`Securities and Exchange Commission
Washington, D.C. 20549

                                   Form 10-KSB


[X]  Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the Fiscal Year Ended: December 31, 2000

     Commission File No. 000-27237


                         HAND BRAND DISTRIBUTION, INC.
--------------------------------------------------------------------------------

                 (Exact name of small business issuer in its charter)


              Florida                                             66-0622463
  ------------------------------
------------------------------------
      (State of incorporation)                        (I.R.S. Employer Identification No.)


          9845 N.E. 2nd Avenue
         Miami Shores, FL                                            33138
----------------------------------------                             -----
(Address of principal executive offices)                          (Zip Code)


                   Issuer's telephone number: (305) 759-8710
                                              --------------



          Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

          Securities registered pursuant to Section 12(g) of the Act:

                                  COMMON STOCK


Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or 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 [ ]


Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB [X]

State issuer's revenues for twelve months ended December 31, 2000: $231,053

The aggregate market value of the voting stock held by non-affiliates of the
Registrant based upon the average bid and asked prices of such stock, at
April 20, 2001 was $631,968.

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 2,538,600 shares of common stock,
as of April 20, 2001.


                      DOCUMENTS INCORPORATED BY REFERENCE

                                      None

               Transitional Small Business Disclosure Format: No

2

                                     PART I

Item 1.        Description of Business.


We publish an informational magazine/catalog, Family Health News, four times a
year which includes articles on health, nutrition, lifestyle and innovative
health products and therapies. We distribute a select line of products related
to these topics including books and tapes, health and nutritional supplements,
lifestyle products and water filtration systems through the Family Health
News, through a sales force of independent distributors recruited primarily though
our catalog and through World Wide Web site on the Internet (www.familyhealthnews.com).
Most of the products we sell are developed and manufactured by others. Our product
line is narrowly focused and consists of approximately 120 products.

         We are a Florida corporation which was incorporated in 1995. Our
executive offices are located at 9845 N.E. 2nd Avenue, Miami Shores, FL 33138
and our telephone number is 305-759-8710.

Background

         In October 1996 we acquired The Family News, Inc. which publishes
Family Health News, a news catalog that is devoted to marketing a select line
of innovative health and lifestyle products. The Family News was founded in
1990 to offer a subscription-based newsletter and digest focused on health,
nutrition, and alternative medical therapies. Family Health News has been
published quarterly since its founding in 1990.


The Family Health News

         The Family Health News is published quarterly and typically contains
24 - 30 11" x 17" pages. It is printed on newsprint in black and white with
spot color. Each issue contains five to seven articles on health topics that range
in length from 4,500 to 12,000 words. These treatises are designed to give readers
a comprehensive range of information on a particular disease, condition, therapy
or other health related issue and generally focus on the scientific basis and
design rationale behind therapeutic innovations. We currently have a paid
subscription base of over 1,000 people who pay $16.00 annually for the
publication. The Family Health News is also a catalog of our products. It
contains an order form for mail order, our 800 number for ordering by toll-free
telephone and information on how to reach our World Wide Web site where orders
may also be placed.

         Our articles are either written especially for the Family Health News,
or are digested from other periodicals. Products that are related to the content
of the feature articles are frequently offered to the reader. Hand Brand
manufactures some of its approximately 120 advertised products and is a
distributor for the remainder. The product list is continuously changed to
reflect the latest research developments in health and nutrition.

Our Direct Sales Organization

         Every subscriber to the Family Health News has the opportunity to join
our direct sales organization as an independent distributor. To become a
distributor, a person or entity must subscribe to the Family Health News. There
is no agreement or any other purchase obligation and no fees are charged to
become a distributor. Distributors are offered discounts on our products ranging
from 10% to 40%. Distributors who recruit other distributors are entitled to a
commission of the sales to such persons of approximately 3% to 15%. Each
distributor is issued a unique identification number and the number included in
any order is used to keep track of commissions earned. We have approximately
400 active distributors at the present time.

         The direct selling organization is the most recent addition to our
marketing strategy. Although it is proving popular, it is currently responsible
for approximately 10% of our sales volume versus 90% from mail order 800
number and internet sales.

Product Selection and Pricing and Sourcing

         We have considered over 4,500 products for distribution in the last
ten years and yet Hand Brand carries only 120 products. We seek to identify
products which represent effective, science-based formulas and technologies. However,
as with most vitamins, herbals and nutritional supplements, such products do not
undergo the vigorous scientific validation of safety and effectiveness and
pre-market approval by the Food and Drug Administration required of
pharmaceutical products. All products are manufactured by established
manufacturers. Some products are standardformulations and some are specially
formulated for Hand Brand alone. The products are generally sold under the brand
name of the manufacturer but approximately 24 of our products are labeled under
our Hand Brand name.

         We depend upon the manufacturers of our products to conduct adequate
quality control and compliance with applicable manufacturing and labeling
regulations. We do not undertake independent quality testing of our products
after they are received from the manufacturer.

         We do not have any long term supply contracts with the manufacturers
of our products. We believe that virtually all of the products we offer are
available from several sources and have not experienced any inability to
obtain products in the past. We currently deal with 80 different suppliers of our
products. Retail prices range from $4 to $49 per unit.

The primary channels of distribution for the Company's products are:
(i) mass market retailers which include drug stores, supermarkets, mass
merchandisers and discount stores; (ii) health food stores: (iii) direct sales
organizations; (iv) mail order; and (v) the Internet. The market is highly
competitive. We believe that we compete based upon the information which we
provide to our customers through the Family Health News and our World Wide Web
site. We believe the narrow focus of our product line, along with the
information provided, avoids the confusion of the typical retail location which
carries a vast selection of products but generally offers little information
on the products.

