<PAGE>

================================================================================

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

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


                                  FORM 10-Q/A


              Quarterly Report Pursuant to Section 13 or 15(d) of
                    the Securities and Exchange Act of 1934

                   For the quarterly period ended: 04/30/02

                        Commission file number: 1-14091

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

                             SHERWOOD BRANDS, INC.
            (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                            <C>
                North Carolina                               56-1349259
(State or Other Jurisdiction of Incorporation) (I.R.S. Employer Identification Number)
</TABLE>

<TABLE>
              <S>                                      <C>
                   1803 Research Blvd., Suite 201
                        Rockville, Maryland              20850
              (Address of Principal Executive Offices) (Zip Code)
</TABLE>

       Registrant's telephone number, including area code: 301-309-6161

   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 requirement for the past 90 days. Yes [X] No [_]

   The number of shares outstanding of issuer's Class A Common Stock, $.01 par
value per share, as of June 10, 2002 was 2,716,250. The number of shares
outstanding of issuer's Class B Common Stock, $.01 par value per share, as June
10, 2002 was 1,000,000. The Class B Common Stock is not publicly traded.

   Transitional Small Business Disclosure Format (check one):  Yes [_] No [X]

================================================================================

<PAGE>

                             SHERWOOD BRANDS, INC.

                                     INDEX

<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
PART I  FINANCIAL INFORMATION
<S>                                                                                              <C>

 Item 1.  FINANCIAL STATEMENTS
   Consolidated Balance Sheets--April 30, 2002 (unaudited) and July 31, 2001....................   1
   Consolidated Statements of Operations--Three and Nine months ended April 30, 2002 and 2001
     (unaudited)................................................................................   2
   Consolidated Statements of Cash Flows--Nine months ended April 30, 2002 and 2001 (unaudited).   3
   Notes to Consolidated Financial Statements...................................................   4

 Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS..................................................................   8

 Item 3.  Quantitative and Qualitative Disclosures about Market Risk............................  11

PART II  OTHER INFORMATION......................................................................

 Item 1.  Legal Proceedings.....................................................................  12
 Item 6.  Exhibits and Reports on form 8-K......................................................  12

SIGNATURES......................................................................................  13
</TABLE>

                                      2

<PAGE>

                    SHERWOOD BRANDS, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                 (Un-Audited)

<TABLE>
<CAPTION>
                                                                                   April 30, 2002 July 31, 2001
                                                                                   -------------- -------------
<S>                                                                                <C>            <C>
                                                                                     (unaudited)    (audited)
                                      Assets
Current assets
 Cash and cash equivalents........................................................      630,592       385,195
 Accounts receivable, less allowance of $404,000 and $189,000.....................    3,854,511     1,977,093
 Inventory........................................................................   10,433,654    14,709,515
 Refundable income taxes..........................................................      149,458            --
 Other current assets.............................................................      337,621       344,568
 Deferred taxes on income.........................................................      425,000       425,000
                                                                                     ----------    ----------
Total Current Assets..............................................................   15,830,836    17,841,371
Net property and equipment........................................................    5,917,620     4,906,350
Other assets......................................................................      963,875        56,391
                                                                                     ----------    ----------
TOTAL ASSETS......................................................................   22,712,331    22,804,112
                                                                                     ==========    ==========

                       Liabilities and Stockholders' Equity
Current liabilities
 Line of credit...................................................................    3,511,648     3,842,297
 Current portion of long-term debt................................................      215,000       215,000
 Current portion of capital lease obligation......................................       31,245        31,245
 Accounts payable.................................................................    2,636,706     3,986,845
 Accrued expenses.................................................................    1,837,638     1,558,342
 Income taxes payable.............................................................      338,330       722,474
                                                                                     ----------    ----------
Total current liabilities.........................................................    8,570,567    10,356,203

Deferred taxes on income..........................................................      244,000       244,000
Long-term debt....................................................................      550,000       550,000
Obligations under capital lease...................................................      426,733       424,917
                                                                                     ----------    ----------
TOTAL LIABILITIES.................................................................    9,791,300    11,575,120
                                                                                     ----------    ----------

