Summary of HEALTHY FAST FOOD INC

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial statements and the related notes included in this report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those projected in the forward-looking statements as a result of many factors.

History and Overview

Healthy Fast Food, Inc. (the "Company") was incorporated under the laws of the state of Nevada on November 14, 2005 to own and operate EVOS fast food franchises.

We entered into a franchise agreement effective December 14, 2005 to operate an EVOS restaurant in Henderson, Nevada. Shortly after signing the franchise agreement, we found a location for the restaurant, obtained approval of the site from EVOS USA, Inc. (EVOS USA"), and entered into a lease in January 2006. From January 2006 to September 2006, we sold 300,000 shares of common stock in a private placement, resulting in net proceeds of $544,878. These proceeds, together with loans from related parties, were used to build out, open and operate the restaurant. The restaurant opened in October 2006.

In December 2006, we entered into an area representative agreement that gives us the exclusive right to develop EVOS restaurants in a 12-state territory. To maintain our exclusivity in the territory, we were required to open a minimum number of restaurants within certain timeframes through 2016. These restaurants could be opened by us or by franchise owners that we identified and solicited. From December 2006 to June 2007, we engaged in a second private placement of 389,450 shares of common stock, resulting in net proceeds of $1,552,127. These proceeds were used to repay related party loans, pay some of the expenses of our initial public offering, and fund our efforts to solicit franchise owners for our territory. A portion of these proceeds were also used to open another restaurant. During this period, we improved our operations at the Henderson restaurant and began to build the infrastructure necessary to support the operation of multiple restaurants. We hired a director of operations and a director of training in March 2007.

In March 2008, we completed an initial public offering of 1,000,000 units, each unit consisting of one share of common stock, one Class A warrant and two Class B warrants, resulting in gross proceeds of $5,100,000 and net proceeds of $4,002,840. The proceeds of the offering were intended to be used to open six company-owned EVOS restaurants in the Las Vegas metropolitan statistical area (the "Las Vegas MSA") during the following 12 to 18 months, as well as for marketing expenses, franchise development and working capital. We opened our second restaurant in the Las Vegas MSA in December 2008, and our EVOS sub-franchisee in California opened its first store in November 2008.

After experiencing continued operating losses with our EVOS restaurants, we decided to diversify into another healthy fast food concept and acquired the worldwide rights to U-Swirl Frozen YogurtSM ("U-Swirl") on September 30, 2008. Our intent with the acquisition of the rights to U-Swirl is to build and operate stores to be owned and operated by the Company ("Company-owned") and to franchise to others the right to own and operate U-Swirl stores pursuant to either a (a) license agreement as a U-Swirl licensee, (b) a franchise and area development agreement as a U-Swirl franchisee, or (c) a joint venture agreement as a U-Swirl joint-venture partner.

We opened our first Company-owned U-Swirl location in the Las Vegas MSA in March 2009, and the Company has since developed five more Company-owned locations in the Las Vegas MSA. In addition, the original U-Swirl store continues to operate as a licensee.

We issued a Franchise Disclosure Document (the "FDD") in November 2008 and filed it in certain states which require filing. In July 2009, we entered into a franchise agreement with Galena Frozen Yogurt Company, which over the next 12 months plans to open three U-Swirl Frozen Yogurt stores in

Reno, Nevada, and at least one U-Swirl store in Northern California. The first store in Reno opened in October 2009.

Results of Operations

Three Months Ended September 30, 2009. For the three months ended September 30, 2009, our U-Swirl restaurants generated $515,332 in sales. As we did not have any U-Swirl locations in operation in 2008, there is no comparable period information available. Franchise royalties and fees were derived from the sale of a new U-Swirl Yogurt franchise store and franchise area development agreement in Reno, Nevada.

Our restaurant operating costs, including pre-opening expenses attributable to training, supplies and various grand-opening promotions including product giveaways, were $390,791, or 76% of net sales revenues, resulting in a restaurant operating profit of $124,541.

Marketing and advertising expenses were $74,342 for the 2009 quarter as compared to $10,675 for 2008, as we opened four Company-owned U-Swirl locations during the period.

For the quarter ended September 30, 2009, general and administrative expense increased by $116,136 (191%) due primarily to increased U-Swirl operations. The largest components of general and administrative expenses for the 2009 period were accounting fees ($8,005), administrative salaries and payroll taxes ($6,712), consulting fees ($55,000), insurance ($11,324), licenses, permits and fees ($10,192), legal fees ($19,574), office and postage expense ($6,822) and supplies ($27,352).

Officer compensation for the quarter ended September 30, 2009 increased by $7,395 (17%), as we paid salaries to all of our officers during the 2009 quarter. We hired a chief operating officer in August 2009 and increased the salaries of some of our officers.

We discontinued the services of our investor relations firm in December 2008. We incurred $23,398 of investor relations fees in 2008, as we hired a financial public relations firm in conjunction with our becoming a public company.

The increase in depreciation and amortization expense of $44,472 reflects our increased base of leasehold improvements, property and equipment.

We owned and operated two fast food restaurants located in Henderson and Las Vegas, Nevada under the "Fresh and Fast" Concept. The restaurants were formerly operated under franchise rights and "EVOS" branding purchased from EVOS USA, Inc. Effective March 1, 2009, we notified EVOS USA, Inc. of our intent to terminate the franchise and area development agreements. Effective July 1, 2009, we ceased conducting business under the EVOS USA, Inc. franchise and area development agreements and converted the restaurants to the "Fresh and Fast" Concept. Effective August 1, 2009, we determined to cease conducting business under the "Fresh and Fast" Concept altogether in order to focus on our U-Swirl Yogurt Concept, and have accordingly accounted for the "Fresh and Fast" Concept divestiture as "discontinued operations". We wrote off all of our assets related to the EVOS restaurant concept, resulting in a loss of $1,027,467, as compared to a loss of $94,637 for the 2008 quarter.

