SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               ------------------

                                   FORM 10-KSB

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended December 31, 2001
                          Commission File No. 000-27237

                          Hand Brand Distribution, Inc.
                 (Name of Small Business Issuer in Its Charter)

                    Florida                                 66-0622463
        (State or Other Jurisdiction of                  (I.R.S. Employer
        Incorporation or Organization)                Identification Number)

    900 Broadway, Suite 1002, New York, NY                     10003
   (Address of principal executive offices)                 (Zip Code)

                                 (212) 982-6400
                (Issuer's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Exchange Act:  NONE
Securities registered pursuant to Section 12(g) of the Exchange Act: Common
Stock, $.001 per share

Check  whether  the issuer:  (1) has filed all  reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days:
                                 Yes |_|   No |X|

Check if there is no  disclosure of  delinquent  filers  pursuant to Item 405 of
Regulation S-B contained  herein,  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 the issuer's revenues for its most recent fiscal year: $112,522

State  the  aggregate  market  value  of  the  issuer's  voting  stock  held  by
non-affiliates of the issuer as of May 24, 2002 was $943,356.65.

State the number of shares outstanding as of the issuer's common stock as of May
24, 2002 was 664,299.


                       DOCUMENTS INCORPORATED BY REFERENCE
None.

Transitional Small Business Disclosure Format: Yes |_|    No  |X|
<PAGE>

                    FORWARD-LOOKING AND CAUTIONARY STATEMENTS

Sections of this Form 10-KSB, including the Management's Discussion and Analysis
of  Financial  Condition  and Results of  Operations,  contain  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities  Act"),  Section 21E of the Securities and Exchange Act
of 1934, as amended (the "Exchange Act"), and the Private Securities  Litigation
Reform Act of 1995, as amended. These forward-looking  statements are subject to
risks and  uncertainties  and other  factors that may cause our actual  results,
performance  or  achievements  to be  materially  different  from  the  results,
performance  or  achievements   expressed  or  implied  by  the  forward-looking
statements.  You  should not unduly  rely on these  statements.  Forward-looking
statements  involve  assumptions  and  describe  our  plans,   strategies,   and
expectations.  You can generally  identify a forward-looking  statement by words
such as "may," "will," "should," "expect," "anticipate,"  "estimate," "believe,"
"intend," or "project".  This report  contains  forward-looking  statements that
address, among other things,

          o our financing plans,
          o regulatory environments in which we operate or plan to operate, and
          o trends affecting our financial  condition or results of operations,
            the impact of competition,  the start-up of certain  operations and
            acquisition opportunities.

Factors,  risks,  and  uncertainties  that could cause actual  results to differ
materially   from   those  in  the   forward-looking   statements   ("Cautionary
Statements") include, among others,

          o our ability to raise capital,
          o our ability to execute our business  strategy in a very competitive
            environment,
          o our degree of financial leverage,
          o risks associated with our acquiring and integrating companies into
            our own,
          o risks relating to rapidly developing technology,
          o regulatory considerations;
          o risks related to international  economies,
          o risks related to market acceptance and demand for our products and
            services,
          o the impact of competitive services and pricing, and
          o other risks referenced from time to time in our SEC filings.

All subsequent written and oral forward-looking  statements  attributable to us,
or anyone acting on our behalf, are expressly qualified in their entirety by the
cautionary  statements.  We do not undertake any obligations to publicly release
any  revisions  to  any   forward-looking   statements  to  reflect   events  or
circumstances after the date of this report or to reflect  unanticipated  events
that may occur.



                                       ii
<PAGE>


                                     PART I

Item 1.  Description of Business
-------  -----------------------

Hand Brand  Distribution,  Inc.  (the  "Company"  or "Hand  Brand") is a Florida
corporation  organized in 1995. Our Common Stock  currently  trades on the "pink
sheets" under the symbol  HBDI.OB,  but is  anticipated to resume trading in the
near future on the Over-the-Counter Bulletin Board ("OTC"). Sometime thereafter,
the Company  will begin  trading  under the new symbol  GETH.OB.  Our  Executive
offices are located at 900  Broadway,  Suite  1002,  New York,  NY 10003 and our
telephone number is 212-982-6400.

Through  our  subsidiary  companies,  Family  Health  News,  Inc.  ("FHNI")  and
GeneThera,  Inc.  ("GeneThera"),  we are currently  involved in the agriculture,
veterinary and health care industries.  FHNI publishes a quarterly international
magazine,  Family  Health News  ("FHNews"),  that  contains  articles on health,
nutrition,  lifestyle and innovative  health  products and therapies.  FHNI also
distributes  a  select  line of  products  related  to these  topics.  GeneThera
develops  molecular  assays for the detection of food  contaminating  pathogens,
veterinary diseases, and genetically modified organisms.

FAMILY HEALTH NEWS, INC.

In October  1996, we acquired FHNI  (formerly  known as The Family News,  Inc.),
which publishes FHNews.  FHNews is a  subscription-based  newsletter and digest,
published  quarterly  since  1990,  that  focuses  on  health,   nutrition,  and
alternative  medical therapies.  FHNI also distributes a small line of products,
including dietary supplements and health and nutrition related equipment,  books
and tapes.  The Company pays a nominal  royalty to the author of the books.  The
Company  has entered  into a Stock  Purchase  Agreement  to sell FHNI (the "FHNI
Stock Sale") to John Taggert, a former officer and director of the Company.  The
FHNI Stock Sale is being presented for stockholder approval at a Special Meeting
of Shareholders of the Company to be held on or about July 25, 2002.

Product Selection and Supply
----------------------------

FHNI seeks to identify products that 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 United States Food and
Drug Administration  ("FDA") required of pharmaceutical  products.  All products
are    manufactured   by   established    manufacturers,    including    Baywood
Pharmaceuticals, Enguard Health Products, Proper Nutrition, Inc., Neutraceutics,
Lentek and Martek.  These products are standard  formulations  and are generally
sold under the brand name of the  manufacturer,  but some are labeled  under the
Company name.

FHNI does 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.

                                       1
<PAGE>

FHNI depends upon the  manufacturers of our products to conduct adequate quality
control and compliance with applicable  manufacturing and labeling  regulations.
FHNI does not undertake  independent  quality testing of our products after they
are  received  from the  manufacturer.  Each  manufacturer  provides  FHNI  with
certificates  of  insurance  evidencing  their  policies  of general and product
liability coverage in amounts that conform to industry standards.

Distribution
------------

FHNI  distributes its products  through a sales force comprised of six to twelve
independent  distributors.  The sales force is  recruited  primarily  though our
catalog and through FHNews' web site. The primary  channels of distribution  for
our  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
Company does not rely on any one customer or a few major customers.

Competition
-----------

Our market is highly  competitive.  We believe  the narrow  focus of our product
line and the information that we provide to our customers through FHNews and our
World Wide Web site avoid 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 bookstores that carry competing  products.  There
are also  competing  mail order and  Internet  retailers  that  carry  competing
products.  These competitors compete on the basis of selection,  price, physical
location and personal  service  availability  at some  locations.  Most of these
competitors have vastly greater resources than the Company.

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 FDA, 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  and prescription
drugs and cosmetics. The regulations that are promulgated by the FDA relating to
the  manufacturing  process are known as CGMPs,  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,  non-prescription
drugs, cosmetics and foods.

The  Dietary  Supplement  Health and  Education  Act of 1994 (the  "DSHEA")  was
enacted on October 25, 1994. The DSHEA 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.  The DSHEA  provides a regulatory  framework to ensure safe,
quality dietary supplements and the dissemination of accurate  information about
such products.  Under the DSHEA, 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.

                                       2
<PAGE>

The DSHEA provides for specific  nutritional  labeling  requirements for dietary
supplements and the FDA's final regulations require that all dietary supplements
be labeled in compliance with the regulations.  The DSHEA 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. The
FDA issued a final  regulation,  "Regulations  on  Statements  Made For  Dietary
Supplements Concerning the Effect of the Product on the Structure or Function of
the Body." The regulations  establish  criteria for determining when a statement
is a claim to diagnose,  came, mitigate, treat or prevent disease thereby making
the product an unapproved new drug.

Final labeling  regulations may require  expanded or different  labeling for the
vitamin  and  nutritional   supplement  products  sold  by  the  Company.  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

Product Liability Insurance
---------------------------

FHNI, 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 FHNI does not manufacture its
ingestible  products,  FHNI does not currently have product liability  insurance
for these products. FHNI requires that each of our suppliers provide the Company
with  certificates  of  insurance   evidencing  policies  of  product  liability
insurance  that are adequate in scope and amount based upon industry  standards.
Nevertheless,  such  policies of  insurance  do not extend such  coverage to the
Company  and  the  Company's  agreements  with  such  suppliers  do not  provide
indemnification  by the suppliers of any losses  incurred by the Company arising
out of any product liability claims.

GENETHERA, INC.

On February  25, 2002,  the Company  closed on the  acquisition  of 92.9% of the
issued and outstanding  shares of capital stock of GeneThera,  which resulted in
GeneThera  becoming a subsidiary  of the  Company.  We  anticipate  that we will
acquire an  additional  6.3% of the  outstanding  GeneThera  common stock in the
future.  Pursuant to the stock purchase  agreements with the former shareholders
of GeneThera  (the "Former GTI  Shareholders"),  the Company  agreed to issue an
aggregate  of  8,305,950   shares  of  its  shares  of  Common  Stock  to  these
shareholders.  At the time of the closing of the  acquisition of GeneThera,  the
Company did not have sufficient  authorized shares of Common Stock to issue such
shares. Consequently,  under Florida Law, the issuance of such authorized shares
would be void. In May 2002, the Former GTI  Shareholders  holding  approximately
94% of the 92.9% of shares of  GeneThera  common  stock  acquired by the Company
agreed to accept shares of the  Company's  Common Stock  promptly  following the

                                       3
<PAGE>

effectiveness  of the  approval  by the  Company's  shareholders  either  to (i)
increase the number of authorized shares of Common Stock ("Proposal 1"); or (ii)
reincorporate  in  Delaware  with  a  sufficient  number  of  authorized  shares
("Proposal 2") in complete  satisfaction of the Company's  obligation to them to
issue and deliver shares of its Common Stock (the "May Amendments"). The Company
intends  to  enter  into  similar  agreements  with  the  remaining  Former  GTI
Shareholders,  but there can be no assurance that it will be successful in doing
so.  Pursuant  to the May  Amendments,  the  Company  agreed with the Former GTI
Shareholders  that if it does not  receive  approval  by  December  31,  2002 to
increase  its  authorized  capital  pursuant  to  either  Proposal  1 or, at the
Company's option,  Proposal 2, then such Former GTI Shareholders may at any time
thereafter elect to forego their rights to receive shares of the Common Stock of
the  Company and have their  shares of  GeneThera  returned to them.  In such an
event,  the  Company's  ownership  interest  in  GeneThera  would be  reduced or
eliminated by any Former GTI  Shareholders  making such election.  Such a result
would likely have a material  adverse  effect on the Company and,  when combined
with the planned  FHNI Stock Sale,  could  leave the Company  with no  operating
business or planned business operations.

