Someone close to me is interested in
investing in a private company,
American Hot Foods of Irvine, California.

This company is somehow related to KRh Thermal Systems.
Don't know where it is located.

Doing a simple Google search appeared to show
that American Hot Foods is in legal trouble
in Pennsylavania.

Are these legitimate firms?  In trouble elsewhere?
If they are "bad news," I need 5-10 bullets (one-liners) which would convince 
my friend to stay away.

All comments greatly appreciated.

Hello.

Although I can't offer any advice on this venture, I have located some
information about the business entities involved.

The enterprise apparently operates under at least three names:
American Hot Food Systems, Automated Hot Food Systems, and Hot Choice
Distributors.  The web sites of both American Hot Food Systems and
Automated Hot Food Systems show the same address: 16 Technology #130, 
Irvine, CA 92618.

American Hot Food Systems
http://www.americanhotfood.com/index.html

Automated Hot Food Systems
http://www.automatedhotfoods.com/

I checked the web site of the Nevada Secretary of State  [
http://sos.state.nv.us/corpsrch.asp ] and the companies are
incorporated there.

American Hot Food Systems Inc was incorporated on September 09, 2002.
Automated Hot Food Systems Inc was incorporated on  June 22, 2001.
Hot Choice Distributors was incorporated on February 27, 2002

Jack Tortorice is listed as president of all three corporations.
Source: Nevada Secretary of State
http://sos.state.nv.us/corpsrch.asp 

According to their web sites, American Hot Food Systems and Automated
Hot Food Systems distribute "the revolutionary  the new HOT Choice
American food diner systems and HOT                Choice meals."
http://www.americanhotfood.com/aboutus.html

The Hot Choice System (i.e., the actual vending machine) is
manufactured by another corporation called KRh Thermal. They have
their own web site but very little information is posted there.
http://www.krhthermal.com/

A  July 18, 2002 article in the Irvine World News discusses both KRh
Thermal and Automated Hot Food Systems. KRh is identified as the maker
of the machine while Automated Hot Food Systems is identified as a
distributor.
http://www.irvineworldnews.com/Bstories/july18/hot.html

Another company called "HOT CHOICE AUTOMATED DINER CORPORATION" is 
incorporated in California according to the California Secretary of
State
 http://kepler.ss.ca.gov/corpdata/ShowAllList?QueryCorpNumber=C2345580

A search at the Southland Better Business Bureau indicates that they
opened a file on Automated Hot Food Systems on October 14, 2002. The
entry indicates that the company has a clear record and that the BBB
has received no consumer complaints.
http://www.labbb.org/scripts/cgiip.exe/WService=wsbroker1/C%3A/Inetpub/wwwroot/SouthlandReport/default.htm?hCompID=13180771&hAKAID=1&hAddrID=1

A Google search of "Jack Tortorice" indicates that an individual with
that name was recently CEO of a wireless internet company in Orange
County called "Worldwide Wireless Networks."
://www.google.com/search?q=%22jack+tortorice%22&hl=en&lr=&ie=UTF-8&oe=UTF-8&start=10&sa=N

I haven't located any mention on the internet of legal trouble
relating to American Hot Food Systems or Automated Hot Food Systems or
their sister companies.

Generally speaking, though, it's always wise to carefully scrutinize
all business investments and opportunities. The Federal Trade
Commission's web page "Could  'Biz Opp' Offers Be Out For Your
Coffers?" offers some good tips on the subject.
http://www.ftc.gov/bcp/conline/pubs/invest/vending.htm

search terms: "american hot food", "krh thermal", nevada corporations,
california corporations, "jack tortorice", "better business bureau",
"vending machines", "business opportunities"

I hope this helps. If any of this is unclear, please use the "request
clarification" feature. Best of luck to your friend

Top-notch answer.  My friend was approached to put some money into the
company.  But much of their story doesn't "add up" to what you found. 
I appreciate the work.  ron

Please mention the website where you thought the company might be in
trouble in Pennsylvania.  The California Secretary of State database
says that American Hot Food is owned by Daniel P. Whelan of Irvine. 
The website of course is very slick and informative, but that could
only be a case of putting their best face forward.  If friend is
seriously considering investing, he needs to see how cooperative they
will be in providing financial information, such as company tax
returns, financial income statements, and references from at least 2
other prior investors who have supposedly profited from their
investment already.  Also it wouldn't hurt to pay a private
investigator $100-$200 to do a financial background check on Mr.
Whelan and Mr. Tortoirice and the company names to see if there have
been any history of lawsuits or legal action (in Orange County).  Tell
friend if he can't afford to risk losing all of his investment, then
he shouldn't put any money up and should probably find a safer more
reliable investment to make elsewhere.

SINCERELY,
4keith-ga

Thanks, 4keith, for your comments.  After reading the following, my
friend has decided to forget this idea...


For Immediate Release: May 23, 2002
Commission Halts Unregistered Activity
By Automated Hot Food Systems, Inc.
Harrisburg, PA, May 23, 2002 - - To halt the offer and sale of
unregistered
securities in Pennsylvania, the Pennsylvania Securities Commission
issued a
Summary Order to Cease and Desist against Automated Hot Food Systems,
inc.
(Automated), Richard O'Connor and William Chris Moore. Automated is
located
in Irvine, California.

In April 2002, Automated, through its representatives, offered for
sale
Convertible Secured Promissory Notes (Notes) in Automated to at least
one
Pennsylvania resident who had no pre-existing relationship with the
Respondents and who did not have sufficient experience in financial
matters
to be able to evaluate the merits and risks of the investment.

Offering materials indicate that Notes are available at a minimum
investment
of $25,000, for a total offering of $500,000.

The Commission directed the respondents and affiliates to stop
offering or
selling the Notes in the Commonwealth. The Notes issued by Automated
are
securities which are not registered under Section 201 of the
Pennsylvania
Securities Act of 1972, and no exemptions from registration are
available.
Respondent Moore represented for compensation Automated in the offer
and
sale of the Notes while he was neither registered in Pennsylvania, nor
exempt from registration as an agent.

Any further solicitations or sales made by these respondents or their
affiliates in Pennsylvania will constitute further violations of the
1972
Act. Any person who is solicited by or has information about the
companies
and individuals is asked to immediately notify the Pennsylvania
Securities
Commission by calling the toll-free line 800-600-0007, or, in
Pittsburgh:
(412) 565-5083 or, in Philadelphia: (215) 560-2088.

Contact:
Aimee A. Toth, Counsel
Division of Enforcement, Litigation & Compliance
412/565-5083