SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q
(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001.


[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ________________


                          Commission File No. 333-22997

                         SPECTRUM ORGANIC PRODUCTS, INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its Charter)

          California                                           94-3076294
 ------------------------------                           --------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                          Identification Number)

                               133 Copeland Street
                           Petaluma, California 94952
                     --------------------------------------
                    (Address of principal executive offices)

                                  (707)778-8900
                          -----------------------------
                          Registrant's telephone number

Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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[ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: Common Stock, no par value,
45,560,354 shares as of November 1, 2001.
Transitional Small Business Disclosure Format: Yes [ ] No [X]


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PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
-----------------------------

                                  SPECTRUM ORGANIC PRODUCTS, INC.
                                          BALANCE SHEETS

                                              ASSETS

                                                                     (Unaudited)
                                                                    September 30,   December 31,
                                                                        2001            2000
                                                                    ------------    ------------
Current Assets:
   <S>                                                              <C>             <C>
   Cash                                                             $      1,100    $        900
   Accounts receivable, net                                            5,004,100       2,971,700
   Inventories, net                                                    6,390,200       6,676,400
   Prepaid expenses and other current assets                              86,900          84,600
                                                                    ------------    ------------
     Total Current Assets                                             11,482,300       9,733,600

Property and Equipment, net                                            3,145,300       3,254,900

Other Assets:
   Goodwill, net                                                       2,482,000       9,721,100
   Other assets, net                                                     130,700         131,800
                                                                    ------------    ------------
Total Assets                                                        $ 17,240,300    $ 22,841,400
                                                                    ============    ============

                               LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Bank overdraft                                                   $    648,900    $    539,000
   Line of credit                                                      5,891,400       5,432,200
   Accounts payable, trade                                             4,733,600       6,057,600
   Accrued expenses                                                      971,800         715,400
   Current maturities of notes payable, former stockholder               328,100         375,000
   Current maturities of notes payable and
     capitalized lease obligations                                       329,200       1,312,900
   Current maturities of notes payable, stockholders                     131,200         110,800
                                                                    ------------    ------------
     Total Current Liabilities                                        13,034,200      14,542,900

Notes payable, former stockholder, less current maturities               805,900         961,400
Notes payable and capitalized lease obligations, less
   current maturities                                                    674,800         149,900
Notes payable, stockholders, less current maturities                     236,500         337,200
                                                                    ------------    ------------
Total Liabilities                                                     14,751,400      15,991,400
                                                                    ------------    ------------

Commitments and Contingencies

Stockholders' Equity:
   Preferred stock, 5,000,000 shares authorized, no shares issued
     or outstanding                                                         --              --
   Common stock, without par value, 60,000,000 shares authorized,
     45,560,354 and 44,495,828 issued and outstanding at
     September 30, 2001 and  December 31, 2000, respectively           8,850,200       8,616,200
   Additional paid-in capital                                            407,300         304,200
   Accumulated deficit                                                (6,768,600)     (2,070,400)
                                                                    ------------    ------------
Total Stockholders' Equity                                             2,488,900       6,850,000
                                                                    ------------    ------------
Total Liabilities and Stockholders' Equity                          $ 17,240,300    $ 22,841,400
                                                                    ============    ============


                            The accompanying notes are an integral part
                                    of the financial statements

                                                2
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                                    SPECTRUM ORGANIC PRODUCTS, INC.
                                       STATEMENTS OF OPERATIONS




                                                 (Unaudited)                    (Unaudited)
                                             Three Months Ended              Nine Months Ended
                                        September 30,   September 30,   September 30,   September 30,
                                            2001            2000            2001            2000
                                        ------------    ------------    ------------    ------------
<S>                                     <C>             <C>             <C>             <C>
Gross Sales                             $ 11,330,300    $ 11,411,200    $ 33,838,500    $ 34,977,000

Discounts and Allowances                     735,400         796,700       2,400,700       2,257,700
                                        ------------    ------------    ------------    ------------
Net Sales                                 10,594,900      10,614,500      31,437,800      32,719,300

Cost of Goods Sold                         7,738,900       7,941,300      22,698,000      24,340,300
                                        ------------    ------------    ------------    ------------
Gross Profit                               2,856,000       2,673,200       8,739,800       8,379,000
                                        ------------    ------------    ------------    ------------
Operating Expenses:

   Sales and Marketing                     1,560,600       1,546,000       4,726,900       4,810,800

   General and Administrative                859,300         922,000       2,585,700       2,701,100

   Amortization of Goodwill                   62,200         225,500         458,600         684,200

   Loss on Sale of Product Lines and
       Plant Closure                            --           250,000       4,976,400         388,400
                                        ------------    ------------    ------------    ------------
Total Operating Expenses                   2,482,100       2,943,500      12,747,600       8,584,500
                                        ------------    ------------    ------------    ------------

Income (Loss) from Operations                373,900        (270,300)     (4,007,800)       (205,500)
                                        ------------    ------------    ------------    ------------
Other Income (Expense):

   Interest Expense                         (179,500)       (366,400)       (705,900)     (1,067,300)
   Other, net                                  1,500             400          15,500          61,900
                                        ------------    ------------    ------------    ------------
Total Other Expenses                        (178,000)       (366,000)       (690,400)     (1,005,400)
                                        ------------    ------------    ------------    ------------

Net Income (Loss)                       $    195,900    $   (636,300)   $ (4,698,200)   $ (1,210,900)
                                        ============    ============    ============    ============

Basic and Fully Diluted Income (Loss)
   Per Share                            $       0.00    $      (0.01)   $      (0.10)   $      (0.03)
                                        ============    ============    ============    ============

Weighted Average Shares Outstanding       45,560,354      44,423,844      45,170,889      44,169,015
                                        ============    ============    ============    ============


                              The accompanying notes are an integral part
                                      of the financial statements

                                                  3
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                                  SPECTRUM ORGANIC PRODUCTS, INC.
                                     STATEMENTS OF CASH FLOWS


                                                                              (Unaudited)
                                                                           Nine Months Ended
                                                                     September 30,   September 30,
                                                                         2001            2000
                                                                     ------------    ------------
<S>                                                                  <C>             <C>
Net Loss                                                             $ (4,698,200)   $ (1,210,900)
  Adjustments to Reconcile Net Loss to Net Cash (Used In) Provided
      by Operating Activities:
         Provision for allowances against receivables                     (54,300)        (17,900)
         Provision for reserves for inventory obsolescence               (196,200)       (285,000)
         Depreciation and amortization                                    309,800         429,800
         Amortization of goodwill                                         458,600         684,200
         Loss on sale of product lines and plant closure                4,976,400         338,400
         Loss on sale of fixed assets                                      63,300            --
         Imputed interest on notes payable and conversion of notes
           payable to equity                                               27,000          42,100
         Imputed interest on stock warrants issued                         52,700         118,700
         Increase in cash surrender value of life insurance                (6,700)        (10,200)
         Amortization of original issue discount on unsecured and
           subordinated notes payable                                        --            55,200

