<PAGE>

                                   FORM 10-QSB

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20429


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

      For the quarterly period ended March 31, 2005

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

For the transition period from ____________________ to _____________________
Commission File Number 0-27227.
                       -------

                          ALLERGY RESEARCH GROUP, INC.
             (Exact name of registrant as specified in its charter)


                 Florida                                    13-3940486
     (State or other jurisdiction of                      (IRS Employer
      incorporation or organization)                   Identification No.)


                 2300 North Loop Road, Alameda, California 94502

                    (Address of principal executive offices)

(Issuer's telephone number) (800) 545-9960.
                            --------------

Former address: 30806 Santana Street, Hayward CA 94544
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Checkmark whether the issuer (1) has filed all reports required to be filed by
Sections 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 [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 14,516,605 shares of Issuer's voting
common stock were outstanding on May 12, 2005.

<PAGE>

                          ALLERGY RESEARCH GROUP, INC.
                            INDEX TO QUARTERLY REPORT
                                 ON FORM 10-QSB

PART I. FINANCIAL INFORMATION                                              PAGE

     ITEM 1. Condensed Consolidated Financial Statements (Unaudited):

             Consolidated Balance Sheet.....................................  3

             Consolidated Income Statements.................................  4

             Consolidated Statements of Cash Flows..........................  5

             Notes to Condensed Consolidated Financial Statements...........  6

     ITEM 2. Management's Discussion and Analysis...........................  9

     ITEM 3. Controls and Procedures........................................ 15

PART II. OTHER INFORMATION

     ITEM 1. Legal Proceedings.............................................. 16
     ITEM 2. Changes in Securities and Use of Proceeds...................... 16
     ITEM 3. Defaults Upon Senior Securities................................ 16
     ITEM 4. Submission of Matters to a Vote of Security Holders............ 16
     ITEM 5. Other Information.............................................. 16
     ITEM 6. Exhibits....................................................... 16

SIGNATURE................................................................... 17


                                       2
<PAGE>

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

In the opinion of management, the accompanying unaudited financial statements
included in this Form 10-QSB reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results of
operations for the periods presented. The results of operations for the periods
presented are not necessarily indicative of the results to be expected for the
full year.


                          ALLERGY RESEARCH GROUP, INC.
                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)
                                                                     March 31,
                                                                        2005
                                                                    -----------

ASSETS
------
Current Assets
    Cash and Cash Equivalents                                       $ 2,066,999
    Accounts Receivable                                               1,044,999
    Inventories                                                       2,361,047
    Prepaid Income Taxes                                                 19,158
    Prepaid Expenses and Other Current Assets                           287,315
                                                                    -----------
Total Current Assets                                                  5,779,518
                                                                    -----------

Property and Equipment, Net                                             610,874
                                                                    -----------

Other Assets
    Due From Officer                                                     22,333
    Intangible Assets                                                    13,180
                                                                    -----------
Total Other Assets                                                       35,513
                                                                    -----------

Total Assets                                                        $ 6,425,905
                                                                    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities
    Accounts Payable                                                $   387,134
    Accrued Liabilities (Note 3)                                        446,880
    Income Taxes Payable                                                149,500
                                                                    -----------
Total Current Liabilities                                               983,514
                                                                    -----------

Commitments and Contingencies (Note 3, 4)

Stockholders' Equity
    Preferred Stock, $.25 Par Value, Authorized 1,000,000
       Shares, Issued and Outstanding: None                                   -
    Common Stock, $.001 Par Value, Authorized 100,000,000 Shares
      Issued: 15,105,355, Outstanding: 14,516,605                        15,105
    Additional Paid In Capital                                        1,149,705
    Retained Earnings                                                 4,557,182
    Less: Treasury Stock, at cost (588,750 shares)                     (279,601)
                                                                    -----------
Total Stockholders' Equity                                            5,442,391
                                                                    -----------
Total Liabilities and Stockholders' Equity                          $ 6,425,905
                                                                    ===========

See Notes to Condensed Consolidated Financial Statements.


                                       3
<PAGE>

<TABLE>
                            ALLERGY RESEARCH GROUP, INC.
                           CONSOLIDATED INCOME STATEMENTS
                                     (UNAUDITED)

                                                              Three Months Ended
                                                                   March 31,
                                                                   ---------
                                                              2005          2004
                                                              ----          ----
<S>                                                       <C>           <C>
Revenues                                                  $ 4,111,173   $ 3,724,899
Cost of Sales                                               2,423,385     2,134,619
                                                          -----------   -----------
Gross Profit                                                1,687,788     1,590,280
                                                          -----------   -----------

Operating Expenses
        Selling, General and Administrative                 1,109,021       931,993
        Research and Development                               72,814        61,180
                                                          -----------   -----------
Operating Expenses                                          1,181,835       993,173
                                                          -----------   -----------

Earnings from Operations                                      505,953       597,107
                                                          -----------   -----------

Other Income
        Interest Income                                         5,780         2,601
                                                          -----------   -----------
Other Income                                                    5,780         2,601
                                                          -----------   -----------

Net Earnings Before Tax                                       511,733       599,708

Provision for Income Taxes                                    192,200       215,645
                                                          -----------   -----------

Net Earnings Available to Common Stockholders             $   319,533   $   384,063
                                                          ===========   ===========


Basic and Diluted Earnings Per Common Share (Note 2)      $      0.02   $      0.03
                                                          ===========   ===========


See Notes to Condensed Consolidated Financial Statements.


