<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 333-92849


                               GO2PHARMACY, INC.
       (Exact name of small business issuer as specified in its charter)


             STATE OF FLORIDA                            59-2600232
             ----------------                            ----------
      (State or other jurisdiction of                   (IRS Employer
       incorporation or organization)                Identification No.)


       6950 Bryan Dairy Road, Largo, Florida                     33777
       -------------------------------------                     -----
      (Address of principal executive offices)                (Zip Code)


        Issuer's telephone number, including area code: (727) 544-8866


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 7,025,000.
<PAGE>

                        PART I - FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS.

                      GO2PHARMACY, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                    March 31,                     December 31,
                                                                                      2001                            2001
                                                                                  ------------                    ------------
                                                                                    (Audited)                      (Unaudited)
<S>                                                                               <C>                             <C>
                        ASSETS

Current assets:
      Cash and cash equivalents                                                   $  3,280,585                    $  1,019,901

      Certificate of deposit, restricted                                               650,000                         650,000
      Accounts receivable, net                                                         798,175                       1,086,192
      Inventories, net                                                               1,799,737                       1,939,043
      Prepaid expenses and other current assets                                        478,803                         300,831
      Due from affiliates                                                                  764                         221,619
                                                                                  ------------                    ------------
Total current assets                                                                 7,008,064                       5,217,586

Property, leaseholds and equipment, net                                              1,053,052                       1,614,661

Intangible assets, net                                                               1,206,255                       1,104,070

Other assets                                                                           160,340                         156,216
                                                                                  ------------                    ------------
Total assets                                                                      $  9,427,711                    $  8,092,533
                                                                                  ============                    ============

         LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
      Accounts payable                                                            $    870,811                    $    985,526
      Credit lines payable                                                             647,789                         647,789
      Current portion of long-term obligations                                         388,941                         444,391
      Accrued expenses                                                                 361,753                         290,543
      Obligations to related parties                                                    23,230                           3,040
      Obligations to affiliates                                                         74,553                          79,233
                                                                                  ------------                    ------------
Total current liabilities                                                            2,367,077                       2,452,120
Long-term obligations, less current portion                                            624,419                         519,307
                                                                                  ------------                    ------------
Total liabilities                                                                    2,991,496                       2,971,427
                                                                                  ------------                    ------------

Redeemable series A preferred stock, no par value,
      150,000 shares authorized; 150,000 shares
      Issued and outstanding, at face value                                          1,500,000                       1,500,000

Commitments and contingencies

Shareholders' equity :
      Preferred stock, no par value, 5,850,000
        Shares authorized; no shares issued And outstanding                                 --                              --

      Common stock, $.01 par value; 24,000,000
       shares authorized; 7,025,000 shares issued and outstanding                       70,250                          70,250
       Additional paid in  capital                                                  29,944,240                      29,953,495
      Retained earnings (deficit)                                                  (25,078,275)                    (26,402,639)


                                                                                  ------------                    ------------
Total shareholders' equity                                                           4,936,215                       3,621,106
                                                                                  ------------                    ------------
Total liabilities and shareholders' equity                                        $  9,427,711                    $  8,092,533
                                                                                  ============                    ============
</TABLE>


    See accompanying notes to condensed consolidated financial statements.

                                      -2-
<PAGE>

                       GO2PHARMACY, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                     Three Months Ended               Nine Months Ended
                                                        December 31,                     December 31,
                                                ----------------------------    ----------------------------
                                                    2000            2001           2000             2001
                                                ------------    ------------    ------------    ------------
<S>                                             <C>             <C>             <C>             <C>
Revenues:
PBM                                             $          -    $    521,607    $          -    $  1,236,999
Distribution                                          18,844         162,788         346,723         232,994
Manufacturing                                        976,335       1,064,369       3,526,487       3,768,070
                                                ------------    ------------    ------------    ------------
Total revenues                                  $    995,179    $  1,748,764    $  3,873,210    $  5,238,063
                                                ------------    ------------    ------------    ------------

Cost of goods sold:

