
Working capital (2) .................................... 1,238,400 44.2
---------- ------
$2,800,000 100 %
========== ======

Mike's intends to use approximately $390,000 of the proceeds of this
offering to repay its private placement notes on the closing of this offering,
$76,600 to repay non-interest bearing loans due March, 1999 by Michael Rosen and
Elizabeth Pilossoph pursuant to a settlement agreement, $25,000 to repay 6%
demand loans by Annette Cantor, $715,000 to purchase all of the assets of New
Yorker and $255,000 to purchase all of the assets of Jerry's. Mike's expects to
use the balance of the proceeds of the offering for general corporate purposes,
including working capital and capital expenditures. See "Business --Acquisition
of Distributors."

Pending use of the proceeds from this offering as set forth above, Mike's
may invest all or a portion of such proceeds in short-term, interest-bearing
securities, U.S. Government securities, money market investments and short-term,
interest-bearing deposits in major banks.
- -------------
<FN>
(1) Includes the repayment of $390,000 of its 12% private placement notes. The
terms of the notes require their repayment upon the earlier of December,
1999 or the closing of this offering.

(2) Mike's presently anticipates that the balance of the proceeds attributable
to working capital will be used to fund current operations through a
substantial portion of calendar 1999, including inventory purchases,
acquisition of freezers and trucks and purchasing related computer hardware
and software to expand the operations. See "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
</FN>
</TABLE>

<PAGE>
DILUTION

As of September 30, 1998, the net pro forma negative tangible book value,
after giving to certain transactions as if they occurred on September 30, 1998,
of Mike's was ($946,539) or ($.18 ) per share of common stock. Net negative
tangible book value per share represents the amount by which the liabilities
exceed the amount of total tangible assets divided by 5,152,908, the number of
shares of common stock outstanding on a pro forma basis on September 30, 1998 .
See "Capitalization". Thus, as of September 30, 1998, the pro forma net negative
tangible book value per share of common stock owned by Mike's current
stockholders would have increased by $2,800,000 or $.34 per share after giving
effect to this offering without any additional investment on their part and the
purchasers of the common stock offered hereby would have incurred an immediate
dilution of $.83 per share from the offering price. The following table
illustrates this per share dilution:

Public Offering price per share of
Common Stock Offered hereby . . . . . . . . . . . . . . . . $1.00
Net tangible book value per share before offering (1). . . . . (.18 )
Increase per share attributable to new investors (2) . . . . . .34
Increase per share attributable to acquisition (3) . . . . . . .01
Adjusted net tangible book value per share
after this offering. . . . . . . . . . . . . . . . . . . . . $ .17
-----
Dilution per share to new investors. . . . . . . . . . . . . . $ .83
=====
</TABLE>
The following table summarizes the relative investments of investors
pursuant to this offering and the current stockholders of Mike's:
<TABLE>
<CAPTION>
Common Shares Average
Acquired Total Consideration Price
Number Percent Amount Percent Per Share
------ ------- ------ ------- ---------
<S> <C> <C> <C> <C> <C>
Current Stockholders 5,152,908(1) 43.7% $12,209,029 65.5% $2.37
Purchasers of Common Shares
in the Offering 3,500,000(2) 29.7% $ 3,500,000 18.8% $1.00
Shares issued in connection
with acquisitions 3,150,000(3) 26.6% $ 2,942,500 15.7% $ .93
------------ ------ ----------- ------
Total 11,802,908 100.0% $18,651,529 100.0%
------------ ------ ----------- ------
- --------
<FN>
(1) Gives effect to the issuance of shares after September 30, 1998 as if they
occurred on that date: 760,000 shares as part of the units sold in the
private placement and 170,000 shares for services rendered.
(2) Assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting".
(3) Gives effect to the issuance simultaneously with the closing of this
offering of 650,000 shares as partial payment for the acquisition of New
Yorker, 170,000 shares as partial payment for the acquisition of Jerry's,
1,500,000 shares to an unrelated third party as a finder's fee in
connection with the acquisition of New Yorker and Jerry's and 830,000
shares for services rendered.
</FN>
</TABLE>
If the over-allotment option is exercised in full, the new common stock
investors will have paid $4,025,000 and will hold 4,025,000 shares of common
stock, representing 21.0% of the total consideration and 32.6% of the total
number of outstanding shares of common stock. See "Description of Securities"
and "Underwriting".

<PAGE>

CAPITALIZATION

The following table sets forth the cash and capitalization of Mike's as of
September 30, 1998, proforma capitalization and the as adjusted capitalization
which gives effect to the consummation of this offering as if it occurred on
September 30, 1998. This table should be read in conjunction with the financial
statements and related notes included elsewhere in this prospectus.
<TABLE>
<CAPTION>
September 30, 1998
--------------------------------------
Pro Forma
Actual Pro Forma (1) As Adjusted (2)
------ ------------ --------------
<S> <C> <C> <C>
Cash and cash equivalents $7,979 $178,979 $1,417,393
=====================================

Accounts payable and accrued expenses $ 569,179 $ 219,179 $ 219,179
Notes payable to related parties 331,586 331,586 135,000
Notes payable (including private placement) 700,244 750,244 380,244
Current portion - long-term debt - - 323,750
Accrued interest on notes 55,325 55,325 55,325
-------------------------------------
Total short-term liabilities 1,656,334 1,356,334 1,113,498
-------------------------------------
Long-term notes payable - - 371,250
-------------------------------------
Stockholders' equity (deficit):
Preferred Stock $.01 par value; 500,000 shares
authorized, no shares issued or outstanding
(actual, pro forma and pro forma as adjusted)
Common Stock, $.001 par value; 20,000,000 shares
authorized, 4,222,908 shares (actual), 5,152,908
shares (pro forma) and 11,802,908 shares
(pro forma as adjusted) 4,222 5,152 11,802
Additional paid-in capital 10,829,066 11,506,636 17,242,486
Accumulated deficit (11,724,159)(12,456,659) (14,504,159)
-------------------------------------
Total stockholders' equity (deficit) (890,871) (944,871) 2,750,129
-------------------------------------
Total capitalization $ (890,871)$ (944,871) $3,121,379
-------------------------------------
<FN>
(1) Gives effect to the issuance of shares after June 30, 1998 as if they
occurred on that date: 760,000 shares as part of the units sold in the
private placement and 170,000 shares for services rendered.
(2) Reflects the sale of 3,500,000 shares of common stock by Mike's at an
assumed offering price of $1.00 per share and the application of the net
proceeds as described in "Use of Proceeds", including the acquisition of New
Yorker and Jerry's.
</FN>
</TABLE>

<PAGE>
PRICE RANGE OF COMMON STOCK

Mike's common stock has traded on the OTC Bulletin Board under the symbol
"MIKS" since July 31, 1997. The following table sets forth the high and low
closing prices for the common stock for the periods indicated:
<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C>
1999
First Quarter
(through January 19, 1999) . . . . . 7/8 3/8

1998
Fourth Quarter. . . . . . . . . . . . 1 3/8
Third Quarter . . . . . . . . . . . . 1 5/32 5/8
Second Quarter. . . . . . . . . . . . 2 5/8 3/4
First Quarter . . . . . . . . . . . . 4 1/2 2 1/4

1997
Fourth Quarter. . . . . . . . . . . . 5 11/16 2 9/16
Third Quarter . . . . . . . . . . . . 12 5 1/8
</TABLE>
-------

As of January 10, 1999, there were approximately 170 holders of record of
the common stock. On January 19, 1999, the closing sales price of Mike's common
stock was $.875 per share.

DIVIDEND POLICY

Mike's has never declared or paid any cash dividends. Mike's currently does
not intend to pay cash dividends in the foreseeable future on the shares of
common stock. Management intends to reinvest any earnings in the development and
expansion of Mike's business. Any cash dividends in the future to common
stockholders will be payable when, as and if declared by the Board of Directors
of Mike's, based upon the Board's assessment of :

. the financial condition of Mike's;
. earnings;
. need for funds;
. capital requirements;
. prior claims of preferred stock to the extent issued and outstanding;
and
. other factors, including any applicable laws.

Therefore, there can be no assurance that any dividends on the common stock
will ever be paid.

<PAGE>
SELECTED FINANCIAL DATA

The following selected financial information concerning Mike's, other than
the pro forma and the pro forma as adjusted balance sheet and statement of
operations data, has been derived from the financial statements included
elsewhere in this prospectus and should be read in conjunction with such
financial statements and the notes thereto. See "Financial Statements".

The selected financial data should be read in conjunction with and is
qualified in its entirety by, Mike's financial statements, related notes and
other financial information included elsewhere in this prospectus.

Statement of Operations Data:
<TABLE>
<CAPTION>
Fiscal Year Ended Nine Months Ended
December 31, September 30,
1997 1996 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $384,348 $2,392,258 $130,403 $361,660
Net loss (4,502,645) (4,050,547) (582,511) (4,089,395)
Loss per Common Share (1) $ (1.69) $ (2.54) $ (.17) $ (1.65)
Weighted Average Common
Shares Outstanding (1) 2,662,013 1,592,106 3,441,927 2,471,455
</TABLE>
Balance Sheet Data:
<TABLE>
<CAPTION>

As of September 30, 1998
Pro Forma
Actual Pro Forma (3) As Adjusted (4)
------ ------------ --------------
<S> <C> <C> <C>
Total assets $765,463 $ 411,463 $ 4,234,877
Current liabilities (2) 1,656,334 1,356,334 1,113,498
Long-term liabilities net of
current portion - - 371,250
Stockholders' equity (deficit) (890,871) (944,871) 2,750,129
- -------
<FN>
(1) Does not include 3,069,999 shares of Common Stock reserved for issuance
upon the exercise of outstanding stock options and warrants at a weighted
average exercise price of $3.06 per share.
(2) Reflects the repayment of the private placement notes with a portion of the
offering proceeds.
(3) Gives effect to the issuance of shares after September 30, 1998 as if they
occurred on that date: 760,000 shares as part of the units sold in the
private placement and 170,000 shares for services.
(4) Reflects the sale of 3,500,000 shares of common stock by Mike's at an
assumed offering price o f $1.00 per share, after deducting the
underwriting discount, estimated offering expenses and the application of
the net proceeds as described in "Use of Proceeds," including the
acquisition of two ice cream distributors.
</FN>
</TABLE>

<PAGE>

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

The following discussion should be read in conjunction with the historical
financial statements of Mike's included elsewhere in this prospectus.

Results of Operations

Nine Months Ended September 30, 1998 and September 30, 1997

Mike's sales for the nine months ended September 30, 1998 and 1997 were
$130,403 and $361,660 respectively. The limited volume for the current year was
primarily due to insufficient working capital and the limited usage of the
Mike's Original brand. Management has changed Mike's operations from
manufacturing, marketing and distributing its own line of ice cream products to
marketing and distributing a variety of ice cream products and other frozen
desserts, Management intends to accomplish this plan by acquiring distribution
companies with new brands and customers, distribution expertise and an
operations center that can absorb any future acquisitions. As part of this plan,
Mike's has recently acquired the rights to purchase the assets of New Yorker Ice
Cream Corp. ("NYIC") and Jerry's Ice Cream Co., Inc. ("Jerry's"). NYIC and
Jerry's provide full service distribution and marketing services of ice cream
and frozen novelties. These companies had combined 1997 revenues of
approximately $6,800,000.

Gross profit for the nine months ended September 30, 1998 was $(126,372)
and $16,699 for the comparable nine months ended September 30, 1997. The
decrease and elimination of gross profit dollars is primarily attributable to
the lack of sales due to limited operations and the limited usage of the Mike's
Original brand. Remaining finished goods inventories were sold at significantly
reduced prices over the nine month period.

General and administrative expenses (G&A) for the nine months ended
September 30, 1998 and September 30, 1997 were approximately $381,200 and
$1,943,300 respectively. The decrease was primarily due to a reduction in legal
expenses in the amount of $444,000. Other decreases resulted from salary
reductions ($280,000) and a decrease in other professional fees including
accounting($785,000).

Selling, marketing and shipping expenses for the nine months ended
September 30, 1998 and September 30, 1997 were approximately $190,400 and
$645,900 respectively. The sharp decline for the 1998 period was primarily from
decreases in retail introductory programs, advertising, and in store promotions
as a result of limited operations.

Interest expense, net of interest income for the nine months ended
September 30, 1998 and September 30, 1997 were approximately $95,000 and
$1,495,800 respectively. The reduction in the amount charged to profit and loss
was created by the conversion of debt in 1997 to equity and the reduction of
other interest bearing debt through the application of proceeds from the initial
public offering.

Net loss for the nine months ended September 30, 1998 was $ 582,511 as
compared to $4,089,395 for the comparable prior year period. The net loss in
1998 was offset by the forgiveness of debt by the Rosens and other related
parties in the amount of $216,882. The net loss in 1997 was attributable to the
high cost of debt, prior to the initial public offering and the lack of volume.

<PAGE>
Years Ended December 31, 1997 and December 31, 1996

Mike's net sales for the years ended December 31, 1997 and 1996 were
$384,348 and $2,392,258, respectively, a decrease of 84%. This decrease resulted
from the initial fill of product into the distributor pipeline which occurred
early in 1996, as well as Mike's limited capital in 1997, which limited capital
has adversely impacted its ability to purchase product from its manufacturer to
fill existing customer orders and has limited its ability to engage in marketing
and advertising programs to promote additional sales. Net sales for 1997 were
also adversely affected by the determination by Kraft to terminate its
distributorship agreement with Mike's. Net sales for 1997 was further reduced by
approximately $129,000, representing net returns from this distributor.

Gross (loss) profit for the year ended December 31, 1997 as compared to
1996 declined 107% to ($66,850) from $952,623, taking into account the return of
product previously described. Gross profit as a percentage of sales (before the
effect of the sales returns) for the year ended December 31, 1997 declined to a
deficit of 17.4% of net sales compared to 39.8% for the year ended December 31,
1996. The decrease in gross profit dollars is primarily attributable to the
decline in net sales and gross profit percentage. Gross profit as a percentage
of net sales declined partly as a result of higher raw material costs associated
with the manufacture of Mike's ice cream products, reduced selling prices to
certain area retailers and the very limited volume.

General and administrative expenses (G&A) for the years ended December 31,
1997 and December 31, 1996 were approximately $2,178,000 and $2,194,000
respectively. The major components of these expenses for the years ended
December 31, 1997 and December 31, 1996 were payroll and related taxes of
$399,000 and $361,000, respectively, legal and accounting fees of $597,000 and
$413,000, respectively (of which $450,000 was paid in common stock during
calendar year 1997) and consulting fees of $948,000 and $1,178,000, respectively
(of which $855,000 and $180,000, respectively was paid in common stock). The
shares issued during the year ended December 31, 1997, though restricted
securities, were valued by Mike's at $1,311,000, based upon 25% discounts from
the initial public offering price on transactions occurring prior to the IPO and
the closing bid price on the date authorized for transactions occurring after
the IPO.

Selling and shipping expenses for the years ended December 31, 1997 and
December 31, 1996 were approximately $724,000 and $2,597,000 respectively. The
decline for the 1997 period was primarily from decreases in retail introductory
programs from $602,000 to $131,000 and store and media price reduction coupons
and media events from $983,000 to $314,000, as well as decreases in advertising
programs with store chains from $305,000 to $64,000.

Research and development costs for the year ended December 31, 1997 was
$28,594 as compared to $70,632 for the year ended December 31, 1996. This
decrease of $42,038 or 60% is a direct result of the limited capital available
for such expenditures.

Interest expense, net of interest income for the years ended December
31, 1997 and December 31, 1996 were approximately $1,506,000 and $142,000
respectively. $169,000 of the net interest cost for the year ended December 31,
1997 was attributable to the conversion of open accounts payable into
interest-bearing accounts, and additional borrowings from related parties and
other creditors. These additions to interest-bearing obligations began in mid
1996 and continued in 1997 until completion of Mike's IPO. The remainder of
interest charges for the years December 31, 1997 and 1996 resulted from non-cash
imputed interest charges of $1,327,000 and $15,000, respectively, primarily in
connection with the issuance of common stock to Mike's manufacturer, and the
issuance of convertible debt and/or warrants to lenders, including vendors. The
imputed interest charges attributable to the shares issued and issuable to these
various creditors in 1997 were charged to operations in the period the shares or
convertible securities were initially issued. The shares, though restricted
securities, were valued by Mike's based upon a 25% discount from the IPO price.

<PAGE>
Net loss for the years December 31, 1997 and 1996 amounted to approximately
$4,503,000 and $4,051,000, respectively. The primary reason for the net loss in
1997 was the lack of sales volume, the lack of cash flow through the date of the
IPO and the high interest costs associated with the high debt levels prior to
the IPO. The 1996 net loss was attributable to the high selling, general and
administrative expenses combined with lower gross profits.

Seasonality

Mike's typically experiences more demand for its products during the summer
than during the winter.

The ice cream industry generally experiences its highest volume during the
spring and summer months and the lowest volume in the winter months. In this
regard, according to statistics published by the International Ice Cream
Association, 35.5% of sales of novelty ice cream products and 29.5% of sales of
packaged ice cream products were made during the third quarter (July -
September) of calendar 1996 while only 18.0% of sales of novelty ice cream
products and 22.4% of sales of packaged ice cream were made during the first
quarter (January - March) of calendar 1996.

Liquidity and Capital Resources

Mike's cash requirements have been significantly exceeding its resources
due to the limited operations of Mike's. At September 30, 1998 Mike's had a
working capital deficit of $1,006,104. It is anticipated that the cash balance
of $7,979, collection of receivables and the net proceeds of $355,000 from
Mike's's recent private placement should sustain Mike's until an additional
offering of securities can be accomplished. While Mike's has filed a
registration statement with the Securities and Exchange Commission covering a
secondary offering of securities, there are no assurances that such additional
offering of securities can be accomplished. If the offering of additional
securities is successful, Mike's plans to close the two acquisitions currently
under contract with Mike's and may seek additional acquisitions to continue the
shift of Mike's's business to more of a distributorship rather than a
manufacturer. These acquisitions and additional financing are anticipated to
generate sufficient cash flow to meet Mike's needs for the balance of the year.
The failure of Mike's to complete this secondary offering would require Mike's
to seek other financing in order to continue as a going concern and Mike's has
no alternative plans for financing. See "Description of Securities - Private
Placement," "Use of Proceeds" and "Business - Acquisitions of Distributors."

Impact of the Year 2000 on Information Systems

The Year 2000 issue arises as the result of computer programs having been
written, and systems having been designed, using two digits rather than four to
define the applicable year. Consequently, such software has the potential to
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.

<PAGE>

Mike's is not expected to be affected by Year 2000 as it does not rely on
date-sensitive software or affected hardware. Mike's current accounting and
other systems were purchased "off-the-shelf". Mike's intends to timely update
its accounting and other systems which are determined to be affected by Year
2000 by purchasing Year 2000 compliant software and hardware available from
retail vendors at reasonable cost.

Mike's has not yet contacted other companies on whose services Mike's
depends to determine whether such companies' systems are Year 2000 compliant. If
the systems of Mike's or other companies on whose services Mike's depends,
including Mike's customers, are not Year 2000 compliant, there could be a
material adverse effect on Mike's financial condition or results of operations.

BUSINESS

General

According to the International Ice Cream Association, ice cream was part of
a $10.5 billion nationwide frozen dessert industry in 1995 and has wide appeal,
with over 93% of households in the United States consuming these products. From
its inception, Mike's marketed, sold and distributed Mike's Original Cheesecake
Ice Cream, an all natural blend of ice cream with cheesecake ingredients. This
product line was offered in a variety of flavors mainly to supermarkets and
grocery stores and also, to a lesser extent, to convenience stores and food
service outlets. Since March 1998, sales of Mike's ice cream have been nominal.
In June 1998, sales of Mike's ice cream were reduced and Mike's began
distributing Veryfine Frozen Juice Bars under an agreement with Veryfine.

Initially, Mike's manufactured, marketed and distributed its own line of
ice cream products. Mike's wants to change its operations to marketing and
distributing a variety of ice cream products and other frozen desserts,
including nationally known brands of super-premium ice cream products and
possibly its own ice cream products. Mike's plans to change its operations by
buying distribution companies in large metropolitan areas. Mike's expects these
purchases to provide new brands and customers, distribution expertise and an
operations center that can absorb any future acquisitions. As part of this plan,
Mike's recently acquired the rights to purchase the assets of New Yorker Ice
Cream Corp. and Jerry's Ice Cream Co., Inc. New Yorker and Jerry's distribute
and market of ice cream and frozen novelties including Haagen-Dazs, Good Humor,
and Edy's. These companies had combined 1997 revenues of approximately
$6,800,000 (See Pro Forma Financial Statements). Mike's intends to use part of
the offering proceeds to buy these assets.

Mike's was incorporated in New York in March 1993 and reincorporated in
Delaware in May 1994. It maintains its principal offices at 366 N. Broadway,
Jericho, New York 11753 and its telephone number is (516) 942-8068.

Agreement with Veryfine Products

Mike's entered into a license agreement with Veryfine Products, Inc.
effective April 1, 1998 for the sale of Veryfine Frozen Juice Bars. The
agreement grants Mike's wholly-owned subsidiary, New Yorker Frozen Desserts,
Inc., an exclusive license to manufacture and sell frozen juice bars in certain
flavors, sizes and packaging for a two year period in the New York Metropolitan
area, including Nassau, Suffolk, Westchester, Putnam and Rockland counties, and
certain counties in New Jersey and in the State of Connecticut. Mike's has the

<PAGE>

right to manufacture these products at facilities it designates under quality
assurance procedures established by Veryfine. These products have been
manufactured in the Fieldbrook facility in Buffalo, New York and Mike's has been
selling these products since June 1998. The license agreement also prohibits
Mike's from manufacturing or selling any other branded frozen juice bar.

Proposed Acquisition of Distributors

Mike's will be using a portion of the proceeds of this offering to purchase
the assets of New Yorker and Jerry's, two full service distributors and
marketers of ice cream and frozen novelties. In July 1998, Multi Venture
Partners Ltd. assigned to Mike's all of its right, title and interest under
certain purchase agreements to acquire the assets of New Yorker and Jerry's.
These agreements, which have since been amended, provide for an aggregate
purchase price of approximately $2,500,000, of which

. $970,000 is payable in cash at closing,
. $820,000 is payable in restricted common stock at closing,
. $200,000 is payable over six months at an 8% annual interest rate; and
. $495,000 is payable over four years at an 8% annual interest rate.

Each agreement further provides: (i) for a price guarantee on the common
stock issued at closing which is exercisable by the purchaser eighteen months
from the closing date; and (ii) that Mike's can call all or part of such common
stock at any time during such eighteen month period, at the closing price of the
common stock on the closing date of the acquisition.

At closing Mr. Ted Ketsoglou, the principal of New Yorker and Mr. Gerald
Schneider, the principal of Jerry's, will become directors and officers of
Mike's and will be employed by Mike's pursuant to written employment agreements.
See "Management - Proposed Employment Agreements."

Some of the products currently being distributed by New Yorker and Jerry's
are Haagen Dazs, Good Humor, Baskin Robbins, Snickers, Edy's, Veryfine Juice
Bars and American Classics. New Yorker and Jerry's own in the aggregate
approximately 2,000 freezers which they have placed in approximately 1,500
locations throughout the New York Metropolitan area, including Connecticut and
New Jersey. The institutions serviced by these companies include grocery stores,
bodegas, restaurants, delicatessens, supermarkets, parks, beaches and airports.
Their combined revenues for the year ended December 31, 1997 were approximately
$6,800,000.

Principal Supplier

For the year ended December 31, 1997 and for the nine months ended
September 30, 1998, approximately 30% of the combined revenues of New Yorker and
Jerry's were from the sale of Haagen-Dazs products. While these companies enjoy
long term relationships with Haagen-Dazs, the loss of this company as a supplier
could have a material adverse effect upon the business of New Yorker and
Jerry's.

Manufacturing

Mike's products are presently manufactured by Fieldbrook Farms, an
independent FDA approved facility located in Buffalo, New York, under a two-year
exclusive manufacturing agreement expiring in March 1999. The manufacturing
agreement, dated as of March 20, 1997, provides that Fieldbrook shall be the
exclusive supplier of all products manufactured by Fieldbrook and distributed by
Mike's east of the Mississippi River for a period of two years.

<PAGE>

The products distributed by New Yorker and Jerry's are manufactured either
by the ice cream company themselves, i.e., Haagen Dazs, or by third party
manufacturers, and sold to New Yorker and Jerry's.

Distribution and Marketing

Mike's, through its officers, consultants and other representatives,
currently markets the Mike's Original products on a limited basis to
supermarkets, grocery stores, convenience stores and food service outlets. While
Mike's incurred substantial promotional expenses for freezer space in connection
with entering new markets, maintaining existing markets, entering new retailers
and maintaining shelf space in existing retailers, it has received no assurance
that these retailers will continue to allocate freezer space for Mike's products
even after the payment of these fees and, in fact, many supermarkets have
discontinued selling Mike's products.

New Yorker and Jerry's employees primarily distribute their products to
grocery stores, bodegas and restaurants in their own trucks. New Yorker and
Jerry's have placed their own freezers at these locations at no expense to the
store owner. New Yorker and Jerry's currently have placed approximately 2,000
freezers in approximately 1,500 locations in the New York City Metropolitan
area.

Competition

In the distribution of products, New Yorker and Jerry's compete with many
distributors in the New York City Metropolitan area, several of which have
greater financial and other resources. In order to maintain and increase its
market position, New Yorker and Jerry's must maintain the condition of their
freezers, effectively compete in the selling price of their products, and seek
additional locations for freezers.

Government Regulation

Mike's is subject to regulation by various governmental agencies regarding
the distribution and sale of food products, including the FDA and various state
agencies. Mike's believes that its marketing and distributing operations comply
with all existing applicable laws and regulations.

Mike's cannot predict the impact of possible changes that may be required
in response to future legislation, rules or inquiries made from time to time by
governmental agencies. FDA regulations may, in certain circumstances, affect the
ability of Mike's, as well as others in the industry, to develop and market new
products. However, Mike's does not presently believe that existing applicable
legislative and administrative rules and regulations will have a significant
impact on its operations.

Trademarks and Patents

Mike's owns registered trademarks and service marks under the names "Mike's
Original ", "GRAMWICH " and "Graham Cracker Delight ". Mike's has common law
trademarks for "Strawberry Fantasy ", "Chocolate Tidbits ", Sorbet Blends ,
Raspberry Romance and Lemon Lace . Mike's does not believe that any of these
trademarks are material, either individually or collectively, to Mike's
planned operations.

<PAGE>

All trademarks and service marks appearing in this prospectus that do not
relate to Mike's products are the property of their respective holders.

Insurance

Mike's business exposes it to potential liability which is inherent in the
marketing and distribution of food products. Mike's currently maintains
$2,000,000 of product liability insurance. Mike's also maintains $1,000,000 of
general and personal injury insurance per occurrence and $5,000,000 in the
aggregate. Any product liability judgement against Mike's which is not covered
by insurance could have a material adverse effect on Mike's business and
prospects.

Employees

Mike's currently employs two part-time persons, who serve in administrative
capacities. New Yorker and Jerry's employ an aggregate of approximately 30
full-time persons, of whom approximately 5 are in executive and administrative
operations and approximately 25 in warehouse, selling and distribution. None of
the employees are represented by a labor union. Mike's, New Yorker and Jerry's
consider their relationships with their employees to be satisfactory.

Seasonality

Legal Matters

J.W. Messner, Inc. v. Mike's Original, Inc. On May 22, 1997, the parties
entered into a Stipulation of Settlement in this action pending in the Supreme
Court of New York, Nassau County, wherein Mike's agreed to pay J. W. Messner,
Mike's former advertising agent, the sum of $125,935.82, in three installments
as follows: $40,000 on June 30, 1997; $42,967.91, plus accrued interest, on or
before June 30, 1998; and $42,967.91, plus accrued interest, on or before
December 31, 1998. As of January 19, 1999, only the $40,000 due on June 30, 1997
has been paid.

Universal Folding Box Co., Inc. v. Mike Original, Inc., et al. On April 2,
1998, Mike's was served with a complaint in an action pending in the Supreme
Court of New York, Nassau County and seeks damages in the amount of $82,037,
arising from Mike's alleged failure to pay for certain inventory purchased. In
December, 1998, the parties submitted the case to non-binding arbitration in
which the arbitrator found in favor of Universal Folding Box Co., Inc. in the
sum of $30,000. Mike's disputes the non-binding arbitrator's decision, the
allegations of the complaint and intends to file an answer and vigorously defend
against the allegations raised in the complaint.

Except as set forth above, Mike's is not involved in any material pending
legal proceedings.

<PAGE>
MANAGEMENT

Directors and Executive Officers

The By-Laws of Mike's provide for a Board of Directors of between three and
nine members classified into three classes as nearly equal in number as
possible, whose terms expire in successive years.

The directors and executive officers of Mike's are as follows:

Name Age Position(s) with Mike's
---- --- -----------------------
Arthur G. Rosenberg 61 President and Director
Marc P. Palker 46 Secretary
Frederic D. Heller 60 Director
Myron Levy 56 Director

Arthur G. Rosenberg, Esq. has been a director of Mike's since September
1995 and President since September 1, 1998. Mr. Rosenberg has been the Vice
President of Acquisitions for The Associated Companies, a real estate developer,
in Bethesda, Maryland since June 1987 and is a principal of Millennium
Development Group, LLC, a real estate developer in Frederick, Maryland. Mr.
Rosenberg is an attorney admitted to practice in the State of New York and has
practiced law for over 30 years. Mr. Rosenberg is a director of Phar-mor Inc.,
which operates a chain of retail drug stores.

Marc P. Palker has been a financial consultant to Mike's since December,
1997 and Secretary of Mike's since September 1, 1998. From January, 1997 to the
present, Mr. Palker has been an independent financial consultant. From February,
1989 through December, 1996 Mr. Palker was Chief Financial Officer of Firetector
Inc. a publicly owned business involved in the design, manufacture and service
of life safety communications equipment. From 1994 through 1995, Mr. Palker
served as National Vice President of the Institute of Management Accountants.
Mr. Palker is a Certified Management Accountant.

Frederic D. Heller was Vice President of Finance and director of Mike's
from January 1997 until November 14, 1997 when he resigned as an officer of
Mike's. Since November 1997, Mr. Heller has been Chief Financial Officer of J &
W Management Corp., a commercial real estate management company. Mr. Heller is a
CPA licensed in the State of New York for over the last ten years. Prior to
joining Mike's, from November 1994 through January 1997, he practiced as an
independent financial consultant including rendering such services to Mike's in
that capacity from August 1996 to January 1997. From September 1992 through
October 1994, Mr. Heller was Vice President of Finance and director of
Vasomedical, Inc., formerly Future Medical Products, Inc., a publicly owned
business involved in the merchandising of certain medical technology. From
October 1990 through September 1992, Mr. Heller was president and chief
operating officer of FDH Enterprises, Inc., a company rendering financial
consulting services to business clients.

Myron Levy has been a director of Mike's since July 1997. Since June 1993,
Mr. Levy has been President of Herley Industries, Inc., a publicly owned
designer and manufacturer of flight instrumentation products. From May 1991 to
June 1993, Mr. Levy served as Executive Vice President and Treasurer of Herley
Industries, Inc. Mr. Levy also has been a director of Herley since 1992.

<PAGE>

Mike's Board of Directors is classified into three classes. The directors
in each class serve for three-year terms. Arthur G. Rosenberg is a member of
Class I which serves until Mike's 1998 Annual Meeting of Stockholders. Myron
Levy is a member of Class II which serves until Mike's 1999 Annual Meeting of
Stockholders. Frederic D. Heller is a member of Class III which serves until
Mike's 2000 Annual Meeting of Stockholders. Directors who are not employees of
Mike's receive no cash compensation for their services to Mike's as directors,
but are reimbursed for expenses actually incurred in connection with attending
meetings of the Board of Directors. All members of the Board of Directors are
eligible to participate in Mike's stock option plans. Each director attended or
participated in at least 75% of the meetings of the Board of Directors during
his tenure in fiscal 1997.

Executive Compensation

The following table sets forth the cash and other compensation paid or
accrued by Mike's during the year ended December 31, 1997 and 1996 and the nine
months ended December 31, 1995 to Mike's Chief Executive Officer. Michael Rosen
ceased to be Mike's Chief Executive Officer effective in May 1998. No other
executive officer earned over $100,000 in any fiscal year.

<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
-------------------------------------------- Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation(2) Options Compensation
- ------------------ ---- ------ ----- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>

Michael Rosen 1997 $ 98,083 - - 50,000(3) -
Chairman of the Board, 1996 112,250(1) - - 200,000(3) -
President, Chief 9/30/95(4) 81,000(1) - - - -
Executive Officer
<FN>
- ---------
(1) Does not include an aggregate of $89,565 of salary which was accrued and
not paid to Mr. Rosen during the period from inception through September
30, 1996, to which Mr. Rosen has waived all rights.
(2) The value of all perquisites provided to Mike's officers did not exceed the
lesser of $50,000 or 10% of the officer's salary and bonus.
(3) Represents ten-year options granted in May 1996 and September 1996 pursuant
to Mike's 1995 Long Term Incentive Plan.
(4) Represents the nine-month period ended December 31,1995.

</FN>
</TABLE>

<PAGE>
Option/SAR Grants in Last Fiscal Year

The following table sets forth all stock options granted to the executive
officers named in the Executive Compensation table during the fiscal year ended
December 31, 1997 and 1996.
<TABLE>
<CAPTION>

Individual Grants
-----------------------------------------------------
Number of % of Total
Securities Options/SARS
Underlying Granted to Exercise or
Options/SARS Employees in Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
- ---- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C>

Michael Rosen 33,333 12.5% $3.00 May 31, 2006 (1)
166,667 62.5% $1.50 September 11, 2006 (2)
50,000 42.9% $1.50 May 1, 2007(3)
- ------
<FN>

(1) Represents ten year options granted in May 1996, pursuant to Mike's 1995
Long Term Incentive Plan. Options became fully vested on November 30, 1996.
(2) Represents ten year options granted in September 1996, pursuant to Mike's
1995 Long Term Incentive Plan. Options became fully vested on March 12,
1997.
(3) Represents ten year options granted in May 1997 pursuant to Mike's 1995
Long Term Incentive Plan. Options became fully vested on November 1, 1997.

</FN>
</TABLE>

Consulting Agreements

In October 1998, Mike's entered into a five-year consulting agreement with
its President, Arthur G. Rosenberg which becomes effective upon the acquisition
of New Yorker and Jerry's, at which time Mr. Rosenberg will be resigning as
President of Mike's and continuing in his position as Chief Executive Officer.
Mr. Rosenberg is to provide management, sales and marketing services to Mike's
for a monthly fee of $5,000.

Mike's has entered into a consulting agreement with Alma Management Corp.
("Alma"), as of November 1, 1996. Under this agreement, which is for a term
ending October 31, 1998, Alma has agreed to cause its two principals, to provide
sales and marketing advisory and consulting services to Mike's. Alma receives an
annual consulting fee of $50,000 payable at Mike's option in either cash or
common stock. In addition, Alma has received 30,000 shares of common stock and
options to purchase 133,333 shares of common stock at an exercise price of $1.50
per share. One-third of the options vest on May 1, 1997, one-third six months
thereafter and the balance vest on May 1, 1998. Mike's may terminate the
services of either of Alma's principals under the consulting agreement with Alma
if he cannot adequately perform his duties thereunder because of mental or
physical disability, death or for "Just Cause" (as defined in the consulting
agreement). The consulting agreement provides that if one of Alma's principals
is terminated by Mike's, the consulting fee paid to Alma will be reduced by one
half and if both principals are terminated by Mike's, no further compensation
will be paid to Alma. The consulting agreement restricts Alma and its principals
from competing with Mike's for the term of the agreement and for one year after
it terminates and contains provisions protecting Mike's trade secrets and
proprietary rights and information.

<PAGE>

Proposed Employment Agreements

Ted Ketsoglou has entered into a five year employment agreement, commencing
on the closing of the New Yorker acquisition, wherein he has agreed to serve as
President of Mike's. The term of the agreement may be extended for an additional
five year period at the sole option of Mike's. As compensation for his services,
Mr. Ketsoglou is to receive $126,000 annually and an annual bonus equal to 2% of
Mike's pretax profits. He is also to receive annual salary increases of 5%
during the initial five year term and 10% thereafter. Upon the effectiveness of
the agreement, Mike's will issue to Mr. Ketsoglou 200,000 shares of its common
stock, of which half shall vest on January 15, 1999 and half on January 15,
2000. His employment agreement also provides that Mike's will grant certain
options on closing future acquisitions and for certain payments following death
or disability. During the term of his employment, Mike's has also agreed to use
reasonable efforts to cause Mr. Ketsoglou's appointment or election to Mike's
Board of Directors. For more than the past five years, Mr. Ketsoglou has been
President of New Yorker.

Gerald Schneider has entered into a five year employment agreement,
commencing on the closing of the Jerry's acquisition, wherein he has agreed to
serve as Vice President of Sales of Mike's. The term of the agreement may be
extended for an additional five year period at the sole option of Mike's. As
compensation for his services, Mr. Schneider is to receive $115,500 annually and
an annual bonus equal to 2% of Mike's pretax profits. He is also to receive
annual salary increments of 5% during the initial five year term and 10%
thereafter. Upon the effectiveness of the agreement, Mike's will issue to Mr.
Schneider 200,000 shares of its common stock on which half shall vest on January
15, 1999 and half on January 15, 2000. His employment agreement also provides
that Mike's will grant certain options on closing future acquisitions and for
certain payments following death or disability. During the term of his
employment, Mike's has also agreed to use reasonable efforts to cause Mr.
Schneider's appointment or election to Mike's Board of Directors. For more than
the past five years, Mr. Schneider has been President of Jerry's.

Stock Plans

1995 Long Term Incentive Plan

In August 1995, Mike's adopted The Mike's Original, Inc. 1995 Long Term
Incentive Plan (the "1995 Incentive Plan") in order to motivate qualified
employees of Mike's, to assist Mike's in attracting employees and to align the
interests of such persons with those of Mike's stockholders.

The 1995 Incentive Plan provides for the grant of "incentive stock options"
within the meaning of the Section 422 of the Internal Revenue Code of 1986, as
amended, "non-qualified stock options," restricted stock, performance grants and
other types of awards to officers, key employees, consultants and independent
contractors of Mike's and its affiliates.

The 1995 Incentive Plan, which is administered by the Board of Directors,
authorizes the issuance of a maximum of 433,333 shares of common stock. If any
award under the 1995 Incentive Plan terminates, expires unexercised, or is
canceled, the common stock that would otherwise have been issuable pursuant
thereto will be available for issuance pursuant to the grant of new awards. To
date, Mike's has granted an aggregate of 306,667 options to purchase common
stock under the 1995 Incentive Plan, of which 250,000 options have been granted
to Michael Rosen, Mike's former Chairman of the Board and Chief Executive
Officer. 33,333 of these options are exercisable for ten years from the date of
grant at a price of $3.00 per share and 216,667 of these options are exercisable
for ten years from the date of grant at a price of $1.50 per share. Another
56,667 options have been granted to Steven A. Cantor. Each of the options
granted to Mr. Cantor are exercisable for a ten year term at a price of $1.50
per share. As of September 30, 1998, none of these options had been exercised.

<PAGE>
1996 Non-Qualified Stock Option Plan

In October 1996, Mike's Board of Directors approved a 1996 Non-Qualified
Stock Option Plan (the "Non-Qualified Plan") which covers 500,000 shares of
Mike's common stock. The options become exercisable in installments as
determined at the time of grant by the Board of Directors. As of the date of
this registration statement, Mike's had granted 478,332 options to purchase
shares of common stock under the Non-Qualified Plan at an exercise price of
$1.50 per share. Arthur G. Rosenberg, Martin Pilossoph and Myron Levy have been
granted options to purchase 23,333 shares of common stock each at the exercise
price of $1.50 per share pursuant to the Non-Qualified Plan. Frederic D. Heller
has been granted options to purchase 58,333 shares of common stock at the
exercise price of $1.50 per share pursuant to the Non-Qualified Plan. Alma has
been granted options to purchase 133,333 shares of common stock at an exercise
price of $1.50 per share pursuant to the Non-Qualified Plan. Steven A. Cantor
has been granted options to purchase 76,667 shares of common stock at an
exercise price of $1.50 per share. As of September 30, 1998, none of these
options had been exercised.

Personal Liability and Indemnification of Directors

Mike's Certificate of Incorporation and By-laws contain provisions which
reduce the potential personal liability of directors for certain monetary
damages and provide for indemnity of directors and other persons. Mike's is
unaware of any pending or threatened litigation against Mike's or its directors
that would result in any liability for which such director would seek
indemnification or similar protection.

Such indemnification provisions are intended to increase the protection
provided directors and, thus, increase Mike's ability to attract and retain
qualified persons to serve as directors. Because directors liability insurance
is only available at considerable cost and with low dollar limits of coverage
and broad policy exclusions, Mike's does not currently maintain a liability
insurance policy for the benefit of its directors, although Mike's may attempt
to acquire such insurance in the future. Mike's believes that the substantial
increase in the number of lawsuits being threatened or filed against
corporations and their directors and the general unavailability of directors
liability insurance to provide protection against the increased risk of personal
liability resulting from such lawsuits have combined to result in a growing
reluctance on the part of capable persons to serve as members of boards of
directors of companies, particularly of companies which intend to become public
companies. Mike's also believes that the increased risk of personal liability
without adequate insurance or other indemnity protection for its directors could
result in overcautious and less effective direction and management of Mike's.
Although no directors have resigned or have threatened to resign as a result of
Mike's failure to provide insurance or other indemnity protection from
liability, it is uncertain whether Mike's directors would continue to serve in
such capacities if improved protection from liability were not provided.

The provisions affecting personal liability do not abrogate a director's
fiduciary duty to Mike's and its stockholders, but eliminate personal liability
for monetary damages for breach of that duty. The provisions do not, however,
eliminate or limit the liability of a director for failing to act in good faith,
for engaging in intentional misconduct or knowingly violating a law, for
authorizing the illegal payment of a dividend or repurchase of stock, for
obtaining an improper personal benefit, for breaching a director's duty of
loyalty (which is generally described as the duty not to engage in any
transaction which involves a conflict between the interests of Mike's and those
of the director) or for violations of the federal securities laws. The
provisions also limit or indemnify against liability resulting from grossly
negligent decisions including grossly negligent business decisions relating to
attempts to change control of Mike's.

<PAGE>

The provisions regarding indemnification provide, in essence, that Mike's
will indemnify its directors against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with any action, suit or proceeding arising out of the director's
status as a director of Mike's, including actions brought by or on behalf of
Mike's (shareholder derivative actions). The provisions do not require a showing
of good faith. Moreover, they do not provide indemnification for liability
arising out of willful misconduct, fraud, or dishonesty, for "short-swing"
profits violations under the federal securities laws, or for the receipt of
illegal remuneration. The provisions also do not provide indemnification for any
liability to the extent such liability is covered by insurance. One purpose of
the provisions is to supplement the coverage provided by such insurance.
However, as mentioned above, Mike's does not currently provide such insurance to
its directors, and there is no guarantee that Mike's will provide such insurance
to its directors in the near future, although Mike's may attempt to obtain such
insurance.

