UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q


 /x/  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF
THE  SECURITIES  EXCHANGE  ACT  OF  1934

                       For the Period Ended March 31, 2001
                                       or


 /  /  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)
OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

                For the transition period from                to

                         Commission file number 0-18160

                            OMNI NUTRACEUTICALS, INC.
              Exact name of registrant as specified in its charter)

                     UTAH                         87-0468225
         (State of incorporation)  (I.R.S. Employer Identification No.)

                              5310 Beethoven Street
                          Los Angeles, California 90066
                    (Address of principal executive offices)

                  Registrant's telephone number: (310) 306-3636

     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  90  days.  Yes  /x/  No  /  /

     The  number  of shares of the registrant's Common Stock, par value $.01 per
share,  outstanding  as  of  May  14,  2001  was  34,494,379.

<PAGE>
                            Omni Nutraceuticals, Inc.
                               Index to Form 10-Q

<TABLE>
<CAPTION>
PART  1.   FINANCIAL  INFORMATION

<S>                                                                                               <C>
                                                                                                  Page
Item 1.   Financial Statements:                                                                      3
Consolidated Balance Sheets as of March 31, 2001 (unaudited) and December 31, 2000                   3
Consolidated Statements of Operations for Three Months Ended March 31, 2001 and 2000 (unaudited)     5
Consolidated Statements of Cash Flows for Three Months Ended March 31, 2001 and 2000 (unaudited)     6
Notes to Condensed Consolidated Financial Statements                                                 8
Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations     10
PART II.  OTHER INFORMATION                                                                         13
Item 1.   Legal Proceedings                                                                         13
Item 2.   Changes in Securities and Use of Proceeds                                                 13
Item 3   Defaults upon Senior Securities                                                            13
Item 4.   Submission of Matters to a Vote of Security Holders                                       13
Item 5.   Other Information                                                                         14
Item 6.   Exhibits and Reports on Form 8-K                                                          14
SIGNATURES                                                                                          14
</TABLE>

THIS  QUARTERLY REPORT ON FORM 10-Q INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN
THE  MEANING  OF  SECTION  27A  OF  THE  SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES  ACT")  AND  SECTION  21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED (THE "EXCHANGE ACT"). ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL
FACTS  INCLUDED  IN  THIS QUARTERLY REPORT, INCLUDING, WITHOUT LIMITATION, THOSE
REGARDING  THE  COMPANY'S  FINANCIAL  POSITION,  BUSINESS, MARKETING AND PRODUCT
INTRODUCTION  AND
DEVELOPMENT  PLANS  AND  OBJECTIVES  OF  MANAGEMENT  FOR  FUTURE OPERATIONS, ARE
FORWARD-LOOKING  STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS
REFLECTED  IN  SUCH  FORWARD-LOOKING  STATEMENTS  ARE REASONABLE, IT CAN GIVE NO
ASSURANCE  THAT  SUCH  EXPECTATIONS  WILL  PROVE TO HAVE BEEN CORRECT. IMPORTANT
FACTORS  THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S
EXPECTATIONS ("CAUTIONARY STATEMENTS") ARE DISCLOSED UNDER "RISKS RELATED TO THE
BUSINESS OF OMNI NUTRACEUTICALS" AND ELSEWHERE IN THE COMPANY'S ANNUAL REPORT ON
FORM  10-K  AND  IN "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND  RESULTS  OF  OPERATIONS" AND ELSEWHERE IN THE ANNUAL REPORT. ALL SUBSEQUENT
WRITTEN  AND  ORAL  FORWARD-LOOKING  STATEMENTS  ATTRIBUTABLE  TO THE COMPANY OR
PERSONS  ACTING  ON  BEHALF  OF  THE  COMPANY,  ARE EXPRESSLY QUALIFIED IN THEIR
ENTIRETY  BY  THE  CAUTIONARY  STATEMENTS.

