Chefs International Inc – ‘10KSB’ for 1/29/95

As of:  Thursday, 4/27/95   ·   For:  1/29/95   ·   Accession #:  930883-95-3   ·   File #:  0-08513

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       40±   174K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     1      7K 

10KSB   —   Annual Report — Small Business
Document Table of Contents

SECURITIES AND EXCHANGE COMMISSION      
Washington, D. C. 20549     

FORM 10-KSB     

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

For the fiscal year ended January 29, 1995                                      

OR      

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE              
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)                     

For the Transition period from_________________to________________               

Commission File Number 0-8513     

CHEFS INTERNATIONAL, INC.     
[Exact name of registrant as specified in its charter]      

Delaware                              22-2058515                  
[State or other jurisdiction of              [IRS Employer                      
incorporation or organization]                Identification                  
Number]                                                                         

62 Broadway, P.O. Box 1332                                                      
Pt. Pleasant Beach, New Jersey                          08742                   
[Address of principal executive offices]               [Zip Code]               

Registrant's telephone number, including area code 908-295-0350                 

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

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

Common Stock, $.01 par value      
(Title of Class)      

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

Indicate by check mark if disclosure of delinquent filers pursuant              
to Item 405 of Regulation S-B is not contained herein, and will not             
be contained, to the best of registrant's knowledge, in definitive              
proxy or information statements incorporated by reference in Part               
III of this Form 10-KSB or any amendment to this Form 10-KSB.                   
[   ]               

For the year ended January 29, 1995, the issuer's revenues were                 
$31,916,257.                                                                    

On March 31, 1995, the aggregate market value of the voting stock               
of Chefs International, Inc. (consisting of Common Stock, $.01 par              
value) held by non-affiliates of the Issuer was approximately                   
$3,600,000 based upon the closing bid price for such Common Stock               
on said dated in the over-the-counter market as reported by the                 
National Quotation Bureau, Inc.  On such date, there were                       
13,459,576 shares of Common Stock of the Issuer outstanding.                    

CHEFS INTERNATIONAL, INC.     

PART I      

Item 1.   Description of Business                                               

(a) Business Development - Chefs International, Inc. ("Chefs"         
or the "Company") was organized under the laws of the State of                  
Delaware in March 1975.  The Company currently operates nine                    
restaurants on a year-round basis, eight of which are free-standing             
seafood restaurants in New Jersey (five) and Florida (three) and                
one of which is a limited menu La Crepe restaurant located in a                 
shopping mall in New Jersey.  Seven of the seafood restaurants are              
operated under the name "Lobster Shanty" and one under the name                 
"Baker's Wharfside."  The Company opened its first La Crepe                     
restaurant in November, 1975 and its first seafood restaurant in                
November, 1978.  In July 1993 effective June 30, 1993, the Company              
acquired all of the issued and outstanding capital stock of Mister              
Cookie Face, Inc. ("MCF" or "Mr. Cookie Face"), a Lakewood, New                 
Jersey producer of ice cream sandwiches currently available in 35               
states.  Mr. Cookie Face's products are currently being distributed             
primarily in the northeastern United States including the New York,             
Philadelphia and Boston metropolitan areas, and also in the                     
midwest, including the Chicago metropolitan area, Colorado and                  
Arizona, the northwest, Florida and the greater Los Angeles and San             
Francisco areas.  (As used herein, the term the "Company" may also              
at times include Chefs and its various subsidiaries, including "Mr.             
Cookie Face").                                                                  

The Company's executive offices are located at 62 Broadway,           
Point Pleasant Beach, New Jersey 08742.  Its telephone number is                
(908) 295-0350.  Mr. Cookie Face's offices and production facility              
are located at 170 North Oberlin Avenue, Unit 19, Lakewood, New                 
Jersey 08701 where its telephone number is (908) 370-5533.                      

Recent Developments                                                             

Effective June 8, 1993, the Company completed a one-for-three         
reverse stock split of its outstanding Common Stock, $.01 par value             
(the "Common Stock").  Unless otherwise indicated, all share and                
per share information contained in this report gives effect to the              
said one-for-three reverse stock split.  In addition, unless                    
otherwise indicated, actual price quotations for the Common Stock               
as quoted on the NASDAQ System have been adjusted throughout this               
report by multiplying the actual price for the Common Stock for                 
periods prior to June 8, 1993 by three.  No assurances can be given             
that the actual price quotations for the Common Stock during such               
pre-split period would have approximated such adjusted prices if                
the one-for-three reverse stock split had been effectuated at such              
time.                                                                           

In July 1993 effective June 30, 1993, the Company acquired all        
of the issued and outstanding capital stock of Mr. Cookie Face from             
its sole stockholder, Frank Koenemund, in exchange for 1,000,000                
authorized but unissued shares of Chefs Common Stock.  In                       
connection with the acquisition, Mr. Koenemund agreed to execute an             
approximately four and one-half year employment contract with Mr.               
Cookie Face to serve as its president and chief executive officer.              
See "Item 10 - Executive Compensation."                                         

An aggregate 500,000 of the 1,000,000 shares of Chefs Common          
Stock issued to Mr. Koenemund were held in escrow subject to                    
forfeiture pursuant to a formula requiring Mr. Cookie Face to                   
achieve certain net revenues in fiscal 1994 and fiscal 1995,                    
provided that Chefs provide at least $5,000,000 of funding to Mr.               
Cookie Face on or before January 31, 1994.  As Chefs was unable to              
provide the $5,000,000 of funding to Mr. Cookie Face by January 30,             
1994, the escrowed shares were released to Mr. Koenemund.  Despite              
Chefs' inability to provide $5,000,000 of funding by January 31,                
1994, Mr. Cookie Face achieved net revenues in excess of the target             
net revenues it would have been required to achieve to avoid                    
forfeiture ($2,000,000 in fiscal 1994 and $10,000,000 in fiscal                 
1995).                                                                          

At the Closing, Mr. Koenemund was elected to the Chefs board          
of directors and two of Chefs' principal executive officers,                    
Anthony Papalia and Martin Fletcher, were elected as directors and              
as vice president and as secretary-treasurer of Mr. Cookie Face.                
See "Item 12 - Certain Relationships and Related Transactions"                  
herein as to the grant by the Company's principal stockholder to                
Messrs. Papalia, Martin Fletcher, Koenemund and Jack Mariucci, of               
options to purchase an aggregate 3,250,000 of his approximately                 
5,800,000 shares of Chefs' Common Stock.                                        

On August 3, 1993, Chefs filed a Registration Statement on            
Form SB-2 (File No. 33-66936) with the Securities and Exchange                  
Commission (the "Commission") for the purpose of registering shares             
of Common Stock and warrants for sale to the public in an                       
underwritten public offering.  The offering was seeking to raise                
net proceeds of approximately $8,500,000, approximately $5,000,000              
of which was to be applied to the expansion of the business of Mr.              
Cookie Face and the balance to the acquisition and/or construction              
by Chefs of additional seafood restaurants.                                     

The effectiveness of the Registration Statement is currently          
being delayed due to the conduct by the staff of the Commission of              
an investigation pursuant to a formal order of investigation (HO-               
2781) issued by the Commission in October 1993.  See Item 3 herein.             
The ongoing investigation has inhibited the Company's ability to                
obtain sufficient additional financing to adequately fund the                   
growth of Mr. Cookie Face or to adequately fund the planned                     
expansion of the Company's restaurant business.  No assurances can              
be given that the Registration Statement will be declared effective             
or that the proposed public offering will be consummated upon                   
completion of the investigation.  Furthermore, management is unable             
to predict the long-term effect which this investigation will have              
on the Company or the market for its securities.                                

On February 25, 1994, the Company obtained a $2,000,000 line          
of credit pursuant to a two-year revolving credit agreement with                
First Fidelity Bank, National Association ("First Fidelity")                    
secured by mortgages on the Company's two Point Pleasant Beach, New             
Jersey restaurants.  Repayment of borrowings under the line of                  
credit is guaranteed by each of the Company's subsidiaries.   At                
the end of fiscal 1995, approximately $1,225,000 was outstanding                
under the line.  Pursuant to the credit agreement, the Company has              
made certain affirmative and negative covenants to First Fidelity               
(including covenants not to pay dividends while the loan is                     
outstanding, to maintain on a consolidated basis, minimum working               
capital of at least $600,000 and a current asset to current                     
liability ratio of at least 1.25:1; tangible net worth of at least              
$12,300,000; a debt to equity ratio of no greater than .55:1; a net             
income, depreciation and amortization to current portion of long                
term debt ratio of not less than 1.15:1; and cash and cash                      
equivalents of not less than $750,000).  A failure by the Company               
to satisfy any such covenant constitutes an event of default which              
would enable First Fidelity to accelerate repayment of borrowings               
under the line of credit.  The Company applied proceeds borrowed                
under the line of credit to the expansion of Mr. Cookie Face's                  
business.  Subsequent to said fiscal year-end, Chefs drew down an               
additional $200,000 under the line to provide additional working                
capital for Mr. Cookie Face.  In September 1994, Chefs borrowed an              
additional $150,000 from First Fidelity (not pursuant to the line               
of credit) to fund renovations at its newly opened seafood                      
restaurant in Belmar, New Jersey.  This loan is repayable over a                
three-year period in principal installments of $12,500 in June,                 
July, August and September, the balance being due September 30,                 
1997.  Interest is paid monthly at an annual rate equal to 1% above             
the Bank's prime rate.  See "Item 6 - Management's Discussion and               
Analysis of Financial Condition and Results of Operations" and Note             
5 to Notes to the Company's Consolidated Financial Statements.                  

In September 1994, Chefs closed its LaCrepe restaurant at the         
Quakerbridge Mall in Lawrenceville, New Jersey.  In connection with             
the closing of this restaurant, Chefs sold the liquor license for               
$160,000 and was paid an additional $60,000 in order to prematurely             
abandon the lease.                                                              

In October 1994, Chefs opened an additional approximately             
9,000 square foot seafood restaurant in Belmar, New Jersey under                
the name "Lobster Shanty."  See "Restaurant Operations - Lobster                
Shanty Restaurants" in this Item 1.                                             

(b) Business of Issuer - The Company is engaged in two                
principal lines of business; the operation of nine restaurants in               
New Jersey and Florida on a year-round basis and, through its Mr.               
Cookie Face subsidiary acquired in July 1993, the production of ice             
cream sandwiches currently distributed primarily in the                         
northeastern United States including the New York, Philadelphia and             
Boston metropolitan areas and also distributed in the midwest, the              
northwest, Florida and the greater Los Angeles area.                            

