<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                  FORM 10-QSB


                [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
                 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
                    For the quarter ended December 31, 2001

                                      or

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


                        Commission File Number 0-23031


                         DYNAMIC HEALTH PRODUCTS, INC.
       (Exact name of small business issuer as specified in its charter)


                 STATE OF FLORIDA                    34-1711778
                 ----------------                    ----------
         (State or other jurisdiction of            (IRS Employer
          incorporation or organization)         Identification No.)


        6925 112/th/ Circle North, Suite 101, Largo, Florida      33773
        ---------------------------------------------------------------
       (Address of principal executive offices)                 (Zip Code)


        Issuer's telephone number, including area code: (727) 456-2200


Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [_] No


The number of shares outstanding of the Issuer's common stock at $.01 par value
as of February 11, 2002 was 2,927,141 (exclusive of Treasury Shares).
<PAGE>

                        PART I - FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS.

                DYNAMIC HEALTH PRODUCTS, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                           December 31,              March 31,
                                                                               2001                    2001
                                                                         ---------------           ------------
                                                                            (Unaudited)              (Audited)
<S>                                                                      <C>                       <C>
                  ASSETS
Current assets:
    Cash and cash equivalents                                            $       651,605           $    1,131,156
    Marketable equity securities, net                                             10,859                   14,665
    Accounts receivable, net                                                      56,423                        -
    Inventories                                                                   96,019                  253,008
    Prepaid expenses                                                              70,770                  167,899
    Other current assets                                                         511,530                   97,316
    Due from affiliates                                                              387                1,235,801
    Due from related parties                                                       1,105                      616
    Notes receivable                                                             257,586                        -
    Notes receivable from affiliates                                              91,486                  145,854
                                                                         ---------------           --------------
Total current assets                                                           1,747,770                3,046,315

Property, plant and equipment, net                                             1,440,495                1,583,529

Intangible assets, net                                                            26,139                  122,156
Investments in unconsolidated affiliates                                       8,106,170                6,958,260
Notes receivable                                                               1,012,291                        -
Note receivable from affiliate                                                   396,614                  373,333
Other assets, net                                                                 11,661                  157,761
                                                                         ---------------           --------------
Total assets                                                             $    12,741,140           $   12,241,354
                                                                         ===============           ==============

                        LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                                     $       172,120           $      149,745
    Other payables                                                                68,993                  239,918
    Current portion of long-term obligations                                      44,230                1,116,591
    Accrued expenses                                                             176,913                  149,462
    Accrued income taxes                                                         410,603                   55,000
    Obligations to affiliates                                                    116,659                    3,609
                                                                         ---------------           --------------
Total current liabilities                                                        989,518                1,714,325

Deferred income taxes                                                          2,905,787                2,551,301
Long-term obligations, less current portion                                      875,781                  907,132
                                                                         ---------------           --------------
Total liabilities                                                              4,771,086                5,172,758
                                                                         ---------------           --------------

Commitments and contingencies

Shareholders' equity:
    Series A Convertible Preferred stock, $.01 par value;
     400,000 shares authorized; 310,000 shares issued
     and outstanding, at face value                                              775,000                  775,000
    Series B 6% Cumulative Convertible Preferred stock,
     $.01 par value; 800,000 shares authorized;
     30,000 shares issued and outstanding, at face value                          75,000                   75,000
    Common stock, $.01 par value; 20,000,000 shares authorized;
     2,917,141 shares issued and outstanding                                      29,171                   29,171
    Additional paid-in capital                                                 1,861,580                1,861,580
    Retained earnings                                                          5,301,202                4,414,421
    Accumulated other comprehensive income:
      Unrealized losses on marketable equity securities                          (71,899)                 (86,576)
                                                                         ---------------           --------------
Total shareholders' equity                                                     7,970,054                7,068,596
                                                                         ---------------           --------------
Total liabilities and shareholders' equity                               $    12,741,140           $   12,241,354
                                                                         ===============           ==============
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                      -2-
<PAGE>

                DYNAMIC HEALTH PRODUCTS, INC. AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  Three Months Ended                     Nine Months Ended
                                                                     December 31,                          December 31,
                                                            ------------------------------      ---------------------------------
                                                                2001             2000                2001               2000
                                                            ------------    --------------      --------------     ---------------
<S>                                                         <C>             <C>                 <C>                <C>
Revenues:
     Distribution                                           $    749,617    $     1,397,189     $    1,380,795     $     4,011,613
     Manufacturing                                                     -            531,907                  -           2,247,123
                                                            ------------    ---------------     --------------     ---------------
Total revenues                                                   749,617          1,929,096          1,380,795           6,258,736
                                                            ------------    ---------------     --------------     ---------------
Cost of goods sold:
     Distribution                                                253,945            985,107            592,971           1,550,090
     Manufacturing                                                     -            342,521                  -           1,897,872
                                                            ------------    ---------------     --------------     ---------------
Total cost of goods sold                                         253,945          1,327,628            592,971           3,447,962
                                                            ------------    ---------------     --------------     ---------------
Gross profit:
     Distribution                                                495,672            412,082            787,824           2,461,523
     Manufacturing                                                     -            189,386                  -             349,251
                                                            ------------    ---------------     --------------     ---------------
Total gross profit                                               495,672            601,468            787,824           2,810,774
                                                            ------------    ---------------     --------------     ---------------
Selling, general and
     administrative expenses                                     942,957            773,548          1,903,228           2,884,559
                                                            ------------    ---------------     --------------     ---------------
Operating income (loss) before
     other income and expense                                   (447,285)          (172,080)        (1,115,404)            (73,785)

Other income (expense):
     Interest income                                              23,811             24,228             63,794              56,210
     Preferred share dividends                                         -             22,083                  -              22,083
     Gain on sale of securities to related parties                     -            100,000                  -             100,000
     Gain on sale of subsidiary                                1,584,318                  -          1,584,318                   -
     Gain on transfer of equity securities                       301,107                  -            301,107                   -
     Gain on sale of assets                                            -                  -                  -             424,791
     Other income and expenses, net                              139,608            118,801            412,445             403,103
     Losses on marketable equity securities, net                       -           (156,960)           (17,503)           (156,960)
     Equity in income (loss) of affiliated companies              42,132           (997,117)           590,270          (1,621,344)
     Equity in loss of subsidiary through date of sale           (93,985)                 -            (93,985)                  -
     Interest expense                                            (34,498)           (83,673)          (125,867)           (323,962)
                                                            ------------    ---------------     --------------     ---------------
Total other income (expense)                                   1,962,493           (972,638)         2,714,579          (1,096,079)
                                                            ------------    ---------------     --------------     ---------------
Income (loss) before income taxes                              1,515,208         (1,144,718)         1,599,175          (1,169,864)