<PAGE>

PART  I.  FINANCIAL  INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS
<TABLE>
<CAPTION>

OMNI  NUTRACEUTICALS  INC.
CONSOLIDATED  BALANCE  SHEETS
                                                                                                    MARCH 31,      DECEMBER 31,
                                                                                                       2001            2000
<S>                                                                                               <C>             <C>
     (unaudited)
                                                                                                 -------------------------------
ASSETS
CURRENT ASSETS
Cash                                                                                              $     229,000   $     199,000
Accounts receivable, net of reserves and allowances of  $3,000,000 and $3,829,000, respectively       2,112,000       2,566,000
Inventories, net of reserves of $796,000 and $796,000, respectively                                   2,643,000       2,871,000
Prepaid expenses and other                                                                              618,000         519,000
                                                                                                   -------------   -------------
     Total Current Assets                                                                             5,602,000       6,155,000

Property and equipment, net                                                                           1,193,000       1,253,000
Trademarks, net of accumulated amortization of $1,853,000 and $1,627,000, respectively               11,672,000      11,897,000
Other assets, net of accumulated amortization of $831,000 and $748,000, respectively                    857,000         872,000
Investment in Vitacost.com, Inc.                                                                      7,000,000               -
Assets held for sale                                                                                          -       7,128,000
                                                                                                   -------------   -------------
Total Assets                                                                                      $  26,324,000   $  27,305,000
                                                                                                   =============   =============
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES
Line of credit                                                                                    $   6,285,000   $   5,511,000
Current portion of term loan                                                                          3,500,000       2,917,000
Current portion of notes payable                                                                         22,000          23,000
Accounts payable                                                                                      5,453,000       6,003,000
Accrued liabilities                                                                                   2,441,000       2,392,000
Customer deposits                                                                                       450,000         450,000
                                                                                                   -------------   -------------
Total current liabilities                                                                            18,151,000      17,296,000

Term loan, net of current portion                                                                     6,778,000       7,361,000
Notes payable, net of current portion                                                                    74,000          79,000

SHAREHOLDERS' INVESTMENT
Preferred stock                                                                                           3,000           3,000
Common Stock                                                                                            346,000         341,000
Additional paid-in capital                                                                           43,936,000      43,633,000
Treasury stock                                                                                          (50,000)        (50,000)
Retained deficit                                                                                    (42,914,000)    (41,358,000)
                                                                                                  --------------  --------------
TOTAL SHAREHOLDERS' INVESTMENT                                                                        1,321,000       2,569,000
                                                                                                  --------------  --------------
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT                                                    $  26,324,000   $  27,305,000
                                                                                                  ==============   =============
See Notes to Condensed Consolidated Financial Statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

OMNI  NUTRACEUTICALS
CONSOLIDATED  STATEMENTS  OF  OPERATIONS


                                                                      FOR THE THREE MONTHS ENDED MARCH 31,
                                                                                    2001          2000
<S>                                                             <C>                                    <C>
Net sales                                                       $                 5,751,000   $ 8,039,000
Cost of sales                                                                     3,308,000     4,824,000
Gross Profit                                                                      2,443,000     3,215,000
                                                                ----------------------------  ------------

Selling, general and administrative expenses                                      3,310,000     9,305,000

Loss from operations                                                               (867,000)   (6,090,000)

Other income (expense)
      Interest Income                                                                     -         8,000
      Interest Expense                                                             (440,000)     (465,000)
      Other income (expense)                                                              -         1,000

Total other income (expense)                                                       (440,000)     (456,000)

Loss before provision for income taxes and loss
     from discontinued operations                                                (1,307,000)   (6,546,000)
Provision for income taxes                                                            3,000
Loss before loss from discontinued operations                                    (1,310,000)   (6,546,000)
                                                                ----------------------------  ------------
Discontinued operations:
     Loss on operations of discontinued e-commerce
     segment, net of taxes of $0                                                   (246,000)     (230,000)
Net Loss                                                                         (1,556,000)   (6,776,000)
Preferred Stock Dividends                                                                 -     1,950,000
Net Loss available to common shareholders                       $                (1,556,000)  $(8,726,000)

Loss per common share basic and diluted                         $                     (0.05)  $     (0.30)
Weighted average number of shares outstanding                                    34,256,879    27,765,052
                                                                ============================  ============

     See Notes to Condensed Consolidated Financial Statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
OMNI  NUTRACEUTICALS  INC.
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS

                                                                                FOR THE THREE MONTHS ENDED MARCH 31,
                                                                                                2001         2000
<S>                                                             <C>                                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) available to common shareholders                                        $(1,556,000)  $(8,726,000)
Adjustments to reconcile net income (loss) available to common
shareholders to net cash provided by (used in) operating
activities:
  Depreciation and amortization                                                               556,000       655,000
  Provision for reserves and allowances                                                      (829,000)
  Issuance of warrants and options                                                                           97,000
  Issuance for shares for services                                                            136,000     1,770,000
  Imputed preferred dividends                                                                             1,950,000
  (Increase) decrease in:
    Accounts receivable                                                                     1,283,000    (1,357,000)
    Inventory                                                                                 228,000       450,000
    Prepaid and other                                                                         (53,000)      124,000
   Increase (decrease) in:
    Cash overdraft                                                                                         (165,000)
    Accounts payable                                                                         (550,000)    1,834,000
    Accrued liabilities                                                                        49,000     1,185,000
    Income taxes payable                                                                                    (52,000)
                                                                                           -----------   -----------
Cash provided by (used in) operating activities                                              (736,000)   (2,235,000)
                                                                                           -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of fixed assets                                                                    (2,000)      (35,000)
Decrease in other assets                                                                                     22,000
Collections on notes receivable                                                                               3,000
                                                                                           -----------   -----------
Cash used in investing activities                                                              (2,000)      (10,000)
                                                                                           -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock                                                                    2,376,000
Proceeds from issuance of preferred stock                                                                 1,900,000
Proceeds from sale of minority interest                                                                   1,000,000
Proceeds from issuance of warrants                                                                          100,000
Borrowings (repayments) under exist. line of credit                                           774,000    (1,036,000)
Repayments on long term borrowings                                                             (6,000)     (665,000)
Costs incurred with financing                                                                              (100,000)
                                                                                           -----------  ------------
Cash provided by (used in) financing activities                                               768,000     3,575,000
                                                                                           -----------  ------------
Net increase (decrease) in cash                                                                30,000     1,330,000
Cash and cash equivalents, beginning of period                                                199,000
                                                                                           -----------  ------------
Cash and cash equivalents, end of period                                                   $  229,000   $ 1,330,000
                                                                                           ==========   ============
See Notes to Condensed Consolidated Financial Statements
</TABLE>

                                      2000

     We  recorded  a preferred dividend of $1,950,000 related to the issuance of
preferred  stock  with  a  conversion  rate below the market price of our common
stock.

     We  issued 30,000 shares to two directors and recorded a non-cash charge of
$30,000.

     We  recorded a compensation charge of $1,720,000 related to the transfer of
personal  shares  from  an  officer  and  major shareholder to a departing board
member.

     We issued 800,000 shares of common stock to a financial consulting firm for
services  provided  in  connection with a private placement of 700,000 shares of
common  stock  for  $2,100,000.

                                      2001

     We  sold  our e-commerce business to Vitacost.com, Inc. for common stock of
vitacost.com  valued  at  $7,000,000.




<PAGE>

                            Omni Nutraceuticals, Inc.
              Notes to Condensed Consolidated Financial Statements
                        Three Months Ended March 31, 2001
                                   (Unaudited)

NOTE  1.  BASIS  OF  PRESENTATION

     The  accompanying  unaudited  consolidated financial statements reflect the
results  of  operations for Omni Nutraceuticals, Inc. ( "we", "us",  "our"), and
have  been  prepared in accordance with generally accepted accounting principles
for  interim  financial  information  and with the instructions to Form 10-Q and
Article  10  of  Regulation  S-X.  Accordingly,  they  do not include all of the
information  and  footnotes required by generally accepted accounting principles
for  complete  financial statements. In our opinion, all adjustments (consisting
of  normal  recurring  accruals, with the exception of the adjustments described
below  in the consolidated financial statements) considered necessary for a fair
presentation  have  been  included.  Our  operating  results for the three-month
period  are  not  necessarily indicative of the results that may be expected for
the  year  ending  December  31,  2001.  For  further  information, refer to the
consolidated  financial  statements  and  footnotes thereto included in our Form
10-K  for  the  year  ended  December  31,  2000. Certain 2000 amounts have been
reclassified  to conform to 2001 presentation. For the three-month periods ended
March  31,  2001  and  March 31, 2000, no common stock equivalents were included
because  they  would  have  been  anti-dilutive.

NOTE  2.  GOING  CONCERN  ISSUES

     In  connection  with  the  audit  for  the year ended December 31, 2000, we
received  a  report  from  our  independent  certified  public  accountants that
includes  an  explanatory  paragraph  describing  uncertainty  in our ability to
continue  as  a  going  concern. Our condensed consolidated financial statements
included  herein  contemplate our ability to continue and as such do not include
any  adjustments  that  might  result  from  this  uncertainty.