These provisions diminish the potential rights of action which might
otherwise be available to shareholders by limiting the liability of officers and
directors to the maximum extent allowable under Delaware law and by affording
indemnification against most damages and settlement amounts paid by a director
of Mike's in connection with any shareholders derivative action. However, the
provisions do not have the effect of limiting the right of a shareholder to
enjoin a director from taking actions in breach of his fiduciary duty, or to
cause Mike's to rescind actions already taken, although as a practical matter
courts may be unwilling to grant such equitable remedies in circumstances in
which such actions have already been taken. Also, because Mike's does not
presently have directors liability insurance and because there is no assurance
that Mike's will procure such insurance or that if such insurance is procured it
will provide coverage to the extent directors would be indemnified under the
provisions, Mike's may be forced to bear a portion or all of the cost of the
director's claims for indemnification under such provisions. If Mike's is forced
to bear the costs for indemnification, the value of Mike's stock may be
adversely affected.

Mike's has entered into indemnification agreements with certain of its
officers and directors. The indemnification agreements provide for reimbursement
for all direct and indirect costs of any type or nature whatsoever (including
attorneys' fees and related disbursements) actually and reasonably incurred in
connection with either the investigation, defense or appeal of a Proceeding, (as
defined) including amounts paid in settlement by or on behalf of an indemnitee
thereunder.

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

<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth the beneficial ownership of shares of voting
stock of Mike's, as of October 15, 1998, of (i) each person known by Mike's to
beneficially own 5% or more of the shares of outstanding common stock, based
solely on filings with the SEC, (ii) each of Mike's executive officers and
directors and (iii) all of Mike's executive officers and directors as a group.
Except as otherwise indicated, all shares are beneficially owned, and investment
and voting power is held by, the persons named as owners.

Amount and Nature
Name and Address of of Shares Percentage
Beneficial Owner Beneficially Owned Ownership
- -------------------- ------------------ ---------
<S> <C> <C>
Steven A. Cantor (1) 283,333 (2) 5.4%
Annette Cantor (1) 298,650 5.8%
Arthur G. Rosenberg (1) 33,333 (3) *
Frederic D. Heller (1) 160,000 (4) 3.1%
Myron Levy (1) 125,833 (3) 2.4%
All officers and directors
as a group (3 persons) 319,166 (5) 6.1%
- -----------
<FN>
* less than one percent (1%) unless otherwise indicated.

(1) The address for each of these persons is 366 N. Broadway, Jericho, NY 11753
(2) Includes options to purchase 56,667 shares of common stock granted under
the 1995 Long-Term Incentive Plan and options to purchase 76,666 shares of
common stock granted under the 1996 Non-Qualified Plan.
(3) Includes options to purchase 23,333 shares of common stock granted under
the 1996 Non-Qualified Plan.
(4) Includes options to purchase 58,333 shares of common stock granted under
the 1996 Non-Qualified Plan.
(5) Includes 104,999 shares issuable upon the exercise of options granted
pursuant to Mike's stock option plans.
</FN>
</TABLE>

<PAGE>
CERTAIN TRANSACTIONS

In October 1998, Mike's authorized the issuance of 475,000 shares of common
stock to Arthur G. Rosenberg, which shares are issuable upon the closing of New
Yorker and Jerry's, in consideration for prior management services, including
negotiating the acquisition agreements with New Yorker and Mike's, overseeing
the operations of Mike's and providing financial advice to Mike's. These
services were performed in 1998. 85,000 shares were issued at such time to each
of Myron Levy and Frederic D. Heller as directors' compensation.

In August 1998, Mike's issued 97,500 shares of common stock to Marc P.
Palker in consideration for financial consulting services rendered for Mike's
through July 1998.

In May 1998, Mike's entered into a settlement and general release
("Settlement Agreement") with Michael Rosen, its then Chairman of the Board and
President, Rachelle Rosen, its then Secretary and Treasurer, Martin Pilossoph,
the father of Rachelle Rosen and father-in-law of Michael Rosen and then a
director and Elizabeth Pilossoph, the mother of Rachelle Rosen and mother-in-law
of Michael Rosen. Pursuant to the terms of the Settlement Agreement, (i) Michael
Rosen, Rachelle Rosen and Martin Pilossoph voluntarily resigned as officers and
directors of Mike's, (ii) the employment agreements of each of Michael Rosen and
Rachelle Rosen, providing for annual compensation of $125,000 and $40,000
respectively through May 31, 2001, were terminated, (iii) Mike's agreed to repay
certain outstanding indebtedness aggregating $305,000 to Michael Rosen and
Elizabeth Pilossoph and (iv) each of Mike's on the one hand, and the Rosens and
Pilossophs on the other hand, gave the other a general release.

In April 1997, Mike's issued 150,000 shares of common stock to Steven A.
Cantor as consideration for the termination of his three year consulting
agreement providing for payments of $125,000 annually, which would have
commenced on Mike's initial public offering in July, 1997.

In October 1996, Mike's issued 16,667 shares of common stock to Frederic D.
Heller, Mike's former Vice President-Finance, Treasurer and a director, as
payment for services rendered during the year ended December 31, 1996. These
shares were valued at $3.00 per share, the estimated fair market value of the
common stock at the date of issuance.

On August 28, 1996, Michael Rosen was issued a promissory note in the
principal amount of $206,250. The funds that Mr. Rosen loaned Mike's were the
proceeds of a sale by Mr. Rosen to investors of 183,333 shares of his common
stock at a price of $1.12 per share. This loan bears interest at a rate of 8%
and initially was payable the earlier of (i) thirteen (13) months from the date
of the loan, or (ii) the date Mike's successfully consummates an initial public
offering of securities of Mike's, but only to the extent that the over-allotment
option is exercised in such offering and only from the proceeds received by
Mike's from the exercise of the over-allotment option. In September 1996, the
maturity date of this promissory note was revised to September 30, 1998. In
addition, the revised promissory note provides that one-half of the outstanding
principal amount of the note will be paid with accrued interest thereon in the
event Mike's successfully consummates an initial public offering of securities
of Mike's, but only to the extent that the over-allotment option was exercised
in such offering and only from the proceeds received by Mike's from the exercise
of the over-allotment option. This loan was part of the May 1998 settlement
agreement with Mr. Rosen.

<PAGE>

In August, September and October 1996, Mike's received three loans from
Steven A. Cantor aggregating $253,750. A portion of the funds that this
stockholder loaned Mike's was a result of the stockholder selling shares of his
common stock to an investor. In August 1996, this stockholder sold 38,889 shares
of his common stock at a price of $1.12 per share. In September 1996, this
stockholder sold 23,333 shares of his common stock at a price of $1.50 per
share. These loans, which were consolidated into one note in September 1997,
bear interest at a rate of 8% and are payable the earlier of (i) June 1, 1997,
or (ii) with respect to $123,750 of the principal amount, the date Mike's
successfully consummates an initial public offering of securities of Mike's, but
only to the extent that either the over-allotment option is exercised in such
offering or within ninety (90) days after the underwriter elects not to exercise
the over-allotment option. This loan was repaid in 1997.

As a general rule, all transactions among Mike's and its officers,
directors or stockholders have been, and in the future will be, made on terms no
less favorable to Mike's than those available from unaffiliated parties.

<PAGE>
SELLING STOCKHOLDERS

This prospectus will also be used for the offering of additional shares of
common stock owned by persons who have participated in a recent private offering
of Mike's securities (the "Selling Stockholders"). Except for 342,136 shares
owned by the Selling Stockholders, the Selling Stockholders have agreed that the
remaining shares of common stock owned by them which are registered for resale
hereunder may not be sold for sixty (60) days from the date of this prospectus
without the prior written consent of Millennium Securities. Mike's will not
receive any proceeds from such sales. Millennium Securities may release such
restriction at any time after completion of this offering, although there are no
understandings or arrangements in this regard. The resale of the securities by
the Selling Stockholders is subject to prospectus delivery and other
requirements of the Securities Act.

The Shares are being offered by the following persons in the amounts set
forth below:
<TABLE>
<CAPTION>

Beneficial Ownership Number of Shares Beneficial Ownership
Stockholder Prior to Offering Offered After Offering
----------- -------------------- ---------------- --------------------
<S> <C> <C> <C>
Arthur & Janet Wolfman 200,000 200,000 --
Barney & Madeline Shapiro 100,000 100,000 --
David Lieberman 178,577 80,000 98,577
Vosavu Pty, Ltd. 163,559 80,000 83,559
Nader D. Rashti 200,000 200,000 --
Sean Desmond 100,000 100,000 --
Gary L. Spieler 200,000 200,000 --
Shawn Campbell 400,000 400,000 --
Ted & Phyllis Cohen 100,000 100,000 --
Barry Gerston 100,000 100,000 --
</TABLE>

<PAGE>
DESCRIPTION OF SECURITIES

Capital Stock

Mike's authorized capital stock consists of 20,000,000 shares of common
stock, $.001 par value per share and 500,000 shares of preferred stock, $.01 par
value per share.

Common Stock

Holders of the common stock do not have subscription, redemption,
conversion or preemptive rights. The shares of common stock sold by Mike's in
this offering will be, when issued and paid for, fully paid and non-assessable.
Each share of common stock is entitled to participate pro rata in distribution
upon liquidation, subject to the rights of holders of preferred stock, and to
one vote on all matters submitted to a vote of stockholders. The holders of
common stock may receive cash dividends as declared by the Board of Directors
out of funds legally available therefor, subject to the rights of any holders of
preferred stock. Holders of the common stock are entitled to elect all
directors. Mike's Board consists of three classes each of which serves for a
term of three years. At each annual meeting of the stockholders the directors in
only one class will be elected. The holders of the common stock do not have
cumulative voting rights, which means that the holders of more than half of the
shares voting for the election of a class of directors can elect all of the
directors of such class and in such event the holders of the remaining shares
will not be able to elect any of such directors.

Preferred Stock

Mike's certificate of incorporation, as amended, authorizes the issuance of
up to 500,000 shares of preferred stock, par value $.01 per share.

The issuance of additional Series A preferred stock or preferred stock by
the Board of Directors could adversely affect the rights of holders of shares of
common stock by, among other things, establishing preferential dividends,
liquidation rights or voting power. The issuance of Series A preferred stock or
preferred stock could be used to discourage or prevent efforts to acquire
control of Mike's through the acquisition of shares of common stock.

Warrants

Class A Warrants were issued in connection with Mike's July 31, 1997
initial public offering. The following summary of the provisions of the
warrants.

Each warrant entitles its registered holder to purchase one share of common
stock (subject to certain adjustments) through June 30, 2000, at a price of
$5.00 per share. A warrantholder may exercise warrants by surrendering the
warrant certificate to Mike's, together with a properly completed and signed
form of election to purchase and the payment of the exercise price and any
transfer tax. The election to purchase is on the reverse side of the warrant
certificate. Warrantholders who exercise a warrant for less than all of the
warrants evidenced by a warrant certificate will receive a new warrant
certificate for the remaining number of warrants.

<PAGE>

Warrantholders cannot exercise their warrants unless a current registration
statement is on file with the SEC and various state securities commissions.
Mike's is required to file post-effective amendments to
the registration statement when events require such amendments. While Mike's
intends to file post-effective amendments when necessary, there is no assurance
that the registration statement will be kept effective. If the registration
statement is not kept current for any reason, the warrants will not be
exercisable, and the warrants may be worth less. A warrantholder may not be
permitted to exercise his warrants if the shares of common stock underlying the
warrants are not registered or qualified for sale in the state where the
warrantholder lives. If Mike's is unable to qualify the common stock underlying
such Warrants for sale in certain states, holders of Mike's Warrants in those
states will have no choice but to either sell such Warrants or allow them to
expire.

Mike's has authorized and reserved for issuance a number of underlying
shares of common stock sufficient to provide for the exercise of the warrants.
When issued, each share of common stock will be fully paid and nonassessable.

Warrantholders do not have any voting or other rights as shareholders of
Mike's unless and until warrants are properly exercised and exchanged for
shares.

Redemption Rights. Mike's may redeem any or all of the warrants upon
payment of $.01 per warrant, on not less than thirty (30) days' nor more than
sixty (60) days' written notice at any time, provided that the average closing
bid price of the common stock for twenty (20) consecutive trading days ending
three (3) days of the notice of redemption has equaled or exceeded $10.00 per
share. Warrantholders won't be able to purchase the common stock underlying the
warrants called for redemption unless they exercise the warrants prior to the
date specified by Mike's in the redemption notice.

Adjustments. The exercise price and the number of shares of common stock
issuable upon the exercise of each warrant are subject to adjustment in the
event of a stock dividend, recapitalization, merger, consolidation or certain
other events.

Until the warrants expire warrantholders have the opportunity, at nominal
cost, to profit from a rise in the market price of Mike's common stock. An
exercise of the warrants dilutes the then book value of the Mike's common stock
held by the public investors and their percentage ownership. Until the warrants
expire, the terms upon which Mike's may obtain additional capital may be
adversely affected. Warrantholders may be expected to exercise them at a time
when Mike's is likely to be able to obtain equity capital on terms more
favorable than those provided for by the warrants.

Private Placement

From July through November 1998, Mike's issued an aggregate of 7.8 private
placement units to 10 accredited persons, each unit consisting of a $50,000
principal amount of private placement notes and 200,000 shares. The proceeds
from the sale of the private placement units were used primarily to fund working
capital and general corporate purposes until such time as Mike's uses the
proceed from this offering to acquire the assets of New Yorker and Jerry's,
although a portion of the proceeds from the sale of the units was used to repay
certain indebtedness.

<PAGE>

The private placement notes bear interest at a rate equal to 12% per annum,
payable at maturity. The private placement notes mature on the earlier of (i)
December 1, 1999, or (ii) the closing date of this offering; provided, that the
maturity of the private placement notes will be accelerated upon an Event of
Default (as defined therein).

Mike's has registered all of the 1,560,000 shares included in the private
placement units for resale under the registration statement of which this
prospectus forms a part. These shares also have piggyback registration rights
with respect to all other registration statements filed by Mike's with the SEC
(other than on forms S-4 or S-8), subject to customary underwriter's or board of
director's rights to limit such participation. However, all holders of private
placement shares cannot sell them for sixty (60) days after the date of this
prospectus, subject to the prior consent of Millennium Securities. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Underwriting".

Certain Provisions of Mike's Certificate of Incorporation

Mike's certificate of incorporation contains certain provisions which may
be deemed to be "anti-takeover" in nature in that such provisions may deter,
discourage or make more difficult the assumption of control of Mike's by another
entity or person. In addition to the ability to issue preferred stock, these
provisions are as follows:

A vote of 66-2/3% of the stockholders is required by the certificate of
incorporation in order to approve certain transactions including mergers and
sales or transfers of all or substantially all of the assets of Mike's.

Mike's certificate of incorporation also provides that the members of the
Board of Directors of Mike's have been classified into three classes. The term
of each class will run for three years and expire at successive annual meetings
of stockholders. Accordingly, it is expected that it would take a minimum of two
annual meetings of stockholders to change a majority of the Board of Directors.

Section 203 of the Delaware General Corporation Law provides, with certain
exceptions, that a Delaware corporation may not engage in any of a broad range
of business combinations with an interested stockholder, which is defined as a
person who owns 15% or more of the corporation's outstanding voting stock.
Nevertheless, the corporation may engage in a transaction with an interested
stockholder if: (i) the transaction resulting in a person's becoming an
interested stockholder, or the business combination, is approved by the board of
directors of the corporation before the person becomes an interested
stockholder, (ii) the interested stockholder acquires 85% or more of the
outstanding voting stock of the corporation (excluding shares owned by persons
who are both officers and directors of the corporation and shares held by
certain employee stock ownership plans), or (iii) the business combination is
approved by the corporation's board of directors and by the holders of at least
66 2/3% of the corporation's outstanding voting stock at an annual or special
meeting, excluding shares owned by the interested stockholder.

<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, Mike's will have 11,802,908 shares of
common stock outstanding 12,327,908 shares if Millennium Securities'
over-allotment option is exercised in full). Of these shares, the 3,500,000
shares sold in this offering (4,025,000 shares if Millennium Securities'
over-allotment option is exercised in full) will be freely tradeable without
restriction or further registration under the Securities Act, except for any
shares purchased by an "affiliate" of Mike's (in general, a person who has a
control relationship with Mike's) which will be subject to the limitations of
Rule 144 adopted under the Securities Act. Another 1,560,000 shares are
registered under the registration statement of which this prospectus forms a
part and are freely saleable under the Securities Act, but may not be
transferred for sixty days (60) days from the date of this prospectus or at such
earlier date as may be permitted by Millennium Securities. All of the remaining
shares are deemed to be "restricted securities," as that term is defined under
Rule 144 promulgated under the Securities Act.

In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
Mike's (or persons whose shares are aggregated), who has owned restricted shares
of common stock beneficially for at least one year is entitled to sell, within
any three-month period, a number of shares that does not exceed the greater of
(i) 1% of the total number of outstanding shares of the same class or (ii) the
average weekly trading volume of Mike's common stock on all exchanges and/or
reported through the automated quotation system of a registered securities
association during the four calendar weeks preceding the date on which notice of
the sale is filed with the SEC. Sales under Rule 144 are also subject to certain
manner of sale provisions, notice requirements and the availability of current
public information about Mike's. A person who has not been an affiliate of
Mike's for at least the three months immediately preceding the sale and who has
beneficially owned shares of common stock for at least two years is entitled to
sell such shares under Rule 144 without regard to any of the limitations
described above.

Pursuant to the terms of the underwriting agreement, certain Selling
Stockholders owning an aggregate of 1,560,000 shares of common stock have agreed
not to sell such shares for a period of sixty (60) days following the date of
this prospectus without the prior written consent of Millennium Securities. The
sale of any substantial number of these shares in the public market could
adversely affect prevailing market prices following the offering.

No predictions can be made as to the effect, if any, that sales of shares
under Rule 144 or otherwise or the availability of shares for sale will have on
the market, if any, prevailing from time to time. Sales of substantial amounts
of the common stock pursuant to Rule 144 or otherwise may adversely affect the
market price of the common stock or the Warrants offered hereby.

Transfer Agent

The transfer agent and registrar for Mike's common stock is American Stock
Transfer and Trust Company, 6201 15th Avenue, Brooklyn, New York 11219.

<PAGE>

UNDERWRITING

Subject to the terms and conditions contained in the underwriting agreement
between Mike's and the underwriters named below, for which Millennium Securities
Corp. is acting as representative (a copy of which agreement is filed as an
exhibit to the registration statement of which this prospectus forms a part),
Mike's has agreed to sell to each of the underwriters named below, and each of
such underwriters has severally agreed to purchase the number of shares of
common stock set forth opposite its name. All 3,500,000 shares of common stock
offered must be purchased by the several underwriters if any are purchased.
<TABLE>
<CAPTION>
Number
Underwriter of Shares
- ----------- ---------
<S> <C>
Fairchild Securities Corp.
Millennium Securities Corp.

----------

Total.....................................
==========

</TABLE>

The underwriters propose to offer the shares of common stock directly to
the public at the offering price set forth on the cover page of this prospectus
and at such price less a concession of not in excess of $ per share to certain
securities dealers, of which a concession of not in excess of $ per share may be
reallowed to certain other securities dealers. After this offering, the public
offering price, allowances, concessions and other selling terms may be changed
by the Underwriters.

This is a firm commitment offering. The underwriting agreement provides
that the obligations of the underwriters to purchase common stock are subject to
certain conditions, including that if any of the common stock is purchased by
the underwriters pursuant to the underwriting agreement, such shares must be so
purchased.

Mike's has granted options to the Underwriters, exercisable within 30 days
after the date of this prospectus, to purchase from Mike's up to an aggregate of
525,000 additional shares of common stock to cover over-allotments, if any, at
the public offering price less the underwriting discount set forth on the cover
page of this prospectus. Mike's will be obligated, pursuant to the
over-allotment option, to sell shares of common stock to the Underwriters to the
extent such over-allotment option is exercised.

Mike's officers and directors have agreed that they will not, without the
prior written consent of Millennium Securities Corp., offer, sell or dispose of
any shares of common stock or securities exchangeable or convertible into shares
of common stock until 12 months after this offering. Subject to certain
limitations, Mike's has also agreed that it will not, without consent of
Millennium Securities Corp., offer, sell or dispose of any shares of common
stock, options or warrants to acquire shares of common stock or securities

<PAGE>

exchangeable for or convertible into shares of common stock until 90 days after
this offering (except for (i) previous commitments set forth in this Prospectus,
(ii) shares issued pursuant to stock options outstanding on the date hereof and
(iii) stock options issued pursuant to employee benefit or incentive
compensation plans in effect on the date hereof).

Mike's and the Selling Stockholders have agreed to indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act, and to contribute to certain payments that the underwriters may
be required to make in respect thereof.

The Underwriters do not intend to confirm sales of the common stock to
any account over which it exercises discretionary authority.

This section is not a complete statement of the terms and conditions of the
underwriting agreement and related documents, copies of which are on file at the
offices of the Underwriters, Mike's and the SEC, and forms of which have been
filed as an exhibit to the registration statement of which this prospectus is a
part.

In connection with its private placement of units, Mike's paid Millennium
Securities Corp., as placement agent, a $35,000 commission on the sales of the
private placement units.

LEGAL MATTERS

The validity of the issuance of the securities offered hereby will be
passed upon for Mike's by the law firm of Blau, Kramer, Wactlar & Lieberman,
P.C., Jericho, New York. The law firm of Beckman & Millman, P.C., New York, New
York will pass on certain aspects of this offering on behalf of the
Underwriters. Employees of Blau, Kramer, Wactlar & Lieberman, P. C. own an
aggregate of 228,507 shares of common stock, 80,000 of which are registered for
resale hereunder, and options to purchase 73,333 shares of common stock at $1.50
per share issued under the 1996 Non-Qualified Stock Option Plan.

<PAGE>
EXPERTS

Grant Thornton LLP served as Mike's independent auditors for the nine month
period ended December 31, 1995, and the year ended December 31, 1996. On
September 10, 1997, Mike's received a letter from Grant Thornton LLP in which
they advised Mike's in writing that they had resigned as Mike's independent
auditors.

The reports of Grant Thornton LLP for the nine month period ended December
31, 1995 and for the fiscal year ended December 31, 1996 did not contain an
adverse opinion or a disclaimer of opinion, nor were they qualified or modified
as to uncertainty, audit scope or accounting principles, except that the
opinions included an explanatory paragraph that there were conditions that
raised substantial doubt about the Company's ability to continue as a going
concern.

On January 15, 1998, with the approval of Mike's Board of Directors, Mike's
retained Lazar Levine & Felix LLP as its independent accountants for the year
ending December 31, 1997.

WHERE TO FIND ADDITIONAL INFORMATION

Mike's has filed with the SEC , Washington, D.C., a registration statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
common stock offered hereby. This prospectus does not contain all the
information set forth in the registration statement and the related exhibits.
For further information with respect to Mike's and the shares of common stock
offered by this prospectus, reference is made to such registration statement and
related exhibits. This prospectus contains statements regarding the contents of
contracts or other documents which are not necessarily complete. Please refer to
the copy of such contract or other document filed as an exhibit to the
registration statement for a full statement of the provisions thereof; each such
statement contained herein is qualified in its entirety by such reference.

Mike's is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, files reports,
proxy statements and other information with the SEC. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained at the office of the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's Regional Offices at
Suite 788, 1375 Peachtree St., N.E., Atlanta, Georgia 30367; Northwestern Atrium
Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60621-2511; and 7
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the SEC, Washington, D.C. 20549,
at prescribed rates, and from the SEC'S Web site at the address
http://www.sec.gov.

<PAGE>

INDEX TO FINANCIAL STATEMENTS

Page
----
- - Pro Forma Financial Statements:
Mike's Original, Inc.
Introduction to Pro Forma Financial Statements F-2
Pro Forma Balance Sheet as of September 30, 1998 F-3
Pro Forma Statement of Operations Nine Months Ended September 30, 1998 F-4
Pro Forma Statement of Operations Year Ended December 31, 1997 F-5
Notes to Pro Forma Financial Statements F-6

- - Historical Interim Financial Statements:
Mike's Original, Inc. Financial Statements - September 30, 1998
Balance Sheet F-7
Statements of Operations F-8
Statements of Cash Flows F-10
Notes to Financial Statements F-11

- - Historical Year End Financial Statements:
Mike's Original, Inc. Financial Statements - December 31, 1997
Report of Independent Certified Public Accountants - Current Auditor F-14
Report of Independent Certified Public Accountants - Prior Auditor F-15
Financial Statements:
Balance Sheets F-16
Statements of Operations F-17
Statement of Changes in Stockholders' Deficit F-18
Statements of Cash Flows F-19
Notes to Financial Statements F-21

New Yorker Ice Cream Corp. Financial Statements - December 31, 1997
Report of Independent Certified Public Accountants F-39
Balance Sheet F-40
Statements of Operations F-41
Statements of Stockholders' Equity F-42
Statements of Cash Flows F-43
Notes to Financial Statements F-44

Jerry's Ice Cream, Inc. Financial Statements - December 31, 1997
Report of Independent Certified Public Accountants F-48
Balance Sheet F-49
Statements of Operations F-50
Statements of Cash Flows F-51
Notes to Financial Statements F-52

<PAGE>
MIKE'S ORIGINAL, INC.
INTRODUCTION TO PRO FORMA FINANCIAL STATEMENTS
(unaudited)

The following unaudited pro forma financial statements have been prepared
based upon certain pro forma adjustments to the historical financial statements
of Mike's Original, Inc. , set forth elsewhere in this prospectus. The pro forma
financial statements should be read in conjunction with the notes thereto and
the historical financial statements of the Company.

The accompanying pro forma balance sheet has been presented as if the
transactions described below occurred at the Company's balance sheet date. The
accompanying pro forma statements of operations have been prepared as if the
transactions occurred at the beginning of the year ended December 31, 1997 and
nine months ended September 30, 1998. In addition, the pro forma financial
statements are presented giving effect to the Company's offering of securities
contemplated herein.

These proforma financial statements do not purport to be indicative of the
results which would actually have been obtained had the pro forma transactions
been completed as of the beginning of the year ended December 31, 1997 and the
nine months ended September 30, 1998.

The pro forma transactions (see notes to pro forma financial statements)
are as follows:

- Private Placement Notes in the amount of $190,000 ($171,000 net of
commissions) and the issuance of 760,000 shares of the Company's Common Stock.

- The restructure of certain of the Company's debt.

- The issuance of shares in exchange for services rendered

- The sale of 3,500,000 shares of the Company's Common Stock

- The acquisition of two ice cream distributors using the proceeds from
the sale of the 3,500,000 shares of common stock

F-2
<PAGE>
MIKE'S ORIGINAL, INC.
PROFORMA BALANCE SHEET
SEPTEMBER 30, 1998

Mike's Original New Yorker Jerry's
--------------- ---------- -------
<S> <C> <C> <C>
ASSETS

Current Assets:
Cash $ 7,979

Accounts Receivable 24,218 349,671 4,930
Inventories 62,454 181,755 7,437
Prepaid expenses and other current assets 555,579 1,500

----------- --------- --------
Total current assets 650,230 531,426 13,867

Fixed assets 2,086 107,568 30,632

Intangible assets 1,668 191,185

Other assets 111,479 76,881

------------ --------- --------
TOTAL ASSETS $ 765,463 $ 715,875 $235,684
=========== ========= ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued liabilities $ 569,179 $ 353,347 $ 21,650
Notes payable - related parties 331,586
Notes payable - other 180,000 129,306 41,997

Notes payable - trade 520,244
Accrued interest - Related Party notes 55,325
Current portion long-term debt

------------ --------- --------
Total current liabilities 1,656,334 482,653 63,647

Notes payable - acquisition
Long-term debt 171,000 91,807

------------ --------- --------
Total liabilities 1,656,334 653,653 155,454
------------ --------- --------
Stockholders' equity (deficit):
Common stock 4,222 26,750 138,890

Additional paid-in capital 10,829,066 117,897

Treasury stock (147,808)

Accumulated deficit (11,724,159) 65,383 (58,660)

------------ --------- --------
Total stockholders' equity (deficit) (890,871) 62,222 80,230
------------ --------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 765,463 $ 715,875 $235,684
=========== ========= ========
</TABLE>

F-3

Subsequent Transactions Proforma Acquisition/Offering
------------------------ ------------------------------ Proforma
Debit Credit Debit Credit September 30, 1998
----- ------ ----- ------ ------------------
<S> <C> <C> <C> <C> <C>
ASSETS

Current Assets:
Cash $171,000(1) $2,800,000(4) $ 970,000(6) $1,417,379
100,000(6)
491,600(8)
Accounts Receivable 354,601(5) 24,218
Inventories 100,000(6) 189,192(5) 162,454
Prepaid expenses and other current assets 570,000(1) 1,500(5) $30,579
1,095,000(8)
----------
Total current assets 1,634,630

Fixed assets 1,698,475(6) 1,838,761

Intangible assets 836,525(6) 191,185(5) 595,485
242,708(5)
Other assets 76,881(5) 61,479
50,000(6)
----------
TOTAL ASSETS $4,130,355
==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued liabilities $350,000(2) $331,697(5) $262,479
Notes payable - related parties 196,600(8) 134,986
Notes payable - other 190,000(1) 171,303(5) 0
370,000(8)
Notes payable - trade $140,000(2) 380,244
Accrued interest - Related Party notes 55,325
Current portion long-term debt 323,750(6) 323,750

----------
Total current liabilities 1,156,784

Notes payable - acquisition 371,250(6) 371,250
Long-term debt 262,807(5) 0

----------
Total liabilities 1,528,034
----------
Stockholders' equity (deficit):
Common stock 760(1) 165,640(5) 3,500(4) 11,802
170(3) 820(6)
1,500(6)
830(7)
Additional paid-in capital 19,000(1) 569,240(1) 117,897(5) 2,796,500(4) 17,094,678
127,330(3) 671,372(6)
1,498,500(6)
621,670(7)
Treasury stock 147,808(6) 0

Accumulated deficit 127,500(3) 490,000(2) 6,723(5) 75,000(8) (14,504,159)
1,500,000(6)
622,500(7)
1,095,000(8)

----------
Total stockholders' equity (deficit) 2,602,321
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 4,130,355
============

</TABLE>
<PAGE>
MIKE'S ORIGINAL, INC.
PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(unaudited)
<TABLE>
<CAPTION>

Mike's Original New Yorker Jerry's Eliminations
--------------- ---------- ------- ------------
<S> <C> <C> <C> <C>
Sales, net $ 130,403 $4,723,536 $640,957 $341,751

Cost of sales 256,775 4,226,799 500,698 341,751

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

Gross profit (126,372) 496,737 140,259
---------- ---------- --------
Operating expenses
Selling, marketing and shipping 190,355
Research & development 12,254
General and administrative 381,179 404,586 138,421
---------- ---------- --------
Total operating expenses 583,788 404,586 138,421
---------- ---------- --------
Loss from operation (710,160) 92,151 1,838
Interest expense (net) 94,982 7,394 5,392
---------- ---------- --------
Net loss $ (805,142) 84,757 (3,554)
========== ========== ========
Weighted average common shares outstanding 3,285,429
==========
Basic loss per share $ (0.17)
==========
</TABLE>
<TABLE>
<CAPTION>
Adjustments
----------------------- Pro Forma
Debit Credit September 30, 1998
----- ------ ------------------
<S> <C> <C> <C>
Sales, net $5,153,145

Cost of sales 138,000(9) 4,780,521

-----------
Gross profit 372,624
-----------
Operating expenses
Selling, marketing and shipping 190,355
Research & development 12,254
General and administrative 70,050(9) 175,500(9) 818,736

-----------
Total operating expenses 1,021,345
-----------
Loss from operation (648,721)
Interest expense (net) 94,982
-----------
Net loss (743,703)
===========
Weighted average common shares outstanding 11,802,908
===========
Basic loss per share $ (0.06)
===========

</TABLE>
F-4
<PAGE>
Mike's Original, Inc.
Pro Forma Statement of Operations
Year Ended December 31, 1997
(unaudited)
<TABLE>
<CAPTION>
Mike's Original New Yorker Jerry's Eliminations
--------------- ---------- ------- ------------
<S> <C> <C> <C> <C>
Sales, net $ 384,348 $6,498,430 $807,310 $515,099

Cost of sales 451,198 5,990,781 656,922 515,099
----------- ---------- --------
Gross profit (66,850) 507,649 150,388
----------- ---------- --------
Operating expenses
Selling, marketing and shipping 723,861
General and administrative 2,177,698 397,702 157,121
Research & development 28,584
----------- ---------- --------
Total operating expenses 2,930,143 397,702 157,121
----------- ---------- --------
Loss from operation (2,996,993) 109,947 (6,733)

Interest expense (net) 1,505,642 15,852 9,232
----------- ---------- --------
Net loss $(4,502,635) $ 94,095 $(15,965)
=========== ========== ========
Weighted average common shares outstanding 2,662,013
===========
Basic loss per share $ (1.69)
===========
</TABLE>
<TABLE>
<CAPTION>
Adjustments
----------------------- Pro Forma
Debit Credit December 31, 1997
----- ------ -----------------
<S> <C> <C> <C>
Sales, net $7,174,989

Cost of sales 184,000(9) 6,767,802
----------
Gross profit 407,187
----------
Operating expenses
Selling, marketing and shipping 723,861
General and administrative 93,400(9) 256,127(9) 2,569,794
Research & development 28,584

----------
Total operating expenses 3,322,239
----------
Loss from operation (2,915,052)

Interest expense (net) 1,530,726
----------
Net loss $(4,445,778)
===========
Weighted average common shares outstanding 11,802,908
===========
Basic loss per share $ (0.38)
===========
</TABLE>
F-5
<PAGE>
MIKE'S ORIGINAL, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1998
(unaudited)
(1) In November 1998, the Company completed the sale of 3.8 Private Placement
Units, each unit consisting of $50,000 12% notes and 200,000 shares of common
stock. This resulted in net proceeds of $171,000. The aggregate fair value of
the shares of common stock at the time of issuance was deemed to be $570,000
($0.75 per share) and is being considered as additional interest. These notes
must be repaid from the proceeds of the offering.

(2) The Company has entered into agreements to restructure certain debt which
includes (i) forgiveness of trade notes payable of $140,000; and (ii)
forgiveness and reduction of accounts payable in the amount of $350,000.

(3) In October 1998, the Company issued 85,000 shares of common stock each to
Myron Levy and Frederic Heller, outside directors, for prior services rendered.
The aggregate fair value of these shares was deemed to be $127,500 ($0.75 per
share).

(4) The Company is offering 3,500,000 shares of its Common Stock at an assumed
price of $1.00 per share with estimated net proceeds of $2,800,000.

(5) This adjustment eliminates all assets and liabilities of New Yorker Ice
Cream Corp. and Jerry's Ice Cream, Inc. (see Note 6) not being acquired by the
Company.

(6) The Company has acquired the rights to acquire assets of New Yorker Ice
Cream Corp. and Jerry's Ice Cream, Inc. in exchange for $1,020,000 in cash (of
which $50,000 was paid prior to September 30, 1998), $200,000 8% notes payable
in six months, assumption of debt of $495,000 payable at 8% over four years and
$820,000 in the Company's Common Stock. In addition, inventory will be purchased
currently estimated at $100,000.

The acquisition has been accounted for as a purchase and therefore fixed
assets have been recorded at fair market appraisal value resulting in the
recording of additional equity and reducing goodwill.

The purchase price is summarized as follows:
<TABLE>
<S> <C>
Cash $1,020,000
Notes payable 695,000
Common stock 820,000
----------
Total purchase price 2,535,000
Less: Book value of fixed assets acquired (138,200)
----------
Excess purchase price $2,396,800
==========
</TABLE>
Allocation of total purchase price
<TABLE>
<S> <C>
Fixed Assets $1,698,475
Covenant Not to Compete 150,000
Goodwill 686,525
----------
2,535,000
==========
</TABLE>
<PAGE>

Fixed assets have been written up to fair market value (of $1,836,675)
based upon an appraisal performed for purposes of establishing the purchase
price of the entities to be acquired. In addition, inventory estimated to be
approximately $100,000 will be acquired.

(7) The Company will issue 830,000 of its common shares in exchange for services
rendered. Arthur Rosenberg, President, and David Lieberman, outside counsel,
will be issued 475,000 and 350,000 shares respectively at the closing of the
acquisitions for management services provided during 1998. The remaining 5,000
shares will be issued to the Company's financial consultant. These shares have
been valued at $0.75 per share.

(8) This entry reflects the payment of notes to related parties and notes issued
in the private placement of $491,600. Deferred interest aggregating $1,095,000
is being charged to accumulated deficit. A forgiveness of $75,000 has been
recorded associated with the settlement of a related party debt.

(9) Preparation of the pro forma statements of operations gives effect to the
depreciation of fixed assets and amortization of goodwill as if they were
acquired at the beginning of the period. In addition, a management fee payable
by New Yorker Ice Cream Corp. to a party not being acquired has been eliminated
since it will not continue to be paid after closing.

F-6
<PAGE>
MIKE'S ORIGINAL, INC.
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1998
------------------
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 7,979
Accounts receivable, less allowance for
doubtful accounts of $ -0- 24,218
Inventories 62,454
Prepaid expenses & other current assets 555,579
---------
Total current assets 650,230

Fixed assets, net of accumulated depreciation of
$34,874 2,086
Trademarks and organization costs, net of accumulated
amortization of $17,148 1,668

Security deposits 1,975
Other assets 109,504
---------
TOTAL ASSETS $ 765,463
=========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities $569,179
Notes payable to related parties (NOTE - D) 331,586
Notes payable - other (NOTE - B) 180,000
Notes payable-trade 520,244
Accrued interest-Related party notes 55,325
----------
Total current liabilities 1,656,334

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 per value;
20,000,000 shares authorized; 4,222,908
shares issued and outstanding 4,222
Additional paid-in capital 10,829,066
Accumulated deficit (11,724,159)
----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ( 890,871)
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 765,463
==========

</TABLE>
F-7
<PAGE>

MIKE'S ORIGINAL, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>

Three Months Ended September 30,
--------------------------------
1998 1997
---- ----
<S> <C> <C>
Sales, net $ 780 $ 15,859

Cost of sales 36,411 50,498
--------- ---------
Gross profit (35,631) (34,639)

Operating expenses
Selling, marketing and shipping 90,979 35,658
Research and Development (1,500) 2,030
General and administrative 22,422 431,139
--------- ---------
Total operating expenses 111,901 468,827
--------- ---------
Loss from operations (147,532) (503,466)

Interest expense (net) 77,806 87,453
--------- ---------
Net loss before extraordinary item (225,338) (590,919)

Extraordinary item - forgiveness of debt 5,749 -
---------- ----------
Net income (loss) $ (219,589) $ (590,919)
========== ==========
Weighted average common
shares outstanding 3,676,674 3,020,264
========== ==========
Basic loss per share before extraordinary item $ (.06) $ ( .20)

Basic income per share from extraordinary item - -
---------- ----------
Basic income (loss) per share $ (.06) $ ( .20)
========== ==========
</TABLE>
F-8
<PAGE>

MIKE'S ORIGINAL, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>

Nine Months Ended September 30,
------------------------------
1998 1997
---- ----
<S> <C> <C>
Sales, net $ 130,403 $ 361,660

Cost of sales 256,775 344,961
---------- ----------
Gross profit (126,372) 16,699

Operating expenses
Selling, marketing and shipping 190,355 645,867
Research and Development 12,254 21,138
General and administrative 381,179 1,943,330
--------- ----------
Total operating expenses 583,788 2,610,335
--------- ----------
Loss from operations (710,160) (2,593,636)

Interest expense (net) 94,982 1,495,759
--------- ----------
Net loss before extraordinary item (805,142) (4,089,395)

Extraordinary item - forgiveness of debt 222,631 -
----------- -----------
Net loss $ (582,511) $(4,089,395)
========== ===========
Weighted average common
shares outstanding 3,441,927 2,471,455
========== ===========
Basic loss per share before extraordinary item $ (.23) $ (1.65)

Basic income per share from extraordinary item .06 -
---------- ----------
Basic loss per share $ ( .17) $ (1.65)
========== ==========
</TABLE>
F-9
<PAGE>
MIKE'S ORIGINAL, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
---- ----
<S> <C> <C>

Cash flows from operating activities
Net loss $ (582,511) $(4,089,395)
Adjustments to reconcile net loss to net cash
used in operating activities
Imputed interest on stock issued 75,000 1,327,051
Provision for doubtful accounts (24,185)
Depreciation and amortization 4,591 11,040
Compensation expense attributable to the
issuance of common stock for services rendered 158,696 1,331,250
Forgiveness of debt (222,631)
Changes in operating assets and liabilities
Accounts receivable (11,618) 52,089
Inventories 81,445 77,742
Prepaid expenses & other current assets (13,276) (17,487)
Accounts payable and accrued liabilities 48,139 (244,839)
---------- -----------
Net cash used in operating activities (486,350) (1,552,549)
---------- -----------

Cash flows from investing activities
Purchases of office equipment (1,513)
Security deposit 3,093 14,023
Other assets (111,154)
---------- -----------
Net cash (used by) provided by investing activities (109,574) 14,023
---------- -----------

Cash flows from financing activities
Proceeds from notes payable to related parties 20,000
Proceeds from initial public offering 3,342,444
Proceeds from convertible note 100,000
Proceeds from notes payable 180,000 (853,032)
Proceeds of interim notes payable 340,000
Payment of interim notes payable (315,000)
Payment of related party debt (25,000) (253,750)
Payment of line of credit (9,374) (3,027)
Payment of capital lease obligation (13,568)
---------- -----------
Net cash (used) provided by financing activities 165,626 2,344,067
---------- -----------
Net Increase (Decrease) in Cash (430,298) 805,541
Cash at beginning of period 438,277 32,523
---------- -----------
Cash at end of period $ 7,979 $ 838,064
========= ===========
</TABLE>
F-10
<PAGE>
MIKE'S ORIGINAL INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(Unaudited)

NOTE A - BASIS OF PRESENTATION

The balance sheet as of September 30, 1998 and the related statements of
operations for the three-month and six month periods ended September 30, 1998
and 1997 and changes in cash flow for the six month period ended September 30,
1998 and 1997 and have been prepared by Mike's Original, Inc. (the "Company")
without audit. In the opinion of management, all adjustments (which include only
normal, recurring accrual adjustments) necessary to present fairly the financial
position as of September 30, 1998 and for all periods presented have been made.

Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted accounting
principles, have been condensed or omitted. These financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's Annual Report filed on Form 10-KSB. Results of operations for the
period ended September 30, 1998 are not necessarily indicative of the operating
results expected for the full year.

NOTE B STOCKHOLDERS' EQUITY

During February 1998, the Company issued 30,000 shares of common stock to
one of its marketing consultants in exchange for services to be performed during
1998. These shares were valued at $ 2.96 per share, the estimated fair value of
the stock at the date of issuance and accordingly $ 88,800 is charged to
operations during the nine month period ended September 30, 1998.

During August 1998, the Company issued 97,500 shares of common stock to one
of its financial consultants in exchange for services performed through July,
1998. These shares were valued at $ .38 per share, the estimated fair value of
the stock at the date of issuance and accordingly $ 36,563 is charged to
operations during the nine month period ended September 30, 1998.