Income taxes                                                     708,719                  -            709,019                   -
                                                            ------------    ---------------     --------------     ---------------
Net income (loss)                                                806,489         (1,144,718)           890,156          (1,169,864)

Preferred stock dividends                                          1,125              1,125              3,375               3,375
                                                            ------------    ---------------     --------------     ---------------
Net income (loss) available
     to common shareholders                                 $    805,364    $    (1,145,843)    $      886,781     $    (1,173,239)
                                                            ============    ===============     ==============     ===============
Basic income (loss) per share                               $       0.28    $         (0.39)    $         0.30     $         (0.40)
                                                            ============    ===============     ==============     ===============
Basic weighted average number of
     common shares outstanding                                 2,917,141          2,917,141          2,917,141           2,917,174
                                                            ============    ===============     ==============     ===============
Diluted income (loss) per share                             $       0.28    $         (0.39)    $         0.30     $         (0.40)
                                                            ============    ===============     ==============     ===============
Diluted weighted average number of
     common shares outstanding                                 2,917,141          2,917,141          2,917,141           2,917,174
                                                            ============    ===============     ==============     ===============
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                      -3-
<PAGE>

                DYNAMIC HEALTH PRODUCTS, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
                      Nine Months Ended December 31, 2001


<TABLE>
<CAPTION>
                                                        Series A                   Series B
                                                    Preferred Stock             Preferred Stock               Common Stock
                                                    ---------------             ---------------               ------------
                                                 Shares         Dollars       Shares      Dollars         Shares        Dollars
                                              ---------------------------------------------------------------------------------
<S>                                           <C>               <C>           <C>         <C>            <C>            <C>
Balances at
  March 31, 2001 (Audited)                       310,000         $775,000      30,000      $75,000       2,917,141      $29,171

Dividends to preferred shareholders                    -                -           -            -               -            -

Net income                                             -                -           -            -               -            -

Other comprehensive income                             -                -           -            -               -            -

Balances at
                                              ---------------------------------------------------------------------------------
  December 31, 2001 (Unaudited)                  310,000         $775,000      30,000      $75,000       2,917,141      $29,171
                                              =================================================================================
<CAPTION>
                                                                                       Accumulated Other
                                                                                     Comprehensive Income
                                                                                     --------------------
                                                                                          Unrealized
                                              Additional                                   Losses on                  Total
                                                Paid-in            Retained            Marketable Equity          Shareholders'
                                                Capital            Earnings               Securities                 Equity
                                              --------------------------------------------------------------------------------
<S>                                           <C>                 <C>                  <C>                       <C>
Balances at
  March 31, 2001 (Audited)                     $1,861,580         $4,414,421                    $(86,576)            $7,068,596

Dividends to preferred shareholders                     -             (3,375)                          -                 (3,375)

Net income                                              -            890,156                           -                890,156

Other comprehensive income                              -                  -                      14,677                 14,677

Balances at
                                              ---------------------------------------------------------------------------------
  December 31, 2001 (Unaudited)                $1,861,580         $5,301,202                    $(71,899)            $7,970,054
                                              =================================================================================
</TABLE>


    See accompanying notes to condensed consolidated financial statements.

                                      -4-
<PAGE>

                   DYNAMIC HEALTH PRODUCTS, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                             Nine Months Ended
                                                                                                 December 31,
                                                                                    ----------------------------------------
                                                                                           2001                2000
                                                                                    -----------------   --------------------
<S>                                                                                <C>                  <C>
Cash flows from operating activities:
      Net income (loss)                                                               $       890,156   $      (1,169,864)

      Adjustments to reconcile net income (loss) to net
        cash from operating activities:
           Depreciation and amortization                                                       79,969             262,812
           Write off of goodwill                                                               95,085                   -
           Equity in (income) loss of affiliated companies                                   (590,270)          1,621,344
           Equity in loss of subsidiary through date of sale                                   93,985                   -
           Gain on sale of subsidiary                                                      (1,584,318)                  -
           Gain on sale of assets                                                                   -            (424,791)
           Gain on sale of securities to related parties                                            -            (100,000)
           Gain on transfer of equity securities                                             (301,107)                  -
           Losses on sales of marketable equity securities, net                                17,503             156,960
           Changes in operating assets and liabilities:
                Accounts receivable                                                           (56,423)            174,620
                Inventories                                                                    12,098            (449,923)
                Due to/from affiliates, net                                                    56,748              43,900
                Prepaid expenses                                                               14,579              82,849
                Other current assets                                                          (34,345)           (884,353)
                Other assets                                                                   48,631            (370,392)
                Accounts payable                                                               58,012              54,015
                Other payables                                                                 27,581             485,144
                Accrued expenses                                                               58,098              55,774
                Accrued income taxes                                                          112,540                   -
                Deferred income taxes                                                         596,179                   -
                                                                                    -----------------   --------------------
Net cash used in operating activities                                                        (405,299)           (461,905)
                                                                                    -----------------   --------------------
Cash flows from investing activities:
      Purchases of property and equipment                                                      (3,254)           (150,751)
      Cash transferred with sale of subsidiary                                                 (9,605)             85,283
      Proceeds from transfer of assets                                                              -             745,000
      Purchase of investment in common stock                                                  (83,341)                  -
      Conversion of restricted certificate of deposit                                               -             527,597
      Purchases of marketable equity securities                                                     -             (47,160)
      Proceeds from sale of marketable equity securities                                        2,351             250,574
      Common stock repurchase                                                                       -                (208)
      Proceeds from related party receivables                                                  23,406                   -
                                                                                    -----------------   --------------------
Net cash provided by (used in) investing activities                                           (70,443)          1,410,335
                                                                                    -----------------   --------------------
Cash flows from financing activities:
      Net change in revolving line of credit agreements                                             -            (117,378)
      Proceeds from issuance of long-term obligations                                          15,832              95,810
      Payments of long-term obligations                                                       (31,261)           (495,660)
      Proceeds from issuance of related party obligations                                      11,620             105,263
      Payments of related party obligations                                                         -             (29,000)
                                                                                    -----------------   --------------------
Net cash used in financing activities                                                          (3,809)           (440,965)
                                                                                    -----------------   --------------------
Net increase (decrease) in cash                                                              (479,551)            507,465

Cash and cash equivalents at beginning of period                                            1,131,156             693,595
                                                                                    -----------------   --------------------
Cash and cash equivalents at end of period                                            $       651,605   $       1,201,060
                                                                                    =================   ====================
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                      -5-
<PAGE>

                DYNAMIC HEALTH PRODUCTS, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS -
                             CONTINUED (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                Nine Months Ended
                                                                                   December 31,
                                                                =====================================================
                                                                            2001                       2000
                                                                ==========================   ========================
<S>                                                             <C>                         <C>
Supplemental disclosure of cash flow information:
     Cash paid during the period for interest                     $                89,163     $              313,087
                                                                ==========================   ========================
     Cash paid during the period for income taxes                 $                   300     $                    -
                                                                ==========================   ========================