RESTAURANT OPERATIONS     

For the past three fiscal years and at present, the Company           
has been principally engaged in the operation of nine restaurants               
on a year-round basis, eight of which are free-standing seafood                 
restaurants in New Jersey (five) and Florida (three) and one of                 
which is a limited menu La Crepe restaurant located in a shopping               
mall in New Jersey.  Seven of the seafood restaurants are operated              
under the name "Lobster Shanty" and one under the name "Baker's                 
Wharfside."  The Company opened its first La Crepe restaurant in                
November, 1975 and its first seafood restaurant in November, 1978.              
The Company's restaurants, all of which are operated on a year-                 
round basis, are as follows:                                                    

Date of Opening     
Under the Company's 
Location                      Management                              

SEAFOOD RESTAURANTS                                                             

Lobster Shanty                                                                  

Vero Beach, Florida                December, 1979                               
Pt. Pleasant Beach, New Jersey     October, 1980                                
Toms River, New Jersey             October, 1980                                
Jensen Beach, Florida              December, 1980                               
Cocoa Beach, Florida               September, 1981                              
Hightstown, New Jersey             December, 1981                               
Belmar, New Jersey                 October, 1994                                

Baker's Wharfside                                                               

Pt. Pleasant Beach, New Jersey     October, 1980                                

LA CREPE RESTAURANT                                                             

Monmouth Mall, Eatontown,                                                       
New Jersey                       November, 1975                             

Seafood Restaurants                                                             

The Company's seafood restaurants provide a variety of seafood        
dishes including shell fish such as lobster, scallops, shrimp,                  
oysters and clams, and other fish including red snapper, bluefish,              
grouper and other varieties.  A limited selection of non-seafood                
entrees is also offered including steak and chicken as well as a                
dessert selection.  Most of the Company's seafood restaurants have              
a nautical decor.                                                               

Lobster Shanty Restaurants                                                      

Vero Beach, Florida - This restaurant, consisting of                  
approximately 6,900 square feet, is free standing in Vero Beach,                
Florida approximately 100 yards off U.S. Highway #60 on the                     
intracoastal waterway.  It opened in December, 1979 pursuant to a               
lease from Gourmet Associates ("Gourmet") owned by Robert E.                    
Brennan, the principal stockholder of the Company.  The lease is                
currently a month to month "net" lease at a monthly rental of                   
$10,000 with the Company paying personal property taxes and                     
insurance thereunder.                                                           

Gourmet had purchased the property for $700,000 in April, 1979        
by making a $200,000 down payment and issuing its $500,000                      
promissory note for the balance, payable with 9.5% annual interest              
over 18 years secured by a first mortgage.  Gourmet expended                    
approximately $315,000 in extensions and improvements to the                    
facility as well as for equipment therein prior to leasing this                 
restaurant to the Company.                                                      

Pt. Pleasant Beach, New Jersey - This restaurant, consisting          
of approximately 17,000 square feet, is free standing with a                    
waterfront location on Channel Drive in Pt. Pleasant Beach, New                 
Jersey and seats approximately 750.  It shares parking with the                 
Baker's Wharfside restaurant in Pt. Pleasant Beach with space for               
approximately 250 automobiles.  The Company purchased this                      
restaurant and three others (including the land, buildings,                     
improvements and businesses including personal property and                     
fixtures, liquor licenses and all of the outstanding stock of the               
four corporations operating these restaurants) from Robert E.                   
Brennan, the principal stockholder of the Company, and from three               
partnerships owned by him, in October, 1980 for an aggregate                    
$7,750,000 less a subsequent $250,000 prepayment discount.                      
Subsequent to its January 26, 1992 fiscal year-end, the Company                 
commenced renovations and improvements to this restaurant at a cost             
of approximately $375,000.  These renovations were completed in the             
second quarter of calendar 1992.                                                

Toms River, New Jersey - This restaurant, consisting of               
approximately 10,750 square feet, is free standing on Robbins                   
Parkway in Toms River, New Jersey and seats approximately 400.                  
Municipal parking facilities are available nearby.  The Company                 
purchased this restaurant and three others (including the land,                 
buildings, improvements, and businesses including personal property             
and fixtures, liquor licenses and all of the outstanding stock of               
the four corporations operating these restaurants) from Robert E.               
Brennan, the principal stockholder of the Company, and from three               
partnerships owned by him, in October, 1980 for an aggregate                    
$7,750,000 less a subsequent $250,000 prepayment discount.                      

Jensen Beach, Florida - This 200 seat restaurant, consisting          
of approximately 4,500 square feet, is located in a free standing               
building on the intracoastal waterway in Jensen Beach, Martin                   
County, approximately 50 miles north of Palm Beach.  The restaurant             
has parking for 100 automobiles.  Acquired in October, 1980 were                
two lots, the restaurant with furnishings and a liquor license from             
an unaffiliated party for $975,000.  The Company made a $295,000                
down payment and paid the balance over a ten year period through                
September, 1990.                                                                

Cocoa Beach, Florida - On September 29, 1981, the Company             
purchased all of the outstanding capital stock of two corporations              
engaged in the ownership and operation of two Florida seafood                   
restaurants from two unaffiliated individuals.  One restaurant was              
in Cocoa Beach and the other (sold by the Company in January, 1988)             
was in Titusville, Florida.  The corporations owned the land on                 
which the restaurants were located, the restaurant buildings, the               
restaurant businesses including personal property and fixtures and              
liquor licenses for each restaurant, all of which were included in              
the sale.  Each restaurant was free standing and had approximately              
240 seats.  The Cocoa Beach  restaurant on Highway A1A has parking              
for approximately 90 cars.  The Titusville restaurant on Marina                 
Road, within one mile of Highway A1A had parking for approximately              
120 cars.  The Company commenced operation of both restaurants                  
immediately after the purchase under the names "Jack Baker's                    
Pelican Point Inn" and "Jack Baker's Sands Point Inn" and                       
subsequently changed the name of each to "Lobster Shanty."                      

The purchase price for the stock of the two corporations was          
$3,370,000 increased by an amount equal to certain additional                   
assets available at the closing, primarily cash and receivables                 
totalling $414,029 and decreased by indebtedness under various bank             
notes, recapture taxes and other liabilities paid by the Company                
leaving a net balance of $2,655,239.  The Company paid $289,671 in              
cash at the closing and issued two $1,182,784 promissory notes, one             
to each seller, for the balance.  Each note was secured by a                    
mortgage on the restaurants and was payable in 240 consecutive                  
monthly installments with interest computed on the unpaid balance               
at an annual rate of 12%.  In addition, the Company paid a $130,000             
sales commission to the real estate broker involved in the                      
transaction by delivering its check for $60,000 and its ten year                
note for the $70,000 balance.                                                   

In January, 1988, the Company sold the Titusville restaurant          
to an unaffiliated third party in a transaction in which it                     
realized a loss of approximately $942,000.  The $800,000                        
consideration received by the Company together with an additional               
$263,126 paid by the Company was applied to reduce the outstanding              
promissory notes to 50% of the outstanding balance immediately                  
prior to the sale thereby enabling the release of a mortgage lien               
on the Titusville restaurant.  The outstanding notes secured by a               
mortgage on the Cocoa Beach restaurant were paid in July 1993 with              
the proceeds received from the sale in June 1993 of the Company's               
Ft. Myers, Florida property.                                                    

Hightstown, New Jersey - This restaurant, consisting of               
approximately 4,600 square feet, is free standing on State Highway              
33 approximately two miles east of Hightstown and seats                         
approximately 175.  The restaurant has parking for approximately                
100 automobiles.  The Company purchased this restaurant and three               
others (including the land, buildings, improvements and businesses              
including personal property and fixtures, liquor licenses and all               
of the outstanding stock of the four corporations operating these               
restaurants) from Robert E. Brennan, the principal stockholder of               
the Company and from three partnerships owned by him, in October,               
1980 for an aggregate $7,750,000 less a subsequent $250,000                     
prepayment discount.  The Company made substantial renovations to               
this restaurant commencing in fiscal 1993 which renovations were                
completed early in fiscal 1994.  The renovations, which cost                    
approximately $200,000, were paid for by the Company out of                     
existing cash reserves.                                                         

Belmar, New Jersey - This restaurant, consisting of                   
approximately 9,000 square feet, is free standing on Main Street in             
Belmar, New Jersey.  The restaurant seats approximately 250 and has             
parking for approximately 110 automobiles.  The Company purchased               
the liquor license and trade name for use at this restaurant in                 
October 1994 for $250,000 from unaffiliated parties and leased the              
restaurant, the parking lot and the restaurant furniture, fixtures              
and equipment at such time from such parties pursuant to a five-                
year lease in which the Company was given four consecutive five-                
year options to renew.  The lease provides for a monthly base rent              
of $8,000 increasing every three years up to a monthly base rent                
after the eighteenth year of $12,693 with an additional annual                  
percentage rent equal to 6% of Chefs' gross receipts at the                     
restaurant for such period less the base rent.  The restaurant                  
opened as a "Lobster Shanty" restaurant under the Company's                     
management in October 1994.  In November 1994, the Company borrowed             
$150,000 from First Fidelity to fund renovations at this                        
restaurant.  This loan is repayable over a three-year period in                 
principal installments of $12,500 in June, July, August and                     
September, the balance being due September 30, 1997.  Interest is               
paid monthly at an annual rate equal to 1% above the bank's prime               
rate.                                                                           

Baker's Wharfside Restaurant                                                    

Pt. Pleasant Beach, New Jersey - This restaurant, consisting          
of approximately 7,500 square feet, is free standing with a                     
waterfront location on Channel Drive in Pt. Pleasant Beach, New                 
Jersey and seats approximately 500.  It shares parking with the                 
Lobster Shanty restaurant in Pt. Pleasant Beach with space for                  
approximately 250 automobiles.  The Company purchased this                      
restaurant and three others (including the land, buildings,                     
improvements and businesses including personal property and                     
fixtures, liquor licenses and all of the outstanding stock of the               
four corporations operating these restaurants) from Robert E.                   
Brennan, the principal stockholder of the Company, and from three               
partnerships owned by him, in October, 1980 for an aggregate                    
$7,750,000 less a subsequent $250,000 prepayment discount.                      

La Crepe Restaurant                                                             

The Company's La Crepe restaurant features authentic crepes;          
thin, delicate French pancakes which can be filled with more than               
fifty different fillings ranging from breakfast and brunch items,               
such as sausages and eggs, to French culinary specialties suitable              
for lunch and dinner, such as ratatouille, beef bourguignon,                    
seafood, etc., to dessert items, such as crepe suzettes, hot apples             
and ice cream, etc.  The crepes are prepared and filled in a stone-             
faced barbecue area in full view of the customers.  Soups and salad             
dishes and a variety of other desserts are also featured.  The                  
Company's La Crepe unit features a sidewalk cafe area.                          

Monmouth Mall, Eatontown, Monmouth County, New Jersey - The           
Company has leased approximately 3,550 square feet in the Monmouth              
Mall, Eatontown, New Jersey for an approximately twenty-year period             
ending December 31, 1995 and has constructed a 150-seat La Crepe                
restaurant and sidewalk cafe within the leased premises.  The                   
restaurant opened in November, 1975 and has a liquor license for                
which the Company paid $85,000, permitting the consumption of wine              
and alcoholic beverages on the premises.                                        

The lease requires the Company to pay a minimum annual rental         
of the greater of $34,450 or 5% of gross sales as well as a common              
area charge, taxes and Merchants' Association dues.  The Mall and               
the restaurant are open seven days per week.                                    

The Mall has been in operation for approximately nineteen             
years.  Macy's, J.C. Penney and Abraham & Straus are major                      
department stores in the Mall.  The Mall is one of the largest                  
shopping centers in New Jersey with 1,500,000 square  feet of                   
shopping area on 105 acres with parking for 7,200 cars.                         

The restaurant is located on the upper level of the Mall next         
to a major Mall entrance between J.C. Penney and Abraham & Straus.              

Sources of Food Products                                                        

The food products used by the Company in the operation of its         
seafood restaurants and its La Crepe restaurant are readily                     
available from a variety of sources including national distributors             
and local sources on an order basis when needed.  In its last three             
fiscal years, the Company has not purchased any of its food                     
products from affiliated entities or entities affiliated with                   
former executive officers or directors.                                         

Seasonal Aspects                                                                

To date, the Company's New Jersey seafood restaurants have            
experienced their greatest sales volumes from May through September             
whereas its Florida seafood restaurants have experienced their                  
greatest sales volumes from January through April.  The Company's               
La Crepe restaurant has experienced a greater sales volume during               
the period from Thanksgiving through the beginning of January, than             
at any other similar time span during the year.                                 

