NEW YORKER MARKETING CORP, 424B1, 1999-06-10

NEW YORKER MARKETING CORP
424B1, 1999-06-10
ICE CREAM & FROZEN DESSERTS

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<PAGE> 1
As Filed Pursuant to Rule 424(b)(1)
Registration No. 333-67227

PROSPECTUS

680,000 Shares

New Yorker Marketing Corp.

Common Stock

This is an offering of shares of common stock of New Yorker Marketing Corp.
(formerly Mike's Original, Inc. and hereinafter referred to as "New Yorker").
New Yorker is offering to sell 368,000 shares of its common stock and certain of
New Yorker's stockholders are offering to sell 312,000 shares of common stock.
The number of shares offered takes into account a .20-for-one reverse stock
split of New Yorker's outstanding common stock which has been approved by New
Yorker's stockholders and will take effect upon the effectiveness of this
offering. New Yorker will not receive any of the proceeds from the selling
stockholders' sale of shares.

New Yorker's common stock is quoted on the OTC Bulletin Board. On May 13,
1999, the last reported sale price of the common stock was $1 1/2 per share.
This is the pre-reverse split price. 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.

<TABLE>
<CAPTION>
TOTAL ASSUMING EXERCISE OF
PER SHARE TOTAL OVER-ALLOTMENT OPTION(1)
--------- ---------- --------------------------
<S> <C> <C> <C>
Public Price................................... $6.25 $4,250,000 $4,595,000
Underwriting Discounts(2)...................... $ .63 $ 428,400 $ 463,176
Proceeds to the Company........................ $5.62 $2,068,160 $2,378,384
Proceeds to Selling Stockholders............... $5.62 $1,753,440 $1,753,440
</TABLE>

- ---------------
(1) This is a firm commitment offering for the 368,000 shares of common stock
being offered by New Yorker. The Underwriters have a 30-day option to
purchase an additional 55,200 shares of common stock solely to cover any
over-allotments.

(2) All of which is payable by New Yorker.

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 FINANCIAL GROUP, INC. MILLENNIUM SECURITIES CORP.

PROSPECTUS DATED JUNE 7, 1999
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<S> <C>
PROSPECTUS SUMMARY.......................................... 3
New Yorker Marketing Corp................................. 3
The Offering.............................................. 4
Summary Financial Information............................. 5
RISK FACTORS................................................ 6
New Yorker may continue to be unprofitable................ 6
New Yorker will cease doing business without the proceeds
of this offering....................................... 6
New Yorker's assets could be seized if certain debt is not
paid................................................... 6
New Yorker relies on one supplier for 30% of its
business............................................... 6
Approximately 25% of the proceeds of this offering are not
specifically allocated................................. 6
The distribution of ice cream is very competitive......... 6
The potential acquisition of New Yorker is more difficult
as a result of charter provisions...................... 6
Potential changes in control of New Yorker are limited by
certain charter provisions............................. 6
New Yorker's charter and its option plans and warrants
permit additional shares to be issued without
stockholder approval................................... 7
New Yorker's stock could become "penny stock" which would
make it more difficult to trade........................ 7
Unfavorable resolution of SEC investigation against
Fairchild Financial Group, Inc. could adversely affect
price of New Yorker's common stock..................... 7
Unfavorable resolution of Florida complaint against
Fairchild and certain of its employees could adversely
affect the price of New Yorker's common stock.......... 7
USE OF PROCEEDS............................................. 8
DILUTION.................................................... 9
CAPITALIZATION.............................................. 10
PRICE RANGE OF COMMON STOCK................................. 11
DIVIDEND POLICY............................................. 11
SELECTED FINANCIAL DATA..................................... 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................. 13
Forward Looking Statements................................ 13
Results of Operations..................................... 13
Liquidity and Capital Resources........................... 14
Impact of the Year 2000 on Information Systems............ 14
BUSINESS.................................................... 15
General................................................... 15
Agreement with Veryfine Products.......................... 16
Proposed Acquisition of Distributors...................... 16
Principal Supplier........................................ 16
Manufacturing............................................. 17
Distribution and Marketing................................ 17
Competition............................................... 17
Government Regulation..................................... 17
Trademarks and Patents.................................... 17
Insurance................................................. 18
Employees................................................. 18
Properties................................................ 18
Seasonality............................................... 18
Legal Matters............................................. 18
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
MANAGEMENT.................................................. 19
Directors and Executive Officers.......................... 19
Executive Compensation.................................... 20
Option/SAR Grants in Last Fiscal Year..................... 20
Consulting Agreements..................................... 20
Proposed Employment Agreements............................ 21
Stock Plans............................................... 21
Personal Liability and Indemnification of Directors....... 22
PRINCIPAL STOCKHOLDERS...................................... 24
CERTAIN TRANSACTIONS........................................ 25
SELLING STOCKHOLDERS........................................ 26
DESCRIPTION OF SECURITIES................................... 27
Capital Stock............................................. 27
Warrants.................................................. 27
Private Placement......................................... 28
Certain Provisions of New Yorker Certificate of
Incorporation.......................................... 29
SHARES ELIGIBLE FOR FUTURE SALE............................. 29
Transfer Agent............................................ 30
UNDERWRITING................................................ 31
SEC Investigation Involving Fairchild..................... 32
NASD Enforcement Action Against Fairchild................. 32
State of Florida-Administrative Proceeding Against
Fairchild.............................................. 33
LEGAL MATTERS............................................... 34
EXPERTS..................................................... 34
WHERE TO FIND ADDITIONAL INFORMATION........................ 34
</TABLE>
<PAGE> 4

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. Information presented throughout this prospectus gives effect to a
.20-for-one reverse stock split of New Yorker's common stock which has been
approved by stockholders and will take effect on the effectiveness of this
offering. This prospectus also 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.

NEW YORKER MARKETING CORP.

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

The Business: New Yorker and its predecessors initially
marketed, sold and distributed Mike's Original
Cheesecake Ice Cream, an all natural blend of
ice cream with cheesecake ingredients. New
Yorker'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 New Yorker's ice cream have been
nominal. In June 1998, New Yorker curtailed the
sale of its ice cream and began distributing
Veryfine Frozen Juice Bars under an agreement
with Veryfine.

Strategy: Initially, New Yorker manufactured, marketed
and distributed its own line of ice cream
products. New Yorker 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. New Yorker plans to
change its operations by buying distribution
companies in large metropolitan areas. New
Yorker 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, New
Yorker recently acquired the rights to purchase
the assets of New Yorker Ice Cream Corp. and
Jerry's Ice Cream Co., Inc. New Yorker Ice
Cream and Jerry's Ice Cream distribute and
market ice cream and frozen novelties including
Haagen-Dazs, Good Humor, and Edy's. These
companies had combined 1998 revenues of
approximately $6,500,000 (See Pro Forma
Financial Statements). New Yorker intends to
use part of the offering proceeds to buy these
assets.

3
<PAGE> 5

THE OFFERING

Common Stock Offered by New
Yorker...................... 368,000 shares

Common Stock Offered by the
Selling Stockholders.......... 312,000 shares

Price Per Share of Common
Stock......................... $6.25

Shares Outstanding Prior to
Offering...................... 1,030,582 shares

Shares to be Outstanding after
the Offering.................. 1,995,782 shares. This includes all
transactions after December 31, 1998 as if they
occurred on that date. This does not include
334,000 shares of common stock issuable upon
the exercise of outstanding stock options at an
average exercise price of approximately $8.26
per share and 280,000 shares issuable upon the
exercise of warrants at an exercise price of
$25.00 per share. It also assumes the
Underwriter does not exercise its
over-allotment option, which is described in
"Underwriting."

Over-allotment................ Up to 55,200 shares; if the full over-allotment
option is exercised, the total public offering
price will be $4,595,000, the total
underwriting discount will be $463,176, the
total proceeds to New Yorker will be $2,378,384
and the total price to the selling stockholders
will be $1,753,440.

Use of Proceeds............... New Yorker 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."

4
<PAGE> 6

SUMMARY FINANCIAL INFORMATION

The following financial information has been derived from New Yorker
consolidated financial statements included elsewhere in this prospectus. This
data should be read in conjunction with those consolidated financial statements
and the related notes. This prospectus gives retroactive effect to a .20-for-one
reverse stock split approved by New Yorker's stockholders and which takes effect
on the effectiveness of this offering. It is qualified in its entirety by New
Yorker's financial statements, related notes and other financial information
included elsewhere in this prospectus. The summary financial information: (a)
does not include 614,000 shares of Common Stock reserved for issuance upon the
exercise of outstanding stock options and warrants at a weighted average
exercise price of $15.89 per share; (b) reflects the repayment of certain debt
with a portion of the offering proceeds; and (c) reflects the sale of 368,000
shares of common stock by New Yorker at an assumed offering price of $6.25 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 and 597,200 shares of
common stock issued in connection with these acquisitions. See "Financial
Statements".

STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>
THREE MONTHS ENDED FISCAL YEAR ENDED
MARCH 31, DECEMBER 31,
----------------------- --------------------------
1999 1998 1998 1997
---------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales............................... $ 0 $ 49,010 $ 103,410 $ 384,348
Net loss................................ (404,200) (367,832) (1,113,155) (4,502,645)
Loss per Common Share................... $ (.40) $ (.55) $ (1.55) $ (8.46)
Weighted Average Common Shares
Outstanding........................... 1,030,582 656,086 725,427 532,403
</TABLE>

BALANCE SHEET DATA:

<TABLE>
<CAPTION>
AS OF MARCH 31, 1999
--------------------------
PRO FORMA
ACTUAL AS ADJUSTED
----------- -----------
<S> <C> <C>
Total assets................................................ $ 383,205 $3,661,605
Current liabilities......................................... 2,279,219 2,021,369
Long-term liabilities net of current portion................ -- 371,250
Stockholders' equity (deficit).............................. (1,896,014) 1,268,986
</TABLE>

5
<PAGE> 7

RISK FACTORS

Investing in New Yorker 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:

New Yorker may continue to be unprofitable. New Yorker has had limited
revenue since its incorporation in May 1994. For the three months ended March
31, 1999 and the years ended December 31, 1998 and 1997, New Yorker had net
losses of $404,200, $1,113,155 and $4,502,645, respectively. New Yorker had no
revenues for the three months ended March 31, 1999. New Yorker recognized
$103,410 and $384,348 in revenue for the years ended December 31, 1998 and 1997,
respectively. As of March 31, 1999, New Yorker had total assets of $383,205, a
working capital deficit of $2,145,258 and stockholders' deficit of $1,896,014.
New Yorker continues to experience losses and depends upon the acquisitions of
New Yorker Ice Cream and Jerry's Ice Cream to continue its business. Even after
these acquisitions, there is no guarantee that New Yorker will become
profitable.

New Yorker will cease doing business without the proceeds of this
offering. As indicated in New Yorker's 1998 Annual Report on Form 10-KSB, its
financial statements assume that it will continue as a going concern. However,
New Yorker has had losses since it started operations and requires the proceeds
of this offering to continue in operations. These matters raise substantial
doubt about New Yorker'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.

New Yorker's assets could be seized if certain debt is not paid. New
Yorker presently owes a former manufacturer approximately $350,000 but has
negotiated a settlement of $150,000. Pursuant to agreements, as amended, the
debt to this manufacturer is secured by all of New Yorker's assets. If New
Yorker doesn't pay, this manufacturer could foreclose on all of New Yorker's
assets which would materially adversely affect New Yorker's business plans and
financial condition.

New Yorker relies on one supplier for 30% of its business. For the years
ended December 31, 1998 and 1997, approximately 30% of the combined revenues of
New Yorker Ice Cream and Jerry's Ice Cream 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.

Approximately 25% of the proceeds of this offering are not specifically
allocated. New Yorker expects to use approximately $985,000 of the net proceeds
from this offering to purchase all of the assets of New Yorker Ice Cream and
Jerry's Ice Cream and $349,300 to repay certain indebtedness. New Yorker expects
to use the balance of the proceeds for general corporate purposes, including
working capital and capital expenditures in the operations of New Yorker Ice
Cream and Jerry's Ice Cream. Consequently, New Yorker'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 New Yorker's operations.

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

The potential acquisition of New Yorker is more difficult as a result of
charter provisions. Certain provisions of Delaware law and New Yorker's
certificate of incorporation and by-laws could make more difficult a merger,
tender offer or proxy contest involving New Yorker, even if those events could
benefit New Yorker stockholders. These provisions could limit the price that
certain investors might be willing to pay in the future for shares of New Yorker
common stock or preferred stock.

Potential changes in control of New Yorker are limited by certain charter
provisions. New Yorker's certificate of incorporation permits the Board of
Directors to issue up to 500,000 shares of preferred stock. The

6
<PAGE> 8

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 New Yorker.

New Yorker's charter and its option plans and warrants permit additional
shares to be issued without stockholder approval. After this offering, New
Yorker will have approximately 17,207,418 shares of common stock authorized but
unissued and not reserved for specific purposes, an additional 334,000 shares
and 280,000 shares of common stock unissued but reserved for issuance under New
Yorker option plans and warrants, respectively. All of such shares may be issued
without any action or approval by New Yorker stockholders. Any issuance of these
additional shares of common stock would further dilute the percentage ownership
of New Yorker held by the investors in this offering.

New Yorker's stock could continue to be "penny stock" which would make it
more difficult to trade. 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. New Yorker 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.

Unfavorable resolution of SEC investigation against Fairchild Financial
Group, Inc. could adversely affect price of New Yorker's common stock. New
Yorker has been advised by Fairchild Financial Group, Inc. ("Fairchild") that
the SEC has issued a formal order directing a private investigation by the staff
of the SEC involving Fairchild and certain other persons. An unfavorable
resolution of the SEC investigation concerning the sales and trading activities
and practices of such underwriter could have the effect of limiting or
curtailing the underwriter's ability to continue making a market in New Yorker's
securities in which case the market for the liquidity of New Yorker's securities
may be adversely affected.

Unfavorable resolution of Florida complaint against Fairchild and certain
of its employees could adversely affect the price of New Yorker's common stock.
New Yorker has been advised by Fairchild that the State of Florida has issued a
complaint against Fairchild and certain of its employees. An unfavorable
resolution of the Florida complaint concerning the sales and business practices
of such underwriter could have the effect of limiting or curtailing the
underwriter's ability to continue making a market in New Yorker's securities in
which case the market for the liquidity of New Yorker's securities may be
adversely affected.

