U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-QSB (Mark One)x
  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934FOR
  THE QUARTERLY PERIOD ENDED JUNE 30, 2001o
  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
___________ TO ___________ Commission File No. 0-26682 TECHNOLOGY FLAVORS &
  FRAGRANCES, INC.(Exact Name of Small
  Business Issuer as Specified in its Charter)
  Delaware
  11-3199437(State or other
  Jurisdiction of Incorporation or Organization)
  (IRS Employer
  Identification No.)10
  Edison Street East, Amityville, New York 11701(Address of Principal
  Executive Offices)(631)
  842-7600(Issuers Telephone Number,
  Including Area Code)
 Check whether the issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 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. YESxNOo APPLICABLE
ONLY TO CORPORATE ISSUERS The number of outstanding shares of the
issuer's common stock, par value $.01 per share, as of July 20, 2001, was
13,004,473. Transitional Small Business Disclosure
Format (check one): YESoNOx   TECHNOLOGY FLAVORS & FRAGRANCES, INC.

INDEX TO FORM 10-QSB

June
30, 2001

PART
  I  FINANCIAL INFORMATIONItem 1 
  Financial Statements
  (Unaudited)Consolidated Balance Sheets
  at June 30, 2001 and December 31, 2000Consolidated
  Statements of Operations for the Three Months and Six Months Ended June 30,
  2001 and June 30, 2000Consolidated
  Statements of Cash Flows for the Six Months Ended June 30, 2001 and June 30,
  2000Notes to
  Consolidated Financial StatementsItem
  2 
  Managements
  Discussion and Analysis of Financial Condition and Results of OperationsPART II  OTHER INFORMATIONSIGNATURES

PART I

ITEM 1
- FINANCIAL STATEMENTS

TECHNOLOGY FLAVORS &
FRAGRANCES, INC.CONSOLIDATED BALANCE SHEETS
(In U.S. Dollars)

At
  JUNE 30,
  2001
  (Unaudited)
  At
  DECEMBER 31,
  2000
  (Note)ASSETSCurrent assets:Cash and cash equivalents
  $185,973
  $195,387Receivables, net
  3,636,695
  2,953,620Inventories
  2,844,016
  2,829,974Prepaid expenses and other current
  assets
  185,096
  92,750Total current assets
  6,851,780
  6,071,731Fixed assets, net
  663,758
  547,441Intangible assets, net
  689,158
  770,235Other assets
  123,211
  145,346Notes receivable from related parties
  103,635
  125,035Total assets
  $8,431,542
  $7,659,788LIABILITIESCurrent liabilities:Accounts payable
  $1,573,240
  $1,180,905Accrued expenses
  43,655
  77,053Revolving credit facility
  1,335,062
  1,340,499Current portion of capital lease
  obligations
  56,125
  22,066Total current liabilities
  3,028,082
  2,620,523Capital lease
  obligations
  161,355
  58,107Deferred credits
  73,047
  71,4473,262,484
  2,750,077STOCKHOLDERS' EQUITYCommon stock:$.01 par value, authorized 20,000,000
  shares, issued and outstanding 13,004,473 and 13,019,348 shares, respectively
  130,045
  130,193Paid-in capital
  10,345,272
  10,363,542Accumulated deficit
  (5,306,259)
  (5,584,024)Total stockholders' equity
  5,169,058
  4,909,711Total liabilities and
  stockholders' equity
  $8,431,542
  $7,659,788Note:
  The balance sheet at
  December 31, 2000 has been derived from the audited financial statements at
  that date but does not include all of the information and footnotes required
  by generally accepted accounting principles for complete financial
  statements.See
  accompanying notes.TECHNOLOGY FLAVORS &
FRAGRANCES, INC.CONSOLIDATED STATEMENTS OF
OPERATIONS
(In U.S. Dollars) (Unaudited)

For the three months ended
  June 30,
  For the six months ended
  June 30,2001
  2000
  2001
  2000Net sales
  $4,126,438
  $4,471,740
  $8,313,433
  $8,687,955Cost of sales
  2,423,001
  2,492,036
  4,779,749
  4,954,976Gross profit
  1,703,437
  1,979,704,
  3,533,684
  3,732,979Operating expenses:Selling
  697,208
  631,675
  1,380,091
  1,243,611General and administrative
  490,150
  466,823
  981,292
  909,508Research and development
  360,607
  360,669
  709,800
  697,685Amortization
  49,323
  48,714
  98,645
  97,428Total operating expenses
  1,597,288
  1,507,881
  3,169,828
  2,948,232Income from operations
  106,149
  471,823
  363,856
  784,747Interest expense, net
  (33,679)
  (46,208)
  (68,677)
  (88,227)Income before
  provision for income taxes
  72,470
  425,615
  295,179
  696,520Provisions for income
  taxes
  (688)
  (13,000)
  (17,414)
  (23,355)Net income
  $71,802
  $412,615
  $277,765
  $673,165Net income per common
  share - basic and diluted
  $.01
  $.03
  $.02
  $.05Weighted average
  common shares outstanding
  13,017,806
  12,491,015
  13,019,431
  12,520,401See
  accompanying notes.