                                         4
</TABLE>
<PAGE>
<TABLE>
                                              ALLERGY RESEARCH GROUP, INC.
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (UNAUDITED)


                                                                                                Three Months Ended
                                                                                                     March 31,
                                                                                                     ---------
                                                                                                2005           2004
                                                                                                ----           ----
<S>                                                                                         <C>            <C>
Cash Flows From Operating Activities
    Net Earnings                                                                            $   319,533    $   384,063
                                                                                            -----------    -----------
    Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities
        Depreciation and Amortization                                                            22,214         32,002
    Changes in Assets and Liabilities
        (Increase) Decrease in Accounts Receivable                                             (286,931)       (69,444)
        (Increase) Decrease in Inventory                                                        189,268       (225,913)
        (Increase) Decrease in Prepaid Expenses and Other Assets                                (47,340)      (127,391)
        (Increase) Decrease in Deferred Tax Assets                                                    -        197,260
        Increase (Decrease) in Accounts Payable and Accrued Liabilities                         186,097        406,452
        Increase (Decrease) in Income Taxes Payable                                              44,540       (121,158)
                                                                                            -----------    -----------
    Total Adjustments                                                                           107,848         91,808
                                                                                            -----------    -----------
Net Cash Flows Provided By Operating Activities                                                 427,381        475,871
                                                                                            -----------    -----------

Cash Flows From Investing Activities
    Acquisition of Property and Equipment                                                      (512,505)        (7,536)
    Repayments From Officers                                                                      6,485          6,923
                                                                                            -----------    -----------
Net Cash Flows Used In Investing Activities                                                    (506,020)          (613)
                                                                                            -----------    -----------

Cash Flows From Financing Activities                                                                  -              -

Increase (Decrease) in Cash and Cash Equivalents                                                (78,639)       475,258
Cash and Cash Equivalents, Beginning of Period                                                2,145,638      1,704,529
                                                                                            -----------    -----------
Cash and Cash Equivalents, End of Period                                                    $ 2,066,999    $ 2,179,787
                                                                                            ===========    ===========


See Notes to Condensed Consolidated Financial Statements.


                                                           5
</TABLE>
<PAGE>

                          ALLERGY RESEARCH GROUP, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005
                                   (UNAUDITED)

Note 1 - Statement of Information Furnished
-------------------------------------------

     The accompanying unaudited Consolidated Financial Statements of Allergy
     Research Group, Inc. ("the Company") have been prepared in accordance with
     generally accepted accounting principles for interim financial information
     and the instructions to Form 10-QSB. Accordingly, they do not include all
     the information and footnotes required by generally accepted accounting
     principles for complete financial statements. In the opinion of management,
     all adjustments (which include only normal recurring adjustments) necessary
     to present fairly the financial position, results of operations and cash
     flows for all periods presented have been made. Preparing financial
     statements requires management to make estimates and assumptions that
     affect the reported amounts of assets, liabilities, revenue and expenses.
     Examples include provisions for returns, accounting for income taxes, bad
     debts, length of product life cycles and property, and plant and equipment
     lives for depreciation purposes. Actual results may differ from these
     estimates. The results of operations for the period ended March 31, 2005
     are not necessarily indicative of the operating results that may be
     expected for the entire year ending December 31, 2005. These financial
     statements should be read in conjunction with the Management's Discussion
     and Analysis included in the Company's financial statements and
     accompanying notes thereto as of and for the year ended December 31, 2004,
     filed with the Company's Annual Report on Form 10-KSB.

     Certain accounts from prior years have been reclassified to conform to the
     current year's presentation. These changes had no effect on previously
     reported results of operations or total stockholders' equity.

Note 2 - Earnings Per Share
---------------------------

     Basic earnings per share is based on the weighted average number of common
     shares outstanding. Diluted earnings per share is based on the weighted
     average number of common shares outstanding and dilutive common stock
     equivalents. All earnings per share amounts in these financial statements
     are basic earnings per share as defined by SFAS No. 128, "Earnings Per
     Share." Total potential common shares not included in the computation of
     dilutive EPS for all periods presented was 150,000 options to purchase
     common shares, which expired in January 2004, because their impact would be
     antidilutive based on current market prices.