7
<PAGE> 9

USE OF PROCEEDS

The net proceeds to New Yorker from the sale of the common stock offered by
the prospectus (after deducting underwriting discounts and estimated offering
expenses) are estimated to be $1,780,000 ($2,080,150 if the Underwriter's
over-allotment is exercised in full). New Yorker will not receive any of the
proceeds of the sale of common stock by the selling stockholders. New Yorker
intends to use its proceeds substantially as follows:

<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
APPLICATION OF PROCEEDS AMOUNT PERCENTAGE
- ----------------------- ----------- -----------
<S> <C> <C>
Repayment of Indebtedness................................... $ 349,288 19.7%
Acquisition of the assets of New Yorker Ice Cream........... 630,000 35.4
Acquisition of the assets of Jerry's Ice Cream.............. 255,000 14.3
Acquisition of inventory from New Yorker Ice Cream and
Jerry's Ice Cream......................................... 100,000 5.6
Working capital............................................. 445,712 25.0
---------- -----
$1,780,000 100%
========== =====
</TABLE>

New Yorker intends to use approximately $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,
$150,000 to settle its outstanding indebtedness to Penn Traffic, $97,688 to
satisfy an outstanding judgment of J. W. Messner, $630,000 to purchase all of
the assets of New Yorker Ice Cream and $255,000 to purchase all of the assets of
Jerry's Ice Cream. New Yorker expects to use the balance of the proceeds of the
offering for general corporate purposes, including working capital and capital
expenditures. New Yorker presently anticipates this balance 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 -- Acquisition of
Distributors."

Pending use of the proceeds from this offering as set forth above, New
Yorker 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.

8
<PAGE> 10

DILUTION

As of March 31, 1999, the net negative tangible book value, of New Yorker
was ($1,896,197) or ($1.84) 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 1,030,582, the number of shares of
common stock outstanding on December 31, 1998. See "Capitalization". Thus, as of
December 31, 1998, net tangible book value per share of common stock owned by
New Yorker current stockholders would have increased by $1,780,000 or $1.72 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 $5.96 per share from the offering price. The
following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Public Offering price per share of Common Stock Offered
hereby.................................................... $6.25
Net tangible book value per share before offering........... (1.84)
Increase per share attributable to new investors (1)........ 1.72
Increase per share attributable to acquisition (2).......... .41
Adjusted net tangible book value per share after this
offering.................................................. $ .29
-----
Dilution per share to new investors......................... $5.96
=====
</TABLE>

The following table summarizes the relative investments of investors
pursuant to this offering and the current stockholders of New Yorker:

<TABLE>
<CAPTION>
COMMON SHARES
ACQUIRED TOTAL CONSIDERATION AVERAGE
--------------------- ---------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Current Stockholders............................ 1,030,582 51.6% $12,209,029 66.9% $11.85
Purchasers of Common Shares in the Offering..... 368,000(1) 18.4% $ 2,300,000 12.6% $ 6.25
Shares issued in connection with acquisitions... 597,200(2) 29.9% $ 3,732,500 20.5% $ 6.25
---------- ----- ----------- ----- ------
Total.................................. 1,995,782 100.0% $18,241,529 100.0%
---------- ----- ----------- -----
</TABLE>

- ---------------
(1) Assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting".

(2) Gives effect to the issuance simultaneously with the closing of this
offering of 104,000 shares as partial payment for the acquisition of New
Yorker, 27,200 shares as partial payment for the acquisition of Jerry's,
300,000 shares to an unrelated third party as a finder's fee in connection
with the acquisition of New Yorker and Jerry's and 166,000 shares for
services rendered.

If the over-allotment option is exercised in full, the new common stock
investors will have paid $2,645,000 and will hold 423,200 shares of common
stock, representing 14.2% of the total consideration and 20.6% of the total
number of outstanding shares of common stock. See "Description of Securities"
and "Underwriting".

9
<PAGE> 11

CAPITALIZATION

The following table sets forth the cash and capitalization of New Yorker as
of March 31, 1999 and pro forma capitalization as adjusted which gives effect to
the consummation of this offering as if it occurred on March 31, 1999 after
giving retroactive effect to the .20 to 1 proposed stock split. This table
should be read in conjunction with the financial statements and related notes
included elsewhere in this prospectus. The table reflects the sale of 368,000
shares of common stock by New Yorker at an assumed offering price of $6.25 per
share and the application of the net proceeds as described in "Use of Proceeds",
including the acquisition of New Yorker Ice Cream and Jerry's Ice Cream and the
issuance of 597,200 shares of common stock in connection with these
acquisitions.

<TABLE>
<CAPTION>
MARCH 31, 1999
----------------------------
PRO FORMA
ACTUAL AS ADJUSTED
------------ ------------
<S> <C> <C>
Cash and cash equivalents................................... $ 367 $ 693,767
------------ ------------
Accounts payable and accrued expenses....................... 850,282 490,281
Notes payable to related parties............................ 299,497 122,897
Current portion long-term debt.............................. 1,129,440 1,408,190
------------ ------------
Total short-term liabilities................................ 2,279,219 2,021,369
------------ ------------
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, 1,030,582 shares (actual) and 1,995,782
(pro forma as adjusted)................................ 1,031 1,996
Additional paid-in capital................................ 11,510,758 17,022,293
Deferred financing costs.................................. (748,800) (748,800)
Accumulated deficit......................................... (12,659,003) (15,006,503)
------------ ------------
Total stockholders' equity (deficit)........................ (1,896,014) 1,268,986
------------ ------------
Total capitalization.............................. $ 383,205 $ 3,661,605
------------ ------------
</TABLE>

10
<PAGE> 12

PRICE RANGE OF COMMON STOCK

New Yorker'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. The prices do
not give effect to a .20-to-one reverse stock split which shall commence trading
at the adjusted price on the effectiveness of this offering.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1999
Second Quarter (through May 13, 1999)....................... $ 1 7/8 $ 1/2
First Quarter............................................... 1 1/8 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 May 13, 1999, there were approximately 195 holders of record of the
common stock. On May 13, 1999, the closing sales price of New Yorker common
stock was $1.50 per share.

DIVIDEND POLICY

New Yorker has never declared or paid any cash dividends. New Yorker
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 New Yorker business. Any cash dividends in the
future to common stockholders will be payable when, as and if declared by the
Board of Directors of New Yorker, based upon the Board's assessment of:

- the financial condition of New Yorker;

- 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.

11
<PAGE> 13

SELECTED FINANCIAL DATA

The following financial data has been derived from New Yorker consolidated
financial statements included elsewhere in this prospectus. This data should be
read in conjunction with those consolidated financial statements and the related
notes. This prospectus gives retroactive effect to a .20-for-one reverse stock
split approved by New Yorker's stockholders and which takes effect on the
effectiveness of this offering. It is qualified in its entirety by New Yorker's
financial statements, related notes and other financial information included
elsewhere in this prospectus. The summary financial information: (a) does not
include 614,000 shares of Common Stock reserved for issuance upon the exercise
of outstanding stock options and warrants at a weighted average exercise price
of $15.89 per share; (b) reflects the repayment of certain debt with a portion
of the offering proceeds; and (c) reflects the sale of 368,000 shares of common
stock by New Yorker at an assumed offering price of $6.25 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 and 597,200 shares of common stock
issued in connection with these acquisitions. See "Financial Statements".

STATEMENT OF OPERATIONS DATA:

BALANCE SHEET DATA:

12
<PAGE> 14

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 New Yorker included elsewhere in this prospectus.

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 New Yorker's
management, as well as assumptions made by and information currently available
to New Yorker's management. Such statements reflect the current views of New
Yorker with respect to future events and are subject to risks, uncertainties and
assumptions relating to the operations, results of operations, growth strategy
and liquidity of New Yorker. 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 New Yorker's future filings with the Commission. New
Yorker 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 New Yorker or persons
acting on its behalf are expressly qualified by this paragraph.

RESULTS OF OPERATIONS

Three Months Ended March 31, 1999 Compared to March 31, 1998

The Company had no revenues during the quarter ended March 31, 1999.
Inventory of Veryfine frozen juice bars was being held awaiting the warmer
weather and the completion of the pending acquisitions.

General and administrative expenses (G&A) for the quarters ended March 31,
1999 and March 31, 1998 were approximately $92,100 and $242,100 respectively.
Major components of general and administrative expenses for the quarter ended
March 31, 1999 were professional fees of $73,200 and insurance $9,700. For the
quarter ended March 31, 1998, the major components were salaries of $71,000,
professional fees of $86,600, insurance of $11,000 and office expenses,
including rent, of $25,300.

Interest expense, net of interest income for the quarters ended March 31,
1999 and March 31, 1998 were $311,200 and $7,100 respectively. The increase in
the amount charged to profit and loss was due to the shares issued in connection
with the sale of private placement units and recorded as interest expense.

Net loss for the quarters ended March 31, 1999 and 1998 amounted to
$404,200 and $367,832 respectively. The primary reason for the net losses in
1999 and 1998 was due to the lack of volume in 1998 and no volume in 1999.

Years Ended December 31, 1998 and December 31, 1997

New Yorker's sales for the years ended December 31, 1998 and 1997 were
$103,410 and $384,348 respectively, a decrease of 73%. This decrease resulted
from the limited operations of New Yorker and limited capital. In May 1998 New
Yorker introduced Veryfine frozen juice bars and sales did not meet expectation.
The limited available capital created difficulty in getting the product
introduced into the marketplace.

New Yorker experienced a gross loss in the years ended December 31, 1998
and 1997. For the year ended December 31, 1998 the loss increased to $333,047
from the 1997 level of $66,850 primarily due to raw ingredients and excess
packaging that had to be discarded. 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 and the very limited volume.

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<PAGE> 15

General and administrative expenses (G&A) for the years ended December 31,
1998 and December 31, 1997 were approximately $760,000 and $2,177,000
respectively. The major components of these expenses for the year ended December
31, 1998 were payroll and related taxes of $139,000, professional fees of
$183,000, director's expense of $144,000 (of which $128,000 was paid in Common
Stock) and legal fees of $84,000. The major components of these expenses for the
year ended December 31, 1997 were payroll and related taxes of $399,000, legal
and accounting fees of $597,000 and consulting fees of $948,000 (of which
$855,000 was paid in Common Stock). The shares issued during the year ended
December 31, 1997, though restricted securities, were valued by New Yorker 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, 1998 and
December 31, 1997 were approximately $32,000 and $724,000 and respectively. The
sharp decline for the 1998 period was primarily due to New Yorker's limited
operations and low volume.

Interest expense, net of interest income for the years ended December 31,
1998 and December 31, 1997 were $167,000 and $1,506,000 respectively. The
primary expense in 1998 was associated with the issuance of private placement
notes. The notes were part of a sale of units with each unit consisting of a
$50,000 12% note and 200,000 shares of Common Stock. In the year ended December
31, 1997, $169,000 of the net interest cost 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 New Yorker's Initial Public Offering. The remainder of interest
charges for the years December 31, 1997 resulted from non-cash imputed interest
charges of $1,327,000 primarily in connection with the issuance of Common Stock
to New Yorker'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 New Yorker based upon a 25% discount from the Initial Public Offering
price.

Net loss for the years December 31, 1998 and 1997 amounted to $1,113,000
and $4,503,000 respectively. The primary reason for the net loss in 1998 was the
low volume created by the limited operations. The primary reason for the net
loss in 1997 was due to the lack of volume from the absence of distributors, the
lack of cash flow through the date of the initial public offering and the high
interest cost associated with the high debt levels prior to the offering.

Seasonality

New Yorker 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

New Yorker's cash requirements have been significantly exceeding its
resources due to the limited operations of New Yorker. At March 31, 1999 New
Yorker had a working capital deficit of $2,145,258. While New Yorker 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, New Yorker plans to close the two acquisitions
currently under contract with New Yorker and may seek additional acquisitions to
continue the shift of New Yorker's business to more of a distributorship rather
than a manufacturer. These acquisitions and

14
<PAGE> 16

additional financing are anticipated to generate sufficient cash flow to meet
New Yorker needs for the balance of the year. The failure of New Yorker to
complete this secondary offering would require New Yorker to seek other
financing in order to continue as a going concern and New Yorker has no
alternative plans for financing. See "Description of Securities -- Private
Placement," "Use of Proceeds" and "Business -- Proposed Acquisition 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.

New Yorker is not expected to be affected by Year 2000 as it does not rely
on date-sensitive software or affected hardware. New Yorker's current accounting
and other systems were purchased "off-the-shelf". New Yorker 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.

New Yorker has not yet contacted other companies on whose services New
Yorker depends to determine whether such companies' systems are Year 2000
compliant. If the systems of New Yorker or other companies on whose services New
Yorker depends, including New Yorker's customers, are not Year 2000 compliant,
there could be a material adverse effect on New Yorker'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, New Yorker 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 Original
Cheesecake Ice Cream have been nominal. In June 1998, New Yorker curtailed the
sale of its ice cream and began distributing Veryfine Frozen Juice Bars under an
agreement with Veryfine.

Initially, New Yorker manufactured, marketed and distributed its own line
of ice cream products. New Yorker 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. New Yorker plans to change its operations
by buying distribution companies in large metropolitan areas. New Yorker 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, New Yorker recently acquired the rights to purchase the assets of New
Yorker Ice Cream Corp. and Jerry's Ice Cream Co., Inc. New Yorker Ice Cream and
Jerry's Ice Cream distribute and market of ice cream and frozen novelties
including Haagen-Dazs, Good Humor, and Edy's. These companies had combined 1998
revenues of approximately $6,500,000 (See Pro Forma Financial Statements). New
Yorker intends to use part of the offering proceeds to buy these assets.

New Yorker was incorporated in New York in March 1993, reincorporated in
Delaware in May 1994 and changed its name from Mike's Original, Inc. to New
Yorker Marketing Corp. in March 1999. It maintains its principal offices at 366
N. Broadway, Jericho, New York 11753 and its telephone number is (516) 942-8068.

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<PAGE> 17

AGREEMENT WITH VERYFINE PRODUCTS

New Yorker entered into a license agreement with Veryfine Products, Inc.
effective April 1, 1998 for the sale of Veryfine Frozen Juice Bars. The
agreement grants New Yorker'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.
New Yorker has the 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 New Yorker has been selling these products since June 1998. The license
agreement also prohibits New Yorker from manufacturing or selling any other
branded frozen juice bar.

PROPOSED ACQUISITION OF DISTRIBUTORS

New Yorker will be using a portion of the proceeds of this offering to
purchase the assets of New Yorker Ice Cream and Jerry's Ice Cream, two full
service distributors and marketers of ice cream and frozen novelties. In July
1998, Multi Venture Partners Ltd. assigned to New Yorker 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

- $885,000 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.

- $95,000 is payable on demand at 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 New Yorker 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 Ice Cream and Mr.
Gerald Schneider, the principal of Jerry's Ice Cream, will become directors and
officers of New Yorker and will be employed by New Yorker pursuant to written
employment agreements. The agreements do not provide for key man life insurance
for either Mr. Ketsoglou or Mr. Schneider. See "Management -- Proposed
Employment Agreements."