GeneThera  is a  molecular  diagnostic  company  that has  created a  technology
platform to develop and  commercialize  genomic assays with  applications in the
agriculture,  veterinary,  and medical industries.  "Assays" are testing methods
that  diagnose  particular  diseases  primarily  from  blood or  feces  samples.
Specifically  these assays can be used to diagnose,  treat, and manage cancerous
and  infectious  diseases,   primarily  in  animals;  and  detect  and  quantify
food-borne pathogens,  and detect and quantify genetically modified organisms in
crops and processed food products.

GeneThera   recently  completed  the  first  phase  of  research  on  Real  Time
Fluorogenic  Polymerase Chain Reaction (F-PCR) platform  technology.  F-PRC is a
combination  of chemical  processes and  specialized  equipment  that permit the
analysis of genetic materials  relating to specific disease states. The addition
of a  specific  enzyme  known as a  polymerase  to a genetic  sample  causes the
selected  material to duplicate  itself into  sufficient  volume to allow rapid,
accurate and actionable decisions.  The addition of flourogenic materials to the
process produces light from the subject  material.  It also allows  specifically
designed  laser guided  computer  programs to produce real time data on both the
presence and volume of targeted  materials.  GeneThera is currently  focusing on
the agricultural and veterinary applications of this technology.

This F-PCR platform is flexible.  GeneThera designs assays including proprietary
chemical  compounds and processes that can provide the foundation for patentable
market  applications.  GeneThera intends to file patent  applications to protect
its assay designs.  There can be no assurances,  however, that such applications
will result in the awarding of patents.

Previous diagnostic  technologies,  such as antibody detection and even standard
polymerase chain reaction (PCR) methods, have been limited to disease detection.
GeneThera 's application  of F-PCR is expected to go beyond  detection and allow
for the precise quantification of viral, bacterial,  and cancerous nucleic acids
levels.

                                       4
<PAGE>

Development Process
-------------------

The development process of such assays has six primary phases. These are: (i)
the identification of the disease condition targeted and the valuation of the
target market's size, penetration requirements and profit potential; (ii) the
design of the assay by defining the indicators of the presence of disease and
establishing internal controls; (iii) the establishment of baseline performance
criteria; (iv) the defining of the assay efficacy outcomes; (v) the validation
of the assay; and (vi) small scale commercialization. Assuming that an assay is
validated in accordance with the original assay design, the entire scientific
process for the development of such an assay through to its commercial
application is approximately one year. At present, the Company is in the process
of establishing baseline performance criteria (phase 3) for the assays for
Chronic Wasting Disease and E.coli. For all other targeted diseases, the Company
is either in the market valuation stage or in the process of designing the
assay. It is estimated that it will require outside capital of between four and
five million dollars over the next two years to complete the commercialization
of GeneThera's integrated assays and tests.


Business Model
--------------

GeneThera's business model has four features:

         1.   Staged Market Penetration
              -------------------------

         We believe that our technology platform has many potential commercially
         marketable applications.  We have selected the non-human testing market
         as our initial focus,  specifically,  the beef industry.  The non-human
         testing  markets  do not  require  lengthy  approval  or  certification
         processes.  Over the next year,  the  Company  intends to  introduce  a
         number of individual assays for commercial use. These assays include:

                  o   the detection of Mad Cow Disease and Chronic Wasting
                      Disease in live animals
                  o   the detection of Johne's Disease in all ruminants
                  o   the detection of Foot and Mouth Disease
                  o   the detection of a certain type of E.coli in beef

         2.   Standardization with Operational Flexibility
              --------------------------------------------

         We intend to  develop a  modularized  approach  to each assay such that
         each assay will be  standardized  around a  specific  set of  equipment
         using consistent laboratory  procedures.  This will allow for placement
         of  individual  modularized  laboratories  in any  geographic  location
         including  existing  independent  labs or  on-site  with the  end-user.
         GeneThera  intends  to  own  and  operate  the  on-site   laboratories.
         GeneThera's  personnel  will be responsible  for sample  collection and
         processing according to GeneThera's specifications.

         3.   High Throughput
              ---------------

         We  believe  that our  planned  modularized  laboratory  approach  will
         provide   high  volume   throughput   necessary   for   effective   and
         cost-efficient commercial operations.  High volume testing is extremely
         important to the  agriculture  and food  processing  industries  due to
         their large volume of production.

         We have two distinct  techniques for processing  this large quantity of
         assays.  The  first is to  conduct  assays  for the  detection  of food
         contaminating  organisms  both in meat products and in meat  processing
         plants.  An example of this would be E.coli  assay in ground  beef at a
         meat processor's facility. The second will be conducted concurrently in
         the lab using a single blood or feces sample from live animals.

                                       5
<PAGE>

         4.   Collection of Data
              ------------------

         The hardware and software platform upon which  GeneThera's  assays are
         built are anticipated to allow for the continual collection,  analysis
         and  management  of assay results over time.  With the data  available
         from this system, animal owners, feedlot managers, food producers, and
         veterinarians  will be able to build a  comprehensive  inventory of an
         animal's health.

Competition
-----------

Competition  for  GeneThera's  assays  comes  primarily  from  small  commercial
veterinary  diagnostic  labs in the E.coli and  processed  food product area and
University or government based Microbiology programs, such as the Colorado State
or the USDA lab in Ames, Iowa that employ laboratory based  neurological  tissue
culture  processes  in the area of Mad Cow or Chronic  Wasting  diseases.  These
processes  take  significantly  longer than the  processes  being  developed  by
GeneThera and require extraction of tissue or fluids not easily performed in the
field.

Distribution
------------

On September 24, 2001,  GeneThera entered into an exclusive  licensing agreement
with Micro Beef  Technologies,  Inc. to distribute and  sub-license  the Modular
Unit  Workstations  and Tests  (including  materials  and  supplies)  created by
GeneThera.   Micro   Beef   Technologies,   Inc.   provides   rapid   technology
commercialization  services,  supply  chain  integration  programs  to the  food
producing animal industry and has an established sales and distribution  system.
This  agreement  calls  for,  among  other  things,  Micro Beef to make its best
efforts  to  pursue  and  implement  marketing,  sales and  distribution  of the
mutually agreed  marketing plan;  provide a sales force  sufficient to implement
the marketing  plan; and develop and provide the materials,  staff,  advertising
and necessary support to implement the marketing plan.

Primary Supplier
----------------

GeneThera's molecular assays are built on Applied BioSystems, Inc.'s proprietary
system of hardware, software and disposable agents ("the System"). GeneThera has
rights as sublessee of the system, which is subject to a capital lease. While
there are other suppliers of equipment and software that could support the
GeneThera technology, GeneThera believes that ABI's system is superior and that
ABI is a stable company capable of providing the resources necessary to sustain
GeneThera's business plan.

When a System is purchased from ABI, the purchaser  receives a perpetual license
to use the equipment,  software and consumables.  These licenses are specific to
the individual  machine and are not currently  transferable to a sub-licensor of
GeneThera's  technology,  but GeneThera's business model (which contemplates the
use of modular  workstation  units operated by GeneThera) does not contemplate a
sublicensing of the technology.

Government Regulations
----------------------

GeneThera's  current set of assays will come under the  jurisdiction of the Food
Safety and  Inspection  Service of the United States  Department of  Agriculture
(the  "USDA").  The USDA's  mission is to  enhance  the  quality of life for the
American  people by supporting  production of  agriculture  and ensuring a safe,
affordable,   nutritious  and  accessible  food  supply.  The  Food  Safety  and
Inspection Service (the "FSIS"),  ensures that the nation's commercial supply of
meat,  poultry and egg products is safe,  wholesome  and  correctly  labeled and
packaged. The FSIS sets standards for food safety and inspects meat, poultry and
egg products  produced  domestically and imported.  The Service inspects animals
and  birds  at  slaughter  and  processed  products  at  various  stages  of the
production  process  and  analyzes  product  for  microbiological  and  chemical
adulterants.  FSIS also informs the public  about meat,  poultry and egg product
safety issues.

                                       6
<PAGE>

FSIS works with the Research,  Education and Economics  mission area of the USDA
on food  safety  research  issues  and the Animal  and Plant  Health  Inspection
Service on instances  where animal  diseases  impact the food safety.  FSIS also
facilitates the management of US activities pertaining to the Codex Alimentarius
Commission,  an  international  organization  created by the  United  Nations to
promote the health and economic  interests of consumers while  encouraging  fair
international  trade in food. FAS supports FSIS in food  discussions in the food
export market.

FSIS was  established  by the  Secretary  of  Agriculture  in 1981,  pursuant to
legislative  authority  contained in 5 U.S.C. 301 which permits the Secretary to
issue  regulations  governing  the  USDA.  Its work is  carried  out  under  the
authority of the Federal Meat Inspection  Act, the Poultry  Products Act and the
Egg Products Inspection Act. (www.fsis.usda.gov).

As  GeneThera  enters  the  validation  phase  for  each  of  the  assays  under
development,  a simultaneous review of outcomes and efficacy will be coordinated
with the USDA. When GeneThera has completed  development of an assay or vaccine,
it  presents  the test and  product  to the USDA for  validation.  The USDA will
either select an independent  laboratory to reproduce and confirm the results or
use a blind blood test program. In the event a blind test is done, samples coded
by the USDA will be given to GeneThera,  who will verify the results and forward
them to the USDA for re-verification. The validation process will generally take
between 2 and 4 months, assuming the successful validation of the original assay
design. In the event that the Company cannot validate the original assay design,
then the process  would be delayed as the Company  redesigns  the assay until it
achieves a successful validation of such design.

EMPLOYEES

As of May 24, 2002,  the Company had a total of six (6) full-time  employees and
one (1) consultant who devotes  substantial effort on the Company's behalf. None
of the employees of the Company are represented by a collective bargaining unit.

RISK FACTORS

We encounter  various  risks  related to our business  and our  industry.  These
include the following risks.

Development Stage Company
-------------------------

We have a  history  of losses  and may  never  become  profitable.  Our  primary
subsidiary, GeneThera, Inc., is a development stage company. As such, GeneThera,
Inc. will continue to incur high research and development  expenses and will not
generate revenues until it successfully  develops and markets assays.  There can
be no assurance that the Company will become profitable.