     The computation of basic and diluted earnings per share is as follows:

<TABLE>
                                                                  Three Months   Three Months
                                                                      Ended         Ended
                                                                     3/31/05       3/31/04
                                                                     -------       -------
<S>                                                                <C>           <C>
     Numerator-Net Earnings Available to Common Stockholders       $   319,533   $   384,063
                                                                   ===========   ===========

     Denominator:

     Weighted average shares used in computing basic EPS            14,516,605    14,492,105
     Net effect of dilutive common shares                              197,687       234,666
                                                                   -----------   -----------
     Weighted average shares used in computed diluted EPS           14,714,292    14,726,771

     Basic Earnings Per Share                                      $      0.02   $      0.03
                                                                   ===========   ===========

     Diluted Earnings Per Share                                    $      0.02   $      0.03
                                                                   ===========   ===========
</TABLE>


                                       6
<PAGE>

Note 3 - Accrued Expenses And Contingencies
-------------------------------------------

     Accrued expenses as of March 31, 2005 consist of the following:

     Potential settlement                                      $  151,500
     Operating expense                                             77,210
     Vacation and bonus                                           153,131
     Payroll                                                       56,041
     Sales Tax                                                      8,998
                                                               ----------
                                                               $  446,880
                                                               ==========

     The potential settlement above refers to a loss provision associated with a
     lawsuit that was settled during 2003. The Company was awarded a $250,000
     settlement and a Florida lawyer asserted a lien claim for 35% of the
     proceeds, plus costs of $64,000. Management intends to continue to contest
     the claim; however, outside counsel for the Company has advised that an
     unfavorable outcome is reasonably possible.

Note 4 - Line of Credit
-----------------------

     The Company has a Merrill Lynch Working Capital Management Account (WCMA)
     which provides for a line of credit up to $1,500,000 bearing interest at
     the London Interbank Offered Rate (LIBOR) plus 2.75%, due monthly. The
     LIBOR plus 2.75% at March 31, 2005 was 5.61%. The note is secured by
     substantially all of the assets of the Company and is personally guaranteed
     by the CEO of the Company. The WCMA account immediately pays down the line
     of credit when deposits are received. When checks are issued, the line of
     credit is utilized if no cash is available. If the line of credit has a
     zero balance, the WCMA account pays interest on deposits at Merrill Lynch's
     money market rate, which as of March 31, 2005 was 2.12%. The entire line
     was available for use as of March 31, 2005.


Note 5 - Concentration of Credit Risk
-------------------------------------

     The Company is subject to a wide variety of risks in the ordinary course of
     its business as follows:

          SALES. Approximately 11% of the Company's total sales in 2004 were
     attributable to a single distributor. In 2005, this distributor continued
     to account for approximately 11% of sales. In the event the Company were to
     lose that account, management anticipates that it would be able to convert
     the business to sales directly to the customers of that distributor. As
     converted sales would be at a higher margin, management does not believe
     the loss of the account would have a material negative impact on sales.
     However, no assurance can be given that, if the Company were to lose this
     distributor, all or any of the customers would transfer directly to the
     Company or that current sales from this group would be maintained.

          PURCHASES. The Company purchases raw materials and use outside vendors
     for the manufacture of its products. For the three months ended March 31,
     2005, the Company had a concentration of approximately 63% of manufacturing
     with five separate vendors. Three of these vendors individually account for
     more than ten percent and two of the vendors account for eight percent
     each. The Company does not currently have written contracts with any of its
     manufacturers, but relies on long-term personal and professional
     relationships. Management believes that, due to the large number of
     businesses performing this type of service in the industry, it would have
     little difficulty in finding viable alternatives in the event any one of
     these vendors became unable or determined not to continue manufacturing the
     Company's products. However, there can be no assurance that suitable,
     alternative manufacturers would be available to the Company when needed or
     that such alternative manufacturers would not result in an increase in
     costs.

          PRODUCT. The Company has one product that individually accounts for
     more than 10% of its sales dollars. One other product that has historically
     accounted for more than 10% of its sales dropped to 9% during the third
     quarter 2004 and remains at 9% through the first quarter 2005.


                                       7
<PAGE>

Note 6 - Related Party Transactions
-----------------------------------

     The following significant related party transactions occurred during the
     first quarter of 2005:

     On January 4, 2005, the Company entered into a lease with AriBen
     Corporation, a related party 100% owned by Susan and Stephen Levine, for
     approximately 29,821 square feet of office and industrial space. The lease
     is for a ten-year term with the option to renew for an additional fifteen
     years. The monthly obligation for the base rent on the lease is $24,000.
     Over the course of the initial ten year lease we will be obligated to pay
     $2,880,000. During the first quarter we reimbursed AriBen Corporation for
     some of the tenant improvements which were built out to our specifications
     in the amount of $350,000.