         We compete against a variety of retail organizations including
supermarkets, drug stores, chain stores and book stores which carry competing
products.  There are also competing mail order and internet retailers which
carry competing products.  These competitors compete on the basis of selection,
price, physical location and personal service availability at some locations.

Order Fulfillment

         We currently have between four and six individuals available for
receiving orders and offering customer service between 8:00 am and 6:00 pm
Eastern Time, Monday through Friday and can accept online payments at two
websites 24 hours a day seven days a week. The administrative office can
handle up to twenty simultaneous orders. We generally ship orders within one
day of receipt.

Government Regulation

         The manufacturing, processing, formulation, packaging, labeling and
advertising of certain of our products are subject to regulation by one or more
federal agencies, including the U.S. Food and Drug Administration (FDA--a U.S.
government agency which regulates food and drug products), the Federal Trade
Commission ("FTC"), the Consumer Product Safety Commission, the United States
Department of Agriculture, the United States Postal Service, the United States
Environmental Protection Agency and the Occupational Safety and Health
Administration. These activities are also regulated by various agencies of the
states and localities, as well as of foreign countries, in which the Company's
products are sold. In particular, the FDA regulates the safety, labeling and
distribution of dietary supplements, including vitamins, minerals, herbs, food,
non-prescription (OTC) and prescription drugs and cosmetics. The regulations
that are promulgated by the FDA relating to the manufacturing process are known
as CGMPs ("Current Good Manufacturing Practices"), and are different for drug
and food products. In addition, the FTC has overlapping jurisdiction with the
FDA to regulate the labeling, promotion and advertising of vitamins, OTC drugs,
cosmetics and foods.

         The Dietary Supplement Health and Education Act of 1994 ("DSHEA") was
enacted on October 25, 1994. This Act amends the Federal Food, Drug and Cosmetic
Act by defining dietary supplements, which include vitamins, minerals,
nutritional supplements and herbs, as a new category of food separate from
conventional food. This Act provides a regulatory framework to ensure safe,
quality dietary supplements and the dissemination of accurate information
about such products. Under this Act, the FDA is generally prohibited from
regulating the active ingredients in dietary supplements as drugs unless
product claims, such as claims that a product may heal, mitigate,
cure or prevent an illness, disease or malady, trigger drug status.

          The Dietary Health and Supplement Act provides for specific
nutritional labeling requirements for dietary supplements and FDA's final
regulations require that all dietary supplements must be labeled in compliance
with the regulations by no later than March 23, 1999. The Dietary Health and
Supplement Act permits substantiated, truthful and non-misleading statements of
nutritional support to be made in labeling, such as statements describing
general well-being resulting from consumption of a dietary ingredient or the
role of a nutrient or dietary ingredient in affecting or maintaining a structure
or function of the body. On April 29, 1998, FDA issued a Proposed Rule,
"Regulations on Statements Made For Dietary Supplements Concerning the Effect of
the Product on the Structure or Function of the Body." The Proposed Rule, when
finalized, will establish criteria for determining when a statement is a claim
to diagnose, cure, mitigate, treat or prevent disease thereby making the product
an unapproved new drug. We anticipate that the FDA will finalize this Proposed
Rule, as well as manufacturing rules which are specific to dietary supplements.

          Final labeling regulations may require expanded or different labeling
for the vitamin and nutritional supplement products sold by Hand Brand. Final
manufacturing rules for dietary supplements will require at least some of the
quality control provisions contained in the manufacturing rules for drugs. We
cannot determine what effect such regulations, when fully implemented, will have
on our business in the future. We believe that the most likely effects of any
such regulations would be: the recall, reformulation or discontinuance of
certain products, additional record keeping, warnings, notification procedures
and expanded documentation of the properties and manufacturing processes of
certain products and scientific substantiation regarding ingredients, product
claims, safety or efficacy. Failure to comply with applicable FDA requirements
can result in sanctions being imposed on the Company or the manufacturers of its
products, including, warning letters, fines, product recalls and seizures.

          On November 18, 1998, the FTC issued its "Dietary Supplements: An
Advertising Guide for Industry." Such guide provides an application of FTC law
to dietary supplement advertising and includes examples of how principles of
advertisement interpretation and substantiation apply in the context of dietary
supplement advertising. Such Guide provides additional explanation but does not
substantively change the FTC's existing policy that all supplement marketers
have an obligation to ensure that claims are presented truthfully and to verify
the adequacy of the support behind such claims. The Company believes that its
current advertising is in compliance with the requirements of such Guide,
although no assurances can be given in this regard.

          We are subject to Federal, state and local laws and regulations
governing the operation of businesses, such as zoning, payment of minimum wages,
hours of employment and business licensing, truth in advertising and the
operation of direct sales programs. We believe we are in compliance with all
regulations governing our business and such regulations do not materially impact
our operations.

In addition, we cannot predict whether new legislation regulating our
activities will be enacted. Such new legislation could have a material adverse
effect on Hand Brand.

Product Liability Insurance

          Hand Brand, like other distributors and retailers of products that are
ingested, faces an inherent risk of exposure to product liability claims if,
among other things, the use of its products results in injury. Because we do not
manufacture our ingestable products, we do not currently have product liability
insurance for these products. However, we require that each of our suppliers
certify that it carries adequate product liability insurance and in the event of
any claims would seek indemnification from the manufacturer.

