<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                   FORM 10-Q


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

              For the quarterly period ended March 31, 2000

                                      OR

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

                 For the transition period from______to______

                       Commission File Number 000 27037

                            MOTHERNATURE.COM, INC.
            (Exact name of registrant as specified in its charter)


   Delaware                                      23-2832064
   (State or other jurisdiction                  (I.R.S. Employer
   of incorporation or organization)             Identification No.)


                     One Concord Farms, 490 Virginia Road
                         Concord, Massachusetts 01742
                   (Address of principal executive offices)


  Registrant's telephone number, including area code: (978) 929-2000
                                                      --------------

Indicate by check mark whether the Registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days: Yes /x/ No / /

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Class                                       Outstanding at April 30, 2000

Common Stock, $0.01 par value                        15,119,556


                                       1


<PAGE>

                            MOTHERNATURE.COM, INC.
                                   FORM 10-Q
                     For the Quarter ended March 31, 2000
                                     INDEX




                                                                         PAGE
                                                                         ----

PART I    FINANCIAL INFORMATION                                            3
Item 1.   a)   Balance Sheets at March 31, 2000 and                        3
               December 31, 1999

          b)   Statements of Operations for the Three Months Ended         4
               March 31, 2000 and 1999

          c)   Statements of Cash Flows for the Three Months Ended         5
               March 31, 2000 and 1999

          d)   Notes to Financial Statements                               6

Item 2.   Management's Discussion and Analysis of Financial Condition      9
          and Results of Operations

Item 3.   Quantitative and Qualitative Disclosure About Market Risk       23

PART II   OTHER INFORMATION                                               24
Item 1.   Legal Proceedings                                               24
Item 2.   Changes in Securities and use of Proceeds                       24
Item 3    Defaults upon Senior Securities                                  *
Item 4.   Submission of Matters to a Vote of Security Holders              *
Item 5.   Other Information                                                *
Item 6.   Exhibits and Reports on Form 8-K                                25
Signatures                                                                26

* No information provided due to inapplicability of this item.



                                       2

<PAGE>

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

                             MOTHERNATURE.COM, INC.
                                 BALANCE SHEETS
                 (in thousands,except share and per share data)
                                  (unaudited)
<TABLE>
<CAPTION>


                                                    December 31,     March 31,
                                                        1999           2000
                                                    ------------     ---------
<S>                                                <C>             <C>
                        ASSETS
CURRENT ASSETS:
     Cash and cash equivalents                        $ 44,152       $ 34,710
     Accounts receivable                                   183            246
     Inventories                                         2,251          1,864
     Prepaid advertising and other expenses              7,593          2,367
                                                      --------       --------
                        Total current assets            54,179         39,187

Property and equipment, net                              2,194          1,936
Intangible assets                                       14,908         13,252
Other assets                                                93             81
                                                      --------       --------

                        Total assets                  $ 71,374       $ 54,456
                                                      ========       ========

       LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable                                 $  1,925       $  1,304
     Accrued expenses                                    3,018          2,446
     Accrued compensation                                  364            989
     Other current liabilities                              29             24
     Current portion of capital lease obligations           68             69
     Current portion of notes payable                       16              9
                                                      --------       --------
        Total current liabilities                        5,420          4,841

Long-term portion of capital lease obligations             226            209
Other liabilities                                           32             39

SHAREHOLDERS' EQUITY:
Common stock, $0.01 par value:
     Authorized 93,300,000 shares; issued and
     outstanding 15,118,198 and 15,119,556 shares
     at December 31, 1999 and March 31, 2000,
     respectively                                          151            151
Additional paid-in-capital                             133,784        133,432
Deferred compensation                                   (1,879)        (1,390)
Accumulated deficit                                    (66,360)       (82,826)
                                                      --------       --------
                        Total shareholders' equity      65,696         49,367
                                                      --------       --------
        Total liabilities and shareholders' equity    $ 71,374       $ 54,456
                                                      ========       ========

</TABLE>

The accompanying notes are an integral part of these financial statements.


                                       3

<PAGE>

                            MotherNature.com, Inc.

                           STATEMENTS OF OPERATIONS
               (in thousands, except share and  per share data)
                                  (unaudited)


                                          Three Months Ended March 31,
                                         -----------------------------
                                         1999                  2000
                                    --------------        --------------
Net sales                             $      251            $     4,079
Cost of sales                                224                  2,911
                                    --------------        --------------
     Gross profit                             27                  1,168
                                    --------------        --------------
Operating expenses
     Selling and marketing                 2,553                 13,644
     Product development                     880                  1,748
     General and administrative              647                  2,720
                                    --------------        --------------
     Total operating expenses              4,080                 18,112

     Operating loss                       (4,053)               (16,944)
                                    --------------        --------------
Interest income                               72                    497
Interest expense                              (9)                   (19)
                                    --------------        --------------
     Net loss                         $   (3,990)           $   (16,466)
                                    ==============        ==============
Basic and diluted net loss per
     common share                     $    (5.82)           $     (1.09)
                                    ==============        ==============
Shares used to compute basic
     and diluted net loss per
     common share                        685,656             15,118,578
                                    ==============        ==============
Pro forma basic and diluted net
     loss per common share            $    (0.58)           $     (1.09)
                                    ==============        ==============
Shares used to compute pro forma
     basic and diluted net loss
     per common share                  6,894,362             15,118,578
                                    ==============        ==============



 The accompanying notes are an integral part of these financial statements.


                                       4

<PAGE>

                             MotherNature.com, Inc.

                            STATEMENTS OF CASH FLOWS

                                 (in thousands)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                       Three Months Ended
                                                            March 31,
                                                --------------  --------------
                                                       1999          2000
                                                --------------  --------------
<S>                                            <C>             <C>
OPERATING ACTIVITIES:
Net loss                                            $ (3,990)    $ (16,466)
Adjustments to reconcile net loss to
  net cash used in operating activities-
     Depreciation and amortization                        84           316
     Loss on disposal of equipment                         8             2
     Compensation expense relating to
       common stock options and warrants                   8            34
     Amortization of deferred compensation                 -           158
     Amortization of debt discount                         2             1
     Amortization of intangible assets                     -         1,656
Changes in operating assets and liabilities-
         Accounts receivable                             (17)          (63)
         Inventories                                    (163)          387
         Prepaid expenses                               (409)        5,226
         Other assets                                    (88)           12
         Accounts payable                                472          (621)
         Accrued expenses                                111          (572)
         Accrued compensation                             27           625
         Other current liabilities                        (1)           (5)
         Other liabilities                                 -             7
                                                --------------   ------------
          Net cash used in operating activities       (3,956)       (9,303)

INVESTING ACTIVITIES:
     Purchases of property and equipment                (290)          (60)

FINANCING ACTIVITIES:
     Repayments of capital lease obligations             (10)          (16)
     Repayments of notes payable                          (5)           (7)
     Proceeds from Series B preferred
        stock offering, net of issuance costs          1,597             -
     Proceeds from initial public offering,
        net of issuance costs                              -           (56)
                                                --------------   ------------
            Net cash provided by (used in)
                financing activities                   1,582           (79)
                                                --------------   ------------
            Net decrease in cash and
                cash equivalents                      (2,664)       (9,442)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD        11,243        44,152
CASH AND CASH EQUIVALENTS, END OF PERIOD             $ 8,579      $ 34,710
                                                ==============   ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid during the period for interest        $    37      $     14
                                                ==============   ============
     Cash paid during the period for taxes           $     5      $      8
                                                ==============   ============
</TABLE>




   The accompanying notes are an integral part of these financial statements.



                                       5

<PAGE>

                             MotherNature.com, Inc.

                         NOTES TO FINANCIAL STATEMENTS

                                 March 31, 2000


(1) DESCRIPTION OF BUSINESS

  MotherNature.com, Inc. (MotherNature.com or the Company), is an online retail
store and information site for vitamins, supplements, minerals and other natural
and healthy living products. The Company currently offers more than 14,000
products on its site and can special order additional products through its
supplier relationships. MotherNature.com also provides educational and
authoritative news and information about its products and healthy living in
general.

  The Company intends to build upon its retail business strengths, including its
knowledge of the natural products industry, memorable brand name, wealth of
content, broad product assortment and warehousing and customer service
capabilities, to begin the expansion of its business strategy beyond the retail
market.

  Since its inception, the Company has incurred significant losses and as of
March 31, 2000 had an accumulated deficit of approximately $82.8 million. The
Company has incurred costs to develop and enhance its technology, to create,
introduce and enhance its Web site, to establish marketing and distribution
relationships and to build its administrative organization. The Company believes
that it will incur substantial operating losses for the foreseeable future; in
addition, there can be no assurance that the Company will be able to generate
sufficient revenues to achieve or sustain profitability in the future.