                                       8
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

INTRODUCTION
------------

Management's discussion and analysis of results of operations and financial
condition ("MD&A") is provided as a supplement to the accompanying consolidated
financial statements and footnotes to help provide an understanding of Allergy
Research Group, Inc.'s (the "Company") financial condition, changes in financial
condition and results of operations. The MD&A is organized as follows:

     o    CAUTION CONCERNING FORWARD-LOOKING STATEMENTS AND RISK FACTORS. This
          section discusses how certain forward-looking statements made by the
          Company throughout the MD&A and in the consolidated financial
          statements are based on our present expectations about future events
          and are inherently susceptible to uncertainty and changes in
          circumstances.

     o    OVERVIEW. This section provides a general description of the Company's
          business, as well as recent developments that we believe are important
          in understanding the results of operations and to anticipate future
          trends in those operations.

     o    RESULTS OF OPERATIONS. This section provides an analysis of our
          results of operations for the three months ended March 31, 2005
          compared to the same period in 2004. A brief description is provided
          of transactions and events that impact the comparability of the
          results being analyzed.

     o    LIQUIDITY AND CAPITAL RESOURCES. This section provides an analysis of
          our financial condition and cash flows as of and for the three months
          ended March 31, 2005, including related party transactions.

     o    CRITICAL ACCOUNTING POLICIES. This section provides an analysis of the
          significant estimates and judgments that affect the reported amounts
          of assets, liabilities, revenues and expenses, and related disclosure
          of contingent assets and liabilities.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS/RISK FACTORS
----------------------------------------------------------

The following discussion should be read in conjunction with the Company's
financial statements and the notes thereto and the other financial information
appearing elsewhere in this document. In addition to historical information, the
following discussion and other parts of this document contain certain
forward-looking information. When used in this discussion, the words "believes,"
"anticipates," "expects," and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected due to a number of factors beyond our control. The Company does not
undertake to publicly update or revise any of its forward-looking statements
even if experience or future changes show that the indicated results or events
will not be realized. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. You are also
urged to carefully review and consider our discussions regarding the various
factors which affect our business, included in this section and elsewhere in
this report.

The key factors that affect our operating results are as follows:

     o    Overall customer demand for our various products.
     o    Volume of products ordered.
     o    Mix of products purchased by our customers.
     o    Prices at which we sell our products.
     o    Our ability to manage our cost structure for capital expenditures and
          operating expenses such as salaries and benefits, freight and
          royalties.
     o    Our ability to match operating costs to shifting volume levels.


                                       9
<PAGE>

Other factors that might cause actual results, performance or achievements to
differ materially from those projected or implied in such forward-looking
statements include, among other things: (i) the impact of competitive products;
(ii) changes in laws and regulations; (iii) adequacy and availability of
insurance coverage; (iv) limitations on future financing; (v) increases in the
cost of borrowings and unavailability of debt or equity capital; (vi) the effect
of adverse publicity regarding nutritional supplements; (vii) the inability of
the Company to gain and/or hold market share; (viii) exposure to and expense of
resolving and defending product liability claims and other litigation; (ix)
consumer acceptance of the Company's products; (x) managing and maintaining
growth; (xi) customer demands; (xii) market and industry conditions including
pricing, demand for products, levels of trade inventories and raw materials
availability, (xiii) the success of product development and new product
introductions into the marketplace; (xiv) slow or negative growth in the
nutritional supplement industry; (xv) the departure of key members of
management; (xvi) the ability of the Company to efficiently manufacture its
products, (xvii) unexpected customer bankruptsy; as well as other risks and
uncertainties that are described from time to time in the Company's filings with
the Securities and Exchange Commission.


OVERVIEW
--------

BUSINESS DESCRIPTION. Allergy Research Group, Inc. (SYMBOL: ALRG) (the "Company"
or "ARG"), together with its wholly owned subsidiary, Nutricology, Inc., strives
to be an innovative leader in nutraceutical research and product formulation.
Our shares are traded on the Over The Counter Bulletin Board. Since 1980, the
Company has produced quality, hypoallergenic nutritional supplements and
currently supplies products to physicians and health care practitioners
worldwide. These professionals recognize the Company for the quality, purity and
efficacy of its targeted nutritional supplement line. Currently, we supply
products to approximately 4,000 physicians and health care practitioners,
including accounts in the United States, Japan, Taiwan, the United Kingdom,
South Korea, Jamaica, New Zealand, Mexico, Turkey, Norway, Sweden, Switzerland,
Italy, Ireland, Philippines, Russia, South Africa and Singapore. We develop,
contract manufacture, market and sell vitamins and nutritional supplements
throughout the world under the NutriCology(R) and Allergy Research Group(R)
labels. Our products are sold through distributors to medical and professional
accounts, to retailers, and directly to the consumer. We offer a two separate
lines of approximately 200 products, including vitamins in both multivitamin and
single-entity formulas, minerals, and herbals. Our products are manufactured in
various forms, including capsules, tablets, softgels, powders (drink mixes) and
liquids. Our principal executive offices are located at 2300 North Loop Road,
Alameda, California 94502 and the telephone number is (800) 545-9960.