TECHNOLOGY FLAVORS &
FRAGRANCES, INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS
(In U.S. Dollars) (Unaudited)



For the six months ended June 30,2001
  2000Cash flows from
  operating activities:Net income
  $277,765
  $673,165Adjustments to reconcile net income to
  net cash provided by (used in) operating activities:Depreciation and amortization
  189,847
  185,001Deferred rent
  1,600
  6,180Changes in assets and liabilities:Accounts receivable
  (683,075)
  (1,373,134)Inventories
  (14,042)
  (269,702)Prepaid expenses and other
  current assets
  (92,346)
  (57,145)Other assets
  4,567
  (50,000)Accounts payable
  392,335
  387,014Accrued expenses
  (33,398)
  (46,199)Net cash provided by (used in)
  operating activities
  43,253
  (544,820)Cash flows from
  investing activities:Purchase of fixed assets
  (49,185)
  (78,339)Notes receivable
  -
  (30,896)Net cash used in investing
  activities
  (49,185)
  (109,235)Cash flows from
  financing activities:Proceeds from revolving credit facility
  7,625,000
  7,730,000Repayment of revolving credit facility
  (7,610,437)
  (7,115,136)Payment of capital lease obligations
  (21,027)
  (21,536)Issuance of common stock
  2,982
  60,083Net cash (used in) provided by
  financing activities
  (3,482)
  653,411Decrease in cash
  (9,414)
  (644)Cash and cash
  equivalents - beginning of period
  195,387
  154,535Cash and cash
  equivalents - end of period
  $185,973
  $153,891See
  accompanying notes.

TECHNOLOGY
FLAVORS & FRAGRANCES, INC.NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
June 30, 2001

1.          BASIS
OF PRESENTATION

Technology
Flavors & Fragrances, Inc. (the "Company," "us,"
"we" or "our") creates, develops and manufactures flavor
and fragrance products used to provide or enhance flavors or fragrances in a
wide variety of consumer and industrial products.

The
accompanying unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of our management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. 
Operating results for the three-month and six-month periods ended June
30, 2001 are not necessarily indicative of the results that may be expected for
the full year ending December 31, 2001. 
These unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in our Annual Report on Form 10-KSB for the year ended December 31,
2000.

2.          INVENTORIES

Components
of inventories are summarized as follows:

June
  30, 2001
  December
  31, 2000Raw Materials
  $1,774,531
  $1,582,272Finished Goods
  1,069,485
  1,247,702$2,844,016
  $2,829,9743.          EARNINGS
PER SHARE

Basic
net income per share is calculated using the weighted average number of shares
of our common stock outstanding during the period.  Diluted net income per share for the three-month and six-month
periods ended June 30, 2001 and June 30, 2000 was calculated using the weighted
average common and common equivalent shares that were outstanding during the
periods.  The effect of common stock
equivalents for the three-month and six-month periods ended June 30, 2001 and
June 30, 2000 was not material and, thus, diluted net income per share was not
presented.

ITEM 2  MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The
following information for the three-month and six-month periods ended June 30,
2001 and June 30, 2000 have been derived from our unaudited consolidated
financial statements and should be read in conjunction with our Annual Report
on Form 10-KSB for the year ended December 31, 2000.