Stockholders' equity
 Preferred stock, $.01 par value, 5,000,000 shares authorized; no shares issued or
   outstanding....................................................................           --           --
 Common stock, Class A, $.01 par value, 30,000,000 shares authorized, 2,716,250
   and 2,700,000 shares issued and outstanding....................................       27,163        27,000
 Common stock, Class B, $.01 par value, 5,000,000 shares authorized, 1,000,000
   shares issued and outstanding..................................................       10,000        10,000
Additional paid-in-capital........................................................    8,014,469     7,973,538
Retained earnings.................................................................    4,882,929     3,236,724
Accumulated other comprehensive income / (loss)...................................      (13,530)      (18,270)
                                                                                     ----------    ----------
TOTAL STOCKHOLDERS' EQUITY........................................................   12,921,031    11,228,992
                                                                                     ----------    ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........................................   22,712,331    22,804,112
                                                                                     ==========    ==========
</TABLE>

   See accompanying summary of accounting policies and notes to consolidated
financial statements.


                                      3

<PAGE>

                    SHERWOOD BRANDS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                      Three Months Ended April 30,  Nine Months Ended April 30,
                                                      ----------------------------  ---------------------------
                                                         2002           2001            2002          2001
                                                      -----------    -----------     -----------   -----------
<S>                                                   <C>            <C>             <C>           <C>
Net sales............................................ $11,312,184    $14,010,737     $48,290,502   $54,567,143
Cost of sales........................................   9,063,422     11,003,180      34,402,511    38,978,334
                                                      -----------    -----------     -----------   -----------
Gross profit.........................................   2,248,762      3,007,557      13,887,991    15,588,809
                                                      -----------    -----------     -----------   -----------
Selling, general and administrative expenses.........   1,588,005      1,405,820       6,592,152     7,124,603
Salaries and related expenses........................   1,102,277      1,023,645       3,777,329     3,675,168
Non-Recurring Expenses-Moving Costs..................     393,918             --         393,918            --
                                                      -----------    -----------     -----------   -----------
Total operating expenses.............................   3,084,200      2,429,465      10,763,399    10,799,771
                                                      -----------    -----------     -----------   -----------
(Loss)/Income from operations........................    (835,438)       578,092       3,124,592     4,789,038
                                                      -----------    -----------     -----------   -----------
Other income (expense)
 Interest income.....................................         460          1,023           4,340         9,034
 Interest expense....................................    (114,194)      (143,861)       (402,855)     (493,798)
 Other (expense) income..............................      33,595         28,141          19,469       (16,686)
                                                      -----------    -----------     -----------   -----------
Total other (expense) income.........................     (80,139)      (114,697)       (379,046)     (501,450)
                                                      -----------    -----------     -----------   -----------
(Loss) Income before provision (benefit) for taxes on
  income.............................................    (915,577)       463,395       2,745,546     4,287,588
(Benefit) Provision for taxes on income..............    (222,072)       166,832       1,099,341     1,566,410
                                                      -----------    -----------     -----------   -----------
Net (loss) income.................................... $  (693,505)   $   296,563     $ 1,646,205   $ 2,721,178
                                                      -----------    -----------     -----------   -----------
Net (loss) income per share-basic-diluted............ $     (0.19)   $      0.08     $      0.44   $      0.74
                                                            (0.19)          0.08            0.39          0.70
                                                      -----------    -----------     -----------   -----------
Weighted average shares
  outstanding-basic-diluted..........................   3,716,250      3,700,000       3,707,143     3,700,000
                                                        3,716,250      3,884,491       4,243,322     3,884,491
                                                      ===========    ===========     ===========   ===========
</TABLE>


   See accompanying summary of accounting policies and notes to consolidated
financial statements.