FUTURE OPERATIONS. The success of our future operations will depend to a great
extent on the operations, financial condition, and management of the Company. We
intend to expand our position in the vitamin and nutritional supplements
markets. Specifically, our strategy continues to be to: (i) develop new brands
and product line extensions, as well as new products, through our commitment to
research and development; (ii) continue the growth of our balanced distribution
network; (iii) build our execution skills through new operations processes and
decision support systems; (iv) achieve cost superiority through formal
productivity benchmarking and continuous improvement programs; and (v) continue
to improve upon our comprehensive e-commerce plan, which includes a more
user-friendly and marketing-driven web site that has the ability to accommodate
wholesale orders. We believe that our history and reputation in the field,
multiple distribution channels, broad portfolio of products and packaging and
distribution capabilities position us to be a long-term competitor in the
vitamin and nutritional supplements industries.

We continue to work with Dr. Ba Hoang (an employee of the Company) on his
proprietary herbal formulas with a view to developing additional research that
can be marketed to the pharmaceutical and nutraceutical industries. This process
is limited to literature work, including patent submissions for potential
products. The research can be marketed to pharmaceutical companies either
through direct sell of the research to the pharmaceutical company, or through a
joint venture arrangement between the pharmaceutical company and Allergy
Research Group whereby the parties will jointly own the patent and continue
development of the products. It is our hope that, during the process of research
into possible pharmaceutical and nutraceutical products, we will test new herbal
products, or additional uses for existing herbal products that can be added to
our current line of products as health food or dietary supplements.


                                       10
<PAGE>

We also continue to collaborate with several entrepreneurs of cutting-edge
science-based products who have limited resources to bring their products to
market. We look towards working partnerships and/or acquisition of these
businesses to broaden our product line of innovative nutraceuticals, creating
potential for real growth in sales and profit while providing products that
promote general health. The Company's distribution channel to the medical and
professional-practitioners market is key to the successful introduction of
unique products.

We believe that the Company has good relations with all of its current
manufacturers and suppliers. During the period ending March 31, 2005, we
experienced a concentration of approximately 63% of our manufacturing with five
separate vendors. Three of the vendors individually account for more than ten
percent of the total with the other two at eight percent each. We do not
currently have written contracts with any of our manufacturers, but rely on
long-term personal and professional relationships with our five largest vendors.
However, we believe that, due to the large number of businesses performing this
type of service in the industry, the Company would have little difficulty in
finding viable alternatives in the event any one of these vendors became unable
or determined not to continue manufacturing our products.

RESULTS OF OPERATIONS
---------------------

Please refer to the consolidated financial statements, which are a part of this
report, for further information regarding the results of operations of the
Company.

             PERIOD ENDED MARCH 31, 2005 COMPARED TO MARCH 31, 2004
             ------------------------------------------------------

REVENUES. In general, we continued to grow our business at a moderate rate
during the first quarter of 2005. We had net sales of $4,111,173 for the first
quarter ended March 31, 2005, compared with $3,724,899 for the same period in
2004. The increase of $386,274, or 10%, in the first quarter was driven by
increased sales to our distributors and professional accounts, and continuing
increased sales to our retail customers who account for approximately 13% of our
total sales. We expect to continue to benefit from increased consumer awareness
of the importance of nutritional supplements in one's diet.

COSTS OF SALES. Cost of sales increased $288,766 to $2,423,385 for the three
months ended March 31, 2005, compared to $2,134,619 for the three months ended
March 31, 2004. The increase in cost of sales corresponds with the increase in
sales as well as increased cost of materials, which we experienced due to the
demand of certain raw ingredients exceeding the supply in the market place.
Gross profit margins decreased from approximately 43% for the first quarter 2004
to 41% for the first quarter 2005. The decrease of 2% for the period over period
comparison is a result of increased cost of materials that have not been passed
on to our customers in order to preserve our customer base and to respond to
pricing pressures from competitors.

OPERATING EXPENSES. Total operating expenses were $1,181,835 for the first
quarter 2005, compared with $993,173 for the same period in 2004, an increase of
$188,662. Approximately $100,000 of the increase was related to the relocation
of our corporate office in mid-February 2005. The remaining increase is
primarily due to an increase in payroll expense associated with increased wages,
workers' compensation and medical insurance, employer matching contributions to
the 401(k) plan and accruals associated with anticipated year-end bonuses.