Some of the products currently being distributed by New Yorker Ice Cream
and Jerry's Ice Cream are Haagen Dazs, Good Humor, Baskin Robbins, Snickers,
Edy's, Veryfine Juice Bars and American Classics. New Yorker Ice Cream and
Jerry's Ice Cream 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, 1998 were approximately $6,500,000.

PRINCIPAL SUPPLIER

For the year ended December 31, 1997 and 1998 approximately 30% of the
combined revenues of New Yorker Ice Cream and Jerry's Ice Cream 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.

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<PAGE> 18

MANUFACTURING

New Yorker'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
New Yorker east of the Mississippi River for a period of two years.

The products distributed by New Yorker Ice Cream and Jerry's Ice Cream 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

New Yorker, through its officers, consultants and other representatives,
currently markets the Mike's Original products on a very limited basis through
supermarkets, grocery stores, convenience stores and food service outlets. While
New Yorker 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 New
Yorker's products even after the payment of these fees and, in fact,
substantially all of the supermarkets have discontinued selling New Yorker's
products.

New Yorker Ice Cream and Jerry's Ice Cream employees primarily distribute
their products to grocery stores, bodegas and restaurants in their own trucks.
New Yorker Ice Cream and Jerry's Ice Cream have placed their own freezers at
these locations at no expense to the store owner. New Yorker Ice Cream and
Jerry's Ice Cream 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 Ice Cream and Jerry's Ice Cream
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

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

New Yorker 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 New Yorker, as well as others in the industry, to develop
and market new products. However, New Yorker does not presently believe that
existing applicable legislative and administrative rules and regulations will
have a significant impact on its operations.

TRADEMARKS AND PATENTS

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

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

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<PAGE> 19

INSURANCE

New Yorker's business exposes it to potential liability which is inherent
in the marketing and distribution of food products. New Yorker currently
maintains $2,000,000 of product liability insurance. New Yorker 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 New Yorker
which is not covered by insurance could have a material adverse effect on New
Yorker's business and prospects.

EMPLOYEES

New Yorker currently employs two part-time persons, who serve in
administrative capacities. New Yorker Ice Cream and Jerry's Ice Cream 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. New Yorker, New Yorker Ice Cream and Jerry's Ice Cream consider their
relationships with their employees to be satisfactory.

PROPERTIES

On October 1, 1998, New Yorker signed a month-to-month lease for office
space in Jericho, New York at a monthly rental of $650. This office will serve
as the corporate office of New Yorker until such time as New Yorker and the
planned acquisitions can be relocated to an appropriate facility.

SEASONALITY

LEGAL MATTERS

J.W. Messner, Inc. v. New Yorker Marketing Corp. 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 New Yorker agreed to pay J.W.
Messner, New Yorker's former advertising agent, the sum of $125,936, in three
installments as follows: $40,000 on June 30, 1997; $42,968, plus accrued
interest, on or before June 30, 1998; and $42,968, plus accrued interest, on or
before December 31, 1998. Only the $40,000 due on June 30, 1997 has been paid.
On January 30, 1999, a default judgment in the amount of $97,688 was entered
against New Yorker.

Universal Folding Box Co., Inc. v. New Yorker Marketing Corp., et al. On
April 2, 1998, New Yorker 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 New Yorker's alleged failure to pay for certain inventory
purchased. New Yorker has filed an answer in this action. In December, 1998, the
parties submitted the case to non-binding arbitration in which the arbitrator
recommended that New Yorker pay Universal Folding $30,000. New Yorker disputes
the non-binding arbitrator's recommendation and has filed a request for trial.

Lee's Marketing Services, Inc. v. New Yorker Marketing Corp. On December
16, 1998, Lee's Marketing commenced an action against New Yorker in the Circuit
Court, Jo Daviess County, Illinois, seeking $128,354 arising from coupon
processing services allegedly performed for New Yorker in 1996. New Yorker has
received correspondence from plaintiff's counsel indicating that after further
review, the alleged liability to Lee's Marketing Services, Inc. is between
$5,000 and $6,000 and that he believes payment of such an amount will resolve
this matter. New Yorker has filed an answer denying the allegations in the
complaint and intends to defend this action.

Except as set forth above, New Yorker is not involved in any material
pending legal proceedings.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The By-Laws of New Yorker 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 New Yorker are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH NEW YORKER
- ---- --- ---------------------------
<S> <C> <C>
Arthur G. Rosenberg............................ 61 President and Director
Marc P. Palker................................. 47 Secretary
Frederic D. Heller............................. 60 Director
Myron Levy..................................... 56 Director
</TABLE>

ARTHUR G. ROSENBERG, ESQ. has been a director of New Yorker 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 New Yorker since
December, 1997 and Secretary of New Yorker 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 New Yorker
from January 1997 until November 14, 1997 when he resigned as an officer of New
Yorker. 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 New Yorker, from November 1994 through January 1997, he practiced as an
independent financial consultant including rendering such services to New Yorker
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 New Yorker 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.

New Yorker'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 New Yorker's 1998 Annual Meeting of
Stockholders. Myron Levy is a member of Class II which serves until New Yorker's
1999 Annual Meeting of Stockholders. Frederic D. Heller is a member of Class III
which serves until New Yorker's 2000 Annual Meeting of Stockholders. Directors
who are not employees of New Yorker receive no cash compensation for their
services to New Yorker 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 New Yorker'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 1998.

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<PAGE> 21

EXECUTIVE COMPENSATION

The following table sets forth the cash and other compensation paid or
accrued by New Yorker during the year ended December 31, 1998 and 1997 to New
Yorker's Chief Executive Officer. Michael Rosen ceased to be New Yorker'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
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) OPTIONS COMPENSATION
- --------------------------- ---- -------- ----- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Michael Rosen.............. 1998 $ 36,458 -- -- -- --
Chairman of the Board, 1997 98,083 -- -- 10,000(3) --
President, Chief
Executive 1996 112,250(1) -- -- 40,000(3) --
Officer
</TABLE>

- ---------------
(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 New Yorker'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 New Yorker's 1995 Long Term Incentive Plan.

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, 1998 and 1997.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE
- ---- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Michael Rosen..................... 10,000 42.9% $7.50 May 1, 2007(1)
</TABLE>

- ---------------
(1) Represents ten year options granted in May 1997 pursuant to New Yorker's
1995 Long Term Incentive Plan. Options became fully vested on November 1,
1997.

CONSULTING AGREEMENTS

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

New Yorker has entered into a consulting agreement with Alma Management
Corp. ("Alma"), as of November 1, 1996. Under this agreement, which ended
October 31, 1998, Alma agreed to cause its two principals, to provide sales and
marketing advisory and consulting services to New Yorker. Alma received an
annual consulting fee of $50,000 payable at New Yorker's option in either cash
or common stock. In addition, Alma has received 6,000 shares of common stock and
options to purchase 26,667 shares of common stock at an exercise price of $7.50
per share.

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<PAGE> 22

PROPOSED EMPLOYMENT AGREEMENTS

Ted Ketsoglou has entered into a five year employment agreement, commencing
on the closing of the New Yorker Ice Cream acquisition, wherein he has agreed to
serve as President of New Yorker Ice Cream. The term of the agreement may be
extended for an additional five year period at the sole option of New Yorker. As
compensation for his services, Mr. Ketsoglou is to receive $126,000 annually and
an annual bonus equal to 2% of New Yorker 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, New Yorker will issue to
Mr. Ketsoglou 40,000 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 New Yorker will grant certain options on closing future
acquisitions and for certain payments following death or disability. During the
term of his employment, New Yorker has also agreed to use reasonable efforts to
cause Mr. Ketsoglou's appointment or election to New Yorker's Board of
Directors. For more than the past five years, Mr. Ketsoglou has been President
of New Yorker Ice Cream.

Gerald Schneider has entered into a five year employment agreement,
commencing on the closing of the Jerry's Ice Cream acquisition, wherein he has
agreed to serve as Vice President of Sales of New Yorker. The term of the
agreement may be extended for an additional five year period at the sole option
of New Yorker. As compensation for his services, Mr. Schneider is to receive
$115,500 annually and an annual bonus equal to 2% of New Yorker 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, New
Yorker will issue to Mr. Schneider 40,000 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 New Yorker will grant certain options on closing
future acquisitions and for certain payments following death or disability.
During the term of his employment, New Yorker has also agreed to use reasonable
efforts to cause Mr. Schneider's appointment or election to New Yorker's Board
of Directors. For more than the past five years, Mr. Schneider has been
President of Jerry's Ice Cream.

STOCK PLANS

1995 Long Term Incentive Plan

In August 1995, New Yorker adopted a 1995 Long Term Incentive Plan (the
"1995 Incentive Plan") in order to motivate qualified employees of New Yorker,
to assist New Yorker in attracting employees and to align the interests of such
persons with those of New Yorker 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 New Yorker and its affiliates.

The 1995 Incentive Plan, which is administered by the Board of Directors,
authorizes the issuance of a maximum of 86,667 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, New Yorker has granted an aggregate of 61,333 options to purchase common
stock under the 1995 Incentive Plan, of which 50,000 options have been granted
to Michael Rosen, New Yorker's former Chairman of the Board and Chief Executive
Officer. 6,667 of these options are exercisable for ten years from the date of
grant at a price of $15.00 per share and 43,333 of these options are exercisable
for ten years from the date of grant at a price of $7.50 per share. Another
11,333 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 $7.50
per share. As of March 31, 1999, none of these options had been exercised.

21
<PAGE> 23

1996 Non-Qualified Stock Option Plan

In October 1996, New Yorker's Board of Directors approved a 1996
Non-Qualified Stock Option Plan (the "Non-Qualified Plan") which covers 100,000
shares of New Yorker'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, New Yorker had granted 95,666 options
to purchase shares of common stock under the Non-Qualified Plan at an exercise
price of $7.50 per share. Arthur G. Rosenberg, Martin Pilossoph and Myron Levy
have been granted options to purchase 4,667 shares of common stock each at the
exercise price of $7.50 per share pursuant to the Non-Qualified Plan. Frederic
D. Heller has been granted options to purchase 11,667 shares of common stock at
the exercise price of $7.50 per share pursuant to the Non-Qualified Plan. Alma
has been granted options to purchase 26,667 shares of common stock at an
exercise price of $7.50 per share pursuant to the Non-Qualified Plan. Steven A.
Cantor has been granted options to purchase 15,333 shares of common stock at an
exercise price of $7.50 per share. As of March 31, 1999, none of these options
had been exercised.

PERSONAL LIABILITY AND INDEMNIFICATION OF DIRECTORS

New Yorker'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. New Yorker is
unaware of any pending or threatened litigation against New Yorker 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 New Yorker'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, New Yorker does not currently maintain a
liability insurance policy for the benefit of its directors, although New Yorker
may attempt to acquire such insurance in the future. New Yorker 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. New Yorker 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 New Yorker. Although no directors have resigned or have threatened
to resign as a result of New Yorker's failure to provide insurance or other
indemnity protection from liability, it is uncertain whether New Yorker'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 New Yorker 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 New Yorker 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 New Yorker.

The provisions regarding indemnification provide, in essence, that New
Yorker 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 New Yorker, including actions brought by or
on behalf of New Yorker (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

22
<PAGE> 24

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, New Yorker
does not currently provide such insurance to its directors, and there is no
guarantee that New Yorker will provide such insurance to its directors in the
near future, although New Yorker 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 New Yorker 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 New Yorker 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 New Yorker does not
presently have directors liability insurance and because there is no assurance
that New Yorker 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, New Yorker may be forced to bear a portion or all of the
cost of the director's claims for indemnification under such provisions. If New
Yorker is forced to bear the costs for indemnification, the value of New Yorker
stock may be adversely affected.

New Yorker 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 New Yorker
pursuant to the foregoing provisions, or otherwise, New Yorker 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.

23
<PAGE> 25

PRINCIPAL STOCKHOLDERS

The following table sets forth the beneficial ownership of shares of voting
stock of New Yorker, as of March 31, 1999, of (i) each person known by New
Yorker to beneficially own 5% or more of the shares of outstanding common stock,
based solely on filings with the SEC, (ii) each of New Yorker's executive
officers and directors and (iii) all of New Yorker'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.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF SHARES PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OWNERSHIP
- ------------------------------------ ------------------ ----------
<S> <C> <C>
Steven A. Cantor(1)......................................... 56,666(2) 5.4%
Annette Cantor(1)........................................... 59,730 5.8%
Arthur G. Rosenberg(1)...................................... 6,666(3) *
Frederic D. Heller(1)....................................... 32,000(4) 3.1%
Myron Levy(1)............................................... 25,166(3) 2.4%
All officers and directors as a group (3 persons)........... 63,833(5) 6.1%
</TABLE>

- ---------------
* 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 11,333 shares of common stock granted under the
1995 Long-Term Incentive Plan and options to purchase 15,333 shares of
common stock granted under the 1996 Non-Qualified Plan.

(3) Includes options to purchase 4,666 shares of common stock granted under the
1996 Non-Qualified Plan.

(4) Includes options to purchase 11,666 shares of common stock granted under the
1996 Non-Qualified Plan.

(5) Includes 20,999 shares issuable upon the exercise of options granted
pursuant to New Yorker stock option plans.

24
<PAGE> 26

CERTAIN TRANSACTIONS

In October 1998, New Yorker authorized the issuance of 95,000 shares of
common stock to Arthur G. Rosenberg, which shares are issuable upon the closing
of New Yorker Ice Cream and Jerry's Ice Cream, in consideration for prior
management services, including negotiating the acquisition agreements with New
Yorker Ice Cream and Jerry's Ice Cream, overseeing the operations of New Yorker
and providing financial advice to New Yorker. These services were performed in
1998. 17,000 shares were issued at such time to each of Myron Levy and Frederic
D. Heller as directors' compensation.

In August 1998, New Yorker issued 19,500 shares of common stock to Marc P.
Palker in consideration for financial consulting services rendered for New
Yorker through July 1998.

In May 1998, New Yorker entered into a settlement and general release 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 New Yorker, (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) New Yorker agreed to repay certain outstanding
indebtedness aggregating $305,000 to Michael Rosen and Elizabeth Pilossoph and
(iv) each of New Yorker on the one hand, and the Rosens and Pilossophs on the
other hand, gave the other a general release.

In April 1997, New Yorker issued 30,000 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 New Yorker initial public offering in July, 1997.

In October 1996, New Yorker issued 16,667 shares of common stock to
Frederic D. Heller, New Yorker 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 New Yorker were
the proceeds of a sale by Mr. Rosen to investors of 183,333 pre-split 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 New Yorker successfully consummates
an initial public offering of securities of New Yorker, but only to the extent
that the over-allotment option is exercised in such offering and only from the
proceeds received by New Yorker 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 New Yorker successfully consummates an initial
public offering of securities of New Yorker, but only to the extent that the
over-allotment option was exercised in such offering and only from the proceeds
received by New Yorker from the exercise of the over-allotment option. This loan
was part of the May 1998 settlement agreement with Mr. Rosen.