Supplemental schedule of non-cash investing activities:
     Note received from sale of subsidiary                        $             1,000,000     $                    -
                                                                ==========================   ========================
     Notes received from affiliate for sale of assets             $                     -     $              425,000
                                                                ==========================   ========================
     Notes received from related parties for sale
       of securities                                              $                     -     $              100,000
                                                                ==========================   ========================

Supplemental schedule of non-cash financing activities:
     Transfer of equity securities in exchange for
        settlement of notes payable and accrued interest          $             1,131,331     $                    -
                                                                ==========================   ========================
     Obligation to affiliate incurred for purchase of
       investment in common stock                                 $               116,659     $                    -
                                                                ==========================   ========================
     Accrual of preferred stock dividends                         $                 3,375     $                3,375
                                                                ==========================   ========================
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                      -6-
<PAGE>

                DYNAMIC HEALTH PRODUCTS, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                  FOR THE THREE MONTHS AND NINE MONTHS ENDED
                    DECEMBER 31, 2001 AND DECEMBER 31, 2000

NOTE A-BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with U.S. Generally Accepted Accounting
Principles for interim financial information and with the instruction to Form
10-QSB and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by U.S. Generally Accepted Accounting
Principles for complete consolidated financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three month and nine month periods ended December 31, 2001 and 2000 are not
necessarily indicative of the results that may be expected for the year ending
March 31, 2002. For further information, refer to the consolidated financial
statements and footnotes included in the Company's Form 10-KSB for the year
ended March 31, 2001.

         Certain reclassifications have been made to the financial statements as
of and for the three months and nine months ended December 31, 2000, and as of
March 31, 2001, to conform to the presentation as of and for the three months
and nine months ended December 31, 2001.

NOTE B-PRINCIPLES OF CONSOLIDATION

         The condensed consolidated financial statements as of and for the three
months and nine months ended December 31, 2001 include the accounts of Dynamic
Health Products, Inc. and its wholly-owned subsidiaries (collectively the
"Company"), J. Labs, Inc. ("JLabs"), Dynamic Life Products, Inc. ("DLP"), Herbal
Health Products, Inc. ("Herbal"), Dynamic Life, Inc. and its subsidiaries
Dynamic Life Asia, LLC and Dynamic Life Korea, Ltd. (collectively "Dynamic
Life"), Dynamic Financials Corporation and its subsidiary Bryan Capital Limited
Partnership (collectively "Dynamic Financials"), and Today's Drug, Inc. The
Company sold its subsidiary, Dynamic Life Korea, Ltd. ("Dynamic Korea") on
November 30, 2001. Dynamic Korea has a year end of December 31. Accordingly, the
condensed consolidated financial statements as of and for the three months and
nine months ended December 31, 2001 include the results of operations of Dynamic
Korea from July 1, 2001 through September 30, 2001 and January 1, 2001 through
September 30, 2001, respectively. Significant intercompany balances and
transactions have been eliminated in consolidation.

         The condensed consolidated financial statements as of and for the three
months and nine months ended December 31, 2000 include the accounts of Dynamic
Health Products, Inc. and its wholly-owned subsidiaries, Go2Pharmacy, Inc.
("Go2"), JLabs, DLP, Herbal, Dynamic Life, Dynamic Financials and Today's Drug,
Inc. The Company's subsidiary, Go2, filed Registration Statement No. 333-92849
on Form SB-2 with the Securities and Exchange Commission, which became effective
on November 7, 2000, accordingly, the condensed consolidated financial
statements as of and for the three months and nine months ended December 31,
2000 include the results of operations of Go2 through November 7, 2000. The
condensed consolidated financial statements as of and for the three months and
nine months ended December 31, 2000 include the results of operations of Dynamic
Korea from July 1, 2000 through September 30, 2000 and April 1, 2000 through
September 30, 2000, respectively. Dynamic Korea commenced its operations in
April 2000. Significant intercompany balances and transactions have been
eliminated in consolidation.

                                      -7-
<PAGE>

NOTE C-RECENTLY ISSUED AUTHORITATIVE GUIDANCE

     In December 1999, Staff Accounting Bulletin 101 ("SAB 101"), "Revenue
Recognition in Financial Statements," was issued by the Securities and Exchange
Commission ("SEC"). SAB 101 provides guidance related to revenue recognition
issues based on interpretations and practices followed by the SEC. Management
has determined that the adoption of SAB 101 did not have a material impact on
its December 31, 2001 condensed consolidated financial statements.

NOTE D-INVESTMENTS IN UNCONSOLIDATED AFFILIATES

     Investment in net assets of an affiliated company, DrugMax, Inc.
("DrugMax") accounted for under the equity method amounted to $7,906,635 as of
December 31, 2001 with $50,708 and ($174,829), and $600,235 and ($799,056) being
recorded as the Company's share of their income (loss) for the three months and
nine months ended December 31, 2001 and 2000, respectively.

     The combined results of operations for the three months and nine months
ended December 31, 2001 and 2000, and the financial position of the Company's
equity-basis affiliate, DrugMax, Inc. as of December 31, 2001 are summarized
below:

<TABLE>
<CAPTION>
                                                       Three Months               Nine Months
                                                           Ended                    Ended
                                                        December 31,              December 31,
                                                        ------------              ------------
                                                     2001         2000          2001         2000
                                                     ----         ----          ----         ----
                                                 (Unaudited)  (Unaudited)   (Unaudited)  (Unaudited)
     <S>                                        <C>            <C>           <C>           <C>
     Condensed Income Statement Information:
       Net sales                                 $63,735,331  $54,697,214  $200,799,344  $122,473,558
       Gross profit                                2,121,733    1,631,381     5,599,849     3,923,650
       Net income (loss)                             377,010     (606,204)    1,996,126    (2,753,648)
</TABLE>

                                                             December 31, 2001
                                                             -----------------
                                                                (Unaudited)
     Condensed Balance Sheet Information:

       Current assets                                             $ 35,180,956
       Non-current assets                                           28,073,085
       Current liabilities                                          31,170,657
       Non-current liabilities                                         647,784
       Total shareholders' equity                                   31,435,600

     Investment in net assets of an affiliated company, Tribeca Beverage Company
("Tribeca") accounted for under the equity method amounted to $190,035 as of
December 31, 2001 with $8,576 and $9,965 being recorded as the Company's share
of their loss for the three months and nine months ended December 31, 2001. As
the investment did not exist during the comparable December 31, 2000 periods
presented, no financial information for the Company's equity-basis affiliate is
provided as of and for the three months and nine months ended December 31, 2000.