PROVISION FOR INCOME TAXES. Provision for income taxes as of March 31, 2005
represents federal and state income taxes based on earnings.

NET EARNINGS. During the three-month period ended March 31, 2005, we recorded
net earnings of $319,533 compared to net earnings of $384,063 for the same
period in 2004. Although, sales increased by 10%, we continued to control our
general and administrative expenses and the net decrease primarily results from
increased operating expenses related to our corporate office and manufacturing
facility relocation.


                                       11
<PAGE>

SEASONALITY:

Historically, we have experienced little seasonal fluctuation in revenues;
however, during the spring and fall we traditionally attend two trade shows
geared toward the retail market. Show discounts are offered and the retail
distributors tend to purchase higher quantities due to the discounts. We attend
trade shows geared toward the professional market throughout the year, but the
shows are smaller and tend to not have an immediate effect on sales. These shows
are useful because they provide personal contact with the professional market
and increase sales in the long run.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Current Financial Condition

During the three-month period ended March 31, 2005, our working capital
decreased by approximately $164,273 to $4,796,004, compared to a working capital
at December 31, 2004 of $4,960,277. The decrease was principally due to
expenditures associated with the relocation of our facilities. Current assets
mainly consist of approximately $2.07 million in cash, $1.04 million in accounts
receivable, and $2.36 million in inventory. We continue to finance our inventory
and accounts receivable through cash generated by operating activities.
Management believes that the Company's operating cash flow, cash and
equivalents, and borrowing capacity under committed bank credit agreements, is
sufficient to fund its capital and liquidity needs for the next twelve months.

We currently do not utilize any off-balance sheet financing arrangements.

Cash Flows

OPERATING ACTIVITIES. Net cash flows provided by operating activities were
$427,381 and $475,871 for the three months ended March 31, 2005 and 2004,
respectively. Net cash provided by operating activities for both periods
primarily reflects net income and net changes in operating assets and
liabilities such as accounts receivable, inventory and accounts payable. Cash
generated by operating activities for 2005 is explained by (i) an increase in
accounts receivable of $286,931 due to increased sales and extended collection
times resulting from delays in delivery of our mail after our facility move in
mid-February and (ii) reductions in inventory levels of $189,268 as we sold off
inventories built during the prior year's fourth quarter. Cash generated by
operating activities for 2004 is explained by increases in inventory levels as
we built up inventories to respond to forecasted demand for our products from
the prior year's fourth quarter.

INVESTING ACTIVITIES. Net cash flows used in investing activities for the three
months ended March 31, 2005 was $506,020 primarily resulting from payments for
leasehold improvements for our new facility, office furniture and computer
equipment. Net cash flows for the comparative prior period were immaterial.

FINANCING ACTIVITIES. No financing activity took place during either period
presented.

CONCENTRATION OF CREDIT RISK.

The Company is subject to a wide variety of risks in the ordinary course of its
business. Some of the more significant of these risks include heavy
concentrations of sales with a few key customers; heavy concentrations of raw
material purchases with a few key suppliers; regulation by various federal,
state and local agencies with regards to the manufacture, handling, storage and
safety of products; and regulation by various agencies with regards to the
labeling and certification of products. The Company is also subject to
competition from other nutritional supplement companies and is dependant on the
continued demand for nutritional supplements by consumers.


                                       12
<PAGE>

     SALES. Approximately 11% of our total sales in 2004 were attributable to a
single distributor. In 2005, this distributor continued to account for
approximately 11% of sales. In the event we were to lose that account, we
anticipate that we would be able to convert the business to sales directly to
the customers of that distributor. As converted sales would be at a higher
margin, we do not believe the loss of the account would have a material negative
impact on sales. However, we cannot assure you that, if we were to lose this
distributor, all or any of the customers would transfer directly to us or that
current sales from this group would be maintained.

     PURCHASES. We purchase raw materials and use outside vendors for the
manufacture of our products. For the three months ended March 31, 2005, we had a
concentration of approximately 63% of our manufacturing with five separate
vendors. Three of these vendors individually account for more than ten percent
and two of the vendors account for eight percent each. We do not currently have
written contracts with any of our manufacturers, but rely on long-term personal
and professional relationships. We believe that, due to the large number of
businesses performing this type of service in the industry, we would have little
difficulty in finding viable alternatives in the event any one of these vendors
became unable or determined not to continue manufacturing our products. However,
we can give no assurance that suitable, alternative manufacturers would be
available to us when needed or that such alternative manufacturers would not
result in an increase in costs.

     PRODUCT. We have one product that individually accounts for more than 10%
of our sales dollars. One other product that has historically accounted for more
than 10% of our sales dropped to 9% during the third quarter 2004 and continues
through the first quarter 2005.