                                      4

<PAGE>

                    SHERWOOD BRANDS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Un-Audited)

<TABLE>
<CAPTION>
                                            Nine months ended April 30,
                                           -----------------------------
                                              2002              2001
                                           -----------       -----------
  <S>                                      <C>               <C>
  Cash flows from operating activities
    Net income............................ $ 1,646,205       $ 2,721,178
    Adjustments to reconcile net income
     to net cash used in operating
     activities...........................
    Depreciation expense..................     306,566           258,360
    Provision for inventory obsolescence..         865                --
    Provision for doubtful accounts.......     245,742           245,046
    (Increase) decrease in assets
     Accounts receivable..................  (2,123,160)       (3,609,875)
     Inventory............................   4,274,996         3,128,132
     Other current assets.................    (142,511)           83,669
     Other assets.........................    (907,484)            3,780
    Increase (decrease) in liabilities
     Accounts payable.....................  (1,350,139)       (1,884,553)
     Accrued expenses.....................     284,036           635,008
     Income taxes payable.................    (384,144)        1,177,970
                                           -----------       -----------
  Net cash provided in operating
    activities............................   1,850,972         2,764,715
  Cash flows from investing activities
    Capital expenditures..................  (1,317,836)         (742,777)
                                           -----------       -----------
  Net cash used in investing activities...  (1,317,836)         (742,777)
                                           -----------       -----------
  Cash flows from financing activities
    Net (repayments) borrowings on line
    of credit.............................    (330,649)       (2,097,000)
    Other.................................      42,910           (41,418)
                                           -----------       -----------
  Net cash used by financing activities...    (287,739)       (2,138,418)
                                           -----------       -----------
  Net increase (decrease) in cash and
    cash equivalents......................     245,397          (116,480)
  Cash and cash equivalents, at beginning
    of period.............................     385,195           641,497
                                           -----------       -----------
  Cash and cash equivalents, at end of
    period................................ $   630,592       $   525,017
                                           ===========       ===========
</TABLE>


   See accompanying summary of accounting policies and notes to consolidated
financial statements.

                                      5

<PAGE>

                    SHERWOOD BRANDS, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (UNAUDITED)


1.  BASIS OF PRESENTATION

   The consolidated financial statements include the accounts of Sherwood
Brands, Inc., and its wholly-owned subsidiaries, Sherwood Brands, LLC, Sherwood
Brands of RI Inc., and Sherwood Brands Overseas, Inc. ("Overseas")
(collectively, the "Company"). All material inter-company transactions and
balances have been eliminated in consolidation.

   The accompanying consolidated financial statements 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. Certain information and footnote disclosures normally included in the
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. These consolidated financial statements should be read
in conjunction with the consolidated financial statements, and the notes
thereto, included in the Company's Annual Report and Form 10-K filed on October
29, 2001.

2.  ORGANIZATION AND DESCRIPTION OF BUSINESS

   Sherwood Brands, Inc. (formerly Sherwood Foods, Inc.) was incorporated in
December 1982 in the state of North Carolina. Sherwood Brands, Inc.
manufactures its own lines of confectionery products and demitasse(R) biscuits.

   Sherwood Brands, LLC, a Maryland limited liability company and wholly owned
subsidiary of Sherwood Brands, Inc. markets and distributes its own lines of
confectionery products in the United States.

   Sherwood Brands Overseas, Inc., a Bahamian company and wholly owned
subsidiary of Sherwood Brands, Inc. markets and distributes the Sherwood lines
of confectionery products internationally. Sherwood Brands, LLC and Sherwood
Brands Overseas, Inc. purchase confectionery products from Sherwood Brands,
Inc. as well as third party suppliers.

   Sherwood Brands of RI Inc. was incorporated in September 1998 in the state
of Rhode Island. Sherwood Brands of RI Inc. d/b/a E. Rosen Company is a
manufacturer of hard candies, jelly beans and packer of gift items and baskets.

3.  INTERIM FINANCIAL INFORMATION

   The financial information as of April 30, 2002 and for the three and nine
months ended April 30, 2002 and 2001 is un-audited. In the opinion of
management, such information contains all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the results
for such periods. Results for interim periods are not necessarily indicative of
results to be expected for an entire year.

4.  INVENTORY

   Inventory consists of raw materials, packaging materials, components used in
assembly, work- in- process and finished goods and is stated at the lower of
cost or market. Cost is determined by the FIFO (first-in, first-out) method.

