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

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q


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


                  For the quarterly period ended June 30, 2002

                                       OR



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

              For the transition period of _________ to ___________


                        Commission file number: 000-10981

                          EVERGOOD PRODUCTS CORPORATION


               Delaware                                           13-2640515
    (State or other jurisdiction of                             (IRS Employer
     incorporation or organization)                          Identification No.)

     175 Lauman Lane, Hicksville, NY                                11801
(Address of Principal Executive Offices)                         (Zip Code)


Registrant's telephone number, including area code  (516) 822-1230

Check  whether  the  registrant  (1) 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

                                 Yes [X] No [ ]

As of August 12, 2002, the registrant  had 4,475,957  shares  outstanding of its
Common Stock, $.01 par value.

================================================================================
<PAGE>

EVERGOOD PRODUCTS CORPORATION
 AND SUBSIDIARIES

Index
================================================================================

                                                                            Page


Part I. Financial Information

Item 1. Unaudited Consolidated Financial Statements

         Balance Sheets
          December 31, 2001 and June 30, 2002                                3-4

         Statements of Operations
          For the Three and Six Months Ended June 30, 2001 and 2002            5

         Statements of Cash Flows
          For the Six Months Ended June 30, 2001 and 2002                    6-7

         Notes to Consolidated Financial Statements                         8-14

Item 2. Management's  Discussion and Analysis of Financial Condition
         and Results of Operations                                         14-23

Item 3. Quantitative and Qualitative Disclosures About Market Risk            23


Part II. Other Information

Item 1. Legal Proceedings                                                  24-27

Item 6.  Exhibits and Reports on Form 8-K                                     27

Signatures                                                                    28

                                       2
<PAGE>


PART I - FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

EVERGOOD PRODUCTS CORPORATION
 AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
================================================================================
<TABLE>
<CAPTION>

                                                                    December 31,            June 30,
                                                                       2001                   2002
                                                                    ------------            --------
<S>                                                                 <C>                    <C>
Assets
  Current Assets
      Cash                                                          $    358,606           $   783,141
      Accounts receivable - less allowance for doubtful
          accounts of $1,423,535 and $1,417,989 for 2001
          and 2002, respectively                                       6,033,125             8,266,270
      Accounts receivable - related party - less allowance
          for doubtful accounts of $677,910 and $783,647
          for 2001 and 2002, respectively                                   -                     -
      Current maturities of notes receivable - net                        35,304                51,742
      Inventory                                                        9,543,451            12,569,080
      Deferred tax asset                                               1,937,000             2,019,000
      Deferred franchising costs                                          20,500                12,000
      Prepaid income taxes                                               326,455               123,958
      Prepaid expenses                                                 2,346,260             1,577,770
                                                                     -----------           -----------
                                                                      20,600,701            25,402,961
                                                                     -----------           -----------
Fixed Assets - net                                                     3,383,371             3,584,973
                                                                     -----------           -----------

  Other Assets
     Notes receivable - net of current maturities                         36,764                36,112
     Deferred tax asset                                                  334,000               270,000
     Intangible assets - net                                             269,331               111,587
     Other assets                                                         15,416                15,416
                                                                     -----------           -----------
                                                                         655,511               433,115
                                                                     -----------           -----------
                                                                     $24,639,583           $29,421,049
                                                                     ===========           ===========
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>

                                       3
<PAGE>
EVERGOOD PRODUCTS CORPORATION
 AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
================================================================================
<TABLE>
<CAPTION>

                                                  December 31,                 June 30,
                                                     2001                        2002
                                                  -------------------------------------
<S>                                                <C>                        <C>
Liabilities and Stockholders' Equity
  Current Liabilities
   Accounts payable                                $12,818,743                $17,724,650
   Accrued expenses                                  1,739,087                  2,015,082
   Unearned franchise fees                             132,500                    117,500
   Current maturities of long-term debt                240,000                    240,000
                                                   -----------                -----------
                                                    14,930,330                 20,097,232
                                                   -----------                -----------
  Other Liabilities
   Loan payable                                      6,689,526                  5,656,926
   Long-term debt - net of current maturities        1,015,500                    895,500
                                                   -----------                -----------
                                                     7,705,026                  6,552,426
                                                   -----------                -----------
  Commitments and Contingencies

  Stockholders' Equity
   Common stock                                         45,462                     45,462
   Additional paid-in capital                        7,855,052                  7,855,052
   Accumulated (deficit)                            (5,592,253)                (4,825,089)
                                                   -----------                -----------
                                                     2,308,261                  3,075,425
   Less:  Treasury stock                               304,034                    304,034
                                                   -----------                -----------
                                                     2,004,227                  2,771,391
                                                   -----------                -----------
                                                   $24,639,583                $29,421,049
                                                   ===========                ===========
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>
                                       4

<PAGE>
EVERGOOD PRODUCTS CORPORATION
 AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
================================================================================
<TABLE>
<CAPTION>
                                     For the Three Months Ended  For the Six Months Ended
                                             June 30,                   June 30,
                                     --------------------------  ------------------------
                                        2001         2002           2001        2002
                                     ----------------------------------------------------
<S>                                 <C>           <C>         <C>             <C>
Net Revenue                         $18,355,411   $28,265,691   $34,933,153   $47,831,619
Cost of Revenue                      11,871,090    21,674,378    23,730,310    35,519,437
                                    -----------   -----------   -----------   -----------
                                      6,484,321     6,591,313    11,202,843    12,312,182
Selling, General and
 Administrative Expenses              5,917,401     5,411,126    11,151,265    10,722,601
                                    -----------   -----------   -----------   -----------
Income Before Other Expense             566,920     1,180,187        51,578     1,589,581
Other Expense - Interest                152,970       122,984       369,153       245,673
                                    -----------   -----------   -----------   -----------
Income (Loss) Before Provision
 (Benefit) for Income Taxes             413,950     1,057,203      (317,575)    1,343,908
                                    -----------   -----------   -----------   -----------
Provision (Benefit) for Income
 Taxes
 Current                                140,000       165,000       143,000       209,000
 Deferred                               (15,000)      164,000      (281,000)      247,000
                                    -----------   -----------   -----------   -----------
                                        125,000       329,000      (138,000)      456,000
                                    -----------   -----------   -----------   -----------
Income (Loss) Before Cumulative
 Effect of a Change in Accounting
  Principle                             288,950       728,203      (179,575)      887,908
Cumulative Effect on Prior Years
 of Accounting Change - less
 applicable income taxes of $37,000           -             -             -      (120,744)
                                    -----------   -----------   -----------   -----------
Net Income (Loss)                   $   288,950   $   728,203   $  (179,575)  $   767,164
                                    ===========   ===========   ===========   ===========

Basic and Diluted Net Income
 (Loss) Per Share
   Income (loss) before cumulative
     effect change in accounting
     principles                     $        .06  $       .16   $      (.04)  $       .20
   Cumulative effect change in
    accounting principle                       -            -             -          (.03)
                                    -----------   -----------   -----------   -----------

                                   $        .06   $       .16   $      (.04)  $       .17
                                   ============   ===========   ===========   ===========
Weighted Shares Used in
 Computation                          4,475,957     4,475,957     4,475,957     4,475,957
                                   ============   ===========   ===========   ===========
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
                                       5
<PAGE>

EVERGOOD PRODUCTS CORPORATION
 AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)                                                          Page 1 of 2
================================================================================
<TABLE>
<CAPTION>

                                                                     For the Six Months Ended
                                                                              June 30,
                                                                    --------------------------
                                                                         2001           2002
                                                                    --------------------------
<S>                                                                  <C>             <C>
Cash Flows from Operating Activities
 Net income (loss)                                                   $  (179,575)    $   767,164
                                                                     -----------     -----------
 Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
   Depreciation and amortization                                         327,717         522,190
   (Benefit) for deferred taxes                                         (281,000)        (18,000)
   Increase in allowance for doubtful accounts and notes
    receivable                                                           412,812          29,534
   Write-off of accounts receivable and notes receivable                 121,419          29,043
   Prepaid taxes                                                               -         202,497
   Loss on disposal of fixed assets                                       53,231               -
   Increase in inventory obsolescence write-downs                              -          55,000
   (Increase) decrease in:
    Accounts receivable                                                  690,827      (2,256,639)
    Inventory                                                         (2,550,606)     (3,080,629)
    Deferred franchising costs                                            35,400           8,500
    Prepaid expenses                                                     (73,491)        768,489
    Notes receivable                                                      34,857         (50,868)
    Other assets                                                          (3,638)              -
   Increase (decrease) in:
    Accounts payable                                                   4,440,029       4,905,907
    Accrued expenses and sundry liabilities                             (570,706)        275,995
    Unearned franchise fees                                              (40,000)        (15,000)
    Income taxes payable                                                (101,887)              -
                                                                     -----------     -----------
                                                                       2,494,964       1,376,019
                                                                     -----------     -----------
                                                                       2,315,389       2,143,183
                                                                     -----------     -----------
Cash Flows from Investing Activities
 Purchase of fixed assets                                               (708,371)       (566,048)
                                                                     -----------     -----------
Cash Flows from Financing Activities
 (Decrease) in loan payable                                           (1,224,073)     (1,032,600)
 Payments of notes payable                                              (120,000)       (120,000)
 Payments of officers' loans                                            (142,009)              -
                                                                     -----------     -----------
                                                                      (1,486,082)     (1,152,600)
                                                                     -----------     -----------

See notes to consolidated financial statements.


