<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

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


                  For the quarterly period ended March 31, 2001

                                       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.)

140 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 May 10, 2001, the registrant had 4,475,957 shares outstanding of its
Common Stock, $.01 par value.

<PAGE>

EVERGOOD PRODUCTS CORPORATION
   AND SUBSIDIARIES

Index

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

<TABLE>
<CAPTION>


                                                                                                        Page
<S>           <C>                                                                                       <C>
Part I.       Financial Information

  Item 1.     Unaudited Consolidated Financial Statements

                Balance Sheets
                  December 31, 2000 and March 31, 2001                                                   3-4

                Statements of Operations
                  For the Three Months Ended March 31, 2000 and 2001                                     5

                Statements of Cash Flows
                  For the Three Months Ended March 31, 2000 and 2001                                     6-7

                Notes to Consolidated Financial Statements                                               8-11

  Item 2.     Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                                               12-15

  Item 3.     Quantitative and Qualitative Disclosures About Market Risk                                15


Part II.      Other Information

  Item 1.     Legal Proceedings                                                                         16

  Item 6.     Exhibits and Reports on Form 8-K                                                          17


Signatures                                                                                              18
</TABLE>

                                                                               2

<PAGE>

Part I - Financial Information

Item 1.  Consolidated Financial Statements

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

                                                                                December 31,          March 31,
                                                                                    2000                 2001
                                                                              ===============      ===============

Assets
     Current Assets
       <S>                                                                    <C>                  <C>
       Cash                                                                   $       236,037      $       415,881
       Accounts receivable - less allowance for doubtful
         accounts of $790,893 and $939,508 for 2000
         and 2001, respectively                                                     8,589,570            7,343,843
       Accounts receivable - related party - less allowance
         for doubtful accounts of $453,845 and $516,154
         for 2000 and 2001, respectively                                                    -                    -
       Current maturities of notes receivable - net                                    65,914               48,852
       Inventory                                                                    9,577,706            8,775,912
       Deferred tax asset                                                           1,286,000            1,396,000
       Deferred franchising costs                                                      56,400               26,000
       Prepaid expenses                                                               787,217              513,080
                                                                              ---------------      ---------------

                                                                                   20,598,844           18,519,568
                                                                              ---------------      ---------------

     Fixed Assets - net                                                             2,506,042            2,560,219
                                                                              ---------------      ---------------

     Other Assets
       Notes receivable - net of current maturities                                    98,442               70,826
       Deferred tax asset                                                             333,000              489,000
       Intangible assets - net                                                        294,246              288,017
       Other assets                                                                    12,853               12,418
                                                                              ---------------      ---------------

                                                                                      738,541              860,261
                                                                              ---------------      ---------------

                                                                              $    23,843,427      $    21,940,048
                                                                              ===============      ===============
</TABLE>

See notes to consolidated financial statements.                                3
<PAGE>

EVERGOOD PRODUCTS CORPORATION
   AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
================================================================================

<TABLE>
<CAPTION>

                                                                                December 31,          March 31,
                                                                                    2000                2001
                                                                              ===============      ===============
Liabilities and Stockholders' Equity

     Current Liabilities
       <S>                                                                    <C>                  <C>
       Accounts payable                                                       $     9,133,954      $     9,931,110
       Accrued expenses                                                             2,324,275            1,558,321
       Unearned franchise fees                                                        187,500              157,500
       Income taxes payable                                                           101,887                    -
       Current maturities of long-term debt                                           240,000              240,000
       Current maturities of loans payable - officers                                 142,009               12,476
                                                                              ---------------      ---------------

                                                                                   12,129,625           11,899,407
                                                                              ---------------      ---------------

     Other Liabilities
       Loan payable                                                                 6,976,796            5,832,160
       Long-term debt - net of current maturities                                   1,255,500            1,195,500
                                                                              ---------------      ---------------

                                                                                    8,232,296            7,027,660
                                                                              ---------------      ---------------

     Commitments and Contingencies

     Stockholders' Equity
       Common stock                                                                    45,462               45,462
       Additional paid-in capital                                                   7,855,052            7,855,052
       Accumulated (deficit)                                                       (4,114,974)          (4,583,499)
                                                                              ---------------      ---------------
                                                                                    3,785,540            3,317,015
       Less:  Treasury stock                                                          304,034              304,034
                                                                              ---------------      ---------------