                                      6

<PAGE>

                    SHERWOOD BRANDS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                                  (UNAUDITED)


   Inventory consists of the following:

<TABLE>
<CAPTION>
                                            April 30, 2002 July 31, 2001
       -                                    -------------- -------------
                                             (Unaudited)     (Audited)
                                            -------------- -------------
       <S>                                  <C>            <C>
       Raw materials and ingredients.......  $   731,187    $ 1,195,859
       Components used in assembly.........    1,435,172      1,564,878
       Packaging materials.................    2,282,887      2,474,046
       Work-in-process and finished product    6,587,124     10,175,160
                                             -----------    -----------
                                              11,036,370     15,409,943
       Less reserve for inventory allowance     (701,293)      (700,428)
                                             -----------    -----------
                                             $10,335,077    $14,709,515
                                             ===========    ===========
</TABLE>

5.  USE OF ESTIMATES

   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

6.  INCOME TAXES

   The income tax rate utilized on an interim basis is based on the Company's
estimate of the effective income tax rate for the fiscal year ending July 31,
2002 which approximates 40%. The Company recognized $300,000 of dividend income
during the quarter for income tax reporting purposes which was eliminated for
financial reporting purposes. This provision was offset somewhat by the decline
in pretax income for the period.

7.  EMPLOYMENT AGREEMENTS

   Effective as of August 1, 2001, the employment agreements for Uziel Frydman
and Amir Frydman were extended for additional three year terms (until July 31,
2004) and the employment agreement for Anat Schwartz was extended for an
additional six month period (until January 1, 2002), each on substantially the
same terms and conditions as in effect under their respective existing
employment agreements. The annual base salaries payable to Uziel Frydman, Amir
Frydman and Anat Schwartz under the amended agreements were increased to
$451,333, $389,149 and $270,795, respectively, effective August 1, 2001 and are
subject to annual increases. Under the amendments to the employment agreements,
each of Uziel Frydman, Amir Frydman and Anat Schwartz are entitled to
participate in our 1998 Executive Compensation Incentive Plan. For fiscal years
beginning on or after August 1, 2001, the bonus pool will be increased
proportionately to the extent that earnings before interest, taxes, and
depreciation and amortization (EBITDA) in any year exceeds the EBITDA for the
fiscal year ended July 31, 2001.

8.  EARNINGS PER SHARE

   Earnings per share is based on weighted average number of shares of common
stock and dilutive common stock equivalents outstanding. Basic earnings per
share includes no dilution and is computed by dividing income available to
common shareholders by the weighted average number of common shares outstanding
for the period. Diluted earnings per share reflects the potential dilution of
securities that could share in the earnings of an entity. The following table
presents a reconciliation between the weighted average shares outstanding for
basic and diluted earnings per share for the three months ended April 30, 2002
and April 30, 2001 and nine months ended April 30, 2002 and April 30, 2001.

                                      7

<PAGE>

                    SHERWOOD BRANDS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                   Per Share
   For the three months ended April 30, 2002   Income     Shares    Amount
   ----------------------------------------- ----------  --------- ---------
   <S>                                       <C>         <C>       <C>
    Basic Earnings per Share
    Income available to common shareholders. $ (693,505) 3,716,250  ($0.19)
    Effect of dilutive stock options........                    --
    Dilutive earnings per share............. $ (693,505) 3,716,250  ($0.19)
                                             ==========  =========  ======

                                                                   Per Share
   For the three months ended April 30, 2001   Income     Shares    Amount
   ----------------------------------------- ----------  --------- ---------
    Basic Earnings per Share
    Income available to common shareholders. $  296,563  3,700,000   $0.08
    Effect of dilutive stock options........               184,491
    Dilutive earnings per share............. $  296,563  3,884,491   $0.08
                                             ==========  =========  ======

                                                                   Per Share
   For the nine months ended April 30, 2002    Income     Shares    Amount
   ----------------------------------------  ----------  --------- ---------
    Basic Earnings per Share
    Income available to common shareholders. $1,646,205  3,707,143   $0.44
    Effect of dilutive stock options........               536,179
    Dilutive earnings per share............. $1,646,205  4,243,322   $0.39
                                             ==========  =========  ======

                                                                   Per Share
   For the nine months ended April 30, 2001    Income     Shares    Amount
   ----------------------------------------  ----------  --------- ---------
    Basic Earnings per Share
    Income available to common shareholders. $2,721,178  3,700,000   $0.74
    Effect of dilutive stock options........               135,583
    Dilutive earnings per share............. $2,721,178  3,884,491   $0.70
                                             ==========  =========  ======
</TABLE>


9.  LICENSING AGREEMENTS



   During the Quarter the Company entered into two licensing agreements to
incorporate products into Gift sets and manufacturing of hard milk candies and
wafers. The royalty rates for such licenses are from 2% to 3% of net sales and
expire in 4 years.