Employees

          As of December 31, 2000, we employed 3 persons on a full-time basis
and 2 persons on a part-time basis. None of our employees are represented by a
collective bargaining unit.

Item 2.  Description of Property.

         All of the operations of Hand Brand are conducted from premises
leased from independent landlords. The following table sets forth information
concerning these facilities:


    Location Tenant          Approx. Size       Lease Expiration     Monthly Rent
    ---------------          ------------       ----------------     ------------



    9845 N.E. 2nd Avenue      1,200 Sq. Ft.     Month-to-Month        $  745.50
    Miami Shores, FL 33138

    206 NE 55th Terr          1,500 Sq. Ft.     December 2001         $  527.50
    Miami, FL 3316133137


Item 3.   Legal Proceedings.

          None

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

          None

                                    PART II

Item 5.  Market Price of and Dividends on the Registrant's Common Equity
         and other Shareholder Matters.

         Hand Brand Common Stock trades on the over-the-counter under the
symbol: HBDB. The following sets forth the range of high and low bid quotations
for the periods indicated as reported by National Quotation Bureau, Inc. Such
quotations reflect prices between dealers, without retail mark-up, markdown or
commission, and may not represent actual transactions and have not been adjusted
for stock splits.



Quarter Ended           High bid                 Low bid
-------------           --------                 -------


March 31, 1998           1.75                     1.25
June 30, 1998            3.375                    1.125
September 30, 1998       4.75                     3.50
December 31, 1998        6.125                    4.00
March 31, 1999           6.50                     5.25
June 30, 1999            6.87                     5.25
September 30, 1999       7.37                     4.50
December 31, 1999        9.25                     2.75
March 31, 2000          $5.50                    $2.25
June 30, 2000            2.50                      .75
September 30, 2000       2.50                      .75
December 31, 2000        2.50                      .60



         There are no restrictions on the payment of dividends. We have paid no
dividends to date and none are anticipated. As of April 20, 2001 there were
approximately 140 holders of record of Hand Brand common stock.

Item 6.  Management's Discussion and Analysis or Plan of Operations.

         The following discussion and analysis should be read in conjunction
with the financial statements and notes thereto that appear elsewhere herein.

         We generate revenues from two sources: Subscription revenue
from the publication Family Health News comprises 1.4% of our revenue and the
sale of products comprise 98.6% of our revenue. We seek distributor
pricing from our vendors that is typically 42% of the manufacturers suggested
retail price. This enables us to have sufficient margin after selling costs
still make a profit.

RESULTS OF OPERATIONS

         The following table sets forth certain operating data as a percentage
of total revenues for the periods indicated.


                                                    Fiscal Year
                                                 1999          2000


Revenues:

Total Revenues                                 100%            100%

Cost of Goods Sold                            61.8%             57%

Gross Profit                                  38.9%           42.9%

Selling, General and                           140%            130%
Administrative


FISCAL 2000 COMPARED TO FISCAL 1999

          Sales for the year ended December 31, 2000 were $231,053 a
24.8% decrease over sales for the year ended December 31, 1999. Decrease
was due to a reduced level of sales activity. This decrease was anticipated as
during this period Hand Brand was focusing more on the pre-launch development of
our direct selling program at the expense of sales and marketing. This trend is
expected to reverse as Hand Brand moves out of the development stage of our
direct sales organization and into the implementation stage of its business plan
during 2001.

          Cost of goods sold as a percentage of sales was 57% for the year
ended December 31, 2000 as compared to 61.8% for the year ended December 31,
1999 reflecting disposal of obsolete inventory.

          Selling, general and administrative expenses decreased to $302,511 for
the year ended December 31, 2000. This was 130% of sales compared to 140% of
sales for the nine months ended December 31, 1999. This decrease was due
primarily to lowered sales expenses marketing expenses including direct
selling, wholesale direct and mail campaigns.


          The nutritional supplement industry is considered to be in a
maturation phase. After a decade of rapid expansion growth is leveling off. This
phase of an industry's life cycle is marked by acquisitions and consolidation.
It is also typical for an industry at this stage to experience fewer entrants
into the marketplace, less R&D as companies seek to milk what cash cows they
have created and a downward pressure on prices as competitors seek a larger
market share to replace waning industry growth. Lower prices translate into
narrower margins and attrition for companies who are not well capitalized or
have excessive overhead. For Hand Brand this means stiff price competition
because large chains have tremendous buying power. It also means fewer potential
wholesale customers as independent operators get acquired by the chains.

          The current industry trend toward consolidation and joint venture is
likely to put Hand Brand in a position to, as a public company, entertain mergers.
There are numerous entities that have built infrastructure, products and customer
bases where the principals are looking to become public. There are also an
extensive number of larger companies that may be interested in joint venturing
their products into a direct selling organization in order to increase revenues
in an industry where overall growth is slowing. A large threat to the future
plans of the company is housed in the large multinational chains (i,e.
Walgreens, Eckerds) that have tremendous marketing budgets and are able to
promote look alike supplements that are inferior in quality and can be sold for
a fraction of the price. It is a constant challenge to keep the public informed
on the importance of quality supplements and maintain the conviction that
quality is worth paying for.