PBM                                             $          -    $    437,031    $          -    $  1,013,054
Distribution                                          12,792          54,196         209,339         128,702
Manufacturing                                        754,500         847,789       2,309,850       2,961,185
                                                ------------    ------------    ------------    ------------
Total cost of goods sold                        $    767,292    $  1,339,016    $  2,519,189    $  4,102,941
                                                ------------    ------------    ------------    ------------

Gross profit:
PBM                                             $          -    $     84,576    $          -    $    223,945
Distribution                                           6,052         108,592         137,384         104,292
Manufacturing                                        221,835         216,580       1,216,637         806,885
                                                ------------    ------------    ------------    ------------
Total gross profit                              $    227,887    $    409,748    $  1,354,021    $  1,135,122
                                                ------------    ------------    ------------    ------------
Marketing Expense                                 23,625,000               -      23,625,000
Selling, general and
  Administrative expenses                            622,042         815,628       1,770,158       2,300,060
                                                ------------    ------------    ------------    ------------

Operating income (loss) before
  Other income and expense                      $(24,019,155)   $   (405,880)   $(24,041,137)   $ (1,164,938)

Other income (expense),net:

Other income (expense), net                            4,276          (2,745)        116,971           3,412
Interest expense,net                                 (32,540)        (29,336)       (154,945)        (50,337)
                                                ------------    ------------    ------------    ------------
Total other income (expense), net               $    (28,264)   $    (32,081)   $    (37,974)   $    (46,925)
                                                ------------    ------------    ------------    ------------

Income (loss) before income taxes                (24,047,419)       (437,961)    (24,079,111)     (1,211,863)
Income taxes                                               -               -               -               -
                                                ------------    ------------    ------------    ------------

Net income (loss)                                (24,047,419)       (437,961)    (24,079,111)     (1,211,863)
Preferred stock dividends                             37,500          37,500         187,500         112,500
                                                ------------    ------------    ------------    ------------

Net income (loss) available
To common shareholders                          $(24,084,919)   $   (475,461)   $(24,266,611)   $ (1,324,363)
                                                ============    ============    ============    ============

Basic and diluted income(loss) per share        $      (4.46)   $       (.07)   $      (4.49)   $       (.19)
                                                ============    ============    ============    ============

Basic and diluted weighted average
Number of common shares outstanding                5,400,272       7,025,000       5,400,272       7,025,000
                                                ============    ============    ============    ============
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                      -3-
<PAGE>

                      GO2PHARMACY, INC. AND SUBSIDIARIES
                           STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                          Nine Months Ended December 31,
                                                                 ------------------------------------------------
                                                                        2000                           2001
                                                                 -----------------              -----------------
                                                                    (Unaudited)                    (Unaudited)
<S>                                                              <C>                            <C>
Cash flows from operating activities:
 Net income (loss)                                               $     (24,266,611)             $      (1,211,863)
 Adjustments to reconcile net income (loss)
  to net cash from operating activities:
  Common stock issued for marketing costs                               23,625,000                             --
  Provision for obsolete inventory                                          45,000                         60,000
  Provision for uncollectible accounts                                          --                         40,000
  Depreciation and amortization                                            225,953                        348,150
  Changes in operating assets and liabilities:
   Accounts receivable                                                     133,021                       (321,180)
   Inventory                                                              (238,499)                      (199,306)
   Prepaid expenses and other current assets                              (184,042)                       177,972
   Other assets                                                           (203,440)                        (4,754)
   Accounts payable                                                         10,798                        127,837
   Preferred stock dividends payable                                       187,500
   Accrued expenses                                                        224,306                        (71,210)
   Due from affiliates, net                                                     --                       (216,175)
                                                                 -----------------              -----------------

   Net cash used in operating activities                         $        (441,014)             $      (1,270,529)

Cash flows from investing activities:
 Purchases of property, leaseholds and equipment                           (74,359)                      (794,608)
 Collection on notes receivable                                                 --                          8,878
                                                                 -----------------              -----------------

   Net cash used in investing activities                         $         (74,359)             $        (785,730)