Government Regulation
---------------------

The Company is subject to or affected by laws and regulations that govern, among
other things: (i) nutritional  supplements;  and (ii) testing of animals for the
presence  of  certain  diseases.  The  failure  to comply  with  these  laws and
regulations, or to obtain applicable governmental approvals, could result in the
imposition of penalties,  cause delays in, or make impossible,  the marketing of
our products and services.

Item 2.  Description of Property
-------  -----------------------

FHNI  currently  leases 1,200  square feet of office  space on a  month-to-month
basis in Miami Shores,  Florida at $745.50.  Our total rent expense for the year
ended December 31, 2001 was $17,256.

GeneThera 's executive offices are located in Golden, Colorado. They occupy this
facility under a lease, which terminates in December 31, 2005, with an option to
extend the lease for an additional five years.  GeneThera  considers the current
space  adequate.  Annual  lease  costs  were  $45,150  in 2001 and will  rise to
$63,337.00 in 2005.

Item 3.  Legal Proceedings
-------  -----------------

None

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

None



                                       7
<PAGE>


                                     PART II

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

The Company Common Stock currently  trades on the "pink sheets" under the symbol
HBDI.OB,  but is expected to resume  trading on the OTC within the next  several
weeks. Sometime thereafter,  the Company will begin trading under the new symbol
GETH.OB.  The following  sets forth the range of high and low bid quotations for
the periods  indicated as reported by Bloomberg  L.P.  Such  quotations  reflect
prices between dealers, without retail mark-up, markdown or commission,  and may
not represent actual  transactions.  The following numbers have been adjusted to
reflect an eight for one reverse stock split in January 2002.

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

March 31, 2000                             46.00               9.00
June 30, 2000                              22.00               4.50
September 30, 2000                         22.00               5.25
December 31, 2000                          18.00               5.25
March 31, 2001                              5.25               1.75
June 30, 2001                               5.68               1.52
September 30, 2001                          3.52               1.60
December 31, 2001                           3.2                1.12


There are no restrictions on the payment of dividends. We have paid no dividends
to date and none are anticipated.  As of May 24, 2002, there were  approximately
425 holders of record of the Company Common Stock.

At various  times  prior to  December  31,  2001,  the former  President  of the
Company,  John  Taggart,  made loans to the Company in the  aggregate  principal
amount of $15,300,  which amount remained  outstanding on December 31, 2001. The
loans were evidenced by convertible  promissory  notes which convert into shares
of Common Stock.

At various times prior to December 31, 2001, various third parties made loans to
the Company in the aggregate principal amount of $69,500,  which amount remained
outstanding  on December  31,  2001.  The loans were  evidenced  by  convertible
promissory notes which convert into shares of Common Stock.

On January 11, 2001 the Company issued 31,248 shares (after giving effect to the
reverse  stock split) of Common  Stock in exchange for legal serves  provided by
the Company's then-legal counsel.

Since January 15, 2002, the Company issued  convertible  promissory notes in the
aggregate  principal  amount of Three Hundred  Eighty Seven Thousand Six Hundred
Dollars  ($387,600) to a limited number of holders.  In May, 2002, Three Hundred
Fifteen  Thousand Seven Hundred Dollars  ($315,700) of principal under the notes
converted  to  Common  Stock  at the  rate  of one  share  for  each  dollar  of
outstanding  principal  and  accrued  but  unpaid  interest.   The  Company  has
subscriptions  for the  issuance to some of the original  holders of  additional
notes  in the  aggregate  principal  amount  of  One  Hundred  Thousand  Dollars
($100,000) upon the satisfaction of certain conditions.  The notes bear interest
at the rate of 6% per year through the maturity date, which is January 15, 2005.
The notes  automatically  convert into Common Stock at any time the price of the
shares on an exchange  close above  Three  Dollars  ($3.00) per share for twenty
(20)  consecutive  trading days.  In the absence of such event,  each holder may
elect to convert all, or a portion of the  principal  outstanding  on his or her
note. The conversion rate is one share for each dollar of outstanding  principal
and accrued but unpaid interest.

As part of its  acquisition  of GeneThera  on February  25,  2002,  discussed in
greater  detail in  response  to Item 1 herein,  the  Company  will issue to the
Former GTI Shareholders, in the aggregate, 8,305,950 shares of its Common Stock.

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

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

FHNI DISCUSSION AND ANALYSIS

FHNI  generates  revenues from two sources:  (i)  subscription  revenue from the
publication of FHNews comprises 1.4% of FHNI's  revenues;  and (ii) revenue from
the sale of products comprises 98.6% of FHNI's revenues.

FHNI has had a long  history of losses and flat to negative  growth in revenues.
In light of the  Company's  belief that the  GeneThera  business  holds  greater
promise for long-term  growth and value,  the Company's  Board of Directors will
submit to the Company's  shareholders  for approval a proposal to enter into the
FHNI Stock Sale. The FHNI Stock Sale,  which is proposed on terms and conditions
based upon an arm's length  transaction,  will reduce the Company's overall debt
and permit the Company to focus its resources on the GeneThera business.

RESULTS OF OPERATIONS

Based upon the Company's planned  divestiture of FHNI and the recent acquisition
of GeneThera,  the following  discussion of FHNI's operations is not anticipated
to be indicative of future operating results.

Sales for the year ended  December 31, 2001 were  $112,522,  a 53% decrease over
sales for the year ended  December 31, 2000.  The decrease was due to Hand Brand
focusing on the  pre-launch  development  of our direct  selling  program at the
expense of our normal sales and marketing.

Cost of goods sold as a percentage of sales was relatively  stable over the last
fiscal year. Selling,  general and administrative expenses decreased to $134,500
for the year ended December 31, 2001. This decrease was due primarily to lowered
sales and marketing  expenses,  including  direct selling,  wholesale direct and
mail campaigns.

The increase in professional fees,  approximately $150,000 higher for the fiscal
year ended December 31, 2001 over the prior fiscal year, is  attributable to the
issuance of Common  Stock to the  Company's  prior legal  counsel in lieu of the
payment of legal fees.

Total   assets  at  December  31,  2001   dropped  by   approximately   $86,000.
Approximately half of the decrease is attributable to the write-down of goodwill
due to the Company's  continuing  losses,  working capital  deficiency and prior
default on a note payable.

Current liabilities as of December 31, 2001 increased by approximately  $84,000.
This increase  reflects the issuance of additional  convertible notes payable to
fund  operations and the  stretching of accounts  payable to compensate for cash
flow problems.

GENETHERA PLAN OF OPERATION

Background
----------

GeneThera  is a  development  stage  company  (as such  term is  defined  by the
Securities and Exchange  Commission  ("SEC") and Generally  Accepted  Accounting
Principles)  and has had  negligible  revenues  from  operations in the last two
years. As a development stage company, its research and development expenditures
cannot be capitalized.  Upon the divestiture of FHNI, the Company,  itself, will
be reclassified as a development stage company.

GeneThera  plans  to  develop  proprietary  diagnostic  assays  for  use  in the
agricultural and veterinary markets.  Specific assays for Mad Cow Disease,  Foot
and Mouth Disease, E.coli and Chronic Wasting Disease are in development.

Development Process
-------------------

The development  process of such assays has six primary  phases.  These are: (i)
the  identification of the disease  condition  targeted and the valuation of the
target market's size,  penetration  requirements and profit potential;  (ii) the
design of the assay by defining  the  indicators  of the presence of disease and
establishing internal controls;  (iii) the establishment of baseline performance

                                       8
<PAGE>

criteria;  (iv) the defining of the assay efficacy outcomes;  (v) the validation
of the assay; and (vi) small scale commercialization.  Assuming that an assay is
validated in accordance  with the original assay design,  the entire  scientific
process  for  the  development  of  such  an  assay  through  to its  commercial
application is approximately one year. At present, the Company is in the process
of  establishing  baseline  performance  criteria  (phase 3) for the  assays for
Chronic Wasting Disease and E.coli. For all other targeted diseases, the Company
is either in the  market  valuation  stage or in the  process of  designing  the
assay.

Business Model
--------------

GeneThera's business model has four features.  First, we believe that our focus,
the  non-human  testing  market,  has great profit  potential  without a lengthy
approval or certification processes.  Over the next year, the Company intends to
introduce a number of individual assays for the detection of Mad Cow Disease and
Chronic Wasting Disease in live animals, the detection of Johne's Disease in all
ruminants,  the  detection  of Foot and Mouth  Disease  and the  detection  of a
certain  type of E-coli in beef.  Second,  we  intend to  develop a  modularized
approach  to each  assay  such that each  assay  will be  standardized  around a
specific set of equipment  using  consistent  laboratory  procedures.  This will
allow for placement of individual  modularized  laboratories  in any  geographic
location  including  existing  independent  labs or on-site  with the  end-user.
Third, we believe that our planned modularized  laboratory approach will provide
the high volume throughput necessary for effective and cost-efficient commercial
operations.  Finally,  GeneThera's hardware and software platform will allow for
the continual  collection,  analysis and  management of assay results over time.
With the data available from this system, animal owners, feedlot managers,  food
producers, and veterinarians will have a comprehensive inventory of the animal's
health.

 LIQUIDITY AND CAPITAL RESOURCES

Hand Brand had a cash balance of $458 as of December 31, 2001. With the
acquisition of GeneThera, it is estimated that it will require outside capital
of between four and five million dollars over the next two years to complete the
commercialization of GeneThera's integrated assays and tests. The Company is
seeking to address its capital needs in several ways discussed below. In the
event that we are unable to satisfy the conditions for use of the PELC Facility,
described below, or obtain additional financing for operations, we may be forced
to curtail our operations. Nevertheless, at the present time, and without
drawing funds from the PELC Facility, we believe we have adequate working
capital for at least another ninety (90) days.

Convertible Notes
-----------------

To relieve its cash flow  crisis,  since  January 15, 2002,  the Company  issued
convertible  promissory notes in the aggregate principal amount of Three Hundred
Eighty Seven  Thousand Six Hundred  Dollars  ($387,600)  to a limited  number of
holders.  In May, 2002,  Three Hundred  Fifteen  Thousand Seven Hundred  Dollars
($315,700) of principal under the notes converted to Common Stock at the rate of
one share for each  dollar of  outstanding  principal  and  accrued  but  unpaid
interest. The Company has subscriptions for the issuance to some of the original
holders of  additional  notes in the aggregate  principal  amount of One Hundred
Thousand  Dollars  ($100,000) upon the satisfaction of certain  conditions.  The
notes bear interest at the rate of 6% per year through the maturity date,  which
is January 15, 2005.  The notes  automatically  convert into Common Stock at any
time the price of the shares on an exchange  close above Three  Dollars  ($3.00)
per share for twenty  (20)  consecutive  trading  days.  In the  absence of such
event,  each  holder may elect to  convert  all,  or a portion of the  principal
outstanding on his or her note. The conversion rate is one share for each dollar
of outstanding principal and accrued but unpaid interest.