LIQUIDITY AND CAPITAL RESOURCES


          Hand Brand had a cash balance of $5,811 as of December 31, 2000.
We are currently operating at a cash flow deficit on an operating basis and
are addressing this matter in several ways:

(a) we are carefully monitoring expenditures to bring them in line with
anticipated revenues; (b) we are concentrating our sales efforts on those
products which allow us a higher profit margin; and (c) we are considering
various capital raising alternatives, which may include sale of equity, debt or
bank financing. However, there can be no assurance that any financing will be
available. We believe we have adequate working capital for at least the next
twelve months. To date there have been several material expenditures associated
with becoming a public company in good standing as well as in the construction
of the platform that enabled Hand Brand to implement a direct selling program
with a robust product line. These expenses are substantially complete and
management expects Selling & Administrative expense as a percentage of sales to
be substantially reduced in the upcoming quarters. This coupled with anticipated
increase in sales from the direct selling program should provide substantial
liquidity to augment the existing funds.  In the opinion of management these
factors should provide the liquidity for future operations. In the event that
our efforts at bringing our expenditures in line with our references are not
successful or we are unable to obtain additional financing for operations, we
may be forced to curtail our operations.

RETURN OF WATER FILTER DIVISION TO THE ROCKLAND COMPANY

         In November 2000 we returned the assets of the water filter company
that was acquired in 1997.  This was done to reduce operating expenses and
overhead and eliminate $218,000 note payable to The
Rockland Corporation.


Item 7.  Financial Statements.

         The Financial Statements are filed herewith following the signatures.

Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

         None.

Item 9.  Directors, Executive Officers, Promoters and Corporate Persons;
         Compliance with Section 16(a) of the Exchange Act.

         The directors and executive officers of Hand Brand at:



          Name                      Age       Position
          ----                      ---       --------

    John M. Taggart                 40      President, Chairman of the Board

    David M. Taggart                46      Director

    Preston T. Johnson              63      Director


John Taggart has been President and Chairman since our incorporation. He is the
brother of David Taggart, a director.

David Taggart has been a director since inception.  He has been employed as a
tax accountant by Bacardi-Martini USA, Inc. since 1975. He is the brother of
John Taggart.

Preston T. Johnson has been retired since 1984.  He is one of the co-founders of
Hand Brand and has been a board member since the company's inception in November
of 1995.

Promoters: Hand Brand was founded in November 1995 by John Taggart, Preston
Johnson and Derek Hopton who are considered promoters of the Company. See
"Certain Relationships and Related Transactions."

Compliance with Section 16(a) of the Exchange Act.

         Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who beneficially own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and are required to
furnish copies to the Company. To the best of the Company's knowledge, all
reports required to be filed were timely filed in fiscal year ended December 31,
2000.

Item 10. Executive Compensation.

         Summary Compensation Table

         The following table sets forth the total compensation paid to the
Company's chief executive officer for the last three completed fiscal years. No
executive officer of the Company received compensation of $100,000 or more
during any such year.



                                                               Other Annual
Principal Position          Year        Salary      Bonus      Compensation
------------------          ----        ------      -----      ------------

John Taggart, President     2000        $28,600      -0-            -0-
                            1999        $28,600      -0-            -0-
                            1999        $28,600      -0-            -0-


         We do not currently have any long term compensation plans, pension
plans or stock based compensation plans.

DIRECTOR COMPENSATION     No fees are paid for director services.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

         The following table sets forth, as of April 20, 2001, the beneficial
ownership of our 2,538,600 outstanding shares of Common Stock by (1) the only
persons who own of record or are known to own, beneficially, more than 5% of
our Common Stock; (2) each director and executive officer of the Company; and
(3) all directors and officers as a group.





INDIVIDUALS OWNING MORE THAN 5%

                                  Number of
         Name                      Shares                    Percent
         ----                     ---------                  -------


   Ellen & Timothy McLaughlin(1)    260,000                    9.9%



(1) Represents 30,000 shares owned by Ellen McLaughlin individually, 30,000
    shares owned by Timothy McLaughlin individually and 200,000 shares owned by
    Ellen and Timothy McLaughlin jointly.


                            MANAGEMENT AND DIRECTORS



                                 Number of
         Name                     Shares                     Percent
         ----                    ---------                   -------

         John M. Taggart          856,100                     32.6%

         David M. Taggart          53,000                        2%

         Preston T. Johnson        50,000                      1.9%

         All directors and
         officers                 959,000                     36.5%
         as a group (3 persons)


          None of the above individuals has the right to acquire beneficial
ownership of additional stock nor are any of the above individuals owners or
entitled to become owners of any stock warrants.  Address of such shareholders
is as follows:

John M. Taggart
10418 NE 2nd Ave
Miami Shores, FL 33138

Ellen & Timothy McLaughlin
108 Adams St
Novato, CA 94947

David M. Taggart
6293 SW 32nd St
Miami, FL 33155

Preston T. Johnson
7502 Woodhaven Ct
Glen Burnie, MD 21060




Item 12. Certain Relationships and Related Transactions.

         Hand Brand was founded by John Taggart, David Taggart, Preston Johnson
and Derek Hopton in November 1995. Each of the founders received 50,000 shares
of common stock in connection with the organization of Hand Brand. In October
1996, Hand Brand acquired all the shares of The Family News, Inc. for 1,200,000
shares of common stock, of which John Taggart received 800,000 of such shares
and no other original founder of Hand Brand was an owner of The Family News,
Inc. shares. Taggart acquired his Family Health News shares in 1990. The board
of directors of Hand Brand, which consisted of John Taggart, David Taggart and
Preston Johnson, made a determination of the number of shares to issue for The
Family News, Inc. based on the relative operations of each company at the time.