   The products to be incorporated into the Company's gift set items is during
the Christmas Holiday seasons and the hard milk candies and wafers are
effective on the selling season of January 2003. The Company paid a $15,000
advance fee to have the rights to incorporate products into its gift set items.
There was no other minimum license fees under these agreements. The Company is
currently pursuing other licenses with similar terms and conditions.



10.  SUBSEQUENT EVENT


   On May 1, 2002 The Company acquired all of the outstanding common stock of
Asher Candy Acquisition Corporation, a Wyoming corporation with operations
located in New Hyde Park, New York. Asher Candy Acquisition Corporation is a
manufacturer of candy canes and other hard candies under the "Asher" name. The
surviving corporation of the merger is Asher Candy Acquisition Corporation,
which has changed its name to Asher Candy, Inc. The Company issued an aggregate
of approximately 270,000 shares of its common stock at $6.49 per share or
$1,750,000 to the shareholders of Asher Candy Acquisition Corporation in
consideration for the transaction, subject to escrows for indemnification and
adjustments based on a final audit, as well as warrants exercisable for
Sherwood Brands common stock having a value of $250,000. Sherwood Brands will
include operating results of the new entity in consolidated results for the
fourth quarter.

                                      8

<PAGE>

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

Important Information Regarding Forward-Looking Statements

   This Quarterly Report on From 10-Q contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Those
statements include statements regarding the intent, belief or current
expectations of the Company and its management. Such statements are subject to
a variety of risks and uncertainties, many of which are beyond the Company's
control, which could cause actual results to differ materially from those
contemplated in such forward-looking statements, including in particular the
risks and uncertainties described under "Risk Factors" in the Company's
Registration Statement on Form SB-2, filed with the Commission on May 11, 1998.
Existing and prospective investors are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to update or revise the information contained
in this Quarterly Report on From 10-Q, whether as a result of new information,
future events or circumstances or otherwise.

   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of certain assets and liabilities
at the date of the financial statements. Significant estimates in the Company's
financial statements include the accounts receivable and inventory reserves.
The Company continually evaluates these reserves based upon historical
experience. Although actual results could differ from those disclosed,
management feels that the estimates used to establish the reserves are
conservative in nature. Furthermore, management contends that it would be
unlikely that the reserve level would be materially different from any other
independently prudently established reserve.

   On May 1, 2002, the Company acquired all of the outstanding common stock of
Asher Candy Acquisition Corporation, a Wyoming corporation with operations
located in New Hyde Park, New York. Asher Candy Acquisition Corporation is a
manufacturer of candy canes and other hard candies under the "Asher" name. The
Company issued an aggregate of approximately 270,000 shares of its common stock
at $6.49 per share or $1,750,000 to the shareholders of Asher Candy Acquisition
Corporation in consideration for the transaction, subject to escrows for
indemnification and adjustments based on a final audit, as well as warrants
exercisable for Sherwood Brands common stock having a value of $250,000. The
Company will include operating results of the new entity in consolidated
results for the fourth quarter.

Results of Operations

THREE MONTHS ENDED April 30, 2002 AND 2001


   Net sales for the three months ended April 30, 2002 and 2001 were
$11,312,184 and $14,010,737 respectively, a decrease of 19.26%. The
postponement of orders by a major customer accounted for approximately 13.5% of
the decrease while lower sales of jellies and gift items accounted for the
balance. Wal-Mart, Kmart and Sam's Club accounted for approximately 32%, 18%
and 9%, respectively, of the sales ended for the three months April 30, 2002,
and Sams Clubs, Wal-Mart and Dollar General accounted for approximately 33%,
13% and 7%, respectively, of the sales for the prior year's comparable period.



   Gross profit for the three months ended April 30, 2002 and April 30, 2001
decreased to $2,248,762 from $3,007,557, or to 20% from 21% as percent of
sales. The decrease in earnings was attributable to the lower sales on jellies
and gift items.