                                      -8-
<PAGE>

NOTE E-COMPREHENSIVE INCOME

         The Company utilizes the guidance provided by Statement of Financial
Accounting Standards No. 130 ("SFAS 130"), Reporting Comprehensive Income, which
became effective for the Company for the fiscal year ended March 31, 1999. SFAS
130 establishes standards for reporting and display of comprehensive income
within the general purpose financial statements and requires reclassification of
applicable financial statement components for any prior period comparative
financial statement components. The Company has implemented SFAS 130 as of and
for the three months and nine months ended December 31, 2001 based on
comprehensive income transactions being present. The Company has elected to
present the comprehensive income items within the shareholders' equity section
of the balance sheet in addition to presenting a consolidated statement of
changes in equity statement. The following presents comprehensive income as of
December 31, 2001:

                                      Before-Tax  Tax (Expense)   Net-of-Tax
                                        Amount       Benefit        Amount
                                        ------       -------        ------
Unrealized losses on marketable
    equity securities held for sale  $      3,806  $    (1,370)   $     2,436
                                     ------------  -----------    -----------

Other comprehensive income           $      3,806  $    (1,370)   $     2,436
                                     ============  ===========    ===========

NOTE F-SEGMENT INFORMATION

         As of and for the three months and nine months ended December 31, 2000,
the Company had two industry segments: Distribution and Manufacturing. The
channels of distribution for its proprietary products and the channels of
distribution of the products it manufactures for others include health food,
drug, convenience and mass market stores, and direct marketing through
distributors and catalog sales throughout the United States. The Company has two
manufacturing facilities located in Largo, Florida. In addition to being
presented separately, intersegment financial data is included in the gross
segment amounts disclosed below in order to present accurate segment
information, where as on the condensed consolidated balance sheets and
statements of operations, all intercompany transactions have been eliminated in
consolidation.

         The Company's subsidiary, Go2, filed Registration Statement No. 333-
92849 on Form SB-2 with the Securities and Exchange Commission, which became
effective on November 7, 2000. Go2 has manufacturing facilities located in
Largo, Florida. Based on an effective registration statement for this
subsidiary, Go2's financial segment data related to its revenues, gross profits,
operating income (loss) and its assets are only included as of and for the
period from October 1, 2000 through November 7, 2000 and April 1, 2000 through
November 7, 2000.

         Presented below is condensed segment information as of and for the
three months and nine months ended December 31, 2001 and 2000, as required by
SFAS 131, Disclosures about Segments of an Enterprise and Related Information:

                                      -9-
<PAGE>

<TABLE>
<CAPTION>
                                       Three Months                 Nine Months
                                           Ended                       Ended
                                       December 31,                 December 31,
                                       ------------                 ------------
                                    2001         2000            2001          2000
                                    ----         ----            ----          ----
                                (Unaudited)   (Unaudited)    (Unaudited)   (Unaudited)
<S>                            <C>            <C>           <C>            <C>
     Revenues:
       Distribution            $    492,136   $   119,155   $    672,446   $    877,598
       Distribution - Korea         257,481     1,278,034        708,349      3,134,015
       Manufacturing                      -       535,194              -      3,085,344
       Intersegment                       -         3,287              -        838,221
     Gross profit:
       Distribution                 391,617        56,584        514,571        382,877
       Distribution - Korea          94,928       339,107        213,525        995,011
       Manufacturing                      -       192,673              -      1,187,472
     Operating income (loss):
       Distribution                (179,554)      (31,518)      (236,018)      (119,725)
       Distribution - Korea         (88,315)      (18,774)      (384,836)       139,365
       Manufacturing                      -       (21,096)             -        (36,283)
</TABLE>

                                           December 31,          December 31,
                                               2001                  2000
                                               ----                  ----
                                           (Unaudited)           (Unaudited)
     Assets:
       Distribution                        $   739,684           $    697,696
       Distribution - Korea                          -              1,346,314
       Manufacturing                                 -                      -
       Intersegment                                  -                      -

NOTE G-INCOME TAXES

     The Company utilizes the guidance provided by Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), Accounting for Income Taxes. Under
SFAS 109, the Company uses the asset and liability method which recognizes the
amount of current and deferred taxes payable or refundable based on transactions
recorded as of and for the period presented in the consolidated financial
statements as determined by the enacted tax laws and tax rates. The company has
a current and a deferred tax liability recorded as of December 31, 2001 of
$410,603 and $2,905,787, respectively, primarily as a result of the differences
arising between book and tax basis of the gain on the November 1999 sale of
Becan Distributors, Inc.

     In November 2001, the Company incurred deferred tax liabilities in the
amount of $596,179 as a result of the differences arising between book and tax
basis of the sale of the Company's wholly-owned foreign subsidiary, Dynamic Life
Korea, Ltd., on November 30, 2001. For book purposes, the sale was recorded at a
gain of approximately $1.6 million, whereas for tax purposes there was no
recognized gain and the deferred tax gain was approximately $1.6 million. The
deferred tax liability is the difference between income tax as calculated on
the book gain versus taxable gain.

                                      -10-
<PAGE>

     In December 2001, the Company incurred an accrued tax liability of $355,604
and a deferred tax benefit of $243,063 as a result of the differences arising
between book and tax basis of 225,000 shares of common stock of DrugMax
transferred in settlement of approximately $1.1 million of principal and accrued
interest on the notes payable. For book purposes, the transfer was recorded at a
gain of approximately $301,000, whereas for tax purposes there was a recognized
gain of $945,000. The deferred tax benefit is the difference between income tax
as calculated on the book gain versus taxable gain.

NOTE H-RELATED PARTY TRANSACTIONS

     In July 2000, Herbal sold substantially all of its assets relating to the
distribution of veterinary products, which primarily consisted of its inventory
and its customer base to Vertical Health Solutions, Inc. ("Vertical"), formerly
Labelclick.com, Inc., an affiliate of the Company, for a total sales price of
$500,000. The Company owns approximately 4.5% of the issued and outstanding
common stock of Vertical. Payment was in the form of $75,000 in cash and two
promissory notes totaling $425,000. The first promissory note was in the
principal amount of $75,000 and bears interest at 10% per annum. Principal and
interest were payable monthly commencing November 27, 2000, in the amount of
$7,500 per month until the note is paid in full. The second promissory note was
in the principal amount of $350,000 and bears interest at 10% per annum.
Principal and interest were payable (i) upon the completion of an initial public
offering of common stock of Vertical which shall be made within twelve months
from July 31, 2000, or (ii) if the note is not paid in full within twelve months
from July 31, 2000, then payments were to be made monthly in the amount of
$12,372.99 per month until the note was paid in full. The notes are secured by
the business assets of Vertical. On October 1, 2001, the promissory notes were
amended to reflect new terms of repayment. Under the new terms, the entire
amount of unpaid principal and interest shall be due and payable on or before
one year of the date of the note addendum or upon the completion of an initial
public offering of common stock of Vertical. Interest is now due and payable on
the last day of each month at the rate of 10% per annum on the remaining
principal balances. As of December 31, 2001, the outstanding principal balance
on the notes was $419,248 and is included in notes receivable from affiliate.