Three months ended June 30,
  Six months ended June 30,2001
  2000
  2001
  2000(dollar amounts in thousands)Net sales
  $4,126
  100.0%
  $4,472
  100.0%
  $8,313
  100.0%
  $8,688
  100.0%Gross profit
  1,703
  41.3
  1,980
  44.3
  3,534
  42.5
  3,733
  43.0Operating
  expenses:Selling
  697
  16.9
  632
  14.1
  1,380
  16.6
  1,244
  14.3General and administrative
  490
  11.9
  467
  10.5
  981
  11.8
  909
  10.5Research and development
  361
  8.7
  360
  8.1
  710
  8.5
  698
  8.1Amortization
  49
  1.2
  49
  1.1
  99
  1.2
  97
  1.1Income from
  operations
  106
  2.6
  472
  10.5
  364
  4.4
  785
  9.0Interest
  expense, net
  33
  0.8
  46
  1.0
  69
  0.9
  88
  1.0Provision
  for income taxes
  1
  -
  13
  0.3
  17
  0.2
  23
  0.3Net income
  72
  1.8
  413
  9.2
  278
  3.3
  673
  7.7Net sales.  Net sales decreased by $346,000, or 7.7%, to
$4,126,000 for the three months ended June 30, 2001 from $4,472,000 for the
same period last year and decreased by $375,000, or 4.3%, to $8,313,000 for the
six months ended June 30, 2001 from $8,688,000 for the comparable six-month
period of 2000.  The decreases were
principally attributable to the continued weakness in the flavor and fragrance
industries and the general economy resulting in a lower demand for our
products.

Gross profit.  Gross profit, as a percentage of sales,
decreased to 41.3% for the three months ended June 30, 2001 as compared to
44.3% for the same period last year and decreased to 42.5% for the six months
ended June 30, 2001 as compared to 43.0% for the six-month period of 2000.  The decreases in gross profit for the 2001
periods were due primarily to the impact of lower sales volume and, to a lesser
extent, differences in product mix.

Operating expenses:

Selling
expenses.  Selling expenses increased by $65,000, or
10.3%, to $697,000 for the three months ended June 30, 2001 from $632,000 for
the same period last year and increased by $136,000, or 10.9%, to $1,380,000
for the six months ended June 30, 2001 from $1,244,000 for the comparable
six-month period of 2000.  The increases
were due principally to increases in travel expenses, and to a lesser extent,
increases in marketing promotional expenses and media advertising expenses.

General and administrative expenses.  General and administrative expenses
increased by $23,000, or 4.9%, to $490,000 for the three months ended June 30,
2001 from $467,000 for the comparable 2000 period and increased by $72,000, or
7.9%, to $981,000 for the six months ended June 30, 2001 from $909,000 for the
comparable six-month period of 2000. 
The increases were due principally to the hiring of our new president
and, to a lesser extent, an increase in professional fees.

Research
and development expenses.  Research and development expenses for the
three months ended June 30, 2001 of $361,000 were consistent with such expenses
for the comparable period in 2000.  For
the six months ended June 30, 2001, research and development expenses of
$710,000 were generally consistent with the comparable 2000 period of $698,000.

Amortization
expense.  Amortization expense for the three months
ended June 30, 2001 of $49,000 was consistent with such expenses in the
comparable 2000 period.  For the six
months ended June 30, 2001, amortization expense of $99,000 was consistent with
the comparable 2000 period of $97,000.

Total
operating expenses.Total operating expenses increased by
$89,000, or 5.9%, to $1,597,000 for the three months ended June 30, 2001 from
$1,508,000 for the comparable period in 2000 and increased by $222,000, or
7.5%, to $3,170,000 for the six-month period ended June 30, 2001 from
$2,948,000 for the comparable six-month period of 2000.

Interest expense, net.  Interest expense decreased by $13,000, or
28.3%, to $33,000 for the three months ended June 30, 2001 from $46,000 for the
comparable 2000 period and decreased by $19,000, or 21.6%, to $69,000 for the
six months ended June 30, 2001 from $88,000 for the comparable six-month period
of 2000.  The decreases were principally
attributable to lower levels of borrowings under our credit facility and lower
interest rates for the three-month and six-month periods.

Provision for income taxes.Provision for income taxes represents state
franchise taxes and federal alternative minimum tax.  There were no federal income tax provisions for 2001 and 2000
since we had available net operating loss carryforwards.

Net Income.Net income was $72,000 and $278,000 for the
three-month and six-month periods ended June 30, 2001 as compared to net income
for the comparable 2000 periods of $413,000 and $673,000, respectively.