   Selling, general and administrative expenses for the three months ended
April 31, 2002 increased to $1,588,005 from $1,405,820 for the three months
ended April 30, 2001, or to 14.03% from 10.03% as a percent of sales. The
increase was due to additional professional fees, carrier, and insurance
expenses.



                                      9

<PAGE>

   Non recurring expenses-moving costs accounted for $393,918 or 3.48% as
percent of sales for the three months ended April 30, 2002, as a result of the
relocation of the manufacturing facility in Rhode Island to Chase City,
Virginia. No comparable cost or expense was incurred for the three months ended
April 30, 2001. The Company expects to incur additional moving costs in the
fourth quarter.


   Salaries and related expenses for the three months ended April 30, 2002
increased to $1,102,277 from $1,023,645 for the three months ended April 30,
2001, or 9.7% from 7.3%, as a percent of sales. This increase as a percent of
sales was attributable to annual salary and benefits increases for officers and
employees.



   Operating expenses for the three months ended April 30, 2002 increased to
$3,084,200 from $2,429,465 for the three months ended April 30, 2001, or 27.3%
from 17.3% as a percent of sales. The increase as a percentage of sales was
largely due to $80,000 of increased costs of professional fees, $25,000 of
carriers expenses, $65,000 of salary and benefits increases, $65,000 of
insurance costs and $394,000 of non-recurring moving expenses.



   Loss from operations for the three months ended April 30, 2002 was
($835,438), as compared to income of $578,092 for the prior year's comparable
period. The increase was largely attributable to $393,918 of non-recurring
moving expenses and lower sales of approximately $560,000 during the quarter.


   Interest income for the three months ended April 30, 2002 decreased to $460
from $1,023 for three months ended April 30, 2001. Interest expenses decreased
to $114,194 from $143,861 due to lower interest rates on the working capital
line and term facilities. Other income (expense) increased to $33,595 from
$28,141 due to realized gains on foreign exchange currency forward contracts.

   The income tax rate utilized for the three-month period ended April 30, 2002
is based on the Company's estimate of the effective tax rate for the fiscal
year ending July 31, 2002, which approximates 40%. The effective tax rate
increased from 36% to 40% in the period due to the recognition of dividend
income for income tax reporting purposes eliminated for financial reporting
purposes.

NINE MONTHS ENDED April 30, 2002 AND 2001


   Net sales for the nine months ended April 30, 2002 and 2001 were $48,290,502
and $54,567,143 respectively, a decrease of 11.5%. Lower sales of jellies and
gift items associated with Wal-Mart and Kmart accounted for approximately $3
million of the decrease, postponement of orders by a major customer accounted
for approximately $2 million of the decrease and lower sales on gift items for
the Christmas holiday accounted for approximately $1 million of the decrease,
as well as economic conditions which affected retail spending in our industry.
Sam's Club, Wal-Mart and Big Lots accounted for approximately 36%, 15% and 9%,
respectively, of the sales ended April 30, 2002, and Sam's Clubs, Wal-Mart and
Kmart accounted for the period approximately 28%, 15% and 10%, respectively, of
the sales for the prior year's comparable period.



   Gross profit for the nine months ended April 30, 2002 and April 30, 2001
decreased to $13,887,991 from $15,588,809 and increased to 28.7% from 28.6% as
a percent of sales. The increase in earnings was attributable largely to cost
reduction in materials, components and production labor efficiency costs.



   Selling, general and administrative expenses for the nine months ended April
30, 2002 decreased to $6,592,152 from $7,124,603 for the nine months ended
April 30, 2001, or 13.7% from 13.1% as a percent of sales. The increase was
largely due to $70,000 of travel expenses, and $78,000 of carrier expenses.



   Non recurring expenses-moving costs accounted for $393,918 or 3.48% as
percent of sales for the nine months ended April 30, 2002, for the relocation
of the manufacturing facility in Rhode Island to Chase City, Virginia. No
comparable costs or expense was incurred for the nine months ended April 30,
2001. The Company expects to incur additional moving expenses in the fourth
quarter.



