TASTY FRIES, INC.

TASTY FRIES, INC.

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Company Overview
Tasty Fries Inc., with registered head office in Blue Bell, Pennsylvania, USA, is a publicly quoted development stage company engaged in developing, testing and manufacturing of vending machines that are used in cooking and dispensing of French fries. The company was incorporated in 1985 under the name Y.O. Systems, Ltd. In September of 1993, Y.O. Systems became Tasty Fries Inc.
Apart from the manufacture of vending machines, Tasty Fries also produces potato product for French fries production using its owned vending machine. The company’s products, both the vending machine and potato, are marketed in the United States through territorial distributorships.
Tasty Fries’ common stocks are traded on other OTC (over the counter) market in the US under the symbol “TFRY”.
Business Summary
Tasty Fries, Inc. has developed a French fries vending machine (the machine) designed to produce freshly made French fries, utilizing a method that automatically converts a dehydrated potato product into rehydrated potato mix, delivers this mix into a forming-and-cooking cycle and finally, into freshly made French fries. The Company has also developed a related potato product for the production of French fries in the Machine (the potato product). The Company’s basic business strategy is to market the machines and the ancillary products that are required to prepare each serving of French fries. These ancillary products include the potato product, cooking oil, serving cups and condiments. The Company has historically marketed the machines and the products exclusively through territorial distributorships.
Description and history
Tasty Fries, Inc., incorporated on October 18, 1985, has developed a French fries vending machine (the machine) designed to produce freshly made French fries, utilizing a method that automatically converts a dehydrated potato product into rehydrated potato mix, delivers this mix into a forming-and-cooking cycle and finally, into freshly made French fries. The Company has also developed a related potato product for the production of French fries in the machine (the potato product). The Company’s basic business strategy is to market the machines and the ancillary products that are required to prepare each serving of French fries. These ancillary products include the potato product, cooking oil, serving cups and condiments.

The Company has historically marketed the machines and the products exclusively through territorial distributorships. Tasty Fries has sold or granted an aggregate of 15 territorial distributorships. In the course of normal business, some of these distributorships have been reacquired by the Company, and others have been terminated due to default on behalf of the distributor or by the distributor themselves. During the year ended January 31, 2004, there was one distributorship, which was not terminated or reacquired.

French Fries Vending Machine

The design of the machine involves the use of a vegetable oil, enabling the process to deliver a cholesterol-free product. The machine has the capacity to produce 500 vends before any refill of potato product or other ingredient is required. It is computer-controlled and communicates with the consumer from the time the money is deposited into it, until the time the vended cup of fresh French fries is delivered. The machine can accept dollar bills, coins or any combination thereof, depending on the vend charge, which can be changed at anytime by simply reprogramming the currency mechanism.

The machine requires a 110-volt connection, and is equipped with modern computer technology using microprocessors and sensors. If the machine operator desires, the machine can communicate with a central database, via modem, to make available immediate information on product levels, service issues or currency levels. The machine’s cash management program enables it to monitor the cash position at any time and the amount of vends, which allows for spontaneous and immediate cash reporting to the vending operator.

The machine has been designed to be repaired onsite without the necessity of being returned to the manufacturer. The frequency with which the machine must be restocked depends completely upon the number of vends dispensed daily. The Company intends to manufacture and market the machine in, both, domestic and international markets through traditional sales to established vending companies. The Company may also own and operate its own machines. The machines are expected to be located in high-traffic locations that have historically been successful for vending operators, such as universities, airports, bus and train stations, high schools, military bases, industrial locations and recreational venues.

Potato Product

The potato product can be stored at room temperature, has a shelf-life of between 12 and 24 months (depending on storage conditions), requires no refrigeration or freezing and occupies less storage space than frozen fries. The French fries are delivered to the consumer in a four-ounce serving of 32 French fries. From the time currency is deposited, the total vend time for an order of fries from the final production model machine is estimated to be approximately one-and-a-half minutes. The Company’s potato product for use in the machine was developed jointly by Tasty Fries and Nestle Netherlands BV.

Incorporated under the name Y.O. Systems, Ltd.

Business Line
Development stage company engaged in developing, testing and manufacturing of vending machines that are used in cooking and dispensing of French fries
Subsidiary

Advisor
BARATZ & ASSOCIATES
IPO date
6/1986
US SIC Code
3581
Company Address
Suite One
650, Sentry Paryway
City province or state postal code
19422, BLUE BELL, PA
Phone: +1 610 941 2109
Fax: +1 610 941 2108
Country address: UNITED STATES OF AMERICA
Website url: www.tastyfries.com