Cash flows from financing activities:
 Proceeds from issuance of common stock                                  6,655,705                             --
 Net change in credit lines payable                                       (608,140)                            --
 Proceeds from issuance of long-term obligations                            79,324                        204,456
 Payments of long-term obligations                                        (193,652)                      (254,118)
 Increase/(decrease) in due to Dynamic, net                               (663,427)                            --
 (Increase) decrease in due from affiliates, net                            77,558                             --
 Proceeds from issuance of related party obligations                       148,183                             --
   Payments of related party obligations                                  (140,182)                       (42,263)
   Proceeds from capital contribution                                       60,000                             --
   Payments of registration expenses                                      (122,861)                            --
   Payments of preferred stock dividends                                        --                       (112,500)
                                                                 -----------------              -----------------
   Net cash provided by (used in) financing activities           $       5,292,508              $        (204,425)
                                                                 -----------------              -----------------

Net increase (decrease) in cash                                          4,777,135                     (2,260,684)
Cash at beginning of period                                                     --                      3,280,585
                                                                 -----------------              -----------------
Cash at end of period                                            $       4,777,135              $       1,019,901
                                                                 =================              =================
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                      -7-
<PAGE>

                      GO2PHARMACY, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS -
                             CONTINUED (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                               Nine Months
                                                                    Nine Months Ended             Ended
                                                                      December 31,             December 31,
                                                                          2000                    2001
                                                                    -----------------      ----------------

<S>                                                                 <C>                    <C>
Supplemental disclosure of cash flow information:
 Cash paid during the period for interest                                $  161,096        $        101,160
                                                                     ==============        ================
 Cash paid during the period for income taxes                                     -        $              -
                                                                     ==============        ================

 Issuance of 3,000,000 shares of common stock to complete
  the merger of Go2Pharmacy.com, Inc, the Delaware
  corporation                                                          $ 23,625,000        $              -

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

 Initial public offering registration expenses                          $   375,217        $              -

                                                                     ==============        ================
 Issuance of 15,000 shares of common stock for legal
  services at the initial public offering price                         $   118,125        $              -

                                                                     ==============        ================
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                      -5-
<PAGE>

                      GO2PHARMACY, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
        FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2000 AND 2001



NOTE A-BASIS OF PRESENTATION

          The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-QSB and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete 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 and
nine month periods ended December 31, 2000 and 2001 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-10KSB as of and for the years ended
March 31, 2000 and 2001 as filed June 28, 2001.

NOTE B-PRINCIPLES OF CONSOLIDATION

          The condensed consolidated financial statements as of March 31, and
December 31, 2001 and for the three and nine months ended December 31, 2001
include the accounts of Go2Pharmacy, Inc. (the "Company"), ("Go2"), which is
continuing to doing manufacturing business as Innovative Health Products, Inc.
("Innovative"), and its Florida wholly-owned subsidiaries Breakthrough
Engineered Nutrition, Inc. ("Breakthrough"), Belcher Pharmaceuticals, Inc.,
(Belcher) and Go2PBM Services, Inc. (PBM). Significant intercompany balances and
transactions have been eliminated in consolidation.

          The condensed consolidated financial statements for the three and nine
months ended December 31, 2000 include the accounts of Innovative and
Breakthrough.


NOTE C-SEGMENT INFORMATION

          The Company currently has three industry segments: pharmacy benefit
management, distribution and manufacturing in addition to corporate activities.
Our pharmacy benefit management segment administers drug benefits for health
maintenance organizations, insurance company plans, preferred provider
organizations and self-insured health plans. Our manufacturing segment delivers
products through our channels of distribution for its proprietary products and
the products it manufactures for others including health food, drug, convenience
and mass market stores, and direct marketers and catalog sales throughout the
United States. The Company has two manufacturing facilities located in Largo,
Florida.

          The Company commenced operations for its pharmacy benefit management
segment during March 2001. Based on the date of commencing initial operations,
financial segment data related to its

                                      -6-
<PAGE>

revenues, gross profits, and operating income are only included for the three
and nine months ended December 31, 2001.