     At November 7, 2000, the Company held 150,000 shares of redeemable series A
preferred stock of Go2, which constituted all of the issued and outstanding
shares of redeemable series A preferred stock of Go2. In December 2000, the
Company sold the 150,000 shares of redeemable series A preferred stock for a
total sales price of $100,000, to BJ Capital, Ltd., an affiliate of Jugal K.
Taneja, the Chairman of the Board of the Company and an affiliate of William
LaGamba, the Chief Operating Officer and President of DrugMax. Messrs. Taneja
and LaGamba are principal shareholders of the Company. Payment is in the form of
a promissory note receivable in the principal amount of $100,000, which bears
interest at a rate of 10% per annum. There is no prepayment penalty on the note.
Principal and interest on the note are due and payable quarterly commencing
March 31, 2001, in the amount of $37,500 and $12,500 payable quarterly
thereafter until the note is paid in full. As of December 31, 2001, the
outstanding principal balance on the note was $31,613.

     On October 1, 1999, the Company entered into a lease agreement with Go2,
whereby Go2 agreed to lease the Company's land and building situated in Largo,
Florida for a term of ten years at approximately $16,000 monthly. The lease
provides for an annual cost-of-living increase. Management considers these lease
terms to be comparable to those of unrelated third parties.

                                      -11-
<PAGE>

     On November 26, 1999, pursuant to an Agreement and Plan of Reorganization
entered into on September 8, 1999 with DrugMax.com, Inc., formerly
Nutriceuticals.com Corporation, the Company sold all of the shares of capital
stock of Becan Distributors, Inc. and its subsidiary Discount Rx, Inc.
(collectively "Becan") to DrugMax. The Company received 2,000,000 shares of
restricted common stock of DrugMax, with an estimated fair value of $10.00 per
share based on the November 27, 1999 Initial Public Offering price, and
$2,000,000 cash in exchange for all of the issued and outstanding shares of
stock of Becan. Additional consideration of 500,000 restricted shares of common
stock, $.001 par value, of DrugMax were released to the Company in July 2001
because Becan attained certain revenue and gross margin goals. The estimated
fair value of the 500,000 shares of $1,188,751 was accrued as of March 31, 2001
and was included in amounts due from affiliate as of March 31, 2001. The shares
were subsequently received and the estimated fair value of the 500,000 shares of
$1,188,751 is included in investments in unconsolidated affiliates as of
December 31, 2001. Jugal K. Taneja, a principal shareholder, Chairman of the
Board, and Chief Executive Officer of the Company is also a principal
shareholder, Chairman of the Board and Chief Executive Officer of DrugMax.
William L. LaGamba, the Chief Operating Officer and President of DrugMax is also
a principal shareholder of the Company.

     In July 2001, the Company purchased 20%, or 200,000 shares of common stock,
of Tribeca Beverage Company, an affiliate of Jugal K. Taneja, the Company's
Chairman and Mandeep K. Taneja, the Company's President, for a total purchase
price of $200,000. Tribeca is in the business of developing, marketing and
distributing non-alcoholic beverages. The investment is accounted for under the
equity method. As of December 31, 2001, the investment amounted to $190,035 and
is included in investments in unconsolidated affiliates. The balance of the
obligation due to Tribeca for the purchase of the investment as of December 31,
2001 was $116,659, and is included in obligations to affiliates.

     Amounts due to and from affiliates represent balances owed by or amounts
owed to the Company for sales occurring in the normal course of business.
Amounts due to and amounts due from these affiliates are in the nature of trade
payables or receivables and fluctuate based on sales volume and payments
received.

NOTE I-SALE OF SUBSIDIARY

     Effective November 30, 2001, the Company sold all of the issued and
outstanding shares of capital stock of Dynamic Life Korea, Ltd., a wholly-owned
foreign subsidiary of the Company, to the General Director of Dynamic Korea, Mr.
Y.J. Lee of Seoul, South Korea, for a total sales price of $1,000,000 U.S.
Dollars. The sales price was based upon the estimated value of Dynamic Korea and
was approved by unanimous vote of the Board of Directors of the Company.

     The sale was accomplished in accordance with the terms of a Stock Purchase
Agreement dated November 16, 2001, by and between Mr. Y.J. Lee and the Company.
Payment was in the form of a promissory note in the principal amount of
$1,000,000 U.S. Dollars. The note bears interest at 8.5% per annum. Principal
and interest are payable monthly in the amount of $27,777.77 per month for 36
months, commencing from the earlier of the time Dynamic Korea starts making a
profit or twelve months from November 16, 2001, with the balance of any unpaid
principal and interest being paid in full on or before December 31, 2004. The
note is secured by the business assets of Dynamic Korea.

                                      -12-
<PAGE>

NOTE J-SUBSEQUENT EVENTS

     In January 2002, the Company issued 10,000 shares of common stock of the
Company. The 10,000 shares of common stock were issued in exchange for 10,000
shares of Series B 6% Cumulative Convertible Preferred Stock of the Company,
which shares were issued in conjunction with a private placement undertaken in
1998.

                                      -13-
<PAGE>

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

         The following management discussion and analysis should be read in
conjunction with the Condensed Consolidated Financial Statements and Notes
thereto presented elsewhere in this Form 10-QSB. The discussion is based upon
such condensed consolidated financial statements that have been prepared in
accordance with U.S. Generally Accepted Accounting Principles.

         The statements contained in this Report that are not historical are
forward-looking statements, including statements regarding the Company's
expectations, intentions, beliefs or strategies regarding the future.
Forward-looking statements include the Company's statements regarding liquidity,
anticipated cash needs and availability and anticipated expense levels. All
forward-looking statements included in this Report are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statements. It is important to
note that the Company's actual results could differ materially from those in
such forward-looking statements. Additionally, the following discussion and
analysis should be read in conjunction with the Condensed Consolidated Financial
Statements and notes thereto appearing elsewhere in this Report. The discussion
is based upon such condensed consolidated financial statements which have been
prepared in accordance with U.S. Generally Accepted Accounting Principles.

Overview

         The Company derives its revenues from wholesaling and distributing a
wide variety of non-prescription dietary supplements, and health and beauty care
products. Revenues are billed and recognized as product is shipped, net of
discounts, allowances, returns and credits.

         Cost of goods sold is comprised of direct product costs, direct
personnel compensation and other statutory benefits and indirect costs relating
to labor to support the warehousing and shipping of products. Research and
development expenses are charged against cost of goods sold as incurred and are
not material to the Company's operations. Selling, general and administrative
costs include management and general office salaries, advertising and
promotional expenses, sales and marketing and other indirect operating costs.
Interest and other income (expense) consists primarily of interest expense
associated with borrowings to finance capital and other working capital needs.