  Changes in Assets and Liabilities:
         Accounts receivable                                           (1,978,100)       (986,500)
         Inventories                                                     (345,700)      1,426,800
         Prepaid expenses and other assets                                 18,800         112,900
         Accounts payable                                              (1,250,000)        192,900
         Accrued expenses                                                 256,400        (763,000)
                                                                     ------------    ------------
Net Cash (Used In) Provided by Operating Activities                    (2,366,200)        127,500
                                                                     ------------    ------------
Cash Flows from Investing Activities:
  Purchase of property and equipment                                     (344,200)       (324,300)
  Proceeds from sale of assets                                              5,500          53,000
  Proceeds from sale of product lines and related inventories           2,778,100            --
  Merger-related expenses                                                    --          (169,900)
  Transaction fees on sale of product lines                              (139,700)           --
                                                                     ------------    ------------
Net Cash Provided by (Used In) Investing Activities                     2,299,700        (441,200)
                                                                     ------------    ------------
Cash Flows from Financing Activities:
  Increase in checks drawn against future deposits                        109,900         193,500
  Proceeds from lines of credit                                        31,879,000      33,113,200
  Repayment of lines of credit                                        (31,419,800)    (32,505,400)
  Repayment of notes payable, former stockholder                         (218,700)       (275,000)
  Repayment of notes payable to stockholders                             (130,200)       (209,800)
  Proceeds from notes payable                                              50,000         276,100
  Principal repayments under notes payable                               (242,800)       (336,900)
  Repayment of capitalized lease obligations                              (30,700)        (41,500)
  Proceeds of loan against cash surrender value of life insurance            --            98,400
  Restricted shares purchased by board members                             70,000            --
  Warrants exercised                                                         --             1,300
                                                                     ------------    ------------
Net Cash Provided by Financing Activities                                  66,700         313,900
                                                                     ------------    ------------
Net Increase In Cash                                                          200             200

Cash, beginning of the year                                                   900           1,100
                                                                     ------------    ------------
Cash, end of the period                                              $      1,100    $      1,300
                                                                     ============    ============

Supplemental Disclosure of Cash Flow Information:
  Cash paid for income taxes                                         $        800    $     15,400
  Cash paid for interest                                             $    666,000    $    855,900
Non-Cash Financing Activities:
  Conversion of notes payable to common stock                        $    164,000            --


                            The accompanying notes are an integral part
                                    of the financial statements

                                                4
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<PAGE>


SPECTRUM ORGANIC PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS

1.   Basis of Presentation:

     The accompanying unaudited interim financial statements have been prepared
     in accordance with accounting principles generally accepted in the United
     States of America for interim financial information. They include all
     adjustments, which in the opinion of Management, are necessary in order to
     make the financial statements not misleading. Operating results for the
     three-month and nine-month periods ended September 30, 2001 are not
     necessarily indicative of the results that may be expected for the entire
     year ending December 31, 2001. These financial statements have been
     prepared in accordance with the instructions to Form 10-Q and do not
     include certain disclosures required by generally accepted accounting
     principles. Accordingly, the statements should be read in conjunction with
     Spectrum Organic Products, Inc. financial statements and notes thereto
     included in the Company's Form 10-KSB for the year ended December 31, 2000.

     Certain reclassifications have been made to the prior year unaudited
     interim financial statements to be consistent with the presentation at
     September 30, 2001. These reclassifications had no impact on net income or
     retained earnings.

2.   Business Combination:

     On October 6, 1999 Spectrum Naturals, Inc. ("SNI"), its affiliate Spectrum
     Commodities, Inc. ("SCI") and Organic Ingredients, Inc. ("OI"), all
     California corporations, were merged with and into Organic Food Products,
     Inc. ("OFPI"), also a California corporation (the "Merger"). Effective with
     the Merger, the newly combined entity changed its name to Spectrum Organic
     Products, Inc. ("the Company" or "SPOP"). Since former SNI stockholders
     hold a controlling interest in the Company after the Merger, the
     transaction was accounted for as a reverse acquisition, with SNI as
     accounting acquirer and OFPI and OI as accounting acquirees.

3.   Sale of Product Lines:

     On June 11, 2001 the Company sold its tomato-based product lines to Acirca,
     Inc., an unrelated third party, in a transaction approved by unanimous vote
     of the Company's Board of Directors. Acirca has been, and may continue to
     be, a customer of the Company, purchasing organic ingredients from the
     Company. The assets sold included inventories, trademarks and goodwill
     associated with the Millina's Finest, Garden Valley Natural, Parrot and
     Frutti di Bosco brands of pasta sauces and salsas, as well as children's
     meals sold under the Grandma Millina's Kitchen Kids' Meals brand and
     certain private label pasta sauce and salsa products.

     The total consideration in connection with the sale was $3,128,100, which
     included $2,000,000 paid at the closing and $778,100 paid for saleable
     inventory sold to Acirca. Also included in the total amount of
     consideration was $350,000 deposited in an escrow account to be applied
     towards indemnity claims of Acirca and, to the extent not utilized for any
     indemnity claims of Acirca, released to the Company in two equal
     installments at the six month and one year anniversaries of the sale.
     Because of this contingency, the $350,000 in escrow was not recorded as
     part of the consideration received on the sale.

                                       5

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<CAPTION>


     Since the product lines sold comprised all of the remaining assets of OFPI,
     the remaining net goodwill associated with the reverse acquisition of OFPI
     in October 1999 of $6,776,200 was written-off. Accordingly, the Company
     recorded a non-cash loss on the sale of the product lines of $4,976,400,
     which was computed as follows:

      <S>                                                                  <C>
      Total cash consideration                                             $3,128,100
      Less escrowed funds included above                                      350,000
                                                                           ----------
      Net cash proceeds from sale                                           2,778,100
                                                                           ----------
      Assets sold:
         Inventories                                                          778,100
         Label plates, molds and dies, net of accumulated amortization         10,500
         Goodwill, net of accumulated amortization                          6,776,200
      Transaction fees                                                        139,700
      Write-off of remaining inventories not purchased                         50,000
                                                                           ----------
                                                                            7,754,500
                                                                           ----------
      Net Loss on Sale of Product Lines                                    $4,976,400
                                                                           ==========

     The transaction fees represented investment banking, legal and accounting
     fees associated with the sale. The write-off of remaining inventories
     represented losses on close-out sales of dry cut pasta and canned tomatoes,
     which were products previously sold by the Company under the disposed brand
     names that were not purchased by the buyer.