  The Company has been funded principally from the issuance of preferred stock
in June/July 1998, December 1998/January 1999 and May 1999 (the Series A, B-1
and C Preferred Financings) with gross proceeds of $7.2 million, $12.0 million
and $42.0 million, respectively. In addition, on December 10, 1999,the Company
completed its initial public offering with gross proceeds of $53.3 million (see
Note 7).

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC) for reporting on Form 10-Q.
Accordingly, certain information and footnote disclosures required for complete
financial statements are not included herein. It is recommended that these
financial statements be read in conjunction with the consolidated financial
statements and related notes of MotherNature.com, Inc. (the "Company") as
reported in the Company's Annual Report on Form 10-K for the year ended December
31, 1999. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation of the
financial position, results of operations, and cash flows at the dates and for
the periods presented have been included. The balance sheet presented as of
December 31, 1999 has been derived from the financial statements that have been
audited by the Company's independent public accountants. The results of
operations for the quarter ended March 31, 2000 may not be indicative of the
results that may be expected for the year ended December 31, 2000, or any other
period.

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, liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
reported amounts of net sales and expenses during the reporting period. Actual
results could differ from those estimates.



                                       6

<PAGE>

Comprehensive Income

 Comprehensive income is defined as the change in net assets of a business
enterprise during a period from transactions generated from nonowner sources.

It includes all changes in equity during a period except those resulting from
investments by owners and distributions to owners. The Company had no material
comprehensive income in any of the periods presented.

Segment Information

 The Company complies with the provisions of SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information. The Company identifies its
operating segments based on business activities and management responsibility.
The Company operates in a single business segment selling vitamins,
supplements, minerals and other natural and healthy living products online.
International sales were 17% and 5% of revenues for the first quarter of 1999
and 2000, respectively.

(3) NET LOSS PER SHARE AND PRO FORMA NET LOSS PER SHARE

Basic net loss per share is computed by dividing net loss by the weighted number
of common shares outstanding for all periods presented. Diluted net loss per
share reflects the dilutive effect of shares under option plans, warrants and
convertible preferred stock. Potentially dilutive shares outstanding during the
period have been excluded from diluted net loss per share because their effect
would be anti-dilutive. There are 7,304,557 and 1,548,052 potentially dilutive
shares as of March 31, 1999 and 2000, respectively.

Pro forma net loss per share is computed using the weighted average number of
common shares outstanding, including  the pro forma effect of the automatic
conversion of the Company's convertible preferred stock into shares of the
Company's common stock.

The weighted average common shares outstanding, including the dilutive effect of
outstanding options and warrants, and the pro forma weighted average number of
common shares outstanding for the periods ended March 31, 1999 and 2000 are as
follows:

<TABLE>
<CAPTION>

                                                   Three Months Ended March 31,
                                                   ----------------------------
                                                          1999       2000
                                                          -----      -----
<S>                                                   <C>          <C>
Weighted average common shares used in basic and          685,656  15,118,578
 diluted EPS calculation
Weighted average convertible preferred shares
 assumed to convert to common shares                    6,208,706           0
                                                        ---------   ---------
Weighted average number of common shares used in pro
 forma basic and diluted EPS calculation                6,894,362  15,118,578
                                                        =========  ==========
</TABLE>


(4) NEW ACCOUNTING PRONOUNCEMENTS

  In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition in Financial
Statements, which provides guidance on the recognition, presentation, and
disclosure of revenue in financial statements filed with the SEC. The SEC
deferred the effective date of this bulletin to the second quarter of 2000. SAB
101 outlines the basic criteria that must be met to recognize revenue and
provides guidance for disclosure related to revenue recognition policies. We
believe that the impact of SAB 101 will not have a material effect on our
financial position or results of operations.

(5) SIGNIFICANT SUPPLIERS

 The Company purchases a majority of its product from two suppliers. These
suppliers accounted for approximately 48% and 55% of the Company's inventory
purchases in the first quarter of 1999 and 2000, respectively. The Company has
no long-term contracts or arrangements with any of its vendors that guarantee
the availability of merchandise, the continuation of particular payment terms or
the



                                       7

<PAGE>

extension of credit limits. There can be no assurance that the Company's current
vendors will continue to sell merchandise to the Company on current terms or
that the Company will be able to establish new or extend current vendor
relationships to ensure acquisition of merchandise in a timely and efficient
manner and on acceptable credit terms.


(6) RELATED PARTY TRANSACTIONS

  The Company has, in the past, purchased inventory from a vendor which is owned
by a shareholder. For the quarter ended March 31, 1999, the Company purchased
$18,000 of inventory from this vendor. The Company did not purchase inventory
from this vendor during the first quarter of 2000.

  The Company has a Web site hosting agreement with Navisite, Inc. CMGI, Inc.
owns approximately 70% of the Navisite's outstanding common stock. During the
quarters ended March 31, 1999 and 2000, the Company paid service fees to
Navisite, Inc. of $10,000 and $44,000, respectively.

(7) INITIAL PUBLIC OFFERING

  In July 1999, the Company's Board of Directors authorized management to file
a registration statement with the Securities and Exchange Commission to permit
the Company to sell shares of its common stock to the public.

  Also in July 1999, the Company filed an amendment to its certificate of
incorporation increasing the number of shares of common stock into which each
share of Series C Preferred would automatically convert in connection with a
public offering of its equity securities from approximately 0.13 shares of
common stock to approximately 0.14 shares of common stock, subject to certain
conditions related to the offering. At the same time, holders of the series A
shares, series B-1 shares and series C shares agreed to automatic conversion of
their series A shares, series B-1 shares and series C shares, respectively,
into shares of the Company's common stock.

  In October 1999, the Company's Board of Directors approved, subject to
stockholder approval, an amendment to the Company's certificate of incorporation
increasing the number of shares of common stock into which each share of Series
C Preferred would automatically convert, in connection with a public offering of
its equity securities from approximately 0.14 shares of common stock to
approximately 0.15 shares of common stock, subject to certain conditions related
to the offering. This amendment to the Company's certificate of incorporation
also prevented any further adjustments to the number of shares of common stock
issuable upon conversion of the Series C Preferred.

  Pursuant to antidilution adjustments, upon exercise of the warrant issued to
the Investment Bank for services provided in connection with the Series C
Preferred Financing, an additional 6,320 shares of common stock will be
issuable. Upon completion of the Company's initial public offering, the Series
A, Series B-1 and Series C Preferred converted into 9,055,392 shares of common
stock. Of the shares, the Series C Preferred stockholders received 379,889
additional shares of common stock that were issued as an inducement to convert
their shares at the consummation of the offering. The value of the shares,
approximately $4.9 million based upon the initial public offering price of
$13.00 per share, was treated similarly to a special dividend to the preferred
stockholders and accounted for at the time of the offering within equity through
the accumulated deficit and additional paid-in capital accounts.

  On December 9, 1999, the Company's registration statement on Form S-1 became
effective. The managing underwriters were Bear, Stearns & Co., Inc.; Hambrecht &
Quist; and Wit Capital Corporation.  The offering consisted of 4,100,000 shares
of the Company's common stock.  The aggregate gross proceeds from the shares
offered and sold was $53.3 million.  After deducting approximately $3.7 million
in underwriting discounts and commissions and approximately $1.2 million in
other expenses, the Company received net proceeds of $48.4 million.


                                       8

<PAGE>

(8) AGREEMENT WITH LANDMARK

  In the fourth quarter of 1999, the Company entered into an alliance with
Landmark Healthcare, Inc. (Landmark) whereby, effective in January 2000,
Landmark offered its members the opportunity to participate in a new Landmark
nutritional supplement program, which will consist of co-branded, customized Web
sites that displayed the Company's content and offer for sale certain of our
products that the Company designed, developed and hosted for Landmark and
significant Landmark clients. At the end of each quarter during the term of the
Agreement, the Company has agreed to pay Landmark a cash fee or alternatively,
issue three-year warrants to purchase the Company's common stock, all based upon
the number of new members and referring practitioners who participate in the
joint program. For the quarter ended March 31, 2000, the Company paid Landmark a
small cash fee. Over the term of the agreement, the aggregate cash performance
fees payable to Landmark will not exceed $6,000,000 or, alternatively, the
number of shares underlying warrants issuable will not exceed 160,794 shares,
with all warrants exercisable at a price per share equal to the fair market
value of our common stock at the time of grant.