Trademarks                                                                      

The Company has no patents, trademarks, licenses, franchises          
or concessions which it regards as material to its restaurant                   
business with the exception of the service mark "Jack Baker's                   
Lobster Shanty"R registered for a 20 year period with the U.S.                  
Patent and Trademark Office in February, 1989.                                  

Competition                                                                     

The restaurant business is highly competitive and the success         
of any restaurant depends to a great extent upon the services it                
supplies and its location.  The Company's seafood restaurants                   
compete primarily with other local seafood restaurants and to a                 
lesser extent, with local restaurants serving a more general fare.              
The principal national competition to the Company's seafood                     
restaurants is the Red Lobster restaurant chain owned and operated              
by General Mills.  This chain has substantially greater resources               
than the Company.  There are other restaurants in the mall and in               
the vicinity of the mall where the Company is now operating a La                
Crepe restaurant, all of which supply competition to the Company's              
La Crepe unit.  Typical "chain" competitors, all of which are                   
affiliated with better established and more prominent national                  
chains, are the Friendly Ice Cream chain, McDonalds and Roy Rogers              
Restaurants.  Local Chinese restaurants and "sit-down"                          
delicatessens also provide competition.  There can be no assurance              
that the Company's units will be able to successfully compete with              
any of such other restaurants.                                                  

Government Regulation                                                           

The Company is subject to various Federal, state and local            
laws affecting the operation of its restaurants, including                      
licensing and regulation by health, sanitation, safety and fire                 
departments and alcoholic beverage control authorities.  The                    
Company is also subject to the Fair Labor Standards Act, which                  
governs such matters as minimum wages, overtime and other working               
conditions.  While such regulations have not had a material                     
negative impact on the Company's operations to date, difficulties               
in obtaining necessary licenses or permits could result in delays               
or cancellations in the opening of new restaurants and increases in             
the minimum wage could increase the Company's labor cost.                       

Employees                                                                       

The Company maintains its administrative employees at its             
executive offices including its principal officers (see "Item 9 -               
Directors, Executive Officers, Promoters and Control Persons,                   
Compliance with Section 16(a) of the Exchange Act"), secretarial                
and bookkeeping personnel.  Each of the Company's seafood                       
restaurant units employs a manager, a relief manager and between 40             
and 130 other employees to serve as waitresses, waiters, busboys,               
bartenders, cooks, dishwashers, kitchen help, hostesses and                     
cashiers (some on a part-time basis).  Each La Crepe restaurant                 
unit employs approximately 25 to 40 employees serving similar                   
functions.  The Company also presently employs three area                       
supervisors, each responsible for three of the Company's                        
restaurants.  Managerial candidates are recruited for the Company's             
restaurants from hotel and restaurant management schools,                       
restaurant recruiting agencies, through advertising in restaurant               
management magazines and by promotion from within the Company's own             
organization.  At January 29, 1995, the Company had a total of                  
approximately 477 employees (including part-time workers).  This                
number excludes the employees of Mr. Cookie Face acquired in July               
1993.  The Company is not a party to any collective bargaining                  
agreements and has enjoyed satisfactory employee relations since                
inception.                                                                      

ICE CREAM OPERATIONS      
(Mister Cookie Face)      

In July 1993, the Company acquired all of the issued and              
outstanding capital stock of Mr. Cookie Face, a Lakewood, New                   
Jersey producer of ice cream sandwiches currently available in 35               
states.  Mr. Cookie Face's products are currently being distributed             
primarily in the northeastern United States including New York,                 
Philadelphia and Boston metropolitan areas, and also in the                     
midwest, including the Chicago metropolitan area, Colorado and                  
Arizona, the northwest, Florida and the greater Los Angeles and San             
Francisco areas.  The Company's ice cream operations are presently              
conducted through its wholly owned Mister Cookie Face, Inc.                     
subsidiary.                                                                     

Products                                                                        

Mr. Cookie Face's ice cream sandwiches consist of                     
approximately three fluid ounces of ice cream covered top and                   
bottom with a chocolate wafer.  At present, approximately twelve                
varieties of ice cream and combinations thereof are used including              
vanilla, chocolate, chocolate vanilla swirl, vanilla nut, mint,                 
mint chip, strawberry, chocolate chunk, chocolate fudge and butter              
pecan.  Mr. Cookie Face ice cream sandwiches are wrapped in                     
polypropylene plastic containers and are sold to consumers in                   
convenient six-pack and twelve-pack trays primarily at supermarkets             
and other food chains and as singles primarily at convenience                   
stores.  Current retail prices for a six-pack tray generally range              
from $2.99 to $3.99 and for a twelve-pack tray from $4.99 to $5.99.             
The current suggested retail price for single ice cream sandwiches              
is $1.49.  Other products include "COOKIES AND CREAMS," a miniature             
ice cream sandwich containing approximately one-half fluid ounce of             
vanilla ice cream covered top and bottom with a small chocolate                 
cookie, "CHIPSTER," a similar miniature ice cream sandwich using                
chocolate chip cookies, and a lowfat product similar to the                     
standard Mr. Cookie Face ice cream sandwich but using lowfat                    
vanilla chocolate swirl ice cream.                                              

Production                                                                      

All of Mr. Cookie Face's ice cream products are presently             
produced at its production facility in Lakewood, New Jersey by an               
independent subcontractor pursuant to a subcontracting agreement                
which expires in June 1995 subject to Mr. Cookie Face's right to                
renew the contract for incremental periods of six months on the                 
same terms and conditions up to a maximum of thirty months.  The                
subcontractor currently operates one to three shifts per diem at                
the facility as business requires.                                              

Mr. Cookie Face's ice cream products are produced using               
chocolate wafers provided by three different suppliers, mini                    
cookies provided by two other suppliers and ice cream mix provided              
by two other suppliers.  All of the suppliers (except for one                   
located in the midwest) are located in the greater New York                     
metropolitan area.  Mr. Cookie Face does not have any long term                 
contract with its suppliers but does not regard this fact as a                  
material risk to its business as the wafers, the mini cookies and               
the ice cream mix are currently available in similar qualities and              
quantities at competitive prices from a variety of sources on an                
order basis if needed.                                                          

Mr. Cookie Face regards its ice cream sandwiches as handmade          
as the amount of ice cream in each sandwich is determined by a                  
production worker who draws the mix for each sandwich by hand onto              
a wafer or mini cookie from an ice cream dispensing machine.  After             
production, the ice cream sandwiches are placed in freezers and                 
then packaged before shipment to retail outlets.  With its present              
configuration of 24 ice cream dispensing machines and its present               
freezer and packaging equipment, management believes that Mr.                   
Cookie Face can ship approximately $20,000,000 by dollar volume in              
product (based on its current pricing) on an annual basis from the              
Lakewood facility.                                                              

Marketing and Distribution                                                      

Mr. Cookie Face ice cream products are sold directly or               
through food brokers to supermarket and other food chains and                   
through distributors, to convenience stores.  At present, Mr.                   
Cookie Face utilizes more than 40 independent food brokers under                
contracts terminable on 30 days notice to attempt to place its                  
products in various retail outlets .  The brokers are compensated               
on a commission basis equal to a percentage of Mr. Cookie Face's                
collections and provide nationwide coverage.  Marketing efforts are             
also conducted directly by Mr. Cookie Face's chief executive                    
officer, Frank Koenemund and two full-time salaried salespersons.               

In order for its products to be afforded retail "shelf" space         
in most supermarkets, Mr. Cookie Face has been required to pay                  
"slotting" fees to various supermarket chains ranging from $2,000               
to $35,000 per product and will be required to pay additional                   
slotting fees for each additional type of ice cream sandwich.  No               
assurances can be given that Mr. Cookie Face will be able to obtain             
retail shelf space in additional chains or will be able to obtain               
additional shelf space for new products at chains where its present             
product line is carried, even with the availability of financial                
resources to pay additional slotting fees.                                      

Supermarket and other retail food chains which presently carry        
Mr. Cookie Face's products include Pathmark, Waldbaums, A&P,                    
Shoprite, Food Town, Grand Union, King Kullen, Winn-Dixie, Stop &               
Shop, Albertsons, Acme and Shaws; in the Los Angeles area - Vons,               
Ralph's and Lucky's; and Safeway, Food Lion, Jewel, Dominicks and               
Kroger.                                                                         

Mr. Cookie Face was organized in February 1992 and to date has        
not conducted any substantial advertising of its product line.                  
Advertising has been limited to radio (primarily in the New York                
metropolitan area), in-store promotions, circulars and coupons.                 
Management believes that Chefs' inability to provide substantial                
funding for Mr. Cookie Face's operations including advertising has              
had an adverse effect on its potential growth.  See "Developments               
Since the Beginning of the Last Fiscal Year".                                   

Seasonal Aspects                                                                

During its first full year of operation after acquisition by          
the Company, Mr. Cookie Face experienced its greatest sales volume              
during the period from May through August, which management                     
believes is typical in the industry for sales of ice cream                      
products.                                                                       

Competition                                                                     

Mr. Cookie Face's ice cream products compete primarily with           
other ice cream products as well as non-ice cream and other frozen              
dessert products.  Various national and regional ice cream                      
manufacturers with substantially greater resources than the Company             
produce ice cream products similar to Mr. Cookie Face's products.               
Certain well known competitors with similar "novelty" ice cream                 
products are Carvel (in the eastern United States), Colemans (in                
Pennsylvania), and Klondike's "Big Bear" square ice cream sandwich              
(nationwide).  In addition, there are relatively few entry barriers             
to new manufacturers and/or products.  Management believes that in              
addition to product quality and appearance, accessibility of retail             
"shelf" space, entry into new markets before competitors and                    
advertising are major competitive factors.  No assurances can be                
given that Mr. Cookie Face will be able to successfully compete.                

Proposed Mr. Cookie Face Restaurant                                             

Mr. Cookie Face expects to open its first "Mister Cookie Face"        
restaurant in a Manalapan, New Jersey strip mall in May 1995.  The              
restaurant, occupying approximately 2,000 square feet, will seat                
approximately 65 people and will offer a limited menu during lunch              
and dinner hours.  In addition, it will sell Mr. Cookie Face                    
products as well as other ice cream and dessert products such as                
sundaes and cakes for consumption on the premises as well as on a               
retail take-out basis.  See Item 12 herein as to the sale of the                
furniture, fixtures and equipment at this restaurant to Mr. Cookie              
Face by a related party.                                                        

Trademark and Litigation                                                        

Mr. Cookie Face filed an application with the United States           
Patent Office in 1992 to register the trademark "MISTER COOKIE                  
FACE."  On July 26, 1994, the application was granted and the                   
trademark was registered.  Mr. Cookie Face regards this trademark               
to be of material importance to its business.                                   