In August, September and October 1996, New Yorker received three loans from
Steven A. Cantor aggregating $253,750. A portion of the funds that this
stockholder loaned New Yorker was a result of the stockholder selling shares of
his common stock to an investor. In August 1996, this stockholder sold 38,889
pre-split shares of his common stock at a price of $1.12 per share. In September
1996, this stockholder sold 23,333 pre-split 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
New Yorker successfully

25
<PAGE> 27

consummates an initial public offering of securities of New Yorker, 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 New Yorker and its officers,
directors or stockholders have been, and in the future will be, made on terms no
less favorable to New Yorker than those available from unaffiliated parties.

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 New Yorker securities (the "Selling Stockholders"). Except for 36,427 shares
owned by the Selling Stockholders, the Selling Stockholders, all of whom are
non-affiliates of New Yorker, have agreed that the remaining shares of common
stock owned by them which are registered for resale hereunder may be sold
commencing sixty (60) days from the date of this prospectus, provided that if
such shares are sold prior to one year from the date of this prospectus the
prior consent of Millennium Securities is required. New Yorker will not receive
any proceeds from such sales. Millennium Securities may release such restriction
at any time after sixty (60) days from the effective date 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
BENEFICIAL AFTER OFFERING
NUMBER OF SHARES OWNERSHIP (ASSUMING SALE OF ALL
STOCKHOLDER PRIOR TO OFFERING OFFERED OFFERED SHARES)
- ----------- ----------------- ---------- ---------------------
<S> <C> <C> <C>
Arthur & Janet Wolfman................... 40,000 40,000 --
Barney & Madeline Shapiro................ 20,000 20,000 --
David Lieberman.......................... 35,715 16,000 19,715
Vosavu Pty, Ltd.......................... 32,712 16,000 16,712
Nader D. Rashti.......................... 40,000 40,000 --
Sean Desmond............................. 20,000 20,000 --
Gary L. Spieler.......................... 40,000 40,000 --
Shawn Campbell........................... 80,000 80,000 --
Ted & Phyllis Cohen...................... 20,000 20,000 --
Barry Gerston............................ 20,000 20,000 --
</TABLE>

The shares registered by the Selling Stockholders may be sold from time to
time directly by the Selling Stockholders. Alternatively, the Selling
Stockholders may from time to time offer such securities through underwriters,
dealers or agents. The distribution of securities by the Selling Stockholders
may be effected in one or more transactions that may take place on the
over-the-counter market, including ordinary broker's transactions,
privately-negotiated transactions or through sales to one or more broker-dealers
for resale of such shares as principals, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at negotiated
prices. Usual and customary or specifically negotiated brokerage fees or
commissions may be paid by the Selling Stockholders in connection with such
sales of securities. The Selling Stockholders and intermediaries through whom
such securities are sold may be deemed "underwriters" within the meaning of the
Securities Act with respect to the securities offered, and any profits realized
or commissions received may be deemed underwriting compensation. New Yorker is
not aware of any present intentions of any Selling Stockholders to engage in any
transactions with either of the Underwriters of this offering.

26
<PAGE> 28

DESCRIPTION OF SECURITIES

CAPITAL STOCK

New Yorker 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 New Yorker
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. New Yorker 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

New Yorker 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 New Yorker through the acquisition of shares of common stock.

WARRANTS

Class A Warrants were issued in connection with New Yorker 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
$25.00 per share. A warrantholder may exercise warrants by surrendering the
warrant certificate to New Yorker, 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.

Warrantholders cannot exercise their warrants unless a current registration
statement is on file with the SEC and various state securities commissions. New
Yorker is required to file post-effective amendments to the registration
statement when events require such amendments. While New Yorker 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

27
<PAGE> 29

warrantholder lives. If New Yorker is unable to qualify the common stock
underlying such Warrants for sale in certain states, holders of New Yorker
Warrants in those states will have no choice but to either sell such Warrants or
allow them to expire.

New Yorker 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
New Yorker unless and until warrants are properly exercised and exchanged for
shares.

Redemption Rights. New Yorker 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 $50.00 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 New Yorker 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 New Yorker common stock. An
exercise of the warrants dilutes the then book value of the New Yorker common
stock held by the public investors and their percentage ownership. Until the
warrants expire, the terms upon which New Yorker may obtain additional capital
may be adversely affected. Warrantholders may be expected to exercise them at a
time when New Yorker 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, New Yorker 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 40,000 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 New
Yorker 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.

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

New Yorker has registered all of the 312,000 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 New Yorker 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. All holders of private
placement shares can sell them commencing sixty (60) days from the date of this
prospectus, provided that if such shares are sold prior to one year from the
date of this prospectus the prior consent of Millennium Securities is required.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Underwriting".

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<PAGE> 30

CERTAIN PROVISIONS OF NEW YORKER CERTIFICATE OF INCORPORATION

New Yorker'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 New Yorker 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 New Yorker.

New Yorker's certificate of incorporation also provides that the members of
the Board of Directors of New Yorker 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.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, New Yorker will have 1,995,782 shares of
common stock outstanding (2,050,982 shares if Millennium Securities'
over-allotment option is exercised in full). Of these shares, the 368,000 shares
sold in this offering (423,200 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 New Yorker (in general, a person who has a control
relationship with New Yorker) which will be subject to the limitations of Rule
144 adopted under the Securities Act. Another 312,000 shares registered under
the registration statement of which this prospectus forms a part may be sold
commencing sixty (60) days from the date of this prospectus, provided that any
sale prior to one year from the date of this prospectus requires the prior
consent of Millennium Securities. The sale of any substantial number of such
shares in the public market could adversely affect prevailing market prices
following the offering.

In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
New Yorker (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 New Yorker 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 New Yorker. A person who has
not been an affiliate of New Yorker for at least the three months immediately
preceding the sale and who has beneficially owned shares of common stock for at
least

29
<PAGE> 31

two years is entitled to sell such shares under Rule 144 without regard to any
of the limitations described above.

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.

TRANSFER AGENT

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

30
<PAGE> 32

UNDERWRITING

Subject to the terms and conditions contained in the underwriting agreement
between New Yorker 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), New Yorker 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 368,000 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 Financial Group, Inc. (lead managing
underwriter).............................................. 120,000
Millennium Securities Corp.................................. 248,000

--------
Total............................................. 368,000
========
</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 $5.63 per share to
certain securities dealers, of which a concession of not in excess of $5.72 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. The Underwriters also will be receiving a 3%
unallocated expense allowance.

This is a firm commitment offering for the 368,000 shares of common stock
being offered by New Yorker. 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.

New Yorker has granted options to the Underwriters, exercisable within 30
days after the date of this prospectus, to purchase from New Yorker up to an
aggregate of 55,200 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. New Yorker 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.

New Yorker'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, New Yorker 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
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).

31
<PAGE> 33

New Yorker 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, New Yorker 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, New Yorker paid
Millennium Securities Corp., as placement agent, a $35,000 commission on the
sales of the private placement units. See "Description of Securities -- Private
Placement."

SEC INVESTIGATION INVOLVING FAIRCHILD

New Yorker has been advised by Fairchild that the Securities and Exchange
Commission has issued a formal order directing a private investigation by the
staff of the SEC. Such order empowers the SEC staff to investigate whether, from
June 1995 to the present, Fairchild and certain other persons and/or entities
may have engaged in fraudulent acts or practices in connection with the purchase
or sale of securities of certain other companies in violation of Sections 10(b)
and 15(c)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Section 17(a) of the Securities Act. These acts or practices include
whether Fairchild and certain other brokers or dealers effected transactions or
induced transactions by making untrue statements of material fact and whether
Fairchild and certain others have engaged in manipulative, deceptive or other
fraudulent devices. The formal order also concerns whether Fairchild and certain
others who have agreed to participate in a distribution have violated Rule 10b-6
of the Exchange Act by having bid for or purchased securities for accounts in
which it had a beneficial interest or which is the subject of such distribution.
As of March 1, 1999, Fairchild understands that the SEC investigation is
ongoing. While Fairchild cannot predict whether this investigation will result
in any type of enforcement action against it, the staff at the SEC has
informally expressed its belief that Fairchild may have committed some or all of
the allegations expressed in the order. See "Risk Factors."

NASD ENFORCEMENT ACTION AGAINST FAIRCHILD

On February 20, 1998, the NASD Department of Enforcement ("NASDR") filed an
administrative complaint against Fairchild, a principal of the firm and two
traders from other broker-dealers. The complaint alleges that Fairchild, acting
through Edward S. McCune ("McCune") its then President-Chief Executive
Officer-Sole Owner, acquired and distributed certain securities of another
company ("issuer") as "statutory underwriters" without registration under
Section 5 of the Securities Act representing approximately 28% of the available
float in the security in purported violation of NASD Rule 2110 and failed to
provide customers

32
<PAGE> 34

with an offering prospectus. The complaint further alleges that at the same time
Fairchild and McCune (the "Respondents") (i) entered into a consulting agreement
with the issuer to arrange for the sale of certain of its securities at a
"designated price" slightly below the market at the time; (ii) sold short to
retail customers the issuer's securities at prices substantially above the
designated price; (iii) acquired from five short-term investors securities of
the issuer to cover Fairchild's large short inventory position what had
previously been an inactive or thinly traded market for the issuer's securities;
(iv) illegally bid for, purchased, or induced others to purchase the issuer's
securities in the secondary market while a distribution was still in progress;
and (v) continued to make a market in the corporation's stock all in purported
violation of Section 10(b) of the Exchange Act and Rule 10b-6 thereunder and
NASD Rules 2110 and 2120. Moreover, the complaint alleges that the Respondents
caused the aforementioned alleged unregistered distribution without filing the
necessary documents with the NASD's Corporate Financing Department and failed to
disclose to customers alleged unfair excessive and unreasonable compensation
received from the distribution in violation of NASD Rules 2110 and 2710. In
addition, the complaint alleges that the Respondents fraudulently manipulated
the market for the issuer's common stock by arbitrarily increasing the share
price and by artificially inflating the reported trade volume through "wash" and
"matched" or circular trading so as to create the appearance of an active market
in the stock in purported violation of Section 10(b) of the Exchange Act and
Rule 10b-5 thereunder and NASD Rules 2110 and 2120.

On November 19, 1998, the Respondents submitted an Offer of Settlement to
NASDR. On December 11, 1998, the NASDR's Office of Hearing Officers issued an
Order of Acceptance of the Offer of Settlement. Under the terms of the Offer,
the Respondents consented solely for the purpose of that proceeding, without
admitting or denying the allegations of the complaint, to the entry of findings
of acts and violations consistent with the allegations of the complaint and to
the imposition of sanctions upon the understanding that the Order of Acceptance
would become part of their permanent disciplinary record and could be considered
in future actions brought by the NASDR. In its Order of Acceptance, the NASDR
made findings that the Respondents violated Section 10(b) of the Securities
Exchange Act of 1934 and Rules 10b-5 and 10b-6 thereunder and NASD Conduct Rules
2110, 2120 and 2710 and ordered that the Respondents be sanctioned as follows:
Fairchild was censured, required to pay restitution/disgorgement to customers in
the total amount (including interest) of $300,000 and fined $100,000 jointly and
severally with McCune; McCune was also censured and suspended for eight months
from associating with any NASD member firm. In a related matter, on or about
October 12, 1998, NASDR accepted a letter of Acceptance, Waiver and Consent from
the Respondent's trader (David W. Noble) pursuant to which Mr. Noble, without
admitting or denying the alleged violations, consented to findings that during
the period April 19, 1995 through April 24, 1995, Mr. Noble aided and abetted
the Respondents and in so doing violated NASD Conduct Rules 2110, 21209 and 3110
and Sections 10(b) and 17(a) of the Securities Exchange Act of 1934 and Rules
10b-5 and 1871-3 thereunder. Mr. Noble also consented to a censure, a 15
business day suspension and a $10,000 fine.

STATE OF FLORIDA -- ADMINISTRATIVE PROCEEDING AGAINST FAIRCHILD.

On April 3, 1999, the State of Florida, Department of Banking and Finance
(the "Department") filed an administrative complaint against Fairchild, Edward
S. McCune, ("McCune") former President-Chief Executive officer of Fairchild and
three of its brokers. The Department set forth in its complaint allegations of
misconduct and conclusions of law which in summary state that as a matter of law
that: (i) by using sales scripts, Fairchild allowed one of the brokers to make
false, misleading or unwarranted statements and to omit material facts in the
sale or offer of securities; (ii) said sales scripts contained
misrepresentations and baseless price predictions and that a broker violated
rules and regulations which requires each member to deal fairly with the public;
(iii) the use of sales scripts that were not reviewed or approved by Fairchild's
Compliance Department as required by its compliance manual caused the violations
by Fairchild of various rules and regulations; (iv) Fairchild in not preventing
the use of misleading and false sales scripts by its registered associated
persons as required by its compliance manual constituted violations; (v)
Fairchild is responsible for the acts of McCune and the three brokers; (vi) one
of the three brokers is responsible for the acts of two other brokers as they
were his registered associated persons; (vii) Fairchild allowed one of its
brokers to engage in duties that NASD registration rules and Fairchild's
supervisory manual define as principal, supervisory or managerial activities in
contravention of one of the broker's registration agreement with the Department;

33
<PAGE> 35

(viii) Fairchild and one of its branch managers failed to properly supervise a
registered representative; and (ix) Fairchild, McCune and the three brokers
violated sections of the Florida statutes and the rules and regulations of the
NASD by engaging in and permitting violations of such law. The complaint alleges
that such conduct demonstrated Fairchild's unworthiness to conduct a securities
business and subjects it to the administrative penalties set forth in the
Florida statutes. Based upon the foregoing, the Department is seeking to enter a
final order which will (a) impose on Fairchild, McCune, and the three brokers
one or more of the administrative penalties authorized by Sections 517.161, and
517.221 of the Florida Securities and Investors Protection Act, including but
not limited to the revocation, suspension, or denial of any and all
registrations, and the imposition of fines of up to $5,000 per violation; and
(b) order all respondents to cease and desist from violations of Chapter 517 of
the Florida Statutes, and the Rules promogated thereunder. Fairchild intends to
vigorously contest these allegations and conclusions of law. No assurance can be
given that Fairchild will be successful. An adverse result could severely impact
Fairchild's ability to do business in the State of Florida and possibly in other
states.

LEGAL MATTERS

The validity of the issuance of the securities offered hereby will be
passed upon for New Yorker by the law firm of Blau, Kramer, Wactlar & Lieberman,
P.C., Jericho, New York. The law firm of Beckman, Millman & Sanders, LLP, 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 45,701 shares of common stock, 16,000 of which are registered for
resale hereunder, and options to purchase 14,667 shares of common stock at $7.50
per share issued under the 1996 Non-Qualified Stock Option Plan.