(9) SUBSEQUENT EVENTS

  On May 1, 2000, the Company's Board of Directors authorized a re-pricing of
certain outstanding stock options, which includes options held by executive
officers. As a result, the Company has offered to replace 684,963 stock options
granted at exercise prices between $2.99 and $22.39, with 684,963 options at an
exercise price of $2.6875, the fair market value of the Company's common stock
on the date of the re-pricing. The vesting schedules remain unchanged from the
original option grants. The Company will account for this re-pricing under FASB
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation - an Interpretation of APB Opinion No. 25. The interpretation
states that the re-pricing results in variable plan accounting commencing at
July 1, 2000, the effective date of the interpretation. As such, each quarter
the Company will mark the re-priced options to market subsequent to the
effective date, with any changes in the fair market value of the common stock
charged to compensation expense.

  On May 2, 2000, the Company loaned $125,000 to an executive officer, pursuant
to a full-recourse, promissory note that bears interest at a floating rate of
prime plus two percentage points per year and is payable in full on April 14,
2003. Commencing on January 1, 2001, principal and interest will be forgiven in
equal monthly installments for services rendered through the date of termination
or the maturity date, whichever is earlier.


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

Overview

  We are an online retail store and information site for vitamins, supplements,
minerals and other natural and healthy living products. By offering over 14,000
products on our site, we provide one-stop shopping for customers, 24 hours a
day, seven days a week. Our online store, www.MotherNature.com, offers
educational and authoritative information, broad product selection, a high level
of customer service, competitive pricing and easy-to-use navigation and search
capabilities. We have continued to focus on building our organization,
developing our technology infrastructure, further developing and upgrading our
Web site, increasing customer traffic and sales, expanding our product
assortment, promoting our brand and enhancing our fulfillment and customer
service operations. During 1999 we invested in an aggressive, offline
advertising campaign, supplemented by online advertising, business incentive
programs, direct marketing and a public relations campaign. Although we believe
our offline advertising campaign was successful in increasing consumer awareness
of our site, acquiring new customers, and generating sales revenues, we believe
the campaign has accomplished our objectives and plan to limit our offline
advertising in order to reduce marketing costs. In the future, we plan to focus
our advertising efforts using what we believe are more cost-effective methods
for customer acquisition, including online advertising, targeted email
solicitations and other direct marketing initiatives, and business incentive
programs.

  The success of these efforts has been demonstrated by our growth in quarterly
revenues, which have increased quarter over quarter during 1999 and grew from
$251,000 in the first quarter of 1999 to $4.1 million in the first quarter of
2000. In order to manage the increase in our site traffic and revenues, we have
expanded and continue to upgrade our site, order fulfillment operations and
organizational infrastructure. This expansion to date includes enhancing the
features and functions on our site, adding server and database capacity,
building our internally developed order fulfillment and logistics system, moving
our order fulfillment center to a 25,000 square foot facility in Springfield,
Massachusetts and adding to our management and employee team, which totaled 161
employees as of March 31, 2000.  Despite the growth in our revenues, we continue
to incur significant net losses. We have not achieved profitability and expect
to incur operating losses in future periods.


                                       9

<PAGE>

  We intend to build upon our retail business strengths, including our knowledge
of the natural products industry, memorable brand name, wealth of content, broad
product assortment and warehousing and customer service capabilities, to:
  .  offer the broadest selection of natural, earth-friendly products;
  .  operate as a solution-based retailer and wholesaler by integrating content
     and commercial capabilities;
  .  own our fulfillment and customer service operations; and
  .  expand our business beyond the retail market to address the needs of
     natural and healthy living product retailers and manufacturers.

  We recognize revenue at the time of shipment. Cash is generally collected in
less than a week as substantially all of our sales are paid for by credit card.
Advertising expenditures are expensed as incurred.

Results of Operations
Three Months Ended March 31, 2000 Compared to the Three Months Ended March 31,
1999

  Net Sales. Net sales consist of product sales to customers net of product
returns, promotional discounts and coupons, and include shipping and handling
charges. Net sales increased more than 15 times to $4.1 million for the three
months ended March 31, 2000 from $251,000 for the three months ended March 31,
1999. This reflects the increase in orders received during the quarter ended
March 31, 2000, to approximately 147,000 as compared to 10,000 in the first
quarter of 1999.  This increase in orders was driven by an increase in our
customer base. We added 102,000 new customers in the first quarter of 2000,
bringing the cumulative customer count to approximately 350,000, compared to
10,000 cumulative customers at the end of the first quarter of 1999.

  Cost of Sales. Cost of sales consists primarily of the costs of merchandise,
including outbound shipping costs. Cost of sales does not include the cost of
products associated with promotional discounts and coupons used for new customer
purchases, which are included in selling and marketing expense, but does include
the cost of their shipments.  Cost of sales increased to $2.9 million for the
quarter ended March 31, 2000 from $224,000 for the quarter ended March 31, 1999,
reflecting increased sales volume. Our gross margin increased to 29% of net
sales for the three months ended March 31, 2000 from 11% of net sales for the
three months ended March 31, 1999. This increase was primarily due to a shift in
our sales mix of new to existing customers and improvements in our fulfillment
operations. With regard to our customer mix, new customers accounted for only
52% of sales in the first quarter of 2000, as compared to 60% in the first
quarter of 1999. These lower margin new customer sales exerted a significant
downward pressure on margins in the first quarter of 1999. In addition, changes
to our fulfillment systems and outbound freight vendors have reduced our freight
costs per order.

  Selling and Marketing Expense. Selling and marketing expense consists
primarily of advertising and promotional expenditures, including the cost of
products associated with promotional discounts and coupons used for new customer
purchases, Web content expenditures, fulfillment facility and customer service
expenses and payroll and related expenses for personnel engaged in marketing,
content, order fulfillment and customer service operations. Selling and
marketing expenses increased to $13.6 million for the quarter ended March 31,
2000 from $2.6 million for the corresponding quarter in 1999. This increase was
attributable primarily to expenditures for offline and online advertising to
promote brand awareness. Costs also increased for promotional discounts we
offered to attract new customers for campaigns which commenced late in the first
quarter of 1999 and which continued to run through the first quarter of 2000.
Customer acquisition costs, which include our costs of media, marketing and
promotional discounts and goods used to incent new customer purchases fell to
approximately $86 per customer in the first quarter of 2000 from approximately
$271 per customer in the first quarter of 1999, which we believe reflects the
effectiveness of the Company's promotions and advertising campaigns. Content
expenses included $1.7 million of non-cash charges for amortization of the
intangible assets acquired in the Rodale alliance in September, 1999. We expect
selling and marketing expense to decrease in future periods as we reduce our
advertising expenditures by limiting offline advertising and focusing on what we
believe are more cost-effective advertising methods such as online advertising,
direct email solicitations and our business incentive programs.



                                      10

<PAGE>

  Product Development Expense. Product development expense consists primarily of
payroll and related expenses for merchandising, Web site development, and Web
design and related infrastructure. Product development expenses increased to
$1.7 million for the three months ended March 31, 2000 from $880,000 for the
three months ended March 31, 1999. This increase was attributable primarily to
expansion of our technical staff. We believe that continued investment in
product development is critical to attaining our strategic objectives and,
therefore, we expect product development expense to increase modestly in future
periods.

  General and Administrative Expense. General and administrative expense
consists of payroll and related expenses for executive, and administrative and
information technology personnel, recruiting, depreciation and other general
corporate expenses. General and administrative expenses increased to $2.7
million for the first quarter of 2000 from $647,000 for the corresponding
quarter in 1999. The increase reflects increased personnel costs, higher
compensation charges associated with employee stock options, higher depreciation
charges and professional service costs as well as the reclassification of
certain corporate technology costs. We expect general and administrative
expenses will increase modestly in future periods in connection with the growth
of our business.

  Interest Income.  Interest income consists of income earned on our cash
balances in money market accounts.  Interest income increased to $497,000 for
the first quarter of 2000 from $72,000 for the first quarter of 1999.  This
increase reflects earnings on higher average cash and cash equivalent balances
during the first quarter of 2000 compared to the first quarter of 1999.

  Interest expense.  Interest expense is attributable to capital lease
obligations and original issue discount related to notes payable. Interest
expense increased to $19,000 for the three months ended March 31, 2000 from
$9,000 for the corresponding period in 1999.

  Provision for Income Taxes. We have had net operating losses for every period
through December 31, 1999. We may not be able to utilize all or any of these tax
loss carry-forwards as a result of our initial public offering and prior
financings. We have not recognized a provision for income taxes due to the
uncertainty surrounding the realization of the favorable tax attributes in
future tax returns and we have placed a valuation allowance against our net
deferred tax assets.

  Net Loss. As a result of the foregoing factors, we incurred a net loss to
common shareholders of $16.5 million for the first quarter of 2000 compared to
$4.0 million for the first quarter of 1999.


                                      11

<PAGE>

Liquidity and Capital Resources

  Net cash used in operating activities was $9.3 million for the first quarter
of 2000, as compared to $4.0 million for the first quarter of 1999. The
reduction in cash was primarily driven by funding operating losses.  Additional
cash was generated by a $5.2 million reduction in our prepaid expenses, which
represented amounts paid in prior periods to secure offline media which ran
during the first quarter of 2000.

