<PAGE>

                                   FORM 10-QSB

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20429


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

                  For the quarterly period ended March 31, 2004

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

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

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


            Florida                                              13-3940486

(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)


                 30806 Santana Street, Hayward, California 94544

                    (Address of principal executive offices)

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


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 14,511,605 shares of Issuer's voting
common stock were outstanding on May 11, 2004.


<PAGE>

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

PART I. FINANCIAL INFORMATION                                               PAGE

     ITEM 1. Condensed Consolidated Financial Statements (Unaudited):

             Consolidated Balance Sheets...................................... 3

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

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

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

     ITEM 2. Management's Discussion and Analysis............................. 8

     ITEM 3. Controls and Procedures..........................................14

PART II. OTHER INFORMATION

     ITEM 1. Legal Proceedings................................................14
     ITEM 2. Changes in Securities and Use of Proceeds........................14
     ITEM 3. Defaults Upon Senior Securities..................................14
     ITEM 4. Submission of Matters to a Vote of Security Holders..............14
     ITEM 5. Other Information................................................15
     ITEM 6. Exhibits and Reports on Form 8-K.................................15


SIGNATURE.....................................................................16

                                       2
<PAGE>
<TABLE>

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

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

                               ALLERGY RESEARCH GROUP, INC.
                                CONSOLIDATED BALANCE SHEET

                                                                                March 31,
                                                                                  2004
                                                                              --------------
                                                                               (unaudited)
<S>                                                                           <C>
ASSETS
------
Current Assets
 Cash & Cash Equivalents                                                      $   2,179,787
 Accounts Receivable, Net of Allowance for Doubtful Accounts of $54,000             747,391
 Inventories                                                                      1,822,640
 Prepaid Expenses and Other Current Assets                                          225,497
 Deferred Tax Asset                                                                  86,764
                                                                              --------------
Total Current Assets                                                              5,062,079
                                                                              --------------

Property and Equipment, Net                                                         211,957
                                                                              --------------

Other Assets
 Deposits                                                                            18,019
 Due From Officer                                                                    48,807
 Intangible Assets, Net of Amortization of  $25,177                                  16,386
                                                                              --------------
Total Other Assets                                                                   83,212
                                                                              --------------

Total Assets                                                                  $   5,357,248
                                                                              ==============

LIABILITIES AND STOCKHOLDERS EQUITY
-----------------------------------
Current Liabilities
 Accounts Payable                                                             $     763,360
 Accrued Liabilities (Note 3)                                                       366,253
 Income Taxes Payable                                                                13,250
                                                                              --------------
Total Current Liabilities                                                         1,142,863
                                                                              --------------

Commitments and Contingencies (Note 3)

Stockholders' Equity
 Preferred Stock, $.25 Par Value, Authorized 1,000,000 Shares,
    Issued and Outstanding                                                             None
 Common Stock, $.001 Par Value, Authorized 100,000,000 Shares                        15,105
   Issued: 15,105,355, Outstanding: 14,492,105
 Additional Paid In Capital                                                       1,145,120
 Retained Earnings                                                                3,338,976
 Less: Treasury Stock, at cost (613,250 shares)                                   (284,816)
                                                                              --------------
Total Stockholders' Equity                                                        4,214,385
                                                                              --------------
Total Liabilities and Stockholders' Equity                                    $   5,357,248
                                                                              ==============
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                       3
<PAGE>
<TABLE>

                          ALLERGY RESEARCH GROUP, INC.
                         CONSOLIDATED INCOME STATEMENTS
                                   (Unaudited)

                                                               Three Months Ended
                                                                   March 31,
                                                                   ---------
                                                            2004              2003
                                                            ----              ----
<S>                                                     <C>              <C>
Revenues                                                $ 3,724,899      $ 3,448,762
Cost of Sales                                             2,134,619        1,954,840
                                                        ------------     ------------
Gross Profit                                              1,590,280        1,493,922
                                                        ------------     ------------