                                                                                    3,481,506            3,012,981
                                                                              ---------------      ---------------

                                                                              $    23,843,427      $    21,940,048
                                                                              ===============      ===============
</TABLE>

See notes to consolidated financial statements.                                4

<PAGE>

EVERGOOD PRODUCTS CORPORATION
   AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
================================================================================
<TABLE>
<CAPTION>
                                                     For the Three Months Ended
                                                               March 31,
                                                 ==================================
                                                       2000                 2001
                                                 ==================================
<S>                                             <C>                <C>
Net Revenue                                      $   15,249,379     $    16,577,742

Cost of Revenue                                      10,970,072          11,859,220
                                                 --------------     ---------------

                                                      4,279,307           4,718,522

Selling, General and Administrative Expenses          4,146,898           5,233,864
                                                 --------------     ---------------

Income Before Other Income (Expense)                    132,409            (515,342)
                                                 --------------     ---------------

Other Income (Expense)
   Interest (expense)                                  (206,006)           (216,183)
   Other income                                       1,295,630                   -
                                                 --------------     ---------------

                                                      1,089,624            (216,183)
                                                 --------------     ---------------

Income (Loss) Before Income Taxes                     1,222,033            (731,525)
                                                 --------------     ---------------

Provision (Benefit) for Income Taxes
   Current                                              254,125               3,000
   Deferred                                             218,000            (266,000)
                                                 --------------     ---------------

                                                        472,125            (263,000)
                                                 --------------     ---------------

Net Income (Loss)                                $      749,908     $      (468,525)
                                                 ==============     ===============
Basic and Diluted Net Income (Loss) Per Share    $          .19     $          (.10)
                                                 ==============     ===============
Weighted Shares Used in Computation                   3,985,465           4,475,957
                                                 ==============     ===============
</TABLE>

               See notes to consolidated financial statements.                 5
<PAGE>

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

                                                                   For the Three Months Ended
                                                                             March 31,
                                                               ==================================
                                                                     2000                2001
                                                               ==================================
<S>                                                           <C>                <C>
Cash Flows from Operating Activities
   Net income (loss)                                           $      749,908     $      (468,525)
                                                               --------------     ---------------
   Adjustments to reconcile net income (loss) to net cash
     provided by (used for) operating activities:
       Depreciation and amortization                                   68,969             168,360
       Provision (benefit) for deferred taxes                         218,000            (266,000)
       Stock issued for consulting fees                               684,821                   -
       Increase (decrease) in allowance for doubtful
         accounts and notes receivable                                 65,000             213,821
       Write-off of accounts receivable and notes receivable           40,903              15,802
       Loss on disposal of fixed assets                                     -              53,231
       (Increase) decrease in:

         Accounts receivable                                       (2,620,675)          1,049,818
         Accounts receivable - related party                          (97,674)                  -
         Inventory                                                    323,166             801,794
         Deferred franchising costs                                   (10,000)             30,400
         Prepaid expenses                                            (152,937)            274,137
         Notes receivable                                             (15,136)             10,964
         Other assets                                                (224,415)                435
       Increase (decrease) in:

         Accounts payable                                           1,746,743             797,156
         Accrued expenses and sundry liabilities                      215,355            (765,954)
         Unearned franchise fees                                      (57,500)            (30,000)
         Income taxes payable                                         216,762            (101,887)
                                                               --------------     ---------------

                                                                      401,382           2,252,077
                                                               --------------     ---------------

                                                                    1,151,290           1,783,552
                                                               --------------     ---------------

Cash Flows from Investing Activities
   Purchase of fixed assets                                          (196,035)           (269,540)
   Restricted cash as security for equipment lease                     36,410                   -
                                                               --------------     ---------------

                                                                     (159,625)           (269,540)
                                                               --------------     ---------------
</TABLE>

See notes to consolidated financial statements.                                6
<PAGE>

EVERGOOD PRODUCTS CORPORATION
   AND SUBSIDIARIES
Consolidated Statements of Cash Flows

(Unaudited)                                                          Page 2 of 2
================================================================================