  Net cash used in investing activities was $60,000 for the three months ended
March 31, 2000 compared to $290,000 for the three months ended March 31, 1999.
The activity during both periods relates to purchases of property and equipment.

  Net cash used by financing activities was $79,000 for the first quarter of
2000, as compared to net cash provided by financing activities of $1.6 million
for the corresponding quarter in 1999. The net proceeds of $1.6 million were
from a Series B preferred stock offering in January 1999.

  As of March 31, 2000, we had $34.7 million of cash and cash equivalents. As of
that date, our principal commitments consisted of obligations outstanding under
capital leases in the amount of $278,000 and prepaid media programs of $1.9
million. Although we currently have no material commitments for capital
expenditures, we anticipate that our business model will require us to commit
resources to promote our brand, expand our product and service offerings, and
enhance our infrastructure.

  We believe that our current cash and cash equivalents will be sufficient to
meet our anticipated needs for working capital and capital expenditures through
at least the next 9 months. We anticipate that we are likely to need additional
financing to execute our business model after that 9-month period, or sooner if
we need to respond to business contingencies, such as funding additional
advertising expenditures, developing new or enhancing existing content, features
or services, enhancing our operating infrastructure, responding to competitive
pressures, or acquiring complementary businesses or technologies. If we raise
additional funds through the issuance of equity, or convertible debt securities,
the percentage ownership of our stockholders will be reduced, and these newly-
issued securities may have rights, preferences or privileges senior to those of
existing stockholders. We cannot be certain that additional financing will be
available to us on favorable terms when required, or at all.

RISK FACTORS

  We do not provide forecasts of our future financial performance. However,
from time to time, information we provide or statements we make may contain
"forward looking" information that involves risks and uncertainties. In
particular, statements contained in this Quarterly Report on Form 10-Q that are
not historical facts (including, but not limited to statements contained in
"Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations") may constitute forward looking statements and are made under the
safe harbor provisions of The Private Securities Litigation Reform Act of 1995.
Our actual results of operations and financial condition have varied and may in
the future vary significantly from those stated in any forward looking
statements. Factors that may cause such differences include, without limitation,
the risks, uncertainties and other information discussed below and within this
Quarterly Report on Form 10-Q, as well as the accuracy of our internal estimates
of revenue and operating expense levels. The following discussion of our risk
factors should be read in conjunction with the financial statements and related
notes thereto. Such factors, among others, may have a material adverse effect
upon our business, results of operations and financial condition.


RISKS RELATED TO OUR BUSINESS

OUR BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE HAVE A LIMITED OPERATING
HISTORY UNDER OUR CURRENT BUSINESS MODEL.



                                      12

<PAGE>

  Although we were organized in December 1995, our current management team
joined us after June 1998 and our current, redesigned Web site was launched in
late 1998.  Accordingly, an investor in our common stock must consider the
challenges, risks and uncertainties frequently encountered by early-stage
companies using new and unproven business models in new and rapidly evolving
markets.  These challenges include our ability to:

 .  execute on our revised business model;

 .  increase brand recognition;

 .  manage growth in our operations;

 .  expand our customer base cost-effectively;

 .  retain customers;

 .  manage inventory levels effectively;

 .  upgrade and enhance our Web site, transaction-processing systems, order
   fulfillment capabilities and inventory management systems;

 .  access additional capital when required;

 .  develop and renew strategic relationships with companies in the vitamins,
   supplements, minerals and natural and healthy living products industry, such
   as suppliers and content providers; and

 .  attract and retain key personnel.

WE CANNOT BE CERTAIN THAT OUR BUSINESS MODEL WILL BE SUCCESSFUL OR THAT WE WILL
SUCCESSFULLY ADDRESS THESE AND OTHER CHALLENGES, RISKS AND UNCERTAINTIES.

  We have recently begun to expand our business model beyond the retail market
to address smaller natural and healthy living product retailers and
manufacturers.  This change will require us to build upon our knowledge of the
natural and healthy living products industry, leverage our distribution facility
capabilities and develop new products and services to address this new market.
Our prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies expanding their business model
to address an emerging and rapidly evolving market.  Because of our limited
experience in this new market, we cannot assure you that our strategy for
operating in that market or selling our products and services will be
successful.  You should not rely on our historical results of operations as
indications of future performance.

CONSUMERS OF VITAMINS, SUPPLEMENTS, MINERALS AND OTHER NATURAL AND HEALTHY
LIVING PRODUCTS MAY NOT PURCHASE PRODUCTS FROM OUR SITE, WHICH WOULD REDUCE OUR
REVENUES AND PREVENT US FROM BECOMING PROFITABLE.

   Due to our limited operating history, we have not proven an ability to
attract and retain a high volume of online customers.  We may not be able to
convert a large number of customers from traditional shopping methods to online
shopping for vitamins, supplements, minerals and other natural and healthy
living products.  Even if we are successful at attracting online customers, we
expect it will take several years to build a critical mass of repeat customers.
If we do not attract and retain a high volume of online customers at a
reasonable cost, we will not be able to increase our revenues or achieve
profitability.  Specific factors that could prevent widespread customer
acceptance of our store include:

 .  lack of consumer awareness of our online store because of our relatively
   short market presence under our current business model;

 .  customer concern about the privacy of personal health information;

 .  pricing that does not meet customer expectations as we expand our product
   offerings and enhance our marketing efforts;

 .  incorrectly filled orders or damaged products resulting from our transition
   to new order fulfillment systems; and


                                      13

<PAGE>

 .  delayed response to customer service requests if we fail to adequately
   increase our customer service staff.

IF OUR BRAND DOES NOT RAPIDLY ACHIEVE BROAD RECOGNITION, WE MAY LOSE THE
OPPORTUNITY TO BUILD A CRITICAL MASS OF CUSTOMERS NECESSARY TO ACHIEVE INCREASED
SALES AND MARKET SHARE.

  We believe that we must achieve increased sales and market share to become
profitable.  Accordingly, we have spent significant amounts on an aggressive
brand-enhancement strategy, which includes advertising, promotional programs and
public relations activities; however, we have significantly reduced our
advertising spending and expect that our advertising spending will remain at
these reduced levels or be further reduced in the future.  Our brand promotion
efforts may not be successful or may not sufficiently increase our revenues to
enable us to increase our advertising and promotional expenses.  In addition,
even if our brand recognition increases, the number of new users or transactions
in our online store may not increase.  Furthermore, our reduction in advertising
spending may adversely impact our revenues.

WE ANTICIPATE OUR HISTORY OF LOSSES WILL CONTINUE, WHICH MAY DECREASE THE VALUE
OF OUR STOCK.

  We believe that we will continue to incur operating losses for the
foreseeable future and that the rate at which we will incur such losses will
increase significantly from current levels.  As of March 31, 2000, we had an
accumulated deficit of approximately $82.8 million, and we have not achieved
profitability.  We incurred net losses of approximately $4.0 and $16.5 million
for the first quarters of 1999 and 2000, respectively. Specifically, we intend
to incur substantial costs and operating expenses related to:

 .  providing promotional benefits to our customers, such as product discounts
   and free shipping on large orders;

 .  expanding our existing sales and distribution channels to address natural and
   healthy living products retailers and manufacturers;

 .  establishing and maintaining strategic relationships with primary care
   physicians, alternative health providers, corporate health plans, HMOs and
   physician networks, wellness centers and health clubs;

 .  expanding our product offerings and Web site content;

 .  upgrading our Web site, transaction-processing systems, order fulfillment
   capabilities and inventory management systems; and

 .  developing and renewing strategic relationships with companies in the
   vitamins, supplements, minerals and natural and healthy living products
   industry, such as content providers and vendors.

Because we will spend these amounts before we receive any incremental revenues
from these efforts, our losses will be greater than the losses we would incur if
we developed our business more slowly.  In addition, we may find that these
efforts are more expensive than we currently anticipate, which would further
increase our losses.

DISAPPOINTING QUARTERLY REVENUE OR OPERATING RESULTS COULD CAUSE OUR STOCK PRICE
TO FALL.