                                       9
<PAGE>

Private Equity Line of Credit
-----------------------------

In order to  provide  a source  of  future  capital  for  ongoing  research  and
development of the Company's  products and general working  capital,  on January
16, 2002, the Company and Prima Capital Growth Fund LLC (the "Investor") entered
into the  Private  Equity Line of Credit  Agreement  (the "PELC  Agreement"),  a
Registration  Rights  Agreement and Warrants to purchase up to 600,000 shares of
the Company's  Common Stock at $1.00 per share.  Under the PELC  Agreement,  the
Company may issue and sell,  from time to time,  shares of its Common  Stock for
cash consideration up to an aggregate of $30 million (the "PELC Facility").  The
Company  intends to use the PELC Facility to make  investments in GeneThera from
time to time,  consistent  with approved  budgets and the  attainment of planned
milestones, to fund continuing operations.

There are many  conditions  that must be satisfied  before the Company can avail
itself of the PELC Facility. Pursuant to the requirements of the PELC Agreement,
the Company must file a registration  statement on Form SB-2 (the  "Registration
Statement") with the SEC in order to permit the Investor to resell to the public
any shares that it acquires pursuant to the PELC Agreement. Commencing as of the
effective  date of the  Registration  Statement,  and  continuing  for 36 months
thereafter,  the  Company  may  from  time to time at our sole  discretion,  and
subject to certain  restrictions  set forth in the PELC Agreement,  sell ("Put")
shares of our Common Stock to the Investor at an initial purchase price equal to
87.5% of the daily volume weighted  average of the price of the Common Stock for
each day  during  the  specified  purchase  period.  A Put can be made  after 10
trading  days have  elapsed from the date of the delivery of the last Put notice
in amounts ranging from a minimum of $100,000 to a maximum of an amount equal to
the 15% of the  average  daily  prices  for  each  of the  twenty  trading  days
immediately preceding the day the put notice has been sent by the Company to the
Investor  ("Put Date")  multiplied by the reported  daily trading  volume of the
Common Stock on the OTC for the 20 trading days  immediately  preceding  the Put
Date.

The maximum Put amount may be  increased,  and the  discount to the daily volume
weighted  average price of the Company's  Common Stock may be decreased,  if the
trading volume of the Common Stock exceeds certain minimum  thresholds  prior to
the delivery of the Put notice. Other conditions to the Company's ability to Put
shares of its Common Stock, and the Investor's obligation to purchase the shares
include: (i) the continued effectiveness of the Registration Statement, (ii) the
Company's  performance  and  compliance  with  all  obligations  under  the PELC
Agreement  and the  Registration  Rights  Agreement,  (iii)  no  statute,  rule,
regulation,  executive  order,  decree,  ruling or injunction shall be in effect
which  prohibits  or directly  and  adversely  affects  any of the  transactions
contemplated by the PELC Agreement,  (iv) at the time of a Put, there shall have
been  no  material  adverse  change  in  the  Company's  business,   operations,
properties,  prospectus or financial  conditions  for the 30 days  preceding the
delivery  date of a Put Notice,  (v) the  Company's  Common Stock shall not have
been  delisted  from the market on which it is then trading nor  suspended  from
trading,  and (vi) a supplement to the prospectus  included in the  Registration
Statement, if required, shall have been filed with the SEC and sufficient copies
thereof delivered to the Investor on the first trading day immediately following
the delivery of the Put notice.

Pursuant to the PELC Agreement, the Company was required to pay a commitment fee
of $300,000 and to file a Registration  Statement relating to shares that may be
Put under the PELC Facility.  Until the Registration Statement becomes effective
and the Company  elects to Put shares to the Investor  under the PELC  Facility,
Hand Brand has limited cash resources  with which to operate.  On March 4, 2002,
the  Investor  agreed to amend the PELC  Agreement  to permit the payment of the
commitment fee upon the earlier to occur of (i) the Company  receiving  $800,000
of equity financing prior to the filing of the Registration  Statement;  or (ii)
September 15, 2002. The amendment also provided the Investor with the right, but
not the  obligation,  to convert  all or any  portion of the  commitment  fee to
shares of Common Stock based upon a value of $1.00 per share.

Item 7.  Financial Statements
-------  --------------------

The  following  consolidated  financial  statements of the Company and report of
independent  certified  public  accountants  required  by this  item  are  filed
herewith in this Form 10-KSB.


                                       10
<PAGE>

                          HAND BRAND DISTRIBUTION, INC.
                              FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>


Hand Brand Distribution, Inc.                                                                 PAGE
                                                                                              ----
<S>                                                                                            <C>

Independent Auditors' Report..............................................................     12

Balance Sheets as of December 31, 2001 and 2000...........................................     13

Statements of Operations for the years ended December 31, 2001 and 2000 ..................     15

Statements of Changes In Stockholders' Equity (Deficit) for the years ended
   December 31, 2001 and  2000............................................................     16

Statements of Cash Flows for the years ended December 31, 2001 and 2000...................     17

Notes to Financial Statements.............................................................     19

</TABLE>



                                       11




<PAGE>


                          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, 2001 and 2000,  and the related  statements  of  operations,
stockholders'  equity (deficit),  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,  2001 and  2000,  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 14 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 14.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.



SEWELL AND COMPANY, PA


Hollywood, Florida
March 23, 2002



                                       12

<PAGE>


                         HAND BRAND DISTRIBUTION, INC.
                                 BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000

                                                     2001                2000
                                                   ---------          ----------

                                         Assets
Current assets
     Cash                                          $     458         $    6,235
     Accounts receivable, net                          4,087              3,930
     Inventory                                        20,287             41,749
     Other current assets                               --                5,600
                                                   ----------        ----------

Total current assets                                  24,832             57,514

Property and equipment, net                           34,733             45,026

Other assets
     Deposits                                            651                651
     Goodwill and trademark, net                      35,577             78,615
     Other assets                                      2,046              1,960
                                                   ---------          ---------
                                                      38,274             81,226
                                                   ---------          ---------
                                                   $  97,839          $ 183,766
                                                   =========          =========


                                       13

<PAGE>


                         HAND BRAND DISTRIBUTION, INC.
                                 BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000



                                                      2001               2000
                                                   ----------         ----------

                  Liabilities and Stockholders'
                  Equity (Deficit)

Current liabilities
  Bank overdraft                                   $     939         $      424
  Accounts payable and accrued expenses               83,763             53,781
  Accrued interest payable                            18,214             14,523
  Deferred income                                     10,172               -
  Notes payable                                       14,605
  Current portion, convertible notes
    payable - related party                            5,000
  Current portion, convertible notes payable         35,000             14,605
                                                   ----------         ---------

Total current liabilities                            167,693             83,333

Long term, convertible notes payable -
related party                                         10,300              5,000

Long term, convertible notes payable                  34,500             35,000

Stockholders' equity (deficit)
  Common stock $.001 per value authorized
    1,562,500 shares; issued and outstanding;
    348,588, and 317,340 shares                          349                318
  Additional paid in capital                       1,001,051            834,032
  Accumulated deficit                             (1,116,054)          (773,917)
                                                   ---------          ---------

\                                                   (114,654)            60,433
                                                   ---------          ---------

                                                   $  97,839          $ 183,766
                                                   ---------          ---------


                                       14
<PAGE>


                         HAND BRAND DISTRIBUTION, INC.
                            STATEMENTS OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

                                                      2001              2000
                                                   ----------         ----------
Income
     Sales net of returns                          $112,522          $ 231,053
     Cost of sales                                   65,511            131,767
                                                   ----------         ----------
Gross profit                                         47,011             99,286
     Expenses
     Sales expenses                                  11,774             35,860
     General and administrative expenses            122,828            218,524
     Printing and publications                        1,090             15,547
     Interest expense                                15,906             58,777
     Professional fees                              182,214             32,058
     Bad debt expenses                                2,006                 --
     Gain (loss) on transfer of assets                   --              4,624
     Impairment of long-lived assets                 35,577             70,291
     Depreciation and amortization                   17,753             37,285
                                                   ----------         ----------
                                                    389,148            472,966
                                                   ----------         ----------
Loss before extraordinary items                    (342,137)          (373,680)
Extraordinary items
     Gain on debt restructure (net of taxes)            --              76,588
                                                   ----------         ----------
Net loss                                          $(342,137)         $(297,092)
                                                   ==========        ===========
Earnings (loss) per share
     Loss per common share before
       extraordinary items                        $   (0.98)         $   (1.18)
     Extraordinary items                                --                0.24
                                                   ----------         ----------
     Net loss per common share                    $   (0.98)         $   (0.94)


                                       15

<PAGE>


                         HAND BRAND DISTRIBUTION, INC.
            STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>

                                                  Common Stock         Additional
                                                                        Paid in          Accumulated
                                                Shares       Amount     Capital           Deficit        Total
                                               -------      -------    ----------      --------------    -------

<S>                                            <C>         <C>         <C>             <C>             <C>
Balance December 31, 1999                      315,524     $   316     $ 742,934       $  (476,825)    $ 266,425

Private offering on January 27, 2000             1,166           1        46,499                          46,500

Issuance of shares of common stock
     for cash on June 5, 2000                      400           1         3,199                           3,200

Issuance of common stock on Oct. 25,
     2000 for consulting services rendered         250          --         2,000                           2,000

Beneficial conversion feature on notes
     payable                                                              39,400                          39,400

Net loss 2000, as restated (See Note 12)                                                  (297,092)     (297,092)

                                               -------      -------    ---------        -----------     ----------
Balance December 31, 2000                      317,338         318       834,032          (773,917)       60,433


Issuance of common stock on Jan. 11,
     2001 for legal services rendered           31,250          31       156,219                         156,250

Beneficial conversion feature on notes
     payable                                                              10,800                          10,800

Net loss 2001                                                                             (342,137)     (342,137)
                                              --------     --------  -----------       ------------    -----------

Balance December 31, 2001                      348,588     $   349   $ 1,001,051       $(1,116,054)    $(114,654)
                                              ========     ========  ===========       ============    ==========

</TABLE>
                       See notes to financial statements.