                                       6
<PAGE>


EVERGOOD PRODUCTS CORPORATION
 AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)                                                          Page 2 of 2
================================================================================

                                                                      For the Six Months Ended
                                                                              June 30,
                                                                      -------------------------
                                                                           2001         2002
                                                                      -------------------------


Increase in Cash                                                       $ 120,936       $ 424,535

Cash - beginning                                                         236,037         358,606
                                                                     -----------     -----------
Cash - end                                                             $ 356,973       $ 783,141
                                                                     ===========     ===========
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
                                       7
<PAGE>


EVERGOOD PRODUCTS CORPORATION
 AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2002                                                        (Unaudited)
================================================================================




1    - Unaudited Interim Statements

     The accompanying  unaudited  consolidated  financial statements of Evergood
     Products  Corporation and  Subsidiaries  ("Evergood" or the "Company") have
     been prepared in accordance  with the  instructions to Form 10-Q and do not
     include  all  of the  information  and  footnotes  required  by  accounting
     principles  generally accepted in the United States of America for complete
     financial statements. In the opinion of management,  all adjustments (which
     consist only of normal recurring  adjustments  unless otherwise  disclosed)
     necessary  for a fair  presentation  have been  included.  All  significant
     intercompany  transactions  and balances  have been  eliminated.  Operating
     results  for the six  months  ended  June  30,  2002,  are not  necessarily
     indicative  of the results to be expected for the year ending  December 31,
     2002.  These  financial  statements and notes should be read in conjunction
     with the financial  statements and notes thereto  included in the Company's
     Form 10K for the year ended December 31, 2001.


2    - Earnings Per Share

     The accompanying financial statements include earnings per share calculated
     as required by  Financial  Accounting  Standard No. 128 Earnings Per Share.
     Basic earnings per share is calculated by dividing net income (loss) by the
     weighted  average  number of shares of common  stock  outstanding.  Diluted
     earnings  per share  include the  effects of  securities  convertible  into
     common stock to the extent such conversion would be dilutive.


3    - Inventory

      Inventory is comprised of the following:
<TABLE>
<CAPTION>

                                                   December 31,        June 30,
                                                       2001              2002
                                                   -----------------------------
          <S>                                      <C>               <C>
          Raw Materials                            $ 4,003,462       $ 6,186,765
          Work-in-Process                            1,792,359         2,035,896
          Finished Goods                             3,747,630         4,346,419
                                                   -----------       -----------
                                                   $ 9,543,451       $12,569,080
                                                   ===========       ===========
</TABLE>

Continued

                                       8
<PAGE>

4    - Goodwill

     On January 1, 2002, the Company adopted  Statement of Financial  Accounting
     Standards  No. 142,  Goodwill and Other  Intangible  Assets (SFAS 142).  As
     required by the standard,  the Company discontinued  amortizing  previously
     recorded  goodwill.  The standard also requires  that  previously  recorded
     goodwill be evaluated for  impairment at the date of adoption.  Pursuant to
     this  evaluation,  the  Company  determined  that  the full  amount  of the
     goodwill  recorded  in its  franchising  segment,  totaling  $157,744,  was
     impaired. This amount has been written off and is presented as a cumulative
     effect  of a change  in  accounting  principle,  net of the tax  effect  of
     $37,000.

     If SFAS 142 had been  effective  during the three and six months ended June
     30, 2001, the pro forma effect of applying its  provisions  would have been
     as follows:
<TABLE>
<CAPTION>

                                                  For the         For the
                                            Three Months Ended Six Months Ended
                                               June 30, 2001    June 30, 2001
                                            ------------------ ----------------
                <S>                                <C>           <C>
                Reported net income (loss)         $288,950      $(179,575)
                Addback:  Goodwill amortization -
                 net of tax effect                    6,228         12,457
                                                   --------      ---------
                Adjusted Net Income (Loss)         $295,178      $(167,118)
                                                   ========      =========


                Basic and diluted income (loss)
                 per share:
                  Reported net income (loss)       $    .06      $    (.04)
                  Goodwill amortization                 .01              -
                                                   --------      ---------
                Adjusted Net Income (Loss)         $    .07      $    (.04)
                                                   ========      =========
</TABLE>


5    - Segment Disclosure

     The Company  produces  and sells  vitamins  and mineral  products and other
     nutritional   supplements.   The  Company  sells  its  products  under  its
     customers'  private  labels,   under  a  brand  developed  by  one  of  its
     subsidiaries and,  pursuant to a license and supply agreement,  through the
     Great Earth franchise system under the Great Earth label.

     The Company  has three  reportable  segments  determined  primarily  by the
     nature of the  revenue  producing  activity  and the  market to which it is
     directed:   manufacturing,   franchising   and   brand   development.   The
     manufacturing  segment  obtains  revenues from the  manufacture and sale of
     vitamins  and  nutritional   supplements  to  wholesalers   who,  in  turn,
     distribute these products under their own private labels. This segment also
     manufactures  products  for the  Company's  Great Earth  (franchising)  and
     Bodyonics (brand  development)  segments.  The franchising  segment obtains

Continued

                                       9
<PAGE>

     revenues from the franchising of Great Earth vitamin stores, the collection
     of royalties  and the sale of Great Earth brand  vitamins  and  nutritional
     supplements  to Great  Earth  franchisees.  The brand  development  segment
     obtains  revenues  from the  wholesale  and  retail  sale of  vitamins  and
     nutritional supplements under its own nationally advertised brand name.

     Segment  information  for the three and six months  ended June 30, 2001 and
     2002 was as follows:
<TABLE>
<CAPTION>
                                                         Brand
                           Manufacturing Franchising  Development     Corporate     Total
                           ------------------------------------------------------------------
<S>                        <C>           <C>           <C>           <C>           <C>
Three Months Ended
 June 30, 2001
  Net revenue from
   external customers      $12,614,429   $ 2,960,974   $ 2,780,008   $         -   $18,355,411
  Intersegment net sales     3,285,152        57,979             -             -     3,343,131
  Operating income (loss)    2,413,943      (344,349)   (1,482,214)      (20,460)      566,920
  Total assets              15,606,970     4,387,424     4,371,812     1,539,000    25,905,206


 Three Months Ended
 June 30, 2002
  Net revenue from
   external customers      $22,782,326   $ 2,499,695   $ 2,983,670   $         -   $28,265,691
  Intersegment net sales     2,064,271        75,727          (100)            -     2,139,898
  Operating income (loss)    2,229,839      (441,574)     (562,480)      (45,598)    1,180,187
  Total assets              19,218,909     3,565,328     4,563,854     2,072,958    29,421,049


Six Months Ended
 June 30, 2001
 Net revenue from
  external customers      $24,230,612    $ 5,910,874   $ 4,791,667   $         -   $34,933,153
 Intersegment net sales     5,680,735        113,239             -             -     5,793,974
 Operating income (loss)    3,527,954       (903,600)   (2,530,548)      (42,228)       51,578
 Total assets              15,606,970      4,387,424     4,371,812     1,539,000    25,905,206


Six Months Ended
 June 30, 2002
 Net revenue from
  external customers      $37,004,026    $ 5,147,253   $ 5,680,340   $         -   $47,831,619
 Intersegment net sales     3,737,128        146,682           851             -     3,884,661
 Operating income (loss)    3,527,765       (555,476)   (1,321,118)      (61,590)    1,589,581
 Total assets              19,218,909      3,565,328     4,563,854     2,072,958    29,421,049
</TABLE>
Continued

                                      10
<PAGE>


     Revenue from the franchising segment is comprised of the following:
<TABLE>
<CAPTION>
                         For the Three Months Ended  For the Six Months Ended
                                   June 30                   June 30
                         --------------------------  ------------------------
                              2001         2002         2001         2002
                         --------------------------  ------------------------
     <S>                   <C>          <C>          <C>          <C>
     Sale of Products      $2,521,796   $2,119,871   $5,039,603   $4,345,123
     Royalties                404,178      379,824      836,271      767,130
     Sale of Franchises        35,000            -       35,000       35,000
                           ----------   ----------   ----------   ----------
                           $2,960,974   $2,499,695   $5,910,874   $5,147,253
                           ==========   ==========   ==========   ==========
</TABLE>

     Product  sales  include  $48,059 and $47,056 of sales for the three  months
     ended June 30, 2001 and 2002, respectively, and $94,069 and $90,593 for the
     six months ended June 30, 2001 and 2002, respectively, from a Company-owned
     franchise store.