4.   Plant Closure:

     In May 2000, the Company committed to a plan to close its leased
     manufacturing facility in Morgan Hill, California. Production of the
     tomato-based product lines, which were sold as discussed in Note 3, was
     transferred to a third-party co-packer who also purchased certain
     manufacturing equipment from the Company. As a result, production at the
     Morgan Hill facility ceased on July 21, 2000. The facility currently
     remains under lease while the Company returns the facility to its condition
     on the date it was leased. Management has reached an agreement in principle
     with the landlord for a lease termination and anticipates being free of its
     obligations under the lease by December 31, 2001. Rental payments for the
     nine-month period ended September 30, 2001 for the Morgan Hill facility
     were $72,100. All rent through December 31, 2001 has been accrued and is
     included in accounts payable at September 30, 2001.

                                       6
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<CAPTION>



5.   Inventories:

     Inventories consisted of the following:
                                                         September 30,        December 31,
                                                             2001                 2000
                                                         ------------         ------------
     <S>                                                 <C>                  <C>
     Raw materials                                       $    767,600         $  1,130,300
     Finished goods                                         5,991,900            6,111,600
                                                         ------------         ------------
     Total Inventories                                      6,759,500            7,241,900

     Less: Provision for obsolete inventory                  (369,300)            (565,500)
                                                         ------------         ------------
     Net Inventories                                     $  6,390,200         $  6,676,400
                                                         ============         ============

     Included with the sale of product lines was $778,100 of saleable finished
     case goods and packaging material inventories which were sold at the
     Company's cost. Also recorded as part of the sale of product lines was a
     write-off for obsolete inventories of $50,000 to cover losses on closeout
     sales of dry cut pasta and canned tomatoes, which were products previously
     sold under the disposed brand names but not purchased by Acirca.

6.   Commitments and Contingencies:

     Litigation and Settlements
     --------------------------

     In February 1998, OFPI acquired the natural fruit juice and water bottling
     operations of Sunny Farms Corporation for cash and common stock. A portion
     of the common stock consideration was held in escrow, contingent upon
     earn-out calculations for the year following the acquisition. Subsequently,
     Sunny Farms sought voluntary relief pursuant to chapter 7 of the U.S.
     Bankruptcy Code in November 1998. In October 2000, attorneys for the
     bankruptcy trustee filed a complaint against the Company in the U.S.
     Bankruptcy Court for the Northern District of California, challenging the
     Company's earn-out calculations and requesting that a portion of the common
     stock held in escrow be released.

     The Company and the Sunny Farms bankruptcy trustee reached an agreement on
     October 9, 2001 regarding the earn-out calculations and subsequent shares
     to be released from escrow, which is in the process of being approved by
     the Bankruptcy Court. An estimated accrual of $94,400 for common shares to
     be released was included in accounts payable at September 30, 2001.

     In October 2000, the Company was notified by counsel for GFA Brands, Inc.
     that nutritional claims pertaining to Spectrum Naturals Organic Margarine
     were infringing upon two patents issued in the United States that pertain
     to particular fat compositions suitable for human ingestion. The patent
     holder exclusively licensed each of these patents to GFA Brands. Management
     believes that the margarine does not infringe upon either patent, and
     further, that the patents are unenforceable in any case. Management engaged
     legal counsel that specialize in this area and received an opinion letter
     in February 2001 confirming that, in the opinion of counsel, the
     manufacture or sale of Spectrum Naturals Organic Margarine does not
     infringe upon the GFA patents, either literally or under the doctrine of
     equivalents.

                                       7
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<PAGE>


     The Company filed a complaint against GFA Brands for declaratory judgment
     of non-infringement and invalidity of the two patents on August 28, 2001 in
     the U.S. District Court for Northern California. The Complaint requests a
     declaratory judgment that the margarine does not infringe either patent, a
     declaratory judgment that both patents are invalid, that GFA Brands be
     enjoined from threatening or asserting any action for infringement of
     either patent, and attorney's fees.

     Management believes the Company has meritorious defenses and that a loss is
     not probable at this time, therefore, no provision for loss has been
     recorded at September 30, 2001.

     Liquidity
     ---------

     On June 11, 2001 the Company sold its tomato-based product lines to an
     unrelated third party in order to raise cash for working capital purposes.
     The sale generated cash consideration of $3,128,100, of which $350,000 was
     deposited into an escrow account and subject to indemnity claims of the
     buyer, if any, over the course of the one-year period ending June 11, 2002.
     The remaining $2,778,100 in immediately available cash was applied against
     the Company's outstanding line of credit and subsequently, was partially
     utilized to bring the Company's vendors current. At September 30, 2001 the
     Company had $808,300 in available borrowings under its line of credit.

     On October 18, 2001 the Company entered into an amendment (the "Amendment")
     to the existing Credit and Security Agreement (the "Agreement") with its
     primary lender, Wells Fargo Business Credit, Inc. ("WFBC"). The Amendment
     includes new financial covenants based on the Company's current financial
     position and latest forecasts of future results, a new term loan for up to
     $100,000 for new production equipment to be purchased by the Company,
     incentive targets which, if achieved, will enable the Company to reduce the
     interest rates charged by WFBC by 100 basis points, and also entails a two
     year extension through October 2004 under the same terms as the original
     Agreement. In consideration for the Amendment, the Company will pay WFBC an
     accommodation fee of $20,000 in two equal installments on November 1, and
     December 3, 2001. As a result of executing the Amendment, the Company has
     returned to an in-compliance status with WFBC. Accordingly, the Company
     reclassified $418,500 of the WFBC term debt from current liabilities to
     long-term debt at September 30, 2001.

     The Company continues to be highly leveraged and is currently seeking
     additional working capital from various sources such as the sale of certain
     assets or the issuance of common stock. However, Management believes that
     future cash flows from operations should provide adequate funds to meet the
     Company's estimated cash requirements for the foreseeable future.

     The majority shareholder, who holds approximately 69% of the outstanding
     common stock of the Company, has represented that he has the intent and
     ability to support the operations of the Company with additional funding
     for the next fiscal year, if necessary.