                                       16

<PAGE>


                         HAND BRAND DISTRIBUTION, INC.
                            STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

                                                          2001            2000
                                                      ---------         --------
Cash flows from operating activities:
     Net loss                                        $(342,137)       $(297,092)
                                                      ---------         --------
     Adjustments to reconcile net loss
       to net cash provided by operating
       activities
       Depreciation and amortization                    17,753           37,285
       Bad debt expenses                                 2,006              --
       Stock based compensation                        156,250            2,000
       Gain on transfer of asset                           --             4,623
       Gain on debt restructure                            --           (76,588)
       Impairment of long lived assets                  35,577              --
       Beneficial conversion feature                    10,800           39,400
       (Increase) decrease in amounts receivable        (2,162)           8,044
       (Increase) decrease in inventories               21,463          119,378
       (Increase) decrease in other assets               5,514            8,086
       Increase (decrease) in accounts payable
           and accrued liabilities                      29,557           35,525
       Increase (decrease) in deferred income           10,172              --
       Increase (decrease) in accrued interest
         payable                                         3,691           14,523
                                                      ---------         --------

       Total adjustments                               290,621          192,276
                                                      ---------         --------

   Net cash used in operating activities               (51,516)        (104,816)
                                                      ---------         --------

Cash flows from financing activities:
   Proceeds from issuance of common stock                  --            49,700
   Bank overdraft                                          939              424
   Proceeds from issuance of convertible
       notes payable                                    44,800           40,000
   Principal payment on long-term debt                     --            (3,143)
                                                      ---------         --------

Net cash provided by financing activities               45,739           86,981
                                                      ---------        ---------
Net increase (decrease) in cash and cash
  equivalents                                           (5,777)         (17,835)
Cash and cash equivalents, beginning of year             6,235           24,070
                                                      ---------         --------
Cash and cash equivalents, end of year                     458            6,235
                                                      =========        =========


                                       17

<PAGE>


                          HAND BRAND DISTRIBUTION, INC.
                            STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

                                                         2001             2000
                                                       ---------        --------
Supplemental disclosures of cash flow information:
Cash paid during the period for:

     Interest expenses                                 $  1,415        $  4,854
                                                       --------         --------


Stockholders' equity note:

On  October 25, 2000, the  Company issued 250 shares of common stock in exchange
for consulting services valued at the trading price on the date of the grant.

On January  11,  2001,  the Company  issued  31,248  shares  of common  stock in
exchange  for  legal  services  valued at the  trading  price on the date of the
grant.

                                       18

<PAGE>

                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 1   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

Accounting Estimates
--------------------
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 the lower of cost or market (average
cost  method) and  includes  nutritional  supplements,  and cleaning and hygiene
products.

Accounts Receivable
-------------------
Accounts  receivable are stated at the face amount net of allowance for doubtful
accounts.  Generally accepted  accounting  principles require that the allowance
method be used to reflect bad debts. A provision for doubtful  accounts has been
established  to  reflect  an  allowance  for  uncollectible  amounts.  Bad  debt
allowance  for the years ended  December  31, 2001 and 2000 was $2,649 and $643,
respectively.

Property and Equipment and Depreciation
---------------------------------------
Property and equipment are stated at cost.  Depreciation  is computed  using the
straight-line  method over the assets'  estimated useful lives ranging from 5 to
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

Long Lived 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.




                                       19
<PAGE>


                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 1   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

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 2001, and 2000.

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.

Accounting Pronouncements
-------------------------
Statement No. 141 Business Combinations (SFAS 141) establishes revised standards
for accounting for business combinations. Specifically, the statement eliminates
the pooling  method,  provides new guidance for  recognizing  intangible  assets
arising in a business combination, and calls for disclosure of considerably more
information  about a business  combination.  This  statement  is  effective  for
business  combinations  initiated on or after July 1, 2001. The adoption of this
pronouncement  on July 1, 2001 did not have a material  effect on the  Company's
financial position, results of operations or liquidity.

Statement No. 142 Goodwill and Other  Intangible  Assets (SFAS 142) provides new
guidance  concerning the accounting for the acquisition of  intangibles,  except
those acquired in a business combination,  which is subject to SFAS 141, and the
manner in which  intangibles and goodwill should be accounting for subsequent to
their initial recognition.  Generally,  intangible assets with indefinite lives,
and  goodwill,  are no longer  amortized;  they are  carried at lower of cost or
market  and  subject to annual  impairment  evaluation,  or  interim  impairment
evaluation if an interim triggering event occurs,  using a new fair market value
method. Intangible assets with finite lives are amortized over those lives, with
no  stipulated  maximum,  and  an  impairment  test  is  performed  only  when a
triggering  event  occurs.  This  statement  is  effective  for all fiscal years
beginning  after  December  15,  2001.  The  Company  believes  that the  future
implementation of SFAS 142 on January 1, 2002 will not have a material effect on
the Company's financial position, results of operations or liquidity.


                                       20
<PAGE>


                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 1   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Accounting Pronouncements - continued
-------------------------
In August 2001, the FASB issued SFAS No. 143,  Accounting  for Asset  Retirement
Obligations.  The  standard  requires  entities  to record  the fair  value of a
liability  for an  asset  retirement  obligation  in the  period  in which it is
incurred.  When the liability is initially  recorded,  the entity  capitalizes a
cost by increasing the carrying  amount of the related  long-lived  asset.  Over
time,  the  liability  is  accreted to its present  value each  period,  and the
capitalized cost is depreciated over the useful life of the related asset.  Upon
settlement of the  liability,  an entity either  settles the  obligation for its
recorded  amount or  incurs a gain or loss  upon  settlement.  The  standard  is
effective for fiscal years  beginning  after June 15, 2002. The adoption of SFAS
No. 143 is not expected to have a material impact on the Company's  consolidated
financial statements.

Statement  No. 144,  Accounting  for the  Impairment  or Disposal of  Long-Lived
Assets supercedes Statement No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of (SFAS 121). Though it retains
the  basic  requirements  of SFAS  121  regarding  when  and how to  measure  an
impairment loss, SFAS 144 provides additional  implementation guidance. SFAS 144
excludes  goodwill and intangibles  not being amortized among other  exclusions.
SFAS 144 also  supersedes  the  provisions  of APB 30,  Reporting the Results of
Operations,  pertaining  to  discontinued  operations.  Separate  reporting of a
discontinued  operation is still required, but SFAS 144 expands the presentation
to include a component of an entity,  rather than strictly a business segment as
defined in SFAS 131,  Disclosures  about  Segments of an Enterprise  and Related
Information.  SFAS 144 also  eliminates the current  exemption to  consolidation
when control  over a subsidiary  is likely to be  temporary.  This  statement is
effective for all fiscal years  beginning  after  December 15, 2001. The Company
believes  that the  future  implementation  of SFAS 144 will not have a material
effect on the Company's financial position, results of operations or liquidity.

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:

                                                         2001             2000
                                                        ------          --------
         Basic weighted and dilutive average
           number of shares outstanding                 347,646          316,875

In connection with the convertible notes payable, 31,375 shares of common stock,
after stock split, may be issued. At December 31, 2001 and 2000, no common stock
equivalent  was used,  since the effect was  anti-dilutive  to compute  dilutive
earnings per share due to the net loss of the Company. (See Notes 7 & 8)



                                       21
<PAGE>



                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 2   CREDIT RISK

Financial  instruments  that  potentially  subject  the  Company to credit  risk
include cash on deposit with one  financial  institution  amounting to ($939) at
December 31, 2001, and two financial  institutions  totaling  $5,811 at December
31, 2000, which was insured for up to $100,000 per financial  institution by the
U.S. Federal Deposit Insurance Corporation (FDIC).


NOTE 3   INVENTORIES

At  December  31,  2001 and  2000,  inventories,  stated at the lower of cost or
market (average cost method) consisted of the following:

                                                     2001                2000
                                                   -------             --------

         Finished goods                          $  20,287           $  41,749


NOTE 4   PROPERTY AND EQUIPMENT

Fixed assets at December 31, 2001 and 2000 consisted of the following:

                                                  2001          2000
                                                --------      --------

         Furniture and fixtures                 $ 57,837      $ 57,837
         Computers and software                   18,906        18,906
         Equipment                                 5,414         5,414
                                                --------      --------

                                                  82,157        82,157
         Less accumulated depreciation           (47,424)      (37,131)
                                                --------      --------

         Total                                  $ 34,733      $ 45,026
                                                ========      ========


Depreciation  expense for the years ended December 31, 2001 and 2000 was $10,293
and  $22,436,  respectively.   Equipment  in  the  amount  of  $68,538,  net  of
accumulated  depreciation of $44,127, was returned as payment of note payable on
November 30, 2000. (See Note 11)



                                       22
<PAGE>



                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 5   INTANGIBLE ASSETS

At  December  31,  2001 and 2000,  intangible  assets  are  summarized  by major
classification as follows:

                                               2001            2000
                                            ---------        ---------

         Trademark                          $   9,231        $  12,500
         Goodwill                              67,100           99,408
                                            ---------        ---------
                                               76,331          111,908
         Less:
            Accumulated
            amortization                      (40,754)         (33,293)
                                            ---------        ---------

                                            $  35,577        $  78,615
                                            =========        =========



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, 2001 and 2000 was $7,460,
and $14,849, respectively.

At December 31, 2001, the Company  recognized an estimated  asset  impairment of
$35,577.  At December 31, 2000,  the Company  recognized an asset  impairment of
$70,291, net of accumulated depreciation of $24,840. (See Note 6)


NOTE 6   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 the
Company's  continuing losses from operations,  working capital  deficiency,  and
default on a note  payable,  on December 31,  2001,  the Company  recognizes  an
estimated asset impairment loss of $35,577.  This loss represents 50% of the net
carrying  value of the  trademark  and  goodwill.  At December 31, 2000,  due to
underpayment of the note payable,  the creditor repossessed all of the equipment
and inventory related to its water filter business,  (See Note 11). Accordingly,
on  December  31,  2000,  the Company  recognized  an asset  impairment  loss of
$70,291.  This loss  represents  the carrying  value of the goodwill  related to
those assets repossessed. (See Note 5)



                                       23
<PAGE>

                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 7   NOTES PAYABLE

At December 31, 2001 and 2000, notes payable consisted of the following:

                                                         2001            2000
                                                      ---------       ---------
7% note  payable  guaranteed  jointly  by the
Company  and its  President;  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 11)                                 $  14,605       $  14,605

Less current portion                                    (14,605)        (14,605)
                                                      ---------       ---------

Total long-term notes payable                         $       0       $       0
                                                      =========       =========

NOTE 8   CONVERTIBLE NOTES PAYABLE
                                                         2001           2000
                                                      ---------       ---------
Related Party
-------------
Note payable to stockholder  with interest at
6%,  due  November  13,  2002;   callable  at
borrower's  option and convertible into 1,250
shares of common stock. On November 13, 2000,
the  Company   recorded  the  excess  of  the
aggregate fair value of the  instrument  with
beneficial  conversion  features at $4,700 as
interest expense. As of the date of the audit
report,  the option to convert into shares of
common stock was not exercised.                       $   5,000       $   5,000