  Our quarterly revenue and operating results have fluctuated significantly
in the past and may fluctuate significantly in the future due to a variety of
factors, including:

 .  fluctuations in the number of visitors to our Web site as a result of the
   relative successes or failures of our advertising campaign and our ability to
   convert visitors into customers;

 .  demand for our products;


                                      14

<PAGE>

 .  our use of advertising, discount pricing and promotions;

 .  amount and timing of our operating costs and capital expenditures, which are
   currently difficult to predict;

 .  introductions by our competitors of new or enhanced Web sites, products or
   services;

 .  fluctuations in shipping costs or delivery times based on changes in the
   market for distribution services;

 .  management of our inventory levels and fulfillment operations as we introduce
   new inventory and order fulfillment staff and systems;

 .  price competition and fluctuations in the wholesale prices of the products we
   sell as market demand for our products and competition increase;

 .  changes in the mix of products we sell in response to changes in customer
   demand;

 .  shifts in research findings, media publicity and consumer perception
   regarding vitamins, supplements and minerals;

 .  expenses related to potential strategic relationships or acquisitions of
   content, technology or businesses;

 .  changes in or enforcement of government regulations affecting our business;

 .  changes in our management team and key personnel; and

 .  continuing fluctuations in general economic conditions and economic
   conditions specific to the Internet, electronic commerce and the vitamins,
   supplements, minerals and natural and healthy living products industries as
   use and visibility of vitamins, supplements and minerals increase.

  Our limited operating history makes it difficult to assess the impact of
these factors on our operating results.

EXTENSIVE FEDERAL, STATE AND LOCAL GOVERNMENT REGULATIONS MAY RESTRICT THE WAY
WE SELL OUR PRODUCTS, RESULTING IN RESTRICTIONS ON THE PRODUCTS AND CONTENT WE
OFFER OUR CUSTOMERS AND SIGNIFICANT ADDITIONAL EXPENSES.

  The laws, regulations and enforcement policies governing our dietary
supplement products are relatively new and still evolving and we cannot predict
what enforcement positions the FDA or other governmental agencies may take with
respect to our selling methods.  In general, the dietary supplement industry has
adopted more aggressive interpretations of these laws than have the relevant
regulatory agencies.  We cannot be certain that our attempts, or those of our
suppliers, to comply with laws and regulations in this area are or will be
deemed sufficient by the appropriate regulatory agencies.  Enforcement actions
by any of these agencies can result in civil and criminal penalties, an
injunction to stop or modify certain selling methods, seizure of our products,
adverse publicity or voluntary recalls and labeling changes.  If the FDA, FTC or
other federal or state governmental agency were to undertake an enforcement
action against us, it could cause an immediate decrease in our revenues, cause
us to incur significant additional expenses and result in a decrease in our
stock price.  State professional licensing bodies also may object to the
provision of health-related information or advice on our site.  Our efforts to
comply with existing laws and regulations may be costly, may force us to change
our selling strategy and may not be successful.  We cannot assure you that we
will be able to comply with any existing or future laws, regulations,
interpretations or applications without incurring significant costs or adjusting
our business model.

WE MAY FAIL TO COMPETE EFFECTIVELY IN OUR MARKET, WHICH COULD RESULT IN LOWER
REVENUES OR LOSS OF MARKET SHARE.


                                      15

<PAGE>

  The electronic commerce industry is new, rapidly evolving and intensely
competitive, and we expect competition to intensify in the future.  If we fail
to attract and retain a large customer base and our competitors establish a
market position more prominent than ours, we could experience declines in our
revenue and a loss of market share.  Barriers to entry are minimal and current
and new competitors can launch sites at a relatively low cost.  In addition, the
vitamins, supplements, minerals and natural and healthy living products market
is very competitive and highly fragmented, with no clear dominant leader and
increasing public and commercial attention.  We compete with a variety of other
companies, including traditional vitamins, supplements, minerals and natural and
healthy living products retailers, the online retail initiatives of several such
traditional retailers and numerous other companies.

IF WE ARE UNABLE TO ADAPT TO RAPID TECHNOLOGICAL CHANGE, OUR CUSTOMERS MAY CEASE
BUYING OUR PRODUCTS OR FOREGO THE USE OF OUR SERVICES AND USE THOSE OF OUR
COMPETITORS.

  To remain competitive, we must continue to enhance and improve the
functionality and features of our online store.  If our competitors introduce
new products and services embodying new technologies, or if new industry
standards and practices emerge, our existing Web site and proprietary technology
and systems may be rendered obsolete.  Our future success will depend on our
ability to:

 .  enhance our existing services;

 .  internally develop and/or license from third parties new services and
   technologies; and

 .  respond to technological advances and emerging industry standards and
   practices on a cost-effective and timely basis.

  Moreover, we may use new technologies ineffectively or fail to adapt our
Web site, transaction-processing systems, order fulfillment infrastructure and
inventory management systems to customer requirements or emerging industry
standards.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY ADEQUATELY, WE COULD LOSE
OUR COMPETITIVE ADVANTAGE IN THE VITAMINS, SUPPLEMENTS AND MINERALS AND NATURAL
AND HEALTHY LIVING PRODUCTS MARKET.

  Our trademarks, service marks, copyrights, trade dress, which is the
appearance and packaging of our products, trade secrets and similar intellectual
property are critical to our success.  The unauthorized reproduction or other
misappropriation of our trademarks or other intellectual property could diminish
the value of our proprietary rights or goodwill.  We rely upon a combination of
trademark and copyright law, trade secret protection and confidentiality or
license agreements with our employees, affiliates and others to protect our
proprietary rights.  We have submitted trademark and service mark applications
for our name combined with our logo, and these applications are pending.
Effective trademark, service mark, copyright and trade secret protection may not
be available, and the steps we have taken and may take in the future to protect
our proprietary rights may not be adequate.  For instance, we may not be able to
register our name combined with our logo as a federal trademark because there
are other companies using the words "mother nature" who may have prior rights in
those words.  In addition, we may not be able to prevent other people from using
the words "mother nature" in their businesses.  It is possible that others could
use the words "mother nature" in such a way as to damage the goodwill associated
with our business or try to prevent the use of our name or trademark.  In
addition, we license our trademarks and other intellectual property to third
parties, and we cannot be certain that such licensees will not take actions that
harm the value of our proprietary rights.

IF WE ARE UNABLE TO PREVENT THIRD PARTIES FROM ACQUIRING DOMAIN NAMES THAT ARE
SIMILAR TO, INFRINGE UPON OR OTHERWISE DECREASE THE VALUE OF OUR DOMAIN NAMES,
WE COULD LOSE OUR COMPETITIVE ADVANTAGE IN THE VITAMINS, SUPPLEMENTS AND
MINERALS AND NATURAL AND HEALTHY LIVING PRODUCTS MARKET.


                                      16

<PAGE>

  We currently hold several Web domain names relating to our brand, including
"MotherNature.com." The acquisition and maintenance of domain names generally is
regulated by governmental agencies and their designees.  The regulation of
domain names in the United States and abroad is expected to change in the near
future.  Governing bodies may establish additional top-level domains, appoint
additional domain name registrars or modify the requirements for holding domain
names.  As a result, we may be unable to acquire or maintain relevant domain
names in all countries in which we conduct business and other parties may use
domain names similar to ours.  Furthermore, the relationship between regulations
governing domain names and laws protecting trademarks and similar proprietary
rights is unclear.

IF WE DO NOT SUCCESSFULLY EXPAND OUR DISTRIBUTION OPERATIONS, WEB SITE AND
RELATED INFORMATION SYSTEMS TO ACCOMMODATE INCREASES IN CUSTOMER DEMAND, OUR
REVENUES MAY FALL BELOW EXPECTATIONS.

  If we do not successfully expand our distribution operations to accommodate
increases in customer demand, we may not be able to increase our revenues in
accordance with the anticipated expectations of securities analysts and
investors. Due to significant increases in orders, we have recently experienced
delays in processing shipments.  If we do not effectively manage the operation
of our new distribution center, we could lose customers.

  Moreover, our future success will depend in part on our ability to rapidly
expand our Web site, transaction-processing systems, order fulfillment
infrastructure and inventory management systems without systems interruptions in
order to accommodate increased traffic and demand.  We are currently
implementing new technical and operational systems, including a new order
processing, inventory management, shipping and billing software package to
accommodate anticipated increases in customer traffic and order demand.  In
addition, we  are currently in the process of integrating our accounting and
financial reporting system with our other information systems.  Any inability to
scale our systems may cause unanticipated system disruptions, slower response
times, degradation in customer service levels, impaired quality and speed of
order fulfillment or delays in reporting accurate financial information.  We are
not certain that we will be able to project the rate or timing of increases, if
any, in the use of our Web site accurately or promptly enough to permit us to
effectively upgrade and expand our transaction-processing systems or to
integrate smoothly any newly developed or purchased modules with our existing
systems.

EXPANDING THE BREADTH AND DEPTH OF OUR PRODUCT AND SERVICE OFFERINGS IS
EXPENSIVE AND DIFFICULT, AND THESE EFFORTS MAY NOT BE PROFITABLE OR RESULT IN
INCREASED SALES.