Employees                                                                       

In addition to Frank Koenemund who devotes substantially all          
of his working time to Mr. Cookie Face's business as chief                      
executive and chief marketing officer and president, two of the                 
Company's executive officers also serve as executive officers of                
Mr. Cookie Face.  Mr. Cookie Face also employs a plant manager, two             
full-time salaried salespersons and Mr. Koenemund's wife who                    
performs administrative functions.  Mr. Cookie Face's production                
operations are performed by production workers employed by an                   
independent subcontractor.  See "Ice Cream Operations -                         
Production."                                                                    

Item 2.   Description of Property                                               

The Company's executive and administrative offices are located        
in an approximately 4,000 square foot two story Company owned                   
building of cinder block construction at 62 Broadway, Point                     
Pleasant Beach, New Jersey.                                                     

Mr. Cookie Face produces its ice cream products from                  
approximately 15,600 square feet of leased premises in Lakewood,                
New Jersey pursuant to a lease expiring in January, 1998.  At                   
present, Mr. Cookie Face has 24 ice cream dispensing machines,                  
freezers and packaging equipment at the facility capable of                     
producing approximately $20,000,000 of product sales annually                   
(based on current pricing).  Mr. Cookie Face management regards its             
current production equipment to be in good condition, reasonable                
wear and tear excepted.                                                         

See Item 1 herein for a description of the Company's operating        
restaurants.                                                                    

Item 3.   Legal Proceedings                                                     

In October 1993, the Securities and Exchange Commission (the          
"Commission") issued a formal order of private investigation                    
concerning the Company (HO-2781).  The order alleges that members               
of the staff have reported information to the Commission which                  
tends to show that certain persons, including persons associated                
with Chefs, and persons associated with broker dealer firms who                 
make a market in Chefs' securities, may have, in connection with                
the offer, purchase, or sale of Chefs' securities, employed                     
devices, schemes or artifices to defraud; obtained money or                     
property by means of untrue statements of material facts or                     
omissions to state material facts; or may have engaged in                       
transactions, practices or courses of business which operate or                 
would operate as a fraud upon other persons, including purchasers               
or sellers of Chefs' securities, in that, among other things, such              
persons may have engaged in a scheme to dominate, control and                   
manipulate the market for Chefs' securities, and Chefs'                         
registration statement may include untrue statements of material                
fact or omit to state material facts necessary in order to make the             
statements therein not misleading, concerning among other things,               
recent activity in the market for Chefs' securities, the market                 
price for Chefs' securities, or the possible existence of a scheme              
to dominate, control and manipulate the market for Chefs'                       
securities.                                                                     

The Commission deemed that if the alleged acts and practices          
were true, they would constitute possible violations of the                     
Securities Act of 1933 and the Securities Exchange Act of 1934 and              
be the possible basis for the issuance of a stop order pursuant to              
the Securities Act of 1933 suspending the effectiveness of the                  
registration statement and therefore issued a formal order of                   
private investigation with respect to these allegations.  See Item              
5 herein as to certain of the staff's specific factual concerns                 
related to this investigation.                                                  

The staff of the Commission is currently conducting the               
investigation as a result of which the effectiveness of the                     
Company's Registration Statement on Form SB-2 (File No. 33-66936)               
is being delayed.  Although management is unaware of any violations             
of law concerning recent activity in the market for Chefs'                      
securities, the market price for Chefs' securities or the existence             
of a scheme to dominate, control or manipulate the market for                   
Chefs' securities, the ongoing investigation has inhibited the                  
Company's ability to obtain sufficient additional financing to                  
adequately fund the growth of Mr. Cookie Face or to adequately fund             
the planned expansion of the Company's restaurant business.  No                 
assurances can be given that the Registration Statement will be                 
declared effective or that the proposed public offering will be                 
consummated upon completion of the investigation.  Furthermore,                 
management is unable to predict the long-term effect which this                 
investigation will have on the Company or the market for its                    
securities.                                                                     

Item 4.   Submission of Matters to a Vote of Security Holders                   

No matters were submitted to a vote of the Company's security         
holders in the fourth quarter of fiscal year 1995.                              

CHEFS INTERNATIONAL, INC.     

PART II     

Item 5.   Market for the Registrant's Common Stock                              
and Related Security Holder Matters                         

The Common Stock is quoted in the over-the-counter market on          
the NASDAQ Small Cap System under the symbol "CHEF."  The following             
table sets forth the range of high and low closing bid prices for               
the Common Stock for the periods indicated, as derived from reports             
furnished by the National Quotation Bureau, Inc.  All such prices               
have been adjusted to give effect to the Company's one-for-three                
reverse stock split effected at the close of business on June 7,                
1993.  Such prices for periods prior to the split have been                     
computed by multiplying the actual bid price by three.  No                      
assurances can be given that the actual bid prices for the Common               
Stock would have approximated the prices set forth in the table if              
the one-for-three reverse stock split had been in effect at the                 
various periods set forth therein.                                              

Bid Prices        
(Adjusted for         
Quarter          Reverse Stock Split)                       
Ended               High      Low                           

May 2, 1993         $ .66     $ .57                         
August 1, 1993      $6.00     $ .75                         
October 31, 1993    $5.38     $3.88                         
January 30, 1994    $4.25     $3.00                         

April 29, 1994      $3.25     $1.75                         
July 29, 1994       $1.75     $1.00                         
October 28, 1994    $1.19     $ .38                         
January 29, 1995    $1.44     $ .44                         

The above quotations represent prices between dealers and do          
not include retail mark-ups, mark-downs or commissions.  They do                
not necessarily represent actual transactions.                                  

See "Item 3 - Legal Proceedings" herein as to an investigation        
ordered by the Securities and Exchange Commission concerning among              
other items, trading in the Common Stock and the increase in the                
bid price for the Common Stock from a low of $.66 to a high of                  
$6.00 in May and June 1993.  The staff of the Commission has also               
expressed concerns about the involvement in such trading of certain             
broker-dealers who as selected dealers, were each expected to sell              
in excess of 25% of the securities to be offered in the proposed                
public offering to their customers.  The Company is not aware of                
any violations of applicable law or rules with respect to such                  
trading or with respect to the increase in the bid price for the                
Common Stock.                                                                   

At March 31, 1995, the number of record holders of the Common         
Stock was 7,844.  Such number of record owners was determined from              
the Company's shareholder records and does not include beneficial               
owners whose shares are held in nominee accounts with brokers,                  
dealers, banks and clearing agencies.                                           

Pursuant to the Company's two-year revolving credit agreement         
with First Fidelity Bank entered into on February 25, 1994, the                 
Company is restricted during the period any loans are outstanding               
under the agreement from paying dividends on any of its outstanding             
stock.                                                                          

Item 6.   Management Discussion and                                             
Analysis or Plan of Operation                               

Results of Operations                                                           

In fiscal 1995, the Company sustained a loss of $257,100              
compared to a loss of $176,700 in fiscal 1994.  The figures for                 
1995 included registration costs of $270,700 associated with the                
Company's September 1993 registration statement which were written              
off due to the ongoing investigation related to the registration                
statement.  As a result of its inability to obtain funding from the             
proposed public offering, the Company was required to finance the               
planned Mister Cookie Face ("MCF") expansion, in part, through                  
borrowings.  As a result, additional interest expense of $101,600               
was incurred.  Sales rose 80% to $31,916,300 primarily due to the               
MCF expansion.  Segment operating results are summarized below.                 

Restaurants                                                                     

Net income from restaurant operations in fiscal 1995 increased        
by 23% to $334,500 compared to $271,200 for fiscal 1994.  Sales for             
1995 were $16,043,700, an increase of $726,100 or 4.7% over 1994                
sales of $15,317,600.  The increase was due to increased customer               
counts (1.4% higher than 1994), as well as higher menu prices (3.3%             
higher).                                                                        

Gross profit for 1995 was 67% of sales, slightly less than            
1994's 67.3%.  Management offset higher costs by raising menu                   
prices modestly and by attractively pricing higher margin items.                

Payroll and related expenses were 29.5% of sales in 1995              
versus 29.1% in 1994.  The main components of the increase were                 
higher workers' compensation premiums and payroll tax costs.  Other             
operating expenses were 21% of sales, essentially the same as in                
1994.  Depreciation and amortization costs were $36,000 higher in               
1995, mainly as a result of asset purchases and restaurant                      
improvements.  General and administrative expenses were $7,300                  
lower in 1995 resulting from higher payroll and lower rental income             
offset by reduced health insurance costs.                                       

The gain of $76,467 from the sale of restaurants in fiscal            
1995 resulted from the sale of the Company's Quakerbridge, New                  
Jersey, LaCrepe liquor license and the early termination of the                 
lease in September, 1994.  The 1994 fiscal year gain of $71,318                 
resulted from the sale of the Company's Fort Myers, Florida                     
property.                                                                       

Interest expense in the restaurant operations was $66,200             
lower in 1995 due to debt reduction.  The 1994 interest expense                 
included the early pay-off of the Cocoa Beach, Florida restaurant               
mortgage.  Interest income was $22,700 lower in fiscal 1995 due to              
reduced amounts of cash available for short-term investments.                   

The Company operated a total of nine restaurants in both              
fiscal 1995 and 1994.  During fiscal 1995, the Company sold the                 
Quakerbridge, New Jersey restaurant and opened a new seafood                    
restaurant in Belmar, New Jersey, under the name Jack Baker's                   
Lobster Shanty.  Management believes that the addition of the                   
Belmar restaurant should have a positive effect on the restaurant               
division's overall results.                                                     

Mister Cookie Face ("MCF")                                                      

MCF sustained a loss of $320,900 for fiscal 1995 compared to          
a loss of $447,900 for the seven months of operations during fiscal             
1994.  Sales increased by $13,477,800 to $15,872,600 during fiscal              
1995.  The increase was comprised of higher sales of $4,810,100 for             
the seven-month comparative period and $8,667,700 for the five                  
additional months of operation in fiscal 1995.  Expansion into new              
markets across the country, as well as successful promotions in                 
existing markets, accounted for the increase in sales.                          

Gross profit was 33% of sales in fiscal 1995 compared to 38.2%        
of sales in 1994.  The increased cost of promotional price                      
discounts given to supermarket chains was partially offset by a                 
reduction in raw material costs.  This was achieved through the use             
of additional suppliers and volume discounts.  Additionally, MCF                
was able to raise its prices modestly in selective markets.                     

Other operating expenses were 27.9% of sales in 1995 versus           
34% in 1994.  The improvement is due primarily to the large                     
increase in sales volume.  Depreciation and amortization expenses               
increased by $170,000 due to depreciation of equipment purchases                
and plant upgrades and the amortization of the excess fair value                
resulting from the Company's purchase of MCF.  General and                      
administrative expenses increased by $272,000 primarily due to the              
fact that MCF operated for five additional months during fiscal                 
1995.                                                                           

Interest expense increased by $132,000 in fiscal 1995 due to          
borrowings used to finance equipment acquisitions and for working               
capital needs and due to increases in the prime rate.                           

Management believes that MCF should be able to maintain its           
sales volume, despite increased competition, by introduction of new             
products and expansion into new markets.  Additionally, MCF will                
open its first Mister Cookie Face restaurant during May 1995.  The              
restaurant will be located in a Manalapan, New Jersey strip mall                
and will offer a limited menu during lunch and dinner hours.  In                
addition, the restaurant will sell ice cream products such as                   
sundaes and cakes for consumption on the premises as well as on a               
retail take-out basis.                                                          

Liquidity and Capital Resources                                                 

The Company's ratio of current assets to current liabilities          
was 1.45:1 at January 29, 1995 compared to 1.11:1 at January 30,                
1994.  Working capital was $1,195,200 at January 29, 1995, $908,700             
more than at January 30, 1994.  The increase was primarily due to               
net draws on the Company's $2,000,000 revolving line of credit                  
amounting to $1,225,000, new equipment lease funding for MCF                    
totalling $375,600, funds from a six-month $500,000 bank note used              
for MCF operations, and a new three-year bank loan of $150,000 used             
for the Belmar purchase, offset by capital expenditures of                      
$967,300, acquisition of the Belmar, New Jersey liquor license and              
trade name for $250,000 and debt repayment of $1,294,200.  Capital              
expenditures included outlays of $465,900 for restaurant                        
improvements and equipment and $501,400 for MCF equipment and plant             
upgrades.  During fiscal 1994, the Company incurred capital                     
expenditures of $1,105,400; $742,300 for restaurant renovations,                
improvements and equipment and $363,100 for MCF equipment.  Debt                
repayment in 1995 of $1,294,200 included scheduled debt repayment               
as well as repayment of the six-month $500,000 bank note.  Fiscal               
1994's debt repayment of $1,178,500 included the early pay-off of               
the Cocoa Beach mortgage of $854,700.                                           

Subsequent to the year ended January 29, 1995, the Company            
drew down an additional $200,000 from its revolving line of credit              
leaving available a balance of $575,000.  Additionally, the Company             
has $350,000 available in a line of credit secured by the Toms                  
River, New Jersey restaurant.                                                   

Management anticipates that funds from operations, the                
$2,000,000 line and the $350,000 line will be sufficient to meet                
obligations in fiscal 1996 including routine capital expenditures.              
During fiscal 1996, management will be negotiating with the                     
Company's bank to discuss pay-out terms of the revolving line of                
credit, the balance of which is due in February 1996.  The                      
expenditures necessary to open the planned MCF restaurant estimated             
at approximately $75,000 will be paid with existing cash.  There                
are no additional major capital expenditures planned.                           