Note payable to stockholder  with interest at
6%,   due  March  12,   2003;   callable   at
borrower's  option and convertible into 1,000
shares of common stock. As of the date of the
audit  report,  the  option to  convert  into
shares of common stock was not exercised.                 4,000               0




                                       24
<PAGE>



                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 8   CONVERTIBLE NOTES PAYABLE - CONTINUED

                                                         2001           2000
                                                      ---------       ---------

Related Party
-------------
Note payable to stockholder  with interest at
6%  due  April  17,  2003;  callable  at  the
borrower's  option and convertible into 3,750
shares of common  stock.  On April 17,  2001,
the  Company   recorded  the  excess  of  the
aggregate fair value of the  instrument  with
beneficial  conversion  features at $3,000 as
interest expense. As of the date of the audit
report,  the option to convert into shares of
common stock was not exercised.                       $   3,000       $       0
                                                      ---------       ---------
Note payable to stockholder  with interest at
6%  due  May  24,   2003;   callable  at  the
borrower's  option and convertible into 7,000
shares of common stock.  On May 24, 2001, the
Company  recorded the excess of the aggregate
fair value of the instrument  with beneficial
conversion  features  at $2,800  as  interest
expense.  As of the date of the audit report,
the option to convert  into  shares of common
stock was not exercised.                                  2,800               0

Note payable to stockholder  with interest at
6%  due  June  25,  2003;   callable  at  the
borrower's  option and  convertible  into 625
shares of common stock. On June 25, 2001, the
Company  recorded the excess of the aggregate
fair value of the instrument  with beneficial
conversion   features  at  $500  as  interest
expense.  As of the date of the audit report,
the option to convert  into  shares of common
stock was not exercised.

                                                            500               0
                                                      ---------       ---------

                                                         15,300           5,000
Less current portion                                     (5,000)              0
                                                      ---------       ---------

Total long-term convertible notes payable -
related party                                         $  10,300       $   5,000
                                                      =========       =========


Interest  expense for the years ended December 31, 2001 and 2000, was $7,032 and
$4,740, respectively.

Minimum future notes payable to related party are as follows:

                  2002                                               $    5,000
                  2003                                                   10,300
                  2004 and thereafter                                         0
                                                                     ----------
                                                                      $  15,300
                                                                      =========



                                       25
<PAGE>



                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 8   CONVERTIBLE NOTES PAYABLE  - CONTINUED

                                                         2001           2000
                                                      ---------       ---------
Unrelated Parties
-----------------
Note payable  with  interest at 6% due May 5,
2002;  callable at the borrower's  option and
convertible   into  5,000  shares  of  common
stock. On April 5, 2000, the Company recorded
the excess of the aggregate fair value of the
instrument   with    beneficial    conversion
features at $20,000 as interest  expense.  As
of the date of the audit  report,  the option
to convert  into  shares of common  stock was
not exercised.                                       $   20,000       $  20,000


Note payable  with  interest at 6% due August
23, 2002;  callable at the borrower's  option
and  convertible  into 2,500 shares of common
stock.   On  August  23,  2000,  the  Company
recorded  the  excess of the  aggregate  fair
value  of  the  instrument   with  beneficial
conversion  features  at $10,000 as  interest
expense.  As of the date of the audit report,
the option to convert  into  shares of common
stock was not exercised.                                 10,000          10,000

Note payable with interest at 6% due November
13, 2002;  callable at the borrower's  option
and  convertible  into 1,250 shares of common
stock.  On  November  13,  2000,  the Company
recorded  the  excess of the  aggregate  fair
value  of  the  instrument   with  beneficial
conversion  features  at $4,700  as  interest
expense.  As of the date of the audit report,
the option to convert  into  shares of common
stock was not exercised.                                  5,000           5,000


Note  payable  with  interest at 6% due April
17, 2003;  callable at the borrower's  option
and  convertible  into 5,625 shares of common
stock.   On  April  17,  2001,   the  Company
recorded  the  excess of the  aggregate  fair
value  of  the  instrument   with  beneficial
conversion  features  at $4,500  as  interest
expense.  As of the date of the audit report,
the option to convert  into  shares of common
stock was not exercised.                                  4,500               0




                                       26
<PAGE>



                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 8   CONVERTIBLE NOTES PAYABLE  - CONTINUED

                                                         2001            2000
                                                      ---------       ---------
Unrelated Parties
-----------------
Note payable with  interest at 6% due June 2,
2003;  callable at the borrower's  option and
convertible  into 250 shares of common stock.
As of the  date  of  the  audit  report,  the
option to convert into shares of common stock
was not exercised.                                   $    2,000       $       0

Note payable with  interest at 6% due June 4,
2003;  callable at the borrower's  option and
convertible  into 375 shares of common stock.
As of the  date  of  the  audit  report,  the
option to convert into shares of common stock
was not exercised.                                        3,000               0

Note payable with  interest at 6% due June 6,
2003;  callable at the borrower's  option and
convertible  into 125 shares of common stock.
As of the  date  of  the  audit  report,  the
option to convert into shares of common stock
was not exercised.                                        1,000               0

Note payable with  interest at 6% due June 7,
2003;  callable at the borrower's  option and
convertible  into 625 shares of common stock.
As of the  date  of  the  audit  report,  the
option to convert into shares of common stock
was not exercised.                                        5,000               0

Note payable with interest at 6% due June 18,
2003;  callable at the borrower's  option and
convertible  into 375 shares of common stock.
As of the  date  of  the  audit  report,  the
option to convert into shares of common stock
was not exercised.                                        3,000               0

Note payable  with  interest at 6% due August
31, 2003;  callable at the borrower's  option
and  convertible  into 1,250 shares of common
stock.  As of the date of the  audit  report,
the option to convert  into  shares of common
stock was not exercised.                                 10,000               0




                                       27
<PAGE>



                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 8   CONVERTIBLE NOTES PAYABLE  - CONTINUED

                                                         2001            2000
                                                      ---------       ---------

Note payable with interest at 6% due December
18, 2003;  callable at the borrower's  option
and  convertible  into 375  shares  of common
stock.  As of the date of the  audit  report,
the option to convert  into  shares of common
stock was not exercised.                                  6,000               0
                                                      ---------       ---------

                                                         69,500          35,000
Less:  current portion                                  (35,000)              0
                                                      ---------       ---------

Total long-term convertible notes payable             $  34,500       $  35,000
                                                      =========       =========

Interest  expense for the years ended December 31, 2001 and 2000, was $7,459 and
$49,183, respectively.

Minimum future long-term notes payable are as follows:

                  2002                                               $   49,605
                  2003                                                   34,500
                  2004 and thereafter                                         0
                                                                     ----------

                                                                      $  84,105
                                                                      =========

NOTE 9   STOCKHOLDERS' EQUITY (DEFICIT)

Common Stock
------------
On January 27, 2000,  the Company  issued 1,166 (as  restated)  shares of common
stock at a price of $5.00 per share in connection with a private placement for a
total amount of $46,500 in cash.

On June 5, 2000 the Company issued 400 (as restated) 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 250 (as restated) shares of common stock
in exchange for consulting  services rendered.  The value of $1.00 per share was
based on the  closing  price on the date of the grant.  Accordingly,  consulting
expenses of $2,000 were charged to operations.

On January 11, 2001,  the Company  issued 31,248 (as restated)  shares of common
stock in exchange for legal services rendered. The value of $0.625 per share was
the  closing  price on the date of the grant;  accordingly,  legal  expenses  of
$156,200 were charged to operations.



                                       28
<PAGE>



                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 10  INCOME TAXES

The Company has no current or deferred income tax due to its operating losses.

The Company has a federal net operating loss  carryforward  at December 31, 2001
and 2000 of $1,123,657 and $750,470, respectively, subject to annual limitations
prescribed  by the Internal  Revenue  Code,  which is available to offset future
taxable  income  through 2021. A 100%  valuation  allowance has been recorded to
offset the net deferred  taxes due to  uncertainty  of the Company's  ability to
generate future taxable income.

Deferred taxes consist of the following:
                                                    2001         2000
                                                 ---------    ---------

           Current  taxes                        $       0    $       0

           Deferred tax assets:
               Net operating loss carryforward     230,000      156,000
           Less valuation allowance               (230,000)    (156,000)
                                                 ---------    ---------

         Net deferred tax assets                 $       0    $       0
                                                 =========    =========



The Company's tax expense  differs from the "expected" tax expense for the years
ended December 31, (computed by applying the Federal Corporation tax rate of 15%
to loss before taxes), as follows:

                                                    2001        2000
                                                  --------    --------
         Statutory rate applied to loss before
           income taxes                           $ 56,000    $ 51,600
         State income taxes, net of federal
           income tax effect                        18,000      14,600
         Changes in valuation allowance            (74,000)    (66,200)
                                                  --------    --------

                                                  $      0    $      0
                                                  ========    ========

NOTE 11  REPOSSESSION

Due to underpayment of the monthly  installments to unrelated party, on November
30, 2000,  the creditor  repossessed  all of the equipment  related to the water
filter business, with a book value of $68,538, net of accumulated  depreciation,
with a market value of $60,000;  as well as raw materials with a market value of
$77,554  (cost  $73,640).   The  balance  of  the  note  payable  prior  to  the
repossession was $228,747. The remaining 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  at  December  31,  2000.  The  Company
recognized  an  extraordinary  gain of $76,588 and an ordinary loss of $4,624 on
the asset transfer.



                                       29
<PAGE>



                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 12  PRIOR  PERIOD ADJUSTMENT

During the three  months ended March 31, 2001, a change was made to the retained
earnings  of  the  Company  to  correct  the  amount  of  legal,   interest  and
miscellaneous  expenses  reported during 2000.  Accounts payable at December 31,
2000 were  overstated,  and  paid-in  capital  understated.  The 2000  financial
statements  were  restated  to  reflect  this  adjustment.  Subsequently,  legal
expenses were reduced by $9,013,  interest expense was increased by $39,400, and
miscellaneous  expenses  reduced by $7,054,  for a total  increase  in  retained
earnings of $23,333.

NOTE 13  COMMITMENTS

On  December  11,  2000,  the Company  entered  into a new lease  agreement  for
warehouse space in Miami,  Florida.  Monthly  payments were $527 plus 6.5% sales
tax through December 31, 2001. The lease was not renewed at December 31, 2001.

Since 1992, the Company has maintained a lease  agreement for its main facility,
renewable annually. Monthly rental payments are $700 plus 6.5% sales tax.