CONTRACTUAL OBLIGATIONS. The Company's Contractual Obligations and Commercial
Commitments are detailed below:

<TABLE>
----------------------------------------------------------------------------------------------
                                                  Payments Due by Period
                           -------------------------------------------------------------------
                                                Less
    Contractual                                Than 1        1-3          4 - 5      After 5
    Obligations                   Total         Year        Years         Years       Years
----------------------------------------------------------------------------------------------
<S>                            <C>          <C>          <C>          <C>          <C>
Line of Credit (1)                      -            -            -            -            -
----------------------------------------------------------------------------------------------
Operating Leases (2)           $2,844,000   $  288,000   $  864,000      576,000    1,116,000
----------------------------------------------------------------------------------------------
Total Cash Contractual
Obligations                    $2,844,000   $  288,000   $  864,000   $  576,000   $1,116,000
----------------------------------------------------------------------------------------------
</TABLE>

     (1)  This represents the Company's borrowings under its line of credit with
          Merrill Lynch, which had a zero balance throughout the three months
          ended March 31, 2005 and through the date of this filing. The Merrill
          Lynch line of credit provides for maximum financing of $1,500,000,
          bearing interest at the London Interbank Offered Rate (LIBOR) plus
          2.75%, computed on a monthly basis. As of March 31, 2005, the interest
          rate on the line of credit was 5.61% per annum. Because the line of
          credit is secured by substantially all of the assets of the Company,
          if the Company were to fall into default under the terms of our
          agreement with Merrill Lynch it could have material adverse impact on
          our business and financial position. The CEO of the Company has
          personally guaranteed the line of credit.

     (2)  Represents our building lease with AriBen Corporation, a related
          party. See "Related Party Transactions" below. The monthly obligation
          for the base rent on the lease is $24,000 for approximately 29,821
          square feet.

RELATED PARTY TRANSACTIONS. Stephen and Susan Levine, CEO and VP, respectively,
loaned Nutricology approximately $286,000 prior to its reverse acquisition with
the Company in 1998. The loan has been offset and exceeded by advances made to
the Levine's between 1997 and 1999. Each advance was made as a non-interest
bearing, due on demand, loan on the books of the Company. Interest at 8% per
annum has been accrued and paid on these loans. As of March 31, 2005, the
outstanding balance was $22,333. During the three months ended March 31, 2005,
the Levine's repaid $6,485.


                                       13
<PAGE>

On January 4, 2005, we entered into a lease with AriBen Corporation, a related
party 100% owned by Susan and Stephen Levine, for approximately 29,821 square
feet of office and industrial space. The lease is for a ten-year term with the
option to renew for an additional fifteen years. The monthly obligation for the
base rent on the lease is $24,000. During the first quarter we reimbursed AriBen
Corporation for some of tenant improvements which were built out to our
specifications in the amount of $350,000.

LIQUIDITY RESOURCES. We have $2.07 million in cash and cash equivalents as of
March 31, 2005, which we believe to be sufficient to satisfy our cash
requirements over the next twelve months. Our future funding requirements will
depend on numerous factors, some of which are beyond our control. These factors
include our ability to operate profitably, our ability to recruit and train
management and personnel, and our ability to compete with other, better
capitalized and more established competitors who offer alternative or similar
products. We believe that, given our positive working capital position, we can
satisfy our cash requirements over the next twelve months from operations if we
continue to operate at a profit. Our capital resources and liquidity needs are
expected to be provided by our cash flow from operations.

The Company expects to continue to purchase equipment and hire new employees as
is commensurate with the growth of the business. In addition, we will continue
to invest time and effort in research for product development. We know of no
trends that are expected to affect the cost of labor or materials, and sales are
expected to be stable over the next twelve months. See "CAUTION CONCERNING
FORWARD-LOOKING STATEMENTS/RISK FACTORS" above for some of the variables which
may affect our business and financial results.

CRITICAL ACCOUNTING POLICIES
----------------------------

     Our discussion and analysis is based upon our consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, we evaluate our
estimates, including those related to bad debts, inventories, intangible assets,
income taxes and contingencies. We base our estimates on historical experience
and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.

     An accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used or changes in the accounting estimate that are reasonably
likely to occur could materially change the financial statements.

     We believe the following critical accounting policies reflect our more
significant estimates and assumptions used in the preparation of our
consolidated financial statements; however, management does not consider any of
the estimates and assumptions to be highly uncertain.

INCOME TAXES

     SFAS 109, Accounting for Income Taxes, establishes financial accounting and
reporting standards for the effect of income taxes. The objectives of accounting
for income taxes are to recognize the amount of taxes payable or refundable for
the current year and deferred tax liabilities and assets for the future tax
consequences of events that have been recognized in an entity's financial
statements or tax returns. Judgment is required in assessing the future tax
consequences of events that have been recognized in our financial statements or
tax returns. Variations in the actual outcome of these future tax consequences
could materially impact our financial position or our results of operations.