Inflation                                                                       

It is not possible for the Company to predict with any                
accuracy the effect of inflation upon the results of its operations             
in future years.  The price of food is extremely volatile and                   
projections as to its performance in the future vary and are                    
dependent upon a complex set of factors.  The Company is currently              
experiencing food cost increases due to higher seafood prices                   
resulting from fishing quotas in New England.                                   

Item 7.   Financial Statements                                                  

INDEPENDENT AUDITOR'S REPORT              

To the Stockholders and Board of Directors of                                   
Chefs International, Inc.                                             
Point Pleasant, New Jersey                                            

        We have audited the accompanying consolidated balance sheet of Chefs
International, Inc. and its subsidiaries as of January 29, 1995, and the related
consolidated statements of operations, stockholders' equity, and cash flows for 
each of the two fiscal years in the period ended January 29, 1995.  These       
consolidated financial statements are the responsibility of the Company's       
management.  Our responsibility is to express an opinion on these consolidated  
financial statements based on our audits.                                       

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

     In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial      
position of Chefs International, Inc. and its subsidiaries as of January 29,    
1995, and the consolidated results of their operations and their                
cash flows for each of the two fiscal years in the period ended January 29,     
1995, in conformity with generally accepted accounting principles.              

MORTENSON AND ASSOCIATES, P. C.                   
Certified Public Accountants.           

Cranford, New Jersey                                                            
March 22, 1995                                                                  

                                                                [Download Table]
CHEFS INTERNATIONAL, INC. AND SUBSIDIARIES                                     
CONSOLIDATED BALANCE SHEET AS OF JANUARY 29, 1995.                             


Assets:                                                                        
Current Assets:                                                                
                                                                               
  Cash and Cash Equivalents                                       $  1,408,957 
  Investments                                                          100,000 
  Accounts Receivable [Net of Allowance of $3,878]                     383,138 
  Miscellaneous Receivables                                            128,675 
  Inventories                                                        1,761,273 
  Prepaid Expenses                                                      93,705 

  Total Current Assets                                               3,875,748 

Property, Plant and Equipment - At Cost                             19,065,295 

Less:  Accumulated Depreciation                                      6,111,219 

  Property, Plant and Equipment - Net                               12,954,076 

Other Assets:                                                                  
  Investments                                                          606,000 
  Goodwill - Net                                                     3,528,859 
  Liquor Licenses - Net                                                777,031 
  Due from Employees                                                    12,529 
  Deposits and Other Assets                                             49,575 

  Total Other Assets                                                 4,973,994 

  Total Assets                                                     $ 21,803,818

Liabilities and Stockholders' Equity:                                          
Current Liabilities:                                                           
  Accounts Payable                                                $  1,471,349 
  Accrued Expenses                                                     524,021 
  Notes and Mortgages Payable to Banks                                 333,000 
  Other Liabilities                                                    258,920 
  Capital Lease Obligations - Current                                   93,286 

  Total Current Liabilities                                          2,680,576 

Long-Term Debt:                                                                
  Notes and Mortgages Payable to Banks                               1,500,000 
  Capital Lease Obligations - Long-Term                                275,141 

  Total Long-Term Debt                                               1,775,141 

Other Liabilities                                                       82,396 

Commitments and Contingencies                                             --   

Stockholders' Equity:                                                          
  Capital Stock - Common, $.01 Par Value, Authorized 50,000,000                
   Shares; Issued and Outstanding 13,459,576                           134,595 

  Additional Paid-in Capital                                        32,212,586 

  Accumulated [Deficit]                                            (15,081,476)

  Total Stockholders' Equity                                        17,265,705 

  Total Liabilities and Stockholders' Equity                      $ 21,803,818 

See Notes to Consolidated Financial Statements.                                 

                                                                [Download Table]
CHEFS INTERNATIONAL, INC. AND SUBSIDIARIES                                 
CONSOLIDATED STATEMENTS OF OPERATIONS                                      


                                                    For the years ended    
                                                January 29,     January 30,
                                                  1 9 9 5        1 9 9 4   
                                                                           
Sales                                           $ 31,916,257 $ 17,712,293  

Cost of Goods Sold                                15,920,043    6,485,019  

  Gross Profit                                    15,996,214   11,227,274  

Operating Expenses [Income]:                                               
  Payroll and Related Expenses                     4,734,671    4,455,080  
  Other Operating Expenses                         7,819,627    4,074,802  
  Depreciation and Amortization                    1,241,949    1,036,010  
  Suspended Registration Expenses                    270,750       --      
  General and Administrative Expenses              2,125,045    1,860,207  
  [Gain] on Sale of Restaurant                       (76,467)     (71,318) 

  Total Operating Expenses                        16,115,575   11,354,781  

  [Loss] from Operations                            (119,361)    (127,507) 

Other Income [Expense]:                                                    
  Interest Expense                                  (210,586)    (144,725) 
  Interest Income                                     72,817       95,568  

  Total Other [Expense] - Net                       (137,769)     (49,157) 

  [Loss] Before Income Taxes                        (257,130)    (176,664) 

Income Tax Expense [Current]                           --           --     

  Net [Loss]                                        (257,130)    (176,664) 

  Net [Loss] Per Share                          $       (.02)  $     (.01) 

See Notes to Consolidated Financial Statements.                                 

                                                        [Enlarge/Download Table]
CHEFS INTERNATIONAL, INC. AND SUBSIDIARIES                                                            
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                                                       


                                                  Capital   Additional                   Total        
                                       Number      Stock      Paid-in  Accumulated       Stockholders'
                                      of Shares   Par Value   Capital    [Deficit]       Equity       
                                                                                                      
Balance - January 31, 1993           12,458,389  $124,584   $ 29,072,596  $ (14,647,682) $ 14,549,498 
Common Stock Issued in Connection                                                                     
   with Acquisition                   1,000,000    10,000      3,139,990     --             3,149,990 

  Common Stock Issued -                                                                               
  3:1 Split Fractional Shares             1,082        10         --         --                    10 

  Net [Loss] for the Year                   --         --         --           (176,664)     (176,664)

Balance - January 30, 1994           13,459,471   134,594     32,212,586    (14,824,346) $ 17,522,834 
 Common Stock Issued -                                                                                
 3:1 Split Fractional Shares                105         1         --         --                     1 

  Net [Loss] for the year                   --         --         --           (257,130)     (257,130)

Balance - January 29, 1995           13,459,576   $134,595   $32,212,586  $ (15,081,476) $ 17,265,705 

See Notes to Consolidated Financial Statements.                                 

                                                                [Download Table]

CHEFS INTERNATIONAL, INC. AND SUBSIDIARIES                                 
CONSOLIDATED STATEMENTS OF CASH FLOWS                                      

                                                    For the years ended    
                                                January 29,     January 30,
                                                  1 9 9 5        1 9 9 4   
                                                                           
Operating Activities:                                                      
  Net [Loss]                                    $  (257,130)   $  (176,664)
  Adjustments to Reconcile Net [Loss] to Net Cash                          
   Provided by Operating Activities:                                       
   Depreciation and Amortization                  1,241,949      1,036,010 
   Loss on Asset Disposals                            3,225        129,477 
   Allowance for Doubtful Accounts                  (29,873)        22,005 
   [Gain] on Sale of Restaurant                     (76,467)       (71,318)

  Change in Assets and Liabilities:                                        
   [Increase] Decrease in:                                                 
    Inventories                                    (748,915)      (245,414)
    Prepaid Expenses                                 25,621        (26,477)
    Other Assets                                    246,948       (277,870)
    Accounts Receivable                            (124,790)       (81,545)
    Miscellaneous Receivable                        (28,571)        11,349 

   Increase [Decrease] in:                                                 
    Accounts Payable                                143,238        446,341 
    Accrued Expenses and Other Liabilities          110,550         94,290 

   Total Adjustments                                762,915      1,036,848 

   Net Cash - Operating Activities                  505,785        860,184 

Investing Activities:                                                      
  Capital Expenditures                             (955,902)    (1,105,389)
  Proceeds from Sale of Restaurant                  211,273        895,897 
  Payment Received on Mortgage Receivables            --           104,495 
  Sale or Redemption of Investments                 347,000        297,000 
  Purchase of Investments                          (460,000)      (146,000)
  Loans to Acquired Company Prior to Acquisition      --          (100,000)
  Purchase of Subsidiary - Cash Acquired              --            59,696 
  Acquisition of Restaurant                        (267,008)         --    

  Net Cash - Investing Activities                (1,124,637)         5,699 

Financing Activities:                                                      
  Repayment of Debt                              (1,294,270)    (1,178,474)
  Proceeds from Debt                              2,250,618        245,000 

  Net Cash - Financing Activities                   956,348       (933,474)

  Net Increase [Decrease] in Cash and                                      
   Cash Equivalents                                 337,496        (67,591)

  Cash and Cash Equivalents - Beginning of Years  1,071,461      1,139,052 

  Cash and Cash Equivalents - End of Years      $ 1,408,957 $    1,071,461 

Supplemental Disclosures of Cash Flow Information:                         
  Cash paid during the years for:                                          
   Interest                                     $   202,400 $      139,536 
   Income Taxes                                 $     --    $        6,500 

Supplemental Disclosures of Non-Cash Investing and Financing Activities:        
 As of June 30, 1993, the Company acquired all of the outstanding common stock
of Mister Cookie Face for 1,000,000 shares of its common stock in a business    
combination accounted for as a purchase. The purchase price of $3,150,000       
exceeded the fair value of the net assets acquired by $3,056,626, which         
was recorded as cost in excess of fair value that is being amortized over 20    
years under the straight-line method.                                           

During the year ending January 30, 1994, the Company acquired $139,052 of   
equipment which was financed through capital leases.                            

See Notes to Consolidated Financial Statements.                                 

CHEFS INTERNATIONAL, INC. AND SUBSIDIARIES                                      
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                      

[1] Summary of Significant Accounting Policies                                  

Principles of Consolidation - The accompanying consolidated financial statements
include the accounts of the Company and all of its wholly-owned subsidiaries.   
Intercompany transactions and balances have been eliminated in consolidation.   