<TABLE>
<CAPTION>

                                                                                    For the Three Months Ended
                                                                                              March 31,
                                                                                ===================================
                                                                                       2000               2001
                                                                                ===================================

Cash Flows from Financing Activities
<S>                                                                             <C>                 <C>
   Increase (decrease) in loan payable                                          $       (953,549)   $    (1,144,636)
   Payments of notes payable                                                             (78,250)           (60,000)
   Payments of officers' loans                                                           (11,411)          (129,532)
                                                                                ----------------    ---------------

                                                                                      (1,043,210)        (1,334,168)
                                                                                ----------------    ---------------

Increase (Decrease) in Cash                                                              (51,545)           179,844

Cash - beginning                                                                         445,849            236,037
                                                                                ----------------    ---------------

Cash - end                                                                      $        394,304    $       415,881
                                                                                ================    ===============
</TABLE>

See notes to consolidated financial statements.                                7
<PAGE>

EVERGOOD PRODUCTS CORPORATION
   AND SUBSIDIARIES
Notes to Consolidated Financial Statements

March 31, 2001                                                       (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)
       necessary for a fair presentation have been included. All significant
       intercompany transactions and balances have been eliminated. Operating
       results for the three months ended March 31, 2001, are not necessarily
       indicative of the results to be expected for the year ending December 31,
       2001. 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, 2000.

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,       March 31,
                                             2000              2001
                                         ==============================
            <S>                         <C>              <C>
             Raw Materials               $   4,983,743    $   4,468,778
             Work-in-Process                 1,367,494        1,337,249
             Finished Goods                  3,226,469        2,969,885
                                         -------------    -------------
                                         $   9,577,706    $   8,775,912
                                         =============    =============
</TABLE>

Continued                                                                      8
<PAGE>

4 -    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 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 months ended March 31, 2000 and 2001
       was as follows:

<TABLE>
<CAPTION>
                                                                       Brand
                               Manufacturing       Franchising       Development      Corporate           Total
                               ===================================================================================
<S>                           <C>               <C>              <C>               <C>             <C>
Three Months Ended
  March 31, 2000
   Net revenues from
     external customers        $  10,424,511     $   3,242,484    $    1,582,384    $          -    $   15,249,379
   Intersegment net sales          2,607,334            20,307                 -               -         2,627,641
   Operating income (loss)         1,119,793           (24,659)         (250,772)       (711,953)          132,409
   Total assets                   12,014,182         5,071,557         2,733,980       1,446,000        21,265,719


Three Months Ended
  March 31, 2001
   Net revenues from
     external customers        $  11,616,183     $   2,949,900    $    2,011,659    $          -    $   16,577,742
   Intersegment net sales          2,395,583            55,260                 -               -         2,450,843
   Operating income (loss)         1,114,011          (559,251)       (1,048,334)        (21,768)         (515,342)
   Total assets                   12,739,225         4,523,811         3,139,012       1,538,000        21,940,048
</TABLE>

Continued                                                                      9
<PAGE>

       Revenue from the franchising segment is comprised of the following:

<TABLE>
<CAPTION>
                                                                                     March 31,
                                                                          ==============================
                                                                               2000              2001
                                                                          ==============================
                <S>                                                       <C>              <C>
                Sale of Products                                          $   2,769,633    $   2,517,807
                Royalties                                                       410,351          432,093
                Sale of Franchises                                               62,500                -
                                                                          -------------    -------------

                                                                          $   3,242,484    $   2,949,900
                                                                          =============    =============
</TABLE>

       Product sales include $40,245 and $46,010 of sales for the three months
       ended March 31, 2000 and 2001, respectively, from a Company-owned
       franchise store, which was acquired in 2000.

5 -    Litigation

       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. Both suits are
       currently in a discovery stage and, 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 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. 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 Halgley. 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 are
       presently engaged in settlement negotiations.

       In December, 2000, Great Earth International Franchising Corp. ("GEIFC")
       initiated a lawsuit in the United States District Court for the Eastern
       District of New York against 1039405 Ontario, Inc., a sub-franchisor, for
       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 $10,000,000. Subsequently, GEIFC has
       amended its complaint seeking other damages for additional trademark
       infringement with damages sought

Continued                                                                     10

<PAGE>

       in excess of $10,000,000. Discovery has commenced. The parties have
       entered into a scheduling order for the purpose of conducting discovery.
       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 materially
       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 has reached
       the discovery stage. 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
       materially adverse effect on the Company's consolidated financial
       statements.