Item 13.       Exhibits and Reports on Form 8-K.



Exhibit No.                          Description
-----------                          -----------



2(a)                                 Articles of
                                     Incorporation of the Registrant*

2(b)                                 Articles of
                                     Amendment to Articles of
                                     Incorporation*

2(c)                                 By-Laws of the
                                     Registrant*



*Incorporated by reference to this Exhibit No. of Registrant's Registration
Statement on Form 10-SB.


                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                             HAND BRAND DISTRIBUTION, INC.



April 20, 2001                By: /s/ John Taggart
                                 -----------------------
                                 John Taggart, President



         In accordance with the Act, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
date indicated.


April 20, 2001                By: /s/ John Taggart
                                 -----------------------
                                 John Taggart
                                 Director, President & Principal Accounting
Officer


April 20, 2001                By: /s/ David M. Taggart
                                 -----------------------
                                 David M. Taggart
                                 Director


April 20, 2001                By: /s/ Preston T. Johnson
                                 -----------------------
                                 Preston T. Johnson
                                 Director



HAND BRAND DISTRIBUTION, INC.
FINANCIAL STATEMENTS
YEARS ENDED
DECEMBER 31, 2000 AND 1999




     INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders
Hand Brand Distribution, Inc.
Miami, Florida

We have audited the accompanying balance sheets of Hand Brand Distribution,
Inc. as of December 31, 2000 and 1999, and the related statements of
operations, stockholders' equity, and cash flows for the years then ended.
These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, based on our audits, the financial statements referred to
above present fairly, in all material respects, the financial position of Hand
Brand Distribution, Inc. as of December 31, 2000 and 1999, the results of its
operations, and cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern.  As discussed in Note 11 to the financial
statements, the Company's working capital deficiency, recurring losses from
operations, and defaults under the Company's note payable agreement raises
substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is also described in Note 11.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.




SEWELL AND COMPANY, PA


Hollywood, Florida
February 26, 2001



HAND BRAND DISTRIBUTION, INC.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999

     TABLE OF CONTENTS                                   PAGE NO.


Independent Auditors' Report                                2

Balance Sheets                                              3

Statements of Operations                                    5

Statements of Changes in Stockholders'  Equity              6
Statements of Cash Flows                                    7

Notes to Financial Statements                               9





HAND BRAND DISTRIBUTION, INC.
BALANCE SHEETS
DECEMBER 31, 2000 AND 1999

                                         2000             1999

Assets

Current assets
Cash                                    $5,811            $24,070
Accounts receivable, net                 3,930             11,974
Inventory                               41,749            161,127
Other current assets                     5,600              5,600
                                       -------            -------
Total current assets                    57,090            202,771

Property and equipment, net             45,026            135,999

Other assets
  Deposits                                 651              2,025
  Goodwill and trademark, net           78,615            163,756
  Deferred tax asset                         -              6,711
  Other assets                           1,960              1,960
                                       -------            -------
                                        81,226            174,452
                                       -------            -------
                                      $183,342           $513,222
                                       =======            =======

HAND BRAND DISTRIBUTION, INC.
BALANCE SHEETS
DECEMBER 31, 2000 AND 1999

                                          2000          1999

Liabilities and Stockholders' Equity

Current liabilities
Accounts payable and accrued expenses  $69,605            $14,408
Sales tax payable                          244                498
Accrued interest payable                14,523                  -
Note payable, current portion           14,605             19,419
                                       -------            -------
Total current liabilities               98,977             34,325

Long term notes payable                 40,000            212,472

Stockholders' equity
  Common stock $.002 par value,
    authorized 12,500,000 shares;
    issued and outstanding:
    2,538,600 and 2,524,100 shares       5,077              5,048
  Additional paid in capital           789,873            738,202
  Accumulated deficit                 (750,585)          (476,825)
                                       -------            -------
                                        44,365            266,425
                                       -------            -------
                                      $183,342           $513,222
                                       =======            =======


See notes to financial statements.


HAND BRAND DISTRIBUTION, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2000 AND 1999

                                          2000          1999

Income
  Sales net of returns                $231,053           $307,545
  Cost of sales                        131,767            187,779
                                       -------            -------
Gross profit                            99,286            119,766

Expenses
Sales expenses                          35,860            177,558
  General and administrative expenses  266,651            239,180
  Printing and publications             15,547              7,568
  Interest expense                      19,377             16,723
  Gain on transfer of assets             4,623            (69,248)
Loss from disposal of inventory             -              32,625
Impairment of long-lived assets         70,291            -
  Depreciation and amortization         37,285             34,213
                                       -------            -------
                                       449,634            438,619
                                       -------            -------
Loss before extraordinary items       (350,348)          (318,853)

Extraordinary items
   Gain on debt restructure             76,588             63,185
                                       -------            -------
Net loss                             $(273,760)         $(255,668)
                                       =======            =======
Earning (loss) per share
Loss per common share before
extraordinary items                     $(0.14)           $(0.14)
Extraordinary items                       0.03              0.03
                                       -------            -------
Net loss per common share               $(0.11)           $(0.11)
                                       -------            -------

See notes to financial statements.