                                       8

<PAGE>


7.   New Applicable Accounting Pronouncements:

     In May 2000, the EITF reached a consensus on Issue 00-14, "Accounting for
     Certain Sales Incentives." This issue addresses the recognition,
     measurement, and income statement classification for sales incentives
     offered voluntarily by a vendor without charge to customers that can be
     used in, or are exercisable by a customer as a result of a single exchange
     transaction.

     In April 2001, the EITF reached a consensus on Issue 00-25, "Vendor Income
     Statement Characterization of Consideration to a Purchaser of the Vendor's
     Products or Services." This issue addresses the recognition, measurement
     and income statement classification of consideration, other than that
     directly addressed by Issue 00-14, from a vendor to a retailer or
     wholesaler. The Company is currently analyzing Issues 00-14 and 00-25.
     However, based on Management's current understanding and interpretation,
     neither is expected to have a material impact on the Company's financial
     position or results of operations, except that certain reclassifications
     may occur. The conclusions reached in Issue 00-25 and Issue 00-14 (amended
     by Issue 00-25) are effective for fiscal quarters beginning after December
     15, 2001.

     In June 2001, the Financial Accounting Standards Board finalized FASB
     Statements No. 141, "Business Combinations" ("SFAS 141"), and No. 142,
     "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141 requires the
     use of the purchase method of accounting and prohibits the use of the
     pooling-of-interests method of accounting for business combinations
     initiated after June 30, 2001. SFAS 141 also requires that the Company
     recognize acquired intangible assets apart from goodwill if the acquired
     intangible assets meet certain criteria. SFAS 141 applies to all business
     combinations initiated after June 30, 2001 and for purchase business
     combinations completed on or after July 1, 2001. It also requires, upon
     adoption of SFAS 142, that the Company reclassify the carrying amounts of
     certain intangible assets and goodwill based on the criteria in SFAS 141.

     SFAS 142 requires, among other things, that companies no longer amortize
     goodwill, but instead test goodwill for impairment at least annually. In
     addition, SFAS 142 requires that the Company identify reporting units for
     the purposes of assessing potential future impairments of goodwill,
     reassess the useful lives of other existing recognized intangible assets,
     and cease amortization of intangible assets with an indefinite useful life.
     An intangible asset with an indefinite useful life should be tested for
     impairment in accordance with the guidance in SFAS 142. SFAS 142 is
     required to be applied in fiscal years beginning after December 15, 2001 to
     all goodwill and other intangible assets recognized at that date,
     regardless of when those assets were initially recognized. SFAS 142
     requires the Company to complete a transitional goodwill impairment test
     six months from the date of adoption. The Company is also required to
     reassess the useful lives of other intangible assets within the first
     interim quarter after adoption of SFAS 142.

     The Company's previous business combination (the merger of OFPI, OI, SNI
     and SCI as discussed in Note 2 to the financial statements) was accounted
     for using the purchase method. As of September 30, 2001 the net carrying
     amount of goodwill remaining after the sale of the tomato-based product
     lines, as discussed in Note 3 to the financial statements, was $2,482,000
     and other intangible assets was $58,000. Amortization expense of goodwill
     and other intangible assets during the nine-month period ended September
     30, 2001 was $468,300. At present, the Company is currently assessing but
     has not yet determined the impact the adoption of SFAS 141 and SFAS 142
     will have on its financial position and results of operations.

                                       9

<PAGE>


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 related notes and other information included in this report. The
financial results reported herein are not necessarily indicative of the
financial results that may be achieved by the Company in any future period.

Investors should carefully consider the following information as well as other
information contained in this report. Information included in this report
contains "forward-looking statements" which can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "should" or
"anticipates" or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy. No assurance can be given that the
future results covered by the forward-looking statements will be achieved. The
following matters constitute cautionary statements identifying important factors
with respect to such forward-looking statements, including certain risks and
uncertainties that could cause actual results to vary materially from the future
results covered in such forward-looking statements. Other factors could also
cause actual results to vary materially from the future results covered in such
forward-looking statements.

The Company's operating results could vary from period to period as a result of
a number of factors. These factors include, but are not limited to, the
purchasing patterns of significant customers, the timing of new product
introductions by the Company and its competitors, the amount of slotting fees,
new product development and advertising expenses incurred by the Company,
variations in sales by distribution channel, fluctuations in market prices of
raw materials, competitive pricing policies, and situations that the Company
cannot foresee. These factors could cause the Company's performance to differ
from investor expectations, resulting in volatility in the price of the common
stock.

Introduction:

On October 6, 1999, Spectrum Naturals, Inc. ("SNI") and its affiliate, Spectrum
Commodities, Inc. ("SCI"), and Organic Ingredients, Inc. ("OI"), all California
corporations were merged with and into Organic Food Products, Inc. ("OFPI" or
the "Registrant"), (collectively "SPOP" or the "Company"), pursuant to the
Agreement and Plan of Merger and Reorganization, dated May 14, 1999 (the
"Merger"). Since former SNI stockholders hold a controlling interest in the
Company after the Merger, the transaction was accounted for as a reverse
acquisition, with SNI as accounting acquirer and OFPI and OI as accounting
acquirees. Upon the effective date of the Merger, SNI, SCI and OI ceased to
exist, the Registrant continued as the surviving legal entity, and immediately
changed its name to Spectrum Organic Products, Inc.

                                       10

<PAGE>


--------------------------------------------------------------------------------
Results of Operations for the Three-Month Periods Ending September 30, 2001 and
September 30, 2000
--------------------------------------------------------------------------------

Summary of Results:

Management believes that Earnings Before Interest, Taxes, Depreciation,
Amortization and Losses on Asset Disposals ("EBITDA as adjusted") is an
important measure of the Company's operating performance. For the three months
ended September 30, 2001, EBITDA as adjusted was $540,100 compared to $347,200
for the prior year, an increase of $192,900 or 56%. The improved performance in
2001 was primarily attributable to improved gross margins and reduced general
and administrative expenses.

Revenues:

SPOP's gross sales for the three months ended September 30, 2001 were
$11,330,300 compared to $11,411,200 for 2000, a decrease of $80,900, or 0.7%
versus 2000. The decrease in 2001 was entirely due to the lost sales associated
with the disposed product lines, partially offset by higher sales of branded
culinary products and nutritional supplements. Within the branded culinary
products, sales were significantly higher than prior year in packaged mayonnaise
(+31.3%), packaged dairy case products (+27.2%), and individually quick frozen
fruits and vegetables (a new product category this year). Nutritional supplement
sales increased 11.7% versus the prior year.