NOTE  3.  INVESTMENT  IN  VITACOST  &  DIVESTITURE  OF  E-COMMERCE  OPERATIONS

     On  February  2, 2001, we entered into and simultaneously closed a Purchase
Agreement  with Vitacost.com, Inc. ("Vitacost"), an on-line marketer of vitamins
and  nutritional  products,  whereby  Vitacost acquired substantially all of our
operating assets of our combined e-commerce operations in exchange for 6,800,000
shares  of  Vitacost common stock.  A valuation of $7,000,000 has been placed on
the  Vitacost  stock  by  an  independent  valuation  consultant. The results of
operations  of this business segment have been retroactively reported separately
on  the  accompanying  statement  of  operations  as  a  Loss  on  operations of
discontinued  e-commerce segment.  The net assets of the e-commerce segment have
been  reported  as  "Assets  held  for  sale"  at  December  31,  2000.

At  February  2,  2001, prior to the sale of our e-commerce segment, we recorded
the  following  as  Assets  Held  for  Sale  related  the e-commerce operations:


<TABLE>
<CAPTION>
Net book value of assets related to:
<S>                                         <C>
  Healthzone.com                            $ 2,971,000
  Vitamin Discount Connection                   522,000
  SmartBasics                                   521,000
  HealthShop.com                              4,902,000
  Accumulated amortization on goodwill       (2,243,000)
  Deferred losses of e-commerce operations      227,000
                                            ------------
                                            $ 7,000,000
                                            ============
</TABLE>

NOTE  4.  INVENTORIES

Inventories are valued at the lower of cost, determined on a first-in, first-out
basis,  or  market.  Inventories  at  March  31,  2001 and December 31, 2000 are
summarized  as  follows:

<TABLE>
<CAPTION>
                March 31, 2001   December 31, 2000
                ---------------  ------------------
<S>             <C>              <C>
Raw Materials   $     1,015,000  $        1,194,000
Finished Goods        1,628,000           1,677,000
                ---------------  ------------------
                $     2,643,000  $        2,871,000
                ===============  ==================
</TABLE>


NOTE  5.  CREDIT  FACILITY

Our  current credit facility is secured by a lien against all of our assets and
consists  of  a  $13 million (original amount) term loan ("Term Loan") and up to
a$7 million revolving loan ("Revolving Loan"). The remaining balance of the Term
Loan  of  $10,278,000  at March 31, 2001, is payable in installments as follows:
$1,750,000  due  June  15,  2001,  monthly  payments  of  approximately $194,000
commencing  July  15,  2001  and  ending  July  15,  2002 and a final payment of
$6,000,000 due July 30, 2002. Mandatory prepayments are required in the event we
receive  any net proceeds from insurance claims, assets sales and/or debt sales.
Under  certain  circumstances we are required to make mandatory prepayments from
equity sales. Our credit facility agreement contains certain financial and other
covenants  or  restrictions,  including  the  maintenance  of  certain financial
ratios,  limitations  on  capital  expenditures,  restrictions  on acquisitions,
limitations  on the incurrence of indebtedness and restrictions on any dividends
that  we may pay. Presently there are several Events of Default under the credit
facility including non-compliance with the financial covenants. We are currently
seeking changes in the term loan repayment schedule and waivers of the Events of
Default  from  our  lender.

NOTE  6.  CAPITAL  TRANSACTIONS

     During  the  quarter ended March 31, 2001 we recorded the following capital
transactions.

     400,000  shares  of common stock were issued pursuant to a price protection
clause  in  the original agreement to purchase HealthShop and a related increase
in  Assets  Held  for  Sale  was  recorded  in  the  amount  of  $119,000.

     75,000  shares  of common stock were issued in connection with an amendment
to  preferred stock issued in the first quarter of 2000 and a related charge was
recorded  in  the  amount  of  $136,000.

     In  previous  periods  we  recorded prepaid promotion fees representing the
value  of  stock  options  issued  to a celebrity spokesperson. In the period we
recorded  a  charge  representing  the  remaining  amount of the prepaid fees of
$53,000.

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

OVERVIEW

     Omni Nutraceuticals, Inc. ("we", "us",  "our") is a formulator and supplier
of  branded  natural  health,  herbal,  and nutritional supplement products. The
Company's  products  are  sold  through  mass  retail, specialty natural health,
nutrition  and  food  retail  stores.