  We intend to continue to expand the number of products we offer on our site
by promoting new or complementary products or services.  We cannot be certain
that we will be able to expand our product and service offerings in a cost-
effective or timely manner.  Furthermore, any new product or service offering
that is not favorably received by consumers could damage the reputation of our
brand.  The lack of market acceptance of our efforts to expand offerings or our
inability to generate satisfactory revenues from such expanded offerings could
result in decreased revenues, price reductions, reduced margins and loss of
market share.  In addition, expansion of our offerings could strain our
management, financial and operational resources.  For example, we may need to
incur significant marketing expenses, develop relationships with new fulfillment
partners or manufacturers or comply with new regulations.

IF WE FAIL TO PROPERLY MANAGE THE GROWTH OF OUR INVENTORY LEVELS, WE MAY BE
UNABLE TO KEEP PACE WITH CUSTOMER DEMAND OR TO SELL OUR EXCESS INVENTORY.

  We have increased the number and range of products that we stock in
inventory in order to ensure that we can promptly deliver products to our
customers.  Many of our products have a limited shelf life, and we may be unable
to sell inventory that we have stored for an extended period of time.  In the
event that one or more of the products we stock do not achieve widespread
consumer acceptance, we may be required to take inventory markdowns.  In
addition, the market for nutritional supplements is characterized by sudden
changes in consumer tastes.  We must accurately predict these trends and stock
sufficient quantities of popular vitamins, supplements, minerals and other
products and not overstock unpopular products.


                                      17

<PAGE>

IF OUR EXISTING TECHNICAL AND OPERATIONAL SYSTEMS FAIL, WE COULD EXPERIENCE
INTERRUPTIONS OR DELAYS IN OUR SERVICE OR DATA LOSS, AND COULD BE UNABLE TO
ACCEPT AND FULFILL CUSTOMER ORDERS.

   We have experienced periodic systems interruptions which we believe may
continue to occur.  Our systems and operations, including our fulfillment
operations, are vulnerable to damage or interruption from fire, flood,
earthquake, power loss, telecommunications failure, break-ins, vandalism and
similar events.  Substantially all of our product development and information
management systems are in facilities we lease in Massachusetts.  All of our
inventory is stored in facilities we lease in Massachusetts.  In addition,
substantially all of our computer and communications hardware systems are
located at a third-party facility in Massachusetts.  We have no formal disaster
recovery plans, and our insurance may not adequately compensate us for losses
that may occur.  The occurrence of a natural disaster or other unanticipated
problems at our facilities in Massachusetts, or at the third-party facility in
Massachusetts, could cause interruptions or delays in our service or data loss,
or could render us unable to accept and fulfill customer orders.  In addition,
any failure by the third-party facility to provide the data communications
capacity we require could result in interruptions in our service.

OUR ABILITY TO INCREASE OUR CUSTOMER BASE AND OUR SALES DEPENDS ON THE
CONTINUING CONTRIBUTION OF OUR KEY PERSONNEL AND OUR ABILITY TO ATTRACT AND
RETAIN OTHER QUALIFIED EMPLOYEES IN THE FUTURE.

   We may be unable to retain our key employees or attract and retain other
highly qualified employees in the future due to the intense competition for
qualified personnel among Internet related businesses.  If we were to lose the
services of Michael L. Barach, our President, Chief Executive Officer and a
director, and Donald J. Pettini, our Chief Technology Officer or any of our
other executive officers or key employees, many of whom joined us since June
1998, we might not be able to increase our customer base and our sales.  Any
officer or employee can terminate his or her relationship with us at any time.
We also do not have "key person" life insurance policies covering any of our
employees.  Competition for personnel is intense, and qualified technical
personnel are likely to remain a limited resource for the foreseeable future.
Locating candidates with the appropriate qualifications, particularly in the
desired geographic location, can be costly and difficult.  We may not be able to
hire the necessary personnel to implement our business strategy, or we may need
to provide higher compensation to such personnel than we currently anticipate.
If we fail to attract and retain sufficient numbers of highly skilled employees,
we may be unable to attract customers and increase our sales.

THE LOSS OF THIRD-PARTY CONTENT PROVIDERS COULD DECREASE REVENUES, INCREASE OUR
EXPENSES AND RESULT IN A DECREASE IN OUR STOCK PRICE.

   We believe that consumers become interested in purchasing our products in
part because of the information we include on our Web site regarding health
conditions, herbal and homeopathic remedies, drug interactions and our products,
much of which is licensed from third parties, such as Healthnotes, Inc., Rodale
and American Botanical Council.  The loss of this content could require us to
develop similar content or to obtain content that is of lower quality or at a
higher cost.  In addition, we cannot be certain that we will be able to license
additional content on favorable terms or at all.

WE DEPEND ON A LIMITED NUMBER OF THIRD-PARTY SUPPLIERS FOR THE PRODUCTS WE
REQUIRE TO MEET CUSTOMER DEMANDS AND IF WE FAIL TO DEVELOP OR MAINTAIN OUR
RELATIONSHIPS WITH THESE OR OUR OTHER VENDORS, THE PRODUCTS WE OFFER COULD CEASE
TO BE AVAILABLE TO US OR COULD BE AVAILABLE ONLY AT HIGHER COST OR AFTER A LONG
DELAY.

   We do not have long-term contracts with any of our suppliers. We cannot
assure you that in the future we will be able to procure sufficient quantities
of our products on acceptable commercial terms. In the first quarter of 2000,
two suppliers, Reliance Vitamin Company and Super Nutrition Distributors,
accounted for 55% of our inventory purchases, and in the corresponding quarter
of 1999, accounted for 48% of the inventory we purchased. Furthermore, we
purchase nearly all of our private label products through one supplier, Reliance
Vitamin Company.


                                      18

<PAGE>

THE FAILURE OF THIRD-PARTY DELIVERY SERVICES TO PROMPTLY DELIVER PRODUCTS WOULD
IMPAIR OUR ABILITY TO MAINTAIN GOOD RELATIONSHIPS WITH EXISTING CUSTOMERS,
ATTRACT NEW CUSTOMERS AND GENERATE SALES.

     We rely on third-party carriers, such as the United States Postal Service,
UPS and Federal Express, for product shipments, including shipments to and from
our order fulfillment facility.  We are therefore subject to the risks,
including employee strikes and delays due to inclement weather, associated with
these carriers' ability to provide delivery services to meet our shipping needs.

PRODUCT LIABILITY CLAIMS AGAINST US COULD RESULT IN ADVERSE PUBLICITY AND
POTENTIALLY SIGNIFICANT MONETARY DAMAGES.

     Like other retailers, distributors and manufacturers of products that are
ingested, we face an inherent risk of exposure to product liability claims in
the event that the use of the products we sell results in injury.  We may be
subjected to various product liability claims, including claims that the
products we sell contain contaminants, are improperly labeled or include
inadequate instructions as to use or inadequate warnings concerning side effects
and interactions with other substances.  We cannot predict whether product
liability claims will be brought against us in the future or the effect of any
resulting adverse publicity on our business.  Moreover, we may not have adequate
resources in the event of a successful claim against us.  We do not maintain
product liability insurance and do not have formal indemnification arrangements
with the third-party vendors from which we source our products.  Further, our
general liability insurance may not cover product liability claims.  If our
insurance protection is inadequate and we are not indemnified by our third-party
vendors, the successful assertion of product liability claims against us could
result in potentially significant monetary damages.

     Although many of the ingredients in our products are vitamins, minerals,
herbs and other substances for which there is a long history of human
consumption, some of our products contain innovative ingredients or combinations
of ingredients.  There is little long-term experience with human consumption of
some of these innovative product ingredients or combinations in concentrated
form.  In addition, interactions of these products with other similar products,
prescription medicines and over-the-counter drugs have not been fully explored.
Although the manufacturer may perform research and tests in connection with the
formulation and production of the products that we sell, there are no conclusive
clinical studies regarding many of our products.

WE MAY BE LIABLE FOR CONTENT WE PROVIDE ON OUR WEB SITE OR WHICH IS ACCESSED
FROM OUR WEB SITE, WHICH COULD EXPOSE US TO POTENTIALLY SIGNIFICANT MONETARY
DAMAGES.

     As a publisher of Internet content, we face potential liability for
negligence, copyright, patent or trademark infringement, defamation or other
claims based on the nature and content of materials that we publish or
distribute.  In the past, plaintiffs have brought such claims and sometimes
successfully litigated them against online services.  Although we carry general
liability insurance, our insurance may not cover claims of these types or may be
inadequate to indemnify us for all liability imposed on us.  We could be exposed
to potentially significant monetary damages if we were held liable based on our
Internet content.

IF THERE IS UNFAVORABLE PUBLICITY REGARDING NUTRITIONAL SUPPLEMENTS, OUR SALES
WILL LIKELY DECLINE.