Liquidity
and Capital Resources

Historically,
our financing needs have been met through the issuance of equity and debt
securities and commercial bank loans. 
In June 1999, we entered into a Loan and Security Agreement with a
lender which provided us with a three-year $3,000,000 revolving credit
facility.  We call this revolving credit
facility the "1999 Credit Facility. 
Outstanding borrowings under the 1999 Credit Facility initially bore
interest at a rate of three quarters of one percent (0.75%) in excess of a
prime lending rate, and is subject to certain adjustments based upon our
financial performance.  Effective
January 1, 2000, the interest rate was reduced to one quarter of one percent
(0.25%) in excess of a prime lending rate. 
Borrowings under the 1999 Credit Facility are subject to certain
eligibility requirements relating to our receivables and inventories and the
discretion of the lender.  Outstanding
borrowings are secured by substantially all of our assets, including our
product formulations.  We must comply
with certain financial and other covenants contained in the Loan and Security
Agreement, including maintaining tangible net worth of at least $1,750,000,
achieving not less than 75% of our projected pre-tax income for the upcoming
year, and incurring expenditures for capital assets of not more than $450,000
for the year.  Our subsidiaries have
guaranteed our obligations under the 1999 Credit Facility.  Borrowings under the 1999 Credit Facility at
June 30, 2001 was $1,355,000 and 
$1,645,000 was available for additional borrowings in accordance with
the terms of the 1999 Credit Facility. 
The outstanding borrowings under the 1999 Credit Facility are classified
as a current liability due to the terms of the agreement.  At June 30, 2001, the outstanding borrowings
bore interest at 7.0% per annum.

At
June 30, 2001, our working capital increased by $373,000, or 9.3%, to
$3,824,000 from $3,451,000 at December 31, 2000 due principally to the higher
level of accounts receivable. Additionally, the Company recently installed a
new computer system relative to its manufacturing, laboratory and accounting
systems and purchased certain state-of-the-art laboratory and manufacturing
equipment to enhance its productivity.

PART II - OTHER INFORMATION

Item
1.  Legal Proceedings
             None

Item
2.  Changes in Securities and Use of
Proceeds

On
June 20, 2001, we granted non-qualified stock options to purchase 100,000
shares of our common stock at an exercise price of $1.15 per share (the market
price of the common stock on the date of the grant) to an investor relations
firm under our 1999 Stock Option Plan. 
Such options begin vesting one month after the grant date in twenty
equal monthly installments of 5,000 shares. 
The options were granted as full consideration for investor relations
services to be rendered to our company.On
May 31, 2001, we granted options to purchase an aggregate of 150,000 shares of
our common stock to two executive officers at an exercise price of $1.10 per
share representing 110% of the market price of our common stock on the date of
the grant.  Such options vest in equal
annual installments over a three-year period and expire five years from the date
of the grant.  Two other officers were granted
options on May 31, 2001 to purchase an aggregate of 100,000 shares of our
common stock at an exercise price of $1.00 per share representing the market
price of our common stock on the date of the grant.  Such options vest in equal annual installments over a three-year
period and expire ten years from the date of the grant.These
option grants were made in reliance upon an exemption from the registration
provisions of the Securities Act of 1933, as amended, as transactions by an
issuer not involving any public offering.Item
3.  Defaults Upon Senior Securities
             None

Item
4.  Submission of Matters to a Vote of
Security Holders

On
June 20, 2001, we held our annual meeting of stockholders (the "Annual
Meeting"). The proposals voted upon at the Annual Meeting and the results
with respect to each proposal are set forth below.Proposals Voted Upon at Annual Meeting

1.
  
  To
  elect five directors to serve for a term of one year and until their
  respective successors are duly elected and qualified.Philip
  Rosner, A. Gary Frumberg, Sean Deson, Werner F. Hiller and Irwin D. Simon
  were each re-elected to the Board of Directors.  A tabulation of the votes cast in connection with election of
  each of Messrs. Rosner, Frumberg, Deson, Hiller and Simon is set forth below.2.
  
  To
  ratify the appointment by our Board of Directors of Ernst & Young LLP as
  our independent auditors for the year ending December 31, 2001.

Proposals
  For
  Against
  Abstain/Not
  VotingNo. 1 (Election of
  Directors)Philip Rosner
  11,541,013
  50
  3,400A. Gary Frumberg
  11,541,013
  50
  3,400Sean Deson
  11,541,013
  50
  3,400Werner F. Hiller
  11,513,299
  50
  31,114Irwin D. Simon
  11,541,013
  50
  3,400No. 2. (Appointment of
  Ernst & Young LLP)
  11,514,649
  100
  29,714

Item 5.
  Other InformationNoneItem 6.
  Exhibits and Reports on Form 8-Ka) ExhibitsNoneb)
  Reports on Form 8-KNoneSIGNATURES

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

Dated:  
  July 23, 2001TECHNOLOGY FLAVORS & FRAGRANCES, INC.By
  /s/  
  Joseph A. GemmoJoseph A. GemmoVice President and Chief Financial Officer(Principal Financial Officer and Officer
  DulyAuthorized to Sign on Behalf of
  Registrant)