The Company commenced a private placement in July, 1998 of units, each unit
consisting of one $50,000 principal amount of 12% promissory note and 200,000
shares of Common Stock. As of September 30, 1998 the Company sold four units to
seven people (.4 units to a related party). The 800,000 shares of Common Stock
issued was accounted for as additional interest at a price of $.75 per share.
The notes are due in December, 1999 or at the closing of a secondary offering of
securities with gross proceeds of at least $3,000,000. The additional interest
is being amortized over the remaining period unless a qualifying offering is
closed at which time any remaining balance will be written off.

In July, 1998, the Company acquired, from Multi Venture Partners Ltd., an
unrelated third party, the rights to purchase the assets of New Yorker Ice Cream
Corp. and Jerry's Ice Cream Co., Inc. in exchange for $50,000 in cash, 1,500,000
shares of the Company's common stock and 750,000 options to purchase additional
shares of the Company's common stock at an exercise price of $1.50 The
agreements, previously executed to acquire these entities expired in April, 1998
and were extended to September 30, 1998 when they were terminated. The terms of
the acquisitions are substantially the same as existed in the original
agreements. The cash will be credited at closing which is when the shares will
be issued.

F-11
<PAGE>
NOTE C - COMMITMENT AND CONTINGENCIES

Legal Proceedings

The Company is subject to various legal proceedings, claims and liabilities
which arise in the ordinary course of its business. In the opinion of management
, the amount of ultimate liability with respect to these actions will not have a
material adverse effect on the Company's results of operations, cash flow or
financial position.

The Company has entered into a settlement with Darigold, Inc. in the amount
of $33,574 plus interest payable in equal monthly installments of $4,125.45
commencing in April, 1998 after the Company made an initial payment of $10,000.
In July , 1998 the Company defaulted and the unpaid balance of approximately
$14,000 was demanded by Darigold, Inc.. The Company negotiated to make a final
payment of $10,000 in full settlement of all amounts due which was paid in
August, 1998.

On April 2, 1998, the Company was served with a complaint in an action
pending in the Supreme Court of New York, Nassau County and seeks damages in the
amount of $82,037, arising from the Company's alleged failure to pay for certain
inventory purchased. The Company disputes the allegations of the complaint and
intends to file an answer and vigorously defend against the allegations raised
in the complaint.

In the opinion of management, the amount of any additional liability in
connection with the aforementioned matters, in excess of amounts provided for in
the normal course of business, will not materially affect the Company.

NOTE D - NOTES PAYABLE TO RELATED PARTIES

Effective May 1, 1998, the Company entered into an agreement with Michael
Rosen and Rachelle Rosen and certain other family members. Pursuant to the
agreement, Michael Rosen resigned as Chairman of the Board and President of the
Company and Rachelle Rosen as Secretary and Treasurer. Michael Rosen and his
father-in-law, Martin Pilossoph, also resigned as directors of the Company. The
agreement provides, among other things, for the termination of Mr. Rosen's
employment agreement, which would otherwise have expired May 31, 2001 and which
provided for an annual base salary of $125,000 together with pre-tax incentives.
The agreement further provides that the outstanding indebtedness to Michael
Rosen and Rachelle Rosen in the approximate sum of $280,000 is reduced to
$130,336. In addition, $25,000 of indebtedness due to Elizabeth Pilossoph, Mr.
Rosen's mother-in-law, is reduced to $6,250. The Company recorded extraordinary
income of approximately $217,000 in the quarter ended September 30, 1998 as a
result of the aforementioned forgiveness of debt.

On May 22, 1998, a shareholder advanced the Company $35,000 for working
capital. This advance bears interest at the rate of 10% and is due on demand.
The shareholder has the option to convert this debt into units, or fractions of
units, associated with the private placement (See - NOTE B). In July, 1998 this
same shareholder advanced the Company an additional $5,000 bringing the total
demand loan to $40,000. On August 14, 1998 the entire amount was converted to .8
units of the private placement with half being transferred to an unrelated third
party.
F-12
<PAGE>
NOTE E - SUBSEQUENT EVENTS

On July 27, 1998, the Company commenced a private placement, through
Millennium Securities Corp., of its securities to provide gross proceeds of up
to $500,000. The securities are being offered in units consisting of $50,000 12%
Notes due on December 1, 1999 and 200,000 shares of common stock. This offering
terminated on November 11,1998, with gross proceeds of $390,000 received by the
Company representing the sale of 7.8 units. This private placement states that
the Company plans to make a secondary offering of its securities of at least
$3,000,000 of gross proceeds in the fall of 1998. Although the Company feels
such an offering can be accomplished, there is no assurance that such an
offering will be consummated.

In October, 1998 the Company issued 85,000 shares of its Common Stock to
each of its outside directors, Myron Levy and Frederic Heller, and granted
475,000 shares to Arthur G. Rosenberg, to be issued at the closing of the
acquisitions, for prior management services.

On November 13, 1998, the Company filed a registration statement with the
Securities and Exchange Commission on Form SB-2. A total of 5,060,000 shares of
the Company's Common Stock were registered for sale, 3,500,000 by the Company
and 1,560,000 by the purchasers of private placement units. It is anticipated
that the gross proceeds to the Company will be $3,500,000 and that the Company
will not receive any proceeds from the sales by shareholders.

F-13
<PAGE>

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
Mike's Original, Inc.

We have audited the balance sheet of Mike's Original, Inc. (a Delaware
corporation) as of December 31, 1997, and the related statements of
operations, changes in stockholders' equity, and cash flows for the
year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.

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

In our opinion, the 1997 financial statements referred to above
present fairly, in all material respects, the financial position of
Mike's Original, Inc. as of December 31, 1997, and the results of its
operations and its cash flows for the year then ended in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2
to the financial statements, the Company has incurred a net loss of
$4,502,645 for the year ended December 31, 1997 and as of that date
current liabilities exceeded current assets by $1,062,651 and the
stockholders' deficit aggregated $1,051,056. These factors, among
others, raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans regarding these
matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

/s/ Lazar Levine & Felix LLP
LAZAR LEVINE & FELIX LLP

New York, New York
February 25, 1998, except for Note 14,
the date of which is March 4, 1998

F-14

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
Mike's Original, Inc.

We have audited the accompanying balance sheet of Mike's Original, Inc. as of
December 31, 1996, and the related statements of operations, changes in
stockholders' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mike's Original, Inc. as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company incurred a net loss of $4,050,547 during the year ended December 31,
1996, and, as of that date, the Company's current liabilities exceeded its
current assets by $2,539,788 and the Company's stockholders' deficit was
$2,996,411. These factors, among others, as discussed in Note 2 to the financial
statements, raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ GRANT THORNTON LLP
GRANT THORNTON LLP

Melville, New York
April 17, 1997 (except for Note 8, as to
which the date is June 20, 1997)

F-15

<PAGE>

MIKE'S ORIGINAL, INC.
BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND 1996

- ASSETS (Note 8) -

1997 1996
---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash $ 438,277 $ 32,523
Accounts receivable, less allowance for doubtful
accounts of $15,916 and $20,751 for 1997 and
1996, respectively 12,600 61,219
Inventories (Notes 3b and 4) 143,899 247,608
Prepaid expenses 17,303 16,589
-------- --------
TOTAL CURRENT ASSETS 612,079 357,939
-------- --------
FIXED ASSETS - NET (Notes 3c and 5) 3,505 14,478
-------- --------
OTHER ASSETS:
Trademarks and organization costs, net of accumulated
amortization of $15,489 and $11,787 for 1997 and
1996, respectively (Note 3d) 3,022 6,724
Security deposits and other assets 5,068 19,091
Deferred offering costs - 45,000
-------- --------
8,090 70,815
-------- --------
$623,674 $443,232
======== ========

- LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) -

CURRENT LIABILITIES:
Accounts payable - trade $500,453 $1,104,336
Accrued payroll and payroll taxes 20,587 28,000
Other accrued liabilities (Note 6) 137,822 118,607
Capital lease obligations - current portion - 9,957
Notes payable - related parties (Note 7) 486,250 253,750
Current portion of long-term debt (Notes 8 and 13d) 529,618 1,383,077
--------- ---------
TOTAL CURRENT LIABILITIES 1,674,730 2,897,727
--------- ---------
LONG-TERM LIABILITIES:
Notes payable - related parties (Note 7) - 486,250
Capital lease obligations - 3,611
Accrued interest - related parties - 52,055
--------- ---------
- 541,916
--------- ---------

COMMITMENTS AND CONTINGENCIES (Notes 2, 12, 13 and 14)

STOCKHOLDERS' EQUITY (DEFICIT) (Notes 10 and 11):
Preferred stock, $.01 par value; 500,000 shares
authorized; none issued or outstanding - -
Common stock, $.001 par value; 20,000,000 shares
authorized; 3,265,429 and 1,892,641 shares issued
and outstanding for 1997 and 1996, respectively 3,265 1,892
Additional paid-in capital 10,087,327 4,000,700
Deferred financing costs - (360,000)
Accumulated deficit (11,141,648)(6,639,003)
---------- ----------

(1,051,056)(2,996,411)
---------- ----------
$ 623,674 $ 443,232
========== ==========
See accompanying notes
</TABLE>

F-16
<PAGE>

MIKE'S ORIGINAL, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

1997 1996
---- ----
<S> <C> <C>
SALES - NET (Notes 3e) $ 384,348 $2,392,258

COST OF SALES 451,198 1,439,635
---------- ----------

GROSS PROFIT (LOSS) (66,850) 952,623
---------- ----------
OPERATING EXPENSES:
Selling, marketing and shipping (Note 3f) 723,861 2,596,500
General and administrative 2,177,698 2,193,602
Research and development (Note 3h) 28,594 70,632
---------- ----------

2,930,153 4,860,734
---------- ----------

LOSS FROM OPERATIONS (2,997,003) (3,908,111)

Interest expense - net of interest income of
$30,744 and $547 for 1997 and 1996, respectively (1,505,642) (142,436)
---------- ----------
LOSS BEFORE INCOME TAXES (4,502,645) (4,050,547)
Provision for income taxes (Notes 3i and 9) - -
---------- ----------
NET LOSS $(4,502,645) $(4,050,547)
========== ==========
BASIC LOSS PER SHARE (Note 3j) $(1.69) $(2.54)
====== ======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 3j) 2,662,013 1,592,106
========== ==========
</TABLE>

See accompanying notes

F-17

<PAGE>

MIKE'S ORIGINAL, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
Additional Deferred Total
Common Common Paid-in Financing Accumulated Stockholders'
Shares Amount Capital Costs Deficit Deficit
------ ------ ----------- ---------- ----------- --------------

<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996 1,362,160 $1,362 $ 829,742 $ - $(2,588,456) ($1,757,352)

Issuance of common stock for
services rendered 69,231 69 207,623 - - 207,692
Sale of common stock to
investors, net of issuance
costs of $330,437 461,250 461 1,052,853 - - 1,053,314
Compensation attributable to
the transfer of common stock
owned by the founder for
services rendered - - 100,000 - - 100,000
Compensation attributable to the
issuance of stock options - - 812,000 - - 812,000
Compensation attributable to the
release of shares held in escrow - - 265,000 - - 265,000
Waiver of compensation payable to
stockholders and founders - - 358,482 - - 358,482
Imputed interest - convertible
debt - - 375,000 (375,000) - -
Amortization of imputed interest
- convertible debt - - - 15,000 - 15,000
Net loss - - - - (4,050,547) (4,050,547)
-------- -------- -------- -------- ----------- -----------

Balance at December 31, 1996 1,892,641 1,892 4,000,700 (360,000) (6,639,003) (2,996,411)

Amortization of imputed
interest - convertible debt - - - 360,000 - 360,000
Conversion of debt into common
stock by creditor 320,288 320 455,938 - - 456,258
Imputed interest -
convertible debt - - 426,715 - - 426,715
Issuance of common stock
for imputed interest 67,000 67 301,433 - - 301,500
Issuance of common stock
for services rendered 285,500 286 1,330,964 - - 1,331,250
Waiver of compensation payable to
founder - - 27,333 - - 27,333
Imputed interest attributable to
warrants issued and loans - - 202,500 - - 202,500
Proceeds from Company's initial
public offering 700,000 700 3,341,744 - - 3,342,444

Net loss - - - - (4,502,645) (4,502,645)
--------- -------- ---------- -------- ------------ ------------
BALANCE AT DECEMBER 31,
1997 3,265,429 $3,265 $10,087,327 $ - $(11,141,648) $(1,051,056)
========= ======== ========== ======== ============ ============

See accompanying notes
</TABLE>

F-18

<PAGE>

MIKE'S ORIGINAL, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(4,502,645) $(4,050,547)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 14,675 14,718
Allowance for doubtful accounts (4,835) 13,863
Imputed interest 1,327,051 15,000
Compensation expense attributable to issuance of
common stock for services rendered 1,325,250 207,692
Compensation expense attributable to the release
of common stock from escrow account - 265,000
Compensation expense attributable to issuance of
common stock and stock options 6,000 812,000
Compensation expense attributable to the
transfer of common stock by founder for
services rendered - 100,000
Changes in operating assets and liabilities:
Decrease in accounts receivable 53,454 78,320
Decrease (increase) in inventories 103,709 (70,723)
(Increase) in prepaid expenses and other current assets (714) (21,089)
(Decrease) increase in accounts payable (130,986) 812,163
(Decrease) increase in accrued expenses and other
liabilities (12,920) 79,717
---------- ----------
Net cash used in operating activities (1,821,961) (1,743,886)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Refund (payment) of security deposits 14,023 (1,000)
---------- ----------
Net cash provided by (used in) investing activities 14,023 (1,000)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible note payable - 225,000
Proceeds from 12% subordinated notes payable - stockholders - 153,750
Repayment of 12% subordinated notes payable - stockholders (123,750) -
Net proceeds from issuance of common stock 3,387,444 1,053,314
Proceeds from notes payable to related parties - 560,000
Payment of notes payable to related parties (253,750) -
Payment of capital lease obligations (13,568) (9,147)
Payment of notes payable - (244,730)
Proceeds from line of credit - 24,134
Payment of line of credit (14,130) (628)
Proceeds from short-term loans 440,000 -
Repayment of short-term loans (315,000) -
Repayment of notes payable - trade creditors (893,554) -
------------ -----------
Net cash provided by financing activities 2,213,692 1,761,693
------------ -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 405,754 16,807

Cash and cash equivalents, at beginning of year 32,523 15,716
----------- -----------
CASH AND CASH EQUIVALENTS, AT END OF YEAR $ 438,277 $ 32,523
=========== ===========

See accompanying notes
</TABLE>

F-19
<PAGE>

MIKE'S ORIGINAL, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
(a) Interest paid $267,369 $64,685
Taxes paid - -

(b) During 1997 and 1996, the Company converted
$432,077 and $1,176,437 of trade accounts
payable to notes payable, respectively. During
1997, the Company also converted $39,920 of
accounts payable and $380,000 of notes
payable into common stock

See accompanying notes
</TABLE>

F-20
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 1 - ORGANIZATION:

Mike's Original, Inc. (the "Company") was incorporated in Delaware in
May 1994 as successor to Melanie Lane Farms, Inc. ("Melanie Farms"), a
New York corporation formed in 1993. In June 1994, Melanie Farms was
merged into the Company. As both entities were under common control, the
merger was accounted for in a manner similar to a pooling of interests.
On December 31, 1997, a new entity, New York Frozen Desserts, Inc., was
incorporated in New York, as a wholly-owned subsidiary of the Company,
for the purpose of making acquisitions.

Effective December 31, 1995, the Company changed its fiscal year-end
from March 31 to December 31.

Since April 1, 1993, the Company has been engaged in the marketing and
distribution of super- premium ice cream products. The Company markets,
sells and distributes Mike's Original Cheesecake Ice Cream, a blend of
ice cream and cheesecake ingredients. This product line is offered in a
variety of flavors mainly to supermarkets and grocery stores and also,
to a lesser extent, to convenience stores, food service outlets and
warehouse clubs. The Company's products are sold in approximately
fourteen states, including New York, California, Pennsylvania and New
Jersey with sales generally concentrated on the East and West Coasts of
the United States (see Note 12).

NOTE 2 - BASIS OF PRESENTATION:

The Company has incurred losses from operations since its inception in
1993 and, at December 31, 1997, has a stockholders' deficit and a
working capital deficit of $1,051,056 and $1,062,651, respectively. At
December 31, 1996, the Company had a stockholders' deficit and a working
capital deficit of $2,996,411 and $2,539,788, respectively. A
significant portion of these amounts were incurred as a result of
intense marketing by the Company. Payments were made for introductory
programs with supermarkets and other food chain retailers of
approximately $201,000 and $622,000 for the years ended December 31,
1997 and 1996, respectively. Payments for product advertising, promotion
and marketing were also made aggregating $326,000 and $1,526,000 for the
years ended December 31, 1997 and 1996, respectively. Further, net sales
for the year ended December 31, 1997 were minimal and the Company is
continuing to incur losses from operations. The Company has relied
extensively on borrowings to finance its operations and in 1997,
successfully completed an initial public offering of its common stock
(see Note 10), the proceeds of which were used primarily to repay debt.

The circumstances described above raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in
regard to this matter are to change the emphasis of the Company's
operations from marketing and distributing super-premium ice cream
products to marketing and distributing frozen desserts that will include
a line or lines of super- premium ice cream products. Management hopes
to accomplish this plan through the strategic acquisition of
distribution companies, concentrated in large metropolitan areas, which
will provide new brands and customers, distribution expertise and an
operations center that can absorb future acquisitions. The Company is
engaged in discussions with nationally known companies to obtain
to market and distribute product bearing the name of the licenser. See
Notes 13f and 14.

F-21
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 2 - BASIS OF PRESENTATION (Continued):

These acquisitions and distribution licenses would be financed from an
additional offering of securities planned for the second quarter of
1998. If an offering cannot be consummated or other financing obtained,
the Company would be hard pressed to continue. The Company has
sufficient cash on hand and product to sell to last until the end of the
second quarter of 1998. The financial statements do not include any
adjustments that might result from this uncertainty.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a) Use of Estimates in Financial Statement Presentation:

The preparation of these financial statements in accordance with
generally accepted accounting principles requires management to make
estimates and assumptions that could affect the amounts reported in
these financial statements and related notes. Actual results could
differ from these estimates.

(b) Inventories:

Inventories are stated at the lower of cost or market value, with cost
determined on a first-in, first out basis.

Fixed assets are stated at cost less accumulated depreciation.
Depreciation of fixed assets is recorded on a straight-line basis over
their estimated useful lives ranging from three to five years. Certain
leased computer equipment with future rental payments for periods
through 1998 have been capitalized. These amounts are included in fixed
assets within the accompanying balance sheets and are being depreciated
over the estimated useful life of the equipment or term of the lease,
whichever is shorter.

(d) Other Assets:

Costs related to trademark and organizational expenditures have been
deferred and are being amortized on a straight-line basis over five
years.

(e) Revenue Recognition:

Revenue from the sale of ice cream products is recognized upon shipment.
Sales are presented net of distribution fees of $95,679 and $527,540 for
the years ended December 31, 1997 and 1996, respectively. A significant
portion of the Company's sales is made to one distributor pursuant to a
distribution agreement which provides for the payment of distribution
fees based upon a percentage of sales, price protection and certain
rights of return on product unused by third parties. A provision for
such costs is made as revenue is recognized; however, costs relating to
price protection have not been material to date. This distribution
agreement was terminated by the distributor in September 1997.

F-22

<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

(f) Advertising:

Advertising costs are charged to operations when incurred. Advertising
costs charged to operations were $93,000 and $346,000 for the years
ended December 31, 1997 and 1996, respectively.

(g) Introductory Programs:

Payments for introductory programs are made to certain customers
(supermarkets and other food chain retailers) in exchange for the
Company obtaining retail shelf space and are charged to operations when
the Company initially ships products to customers under such agreement.
No costs of introductory programs are deferred as of December 31, 1997
and 1996.

(h) Research & Development:

Research & development expenditures, primarily for product development,
are expensed as incurred.

(i) Income Taxes:

Deferred income taxes are recognized for temporary differences between
the financial statement and income tax bases of assets and liabilities
and loss carryforwards for which income tax benefits are expected to be
realized in future years. A valuation allowance has been established to
offset the deferred tax assets since it is not more likely than not that
such deferred assets will be realized. The effect on deferred taxes of a
change in tax rates is recognized in income in the period that includes
the enactment date.

(j) Income Per Common Share:

The Company has adopted SFAS 128 "Earnings Per Share" ("SFAS 128"),
which has changed the method of calculating earnings per share. SFAS 128
requires the presentation of "basic" and "diluted" earnings per share on
the face of the income statement. Prior period earnings per share data
has been restated in accordance with Statement 128. Loss per common
share is computed by dividing the net loss by the weighted average
number of common shares and common equivalent shares outstanding during
each period.

(k) Statements of Cash Flows:

For the purpose of the statements of cash flows, the Company considers
all highly liquid investments purchased with a remaining maturity of
three months or less to be cash equivalents.

(l) New Accounting Pronouncements:

SFAS 130 "Reporting Comprehensive Income" is effective for years
beginning after December 15, 1997 and early adoption is permitted. This
statement prescribes standards for reporting comprehensive income and
its components. Since the Company currently does not have any items of
other comprehensive income a statement of comprehensive income is not
yet required.

F-23
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

(l) New Accounting Pronouncements (continued):

SFAS 131 "Disclosures About Segments of an Enterprise and Related
Information", is effective for years beginning after December 15, 1997
and early adoption is encouraged. The Company does not presently believe
that it operates in more than one identifiable segment.

See also Income Per Common Share, above.

(m) Impact of the Year 2000 Issue:

The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of
the Company's computer programs that have date- sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000.
This could potentially result in a system failure or miscalculations
causing disruptions of operations, including, among other things, a
temporary inability to process transactions, send invoices, or engage in
other similar normal business activities. The Company had already
planned on upgrading its computer software to increase operational
efficiencies and information analysis and will ensure that the new
systems properly utilize dates beyond December 31, 1999. The cost of
this upgrade project, as it relates to the year 2000 issue, is not
expected to have a material effect on the operations of the Company.

NOTE 4 - INVENTORIES:

Inventories consist of the following as of December 31, 1997 and 1996:

<TABLE>
<CAPTION>
1997 1996
---- ----

<S> <C> <C>
Finished goods $143,899 $ 97,536
Raw materials - 150,072
-------- --------
$143,899 $247,608
======== ========
</TABLE>

NOTE 5 - FIXED ASSETS:

Fixed assets consist of the following as of December 31, 1997 and 1996:
<TABLE>
<CAPTION>

1997 1996
---- ----
<S> <C> <C>
Computer equipment $29,447 $29,447
Office equipment 6,000 6,000
------- -------
35,447 35,447
Less: accumulated depreciation 31,942 20,969
------- -------
$ 3,505 $14,478
======= =======
</TABLE>

F-24
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 6 - OTHER ACCRUED LIABILITIES:

Other accrued liabilities consisted the following as of December 31,
1997 and 1996:

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Accrued distribution fee $ 1,499 $ 7,921
Distributors' deposits - 46,739
Accrued interest payable (Notes 7 and 8) 124,288 18,947
Professional fees payable 12,035 45,000
-------- --------
$137,822 $118,607
======== ========
</TABLE>

NOTE 7 - NOTES PAYABLE TO RELATED PARTIES:

During the fiscal year ended March 31, 1994, the Company obtained loans
from the founder and issued promissory notes of $40,000 and $15,000
which are payable in May and June 1998, respectively. Interest accrues
at an annual rate of 8% and is payable at the maturity date of the
notes. Accrued interest payable related to these notes amounts to
$18,957 and $14,557 at December 31, 1997 and 1996, respectively.

During the fiscal year ended March 31, 1994, the Company borrowed
$100,000 from a shareholder of the Company. The loan, which was
originally due on demand, was formalized in the form of a promissory
note during September 1995. In April 1996, the maturity date of the
$100,000 obligation was revised to occur subsequent to the repayment of
the promissory note issued in April 1996 as further described in Note 8.
The loan was non-interest bearing through April 1994. From May 1994
through maturity, interest accrues at an annual rate of 6% and is
payable upon maturity. In September 1996, the maturity date of this
promissory note was revised to occur the earlier of: (i) February 1,
1998 or (ii) upon the occurrence of events defined by the note as a
"Change in Control." Accrued interest payable related to this note
amounts to $27,491 and $21,491 at December 31, 1997 and 1996,
respectively.

During the fiscal year ended March 31, 1995, the Company issued two
promissory notes of $25,000 each to an investor, who is related to the
founder of the Company, which were originally due in November and
December 1998, respectively. The Company repaid $25,000 of these notes
in April 1995. In September 1995, the maturity date of the outstanding
promissory note was revised to occur the earlier of the Company
receiving proceeds from a securities offering or June 1, 1996. In April
1996, the maturity date of the outstanding promissory note was revised
to occur subsequent to the repayment of the promissory note issued in
April 1996 as further described in Note 8. In September 1996, the
maturity date of this promissory note was revised to occur the earlier
of: (i) February 1, 1998 or (ii) upon the occurrence of events defined
by the note as a "Change in Control." Interest accrues at an annual rate
of 6% and is payable at the maturity date of the note. Accrued interest
payable related to this note amounts to $6,174 and $4,674 at December
31, 1997 and 1996, respectively.

F-25
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 7 - NOTES PAYABLE TO RELATED PARTIES (Continued):

On May 30, 1996, the Company received loans aggregating $100,000 from
two stockholders. The loans were originally due on demand bearing
interest at a rate of 10%. In September 1996, the maturity date of these
promissory notes was revised to occur the earlier of: (i) twenty-four
months from the date of the loans, or (ii) the date the Company
successfully consummates an initial public offering of securities of the
Company, but only to the extent that the overallotment option is
exercised in such offering and only from the proceeds received by the
Company from the exercise of the overallotment option. These notes are
still outstanding at December 31, 1997. Accrued interest payable related
to these notes amounts to $15,833 and $5,833 at December 31, 1997 and
1996, respectively.

On August 28, 1996, the founder of the Company was issued an additional
promissory note of $206,250. The funds that the founder loaned the
Company were a result of the founder selling 183,333 shares of his stock
to an investor at a price of $1.12 per share. This loan bears interest
at a rate of 8% and was originally payable the earlier of: (i) thirteen
months from the date of the loan, or (ii) the successful consummation of
an initial public offering of securities of the Company, but only to the
extent that the overallotment option is exercised in such offering and
only from the proceeds received by the Company from the exercise of the
overallotment option. In September 1996, the maturity date of this
promissory note was revised to occur twenty-four months from September
30, 1996. In addition, the revised promissory note provides that
one-half of the note will be paid with accrued interest in the event the
Company successfully consummates an initial public offering of
securities of the Company, but only to the extent that the overallotment
option is exercised in such offering and only from the proceeds received
by the Company from the exercise of the overallotment option. Accrued
interest related to this borrowing amounts to $22,000 and $5,500 at
December 31, 1997 and 1996, respectively.

In August and September 1996, the Company received three loans from a
stockholder aggregating $253,750. A portion of the funds that this
shareholder loaned the Company was a result of the shareholder selling
shares of his stock to investors. In August 1996, this shareholder sold
38,889 shares of his stock at a price of $1.12 per share. In September
1996, the shareholder sold 23,333 shares of his stock at a price of
$1.50 per share. These loans each bear interest at a rate of 8% per
annum and were originally payable the earlier of: (i) thirteen months
from the date of the loans, or (ii) the date the Company successfully
consummates an initial public offering, but only to the extent that the
overallotment option is exercised in such offering and only from the
proceeds received by the Company from the exercise of the overallotment
option. In September 1996, the maturity date of these promissory notes
was revised to June 1, 1997. In the event that the Company successfully
consummates an initial public offering prior to June 1, 1997, $123,750
will be payable from such proceeds and $130,000 will be payable 90 days
therefrom. In the event the underwriter exercises its overallotment
option, the balance otherwise payable in 90 days will be payable from
such proceeds. Accrued interest payable related to these borrowings
amounted to $5,978 at December 31, 1996. During 1997 the Company repaid
the entire balance of $253,750 plus interest accrued to the date of
repayment of $18,162.

As of December 31, 1997 and 1996, loans payable to related parties
aggregated $486,250 and $740,000, respectively. Interest accrued and
unpaid at December 31, 1997 and 1996 aggregated $90,455 and $58,033,
respectively.

F-26
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 8 - NOTES PAYABLE:

In April 1996, the Company issued a promissory note in the amount of
$830,275 in exchange for certain trade accounts payable. The Company was
required to make payments in monthly installments beginning May 1996
consisting of: (i) accrued interest, and (ii) principal in the amount of
$12,000. In addition to these monthly installments, the Company was
required to pay additional amounts upon the occurrence of certain
events. In the event the Company did not complete an initial public
offering, the note was due in full on December 31, 1996. Interest on the
promissory note accrues at the prime rate plus 1% per annum. This note
is collateralized by substantially all of the assets of the Company. The
balance of this note was $710,275 at December 31, 1996. Accrued interest
payable related to this note amounted to $2,738 at December 31, 1996. In
April 1997 the terms of the note were amended to provide for payments to
the lender, from the proceeds of the Company's initial public offering,
in the amount of $575,000 with the balance of $135,275 payable on
December 31, 1997. In the event that the initial public offering is not
completed by June 1, 1997, all amounts outstanding will then become
immediately due and payable in full. Further, in April 1997, the Company
issued a $221,550 convertible note due December 31, 1998 in exchange for
a like amount of trade payables. The convertible note bears interest at
10% per annum, payable at maturity, and is convertible by the holder
into the Company's common stock at a conversion rate of $3.00 principal
amount for each share of common stock at the option of the holder at any
time prior to maturity. In June 1997, the Company renegotiated the terms
of this agreement. The renegotiated terms provide that if the Company's
initial public offering is not completed by July 15, 1997, all amounts
will then become immediately due and payable in full. In addition, the
balance due to the lender from the proceeds of the Company's initial
public offering was increased from $575,000 to $595,000 and the
principal balance of the convertible note due December 31, 1998 was
reduced to $201,000. On August 8, 1997, at the closing of the initial
public offering, the principal amount plus all accrued interest was
paid. At December 31, 1997, $115,275 plus accrued interest of $4,328 of
the convertible note remains unpaid.

On August 20, 1996, the Company issued a promissory note in the amount
of $289,482 in exchange for certain trade accounts payable and
inventories. The note bears interest at a rate of 10% per annum and was
payable on or before November 15, 1996. The balance of this note was
$210,283 at December 31, 1996. On December 31, 1996, the Company was not
in compliance with the terms of the subject loan agreement. However, the
lender involved has amended the agreement to permit the Company to be in
compliance with such terms at December 31, 1996. In February 1997, the
Company issued a promissory note in the amount of $20,000 in exchange
for a like amount of trade payables. In April 1997, the lender agreed to
extend the due date of such notes to the earlier of June 1, 1997 or the
closing of the Company's initial public offering. In the event the
Company completes its initial public offering by June 1, 1997, the
lender agreed to extend the due date of the then outstanding $96,000 of
principal to December 31, 1998. If such amount is extended, the lender
has the right to convert such amount into 32,000 shares of the Company's
common stock at any time prior to maturity. The lender agreed to extend
the maturity date of the promissory notes originally due on June 1, 1997
to July 31, 1997. At December 31, 1997, $96,000 of the convertible note
plus accrued interest of $3,794 remain unpaid.

F-27
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 8 - NOTES PAYABLE (Continued):

In December 1996, the Company issued two additional short-term
promissory notes in exchange for certain trade accounts payable
aggregating $56,680. One promissory note bears interest at the rate of
10% per annum. Principal and interest are payable in installments as
follows: the sum of $500, or more, semimonthly beginning on December 5,
1996, and payable thereafter on the 20th and 5th day of each month,
until principal and interest have been paid in full. The second
promissory note bears interest at the rate of 8% per annum. Payment of
principal will be made at the rate of $5,000 per month commencing on
January 1, 1997 and monthly, thereafter until the earlier of: (i) May 1,
1997 or (ii) the date the Company successfully consummates an initial
public offering of its securities, at which time this note will be paid
in full with interest. The balance of these notes was $55,680 at
December 31, 1996. The Company has fully paid these notes during the
year ended December 31, 1997.

In December 1996, the Company issued a $225,000 promissory note to an
investor bearing interest at the rate of 8% per annum. This note is
payable in full the earlier of: (i) December 31, 1997 or (ii) five days
after the closing date of an initial public offering. In lieu of
receiving payment, the investor has the right to convert this promissory
note within five days of the closing of such initial public offering
into 200,000 shares of common stock of the Company, par value $.001 per
share. Imputed interest resulting from the difference between the
estimated fair value of the Company's common stock and the conversion
price has been provided for and was charged to operations over the
period this note first became convertible. Interest expense of $360,000
was recognized by the Company during the three months ended March 31,
1997, which represented the amortization of the imputed interest
associated with this transaction. In April 1997, the investor elected to
convert this note.

In January 1997, the Company issued a convertible promissory note to an
investor bearing interest at the rate of 8% per annum, in the principal
amount of $100,000. This convertible note is to be paid in full the
earlier of five days after the closing of an initial public offering or
January 31, 1998. In April 1997, the investor converted the note into
78,431 shares of the Company's common stock. Interest expense of
$252,940 representing the difference between the estimated fair value of
the Company's common stock and the conversion price was recognized
during the three months ended March 31, 1997.

F-28
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 8 - NOTES PAYABLE (Continued):

In March 1997, the Company issued a $50,000 promissory note to an
investor bearing interest at the rate of 10% per annum. This note is
payable on demand on or after May 12, 1997. As additional consideration
for this loan, the Company issued the lender 2,000 shares of its common
stock. These shares were valued at $4.50 per share, the estimated fair
market value of the stock at the date of issuance. On April 3, 1997, the
lender converted $25,000 of the outstanding note balance into 12,500
shares of the Company's common stock. An interest charge of $31,000
representing the difference between the estimated fair value of the
Company's common stock and the value the Company ascribed to these
shares on the date of issuance was recognized by the Company upon
conversion. In June 1997, the lender agreed to extend the maturity date
of the outstanding note balance to the earlier of July 31, 1997 or the
completion of the Company's initial public offering. This note was fully
repaid in August 1997, together with interest accrued to the date of
payment.

In May 1997, the Company negotiated with a creditor in connection with
trade accounts payable balances owed to this creditor aggregating
$60,000. The creditor agreed that the Company would repay $30,000 of
this balance upon completion of an initial public offering. The Company
issued a convertible promissory note for the remaining outstanding
balance of $30,000 bearing interest at the rate of 10% per annum. The
note is payable in full on December 31, 1998. In lieu of receiving
payment, the creditor has the right to convert this promissory note, at
any time prior to the maturity date, into 10,000 shares of common stock
of the Company.

In May and June 1997, the Company issued three promissory notes to
investors bearing interest at the rate of 12% per annum in the aggregate
principal amount of $150,000. These notes are payable in full the
earlier of: (i) July 31, 1997 or (ii) on the date of an initial public
offering. In connection with these transactions, the Company issued an
aggregate of 75,000 warrants, expiring July 31, 2000, to these investors
to purchase 75,000 shares of the Company's common stock at a price of
$3.00 per share. These notes were paid in full in August 1997, together
with interest accrued to the date of payment.

NOTE 9 - INCOME TAXES:

A reconciliation between actual income tax (benefit) and the amount
computed by applying the statutory Federal income tax rate to the loss
before taxes is as follows:

1997 1996
---- ----
<S> <C> <C>
Tax expense (benefit) at statutory
Federal income tax $(1,532,000) $(1,377,000)
Nondeductible compensation 450,000 128,000
Net operating loss not currently
utilizable 1,082,000 1,249,000
----------- -----------
$ - $ -
=========== ===========
</TABLE>

F-29
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 9 - INCOME TAXES (Continued):

The tax effects of temporary differences and loss carryforwards giving
rise to deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>

1997 1996
---- ----
<S> <C> <C>
Net operating loss and other carryforwards $ 2,890,000 $ 1,814,000
Bad debts 5,000 7,000
Depreciation/amortization 1,000 2,000
Deferred compensation 276,000 276,000
Other deferred assets - 20,000
---------- ----------
3,172,000 2,119,000
Valuation allowance (3,172,000) (2,119,000)
----------- -----------
$ - $ -
=========== ===========
</TABLE>

The Company anticipates that for the foreseeable future it will continue
to be required to provide a 100% valuation allowance for the tax benefit
of its net operating loss carryforward and temporary differences as the
Company cannot presently predict when it will generate sufficient
taxable income to utilize such deferred tax assets.

At December 31, 1997 and 1996, Company had net operating losses
available to carry forward of approximately $8,500,000 and $5,320,000
respectively, for tax purposes. Such net operating loss carryforwards
expire through the year ending 2013. No benefit has been recorded for
such loss carryforwards since realization cannot be assured. The
Company's use of its net operating loss carryforwards is limited as the
Company is deemed to have undergone an ownership change as defined in
Internal Revenue Code Section 382.

NOTE 10 - STOCKHOLDERS' EQUITY:

In September 1995, pursuant to a Shareholders' Agreement and associated
Escrow Agreement, a shareholder of the Company placed 88,513 shares of
his common stock in an escrow account. The Escrow Agreement was
terminated in February 1996 and the subject shares were returned to the
shareholder. Compensation expense of $265,000 was recognized based upon
the estimated fair value of the shares by the Company upon the release
of the shares from escrow.

On May 30, 1996, the Board of Directors authorized a reverse stock split
in the ratio of one common share for every six and one-half common
shares outstanding as of that date. In addition, on such date, the Board
of Directors approved an amendment to the Company's Certificate of
Incorporation increasing the number of authorized shares of the
Company's common stock from 3,076,923 to 20,000,000 shares. On February
6, 1997, the Board of Directors authorized a reverse stock split in the
ratio of two common shares for every three common shares outstanding as
of February 7, 1997. The reverse splits and changes in authorized
capital have been retroactively reflected for all periods presented.

F-30
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 10 - STOCKHOLDERS' EQUITY (Continued):

In May 1996, the Company issued 50,000 shares of its common stock to
certain individuals for services rendered on behalf of the Company.
These shares were valued at $3.00 per share, the estimated fair value of
the stock at the date of issuance and accordingly, $150,000 was charged
to operations.

During June 1996 through September 1996, the Company completed a Private
Placement Offering pursuant to Rule 506 of the Securities Act of 1933
consisting of the sale of 61.5 units (the "Second Private Placement").
Each unit consisted of a $2,500, 12% subordinated promissory note and
7,500 shares of common stock at an offering price of $25,000 per unit.
The note balance at December 31, 1996 which resulted from this Second
Private Placement was $153,750. These notes mature on the earlier of:
(i) July 31, 1997, or (ii) the closing date of the initial public
offering. Accrued interest payable related to these notes amounted to
$7,688 at December 31, 1996. In April 1997, $30,000 of such notes, as
well as $2,100 of accrued interest, were converted to 16,050 shares of
the Company's common stock. The balance was repaid upon the successful
completion of the Company's IPO in July 1997.

In September 1996, the founder of the Company transferred 33,333 shares
of his common stock to certain individuals for services rendered on
behalf of the Company. These shares were valued at $3.00 per share, the
estimated fair value of the stock at the date of the transfer. As the
Company implicitly benefitted from this transaction, the value of the
shares transferred was reflected as an expense in the accompanying
financial statements with a corresponding credit of $100,000 to
additional paid-in capital.

In October 1996, the Company issued 19,231 shares of its common stock to
certain individuals for services rendered during the year ended December
31, 1996. These shares were valued at $3.00 per share, the estimated
fair market value of the stock at the date of issuance, and $57,692 was
charged to operations.

In March 1997, the Company in connection with entering into a two-year
exclusive East coast manufacturing agreement, issued 35,000 shares of
its common stock. These shares were valued at $4.50 per share, the
estimated fair market value of the stock at the date of issuance.
Pursuant to the agreement, the manufacturer agreed to provide $250,000
of 21-day credit terms. Further, the Company was obligated to pay the
manufacturer $150,000 against existing amounts owed by April 30, 1997.
In the event such amount was not paid, the Company is obligated to issue
an additional 30,000 shares of its common stock to the manufacturer.
These additional shares were issued to the manufacturer in May 1997.

In May 1997, the Company issued 100,000 shares of its common stock to
its legal counsel for services rendered during March and April of 1997.
These shares were valued at $4.50 per share, the estimated fair value of
the stock at the date of issuance and, accordingly, $450,000 was charged
to operations during the year ended December 31, 1997.

F-31
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 10 - STOCKHOLDERS' EQUITY (Continued):

In June 1997, the Company issued 13,307 shares of its common stock to
certain individuals in settlement of amounts owed to these individuals
aggregating $39,921. An interest charge of $19,961 representing the
difference between the estimated fair value of the Company's common
stock and the value the Company ascribed to these shares on the date of
issuance was recognized by the Company in the year ended December 31,
1997.

On July 31, 1997. the Company completed its Initial Public Offering
("IPO") of 700,000 units sold to investors on the OTC Bulletin Board at
$6.20 per unit for aggregate gross proceeds of $4,340,000. Each unit
contained one share of common stock and two Class A warrants to purchase
one share of Common Stock each at $5.00 per share. The Company realized
net proceeds of $3,342,444.

In August 1997, the Company issued 35,500 shares of common stock as
compensation for professional fees rendered aggregating $206,250.

See also Notes 8 and 13c for additional share issuances.

NOTE 11 - STOCK OPTION PLANS:

At December 31, 1997 the Company has two stock-based compensation plans,
which are described below. The Company applies APB Opinion 25,
"Accounting for Stock Issued to Employees" and related interpretations
in accounting for stock options issued to employees. The Company applies
Statement of Financial Accounting Standards No. 123 ("SFAS No. 123"),
"Accounting for Stock- Based Compensation", in accounting for stock
options issued to non-employees. The compensation cost that has been
charged against income for stock options issued to non-employees was
$812,000 for the year ended December 31, 1996. No options were granted
under this plan during 1997.

Had compensation cost for employees been determined based on the fair
value at the grant dates consistent with the methodology of SFAS No.
123, the Company's net loss and net loss per share would have been
increased to the pro forma amounts indicated:

Year Ended December 31,
1997 1996
---- ----
<S> <C> <C>
Net loss:
As reported $(4,502,645) $(4,050,547)
Pro forma (4,732,943) (4,581,047)
Net loss per share:
As reported $(1.69) $(2.54)
Pro forma (1.78) (2.88)
</TABLE>

F-32

<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 11 - STOCK OPTION PLANS (Continued):

In August 1995, the Company formally adopted a Long-Term Incentive Plan
(the "1995 Plan"), which provides that the Company may grant certain key
employees or consultants either stock options, stock appreciation
rights, restricted stock, performance grants or other Company securities
(the "Awards"). The 1995 Plan, as amended, authorizes the issuance of a
maximum of 433,333 shares of common stock. As of December 31, 1997 and
1996, respectively, the Company has granted an aggregate of 306,667 and
256,667 options to purchase common stock with exercise prices ranging
from $1.50 to $3.00 under this Plan. At December 31, 1997 and 1996,
options exercisable under this plan were 306,667 and 33,333,
respectively. None of these options have been exercised to date. During
the year ended December 31, 1996, compensation cost recognized in income
for the issuance of options under the 1995 Plan to non-employees totaled
$119,000. To date, options granted under this plan are exercisable six
months from date of grant and expire 10 years from date of grant.