   Salaries and related expenses for the nine months ended April 30, 2002
increased to $3,777,329 from $3,675,168 for the nine months ended April 30,
2001, or 7.8% from 6.7%, as a percent of sales. This increase was attributable
to increases in annual fixed overhead salaries and benefit costs.


                                      10

<PAGE>

   As a result, operating expenses for the nine months ended April 30, 2002
decreased to $10,763,399 from $10,799,771 for the nine months ended April 30,
2001 and increased to 22.3% from 19.8%, as a percent of sales. The increase was
largely due to increased costs attributable to carriers, annual salary and
benefits increases, insurance costs and a non recurring expense of $393,918
relating to the relocation of manufacturing from Rhode Island to Chase City,
Virginia Facility.

   Income from operations for the nine months ended April 30, 2002 was
$3,124,592, as compared to $4,789,038 for the prior year's comparable period.

   Interest income for the nine months ended April 30, 2002 decreased to $4,340
from $9,034. Interest expenses decreased to $402,855 from $493,798 due to
decrease in interest rates. Other income (expense) increased to $19,469 from
($16,686) expense due to realized gains on foreign exchange currency forward
contracts.

   The income tax rate utilized for the nine-month period is based on the
Company's estimate of the effective tax rate for the fiscal year ending July
31, 2002, which approximates 40%. The effective tax rate increased from 36% to
40% in the period due to the recognition of dividend income for income tax
reporting purposes eliminated for financial reporting purposes.

   As a result of the foregoing, the Company earned net income of $1,646,205
for the nine months ended April 30, 2002, compared to net income of $2,721,178
for the prior comparable period decreased to 3.4% from 4.98% as percent of
sales. This decrease was largely attributable to $393,918 or 3.48% of
percentage of sales on relocation expenses for the manufacturing facility from
Rhode Island to Chase City, Virginia and reduced sales for the first nine
months of Fiscal 2002.

LIQUIDITY AND CAPITAL RESOURCES

   The Company's primary cash requirements have been to fund the purchase,
manufacture and commercialization of its products. The Company finances its
operation and manufacturing with cash flow from operations and bank financing.
The Company's working capital at April 30, 2002 and July 31, 2001 was
$7,260,269 and $7,485,168, respectively.

   Net cash provided in operating activities for the nine months ended April
30, 2002 and 2001, respectively was $1,850,972 compared to $2,764,175 in the
prior comparable period. The decrease in cash provided by operating activities
was due primarily to lower net income and decreases in accounts receivable due
to lower sales, account payable, which were offset by the increase in
inventory, income taxes payable, as well as the decrease in accrued expenses.

   Net cash used in investing activities increased to $1,317,836 from $742,777,
primarily due to increased equipment purchases and capital improvements for the
Company's relocation of its manufacturing operations into its Chase City,
Virginia facility.

   Net cash used by financing activities was $287,739, compared to $2,138,418
in prior periods. This decrease was primarily due to decreased reliance on
borrowings under the Company's line of credit to finance working capital needs
for seasonal materials. The borrowings for the period ended April 30, 2002 was
approximately $3,500,000 as compared to $3,800,000 for the prior years
comparable period. The Company has $21,200,000 of its $25,000,000 line of
credit available to meet additional seasonal needs to purchase and manufacture
inventory. During the Quarter the Company increased its credit facility to
$25,000,000 to address the needs of additional working capital for the Asher
merger.

   Principal payments for the Company's long-term debt for the twelve months
ending April 30, 2002 is $215,000. The Company believes that cash provided by
operations will be sufficient to finance its operations and fund debt service
requirements.