6    - Litigation

     During the first six months of the fiscal year 2002,  Evergood  was engaged
     in more  than 40  different  active  litigations  - each  currently  are at
     different stages of discovery.  The numerous  litigations  involved various
     claims and in large measure were defended by the Company's  outside general
     counsel,  namely,  the firm of  Hoffinger  Stern & Ross,  LLP, or other law
     firms  supervised by the  Hoffinger  firm as well as a variety of law firms
     appointed by numerous insurance companies with whom the Hoffinger firm acts
     as  co-counsel.  The following is a brief synopsis of the current status of
     the various litigation proceedings.

     In  March  1999  and  May  1999,   Frank   Hillebrand  and  Jonathan  Aube,
     respectively,  each  commenced  an action  against  Evergood in the Supreme
     Court of California,  County of Riverside,  Indio Branch.  Each suit arises
     from allegations by the respective  plaintiff that Evergood used his images
     in, among other things,  advertisements  and product  packaging without his
     authorization.  Each suit claims damages for invasion of privacy,  invasion
     of  the  right  to  privacy,   conversion  and  loss  of  future  earnings.
     Additionally,  each suit seeks injunctive  relief.  After numerous hearings
     and court  appearances,  injunctive relief has been denied in each of these
     matters.  There has been extensive  discovery in each suit,  which includes
     numerous document requests,  numerous examinations before trial, interviews
     and/or  discussions with potential  experts,  as well as exhaustive  motion
     practice  surrounding  the  discovery  process.  The  Hillebrand  matter is
     scheduled  to go to trial on October 7, 2002.  The Aube matter is scheduled
     to go to a mandatory settlement conference on October 25, 2002 and to trial
     on November 18, 2002.  Moreover,  there are still expert  disclosures  that
     need to be made in each of these matters as well as  additional  deposition
     discovery in the Aube matter.  Management believes potential liability,  if
     any,  in excess  of that  which is  covered  by  insurance  will not have a
     material financial impact on Evergood.

Continued

                                       11
<PAGE>
     In April 2000, Great Earth International  Franchising Corp. ("GEIFC") filed
     a lawsuit in the United States District Court for the Southern  District of
     New York against Great Earth Vitamins/Mid-Atlantic, Inc., a franchisee, and
     the principals of  Mid-Atlantic,  John Corumbis,  Abraham  Zaiderman and T.
     Brian  Haigley.  The complaint  seeks  declaratory  judgement,  damages for
     breach of contract, an accounting and injunctive relief. The complaint does
     not state the  amount  of  damages  being  sought.  An answer  has not been
     interposed.  The  parties  have been  engaged in  settlement  negotiations.
     Management  believes the outcome of these  matters will not have a material
     adverse effect on the Company.

     In December 2000,  GEIFC  initiated a lawsuit in the United States District
     Court for the Eastern District of New York against 1039405 Ontario, Inc., a
     sub-franchisee,  for,  among other  things,  breach of contract,  trademark
     infringement,  misappropriation  of  trademarks  and tortious  interference
     seeking  a  preliminary  injunction  and other  damages  in an amount to be
     determined.  In the first quarter of 2001, 1039405 Ontario  counter-claimed
     for breach of contract and  tortious  interference  seeking  damages of $10
     million. Subsequently,  GEIFC has amended its complaint seeking damages for
     additional trademark  infringement in a sum in excess of $10 million.  This
     matter has been the subject of very extensive discovery including, numerous
     document  requests,  numerous  examinations  before  trial,  various  court
     requested conferences, as well as motion notice practice in connection with
     the discovery  process.  The parties are now exchanging expert discovery as
     well as scheduling  additional  depositions  prior to trial. This matter is
     currently  scheduled to go to trial in the fourth quarter of the year 2002.
     It is  impossible  to  currently  predict or  ascertain  the outcome of the
     litigation;   however,  based  upon  currently  available  information  and
     considering its various claims and defenses,  in the opinion of management,
     the outcome of this action should not have a material adverse effect on the
     Company.

     Likewise, in January 2001, GEIFC commenced a separate lawsuit in the United
     States  District Court for the Southern  District of New York against Milks
     Development,  Inc.,  RHG Holdings  Co.,  Edward  Ricciardi and Ted Odd, the
     sub-franchisees  of  1039405  Ontario.  The  identical  causes  pled in the
     lawsuit  against  1039405  Ontario are pled in this lawsuit  against  Milks
     Development,  Inc., RHG Holdings Co.,  Edward  Ricciardi and Ted Odd, along
     with a similar counterclaim.  Each of the claims in the main action and the
     counterclaim  seek damages similar to those sought in the lawsuit described
     above.  This lawsuit is in the same discovery  stage as the 1039405 Ontario
     matter as it has now been consolidated with that matter.  Therefore, due to
     the  consolidation  with the 1039405 Ontario action for all purposes,  this
     action should not have a material adverse effect on the Company.

     In  2000,  Macerich  Corp.,  a  landlord  in a mall in  Boulder,  Colorado,
     initiated a lawsuit  against  Evergood  seeking  performance  of an alleged
     guaranty of a lease entered into by a Great Earth  franchisee.  The lawsuit
     is pending in the District Court, Boulder County, State of Colorado.  There
     have been numerous  motions filed in this matter,  some pretrial  discovery
     and it is presently  scheduled to go to  arbitration on August 23, 2002. In
     the  opinion  of  management,  the  outcome  of this  suit  will not have a
     material adverse effect on the Company.

     In the last quarter of 2001, Total Health  Communications  Inc. initiated a
     lawsuit in State  Court in Utah in the Fifth  Judicial  District  Court for
     Washington  County,  Utah seeking  damages from  Bodyonics,  Ltd. and Total
     Health  Holdings  LLC, and others in connection  with an alleged  breach of
     contract by Evergood.  The material  allegations of the complaint have been

Continued

                                       12
<PAGE>

     denied by the  Company.  Evergood  has  various  affirmative  defenses  and
     significant  couterclaims  which it has now interposed in this action.  The
     Court  dismissed  the case against all  defendants  except  Bodyonics.  The
     Company has commenced a third party action against one of the principals of
     Total Health Communications,  Inc. This matter is not covered by insurance.
     Based upon currently  available  information  and  considering  its various
     claims and  defenses,  in the  opinion of  management,  the  outcome of the
     action should not have a material adverse effect on the Company.

     During 2001, a lawsuit was commenced by Bonnie J. Sampler, individually and
     as  Administratrix of her late husband's estate in the Supreme Court of the
     State of New York,  County of Nassau,  alleging  that her husband died as a
     result of his use of a product  manufactured,  distributed  and marketed by
     Evergood. An answer has been interposed denying the material allegations of
     the  complaint.  This  lawsuit is currently  in the early  discovery  stage
     although  depositions  have  been  scheduled.   Accordingly,   Evergood  is
     currently unable to predict the likely outcome.  Although certain causes of
     action under these  lawsuits are not covered under the Company's  insurance
     policies,  management believes that any potential liability will not have a
     material adverse effect on the Company.