     We believe the vitamins, supplements and minerals market is affected by
national media attention regarding the consumption of nutritional supplements.
Future research reports or publicity that are perceived as less favorable or
that question earlier research or publicity could result in a decline in our
sales.  Because of our dependence upon consumer perceptions, adverse publicity
associated with illness or other undesirable effects resulting from the
consumption of the products we sell or any similar products distributed by other
companies, whether or not accurate, also could damage the trust our customers
have in our products and could result in a decline in our sales.  Unfavorable
publicity could arise even if


                                      19

<PAGE>

the adverse effects associated with products resulted from consumers' failure to
consume such products appropriately.

ANY FUTURE ACQUISITIONS OF COMPANIES OR TECHNOLOGIES MAY RESULT IN DISTRACTION
OF OUR MANAGEMENT AND DISRUPTIONS TO OUR BUSINESS.

   We may acquire or make investments in complementary businesses, technologies,
services or products if appropriate opportunities arise. From time to time we
may engage in discussions and negotiations with companies regarding our
acquiring or investing in those companies' businesses, products, services or
technologies. We cannot make assurances that we will be able to identify future
suitable acquisition or investment candidates, or if we do identify suitable
candidates, that we will be able to make the acquisitions or investments on
commercially acceptable terms or at all. If we acquire or invest in another
company, we could have difficulty assimilating that company's personnel,
operations, technology or product and service offerings. In addition, certain
changes in our management could occur and the key personnel of the acquired
company may decide not to work for us. These difficulties could disrupt our
ongoing business, distract our management and employees, increase our expenses
and adversely affect our results of operations. The issuance of equity
securities could be dilutive to our existing shareholders. As of the date of
this Quarterly Report on Form 10-Q, we have no agreement to enter into any
material investment or acquisition transaction.


WE DO NOT EXPECT TO PAY DIVIDENDS.

   We have never declared or paid any cash dividends on our capital stock.  We
presently intend to retain future earnings, if any, to finance the expansion of
our business and do not expect to pay any cash dividends in the foreseeable
future.

WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS IN OUR CHARTER, BY-LAWS AND DELAWARE
LAW THAT COULD DELAY OR PREVENT AN ACQUISITION OF OUR COMPANY, EVEN IF THE
ACQUISITION WOULD BE BENEFICIAL TO OUR STOCKHOLDERS.

   Certain provisions of our certificate of incorporation, our by-laws and
Delaware law could make it more difficult for a third party to acquire us, even
if doing so would be beneficial to our stockholders.


RISKS OF DOING BUSINESS OVER THE INTERNET

IF USE OF THE INTERNET AND GROWTH OF THE ONLINE VITAMINS, SUPPLEMENTS, MINERALS
AND OTHER NATURAL AND HEALTHY LIVING PRODUCTS MARKET DO NOT CONTINUE, WE MAY NOT
ACHIEVE THE CRITICAL MASS OF CUSTOMERS NECESSARY FOR SUSTAINING REVENUES AND
ACHIEVING PROFITABLE OPERATIONS.

   Our future revenues and profits, if any, substantially depend upon the
widespread acceptance and use of the Internet as an effective medium of business
and communication by our target consumers.  Rapid growth in the use of and
interest in the Internet has occurred only recently.  As a result, acceptance
and use may not continue to develop at historical rates, and a sufficiently
broad base of consumers may not use the Internet and other online services as a
medium of commerce.  In addition, the Internet may not be accepted as a viable
long-term commercial marketplace for a number of reasons, including potentially
inadequate development of the necessary network infrastructure or delayed
development of enabling technologies and performance improvements.  Our
continued growth will depend, in large part, upon third parties maintaining the
Internet infrastructure to provide a reliable network backbone with the speed,
data capacity, security and hardware necessary for reliable Internet access-and
services.

   Further, the online market for vitamins, supplements, minerals and other
natural and healthy living products is in its infancy, and our participation in
this market began growing only after we launched our redesigned Web site in late
1998.  The market is significantly less developed than the online market for
books, auctions, music, software and numerous other consumer products.  Even if
use of the Internet and electronic commerce continues to increase, the rate of
growth, if any, of the online vitamins, supplements, minerals and other natural
and healthy living



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<PAGE>

products market could be significantly less than the online market for other
products. Our rate of revenue growth and prospects for profitability could
therefore be significantly less than that of other online merchants.

IF WE FAIL TO PROVIDE ADEQUATE ELECTRONIC COMMERCE SECURITY OR FAIL TO CONTROL
CREDIT CARD FRAUD, WE COULD BE SUBJECT TO INCREASED OPERATING COSTS, AS WELL AS
CLAIMS, LITIGATION OR OTHER POTENTIAL LIABILITY.

   Since nearly all of our revenues are derived from credit card transactions,
consumer concerns regarding the security of transactions conducted on our site
and users' privacy may inhibit the growth of use of our site.  To transmit
confidential information securely, such as customer credit card numbers, we rely
on encryption and authentication technology that we license from third parties.
We cannot predict whether we will experience compromises or breaches of the
technologies we use to protect customer transaction data.  Furthermore, our
servers may be vulnerable to computer viruses, physical or electronic break-ins
and similar disruptions.  We may need to expend significant additional capital
and other resources to protect against security breaches or alleviate problems
caused by any such breaches.  We cannot guarantee that security breaches will
not occur.  Any penetration of our network security or misappropriation of our
users' personal or credit card information could subject us to liability.  We
may be liable for claims based on unauthorized purchases with credit card
information, impersonation or other similar fraud claims.  Claims also could be
based on other misuse of personal information, including use for unauthorized
marketing purposes.  These claims could result in costly litigation.

   Under current credit card practices, merchants are liable for fraudulent
credit card transactions where, as is the case with the transactions we process,
the merchant does not obtain a cardholder's signature.  A failure to adequately
control fraudulent credit card transactions could result in increased operating
costs, as well as claims, litigation and other potential liability.

PRIVACY CONCERNS MAY LIMIT THE INFORMATION WE CAN GATHER, WHICH COULD LIMIT THE
EFFECTIVENESS OF OUR SALES AND MARKETING EFFORTS AND CAUSE US TO INCUR
SIGNIFICANT ADDITIONAL EXPENSES.

   Web sites typically place "cookies" on a user's hard drive without the
user's knowledge or consent.  Although some companies refuse to use cookies, we
use them for a variety of reasons, including the collection of data derived from
the user's Internet activity.  We use this data to better target our sales and
marketing efforts to our current and prospective customer base.  Accordingly,
any reduction or limitation in the use of cookies could limit the effectiveness
of our sales and marketing efforts.  Most currently available Web browsers allow
users to remove cookies at any time or to prevent cookies from being stored on
their hard drives.  In addition, some commentators, privacy advocates and
governmental bodies have suggested limiting or eliminating the use of cookies.
For example, the European Union recently adopted a directive addressing data
privacy that may limit the collection and use of certain information regarding
Internet users.  This directive may limit our ability to target advertising or
collect and use information in certain European countries.  In addition, the FTC
and several states have investigated the use by certain Internet companies of
personal information.  We could incur significant additional expenses if new
regulations regarding the use of personal information are introduced or if our
privacy practices are investigated.

OUR BUSINESS IS SUBJECT TO GOVERNMENT REGULATION OF THE INTERNET AND OTHER LEGAL
UNCERTAINTIES WHICH COULD PREVENT OUR BUSINESS FROM GROWING OR EXPOSE US TO
UNANTICIPATED LIABILITIES.

   Existing or future legislation could limit growth in use of the Internet,
which would curtail our revenue growth.  Statutes and regulations directly
applicable to Internet communications, commerce and advertising are becoming
more prevalent.  The law remains largely unsettled, however, even in areas where
there has been legislative action.  It may take years to determine whether and
how existing laws governing intellectual property, privacy, libel and taxation
apply to the Internet, electronic commerce and online advertising.  In addition,
the growth and development of electronic commerce may prompt calls for more
stringent consumer protection laws, both in the United States and abroad.
Congress recently passed




                                      21

<PAGE>

laws regarding online children's privacy, copyrights and taxation. In addition,
we do not currently collect sales or other similar taxes for physical shipments
of goods into states other than Massachusetts and Pennsylvania. However, local,
state or foreign jurisdictions may seek to impose sales tax collection
obligations on us. If one or more states or any foreign country successfully
asserts that we should collect sales or other taxes on the sale of our products,
it could also prevent our business from growing or expose us to unanticipated
liabilities.

RISKS ASSOCIATED WITH THE MARKET FOR OUR COMMON STOCK

OUR OFFICERS AND DIRECTORS CONTROL 23.8% OF OUR COMMON STOCK AND MAY BE ABLE TO
SIGNIFICANTLY INFLUENCE CORPORATE ACTIONS.