     Omni  is  a  Utah  Corporation,  and  was  formerly  known  as  Irwin
Naturals/4Health  Inc.,  which  was  formerly known as 4Health, Inc. Omni is the
surviving  corporation  of  a  merger  (the  "Merger")  of 4Health, Inc., a Utah
corporation with Irwin Naturals, Inc., a California corporation consummated June
30,  1998.  Pursuant  to  the  Merger  that  was  accounted  for as a pooling of
interests  4Health  issued 15,750,000 shares of common stock in exchange for all
the  outstanding  shares  of  Irwin  Naturals.

RESULTS  OF  OPERATIONS

OPERATING  RESULTS

     Our  consolidated  net sales for the three months ended March 31, 2001 were
$5,751,000  with an  operating  loss before  provision for income taxes and loss
on discontinued  operations  of  $1,307,000.  The  loss  on  operations  of  our
discontinued  e-commerce segment for the first quarter of 2001 was $246,000. Our
net  loss  for  the  first  quarter  of  2001  was  $1,556,000, and our net loss
available  to  our  common  shareholders  was  $1,556,000 or $0.05 per basic and
diluted  share. Our consolidated net sales for the same period in the prior year
were  $8,039,000  with  an  operating loss before provision for income taxes and
loss  on  discontinued  operations  of $6,546,000. The loss on operations of our
discontinued  e-commerce segment for the first quarter of 2000 was $230,000. Our
net  loss and our net loss available to common shareholders in the first quarter
of  2000  was  $6,776,000  and  $8,726,000  or $.30 per basic and diluted share,
respectively.  Our  total  selling,  general and administrative expenses for the
three months ended March 31, 2001 were $3,310,000 versus $9,305,000 for the same
period  in  2000.

SALES

     Our  net  sales  for  the  three  months ended March 31, 2001, decreased by
$2,288,000, or 28.4%, to $5,751,000 from $8,039,000 for the comparable period in
2000. The decrease in sales results from overall declines in consumer demand for
herbal  supplements,  which  was particularly acute in the mass market. Also the
first  quarter  of 2000 benefited from a national media advertising campaign for
our  Inholtra,  Cholestaid and Veromax products introduced in 1999. Sales in the
first  quarter  of  2001 also declined because substantially all advertising and
promotion  was curtailed for existing products due to limited resources. Also as
of March 31, 2001 we had not introduced any new products since the first quarter
of  2000.

GROSS  PROFIT

     Gross  profit  for  the  three  months  ended  March  31, 2001 decreased by
$772,000,  or 24.0%, to $2,443,000, from $3,215,000 for the comparable period in
2000.  Gross  profits  as a percentage of sales for the three months ended March
31,  2001  increased  to
42.4%  from  40.0%  in  the comparable period in 2000. The increase in the gross
margin was primarily due to a shift in the net sales mix from mass-market sales,
which had higher rates of returns in the first quarter of 2000, to higher margin
health food store sales in 2001, partially offset by a greater contribution from
lower  margin  international  sales  in  2001.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Sales  and  marketing  expenses  for  the three months ended March 31, 2001
decreased  by $3,728,000 or 81.8% to $829,000 from $4,557,000 for the comparable
period  in  2000.  This  decrease  was due primarily to lower advertising, media
expenses and co-op advertising which declined $3,354,000 to $71,000 in the first
quarter  of  2001  from  $3,425,000  in  the comparable period in 2000. The main
products  promoted in the first quarter last year were Inholtra, Cholestaid, and
Veromax.  Other cost reductions came from reductions in the costs of repackaging
and  redesign  of our core product lines, $79,000; salaries and wages, $137,000;
trade  show  expense,  $46,000;  travel,  $32,000;  and  royalties,  principally
Inholtra,  $41,000.

     Distribution  expenses  declined  $116,000 or 19.9% to 466,000 in the three
months  ended  March  31,  2001  from $582,000 in the comparable period in 2000.
Reduction in freight, $79,000 and wages, $41,000 accounted for substantially all
of  the  decline.

     General  and  administrative  expenses  decreased  $2,151,000  or  51.6% to
$2,015,000  in  the  three  months  ended  March 31, 2001 from $4,166,000 in the
comparable  period  in 2000. A compensation charge of $1,720,000 recorded in the
first quarter of 2000 related to the transfer of personal shares from an officer
and  major shareholder to a departing board member accounted for the majority of
the decline. Also accounting for the decline were decreases in salary and wages,
$99,000;  accounting, legal and professional fees, $311,000; amortization of the
e-commerce  business  segment, sold February 2, 2001, $126,000; partially offset
by  increased  stock  compensation  expense  of  $161,000.