Total rental  expense for the years ended December 31, 2001 and 2000 was $17,256
and $35,741, respectively.

NOTE 14  GOING CONCERN UNCERTAINTY

These financial statements are presented assuming the Company will continue as a
going  concern.  For the years ended  December  31,  2001 and 2000,  the Company
showed operating losses of $342,137 and $373,680, respectively. The accompanying
financial  statements  indicate that current liability exceeds current assets by
$142,861 and $25,819 for the years ended December 31, 2001 and 2000.

In  addition,  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. These factors raise  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.



                                       30
<PAGE>



                          HAND BRAND DISTRIBUTION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000



NOTE 15  SUBSEQUENT EVENTS

On January  11,  2002,  the board of  directors  voted to amend the  Articles of
Incorporation  to authorize a 1:8 reverse stock split in its authorized,  issued
and outstanding shares of common stock. No fractional shares will be issued upon
the reverse stock split,  nor is cash intended to be distributed.  Instead,  any
fractional  share  resulting  from the reverse stock split will be rounded up to
the nearest whole share.  For financial  statement  presentation,  the split has
been retroactively applied for all periods presented.

On January 14, 2002, the board of directors voted as follows:

         a)       To  obtain  a  private   equity  line  of  credit  for  up  to
                  $30,000,000,  in  exchange  for  common  stock  and  warrants,
                  subject to  stockholder  approval and based upon the following
                  terms:

                  o        The purchase price for the common stock will be 87.5%
                           of  the  market  price  determined  by  the  weighted
                           average  market  price for the purchase of the shares
                           of common stock.

                  o        The Company  shall  register the resale of the common
                           stock to be acquired  and the 600,000  warrants to be
                           issued,  pursuant to a  registration  statement to be
                           filed with the Securities and Exchange Commission.

                  o        600,000  warrants  to purchase  common  stock with an
                           exercise  price of $1.00 per share  that will  expire
                           five years from the issue date.

                  o        Commission  fee of $300,000  payable on or before the
                           earlier of:

                           i.       Receipt of $800,000 in equity capital by the
                                    company, or

                           ii.      September 15, 2002

         b)       To sell the  assets of the  Family  Health  News,  subject  to
                  stockholder approval;

         c)       To enter into  convertible note agreements for up to $500,000,
                  having a term  expiring on January 15, 2005,  an interest rate
                  of 6% and a default rate of interest of 12%.

On January 23, 2002, the Company entered into stock purchase agreements with ten
stockholders of GeneThera,  Inc. to acquire approximately 92% of its outstanding
stock in exchange for the Company's  common stock.  These  agreements  closed on
February 25, 2002. For accounting  purposes,  the Company expects to account for
the acquisition as a capital transaction and as a recapitalization of GeneThera,
Inc. GeneThera,  Inc. is a biotechnology  company that develops molecular assays
for the  detection  of food  contaminating  pathogens,  veterinary  diseases and
genetically  modified  organisms,  and in the future to develop  recombinant DNA
vaccines.

On February 25, 2002, the principal  officer of the Company advised the board of
directors of his resignation, effective immediately.

Item 8.  Changes in and Disagreements with Accountants on Accounting's
-------  -------------------------------------------------------------
         Disclosure
         ----------

None


                                       31
<PAGE>


                                    PART III

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

DIRECTORS AND OFFICERS

Below are the names and  biographies  of our Executive  Officers,  Directors and
Nominees for Directors as of May 24, 2002:

Name                             Age   Position
----                             ---   --------
Nicolas Wollner                  49    President and Director
Antonio Milici, M.D., PhD        46    Chairman of the Board of Directors,
                                       Chief Scientific Officer
Henry J. Boucher, Jr.            54    Director


NICOLAS WOLLNER has served as the Interim President and Director of the Company
since January 2002. His term as a director expires at the next annual meeting.
He has also served as President and CEO of 1919, LLC a brand identity, strategy
and communications company since its founding in April 2001. 1919's various
divisions offer strategic consultation through execution of complete marketing
and shareholder communication programs. 1919 has offices in New York, Los
Angeles and Salt Lake City. From June 1990 to March 2001, Mr. Wollner was CEO
and president of Crossroads Films, one of the largest TV commercial production
companies in the nation with offices in New York, Los Angeles and Chicago. He
has served as Chairman of the Board of the Association of Independent Commercial
Producers from 1994-1995 and Chairman of the AICP show at MoMA in 1998. Mr.
Wollner was honored by Mayor Giuliani with the City's Crystal Apple Award for
his contributions and commitment to business in New York City.

ANTONIO MILICI,  M.D., PHD. Dr. Milici has served as the Company's  Chairman and
Chief  Science  Officer  and as a Director  since  January  2002.  His term as a
Director  expires  at the next  annual  meeting.  He also  served  as the  Chief
Executive  Officer and Chief  Science  Officer of GeneThera  since October 1998.
From 1995 to August 1998, Dr. Milici was President and Chief  Executive  Officer
of Genetrans,  Inc., a molecular diagnostic company located in Atlanta, Georgia.
Dr. Milici  received his M.D. degree in Medicine and Surgery from the University
of Rome,  Italy in 1979.  After  graduating  from  medical  school,  he moved to
Stanford  University where he worked on his Ph.D.  degree research.  He received
his Ph.D.  degree in Experimental  Hematology from the University of Rome, Italy
in 1983.  He was a  post-doctoral  fellow  at both The  University  of Texas and
Stanford University. He has published over 30 articles and abstracts.

HENRY J.  BOUCHER,  JR. has served as a Director  of the Company  since  January
2002. His term as a Director expires at the next annual meeting. He received his
M.S. in economics from South Dakota State  University in 1972. From 1992 to June
1998, he was a Vice President of Mercer Management  Consulting,  a subsidiary of
Marsh and McLennan,  an insurance  brokerage firm. Prior to joining Mercer,  Mr.
Boucher was a partner  with the  accounting  firm of Coopers  and  Lybrand  (now
PriceWaterhouse  Coopers). Mr. Boucher was an Arthur Andersen consulting partner
from June 1998 until he joined Business Edge Solutions in July of 1999, where he
was a Vice  President of Insurance  Industry  Sales.  Since  January  2001,  Mr.
Boucher has been a principal of Mentus Consulting LLC.


                                       32
<PAGE>

It is the Board's intent to increase the size of the Board of Directors in the
near future and to create an Audit Committee and a Compensation Committee
comprised of certain members of the Board. Each Director is elected at the
Company's Annual Meeting of Shareholders and holds office until the next Annual
Meeting of Shareholders, or until the successors are elected and qualified. At
present, the Company's bylaws provide for not less than three or more than seven
Directors. Currently, we have three Director positions. The bylaws permit the
Board of Directors to fill any vacancy and such director may serve until the
next Annual Meeting of Shareholders or until his successor is elected and
qualified. Officers are elected by the Board of Directors and their terms of
office are, except to the extent governed by employment contracts, at the
discretion of the Board. There are no family relations among any Executive
Officers or Directors of the Company. The officers of the Company devote full
time to the business of the Company.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities  Exchange Act of 1934, as amended,  requires our
Executive  Officers,  Directors and 10%  Shareholders to file reports  regarding
initial  ownership and changes in ownership  with the SEC.  Executive  Officers,
Directors,  and 10%  shareholders  are required by SEC regulations to furnish us
with copies of all  Section  16(a) forms they file.  Our  information  regarding
compliance  with Section 16(a) is based solely on a review of the copies of such
reports  furnished  to  us  by  our  Executive   Officers,   Directors  and  10%
shareholders.  These forms include (i) Form 3, which is the Initial Statement of
Beneficial Ownership of Securities, (ii) Form 4, which is a Statement of Changes
in  Beneficial  Ownership,  and (iii)  Form 5, which is an Annual  Statement  of
Changes in Beneficial Ownership. Based upon this information, all required forms
have been filed for the fiscal year ended December 31, 2001.

Item 10.  Compensation of Directors and Executive Officers
--------  ------------------------------------------------

The following table sets forth certain  summary  information for the fiscal year
ended December 31, 2001  concerning the  compensation  awarded to, earned by, or
paid to those  persons  serving as executive  officers  during fiscal year 2001.
John  Taggart  was the only  executive  officer  during  the  fiscal  year ended
December 31, 2001.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                                                              Long-Term Compensation
                                                                                    ----------------------------------------------
                                              Annual Compensation                          Awards                Payouts
                                    ------------------------------------------      -------------------   ------------------------

                                                                                    Restricted
                                                                   Other Annual       Stock                 LTP
                                                         Bonus     Compensation       Awards    Options   Payouts      All Other
   Name/Principal Position           Year       Salary     ($)          ($)            ($)       /SARs      ($)       Compensation
   -----------------------           ----       ------     ---          ---            ---       -----      ---       ------------
<S>                                  <C>        <C>         <C>          <C>            <C>        <C>       <C>           <C>
John Taggart, Chairman,              2001       $28,000    -0-          -0-            -0-        -0-       -0-           -0-
President and Chief Executive        2000       $28,000    -0-          -0-            -0-        -0-       -0-           -0-
Officer(1)                           1999       $28,000    -0-          -0-            -0-        -0-       -0-           -0-

</TABLE>

1        Mr.  Taggart served as our Chief  Executive  Officer for the past three
         years. He resigned as an officer and director on February 25, 2002.


                                       33
<PAGE>


STOCK OPTION GRANTS IN LAST FISCAL YEAR

During the fiscal year ended  December 31, 2001,  no options were granted to the
Executive Officer.

OPTION EXERCISES AND YEAR END VALUES

No options  were  exercised  in the fiscal year ended  December  31, 2001 by the
Executive Officer who owns no options.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

The Company entered into an employment  agreement with Tony Milici,  M.D., Ph.D,
to serve as the Chief  Executive  Officer of GeneThera and Chairman of the Board
of Directors and Chief  Scientific  Officer of the Company through  December 10,
2006. In consideration  for his services,  Dr. Milici will receive a base salary
of  $144,000  per  annum  plus  bonuses  as may be  determined  by the  Board of
Directors  in its sole  discretion.  As part of his  Employment  Agreement,  Dr.
Milici is subject to  non-disclosure  and  non-competition  obligations  and has
transferred to the Company of all his interests in any idea, concept, technique,
invention or written work.

Effective  February 25, 2002, the Company  entered into an employment  agreement
with Nicolas  Wollner to act as interim  President of the Company.  Mr.  Wollner
will receive  $3,000.00 per month as base salary and options to purchase  50,000
shares of the Company's Common Stock at $3.50 per share,  exercisable commencing
on January 1, 2003,  until  February  24,  2007.  The  options do not vest until
December  31,  2002 and are  subject  to the terms and  conditions  of the Stock
Incentive Plan of the Company. As part of his Employment Agreement,  Mr. Wollner
is subject to non-disclosure and non-competition obligations and has transferred
to the Company of all his interests in any idea, concept,  technique,  invention
or written work.