     During 2001 and the first six months of fiscal year 2002, numerous lawsuits
     were  initiated  in various  forums in Federal and State courts by numerous
     plaintiffs  in  jurisdictions  but not  limited to the  States of  Alabama,
     Nevada,  California,   Illinois,  Louisiana,  New  Jersey,  New  York,  and
     Washington  seeking  damages in connection with their use or ingestion of a
     product  manufactured  by Evergood  for  Cytodyne  Technologies,  Inc. or a
     product  manufactured  in bulk by Evergood for CCA  Industries,  Inc. These
     lawsuits  are in  various  discovery  stages in each of the  jurisdictions.
     Discovery in these  numerous  matters vary from  production of documents to
     attendance at numerous  examinations before trial and the filing of various
     substantiative  motions,  including  but not limited to motions for summary
     judgment.  Although,  certain causes of action under these lawsuits are not
     covered under  Evergoods's  insurance  policies,  management  believes that
     potential  liability,  if any,  in  excess  of that  which  is  covered  by
     insurance will not have a material adverse effect on the Company.

     There are currently  pending two disparate  actions in Italy. Each of these
     involve  allegations  concerning the ingestion of products  manufactured by
     Evergood.  Each of these cases are being  litigated under the laws of Italy
     and are in early discovery stages. The Company's outside general counsel is
     active with Italian  counsel in these  matters.  Although  causes of action
     under these lawsuits are not covered under Evergood's  insurance  policies,
     management  believes  that  potential  liability,  if any,  will not have a
     material adverse effect on the Company.

     In the  latter  part of 2001,  an  action  was  commenced  by the  State of
     California  against  Evergood  in  the  Superior  Court  of  the  State  of
     California,  County of Alameda,  seeking damages in connection with certain
     products  manufactured  by Evergood.  The case is currently  the subject of
     extensive  discovery.   Expert  depositions  have  been  concluded  on  the
     threshold issue of whether  androstenedione  is an anabolic steriod.  It is
     impossible to currently  predict the outcome of this  litigation;  however,
     based upon currently  available  information  and  considering  its various
     claims and  defenses,  in the  opinion of  management,  the outcome of this
     action should not have a material adverse effect on the Company.

Continued

                                       13
<PAGE>


     In the first quarter of 2002, three separate actions were commenced against
     Evergood in the Superior  Court of the State of  California,  County of Los
     Angeles  regarding the product KAVA. These actions have been certified as a
     class action. General demurrers have been filed as well as a motion seeking
     dismissal  of the action.  The motion has been argued and a decision by the
     court  has been  rendered.  Essentially  the court has  stayed  the  action
     pending  action by the FDA.  It is  impossible  to  currently  predict  the
     outcome  of  these  actions,   however,   based  upon  currently  available
     information and considering its various claims and defenses, in the opinion
     of  management,  the  outcome of these  actions  should not have a material
     adverse effect on the Company.

     During the month of August 2002,  five  different  class  actions have been
     commenced  in the States of  California,  Florida,  Illinois,  New York and
     Pennsylvania.  Each of these  lawsuits seek damages in connection  with the
     marketing and sale of androstenedione, among other products. Each complaint
     alleges an  inability  to  substantiate  the claims made with regard to the
     marketing  attendant  to the  sale of such  products.  The  complaint  also
     alleges  that the  products  do not contain  warnings as to adverse  health
     consequences.  Preliminary  discovery was served along with a number of the
     complaints.  No answers need be  interposed  to the  complaints  as yet. No
     responses to the discovery  requests need be made as yet. In the opinion of
     management,  at this time,  the outcome of these actions  should not have a
     material adverse effect on Evergood.

     Additionally,  during calendar year 2001 and the first six months of fiscal
     year 2002,  various third parties have attempted to infringe upon trademark
     and intellectual property rights of Evergood.  Generally, Evergood has been
     able to protect  its  proprietary  rights  without  the need for  extensive
     litigation.  Currently, there are no active trademark infringement lawsuits
     pending.


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

     The Private Securities Litigation Reform Act of 1995 provides a safe harbor
     for  forward-looking  statements.  All statements  other than statements of
     historical  fact  included in this report are  forward-looking  statements.
     Such  forward-looking  statements  are  based  on the  current  beliefs  of
     management  and involve known and unknown  risks,  uncertainties  and other
     factors which may cause the actual results,  performance or achievements of
     the Company to be materially different from any future results, performance
     or achievements  expressed or implied by such forward- looking  statements.
     Such factors include, among others, the following: the Company's history of
     losses;  the need to obtain additional  financing and the ability to obtain
     such financing;  outstanding  indebtedness;  the ability to hire and retain
     key personnel;  relationships with and dependence on third-party  equipment
     manufacturers  and  suppliers;   uncertainties  relating  to  business  and
     economic conditions in markets in which the Company operates; uncertainties
     relating to government and regulatory  policies and other political  risks;
     uncertainties  relating  to  customer  plans and  commitments;  cost of and
     availability of component materials and inventories; effect of governmental
     export and import policies; the highly competitive environment in which the
     Company operates;  potential entry of new capitalized  competitors into the
     Company's markets;  and the uncertainty  regarding the Company's  continued
     ability,  through sales growth,  to absorb  increasing  costs  incurred and
     expected to be incurred in  connection  with its business  activities.  The
     words believe, expect, anticipate,  intend and plan and similar expressions
     identify  forward- looking  statements.  Readers are cautioned not to place
     undue reliance on these forward-looking statements,  which speak only as of
     the date the statement was made.

Continued

                                       14
<PAGE>

     General

     The Company  has three  reportable  segments  determined  primarily  by the
     nature of the  revenue  producing  activity  and the  market to which it is
     directed:   manufacturing,   franchising   and   brand   development.   The
     manufacturing  segment  obtains  revenues from the  manufacture and sale of
     vitamins  and  nutritional   supplements  to  wholesalers   who,  in  turn,
     distribute these products under their own private labels. This segment also
     manufactures  products  for the  Company's  Great Earth  (franchising)  and
     Bodyonics (brand  development)  segments.  The franchising  segment obtains
     revenues from the franchising of Great Earth vitamin stores, the collection
     of royalties  and the sale of Great Earth brand  vitamins  and  nutritional
     supplements  to Great  Earth  franchisees.  The brand  development  segment
     obtains  revenues  from the  wholesale  and  retail  sale of  vitamins  and
     nutritional supplements under its own nationally advertised brand name.


     Critical Accounting Policies

     The  preparation  of  consolidated  financial  statements  under  generally
     accepted  accounting  principles  requires  that the Company  make  certain
     estimates  and   judgments   that  affect   reported   amounts  of  assets,
     liabilities,  revenues,  expenses and  disclosure of contingent  assets and
     liabilities in its financial statements. The Company's actual results could
     differ from these estimates under different assumptions and conditions.

     The Company believes that the following critical accounting policies affect
     the more significant judgments and estimates used in the preparation of its
     consolidated financial statements:

          --    Revenue Recognition and
          --    Inventories.

     Revenue Recognition

     The Company recognizes revenue from product sales when persuasive  evidence
     of an arrangement exists, the product has been shipped,  and title and risk
     of loss have passed to the customer. The Company recognizes royalty revenue
     on retail  sales by  franchisees  at the time sales are made.  The  Company
     recognizes  revenue from franchise sales when the Company has fulfilled its
     obligation to assist the franchisee in opening the retail store.

     The timing of product shipments and receipts can have a significant  impact
     on the  amount  of  revenue  recognized  in a  period.  Also,  some  of the
     Company's  products  are  sold  through  distributors.   Revenue  could  be
     adversely  affected if  distributor  inventories  increased to an excessive
     level.  If this  were to  happen,  the  Company  could  experience  reduced
     purchases in subsequent  periods,  or product return from the  distribution
     channel due to overstocking, low end- user demand, or expiration.

     The Company records  allowances for product  returns.  These allowances are
     recorded as a reduction of revenue. These allowances require the Company to
     make significant  judgments and estimates,  which could require adjustments
     in the future.  Such adjustments could have a material effect on Evergood's
     reported revenues.  Historically,  the Company's returns have averaged less
     than 1% of sales.

     Continued

                                       15

<PAGE>

     The Company does not recognize revenues unless collectibility is reasonably
     assured.  The  Company  maintains  allowances  for  doubtful  accounts  for
     estimated  losses  resulting  from the  inability of our  customers to make
     required payments.  If the financial  condition of the Company's  customers
     were to  deteriorate  and result in an  impairment of their ability to make
     payments, additional allowances may be required.

     Inventories

     The  Company  values  inventories  at cost or, if lower,  fair  value.  The
     Company  determines cost using the first-in,  first-out method. The Company
     analyzes its inventory  levels quarterly and writes down inventory that has
     become obsolete,  inventory that has a cost basis in excess of its expected
     net  realizable  value,  and inventory in excess of expected  requirements.
     Inventory  with a life in excess of its shelf life is  disposed  of and the
     related  costs are  written  off.  If  actual  market  conditions  are less
     favorable than those  projected by management,  additional  inventory write
     downs may be required.