EXPERTS

Lazar Levine & Felix LLP has been New Yorker's independent accountants for
the years ending December 31, 1998 and 1997.

WHERE TO FIND ADDITIONAL INFORMATION

New Yorker 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 New Yorker 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.

New Yorker 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.

34
<PAGE> 36

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PRO FORMA FINANCIAL STATEMENTS:
New Yorker Marketing Corp.
Introduction to Pro Forma Financial Statements......... F-2
Pro Forma Balance Sheet as of March 31, 1999........... F-3
Pro Forma Statement of Operations Three Months Ended
March 31, 1999........................................ F-4
Pro Forma Statement of Operations Year Ended December
31, 1998.............................................. F-5
Notes to Pro Forma Financial Statements................ F-6
HISTORICAL FINANCIAL STATEMENTS:
NEW YORKER MARKETING CORP. FINANCIAL STATEMENTS -- MARCH
31, 1999
Balance Sheet.......................................... F-7
Statements of Operations............................... F-8
Statements of Cash Flows............................... F-9
Notes to Financial Statements.......................... F-10
NEW YORKER MARKETING CORP. FINANCIAL STATEMENTS --DECEMBER
31, 1998
Report of Independent Certified Public Accountants..... F-11
Balance Sheets......................................... F-12
Statements of Operations............................... F-13
Statement of Changes in Stockholders' Deficit.......... F-14
Statements of Cash Flows............................... F-15
Notes to Financial Statements.......................... F-16
NEW YORKER ICE CREAM CORP. FINANCIAL STATEMENTS --DECEMBER
31, 1998
Report of Independent Certified Public Accountants..... F-33
Balance Sheet.......................................... F-34
Statements of Operations............................... F-35
Statements of Stockholders' Equity..................... F-36
Statements of Cash Flows............................... F-37
Notes to Financial Statements.......................... F-38
JERRY'S ICE CREAM, INC. FINANCIAL STATEMENTS -- DECEMBER
31, 1998
Report of Independent Certified Public Accountants..... F-39
Balance Sheet.......................................... F-40
Statements of Operations............................... F-41
Statements of Cash Flows............................... F-42
Notes to Financial Statements.......................... F-43
</TABLE>

F-1
<PAGE> 37

NEW YORKER MARKETING CORP.

INTRODUCTION TO PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma financial statements have been prepared
based upon certain pro forma adjustments to the historical financial statements
of New Yorker Marketing Corp., 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 three month period ended March 31,
1999 and the year ended December 31, 1998.

These pro forma 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 three months ended March 31, 1999 and
the year ended December 31, 1998.

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

- The restructure of certain of the Company's debt

- The issuance of shares in exchange for services rendered

- The sale of 368,000 shares of the Company's Common Stock

- The acquisition of two ice cream distributors using the proceeds from the
sale of the 368,000 shares of the Company's Common Stock

F-2
<PAGE> 38

NEW YORKER MARKETING CORP.

PROFORMA BALANCE SHEET
MARCH 31, 1999
<TABLE>
<CAPTION>
SUBSEQUENT
AS REPORTED TRANSACTIONS
MARCH 31, ---------------------
1999 NEW YORKER JERRY'S DEBIT CREDIT
----------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash........................................ $ 367 $ 11,935 $ 85,000(1)
Accounts Receivable......................... 325,106 8,931
Inventories................................. 55,371 171,959 6,228
Prepaid expenses and other current assets... 78,223 1,500
----------- --------- --------
Total current assets......................... 133,961 509,000 16,659
Fixed assets................................. 907 104,658 26,214
Intangible assets............................ 183 181,705
Other assets................................. 248,154 26,266
----------- --------- --------
TOTAL ASSETS.......................... $ 383,205 $ 639,924 $224,578
=========== ========= ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable -- related parties............ $ 299,497
Notes payable -- other...................... 100,000 43,465
Accounts payable and accrued liabilities.... 610,591 387,064 31,064 350,000(1)
10,000(1)
Other accrued liabilities................... 239,691
Current portion long-term debt.............. 1,129,440 140,000(1) 95,000(1)
----------- --------- --------
Total current liabilities.................... 2,279,219 487,064 74,529
Notes payable -- acquisition.................
Long-term debt............................... 235,443 81,501
----------- --------- --------
Total liabilities............................ 2,279,219 722,507 156,030
----------- --------- --------
Stockholders' equity (deficit):
Common stock................................ 5,153 26,750 138,890
Additional paid-in capital.................. 11,506,636 117,897
Deferred financing costs.................... (748,800)
Treasury stock.............................. (147,808)
Accumulated deficit......................... (12,659,003) (79,422) (70,342) 490,000(1)
----------- --------- --------
Total stockholders' equity
(deficit)............................ (1,896,014) (82,583) 68,548
----------- --------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)..................... $ 383,205 $ 639,924 $224,578
=========== ========= ========

<CAPTION>
PROFORMA ACQUISITION/
OFFERING PROFORMA
------------------------- MARCH 31,
DEBIT CREDIT 1999
---------- ---------- -----------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash........................................ $1,780,000(2) $ 11,935(3) $ 693,767
970,000(4)
100,000(4)
101,600(6)
Accounts Receivable......................... 334,037(3)
Inventories................................. 100,000(4) 178,187(3) 155,371
Prepaid expenses and other current assets... 1,500(3) 78,223
-----------
Total current assets......................... 927,361
Fixed assets................................. 1,708,657(4) 1,840,436
Intangible assets............................ 826,343(4) 181,705(3) 695,654
130,872(3)
Other assets................................. 26,266(3) 198,154
50,000(4)
-----------
TOTAL ASSETS.......................... $ 3,661,605
===========
LIABILITIE LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable -- related parties............ 101,600(6) 122,897
75,000(6)
Notes payable -- other...................... 143,465(3)
Accounts payable and accrued liabilities.... 418,128(3) 250,591
Other accrued liabilities................... 239,691
Current portion long-term debt.............. 323,750(4) 1,408,190
-----------
Total current liabilities.................... 2,021,369
Notes payable -- acquisition................. 371,250(4) 371,250
Long-term debt............................... 316,944(3)
-----------
Total liabilities............................ 2,392,619
-----------
Stockholders' equity (deficit):
Common stock................................ 165,640(3) 368(2) 1,996
4,122(2) 131(4)
300(4)
166(5)
Additional paid-in capital.................. 117,897(3) 1,779,632(2) 17,022,293
4,122(2)
819,869(4)
1,874,700(4)
1,037,334(5)
Deferred financing costs.................... (748,800)
Treasury stock.............................. 147,808(3)
Accumulated deficit......................... 1,875,000(4) 149,764(3) (15,006,503)
1,037,500(5) 75,000(6)
-----------
Total stockholders' equity
(deficit)............................ 1,268,986
-----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)..................... $ 3,661,605
===========
</TABLE>

F-3
<PAGE> 39

NEW YORKER MARKETING CORP.

PRO FORMA STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999

<TABLE>
<CAPTION>
AS REPORTED ADJUSTMENTS PRO FORMA
MARCH 31, 1999 NEW YORKER JERRY'S ELIMINATIONS DEBIT CREDIT MARCH 31, 1999
-------------- ---------- -------- ------------ ------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales, net................ $ 0 $763,293 $157,028 $78,514 $ 841,807
Cost of sales............. 863 612,586 132,104 78,514 46,000(6) 713,039
---------- -------- -------- ---------
Gross profit.............. (863) 150,707 24,924 128,768
---------- -------- -------- ---------
Operating expenses
Selling, marketing and
shipping..............
Research &
development...........
General and
administrative........ 92,108 213,242 34,290 23,350(6) 39,000(6) 323,990
---------- -------- -------- ---------
Total operating
expenses................ 92,108 213,242 34,290 323,990
---------- -------- -------- ---------
Loss from operation....... (92,971) (62,535) (9,366) (195,222)
Interest expense (net).... 311,229 2,250 313,479
---------- -------- -------- ---------
Net loss.................. $ (404,200) $(64,785) $ (9,366) $(508,701)
========== ======== ======== =========
Weighted average common
shares outstanding...... 5,152,908 1,995,782
========== =========
Basic loss per share...... $ (0.08) $ (0.25)
========== =========
</TABLE>

F-4
<PAGE> 40

NEW YORKER MARKETING CORP.

PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
AS REPORTED ADJUSTMENT
DECEMBER 31, DECEMBER 31,
1998 NEW YORKER JERRY'S ELIMINATIONS DEBIT CREDIT 1998 PRO FORMA
------------ ---------- -------- ------------ ------- ------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales, net............... $ 103,410 $6,145,418 $809,117 $410,654 $ 6,647,291
Cost of sales............ 436,457 5,637,062 690,799 410,654 184,000(7) 6,537,664
----------- ---------- -------- -----------
Gross profit............. (333,047) 508,356 118,318 109,627
----------- ---------- -------- -----------
Operating expenses
Selling, marketing and
shipping............. 31,878 31,878
Research &
development.......... 759,928 759,928
General and
administrative....... 7,754 487,066 117,797 93,400(7) 234,000(7) 472,017
----------- ---------- -------- -----------
Total operating
expenses............... 799,560 487,066 117,797 1,263,823
----------- ---------- -------- -----------
Loss from operation...... (1,132,607) 21,290 521 (1,154,196)
Interest expense (net)... 166,769 16,553 6,391 189,713
----------- ---------- -------- -----------
Net loss................. $(1,299,376) $ 4,737 $ (5,870) $(1,343,909)
----------- ---------- -------- -----------
Weighted average common
shares outstanding..... 725,427 1,995,782
=========== ===========
Basic loss per share..... $ (1.79) $ (0.67)
=========== ===========
</TABLE>

F-5
<PAGE> 41

NEW YORKER MARKETING CORP.

NOTES TO PRO FORMA FINANCIAL STATEMENTS
AS OF MARCH 31, 1999

(1) The Company has entered into agreements to restructure certain debt
which includes (i) forgiveness of trade notes payable of $140,000, (ii)
forgiveness and reduction of accounts payable in the amount of $350,000, and
(iii) obtain additional bridge financing until the offering contemplated herein
is completed.

(2) The Company is offering 368,000 shares of its Common Stock at an
assumed price of $6.25 per share with estimated net proceeds of $1,780,000.

(3) This adjustment eliminates all assets and liabilities of New Yorker Ice
Cream Corp. and Jerry's Ice Cream, Inc. (see Note 4) not being acquired by the
Company.

(4) The Company has acquired the rights to acquire assets of New Yorker Ice
Cream Corp. and Jerry's Ice Cream, Inc. in exchange for $935,000 in cash (of
which $50,000 was paid prior to December 31, 1998), assumption of $95,000 8%
debt due on demand, $200,000 8% notes due 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........................................................ $ 935,000
Notes payable............................................... 780,000
Common stock................................................ 820,000
----------
Total purchase price........................................ 2,535,000
Less: Book value of fixed assets acquired................... 130,900
----------
Excess purchase price....................................... $2,404,100
==========
Allocation of total purchase price
Fixed Assets.............................................. $1,708,657
Covenant Not to Compete................................... 150,000
Goodwill.................................................. 676,343
----------
$2,535,000
==========
</TABLE>

Fixed assets have been written up to fair market value (of $1,839,557)
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.

(5) The Company will issue 166,000 of its common shares in exchange for
services rendered. Arthur Rosenberg, President, and David Lieberman, outside
counsel, will be issued 95,000 and 70,000 shares respectively at the closing of
the acquisitions for management services provided for the last eighteen months.
The remaining 1,000 shares will be issued to the Company's financial consultant.
These shares have been valued at $6.25 per share.

(6) This entry reflects the payment of notes to related parties and a
forgiveness of $75,000 has been recorded associated with the settlement of a
related party debt.

(7) 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> 42

NEW YORKER MARKETING CORP.

BALANCE SHEET
(UNAUDITED)

<TABLE>
<CAPTION>
MARCH 31, 1999
--------------
<S> <C>
ASSETS
CURRENT ASSETS
Cash........................................................ $ 367
Inventories................................................. 55,371
Prepaid expenses............................................ 78,223
------------
Total current assets.............................. 133,961
Fixed assets, net of accumulated depreciation of $36,053.... 907
Trademarks and organization costs, net of accumulated
amortization of $18,633................................... 183
Security deposits........................................... 975
Other assets................................................ 247,179
------------
TOTAL ASSETS...................................... $ 383,205
============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities.................... $ 850,282
Notes payable............................................... 493,984
Notes payable to related parties............................ 299,497
Notes payable-trade......................................... 635,456
------------
Total current liabilities......................... 2,279,219
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 per value; 20,000,000 shares authorized;
5,152,908 shares issued and outstanding................... 5,153
Additional paid-in capital.................................. 11,506,636
Deferred financing costs.................................... (748,800)
Accumulated deficit......................................... (12,659,003)
------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT).............. (1,896,014)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)......................................... $ 383,205
============
</TABLE>

F-7
<PAGE> 43

NEW YORKER MARKETING CORP.

STATEMENT OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------
1999 1998
---------- ----------
<S> <C> <C>
Sales,net................................................... $ -- $ 49,010
Cost of sales............................................... 863 53,500
Gross profit................................................ (863) (4,490)
Operating expenses
Selling, marketing and shipping........................... -- 106,408
Research and Development.................................. -- 7,754
General and administrative................................ 92,108 242,102
---------- ----------
Total operating expenses.................................... 92,108 356,263
---------- ----------
Loss from operations........................................ (92,971) (360,753)
Interest expense (net)...................................... 311,229 7,079
---------- ----------
Net loss.................................................... $ (404,200) $ (367,832)
========== ==========
Weighted average common shares outstanding.................. 5,152,908 3,280,429
========== ==========
Basic loss per share........................................ $ (.08) $ (.11)
========== ==========
</TABLE>

F-8
<PAGE> 44

NEW YORKER MARKETING CORP.

STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net loss.................................................... $(404,200) $(367,832)
Adjustments to reconcile net loss to net cash provided
(used) in operating activities............................
Imputed interest on stock issued............................ 280,800
Depreciation and amortization............................... 1,235 1,541
Compensation expense attributable to the issuance of common
stock for services rendered............................... 88,800
Changes in operating assets and liabilities
Accounts receivable....................................... 13,372 (615)
Inventories............................................... 52,270
Prepaid expenses.......................................... (44,718) (29,698)
Accounts payable and accrued liabilities.................. 180,077 (45,377)
--------- ---------
Net cash provided (used) in operating activities............ 26,566 (300,911)
--------- ---------
Cash flows from investing activities
Purchases of office equipment............................. (1,513)
Security deposit and other assets......................... (60,000) (306)
--------- ---------
Net cash (used by) investing activities..................... (60,000) (1,819)
--------- ---------
Cash flows from financing activities
Proceeds from notes payable............................... 14,635
Payment of line of credit................................. (9,375)
--------- ---------
Net cash (used) provided by financing activities............ 14,635 (9,375)
--------- ---------
Net Increase (Decrease) in Cash............................. (18,799) (312,105)
Cash at beginning of period................................. 19,166 438,277
--------- ---------
Cash at end of period....................................... $ 367 $ 126,172
========= =========
</TABLE>

F-9
<PAGE> 45

NEW YORKER MARKETING CORP.

NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)

NOTE A -- BASIS OF PRESENTATION

On March 2, 1999 the Company changed its name from Mike's Original, Inc. to
New Yorker Marketing Corp. This name change was part of the future plan of
operations as described in the Company's Registration Statement filed on Form
SB-2 with the Securities and Exchange Commission for the sale of common stock.
See Note .

The balance sheet as of March 31, 1999 and the related statements of
operations for the three-month periods ended March 31, 1999 and 1998 and
statements of cash flows for the three month periods ended March 31, 1999 and
1998 and have been prepared by New Yorker Marketing Corp. (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 March 31, 1999 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 March 31, 1999 are not necessarily indicative of the operating
results expected for the full year.

NOTE B -- 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.

There have been no changes to the matters listed below, except as noted,
and therefore no additional information is available other than information
disclosed in the Company's Annual Report filed on Form 10-KSB.

J.W. Messner, Inc. v. New Yorker Marketing Corp.
Universal Folding Box Co., Inc. v. New Yorker Marketing Corp., et al

Lee's Marketing Services, Inc. v. New Yorker Marketing Corp.
The Company has received correspondence from plaintiff's indicating that
after further review, the alleged liability to Lee's Marketing Services,
Inc. is between $5,000 and $6,000 (reduced from $128,354) and that he
believes that payment of such an amount will resolve this matter. The
Company intends to continue its defense of this claim.

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.

F-10
<PAGE> 46

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
New Yorker Marketing Corp.

We have audited the balance sheets of New Yorker Marketing Corp., formerly
Mike's Original, Inc., (a Delaware corporation) as of December 31, 1998 and
1997, and the related statements of operations, changes in stockholders'
deficit, and cash flows for the years 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 audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of New Yorker Marketing Corp.,
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years 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 net losses of $1,113,155 and
$4,502,645 for the years ended December 31, 1998 and 1997, respectively, current
liabilities exceeded current assets by $1,974,550 and $1,062,651, as of December
31, 1998 and 1997, respectively and the stockholders' deficit aggregated
$1,772,614 and $1,051,056, as of December 31, 1998 and 1997, respectively. 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.

LAZAR LEVINE & FELIX LLP

New York, New York
February 15, 1999

F-11
<PAGE> 47

NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

BALANCE SHEETS
AS OF DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
-- ASSETS (NOTE 8) --
CURRENT ASSETS:
Cash........................................................ $ 19,166 $ 438,277
Accounts receivable, less allowance for doubtful accounts
of $-0- and $15,916 for 1998 and 1997, respectively.... 13,372 12,600
Inventories (Notes 3b and 4).............................. 55,371 143,899
Prepaid expenses.......................................... 22,048 17,303
------------ ------------
TOTAL CURRENT ASSETS........................................ 109,957 612,079
------------ ------------
FIXED ASSETS -- NET (Notes 3c and 5)........................ 1,210 3,505
------------ ------------
OTHER ASSETS:
Trademarks and organization costs, net of accumulated
amortization of $17,701 and $15,489 for 1998 and 1997,
respectively (Note 3d)................................. 1,115 3,022
Security deposits and other assets (Note 13f)............. 188,154 5,068
Deferred offering costs................................... 11,457 --
------------ ------------
200,726 8,090
------------ ------------
$ 311,893 $ 623,674
============ ============
-- LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) --
CURRENT LIABILITIES:
Accounts payable -- trade................................. $ 670,205 $ 500,453
Accrued payroll and payroll taxes......................... -- 20,587
Other accrued liabilities (Note 6)........................ 157,473 137,822
Notes payable -- related parties (Note 7)................. 346,586 486,250
Notes payable -- other (Notes 8 and 13d).................. 910,243 529,618
------------ ------------
TOTAL CURRENT LIABILITIES................................... 2,084,507 1,674,730
------------ ------------
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; 5,152,908 and 3,265,429 shares issued and
outstanding for 1998 and 1997, respectively............ 5,153 3,265
Additional paid-in capital................................ 11,506,636 10,087,327
Deferred financing costs.................................. (1,029,600) --
Accumulated deficit....................................... (12,254,803) (11,141,648)
------------ ------------
(1,772,614) (1,051,056)
------------ ------------
$ 311,893 $ 623,674
============ ============
</TABLE>

See accompanying notes

F-12
<PAGE> 48

NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
SALES -- NET (Notes 3e)..................................... $ 103,410 $ 384,348
COST OF SALES............................................... 436,457 451,198
----------- -----------
GROSS PROFIT (LOSS)......................................... (333,047) (66,850)
----------- -----------
OPERATING EXPENSES:
Selling, marketing and shipping (Note 3f)................. 31,878 723,861
General and administrative................................ 759,928 2,177,698
Research and development (Note 3h)........................ 7,754 28,594
----------- -----------
799,560 2,930,153
----------- -----------
LOSS FROM OPERATIONS........................................ (1,132,607) (2,997,003)
----------- -----------
OTHER INCOME (EXPENSE):
Forgiveness of debt (Note 7).............................. 186,221 --
Interest expense -- net of interest income of $3,698 and
$30,744 for 1998 and 1997, respectively................ (166,769) (1,505,642)
----------- -----------
19,452 (1,505,642)
----------- -----------
LOSS BEFORE INCOME TAXES.................................... (1,113,155) (4,502,645)
Provision for income taxes (Notes 3i and 9)............... -- --
----------- -----------
NET LOSS.................................................... $(1,113,155) $(4,502,645)
=========== ===========
BASIC LOSS PER SHARE (Note 3j).............................. $ (0.31) $ (1.69)
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 3j)........ 3,627,133 2,662,013
=========== ===========
</TABLE>

See accompanying notes

F-13
<PAGE> 49

NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT

<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 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)
Issuance of common stock for
services rendered............... 327,479 328 285,869 -- -- 286,197
Shares issued in private offering
of securities................... 1,560,000 1,560 1,168,440 (1,170,000) -- --
Costs associated with offering of
securities...................... -- -- (35,000) -- -- (35,000)
Amortization of
interest -- private offering.... -- -- -- 140,400 -- 140,400
Net loss.......................... -- -- -- -- (1,113,155) (1,113,155)
--------- ------ ----------- ----------- ------------ -----------
BALANCE AT DECEMBER 31, 1998...... 5,152,908 $5,153 $11,506,636 $(1,029,600) $(12,254,803) $(1,772,614)
========= ====== =========== =========== ============ ===========
</TABLE>

See accompanying notes

F-14
<PAGE> 50

NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(1,113,155) $(4,502,645)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization.......................... 6,020 14,675
Allowance for doubtful accounts........................ (15,916) (4,835)
Imputed interest....................................... 140,400 1,327,051
Compensation expense attributable to issuance of common
stock for services rendered........................... 286,197 1,325,250
Compensation expense attributable to issuance of common
stock and stock options............................... -- 6,000
Forgiveness of debt.................................... (186,221) --
Changes in operating assets and liabilities:
Decrease in accounts receivable........................ 15,144 53,454
Decrease in inventories................................ 88,528 103,709
(Increase) in prepaid expenses and other current
assets................................................ (4,745) (714)
Increase (decrease) in accounts payable................ 175,501 (130,986)
Increase (decrease) in accrued expenses and other
liabilities........................................... 84,871 (12,920)
----------- -----------
Net cash used in operating activities................ (523,376) (1,821,961)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Refund of security deposits............................... 3,788 14,023
Purchases of fixed assets................................. (1,513) --
Deposits and costs relating to potential acquisition...... (187,179) --
----------- -----------
Net cash (used in) provided by investing
activities.......................................... (184,904) 14,023
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of stockholders notes........................... -- (123,750)
Net proceeds from issuance of common stock................ -- 3,387,444
Costs associated with offering of securities.............. (46,457) --
Payment of notes payable to related parties............... (45,000) (253,750)
Payment of capital lease obligations...................... -- (13,568)
Payment of line of credit................................. (9,374) (14,130)
Proceeds from short-term loans............................ 390,000 440,000
Repayment of short-term loans............................. -- (315,000)
Repayment of notes payable -- trade creditors............. -- (893,554)
----------- -----------
Net cash provided by financing activities............ 289,169 2,213,692
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS........ (419,111) 405,754
Cash and cash equivalents, at beginning of year............. 438,277 32,523
----------- -----------
CASH AND CASH EQUIVALENTS, AT END OF YEAR................... $ 19,166 $ 438,277
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
(a) Interest paid........................................... $ -- $ 267,369
Taxes paid.............................................. -- --
(b) During 1997, the Company converted $432,077 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
</TABLE>

See accompanying notes

F-15
<PAGE> 51

NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997

NOTE 1 -- ORGANIZATION:

New Yorker Marketing Corp., formerly 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 18, 1997, a new entity, New Yorker Frozen Desserts, Inc.,
was incorporated in New York, as a wholly-owned subsidiary of the Company, for
the purpose of making acquisitions. On March 4, 1998, the Company formed NATCO
Brands Inc. for the purpose of operating licensing agreements for the
manufacture and distribution of branded desserts. Both of these subsidiaries are
currently inactive. In February 1999, subsequent to the year end, the Company
changed its name to New Yorker Marketing Corp., approved by a shareholder vote
in December 1998.

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 and licensed frozen desserts.
The Company initially marketed, sold and distributed Mike's Original(R)
Cheesecake Ice Cream, a blend of ice cream and 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, food service
outlets and warehouse clubs. Since March 1998, sales of Mike's ice cream have
been nominal. In June 1998, sales of Mike's ice cream were reduced and the
Company began distributing Veryfine Frozen Juice Bars under an agreement between
Veryfine and the Company's subsidiary New Yorker Frozen Desserts, Inc. See also
Note 13f.

NOTE 2 -- BASIS OF PRESENTATION:

The Company has incurred losses from operations since its inception in 1993
and, at December 31, 1998, has a stockholders' deficit and a working capital
deficit of $1,772,614 and $1,974,550, respectively. At December 31, 1997, the
Company had a stockholders' deficit and a working capital deficit of $1,051,056
and $1,062,651 respectively. Further, the Company is continuing to incur
operating losses from its limited operations.

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. On
December 18, 1997, and amended through July 20, 1998, the Company entered into
agreements to acquire two such distributors. The Company is engaged in
discussions with nationally known companies to obtain licenses to market and
distribute product bearing the name of the licensor. See Note 13f.

These acquisitions and distribution licenses would be financed from an
additional offering of securities filed with the Securities and Exchange
Commission on November 13, 1998 and amended on January 22, 1999 (see Note 14).
It is anticipated that the offering will close in the first quarter of 1999. If
an offering cannot be consummated or other financing obtained, the Company would
not be able to continue operations. The Company does not have sufficient cash on
hand to meet its current obligations. The financial statements do not include
any adjustments that might result from this uncertainty.

F-16
<PAGE> 52
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

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
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 products is recognized upon shipment. Sales are
presented net of distribution fees of $95,679 for the year ended December 31,
1997. In the year ended December 31, 1997 a significant portion of the Company's
sales was 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) Advertising:

Advertising costs are charged to operations when incurred. Advertising
costs charged to operations were $2,000 and $93,000 for the years ended December
31, 1998 and 1997, 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, 1998 and 1997.

(h) Research & Development:

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

F-17
<PAGE> 53
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(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 tax 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. 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. 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.

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

(m) Impact of the Year 2000 Issue:

The year 2000 issue ("Y2K") 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 disruption of
operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in other similar normal business
activities. The Company's current accounting system was purchased
"off-the-shelf," and this will be replaced, if necessary, by Y2K compliant
software and hardware available from retail vendors at reasonable cost. The
Company has not yet contacted other companies on whose services it depends to
determine whether such companies' systems are Y2K compliant.

F-18
<PAGE> 54
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4 -- INVENTORIES:

Inventories consist of the following as of December 31, 1998 and 1997:

<TABLE>
<CAPTION>
1998 1997
------- --------
<S> <C> <C>
Finished goods.............................................. $37,255 $143,899
Raw materials............................................... 18,116 --
------- --------
$55,371 $143,899
======= ========
</TABLE>

NOTE 5 -- FIXED ASSETS:

Fixed assets consist of the following as of December 31, 1998 and 1997:

<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Computer equipment.......................................... $29,447 $29,447
Office equipment............................................ 7,513 6,000
------- -------
36,960 35,447
Less: accumulated depreciation.............................. 35,750 31,942
------- -------
$ 1,210 $ 3,505
======= =======
</TABLE>

NOTE 6 -- OTHER ACCRUED LIABILITIES:

Other accrued liabilities consist of the following as of December 31, 1998
and 1997:

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Accrued distribution fee.................................... $ -- $ 1,499
Accrued interest payable (Notes 7 and 8).................... 143,998 124,288
Other accrued expenses...................................... 13,475 12,035
-------- --------
$157,473 $137,822
======== ========
</TABLE>

NOTE 7 -- NOTES PAYABLE TO RELATED PARTIES:

During the fiscal year ended March 31, 1994, the Company borrowed $100,000
from a shareholder of the Company. This 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."
The Company has not repaid this note and is currently negotiating to satisfy
this liability with a payment of $25,000. Accrued interest payable related to
this note amounted to $33,491 at December 31, 1998.

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

F-19
<PAGE> 55
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

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. On May 1, 1998, these
notes along with accrued interest were reduced to $11,250 and fixed at that
amount with $6,250 to be paid at the closing of the offering of securities
contemplated in 1999. The other $5,000 is to be paid from the proceeds of
additional offerings of securities closed prior to April 30, 2001. This
forgiveness of debt is part of a settlement reached with the founder.

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
over-allotment option is exercised in such offering and only from the proceeds
received by the Company from the exercise of the over-allotment option. These
notes are still outstanding at December 31, 1998. Accrued interest payable
related to these notes amounts to $25,833 and $15,833 at December 31, 1998 and
1997, respectively.