          In addition to the condensed segment information as presented on the
face of the statements of operations for the three and nine months ended
December 31, 2000 and 2001, as required by SFAS 131, "Disclosures about Segments
of an Enterprise and Related Information" are as follows:

<TABLE>
<CAPTION>
                                             Three months ended                    Nine months ended
                                                December 31,                         December 31,
                                         ---------------------------------------------------------------
                                           2000               2001               2000              2001
                                                                   (Unaudited)
<S>                                  <C>                <C>                  <C>             <C>
Operating income (loss):
Corporate                             $(23,649,902)     $    (97,016)         $(23,649,902)   $   (240,181)
PBM                                           --              84,514                  --           218,068
Distribution                               (53,435)           42,359               (15,229)       (135,148)
Manufacturing                             (315,818)         (435,737)             (376,006)     (1,007,677)
</TABLE>

<TABLE>
<CAPTION>
                                           As of  March 31, 2001        As of December 31, 2001
                                                (Audited)                     (Unaudited)
                                    --------------------------------------------------------------
<S>                                  <C>                                <C>
Assets:
Corporate                                     $3,924,600                  $1,739,535
PBM                                              106,838                     270,001
Distribution                                     670,813                     716,967
Manufacturing                                  4,725,460                   5,366,030
</TABLE>

NOTE D-RELATED PARTY TRANSACTIONS

          Amounts due from affiliates and amounts due to affiliates represent
balances owed to or amounts owed by the Company for sales occurring in the
normal course of business. Amounts due from and amounts due to these affiliates
are in the nature of trade receivables or payables and fluctuate based on sales
volume and payments received. As of March 31, and December 31, 2001, amounts due
from affiliates approximated $764 and $221,619, respectively. As of December 31,
2001, the $221,619 balance outstanding was comprised of approximately $103,000
due from Dynamic Life Korea, a subsidiary of Dynamic Health Products, Inc.,
approximately $89,000 due from CarePlus Health Plan, Inc., an affiliate of Mr.
Bartholomew Lawson, a member of the Company's board of directors, and
approximately $30,000 due from Labelclick, Inc., an affiliate of the Chairman.
As of March 31, and December 31, 2001, amounts due to affiliates approximated
$74,553 and $79,233, respectively, primarily representing amounts due to
Drugmax, Inc., an affiliate of the Chairman.

                                      -7-
<PAGE>

         For the three and nine months ended December 31, 2001, $37,500 and
$112,500, respectively, of cumulative preferred dividends earned as a feature of
the redeemable preferred stock outstanding, were paid to JB Capital Ltd.,
("JB"")" formerly known as BJ Capital, Ltd, an affiliate of the Company and the
holder of the 150,000 shares of the preferred stock outstanding.

For the three and nine months ended December 31, 2001, sales to affiliates, by
segment, were as follows:

<TABLE>
<CAPTION>
                                                  Three months ended                    Nine months ended
                                                      December 31,                          December 31
                                         ------------------------------------------------------------------------
                                                2000               2001                2000             2001
                                                                         (Unaudited)
<S>                                      <C>                  <C>                     <C>           <C>
PBM                                               --             521,607                     --     1,236,999
Manufacturing                                 31,812             268,499                905,297       438,285
</TABLE>


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

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 statement. 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 Financial Statements and notes thereto appearing
elsewhere in this Report. The discussion is based upon such financial statements
that have been prepared in accordance with U.S. Generally Accepted Accounting
Principles.

General

     We manufacture, package and ship high-quality private label dietary
supplements, over-the-counter drugs, and health and beauty care products for
companies worldwide from our two manufacturing locations. Through our
wholly-owned subsidiary, Breakthrough Engineered Nutrition, Inc.
("Breakthrough"), we market the Company's product line, Lean Protein(TM).
Through our wholly-owned subsidiary, Go2PBM Services, Inc., we administer
pharmacy benefit management services to health plans for unions, insurance
companies, and other self-insured companies.

                                      -8-
<PAGE>

Results of Operations

Overview

          The Company derives its revenues from developing, manufacturing,
wholesaling and distributing a wide variety of non-prescription dietary
supplements, and health and beauty care products in addition to providing
pharmacy benefit management services. Revenues are billed and recognized as
product is produced and shipped, net of discounts, allowances, returns and
credits. Cost of goods sold is comprised of direct manufacturing and material
product costs, direct personnel compensation and other statutory benefits and
indirect costs relating to labor to support product manufacture and the
warehousing of production and other manufacturing overhead as well as for
prescription and claim-related costs attributable to providing pharmacy benefit
management services. Research and development expenses are charged against cost
of goods sold as incurred. 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 equipment expenditures and other working capital
needs.