Comparable gross sales (after eliminating sales of disposed or discontinued
product lines from both periods) for the third quarter increased by 13.2% versus
the prior year.

During the three months ended September 30, 2001 and 2000, gross sales by source
were as follows:


                                                          2001          2000
                                                          ----          ----

Consumer Brands - Culinary Products                   $ 4,383,800   $ 3,977,200
Consumer Brands - Nutritional Supplements               2,221,000     1,988,600
Industrial Ingredients                                  3,612,800     3,665,100
Private Label Products/Other                            1,021,500       500,000
Disposed/Discontinued Product Lines                        91,200     1,280,300
                                                      -----------   -----------
  Total Gross Sales                                   $11,330,300   $11,411,200
                                                      ===========   ===========

Discounts and allowances as a percent of gross sales decreased to 6.5% of gross
sales for 2001 compared to 7.0% in 2000. The decrease was primarily the result
of decreased promotion levels on nutritional supplements in both liquid and
capsule forms, as well as packaged oils and packaged mayonnaise on the culinary
side.

Cost of Goods Sold:

The Company's cost of goods sold decreased as a percent of gross sales for the
three-month period ended September 30, 2001 to 68.3% compared to 69.6% for the
same period in 2000. The decrease was due primarily to non-recurring costs
during the prior year associated with the move to a new centralized distribution
facility and inventory losses on the disposed product lines.

                                       11

<PAGE>


Gross Profit:

Gross profit for the three months ended September 30, 2001 was $2,856,000 versus
$2,673,200 for 2000, an increase of $182,800 or 6.8%. Gross profit as a
percentage of gross sales was 25.2% for 2001 versus 23.4% for the three months
ended September 30, 2000, primarily due to the reduced promotional expenditures
and the non-recurring costs in the prior year.

Sales and Marketing Expenses:

The Company's sales and marketing expenses for the three months ended September
30, 2001 were $1,560,600 or 13.8% of gross sales, versus $1,546,000 or 13.5% of
gross sales for 2000. There were no significant variances in spending levels
between the two periods.

General and Administrative Expenses:

The Company's general and administrative expenses for the three months ended
September 30, 2001 were $859,300 or 7.6% of gross sales, versus $922,000 or 8.1%
of gross sales for 2000. The decrease in spending of $62,700 was primarily
attributable to lower professional fees, partially offset by increased insurance
costs.

Amortization of Goodwill:

The Company recorded goodwill of $10,848,200 in connection with the Merger.
Amortization expense for the three months ended September 30, 2001 was $62,200,
versus $225,500 of amortization expense for 2000. Since the sale of the
tomato-based product lines comprised all of the remaining assets of OFPI, the
remaining unamortized goodwill associated with the reverse acquisition of OFPI
in October 1999 of $6,776,200 was written-off in June as part of the sale. The
remaining goodwill associated with the acquisition of OI continues to be
amortized over a twelve-year life, resulting in $62,200 in expense for the third
quarter.

Loss on Sale of Product Lines and Plant Closure:

During the prior year, the Company recorded a provision of $250,000 for losses
on the sale of surplus production equipment at the Company's leased
manufacturing facility in Morgan Hill, California where production of the
tomato-based product lines occurred until July 21, 2000.

Interest Expense:

The Company's interest expense for the three months ended September 30, 2001 was
$179,500 versus $366,400 for 2000. The reduction of $186,900 or 51% was
primarily attributable to significant reductions in the prime rate during 2001
and lower non-cash interest expense associated with the private placement notes.
During the third quarter, non-cash interest expense of $11,200 was recorded for
the value of the common stock purchase warrants issued to the private placement
note holders versus $48,600 for the prior year.

Net Income/(Loss):

The Company reported net income of $195,900 versus a net loss of $636,300 for
the three-month periods ended September 30, 2001 and September 30, 2000,
respectively. The improvement in 2001 was primarily due to improved gross
margins, reduced interest expense, reduced general and administrative expenses
and the non-recurring loss on the plant closure recorded in the prior year.

                                       12

<PAGE>


--------------------------------------------------------------------------------
Results of Operations for the Nine-Month Periods Ending September 30, 2001 and
September 30, 2000
--------------------------------------------------------------------------------

Summary of Results:

Management believes that Earnings Before Interest, Taxes, Depreciation,
Amortization and Losses on Asset Disposals ("EBITDA as adjusted") is an
important measure of the Company's operating performance. For the nine months
ended September 30, 2001, EBITDA as adjusted was $1,737,000 compared to
$1,296,900 for the prior year, an increase of $440,100 or 34%. The improved
performance in 2001 was primarily attributable to improved gross margins and
reduced operating expenses.

Revenues:

SPOP's gross sales for the nine months ended September 30, 2001 were $33,838,500
compared to $34,977,000 for 2000, a decrease of $1,138,500, or 3.3% versus 2000.
The decrease in 2001 was entirely due to lower sales of industrial organic
ingredients (particularly citrus products and bulk nutritional oils) and the
lost sales associated with the disposed product lines, partially offset by
higher sales of branded culinary products and nutritional supplements. Within
the branded culinary products, sales were significantly higher than prior year
in packaged oil (+7.6%), packaged mayonnaise (+17.2%) and individually quick
frozen fruits and vegetables (a new product category this year). Branded
nutritional supplement sales increased 13.2% versus the prior year.

Comparable gross sales (after eliminating sales of disposed or discontinued
product lines from both periods) increased by 2.2% versus the prior year.

During the nine months ended September 30, 2001 and 2000, gross sales by source
were as follows:

                                                         2001            2000
                                                         ----            ----

Consumer Brands - Culinary Products                  $12,745,900     $11,174,000
Consumer Brands - Nutritional Supplements              6,718,800       5,937,700
Industrial Ingredients                                10,052,400      12,552,100
Private Label Products/Other                           1,860,300       1,042,200
Disposed/Discontinued Product Lines                    2,461,100       4,271,000
                                                     -----------     -----------
  Total Gross Sales                                  $33,838,500     $34,977,000
                                                     ===========     ===========

Discounts and allowances as a percent of gross sales increased to 7.1% of gross
sales for 2001 compared to 6.5% in 2000. The increase was primarily the result
of increased promotion levels during 2001 on the disposed product lines.

Cost of Goods Sold:

The Company's cost of goods sold decreased as a percent of gross sales for the
nine-months ended September 30, 2001 to 67.1% compared to 69.6% for the same
period in 2000. The decrease was due primarily to lower costs on the nutritional
supplement oils and packaged dairy case products, as well as lower cost of goods
associated with the disposed product lines as a result of the Morgan Hill plant
closure in July, 2000.