During the fiscal year ended March 31, 1994, the Company obtained loans
from the founder of the Company, and issued promissory notes of $40,000 and
$15,000 which were payable in May and June 1998, respectively. Interest accrued
at an annual rate of 8% and was payable at the maturity date of the notes. On
August 28, 1996, the founder of the Company was issued an additional promissory
note of $206,250. The funds that the founder lent 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 an annual 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 over-allotment option
is exercised in such offering and only from the proceeds received by the Company
from the exercise of the over-allotment 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 over-allotment option is exercised in
such offering and only from the proceeds received by the Company from the
exercise of the over-allotment option. On May 1, 1998, these two notes along
with accrued interest were reduced to $180,386 and fixed at that amount with
$70,336 to be paid at the closing of the offering of securities contemplated in
1999 and 12 monthly payments of $5,000 effective May 1998. The other $50,000 is
to be paid from the proceeds of additional offerings of securities closed prior
to April 30, 2001. This forgiveness of debt is part of a settlement agreement
reached with the founder. The Company is current in its monthly payments of
$5,000, and at December 31, 1998, the outstanding balance was $135,336.

In August and September 1996, the Company received three loans from a
stockholder aggregating $253,750. A portion of the funds that this shareholder
lent 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. During 1997 the Company repaid the
entire balance of $253,750 plus interest accrued (at an annual rate of 8%), to
the date of repayment of $18,162.

As of December 31, 1998 and 1997, loans payable to related parties
aggregated $346,586 and $486,250, respectively. Interest accrued and unpaid at
December 31, 1998 and 1997 aggregated $59,324 and $90,455, respectively.

F-20
<PAGE> 56
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 8 -- NOTES PAYABLE -- OTHER:

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 was 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, 1998, $115,275 plus accrued
interest of $15,280 of the convertible note remain unpaid. During 1997, the
Company issued an additional 10% promissory note to this vendor in the amount of
$193,033 in exchange for a like amount of trade payables, which amount is still
outstanding at December 31, 1998, plus accrued interest of $28,955. The creditor
has agreed to accept payment of $190,000, to satisfy these notes plus accrued
interest, if such payment is made by April 10, 1999. The Company plans to make
that payment from the proceeds of the proposed offering (see Note 14).

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
note, however, the vendor 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 second 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 completed 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. At December
31, 1998, $96,000 of the convertible note plus accrued interest of $11,394
remain unpaid.

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 was 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
had 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

F-21
<PAGE> 57
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

$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.

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 was payable in full on December
31, 1998. As of December 31, 1998, $30,000 plus accrued interest of $5,000
remained unpaid. 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.

From July through November 1998, the Company issued an aggregate of 7.8
private placement units, each unit consisting of $50,000 principal amount of
private placement notes and 200,000 shares of the Company's common stock. The
notes, aggregating $390,000, bear interest at the rate of 12% per annum and are
payable on the earlier of December 1, 1999 or the closing of the proposed
offering. Accrued interest at December 31, 1998 amounted to $12,444 (see also
Note 10).

F-22
<PAGE> 58
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- INCOME TAXES:

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

<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Tax expense (benefit) at statutory Federal income tax..... $ (378,000) $(1,532,000)
Nondeductible compensation................................ 98,000 450,000
Net operating loss not currently utilizable............... 280,000 1,082,000
----------- -----------
$ -- $ --
=========== ===========
</TABLE>

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

<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Net operating loss and other carryforwards................ $ 3,268,000 $ 2,890,000
Bad debts................................................. -- 5,000
Depreciation/amortization................................. -- 1,000
Deferred compensation..................................... 350,000 276,000
----------- -----------
3,618,000 3,172,000
Valuation allowance....................................... (3,618,000) (3,172,000)
----------- -----------
$ -- $ --
=========== ===========
</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, 1998 and 1997, Company had net operating losses available
to carry forward of approximately $9,300,000 and $8,500,000 respectively, for
tax purposes. Such net operating loss carryforwards expire through the year
ending 2014. 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:

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.

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

F-23
<PAGE> 59
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

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 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 was
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.

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.

In February 1998, the Company issued 30,000 shares of non-restricted common
stock as compensation for consulting services to be rendered in 1998. The
Company charged $88,800 to operations based upon the market value of the stock
at the time of issuance. The Company also issued 29,979 shares of common stock
to this consultant in lieu of monthly payments aggregating $33,333, due under an
agreement. In August 1998, the Company issued 97,500 shares of restricted common
stock as compensation for professional services rendered. These shares were
valued at 50% of the market price at the time of issuance and, accordingly,
$36,564 was charged to operations.

In October 1998, the Company issued 170,000 shares of common stock (valued
at 75% of the proposed public offering price -- see Note 14), to two directors
as compensation for prior services rendered. The Company charged $127,500 to
operations.

In November 1998, the Company issued 1,560,000 shares of common stock,
valued at $0.75 per share, as additional interest in connection with the private
placement notes (see Note 8). The aggregate value of $1,170,000, was deemed a
financing charge, and is being amortized over the term of the notes, one year.
Amortization expense for the year ended December 31, 1998, aggregated $140,400.

F-24
<PAGE> 60
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 11 -- STOCK OPTION PLANS:

At December 31, 1997, the Company has two stock-based compensation plans,
which are described below. The Company utilizes 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. No
options were granted under these plans during 1998 or 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
(Black-Scholes option valuation model), the Company's net loss and net loss per
share would have been increased to the pro forma amounts indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
Net loss:
As reported............................................. $(1,113,155) $(4,502,645)
Pro forma............................................... (1,146,550) (4,732,943)
Net loss per share:
As reported............................................. $(.31) $(1.69)
Pro forma............................................... (.32) (1.78)
</TABLE>

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, 1998, the Company has granted an
aggregate of 306,667 options to purchase common stock with exercise prices
ranging from $1.50 to $3.00 under this Plan. At December 31, 1998 and 1997,
options exercisable under this plan were 306,667. None of these options have
been exercised 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, 1998, 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. Options granted under this plan are
exercisable six months from date of grant and expire 10 years from date of
grant.

F-25
<PAGE> 61
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

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

<TABLE>
<CAPTION>
WEIGHTED 1996
1995 PLAN AVERAGE NON-QUALIFIED PLAN
------------------------ EXERCISE ---------------------
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
and 1998........................ 306,667 $1.66 478,332 $1.50
======= =======
EXERCISABLE AT DECEMBER 31, 1997
AND 1998........................ 306,667 $1.50 - $3.00 $1.69 478,332 $1.50
======= =======
</TABLE>

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% of the Company's sales for the year
ended December 31, 1997. 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. 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.

NOTE 13 -- COMMITMENTS AND CONTINGENCIES:

(a) Lease Commitments:

The Company is currently renting office space on a month to month basis.
The monthly rent expense is $650. Rent expense for the years ended December 31,
1998 and 1997 aggregated $27,049 and $32,160, respectively.

(b) Employment Contracts:

The Company had employment agreements with the founder and another employee
which provided 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 was recorded 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 expired in June 1998, agreed to modify the
agreement and be compensated on an hourly basis which is anticipated to produce
substantially lower compensation. The agreements with the founder and another
employee have been terminated as part of a settlement agreement which includes
the repayment of debt by the Company (See Note 7). Under the terms of the
settlement dated May 1, 1998, the Company agreed to repay debt as previously
discussed, along with an auto lease and health insurance.

F-26
<PAGE> 62
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

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.

On July 16, 1997, the Company entered into an employment agreement with its
Vice-President -- Marketing. The agreement provided for an annual base salary of
$115,000, plus an incentive bonus. This agreement was 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 was
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
provided for an automobile allowance of $650 per month. On September 15, 1998,
this employee was terminated due to the limited operations of the Company.

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 10), 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.

In August 1998, the Company entered into a consulting agreement with an
individual to provide financial services. This agreement calls for weekly
payments of $1,850 plus reasonable expenses and the issuance of 97,500 shares of
the Company's common stock. The Company recorded an expense of $36,564 in
connection with the issuance of those shares.

(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 were $9,374, which amount was
repaid during 1998.

F-27
<PAGE> 63
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(e) Legal Proceedings:

The Company is subject to various legal proceedings, claims and liabilities
which have arisen as a result of the Company's inability to satisfy its
liabilities. In the opinion of management, the amount of such liabilities,
including applicable interest, has been provided for with respect to these
actions, in the aggregate of $160,000. In addition, the Company is subject to
two additional actions brought by (i) Darigold, Inc., which seeks damages in the
amount of $59,379 arising from the Company's alleged failure to accept return of
product and (ii) Lee's Marketing which seeks $128,354 for services allegedly
performed in 1996. The Company intends to deny these allegations and to
vigorously defend these actions. The Company has not recorded any potential
liability arising from these two actions.

(f) Acquisitions:

On July 20, 1998, the Company entered into two agreements to acquire
companies engaged in the full service distribution of ice cream in the New York
Metropolitan area. In exchange for all the assets of New Yorker Ice Cream Corp.,
the Company will pay (i) $515,000 at closing, (ii) $150,000 payable in six
months with interest at 8% per annum, (iii) issuance of 650,000 shares of the
Company's common stock and (iv) will assume an existing obligation of $695,000,
paying $200,000 at closing, and the remaining $495,000 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 $255,000 at closing, $50,000 payable in six
months with interest at 8% per annum and 170,000 shares of the Company's common
stock.

In connection with these acquisitions, the Company entered into an
agreement with an unrelated third party that provides for a finder's fee in the
amount of 1,500,000 shares of the Company's common stock and 750,000 options to
purchase additional shares at an exercise price of $1.50, which amounts are
payable upon the closing of the acquisitions. All future acquisitions introduced
by this third party, will involve similar fee arrangements to be negotiated
prior to the closing of each transaction.

As of December 31, 1998, the Company had (i) made payments to the sellers
aggregating $90,000 as required per the terms of the agreements, (ii) deposited
$38,243 towards the purchase of new equipment and (iii) incurred $58,936 of
costs associated with these acquisitions.

The Company has also entered into five-year employment agreements with two
individuals to serve as President and Vice-President, which become effective
upon the closing of these acquisitions. These agreements provide for annual
payments of $126,000 and $115,500, respectively, issuance of shares of common
stock and bonus arrangements. The current President of the Company will resign
upon the closing of these acquisitions, and a consulting agreement which
provides for monthly payments of $5,000, will then become effective.

(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-28
<PAGE> 64
NEW YORKER MARKETING CORP.
(FORMERLY MIKE'S ORIGINAL, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 14 -- PROPOSED PUBLIC OFFERING:

The Company has filed a Registration Statement with the Securities and
Exchange Commission to register 3,500,000 shares of common stock (pre-split), at
a price of $1.00 per share, or an aggregate of approximately $2,800,000 of net
proceeds. Proceeds from this offering will be used to repay existing debt,
including the promissory notes from the private offering (see Note 8), acquire
certain operating assets (see Note 13f) and for general working capital.

The proposed offering also covers the sale of 1,560,000 pre-split shares of
common stock held by certain shareholders. The Company will not receive any of
the proceeds from the sale of these shares.

In December 1998, the stockholders approved a reverse stock split in the
ratio of one common share for every five common shares outstanding. Such reverse
split will take effect upon the consummation of the Company's proposed public
offering.

F-29
<PAGE> 65

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 1998 and December 31, 1997, and the related statements of
operations, stockholder's 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, 1998 and December 31, 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

--------------------------------------
Sidney Neuhof
Certified Public Accountant

February 15, 1999

F-30
<PAGE> 66

NEW YORKER ICE CREAM CORP.

BALANCE SHEETS
AS AT: DECEMBER 31, 1998 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash in banks............................................... $ 20,697 $ --
Accounts receivable -- net.................................. 295,259 251,964
Merchandise inventory -- Note 1............................. 197,100 184,612
Other current assets........................................ -- 10,979
--------- ---------
Total current assets.............................. 513,056 447,555
FIXED ASSETS
Furniture and fixtures --
Net of accumulated depreciation of $520,157 for 1998
and $494,915 for 1997 -- Note 1....................... 109,658 111,187
OTHER ASSETS
Intercompanies -- Note 2............................... 42,705 1,394
--------- ---------
TOTAL ASSETS................................................ $ 665,419 $ 560,136
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Bank overdraft............................................ $ -- $ 28,979
Loans payable -- bank -- Note 3........................... 100,000 100,000
Accounts payable and accrued expenses..................... 347,774 347,692
--------- ---------
Total current liabilities......................... 447,774 476,671
OTHER LIABILITIES
Loans payable -- long term Note 4......................... 112,000 106,000
Officer Loan -- Note 5.................................... 123,443 --
--------- ---------
235,443 106,000
STOCKHOLDER'S EQUITY
Capital stock --
83.25 shares authorized, issued and outstanding........ 26,750 26,750
Additional Paid-In-Capital................................ 117,897 117,897
Treasury Stock............................................ (147,808) (147,808)
Retained Earnings (deficit)............................... (14,637) (19,374)
--------- ---------
Total stockholder's equity (deficit).............. (17,798) (22,535)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY.................. $ 665,419 $ 560,136
========= =========
</TABLE>

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

F-31
<PAGE> 67

NEW YORKER ICE CREAM CORP.

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED: DECEMBER 31, 1998 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
NET SALES -- Note 8......................................... $6,145,418 $6,498,430
COST OF GOODS SOLD.......................................... 5,130,871 5,412,912
---------- ----------
GROSS PROFIT................................................ 1,014,547 1,085,518
---------- ----------
OPERATING EXPENSES.......................................... 993,257 975,571
---------- ----------
INCOME BEFORE OTHER EXPENSES................................ 21,290 109,947
OTHER EXPENSES:
Interest expense.......................................... 16,553 15,852
---------- ----------
NET INCOME.................................................. $ 4,737 $ 94,095
========== ==========
</TABLE>

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

F-32
<PAGE> 68

NEW YORKER ICE CREAM CORP.

STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
FOR THE YEARS ENDED: DECEMBER 31, 1998 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
ADDITIONAL RETAINED
CAPITAL PAID IN TREASURY EARNINGS
STOCK CAPITAL STOCK (DEFICIT) TOTAL
------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance -- January 1, 1997........ $26,750 $117,897 (147,808) (113,469) (116,630)
Net Income........................ -- -- -- 94,095 94,095
------- -------- --------- --------- ---------
Balance -- December 31, 1997...... 26,750 117,897 (147,808) (19,374) (22,535)
Net Income........................ 4,737
------- -------- --------- --------- ---------
Balance -- December 31, 1998...... $26,750 $117,897 $(147,808) $ (14,637) $ (17,798)
======= ======== ========= ========= =========
</TABLE>

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

F-33
<PAGE> 69

NEW YORKER ICE CREAM CORP.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED: DECEMBER 31, 1998 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
1998 1997
-------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income.................................................. $ 4,737 $ 94,095
Adjustments to reconcile net income to net Cash provided
by operating activities
Depreciation and Amortization.......................... 25,242 33,506
(Increase) in accounts receivable...................... (43,295) (39,770)
(Increase) Decrease in inventory....................... (12,488) 52,350
Decrease (Increase) in other current assets............ 10,979 (10,979)
(Increase) Decrease in bank overdraft.................. (28,979) 28,979
Increase (Decrease) in accounts payable and accrued
expenses.............................................. 82 (85,551)
-------- ---------
Net cash used by operating activities..................... (43,722) 72,630
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Fixed assets.............................................. (23,713) (10,336)
Other assets.............................................. -- --
-------- ---------
Net cash used in investing activities..................... (23,713) (10,336)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany -- net....................................... (41,311) (107,425)
Loans -- Net.............................................. 6,000 41,000
Shareholder's Loans....................................... 123,443 --
-------- ---------
Net cash provided by (used in) financing activities....... 88,132 (66,425)
-------- ---------
NET INCREASE (DECREASE) IN CASH............................. 20,697 (4,131)
CASH AT BEGINNING OF YEAR................................... -- 4,131
-------- ---------
CASH AT END OF YEAR......................................... $ 20,697 $ 0
======== =========
</TABLE>

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

F-34
<PAGE> 70

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1

History and Business Description

New Yorker Ice Cream Corp., was incorporated under the laws of the state of
New York on December 1, 1996.