As a result of the above, our net loss for the three months ended September 30, 2009 was $1,233,612, as compared to a loss of $394,808 for the comparable 2008 quarter.

Nine Months Ended September 30, 2009. For the nine months ended September 30, 2009, our U-Swirl restaurants generated $910,603 in sales.

Our restaurant operating costs, including pre-opening expenses attributable to training, supplies and various grand-opening promotions including product giveaways, were $671,343, or 74% of net sales revenues, resulting in a restaurant operating profit of $239,260.

Marketing and advertising expenses were $106,145 for the 2009 period as compared to $28,735 for the 2008 period, as we opened six Company-owned U-Swirl locations during that time.

For the nine months ended September 30, 2009, general and administrative expense increased by $234,465 (135%) due to increased U-Swirl operations. The largest components of general and administrative expenses for the nine months ended September 30, 2009 were accounting fees ($25,295), administrative salaries and payroll taxes ($24,921), consulting fees ($55,666), insurance ($24,348), licenses, permits and fees ($20,016), legal fees ($84,650), office and postage expenses ($19,042) and supplies ($63,802).

Officer compensation for the nine months ended September 30, 2009 increased by $172,097 (140%), as we paid salaries to all of our officers during the nine months ended September 30, 2009.

We discontinued the services of our investor relations firm in December 2008. We incurred $154,740 of investor relations fees in 2008, as we hired a financial public relations firm in conjunction with our becoming a public company. Of this amount, $101,342 was the value of warrants to purchase 60,000 units issued to the public relations firm as part of its compensation.

The increase in depreciation and amortization expense of $81,436 reflects our increased base of leasehold improvements, property and equipment due to the operation of the new stores.

We reported a loss from operations of our discontinued EVOS restaurants of $1,155,053, as compared to a loss of $270,249 for the 2008 period.

As a result of the above, our net loss for the nine months ended September 30, 2009 was $1,786,228, as compared to a loss of $892,019 for the comparable 2008 period.

Liquidity and Financial Condition

As of September 30, 2009. At September 30, 2009, we had working capital of $587,591 and cash of $725,916. Working capital and cash at December 31, 2008 were $3,297,262 and $3,335,740, respectively. The decrease in working capital was due to our loss for the nine-month period and the purchase of fixed assets for our six U-Swirl restaurants. Leasehold improvements, property and equipment increased from $879,435 at December 31, 2008, to $1,900,834 at September 30, 2009.

During the nine months ended September 30, 2009, we used $1,918,287 for the purchase of fixed assets and $103,172 for deposits in connection with the opening of U-Swirl restaurants. During the nine months ended September 30, 2008, we used $379,980 for investing activities, of which $239,980 was used for the purchase of fixed assets and $140,000 was paid to EVOS USA. As we had a net loss of $1,786,228 in 2009, operating activities used cash of $573,797 as compared to $573,145 in 2008.

Summary of Significant Accounting Policies

Inventories. Inventories consisting of food, beverages and supplies are stated at the lower of cost or market, including provisions for spoilage commensurate with known or estimated exposures which are recorded as a charge to cost of sales during the period spoilage is incurred.

Leasehold improvements, property and equipment. Leasehold improvements, property and equipment are stated at cost less accumulated depreciation. Expenditures for property acquisitions, development, construction, improvements and major renewals are capitalized. The cost of repairs and maintenance is expensed as incurred. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 5 to 10 years. Leasehold improvements are amortized over the shorter of the lease term, which generally includes reasonably assured option periods, or the estimated useful lives of the assets. Upon sale or other disposition of a depreciable asset,

cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected gain or loss from operations.

We periodically evaluate whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. We use an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

Deposits. Deposits consist of the $108,572 in security deposits for multiple locations. All deposits are carried at the lower of fair value or cost.

Revenue, discounts and expense recognition. Revenue from restaurant sales is recognized when food and beverage products are sold. We reduce revenue by sales returns and sales discounts.

Revenue earned as a U-Swirl Frozen Yogurt franchisor will be derived from restaurants in U-Swirl International, Inc.'s worldwide territory and will include initial franchise fees, continuing service fees, and royalties. Continuing service fees and royalties will be recognized in the period in which they are earned. Franchise fee revenue is recognized and fully earned upon the signing and acceptance of the franchise agreement and franchise fee by both parties. FASB ASC 952-605-25 stipulates that initial franchise fee revenue from a franchise sale should be recognized when the franchiser has substantially performed or satisfied all material services or conditions relating to the sale. Substantial performance has occurred when the franchisor has: (a) no remaining obligations or intent to refund any cash received or to forgive any unpaid notes or receivables; (b) performed substantially all of the initial services required by the franchise agreement (such as providing assistance in site selection, obtaining facilities, advertising, training, preparing operating manuals, bookkeeping, or quality control); and (c) met all other material conditions or obligations. We recorded U-Swirl franchisee fee revenue of $15,000 and $0 during the nine months ended September 30, 2009 and 2008, respectively.

Costs and expenses are recognized during the period in which they are incurred.

Discontinued Operations - Fresh and Fast (formerly EVOS) Concept. For purposes of determining discontinued operations, we have determined that the "concept" level is a component of the entity within the context of FASB ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets". A component of an entity comprises of operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Company. We routinely evaluate our concept base to identify relevant factors for success and determine appropriate actions necessary to grow and operate a successful concept and similarly to identify relevant factors and actions that need to be taken on an underperforming concept including the closing of a non-performing concept. We evaluate the results of operations of the concept both quantitatively and qualitatively to determine if appropriate for reporting as discontinued operations.