HAND BRAND DISTRIBUTION, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2000 AND 1999

                                              Additional
                           Common Stock       Paid in     Accumulated
                         Shares     Amount    Capital     Deficit       TOTAL


Balance January 1, 1999  1,815,100  $3,630    $367,870    $(221,157)   $150,343

Issuance of common stock
 in exchange for
 warrants exercised        674,500   1,349     335,901                  337,250

Issuance of common stock
 in exchange for
 warrants exercised         34,500      69      34,431                   34,500

Net loss 1999                                              (255,668)   (255,668)
                         ---------   -----     -------     --------     -------
Balance
 December 31, 1999       2,524,100   5,048     738,202     (476,825)    266,425

Private offering on
 January 27, 2000            9,300      19      46,481                   46,500

Issuance of shares of
 common stock for cash
 on June 5, 2000             3,200       6       3,194                    3,200

Issuance of common
 stock on Oct. 25, 2000
 for consulting services
 rendered.                   2,000       4       1,996                    2,000

Net loss 2000                                              (273,760)   (273,760)
                         ---------   -----     -------     --------     -------
Balance
 December 31, 2000       2,538,600  $5,077    $789,873    $(750,585)    $44,365
                         =========   =====     =======     ========     =======

See notes to financial statements.



HAND BRAND DISTRIBUTION, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                   2000          1999

Cash flows from operating activities:
  Net loss                                      $(273,760)     $(255,668)
                                                 --------       --------
  Adjustments to reconcile net loss to net
    cash provided by operating activities:
      Depreciation and amortization                37,285         34,213
Allowance for doubtful accounts                         -          2,282
Compensation in exchange for stock options,
 warrants                                           2,000
      Gain on transfer of asset                     4,623        (54,147)
      Gain on debt restructure                    (76,588)       (63,185)
     (Increase) decrease in accounts receivable     8,044         (4,283)
     (Increase) decrease in inventories           119,378         92,515
     (Increase) decrease in other assets            8,086              -
      Increase (decrease) in accounts payable
            and accrued liabilities                51,593            778
      Increase (decrease) in accrued interest
       payable                                     14,523              -
                                                 --------       --------
      Total adjustments                           168,944          8,173
                                                 --------       --------
  Net cash used by operating activities          (104,816)      (247,495)
                                                 --------       --------
Cash flows from investing activities:
  Cash payments for the purchase of property            -         (4,058)
                                                 --------       --------
  Net cash used by investing activities                 -         (4,058)
                                                 --------       --------
Cash flows from financing activities:
  Proceeds from issuance of common stock           49,700        371,750
  Proceeds from issuance of callable debenture     40,000              -
  Principal payment on long-term debt              (3,143)       (98,776)
                                                 --------       --------
  Net cash provided by financing activities        86,557        272,974
                                                 --------       --------
Net increase (decrease) in cash and cash
 equivalents                                      (18,259)        21,421

Cash and cash equivalents, beginning of year       24,070          2,649
                                                 --------       --------
Cash and cash equivalents, end of year             $5,811        $24,070
                                                 ========       ========

See notes to financial statements.



HAND BRAND DISTRIBUTION, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                     2000          1999


Supplemental disclosures of cash flow information:
Cash paid during the period for:
    Interest expense                               $4,854        $16,723
                                                 --------       --------

Stockholders' equity note:
For the year end December 31, 1999 the company issued 709,000 shares of common
stock in exchange of 371,750 warrants exercised.    The proceeds from the
warrants exercised were $ 371, 750.

On November 6, 2000, the company issued 2,000 shares of common stock in
exchange for consulting services valued at the trading price on the date of
the grant.






HAND BRAND DISTRIBUTION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999



NOTE 1     ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Description
          Hand Brand Distribution, Inc. ("the Company") was incorporated in
November 1995, under the laws of the State of Florida for the purpose of
developing and marketing nutritional supplements, cleaning and hygiene
products.  It also publishes a news catalog to market its products.

Use of Estimates in Preparation of Financial Statements
          The preparation of the accompanying financial statements in
conformity with generally accepted accounting principles requires management
to make certain estimates and assumptions that directly affect the results of
reported assets and liabilities and disclosure of contingent assets and
liabilities as of the balance sheet date, and the reported amounts of revenues
and expenses for the period presented.  Actual results could differ from these
estimates.

Cash and Cash Equivalents
          The Company considers all cash and cash equivalents highly liquid
investments with an original maturity of three months or less to be cash
equivalents.

Inventory
          The inventory of the Company is recorded at average cost and
includes nutritional supplements, cleaning and hygiene products and raw
materials.

Accounts Receivable
          The Company considers accounts receivable to be fully collectible.
Accordingly, no allowance for doubtful accounts is required.  If amounts
become uncollectible, they will be charged to operations when that
determination is made.

Property and Equipment and Depreciation
          Property and equipment are stated at cost.  Depreciation is computed
by using the straight-line method based over the assets estimated useful lives
as follows:

               Furniture & Fixtures                     5 - 10 years

          Amortization
Amortization of trademarks and goodwill is determined utilizing the
straight-line method based generally on the estimated useful lives of the
intangibles as follows:

               Trademarks                            15 years
               Goodwill                              15 years


- 9 -


HAND BRAND DISTRIBUTION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999



NOTE 1     ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
continued

Intangible Assets

The Company continually evaluates the carrying value of goodwill and other
intangible assets to determine whether there are any impairment losses.  If
indicators of impairment are present in intangible assets used in operations,
and future cash flows are not expected to be sufficient to recover the assets'
carrying amount, an impairment loss would be charged to expense in the period
identified.

No reduction for impairment of intangible assets was necessary at December 31,
1999.  At December 31, 2000, the Company recognized an asset impairment loss
of $ 70,291 (See Note 5).