OTHER  INCOME  (EXPENSE)

     Interest  expense  for  the three months ending March 31, 2001 decreased by
$25,000  to  $440,000  from  $465,000  for  the  comparable period in 2000. This
decrease  is  the  result of lower term loan balances outstanding from period to
period.

LIQUIDITY  AND  CAPITAL  RESOURCES

     As  of  March  31,  2001, we had cash and cash equivalents of approximately
$229,000,  and approximately $715,000 of availability under our revolving credit
line.  As  of December 31, 2000, we had approximately, $199,000 in cash and cash
equivalents  and  approximately  $1,489,000  under  our  revolving  credit  line
available.  The  increase  in  cash and cash equivalents is solely the result of
timing  of receipt and disbursement of cash. Further as of March 31, 2001 we had
a  working  capital  deficit  of  $12,549,000,  and  an  accumulated  deficit of
$42,914,000.  We  estimate that, based on the current rate of negative cash flow
from  operations, the cash and availability under the revolving credit line will
be  sufficient to provide a source of working capital through approximately June
15,  2001.  On  June  15,  2001  we  are required to make a principal payment of
$1,750,000  on our term loan. We do not have the resources to make this payment.
We  will  be  seeking,  from  our secured lender, an extension of this and other
payment  obligations  as  well  as  waivers  on  current Events of Default.  Our
failure  to receive such extension could have a material adverse effect upon our
financial  condition  and  our ability to continue to operate. Additionally, our
estimate  does  not  give  effect  to  payments, which may be made to vendors to
reduce  outstanding  payables.  Further,  there  can  be  no assurances that the
vendors  will  continue  to  supply us with goods and services in the event that
such payables are not reduced, which may have an adverse effect on our continued
operations.  In  addition,  some of our largest customers have in the past taken
deductions  against trade receivables and although we believe we have identified
and reserved for such deductions, such practices may adversely effect our future
cash  flow.

     During  the three months ended March 31, 2001, we experienced negative cash
flow  from  operations  of  approximately $736,000. We have primarily funded our
operations  to  date through internally generated capital, bank loans or private
equity  financing.  Our future capital requirements will depend on many factors,
including  the  nature  and timing of orders from customers, collection of trade
accounts  receivable,  the  expansion  of  sales  and  marketing  efforts, costs
associated  with  entering  into new channels of distribution, and the status of
competing  products. Management believes that additional investment capital will
be  required  to  permit the Company to meet its business objectives in the near
term.  Such funds may be raised either through debt or equity offerings, or some
combination  of the two. However, there is no assurance that the Company will be
able  to  secure  such funds on commercially reasonable terms, if at all. If not
successful in securing additional funds, the Company may be forced to dispose of
its  assets  outside  of  its  normal  course  of  business.

     Our  independent  certified public accountants have included an explanatory
paragraph  in  their report of Independent Certified Public Accountants included
in  our  Annual Report on Form 10-K for the year ended December 31, 2000, to the
effect that our losses from operations for the year ended December 31, 2000, and
the  working capital deficit and the retained deficit at December 31, 2000 raise
substantial  doubt  about  our  ability  to  continue  as  going  concern.

PART  II.  OTHER  INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

     The former shareholders of Smart Basics, Inc., filed a complaint against us
on  March 30, 2001, in the Second Judicial District Court State of Nevada in and
for  the  County  of  Washoe County, Case No. CV01-01602.  The complaint alleges
that  we  misrepresented  our  financial condition in connection with the merger
with  Smart  Basics,  Inc.  The  plaintiffs  seek rescission and, alternatively,
unspecified  damages,  attorneys  fees  and  costs.  Based  on  the  information
currently  available, we are unable to evaluate the likelihood of an unfavorable
outcome.

ITEM  2.  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

     None

ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES

     None

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     None

ITEM  5.  OTHER  INFORMATION

     None

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     None

SIGNATURES

     Pursuant  to  the  requirements 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.

     OMNI  NUTRACEUTICALS,  INC.
     By:    /s/  KLEE  IRWIN
          Klee  Irwin
          President  &  CEO

Dated:  May  15,  2001