     Results of Operations

     Six months  ended June 30,  2001  compared  with six months  ended June 30,
     2002:

     Revenue
     -------

     Consolidated revenue for the six months ended June 30, 2001 and 2002 was as
     follows:
<TABLE>
<CAPTION>
                                           June 30,
                           ----------------------------------------
                                 2001                  2002
                           -------------------    -----------------
                           Amount      Percent    Amount    Percent
                           ----------------------------------------
    <S>                  <C>           <C>      <C>           <C>
    Segment:
     Manufacturing       $24,231,000    69.0%   $37,004,000    77.4%
     Franchising           5,910,000    17.0      5,147,000    10.8
     Brand Development     4,792,000    14.0      5,680,000    11.8
                         -----------   ------   -----------   ------
    Consolidated         $34,933,000   100.0%   $47,831,000   100.0%
                         ===========   ======   ===========   ======
</TABLE>
     Consolidated  revenue  for the six  months  ended  June  30,  2002  rose by
     approximately  $12,898,000,  an increase of 36.9% over the six months ended
     June 30, 2001.

     Revenue from  product  sales by all  segments  increased  by  approximately
     $12,967,000  or 38.1%  from  $34,062,000  in 2001 to  $47,029,000  in 2002.
     Company-wide sales to the franchise system decreased $720,000 or 14.3% from
     $5,051,000  in  2001  to  $4,331,000   in  2002.   Company-wide   sales  to
     unaffiliated customers increased by approximately $13,688,000 or 47.2% from
     $29,010,000  in 2001 to  $42,698,000  in 2002.  Consolidated  revenue  also
     includes  royalties and franchise fees earned by the  franchising  segment.
     Royalties  decreased  by  approximately  $69,000  from  $836,000 in 2001 to
     $767,000 in 2002. Franchise fee revenue amounted to $35,000 in both years.

Continued

                                       16
<PAGE>

     Manufacturing segment sales increased approximately $12,773,000, reflecting
     additional  sales  to  the  Company's  largest  customers.  There  were  no
     significant  changes in selling  prices during this period.  Selling prices
     are based on the cost of  manufacture,  plus a margin which varies based on
     the brand and, in some cases, the particular product.

     The  decrease in  franchising  segment  revenue of  approximately  $763,000
     primarily  reflects a decrease  in sale of products  to  franchises,  and a
     decrease in royalties.  The decline in sales was primarily due to increased
     competition from national vitamin chains,  vitamin discounters and internet
     sales.

     Brand development sales increased by approximately  $888,000 primarily as a
     result  of  targeted   advertising   and   promotional   expenses  and  the
     introduction   of  new   products.   Advertising   for  this   segment  was
     approximately  $2,838,000  in 2002  compared  with  $4,100,000  in 2001,  a
     decrease of approximately $1,262,000 or 30.8%.

     Operating Income
     ----------------

     Operating  income  for the six  months  ended  June  30,  2001  and 2002 is
     comprised as follows:
<TABLE>
<CAPTION>
                                            June 30
                         -------------------------------------------
                                 2001                  2002
                         ---------------------    ------------------
                                      Percent               Percent
                                        of                    of
                                      Segment               Segment
                           Amount     Revenue     Amount    Revenue
                         --------------------------------------------
   <S>                   <C>           <C>      <C>           <C>
   Segment:
    Manufacturing        $ 3,528,000    14.6%   $ 3,528,000     9.5%
    Franchising             (904,000)  (15.3)      (555,000)   (1.5)
    Brand Development     (2,531,000)  (52.8)    (1,321,000)  (23.3)
    Corporate                (42,000)      -        (62,000)      -
                         -----------            -----------
   Consolidated          $    51,000      .1%   $ 1,590,000     3.3%
                         ===========            ===========
</TABLE>

     Consolidated  operating  income  for the six  months  ended  June 30,  2002
     increased  by  approximately  $1,539,000.  The  increase in gross margin of
     approximately  $1,109,000 resulted from higher sales. Selling,  general and
     administrative  expenses  decreased by  approximately  $430,000.  The major
     items  comprising  this change were decreases in  advertising  and bad debt
     expenses offset by increases in professional fees,  salaries and travel and
     entertainment.

     Manufacturing  segment  operating income was approximately the same in both
     years.  Manufacturing gross profit increased approximately $256,000, offset
     by increases in manufacturing  segment selling,  general and administrative
     expenses of approximately $655,000. The increase in gross profit was caused
     primarily  by increases in sales.  The $655,000  increase in  manufacturing
     segment selling,  general and  administrative  expenses reflects  primarily
     increases in salaries and professional fees.

Continued

                                       17

<PAGE>

     Franchising segment operating loss decreased by approximately  $349,000 for
     the six months ended June 30, 2002  compared with the six months ended June
     30, 2001.  The change is primarily  due to lower sales and lower margins of
     approximately $161,000 and decreases in selling, general and administrative
     expenses of $510,000.

     Brand development operating loss decreased by approximately  $1,210,000 for
     the six  months  ended  June 30,  2002 from June 30,  2001.  This  resulted
     primarily from reduced  advertising and promotional  expenses and increased
     revenue.

     Net Income (Loss)
     -----------------

     Consolidated net income of approximately  $767,000 for the six months ended
     June 30, 2002 was comprised of an operating profit of $1,590,000,  interest
     expense of  $246,000,  and taxes of  $456,000.  Also  reflected in the 2002
     period is a charge for the  write-off  of goodwill in  connection  with the
     adoption  of SFAS 142.  This is  presented  as the  cumulative  effect of a
     change in accounting principle, net of taxes and totaled $121,000.

     For the six  months  ended June 30,  2001,  the  Company  had a net loss of
     $179,000,  comprised of operating income of $52,000 and interest expense of
     $369,000. Additionally, the Company recorded a tax benefit of $138,000.


     Three months ended June 30, 2001  compared with three months ended June 30,
     2002:

     Revenue
     -------

     Consolidated  revenue for the three months ended June 30, 2001 and 2002 was
     as follows:
<TABLE>
<CAPTION>
                                           June 30,
                           ----------------------------------------
                                 2001                  2002
                           -------------------    -----------------
                           Amount      Percent    Amount    Percent
                           ----------------------------------------
    <S>                  <C>           <C>      <C>           <C>
   Segment:
    Manufacturing        $12,614,000    68.7%   $22,782,000    80.6%
    Franchising            2,961,000    16.1      2,500,000     8.8
    Brand Development      2,780,000    15.2      2,984,000    10.6
                         -----------   -----    -----------   -----
   Consolidated          $18,355,000   100.0%   $28,266,000   100.0%
                         ===========   =====    ===========   =====
</TABLE>

     Consolidated  revenue for the three months ended June 30, 2002 increased by
     approximately  $9,911,000,  an increase of approximately 54% over the three
     months ended June 30, 2001.

     Revenue from  product  sales by all  segments  increased  by  approximately
     $9,970,000  or  55.7%  from  $17,916,000  in 2001 to  $27,886,000  in 2002.
     Company-wide  sales to the franchise  system decreased by $437,000 or 17.2%
     from  $2,544,000  in 2001 to  $2,107,000  in  2002.  Company-wide  sales to
     unaffiliated customers increased by approximately $10,407,000 or 67.7% from
     $15,372,000  in 2001 to  $25,779,000  in 2002.  Consolidated  revenue  also
     includes  royalties and franchise fees earned by the  franchising  segment.

Continued

                                       18
<PAGE>

     Royalties  decreased  by  approximately  $24,000 to  $380,000  in the three
     months ended June 30, 2002 from  $404,000 in 2001.  Franchise  fees for the
     three months ended June 30, 2002  decreased by  approximately  $35,000 from
     $35,000 in 2001 to $-0- in 2002.

     Manufacturing  segment sales  increased  approximately  $10,168,000 for the
     three months ended June 30, 2002 and were primarily due to increased  sales
     to the Company's largest  customers.  There were no significant  changes in
     selling prices during these  periods.  Selling prices are based on the cost
     of manufacture,  plus a margin which varies based on the brand and, in some
     cases, the particular product.