         In February 2000, the Company formed Dynamic Life Korea, Ltd., as a
Korean corporation, to market the Company's products to distributors in Korea.
Dynamic Korea has a year end of December 31. Accordingly, the condensed
consolidated financial statements as of and for the three months and nine months
ended December 31, 2001 include the results of operations of Dynamic Korea from
July 1, 2001 through September 30, 2001 and from January 1, 2001 through
September 30, 2001, respectively. On November 30, 2001, the Company subsequently
sold Dynamic Korea. Dynamic Korea commenced its operations in April 2000,
therefor the condensed consolidated financial statements as of and for the three
months and nine months ended December 31, 2000 include the results of operations
of Dynamic Korea from July 1, 2000 through September 30, 2000 and from April 1,
2000 through September 30, 2000, respectively.

         In November 2000, the Securities and Exchange Commission declared Go2's
registration of 1,000,000 shares of its common stock to be effective. Go2,
formerly a significant subsidiary of the Company, is a manufacturer of
non-prescription dietary supplements, and health and beauty care products. The
registration was affected through the filing of Registration Statement No.
333-92849 on

                                      -14-
<PAGE>

Form SB-2 with the Securities and Exchange Commission. Go2's initial public
offering, pursuant to its registration, was successfully completed on November
14, 2000. Prior to the offering, the Company owned all of the issued and
outstanding common stock of Go2. On March 29, 2001, the Company distributed
2,324,984 shares of Go2 common stock to its shareholders. The consolidated
financial statements for the three months and nine months ended December 31,
2000 include the results of operations for Go2.

Results of Operations

Three and Nine Months Ended December 31, 2001 Compared To Three And Nine Months
Ended December 31, 2000

         Revenues. Total revenues decreased $1.2 million, or 61.1%, to $750,000
and $4.9 million, or 77.9%, to $1.4 million, respectively, for the three months
and nine months ended December 31, 2001, as compared to $1.9 million and $6.3
million, respectively, for the three months and nine months ended December 31,
2000. Distribution revenues decreased $648,000, or 46.3%, to $750,000 and $2.6
million, or 65.6%, to $1.4 million, respectively, for the three months and nine
months ended December 31, 2001, as compared to $1.4 million and $4.0 million,
respectively, for the three months and nine months ended December 31, 2000. The
decrease in distribution revenues was primarily attributable to the absence of
revenues associated with Breakthrough and decreased revenues associated with
Dynamic Korea, due to increases in Korean competition and government regulation.
Manufacturing revenues were $532,000 and $2.2 million, respectively, for the
three months and nine months ended December 31, 2000. There were no
manufacturing revenues for the three months and nine months ended December 31,
2001 due to the November 7, 2000 spin-off of Go2, the Company's manufacturing
subsidiary.

         Gross profit. Total gross profit decreased $106,000, or 17.6%, to
$496,000 and $2.0 million, or 72.0%, to $788,000, respectively, for the three
months and nine months ended December 31, 2001, as compared to $601,000 and $2.8
million, respectively, for the three months and nine months ended December 31,
2000. Gross margin increased to 66.1% and 57.1%, respectively, for the three
months and nine months ended December 31, 2001, from 31.2% and 44.9%,
respectively, for the three months and nine months ended December 31, 2000.
Distribution gross profit increased $84,000, or 20.3%, to $496,000 for the three
months ended December 31, 2001 as compared to $412,000 for the three months
ended December 31, 2000. For the nine months ended December 31, 2001,
distribution gross profit decreased $1.7 million, or 68.0%, to $788,000 as
compared to $2.5 million for the nine months ended December 31, 2000. For the
three months ended December 31, 2001, distribution gross margin increased to
66.1%, from 29.5% for the three months ended December 31, 2000. The increase in
distribution gross margin for the three months ended December 31, 2001, as
compared to the three months ended December 31, 2000, was primarily attributable
to a change in the mix of sales in conjunction with the introduction of new
products, which yield a higher gross margin. For the nine months ended December
31, 2001, distribution gross margin decreased to 57.1%, from 61.4% for the nine
months ended December 31, 2000. The decrease in gross margin for the nine months
ended December 31, 2001, as compared to the nine months ended December 31, 2000,
was primarily attributable to the decrease in revenues during such period.
Manufacturing gross profit was $189,000 and $349,000, respectively, for the
three months and nine months ended December 31, 2000. There was no manufacturing
gross profit for the three months and nine months ended December 31, 2001 due to
the November 7, 2000 spin-off of Go2.

                                      -15-
<PAGE>

         Selling, general and administrative expenses. Selling, general and
administrative expenses consist primarily of advertising and promotional
expenses; personnel costs related to general management functions, finance,
accounting and information systems, payroll expenses and sales commissions;
professional fees related to legal, audit and tax matters; and depreciation and
amortization expense. Selling, general and administrative expenses increased
$169,000, or 21.9%, to $943,000 for the three months ended December 31, 2001 as
compared to $774,000 for the three months ended December 31, 2000. The increase
was primarily due increased advertising and promotional expenses during such
period, and the write off of goodwill of $95,000, associated with Dynamic Life,
and was partially offset by the absence of selling, general and administrative
expenses associated with Go2, subsequent to November 7, 2000. For the nine
months ended December 31, 2001, selling, general and administrative expenses
decreased $981,000, or 34.0%, to $1.9 million as compared to $2.9 million for
the nine months ended December 31, 2001. The decrease was primarily due to the
absence of selling, general and administrative expenses associated with Go2,
subsequent to November 7, 2000, and was partially offset by an increase in
advertising and promotional expenses, as well as payroll expenses and costs
associated with fringe benefits. As a percentage of sales, selling, general and
administrative expenses increased to 125.8% and 137.8%, respectively, for the
three months and nine months ended December 31, 2001, from 40.1% and 46.1%,
respectively, for the three months and nine months ended December 31, 2000.

         Interest income (expense), net. Interest expense, net of interest
income, decreased $49,000 to $11,000 and $206,000 to $62,000, respectively, for
the three months and nine months ended December 31, 2001, from $59,000 and
$268,000, respectively, for the three months and nine months ended December 31,
2000. The decrease in interest expense was a result of increases in principal
payments on outstanding obligations, as well as the absence of interest expense
associated with Go2, subsequent to November 7, 2000.

         Income taxes. At December 31, 2001, the Company had accrued income
taxes of $411,000 and a deferred income tax liability of $2.9 million, primarily
associated with the November 1999 gain on the sale of Becan.

         Management believes that there was no material effect on operations or
the financial condition of the Company as a result of inflation for the three
months and nine months ended December 31, 2001 and 2000. Management also
believes that its business is not seasonal; however, significant promotional
activities can have a direct impact on sales volume in any given quarter.