Revenue Recognition
          The Company's products are manufactured to specific customer orders,
and revenues are recognized when the products are shipped.  Revenue is reduced
for estimated customer returns and allowances.

The Company publishes a catalog of its products for mail order marketing,
which includes articles on the health benefits of its product.  Subscriptions
are for two-year periods, and revenue is recorded as a liability and
recognized over the subscription period.  The amount of the subscription
revenue was not material in any year.

Advertising
          Advertising costs are charged to operations when incurred.  There
were no advertising costs during 2000, and $104,935 in 1999.

Stock Options
          The Company elected to account for stock options issued to employees
in accordance with Accounting Principles Board Opinion No. 25 (APB Opinion No.
25) and related interpretations, and accounts for stock options and warrants
issued to non-employees in accordance with SFAS 123.

Basic Earnings (Loss) per Share

Basic earnings (loss) per share for each year is computed by dividing income
(loss) for the year by the weighted average number of common shares
outstanding during the year.  Diluted earnings (loss) per share include the
effects of common stock equivalents to the extent they are dilutive.

Basic weighted and dilutive average number of shares outstanding is as
follows:
                                                    2000         1999
                  Basic weighted average number
                      of shares outstanding      2,527,872     2,359,156

In connection with the convertible note payable, 80,000 shares of common stock
are not included in the computation of dilutive earning per share because the
effect is antidilutive (See Note 6).



- 10 -


HAND BRAND DISTRIBUTION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999



NOTE 1     ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
continued

Credit Risk
          Financial instruments that potentially subject the Company to credit
risk include cash on deposit with one financial institution amounting to
$5,811 at December 31, 2000, and $24,070 at December 31, 1999, which was
insured for up to $100,000 by the U.S. Federal Deposit Insurance Corporation
(FDIC).


NOTE 2     INVENTORIES

At December 31, 2000 and 1999, inventories consisted of the following:

                                    2000         1999

          Finished goods       $  41,749     $  85,307
          Raw materials                0        75,820
                                  ------       -------
                               $  41,749     $ 161,127
                                  ======       =======

Raw materials were used to pay the note payable (See Note 9).


NOTE 3     FIXED ASSETS

          Fixed assets at December 31, 2000 and 1999 consisted of the
following:

                                     2000            1999

     Furniture and fixtures     $    57,837     $   57,837
     Computers and software          18,906         16,711
     Equipment                        5,414        120,274
                                     82,157        194,822
                                    -------        -------
     Less accumulated depreciation  (37,131)       (58,823)
                                    -------        -------
     Total                      $    45,026     $  135,999
                                    =======        =======

          Depreciation expense for the years ended December 31, 2000 and 1999
was $22,436 and $20,411, respectively.  Equipment in the amount of $68,538,
net of accumulated depreciation of $44,127, was returned as payment of note
payable (See Note 9).


- 11 -


HAND BRAND DISTRIBUTION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999



NOTE 4     INTANGIBLE ASSETS

          At December 31, 2000 and 1999, intangible assets are summarized by
major classification as follows:

                              2000          1999

     Trademark            $  12,500     $ 107,631
     Goodwill                99,408        99,408
                            111,908       207,039
     Less:
     Accumulated
     amortization           (33,293)      (43,283)
                            -------       -------
                          $  78,615     $ 163,756
                            =======       =======

          The goodwill represents the excess of the cost over the fair value
of net assets of an acquired business.

Amortization expense for the years ended December 31, 2000 and 1999 was
$14,849, and $13,802, respectively.

During 2000, the Company recognized an asset impairment of $71,348, net of
accumulated depreciation of $24,840 (See Note 5).


NOTE 5     ASSET IMPAIRMENT LOSS

In accordance with SFAS No. 121 Accounting for the Impairment of Long-lived
Assets and for Long-lived Assets to be Disposed, the Company recorded an
impairment loss on the long-lived assets of its Lifetime business.  Due to
underpayment of the note payable (See Note 9), the creditor repossessed all of
the equipment and inventory related to its water filter business.

Accordingly, on December 31, 2000, the Company recognized an asset impairment
loss of $70,291.  This loss represents the carrying value of the goodwill.


- 12 -


HAND BRAND DISTRIBUTION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999



NOTE 6     LONG-TERM NOTES PAYABLE

                                                           2000       1999

7% note payable guaranteed jointly by the
Company and John M. Taggart; due in
monthly installments of  $2,902.73,
including interest; beginning January 1st,
1999 for 10 years.  Due to underpayment
of the monthly installment, on
November 30, 2000, the creditor repossessed
all of the equipment and inventory
related to the water filter business.
The remaining balance is due on demand
(See Note 9).                                          $  14,605  $ 231,891

6% convertible note payable for a 24-month
period, callable at borrower option
and convertible into 40,000 shares of common
stock due on April 5th, 2002.                             20,000          0

6% convertible note payable for a 24-month
period, callable at borrower option
and convertible into 20,000 shares of common
stock due on August 23rd, 2002.                           10,000          0

6% convertible note payable for a 24-month
period, callable at borrower option
and convertible into 10,000 shares of common
stock due on November 14, 2002.                            5,000          0

6% note payable for a 24-month period, callable
at borrower option and convertible into 10,000
shares of common stock due on November 13, 2002.           5,000          0
                                                         -------    -------
                                                          54,605    231,891
Less:  current portion                                   (14,605)   (19,419)
                                                         -------    -------
Total long-term notes payable                          $  40,000  $ 212,472
                                                         =======    =======

Interest expense for the years ended December 31, 2000 and 1999, was $ 3,982
and $16,723, respectively.