     The decrease in the franchising  segment revenue of approximately  $461,000
     in the three  months ended June 30, 2002  primarily  reflects a decrease in
     sales of products to franchisees, lower royalties and lower franchise fees.
     The  decline  in sales was  primarily  due to  increased  competition  from
     national vitamin chains, vitamin discounters and internet sales.

     Brand development sales increased by approximately  $204,000 primarily as a
     result  of  targeted   advertising   and   promotional   expenses  and  the
     introduction  of new  products.  Advertising  expense for this  segment was
     approximately  $1,256,000  in 2002  compared  with  $2,310,000  in 2001,  a
     decrease of $1,054,000 or 45.6%.

      Operating Income

     Operating  income for the three  months ended June 30, 2001 and 2002 was as
     follows:
<TABLE>
<CAPTION>
                                            June 30
                         -------------------------------------------
                                 2001                  2002
                         ---------------------    ------------------
                                      Percent               Percent
                                        of                    of
                                      Segment               Segment
                           Amount     Revenue     Amount    Revenue
                         --------------------------------------------
   <S>                   <C>           <C>      <C>           <C>
   Segment:
    Manufacturing         $2,414,000    19.1%   $2,230,000     9.8%
    Franchising             (344,000)  (11.6)     (442,000)   17.7
    Brand Development     (1,483,000)  (53.3)     (562,000)   18.8
    Corporate                (20,000)      -       (46,000)      -
                          ----------            ----------
   Consolidated           $  567,000     3.1%   $1,180,000     4.2%
                          ==========            ==========
</TABLE>

     Consolidated  operating  income for the three  months  ended June 30,  2002
     increased by  approximately  $613,000.  For the three months ended June 30,
     2002,  consolidated  gross  margin  increased  by  approximately  $107,000.
     Selling,  general and  administrative  expenses  decreased by approximately
     $506,000. The increase in gross margin resulted from higher revenues.

     Company-wide  gross profit from the  franchise  system for the three months
     ended June 30, 2002 decreased by $258,000.  This decrease was primarily due
     to lower sales and a decrease in royalties and franchise fees. Company-wide
     gross profit from unaffiliated  parties for the three months ended June 30,
     2002 increased by $424,000.

Continued

                                       19
<PAGE>
     The decrease in consolidated selling,  general and administrative  expenses
     for the three months ended June 30, 2002 of approximately  $506,000 was due
     primarily to decreases in advertising and promotional expenses.

     Manufacturing segment operating income decreased by approximately  $184,000
     for the three months ended June 30, 2002.  Increases in manufacturing gross
     profit of  approximately  $181,000  were  reduced by  increases in selling,
     general and administrative expenses of approximately $365,000.

     Franchising  segment  operating  losses for the three months ended June 30,
     2002  increased  by  approximately  $97,000.  This  increase  was  due to a
     decrease  in gross  margin of  $209,000  and  lower  selling,  general  and
     administrative expenses of approximately $112,000.

     Brand development operating losses for the three months ended June 30, 2002
     decreased by approximately  $920,000. This decrease was due to increases in
     gross  margin of $135,000  for the three months and a reduction in selling,
     general and administrative expenses of $785,000,  primarily advertising and
     promotion costs.

     Net Income
     ----------

     Consolidated  net income of  approximately  $728,000  for the three  months
     ended June 30, 2002 was  comprised  of an operating  profit of  $1,180,000,
     interest expense of $123,000 and a tax provision of $329,000.

     For the three  months  ended June 30,  2001,  the Company had net income of
     $289,000,  comprised of operating income of $567,000,  and interest expense
     of $153,000 and a tax provision of $125,000.

     Liquidity and Capital Resources
     -------------------------------

     The  Company's  balance sheet  reflects  working  capital of  approximately
     $5,306,000  at June 30, 2002  compared  with  approximately  $5,670,000  at
     December 31, 2001,  a decrease of  $364,000.  Decreases in working  capital
     were  primarily  due to the  utilization  of  current  assets  to  purchase
     equipment in the amount of $566,000 and the reduction of long-term  debt of
     $1,153,000.  Increases in working  capital  were  provided by net income of
     $767,000 adjusted by depreciation and amortization of $522,000.

     Cash flows generated from operations for the six months ended June 30, 2002
     were  approximately  $2,143,000.  Net  income,  as  adjusted  for  non-cash
     charges, provided $1,271,000 in cash. Changes in other operating assets and
     liabilities, primarily an increase in accounts payable and accrued expenses
     and  decreases  in  prepaid   expenses  offset  by  increases  in  accounts
     receivable  and  inventory,  accounted  for the increase in operating  cash
     flow. Accounts receivable increased by approximately $2,257,000,  primarily
     due to increased sales to our largest customer. The receivable balance from
     this  customer  was  approximately  $2,150,000  higher  than the balance at
     December  31,  2001.  The  balance was  current  within 30 days.  Inventory
     increased   approximately   $3,081,000.   The  increase  in  inventory  was
     principally in raw material and was due to the increased revenue and orders
     backlog at June 30, 2002.

Continued

                                       20
<PAGE>


     The following table presents the Company's debt and contractual commitments
     as of June 30, 2002:
<TABLE>
<CAPTION>

                                      Within      Within      Within     After
                                         1         2-3         4 -5        5
                            Total       Year      Years        Years     Years
                         -------------------------------------------------------
    <S>                  <C>          <C>        <C>         <C>          <C>

    Debt                 $6,792,426   $240,000   $6,552,426  $        -   $    -
    Operating Leases      2,562,613    554,091    1,054,503     954,019        -
    Guarantees              470,919    139,296      278,592      53,031        -
                         ----------   --------   ----------  ----------   ------
                         $9,825,958   $933,387   $7,885,521  $1,007,050   $    -
                         ==========   ========   ==========  ==========   ======
</TABLE>

     The Company believes that internally generated funds and its available line
     of credit will be sufficient  for its financing  requirements  for at least
     the next twelve months.


     Related Party Transactions

     In August 1999, a corporation owned by Messrs. Rich and Stern, each of whom
     is an  officer,  director  and  significant  stockholder  of  the  Company,
     acquired two franchise  locations  from a franchisee  who was delinquent in
     discharging its obligations to Evergood.

     Evergood had determined that it was advisable to have a presence in what it
     believes are two of the most prominent  shopping malls in the New York City
     area, Roosevelt Field Mall and Walt Whitman Mall. Evergood further believed
     that these locations could serve as showcases for potential franchisees and
     as  flagship  stores  for  Evergood's  franchise  business.   Nevertheless,
     Evergood  did not then  operate any  company-owned  stores and did not then
     want to assume the responsibility for operating the two locations.

     Consequently,  in order to induce  Messrs.  Rich and  Stern to  assume  the
     obligations of the franchisee, Evergood guaranteed the obligations of their
     corporation  under the leases for the  franchised  locations  and agreed to
     provide  merchandise  to  them.  In  consideration  of  the  guarantee  and
     agreement to provide  product,  the corporation  owned by Messrs.  Rich and
     Stern assumed the existing  obligation of the prior  franchisee to Evergood
     and assumed all  liabilities of the prior  franchisee  under the leases for
     the locations.

     Notwithstanding  the fact  that  Evergood  provided  the  corporation  with
     product, the corporation has been unable to generate a profit and, although
     the corporation has paid all of the  obligations  under the leases,  it has
     not paid any  amounts to Evergood  in respect of product  delivered  to the
     corporation,  nor in respect of the debt of the prior franchisee assumed in
     1999.  The  total  of all  amounts  due from the  corporation  to  Evergood
     amounted to $783,647 at June 30, 2002.

     In fiscal year 2000,  Evergood  determined to fully reserve for the amounts
     then owed,  but to  continue to sell  product to the stores.  The effect of
     this action in the  Consolidated  Statement of  Operations  was a charge of
     $53,167 for the six months ended June 30, 2002.

Continued

                                       21

<PAGE>

     Evergood is presently  evaluating taking over the stores in the fiscal year
     ending December 31, 2002.  Evergood  believes that with the full support of
     its  corporate  marketing  and  advertising  department  and  new  in-store
     management,  the stores may  achieve  their  full  potential  and return to
     profitability within a reasonable amount of time. Nevertheless,  until such
     time as these  stores  become  profitable,  Evergood  expects  that it will
     continue  to  incur  losses  in  connection  with the  operations  of these
     locations.