   As of March 31, 2000, our executive officers, directors and entities
affiliated with them controlled approximately 23.8% of our common stock.  As a
result, these stockholders, acting together, may be able to significantly
influence all matters requiring approval by our stockholders, including the
election of directors and the approval of mergers or other business combination
transactions.

WE ARE LIKELY TO REQUIRE ADDITIONAL FINANCING AND MAY NOT BE ABLE TO RAISE
ADDITIONAL FINANCING ON FAVORABLE TERMS OR AT ALL.

   We anticipate that we are likely to need additional financing to execute on
our business model within the next nine months or sooner if we need to respond
to business contingencies.  Such contingencies may include the need to:

 .  fund additional advertising expenditures;

 .  develop new or enhance existing site content, features or services;

 .  enhance our operating infrastructure;

 .  respond to competitive pressures; or

 .  acquire complementary businesses or necessary technologies.

   If we raise additional funds through the issuance of equity or convertible
debt securities, the percentage ownership of our stockholders will be reduced,
and these newly-issued securities may have, preferences or privileges senior to
those of existing stockholders.  We cannot assure you that additional financing
will be available on terms favorable to us, or at all.  If adequate funds are
not available or are not available on acceptable terms, our ability to fund our
operations, take advantage of unanticipated opportunities, develop or enhance
our site content, features or services, or otherwise respond to competitive
pressures would be significantly limited.  For a further discussion, please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operation--Liquidity and Capital Resources."

MARKET PRICES OF EMERGING INTERNET COMPANIES HAVE BEEN HIGHLY VOLATILE, AND THE
MARKET FOR OUR STOCK MAY EXHIBIT VOLATILITY AS WELL.

   The stock market has experienced significant price and trading volume
fluctuations, and the market prices of technology companies, particularly
Internet companies, have been extremely volatile. As is frequently the case with
the stocks of such Internet companies, the market price of our common stock has
been, and may continue to be, volatile. Factors such as quarterly fluctuations
in results of operations, variations in levels of advertising spending, the
introduction of new products by us or our competitors, increased competition,
expenses or other difficulties associated with assimilating companies we
acquire, changes in the mix of sales channels, and macroeconomic conditions
generally, may have a significant impact on the market price of our stock. Any
shortfall in revenue or earnings from the levels anticipated by securities
analysts could have an immediate and significant adverse effect on the market
price of our common stock in any given period. In addition, the stock market has
from time to time experienced extreme price and volume fluctuations, which have
particularly affected the market price for many Internet companies and which, on
occasion, have appeared to be unrelated to the


                                      22

<PAGE>

operating performance of such companies. In the past, following periods of
volatility in the market price of a public company's securities, securities
class action litigation has often been instituted against that company. Such
litigation could result in substantial costs and a diversion of management's
attention and resources.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

DERIVATIVE FINANCIAL INSTRUMENTS, OTHER FINANCIAL INSTRUMENTS, AND DERIVATIVE
COMMODITY INSTRUMENTS.

At March 31, 2000, we did not participate in any derivative financial
instruments.  The Company's financial instruments include cash and cash
equivalents, accounts receivable, notes payable, capital lease obligations, and
accounts payable, and are carried at cost or carrying value. These amounts were
not materially different from their fair values. The Company uses a discounted
cash flows methodology to calculate the fair value of the notes payable and
capital leases.  We hold no investment securities that would require disclosure
of market risk.


PRIMARY MARKET RISK EXPOSURE.

Our primary market risk exposure is in the area of interest rate risk.  Our
available cash balances are invested in short-term interest bearing securities.
We believe that our exposure to interest rate fluctuations will continue to be
modest.


                                      23

<PAGE>

                                    PART II

Item 1. Legal Proceedings.

On October 8, 1999, a civil complaint was filed as Joseph Reiners d/b/a Mother
Natures Vitamins v. MotherNature.com, Inc., in the United States District Court
for the District of Minnesota, Civil Action  No. 99-CV-1531 DSD/JMM.  A copy of
the complaint was served on the Company on January 27, 2000 and an Answer and
Counterclaims was filed by the Company on March 2, 2000.  In the lawsuit, the
plaintiff alleges that the Company's use of the MOTHERNATURE.COM & Design logo
is likely to cause confusion as to source or association between the Company's
goods and services and those offered by the plaintiff.  The Company has asserted
counterclaims alleging, among other things, that the plaintiff has violated
unfair competition laws.  The parties are now in the early stages of discovery.

On June 30, 1999, a civil complaint was filed as Ross A. Love v.
MotherNature.com, Inc., Mother Nature's General Store, Inc. and  Michael Barach,
individually, in the Superior Court of Suffolk County, Massachusetts, Case No.
99-3087C.  An amended complaint was filed on August 19, 1999 as Ross A. Love v.
MotherNature.com, Inc. and Michael Barach, individually.  In the lawsuit, the
plaintiff, a founder and former officer and director of the Company, alleges
causes of action including economic duress and breach of fiduciary duty.  Mr.
Love, among other things, alleges that he was compelled under economic duress to
sign an agreement in connection with his termination of employment.  In
addition, Mr. Love claims that we breached our fiduciary duty to him as a
stockholder by allegedly failing to provide him with certain information in
connection with our May 1999 preferred stock financing.  On or about February
10, 2000, Mr. Love stipulated to the dismissal without prejudice of all claims
seeking damages resulting from Mr. Love's lack of participation in the May 1999
preferred stock financing and the dismissal without prejudice of certain claims
asserted against Michael Barach, individually.  On or about April 7, 2000, the
court entered summary judgment in the Company's favor as to Mr. Love's economic
duress claim.  Mr.  Love seeks recovery of actual damages which he alleges to be
in excess of $100,000,000.  We believe that the remaining claims made by Mr.
Love are without merit and intend to defend this lawsuit vigorously.

From time to time, the Company is subject to other legal proceedings and claims
in the ordinary course of business, including claims of alleged infringement of
trademarks and other intellectual property rights.  The Company currently is not
aware of any such legal proceedings or claims, other than those described above,
that it believes will have, individually or in the aggregate, a material adverse
effect on its business, prospects, financial condition and operating results.


Item 2. Changes in Securities and Use of Proceeds.

Our registration statement of Form S-1 under the Securities Act of 1933, as
amended, for our initial public offering became effective on December 9, 1999.
The managing underwriters were Bear, Stearns & Co,. Inc., Hambrecht & Quist, and
Wit Capital Corporation.  Of 4,100,000 shares of common stock offered, all
shares were sold by us and no shares were included by selling security holders.
The initial public offering closed on December 15, 1999.  The aggregate offering
price of our initial public offering was approximately $53.3 million with
proceeds to us, after deducting offering expenses of $4.9 million, of $48.4
million.  During the quarter ended March 31, 2000 we used approximately $9.3
million of the net offering proceeds for operating activities of the business,
primarily for advertising and media expenses, cost of goods for discounted
products related to new customer acquisitions, personnel costs and professional
service fees. During the quarter we made capital investments of $60,000,
primarily for computer equipment and software. Our financing activities included
$23,000 of capital lease payments and payments of our note payable. We also paid
approximately $56,000 for issuance costs of our initial public offering. We have
not used any of the net offering proceeds for construction of plant, building or
facilities, the purchases of real estate, or acquisition of other businesses.
The offering proceeds were not paid directly or indirectly to our directors,
officers or their associates, persons owning 10% or more of any class of our
securities or of our affiliates except for salaries and other monetary
compensation to our officers and a promissory note payable to us from an
executive officer. The use of the proceeds from the offering does not represent
a material change in the use of proceeds described in the registration
statement.



                                      24


<PAGE>

Item 6. Exhibits and Reports on Form 8-K

A. Exhibits

Exhibit No.                       Description
-----------                       -----------

10.1+         Promissory Note between Donald L. Pettini and the Registrant,
              dated May 2, 2000. (filed herewith).

27.1          Financial Data Schedule (filed herewith).

-----------
+ Indicates a management contract or any compensatory plan, contract or
  arrangement.

B. Reports on Form 8-K.

       We did not file any Current Reports on Form 8-K during the quarterly
period ended March 31, 2000.




                                      25


<PAGE>


                                  SIGNATURE

  Pursuant to the requirements of Section 13 or 15(d) 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.


                       MOTHERNATURE.COM, INC.

Date: May 15, 2000

                       By:     /s/ MICHAEL I. BARACH
                               ------------------------------------
                               Michael I. Barach
                               President, Chief Executive Officer and Director
                               (Principal Executive Officer)





                                      26

<PAGE>

                               MotherNature.com
                                   Form 10-Q

A. Exhibits

Exhibit No.   Description

10.1          Promissory Note between Donald L. Pettini and the Registrant,
              dated May 2, 2000. (filed herewith).

27.1          Financial Data Schedule (filed herewith).