- 13 -


HAND BRAND DISTRIBUTION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999



NOTE 7     STOCKHOLDERS' EQUITY

Common Stock
          On March 21, 1999, the board of directors amended the provisions of
its warrants to provide an additional share for every warrant for a period of
thirty days from the date of the meeting.  During the period, 337,250 warrants
were exercised at a price of $1. per 2(two) shares.

          An additional 34,500 warrants were exercised at a price of $1.00 by
the end of 1999.

On January 27, 2000, the Company issued 9,300 shares of common stock at a
price of $5. per share in connection with a private placement for a total
amount of $46,500 in cash.

On June 5, 2000 the Company issued 3,200 shares of common stock at a price of
$1.00 per share for a total of $3,200 in cash.

On October 25, 2000, the Company issued 2,000 shares of common stock in
exchange for consulting services rendered.  The value of $1.00 per share was
based on the trading price on the date of the grant.  Accordingly, consulting
expenses of $2,000 were charged to operations.

Warrants

At December 31, 2000 and 1999, warrants were as follows:


      Weighted

                                                 Common     Average
                           Number of Warrants    Stock      Exercise Price

Balance at January 1, 1999        710,500                   $    .00
Granted                                 0                        .00
Exercised                         371,750                        .00
Forfeited                         338,750            -           .00
                                 --------       -------
Balance at December 31, 1999            0
                                 ========       =======

Warrants not exercised at December 31, 1999, expired.



- 14 -


HAND BRAND DISTRIBUTION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999



NOTE 8   INCOME TAXES

The Company has a federal net operating loss carryforward for the years ended
December 31, 2000 and 1999 of $750,468 and $476,825, respectively, through
various years to 2020.

Deferred tax assets and liabilities consist of the following:

                                            2000               1999

     Current deferred tax asset     $       10,000     $      20,000
     Valuation allowance                   (10,000)          (20,000)
                                           -------            ------
                                    $            0     $           0
                                           =======            ======

     Non-current tax asset          $      130,000     $      75,000
     Valuation allowance                  (130,000)          (68,289)
                                           -------            ------
                                    $            0     $       6,711
                                           =======            ======

The non-current deferred tax asset results from the net operating loss
carryforward, which approximates $274,000 at December 31, 2000, and $256,000
at December 31, 1999.  The net operating loss carryforward, which is subject
to annual limitations prescribed by the Internal Revenue Code, is available to
offset future taxable income through 2020.   A 100% valuation allowance has
been recorded to offset the net deferred tax asset due to uncertainty of the
Company generating future taxable income.

The Company's income tax expense for the years ended December 31, 2000 and
1999 differed from the statutory federal rate of 20% as follows:

                                            2000               1999

     Statutory rate applied to loss
         before income taxes       $        54,700     $      51,100
     State income taxes, net of
         federal income tax effect           5,200             4,800
     Increase in valuation allowance       (59,900)          (55,900)
     Other                                       0                 0
                                         ---------           -------
     Income Tax Expense            $             0     $           0
                                         =========           =======



- 15 -


HAND BRAND DISTRIBUTION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999



NOTE 9     DEBT RESTRUCTURING

On August 19, 1999, the Company renegotiated the $448,000 note payable to an
unrelated party that was issued for the acquisition of the assets of a water
filter company. The terms of restructure include a transfer of assets
(inventory) in the amount of $124,814, a new note payable in the amount of
$250,000, payable over a ten-year period, and $10,000 cash due upon
settlement.  The fair market value of the inventory was based on sales of
comparable items to unrelated parties. The Company recognized an extraordinary
gain of $63,185 on the restructuring, and an ordinary gain of $54,147 on the
asset transfer. Due to underpayment of the monthly installments, on November
30, 2000, the creditor repossessed all of the equipment related to the water
filter business, which had cost $68,538, net of accumulated depreciation, as
well as raw materials valued at $73,640.  The balance of the note payable is
$14,605.  The fair market value of the equipment and inventory was based on
sales of comparable items to unrelated parties.  The Company recognized an
extraordinary gain of $76,588 and an ordinary gain of $4,623 on the asset
transfer.


NOTE 10     COMMITMENTS

          On July 10, 1998, the Company entered into a lease agreement for
warehouse space in North Miami, Florida.  Monthly payments are $1,575 plus tax
for a period of two years, ending December 31, 2000.  On December 11, 2000,
the Company entered into a new lease agreement for warehouse space in Miami,
Florida.  Monthly payments are $527 plus tax through December 31, 2001.

          Since 1992, the Company has maintained a lease agreement for its
main facility, renewable annually.  Monthly rental payments are $700 plus tax.

          Total rental expense for the years ended December 31, 2000 and 1999
was $35,741 and $26,195, respectively.


NOTE 11     GOING CONCERN UNCERTAINTY

These financial statements are presented  assuming the Company will continue
as a going concern.  For the years ended December 31, 2000 and 1999, the
Company showed operating losses of $267,049 and $255,668, respectively.  The
accompanying financial statements indicate that current liability exceeds
current assets by $41,887 for the year ended December 31, 2000.

The Company is in default for payments on a note payable in the amount of
$26,125, including accrued interest, for the year ended December 31, 2000.
This raises substantial doubt about its ability to continue as a going
concern.  Management's plan with regard to these matters includes raising
working capital to assure the Company's viability, through private or public
equity offering, and/or debt financing, and/or through the acquisition of new
business or private ventures.



- 16 -`