                                                                              11

<PAGE>

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.

       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.

Continued                                                                     12

<PAGE>

       Results of Operations

       Three months ended March 31, 2000 compared with three months ended
       March 31, 2001.

       Revenue
       -------

       Consolidated revenue for the three months ended March 31, 2000 and 2001
       were as follows:

<TABLE>
<CAPTION>
                                                                             March 31,
                                                    ===========================================================
                                                                2000                             2001
                                                    ----------------------------    ---------------------------
                                                         Amount         Percent          Amount        Percent
                                                    ===========================================================
       Segment:
       <S>                                          <C>               <C>           <C>               <C>
         Manufacturing                              $   10,424,000          68.4%   $   11,616,000         70.0%
         Franchising                                     3,242,000          21.2         2,950,000         17.8
         Brand Development                               1,583,000          10.4         2,012,000         12.2
                                                    --------------    ----------    --------------    ---------

       Consolidated                                 $   15,249,000         100.0%   $   16,578,000        100.0%
                                                    ==============    ==========    ==============    =========
</TABLE>

       Consolidated revenue for the three months ended March 31, 2001 rose by
       approximately $1,329,000, an increase of 8.7% over the three months ended
       March 31, 2000.

       Revenue from product sales by all segments increased by approximately
       $1,369,000 or 9.2% from $14,777,000 in 2000 to $16,146,000 in 2001.
       Company-wide sales to the franchise system decreased $293,000 or 10.4%
       from $2,811,000 in 2000 to $2,518,000 in 2001. Company-wide sales to
       unaffiliated customers increased by approximately $1,662,000 or 14% from
       $11,966,000 in 2000 to $13,628,000 in 2001. Consolidated revenue also
       includes royalties and franchise fees earned by the franchising segment.
       Royalties increased by approximately $22,000 from $410,000 in 2000 to
       $432,000 in 2001. Franchise fee revenue decreased by approximately
       $62,000 from $62,000 in 2000 to $-0- in 2001.

       Manufacturing segment sales increased approximately $1,192,000,
       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 $292,000
       primarily reflects a decrease in sale of products to franchises, and a
       decrease in franchise fee revenue. The decline in sales was primarily due
       to increased competition from national vitamin chains, vitamin
       discounters and internet sales. The decrease in franchise fee revenue was
       due to the absence of sales of franchises during the period.

       Brand development sales increased by approximately $429,000 primarily as
       a result of increases in advertising and promotional expenses.
       Advertising for this segment was approximately $1,774,000 in 2001
       compared with $726,000 in 2000, an increase of $1,048,000 or 144%.

Continued                                                                     13

<PAGE>

       Operating Income (Loss)
       -----------------------

       Operating income (loss) for the three months ended March 31, 2000 and
       2001 is comprised as follows:

<TABLE>
<CAPTION>


                                                                          March 31,
                                                 =========================================================
                                                             2000                          2001
                                                 ---------------------------    --------------------------
                                                                     Percent                       Percent
                                                                       of                             of
                                                                     Segment                       Segment
                                                      Amount         Revenue         Amount        Revenue
                                                 =========================================================
       Segment:
        <S>                                     <C>                  <C>       <C>                 <C>
         Manufacturing                           $    1,120,000        10.7%    $    1,114,000        9.6%
         Franchising                                    (24,000)        (.7)          (559,000)     (19.0)
         Brand Development                             (251,000)      (15.9)        (1,048,000)     (52.1)
         Corporate                                     (712,000)          -            (22,000)
                                                 --------------                 --------------

       Consolidated                              $      133,000          .8%    $     (515,000)     (3.1)%
                                                 ==============                 ==============
</TABLE>

       Consolidated operating income for the three months ended March 31, 2001
       decreased by approximately $648,000 compared to the three months ended
       March 31, 2000. The increase in gross margin of approximately $439,000
       resulted from a combination of higher sales and improved margins overall.
       This increase was offset by increases in selling, general and
       administrative expenses, primarily advertising and promotion expenses,
       officers' salaries and professional fees.