                                       14
<PAGE>

ALLOWANCE FOR DOUBTFUL ACCOUNTS

     We evaluate the collectibility of our trade receivables based on a
combination of factors. We regularly analyze our significant customer accounts,
and, when we become aware of a specific customer's inability to meet its
financial obligations to us, such as in the case of bankruptcy filings or
deterioration in the customer's operating results or financial position, we
record a specific reserve for bad debt to reduce the related receivable to the
amount we reasonably believe is collectible. The allowances are calculated based
on detailed review of certain individual customer accounts, historical rates and
an estimation of the overall economic conditions affecting our customer base. We
review a customer's credit history before extending credit. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required.

INVENTORY

     Our inventory purchases and commitments are made in order to build
inventory to meet future shipment schedules based on forecasted demand for our
products. We perform a detailed assessment of inventory for each period, which
includes a review of, among other factors, demand requirements, product life
cycle and development plans, component cost trends, product pricing and quality
issues. Based on this analysis, we record adjustments to inventory for excess,
obsolescence or impairment, when appropriate, to reflect inventory at net
realizable value. Revisions to our inventory adjustments may be required if
actual demand, component costs or product life cycles differ from our estimates.

CONTINGENCIES

     Currently, there are no outstanding legal proceedings or claims, other than
that disclosed in Note 3 of the Consolidated Financial Statements. The outcomes
of potential legal proceedings and claims brought against us are subject to
significant uncertainty. SFAS 5, ACCOUNTING FOR CONTINGENCIES, requires that an
estimated loss from a loss contingency such as a legal proceeding or claim
should be accrued by a charge to income if it is probable that an asset has been
impaired or a liability has been incurred and the amount of the loss can be
reasonably estimated. Disclosure of a contingency is required if there is at
least a reasonable possibility that a loss has been incurred. In determining
whether a loss should be accrued we evaluate, among other factors, the degree of
probability of an unfavorable outcome and the ability to make a reasonable
estimate of the amount of loss. Changes in these factors could materially impact
our financial position or our results of operations.

ITEM 3. CONTROLS AND PROCEDURES

     As of the end of the period covered by this report, the Company carried out
an evaluation of the effectiveness of the design and operation of its disclosure
controls and procedures pursuant to the Exchange Act Rule 13a-14. This
evaluation was done under the supervision and with the participation of the
Company's Chief Executive Officer and Chief Financial Officer, Stephen A.
Levine. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in gathering, analyzing and disclosing information
needed to satisfy the Company's disclosure obligations under the Exchange Act.

     There were no significant changes in the Company's internal controls or in
the other factors that could significantly affect those controls since the most
recent evaluation of such controls.


                                       15
<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Not Applicable.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     Not Applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not Applicable.

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

     Not Applicable.

Item 5. OTHER INFORMATION

     Not Applicable.

Item 6. EXHIBITS

(a)   Exhibits
3.1   Registrant's Articles of Incorporation*
3.2   Registrant's Articles of Amendment to Articles of Incorporation dated
      January 15, 1998*
3.3   Registrant's Bylaws*
4.1   Form of Common Stock Certificate*
4.2   Form of Non-Qualified Stock Option*
4.3   Form of Incentive Stock Option*
4.4   Form of Common Stock Purchase Warrant*
4.5   1998 Stock Option Plan*
10.1  License Agreement between Registrant and Jim Cassidy dated March 21, 2000*
10.2  Option Agreement between Registrant, Dr. Ba Hoang and PhytoPharm PLC*#
10.3  Loan and Security Agreement between Registrant and Aerofund Financial,
      Inc.*
10.4  Code of Business Conduct and Ethics**
31    Certificate of Stephen A. Levine required by Rule 13a-14(a) or Rule
      15d-14(a) of The Securities Exchange Act of 1934, as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002
32    Certificate of Stephen A. Levine Pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1  Haight-Ashbury Free Medical Clinic Design Research Survey*

* Incorporated by reference to the corresponding Exhibit previously filed as an
Exhibit to Registrant's Form 10-SB (File #0-27227).
** Incorporated by reference to the corresponding Exhibit previously filed as an
exhibit to Registrant's Form 10-KSB on March 31, 2003.
# Registrant requested confidential treatment pursuant to Rule 406 for a portion
of the referenced exhibit and separately filed such exhibit with the Commission
in conjunction with the filing of its registration statement on Form 10-SB.


                                       16
<PAGE>

                          ALLERGY RESEARCH GROUP, INC.
                                    SIGNATURE

     Pursuant to the requirements 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.

                                          ALLERGY RESEARCH GROUP, INC.
                                          Registrant



Dated:  May 16, 2005
                                          By: /s/ Stephen A. Levine
                                              --------------------------------
                                              Chief Executive Officer and
                                              Chief Financial Officer


                                       17