Segment Information - The Company is involved in two businesses, the restaurant 
business and the manufacturing and sale of ice cream products. The Company had  
nine restaurants in operation at January 29, 1995 and January 30, 1994.  At     
January 29, 1995 and January 30, 1994, the Company had one manufacturing plant  
in operation.                                                                   

Cash and Cash Equivalents - Cash equivalents are comprised of certain highly    
liquid investments with a maturity of three months or less when purchased. The  
Company has a significant portion of its cash in one bank, which at times may   
exceed federally insured limits.                                                

Investments - Investments are separated between current and long-term based on  
maturity.  These consist solely of certificates of deposit and are stated at    
cost, which approximates market value.                                          

Inventories - Inventories consist of food, beverages and supplies for the       
restaurant operations and raw materials and finished goods for the ice cream    
manufacturing operation.  Inventories are stated at the lower of cost           
[determined by the first-in, first-out method] or market.                       

Property, Plant and Equipment and Depreciation - Plant and equipment are carried
at cost less accumulated depreciation.  Depreciation is computed over the       
estimated useful lives of the assets using the straight-line method.  The costs 
of maintenance and repairs are expensed as incurred, whereas significant        
betterments and renewals are capitalized.                                       

Goodwill - Goodwill represents cost in excess of fair value of property acquired
and is being amortized over estimated useful lives ranging from 20 to 40 years  
under the straight-line method.                                                 

Management of the Company evaluates the periods of goodwill amortization to     
determine whether later events and circumstances warrant revised estimates of   
useful lives.  Management also evaluates whether the carrying value of goodwill 
has become impaired.  This evaluation is done by comparing the carrying         
value of goodwill to the value of projected discounted net cash flow from       
related operations                                                              

Liquor Licenses - Liquor licenses are being amortized over 40 years under the   
straight-line method.                                                           

[2] Inventories                                                                 

Inventories consist of the following:                                           

Raw Materials                                   $           539,159             
Finished Goods                                            1,222,114             

Total                                         $         1,761,273           

[3] Property, Plant and Equipment                                               

The classification of property, plant and equipment together with their         
estimated useful lives is as follows:                                           

                       January 29,   Estimated
                           1 9 9 5     Useful Life

Land                                   $ 2,335,026        N/A                   
Buildings and Improvements              12,531,683    20 - 40 Years             
Leasehold Improvements                     886,210    Term of Lease             
Furniture and Equipment                  2,699,873     5 - 10 Years             
China, Glassware and Utensils              105,830         *                    
Equipment Held Under Capital Leases        506,673     5 - 10 Years             

Total                                $19,065,295                            

* Carried at original cost for each restaurant.  All replacement purchases are  
charged to expense as incurred.                                                 

Accumulated depreciation for equipment held under capital leases was $76,163 at 
January 29, 1995, and the related depreciation expense was $53,126 and $12,990  
for fiscal 1995 and 1994, respectively.                                         

In June 1993, the Company sold a former restaurant located in Fort Myers,       
Florida for $896,000 resulting in a gain of $71,318.  The net cash proceeds were
used to pay off a mortgage on another restaurant owned by the Company.          

In September 1994, the Company sold a former restaurant located in Quakerbridge,
New Jersey for $211,273  resulting in a gain of $76,467.                        

[4] Intangible Assets                                                           

Intangible assets consist of:                                                   

                              Liquor
                    Goodwill    Licenses

Cost                              $   4,123,453   $  987,307                    
Less:  Accumulated Amortization         594,594      210,276                    

Net                             $   3,528,859   $  777,031                  

Amortization of goodwill is $178,445 and $111,427 for fiscal 1995 and 1994,     
respectively.  Amortization of liquor licenses is $24,136 and $24,330 for fiscal
1995 and 1994.                                                                  

[5] Notes and Mortgages Payable                                                 

Notes and mortgages payable as of January 29, 1995, are as follows:             

Line of Credit, Due February 25, 1996, at prime plus                            
1-1/8%, collateralized by all corporate assets  $        1,225,000          

Note Payable, Due November 25, 1995, at prime plus                              
1%, collateralized by real estate                          233,000          

Note Payable, Due February 1, 1996 at prime,                                    
collateralized by real estate                              225,000          

Note Payable, Due September 30, 1997 at prime plus                              
1%, collateralized by real estate                          150,000          

Total                                                      1,833,000            
Less:  Current Portion                                       333,000            

Total Long-Term Debt                            $        1,500,000          

Availability under the line of credit at January 29, 1995, was $775,000.  The   
notes payable are due in periodic installments through the due dates.  An       
additional $200,000 was borrowed subsequent to year end.  The prime rate at     
January 29, 1995 was 8.5%.                                                      

The Company has an additional line of credit available which permits borrowings 
up to a maximum of $350,000 at the bank's base rate of interest plus 1%.  The   
current line expires in June 1995.  At January 29, 1995, there was no           
outstanding balance under this line.                                            

Annual maturities of debt as of January 29, 1995, are as follows:               

1996                                   $          333,000                       
1997                                            1,450,000                       
1998                                               50,000                       
1999                                                   --                       
2000                                                   --                       
Thereafter                                             --                       

Total                                $        1,833,000                     

[6] Capital Lease Obligations                                                   

The Company leases machinery and equipment under capital leases expiring in 2000
Future minimum payments by the Company under capital leases consist of the      
following at January 29, 1995:                                                  

Payments Due in Fiscal:                                                         

1996              $     121,834                         
1997                    105,353                         
1998                     91,404                         
1999                     91,404                         
2000                     24,254                         
Thereafter                 --                           

Total Minimum Lease                                     
Payments              434,249                       
Amount Representing                                     
Interest               65,822                       

Present Value of                                        
Minimum Lease Payment 368,427                       
Less:  Current Portion   93,286                         

Capital Lease                                           
Obligations - Long-Term$275,141                         

[7] Transactions with Related Parties                                           

Mr. Robert E. Brennan, a principal stockholder of the Company, is the principal 
owner of a partnership known as Gourmet Associates, which leases the Vero Beach 
Restaurant to the Company.  The lease for Vero Beach is on a month-to-month     
basis and requires monthly payments of $10,000.  Total rent expense for Gourmet 
Associates was  $120,000 for both fiscal 1995 and 1994.                         

[8] Operating Leases                                                            

The Company leases restaurant, office and storage facilities, and equipment     
under operating leases expiring at various times through the year 2000.         

Minimum future rental payments under non-cancelable operating leases as of      
January 29, 1995, are as follows:                                               

Year ending January                                                             

                   1996    $     320,452
                   1997          257,498
                   1998          232,524
                   1999          129,117
                   2000          104,463
          Thereafter            --

Total Minimum Future Rentals    $   1,044,054     

Rent expense was $363,947 and $284,618 for fiscal 1995 and 1994, respectively.  

[9] Earnings per Share                                                          

Earnings [loss] per share are based on weighted average number of shares        
outstanding of 13,459,576 and 13,010,156 for fiscal years 1995 and 1994,        
respectively. The effect of options or warrants is anti-dilutive.               

[10] Stock Options                                                              

In June of 1982, the Company's Board of Directors adopted an incentive stock    
option plan for key employees which was subsequently approved by the Company's  
stockholders.  All incentive options granted under the plan were intended to    
qualify as incentive stock options under Section 422A of the Internal Revenue   
Code. Under the plan, an aggregate of 166,667 shares of common stock were       
reserved for issuance.  Options may be exercised over a period of ten years from
the date of grant and expire in 1996 and 1999.                                  

In October of 1994, the stockholders approved the grant of 650,000 options to   
four directors to purchase the Company's stock at $1.25 per share.  The options 
are for five years.                                                             

The following is a summary of transactions:                                     
                      Shares Under Options
                   1 9 9 5   1 9 9 4

Outstanding, beginning of year           156,334   156,334                      
Granted or Sold during the year          650,000     --                         
Cancelled during the year                 (1,000)    --                         
Exercised during the year                   --       --                         

Outstanding, end of year [Option                                            
prices range from $.328 to 1.25]       805,334   156,334                    

[11] Income Taxes                                                               

Effective February 1, 1993, the Company adopted FASB Statement No. 109,         
"Accounting for Income Taxes." Under Statement 109, the asset and liability     
method is used in accounting for income taxes. Under this method, deferred tax  
assets and liabilities are determined based on differences between financial    
reporting and tax bases of assets and liabilities and are measured using the    
enacted tax rates and laws that will be in effect when the differences are      
expected to reverse.                                                            

At January 29, 1995, the Company has a deferral tax asset of approximately      
$4,677,694 which was offset by a valuation allowance of the same amount.  The   
asset resulted from the availability of operating loss carryforwards and tax    
credits and temporary differences primarily caused by using different           
depreciation methods for financial reporting and income tax purposes of         
approximately $280,000.                                                         

The Company has available at January 29, 1995, operating loss carryforwards and 
unused investment credits expiring as follows:                                  

Year of                      Unused Operating    Unused                   
Expiration                    Loss Carryforwards   Investment Credits       

1997                        $     --              $       80,672        
1998                             289,544                  71,197        
1999                           1,217,240                  23,103        
2000                           2,341,860                  27,682        
2001                           1,838,179                  23,634        
2002                           1,509,463                    --          
2003                           2,072,345                    --          
2004                           2,942,316                    --          
2005                             472,062                    --          
2009                             118,411                    --          
2010                             285,130                    --          

Totals                    $ 13,086,550          $      226,288      

[12] 52-53 Week Year                                                            

The Company's year end is the last Sunday in January.  The statements of        
operations are comprised of a 52-week year for fiscal 1995 and 1994.            

[13] New Authoritative Pronouncements                                           

The Financial Accounting Standards Board ["FASB"] has issued Statement of       
Financial Accounting Standards ["SFAS"] No.  107, "Disclosure about Fair Value  
of Financial Instruments", which the Company will adopt on January 28, 1996.    
The FASB has also issued SFAS No. 119, "Disclosure about Derivative Financial   
Instruments and Fair Value of Financial Instruments."  While SFAS No. 119       
primarily creates new disclosure requirements for derivative financial          
instruments which the Company does not trade in at this time, the technical     
disclosure amendments to SFAS No. 107 created by SFAS No. 119 will be           
implemented on January 28, 1996.  The Company adopted SFAS No. 109, "Accounting 
for Income Taxes," on February 1, 1993.  Since that implementation, the         
Financial Accounting Standards Board has issued eleven new authorative          
accounting pronouncements [SFASs].  These new pronouncements either do not apply
to the Company, will be implemented on the effective date as mentioned          
previously, or will be implemented when the Company engages in applicable       
transactions, such as making investments in certain debt and equity securities, 
at which time the Company will implement SFAS No. 115.  None of these applicable
accounting pronouncements is anticipated to have a material impact on the       
Company's financial statements.                                                 

[14] Acquisition                                                                

On July 14, 1993, the Company acquired Mister Cookie Face for 1,000,000 shares  
of its common stock as of June 30, 1993, in a business combination accounted for
as a purchase.  The purchase price of $3,150,000 exceeded the fair value of the 
net assets acquired by $3,056,626, which will be amortized over 20 years under  
the straight-line method.  The results of operations of Mister Cookie Face, Inc.
are included in the consolidated statements of operations from July 1, 1993     
onward.                                                                         

On October 28, 1994, the Company purchased a liquor license and tradename from a
restaurant in New Jersey.  The purchase price of $267,008 exceeded the fair     
value of the assets acquired by $117,008, which is being amortized over 20 years
under the straight-line method.                                               

[15] Capital Transactions                                                       

On June 8, 1993, the Company effected a one-for-three reverse stock split of its
outstanding common stock, .01 par value, without changing the par value of the  
common stock.  All share data has been adjusted to reflect this change.         