                                      11

<PAGE>

Schedule of Contractual Obligations


<TABLE>
<CAPTION>
                                               Payments Due by Period
                                   -----------------------------------------------
                                               Less Than
Contractual Obligation                Total     1 year    1-3 years  After 4 years
----------------------             ----------- --------- ----------- -------------
<S>                                <C>         <C>       <C>         <C>
Long-Term Debt.................... $   550,000 $ 90,000  $   135,000  $  325,000
Capital Lease Obligation..........     426,733   31,245      125,000     270,488
Licensing Agreements..............      15,000       --       15,000          --
Operating Leases..................   1,524,040  508,466      538,362     477,212
                                   ----------- --------  -----------  ----------
Total Contractual Obligation...... $ 2,515,773 $629,711  $   813,362  $1,072,700
                                   =========== ========  ===========  ==========

Schedule of Commercial Commitments
                                                      Amount of Commitment
                                                      expiration per period
                                               -----------------------------------
                                               Less Than
Commercial Commitments                Total     1 Year    1-3 years  After 4 years
----------------------             ----------- --------- ----------- -------------
Line of Credit (*)................ $25,000,000       --  $25,000,000          --
Total Contractual Obligation...... $25,000,000       --  $25,000,000          --
</TABLE>
--------
(*) The line of credit is available for advances to finance working capital and
    the issuance of letter of credits. Advances under the line of credit are
    based on a borrowing formula equal to 85% of eligible domestic accounts
    receivable plus 60% of eligible finished goods and 30% of eligible
    components inventory. The line of credit facility varies from quarter to
    quarter based on working capital needs and pay-downs.

SEASONALITY

   The Company's sales typically increase in the second half of the calendar
Year, principally due to the holiday season.

INFLATION

   The Company does not believe that inflation has had a significant impact on
the Company's results of operations for the periods presented.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   As a result of its variable rate line of credit, the Company is exposed to
the risk of rising interest rates. The Company's $25,000,000 line of credit had
an interest rate ranging from 4.1% to 4.19% for the nine months ended April 30,
2002. The Company's long-term debt is at variable market tax exempt rates,
which exposes the Company to fluctuations in the market. However, since the
rate is based on the tax exempt rate, it is below the market rate.

   The Company utilizes certain derivative instruments, from time to time,
foreign currency forward contracts and currency exchange rate market price risk
exposures. Foreign currency contracts are entered into for periods consistent
with related underlying exposures and do not constitute positions independent
of those exposures. The Company does not hold or issue derivative instruments
for trading purposes and is not a party to any instruments with leverage or
prepayment features. In entering into these contracts, the Corporation has
assumed risk, which might arise from possible inability of counter-parties to
meet the terms of their contracts. The Company does not expect any losses as a
result of counter-party defaults.

   The Company enters into foreign exchange forward contracts to hedge
transactions primarily related to firm commitments to purchase its contract
manufactured products from foreign manufactures under terms that provide for
payment of goods in foreign currency approximately 60 to 90 days from invoice
date. Purchases of COWS butter toffee candies and other candies from
manufacturers located in Argentina are paid in U.S. Dollars. Purchases of RUGER
wafers, ELANA Belgian chocolate products and Zed Gum Specialty Gum products are
purchased from manufacturers located in Austria, Belgium and Ireland
respectively, and are paid for in Euros.

                                      12

<PAGE>

PART II  OTHER INFORMATION

Item 1.  Legal Proceedings

   The Company is from time to time involved in litigation incidental to the
conduct of its business. The Company is currently a plaintiff in several
actions. Management does not believe that the outcome of these actions,
individually or in the Aggregate, would have a material adverse effect on the
Company.

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)  Exhibits

   None.

   (b)  Reports on Form 8-K

   On May 8, 2002, the Company filled a Current Report on Form 8-K regarding
the merger of its wholly owned subsidiary Sherwood Acquisition Corporation, a
Wyoming corporation, with and into Asher Candy Acquisition Corporation, a
Wyoming corporation with operations located in New Hyde Park, New York. Asher
Candy Acquisition Corporation is a manufacturer of candy canes and other hard
candies under the "Asher" name. The surviving corporation of the merger is
Asher Candy Acquisition Corporation, which has changed its name to Asher Candy,
Inc.

                                      13

<PAGE>

                                  SIGNATURES


   Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by
the undersigned thereunto duly authorized.



                                    SHERWOOD BRANDS, INC.

Date:   October 2, 2002                        /s/  UZIEL FRYDMAN
                                          ---------------------------
                                                 Uziel Frydman
                                         President and Chief Executive
                                                    Officer

Date:   October 2, 2002                    /s/  CHRISTOPHER J. WILLI
                                          ---------------------------
                                              Christopher J. Willi
                                          Chief Financial Officer and
                                                   Secretary



                                      14