On October 15, 1996, the Company's Board of Directors approved a 1996
Non-qualified Stock Option Plan ("Non-qualified Plan") for officers,
directors, employees and consultants of the Company. The Plan, as
amended, authorizes the issuance of up to 500,000 shares of common
stock. As of December 31, 1997, the Company has granted 478,332 options
to purchase shares of common stock under the Non-qualified Plan at an
exercise price of $1.50. None of the stock options granted have been
exercised to date. During the year ended December 31, 1996, compensation
cost recognized for the issuance of options under the Non-qualified Plan
to non-employees totaled $693,000. To date, options granted under this
plan are exercisable six months from date of grant and expire 10 years
from date of grant.

A summary of stock option activity related to the Company's Plans is as
follows:

<TABLE>
<CAPTION>
Weighted
Average 1996
1995 Plan Exercise Non-qualified Plan
Shares Price Range Price Shares Price Range
------ ----------- --------- ------ -----------

<S> <C> <C> <C> <C> <C>
Outstanding at January 1, 1996 - -
Granted during 1996 256,667 $1.50 - $3.00 $1.69 396,666 $1.50
------- -------
Outstanding at December 31, 1996 256,667 $1.50 - $3.00 1.69 396,666 1.50
Granted during 1997 50,000 1.50 1.50 81,666 1.50
------- -------

Outstanding at December 31, 1997 306,667 1.66 478,332 1.50
======= =======

Exercisable at December 31, 1996 256,667 1.50 - 3.00 1.69 -
======= =======

Exercisable at December 31, 1997 306,667 1.50 - 3.00 1.69 478,332 1.50
======= =======
</TABLE>

F-33
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATION OF
CREDIT RISK:

The carrying amounts of cash, accounts receivable, accounts payable and
other accrued liabilities are estimated to approximate their fair value.
The Company believes that it is not practicable to estimate the value of
its debt obligations due to its current financial condition.

Concentration of credit risk with respect to trade accounts receivable
exists as the Company sells products primarily to one distributor. The
Company performs periodic credit evaluations of its customers' financial
condition and does not require collateral or other security. The
distributor referred to in Note 3e accounted for approximately 91% and
79% of the Company's sales for the years ended December 31, 1997 and
1996, respectively. This distributor accounted for 57% of the Company's
net accounts receivable at December 31, 1996. As of December 31, 1997,
the Company no longer sells to this distributor and there are no amounts
uncollected.

The Company's products have historically been manufactured by
independent facilities. Certain of these facilities have ceased
manufacturing on behalf of the Company due to the fact that these
facilities are owed substantial sums of money by the Company and the
Company's products are currently manufactured at only one facility. If
this manufacturer elects to suspend the manufacturing of the Company's
products, the Company's operating results may be adversely affected.

NOTE 13 - COMMITMENTS AND CONTINGENCIES:

(a) Lease Commitments:

Future minimum payments under noncancellable operating leases for office
space, equipment and vehicles, with initial terms of one or more years,
consist of the following at December 31, 1997:

Operating
Leases
----------

F-34
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 13 - COMMITMENTS AND CONTINGENCIES (Continued):

(b) Employment Contracts:

The Company had an employment agreement with its former President which
provided for an annual base salary and bonuses. The agreement also
provided for the granting of 5,101 of immediately exercisable and fully
vested options to purchase shares of the Company's common stock at an
exercise price of $3.00. This agreement was to expire in February 1999.
In addition, the former President was granted an incentive stock option
to purchase 73,205 shares of the Company's common stock at an exercise
price of $3.00 which vested ratably over the three years beginning
February 1995. On September 15, 1996, the then President resigned his
employment with the Company. At the time of the resignation, 29,530
options to purchase shares of the Company's common stock at an option
price of $3.00 per share were exercisable and the balance was canceled.
The exercisable options expired on December 15, 1996, three months from
the date of the then President's resignation.

During the year ended December 31, 1996, the Company hired a Vice
President of Sales and Marketing and entered into an employment
agreement with this individual. The agreement provided for an annual
base salary of $100,000, plus an incentive bonus. This agreement was for
an initial term of one year from the earlier of the effective date of an
initial public offering of the Company's securities or March 1, 1997. On
June 20, 1997, this employee resigned his employment with the Company.
At the time of the resignation, 66,667 options to purchase shares of the
Company's common stock at an option price of $1.50 were canceled.

In addition, the Company has employment agreements with the founder and
another employee which provide for annual base salaries of $125,000 and
$40,000, respectively, and expire, as amended, in June 2001 and June
1998, respectively. During the year ended December 31, 1996, these
individuals voluntarily waived all rights to receive the accrued
salaries payable to them aggregating $110,565 and, accordingly, such
amount has been presented as a contribution to the Company's additional
paid-in capital. Further, in April 1997, the founder agreed to waive an
additional $27,333 of accrued salary through February 28, 1997. In
December 1997 the employee whose contract expires in June 1998, agreed
to modify the agreement and be compensated on an hourly basis which is
anticipated to produce substantially lower compensation. All other terms
of the contract remain in effect. The agreement with the founder,
currently serving as the Chairman of the Board and Chief Executive
Officer, provides for bonuses based on the Company's pretax income, and
also includes non-compete and change of control clauses.

In March 1997, the Company entered into a two-year employment agreement
with its Vice- President - Finance which provided for an annual base
salary of $95,000 for the first year and $105,000 for the second year.
In November 1997, this employee resigned, however remained as a member
of the Board of Directors.

F-35
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 13 - COMMITMENTS AND CONTINGENCIES (Continued):

(b) Employment Contracts (continued):

On July 16, 1997, the Company entered into an employment agreement with
its Vice-President Marketing. The agreement provides for an annual base
salary of $115,000, plus an incentive bonus. This agreement is for an
initial term of one year from the effective date of the initial public
offering of the Company's securities. Options were granted to purchase
66,667 shares of the Company's common stock at an exercise price of
$1.50 per share. The Company is responsible for up to $25,000 of
expenses related to the employee traveling to and from Buffalo, NY,
temporary living and other such amounts necessary for the employee to
devote his full time employment to the Company. The agreement also
provides for an automobile allowance of $650 per month.

On March 1, 1994, the Company entered into a consulting agreement with
an investor (the "Investor"), whereby the Company shall pay the Investor
$75,000 for the first year ended March 31, 1995, $100,000 for the second
year and $125,000 for the third year. The Company recorded accrued
consulting expense of $89,585 during the year ended December 31, 1996.
In September 1996, this investor voluntarily waived all rights to
receive the consulting fee payable to him and accordingly, the aggregate
amount waived, $247,917 has been reflected as a contribution to
additional paid-in capital.

In November 1996, this consulting agreement was superseded by a new
agreement. The new agreement provides that beginning January 1, 1997,
the Company will pay consulting fees to the Investor at the rate of
$125,000 per annum for a three-year period. However, no monies will be
paid to this Investor until such time as the Company shall consummate a
private or public offering of its securities for not less than
$2,000,000 in gross proceeds.

In April 1997, the November 1996 consulting agreement was terminated
and, in consideration for such termination, the Company issued 150,000
shares of its common stock to the consultant. At March 31, 1997, accrued
compensation payable to this consultant aggregated approximately
$31,000. In April 1997 the Company recognized a charge to operations of
approximately $644,000 based upon the estimated fair market value of the
shares issued to the consultant.

During the year ended December 31, 1996, the Company entered into a
consulting agreement with an entity that will provide sales and
marketing advisory and consulting services to the Company. This entity
will receive 30,000 shares of common stock (see Note 14), an annual
consulting fee of $50,000 and has received options to purchase 133,333
shares of the Company's common stock at $1.50 per share expiring October
15, 2006. One third of such options become exercisable at the end of
each successive six-month period. At December 31, 1997, options to
purchase 88,889 common shares were exercisable.

(d) Line of Credit:

In December 1995, the Company obtained an unsecured line of credit for
$25,000. Borrowings under this line bear interest at 15% per annum.
Borrowings outstanding under this line at December 31, 1997 and 1996,
were $9,374 and $23,506, respectively.

F-36

<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 13 - COMMITMENTS AND CONTINGENCIES (Continued):

(e) Legal Proceedings:

The Company is subject to various legal proceedings, claims and
liabilities which arise in the ordinary course of its business. In the
opinion of management, the amount of any additional liability in excess
of amounts already provided for with respect to these actions, will not
have a material adverse effect on the Company's results of operations,
cash flow or financial position. As of December 31, 1997, the Company
has provided for approximately $130,000 in connection with known legal
proceedings and claims.

(f) Acquisitions:

On December 18, 1997, the Company entered into two agreements (letters
of intent) to acquire companies engaged in the full service distribution
of ice cream in the New York Metropolitan area, through its wholly-owned
subsidiary, New York Frozen Desserts, Inc. In exchange for all the
assets of New Yorker Ice Cream Corp., the Company will pay (i) $465,000
at closing, (ii) $800,000 over three years with interest at 8% per annum
and (iii) will assume an existing obligation of $735,000, paying
$200,000 at closing, and the remaining $535,000 over four years with
interest at 8% per annum. In exchange for all the assets of Jerry's Ice
Cream Co., Inc., the Company will pay $245,000 at closing, and $220,000
over three years with interest at 8% per annum.

In connection with these acquisitions, the Company entered into an
agreement with a company whose shareholders consist of an investor and a
Director of the Company. The agreement provides for a finder's fee in
the amount of $200,000 and 200,000 shares of the Company's common stock
together with piggy back registration rights to be delivered at the
closing of the above transactions. All future acquisitions introduced by
this company, will involve similar fee arrangements to be negotiated
prior to the closing of each transaction.

(g) Government Regulation:

The Company is subject to regulation by various governmental agencies
regarding the distribution and sale of food products, including the FDA
and various state agencies. The Company believes that its marketing and
distributing operations comply with all existing applicable laws and
regulations.

(h) Insurance:

The Company's business exposes it to potential liability which is
inherent in the marketing and distribution of food products. The Company
currently maintains $2,000,000 of product liability insurance. The
Company also maintains $1,000,000 of general and personal injury
insurance per occurrence and $5,000,000 in the aggregate. If any product
liability claim is made and sustained against the Company and is not
covered by insurance, the Company's business and prospects could be
materially adversely affected
F-37
<PAGE>

MIKE'S ORIGINAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996

NOTE 14 - SUBSEQUENT EVENTS:

On February 6, 1998, the Company issued 30,000 shares of its common
stock to a consultant in exchange for 1998 services. These shares are in
addition to a monthly fee that the Company has the option of paying in
either cash or the Company's common stock. These shares, and any
subsequently issued shares, bear a restrictive legend pursuant to Rule
144 governing such securities. See Note 13c.

On February 15, 1998, the Company signed a lease for a three-month term,
renewable monthly, for new office space in Rye, New York. This office
will serve as the corporate office of the Company until such time as the
Company and the planned acquisitions can be relocated to an appropriate
facility. The lease in Jericho, New York expired without any additional
costs.

On March 4, 1998, the Company, through its wholly-owned subsidiary,
signed a license agreement to sell and distribute frozen juice bars
under the name of a nationally known licensor. This agreement is for a
limited territory in the eastern part of the country and for a period of
two years. The Company has the option to obtain two sub-licensees to
operate under the main agreement on behalf of the Company.

F-38

<PAGE>
SIDNEY NEUHOF
CERTIFIED PUBLIC ACCOUNTANT
1101 STEWART AVENUE, SUITE 302
GARDEN CITY, NEW YORK 11530

Report of Independent Accountant

To the Stockholders of
New Yorker Ice Cream Corp.

I have audited the accompanying balance sheets of New Yorker Ice Cream Corp., as
of December 31, 1997 and 1996, and the related statements of operations,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of New Yorker Ice Cream Corp., as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

/s/ Sidney Neuhof
- ---------------------------
Sidney Neuhof

February 9, 1998

F-39

<PAGE>

PAGE (2)
NEW YORKER ICE CREAM CORP.
BALANCE SHEETS
AS AT: DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
ASSETS
------
1997 1996
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash in banks $ - $ 4,131
Accounts receivable - net 251,964 221,574
Merchandise inventory 184,612 236,962
Other current assets 10,979 -
--------- ---------
Total current assets 447,555 462,667

FIXED ASSETS
Furniture and fixtures -
net of accumulated depreciation 111,187 134,357
$494,915 for 1997 and
$461,409 for 1996

OTHER ASSETS -
Intercompanies - Note 2 1,394 -
-------- --------
$560,136 $597,024
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
----------- --- ------------- ------
CURRENT LIABILITIES
Bank overdraft $ 28,979 $ -
Loans payable - Note 3 100,000 65,000
Accounts payable and accrued expenses 347,692 433,243
-------- --------
Total current liabilities 476,671 498,243

OTHER LIABILITIES
Loans payable long-term portion 106,000 100,000
Intercompanies Note 2 - 115,411
-------- --------
106,000 215,411

STOCKHOLDERS' EQUITY
Capital stock - 26,750 26,750
83.25 shares authorized, issued
and outstanding
Additional Paid-In-Capital 117,897 117,897
Treasury Stock (147,808) (147,808)
Deficit (19,374) (113,469)
-------- --------
Total stockholders' equity (deficit) (22,535) (116,630)
-------- --------
$560,136 $597,024
======== ========
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>

F-40
<PAGE>
PAGE (3)

NEW YORKER ICE CREAM CORP.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED: DECEMBER 31, 1997 AND 1996
- -----------------------------------------------
<TABLE>
<CAPTION>
1997 1996
---- ----

<S> <C> <C>
NET SALES $6,498,430 $6,343,242

COST OF GOODS SOLD 5,412,912 5,106,476
---------- ----------

GROSS PROFIT 1,085,518 1,236,766

OPERATING EXPENSES 975,571 1,183,257
--------- ----------

INCOME BEFORE OTHER EXPENSES 109,947 53,509

OTHER EXPENSES:
Interest expense 15,852 14,179
--------- ----------

NET INCOME $94,095 $39,330
========= ==========

<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>

F-41

<PAGE>

PAGE (4)
NEW YORKER ICE CREAM CORP.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED: DECEMBER 31, 1997 AND 1996
- -----------------------------------------------

Additional Retained
---------- --------
Capital Paid In Treasury Earnings
--------- --------- ---------- --------
Stock Capital Stock (Deficit) Total
--------- --------- ---------- --------- --------

<S> <C> <C> <C> <C> <C>
Balance - Jan. 1, 1996 $26,750 $117,897 $(147,808) $107,543 $104,382

Prior Period Adjustment - - - (260,342) (260,342)

Net Income - - - 39,330 39,330
------- -------- -------- --------- --------
Balance - Dec. 31, 1996 26,750 117,897 (147,808) (113,469) (116,630)

Net Income - - - 94,095 94,095
------- -------- -------- --------- --------

Balance - Dec. 31, 1997 $26,750 $117,897 $(147,808) $(19,374) $(22,535)
======= ======== ========= ======== ========

<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>

F-42

<PAGE>

PAGE (5)
NEW YORKER ICE CREAM CORP.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED: DECEMBER 31, 1997 AND 1996
- -----------------------------------------------
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income $ 94,095 $ 39,330

Adjustments to reconcile net income to net
cash provided by operating activities

Depreciation and Amortization 33,506 54,545

(Increase) Decrease in accounts receivable (39,770) 112,262

Decrease (Increase) in inventory 52,350 (49,061)

(Increase) Decrease in other current assets (10,979) 20,564

Increase in bank overdraft 28,979 -

(Decrease) in accounts payable and
accrued expenses (85,551) (129,132)
--------- --------
Net cash provided by operating activities 72,630 48,508
--------- --------

CASH FLOWS FROM INVESTING ACTIVITIES:

Fixed Assets (10,336) (23,112)
Other Assets - 21,910
-------- --------
Net cash used in investing activities (10,336) (1,202)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:

Intercompany - net (107,425) (72,703)

Loans - Net 41,000 (28,996)
------- --------
Net cash used in financing activities (66,425) (43,707)
------- --------
NET (DECREASE) INCREASE IN CASH (4,131) 3,599

CASH AT BEGINNING OF YEAR 4,131 532
------- -------
CASH AT END OF YEAR $ - $ 4,131
======= =======
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>

F-43

<PAGE>

PAGE (7)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------- -- ----------- ---------- --------

NOTE I
- ---- -
HISTORY AND BUSINESS DESCRIPTION
- ------- --- -------- -----------
New Yorker Ice Cream Corp., was incorporated under the laws of the state of New
York on December 1, 1966.

The company distributes various types of ice cream products such as Haagen Dazs
and Baskin Robbins to retail stores and for food servicing.

All of the shares of the company were purchased by Theodore Ketsoglou on May 13,
1991 from the estate of Joseph K. Ketsoglou.

In 1993 Mr. Theodore Ketsoglou sold all his stock to The Kerry Group, Inc,, with
The Kerry Group, Inc., assuming the outstanding note obligation due to the
estate in return for the ownership of New Yorker.

The Kerry Group is a management consulting company whose primary client is New
Yorker Ice Cream. These financials do not include the financial information of
The Kerry Group, Inc. Mr. Theodore Ketsoglou is the 100% shareholder of The
Kerry Group, Inc.

USE OF ESTIMATES
- --- -- ---------
The preparation of financial statements in conformity with generally accepted
accounting principles require management to make estimates and assumptions that
affect the amounts reported in the financial statement and accompanying notes.
Actual results could differ from those estimates.

INVENTORIES
- -----------
Inventories are valued at the lower of cost or market, cost being determined
using the first in, first out (FIFO) method. All inventory are prepackaged units
which are available for sale.

F-44
<PAGE>

PAGE (8)

PROPERTIES, RENTAL EQUIPMENT, AND DEPRECIATION
- ----------- ------ ---------- --- ------------
Properties and rental equipment are carried at cost and are depreciated over the
estimated lives of such assets using the straight-line method. Leasehold
improvements are amortized over the shorter of the asset lives or the terms of
the respective leases.

Properties, Rental Equipment And
---------- ------ --------- ---
Depreciation Schedule
------------ --------
<TABLE>
<CAPTION>

1997 1996
---------------------- ----------------------
Asset Accum. Asset Accum.
Value Deprec. Value Deprec.
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Freezer Cabinets $294,052 $244,988 $283,716 $221,445

Machinery 61,481 61,481 61,481 58,771

Office Equipment 8,997 8,901 8,997 8,901

Vehicles 55,122 52,765 55,122 51,569

Improvements 186,450 126,780 186,450 120,723
-------- -------- -------- --------
$606,102 $494,915 $595,766 $461,409
======== ======== ======== =======
</TABLE>

NOTE 2
- ---- -
INTERCOMPANIES - PARENT AND RELATED COMPANIES
- -------------- ------ --- ------- ---------
All intercompany loans are noninterest bearing and have no specified repayment
date. The outstanding balances are as follows:
<TABLE>
<CAPTION>
1997 1996
----------------- ----------------
Due From Due To Due From Due To
--- ---- --- -- --- ---- --- --
<S> <C> <C> <C> <C>
(1) The Kerry Group, Inc. $104,483 $72,702
(2) American-Classic, Inc. 105,323 22,399
(2) Tri K Realty, Inc. $100,000 $100,000
(2) Silver Crown Ice
Cream, Inc. 108,412 110,512
-------- -------- ------- --------
$209,806 $208,412 $95,101 $210,512
======== ======== ======= ========

</TABLE>

F-45

<PAGE>

PAGE (9)

NOTE 3
- ---- -
LOANS PAYABLE - BANK OF NEW YORK
- ----- ------- ---- -- --- ----
The company has a $100,000.00 line of credit with interest of 1% over existing
prime. The bank has taken through a UCC filing collateral on all New Yorker's
receivables and fixed assets. There is no due date on the loan as the bank makes
a business evaluation each year on the credit worthiness of the loan. Mr.
Theodore Ketsoglou is a personal guarantor.

NOTE 4
- ---- -
PROVISION FOR INCOME TAXES
- --------- --- ------ -----
No provision for income taxes were made due to carry over tax losses.
<TABLE>
<CAPTION>
Schedule Of Federal Net Operating Loss

<S> <C> <C>
Net Operating Loss 1/l/96 $(199,073)
Loss Used - 1996 $40,031
Loss Used - 1997 94,095
134,216
---------
Carry Forward $ (64,947)
=========
</TABLE>

The value of the net operating loss carry forward at a federal tax rate of 34%
would be $22,082.00.

NOTE 5
- ---- -
LEASES
- ------
The company has no lease at their current premises. The company occupies
premises from a related corporation Tri-K Realty, Inc. As no fair market value
rental has been arrived at, this would be considered a non arm's-length
transaction.

NOTE 6
- ------
LITIGATION
- ----------
There is one lawsuit that has been brought or asserted against the company.
Corporate attorney has indicated that, although the ultimate result of this
lawsuit is not currently determinable, management does not expect that this
matter will have a material adverse effect on the company=s consolidated
financial position, statement of income or liquidity.

F-46

<PAGE>

PAGE (10)

NOTE 7
- ---- -
GOODWILL - PRIOR PERIOD ADJUSTMENT
- -------- ----- ------ ----------
Goodwill from original incorporation of December 1, 1966 has never been
amortized. The goodwill would have been written off in prior years. Accordingly,
$260,342.00 of goodwill was charged against retained earnings as a prior period
adjustment.

F-47

<PAGE>

SIDNEY NEUHOF
CERTIFIED PUBLIC ACCOUNTANT
1101 STEWART AVENUE, SUITE 302
GARDEN CITY, NEW YORK 11530
(516) 222-2239
Fax (516) 222-2327

Report of Independent Accountant

To the Stockholders of
Jerry's Ice Cream, Inc.
- ----------------------

I have audited the accompanying balance sheets of Jerry's Ice Cream, Inc., as of
December 31, 1997 and 1996, and the related statements of operations,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Jerry's Ice Cream, Inc., as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

/s/ Sidney Neuhof
- ------------------------
Sidney Neuhof

February 9, 1998

F-48

<PAGE>
JERRY'S ICE CREAM INC. PAGE (2)
BALANCE SHEETS
AS AT: DECEMBER 31, 1997 AND 1996
- ---------------------------------
<TABLE>
<CAPTION>
ASSETS
------
1997 1996
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash in banks $ 5,585 $ -
Accounts receivable - net 5,468 8,500
Merchandise inventory 4,177 2,550
Other current assets - 8,052
------- -------
Total current assets 15,230 19,102

FIXED ASSETS
Furniture and fixtures -
net of accumulated depreciation 40,798 46,995
of $50,147 for 1997
and $35,458 for 1996

INTANGIBLE ASSETS - Goodwill
Net of accumulated amortization 205,403 224,363
of $55,299 for 1997
and $36,339 for 1996 -------- --------
$261,431 $290,460
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
----------- --- ------------- ------
CURRENT LIABILITIES
Bank overdraft $ - $ 4,414
Accounts payable and accrued expenses 23,825 12,509
Notes payable - Note 2 31,716 31,716
-------- -------
Total current liabilities 55,541 48,639

OTHER LIABILITIES
Loans payable - stockholder 58,873 71,354
Notes Payable - Note 2 63,233 70,718
-------- -------
122,106 142,072
STOCKHOLDERS' EQUITY
Capital stock - 10 shares authorized, 138,890 138,890
issued and outstanding - no par value
Deficit (55,106) (39,141)
-------- --------
Total stockholders' equity 83,784 99,749
-------- --------
$261,431 $290,460
======== ========
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
F-49

<PAGE>

PAGE (3)
JERRY'S ICE CREAM, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
FOR THE YEARS ENDED: DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
---- ----

<S> <C> <C>
NET SALES $807,310 $727,371

COST OF GOODS SOLD 656,922 614,363
-------- --------
GROSS PROFIT 150,388 113,008

OPERATING EXPENSES 157,121 119,016
-------- --------
INCOME (LOSS) BEFORE OTHER EXPENSES (6,733) (6,008)

OTHER EXPENSES:
Interest expense 9,232 11,363
--------- ---------
NET INCOME (LOSS) $(15,965) $(17,371)
========= =========

RETAINED EARNINGS (DEFICIT)
Beginning of Year $(39,141) $(21,770)

NET LOSS (15,965) (17,371)
-------- --------
RETAINED EARNINGS (DEFICIT)
End of Year $(55,106) $(39,141)
========= =========

<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>

F-50

<PAGE>

JERRY'S ICE CREAM, INC. PAGE (4)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED: DECEMBER 31, 1997 AND 1996
- -----------------------------------------------
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss) $(15,965) $(17,371)

Adjustments to reconcile net income to net
cash provided by operating activities

Depreciation and Amortization 33,649 31,107

(Increase) Decrease in accounts receivable 3,032 (800)

Decrease (Increase) in inventory (1,627) (1,047)

(Increase) Decrease in other current assets 8,052 (8,052)

(Decrease) in accounts payable and
accrued expenses 11,316 (17)
-------- -------
Net cash provided by operating activities 38,457 3,820
-------- -------

CASH FLOWS FROM INVESTING ACTIVITIES:

Fixed Assets (8,492) (26,029)
-------- -------
Net cash used in investing activities (8,492) (26,029)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:

Loans - Shareholder (12,481) 40,687

Loans - Net (7,485) (20,353)
-------- -------
Net cash used in (provided by)
financing activities (19,966) 20,334
-------- -------
NET (DECREASE) INCREASE IN CASH 9,999 (1,875)

CASH AT BEGINNING OF YEAR (4,414) (2,539)
-------- -------

CASH AT END OF YEAR $ 5,585 $ (4,414)
======= ========

<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>

F-51
<PAGE>

PAGE (5)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------- -- ----------- ---------- --------

NOTE 1
- ---- -
HISTORY AND BUSINESS DESCRIPTION
- ------- --- -------- -----------
Jerry's Ice Cream Inc., was incorporated under the laws of the state of New York
on September 1, 1994. The company is owned 100% by Gerald Schneider.

On January 20, 1995, Mr. Schneider through a stock redemption agreement sold all
of his stock interest back to the Ennis Ice Cream Co., Inc., and received
certain fixed and intangible assets in exchange. Mr. Schneider transferred his
share (28.57) of the assets and liabilities of Ennis Ice Cream to Jerry's Ice
Cream, Inc., pursuant to a tax free exchange.

The estate of Ron Ennis sold stock of Ennis Ice Cream, Inc., to three
stockholders. The remaining stockholders after the stock redemption were Ron
Kissel and Michael Chase (both nonrelated to Mr. Schneider). Mr. Schneider
agreed not to sell certain accounts of Ennis Ice Cream, Inc., and Ennis Ice
Cream, Inc., agreed not to sell accounts of Gerald Schneider or Jerry's Ice
Cream, Inc.

PROPERTY, RENTAL EQUIPMENT, AND DEPRECIATION
- -------- ------ --------- --- ------------
Properties and rental equipment are carried at cost and are depreciated over the
estimated lives of such assets using the straight-line method.

F-52

<PAGE>

PAGE (6)

Properties, Rental Equipment And
---------- ------ --------- ---
Depreciation Schedule
------------ --------
<TABLE>
<CAPTION>
1997 1996
---------------------- ----------------------
Asset Accum. Asset Accum.
Value Deprec. Value Deprec.
------- ------- ------ -------
<S> <C> <C> <C> <C>
Computers $ 4,644 $ 1,328 $ 500 $ 500
Auto and Truck 15,190 13,939 15,190 13,250
Freezer Cabinets 70,274 34,712 66,763 21,708
Furniture Fixtures 837 168 - -
------- ------- ------- -------
$90,945 $50,147 $82,453 $35,458
======= ======= ======= =======
</TABLE>

NOTE 2
- ---- -
NOTES PAYABLE
- ----- -------

The company has two notes payable:
<TABLE>
<CAPTION>
1997 1996
------------------- -------------------
Short Long Short Long
Term Term Term Term
<S> <C> <C> <C> <C>
1) Note Payable - Schneider
Management - Long term
note - 7% interest $15,000 -

2) Note Payable - Estate
of Ron Ennis - Self
Amortizing Loan -
Interest Rate 10% $31,716 $48,233 $31,716 $70,718
------- ------- ------- -------
$31,716 $63,233 $31,716 $70,718
======= ======= ======= =======
<FN>
1) Schneider Management is a corporation owned by Gerald Schneider's brother.
Gerald Schneider has no interest in Schneider Management. The loan is
unsecured and Mr. Gerald Schneider is a personal guarantor. The loan was
made on December 17, 1997 and repayment date is January 1, 1999 with
interest at 7% per annum. There is no prepayment penalty.

2) Notes Payable - Estate of Ron Ennis - Represent a portion of loan that Mr.
Gerald Schneider and two other original stockholders of Ennis Ice Cream,
Inc., agreed to, upon purchasing Ennis Ice Cream, Inc. Jerry's Ice Cream,
Inc., assumed 28.57% of the loan in which the monthly payments are
$2643.00. Mr. Gerald Schneider is a personal guarantor on this obligation.
</FN>
</TABLE>

F-53
<PAGE>

No dealer, salesperson or any other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this prospectus and, if given or made, must not be
relied upon as having been authorized by the Company, the Selling Stockholders
or the Underwriter. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the common stock offered
by this prospectus, nor does it constitute an offer to sell or a solicitation of
an offer to buy the securities by any person in any jurisdiction where such
offer or solicitation is not authorized, or in which the person making such
offer is not qualified to do so, or to any person to whom it is unlawful to make
such offer or solicitation. The delivery of this prospectus shall not, under any
circumstances create any implication that there has been no change in the
affairs of the Company since the date hereof.

---------------
TABLE OF CONTENTS
Page
----
Prospectus Summary . . . . . . . . 1
Risk Factors . . . . . . . . . . . 4
Use of Proceeds. . . . . . . . . . 7
Dilution . . . . . . . . . . . . . 8
Capitalization . . . . . . . . . . 9
Price Range of Common Stock. . . . 10
Dividend Policy. . . . . . . . . . 10
Selected Financial Data. . . . . . 11
Management's Discussion and Analysis
of Financial Condition and Results of
Operations . . . . . . . . . . . 12
Business . . . . . . . . . . . . . 15
Management . . . . . . . . . . . . 19
Principal Stockholders . . . . . . 25
Certain Transactions . . . . . . . 26
Selling Stockholders . . . . . . . 28
Description of Securities. . . . . 29
Shares Eligible for Future Sale. . 32
Underwriting . . . . . . . . . . . 33
Legal Matters. . . . . . . . . . . 34
Experts. . . . . . . . . . . . . . 35
Where to Find Additional Information 35
Index to Financial Statements. . . F-1
Independent Auditor's Report . . . F-22
Independent Auditor's Report . . . F-23

5,060,000 Shares

MIKE'S ORIGINAL, INC.

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

PROSPECTUS
---------------

FAIRCHILD SECURITIES CORP.

MILLENNIUM SECURITIES CORP.

, 1999

<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Offices

See "Management -- Personal Liability and Indemnification of Directors".

Item 25. Other Expenses of Issuance and Distribution

The estimated expenses of the distribution, all of which are to be borne by
Mike's, are as follows:
<TABLE>

<S> <C>
SEC Registration Fee. . . . . . . . . . . . . . . . . $882
NASD Filing Fee . . . . . . . . . . . . . . . . . . . 7,500
Blue Sky Fees and Expenses. . . . . . . . . . . . . . 15,000
Transfer Agent Fees . . . . . . . . . . . . . . . . . 2,500
Accounting Fees and Expenses. . . . . . . . . . . . . 25,000
Legal Fees and Expenses . . . . . . . . . . . . . . . 135,000
Printing and Engraving. . . . . . . . . . . . . . . . 40,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . 19,118
Total. . . . . . . . . . . . . . . . . . . . . . . $245,000
</TABLE>
Item 26. Recent Sales of Unregistered Securities

1. In May 1994, Mike's issued an aggregate of 1,133,333 shares of common
stock to its two founding stockholders. This was a transaction by the issuer not
involving any public offering which was exempt from the registration
requirements under the Securities Act pursuant to Section 4(2) thereof.

2. From November 1994 to May 1995, Mike's issued an aggregate of
approximately 180,667 shares of common stock to 206 purchasers in consideration
for the aggregate sum of $612,881. These transactions by Mike's did not involve
any public offering and were exempt from the registration requirements under the
Securities Act pursuant to Section 3(b) thereof and Rule 504 of Regulation D
promulgated pursuant thereto.

3. In April 1995, Mike's issued 5,128 shares of its common stock to a
consultant in consideration of his efforts in assisting in various matters for
Mike's during the fiscal year ended March 31, 1994 and 1995. This transaction by
Mike's did not involve any public offering and was exempt from the registration
requirements under the Securities Act pursuant to Section 4(2) thereof. The
consultant was a sophisticated investor with full access to corporate and
financial information.

4. In September 1995, Mike's issued 7,179 shares of its common stock to two
individuals for services rendered on behalf of Mike's during the nine month
period ending December 31, 1995. These transactions by Mike's did not involve
any public offering and was exempt from the registration requirements under the
Securities Act pursuant to Section 4(2) thereof. The two individuals were
employees of the Company, with full access to corporate and financial
information.

<PAGE>

5. In February 1996, Mike's issued $325,000 principal amount of 12%
convertible notes payable in August 1996 to four purchasers thereof. These
transactions by Mike's did not involve any public offering and were exempt from
the registration requirements under the Securities Act pursuant to Section 4(2)
thereof. The purchasers were accredited investors.

6. In October 1996, Mike's issued 19,231 shares of common stock to two
consultants as payment for services rendered during the year ended December 31,
1996. These transactions by Mike's did not involve any public offering and were
exempt from the registration requirements under the Securities Act pursuant to
Section 4(2) thereof. The two individuals were sophisticated investors, with
full access to corporate and financial information.

7. In May 1996, Mike's issued two 10% notes each in the amount of $50,000
to two purchasers. These transactions by Mike's did not involve any public
offering and were exempt from the registration requirements under the Securities
Act pursuant to Section 4(2) thereof. The two purchasers were accredited
investors.

8. In May 1996, Mike's issued 20,000 shares of common stock to two persons
for services rendered. These transactions by Mike's did not involve any public
offering and were exempt from the registration requirements under the Securities
Act pursuant to Section 4(2) thereof. The two persons were accredited investors.

9. In June through September 1996, Mike's sold $1,537,500 principal amount
of Second Private Placement Units, each Second Private Placement Unit consisting
of one $2,500 principal amount of 12% promissory notes and 7,500 shares of
common stock, to 36 persons, all of whom are deemed accredited pursuant to Rule
501 of Regulation D, including the exchange of the notes referred to in
paragraph 3, in private transactions by the issuer not involving any public
offering which were exempt from registration requirements under the Securities
Act pursuant to Section 4(2) thereof and Rule 506 of Regulation D promulgated
pursuant thereto.

10. In December 1996, Mike's issued an 8% convertible promissory note in
the amount of $225,000 to one purchaser, which was convertible into 200,000
shares of common stock in April 1997. This transaction by Mike's did not involve
any public offering and was exempt from the registration requirements under the
Securities Act pursuant to Section 4(2) thereof. The purchaser was an accredited
investor.

11. In January 1997, Mike's issued an 8% convertible promissory note in the
amount of $100,000 to one purchaser, which was convertible into 78,431 shares of
common stock in April 1997. This transaction by Mike's did not involve any
public offering and was exempt from the registration requirements under the
Securities Act pursuant to Section 4(2) thereof. The purchaser was an accredited
investor.

12. In March 1997, Mike's issued 35,000 shares of common stock to its East
coast product manufacturer pursuant to the terms of a credit agreement by and
among Mike's, the product manufacturer and Michael Rosen. This transaction by
Mike's did not involve any public offering and was exempt from the registration
requirements under the Securities Act pursuant to Section 4(2) thereof. The
purchaser was a sophisticated investor with full access to corporate and
financial information.

<PAGE>

13. In March 1997, Mike's issued a 10% promissory note in the amount of
$50,000 together with 2,000 shares of common stock, to one purchaser. In April
1997, this person exchanged $25,000 of such note into 12,500 shares of common
stock. This transaction by Mike's did not involve any public offering and was
exempt from the registration requirements under the Securities Act pursuant to
Section 4(2) thereof. The purchaser was an accredited investor.

14. In April 1997, Mike's issued 150,000 shares of common stock in payment
of obligations under a consulting agreement. This transaction by Mike's did not
involve any public offering and was exempt from the registration requirements
under the Securities Act pursuant to Section 4(2) thereof. The purchaser was an
accredited investor.

15. In February 1998, Mike's issued 30,000 shares of common stock to one of
its marketing consultants in exchange for services to be performed during 1998.
This transaction by Mike's did not involve any pubic offering and was exempt
from the registration requirements under the Securities Act pursuant to Section
4(2) thereof. The purchaser was a sophisticated investor with full access to
corporate and financial information.

16. From July through November 11, 1998, Mike's sold $390,000 principal
amount of Private Placement Units, each Private Placement Unit consisting of one
$50,000 principal amount of 12% promissory note and 200,000 shares of common
stock, to 10 persons, all of whom are deemed accredited pursuant to Rule 501 of
Regulation D, including the exchange of the notes referred to in paragraph 3, in
private transactions by the issuer not involving any public offering which were
exempt from registration requirements under the Securities Act pursuant to
Section 4(2) thereof and Rule 506 of Regulation D promulgated pursuant thereto.

17. In August 1998, Mike's issued 97,500 shares of common stock to one of
its financial consultants in exchange for services performed through July, 1998.
This transaction by Mike's did not involve any pubic offering and was exempt
from the registration requirements under the Securities Act pursuant to Section
4(2) thereof. The consultant was an accredited investor.

18. In October 1998, Mike's issued 85,000 shares of common stock to each of
its two outside directors. This transaction by Mike's did not involve any pubic
offering and was exempt from the registration requirements under the Securities
Act pursuant to Section 4(2) thereof. The directors were accredited investors.

Item 27. Exhibits.

1.1 Form of Underwriting Agreement .
1.2 Form of Agreement Among Underwriters.
3.1 Restated Certificate of Incorporation of the Registrant (*).
3.2 By-laws of the Registrant (*).
5.1 Form of Opinion of Blau, Kramer, Wactlar & Lieberman, P. C. regarding
the legality of the securities being registered.
10.1 1995 Long Term Incentive Plan (*).

<PAGE>

10.2 1996 Non-Qualified Stock Option Plan (*).
10.3 Employment Agreement dated June 1, 1995 between the Registrant and
Michael Rosen, as amended (*).
10.4 Consulting Agreement dated November 1, 1996 between the Registrant and
Alma Management Corp. (*)
10.5 Form of Second Private Placement Note (*).
10.6 Form of Second Private Placement Unit Subscription Agreement (*).
10.7 Form of Indemnification Agreement between the Registrant and its
officers and directors (*).
10.8 Credit Agreement dated April 10, 1996, as amended, between the
Registrant and The Penn Traffic Company (*).
10.9 Manufacturing, Delivery & Pricing Agreement dated as of September 11,
1996 between the Registrant and Fieldbrook Farms (*).
10.10 Credit Agreement with Fieldbrook Farms dated March 20, 1997 (*).
10.11 Modification Agreement with The Penn Traffic Company dated April 15,
1997 (*).
10.12 Asset Purchase Agreement among New Yorker Ice Cream Corp., Kerry Group
Ltd., Ted Ketsoglou and the Registrant dated as of July 20, 1998.**
10.13 Asset Purchase Agreement between Jerry's Ice Cream, Inc. and the
Registrant dated as of July 20, 1998.**
10.14 Proposed Employment Agreement with Ted Ketsoglou.**
10.15 Proposed Employment Agreement with Gerald Schneider.**
10.16 Test Market License Agreement for Veryfine Frozen Juice Bar dated
April 1, 1998.
10.17 Consulting Agreement between Registrant and Arthur G. Rosenberg.
10.18 Form of Promissory Note dated July 20, 1998 between Registrant and New
Yorker Ice Cream Corp.
10.19 Form of Promissory Note dated July 20, 1998 between Registrant and
Jerry's Ice Cream Co., Inc.
10.20 Security Agreement dated as of July 20, 1998 between Registrant and
New Yorker Ice Cream Corp.
10.21 Security Agreement dated as of July 20, 1998 between Registrant and
Jerry's Ice Cream Co., Inc.
10.22 Settlement and General Release dated May 15, 1998 among Michael Rosen,
Rachelle Rosen, Elizabeth Pilossoph, Martin Pilossoph and Registrant.
21 Subsidiaries of Registrant.
Name State of Incorporation
---- ----------------------
New York Frozen Desserts, Inc. New York
Natco Brands, Inc. New York

23.1 Consent of Blau, Kramer, Wactlar & Lieberman, P. C. (included in
Exhibit 5.1).
23.2 Consent of Lazar, Levine & Felix
23.3 Consent of Grant Thornton LLP
23.4 Consent of Sidney Neuhof
23.5 Consent of Ted Ketsoglou.
23.6 Consent of Gerald Schneider.
25.1 Powers of Attorney
- -------

(*) Incorporated by reference to registration statement on Form SB-2 (No.
333-21575) filed July 23, 1997.

(**) Previously filed.

Item 28. Undertakings.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer 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 small business
issuer 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 Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>
Registrant hereby undertakes that it will:

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement; and
(iii)Include any additional or changed material information on the plan of
distribution.
(2) For determining any liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.

Registrant further undertakes that it will:

(1) For determining any liability under the Securities Act, tr eat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the small business issuer under Rule 424(b)(1), or
(4) or 497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it effective.

(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
<PAGE>
SIGNATURES

In accordance with the requirements of the Securities Act, 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 Amendment No. 1 to this
registration statement to be signed on its behalf by the undersigned, in
Jericho, New York on the 21st day of January, 1999.

MIKE'S ORIGINAL, INC.

By: /s/ Arthur G. Rosenberg
----------------------------------
Arthur G. Rosenberg
President (Chief Executive Officer)

In accordance with the requirements of the Securities Act, this
registration statement was signed by the following persons in the capacities
indicated on January 21, 1999.

Signatures Title
---------- -----
/s/ Arthur G. Rosenberg
-------------------- President, Chief Executive Officer,
Arthur G. Rosenberg Chief Financial Officer, Director

* Director
--------------------
Frederic D. Heller

* Director
--------------------
Myron Levy

- ------
*By Arthur G. Rosenberg, Attorney-in-fact

3,500,000 Shares of Common Stock

MIKE'S ORIGINAL, INC.

UNDERWRITING AGREEMENT

New York, New York
January_________, 1999

Fairchild Securities Corp.
99 Wall Street
New York, New York 10005

Attn: Mr. ________________
President

Ladies and Gentlemen:

Mike's Original, Inc., a Delaware corporation (the "Company"), confirms its
agreement with Fairchild Securities Corp. ("Fairchild") and each of the
underwriters named in Schedule A hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 14), for whom Fairchild is acting as representative (however, Millennium
Securities, Inc. shall hereinafter be referred to as "you" or the
"Representative"), with respect to the sale by the Company and the purchase by
the Underwriters, acting severally and not jointly, of the respective numbers of
shares (hereinafter referred to as the "Shares" or the "Securities") of the
Company's common stock, $0.001 par value per share (the "Common Stock") as set
forth in said Schedule A. The Securities are more fully described in the
Registration Statement and the Prospectus referred to below.