Liquidity and Capital Resources

         The Company has financed its operations through available borrowings
under its previous credit line facilities, loans from within the Company, the
sale of equity securities issued by the Company and the sale of its subsidiary,
Becan. The Company had working capital of $758,000 at December 31, 2001.

         Net cash used in operating activities was $405,000 for the nine months
ended December 31, 2001, as compared to net cash used in operating activities of
$462,000 for the nine months ended December 31, 2000. The usage of cash was
primarily attributable to an increase in accounts receivable of $56,000 and an
increase in other current assets of $34,000, partially offset by a decrease in
inventories of $12,000, an decrease in amounts due to/from affiliates, net of
$57,000, a decrease in prepaid expenses of $15,000, a decrease in other assets
of $49,000, an increase in accounts payable of $58,000, an increase in other
payables of $28,000, an increase in accrued expenses of $58,000, an increase in
accrued income taxes of $113,000 and an increase in deferred income taxes of
$596,000.

                                      -16-
<PAGE>

         Net cash used in investing activities was $70,000, representing
purchases of property and equipment of $3,000, the sale of assets of $10,000
and the purchase of an investment in common stock of $83,000, partially offset
by proceeds from the sale of marketable equity securities of $2,000 and proceeds
from related party receivables of $23,000.

         Net cash used in financing activities was $4,000, representing payments
of long-term obligations of $31,000 and was partially offset by proceeds from
the issuance of long-term obligations of $16,000 and proceeds from issuance of
related party obligations of $12,000.

         At December 31, 2001, the Company had $652,000 in cash and cash
equivalents, as compared to $1.2 million at December 31, 2000.

         Management believes that cash expected to be generated from operations
and current cash reserves will be sufficient for the Company to meet its capital
expenditures and working capital needs for its operations as presently
conducted. The Company's future liquidity and cash requirements will depend on a
wide range of factors, including the level of business in existing operations,
expansion of facilities and possible acquisitions. In particular, if cash flows
from operations are not sufficient, it will be necessary for the Company to seek
additional financing. While there can be no assurance that such financing would
be available in amounts and on terms acceptable to the Company, management
believes that such financing would likely be available on acceptable terms.

         The Company is involved in pending litigation from U.S. Diversified
Technologies, Inc., Paul Santostasi and Gerald Schmoling. Management believes
that such claims are without merit and the litigation is being dealt with. Legal
expenses associated with such pending litigation totaled approximately $10,000
and $85,000, respectively, for the three months and nine months ended December
31, 2001.

         On October 1, 1999, the Company entered into a lease agreement with
Go2, whereby Go2 agreed to lease the Company's land and building situated in
Largo, Florida for a term of ten years at approximately $192,000 annually. The
lease provides for an annual cost-of-living increase. Management considers these
lease terms to be comparable to those of unrelated third parties.

         In February 2000, the Company established a subsidiary in Korea to
market its products to distributors in Korea. In April 2000, Dynamic Korea
entered into various lease agreements to lease certain office, seminar room and
housing space. The office lease is for a one year period at a monthly rental
amount of $14,309. In May 2001, the lease was renewed for a one year period. In
August 2000, the seminar room was leased for a one year period at a monthly
rental amount of $868. In January, 2001, the housing space was leased for a four
month plus thirteen day period at a monthly rental amount of $2,605. Upon
termination of this lease, the Company did not continue to lease housing space.

         In July 2000, Herbal sold substantially all of its assets relating to
the distribution of veterinary products, which primarily consisted of its
inventory and its customer base to Vertical Health Solutions, Inc., formerly
Labelclick.com, Inc., an affiliate of the Company, for a total sales price of
$500,000. The Company owns approximately 4.5% of the issued and outstanding
common stock of Vertical. Payment was in the form of $75,000 in cash and two
promissory notes totaling $425,000. The first promissory note was in the
principal amount of $75,000 and bears interest at 10% per annum. Principal and
interest were payable monthly commencing November 27, 2000, in the amount of
$7,500 per month until the

                                      -17-
<PAGE>

note is paid in full. The second promissory note was in the principal amount of
$350,000 and bears interest at 10% per annum. Principal and interest were
payable (i) upon the completion of an initial public offering of common stock of
Vertical which shall be made within twelve months from July 31, 2000, or (ii) if
the note is not paid in full within twelve months from July 31, 2000, then
payments were to be made monthly in the amount of $12,372.99 per month until the
note was paid in full. The notes are secured by the business assets of Vertical.
On October 1, 2001, the promissory notes were amended to reflect new terms of
repayment. Under the new terms, the entire amount of unpaid principal and
interest shall be due and payable on or before one year of the date of the note
addendum or upon the completion of an initial public offering of common stock of
Vertical. Interest is now due and payable on the last day of each month at the
rate of 10% per annum on the remaining principal balances. As of December 31,
2001, the outstanding principal balance on the notes was $419,248 and is
included in notes receivable from affiliate.

         At November 7, 2000, the Company held 150,000 shares of redeemable
series A preferred stock of Go2, which constituted all of the issued and
outstanding shares of redeemable series A preferred stock of Go2. In December
2000, the Company sold the 150,000 shares of redeemable series A preferred stock
for a total sales price of $100,000, to BJ Capital, Ltd., an affiliate of Jugal
K. Taneja, the Chairman of the Board of the Company and an affiliate of William
LaGamba, the Chief Operating Officer and President of DrugMax. Messrs. Taneja
and LaGamba are principal shareholders of the Company. Payment is in the form of
a promissory note receivable in the principal amount of $100,000, which bears
interest at a rate of 10% per annum. There is no prepayment penalty on the note.
Principal and interest on the note are due and payable quarterly commencing
March 31, 2001, in the amount of $37,500 and $12,500 payable quarterly
thereafter until the note is paid in full. As of December 31, 2001, the
outstanding principal balance on the note was $31,613.

         On November 26, 1999, pursuant to an Agreement and Plan of
Reorganization entered into on September 8, 1999 with DrugMax, Inc., formerly
Nutriceuticals.com Corporation, the Company sold all of the shares of capital
stock of Becan Distributors, Inc. and its subsidiary Discount Rx, Inc. to
DrugMax. The Company received 2,000,000 shares of restricted common stock of
DrugMax, with an estimated fair value of $10.00 per share based on the November
27, 1999 Initial Public Offering price, and $2,000,000 cash in exchange for all
of the issued and outstanding shares of stock of Becan. Additional consideration
of 500,000 restricted shares of common stock, $.001 par value, of DrugMax were
released to the Company in July 2001 because Becan attained certain revenue and
gross margin goals. The estimated fair value of the 500,000 shares of $1,188,751
was accrued as of March 31, 2001 and was included in amounts due from affiliate
as of March 31, 2001. The shares were subsequently received and the estimated
fair value of the 500,000 shares of $1,188,751 is included in investments in
unconsolidated affiliates as of December 31, 2001. Jugal K. Taneja, a principal
shareholder, Chairman of the Board, and Chief Executive Officer of the Company
is also a principal shareholder, Chairman of the Board and Chief Executive
Officer of DrugMax. William L. LaGamba, the Chief Operating Officer and
President of DrugMax is also a principal shareholder of the Company.