                                       13

<PAGE>


Gross Profit:

Gross profit for the nine months ended September 30, 2001 was $8,739,800 versus
$8,379,000 for 2000, an increase of $360,800 or 4.3%. Gross profit as a
percentage of gross sales was 25.8% for 2001 versus 24.0% for the nine months
ended September 30, 2000, primarily due to the improved margins on the
nutritional supplement products, packaged dairy case products and the lower cost
of goods associated with the disposed product lines as a result of the Morgan
Hill shutdown.

Sales and Marketing Expenses:

The Company's sales and marketing expenses for the nine months ended September
30, 2001 were $4,726,900 or 14.0% of gross sales, versus $4,810,800 or 13.8% of
gross sales for 2000. The decrease in spending of $83,900 was primarily
attributable to reduced spending on trade shows, consulting fees and broker
commissions, partially offset by increased advertising and slotting fees.

General and Administrative Expenses:

The Company's general and administrative expenses for the nine months ended
September 30, 2001 were $2,585,700 or 7.6% of gross sales, versus $2,701,100 or
7.7% of gross sales for 2000. The decrease in spending of $115,400 was primarily
attributable to lower banking, accounting and legal fees, partially offset by
increased insurance and utility costs.

Amortization of Goodwill:

The Company recorded goodwill of $10,848,200 in connection with the Merger.
Amortization expense for the nine months ended September 30, 2001 was $458,600,
versus $684,200 of amortization expense for 2000. Since the sale of the
tomato-based product lines comprised all of the remaining assets of OFPI, the
remaining unamortized goodwill associated with the reverse acquisition of OFPI
in October 1999 of $6,776,200 was written-off in June as part of the sale. The
remaining goodwill associated with the acquisition of OI continues to be
amortized over a twelve-year life.

Loss on Sale of Product Lines and Plant Closure:

Since the product lines sold comprised all of the remaining assets of OFPI, the
remaining net goodwill associated with the reverse acquisition of OFPI in
October 1999 of $6,776,200 was written-off as part of the entry to record the
sale. Accordingly, the Company recorded a non-cash loss on the sale of the
product lines of $4,976,400 in the month of June 2001. During the prior year,
the Company recorded a provision of $388,400 for losses on the sale or disposal
of production equipment and leasehold improvements at the Company's leased
manufacturing facility in Morgan Hill, California where production of the
tomato-based product lines occurred until July 21, 2000.

Interest Expense:

The Company's interest expense for the nine months ended September 30, 2001 was
$705,900 versus $1,067,300 for 2000. The reduction of $361,400 or 34% was
primarily attributable to significant reductions in the prime rate during 2001

                                       14

<PAGE>


and lower non-cash interest expense associated with the private placement notes.
Non-cash interest expense of $52,700 was recorded during the nine months ended
September 30, 2001 versus $118,700 for 2000 for the value of the common stock
purchase warrants issued to the private placement note holders.

Net Loss:

The Company reported a net loss of $4,698,200 and $1,210,900 for the nine-month
periods ended September 30, 2001 and September 30, 2000, respectively. Excluding
the loss on the disposed product lines and plant closure, the Company reported
net income of $278,200 versus a net loss of $822,500 for the prior year. The
improvement in 2001 was primarily due to improved gross margins, reduced
interest expense and lower operating expenses.

Seasonality:

Historically, the Company has experienced only minor seasonal fluctuations in
revenues. Typically, the third and fourth quarters feature stronger demand for
the Company's culinary products than the first and second quarters.

In the ordinary course of its business, the Company enters into commitments to
purchase raw materials over a period of time, generally six months to one year,
at contracted prices. At September 30, 2001, these future commitments were not
at prices in excess of current market, or in quantities in excess of normal
requirements. The Company does not utilize derivative contracts either to hedge
existing risks or for speculative purposes.

Liquidity and Capital Resources:

The Company maintains a credit facility with its primary lender, Wells Fargo
Business Credit ("WFBC"), consisting of term debt and a revolving line of
credit, that is secured by substantially all assets of the Company and bears
interest at prime plus 1% to 1+1/4%. Advances under the revolving line of credit
are limited to a borrowing base consisting of certain accounts receivable and
inventory. Also included in the facility are two term notes requiring payment
over 60 months. Due to operating losses following the Merger, the Company was in
default of certain financial covenants that were based on financial projections
made at the time the facility was put in place. As a result of the default, WFBC
began assessing an additional 100 basis points to the interest rates charged for
the revolving line of credit and the two term notes as of July 17, 2000.

On October 18, 2001 the Company entered into an amendment (the "Amendment") to
the existing Credit and Security Agreement (the "Agreement") with WFBC. The
Amendment includes new financial covenants based on the Company's current
financial position and latest forecasts of future results, a new term loan for
up to $100,000 for new production equipment to be purchased by the Company,
incentive targets which, if achieved, will enable the Company to reduce the
interest rates charged by WFBC by 100 basis points, and also entails a two year
extension through October 2004 under the same terms as the original Agreement.
In consideration for the Amendment, the Company will pay WFBC an accommodation
fee of $20,000 in two equal installments on November 1, and December 3, 2001. As
a result of executing the Amendment, the Company has returned to an
in-compliance status with WFBC. Accordingly, the Company reclassified $418,500
of the WFBC term debt from current liabilities to long-term debt as of September
30, 2001.

                                       15

<PAGE>


At September 30, 2001 the Company had $808,300 in available borrowing under its
line of credit versus none at December 31, 2000. The Company's bank overdraft as
of September 30, 2001 was $648,900 compared to $539,000 at December 31, 2000.
During the first nine months of 2001, the Company used $2,366,200 in cash from
operating activities, compared to generating $127,500 in cash in 2000. The
additional cash used was primarily due to reductions in trade payables financed
by the sale of the disposed product lines and increased trade accounts
receivable primarily due to seasonal fluctuations. Cash provided by investing
activities was $2,299,700 in 2001 compared to cash used of $441,200 in 2000,
which primarily reflected the proceeds from the sale of the tomato-based product
lines in 2001. Cash provided by financing activities was $66,700 in 2001
compared to $313,900 in 2000. The decrease in funds provided by financing
activities during 2001 primarily reflected lower utilization of the revolving
line of credit and lower proceeds from notes payable, partially offset by lower
principal payments on long-term debt.