1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the Underwriters as of the date
hereof, and the Closing Date as follows:

(a) The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission"), a registration statement, and an amendment or
amendments thereto, on Form SB-2, including any related preliminary prospectus
(the "Preliminary Prospectus"), for the registration of the Shares as more fully
described in the Prospectus under the heading "Selling Security Holders", under
the Securities Act of 1933, as amended (the "Act"), which registration statement
and amendment or amendments have been prepared by the Company in conformity with
the requirements of the Act, and the Rules and Regulations, as defined below.
The Company will promptly file a further amendment to the registration statement
in the form heretofore delivered to the Underwriters but will not file any other

<PAGE>

amendment thereto to which the Underwriters shall have objected in writing after
having been furnished with a copy thereof. Except as the context may otherwise
require, the registration statement, as amended, on file with the Commission at
the time the registration statement becomes effective (including the prospectus,
financial statements, schedules, exhibits and all other documents filed as a
part thereof or incorporated therein (including, but not limited to those
documents or information incorporated by reference therein) and all information
deemed to be a part thereof as of such time pursuant to paragraph (b) of Rule
430(A) of the Regulations) and as further amended by any post effective
amendment declared effective prior to the Closing Date, is hereinafter called
the "Registration Statement", and the form of prospectus in the form first filed
with the Commission pursuant to Rule 424(b) of the Regulations, is hereinafter
called the "Prospectus." For purposes hereof, "Rules and Regulations" shall mean
the rules and regulations adopted by the Commission under either the Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as applicable.
The Preliminary Prospectus, Registration Statement and Prospectus are sometimes
referred to herein as the "Offering Documents".

(b) Neither the Commission nor any state regulatory authority has issued
any order preventing or suspending the use of any Preliminary Prospectus, the
Registration Statement or the Prospectus or any part of any thereof and no
proceedings for a stop order suspending the effectiveness of the Registration
Statement or any of the Company's securities have been instituted or are pending
or threatened. Each of the Preliminary Prospectus, the Registration Statement
and the Prospectus at the time of filing thereof conformed with the requirements
of the Act and the Rules and Regulations, and none of the Preliminary
Prospectus, the Registration Statement or the Prospectus at the time of filing
thereof contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

(c) When the Registration Statement becomes effective and at all times
subsequent thereto until the Closing Date and any Additional Closing Date (as
defined in Section 5 hereof) and during such longer period as the Prospectus may
be required to be delivered in connection with sales by the Underwriters or a
dealer, the Registration Statement and the Prospectus contained, and as amended
by any amendment or supplement thereto, will contain, all statements which are
required to be stated therein in accordance with the Act and the Rules and
Regulations, and will conform to the requirements of the Act and the Rules and
Regulations; neither the Registration Statement nor the Prospectus, as amended
or supplemented by any amendment or supplement thereto, nor any such amendment
or supplement thereto, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

(d) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the state of its incorporation.
The Company does not own an interest in any firm, association, corporation,
partnership, trust, joint venture or other business entity. The Company is duly
qualified and licensed for the transaction of business and in good standing as a
foreign corporation in each jurisdiction in which its ownership or leasing of
any properties or the conduct of its business ("Business") requires such
qualification or licensing, except for jurisdictions where the failure to be so
registered or qualified would not have a material adverse effect on the

<PAGE>

Company's Business, assets, prospects, earnings, properties, condition
(financial or otherwise) or results of operation of the Company (herein referred
to as a "Material Adverse Effect"). The Company has all requisite power and
authority (corporate and other), and has obtained any and all necessary and
material authorizations, approvals, orders, licenses, certificates, franchises
and permits of and from all government or regulatory officials and bodies
(including, without limitation, those having jurisdiction over building,
factory, environmental or similar matters) to own or lease its properties and
conduct its Business (collectively, the "Approvals"); the Company is and has
been doing business in, and on each Closing Date will be in, compliance with all
such Approvals, and all Federal, state, local and foreign laws, rules and
regulations; and the Company has not received any notice of proceedings relating
to the revocation or modification of any such Approval, which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, which
would have a Material Adverse Effect.

(e) The Company has a fully authorized, issued and outstanding
capitalization as set forth in the Prospectus under "Capitalization" and
"Description of Securities" and will have the capitalization set forth therein
on the Closing Date after giving effect to the Closing, and the Company is not a
party to or bound by any instrument, agreement or other arrangement providing
for the issuance of any capital stock, rights, warrants, options or other
securities, except for this Agreement and as described in the Prospectus. The
offers and sales of all securities of the Company outstanding on the date hereof
and/or immediately prior to the Closing Date were at all relevant times either
registered under the Securities Act and the applicable state securities or Blue
Sky laws, or exempt from such registration. No holder of any of the Company's
securities has any rights, "demand," "piggyback" or otherwise, to have such
securities registered (including without limitation on the Registration
Statement) or to demand the filing of a registration statement except as
specifically described in the Prospectus. No holder of any outstanding
securities of the Company has any rights of rescission with respect to the
offering and sale of such securities. The Shares and all other securities issued
or issuable by the Company conform or, when issued and paid for, will conform,
in all respects to all statements with respect thereto contained in the Offering
Documents. All issued and outstanding securities of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, and the
holders thereof are not subject to personal liability by reason of being such
holders; and none of such securities were issued in violation of the preemptive
rights of any holders of any security of the Company or similar contractual
rights granted by the Company. The Securities are not and will not be subject to
any preemptive or other similar rights of any stockholder, have been duly
authorized and, when issued, paid for and delivered in accordance with the terms
hereof, will be validly issued, fully paid and non-assessable; the holders
thereof will not be subject to any personal liability solely by reason of being
such holders; all corporate action required to be taken for the authorization,
issuance and sale of the Securities has been duly and validly taken, and the
certificates representing the Securities will be in due and proper form. Upon
the issuance and delivery pursuant to the terms hereof of the Securities to be
sold by the Company hereunder, the Underwriters or the Representative, as the
case may be, will acquire good and marketable title to such securities free and
clear of any lien, charge, claim, encumbrance, pledge, security interest, defect
or other restriction or right of equity of any kind whatsoever.

(f) The financial statements of the Company are true and complete and
fairly present the financial position of the Company at the respective dates and
for the respective periods to which they apply and such financial statements
have been prepared in conformity with generally accepted accounting principles
and the Rules and Regulations, consistently applied throughout the periods
involved and are in accordance with the books and records of the Company. No
other financial statements are required by Form SB-2 or otherwise to be included
in the Registration Statement or the Prospectus. The outstanding debt, the
property, both tangible and intangible, and the business of the Company conform
in all respects to the descriptions thereof contained in the Registration
Statement and the Prospectus. Financial information set forth in the Prospectus

<PAGE>

under the headings "Selected Financial Data," "Capitalization," and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," fairly present, on the basis stated in the Prospectus, the
information set forth therein and have been derived from or compiled on a basis
consistent with that of the audited financial statements included in the
Prospectus. Except as otherwise stated in the Offering Documents, since December
31, 1997, (I) the Company has not incurred any liabilities or obligations,
direct or contingent, not in the ordinary course of business, or entered into
any transaction not in the ordinary course of business, which is material to the
business of the Company, and there has not been any change in the capital stock
of, or any incurrence of long-term debt by, the Company, or any issuance of
options, warrants or other rights to purchase the capital stock of the Company,
or any security or other instrument which by its terms is convertible into,
exercisable for or exchangeable for capital stock of the Company and (ii) there
has not occurred any Material Adverse Effect or any development involving a
prospective Material Adverse Effect. The Company has not become a party to, and
neither the business nor the property of the Company has become the subject of,
any litigation which, if adversely determined, would have a Material Adverse
Effect whether or not in the ordinary course of business.

(g) The Company has filed all federal tax returns and all state and
municipal and local tax returns (whether relating to income, sales, franchise,
real or personal property or other types of taxes) required to be filed under
the laws of the United States and applicable states, and has paid in full all
taxes which have become due pursuant to such returns or claimed to be due by any
taxing authority or otherwise due and owing; provided, however, that the Company
has not paid any tax, assessment, charge, levy or license fee that it contests
in good faith and by proper proceedings, which it has disclosed in writing to
the Representative and for which adequate reserves for the accrual of same are
maintained if required by generally accepted accounting principles. Each of the
tax returns heretofore filed by the Company correctly and accurately reflects
the amounts of its tax liability thereunder. The Company has withheld, collected
and paid all other levies, assessments, license fees and taxes (including,
without limitation, employment withholding taxes, FICA/social security and
similar employee taxes) to the extent required and, with respect to payments, to
the extent that the same have become due and payable.

(h) No transfer tax, stamp duty or other similar tax is payable by or on
behalf of the Underwriters in connection with (I) the issuance by the Company of
the Securities; (ii) the purchase by the Underwriters of the Securities from the
Company; (iii) the consummation by the Company of any of its obligations under
this Agreement, or (iv) resales of the Securities in connection with the
distribution contemplated hereby.

(i) The Company has, and at the Closing will have, good and marketable
title to, or valid and enforceable leasehold estates in, all items of real
property owned or leased by it, and good and marketable title to, or valid and
enforceable leases with respect to, all items of personal property (tangible and
intangible), free and clear of all liens, encumbrances, claims, security
interests, defects of title, and restrictions of any nature whatsoever, other
than those referred to in the Offering Documents and liens for taxes not yet due
and payable. The Company has adequately insured its tangible and/or real
properties, other than its intellectual properties, against loss or damage by
fire or other casualty (other than earthquake and flood) and maintains such
insurance in adequate amounts (such adequacy being measured by such types and
levels of insurance as are carried by companies conducting comparable volumes of
business of the nature carried on and proposed to be carried on by the Company),
on terms generally offered by reputable insurance carriers in New York State.
The Company (I) has not failed to give notice or present any insurance claims
with respect to any matter, including but not limited to the Company's business
and property under any such insurance policy in a due and timely manner; (ii)
does not have any disputes or claims against any underwriter of such insurance
policies or has not failed to pay any premiums due and payable thereunder, or

<PAGE>

(iii) has not failed to comply with all conditions contained in such insurance
policies. To the best of the Company's knowledge, there are no facts or
circumstances under any such insurance policy which would relieve any insurer of
its obligation to satisfy in full any valid claim of the Company.

(j) There is no action, suit, proceeding, injury, arbitration,
investigation, litigation or governmental proceeding (including, without
limitation, those having jurisdiction over environmental or similar matters),
domestic or foreign, pending or, to the best knowledge of the Company,
threatened against, or involving the properties or business of, the Company in
or before any court, agency, tribunal, arbitrator, governmental authority or
other person with jurisdiction over the Company and/or its properties
(including, without limitation, those having jurisdiction over environmental or
similar matters) which (I) questions the validity of the capital stock of the
Company, this Agreement, the RPO, or the Warrant Agreement (as defined herein)
or of any action taken or to be taken by the Company pursuant to or in
connection with this Agreement or the Warrant Agreement, or (ii) is required
under the Act or the Rules and Regulations to be disclosed in the Registration
Statement and/or the Prospectus which is not so disclosed (and such proceedings
as are summarized in the Registration Statement and/or the Prospectus are
accurately summarized in all material respects).

(k) The Company is not in violation of its Certificate of Incorporation or
By-Laws. The Company has full legal right, power and authority to issue, deliver
and sell the Securities, to execute and deliver this Agreement and to consummate
the transactions provided for in this Agreement; and this Agreement has been
duly and properly authorized, executed and delivered by the Company. This
Agreement constitutes a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its respective terms, and
none of the Company's delivery or performance of this Agreement, the
consummation of the transactions contemplated herein and therein or the conduct
of its current or proposed business as described in the Offering Documents and
any amendments or supplements thereto, conflicts with or with the lapse of time
will conflict with, or results or with the lapse of time will result in, any
breach or violation of any of the terms or provisions of, or constitutes a
default under, or result in the creation or imposition of any lien, charge,
claim, encumbrance, pledge, security interest defect or other restriction or
right of equity of any kind whatsoever upon , any property or assets (tangible
or intangible) of the Company pursuant to or under the terms of, (I) the
certificate of incorporation or By-Laws of the Company; (ii) any license,
contract, indenture, mortgage, deed of trust, voting trust agreement,
stockholders agreement, note, loan or credit agreement or any other agreement or
instrument to which the Company is a party or by which it is or may be bound or
to which its properties or assets (tangible or intangible) is or may be subject,
or any indebtedness; (iii) any statute, judgment, decree, order, rule or
regulation applicable to the Company of any arbitrator, court, regulatory body
or administrative agency or other governmental agency or body (including,
without limitation, those having jurisdiction over environmental or similar
matters), domestic or foreign, having jurisdiction over the Company or any of
its activities or properties; or (iv) any permit, certification, registration,
approval, consent, license or franchise necessary for the Company to own or
lease and operate any of its properties and to conduct its business or the
ability of the Company to make use thereof.

(l) No consent, approval, authorization or order of, and no filing with,
any court, regulatory body, government agency or other body, domestic or
foreign, is required for the issuance of the Shares as described in the
Prospectus and the Registration Statement, the performance of this Agreement and
the transactions contemplated hereby and thereby, including without limitation,
any waiver of any preemptive, first refusal or other rights that any entity or

<PAGE>

person may have for the issue and/or sale of any of the Securities, except such
as (I) have been made or obtained prior to the date hereof or (ii) may be
obtained under the Act or may be required under state securities or Blue Sky
laws in connection with the Underwriters' purchase and distribution of the
Securities or the clearance of such purchase, distribution and sale by the
National Association of Securities Dealers, Inc. (the "NASD").

(m) All executed agreements, contracts or other documents or copies of
executed agreements, contracts or other documents filed as exhibits to the
Registration Statement to which the Company is a party or by which it may be
bound or to which its assets, properties or business may be subject have been
duly and validly authorized, executed and delivered by the Company and
constitute the legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their respective terms. There are no
contracts or other documents which are required by the Act to be described in
the Registration Statement or filed as exhibits to the Registration Statement
which are not described or filed as required, and the exhibits which have been
filed are complete and correct copies of the documents of which they purport to
be copies. The descriptions in the Registration Statement of such agreements,
contracts and other documents are accurate and fairly present the information
required to be disclosed in conformity with the Act and the Rules and
Regulations. The contracts so described are in full force and effect and the
Company is not in breach of any such agreement.

(n) Subsequent to the respective dates as of which information is set forth
in the Registration Statement and the Prospectus, and except as may otherwise be
indicated or contemplated herein or therein, the Company has not (I) issued any
securities or incurred any liability or obligation, direct or contingent, for
borrowed money; (ii) entered into any transaction other than in the ordinary
course of business, or (iii) declared or paid any dividend or made any other
distribution in respect of its capital stock of any class, and there has not
been any change in the capital stock or any change in the debt (long or short
term) or liabilities or material change in or affecting the general affairs,
management, financial operations, stockholders' equity or results of the
operations of the Company.

(o) No default by the Company (or to the Company's knowledge by any other
party) exists in the due performance of any term, covenant or condition of any
license, contract, indenture, mortgage, installment sale agreement, license,
permit, franchise, lease, deed of trust, voting trust agreement, stockholders
agreement, note, loan or credit agreement, purchase agreement, or any other
agreement or instrument evidencing an obligation for borrowed money, or any
other agreement or instrument to which the Company is a party or by which the
Company may be bound or to which the property or assets (tangible or intangible)
of the Company is subject or affected.

(p) The Company is in compliance with all Federal, state, local, and
foreign laws and regulations respecting employment and employment practices,
terms and conditions of employment and wages and hours. To the best of the
Company's knowledge, there are no pending investigations involving the Company
by the United States Department of Labor or any other governmental agency
responsible for the enforcement of such Federal, state, local, or foreign laws
and regulations. There is no unfair labor practice charge or complaint against
the Company pending before the National Labor Regulations Board or any strike,
picketing, boycott, dispute, slowdown or stoppage pending or, to the best of the
Company's knowledge, threatened against or involving the Company, or any
predecessor entity, and none has ever occurred. No representation question
exists respecting the employees of the Company, and no collective bargaining
agreement or modification thereof is currently being negotiated by the Company.
No grievance or arbitration proceeding is pending under any expired or existing

<PAGE>

collective bargaining agreements of the Company. No labor dispute with the
employees of the Company exists or, to the best of the Company's knowledge, is
imminent.

(q) The Company does not maintain, sponsor or contribute to any program or
arrangement that is an "employee pension benefit plan," an "employee welfare
benefit plan," or a "multiemployer plan" as such terms are defined in sections
32(2) and 3(1) and 3(37), respectively, of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") ("ERISA" Plans") The Company does not
maintain or contribute, now or at any time previously, to a defined benefit
plan, as defined in Section 3(35) of ERISA. The Company has never completely or
partially withdrawn from a "multiemployer plan."

(r) None of the Company, any of its employees, directors, shareholders, or
affiliates (within the meaning of the Rules and Regulations) of any of the
foregoing has taken or will take, directly or indirectly, any action designed to
or which has constituted or which might be expected to cause or result in, under
the Exchange Act, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities or otherwise.

(s) The Company owns or possesses the requisite licenses and/or enforceable
rights to use, free and clear of all liens, charges, claims, encumbrances,
pledges, security interests, defects or other restrictions of any kind
whatsoever, all trademarks, trademark applications, service marks, service
names, trade names, patents and patent applications, copyrights and other rights
(collectively, "Intangibles") described as owned or used by it in the Offering
Documents and/or which are necessary for the conduct of its current business and
the business it proposes to conduct as described in the Offering Documents.
There is no proceeding or action by any person pertaining to, or proceeding or
claim pending or, to the best knowledge of the Company, threatened, and the
Company has not received any claim alleging, infringement directly or indirectly
attributable to the Company's use of its Intangibles with the rights of any
third party or any notice of conflict with the asserted rights of others which
challenges the exclusive right of the Company with respect to, any Intangibles
used in the conduct of the Company's present or proposed business. The Company's
current products, services and processes do not and to the best knowledge of the
Company its proposed products, services and processes do not, infringe on any
Intangibles of any third party. The Company has direct ownership and title, free
and clear of any liens, security interests, encumbrances or claims of others, to
all intellectual property (including all United States patents and United States
and foreign patent applications) and other proprietary rights, confidential
information and know-how. Except as set forth in the Offering Documents, the
Company is not obligated or under any liability whatsoever to make any payments
by way of royalties, fees or otherwise to any owner or licensee of, or other
claimant to, any patent, trademark, service mark, trade name, copyright,
know-how, technology or other intangible asset, with respect to the use thereof
or in connection with the conduct of the Company's business as now (or currently
proposed to be) conducted or otherwise. No unresolved claims or notices have
been asserted or given during the past three years by any person challenging the
use by the Company of any Intangible or challenging or questioning the validity,
enforceability or effectiveness of or the title to any Intangible or agreement
relating thereto nor to the Company's knowledge is there any action, suit,
investigation or proceeding by or before any court or other governmental entity
reasonably likely to have a Material Adverse Effect on the validity or
enforceability of, or the title or right of the Company to use, any Intangible.

(t) Grant Thornton LLP, whose report is filed with the Commission as a part
of the Registration Statement, are independent certified public accountants as
required by the Act and the Rules and Regulations.
<PAGE>

(u) The Company is not obligated to pay a finder's or broker's fee to
anyone in connection with the introduction of the Company to the Representative
or the consummation of the offering contemplated hereunder, other than payments
to the Representative. The Company has not paid or issued any monies, securities
or other compensation to any member of the National Association of Securities
Dealers, Inc. ("NASD"), or to any affiliate of such a member during the previous
twelve (12) months, except payments made to Millennium Securities Corp. in
connection with the Second Private Placement Financing.

(v) The Securities have been approved for quotation on the OTC Bulletin
Board.

(w) Neither the Company nor any of its officers, employees, agents or any
other person acting on behalf of the Company, has, directly or indirectly, given
or agreed to give any money, gift or similar benefit (other than legal price
concessions to customers in the ordinary course of business) to any customer,
supplier, employee or agent of a customer or supplier, or official employee of
any governmental agency (domestic or foreign) or instrumentality of any
government (domestic or foreign) or any political party or candidate for office
(domestic or foreign) or other person who was, is, or may be in a position to
help or hinder the current or proposed business of the Company (or assist the
Company in connection with any actual or proposed transaction) which (a) might
subject the Company, or any other such person to any damage or penalty in any
civil, criminal or governmental litigation or proceeding (domestic or foreign);
(b) if not given in the past, might have had a Material Adverse Effect, or (c)
if not continued in the future, might cause a Material Adverse Effect. The
Company's internal accounting controls are sufficient to cause the Company to
comply with the Foreign Corrupt Practices Act of 1977, as amended.

(x) Except as disclosed in the Prospectus, no officer, director or
shareholder of the Company, or any "affiliate" or "associate" (as these terms
are defined in Rule 405 promulgated under the Rules and Regulations) of any of
the foregoing persons or entities has or has had, either directly or indirectly,
(I) an interest in any person or entity which (A) currently furnishes or sells
services or products which are furnished or sold or are proposed to be furnished
or sold by the Company, or (B) purchases from or sells or furnishes to the
Company any goods or services, or (ii) a beneficial interest in any contract or
agreement to which the Company is a party or by which it may be bound or
affected, which in any such case is required to be so disclosed. Except as set
forth in the offering documents, there are no existing agreements, arrangements,
understandings or transactions, or proposed agreements, arrangements,
understandings or transactions, between or among the Company on the one hand,
and any officer, director or shareholder owning in excess of 5% of the Common
Stock of the Company, or any affiliate or associate of any of the foregoing
persons or entities, on the other hand.

(y) The minute books of the Company contain a complete summary of all
meetings and actions of the directors and shareholders of the Company, since the
time of its incorporation, and reflect all transactions referred to in such
minutes accurately in all respects.

(z) No holders of any securities of the Company or of any options, warrants
or other convertible or exchangeable securities of the Company has any
anti-dilution rights with respect to any securities of the Company except as
described in the Prospectus.

(aa) The Company (I) has not filed a registration statement which is the
subject of any pending proceeding or examination under Section 8 of the
Securities Act, or is the subject of any refusal order or stop order thereunder;

<PAGE>

(ii) is not subject to any pending proceeding under Rule 261 of the Securities
Act or any similar rule adopted under Section 3(b) of the Securities Act, or to
an order entered thereunder; (iii) has not been convicted of any felony or
misdemeanor in connection with the purchase or sale of any security or involving
the making of any false filing with the Commission; (iv) is not subject to any
order, judgment, or decree of any court of competent jurisdiction temporarily,
preliminarily or permanently restraining or enjoining, the Company from engaging
in or continuing any conduct or practice in connection with the purchase or sale
of any security or involving the making of any false filing with the Commission;
or (v) is not subject to a United States Postal Service false representation
order entered under Section 3005 of Title 39, United States Code; or a temporary
restraining order or preliminary injunction entered under Section 3007 of Title
39, United States Code, with respect to conduct alleged to have violated Section
3005 of Title 39, United States Code. None of the Company's directors, officers,
or beneficial owners of five percent (5%) or more of any class of its equity
securities (I) has been convicted of any felony or misdemeanor in connection
with the purchase or sale of any security involving the making of a false filing
with the Commission, or arising out of the conduct of the business of an
underwriter, broker, dealer, municipal securities dealer, or investment advisor;
(ii) is subject to any order, judgment, or decree of any court of competent
jurisdiction temporarily, preliminarily or permanently enjoining or restraining,
such person from engaging in or continuing any conduct or practice in connection
with the purchase or sale of any security, or involving the making of a false
filing with the Commission, or arising out of the conduct of the business of an
underwriter, broker, dealer, municipal securities dealer, or investment adviser;
(iii) is subject to an order of the Commission entered pursuant to section
15(b), 15B(a) or 15B(c) of the Securities Exchange Act of 1934 (the "1934 Act"),
or is subject to an order of the Commission entered pursuant to Section 203(e)
or (f) of the Investment Advisers Act of 1940; (iv) is suspended or expelled
from membership in, or suspended or barred from association with a member of, an
exchange registered as a national securities exchange pursuant to Section 6 of
the 1934 Act, an association registered as a national securities association
under Section 15A of the 1934 Act, or a Canadian securities exchange or
association for any act or omission to act constituting conduct inconsistent
with just and equitable principles of trade; or (v) is subject to a United
States Postal Service false representation order entered under Section 3005 of
Title 39, United States Code; or is subject to a restraining order or
preliminary injunction entered under Section 3007 of Title 39, United States
Code, with respect to conduct alleged to have violated Section 3005 of Title 39,
United States Code.

(bb) The Company is not, and the Closing will not be, in violation of any
law, rule, regulation, judgment or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or Business other than any violation which individually or in the
aggregate would not have a Material Adverse Effect.

(cc) None of the Company's obligations to any third party are secured by
any of the Company's outstanding securities.

(dd) Any certificate signed by any officer of the Company, and delivered to
the Underwriters or the Underwriters's Counsel (as defined herein) shall be
deemed a representation and warranty by the Company to the Underwriters as to
the matters covered thereby.

<PAGE>

2. Purchase, Sale and Delivery of the Securities.

(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, and each Underwriter,
severally and not jointly agrees to purchase from the Company, at a price of
$_________ per share of Common Stock, that number of shares as set forth in
Schedule A opposite the name of such Underwriter, subject to such adjustment as
the Representative in its discretion shall make to eliminate any sales or
purchases of fractional shares. The initial public offering price per share
shall be $_______, comprising of one Share of Common Stock.

(b) Payment of the purchase price and delivery of certificates for the
Shares shall be made at the offices Beckman, Millman & Sanders, LLP, 116 John
Street, New York, New York 10004, or at such other place as shall be agreed upon
by the Representative and the Company. Such delivery and payment shall be made
at 10:00 a.m. (New York City time) on the third business day following the date
on which the Registration Statement has been declared effective (the "Effective
Date") or at such earlier time and date or other time and date as shall be
agreed upon by the Representative and the Company not later than third business
days after such third business day (such time and date of payment and delivery
being herein called the "Closing Date"). Delivery of the certificates for the
Shares shall be made to you, for the respective accounts of the Underwriters,
against payment by you, for the respective accounts of the Underwriters, of the
purchase price for the Shares by certified or official bank checks payable in
same day funds or by wire transfer of immediately available funds, to the order
of the Company. Certificates for the Shares shall be in definitive, fully
registered form, shall bear no restrictive legends (except with respect to Blue
Sky resale restrictions) and shall be in such denominations and registered in
such names as the Underwriters may request in writing at least two business days
prior to the Closing Date. The certificates for the Shares shall be made
available to the Representative at such office or such other place as the
Representative may designate for inspection, checking and packaging no later
than 9:30 a.m. on the last business day prior to the Closing Date.

(c) The Additional Securities shall be purchased by the Underwriter from
the Company as provided herein. This option may be exercised only to cover
over-allotments in the sale of the Shares by the Underwriter. This option may be
exercised by you on the basis of the representations, warranties, covenants, and
agreements herein contained, but subject to the terms and conditions herein set
forth, at any time and from time to time on or before the forty-fifth day
following the date that the Registration Statement is declared effective by the
Commission, by written notice by you to the Company. Such notice shall set forth
the aggregate number of Additional Securities as to which the option is being
exercised, the name or names in which the certificates for the Shares (the
"Additional Securities") underlying such Additional Securities are to be
registered, the authorized denominations in which such Additional Securities are
to be issued, and the time and date, as determined by the Underwriter, when such
Additional Securities are to be delivered (each such time and date are herein
called an "Additional Closing Date") (references herein to the Closing Date
shall mean the Closing Date referred to in section 5(a) hereof and/or any
Additional Closing Date, if any, as the context requires, unless otherwise
specifically provided herein); provided, however, that no Additional Closing
Date shall be earlier than the Closing Date nor earlier than the second business
day after the date on which the notice of the exercise of the option shall have
been given nor later than the eighth business day after the date on which such
notice shall have been given.

(d) Payment of the purchase price of $______ per share and delivery of
certificates for the Additional Securities shall be made at the offices of
Beckman, Millman & Sanders, LLP, 116 John Street, New York, New York 10004, or

<PAGE>

at such other place as shall be agreed upon by the Representative and the
Company. Delivery of the certificates for the Additional Securities shall be
made to you, for the respective accounts of the Underwriters, against payment by
you, for the respective accounts of the Underwriters, of the purchase price for
the Additional Securities by certified or official bank checks payable in same
day funds or by wire transfer of immediately available funds, to the order of
the Company. Certificates for the Additional Securities shall be in definitive,
fully registered form, shall bear no restrictive legends (except with respect to
Blue Sky resale restrictions) and shall be in such denominations and registered
in such names as the Underwriters may request in writing at least two business
days prior to the Closing Date. The certificates for the Additional Securities
shall be made available to the Representative at such office or such other place
as the Representative may designate for inspection, checking and packaging no
later than 9:30 a.m. on the last business day prior to the Additional Closing
Date.

You have advised the Company that each Underwriter has authorized you to
accept delivery of its Securities, to make payment and to deliver a receipt
therefor. You, individually and not as the Representative of the Underwriters,
may (but shall not be obligated to) make payment for any Securities to be
purchased by any Underwriter whose funds shall not have been received by you by
the Closing Date for the account of such Underwriter, but any such payment shall
not relieve such Underwriter from any of its obligations under this Agreement.

3. Public Offering of the Securities. Immediately upon effectiveness of the
Registration Statement, the Underwriters shall make a public offering of the
Securities (other than to residents of or in any jurisdiction in which
qualification of the Securities is required and has not become effective) at the
price and upon the other terms set forth in the Prospectus. The Representative
may from time to time increase or decrease the public offering price after
distribution of the Securities has been completed to such extent as the
Representative, in its sole discretion deems advisable. The Underwriters may
enter into one of more agreements as the Underwriters, in each of their sole
discretion, deem advisable with one or more broker-dealers who shall act as
dealers in connection with such public offering.

4. Covenants of the Company. The Company covenants and agrees with each of
the Underwriters as follows:

(a) The Company shall use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
practicable and will not at any time, whether before or after the Effective
Date, file any amendment to the Registration Statement or supplement to the
Prospectus or file any document under the Act or Exchange Act before termination
of the offering of the Securities by the Underwriters of which the
Representative shall not previously have been advised and furnished with a copy,
to which the Representative shall have reasonably objected or which is not in
compliance with the Act, the Exchange Act or the Rules and Regulations.

(b) As soon as the Company is advised or obtains knowledge thereof, the
Company will advise the Representative and confirm the notice in writing (I)
when the Registration Statement as amended, becomes effective or, if the
provisions of Rule 430A promulgated under the Act will be relied upon, when the
Prospectus has been filed in accordance with said rule 430A and when any post
effective amendment to the Registration Statement becomes effective; (ii) of the
issuance by the Commission of any stop order or of the initiation, or the
threatening, of any proceeding, suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of the Preliminary

<PAGE>

Prospectus or the Prospectus, or any amendment or supplement thereto, or the
institution of proceedings for that purpose; (iii) of the issuance by the
Commission or by any state securities commission of any proceedings for the
suspension of the qualification of any of the Securities for offering or sale in
any jurisdiction or the initiation, or the threatening, of any proceeding for
that purpose; (iv) of the receipt of any comments from the Commission, and (v)
of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for additional information.
If the Commission or any state securities commission or authority shall enter a
stop order or suspend such qualification at any time, the Company will make
every effort to obtain promptly the lifting of such order.

(c) The Company shall file the Prospectus (in form and substance reasonably
satisfactory to the Representative) or transmit the Prospectus by a means
reasonably calculated to result in filing with the Commission pursuant to Rule
424(b) not later than the Commission's close of business on the earlier of (I)
the second business day following the execution and delivery of this Agreement,
and (ii) the third business day after the Effective Date.

(d) The Company will give the Representative notice of its intention to
file or prepare any amendment to the Registration Statement (including any
revised prospectus which the Company proposes for use by the Underwriters in
connection with the offering of the Securities which differs from the
corresponding Prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the Rules and Regulations), and will
furnish the Representative with copies of any such amendment or supplement
within a reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file any such amendment to which the Representative
shall reasonably object.

(e) The Company shall use its best efforts, in cooperation with the
Representative, at or prior to the time the Registration Statement becomes
effective, to qualify the Securities for offering and sale under the securities
laws of such jurisdiction as the Representative may designate to permit the
continuance of sales and dealings therein for as long as may be necessary to
complete the distribution, and shall make such applications, file such documents
and furnish such information as may be required for such purpose. In each
jurisdiction where such qualification shall be effected, the Company will,
unless the Representative agrees that such action is not at the time necessary
or advisable, use best efforts to file and make such statements or reports at
such times as are or may reasonably be required by the laws of such jurisdiction
to continue such qualification.

(f) During the time when a prospectus is required to be delivered under the
Act, the Company shall use best efforts to comply with all requirements imposed
upon it by the Act and the Exchange Act, as now and hereafter amended, and by
the Rules and Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Securities in accordance
with the provisions hereof and the Prospectus, or any amendments or supplements
thereto. If at any time when a prospectus relating to the Shares is required to
be delivered under the Act, any event shall have occurred as a result of which,
in the judgment of the Company, or in the opinion of counsel to the
Underwriters, the Prospectus, as then amended or supplemented, included an
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will notify the Representative promptly and prepare and file with the
Commission an appropriate amendment or supplement (in form and substance
satisfactory to the Underwriters) to correct such statement or omission or to
effect such compliance, and the Company will furnish to the Underwriters copies
of such amendment or supplement as soon as available and in such quantities as
the Underwriters may request.

<PAGE>

(g) As soon as practicable, but in any event not later than 45 days after
the end of the 12-month period beginning on the day after the end of the fiscal
quarter of the Company during which the Effective Date occurs (90 days in the
event that the end of such fiscal quarter is the end of the Company's fiscal
year), the Company shall make generally available to its security holders, in
the manner specified in Rule 158(b) of the Rules and Regulations, and to the
Representative, an earnings statement which will be in the detail required by,
and will otherwise comply with, the provisions of Section 11(a) of the Act and
Rule 158(a) of the Rules and Regulations, which statement need not be audited
unless required by the Act, covering a period of at least 12 consecutive months
after the Effective Date.

(h) During the period of three years after the date hereof, the Company
will furnish to its shareholders, as soon as practicable, annual reports
(including financial statements audited by independent public accountants) and
unaudited quarterly reports of earnings, and will deliver to the Representative:

(i) concurrently with furnishing such quarterly reports to its
shareholders, statements of income of the Company for each quarter in
the form furnished to the Company's shareholders and certified by the
Company's principal financial or accounting officer;

(ii) concurrently with furnishing such annual reports to its shareholders,
a balance sheet of the Company as at the end of the preceding fiscal
year, together with statements of operations, shareholders' equity,
and cash flows of the Company for such fiscal year, accompanied by a
copy of the certification thereof by the Company's independent
certified public accountants;

(iii)as soon as they are available, copies of all reports (financial or
other) mailed to shareholders;

(iv) as soon as practicable after the filing thereof, copies of all reports
and financial statements furnished to or filed with the Commission,
the NASD or any securities exchange, and

(v) every press release and every material news item or article of
interest to the financial community in respect of the Company or its
affairs which was released or prepared by or on behalf of the Company.

(i) The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar (which may be the same
entity as the transfer agent) for all Common Stock and Warrants outstanding.

(j) The Company will furnish to the Representative or on the
Representative's order, without charge, at such place as the Representative may
designate, copies of each Preliminary Prospectus, and all amendments and
supplements thereto, including any Prospectus, the Registration Statement and
any pre-effective or post-effective amendments thereto (two of which copies will
be signed and will include all financial statements and exhibits), the
Prospectus and all amendments and supplements thereto, including any prospectus
prepared after the Effective Date, in each case as soon as available and in such
quantities as the Representative may request.

(k) On or before the Effective Date, the Company shall provide the
Representative with true copies of duly executed, legally binding and
enforceable agreements pursuant to which: (i) the Company's Officers, Directors

<PAGE>

and Affiliates agrees that it, he or she will not directly or indirectly, issue,
offer to sell, grant an option for the sale of, assign, transfer, pledge,
hypothecate or otherwise encumber or dispose of any shares of Common Stock or
securities convertible into, exercisable or exchangeable for or evidencing any
right to purchase or subscribe for any shares of Common Stock which are
registered in the Registration Statement (either pursuant to Rule 144 of the
Rules and Regulations or otherwise) or dispose of any beneficial interest
therein without the prior written consent of the Representative for a period of
12 months from the effective date of the Registration Statement (or for such
longer period not to exceed 36 months as may be required under applicable state
blue sky laws); and (ii) each Selling Shareholder (as that term is defined in
the Prospectus) agrees that it, he or she will not directly or indirectly,
issue, offer to sell, grant an option for the sale of, assign, transfer, pledge,
hypothecate or otherwise encumber or dispose of any shares of Common Stock or
securities convertible into, exercisable or exchangeable for or evidencing any
right to purchase or subscribe for any shares of Common Stock which are
registered in the Registration Statement (either pursuant to Rule 144 of the
Rules and Regulations or otherwise) or dispose of any beneficial interest
therein without the prior written consent of the Representative for a period of
60 days from the effective date of the Registration Statement (or for such
longer period not to exceed 36 months as may be required under applicable state
blue sky laws) (collectively (i) and (ii) shall be known as the "Lock-up
Agreements"). On or before the Closing Date, the Company shall deliver
instructions to the transfer agent authorizing it to place appropriate legends
on the certificates representing the securities subject to the Lock-up
Agreements and to place appropriate stop transfer orders on the Company's
ledgers.

(l) None of the Company, any of its officers, directors, shareholders or
affiliates (within the meaning of the Rules and Regulations) will take, directly
or indirectly, any action designed to, or which might in the future reasonably
be expected to cause or result in, stabilization or manipulation of the price of
any securities of the Company.

(m) The Company shall timely file all such reports, forms or other
documents as may be required (including, but not limited to a Form SR as may be
required pursuant to Rule 463 under the Act) from time to time, under the Act,
the Exchange Act, and the Rules and Regulations, and all such reports, forms and
documents filed will comply as to form and substance with the applicable
requirements under the Act, the Exchange Act, and the Rules and Regulations.

(n) The Company shall furnish to the Representative as early as practicable
prior to each of the date hereof, and the Closing Date but not later than two
business days prior thereto, a copy of the latest available unaudited interim
financial statements of the Company (which in no event shall be as of a date
more than 30 days prior to the effective date of the Registration Statement)
which have been read by the Company's independent public accountants, as stated
in their letters to be furnished pursuant to Section 9(g) hereof.

(o) The Company shall cause the Securities to be quoted on OTC Bulletin
Board for a period of five years from the date hereof shall use its best efforts
to maintain such quotation of the Securities.

(p) For a period of three years from the Closing Date, at the
Representative's request, the Company shall furnish to the Representative at the
Company's sole expense, daily consolidated transfer sheets relating to the
Shares.

(q) Until the completion of the distribution of the Shares but in no event
more than 25 days after the Effective Date, the Company shall not without prior
written consent of the Representative, issue, directly or indirectly any press
release or other communication or hold any press conference with respect to the
Company or its activities or the offering contemplated hereby.

<PAGE>

(r) Until the seventh anniversary of the date hereof the Company will not
take any action or actions which may prevent or disqualify the Company's use of
Form S-1 (or other appropriate form) for the registration under the Act of the
Representative's Securities.

(s) For a period of not less than two years from the Closing Date, the
Company will recommend and use its best efforts to elect the Representative's
designee (the "Designee") at the Representative's option, either as a member of
or a non-voting observer to the Company's Board of Directors; such Designee, if
elected or appointed, shall attend meetings of the Board and receive no more or
less compensation than is paid to other directors of the Company and shall be
entitled to receive reimbursement for all reasonable expenses incurred in
attending such meetings, including, but not limited to, food, lodging and
transportation. To the extent permitted by law, the Company will agree to
indemnify the Representative and the Designee for the actions of such Designee
as a director of the Company. The Company shall include each of the
Representative and the Designee as an insured under the insured policy referred
to in Section 7 of this Agreement. If the Representative does not exercise its
option to designate a member of or an advisor to the Company's Board of
Directors, the Representative shall nevertheless have the right to send a
representative (who need not be the same individual) from meeting to meeting,
although the Representative shall endeavor to send the same representative to
each meeting to observe such meeting of the Board of Directors. The Company
agrees to give the Representative notice of each such meeting not later than it
gives such notice and provides such items to the other directors.

(t) The Company agrees that any and all future transactions between the
Company and its officers, directors, principal shareholders and the affiliates
of the foregoing persons will be on terms no less favorable to the Company than
could reasonably be obtained in arm's length transactions with independent third
parties, and that any such transactions also be approved by a majority of the
Company's outside independent directors disinterested in the transaction, if
any.

(u) Until the offering contemplated hereby has been completed or
terminated, if there shall occur any event relating to or affecting, among other
things, the Company or any affiliate thereof, or the operations of the Company
as described in the Offering Documents, as a result of which it is necessary, in
the opinion of counsel for the Representative or counsel for the Company, to
amend or supplement the Offering Documents in order that the Offering Documents
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, the Company shall
immediately prepare and furnish to the Representative a reasonable number of
copies of an appropriate amendment of or supplement to the Offering Documents,
in form and substance satisfactory to counsel for the Representative.

(v) The Company shall apply the net proceeds from the sale of the
Securities in the manner, and subject to the conditions, substantially as set
forth under "Use of Proceeds" in the Prospectus.

(w) The Company shall be responsible for, and shall pay, all expenses
directly and necessarily incurred in connection with this Offering, including,

<PAGE>

but not limited to, the costs of preparing, printing, mailing and filing, where
necessary, the Offering Documents and all amendments and supplements thereto;
the Company's legal and accounting fees, transfer agent fees and the blue sky
fees, filing fees and disbursements of the Representative's counsel in
connection with blue sky matters, as well as the fees and expenses of the
Representative as set forth in Section 10(b) hereof.

(x) Except as disclosed in the Offering Documents the Company has not prior
to the date hereof issued and irrespective of such disclosure will not hereafter
issue, any of the Company's Common Stock, or Preferred Stock(as defined in the
Offering Documents) or securities exercisable or convertible into any of such
securities or enter into any agreement therefor in satisfaction of any
obligation or indebtedness of the Company arising out of any agreement to which
the Company is a party or by which the Company is bound now or for a period of
one year after the Effective Date.

(y) Until one (1) year from the date hereof, the maximum number of shares
of capital stock of the Company issuable under its 1995 Long Term Incentive Plan
and 1996 Non-Qualified Stock Option Plan shall not exceed 2,000,000 without the
prior written consent of the Representative.

(z) Except as contemplated hereby during the period commencing on the date
hereof and ending on the Closing Date, the Company shall not, without prior
notice to and consent of the Representative, (a) issue any securities or incur
any liability or obligation except the purchase of inventory, equipment and
machinery for the Company's manufacturing operations as described in the
Offering Documents, (b) enter into any transaction not in the ordinary course of
business, or (c) declare or pay any dividend on its capital stock.

(aa) The Company shall for a period of no less than five years from the
date hereof cause and/or take all action necessary to maintain no less than two
(2) outside directors on the Company's Board of Directors.

(bb) For a period of three (3) years from the date hereof, the Company
shall remain covered by the Corporation Records Service published by Standard
and Poor's Corporation.