The company distributes various types of ice cream products such as Haagen
Dazs and Baskin Robbins to retail stores and for food servicing. They also sell
to sub-distributors who work out of the company's facility. The company adds 7%
to 10% to the cost of the merchandise which is included in sales.

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 Ice Cream Corp.

The Kerry Group, Inc., is a management consulting company whose primary
client is New Yorker Ice Cream Corp. 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.

Cash and Cash Equivalent

All highly liquid investments with original maturities of three months or
less are considered to be cash equivalents.

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.

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>
1998 1997
------------------------ ------------------------
ASSET ACCUMULATED ASSET ACCUMULATED
VALUE DEPRECIATION VALUE DEPRECIATION
-------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Freezer Cabinets............................. $317,765 $263,198 $294,052 $244,988
Machinery.................................... 61,481 61,481 61,481 61,481
Office Equipment............................. 8,997 8,901 8,997 8,901
Vehicles..................................... 55,122 53,740 55,122 52,765
Improvements................................. 186,450 132,837 186,450 126,780
-------- -------- -------- --------
$629,815 $520,157 $606,102 $494,915
======== ======== ======== ========
</TABLE>

F-35
<PAGE> 71
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

NOTE 2

Intercompanies -- Parent and Related Companies

All intercompany loans are non-interest bearing and have no specified
repayment date. The outstanding balances are as follows:

<TABLE>
<CAPTION>
1998 1997
-------------------- --------------------
DUE FROM DUE TO DUE FROM DUE TO
-------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
(1) The Kerry Group, Inc................ $100,224 -- $104,483 --
(2) American Classic Inc................ 150,893 -- 105,323 --
(3) Tri K Realty Inc.................... -- $100,000 -- $100,000
(4) Silver Crown Ice Cream Inc.......... -- 108,412 -- 108,412
-------- -------- -------- --------
$251,117 $208,412 $209,806 $208,412
======== ======== ======== ========
</TABLE>

NOTE 3

Loans Payable -- Bank of New York

The company has a $100,000 line of credit with interest of 1% over existing
prime. The bank has taken through a UCC filing collateral on all New Yorker Ice
Cream Corp.'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. The interest rate at
12/31/98 was 9%.

NOTE 4

Loans Payable -- Long Term

The company owes $100,000 to Smaragda Tragellis (Mr. Ketsoglou's mother)
with interest accruing at 6% per annum.

NOTE 5

During 1998, Theodore Ketsoglou loaned the corporation $123,443. Mr.
Ketsoglou has indicated that the loan will not be repaid until all other
liabilities are satisfied. Accordingly, the loans have been classified at
long-term.

NOTE 6

Provision for Income Taxes

No provision for income taxes were made due to carry over tax losses.

SCHEDULE OF FEDERAL NET OPERATING LOSS

<TABLE>
<S> <C> <C>
Net Operating Loss 1/1/97................................... $ (159,042)
Loss Used 1997.............................................. $94,095
Loss Used 1998.............................................. 4,737 98,832
------- ----------
Carry Forward............................................... $ (60,210)
==========
</TABLE>

The value of the net operating loss carry forward at a federal tax rate of
34% would be $20,471.

F-36
<PAGE> 72
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

NOTE 7

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 8

Litigation

There is one lawsuit that was brought against the company in 1997 and
stopped in 1998. Corporate attorney and management indicate that there are
currently no lawsuits against the company.

NOTE 9

Sales Break and Concentration

The company has two sources of sales (1) routes and food service and (2)
sub-distributors.

<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
1. Routes and food service................................. $3,511,259 $3,267,188
2. Sub-distributors........................................ 2,634,159 3,231,242
---------- ----------
$6,145,418 $6,498,430
========== ==========
</TABLE>

Sub-distributors are other distributors who buy products directly from New
Yorker Ice Cream Corp. at a 7% - 10% up-charge (gross margin) for storage, rent
and loading products onto sub-distributors' trucks. The two largest
sub-distributors are (A) Bartolini Ice Cream Co., Inc. and (B) Jerry's Ice Cream
Inc.

<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
A. Bartolini Ice Cream Co., Inc. .......................... $1,830,879 $1,997,244
B. Jerry's Ice Cream Inc. ................................. 410,654 515,100
</TABLE>

- ---------------
A. Bartolini Ice Cream Co., Inc. would be considered a high concentration
customer given the percentage of sales. Bartolini Ice Cream Co., Inc. pays a
7% fee on all purchases from New Yorker Ice Cream Corp. Currently, management
feels there is no reason to expect that Bartolini Ice Cream Co., Inc. will
not continue its purchase from New Yorker Ice Cream Corp.

B. Jerry's Ice Cream Inc. -- As mentioned in footnote number 9, regarding sale
of assets, Jerry's Ice Cream Inc. is also selling their assets to the same
parties at that same time.

F-37
<PAGE> 73
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

NOTE 10

The company signed a contract on July 20, 1998 to sell all of its assets to
Mike's Original Inc. for $2,045,000. The contract calls for the assets (not
including inventory which will be purchased separately, cash and accounts
receivable) to be paid for as follows:

<TABLE>
<S> <C> <C> <C>
1. Down payment (already paid)............................... $ 35,000
2. At closing in cash........................................ 515,000
3. Due in 6 months with 8% interest.......................... 150,000
4. Promissory Notes -- to be paid by the issuance of shares
of Mike's Original Inc. stock............................. 650,000
5. Assumption of indebtedness of a liability to the estate of
Joseph Ketsoglou to be paid:
A. At closing............................................ $200,000
B. Over 4 years with interest at 8%...................... 495,000
--------
695,000
----------
$2,045,000
==========
</TABLE>

The contract is subject to Mike's Original Inc. raising the necessary funds
through a public offering and final approval by the SEC.

Assuming that the sale of assets takes place, the company will cease to be
a going concern entity.

F-38
<PAGE> 74

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, 1998 and December 31, 1997, and the related statements of
operations, retained earnings 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, 1998 and December 31, 1997, 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
Certified Public Accountant

February 16, 1999

F-39
<PAGE> 75

JERRY'S ICE CREAM INC.

BALANCE SHEETS
AS AT: DECEMBER 31, 1998 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash in banks............................................. $ -- $ 5,585
Accounts receivable -- net................................ 4,520 5,468
Merchandise inventory..................................... 10,761 4,177
Other current assets...................................... 1,500 --
-------- --------
Total current assets.............................. 16,781 15,230
FIXED ASSETS
Furniture and fixtures --
Net of accumulated depreciation of $67,218 for 1998 and
$50,147 for 1997...................................... 30,214 40,798
INTANGIBLE ASSETS -- Goodwill
Net of accumulated amortization of $74,257 for 1998 and
$55,299 for 1997....................................... 186,445 205,403
-------- --------
TOTAL ASSETS................................................ $233,440 $261,431
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Bank overdraft............................................ $ 6,453 $ --
Accounts payable and accrued expenses..................... 28,593 23,825
Notes payable -- Note 2................................... 31,716 31,716
-------- --------
Total current liabilities......................... 66,762 55,541
OTHER LIABILITIES
Loans payable -- stockholder.............................. 43,926 58,873
Notes payable -- Note 2................................... 44,838 63,233
-------- --------
88,764 122,106
STOCKHOLDER'S EQUITY
Capital stock -- 10 shares authorized,
Issued and outstanding -- no par value.................... 138,890 138,890
Deficit................................................... (60,976) (55,106)
-------- --------
Total stockholder's equity........................ 77,914 83,784
-------- --------
$233,440 $261,431
======== ========
</TABLE>

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

F-40
<PAGE> 76

JERRY'S ICE CREAM, INC.

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
FOR THE YEARS ENDED: DECEMBER 31, 1998 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
NET SALES................................................... $809,117 $807,310
COST OF GOODS SOLD.......................................... 690,799 656,922
-------- --------
GROSS PROFIT................................................ 118,318 150,388
OPERATING EXPENSES.......................................... 117,797 157,121
-------- --------
INCOME (LOSS) BEFORE OTHER EXPENSES......................... 521 (6,733)
OTHER EXPENSES:
Interest Expense.......................................... 6,391 9,232
-------- --------
NET (LOSS).................................................. $ (5,870) $(15,965)
======== ========
RETAINED EARNINGS (DEFICIT)
Beginning of year......................................... $(55,106) $(39,141)
NET (LOSS).................................................. (5,870) (15,965)
-------- --------
RETAINED EARNINGS (DEFICIT)
End of year............................................... $(60,976) $(55,106)
======== ========
</TABLE>

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

F-41
<PAGE> 77

JERRY'S ICE CREAM INC.

STATEMENTS OF CASH FLOWS
FOR YEARS ENDED: DECEMBER 31, 1998 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss)................................................ $ (5,870) $(15,965)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and Amortization........................ 36,031 33,649
Decrease in accounts receivable...................... 948 3,032
(Increase) in inventory................................ (6,584) (1,627)
(Increase) Decrease in other current assets............ (1,500) 8,052
Increase in accounts payable and accrued expenses...... 4,768 11,316
-------- --------
Net cash provided by operating activities................. 27,793 38,457
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Fixed Assets.............................................. (6,488) (8,492)
-------- --------
Net cash used in investing activities..................... (6,488) (8,492)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans -- Shareholder...................................... (14,947) (12,481)
Loans -- Net.............................................. (18,396) (7,485)
-------- --------
Net cash (used in) financing activities................... (33,343) (19,966)
-------- --------
NET (DECREASE) INCREASE IN CASH............................. (12,038) 9,999
CASH AT BEGINNING OF YEAR................................... 5,585 (4,414)
-------- --------
CASH AT END OF YEAR......................................... $ (6,453) $ 5,585
======== ========
</TABLE>

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

F-42
<PAGE> 78

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 non-related 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.

Use of Estimates

Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or
less are considered to be cash equivalents.

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 merchandise available for sale.

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.

PROPERTIES, RENTAL EQUIPMENT AND DEPRECIATION SCHEDULE

<TABLE>
<CAPTION>
1998 1997
----------------------- -----------------------
ASSET ACCUMULATED ASSET ACCUMULATED
VALUE DEPRECIATION VALUE DEPRECIATION
------- ------------ ------- ------------
<S> <C> <C> <C> <C>
Computers...................................... $ 5,144 $ 2,381 $ 4,644 $ 1,328
Auto and Truck................................. 15,190 14,539 15,190 13,939
Freezer Cabinets............................... 76,261 49,963 70,274 34,712
Furniture Fixtures............................. 837 335 837 168
------- ------- ------- -------
$97,432 $67,218 $90,945 $50,147
======= ======= ======= =======
</TABLE>

F-43
<PAGE> 79
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

NOTE 2

<TABLE>
<CAPTION>
1998 1997
------------------ ------------------
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 -- $15,000
2) Note Payable -- Estate of Ron Ennis
Self Amortizing Loan Interest Rate 10%........... $31,716 29,838 $31,716 48,233
------- ------- ------- -------
$31,716 $44,838 $31,176 $63,233
======= ======= ======= =======
</TABLE>

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 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 $2,643.00. Mr.
Gerald Schneider is a personal guarantor on this obligation.

NOTE 3

Amortization of Intangible Assets

The company is amortizing route values (goodwill) acquired as part of a
stock redemption (see Note 1) of $248,057.00 over 15 years.

NOTE 4

Provision for Income Taxes

Provision for income taxes Jerry's Ice Cream Inc., has elected to be taxed
under the provision of Subchapter S of the Internal Revenue Code and New York
State tax laws. Accordingly, there is only a provision for minimum taxes of $625
which is included in operating expenses.

NOTE 5

Leases

The company has no leases.

NOTE 6

Litigation

Management and Counsel has indicated that as of report date there are no
lawsuits pending.

F-44
<PAGE> 80
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

NOTE 7

Sale of Corporate Assets

The company signed a contract on July 20, 1998 to sell all of its assets to
Mike's Original Inc., for $490,000. The contract calls for an asset sale (not
including inventory which will be purchased separately, cash and accounts
receivable) to be paid for as follows:

<TABLE>
<S> <C> <C>
1. Down payment (already paid)................................. $ 15,000
2. At closing in cash.......................................... 255,000
3. Due in 6 months with 8% interest............................ 50,000
4. Promissory Notes to be paid by the issuance of shares of
Mike's Original Inc.
stock..................................................... 170,000
--------
$490,000
========
</TABLE>

The contract is subject to the raising of funds by Mike's Original Inc.,
through a public offering and approval by the SEC.

Assuming that the sale of assets takes place, the company will cease to be
a going concern entity.

F-45
<PAGE> 81

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

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 NEW YORKER, 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 NEW YORKER SINCE THE DATE HEREOF.

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................... 3
Risk Factors............................... 6
Use of Proceeds............................ 8
Dilution................................... 9
Capitalization............................. 10
Price Range of Common Stock................ 11
Dividend Policy............................ 11
Selected Financial Data.................... 12
Management's Discussion and Analysis
of Financial Condition and Results
of Operations............................ 13
Business................................... 15
Management................................. 19
Principal Stockholders..................... 24
Certain Transactions....................... 25
Selling Stockholders....................... 26
Description of Securities.................. 27
Shares Eligible for Future Sale............ 29
Underwriting............................... 31
Legal Matters.............................. 34
Experts.................................... 34
Where to Find Additional Information....... 34
Index to Financial Statements.............. F-1
Independent Auditor's Report............... F-11
Independent Auditor's Report............... F-30
</TABLE>

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680,000 SHARES
NEW YORKER
MARKETING CORP.
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PROSPECTUS
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FAIRCHILD FINANCIAL GROUP, INC.

MILLENNIUM SECURITIES CORP.
JUNE 7, 1999

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