The Company is highly leveraged and is currently investigating potential
additional sources of working capital such as the sale of certain assets and the
issuance of common stock. However, Management believes that future cash flows
from operations should provide adequate funds to meet the Company's estimated
cash requirements for the foreseeable future. Moreover, the majority shareholder
has indicated that he has the intent and ability to support the operations of
the Company with additional funding for the next fiscal year, if needed.

The Company's future results of operations and any forward-looking statements
contained in this report involve a number of risks and uncertainties. In
addition to the issues discussed above, other factors that could cause actual
results to differ materially are general business conditions and the general
economy, competitors' pricing and marketing efforts, availability of third-party
materials at reasonable prices, risk of nonpayment of accounts receivable, risk
of inventory obsolescence due to shifts in market demand, timing of product
introductions, and litigation involving product liabilities and consumer issues.

New Applicable Accounting Pronouncements:

In May 2000, the EITF reached a consensus on Issue 00-14, "Accounting for
Certain Sales Incentives." This issue addresses the recognition, measurement,
and income statement classification for sales incentives offered voluntarily by
a vendor without charge to customers that can be used in, or are exercisable by
a customer as a result of a single exchange transaction. The Company is
currently analyzing Issue 00-14. However, based on Management's current
understanding and interpretation, Issue 00-14 is not expected to have a material
impact on the Company's financial position or results of operations, except that
certain reclassifications may occur.

In April 2001, the EITF reached a consensus on Issue 00-25, "Vendor Income
Statement Characterization of Consideration to a Purchaser of the Vendor's
Products or Services." This issue addresses the recognition, measurement and
income statement classification of consideration, other than that directly
addressed by Issue 00-14, from a vendor to a retailer or wholesaler. The Company
is currently analyzing Issue 00-25. However, based on Management's current
understanding and interpretation, Issue 00-25 is not expected to have a material
impact on the Company's financial position or results of operations, except that
certain reclassifications may occur. The conclusions reached in Issue 00-25 and
Issue 00-14 (amended by Issue 00-25) are effective for fiscal quarters beginning
after December 15, 2001.

                                       16

<PAGE>


In June 2001, the Financial Accounting Standards Board finalized FASB Statements
No. 141, "Business Combinations" ("SFAS 141"), and No. 142, "Goodwill and Other
Intangible Assets" ("SFAS 142"). SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that the Company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria. SFAS 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001. It also
requires, upon adoption of SFAS 142, that the Company reclassify the carrying
amounts of certain intangible assets and goodwill based on the criteria in SFAS
141.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

The Company's previous business combination (the merger of OFPI, OI, SNI and SCI
as discussed in Note 2 to the financial statements) was accounted for using the
purchase method. As of September 30, 2001 the net carrying amount of goodwill
remaining after the sale of the tomato-based product lines, as discussed in Note
3 to the financial statements, was $2,482,000 and other intangible assets was
$58,000. Amortization expense of goodwill and other intangible assets during the
nine-month period ended September 30, 2001 was $468,300. At present, the Company
is currently assessing but has not yet determined the impact the adoption of
SFAS 141 and SFAS 142 will have on its financial position and results of
operations.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------------------------------------------------------------------

The Company does not hold market risk sensitive trading instruments, nor does it
use financial instruments for trading purposes. All sales, operating items and
balance sheet data are denominated in U.S. dollars, therefore, the Company has
no foreign currency exchange rate risk.

Certain Company debt items are sensitive to changes in interest rates. The
following table summarizes principal cash flows and related weighted average
interest rates by expected maturity date for long-term debt ($ thousands):

                                       17

<PAGE>
<TABLE>
<CAPTION>


                                                                      Expected Maturity Date
                                 Outstanding                         (Years Ended December 31)
                               Sept 30, 2001       2001       2002       2003      2004       2005      2006+
                               -------------       ----       ----       ----      ----       ----      -----
Long Term Debt:
<S>                                 <C>           <C>       <C>        <C>       <C>         <C>       <C>
Fixed Rate                          $1,738.0      $77.4     $608.4     $586.6    $165.9      $40.7     $259.0
  Avg. Int. Rate                        10.8%      11.2%      11.2%      11.3%     10.9%      10.0%       8.6%
Variable Rate                         $597.3      $44.7     $178.8     $178.8    $158.2      $36.8        --
  Avg. Int. Rate                         7.8%       7.5%       6.8%       7.8%      8.5%       8.7%       --


Throughout the course of its fiscal year, the Company utilizes a variable
interest rate line of credit at various borrowing levels. For the nine months
ended September 30, 2001, the average outstanding balance under the line of
credit was approximately $5,715,500, with a weighted average interest rate of
9.5%. The line of credit agreement calls for the interest rate to float at the
prime rate plus 200 basis points. Under the terms of the Amendment executed on
October 18, 2001, the interest rates charged will drop to prime plus 100 basis
points if certain financial targets are achieved by the Company for the year
ended December 31, 2001.

In the ordinary course of its business, the Company enters into commitments to
purchase raw materials over a period of time, generally six months to one year,
at contracted prices. At September 30, 2001, these future commitments were not
at prices in excess of current market, or in quantities in excess of normal
requirements. The Company does not utilize derivative contracts either to hedge
existing risks or for speculative purposes.



PART II - OTHER INFORMATION

Item 1.  Legal Proceedings
--------------------------

In February 1998, OFPI acquired the natural fruit juice and water bottling
operations of Sunny Farms Corporation for cash and common stock. A portion of
the common stock consideration was held in escrow, contingent upon earn-out
calculations for the year following the acquisition. Subsequently, Sunny Farms
sought voluntary relief pursuant to chapter 7 of the U.S. Bankruptcy Code in
November 1998. In October 2000, attorneys for the bankruptcy trustee filed a
complaint against the Company in the U.S. Bankruptcy Court for the Northern
District of California, challenging the Company's earn-out calculations and
requesting that a portion of the common stock held in escrow be released.

The Company and the Sunny Farms bankruptcy trustee reached an agreement on
October 9, 2001 regarding the earn-out calculations and subsequent shares to be
released from escrow, which is in the process of being approved by the
Bankruptcy Court. An estimated accrual of $94,400 for common shares to be
released was included in accounts payable at September 30, 2001.

In October 2000, the Company was notified by counsel for GFA Brands, Inc. that
nutritional claims pertaining to Spectrum Naturals Organic Margarine were
infringing upon two patents issued in the United States that pertain to
particular fat compositions suitable for human ingestion. The patent holder
exclusively licensed each of these patents to GFA Brands. Management believes
that the margarine does not infringe upon either patent, and further, that the
patents are unenforceable in any case. Management engaged legal counsel that

                                       18
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


specialize in this area and received an opinion letter in February 2001
confirming that, in the opinion of counsel, the manufacture or sale of Spectrum
Naturals Organic Margarine does not infringe upon the GFA patents, either
literally or under the doctrine of equivalents.