5. Payment of Expenses.

(a) The Company hereby agrees to pay on the first Closing Date all expenses
and fees (other than fees of Underwriters' counsel, except as provided in
subclause (iv) of this section 5(a)) incident to the performance of the
obligations of the Company under this Agreement and the Warrant Agreement,
including, without limitation, (I) the fees and expenses of accountants and
counsel for the Company; (ii) all costs and expenses incurred in connection with
the preparation, duplication, printing (including mailing and handling charges),
filing, delivery and mailing (including the payment of postage with respect
thereto) of the Registration Statement and the Prospectus and any amendments and
supplements thereto and the duplication, mailing (including the payment of
postage with respect thereto) and delivery of this Agreement, the Agreement
Among Underwriters, the Selected Dealer Agreement, the Powers of Attorney, and

<PAGE>

related documents, including the cost of all copies thereof and of the
Preliminary Prospectus and of the Prospectus and any amendments thereof or
supplements thereto supplied to the Underwriters and such dealers as the
Underwriters may request; (iii) the printing, engraving, issuance and delivery
of the Securities; (iv) the qualification of the Securities under state
securities or "Blue Sky" laws, including the costs of printing and mailing the
"Preliminary Blue Sky Memorandum," the "Supplemental Blue Sky Memorandum" if
any, and disbursements and fees of counsel to the Underwriters in connection
therewith (such fees and disbursements to be so reimbursed not to exceed
$____________ in the aggregate; (v) the fees and disbursements of Underwriter's
counsel in connection with the qualification with the NASD of the terms of the
transaction relating to underwriting compensation; (vi) advertising costs and
expenses, including but not limited to costs and expenses in connection with the
"road show," information meetings and presentations, and "tombstone"
advertisement expenses; (vii) fees and expenses of the transfer agent and
registrar, and (viii) the fees payable to the Commission, the NASD and OTC
Bulletin Board including the fees and expenses incurred in connection with the
listing of the Securities on the OTC Bulletin Board.

(b) The Company further agrees that, in addition to the expenses payable
pursuant to subsection (a) of this Section 5, it will pay to the Representative
on the Closing Date by certified or bank cashier's check or, at the election of
the Representative, by deduction from the proceeds of the offering contemplated
herein a non-accountable expense allowance equal to three percent (3%) of the
gross proceeds received by the Company from the sale of the Securities, it being
acknowledged that $_________ of said amount has already been delivered to the
Representative.

6. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters hereunder shall be subject to the continuing accuracy of the
representations and warranties of the Company herein as of the date hereof and
as of each Closing Date, as if they had been made on and as of each Closing
Date, the accuracy on and as of each Closing Date of the statements of officers
of the Company made pursuant to the provisions hereof, and the performance by
the Company on and as of each Closing Date of its covenants and obligations
hereunder and to the following further conditions:

(a) The Registration Statement shall have become effective not later than
5:00 p.m. New York time, on the date subsequent to the date of this Agreement or
such later date and time as shall be consented to in writing by the
Representative, and, at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending or
contemplated by the Commission and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of the Representative. If the Company has elected to rely upon Rule
430A of the Rules and Regulations, the price of the Shares and Warrants and any
price-related information previously omitted from the effective Registration
Statement pursuant to such Rule 430A shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) of the Rules and Regulations
within the prescribed time period, and prior to the Closing Date the Company
shall have provided evidence satisfactory to the Representative of such timely
filing, or a post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the requirements of
Rule 430A of the Rules and Regulations.

(b) The Registration Statement, or any amendment thereto, shall not contain
an untrue statement of a material fact or omit to state a material fact which is
required to be stated therein or is necessary to make the statements therein not
misleading, or the Prospectus, or any supplement thereof, shall not contain an
untrue statement of a material fact, or omit to state a material fact which is
required to be stated therein or is necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

<PAGE>

(c) At each of the Effective Date and each Closing Date, the Underwriters
shall have received the opinion of Blau, Kramer, Wactlar & Lieberman, P.C. (the
"Firm") counsel to the Company, dated the Effective Date and each Closing Date,
respectively, addressed to the Underwriters and in form and substance
satisfactory to Fairchild, to the effect that:

(i) the Company (A) has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation; (B) is duly qualified and licensed for the transaction
of business and in good standing as a foreign corporation in every
jurisdiction in which its ownership, leasing, licensing or use of
property and assets or the conduct of its Business makes such
qualification necessary except where the failure to be so qualified
does not now have and will not in the future have a Material Adverse
Effect; and (c) has all requisite corporate power and authority, has
obtained any and all material authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all
governmental or regulatory officials and bodies, to own or lease its
properties and conduct its Business. The disclosures in the
Registration Statement concerning the effects of Federal, state and
local laws, rules and regulations on the Company's business as
currently conducted and as contemplated are accurate in all respects
and do not omit to state a fact necessary to make the statements
contained therein not misleading in light of the circumstances in
which they were made;

(ii) the Firm has not been engaged to perform legal services in connection
with any transaction whereby the Company would acquire an interest in
any corporation, partnership, joint venture, trust or other business
entity other than those contemplated in the Offering;

(iii)the Company has a duly authorized, issued and outstanding
capitalization as set forth in the Prospectus (and any amendment or
supplement thereto) under the heading "Capitalization" and except as
set forth in the Prospectus, the Company is not a party to or bound by
any instrument, agreement or other arrangement providing for it to
issue any capital stock, rights, warrants, options or other
securities. The Securities and all other securities issued or issuable
by the Company have been duly authorized; all outstanding shares of
Common Stock have been fully paid for and are non-assessable, and the
Securities when issued, paid for and delivered in accordance with the
terms hereof and of the Warrant Agreement, will be validly issued
fully paid and non-assessable. The Securities conform to the
description thereof in the Prospectus. All corporate action required
to be taken for the authorization, issue and sale of the Securities
has been duly and validly taken. The Representative's Securities
constitute valid and binding obligations of the Company to issue and
sell, upon exercise thereof and payment therefor, the number and type
of securities of the Company called for thereby. Upon the issuance and
delivery pursuant to this Agreement, the Warrant Agreement and the RPO
of the Securities and Representative's Securities, as applicable, the
Underwriters will acquire title to the Firm Securities, and the
Representative will acquire title to the Representative's Securities,
free and clear of any pledge, lien, charge, claim, encumbrance,
pledge, security interest, or other restriction or equity of any kind
whatsoever. No transfer tax is payable by or on behalf of the
Underwriters in connection with (A) the issuance by the Company of the
Shares; (B) the purchase by the Underwriters and the Representative of
the Shares from the Company;(C)the consummation by the Company of any
of its obligations under this Agreement or (D) resales of the Shares
held by Selling Shareholders in connection with the distribution
contemplated hereby;

<PAGE>

(iv) the Registration Statement has become effective under the Act, and, if
applicable, filing of all pricing information has been timely made in
the appropriate form under Rule 430A, and to counsel's knowledge no
stop order suspending the effectiveness of the Registration Statement
or preventing the use of the preliminary prospectus or any part of any
thereof has been issued and no proceeding for that purpose has been
instituted or is pending, or is threatened or contemplated under the
Act;

(v) counsel does not know of any agreements, contracts or other documents
required by the Act to be described in the Registration Statement and
the Prospectus or to be filed as exhibits to the Registration
Statement (or required to be filed under the Exchange Act if upon such
filing they would be incorporated, in whole or in part, by reference
therein) which are not so described or filed; the descriptions in the
Registration Statement and the Prospectus and any supplement or
amendment thereto of contracts and other documents to which the
Company is a party or by which it is bound, incorporated by reference
into the Prospectus and any supplement or amendment thereto, are
accurate and fairly present in all material respects the information
required to be presented therein; to counsel's knowledge there is no
action, arbitration, suit, proceeding, inquiry, investigation,
litigation, governmental, legal or other proceeding (including,
without limitation those having jurisdiction over environmental or
similar matters), domestic or foreign, pending or threatened against
the Company, or involving the properties or business of the Company
which is required to be disclosed in the Registration Statement which
is not so disclosed. No Federal, state or local statute or regulation
required to be described in the Prospectus is not described as
required;

(vi) the Company has full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated herein; and
this Agreement has been duly authorized, executed and delivered by or
on behalf of the Company. This Agreement assuming due authorization,
execution and delivery by each other party thereto, constitutes a
legal, valid and binding agreement of the Company enforceable against
the Company in accordance with its respective terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application
relating to or affecting enforcement of creditors' rights generally
and the application of general equitable principles in any action,
legal or equitable, and except as to those provisions relating to
indemnity or contribution as to which no opinion is expressed). The
Company's execution, delivery or performance of this Agreement or the
conduct of its Business will not result in any breach or violation of
any of the terms or provisions of, or conflicts or will conflict with
or constitutes or will constitute a default under, or result in the
creation or imposition of any lien, charge, claim, encumbrance,
pledge, security interest, defect or other restriction or equity of
any kind whatsoever upon, any property or assets (tangible or
intangible) of the Company pursuant to the terms of (A) the articles
of incorporation or by-laws of the Company; (B) any material license,
contract, indenture, mortgage, deed of trust, voting trust agreement,
shareholders agreement, note, loan or credit agreement or any other
agreement or instrument to which the Company is a party or by which it
is or may be bound or to which any of its properties or assets
(tangible or intangible) is or may be subject; (c) any Federal, state
or local statute, judgment, decree, order, rule or regulation
applicable to the Company of any arbitrator, court, regulatory body or
administrative agency or other governmental agency or body, domestic
or foreign, having jurisdiction over the Company or any of its
properties, or (D) have any Material Adverse Effect on any permit,
certification, registration, approval, consent, license or franchise
necessary for the Company to own or lease and operate any of its
properties and to conduct its Business or the ability of the Company
to make use thereof;

<PAGE>

(vii)the Firm has not been engaged to provide legal services with respect
to, nor does the Firm have any knowledge of, any breach of or a
default under, any term or provision of any license, contract,
indenture, mortgage, installment sale agreement, deed of trust, lease,
voting trust agreement, shareholders' agreement, note, loan or credit
agreement or any other agreement or instrument evidencing any
obligation for borrowed money, or any other agreement or instrument to
which the Company is a party or by which the Company may be bound or
to which the property or assets (tangible or intangible) of the
Company is subject or affected. The Company is not in violation of any
term or provision of its certificate of incorporation or by-laws or,
to counsel's knowledge in violation of any franchise, license, permit,
judgment, decree, order, statute, rule or regulation;

(viii) the statements in the Prospectus under the headings "THE COMPANY",
"BUSINESS", "MANAGEMENT," "PRINCIPAL STOCKHOLDERS, "SELLING SECURITY
HOLDERS", "CERTAIN TRANSACTIONS", "DESCRIPTION OF SECURITIES", and
"SHARES ELIGIBLE FOR FUTURE SALE" have been reviewed by such counsel,
and insofar as they refer to statements of law, descriptions of
statutes, licenses, rules or regulations or legal conclusions, except
for any of the foregoing opined upon to the underwriters by counsel to
the Company other than Blau, Kramer, Wactlar & Lieberman, P.C.; are
correct in all material respects;

(ix) the Firm Securities have been accepted for quotation on the OTC
Bulletin Board;

(x) to counsel's knowledge, there are no claims, payments, issuances,
arrangements or understandings for services in the nature of a
finder's or origination fee with respect to the sale of the Securities
hereunder or financial consulting arrangement or any other
arrangements, agreements, understandings, payments or issuances that
may affect the Underwriters' compensation, as determined by the NASD;

(xi) to counsel's knowledge, the Company is not party to any ERISA plans or
defined benefit plan, as defined in Section 3(35) of ERISA; and

(xii)The Securities, when issued in accordance with the terms of this
Agreement, will be duly and validly issued. The stock certificates and
warrants comprising the Securities are in due and proper legal form.
To the knowledge of such counsel and except as disclosed in the
Prospectus, no holder of any of the Company's securities has any
rights, "demand," "piggyback" or otherwise, to have such securities
registered or to demand the filing of a registration statement. Except
as set forth in the Prospectus, there are no preemptive or other
rights to subscribe for or purchase, or any restriction upon the
voting or transfer of, any shares of Common Stock, under the
Certificate of Incorporation or By-Laws of the Company or under the
General Corporation Law of the State of Delaware, or, to the knowledge
of such counsel, under any agreement or other outstanding instrument
to which the Company is a party or by which it is bound.

(xiii) To such counsel's knowledge, no approval or consent of any court,
board or governmental agency, instrumentality or authority of the
United States or of any state having jurisdiction or authority over

<PAGE>

the Company or of any other third party, not duly obtained (other than
any approval or consent required under any state securities or Blue
Sky laws) is required for the valid authorization, issuance, sale and
delivery of the Securities and the consummation of the transactions
contemplated by this Agreement or the Offering Documents.

(xiv)To such counsel's knowledge, there are no claims, actions, suits,
hearings, investigations, inquiries or proceedings of any kind or
nature, before or by any court, governmental authority, tribunal or
instrumentality pending or threatened against the Company or involving
the properties of the Company which could materially and adversely
affect the Business of the Company, or which would reasonably be
expected to materially adversely affect the transactions or other acts
contemplated by this Agreement or the validity or enforceability of
this Agreement.

(xv) To such counsel's knowledge, there are no material licenses, permits,
certificates, registrations, approvals or consents of any governmental
agency, commission, board, instrumentality or department that are
required to be obtained by the Company in order to conduct its current
or presently proposed business as described in the Offering Documents
which have not been so obtained and the failure to so obtain which
would have a Material Adverse Effect.

(xvi)To such counsel's knowledge and except as disclosed in the
Prospectus, the issuance of the Securities will not give any holder of
any of the Company's outstanding securities or rights to purchase
shares of the Company's Common Stock, the right to purchase any
additional shares of Common Stock and/or the right to purchase shares
at a reduced price.

The opinion shall also state that the Registration Statement, the
Prospectus and each amendment thereto or supplement thereof (except for the
financial statements and schedules and other financial information included
therein, as to which such counsel will express no opinion) comply as to form in
all material respects with the applicable requirements of the Act and the Rules
and Regulations.

Such counsel's opinion shall also include a statement to the effect that it
has participated in conferences with officers and other representatives of the
Company representatives of the independent public accountants of the Company and
representatives of the Representative at which the contents of the Registration
Statement and the Prospectus were discussed and, although such counsel is not
passing upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or the
Prospectus, on the basis of the foregoing (relying as to materiality to a large
extent upon the opinions of officers and other representatives of the Company),
nothing has come to such counsel's attention that causes it to believe that the

<PAGE>

Registration Statement at the time the Registration Statement became effective
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus at the date of the Prospectus and as
supplemented or amended at all times up to and including the date of such
opinion, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein, in light of circumstances under
which they were made, not misleading (it being understood that such counsel
expresses no opinion or belief with respect to the financial statements and
schedules, statistical information or other financial information included in
the Registration Statement or Prospectus, or as to information set forth in the
Registration Statement under the captions "Risk Factors -- Government
Regulation", "Business -- Intellectual Properties Patent, Patents Pending and
Products", "Business -- Government Regulation" and "Business -- Legal
Proceedings").

(d) On or prior to each Closing Date, the Representative shall receive from
the President and Chief Financial Officer of the Company a certificate dated the
date of each Closing Date stating that:

(i) the representations and warranties of the Company in this Agreement
are true and correct in all material respects, on and as of each
Closing Date, and the Company has complied with all agreements and
covenants and satisfied all conditions contained in this Agreement on
its part to be performed or satisfied at or prior to each Closing
Date;

(ii) no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued, and no proceedings for
that purpose have been instituted or are pending or, to the best of
each of such person's knowledge, after due inquiry, are contemplated
or threatened under the Act;

(iii)the Registration Statement and Prospectus contain all statements and
information required to be included therein, and neither of the
Registration Statement or the Prospectus includes any untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make statements therein not misleading
and neither the Preliminary Prospectus or any supplement thereto
includes any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, and

(iv) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, (A) the Company has not
incurred up to and including each Closing Date, other than in the
ordinary course of its business, any material liabilities or
obligations, direct or contingent; (B) the Company has not paid or
declared any dividends or other distributions on its capital
stock;(C)the Company has not entered into any transactions not in the
ordinary course of business; (D) there has not been any change in the
capital stock or long-term debt or any increase in the short-term
borrowings of the Company; (E) the Company has not sustained any loss
or damage to its property or assets, whether or not insured; (F) there
is no litigation which is pending or threatened (or circumstances
giving rise to same) against the Company or any affiliated party or
any of the foregoing which is required to be set forth in an amended
or supplemental Prospectus which has not been set forth, and (G) there
has occurred no event required to be set forth in an amended or
supplemental Prospectus which has not been set forth.

(References to the Registration Statement and the Prospectus in this subsection
are to such documents as amended and supplemented at the date of such
certificate.)

(e) By the Effective Date, the Underwriters will have received clearance
from the NASD as to the amount of compensation allowable or payable to the
Underwriters.

(f) At the date this Agreement is executed, the Underwriters shall have
received a letter, dated such date, addressed to the Underwriters in form and
substance satisfactory in all respects (including the non-material nature of the
changes or decreases, if any, referred to in clause (iii) below) to the
Underwriters and Underwriters' counsel, from Grant Thornton LLP.

<PAGE>

(i) confirming that they are independent certified public accountants with
respect to the Company within the meaning of the Act and the
applicable Rules and Regulations;

(ii) stating that it is their opinion that the financial statements and
supporting schedules and footnotes thereto of the Company included in
the Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the Act and the Rules
and Regulations thereunder and that the Representatives may rely upon
the opinion of Grant Thornton LLP with respect to the financial
statements and supporting schedules included in the Registration
Statement;

(iii)stating that, on the basis of a limited review which included a
reading of the latest available unaudited interim financial statements
of the Company (with an indication of the date of the latest available
unaudited interim financial statements), a reading of the latest
available minutes of meetings of the shareholders and board of
directors and the various committees of the board of directors of the
Company, consultations with officers and other employees of the
Company responsible for financial and accounting matters and other
specified procedures and inquiries, nothing has come to their
attention which would lead them to believe that (A) the unaudited
financial statements and supporting schedules of the Company included
in the Registration Statement, if any, do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Rules and Regulations or are not fairly presented in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial
statements of the Company included in the Registration Statement, or
(B) at a specified date not more than five days prior to the Effective
Date, there has been any change in the capital stock or long-term debt
of the Company, or any decrease in the shareholders' equity or net
current assets or net assets of the Company as compared with amounts
shown in the June 30, 1996 balance sheet included in the Registration
Statement, other than as set forth in or contemplated by the
Registration Statement, or, if there was any change or decrease,
setting forth the amount of such change or decrease;

(iv) setting forth, at a date not later than five days prior to the date of
the Registration Statement, the amount of liabilities of the Company
(including a breakdown of commercial paper and notes payable);

(v) stating that they have compared specific dollar amounts, numbers of
shares, percentages of revenues and earnings, statements and other
financial information pertaining to the Company set forth in the
Prospectus in each case to the extent that such amounts, numbers,
percentages, statements and information may be derived from the
general accounting records, including work sheets, of the Company and
excluding any questions requiring an interpretation by legal counsel,
with the results obtained from the application of specified readings,
inquiries and other appropriate procedures (which procedures do not
constitute an examination in accordance with generally accepted
auditing standards) set forth in the letter and found them to be in
agreement, and

(vi) statements as to such other matters incident to the transaction
contemplated hereby as the Representative may request.

<PAGE>

(g) On each Closing Date, there shall have been duly tendered to the
Representative for the several Underwriters' accounts, the certificates in the
names and denominations requested by the Representative for the Securities.

(h) No order suspending the sale of the Securities in any jurisdiction
designated by the Representative pursuant to subsection (e) of Section 7 hereof
shall have been issued on the Closing Date and no proceedings for that purpose
shall have been instituted or shall be contemplated.

(i) On or before Closing Date, the Securities shall have been duly approved
for quotation on the OTC Bulletin Board.

(j) On or before Closing Date, there shall have been delivered to the
Representative all of the Lock-up Agreements, in form and substance satisfactory
to Underwriters' counsel.

(k) On or before Closing Date, the Company shall have executed the RPO and
the Warrant Agreement, substantially in the forms thereof filed as exhibits to
the Registration Statement.

(l) On or before the Effective Date the Company shall deliver to the
Representative satisfactory results of UCC, lien and title searches effected in
all appropriate jurisdictions, showing that the Company's assets, including all
of its intellectual properties, except as set forth in the offering documents,
are unencumbered, and satisfactory evidence, including trademark and copyright
searches, of its unencumbered title to its owned intellectual properties.

If any condition to the Underwriters' obligations hereunder to be fulfilled
prior to or at the Closing Date is not so fulfilled, the Representative may
terminate this Agreement on notice to the Company or, if the Representative so
elects, it may waive any such conditions which have not been fulfilled or extend
the time for their fulfillment, and proceed with the transactions contemplated
by this Agreement.

7. Indemnification.

(a) The Company agrees to indemnify and hold harmless each of the
Underwriters (for purposes of this Section 7 "Underwriters" shall include the
officers, directors, partners, employees, agents and counsel of the
Underwriters), including specifically each person who may be substituted for an
Underwriter (a "controlling person") within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, from and against any and all losses,
claims, damages, expenses or liabilities, joint or several (and actions in
respect thereof), whatsoever (including but not limited to any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever), as such are
incurred, to which the Underwriters or such controlling person may become
subject under the Act, the Exchange Act or any other statute or at common law or
otherwise or under the laws of foreign countries, arising out of or based upon

<PAGE>

any untrue statement or alleged untrue statement of a material fact contained
(I) in any Preliminary Prospectus, the Registration Statement or the Prospectus
(as from time to time amended and supplemented); (ii) in any post-effective
amendment or amendments or any new registration statement and prospectus in
which is included securities of the Company issued or issuable upon exercise of
the Securities, or (iii) in any application or other document or written
communication (in this Section 7 collectively called "application") executed by
the Company or based upon written information furnished by the Company in any
jurisdiction in order to qualify the Securities under the securities laws
thereof or filed with the Commission, any state securities commission or agency,
OTC Bulletin Board or any other securities exchange; or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading (in the case of the Prospectus, in
light of the circumstances under which they were made) unless such statement or
omission was made in reliance upon and in conformity with written information
furnished to the Company expressly for use in any Preliminary Prospectus, the
Registration Statement or Prospectus, or any amendment thereof or supplement
thereto, or in any application, as the case may be.

The indemnity agreement above referred to shall be in addition to any
liability which the Company may have at common law or otherwise.

(b) Each of the Underwriters agrees severally, but not jointly, to
indemnify and hold harmless the Company, each of its officers and directors who
has signed the Registration Statement, and each other person, if any, who
controls the Company, within the meaning of the Act, to the same extent as the
foregoing indemnity from the Company to the Underwriters but only with respect
to statements or omissions, if any, made in any Preliminary Prospectus, the
Registration Statement or Prospectus or any amendment thereof or supplement
thereto or in any application made in reliance upon, and in strict conformity
with, written information furnished to the Company by such Underwriter expressly
for use in such Preliminary Prospectus, the Registration Statement or Prospectus
or any amendment thereof or supplement thereto or any such application. The
Company acknowledges that the statements with respect to the public offering of
the securities set forth under the heading "Underwriting," the risk factor
entitled "Experience of the Underwriter" and the stabilization legend in the
Prospectus have been furnished by the Underwriters expressly for use therein and
constitute the only information furnished in writing by or on behalf of the
Underwriters for inclusion in the Prospectus.

(c) Promptly after receipt of an indemnified party under this Section 7 of
notice of the commencement of any action, suit or proceeding, such indemnified
party shall, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 7, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party, and it
notifies an indemnifying party or parties of the commencement thereof, the
indemnifying party or parties will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such case
but the fees and expenses of such counsel shall be at the expense of the

<PAGE>

indemnified party or parties unless (I) the employment of such counsel shall
have been authorized in writing by the indemnifying parties in connection with
the defense of such action at the expense of the indemnifying party; (ii) the
indemnifying parties shall not have employed counsel reasonably satisfactory to
such indemnified party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses of one additional counsel shall be borne by the
indemnifying parties. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
Anything is this Section 7 to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent, provided, such consent was not unreasonably
withheld.

(d) In order to provide for just and equitable contribution in any case in
which (I) an indemnified party makes claim for indemnification pursuant to this
Section 7, but it is judicially determined (by entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that the express provisions of
this Section 7 provide for indemnification in such case, or (ii) contribution
under the Act may be required on the part of any indemnified party, then each
indemnifying party shall contribute to the amount paid as a result of such
losses, claims, damages, expenses or liabilities (or actions in respect thereof)
(A) in such proportion as is appropriate to reflect the relative benefits
received by each of the contributing parties, on the one hand, and the party to
be indemnified on the other hand from the offering of the Securities, or (B) if
the allocation provided by clause (A) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (I) above but also the relative fault of each of the
contributing parties, on the one hand, and the party to be indemnified on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages, expenses or liabilities, as well as any other relevant
equitable considerations. In any case where the Company is a contributing party
and the Underwriters are the indemnified party, the relative benefits received
by the Company on the one hand, and the Underwriters on the other, shall be
deemed to be in the same proportions as the total net proceeds from the offering
of the Securities (before deducting expenses) bear to the total underwriting
discounts received by the Underwriters hereunder, in each case as set forth in
the table on the Cover Page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission of alleged omission to state
a material fact relates to information supplied by the Company, or by the

<PAGE>

Underwriters, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, expense or liabilities (or actions in respect thereof) referred
to above in this subdivision (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claims. Notwithstanding the
provisions of this subdivision (d) the Underwriters shall not be required to
contribute any amount in excess of the underwriting discount applicable to the
Securities purchased by the Underwriters hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 12(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person, if
any, who controls the Company within the meaning of the Act, each officer of the
Company who has signed the Registration Statement, and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to this subparagraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect to which a claim for contribution may
be made against another party or parties under this subparagraph (d), notify
such party or parties from whom contribution may be sought, but the omission so
to notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they have hereunder or
otherwise than under this subparagraph (d), or to the extent that such party or
parties were not adversely affected by such omission. The contribution agreement
set forth above shall be in addition to any liabilities which any indemnifying
party may have at common law or otherwise.

8. Representations and Agreements to Survive Delivery. All representations,
warranties, covenants and agreements contained in this Agreement or contained in
certificates of officers of the Company submitted pursuant hereto, shall be
deemed to be representations warranties and agreements of the Company at the
Closing Date and such representations, warranties and agreements of the Company
including without limitation the respective indemnity agreements contained in
Sections 4 and 7 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, the
Company, any controlling person of either the Underwriter or the Company and
shall survive the execution and/or termination of this Agreement or the issuance
and delivery of the Securities to the Underwriters and the Representative, as
the case may be.

9. Effective Date. This Agreement shall become effective at 9:00 a.m., New
York City time, on the next full business day following the date hereof, or at
such earlier time after the Registration Statement becomes effective as the
Representative, in its discretion, shall release the Securities for the sale to
the public, provided, the provisions of Sections 7, 8 and 10 of this Agreement
shall at all times be effective. For purposes of this Section 9, the Securities
to be purchased hereunder shall be deemed to have been so released upon the
earlier of dispatch by the Representative of telegrams to securities dealers
releasing such shares for offering or the release by the Representative for
publication of the first newspaper advertisement which is subsequently published
relating to the Securities.

10. Termination.

(a) The Representative shall have the right to terminate this Agreement by
giving written notice to the Company at any time prior to the Closing Date if
(I) market conditions are unsuitable for the offering contemplated hereby at the
price per share set forth in Section 5(a) hereof and the Company and the
Representative cannot agree on another price or structure; or (ii) the Company
shall have failed, refused, or been unable to perform any of its obligations
hereunder, or breached any of its representations or warranties hereunder or
there shall be a failure of a closing condition to the Representative's
obligations hereunder; (iii) information comes to the Representative's attention
subsequent to the date hereof relating to the Company, its financial operations
and status, its management, its prospects or its position in the industry which
would preclude a successful offering on the terms set forth herein; (iv) a
material adverse change has occurred in the financial condition, business or
prospects of the Company; (v) the Company has failed to comply with all
applicable statutes, laws, rules and regulations; (vi) the Company cannot
expeditiously proceed with the offering contemplated hereby; (vii) an action,
suit or proceeding at law or in equity is commenced or brought against the
Company by any Federal, state or other commission, board or agency, where any
unfavorable decision would materially adversely affect the business property,
financial condition, prospects or income of the Company; (viii) any domestic or
international event or act or occurrence shall have disrupted the financial
markets; (ix) minimum or maximum prices shall have been established by the New
York Stock Exchange, by the American Stock Exchange or in the over-the-counter
market by the NASD (but not in the discretion of any Underwriter), or trading in
securities generally shall have been suspended or materially limited by either
stock exchange or in the over-the-counter market by the NASD; (x) the United
States shall have become involved in a war or major hostilities, or if there
shall have been an escalation in an existing war or major hostilities in which
the United States is a participant, or a national emergency shall have been
declared in the United States; (xi) a general banking moratorium shall have been
declared by New York or Federal authorities, or (xii) there shall have been a
material adverse change in the general market, political or economic conditions
in the United States, such that in any such case, in the Representative's
judgment it would make it inadvisable to proceed with the offering, sale and/or
delivery of the Securities.

(b) If the Representative exercises its rights to terminate this Agreement
and not proceed with the Offering as a result of the circumstances enumerated in
subclauses (ii) through (xi) of the previous sentence, the Company shall
reimburse the Representative in full for its accountable out-of-pocket expenses
(including the Representative's counsel fees and disbursements), minus any
amounts previously paid pursuant to Section 5 hereof. If the Representative
exercises its rights to terminate this Agreement as a result of the
circumstances enumerated in subclause (I) of such sentence, the Company shall
reimburse the Representative in full for its accountable out-of-pocket expenses
(including the Representative's counsel fees and disbursements) up to a maximum
of $75,000 minus the amount previously paid pursuant to Section 5 hereof.

(c) In the event the Representative elects not to proceed with the offering
contemplated hereby as a result of any condition enumerated in Section 10(a)
above, then the Company agrees that it will not negotiate with or engage any
investment banking firm or underwriter other than the Representative with
respect to any private or public financing for the Company during the 12-month
period commencing on the date of such termination.

11. Substitution of the Underwriters. If one or more of the Underwriters
shall fail (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or Section 11 hereof) to
purchase the Securities which it or they are obligated to purchase on such date
under this Agreement (the "Defaulted Securities"), the Representative shall have
the right, within 24 hours thereafter, to make arrangement for one or more of
the non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth and if any such underwriter is willing
to so purchase the Defaulted Securities, then notwithstanding Sub-Section (ii)
of this Section 11, the Representative shall be obligated to effect such
arrangement; if, however, the Representative shall not have completed such
arrangement within such 24-hour period, then:

(i) if the number of Defaulted Securities does not exceed 10% of the total
number of the Shares to be purchased on such date, the non-defaulting
Underwriters shall be obligated to purchase the full amount thereof in
the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or

(ii) if the number of Defaulted Securities exceeds 10% of the total number
of the Shares, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriters.

No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of any default by such Underwriter under
this Agreement.

<PAGE>

In the event of any such default which does not result in a termination of
this Agreement, the Representative shall have the right to postpone the Closing
Date for a period of not exceeding ten days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements.

12. Notices. All notices and communications hereunder, except as herein
otherwise specifically provided, shall be in writing and shall be deemed to have
been duly given three days following the day when mailed by prepaid first class
mail, or upon the day of personal delivery. Notices to the Underwriters shall be
directed to the Representative, Fairchild Securities Corp., 99 Wall Street, New
York, New York 10005, Att: ________________, President, with a copy to Beckman,
Millman & Sanders, LLP, 116 John Street, New York, NY 10004, Att: Michael
Beckman, Esq. Notices to the Company shall be directed to the Company at 131
Jericho Turnpike, Jericho, NY 11753, with a copy to Blau, Kramer, Wactlar &
Lieberman, P.C., 100 Jericho Quadrangle, Jericho, NY 11753, Att: David H.
Lieberman, Esq.

13. Parties. This Agreement shall inure solely to the benefit of and shall
be binding upon, the Underwriters, the Company and the controlling persons,
directors and officers and their respective successors, legal representatives
and assigns, and no person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of by virtue of this
Agreement or any provisions herein contained. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.

14. Construction. This Agreement shall be governed by and construed and
enforced in accordance with the law of the State of New York without giving
effect to the choice of law or conflict of laws principles.

15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
taken together shall be deemed to be one and the same instrument.

16. Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties hereto, and supersedes all prior written or oral
agreements, understandings and negotiations, with respect to the subject matter
hereof, except as herein expressly provided. This Agreement may not be amended
except in writing, signed by the Representative and the Company.

17. Law. This Agreement shall be deemed to have been made and delivered in
New York City and shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal laws of the State
of New York. The Company and you (I) agree that any legal suit, action or
proceeding arising out or relating to this letter shall be instituted
exclusively in New York State Supreme Court, County of New York or in the United
States District Court for the Southern District of New York, and the United
States District Court for the Southern District of New York; (ii) waive any
objection to the venue of any such suit, action or proceeding, and (iii)
irrevocably consent to the jurisdiction of the New York State Supreme Court,
County of New York, and the United States District Court for the Southern
District of New York in any such suit, action or proceeding. The Company and you
further agree to accept and acknowledge service of any and all process which may
be served in any such suit, action or proceeding in the New York State Supreme
Court, County of New York, or in the United States District Court for the
Southern District of New York and agree that service of process upon it mailed
by certified mail to its address shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding.

<PAGE>

18. No Assignment. Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the prior written consent of
the other party, and any attempted assignment without such consent shall be void
and of no effect.

19. Schedules. Any disclosure made on any schedule hereto shall be deemed
as also having been made on any other schedule hereto as to which such
disclosure is also responsive.

<PAGE>

If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.

Very truly yours,

MIKE'S ORIGINAL, INC.

By:______________________________
Arthur Rosenberg
President

Confirmed and accepted as of
the date first above written

Fairchild Securities Corp.

For itself and as Representative
of the other Underwriters named
in Schedule A hereto.

By: _______________________________
President

<PAGE>

SCHEDULE A

Underwriter Number of Shares to be Purchased
----------- --------------------------------

Fairchild Securities Corp.

Millennium Securities Corp.

TOTAL 3,500,000 $_________

MIKE'S ORIGINAL, INC.

3,500,000 Shares of Common Stock

January ___, 1999

AGREEMENT AMONG UNDERWRITERS

Fairchild Securities Corp.
99 Wall Street
New York, New York 10005

Gentlemen:

We wish to confirm as follows the agreement among you, the undersigned, and
the other Underwriters named in Schedule A to the Underwriting Agreement (as
defined hereinafter), as it is to be executed (all such parties being herein
called the "Underwriters"), with respect to the purchase by the Underwriters
severally from Mike's Original, Inc., a Delaware corporation (the "Company"), of
3,500,000 shares (the "Shares"), par value $.001 per share, of the Company (the
"Common Stock") and the proposed sale of the Shares as hereinafter set forth.
The obligations of the Underwriters to purchase the Shares pursuant to the
Underwriting Agreement are herein called "Underwriting Obligations".

1. Authority and Compensation of Representative. We hereby authorize you,
as our Representative and on our behalf, (a) to enter into an agreement with the
Company substantially in the form attached hereto as Exhibit A (the
"Underwriting Agreement"), but with such changes therein, including changes in
those who are to be Underwriters and in the respective number of Shares to be
purchased by them, as in your judgment are not materially adverse to the
Underwriters; provided, however, that the number of Shares to be purchased by us
as set forth in or determined pursuant to the Underwriting Agreement will not be
increased, except as provided herein and in the Underwriting Agreement, without
our consent, (b) to exercise all the authority and discretion vested in the
Underwriters and in you by the provisions of the Underwriting Agreement, and (c)
to take all such action and execute all such documents and instruments as you in
your discretion may deem necessary or advisable in order to carry out the

<PAGE>

provisions of the Underwriting Agreement and this Agreement and the sale and
distribution of the Shares; provided, however, that the time within which the
Registration Statement (as defined in the Underwriting Agreement) is required to
become effective pursuant to the Underwriting Agreement will not be extended by
more than 24 hours without the approval of a majority in interest of the
Underwriters (including you).

As your share of the compensation for your services hereunder, we will pay
you, and we authorize you to charge to our account on the Closing Date and the
Additional Closing Dates referred to in the Underwriting Agreement, a sum equal
to not more than 25% of the underwriting discount per Share or Warrant for each
Share or Warrant which we are then obligated to purchase from the Company
pursuant to the Underwriting Agreement.

We hereby authorize you to furnish such information and to make such
representations to the Securities and Exchange Commission (the "Commission") on
behalf of the undersigned as you in your discretion may deem necessary or
advisable.

2. Public Offering. A public offering of the Shares is to be made, as
herein provided, as soon, on or after the effective date of the Registration
Statement, as you deem it advisable so to do. The Shares are to be initially
offered to the public at the public offering price set forth on, or determined
pursuant to the disclosure on, the cover page of the Prospectus (as defined in
the Underwriting Agreement). You will advise us by telegraph or telephone when
the Shares are released for offering. We authorize you, as Representative of the
Underwriters, after the initial public offering, from time to time to increase
or decrease the public offering price, in your sole discretion, by reason of
changes in general market conditions or otherwise. The public offering price of
the Shares at the time in effect is herein called the "Offering Price".

3. Offering to Dealers and Group Sales. We authorize you to reserve for
offering and sale, and on our behalf to sell, to institutions or other retail
purchasers (such sales being herein called "Group Sales") and to dealers
selected by you (such dealers, among whom any of the Underwriters may be
included, being herein called "Dealers") all or any part of our Shares as you
may determine. Such sales of Shares,if any, shall be made (a) in the case of
Group Sales, at the Offering Price, and (b) in the case of sales to Dealers, at
the Offering Price or at the Offering Price less such concession or concessions
as you may from time to time determine.

The aggregate of any Group Sales made for our account shall be as nearly as
practicable in proportion to our underwriting obligations (unless you agree to a
smaller proportion for the account of any Underwriter at the request of such
Underwriter), but it shall not be necessary for each such sale to be made in
such proportion. Any sales to Dealers made for our account shall be as nearly as
practicable in the ratio that the Shares reserved for our account for offering
to Dealers bears to the aggregate of all Shares of all Underwriters so reserved.

You agree to notify us promptly on the date of the public offering as to
the number of Shares, if any, which we may retain for direct sale. Prior to the
termination of this Agreement, you may reserve for offering and sale as
hereinbefore provided any Shares remaining unsold theretofore retained by us and
we may, with your consent, retain any Shares remaining unsold theretofore
reserved by you.

<PAGE>

We authorize you to determine the form and manner of any communications or
agreements with Dealers, which may be in the form of the Selling Agreement, or
otherwise, as you may determine. If there shall be any such agreements with
Dealers, you are authorized to act as manager thereunder and we agree, in such
event, to be governed by the terms and conditions of such agreements. You may
arrange for any Underwriter, including yourself, to become one of such Dealers.
Each Underwriter agrees that it will not offer any of the Shares for sale at a
price below the Offering Price or allow any concession therefrom except as
herein otherwise provided.

It is understood that any Dealer to which an offer may be made as
hereinbefore provided shall be actually engaged in the investment banking or
securities business, shall execute the written agreement prescribed by Section
24(c) of Article III of the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. (the "NASD"), and shall either be a member in good
standing of the NASD or be a foreign dealer or institution not eligible for
membership in the NASD which agrees to make no offers or sales of the Shares in
the United States, its territories, or its possessions or to persons who are
citizens thereof or residents therein, and, in making sales, to comply with the
NASD's interpretation with respect to Free-Riding and Withholding and Sections
8, 24, and 36 of the Article III of the NASD's Rules of Fair Practice as if it
were an NASD member and Section 25 of such Article III as it applies to a
non-member broker or dealer in a foreign country. The Underwriters may allow,
and the Dealers, if any may reallow, such concession or concessions as you may
from time to time determine on sales of Shares, to any eligible broker or
dealer, all subject to the Rules of Fair Practice of the NASD.

You, as Representative, and any of the Underwriters with your prior
consent, may make purchases or sales of Shares (c) from or to any of the other
Underwriters, at the Offering Price less all or any part of the underwriting
discount as set forth on, or determined pursuant to the disclosure on, the cover
page of the Prospectus and (d) from or to any of the dealers, at the Offering
Price or at the Offering Price less all or any part of the concession to
Dealers.

We authorize you to determine the form and manner of any public
advertisement of the Shares.

Nothing contained in this Agreement shall be deemed to restrict our right,
subject to the provisions of this Section 3, to offer our Shares prior to the
effective date of the Registration Statement, provided that any such offer shall
be made in compliance with any applicable requirements of the Securities Act of
1933, as amended (the "Act"), and the Securities Exchange act of 1934, as
amended (the "Exchange Act"), and the rules and regulation of the Commission
thereunder and of any applicable state or foreign laws.

4. Repurchases in the Open Market. Any Shares sold by us (otherwise than
through you) which, prior to the termination of this Agreement or such earlier
date as you may determine, shall be contracted for or purchased in the open
market by you on behalf of any Underwriter or Underwriters, shall be repurchased
by us on demand at a price equal to the cost of such purchase (including
commissions and taxes paid in connection with such purchase) plus commissions
and taxes on redelivery. Any Shares delivered on such repurchase need not be the

<PAGE>

identical Shares originally sold by us. In lieu of delivery of such Shares to
us, you may (a) sell such Shares in any manner for our account and charge us
with the amount of any loss or expense, or credit us with the amount of any
profit less any expense, resulting from such sale or, at your option, (b) charge
our account with an amount not in excess of the concession to Dealers on such
Shares, plus commissions and taxes paid in connection with such purchase.

5. Delivery and Payment. We agree to deliver to you at or before 8:30 A.M.,
New York City Time, on the Closing Date and any Additional Closing Date referred
to in the Underwriting Agreement, at the office of Fairchild Securities Corp.,
99 Wall Street, New York, New York 10005, a certified or official bank check in
New York Clearing House funds payable to your order for an amount equal to the
initial public offering price, less the selling concession, of either (a) the
Shares which we are then obligated to purchase pursuant to the Underwriting
Agreement or (b) such of our Shares which have not been sold or reserved for
sale in Group Sales or to Dealers, as you direct. The proceeds of such check
shall be credited to our account and applied by you, in the manner provided in
the Underwriting Agreement, to the payment of the purchase price of the Shares,
against delivery of certificates for such Shares to you for our account. You are
authorized to accept such delivery and to give receipts therefor. If we fail
(whether or not such failure shall constitute a default hereunder) to deliver to
you, or you fail to receive, our check for the Shares which we have agreed to
purchase, at the time and in the manner provided in this Section 5, you,
individually and not as representative of the Underwriters, are authorized (but
shall not be obligated) to make payment for such Shares for our account, but any
such payment shall not relieve us of any of our obligations under the
Underwriting Agreement or under this Agreement, and we agree to repay on demand
the amount so advanced for our account (plus interest at then current rates).

Notwithstanding the other provisions of this Section 5, if transactions in
the Shares can be settled through the facilities of The Depository Trust
Company, payment for and delivery of our Shares will be made through the
facilities of The Depository Trust Company if we are a member, unless we have
otherwise notified you prior to a date to be specified by you, or, if we are not
a member, settlement may be made through a correspondent which is a member
pursuant to instructions we may send to you prior to such specified date.

We also agree on demand to take up and pay for or to deliver to you funds
sufficient to pay for at cost any securities purchased by you for our account
pursuant to the provisions of Section 9 hereof, and to deliver to you on demand
any securities sold or over-allotted by you for our account pursuant to any
provision of this Agreement. We also authorize you to deliver our Shares and any
other securities purchased by you for our account pursuant to the provisions of
Section 9 hereof, against sales made by you for our account pursuant to any
provision of this Agreement.