       Manufacturing segment operating income decreased by approximately $6,000
       in the three months ended March 31, 2001. Manufacturing gross profit
       increased approximately $246,000, offset by increases in manufacturing
       segment selling, general and administrative expenses of approximately
       $251,000. The increase in gross profit was caused primarily by increases
       in sales and decreases in raw material. The $251,000 increase in
       manufacturing segment selling, general and administrative expenses
       reflects increases in salaries and professional fees.

       Franchising segment operating loss increased by approximately $535,000
       for the three months ended March 31, 2001 compared with the three months
       ended March 31, 2000. The change is primarily due to lower sales and
       lower margins of approximately $184,000 and increases in selling, general
       and administrative expenses, primarily warehouse charges of $81,000, bad
       debt of $75,000, conventions and seminars of $40,000, consulting fees of
       $34,000 and salaries of approximately $132,000.

       Brand development operating loss increased by approximately $797,000 for
       the three months ended March 31, 2001 from March 31, 2000. This resulted
       primarily because increased revenue and higher gross profit of
       approximately $378,000 was more than offset by increases to selling,
       general and administrative expenses of approximately $1,175,000 due
       mostly to an increase in advertising and promotion expenses of
       approximately $1,048,000.


Continued                                                                    14
<PAGE>

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

       Consolidated net loss of approximately $469,000 was comprised of the
       operating loss of $515,000 and interest expense of $216,000, offset in
       part by a tax benefit of $263,000.

       For the three months ended March 31, 2000, the Company had net income of
       $750,000, comprised of operating income of $132,000, interest expense of
       $206,000 and income from litigation settlements of $1,300,000.
       Additionally, the Company recorded a tax expense of $472,000.

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

       The Company's balance sheet reflects working capital of approximately
       $6,621,000 at March 31, 2001 compared with approximately $8,469,000 at
       December 31, 2000, a decrease of $1,848,000. In addition to the net loss
       of $469,000, items contributing to the decrease in working capital
       included the utilization of current assets to purchase equipment in the
       amount of $270,000 and to reduce long-term debt by approximately
       $1,200,000.

       Cash flows generated from operations for the three months ended March 31,
       2001 were approximately $1,800,000. The $469,000 net loss was the
       principal factor requiring the use of operating cash flows. However, this
       was more than offset by changes in other operating assets and
       liabilities, primarily decreases to accounts receivable and inventory
       levels. Accounts receivable decreased by approximately $1,100,000, mainly
       because one of the Company's major customers has begun paying at a much
       quicker pace. Inventory decreased approximately $814,000, mainly because
       the year-end balance included significant stocks of a new product which
       was introduced and shipped shortly after year-end.

       Cash used for financing activities in the amount of approximately
       $1,334,000 was for the repayment of loans. The Company uses its loan
       facility, which is collateralized by its accounts receivable, inventories
       and fixed assets, together with working capital generated from
       operations, to fund its cash needs. At March 31, 2001, the Company had
       available approximately $1,600,000 under this facility.

       Management of the Company believes that internally generated funds and
       its available line of credit will be sufficient for its working capital
       needs and the servicing of its debt for at least the next 12 months.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

       Not applicable.

                                                                              15

<PAGE>

Part II - Other Information

Item 1.  Legal 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. Both suits are
       currently in a discovery stage and, 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 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. 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 Halgley. 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 are
       presently engaged in settlement negotiations.

       In December, 2000, Great Earth International Franchising Corp. ("GEIFC")
       initiated a lawsuit in the United States District Court for the Eastern
       District of New York against 1039405 Ontario, Inc., a sub-franchisor, for
       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 $10,000,000. Subsequently, GEIFC has
       amended its complaint seeking other damages for additional trademark
       infringement with damages sought in excess of $10,000,000. Discovery has
       commenced. The parties have entered into a scheduling order for the
       purpose of conducting discovery. 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
       materially 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 has reached the discovery
       stage. 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 materially
       adverse effect on the Company's consolidated financial statements.

                                                                              16
<PAGE>
Item 6.  Exhibits and Reports on Form 8-K

       (a)  Exhibits

            None.


       (b)  Reports on Form 8-K

            None.

                                                                              17
<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:   May 11, 2001                     EVERGOOD PRODUCTS CORPORATION


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

                                                                              18