     Risks Related to Our Business

     Customer Concentration:

     Evergood is  dependent  upon sales to its largest  customer.  Sales to this
     customer  for the  six  months  ended  June  30,  2002  represented  55% of
     Evergood's consolidated net revenue.  Evergood has what it believes to be a
     very  close  and  extremely  positive  continuing  relationship  with  this
     customer. Net revenue from this customer during the first six months of the
     fiscal year ending  December  31,  2002,  has  continued  to grow above the
     comparable period for the fiscal year ended December 31, 2001. It should be
     noted  that if this  customer  for any  reason  substantially  reduces  its
     purchases,  such event may have an adverse  effect on the operations of the
     Company.  The Company is not currently  aware of any facts which may change
     the status of the business relationship between the two parties.

     Effect of Adverse Publicity:

     The Company's products consist of vitamins,  minerals, dietary supplements,
     herbs and other  ingredients that the Company regards as safe when taken as
     suggested  by the  Company.  While the  Company  conducts  quality  control
     testing on its products,  the Company does not conduct or sponsor  clinical
     studies  relating to the benefits of all of the  products it  manufactures.
     The Company is highly dependent upon consumers and distributors' perception
     of the overall integrity of its business, as well as the safety and quality
     of its products.  Similar  products  distributed by other companies may not
     adhere to the same  quality  standards as the Company and could impact upon
     the  Company.  The  Company  could  be  adversely  affected  if  any of the
     Company's  products or any similar products  distributed by other companies
     should prove or be asserted to be harmful to consumers or should scientific
     studies provide  unfavorable  findings  regarding the  effectiveness of any
     such  products.  The Company's  ability to attract and retain  distributors
     could be adversely affected by negative publicity or by the announcement by
     any governmental agency of investigatory proceedings regarding the business
     practices of the Company.


     Variability of Quarterly Results:

     The  Company  has  experienced,  and  expects to  continue  to  experience,
     variations in its net sales and operating  results from quarter to quarter.
     The Company  believes that the factors which influence this  variability of
     quarterly  results  include,  among others,  the timing of  expenditures in
     anticipation  of  increased  sales,  including  advertising  and  promotion
     expenditures,  the  timing of the  Company's  introduction  of new  product
     lines,  the level of consumer  acceptance  of each  product  line,  general
     economic and industry conditions that affect consumer spending and retailer
     purchasing, the availability of manufacturing capacity, the timing of trade
     shows,  the product  mix of customer  orders,  the timing of  placement  of
     customer  orders and the  occurrence of charge backs in excess of reserves.
     Accordingly,  a comparison  of the  Company's  results of  operations  from
     period to period is not necessarily  meaningful,  and the Company's results

Continued

                                       22
<PAGE>

     of  operations  for any period  are not  necessarily  indicative  of future
     performance.

     Under its present product liability insurance  coverage,  the Company has a
     deductible amount of $75,000 per occurrence to a maximum total of $750,000,
     which  includes  legal  fees and  settlements  paid under  litigation.  The
     Company  has  been  expensing  these  costs on a pay as you go  basis.  The
     Company  believes  that the amount  remaining  to be paid under this clause
     will not have a material effect on its operations in any one year.

     The  Company's  current  product  liability  insurance  is due to expire on
     August 18,  2002.  The Company  being  sensitive  to the current  insurance
     market place is attempting to place its product liability insurance with an
     appropriate  carrier.  Due to the trends in both the insurance industry and
     the vitamin and nutritional  supplement industry,  the cost of premiums and
     amounts of  insurance  coverage is  impossible  to ascertain at the present
     time. Under any circumstances,  management  believes it will not be able to
     duplicate  the amount of coverage it  currently  has for the  premiums  and
     deductibles it currently  has.  Notwithstanding  the foregoing,  any action
     commenced  prior to August 18,  2002 or any  occurrence  giving rise to the
     commencement  of an  action  if  within  the  parameters  of the  currently
     existing  policy  for  non  ephedra  products  should,  in the  opinion  of
     management, be covered for a period of three years by the existing products
     liability insurance.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

     The Company has  historically  invested  its cash and cash  equivalents  in
     short-term,  fixed-rate,  highly-rated and highly-liquid  instruments which
     are reinvested when they mature throughout the year. Presently, the Company
     does not have short-term investments.

     The interest rate on the Company's borrowings is generally determined based
     upon prime rate and may be subject to market  fluctuation as the prime rate
     changes as determined within each specific agreement.  The Company does not
     anticipate entering into interest rate swaps or other financial instruments
     to hedge its  borrowings.  If market  interest  rates  increase by 10% from
     levels at June 30, 2002 and the  average  outstanding  debt  remains at the
     2002 level,  the effect on the  Company's  net income would be decreased by
     approximately  $12,269.  Although  the  Company  sells  products in foreign
     countries,   it  does  so  under  dollar  denominated  letters  of  credit.
     Accordingly,  it is not exposed to market risk related to foreign  currency
     exchange rates.


     Inflation

     Inflation has not had a significant impact on the Company's operations.

Continued

                                       23
<PAGE>
PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

     During the first six months of the fiscal year 2002,  Evergood  was engaged
     in more  than 40  different  active  litigations  - each  currently  are at
     different stages of discovery.  The numerous  litigations  involved various
     claims and in large measure were defended by the Company's  outside general
     counsel,  namely,  the firm of  Hoffinger  Stern & Ross,  LLP, or other law
     firms  supervised by the  Hoffinger  firm as well as a variety of law firms
     appointed by numerous insurance companies with whom the Hoffinger firm acts
     as  co-counsel.  The following is a brief synopsis of the current status of
     the various litigation proceedings.

     In  March  1999  and  May  1999,   Frank   Hillebrand  and  Jonathan  Aube,
     respectively,  each  commenced  an action  against  Evergood in the Supreme
     Court of California,  County of Riverside,  Indio Branch.  Each suit arises
     from allegations by the respective  plaintiff that Evergood used his images
     in, among other things,  advertisements  and product  packaging without his
     authorization.  Each suit claims damages for invasion of privacy,  invasion
     of  the  right  to  privacy,   conversion  and  loss  of  future  earnings.
     Additionally,  each suit seeks injunctive  relief.  After numerous hearings
     and court  appearances,  injunctive relief has been denied in each of these
     matters.  There has been extensive  discovery in each suit,  which includes
     numerous document requests,  numerous examinations before trial, interviews
     and/or  discussions with potential  experts,  as well as exhaustive  motion
     practice  surrounding  the  discovery  process.  The  Hillebrand  matter is
     scheduled  to go to trial on October 7, 2002.  The Aube matter is scheduled
     to go to a mandatory settlement conference on October 25, 2002 and to trial
     on November 18, 2002.  Moreover,  there are still expert  disclosures  that
     need to be made in each of these matters as well as  additional  deposition
     discovery in the Aube matter. Management believes that potential liability,
     if any,  in excess of that which is covered  by  insurance  will not have a
     material financial impact on Evergood.

     In April 2000, Great Earth International  Franchising Corp. ("GEIFC") filed
     a lawsuit in the United States District Court for the Southern  District of
     New York against Great Earth  Vitamins/Mid-  Atlantic,  Inc., a franchisee,
     and the principals of Mid-Atlantic, John Corumbis, Abraham Zaiderman and T.
     Brian  Haigley.  The complaint  seeks  declaratory  judgement,  damages for
     breach of contract, an accounting and injunctive relief. The complaint does
     not state the  amount  of  damages  being  sought.  An answer  has not been
     interposed.  The  parties  have been  engaged in  settlement  negotiations.
     Management  believes the outcome of these  matters will not have a material
     adverse effect on the Company.

     In December 2000,  GEIFC  initiated a lawsuit in the United States District
     Court for the Eastern District of New York against 1039405 Ontario, Inc., a
     sub-franchisee,  for,  among other  things,  breach of contract,  trademark
     infringement,  misappropriation  of  trademarks  and tortious  interference
     seeking  a  preliminary  injunction  and other  damages  in an amount to be
     determined.  In the first quarter of 2001, 1039405 Ontario  counter-claimed
     for breach of contract and  tortious  interference  seeking  damages of $10
     million. Subsequently,  GEIFC has amended its complaint seeking damages for
     additional trademark  infringement in a sum in excess of $10 million.  This
     matter has been the subject of very extensive discovery including, numerous
     document  requests,  numerous  examinations  before  trial,  various  court
     requested conferences, as well as motion notice practice in connection with
     the discovery  process.  The parties are now exchanging expert discovery as
     well as scheduling  additional  depositions  prior to trial. This matter is

Continued

                                       24
<PAGE>

     currently  scheduled to go to trial in the fourth quarter of the year 2002.
     It is  impossible  to  currently  predict or  ascertain  the outcome of the
     litigation;   however,  based  upon  currently  available  information  and
     considering its various claims and defenses,  in the opinion of management,
     the outcome of this  action  should not have a material  adverse  effect on
     Evergood's consolidated financial statements.