Upon receipt by you of payment for the Shares sold by or though you for our
account, you will (c) with respect to such Shares paid for by us, remit to us
promptly an amount equal to the purchase price paid by us for such Shares and
credit or debit our account on your books with the difference between the
selling price and the purchase price of such Shares as set forth in or
determined pursuant to Section 5 of the Underwriting Agreement and (d) with

<PAGE>

respect to such Shares not paid for by us, credit or debit our account on your
books with the difference between the selling price and the purchase price of
such Shares as set forth in or determined pursuant to Section 5 of the
Underwriting Agreement. You agree to cause to be delivered to us, as soon as
practicable after the Closing Date or any Additional Closing Date, as the case
may be, referred to in the Underwriting Agreement, such part of our Shares as
shall not have been sold or reserved for sale by you for our account.

In case any Shares reserved for sale in Group Sales or to Dealers shall not
be purchased and paid for in due course as contemplated hereby, we agree (e) to
accept delivery when tendered by you of any Shares so reserved for our account
and not so purchased and paid for and (f) in case we shall have received payment
from you in respect of any such Shares, to reimburse you on demand for the full
amount which you shall have paid us in respect of such Shares.

6. Authority to Borrow. We authorize you (to the extent permitted by law)
to advance your funds for our account (charging then current interest rates) and
to arrange loans and to purchase funds for our account for the purpose of
carrying out this Agreement and in connection therewith to execute and deliver
any notes or other instruments and to hold or pledge as security therefor all or
any part of the Shares purchased by us pursuant to the Underwriting Agreement or
any other securities purchased by you for our account pursuant to the provisions
of Section 9 hereof as you shall determine in your discretion. Any lending bank
is hereby authorized to accept your instructions as Representative in all
matters relating to such loans and purchase of funds. We will repay on demand
any such advances, loans, or purchases, including interest thereon at then
current rates.

7. Allocation of Expense and Liability. We authorize you to charge our
account with and we agree to pay (a) all transfer taxes on sales made by you for
our account, except as herein otherwise provided, and (b) our proportionate
share (based on our underwriting obligations) of all expenses incurred by you in
connection with the purchase, carrying, and distribution, or proposed purchase
and distribution, of the Shares and all other expenses arising under the terms
of the Underwriting Agreement or this Agreement. Your determination of all such
expenses and your allocation thereof shall be final and conclusive. Funds for
our account at any time in your hands as our Representative may be held in your
general funds without accountability for interest. As soon as practicable after
the termination of this Agreement, the net credit or debit balance in our
account, after proper charge and credit for all interim payments and receipts,
shall be paid to or paid by us; provided, however, that you in your discretion
may establish such reserves as you deem advisable to cover possible additional
expenses chargeable to the Underwriters.

8. Liability for Future Claims. Neither any statement by you, as
Representative of the Underwriters, of any credit or debit balance in our
account nor any reservation from distribution to cover possible additional
expenses relating to the Shares shall constitute any representation by you as to
the existence or non-existence of possible unforeseen expenses or liabilities of
or charges against the Underwriters. Notwithstanding the distribution of any net
credit balance to us or the termination of this Agreement or both, we shall be

<PAGE>

and remain liable for, and will pay on demand, (a) our proportionate share
(based on our underwriting obligations) of all expenses and liabilities which
may be incurred by or for the accounts of the Underwriters or any of them,
including any liability which may be incurred by or for the accounts of the
Underwriters or any of them based on the claim that the Underwriters constitute
an association, unincorporated business, partnership, or separate entity, and
(b) any transfer taxes paid after such settlement on account of any sale or
transfer for our account.

9. Stabilization. We authorize you, until the termination of this
Agreement, (a) to make purchases and sales of Shares or of any other securities
of the Company, in the open market or otherwise, for long or short account, and
on such terms and at such prices as you in your discretion may deem desirable,
(b) in arranging for sales of Shares to Dealers, to over-allot, and (c) either
before or after the termination of this Agreement, to cover any short position
incurred pursuant to this Section 9; subject, however, to the applicable rules
and regulations of the Commission under the Exchange Act. All such purchases,
sales, and over-allotments shall be made for the accounts of the several
Underwriters as nearly as practicable in proportion to their respective
underwriting obligations.

If you engage in any stabilizing transactions as Representative of the
Underwriters, you shall notify us of that fact. If we effect any transaction
which may be deemed to be a stabilizing purchase, we will notify you in writing
within three business days following such purchase of the information required
by Rule 17a-2(d) under the Exchange Act.

We agree to advise you, from time to time upon request until the settlement
of accounts hereunder, of the number of Shares at the time retained by us
unsold, and we will upon request sell to you for the accounts of one or more of
the several Underwriters such number of our unsold Shares as you may designate,
at the Offering Price less such amount, not in excess of the concession to
Dealers, as you may determine.

10. Open Market Transactions. We agree that except with your consent and
except as herein provided we will not, prior to the termination of this
agreement or until you notify us that we are released from this restriction, bid
for, purchase, or sell, directly or indirectly, for our own account, in the open
market or otherwise, or attempt to induce others to bid for, purchase, or sell,
either before or after the sale of the Shares and either for long or short
account, any securities of the Company or any right to purchase any such
security, and, prior to the completion (as defined in Rule 10b-6 under the
Exchange Act) of our participation in the distribution, we will otherwise comply
with Rule 10b- 6. We represent that we have complied with Rule 10b-6 in
connection with the offering. Nothing in this Section 10 shall prohibit us from
acting as broker or agent in the execution of unsolicited orders of customers
for the purchase or sale of any securities of the Company.

11. "Blue Sky." Prior to the initial offering by the Underwriters, you will
inform us as to the advice you have received from counsel concerning the
jurisdictions under the respective "blue sky" or securities laws of which it is
believed that the Shares have been qualified or registered or are exempt for
offer and sale, but you have not assumed and will no assume any responsibility
or obligation as to the accuracy of such information or as to the right of any
Underwriter or Dealer to offer or sell the Shares in any jurisdiction. You

<PAGE>

agree, however, to cause to be filed a Further State Notice with respect to the
Shares if, in the opinion of counsel for the Underwriters, such filing is
required by Article 23-A of the General Business Law of the State of New York.

We authorize you, if you deem it inadvisable in arranging sales of Shares
for our account hereunder to sell any of our Shares to any particular Dealer or
other buyer because of the "blue sky" or securities laws of any jurisdiction, to
sell our Shares to one or more other Underwriters at the Offering Price less, in
the case of a sale for resale to a Dealer, such amount, not in excess of the
concession to Dealers, as you may determine. The transfer tax on any such sales
among Underwriters shall be treated as an expense and charged to the respective
accounts of the Underwriters in proportion to their respective underwriting
obligations.

12. Default by Underwriters. Default by one or more Underwriters in respect
of their obligations under the Underwriting Agreement shall not release us from
any of our obligations or in any way affect the liability of any defaulting
Underwriter to the other Underwriters for damages resulting from such default.

In the event of default by one or more Underwriters in respect of their
obligations under this Agreement to take up and pay for any securities purchased
by you for their respective accounts pursuant to Section 9 hereof, or to deliver
any such securities sold or over-allotted by you for their respective accounts
pursuant to any provision of this Agreement, or to bear their respective shares
of expenses or liabilities pursuant to any provision of this Agreement, and to
the extent that arrangements shall not have been made by you or the Company for
other persons to assume the obligations of such defaulting Underwriter or
Underwriters, each non-defaulting Underwriter shall assume its proportionate
share (without regard to the obligation of such defaulting Underwriter or
Underwriters) of the aforesaid obligations of each such defaulting Underwriter
without relieving any such Underwriter of its liability therefor.

13. Termination of Agreement. Unless earlier terminated by you, the
provisions of Sections 2, 3, 4, 6, 9 and 10 hereof shall, except as otherwise
provided therein, terminate at the close of business on the forty-fifth day
after the public offering price of the Stock is determined, but may be extended
by you for an additional period or periods not exceeding forty five days in the
aggregate. You may, however, terminate this Agreement or any provisions hereof
at any time by written or telegraphic notice to us.

14. General Position of the Representative. In taking action under this
Agreement, you shall act only as agent of the Underwriters, except as otherwise
specifically provided herein where you may act individually. Your authority as
Representative of the Underwriters shall include the taking of such actions as
you may deem advisable in respect of all matters pertaining to any and all
offers and sales of the Shares, including the right to make any modifications
which you consider necessary or desirable in the arrangements with Dealers or
others. You shall be under no liability for or in respect of the value of the
Shares or the validity or the form thereof, any preliminary prospectus, the

<PAGE>

Registration Statement, the Prospectus, the Underwriting Agreement, or other
instruments executed by the Company, or others; or for the delivery of the
Shares; or for the performance by the Company, or others of any agreement on its
or their part; nor shall you as such Representative or otherwise be liable to
the Underwriters under any of the provisions hereof or for any matters connected
herewith, except for want of good faith; and no obligation not expressly assumed
by you as such Representative herein shall be implied from this Agreement. In
representing the Underwriters hereunder, you shall act as the Representative of
each of them respectively. Nothing herein contained shall constitute the
Underwriters partners with you or with each other, or render any Underwriter
liable for the commitments of any other Underwriter, except as otherwise
provided in Section 12 hereof. The commitments and liabilities of each of the
Underwriters are several in accordance with their respective underwriting
obligations and are not joint. If for federal income tax purposes the
Underwriters should be deemed to constitute a partnership, then each Underwriter
elects to be excluded from the application of Subchapter K, Chapter 1, Subtitle
A of the Internal Revenue Code of 1986, as amended, and agrees not to take any
position inconsistent with such election. You, as Representative of the
Underwriters, are authorized, in your discretion, to execute and file on behalf
of the Underwriters such evidence of such election as may be required by the
Internal Revenue Service.

15. Acknowledgment of Registration Statement. We hereby confirm that we
have received and examined the Registration Statement (including all amendments
thereto but excluding exhibits) and the related prospectus in respect to the
Shares as heretofore filed with the Commission, that we are familiar with any
amendment to the Registration Statement which may have been filed and the final
form of amendment and prospectus proposed to be filed, that we are willing to
accept the responsibilities of an Underwriter thereunder, and that we are
willing to proceed as therein contemplated. We further confirm that the
statements made under the heading " Underwriting" in such proposed final form of
prospectus, insofar as they relate to us, do not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. We understand that
the aforementioned documents are subject to further change and that we will be
supplied with copies of any amendment or supplement to the Registration
Statement or the Prospectus promptly, if and when received by you, but the
making of such changes, amendments, or supplements shall not release us or
affect our obligations hereunder or under the Underwriting Agreement.

16. Indemnity and Contribution. A. We agree to indemnify and hold harmless
each other Underwriter (including you), its officers, directors, partners,
employees, agents, and counsel and each person, if any, who controls any such
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the extent and upon the terms which we agree to indemnify and
hold harmless the Company as set forth in the Underwriting Agreement.

B. Each Underwriter (including you) will pay, upon your request, as
contribution, its proportionate share, based upon its underwriting obligation,
of any losses, liabilities, claims, or damages, joint or several, paid or
incurred by any Underwriter (including you) to any person other than an
Underwriter, arising out of, based upon, or in connection with any untrue
statement or alleged untrue statement of any material fact contained in any
preliminary prospectus, the Registration Statement, the Prospectus (as from time
to time amended or supplemented), any amendment or supplement thereto, any other
selling or advertising material approved by you for use by the Underwriters in

<PAGE>

connection with the sale of the Shares, or in any application or other document
or communication executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Shares under the "blue sky" or securities laws thereof
or filed with the Commission or any securities exchange, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; and will pay such
proportionate share, based upon its underwriting obligation, of all attorney's
fees and any and all expenses whatsoever reasonably incurred by you or with your
consent in investigating, preparing, or defending against any such loss,
liability, claim, or damage, or any action in respect thereof and any amounts
paid in settlement of any claim or litigation. In determining the amount of our
obligation under this Section 16(b), appropriate adjustment will be made by you
to reflect any amounts received by any Underwriter in respect of such untrue
statement, alleged untrue statement, omission, or alleged omission from the
Company pursuant to the Underwriting Agreement or otherwise. There shall be
credited against any amount paid or payable by us pursuant to this Section 16(b)
any loss, liability, claim, damage, or expense which is reasonably incurred by
us as a result of any such claim asserted against us (other than fees and
disbursements of our separate counsel if such counsel is not approved by you as
provided in the next sentence), and if such loss, liability, claim, damage, or
expense is incurred by us subsequent to any payment by us pursuant to this
Section 16(b), appropriate provision shall be made to effect such credit by
refund or otherwise. If any such claim is asserted or any action is commenced in
respect thereto, you may take such action in connection therewith as you deem
necessary or desirable, including retaining counsel for the Underwriters, and in
your discretion separate counsel for any particular Underwriter or group or
Underwriters, and the fees and disbursements of any counsel so retained by you
shall be included in the amounts payable pursuant to this Section 16(b).

C. Our indemnity and contribution agreements contained in this Section 16
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of such other Underwriter or its officers,
directors, partners, employees, agents, counsel, or controlling persons (if any)
and shall survive the delivery of the Shares to the several Underwriters and the
termination of this Agreement and the similar agreements entered into with the
other Underwriters. In determining amounts payable pursuant to Section 16(b)
hereof, any loss, liability, claim, damage, or expense incurred by any person
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act or by any officer, director, partner,
employee, agent, or counsel of any Underwriter which has been incurred by reason
of such control or other relationship shall be deemed to have been incurred by

<PAGE>

such Underwriter. Any Underwriter shall have the right to employ its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Underwriter. No Underwriter may settle any such claim or action, except you
may so settle on advice of counsel retained by you and with approval of a
majority in interest of the Underwriters (including you). Whenever you receive
notice of the assertion of any claim or the commencement of any action to which
the provisions of Section 16(b) hereof would be applicable, you will give prompt
notice thereof to each Underwriter. If any Underwriter or Underwriters default
in its or their obligation to make payments under Section 16(b) hereof, each
non-defaulting Underwriter shall be obligated to pay its proportionate share of
all defaulted payments, based upon such Underwriter's underwriting commitment as
related to the underwriting commitments of all non-defaulting Underwriters.
Nothing herein shall relieve a defaulting Underwriter of liability for its
default.

17. Capital Requirements. We confirm that we may, in accordance with and
pursuant to Rule 15c3-1 promulgated by the Commission under the Exchange Act and
any applicable rules relating to capital requirements of any securities exchange
to which we are subject, agree to purchase the numbers of Shares we may be
obligated to purchase under any provision of the Underwriting Agreement or this
Agreement.

18. Undertaking to Mail Prospectuses. As contemplated by Rule 15c2-8 under
the Exchange Act, you agree to mail a copy of the Prospectus to any person
making a written request therefor during the period referred to in Rule 15c2-8,
such mailing to be made to the address given in the request. We confirm that we
have delivered all preliminary prospectuses and revised preliminary
prospectuses, if any, required to be delivered under the provisions of Rule
15c2-8 and agree to deliver all final prospectuses and amendments or supplements
thereto required to be delivered under Rule 15c2-8. You have heretofore
delivered to us such preliminary prospectuses as have been requested by us,
receipt of which is hereby acknowledged, and will deliver such copies of the
Prospectus as will be requested by us.

19. Miscellaneous. Any notice hereunder from you to us or from us to you
shall be deemed to have been duly given if sent by registered mail, telegram, or
teletype, to us at our address as set forth in our Underwriters' Questionnaire
previously delivered to you, or to you at Fairchild Securities Corp., 99 Wall
Street, New York, New York 10005 Attention: ___________________, President.

We understand that you are a member in good standing of the NASD. We
represent that we are actually engaged in the investment banking or securities
business and that we are a member in good standing of the NASD which agrees to
comply with all applicable rules of the NASD, including, without limitation, the
NASD's interpretation with respect to Free-Riding and Withholding and Section 24
of Article III of the NASD's Rules of Fair Practice, or, if we are not such a
member, we are a foreign dealer or institution not eligible for membership in
the NASD (a) which agrees to make no offers or sales within the United States,
its territories, or its possessions (except that we may participate in Group
Sales under Section 3 hereof) or to persons who are citizens thereof or
residents therein, and, in making sales, to comply with the NASD's
interpretation with respect to Free-Riding and Withholding and Sections 8, 24,
and 36 of Article III of the NASD's Rules of Fair Practice as if we were an NASD
member and Section 25 of such Article III as it applies to a non-member broker
or dealer in a foreign country and (b) which in connection with sales and offers
of Shares made by us outside the United States, (i) will either furnish to each
person to whom any such offer or sale is made a copy of the then current

<PAGE>

preliminary prospectus or the Prospectus (as then amended or supplemented if the
Company shall have furnished amendments or supplements thereto), as the case may
be, or inform such person that such preliminary prospectus or the Prospectus
will be made available upon request and (ii) will furnish to each person to whom
any such offer or sale is made such prospectus, advertisement, or other offering
document containing information relating to the Shares, Common Stock or the
Company as may be required under the law of the jurisdiction in which such offer
or sale is made. Any prospectus, advertisement, or other offering document
furnished by us to any person in accordance with clause (b)(ii) of the preceding
sentence and any such additional offering material as we may furnish to any
person (c) shall comply in all respects with the laws of the jurisdiction in
which it is so furnished, (d) shall be prepared and so furnished at our sole
risk and expense, and (e) shall not contain information relating to the Common
Stock or the Company which is inconsistent in any respect with the information
contained in the then current preliminary prospectus or in the Prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), as the case may be.

This Agreement may be signed by the Underwriters in various counterparts
which together shall constitute one and the same agreement among all the
Underwriters and shall become effective at such time as all the Underwriters
shall have signed such counterparts and you shall have confirmed all such
counterparts.

This Agreement shall be construed in accordance with the laws of the State
of New York, without giving effect to conflict of laws. Time is of the essence
in this Agreement.

[THIS SPACE INTENTIONALLY LEFT BLANK]
<PAGE>

Please confirm that the foregoing correctly sets forth the understanding
between us by signing and returning to us a counterpart hereof.

Very truly yours,

_________________________________
As Attorney-in-Fact for each of the
Underwriters named in Schedule A to the
Underwriting Agreement

Confirmed as of the date first above written.

New York, New York

FAIRCHILD SECURITIES CORP.

By: __________________________________
Name:
Title:

January 22, 1999

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

Re: Mike's Original, Inc.
Registration Statement on Form SB-2

Gentlemen:

Reference is made to the filing by Mike's Original, Inc. (the "Company") of
a Registration Statement on Form SB-2 (the "Registration Statement"), as
amended, with the Securities and Exchange Commission pursuant to the provisions
of the Securities Act of 1933, as amended, covering the registration of (a)
3,500,000 shares of the Company's common stock, par value $.001 per share (the
"Common Stock") and (b) an aggregate of 1,560,000 shares of Common Stock which
are owned by selling shareholders (the "Selling Securityholders").

As counsel for the Company, we have examined its corporate records,
including its Certificate of Incorporation, By-Laws, its corporate minutes, the
form of its Common Stock certificate and such other documents as we have deemed
necessary or relevant under the circumstances.

Based upon our examination, we are of the opinion that:

1. The Company is duly organized and validly existing under the laws of the
State of Delaware.

2. The shares of Common Stock covered by the Registration Statement have
been duly authorized and, when issued in accordance with their terms, as more
fully described in the Registration Statement, will be validly issued, fully
paid and non-assessable.

We hereby consent to be named in the Registration Statement and in the
Prospectus which constitutes a part thereof as counsel to the Company, and we
hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement.

Very truly yours,

/s/ BLAU, KRAMER, WACTLAR & LIEBERMAN, P. C.

BLAU, KRAMER, WACTLAR
& LIEBERMAN, P.C.

TEST MARKET LICENSE AGREEMENT FOR VERYFINE FROZEN JUICE BAR
-----------------------------------------------------------

THIS AGREEMENT ("Agreement"), effective April 1, 1998, is made by and
between Veryfine Products, Inc., a Massachusetts corporation, with its principal
place of business at 210 Littleton Road, Westford, MA ("Veryfine") and New
Yorker Frozen Desserts, Inc., a New York corporation with its principal place of
business at 1122 Southern Boulevard, Bronx, NY 10459 ("New Yorker").

Section 1. Grant of License.
- -----------------------------
1.1. License Subject to the terms hereof and in consideration of the payment of
the royalty specified hereinafter, Veryfine hereby grants to New Yorker, and New
Yorker hereby accepts from Veryfine, an exclusive license to manufacture and
sell frozen juice bars in the flavors, sizes and packaging listed in Schedule
1.1 ("Licensed Products"), for sale solely in the territory listed in Schedule
1.2 ("Licensed Territory") using the trademarks identified in Schedule 1.3
("Licensed Trademarks"). Veryfine shall not license the Licensed Products to any
other party during the term of this Agreement. This Agreement shall not preclude
Veryfine from entering into licensing arrangements with another party for freeze
pops. During the term of this Agreement, the Licensed Products shall be the only
branded frozen juice bar manufactured or sold by New Yorker.

1.2. Sub-License New Yorker shall have the right to grant sub-licenses to third
parties to manufacture and sell the Licensed Products; provided, however, that
any sub-licensee is subject to the prior written approval of Veryfine and must
execute a sub-license agreement which includes the license provisions listed in
Exhibit A to this Agreement.

Section 2. Royalty and Payment.
- --------------------------------
2.1. Royalty New Yorker shall pay to Veryfine a royalty fee of one dollar
($1.00) per case (24 individual juice bars) of the Licensed Products sold by New
Yorker.

2.2. Payment New Yorker shall keep an accurate account of the Licensed Products
manufactured and sold under the scope of the license granted hereunder and shall
render a statement in writing to Veryfine within 30 days after the end of each
calendar quarter during the term of this Agreement, and shall, concurrently with
the rendering of such statement, pay to Veryfine the amount of the royalties
accrued during the corresponding calendar quarter. Veryfine shall have the right
to examine New Yorker's books relating to the Licensed Products to verify the
royalty statements and royalties due to Veryfine pursuant to this Agreement.

Section 3 Marketing Efforts.
- -----------------------------
3.1. Marketing Fund New Yorker shall set aside fifty cents ($.50) for each case
of Licensed Product sold, which shall accrue into a marketing fund. These funds
will be used by New Yorker exclusively for promotional activities, to support
the sale of the Licensed Products.

3.2. Sales Quota New Yorker accepts the quotas outlined on Schedule 3.1 as the
agreed sales targets for this market test. New Yorker will expend its best
efforts to attain the quotas, recognizing that achieving the quotas will
determine the continuation of this license agreement.

3.3. Marketing Materials, Packaging, Labels New Yorker agrees to receive
Veryfine's written approval for all marketing materials, packaging and labels
related to the Licensed Products and shall keep all such material consistent
with similar material for Veryfine beverage products.
<PAGE>
Section 4. Product Formulation and Manufacture.
- ------------------------------------------------
4.1. Formula All formulas developed by New Yorker for use in producing the
Licensed Products must be approved by Veryfine in writing and will be the sole
property of Veryfine. New Yorker may use such formulas solely in accordance with
the terms and conditions of this Agreement. All Licensed Products shall be
produced from Veryfine approved flavoring agents which shall be purchased from
Veryfine or Veryfine designated vendors.

4.2. Manufacture In manufacturing the Licensed Products, New Yorker agrees to
maintain reasonable standards, specifications and procedures, consistent with
those accepted in the industry, relating to quality assurance for the Licensed
Products and raw materials. New Yorker agrees to accept and implement any
reasonable additional quality control and quality assurance procedures Veryfine
may specify.

4.3. Inspection During normal business hours, Veryfine shall have the right to
inspect New Yorker's facilities.

Section 5. Trademarks and Confidential Information.
- ----------------------------------------------------
5.1. Trademarks New Yorker acknowledges and Veryfine represents that it has the
full right and title to the Licensed Trademarks. New Yorker shall not use the
Licensed Trademarks on any product except the Licensed Products and only as
contemplated by this Agreement. It is agreed and understood that no right,
property, license, permission or interest of any kind or nature in or to the
Licensed Trademarks is intended to be given or transferred to or acquired by New
Yorker by the execution, performance or non-performance of this Agreement or any
part thereof, except as expressly provided herein. At the termination of this
Agreement, New Yorker agrees to cease all use of the Licensed Trademarks and
make no claim to any ownership interest in the Licensed Trademarks.

5.2. Confidentiality In connection with the Agreement, each party will disclose
certain confidential and proprietary technical and business information
("Confidential Information") to the other party. Each party shall take all
reasonable measures to keep Confidential Information of the disclosing party
confidential and shall not disclose Confidential Information without prior
written permission of the disclosing party. Unless specified otherwise in this
Agreement, all originals and copies of Confidential Information shall remain the
property of the disclosing party and shall be returned upon the termination of
this Agreement. New Yorker may disclose Confidential Information to potential or
actual sub-licensees or mutually approved manufacturers, but only to the extent
necessary for the sub-license or manufacturing arrangement and only if such
potential or actual sub-licensee or mutually approved manufacturer is bound by a
confidentiality agreement reasonably protecting the confidential nature of the
Confidential Information.

Section 6. Covenants, Representations and Warranties.
- ------------------------------------------------------
6.1. Veryfine warrants that it holds or has filed for the United States
trademark registrations for all the Licensed Trademarks.

6.2. In the manufacture of the Licensed Products, New Yorker shall strictly
comply with all applicable packaging, food, drug, health and sanitary laws and
regulations and environmental laws and regulations, including, but not limited
to, the Federal Food, Drug and Cosmetic Act, as amended, and the regulations
promulgated thereunder including current good manufacturing practices. New
Yorker shall blend, process, package, store and load the Licensed Products for
shipment in accordance with accepted industry standards of safety and
cleanliness, in compliance with applicable federal, state and local laws, rules,
regulation, ordinances and requirements of any governmental body in effect
during the Term hereof and in such a way as to achieve the highest consistent
quality possible. In the marketing and sale of the Licensed Products, New Yorker
shall strictly comply with all applicable laws, statutes, ordinances, rules and
regulations of all federal, state, local or other governmental or regulatory
entities to which it is bound or affected.
<PAGE>
6.3. New Yorker hereby warrants that the Licensed Products shall (i) strictly
conform to the formulas approved by Veryfine; (ii) conform to the laws,
statutes, ordinances, regulations and rules referenced in Section 6.2.; (iii) be
free from any manufacturing defect; and, (iv) not be adulterated within the
meaning of all applicable federal, state and local laws and regulations.

6.4. New Yorker shall maintain for the benefit of both New Yorker and Veryfine
during the Term of the Agreement and for twelve (12) months following the
termination thereof, comprehensive general liability insurance (including
product liability) and so-called "all-risks" property damage insurance insuring
the Licensed Product, the Equipment and any related materials against loss or
damage. The insurance shall be maintained with limits acceptable to Veryfine,
initially no less than $1,000,000 bodily injury per occurrence; $300,000
property damage per occurrence (or $1,000,000 combined single limit per
occurrence bodily injury and property damage). New Yorker agrees to provide a
certificate of insurance within fifteen (15) days of signing this Agreement
specifying that (i) the insurance applies as primary coverage and will not be
contributory with any other insurance available to Veryfine; and (ii) the
coverage will not be canceled or reduced without thirty (30) days prior written
notice to Veryfine.

Section 7. Indemnification.
- ----------------------------
7.1. Veryfine shall indemnify and hold harmless New Yorker, its parent,
subsidiary and affiliated companies and their respective officers, directors,
employees, agents and representatives from all claims of trademark infringement
arising from the use of the Licensed Trademarks with the Licensed Products, and
all related losses, damages, liabilities, costs and expenses (including
reasonable attorney's fees) incurred by New Yorker unless such acts or omissions
were caused by the Indemnified Party. New Yorker shall indemnify and hold
harmless Veryfine, its parent, subsidiary and affiliated companies and their
respective officers, directors, employees, agents and representatives from all
claims arising from the manufacture of the Licensed Products by New Yorker or
any sub-licensee of New Yorker, and all related losses, damages, liabilities,
costs and expenses (including reasonable attorney's fees) incurred by Veryfine,
unless such acts or omissions were caused by the Indemnified Party.

Section 8. Term and Termination.
- ---------------------------------
8.1 Term and Termination. The term of this Agreement shall begin on the date
hereof and continue for two years unless terminated by either party in
accordance with the provisions specified in the Agreement. The Agreement may be
terminated as follows:

(a) Bankruptcy, etc. Immediately upon written notice to the other party in
the event that proceedings in bankruptcy or insolvency are instituted by or
against the other party, or a receiver is appointed, or if any substantial part
of the assets of the other party is the object of attachment, sequestration or
other type of comparable proceeding, and such proceeding is not vacated or
terminated within ninety (90) days after its commencement or institution.

(b) Default. If one party commits a material breach of any of the terms or
provisions of this Agreement and does not cure such breach within thirty (30)
days after receipt of written notice given by the other party;

(c) Licenses. Immediately if either party is unable to obtain or renew any
permit, license, patent or other governmental approval necessary to carry on the
business contemplated under this Agreement.

(d) Product Formulation. If New Yorker manufactures the Licensed Product in
a manner inconsistent with formulas approved by Veryfine and does not correct
all such manufacturing inconsistencies within sixty (60) days after receipt of
written notice from Veryfine of such manufacturing inconsistencies.

(e) Abandonment. Immediately by Veryfine if New Yorker shall abandon the
sale of the Licensed Products by failing for a period of two quarters to engage
in the sale of Licensed Products.
<PAGE>
Section 9. Miscellaneous.

9.1. Notice All notices relating to the provisions of this Agreement shall be in
writing and sent to:
Veryfine: Veryfine Products, Inc.
210 Littleton Road
P.O. Box 670
Westford, MA 01886
Attention: Mr. Kenneth Venti

New Yorker: New Yorker Frozen Desserts, Inc.
1122 Southern Boulevard
Bronx, NY 10459
Attention: Mr. Mike Mitchell

or such other address as either party may designate.

9.2. No Waiver Waiver by either party of any breach or the failure by either
party to enforce any of the provisions of this Agreement at any time shall not
in any way affect, limit or waive the right of such party thereafter to enforce
and compel strict compliance with each and every term and condition hereof.

9.3. Assignment; Successors in Interest The rights and obligations under this
Agreement shall not be assigned by either party without the prior written
consent of the other party; except in the case of an assignment to an affiliated
company or in connection with a sale of substantially all assets. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties and their respective allowable successors and assigns.

9.4. Severability This unenforceability, invalidity or illegality of any
provision of this Agreement shall not affect or impair any other provision or
render it unenforceable, invalid or illegal.

9.5. Headings The headings and titles used herein are for convenience only and
shall not affect the construction and interpretation of this Agreement.

9.6. Applicable Law This Agreement shall be construed and enforced in accordance
with the laws of the Commonwealth of Massachusetts, applicable to agreements
made and to be performed entirely with Massachusetts.

9.7. Relationship The relationship of the parties is and shall be solely that of
independent contractors.

9.8. Entire Agreement; Amendment This agreement and the attached schedules
constitute the entire understanding between the parties concerning the subject
matter hereof and supersedes any and all previous agreements between the
parties. This Agreement shall not be modified or altered except by a written
instrument signed by an authorized representative of each party. Both parties
acknowledge that this agreement may be amended to promote new opportunities as
they arise and any modifications will be agreed in writing by both parties.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representative on the date first above
written.

VERYFINE PRODUCTS, INC. NEW YORKER FROZEN DESSERTS, INC.

By: /s/ By: /s/
----------------------------- ------------------------------

Title: Vice President Title: Vice President
----------------------------- ------------------------------
<PAGE>
SCHEDULE 1.1
------------

LICENSED PRODUCTS
-----------------

ITEMS FLAVORS PACKAGING
----- ------- ---------
3 oz Single Stick Bar Orange Single Serve Box
Fruit Punch
Strawberry Kiwi

SUB-LICENSEE
------------
2.5 Single Stick Bar Orange Single Serve Wrap
Fruit Punch
Strawberry Kiwi

<PAGE>
SCHEDULE 1.2
------------

LICENSED TERRITORY The Counties of New York City, Nassau, Suffolk, Westchester,
Putnam, Rockland in N.Y. and the following Counties in New Jersey, Bergen,
Essex, Hudson Union, Middlesex and Monmouth and the State of Connecticut.
<PAGE>
Schedule 1.3
------------

Licensed Trademarks
-------------------

Veryfine
Veryfine logo (see attached)

<PAGE>
Veryfine Logo
<PAGE>
SCHEDULE 3.1
------------
QUOTAS
------

New Yorker shall sell at least the number of cases of the Licensed Products
listed below in each respective year of this Agreement:

1st Year 85,000
2nd Year 220,000

<PAGE>
EXHIBIT A
---------
SUB-LICENSE PROVISIONS
----------------------

Grant of License.
- -----------------
License. Subject to the terms hereof and in consideration of the payment of
the royalty specified hereinafter, New Yorker hereby grants to Sub-Licensee and
Sub-Licensee hereby accepts from New Yorker, a license to manufacture and sell
frozen juice bars in the flavors, sizes and packaging listed in Schedule 1.1
("Licensed Products"), for sale solely in the territory listed in Schedule 1.2
("Licensed Territory") using the trademarks identified in Schedule 1.3
("Licensed Trademarks"). Sub-Licensee shall have no right to grant sub-licenses
to any other third party.

Marketing Efforts.
- ------------------
Marketing Materials, Packaging, Labels. Sub-Licensee agrees to receive
Veryfine's written approval for all marketing materials, packaging and labels
related to the Licensed Products and shall keep all such material consistent
with similar material for Veryfine beverage products.

Product Formulation and Manufacture.
- ------------------------------------
Formula. All formulas developed or used by Sub-Licensee for use in
producing the Licensed Products must be approved by Veryfine in writing and will
be the sole property of Veryfine. Sub-Licensee may use such formulas solely in
accordance with the terms and conditions of this Agreement. All Licensed
Products shall be produced from Veryfine approved flavoring agents which shall
be purchased from Veryfine or Veryfine designated vendors.

Manufacture. In manufacturing the Licensed Products, Sub-Licensee agrees to
maintain reasonable standards, specifications and procedures, consistent with
those accepted in the industry, relating to quality assurance for the Licensed
Products and raw materials. Sub-Licensee agrees to accept and implement any
reasonable additional quality control and quality assurance procedures that
Veryfine or New Yorker may specify.

Inspection. During normal business hours, Veryfine and New Yorker shall
have the right to inspect Sub-Licensee's facilities.

Trademark and Confidential Information.
- ---------------------------------------
Trademarks. Sub-Licensee acknowledges that Veryfine has the full right and
title to the Licensed Trademarks. Sub-Licensee shall not use the Licensed
Trademarks on any product except the Licensed Products and only as contemplated
by this Agreement. It is agreed and understood that no right, property, license,
permission or interest of any kind or nature in or to the Licensed Trademarks is
intended to be given or transferred to or acquired by Sub-Licensee herein. At
the termination of this Agreement, Sub-Licensee agrees to cease all use of the
Licensed Trademarks and make no claim to any ownership interest in the Licensed
Trademarks.

Confidentiality. In connection with the Agreement, each party will disclose
certain confidential and proprietary technical and business information
("Confidential Information") to the other party. Each party shall take all
reasonable measures to keep Confidential Information of the disclosing party
confidential and shall not disclose Confidential Information without prior
written permission of the disclosing party. Unless specified otherwise in this
Agreement, all originals and copies of such information shall remain the
property of the disclosing party and Confidential Information shall be returned
upon the termination of this Agreement.
<PAGE>
Covenants, Representations and Warranties.
- ------------------------------------------
In the manufacture of the Licensed Products, Sub-Licensee shall strictly
comply with all applicable packaging, food, drug, health and sanitary laws and
regulations and environmental laws and regulations, including, but not limited
to, the Federal Food, Drug and Cosmetic Act, as amended, and the regulations
promulgated thereunder including current good manufacturing practices.
Sub-Licensee shall blend, process, package, store and load the Licensed Products
for shipment in accordance with accepted industry standards of safety and
cleanliness, in compliance with applicable federal, state and local laws, rules,
regulation, ordinances and requirements of any governmental body in effect
during the Term hereof and in such a way as to achieve the highest consistent
quality possible. In the marketing and sale of the Licensed Products,
Sub-Licensee shall strictly comply with all applicable laws, statutes,
ordinances, rules and regulations of all federal, state, local or other
government entities to which it is bound or affected.

Sub-Licensee hereby warrants that the Licensed Products shall (i) strictly
conform to the formulas approved by Veryfine, (ii) conform to the laws, statues,
ordinances, regulations and rules referenced in paragraph above; (iii) be free
from any manufacturing defect; and, (iv) not be adulterated within the meaning
of all applicable federal, state and local laws and regulations.

Sub-Licensee shall maintain for the benefit of Sub-Licensee, New Yorker and
Veryfine during the Term of the Agreement and for twelve (12) months following
the termination thereof, comprehensive general liability insurance (including
product liability) and so-called "all-risks" property damage insurance insuring
the Licensed Product, and any related materials against loss or damage. The
insurance shall be maintained with limits acceptable to New Yorker and Veryfine,
initially no less than $1,000,000 bodily injury per occurrence; $300,000
property damage per occurrence (or $1,000,000 combined single limit per
occurrence bodily injury and property damage). Sub-Licensee agrees to provide a
certificate of insurance to Veryfine and New Yorker within fifteen (15) days of
signing this Agreement specifying that (i) the insurance applies as primary
coverage and will not be contributory with any other insurance available to
Veryfine and New Yorker; and (ii) the coverage will not be canceled or reduced
without thirty (30) days prior written notice to Veryfine and New Yorker.
<PAGE>
SUB-LICENSE PROVISIONS
----------------------
SCHEDULE 1.1
------------

LICENSED PRODUCTS
-----------------

ITEMS FLAVORS PACKAGING
----- ------- ---------
2.5 Single Stick Bar Orange Single Serve Wrap
Fruit Punch
Strawberry Kiwi

<PAGE>
SUB-LICENSE PROVISIONS
----------------------
SCHEDULE 1.2
------------

LICENSED TERRITORY [Specify distribution area]
------------------
<PAGE>
SUB-LICENSE PROVISIONS
----------------------
Schedule 1.3
------------

Licensed Trademarks
-------------------

Veryfine
Veryfine logo (see attached)

CONSULTING AGREEMENT

Consulting Agreement made as of this 14th day of October, 1998 by and
between Mike's Original, Inc., a Delaware corporation (hereinafter the
"Company") and Arthur Rosenberg(hereinafter called the "Consultant").

W I T N E S S E T H:

Whereas, the Company is aware of Consultant's business expertise and
desires to enter into a Consulting Agreement with Consultant; and

Whereas, Consultant desires to act as a consultant to the Company on the
terms and conditions set forth herein.

Now, therefore, in consideration of the premises and of the mutual
covenants and conditions herein contained, the parties hereto agree as follows:

1. Prior Agreements Superseded. The Agreement supersedes any employment or
consulting agreements, oral or written, entered into between the Consultant and
the Company or any of its subsidiaries, prior to the date of this Agreement.

2. Term. The Company hereby retains Consultant to perform management, sales
and marketing consulting services to the Company for a term of five (5) years,
commencing on the effective date of the acquisition of New Yorker Ice Cream
Corp. and Jerry's Ice Cream Co., Inc.; subject, however, to termination as
hereinafter provided. Consultant hereby accepts such retention.

3. Remuneration. The Company shall pay to Consultant an annual salary at
the rate of $60,000, payable in monthly installments, or in such other manner as
shall be agreed to in writing by the Company and Consultant.

4. Consultant Benefits; Expenses. The Company shall reimburse Consultant
for all proper expenses incurred by him, including disbursements made in the
performance of his duties to the Company; provided, however, that no expenses
and/or disbursements shall be incurred by Consultant without the prior approval
of the Board of Directors of the Company.

5. Non-Competition. Consultant agrees that during the term of this
Agreement and provided he is receiving payment hereunder, he will not directly
or indirectly enter into or remain in the employ of any person, firm or
corporation, or engage in or have a financial interest in any business which is
then manufacturing any article or product which is the same as, or similar to,
any articles or products manufactured by the Company. In the event of a breach
of this covenant not to compete, the parties acknowledge that the Company may be

<PAGE>

irreparably damaged and may not have an adequate remedy at law. The Company may
therefore obtain injunctive relief, without the necessity of posting a bond, for
any breach or threatened breach of this covenant. The parties hereto further
acknowledge that this covenant not to compete is intended to conform with the
laws of the State of New York. Any court of competent jurisdiction is hereby
authorized to expend or contract the restrictions of this covenant not to
compete in order to conform with the laws of New York so that it shall bind the
parties hereto.

Consultant further agrees that he will not use the name "Mike's Original"
or any variation thereof, or successor name, or otherwise allow any person to
use such name or permit any member of his family to use such name, or authorize
the use of such name as or in the name of any corporation, partnership, firm or
venture which manufactures any article, product, special process or performs any
service which is the same as, or similar or in competition with any article,
product, special process or service manufactured or performed by the Company, or
as in the name of any such article or product.

6. Consolidation or Merger. In the event of any consolidation or merger of
the Company into or with any other corporation during the term of this
Agreement, or the sale of all or substantially all of the assets of the Company
to another corporation during the term of this Agreement, such successor
corporation shall assume this Agreement and become obligated to perform all of
the terms and provisions hereof applicable to the Company, and Consultant's
obligations hereunder shall continue in favor of such successor corporation.

7. Notices. Notice is to be given hereunder to the parties by telegram or
by certified or registered mail, addressed to the respective parties at the
addresses hereinbelow set forth or to such addresses as may be hereinafter
furnished, in writing:

To: Mr. Arthur Rosenberg
c/o The Associated Companies
7979 Old Georgetown Road
Suite 800
Bethesda, Maryland 20814

To: Mike's Original, Inc.
366 North Broadway
Jericho, New York 11753

8. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company. Unless clearly
inapplicable, reference herein to the Company shall be deemed to include such
other successor. In addition, this Agreement shall be binding upon and inure to
the benefit of the Consultant and his heirs, executors, legal representatives
and assigns, provided, however, that the obligations of Consultant hereunder may
not be delegated without the prior written approval of the Board of Directors of
the Company.
<PAGE>

9. Amendments. This Agreement may not be altered, modified, amended or
terminated except by a written instrument signed by each of the parties hereto.

10. Governing Law. This Agreement is entered into and shall be construed in
accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

MIKE'S ORIGINAL, INC.

By: _____________________________

---------------------------------
Arthur Rosenberg

PROMISSORY NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR UNDER ANY
STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED UNTIL
(i) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES LAW OR (ii) THE
COMPANY RECEIVES AN OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH NOTE MAY BE
PLEDGED, SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.

$156,000.00 Jericho, New York
July 20, 1998

FOR VALUE RECEIVED, the undersigned, MIKE'S ORIGINAL, INC., a Delaware
corporation (the "Maker"), does hereby unconditionally promise to pay to the
order of NEW YORKER ICE CREAM CORP., a New York corporation (the "Payee"), at
the offices of the Payee located at 1122 Southern Boulevard, Bronx, New York
10459, or at such other place as the Payee or any holder hereof may from time to
time designate, the principal sum of ONE HUNDRED FIFTY SIX THOUSAND DOLLARS
($156,000.00) in lawful money of the United States and immediately available
funds, without interest payable in six (6) equal monthly installments of
Twenty-Six Thousand Dollars ($26,000) each commencing thirty (30) days after the
Closing, as defined in Asset Purchase Agreement ("Purchase Agreement") pursuant
to which this Note was issued.