Three Months Ended December 31, 2001 Compared To Three Months December 31, 2000

          Revenues. Total revenues increased approximately $754,000, or 75.7%,
to approximately $1,749,000 for the three months ended December 31, 2001, as
compared to approximately $995,000 for the three months ended December 31, 2000.
Pharmacy benefit management revenues increased approximately $522,000 for the
three months ended December 31, 2001, as compared to $0 for the three months
ended December 31, 2000. The increase results from the absence of revenues in
the corresponding period, as Go2PBM Services, Inc. commenced operations
recording its first sales during March 2001. Distribution revenues increased
approximately $144,000, or 763.9% to $163,000 for the three months ended
December 31, 2001, as compared to $19,000 for the three months ended December
31, 2000. The increase is primarily attributable to the introduction of a new
product to our existing Lean Proteintm product line. Manufacturing revenues
increased approximately $88,000, or 9.0%, to approximately $1,064,000 for the
three months ended December 31, 2001, as compared to approximately $976,000 for
the corresponding period. The increase in manufacturing revenues was primarily
caused by increased sales volumes to affiliate customers as partially offset by
a decline in sales volumes to nonaffiliate customers.

          Gross profit. Total gross profit increased approximately $182,000, or
79.8%, to approximately $410,000 for the three months ended December 31, 2001,
as compared to approximately $228,000 for the three months ended December 31,
2000. Total gross margins increased from 22.9% for the three months ended
December 31, 2000, to 23.4% for the three months ended December 31, 2001.
Pharmacy benefit management gross profits increased approximately $85,000 for
the three months ended December 31, 2001, as compared to $0 for the three months
ended December 31, 2000. Pharmacy benefit management gross margin was 16.2% for
the three months ended December 31, 2001. The increase is primarily attributable
to the absence of revenues and related gross profits in the corresponding period
based on the date operations commenced. Distribution gross profit increased
approximately $103,000 to approximately $109,000 for the three months ended
December 31, 2001, as compared to

                                      -9-
<PAGE>

$6,000 for the three months ended December 31, 2000. Distribution gross margin
was 66.71% for the three months ended December 31, 2001 as compared to 32.1% in
the corresponding period. ___ The increase in gross profits and related gross
margins were primarily due to the introduction of a new product to our existing
distribution product line. Manufacturing gross profits decreased approximately
$5,000, or 2%, to approximately $217,000 for the three months ended December 31,
2001, as compared to approximately $222,000 in the corresponding period in 2000.
For the three months ended December 31, 2001, manufacturing gross margins
decreased to 20.0%, from 22.7% in the corresponding period in 2000. The decrease
is primarily attributable to a current change in our sales portfolio that is
yielding a lower gross margin in addition to the hiring of additional chemists,
quality assurance and quality control personnel in order to meet and exceed the
higher standards required to maintain and continue to add more attractive gross-
margined nutricuetical-manufacturing contracts in the future.

         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
approximately $194,000, or 31.1%, to approximately $816,000 for the three months
ended December 31, 2001, as compared to approximately $622,000 in the
corresponding period. The increase is primarily attributable to additional
advertising and promotional expenses associated with our distribution segment,
rents, as well as payroll expenses and costs associated with fringe benefits to
support our plans for distribution and manufacturing growth. As a percentage of
sales, selling, general and administrative expenses decreased to 46.6% for the
three months ended December 31, 2001 from 62.5% in the corresponding period in
2000.

         Interest income (expense), net. Interest expense, net of interest
income, decreased approximately $4,000 to approximately $29,000 for the three
months ended December 31, 2001, from approximately $33,000 for the three months
ended December 31, 2000. The decrease in net interest expense is primarily
attributable to lower interest expense due to decreased balances outstanding due
to continued principal payments as applied to outstanding obligations in
addition to the partial offset created by the interest income earned on the
initial public offering funds. Overall, interest rates have also declined as
compared to the corresponding period.