Operating Expenses
 Selling, General and Administrative                        961,993          887,352
 Research and Development                                    31,180           56,962
                                                        ------------     ------------
     Total Operating Expenses                               993,173          944,314
                                                        ------------     ------------

Operating Income                                            597,107          549,608
                                                        ------------     ------------

Other Income (Expense)
  Interest Expense                                                0             (720)
  Interest Income                                             2,601            2,084
                                                        ------------     ------------
     Total Other Income (Expense)                             2,601            1,364
                                                        ------------     ------------

Net Income Before Tax                                       599,708          550,972

Provision for Income Taxes                                  215,645           48,706
                                                        ------------     ------------

Net Income Available to Common Stockholders             $   384,063      $   502,266
                                                        ============     ============



Basic and Diluted Income Per Common Share (Note 2)      $      0.03      $      0.03
                                                        ============     ============
</TABLE>


See Notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>
<TABLE>

                                                   ALLERGY RESEARCH GROUP, INC.
                                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                            (UNAUDITED)
                                                                                                  Three Months Ended
                                                                                                       March 31,

                                                                                                2004               2003
                                                                                                ----               ----
<S>                                                                                          <C>               <C>
Cash Flows From Operating Activities
       Net Income                                                                            $   384,063       $   502,266
                                                                                             ------------      ------------
       Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
           Depreciation and Amortization                                                          32,002            41,796
       Changes in Assets and Liabilities
           (Increase) Decrease in Accounts Receivable                                            (69,444)          (91,451)
           (Increase) Decrease in Inventory                                                     (225,913)            3,880
           (Increase) Decrease in Prepaid Expenses and Other Assets                             (127,391)         (140,868)
           (Increase) Decrease in Deferred Tax Assets                                            197,260                --
           Increase (Decrease) in Accounts Payable and Accrued Liabilities                       406,452          (108,593)
           Increase (Decrease) in Income Taxes Payable                                          (121,158)          (22,009)
                                                                                             ------------      ------------
       Total Adjustments                                                                          91,808          (317,245)
                                                                                             ------------      ------------
Net Cash Flows Provided By Operating Activities                                                  475,871           185,021

Cash Flows From Investing Activities
       Acquisition of Property and Equipment                                                      (7,536)
       Repayments From Officers                                                                    6,923            53,724
                                                                                             ------------      ------------
Net Cash Flows Provided By (Used In) Investing Activities                                           (613)           53,724

Cash Flows From Financing Activities
       Repayment on Capital Lease Obligations                                                         --           (14,285)
                                                                                             ------------      ------------
Net Cash Flows Used In Financing Activities                                                           --           (14,285)

Increase (Decrease) in Cash and Cash Equivalents                                                 475,258           224,460
Cash and Cash Equivalents, Beginning of Period                                                 1,704,529           340,002
                                                                                             ------------      ------------
Cash and Cash Equivalents, End of Period                                                     $ 2,179,787       $   564,462
                                                                                             ============      ============
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                                                5
<PAGE>

                          ALLERGY RESEARCH GROUP, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004
                                   (UNAUDITED)

NOTE 1 - STATEMENT OF INFORMATION FURNISHED
-------------------------------------------

         The accompanying unaudited Consolidated Financial Statements of Allergy
         Research Group, Inc. ("the Company") have been prepared in accordance
         with generally accepted accounting principles for interim financial
         information and the instructions to Form 10-QSB. Accordingly, they do
         not include all the information and footnotes required by generally
         accepted accounting principles for complete financial statements. In
         the opinion of management, all adjustments (which include only normal
         recurring adjustments) necessary to present fairly the financial
         position, results of operations and cash flows for all periods
         presented have been made. Preparing financial statements requires
         management to make estimates and assumptions that affect the reported
         amounts of assets, liabilities, revenue and expenses. Examples include
         provisions for returns, accounting for income taxes, bad debts, and
         length of product life cycles and property, plant and equipment lives
         for depreciation purposes. Actual results may differ from these
         estimates. The results of operations for the three-month period ended
         March 31, 2004 are not necessarily indicative of the operating results
         that may be expected for the entire year ending December 31, 2004.
         These financial statements should be read in conjunction with the
         Management's Discussion and Analysis and financial statements and notes
         thereto included in the Company's financial statements and accompanying
         notes thereto as of and for the year ended December 31, 2003, filed
         with the Company's Annual Report on Form 10-KSB on March 30, 2004.