An "Event of Default" under this Note shall exist if any one or more of the
following shall occur and shall remain uncured by Maker thirty (30) days (except
as provided below) after its receipt of notice of such default from Payee:

(a) Failure by Maker to pay the principal of the Note or any installment
thereof when due, whether on the date fixed for payment or by acceleration or
otherwise, or the failure by Maker to pay any interest on the Note fifteen (15)
days after the Maker's receipt of notice from Payee that such amount is due; or

(b) If any representation or warranty made by Maker in this Note, the
Purchase Agreement or in the Security Agreement between the Maker and Payee (the
"Security Agreement") shall prove to have been untrue or misleading in any
material respect at the time made; or

(c) Failure by Maker to make any payment due on the Assumed Obligation, as
defined in the Purchase Agreement, fifteen (15) days after Maker's receipt of
notice that such payment is due; or.

<PAGE>

(d) If an Event of Default under the Security Agreement shall occur and any
grace period provided for therein shall have expired; or

(e) If Maker shall take any action (by any person or persons having the
capacity to do the same) to effect a dissolution or liquidation of Maker; or

(f) If Maker shall make a general assignment for the benefit of creditors
or consent to the appointment of a receiver, liquidator, custodian, or similar
official of all or substantially all of its properties, or any such official is
placed in control of such properties, or Maker admits in writing its inability
to pay its debts as they mature, or Maker shall commence any action or
proceeding or take advantage of or file under any federal or state insolvency
statute, including, without limitation, the United States Bankruptcy Code,
seeking to have an order for relief entered with respect to it or seeking
adjudication as a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution, or other relief with respect to it or its
debts; or

(g) There shall be commenced against Maker any action or proceeding of the
nature referred to in paragraph (g) above or seeking issuance of a warrant of
attachment, execution, distraint, or similar process against all or any
substantial part of the property of Maker, which results in the entry of an
order for relief which remains undismissed, undischarged or unbonded for a
period of sixty days; or

(h) The Security Agreement shall cease, at any time after its execution and
delivery and for any reason, to create a valid and perfected first priority
security interest in and to the property subject thereto or the validity or
priority of such security interest shall be contested by Maker or any of its
affiliates or by any other person; or any of the other Financing Agreements (as
defined below) shall at any time after their execution and delivery for any
reason cease to be in full force and effect or shall be declared null or void,
or the validity or enforceability thereof shall be contested by Maker or any of
its affiliates or by any other person; or

(i) Default by Maker in the performance or observance of any covenant or
agreement contained herein or in any of the Financing Agreements; or

(j) Maker's termination of its Employment Agreement with Ted Ketsoglou
without cause; or

(k) A final judgment for the payment of money in excess of $100,000.00
shall be rendered against Maker, and such judgment shall remain undischarged for
a period of sixty (60) days from the date of entry thereof unless within such
sixty (60) day period such judgment shall be stayed, appealed or otherwise
contested by Maker.

Maker may prepay, at any time, the unpaid principal balance of this Note or
any portion thereof, together with all accrued and unpaid interest on the amount
so prepaid. Amounts so prepaid shall be applied first to Maker's obligations
under this Note in respect of interest, and second, to principal.

<PAGE>

Maker may set off at anytime, against the unpaid principal balance of this
Note, any amount payable to Maker as an indemnity or otherwise due to Maker as a
result of any default under the Purchase Agreement by Payee provided Maker
provides Payee with thirty (30) days written notice of such default and such
default remains uncured at the end of the notice period.

This Note is secured by the "Collateral", as defined in the Security
Agreement, together with all other collateral in which Maker now or hereafter
grants to Payee a security interest and any supplement, agreement, document or
instrument now or at any time hereafter executed and/or delivered in connection
with this Note, the Purchase Agreement or the Security Agreement (the foregoing,
as the same now exist or may hereafter be amended, modified, supplemented,
renewed, extended, restated or replaced, are hereinafter collectively referred
to as the "Financing Agreements"), and is entitled to all of the benefits and
rights thereof and of the Financing Agreements.

In the event an Event of Default occurs as a result of Maker's failure to
make any payment due Payee, the interest rate on any unpaid principal
installments due under this Note shall be fifteen percent (15%) until the Event
of Default is cured.

If any Event of Default hereunder shall occur for any reason, then, in
addition to all rights and remedies of Payee under the Financing Agreements,
applicable law or otherwise, all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively and concurrently, at its
option, Payee may if, such Event of Default remains uncured after Payee has
provided Maker with an additional thirty (30) days notice of intention to
accelerate repayment, declare any or all of Maker's obligations, liabilities and
indebtedness owing to Payee under the Financing Agreements (the "Obligations"),
including, without limitation, all amounts owing under this Note, to be due and
payable, whereupon the then unpaid balance hereof together with all interest
accrued thereon, shall forthwith become due and payable, together with interest
accruing thereafter at the then applicable rate stated above until the
indebtedness evidenced by this Note is paid in full, plus the costs and expenses
of collection hereof, including, but not limited to, reasonable attorneys' fees.

Maker (i) waives diligence, demand, presentment and protest, (ii) agrees
that it will not be necessary for any holder hereof to first institute suit in
order to enforce payment of this Note and (iii) consents to any one or more
extensions or postponements of time of payment, release, surrender or
substitution of collateral security or forbearance or other indulgence, without
notice or consent. The pleading of any statute of limitations as a defense to
any demand against Maker is expressly hereby waived.

Payee shall not be required to resort to any Collateral for payment, but
may proceed against Maker and any guarantors or endorses hereof in such order
and manner as Payee may choose. None of the rights of Payee shall be waived or
diminished by any failure or delay in the exercise thereof.

The provisions of this Note may not be changed, modified or terminated
orally, but only by an agreement in writing signed by the party to be charged,
nor shall any waiver be applicable except in the specific instance for which it
is given.

<PAGE>

In the event of any litigation with respect to this Note, the Maker waives
the right to a trial by jury and, except as set forth herein, all rights of set
off and rights to interpose counterclaims, consents to the nonexclusive
jurisdiction of the Supreme Court of the State of New York located in Nassau
County and the United States District Court for the Eastern District of New York
for all purposes in connection with any action or proceeding arising out of or
relating to this Note, and further consents that any process or notice of motion
or other application to said courts or judge thereof, or any notice in
connection with any proceeding hereunder may be served (i) inside or outside the
State of New York by registered or certified mail, return receipt requested, and
service or notice so served shall be deemed complete five (5) days after the
same shall have been posted or (ii) in such other manner as may be permissible
under the rules of said courts. Within thirty days after such mailing, Maker
shall appear in answer to such process or notice of motion or other application
to said courts, failing which Maker shall be deemed in default and judgment may
be entered by Payee against Maker for the amount of the claim and other relief
requested therein.

The execution and delivery of this Note has been authorized by the Board of
Directors of Maker and by any necessary vote or consent of the stockholders of
Maker. This Note shall be governed by and construed, and all rights and
obligations hereunder and thereunder determined, in accordance with the laws of
the State of New York without regard to the conflicts of laws principles thereof
and shall be binding upon the successors and assigns of the Maker and inure to
the benefit of the Payee, its successors, endorsees and assigns. If any term or
provision of this Note shall be held invalid, illegal or unenforceable, the
validity of all other terms and provisions shall in no way be affected thereby.

Whenever used herein, the terms "Maker" and "Payee" shall be deemed to
include their respective successors and assigns.

MIKE'S ORIGINAL, INC.

By:_________________________
Title: _______________________

PROMISSORY NOTE

$52,000.00 Jericho, New York
July 20, 1998

FOR VALUE RECEIVED, the undersigned, MIKE'S ORIGINAL, INC., a Delaware
corporation (the "Maker"), does hereby unconditionally promise to pay to the
order of JERRY'S ICE CREAM CO., INC., a New York corporation (the "Payee"), at
the offices of the Payee located at 1122 Southern Boulevard, Bronx, New York
10459, or at such other place as the Payee or any holder hereof may from time to
time designate, the principal sum of FIFTY-TWO THOUSAND DOLLARS ($52,000) in
lawful money of the United States and immediately available funds, without
interest payable in six (6) equal monthly installments of Eight Thousand Six
Hundred and Sixty-Six Dollars and 66/100 ($8,666.66) each commencing thirty (30)
days after the Closing, as defined in Asset Purchase Agreement ("Purchase
Agreement") pursuant to which this Note was issued.

(c) Failure by Maker to make any payment due on the Assumed Obligation, as
defined in the Purchase Agreement, fifteen (15) days after Maker's receipt of
notice that such payment is due; or.

<PAGE>

(d) If an Event of Default under the Security Agreement shall occur and any
grace period provided for therein shall have expired; or

(e) If Maker shall take any action (by any person or persons having the
capacity to do the same) to effect a dissolution or liquidation of Maker; or

(i) Default by Maker in the performance or observance of any covenant or
agreement contained herein or in any of the Financing Agreements; or

(j) Maker's termination of its Employment Agreement with Gerald Schneider
without cause; or

<PAGE>

Whenever used herein, the terms "Maker" and "Payee" shall be deemed to
include their respective successors and assigns.

MIKE'S ORIGINAL, INC.

By:_________________________
Title: _______________________

SECURITY AGREEMENT

THIS SECURITY AGREEMENT dated as of July 20, 1998 is entered into by and
between MIKE'S ORIGINAL, INC., a Delaware corporation (the "Borrower"), and NEW
YORKER ICE CREAM CORP., a New York corporation (the "Secured Party").

W I T N E S S E T H:

WHEREAS, pursuant to an Asset Purchase Agreement dated July 20, 1998 (the
"Purchase Agreement") and the Promissory Note referred to therein (as amended,
supplemented or otherwise modified from time to time, the "Note") issued by the
Borrower to the Secured Party, such Secured Party has made a loan to the
Borrower evidenced by the Note, all upon the terms and subject to the conditions
set forth therein; and

WHEREAS, it is a condition precedent to the obligation of the Secured Party
to make a loan to the Borrower under the Note that the Borrower shall have
executed and delivered this Security Agreement to the Secured Party.

NOW, THEREFORE, in consideration of the premises and to induce the Secured
Party to make the loan evidenced by the Note to the Borrower, the Borrower
hereby agrees with the Secured Party as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Note and used herein are so used as so defined, and the following
terms shall have the following meanings:

"Collateral" shall have the meaning set forth in Section 2(a).

"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.

"Obligations" shall mean the unpaid principal of and interest on the Note
and all other obligations and liabilities of the Borrower to the Secured Party,
including any obligations of Borrower to the Estate of Joseph Kologlou as
described in the Purchase Agreement, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with, the Purchase Agreement, the Note or
this Security Agreement and any other document made, delivered or given in
connection therewith or herewith, whether on account of principal, interest,
fees, indemnities, costs, expenses or otherwise.

"Payment Demand" shall have the meaning set forth in Section 8.
<PAGE>

"Security Agreement" shall mean this Security Agreement as amended,
supplemented or otherwise modified from time to time.

"Security Interests" shall have the meaning set forth in Section 2(b).

"UCC" shall mean the Uniform Commercial Code as in effect in the State of
New York from time to time.

SECTION 2. Grant of Security Interest. (a) In order to secure the
Obligations, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower hereby grants to the
Secured Party, a continuing security interest in all of the Assets described in
the Purchase Agreement and other assets and equipment of Borrower substituted
therefor, all of which shall hereinafter be referred to as the "Collateral." The
Secured Party hereby consents to any such substitution and agrees to cooperate
with, and execute any and all documents reasonably requested by Borrower to
effectuate, such substitution.

(b) The security interest granted pursuant to this Section 2 (the
"Security Interest") is granted as security only and shall not subject the
Secured Party to, or transfer or in any way affect or modify, any obligation or
liability of the Borrower under any of the Collateral or any transaction which
gave rise thereto.

(c) To the extent the granting of a Security Interest in any contract
rights of the Borrower would, with or without the giving of notice or the
passage of time or both, conflict with the contract giving rise to such rights
or result in a default or loss of rights, or give rise to any right of
termination, cancellation or acceleration, under such contract, the Borrower
agrees to take any action which the Secured Party may reasonably request in
order to obtain any necessary consent of the parties to such contract to allow
for the granting of a Security Interest in the rights arising thereunder.

(d) Borrower shall provide the Secured Party with written notice of
any substitution of new or different assets or equipment for the original
Collateral described above.

SECTION 3. Filing, Further Assurances. The Borrower at its expense will
execute, deliver, file (in such manner and form as the Secured Party may
require), or permit the Secured Party to file and record, any financing
statements, any carbon, photographic or other reproduction of a financing
statement or this Security Agreement (which shall be sufficient as a financing
statement hereunder), any specific assignments or other paper that may be
reasonably necessary or desirable, or that the Secured Party may reasonably
request, in order to create, preserve, perfect or validate any Security Interest
or to enable the Secured Party to exercise and enforce its rights hereunder with
respect to any of the Collateral. The Borrower hereby appoints the Secured
Party, which appointment is irrevocable and coupled with an interest, as its
attorney-in-fact to execute in the name and on behalf of Borrower such
additional financing statements as the Secured Party may reasonably request.
<PAGE>

SECTION 4. Representations and Warranties of the Borrower. The Borrower
hereby represents and warrants to the Secured Party that it:

(a) is, or to the extent that certain of the Collateral is to be
acquired after the date hereof, will be, the owner of the Collateral free from
any adverse Lien, except (i) the security interest of the estate of Estate of
Joseph Kologlou in the Collateral, (the "Prior Lien"), and (ii) as otherwise
specifically permitted by the Secured Party; and

(b) except for such financing statements relating to Liens
specifically permitted by the Secured Party, no financing statement covering the
Collateral is on file in any public office, other than the financing statements
filed pursuant to this Security Agreement;

SECTION 5. Covenants of The Borrower. The Borrower hereby covenants and
agrees with the Secured Party that it:

(a) will defend the Collateral against all claims and demands of all
persons (excluding holders of the Prior Lien and other superior security
interests permitted by the Secured Party) at any time claiming any interest
therein senior to that of the Secured Party;

(b) will promptly pay any and all taxes, assessments and governmental
charges upon the Collateral prior to the date penalties are attached thereto,
except to the extent otherwise permitted by the Secured Party;

(c) will immediately notify the Secured Party of any event causing a
substantial loss or diminution in the value of all or any material part of the
Collateral and the amount or an estimate of the amount of such loss or
diminution;

(d) will have and maintain insurance of the Collateral in such amounts
as is commercially reasonable;

(e) will not sell or offer to sell or otherwise assign, transfer or
dispose of the Collateral or any interest therein, without the written consent
of the Secured Party;

(f) will keep the Collateral free from any adverse Lien (other than
the Prior Lien and other Liens specifically permitted by the Secured Party) and
will not waste or destroy the Collateral or any part thereof;

(g) will not knowingly use the Collateral in violation of any statute
or ordinance, the violation of which could materially impair the value of the
Collateral.

SECTION 6. Records Relating to Collateral. The Borrower will keep its
records concerning the Collateral at its address designated on the signature
page hereof or at such other place or places of which the Secured Party shall
have been notified in writing upon no less than ten (10) days advance written
notice. The Borrower will hold and preserve such records and will permit

<PAGE>

representatives of the Secured Party at any time during normal business hours
without disrupting its business to examine, inspect and to make abstracts from
such records and will furnish to the Secured Party such information and reports
regarding the Collateral as the Secured Party may from time to time reasonably
request.

SECTION 7. General Authority. The Borrower hereby appoints, which
appointment is irrevocable and coupled with an interest, the Secured Party its
lawful attorney with full power of substitution, in its name, for the sole use
and benefit of the Secured Party, but at the Borrower's expense, to exercise,
all or any of the following powers with respect to all or any of the Collateral
following a Payment Demand (as defined below) or an Event of Default hereunder,
under the Purchase Agreement or any of the Note:

(i) to demand, sue for, collect, receive and give acquittance for
any and all monies due or to become due,

(ii) to receive, take, endorse, assign and deliver all checks, notes,
drafts, documents and other negotiable and non-negotiable instruments and
chattel paper taken or received by the Secured Party,

(iii) to settle, compromise, prosecute or defend any action or
proceeding with respect thereto,

(iv) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto,

(v) to discharge any taxes, liens, security interests or other
encumbrances at any time placed thereon, and

(vi) to execute any document or form, in the name of the Borrower,
which may be necessary or desirable in connection with any sale of the
Collateral by the Secured Party;

provided that the Secured Party shall give the Borrower not less than ten (10)
days' prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral.

SECTION 8. Payment Demand. For purposes of this Agreement, the term
"Payment Demand" shall mean the Secured Party' making demand for payment of any
Note and satisfaction in full of all other obligations upon maturity of any
Note.

<PAGE>

assemble all or any part of the Collateral and make it available to the Secured
Party at a place to be designated by the Secured Party which is reasonably
convenient. The Secured Party shall give the Borrower ten (10) days' written
notice of its intention to make any public or private sale or sale at a broker's
board or on a exchange of the Collateral. At any such sale the Collateral may be
sold in one lot as an entirety or in separate parcels, as the Secured Party may
determine. The Secured Party shall not be obligated to make any such sale
pursuant to any such notice. The Secured Party, without notice or publication,
may adjourn any public or private sale or cause the same to be adjourned from
time to time by announcement at the time and place fixed for the sale, and such
sale may be made at any time or place to which the same may be adjourned. The
Secured Party, instead of exercising the power of sale herein conferred upon it,
may proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.

SECTION 10. Application of Collateral and Proceeds.

The proceeds of any sale of, or other realization upon, all or any part of
the Collateral shall be applied in the following order of priority:

(i) first, to pay the expenses of such sale or other realization,
including reasonable attorneys' fees, and all expenses, liabilities and advances
incurred or made by the Secured Party in connection therewith, and any other
unreimbursed expenses for which the Secured Party is to be reimbursed pursuant
to Section 11;

(ii) second, to the payment of the Obligations in such order of
priority as the Secured Party, in its sole discretion, shall determine; and

(iii) finally, to pay to the Borrower, or its successors or assigns,
or as a court of competent jurisdiction may direct, any surplus then remaining
from such proceeds.

SECTION 11. Expenses; Secured Party's Lien. The Borrower will forthwith
upon demand pay to the Secured Party:

(a) the amount of any taxes which the Secured Party may have been
required to pay by reason of the Security Interest (including any applicable
transfer and personal property taxes but excluding taxes in respect of the
Secured Party's income and profits) or to free any of the Collateral from any
Lien thereon; and

(b) the amount of any and all reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of its counsel and of any agents
not regularly in their employ, which the Secured Party may incur in connection
with (i) the collection, sale or other disposition of any of the Collateral,
(ii) the exercise by the Secured Party of any of the powers conferred upon it
hereunder, or (iii) any default on the part of any of the Borrower hereunder.

<PAGE>

SECTION 12. Termination of Security Interests; Release of Collateral. Upon
the repayment and performance in full of all the Obligations, the Security
Interest shall terminate and all rights to the Collateral shall revert to the
Borrower. Upon any such termination of the Security Interest or release of
Collateral, the Secured Party, at the Borrower' expense, will execute and
deliver to the Borrower such documents as the Borrower shall reasonably request
to evidence the termination of the Security Interest or the release of such
Collateral, as the case may be.

SECTION 13. Existence of Prior Lien. The Security Party hereby acknowledges
the existence of the Prior Lien and agrees that all of its rights hereunder
shall at all times be subject to the rights of the Prior Lien holder in and to
the Collateral.

SECTION 14. Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing and directed to the
applicable party at the addresses set forth on the signature page hereof or, as
to each party, at such other address as shall be designated by such party in a
written notice to the other parties complying as to delivery with the terms of
this Section. All such notices, requests, demands and other communication shall
be deemed given upon the earlier to occur of (i) the third day following deposit
thereof with the U.S. Postal Service for mailing via certified or registered
mail or (ii) the actual receipt by the party to whom such notice is directed.

SECTION 15. Miscellaneous. (a) No failure on the part of the Secured Party
to exercise, and no delay in exercising, and no course of dealing with respect
to, any right, power or remedy under this Security Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Secured Party of
any right, power or remedy under this Security Agreement preclude any other
right, power or remedy. The remedies in this Security Agreement are cumulative
and are not exclusive of any other remedies provided by law. Neither this
Security Agreement nor any provision hereof may be changed, waived, discharged
or terminated orally but only by a statement in writing signed by the party
against which the enforcement of the change, waiver, discharge or termination is
sought.

(b) This Security Agreement shall be construed in accordance with and
governed by the laws of the State of New York, excluding therefrom any
principles of conflicts of laws.

(c) This Security Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and
the same Security Agreement.
<PAGE>

(d) The Borrower hereby agrees to execute and deliver such further
instruments and documents as may be reasonably requested by the Secured Party in
order to carry out fully the intent and accomplish the purposes of this Security
Agreement. The Borrower agrees to take any action which the Secured Party may
reasonably request in order to obtain and enjoy the full rights and benefits
granted to the Secured Party by this Security Agreement including specifically,
at the Borrower's own cost and expense, the use of their best efforts to assist
in obtaining the consent of any agency or governmental authority for an action
or transaction contemplated by this Security Agreement which is then required by
law.

SECTION 16. Consent to Jurisdiction. The Borrower hereby consents to the
jurisdiction of the courts of the State of New York located in the County of
Nassau and the United States District Court for the Eastern District of New
York, as well as to the jurisdiction of all courts from which an appeal may be
taken from the aforesaid courts, for the purpose of any suit, action or other
proceeding arising out of any of the Borrower's obligations under or with
respect to this Agreement, and expressly waives any and all objections Borrower
may have as to venue in any of such courts. In addition, the Borrower consents
to the service of process by U.S. certified or registered mail, return receipt
requested, addressed to the address stated below its signature. The Borrower
also waives trial by jury in any action brought on or with respect to this
Agreement and agrees that in the event this Agreement shall be enforced by suit
or otherwise, it agrees to reimburse the holder or holders of the Obligations,
upon demand, for all reasonable expenses incurred in connection therewith,
including, without limitation, reasonable attorneys' fees.

SECTION 17. Separability. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
favor of the Secured Party.

IN WITNESS WHEREOF, this Security Agreement has been executed by the
parties hereto as of the day and year first above written.

Secured Party: The Borrower:

NEW YORKER ICE CREAM CORP. MIKE'S ORIGINAL, INC.

By:_______________________ By:____________________________
Name Name
Title: Title:
Address: Address:

SECURITY AGREEMENT

THIS SECURITY AGREEMENT dated as of July 20, 1998 is entered into by and
between MIKE'S ORIGINAL, INC., a Delaware corporation (the "Borrower"), and
JERRY'S ICE CREAM CO., INC., a New York corporation (the "Secured Party").

W I T N E S S E T H:

NOW, THEREFORE, in consideration of the premises and to induce the Secured
Party to make the loan evidenced by the Note to the Borrower, the Borrower
hereby agrees with the Secured Party as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Note and used herein are so used as so defined, and the following
terms shall have the following meanings:

"Collateral" shall have the meaning set forth in Section 2(a).

"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.

"Obligations" shall mean the unpaid principal of and interest on the Note
and all other obligations and liabilities of the Borrower to the Secured Party,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Purchase Agreement, the Note or this Security Agreement and any other
document made, delivered or given in connection therewith or herewith, whether
on account of principal, interest, fees, indemnities, costs, expenses or
otherwise.

"Payment Demand" shall have the meaning set forth in Section 8.

<PAGE>

"Security Agreement" shall mean this Security Agreement as amended,
supplemented or otherwise modified from time to time.

"Security Interests" shall have the meaning set forth in Section 2(b).

"UCC" shall mean the Uniform Commercial Code as in effect in the State of
New York from time to time.

(d) Borrower shall provide the Secured Party with written notice of
any substitution of new or different assets or equipment for the original
Collateral described above.

<PAGE>

SECTION 4. Representations and Warranties of the Borrower. The Borrower
hereby represents and warrants to the Secured Party that it:

(a) is, or to the extent that certain of the Collateral is to be
acquired after the date hereof, will be, the owner of the Collateral free from
any adverse Lien, except as specifically permitted by the Secured Party; and

SECTION 5. Covenants of The Borrower. The Borrower hereby covenants and
agrees with the Secured Party that it:

(a) will defend the Collateral against all claims and demands of all
persons (excluding holders of superior security interests permitted by the
Secured Party) at any time claiming any interest therein senior to that of the
Secured Party;

(d) will have and maintain insurance of the Collateral in such amounts
as is commercially reasonable;

(e) will not sell or offer to sell or otherwise assign, transfer or
dispose of the Collateral or any interest therein, without the written consent
of the Secured Party;

(f) will keep the Collateral free from any adverse Lien (other than
Liens specifically permitted by the Secured Party) and will not waste or destroy
the Collateral or any part thereof;

(g) will not knowingly use the Collateral in violation of any statute
or ordinance, the violation of which could materially impair the value of the
Collateral.

<PAGE>

the Secured Party at any time during normal business hours without disrupting
its business to examine, inspect and to make abstracts from such records and
will furnish to the Secured Party such information and reports regarding the
Collateral as the Secured Party may from time to time reasonably request.

(i) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due,

(ii) to receive, take, endorse, assign and deliver all checks, notes,
drafts, documents and other negotiable and non-negotiable instruments and
chattel paper taken or received by the Secured Party,

(iii) to settle, compromise, prosecute or defend any action or
proceeding with respect thereto,

(iv) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto,

(v) to discharge any taxes, liens, security interests or other
encumbrances at any time placed thereon, and

(vi) to execute any document or form, in the name of the Borrower,
which may be necessary or desirable in connection with any sale of the
Collateral by the Secured Party;

provided that the Secured Party shall give the Borrower not less than ten (10)
days' prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral.

SECTION 9. Remedies Upon a Payment Demand. If a Payment Demand shall have
been made, the Secured Party may exercise all the rights and remedies of a
Secured Party under the UCC. The Secured Party may require the Borrower to
assemble all or any part of the Collateral and make it available to the Secured
Party at a place to be designated by the Secured Party which is reasonably
convenient. The Secured Party shall give the Borrower ten (10) days' written

<PAGE>

notice of its intention to make any public or private sale or sale at a broker's
board or on a exchange of the Collateral. At any such sale the Collateral may be
sold in one lot as an entirety or in separate parcels, as the Secured Party may
determine. The Secured Party shall not be obligated to make any such sale
pursuant to any such notice. The Secured Party, without notice or publication,
may adjourn any public or private sale or cause the same to be adjourned from
time to time by announcement at the time and place fixed for the sale, and such
sale may be made at any time or place to which the same may be adjourned. The
Secured Party, instead of exercising the power of sale herein conferred upon it,
may proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.

SECTION 10. Application of Collateral and Proceeds.

The proceeds of any sale of, or other realization upon, all or any part of
the Collateral shall be applied in the following order of priority:

(ii) second, to the payment of the Obligations in such order of
priority as the Secured Party, in its sole discretion, shall determine; and

(iii) finally, to pay to the Borrower, or its successors or assigns,
or as a court of competent jurisdiction may direct, any surplus then remaining
from such proceeds.

SECTION 11. Expenses; Secured Party's Lien. The Borrower will forthwith
upon demand pay to the Secured Party:

<PAGE>

Interest shall terminate and all rights to the Collateral shall revert to the
Borrower. Upon any such termination of the Security Interest or release of
Collateral, the Secured Party, at the Borrower' expense, will execute and
deliver to the Borrower such documents as the Borrower shall reasonably request
to evidence the termination of the Security Interest or the release of such
Collateral, as the case may be.

SECTION 13. Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing and directed to the
applicable party at the addresses set forth on the signature page hereof or, as
to each party, at such other address as shall be designated by such party in a
written notice to the other parties complying as to delivery with the terms of
this Section. All such notices, requests, demands and other communication shall
be deemed given upon the earlier to occur of (i) the third day following deposit
thereof with the U.S. Postal Service for mailing via certified or registered
mail or (ii) the actual receipt by the party to whom such notice is directed.

SECTION 14. Miscellaneous. (a) No failure on the part of the Secured Party
to exercise, and no delay in exercising, and no course of dealing with respect
to, any right, power or remedy under this Security Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Secured Party of
any right, power or remedy under this Security Agreement preclude any other
right, power or remedy. The remedies in this Security Agreement are cumulative
and are not exclusive of any other remedies provided by law. Neither this
Security Agreement nor any provision hereof may be changed, waived, discharged
or terminated orally but only by a statement in writing signed by the party
against which the enforcement of the change, waiver, discharge or termination is
sought.

(b) This Security Agreement shall be construed in accordance with and
governed by the laws of the State of New York, excluding therefrom any
principles of conflicts of laws.

(c) This Security Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and
the same Security Agreement.

SECTION 15. Consent to Jurisdiction. The Borrower hereby consents to the
jurisdiction of the courts of the State of New York located in the County of
Nassau and the United States District Court for the Eastern District of New
York, as well as to the jurisdiction of all courts from which an appeal may be
taken from the aforesaid courts, for the purpose of any suit, action or other

<PAGE>

proceeding arising out of any of the Borrower's obligations under or with
respect to this Agreement, and expressly waives any and all objections Borrower
may have as to venue in any of such courts. In addition, the Borrower consents
to the service of process by U.S. certified or registered mail, return receipt
requested, addressed to the address stated below its signature. The Borrower
also waives trial by jury in any action brought on or with respect to this
Agreement and agrees that in the event this Agreement shall be enforced by suit
or otherwise, it agrees to reimburse the holder or holders of the Obligations,
upon demand, for all reasonable expenses incurred in connection therewith,
including, without limitation, reasonable attorneys' fees.

SECTION 16. Separability. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
favor of the Secured Party.

IN WITNESS WHEREOF, this Security Agreement has been executed by the
parties hereto as of the day and year first above written.

Secured Party: The Borrower:

JERRY'S ICE CREAM CO., INC. MIKE'S ORIGINAL, INC.

By:_______________________ By:____________________________
Name Name
Title: Title:
Address: Address:

SETTLEMENT AND GENERAL RELEASE

THIS SETTLEMENT AND GENERAL RELEASE (the "Agreement") is made and entered
into by and among MICHAEL ROSEN, RACHELLE ROSEN, ELIZABETH PILOSSOPH AND MARTIN
PILOSSOPH (hereinafter sometimes collectively called "the Rosen Family") and
MIKE'S ORIGINAL, INC. (hereinafter called "Mike's"). The parties acknowledge
that the terms and conditions of this Agreement have been voluntarily agreed to
and that such terms are final and binding.

WHEREAS, Michael Rosen has been employed by Mike's as Chairman of the Board
and President; and

WHEREAS, Rachelle Rosen has been employed by Mike's as Secretary and
Treasurer; and

WHEREAS, Mike's is indebted to Michael Rosen and Rachelle Rosen, and
Elizabeth Pilossoph in the sums of $281,337 (the "Indebtedness") and $25,000,
respectively; and

WHEREAS, Martin Pilossoph has been a director of Mike's; and

WHEREAS, the Parties now desire to settle fully and finally all claims the
Rosen Family may have against Mike's and that Mike's may have against the Rosen
Family, including, but not limited to, any matters arising out of Michael Rosen
and Rachelle Rosen's employment with Mike's and their separation therefrom and
any outstanding indebtedness to the Rosen Family;

NOW, THEREFORE, in consideration of the premises and mutual promises herein
contained, it is agreed as follows:

1. Non-Admission of Liability of Wrongdoing

This Agreement shall not be construed in any manner as an admission by
Mike's or the Rosen Family that either has acted wrongfully with respect to each
other or any other person or that either has any rights whatsoever against the
others.

2. Consideration by Mike's

I. In consideration for this Agreement and General Release, Mike's
shall make the following repayments in full discharge of any and all obligations
to the Rosen Family which amounts shall be equal to or greater than the
percentage being repaid to related parties, as such term is used in Mike's
financial statements.

<PAGE>

(a) To Michael and Rachelle Rosen:

(i) $70,336 of the outstanding indebtedness to them is to be
repaid without interest at the earlier of (x) December 31,
1998 or (y) upon the closing of a proposed secondary
offering by Mike's of not less than $2 million (gross) to
occur in 1998 (the "Secondary Offering");

(ii) $5,000 of the Indebtedness is to be paid on the first of
each month commencing May 1, 1998 for twelve consecutive
months;

(iii)$50,000 of the Indebtedness is to be repaid only in the
event Mike's engages in an offering of its securities,
subsequent to the Secondary Offering and prior to April 30,
2001, for gross proceeds not less than $2,500,000 (the
"Subsequent Offering"); and

(iv) Michael Rosen will be reimbursed $687 per month for twelve
months commencing May 1, 1998 for his leased vehicle. Mr.
Rosen will maintain his own insurance on the vehicle during
such period for which the Company will pay him $125 per
month. At the end of such twelve month period, Mr. Rosen may
continue to lease the vehicle in which event he shall be
solely responsible for all fees and costs directly or
indirectly relating thereto, or he can return the vehicle to
the Company. In the event the vehicle is returned, Mr. Rosen
will not be held responsible for any surrender charges
caused by the early termination of the lease on the vehicle
or any charges for mileage in excess of 45,000 miles.

(b) To Elizabeth Pilossoph:

(i) $6,250 of the outstanding indebtedness to her is to be
repaid without interest at the earlier of (x) December 31,
1998 or (y) upon the closing of the Secondary Offering;

(ii) $5,000 of the indebtedness is to be repaid in the event
Mike's engages in the Subsequent Offering.

II. In further consideration for this Agreement and General Release:

(a) Mike's shall make Cobra payments on behalf of Michael Rosen for
the months of May 1, 1998 through April 30, 1999. Mike's shall
have no further obligation to make any Cobra payments on behalf
of Michael Rosen after the April 30, 1999 payment.
<PAGE>

(b) All outstanding options to Michael Rosen (as described in Exhibit
A , copies of which have been delivered to the Rosen Family)
shall be deemed vested as of the date hereof and, subject to
existing lock-ups, shall be exercisable until their respective
expiration dates.

3. Consideration by the Rosen Family

(a) In consideration of the foregoing and as a material inducement to
Mike's to enter into this Agreement and subject to clause (b) hereof:

(i) Michael Rosen, Rachelle Rosen and Martin Pilossoph will
voluntarily resign, effective immediately, as officers and
directors of Mike's.

(ii) The Rosen Family agrees to the complete releases set forth
in paragraph 4 hereof.

(b) In the event payment is not made pursuant to paragraph 2(a)(i)
hereof, the members of the Rosen Family who tendered their resignations as
officers of the company under paragraph 3(a)(i) hereof shall be reinstated as
such officers immediately and the employment contracts being terminated
hereunder shall be reinstated.

4. Complete Release

(a) As a further material inducement to Mike's to enter into this
Agreement, the employment agreements with Michael and Rachelle Rosen are hereby
terminated and except as set forth in paragraphs 2 and 3(b) hereof, any
outstanding indebtedness to Michael Rosen and Rachelle Rosen is hereby
discharged and Michael Rosen and Rachelle Rosen each hereby waives, remits,
releases and forever discharges Mike's, its Board members, officers, directors,
stockholders, employees, agents, attorneys, subsidiaries, servants, successors,
insurers, affiliates and their successors and assignees, from any and all manner
of action, claims, liens, demands, liabilities, causes of action, charges,
complaints, suits (judicial, administrative, or otherwise), damages, debts,
demands, obligations of any other nature, past or present, known or unknown,
whether in law or in equity, whether founded upon contract (expressed or
implied), tort (including, but not limited to, defamation), statute or
regulation (State, Federal or local), common law and/or any other theory or
basis, from the beginning of the world to the date hereof, including, but not
limited to, any claim that Michael Rosen and Rachelle Rosen has asserted, now

<PAGE>

asserts or could have asserted. This includes, but is not limited to, claims for
additional compensation or benefits, under employment agreements or otherwise,
tortious claims arising out of the employment relationship, claims of an
expressed or implied contract of employment, claims under the Family and Medical
Leave Act, claims arising under Federal, State or local laws prohibiting
employment or other discrimination or claims growing out of any legal
restrictions on the Company's rights to terminate its employees, including
without limitation any claims arising under Title VII of the United States Code,
and the Age Discrimination in Employment Act, but excludes indemnification for
acts as officers and directors of the Company to the extent permitted by
applicable laws. Included in this General Release are any and all claims for
future damages allegedly arising from the alleged continuation of the effect of
any past action, omission or event. Michael Rosen and Rachelle Rosen further
agree to waive any rights he or she may have to reinstatement or reemployment
with Mike's except as set forth in paragraph 3(b).

(b) As a further material inducement to Mike's to enter into this
Agreement, and except as set forth in paragraph 2(b) hereof, any outstanding
indebtedness to Elizabeth Pilossoph is hereby discharged and she hereby waives,
remits, releases and forever discharges Mike's, its Board members, officers,
directors, stockholders, employees, agents, attorneys, subsidiaries, servants,
successors, insurers, affiliates and their successors and assignees, from any
and all manner of action, claims, liens, demands, liabilities, causes of action,
charges, complaints, suits (judicial, administrative, or otherwise), damages,
debts, demands, obligations of any other nature, past or present, known or
unknown, whether in law or in equity, whether founded upon contract (expressed
or implied), tort (including, but not limited to, defamation), statute or
regulation (State, Federal or local), common law and/or any other theory or
basis, from the beginning of the world to the date hereof, including, but not
limited to, any claim that Elizabeth Pilossoph has asserted, now asserts or
could have asserted. Included in this General Release are any and all claims for
future damages allegedly arising from the alleged continuation of the effect of
any past action, omission or event.

(c) As a further material inducement to the Rosen Family to enter into
this Agreement, and to the extent permitted under applicable laws for officers
and/or directors of public corporations, Mike's hereby waives, remits, releases
and forever discharges the Rosen Family, its agents, attorneys, servants,
successors, insurers, affiliates and their successors and assignees, from any
and all manner of action, claims, liens, demands, liabilities, causes of action,
charges, complaints, suits (judicial, administrative, or otherwise), damages,
debts, demands, obligations of any other nature, past or present, known or
unknown, whether in law or in equity, whether founded upon contract (expressed
or implied), tort (including, but not limited to, defamation), statute or
regulation (State, Federal or local), common law and/or any other theory or
basis, from the beginning of the world to the date hereof, including, but not
limited to, any claim that the Mike's has asserted, now asserts or could have
asserted. Included in this General Release are any and all claims for future
damages allegedly arising from the alleged continuation of the effect of any
past action, omission or event, except with respect to paragraph 5 hereof.

5. Non-Disclosure

Neither Michael Rosen nor Rachelle Rosen shall disclose or deliver to
any other party certain trade secrets or confidential or proprietary information
gained through employment with Mike's. This includes, but is not limited to,
proprietary technologies, software programs and tools, financial information,
business plans, systems files, file structures, customer lists, supplier lists,

<PAGE>

internal program structures and data developed by Mike's or any subsidiary or
division thereof. Michael Rosen and Rachelle Rosen each agree that any breach of
this paragraph would cause Mike's substantial and irreparable damages that would
not be qualifiable and therefore, in the event of any such breach, in addition
to other remedies that may be available, Mike's shall have the right to seek
specific performance and other injunctive and equitable relief.

6. No Representations

The parties represent that in signing this Agreement, they do not rely
on nor have they relied on any representation or statement not specifically set
forth in this Agreement by any of the Releasees or by any of the Releasees'
agents, representatives or attorneys with regard to the subject matter, basis or
effect of this Agreement or otherwise.

7. Severability

Should any of the provisions of this Agreement be declared or be
determined to be illegal or invalid, the validity of the remaining parts, terms
or provisions shall not be affected thereby and said illegal or invalid part,
term or provision shall be deemed not be a part of this Agreement.

8. Entire Agreement

This Agreement sets forth the entire agreement between the parties
hereto, and fully supersedes any and all prior agreements or understandings
between the parties hereto pertaining to the subject matter hereof. All other
contracts, agreements or understandings between the Rosen Family and Mike's are
null and void.

9. Counterparts

This Agreement may be executed in counterparts. Each counterpart shall
be deemed an original, and when taken together with the other signed
counterpart, shall constitute one fully executed Agreement.

PLEASE READ CAREFULLY. THIS SETTLEMENT, AGREEMENT AND
GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.

Dated: May 15th 1998 Dated: May 11, 1998

MIKE'S ORIGINAL, INC.

By: /s/ Arthur G. Rosenberg /s/ Michael Rosen
Arthur G. Rosenberg MICHAEL ROSEN
Authorized Signatory

Sworn to before me this Sworn to before me this
15th day of May, 1998 11 day of May, 1998
/s/ ________________________________ /s/_______________________________
Notary Public Notary Public

<PAGE>

/s/ Rachelle Rosen
RACHELLE ROSEN

Sworn to before me this
14th day of May, 1998

/s/________________________________
Notary Public

/s/ Elizabeth Pilossoph
ELIZABETH PILOSSOPH

Sworn to before me this
14th day of May, 1998

/s/________________________________
Notary Public

/s/ Martin Pilossoph
MARTIN PILOSSOPH

Sworn to before me this
14th day of May, 1998
/s/________________________________
Notary Public

<PAGE>

Exhibit A

MIKE'S ORIGINAL, INC.

Schedule of Stock Options Outstanding as of May 8, 1998

Name Grant Date Shares Exercise Price
- ---- ---------- ------ --------------

Michael Rosen May 30, 1996 33,333 $3.00
Michael Rosen September 12, 1996 166,666 $1.50
Michael Rosen May 1, 1997 50,000 $1.50

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACOCUNTANT

We hereby consent to the use in this amendment No. 1 to the registration
statement on Form SB-2 of our report dated February 25, 1998. except for Note 14
the date of which is March 4, 1998, relating to the financial statements of
Mike's Original, Inc. and to the reference to our firm under the caption
"Experts" in the prospectus.

/s/ Lazar Levine & Felix, LLP
______________________________

New York, New York
January 20, 1999

CONSENT OF INDEPENDENT CERTIFID PUBLIC ACCOUNTANTS

We have issued our report dated April 17, 1997 (except for Note 8, as to which
the date is June 20, 1997), which contains an explanatory paragraph that
expresses substantial doubt about the Company's ability to continue as a going
concern, accompanying the financial statements of Mike's Original, Inc.
contained in the Registration Statement and Prospectus. We consent to the use of
the aforementioned report in the Registration Statement and Prospectus, and to
the use of our name as it appears under the caption "Experts."

/s/ GRANT THORNTON LLP
_______________________
GRANT THORNTON LLP

Melville, New York
January 21, 1999

SIDNEY NEUHOF
Certified Public Accountant
125 Michael Drive
Suite 101
Syosset, New York 11791
Tel. 516-921-1739

Consent of Independent Certified Public Accountant

I hereby consent to the use in this registration statement on Form SB-2 of my
report dated February 25, 1998.

/s/ Sidney Neuhof
Sidney Neuhof, C.P.A.
S. Neuhof
New York
January 20, 1999

CONSENT

I hereby consent to the use of my name in the Registration Statement on Form
SB-2 and the Prospectus contained therein of Mike's Original, Inc.

/s/ Ted Ketsoglou
-------------------------
Ted Ketsoglou

January 21, 1999

CONSENT

I hereby consent to the use of my name in the Registration Statement on Form
SB-2 and the Prospectus contained therein of Mike's Original, Inc.

/s/ Jerry Schneider
-------------------------
Jerry Schneider

January 21, 1999