         Income taxes. At December 31, 2001, the Company had neither amounts
recorded for a current or a deferred income tax liability, nor any income tax
expense recorded for the three months ended December 31, 2001, due to available
operating loss carryforwards.

Nine Months Ended December 31, 2001 Compared To Nine Months Ended December 31,
2000

         Revenues. Total revenues increased approximately $1,365,000, or 35.2%,
to approximately $5,238,000 for the nine months ended December 31, 2001, as
compared to approximately $3,873,000 for the nine months ended December 31,
2000. Pharmacy benefit management revenues increased

                                      -10-
<PAGE>

approximately $1,237,000 for the nine months ended December 31, 2001, as
compared to $0 for the nine months ended December 31, 2000. The increase results
from the absence of revenues in the corresponding period, as Go2PBM Services,
Inc. commenced operations recording its first sales during March 2001.
Distribution revenues decreased approximately $114,000 to $233,000 for the nine
months ended December 31, 2001, as compared to $347,000 for the nine months
ended December 31, 2000. The decrease results primarily from the absence of
revenues for the three month period ended September 30, 2001 due to a temporary
interruption in manufacturing our Lean Protein product line for distribution due
to a change in manufacturing locations as partially offset by our new product
introduction. Manufacturing revenues increased approximately $242,000, or 6.9%,
to approximately $3,768,000 for the nine months ended December 31, 2001, as
compared to $3,526,000 for the corresponding period. The increase is primarily
attributable to increased sales volume to new, nonaffiliate, customers as
partially offset by a decline in sales to affiliated customers.

         Gross profit. Total gross profit decreased approximately $219,000, or
16.0%, to approximately $1,135,000 for the nine months ended December 31, 2001,
as compared to approximately $1,354,000 for the nine months ended December 31,
2000. Total gross margins decreased from 35.0% for the nine months ended
December 31, 2000 to 21.7% for the nine months ended December 31, 2001. Pharmacy
benefit management gross profits increased approximately $224,000 for the nine
months ended December 31, 2001, as compared to $0 for the nine months ended
December 31, 2000. Pharmacy benefit management gross margin was 18.1% for the
nine months ended December 31, 2001. The increase is primarily attributable to
the absence of revenues and related gross profits in the corresponding period
based on the date operations commenced. Distribution gross profit decreased
approximately $33,000 to $104,000 for the nine months ended December 31, 2001,
as compared to $137,000 for the nine months ended December 31, 2000. The
decrease is primarily attributable to the temporary interruption in
manufacturing of the distribution product line in addition to the charge off of
obsolete raw material and finished product inventory during the period ended
September 30, 2001 as partially offset by our new product introduction during
the three months ended December 31, 2001. Manufacturing gross profit decreased
approximately $410,000, or 33.7%, to approximately $807,000 for the nine months
ended December 31, 2001, as compared to approximately $1,217,000 in the
corresponding period. For the nine months ended December 31, 2001, manufacturing
gross margins decreased to 21.4%, from 34.5% in the corresponding period.
Although sales volumes increased, the decrease in margins was primarily
attributable to a change in the mix of sales for the period which yielded a
lower gross profit.

         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
approximately $1,130,000, or 96.6%, to approximately $2,300,000 for the nine
months ended December 31, 2001, as compared to approximately $1,170,000 in the
corresponding period. The increase was primarily attributable to additional
advertising and promotional expenses associated with our distribution segment,
rents, as well as payroll expenses and costs associated with fringe benefits to
support our growth plans in the areas of distribution and manufacturing. As a
percentage of sales, selling, general and administrative expenses increased to
43.9% for the nine months ended December 31, 2001 from 30.2% in the
corresponding period.

                                      -11-
<PAGE>

         Interest income (expense), net. Interest expense, net of interest
income, decreased approximately $105,000 to approximately $50,000 for the nine
months ended December 31, 2001 from approximately $155,000 for the nine months
ended December 31, 2000. The decrease in net interest expense is primarily
attributable to lower interest expense due to decreased balances outstanding due
to continued principal payments as applied to outstanding obligations in
addition to the partial offset created by the interest income earned on the
initial public offering funds. Overall, interest rates have also declined.