         In July 2001, the Company purchased 20%, or 200,000 shares of common
stock, of Tribeca Beverage Company, an affiliate of Jugal K. Taneja, the
Company's Chairman and Mandeep K. Taneja, the Company's President, for a total
purchase price of $200,000. Tribeca is in the business of developing, marketing
and distributing non-alcoholic beverages. The investment is accounted for under
the equity method. As of December 31, 2001, the investment amounted to $190,035
and is included in investments in unconsolidated affiliates. The balance of the
obligation due to Tribeca for the purchase of the investment as of December 31,
2001 was $116,659, and is included in obligations to affiliates.

                                      -18-
<PAGE>

         Effective November 30, 2001, the Company sold all of the issued and
outstanding shares of capital stock of Dynamic Life Korea, Ltd., a wholly-owned
foreign subsidiary of the Company, to the General Director of Dynamic Korea, Mr.
Y.J. Lee of Seoul, South Korea, for a total sales price of $1,000,000 U.S.
Dollars. The sales price was based upon the estimated value of Dynamic Korea and
was approved by unanimous vote of the Board of Directors of the Company. The
sale was accomplished in accordance with the terms of a Stock Purchase Agreement
dated November 16, 2001, by and between Mr. Y.J. Lee and the Company. Payment
was in the form of a promissory note in the principal amount of $1,000,000 U.S.
Dollars. The note bears interest at 8.5% per annum. Principal and interest are
payable monthly in the amount of $27,777.77 per month for 36 months, commencing
from the earlier of the time Dynamic Korea starts making a profit or twelve
months from November 16, 2001, with the balance of any unpaid principal and
interest being paid in full on or before December 31, 2004. The note is secured
by the business assets of Dynamic Korea.

         In December 2001, the Company transferred 225,000 of its shares of
common stock of DrugMax in settlement of approximately $1.1 million of principal
and interest due on notes payable to various unrelated third party note holders.
This resulted in a book gain of approximately $300,000.

                                      -19-
<PAGE>

                           Part II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.

         The Company is involved in pending litigation from U.S. Diversified
Technologies, Inc., Paul Santostasi and Gerald Schmoling. Management believes
that such claims are without merit and the litigation is being dealt with.

         From time to time the company is subject to litigation incidental to
its business including possible product liability claims. Such claims, if
successful, could exceed applicable insurance coverage. The Company is not
currently a party to any legal proceedings which it believes will have a
material adverse affect on its results of operations.

Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         None.

Item 3.  DEFAULTS UPON SENIOR SECURITIES.

         Not applicable.

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

         The Annual Meeting of the Stockholders of the Company was held on
December 20, 2001. At the meeting, the following actions were taken by the
shareholders:

         Jugal K. Taneja,  Mandeep K. Taneja, Cani I. Shuman,  Kotha S. Sekharam
and Rakesh K. Sharma, M.D. were elected as Directors to the serve until the next
annual meeting and until their  respective  successors are elected and qualified
or until their earlier resignation, removal from office or death. The votes cast
for and against each were as follows:

                                     For           Against           Withheld
                                     ---           -------           --------

Jugal K. Taneja                   2,620,307           -0-              3,530
Mandeep K. Taneja                 2,622,640           -0-              1,197
Cani I. Shuman                    2,622,640           -0-              1,197
Kotha S. Sekharam                 2,622,640           -0-              1,197
Rakesh K. Sharma, M.D.            2,620,307           -0-              3,530

Item 5.  OTHER INFORMATION.

         In January 2002, the Company issued 10,000 shares of common stock of
the Company. The 10,000 shares of common stock were issued in exchange for
10,000 shares of Series B 6% Cumulative Convertible Preferred Stock of the
Company, which shares were issued in conjunction with a private placement
undertaken in 1998.

                                      -20-
<PAGE>

Item 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits.

        The following exhibits are filed with this report:

2.1     Stock Purchase Agreement dated November 16, 2001, fully executed on
        November 30, 2001, by and among Dynamic Health Products, Inc. and its
        foreign subsidiary, Dynamic Life Korea, Ltd., and Mr. Y.J. Lee. (1)

3.1     Articles of Incorporation of Direct Rx Healthcare, Inc., filed January
        27, 1998. (2)

3.2     Articles of Amendment to Articles of Incorporation of Nu-Wave Health
        Products, Inc., dated August 11, 1998. (3)

3.3     Articles of Amendment to Articles of Incorporation of Dynamic Health
        Products, Inc., filed September 1, 1998. (4)

3.4     Articles of Restatement of the Articles of Incorporation of Dynamic
        Health Products, Inc., filed April 16, 1999. (4)
____________

        (1)   Incorporated by reference to the Company's Current Report on Form
              8-K/A, dated January 29, 2002, file number 0-23031, filed in
              Washington, D.C.

        (2)   Incorporated by reference to the Company's Annual Report on Form
              10-KSB for the fiscal year ended March 31, 1998, file number 0-
              23031, filed in Washington, D.C.

        (3)   Incorporated by reference to the Company's Quarterly Report on
              Form 10-QSB for the quarter ended June 30, 1998, file number
              0-23031, filed in Washington, D.C.

        (4)   Incorporated by reference to the Company's Annual Report on Form
              10-KSB for the fiscal year ended March 31, 1999, file number 0-
              23031, filed in Washington, D.C.

(b) Reports on Form 8-K.

        During the nine months ended December 31, 2001, the Company filed two
reports on Form 8-K.

        Form 8-K dated November 30, 2001, filed December 11, 2001, with respect
to the sale of Dynamic Life Korea, Ltd., a foreign subsidiary of the Company.

        Form 8-K/A dated January 29, 2002, filed January 29, 2002, with respect
to the sale of Dynamic Life Korea, Ltd., a foreign subsidiary of the Company.

                                      -21-
<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




                                             Dynamic Health Products, Inc.


Date: February 14, 2002                      By: /s/ Jugal K. Taneja
                                                --------------------
                                                Jugal K. Taneja
                                                Chairman of the Board and
                                                Chief Executive Officer


Date: February 14, 2002                      By: /s/ Cani I. Shuman
                                                -------------------
                                                Cani I. Shuman
                                                Chief Financial Officer


Date: February 14, 2002                      By: /s/ Mandeep K. Taneja
                                                ----------------------
                                                Mandeep K. Taneja
                                                President

                                      -22-