Item 11.  Security Ownership of Certain Beneficial Owners and Management and
--------  ------------------------------------------------------------------
          Related Stockholder Matters
          ---------------------------

The  following  table  shows,  as of  May  24,  2002,  the  Common  Stock  owned
beneficially  by (i) each of our  Executive  Officers,  (ii) each of our current
Directors,  (iii) all  Executive  Officers and  Directors as a group,  (iv) each
person known by us to be the  beneficial  owner of more than five percent of our
Common  Stock,  and (v) on a pro forma  basis to give  effect  to the  Company's
commitment to issue  approximately  8,305,950  shares of its Common Stock to the
Former GTI  Shareholders,  in  connection  with the  acquisition  of  GeneThera.


                                       34
<PAGE>

Beneficial ownership is a technical term broadly defined by the SEC to mean more
than  ownership in the usual sense.  For example,  you  beneficially  own Common
Stock not only if you hold it directly,  but also if you  indirectly  (through a
relationship,   a  position  as  a  director  or  trustee,   or  a  contract  or
understanding),  have the right to acquire it within 60 days (or share the power
to vote the stock, or sell it). Except as disclosed in the footnotes below, each
of the Executive  Officers and Directors  listed have sole voting and investment
power over his shares.  As of May 24, 2002,  there were 664,299 shares of Common
Stock issued and outstanding and approximately 425 holders of record.


<TABLE>
<CAPTION>

                                                          Shares
                                                       Beneficially                    Percent of
     Name(1)                  Current Title               Owned                           Class
-------------------------     ---------------     ---------------------------     ---------------------------
                                                   Actual        Proforma(2)       Actual        Proforma(2)
                                                   ------        --------          ------        ---------
<S>                           <C>                    <C>          <C>                  <C>          <C>
Nicolas Wollner               President/             0            440,000(3)           0            4.6%
                              Director

Antonio Milici, M.D.          Chairman/              0           4,815,000(4)          0           50.5%
                              Director/Chief
                              Scientific
                              Officer

Henry J. Boucher, Jr.         Director               0           2,477,500(5)          0           25.9%

John M. Taggart(6)                                107,000         107,000            16.2           1.2%

Vantage Holdings I, LLC                              0           1,073,148(7)           0          11.3%

Madison 2B Holdings LLC(8)                        255,700         255,700            38.5           2.8%

All Current Officers,                                0           5,415,000              0          56.8%
Directors as a Group
(three persons)
</TABLE>


1    Unless  otherwise  specifically  noted below, all addresses are care of the
     Company at 900 Broadway, Suite 1002, New York, New York 10003.

2    Based on 9,526,449 shares  outstanding  following the  effectiveness of the
     Company   shareholders   approving   an   amendment   to  the  Articles  of
     Incorporation  to increase the number of authorized  shares  ("Proposal 1")
     and/or approving the  reincorporation  of the Company in Delaware with such
     increased  number of authorized  shares  ("Proposal  2"). At such time, the
     Company  will  issue an  additional  8,305,950  shares  to the  Former  GTI
     Shareholders.

3    Represents shares to be issued upon the effective time of Proposal 1 and or
     Proposal 2 and options to purchase  50,000 shares  pursuant to the terms of
     his employment agreement with the Company.

4    Represents shares to be issued upon the effective time of Proposal 1 and or
     Proposal  2.  The  shares  to be  held  by Dr.  Milici  are  subject  to an
     irrevocable  proxy that  expires  January 24, 2005  granted to Mr.  Boucher
     (except as to the election of directors,  on which Dr. Milici has the right
     to vote 50% of his shares). In addition,  such shares are subject to a lock
     up agreement  whereby Dr.  Milici may not transfer his shares until January
     23, 2005 without the approval of Vantage Holdings I, LLC. Also, such shares
     include 180,000 shares owned by his wife for which he disclaims  beneficial
     ownership.

5    Represents shares to be issued upon the effective time of Proposal 1 and or
     Proposal 2. Also includes options to purchase up to 40,000 shares of Common
     Stock at the fair market  value on the date of grant as  consideration  for
     his role as a Non-Employee  Director  pursuant to the 2002 Hand Brand Stock
     Incentive  Plan.  Also includes  2,317,500  shares of Common Stock owned by
     Antonio Milici,  M.D.,  which Mr. Boucher has the right to vote pursuant to
     an irrevocable proxy that expires January 24, 2005.


                                       35
<PAGE>

6    Mr. Taggart resigned as an officer and director of the Company on February
     25, 2002. Mr. Taggart's address is 6293 S.W. 32nd St., Miami, Florida
     33130.

7    The address for Vantage is 6535 Parkview Drive, Suite F, Boca Raton,
     Florida 33433. The share figure includes 25,000 shares to be acquired by
     Vantage from Hand Brand stockholders by July 14, 2002 pursuant to executed
     stock purchase agreements. Additionally, shareholders owning an aggregate
     of 5,940,000 shares of Company Common Stock have entered into lock-up
     agreements whereby they have agreed not to transfer their respective shares
     until January 23, 2005, without the prior approval of Vantage. Such
     5,940,000 shares are not included in the number of shares reflecting
     Vantage's pro forma beneficial ownership.

8    The address for Madison 2B Holdings LLC is 11575 Heron Bay Blvd., Coral
     Springs, Florida 33076.


                                       36
<PAGE>

Item 12.  Certain Relationships and Related Party Transactions
--------  ----------------------------------------------------

At various  times  prior to  December  31,  2001,  the former  President  of the
Company,  John  Taggart,  made loans to the Company in the  aggregate  principal
amount of $15,300,  which amount remained  outstanding on December 31, 2001. The
loans were evidenced by convertible  promissory  notes which convert into shares
of Common Stock.

Our Board of Directors recommends and considers it to be in our best interest to
enter into the FHNI Stock Sale with John  Taggart,  our former  President  and a
former Director.  FHNI has had a long history of losses, flat to negative growth
in revenues.  Our Board  believes  that the terms and  conditions of the sale of
FHNI are  favorable  and have been  negotiated on terms based on an arm's length
transaction.  The Board also believes that there are no potential purchasers for
FHNI other than Mr.  Taggart.  The sale will allow the  Company's  management to
focus on the biotech business of GeneThera, while reducing our overall debt. The
Board believes the GeneThera  business  holds more promise for long-term  growth
and  value  than  FHNI and  wishes  to devote  the  Company's  resources  to the
development of GeneThera's business.

Under the terms of the Stock Purchase Agreement with FHNI and Mr. Taggart,  FHNI
will be  acquiring  the  stock of FHNI  without  any  representations  as to its
underlying  assets and  business  (which is on an "AS IS,  WHERE IS" basis).  In
exchange,  Mr.  Taggart and FHNI will assume all of the  liabilities of FHNI and
the Company (approximately  $150,000 as of January 23, 2002), with the exception
of convertible notes issued by the Company in the aggregate  principal amount of
$100,000 and liabilities of our subsidiary GeneThera, which will remain with the
Company.  The Company  will also  contribute  $50,000  towards  the  liabilities
assumed by FHNI and Mr. Taggart.

The FHNI  Stock  Sale was  unanimously  approved  by our Board of  Directors  on
January 25, 2002. Mr. Taggart did not  participate in the  discussions or voting
by the Board as to the sale of FHNI.

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

(a)      FINANCIAL STATEMENTS

         Reference is made to the  financial  statements  listed on the Index to
         Financial Statements set forth on Page 11 of this Form 10-KSB.

(b)      EXHIBITS

         3.1.1    Articles of Incorporation filed November 8, 1995

         3.1.2    Amendment to the Articles of  Incorporation  filed on February
                  4, 1999 to effectuate a 1 for 2 reverse stock split

         3.1.3    Amendment to the Articles of  Incorporation  filed January 15,
                  2002 to effectuate a 1 for 8 reverse stock split (1)

         3.2      Bylaws

         4.1.1    Private  Equity Line of Credit  Agreement  between the Company
                  and the Investor dated January 16, 2002 (2)

         4.1.2    Registration  Rights  Agreement  between  the  Company and the
                  Investor dated January 16, 2002 (2)

         4.1.3    Warrant  Agreement  with respect to the shares  underlying the
                  Private Equity Line of Credit Agreement (2)

         4.1.4    Amendment to Private Equity Line of Credit  Agreement  between
                  the Company and the Investor dated March 4, 2002 (3)

         4.2      Registration  Rights Agreement between the Company and Vantage
                  dated January 23, 2002 (2)

         4.3      Form of Convertible  Notes bearing  interest at the rate of 6%
                  and maturing on January 15, 2005.

         10.1     FHNI Stock Sale Agreement  between the Company,  FHNI and John
                  Taggart, as amended (3)

         10.2.1   Form of Common Stock Purchase Agreement among the Company and
                  various  original  holders of the common  stock of  GeneThera,
                  Inc. (2)



                                       37
<PAGE>

         10.2.2   Form of Letter  Agreement  between  the  Company  and various
                  original holders of the common stock of GeneThera, Inc.

         10.3     License Agreement between the Company and Micro Beef
                  Technologies, Inc. dated September 24, 2001.

         10.4     Employment  Agreement  between  Antonio  Milici,  M.D. and the
                  Company dated January 23, 2002.

         10.5     Employment  Agreement  between Nicolas Wollner and the Company
                  dated February 25, 2002 (2)

         21.      List of registrant's subsidiaries,  the state of incorporation
                  of  each  and the  names  under  which  such  subsidiaries  do
                  business.

-----------------

         (1)      Incorporated  by  reference  from an  Exhibit  to the  Current
                  Report on Form 8-K, as filed with the SEC on January 17, 2002.

         (2)      Incorporated  by  reference  from an Exhibit to the  Company's
                  Current  Report on Form 8-K, as filed with the SEC on March 4,
                  2002.

         (3)      Incorporated  by  reference  from an Exhibit to the  Company's
                  Schedule 14-C Preliminary Information Statement, as filed with
                  the SEC on May 23, 2002.

(c)      REPORTS ON FORM 8-K

         None were filed during the period  September 1, 2001 through
         December 31, 2001.



                                       38
<PAGE>


                                   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.


By: _____________________________

Date:  June __, 2002

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


/s/                                                  Date:  __________, 2002
---------------------------------
President (Principal Executive Officer
and Principal Financial Officer)
and Director


/s/                                                  Date: __________, 2002
---------------------------------
___________________, Director



/s/                                                  Date: __________, 2002
---------------------------------
___________________, Director





                                       39