The Company filed a complaint against GFA Brands for declaratory judgment of
non-infringement and invalidity of the two patents on August 28, 2001 in the
U.S. District Court for Northern California. The Complaint requests a
declaratory judgment that the margarine does not infringe either patent, a
declaratory judgment that both patents are invalid, that GFA Brands be enjoined
from threatening or asserting any action for infringement of either patent, and
attorney's fees.

Management believes the Company has meritorious defenses and that a loss is not
probable at this time, therefore, no provision for loss has been recorded at
September 30, 2001.


Item 2.  Changes in Securities and Use of Proceeds
--------------------------------------------------

During the nine months ended September 30, 2001, the Company issued unregistered
no par value restricted shares of its common stock as follows:


                                                                                        Cash and
                                                         Date            Shares         Non-Cash
                                                        Issued           Issued         Proceeds
                                                        ------           ------         --------

Shares issued to Thomas B. Simone, a  non-
  executive Director of the Company, under
  <S>                                               <C>                 <C>            <C>
  a private sale (a)                                 Feb 14, 2001        160,000       $  50,000

Shares issued to Charles A. Lynch and
  Phillip L. Moore, both non-executive
  Directors of the Company, in lieu of
  cash compensation for Board fees earned
  during CY 2000 (b)                                 Feb 15, 2001         64,000          20,000

Shares issued to four note holders under
  the private placement conversion offer
  to clear the default under the notes (c)              Various          630,000         164,000

Default common stock purchase warrants
  exercised by the note holders under the
  private placement completed in October
  1999 (d)                                              Various          210,500           2,100
                                                                       ---------        --------
Total Unregistered Restricted Common Shares Issued                     1,064,500       $ 236,100
                                                                       =========       =========

(a)  These shares were issued under a transaction approved by the Company's
     disinterested members of the Board of Directors. The shares were issued at
     $.3125 per share, the closing price of the Company's common stock as quoted
     on the NASDAQ OTC Bulletin Board System on the date the Board approved the
     transaction. In addition to the shares issued, the Company granted common
     stock purchase warrants to Mr. Simone for 160,000 shares at the same price,
     which expire five years from the date granted. The Company applied the
     proceeds received from Mr. Simone toward the expansion of its proprietary
     SpectraVac(TM) technology.

                                       19
</TABLE>

<PAGE>


(b)  These shares were also issued in a transaction approved by the Company's
     disinterested Board members. The shares were issued at $.3125 per share,
     the closing price of the Company's common stock as quoted on the NASDAQ OTC
     Bulletin Board System on the date the Board approved the transaction. The
     shares were issued in lieu of cash compensation for Board fees due to Mr.
     Lynch and Mr. Moore for CY 2000 in the amount of $10,000 each.

(c)  During the nine months ended September 30, 2001, the Company completed the
     process of curing the default under the private placement notes by offering
     the note holders the option of converting their notes to restricted common
     stock at a price of $.25 per share, or a three-year payment schedule
     calling for interest only during 2001, with principal and interest
     thereafter, plus common stock purchase warrants retroactive to October 1,
     2000, equal to 10% of the outstanding principal at the closing bid price of
     SPOP stock at each quarter-end until the note is retired. On February 28,
     2001, two note holders elected the conversion option and the Company issued
     210,000 shares of restricted common stock in exchange for cancellation of
     both notes in the amount of $26,250 each. On June 28, 2001, two additional
     note holders elected the conversion option and the Company issued 420,000
     shares of restricted common stock in exchange for cancellation of both
     notes in the amount of $52,500 each.

(d)  During the nine months ended September 30, 2001, the remaining outstanding
     common stock purchase warrants issued to the private placement note holders
     as a result of the default were exercised at a penny per share.

All shares were issued under Regulation D of the Securities Act of 1933 (the
"Act"), with resale of such shares permitted only pursuant to Rule 144 of the
Act. All certificates representing the unregistered shares were endorsed with
restrictive legends identifying them as unregistered under the Act.

The Company has not in the past nor does it intend to pay cash dividends on its
common stock in the future. The Company intends to retain earnings, if any, for
use in the operation and expansion of its business.


Item 3.  Defaults Upon Senior Securities
----------------------------------------

As of December 31, 1999 the Company was in technical default of certain
financial covenants specified in its credit facility with its major lender,
Wells Fargo Business Credit ("WFBC"). The facility consists of two term notes
and a revolving line of credit that is secured by substantially all assets of
the Company. The default occurred as a result of operating losses following the
Merger which were in excess of the financial projections made by the Company at
the time the credit facility was put in place. As a result of the default, WFBC
began assessing an additional 100 basis points to the interest rates charged
under the credit facility as of July 17, 2000.

On October 18, 2001 the Company entered into an amendment (the "Amendment") to
the existing Credit and Security Agreement (the "Agreement") with WFBC. The
Amendment includes new financial covenants based on the Company's current
financial position and latest forecasts of future results, a new term loan for
up to $100,000 for new production equipment to be purchased by the Company,

                                       20

<PAGE>


incentive targets which, if achieved, will enable the Company to reduce the
interest rates charged by WFBC by 100 basis points, and also entails a two year
extension through October 2004 under the same terms as the original Agreement.
In consideration for the Amendment, the Company will pay WFBC an accommodation
fee of $20,000 in two equal installments on November 1, and December 3, 2001. As
a result of executing the Amendment, the Company has returned to an
in-compliance status with WFBC. Accordingly, the Company reclassified $418,500
of the WFBC term debt from current liabilities to long-term debt at September
30, 2001.


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
-----------------------------------------

(a)  The following documents are filed as exhibits to this Form 10-Q:

     2.09  Settlement Agreement dated October 9, 2001 by and between Tevis T.
           Thompson, Jr., trustee of the Chapter 7 Estate of Sunny Farms
           Corporation and Spectrum Organic Products, Inc.

     10.35 First Amendment to Credit and Security Agreement dated October 18,
           2001 by and between Spectrum Organic Products, Inc. and Wells Fargo
           Business Credit, Inc.

(b)  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.

Date: November 5, 2001                      SPECTRUM ORGANIC PRODUCTS, INC.

                                            By:  /s/  Robert B. Fowles
                                               -------------------------------
                                                      Robert B. Fowles
                                                      Duly Authorized Officer &
                                                      Chief Financial Officer

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