[16] Registration Statement and SEC Investigation                               

In September 1993, the Company filed a registration statement which was         
subsequently suspended by the Securities and Exchange Commission pending        
completion of an investigation which is still ongoing.  The Company incurred    
approximately $270,750 in registration costs which were written-off in fiscal   
1995.                                                                           

Item 8.   Changes in and Disagreements with Accountants                         
on Accounting and Financial Disclosure                      

None.                                                                 

CHEFS INTERNATIONAL, INC.     

PART III      

Item 9.   Directors and Executive Officers, Promoters                           
and Control Persons, Compliance with Section                
16(a) of the Exchange Act                                   

The following table sets forth certain information with               
respect to each of the directors and executive officers of the                  
Company:                                                                        

Name                Age  Office                                       

Anthony Papalia           37  President, Treasurer, Chief                       
              Executive Officer, Chief Financial
Officer and Director

James Fletcher            64  Vice President and Director                       

Martin W. Fletcher        42  Secretary and Director                            

Frank Koenemund           51  Director                                          

Jack Mariucci             55  Director                                          
____________                                                                    
(a) James Fletcher is the father of Martin Fletcher.                      

The Company does not have an Executive Committee.  The term of        
office of each director and executive officer expires when his                  
successor is elected and qualified.  Executive officers are elected             
by and hold office at the discretion of the Board of Directors.                 

The following is a brief account of the business experience of        
each director and executive officer of the Company during the past              
five years.                                                                     

Anthony Papalia has been continuously employed by the Company         
for the preceding five years.  He has served as a manager of                    
various New Jersey Lobster Shanty restaurants and as an area                    
supervisor.  Mr. Papalia, who was elected senior vice president and             
a director of the Company in September, 1985 and president and                  
treasurer in March, 1988, is currently devoting all of his working              
time to the business of the Company.  In July 1993, he was elected              
an executive officer and a director of Mr. Cookie Face.                         

James Fletcher was elected a vice president of the Company on         
February 10, 1978 and a director in December, 1978.  In April, 1980             
Mr. Fletcher became general manager of the Company's Florida                    
seafood restaurants.  He is currently devoting all of his working               
time to the business of the Company.                                            

Martin Fletcher has been continuously employed by the Company         
for the preceding five years in various capacities.  He has served              
as general manager of the Company's Toms River, New Jersey Lobster              
Shanty, as area supervisor for its Florida west coast restaurants,              
as assistant controller, since September, 1987 as controller and                
since March 1988 as secretary and a director of the Company.  He is             
currently devoting all of his working time to the business of the               
Company.  In July 1993, he was elected an executive officer and a               
director of Mr. Cookie Face.                                                    

Frank Koenemund was principally engaged from 1988 through 1991        
as a principal of Thin's Inn and Thin N'Creamy, two New Jersey                  
entities packaging and selling diet cookies in various United                   
States markets.  Since February 1992, Mr. Koenemund has been                    
principally engaged as sole owner and as an executive officer of                
Mr. Cookie Face which was acquired by the Company in July 1993, at              
which time, he was elected a director of the Company.  He currently             
devotes all of his working time to the business of the Company.                 

Jack Mariucci was principally engaged for more than the past          
five years and until October 1994 as Executive Vice President and               
Executive Creative Director of DDB Needham Worldwide - New York.                
DDB Needham is a global advertising agency with offices in cities               
throughout the world.  Mr. Mariucci was also a member of the New                
York Management Board of DDB Needham.  Since October 1994, Mr.                  
Mariucci has been principally engaged as an independent marketing               
consultant.  He was elected a director of the Company in July 1993.             

Compliance with Section 16 (a) of the Exchange Act                              

Based solely upon a review of Forms 3 and 4 and on                    
representations that no Forms 5 were required, the Company believes             
that with respect to fiscal 1995, all Section 16(a) filing                      
requirements applicable to its officers, directors and beneficial               
owners of more than 10% of its equity securities were timely                    
complied with except for late filings made in fiscal 1995 by                    
Messrs. Papalia, Martin Fletcher, Koenemund and Mariucci with                   
respect to stock options authorized at the Company's annual meeting             
of stockholders held on October 3, 1994.                                        

Item 10.  Executive Compensation                                                

The following table sets forth information concerning the             
compensation paid or accrued by the Company during the three fiscal             
years ended January 29, 1995 to its Chief Executive Officer as well             
as to any other executive officer of the Company or a subsidiary                
who earned at least $100,000 during fiscal 1995.  During the three-             
year period ended January 29, 1995, the Company did not grant any               
restricted stock awards or have any long-term incentive plan in                 
effect.  The Company maintains a Supplemental Employee Benefit                  
Program for its officers, supervisors, restaurant managers and                  
assistant managers paying annual contributions ranging from $1,000              
to $2,000 per individual.  The Program provides life insurance                  
death benefits, disability income benefits and retirement income                
benefits.  James Fletcher is not covered under this Program but the             
Company has agreed if he remains in its employ until age 65 and                 
leaves such employ at any time thereafter, the Company will pay him             
$20,000 annually for the ten year period following such termination             
of employment or until his death, if he dies prior thereto.  The                
Company partially funds this obligation with an insurance policy                
paying an annual premium of approximately $5,000.                               

SUMMARY COMPENSATION TABLE      

Annual Compensation 

Name and            Fiscal                        Other Annual                  
Principal Position  Year      Salary    Bonus     Compensation                  

Anthony Papalia     1995      $110,600  $-0-      $-0-                          
President and     1994      $107,139  $-0-      $-0-                        
Chief Executive   1993      $ 97,439  $-0-      $-0-                        
Officer                                                                     

Frank Koenemund     1995      $100,000  $-0-      $-0-                          
Chief Executive    1994      $ 84,878  $-0-      $-0-                         
Officer of MCF     1993        --      $-0-      $-0-                         

Long-Term                     
Compensation                  

  Restric-
              ted              All
Name and            Fiscal  Options  Stock     LTIP   Other                     
Principal Position  Year    SARs     Awards    Payouts Compensation             

Anthony Papalia     1995    162,500*    0      $-0-    $-0-                     
President and     1994     -0-        0      $-0-    $-0-                   
Chief Executive   1993     -0-        0      $-0-    $-0-                   
Officer                                                                     

Frank Koenemund     1995    162,500*    0      $-0-    $-0-                     
Chief Executive    1994     -0-        0      $-0-    $-0-                    
Officer of MCF     1993     -0-        0      $-0-    $-0-                    
_________                                                                       
*Each exercisable to purchase one share of Common Stock at $1.25            
per share.                                                                      

Employment Agreement                                                            

None of the executive officers of Chefs or any of its                 
subsidiaries has an employment contract except for Frank Koenemund              
who in connection with the Company's acquisition of Mr. Cookie Face             
in July 1993, executed an approximately four and one-half year                  
employment contract with Mr. Cookie Face (through January 31, 1998)             
agreeing to serve as president and chief executive officer and to               
devote at least 90% of his working time to such duties.  Pursuant               
to the employment contract, Mr Koenemund is compensated at an                   
annual salary of $100,000 and is also entitled to an annual bonus               
equal to the following percentages of Mr. Cookie Face's pre-tax                 
income (excluding extraordinary items) provided that no losses from             
any fiscal period will be carried over to reduce profits in any                 
other fiscal period.                                                            

MCF Pre-Tax Income            Percentage Bonus                        

On amounts up to $1,000,000             10%                                     
On amounts in excess of $1,000,000                                              
but not in excess of $2,000,000       7.5%                                  
On amounts in excess of $2,000,000                                              
but not in excess of $3,000,000       5%                                    
On amounts in excess of $3,000,000      2.5%                                    

Stock Options                                                                   

On November 18, 1986, the Company's Board of Directors granted        
Incentive Stock Options ("ISOs") exercisable to purchase an                     
aggregate 36,334 shares of Chefs's Common Stock at $.375 per share,             
pursuant to the Company's 1982 Incentive Stock Option Plan (the                 
"Plan") to 27 employees including three officers.  The options are              
exercisable until ten years after the Date of Grant but only by the             
employee (or his estate in the event of death).  The Company's                  
three present executive officers each were granted options to                   
purchase 1,667 shares.  On November 18, 1986, the closing bid price             
for the Company's common stock on the NASDAQ system was $.375.                  
None of such options have been exercised to date and an aggregate               
20,667 of such options have been cancelled due to terminations of               
employment.                                                                     

On November 3, 1989, the Company's Board of Directors granted         
additional ISOs,  identical in form and exercisable to purchase an              
aggregate 146,334 shares of Common Stock at $.328125 per share                  
(equal to the mean between the closing bid price and the closing                
asked price for the Common Stock on NASDAQ on November 2, 1989),                
pursuant to the Plan, to ten employees including three officers.                
Anthony Papalia, James Fletcher and Martin W. Fletcher were granted             
36,667, 20,000 and 33,000 of these options, respectively.  None of              
such options have been exercised to date and an aggregate 6,664 of              
such options have been cancelled due to terminations of employment.             

On August 1, 1994 pursuant to the recommendation of the               
Compensation Committee, Chefs' Board of Directors authorized the                
grant to four key members of management of stock options                        
exercisable to purchase an aggregate 650,000 shares of Common                   
Stock, subject to stockholder approval.  The options are each                   
exercisable over a term of five years from the date of stockholder              
approval at an exercise price of $1.25 per share (the last sales                
price for the Common Stock on the NASDAQ Small-Cap System on July               
29, 1994, the last trading day prior to the date of grant).  Each               
option is non-transferable (except on death) and is exercisable by              
the optionee only while serving as an officer, director or employee             
of the Company or one of its subsidiaries.  The grant of each of                
said options was approved by stockholders at Chefs' annual meeting              
of stockholders held on October 3, 1994.  The optionees and the                 
number of shares issuable upon exercise of the options granted to               
such optionees are as follows:                                                  

Optionee                      Number of Shares              

Anthony Papalia                         162,500                       
(President, Treasurer, CEO,                                         
CFO and Director)                                                 

Martin Fletcher                         162,500                       
(Secretary and Director)                                            

Frank Koenemund                         162,500                       
(President of Mr. Cookie Face                                       
subsidiary and Director)                                          

Jack Mariucci                           162,500                       
(Director)                                                          

No stock options have been exercised during the three fiscal          
years ended January 29, 1995.  The Company's ISO Plan terminated in             
August 1992.                                                                    

The following table illustrates information concerning stock          
option grants made during fiscal 1995 to each of the executive                  
officers named in the "Summary Compensation Table."                             

Option Grants in Fiscal 1995      

Percent of
Number of Shares    Total Options                 
 of Common Stock     Granted to     Exercise  Expir-
Underlying          "Employees"    Price     ation
Name      Options Granted     in Fiscal Year Per Share Date           

Anthony Papalia     162,500             33%       $1.25     10/3/99             

Frank Koenemund     162,500             33%       $1.25     10/3/99             

The following tables sets forth certain information concerning        
unexercised options for each of the executive officers named in the             
"Summary Compensation Table."  No options were exercised in fiscal              
1995.                                                                           

1995 Fiscal Year-End Options Values     

Number of Unexercised Options                     
at 1995 Fiscal Year-End                           

                  Value of
                     Unexercised
                      In-The-Money
Name      Exercisable    Unexercisable  Options at 1/29/95(1)         

Anthony Papalia   38,334           -0-       $11,302.27                         
162,500           -0-         -0-(2)          

Frank Koenemund  162,500           -0-         -0-(2)                           
____________                                                                    
(1) Based upon the difference between the closing bid price for       
the Common Stock in the over-the-counter market on the last trading             
day preceding January 29, 1995 and the option exercise prices.                  
(2) The option exercise price exceeded the over-the-counter           
market price referred to in footnote (1).                                       

The foregoing table does not include stock options granted by         
the Company's principal stockholder to purchase shares of Common                
Stock owned by him.  See "Item 12 - Certain Relationships and                   
Related Transactions."                                                          

Directors' Compensation                                                         

Directors who are not employees of the Company or its                 
subsidiaries are compensated at a monthly rate of $1,500.                       