     Likewise, in January 2001, GEIFC commenced a separate lawsuit in the United
     States  District Court for the Southern  District of New York against Milks
     Development,  Inc.,  RHG Holdings  Co.,  Edward  Ricciardi and Ted Odd, the
     sub-franchisees  of  1039405  Ontario.  The  identical  causes  pled in the
     lawsuit  against  1039405  Ontario are pled in this lawsuit  against  Milks
     Development,  Inc., RHG Holdings Co.,  Edward  Ricciardi and Ted Odd, along
     with a similar counterclaim.  Each of the claims in the main action and the
     counterclaim  seek damages similar to those sought in the lawsuit described
     above.  This lawsuit is in the same discovery  stage as the 1039405 Ontario
     matter as it has now been consolidated with that matter.  Therefore, due to
     the  consolidation  with the 1039405 Ontario action for all purposes,  this
     action should not have a material adverse effect on Evergood's consolidated
     financial statement.

     In  2000,  Macerich  Corp.,  a  landlord  in a mall in  Boulder,  Colorado,
     initiated a lawsuit  against  Evergood  seeking  performance  of an alleged
     guaranty of a lease entered into by a Great Earth  franchisee.  The lawsuit
     is pending in the District Court, Boulder County, State of Colorado.  There
     have been numerous  motions filed in this matter,  some pretrial  discovery
     and it is presently  scheduled to go to  arbitration on August 23, 2002. In
     the  opinion  of  management,  the  outcome  of this  suit  will not have a
     material adverse effect upon the consolidated  financial  statements of the
     Company.

     In the last quarter of 2001, Total Health  Communications  Inc. initiated a
     lawsuit in State  Court in Utah in the Fifth  Judicial  District  Court for
     Washington  County,  Utah seeking  damages from  Bodyonics,  Ltd. and Total
     Health  Holdings  LLC, and others in connection  with an alleged  breach of
     contract by Evergood.  The material  allegations of the complaint have been
     denied  by the  Company  who has  filed  motions  seeking  to  dismiss  the
     complaint,  and in the alternative moving the case to the Eastern District,
     Federal  Court of the State of New York.  Evergood has various  affirmative
     defenses and  significant  couterclaims  which has now  interposed  in this
     action.  The  Court  dismissed  the  case  against  all  defendants  except
     Bodyonics.  The Company has  commenced a third party action  against one of
     the  principals  of Total Health  Communications,  Inc.  This matter is not
     covered  by  insurance.  Based upon  currently  available  information  and
     considering its various claims and defenses,  in the opinion of management,
     the  outcome of the action  should  not have a material  adverse  effect on
     Evergood's consolidated financial statements.

     During 2001, a lawsuit was commenced by Bonnie J. Sampler, individually and
     as  Administratrix of her late husband's estate in the Supreme Court of the
     State of New York,  County of Nassau,  alleging  that her husband died as a
     result of his use of a product  manufactured,  distributed  and marketed by
     Evergood. An answer has been interposed denying the material allegations of
     the  complaint.  This  lawsuit is currently  in the early  discovery  stage
     although  depositions  have  been  scheduled.   Accordingly,   Evergood  is
     currently unable to predict the likely outcome.  Although certain causes of
     action under these  lawsuits  are not covered  under  Evergood's  insurance
     policies,  management believes that any potential liability will not have a
     material adverse effect on Evergood.

     During 2001 and the first six months of fiscal year 2002, numerous lawsuits
     were  initiated  in various  forums in Federal and State courts by numerous
     plaintiffs  in  jurisdictions  but not  limited to the  States of  Alabama,
     Nevada,  California,   Illinois,  Louisiana,  New  Jersey,  New  York,  and

Continued

                                       25
<PAGE>

     Washington  seeking  damages in connection with their use or ingestion of a
     product  manufactured  by Evergood  for  Cytodyne  Technologies,  Inc. or a
     product  manufactured  in bulk by Evergood for CCA  Industries,  Inc. These
     lawsuits  are in  various  discovery  stages in each of the  jurisdictions.
     Discovery in these  numerous  matters vary from  production of documents to
     attendance at numerous  examinations before trial and the filing of various
     substantiative  motions,  including  but not limited to motions for summary
     judgment.  Although,  certain causes of action under these lawsuits are not
     covered under  Evergoods's  insurance  policies,  management  believes that
     potential  liability,  if any,  in  excess  of that  which  is  covered  by
     insurance will not have a material adverse effect on Evergood.

     There are currently  pending two disparate  actions in Italy. Each of these
     involve  allegations  concerning the ingestion of products  manufactured by
     Evergood.  Each of these cases are being  litigated under the laws of Italy
     and are in early discovery stages. The Company's outside general counsel is
     active with Italian  counsel in these  matters.  Although  causes of action
     under these lawsuits are not covered under Evergood's  insurance  policies,
     management  believes  that  potential  liability,  if any,  will not have a
     material adverse effect on Evergood.

     In the  latter  part of 2001,  an  action  was  commenced  by the  State of
     California  against  Evergood  in  the  Superior  Court  of  the  State  of
     California,  County of Alameda,  seeking damages in connection with certain
     products  manufactured  by Evergood.  The case is currently  the subject of
     extensive  discovery.   Expert  depositions  have  been  concluded  on  the
     threshold issue of whether  androstenedione  is an anabolic steriod.  It is
     impossible to currently  predict the outcome of this  litigation;  however,
     based upon currently  available  information  and  considering  its various
     claims and  defenses,  in the  opinion of  management,  the outcome of this
     action should not have a material adverse effect on Evergood's consolidated
     financial statements.


     In the first quarter of 2002, three separate actions were commenced against
     Evergood in the Superior  Court of the State of  California,  County of Los
     Angeles  regarding the product KAVA. These actions have been certified as a
     class action. General demurrers have been filed as well as a motion seeking
     dismissal  of the action.  The motion has been argued and a decision by the
     court  has been  rendered.  Essentially  the court has  stayed  the  action
     pending  action by the FDA.  It is  impossible  to  currently  predict  the
     outcome  of  these  actions,   however,   based  upon  currently  available
     information and considering its various claims and defenses, in the opinion
     of  management,  the  outcome of these  actions  should not have a material
     adverse effect on Evergood's consolidated financial statements.

     During the month of August 2002,  five  different  class  actions have been
     commenced  in the States of  California,  Florida,  Illinois,  New York and
     Pennsylvania.  Each of these  lawsuits seek damages in connection  with the
     marketing and sale of androstenedione, among other products. Each complaint
     alleges an  inability  to  substantiate  the claims made with regard to the
     marketing  attendant  to the  sale of such  products.  The  complaint  also
     alleges  that the  products  do not contain  warnings as to adverse  health
     consequences.  Preliminary  discovery was served along with a number of the
     complaints.  No answers need be  interposed  to the  complaints  as yet. No
     responses to the discovery  requests need be made as yet. In the opinion of
     management,  at this time,  the outcome of these actions  should not have a
     material adverse effect on Evergood.

     Additionally,  during calendar year 2001 and the first six months of fiscal
     year 2002,  various third parties have attempted to infringe upon trademark

Continued
                                      26
<PAGE>

     and intellectual property rights of Evergood.  Generally, Evergood has been
     able to protect  its  proprietary  rights  without  the need for  extensive
     litigation.  Currently, there are no active trademark infringement lawsuits
     pending.

Item 6: Exhibits and Reports on Form 8-K

         (a)   Exhibits

     99.1  Certification  by  Mel  Rich,  CEO,  Evergood  Products  Corporation,
pursuant to 18 U.S.C.  Section 1360,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

     99.2 Certification by Stephen R. Stern, CFO, Evergood Products  Corporation
pursuant to 18 U.S.C.  Section 1360,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

     (b) No  reports on Form 8-K were filed  during the  quarter  ended June 30,
2002.

                                       27
<PAGE>


Signatures


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.



   Date:   August 14, 2002          EVERGOOD PRODUCTS CORPORATION

                                  By: /s/ Stephen R. Stern
                                     ---------------------------------
                                     Chief Financial Officer and
                                     Principal Accounting Officer


                                       28