         Income taxes. At December 31, 2001, the Company had no amounts recorded
for a current or a deferred income tax liability nor do we have any income tax
expense recorded for the six months ended December 31, 2001 due to available
operating loss carryforwards.

         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
and nine months ended December 31, 2000 and 2001. 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.

          The terrorist attacks on September 11, 2001, exacerbated an already
fragile economic situation and have added to a growing level of uncertainty and
caution in the marketplace. The adverse impacts to our business may include, but
are not limited to, a delay in placing or a decrease in the size of orders, a
lengthening of sales cycles and increased credit risks. We can give no estimate
of how long these effects may last.

Financial Condition, Liquidity and Capital Resources

         The Company has financed its operations through available borrowings
under its credit line facilities, loans from within the Company, cash provided
from operations and cash provided from the proceeds received from our initial
public offering consummated. The Company had working capital of approximately
$2,765,000 at December 31, 2001, inclusive of current portion of long-term
obligations and credit facilities, as compared to a working capital of
approximately $4,641,000 at March 31, 2001. The decline in working capital is
primarily attributable to the Company's investment of funds into accounts
receivable financing, inventories, manufacturing equipment and manufacturing
plant leasehold improvements all of which is inline with the Company's business
plan and is currently forecasted to bring additional competitive business in the
future.

Net cash used in operating activities was approximately $1,271,000 for the nine
months ended December 31, 2001, as compared to net cash used in operating
activities of approximately $441,000 for the nine months ended December 31,
2000. Cash used is primarily attributable to increases in inventory of
approximately $199,000, increases in accounts receivable of approximately
$321,000, and increases of due from affiliates of approximately $216,000 all of
which is partially offset by a decrease in prepaid expenses of approximately
$178,000 with an increase of approximately $128,000 in accounts payable.

         Net cash used in investing activities was approximately $786,000,
primarily representing the purchase of plant equipment and plant leasehold
modifications.

         Net cash used in financing activities was approximately $204,000,
primarily attributable to payments on long-term obligations of approximately
$254,000, payments made on related party obligations of approximately $42,000,
and payments of preferred dividends of approximately $113,000 all of which is
partially offset by proceeds from issuance of debt of approximately $204,000.

                                      -12-
<PAGE>

         Management believes that cash expected to be generated from operations,
current cash reserves, and existing financial arrangements 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, expected results from
recent procedural changes surrounding the acceptance of manufacturing sales
orders, and possible acquisitions. In particular, if cash flows from operations
and available credit facilities are not sufficient, it will be necessary for the
Company to seek additional financing. There can be no assurance that such
financing will be available in amounts and on terms acceptable to the Company.

                          Part II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.

         From time to time the Company is subject to litigation incidental to
its business. Such claims, if successful, could exceed applicable insurance
coverage. _______ The Company is not currently a party to any material legal
proceedings.

Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

Use of proceeds from the effective date of the offering, November 7, 2000
through December 31, 2001, is presented as follows:

         Manufacturing equipment and facilities:                   $  770,538
         Debt retirement:                                          $1,386,843
         Business expansion:                                       $1,856,434
         Working capital and general corporate purposes:           $1,170,582

Item 3.  DEFAULTS UPON SENIOR SECURITIES.

         Not applicable.

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

         Not applicable.

Item 5.  OTHER INFORMATION.

         Not applicable.

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

         (a) Exhibits.

         None.

         (b) Reports on Form 8-K.

         The Company did not file any reports on Form 8-K during the applicable
period.

                                      -13-
<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.


                                 Go2Pharmacy, Inc.


Date: February  14, 2002         By: /s/ Mihir K.Taneja
                                    -------------------
                                 Mihir K. Taneja
                                 Chief Executive Officer, Secretary and Director


Date: February 14, 2002          By: /s/ Carol Dore-Falcone
                                    -----------------------
                                 Carol Dore-Falcone
                                 Vice President, Chief Financial Officer

                                      -14-