Item 11.  Security Ownership of Certain                                         
Beneficial Owners and Management                            

The following table sets forth information as of March 31,            
1995 with respect to their ownership of Chefs' Common Stock by (i)              
each person known by the Company to be the beneficial owner of more             
than 5% of Chefs' outstanding Common Stock, (ii) each director of               
the Company, (iii) each executive officer of the Company, and (iv)              
all directors and executive officers as a group.  The percentages               
have been calculated on the basis of treating as outstanding for a              
particular holder, all shares of Chefs' Common Stock outstanding on             
said date and all shares of Common Stock issuable to such holder in             
the event of exercise or conversion of outstanding options,                     
warrants and convertible securities owned by such holder at said                
date which are exercisable or convertible within 60 days of such                
date.                                                                           

Shares of                     
Name and Address of      Common Stock        Percentage                         
Beneficial Owner         Beneficially Owned  Ownership                          

Directors*                                                                      

Anthony Papalia          1,200,834(1)         9%                                
James Fletcher              22,667(2)        --                                 
Martin Fletcher            697,167(3)         5%                                
Frank Koenemund          2,662,500(4)        20%                                
Jack Mariucci              412,500(5)         3%                                

All executive officers                                                          
and directors as a group                                                        
(five persons)           4,995,688(1)(2)(3)(4)(5)      35%                      

Other                                                                           

Robert E. Brennan        5,299,667(6)        39%                                
50 Broadway                                                                     
New York, New York 10004                                                        
____________                                                                    
*The address of each executive officer and director is c/o the                  
Company, 62 Broadway, Point Pleasant Beach, New Jersey 08742.                   

(1) Includes 200,834 shares issuable upon exercise of stock           
options granted by the Company and 1,000,000 shares issuable upon               
exercise of options granted by Robert E. Brennan to purchase shares             
of Chefs' Common Stock owned by him.  See "Item 12 - Certain                    
Relationships and Related Transactions".                                        
(2) Includes 21,667 shares issuable upon exercise of stock            
options granted by the Company.                                                 
(3) Includes 197,167 shares issuable upon exercise of stock           
options granted by the Company and 500,000 shares issuable upon                 
exercise of options granted by Robert E. Brennan to purchase shares             
of Chefs' Common Stock owned by him.  See "Item 12 - Certain                    
Relationships and Related Transactions."                                        
(4) Includes 162,500 shares issuable upon exercise of stock           
options granted by the Company, 1,000,000 shares of Chefs' Common               
Stock issued in connection with the July 1993 acquisition of Mr.                
Cookie Face and 1,500,000 shares issuable upon exercise of options              
granted by Robert E. Brennan to purchase shares of Chefs' Common                
Stock owned by him.  See "Item 12 - Certain Relationships and                   
Related Transactions."                                                          
(5) Includes 162,500 shares issuable upon exercise of stock           
options granted by the Company and 250,000 shares issuable upon                 
exercise of options granted by Robert E. Brennan to purchase shares             
of Chefs' Common Stock owned by him.  See "Item 12 - Certain                    
Relationships and Related Transactions."                                        
(6) Includes 3,250,000 shares subject to options granted by           
Robert E. Brennan to four of the five directors of the Company.                 
See "Item 12 - Certain Relationships and Related Transactions."                 

Robert E. Brennan through his stock ownership may be deemed           
the controlling stockholder of the Company.  However if the options             
he has granted to Messrs. Papalia, Martin Fletcher, Koenemund and               
Mariucci to purchase an aggregate 3,250,000 shares of his Chefs'                
Common Stock are exercised in full, the management group of Messrs.             
Papalia, Fletcher, Koenemund and Mariucci would to the best of                  
management's knowledge, based on the present number of outstanding              
shares, collectively comprise the largest single ownership group of             
Chefs' Common Stock.                                                            

Item 12.  Certain Relationships and Related Transactions                        

Robert E. Brennan is a principal stockholder of the Company as        
well as the owner of Gourmet Associates ("Gourmet") which has                   
leased the Vero Beach, Florida Lobster Shanty restaurant to the                 
Company since 1979.  During the Company's two most recently                     
completed fiscal years and at present, the lease has been and                   
continues to be a month to month "net" lease at a monthly rental of             
$10,000 with the Company also paying personal property taxes and                
insurance thereunder.  Management regards this lease to be                      
advantageous to the Company.                                                    

On July 23, 1993, Robert E. Brennan, granted options to               
purchase an aggregate of 3,250,000 of his approximately 5,800,000               
shares of Chefs Common Stock to Messrs. Koenemund, Papalia and                  
Martin Fletcher and to Jack Mariucci who became a Chefs' director               
on July 14, 1993.  The options granted are as follows:                          

No. of    Option    Expiration          
Optionees           Shares    Price     Date                                    

Frank Koenemund     750,000   $5.50     7/23/95                                 
750,000   $8.00     7/23/96             
Anthony Papalia     500,000   $5.50     7/23/95                                 
500,000   $8.00     7/23/96             
Martin Fletcher     250,000   $5.50     7/23/95                                 
250,000   $8.00     7/23/96             
Jack Mariucci       125,000   $5.50     7/23/95                                 
125,000   $8.00     7/23/96             

The options granted to Messrs. Koenemund, Papalia and Fletcher        
are exercisable solely while the optionee is employed by the                    
Company and/or a Company subsidiary and the options granted to Mr.              
Mariucci are exercisable only while he is a director of the                     
Company.  If all 3,250,000 options are exercised, the management                
group of Messrs. Papalia, Fletcher, Koenemund and Mariucci would to             
the best of management's knowledge, based on the present number of              
outstanding shares, collectively comprise the largest single                    
ownership group of Chefs' Common Stock.                                         

In February 1995, Mr. Cookie Face agreed to purchase certain          
furniture, fixtures and equipment at a restaurant operated by a                 
corporation wholly-owned by Frank Koenemund in a strip mall in                  
Manalapan, New Jersey for $125,000.  Chefs' management is of the                
opinion that the replacement cost of such furniture, fixtures and               
equipment approximated $125,000.  Mr. Koenemund represented that                
his approximate cost for same two and three years prior was also                
$125,000.  Mr. Cookie Face entered into a five-year lease for the               
premises through January 31, 2000 to operate its first Mister                   
Cookie Face restaurant at such location at an annual rental                     
initially at approximately $32,000 and reducing to an annual rental             
in the last year of $26,700.  The restaurant is expected to open in             
May 1995.  See "Item 1 - Business - Ice Cream Operations."                      

Parents of the Company                                                          

Assuming non-exercise of the above described options, Anthony         
Papalia, chief executive and chief financial officer of the Company             
and Robert E. Brennan, the beneficial owner of 39% of the Company's             
outstanding Common Stock may be deemed the "parents" or controlling             
persons of the Company as that term is defined under the Securities             
Act of 1933.                                                                    

Item 13.  Exhibits and Reports on Form 8-K                                      

3.1       Certificate of Incorporation of the Company, as amended(A)            

3.2       By-Laws of the Company, as amended(A)                                 

4.1       Specimen Common Stock Certificate(A)                                  

10.1      Monmouth Mall Shopping Center Lease(A)                                

10.2      Quaker Bridge Mall Lease(A)                                           

10.3      Acquisition Agreement as of June 30, 1993 between the                 
Company and Frank Koenemund concerning the acquisition of   
Mr. Cookie Face(B)                                          

10.4      Employment Agreement as of June 30, 1993 between Mr.                  
Cookie Face and Frank Koenemund(B)                          

10.5      Revolving Credit Agreement dated February 25, 1994                    
between the Company and First Fidelity Bank, National       
Association(C)                                              

10.6      Acquisition Agreement dated April 8, 1994 between the                 
Company and Evelyn's Fish Market, Inc. for the              
acquisition of "Evelyn's" restaurant in Belmar, N.J.(C)               

10.7      Lease Agreement dated September 29, 1995 between Evelyn's             
Associates and Chefs International, Inc. for "Lobster       
Shanty" restaurant in Belmar, New Jersey.                   

22        Subsidiaries - The following table indicates the wholly               
owned subsidiaries of the Company, their respective         
states of incorporation, and (except for Mister Cookie      
Face, Inc.) the restaurants operated by each                

State of                      
Name                     Incorporation  Restaurants                             

Chefs International      Florida        Lobster Shantys -                       
Palm Beach, Inc.                      Vero Beach and Jensen                 
              Beach, Florida

Kev, Inc.                New Jersey     Lobster Shanty -                        
                   Pt. Pleasant Beach,
          New Jersey

Robbins Parkway          New Jersey     Lobster Shanty - Toms                   
Realty Co., Inc.                      River, New Jersey                     

Hightstown REB, Inc.     New Jersey     Lobster Shanty -                        
                      Hightstown, New Jersey

Mister Cookie Face,Inc.  New Jersey                                             
____________                                                                    
(A) Incorporated by reference to exhibit filed with the               
Company's Registration Statement on Form SB-2 (File no. 33-66936)               
(B) Incorporated by reference to exhibit filed with the               
Company's current report on Form 8-K for July 23, 1993                          
(C) Incorporated by reference to exhibit filed with the               
Company's annual report on Form 10-KSB for the fiscal year ended                
January 30, 1994                                                                

The Company did not file any reports on Form 8-K during the           
last quarter of the fiscal year ended January 29, 1995.                         

SIGNATURES          

Pursuant to the requirements of Section 13 or 15(d) of the            
Securities Exchange Act of 1934, the registrant has duly caused                 
this report to be signed on its behalf by the undersigned,                      
thereunto duly authorized.                                                      

(Registrant)                  Chefs International, Inc.                         

By                            /s/Anthony Papalia                                
         Anthony C. Papalia, President

Date                          April 27, 1995                                    

Pursuant to the requirements of the Securities Exchange Act of        
1934, this report has been signed below by the following persons on             
behalf of the registrant and in the capacities and on the date                  
indicated.                                                                      

By/s/Anthony Papalia               By/s/Frank Koenemund                         
Anthony C. Papalia, Principal      Frank Koenemund, Director                
executive, financial and                                                    
accounting officer and director  Date April 27, 1995                        

Date April 27, 1995                                                             

By/s/Martin Fletcher               By/s/Jack Mariucci                           
Martin Fletcher, Director          Jack Mariucci, Director                  

Date April 27, 1995                Date April 27, 1995                          

By/s/James Fletcher                                                             
James Fletcher, Director                                                    

Date April 27, 1995                                                             

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10KSB’ Filing		Date		Other Filings
		1/31/00
		1/31/98
		9/30/97
		2/25/96
		2/1/96
		1/28/96		10-K,  NT 10-K,  NT 10-K/A
		12/31/95
		11/25/95
		9/29/95
Filed on:		4/27/95
		3/31/95
		3/22/95
For Period End:		1/29/95		10KSB/A
		10/28/94
		10/3/94
		8/1/94
		7/29/94
		7/26/94
		4/29/94
		4/8/94
		2/25/94
		1/31/94
		1/30/94
		10/31/93
		8/3/93
		8/1/93
		7/23/93
		7/14/93
		7/1/93
		6/30/93
		6/8/93
		6/7/93
		5/2/93
		2/1/93
		1/26/92
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