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

NOTE 2 - EARNINGS PER SHARE
---------------------------

         Basic earnings per share is based on the weighted average number of
         common shares outstanding. Diluted earnings or loss per share is based
         on the weighted average number of common shares outstanding and
         dilutive common stock equivalents. All earnings per share amounts in
         these financial statements are basic earnings per share as defined by
         SFAS No. 128, "Earnings Per Share." Diluted weighted average shares
         outstanding exclude the potential common shares from options because to
         do so would be antidilutive.

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

<TABLE>
                                                                    Three Months     Three Months
                                                                       Ended            Ended
                                                                      3/31/04          3/31/03
                                                                      -------          -------
<S>                                                                 <C>              <C>
         Numerator-Net Income Available to Common Stockholders      $   384,063      $   502,266

         Denominator-
         Weighted Average Shares Used to Compute basic EPS           14,511,605       14,722,105

         Dilutive potential common shares                               363,250               --
                                                                    -----------      -----------
         Weighted Average Shares Used to Compute diluted EPS         14,874,855       14,722,105

         Basic Earnings Per Common Share                            $      0.03      $      0.03
                                                                    ===========      ===========

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

                                       6
<PAGE>

NOTE 3 - ACCRUED EXPENSES AND CONTINGENCIES


         -----------------------------------------------------------------------
         Accrued expenses as of March 31, 2004 consist of the following:
         -----------------------------------------------------------------------

         Potential settlement                                         $  151,500
         Operating expense                                                52,695
         Vacation and bonus                                              109,879
         Payroll                                                          43,765
         Sales Tax                                                         8,414
                                                                      ----------
                                                                      $  366,253
                                                                      ==========

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

NOTE 4 - LINE OF CREDIT
-----------------------

         The Company has a Merrill Lynch Working Capital Management Account
         (WCMA) which provides for a line of credit up to $1,500,000 bearing
         interest at the London Interbank Offered Rate (LIBOR) plus 2.75%, due
         monthly. The LIBOR plus 2.75% at March 31, 2004 was 3.84%. The note is
         secured by substantially all of the assets of the Company and is
         personally guaranteed by the CEO of the Company. The WCMA account
         immediately pays down the line of credit when deposits are received.
         When checks are issued, the line of credit is utilized if no cash is
         available. If the line of credit has a zero balance, the WCMA account
         pays interest on deposits at Merrill Lynch's money market rate, which
         as of March 31, 2004 was .56%.

                                       7
<PAGE>

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

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

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

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

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

         o        RESULTS OF OPERATIONS. This section provides an analysis of
                  our results of operations for the first quarter 2004 compared
                  to the first quarter of 2003. A brief description is provided
                  of transactions and events, including related party
                  transactions, that impact the comparability of the results
                  being analyzed.

         o        LIQUIDITY AND CAPITAL RESOURCES. This section provides an
                  analysis of our financial condition and cash flows as of and
                  for the three months ended March 31, 2004.

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

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

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

Factors that might cause actual results, performance or achievements to differ
materially from those projected or implied in such forward-looking statements
include, among other things: (i) the impact of competitive products; (ii)
changes in law and regulations; (iii) adequacy and availability of insurance
coverage; (iv) limitations on future financing; (v) increases in the cost of
borrowings and unavailability of debt or equity capital; (vi) the effect of
adverse publicity regarding nutritional supplements; (vii) the inability of the
Company to gain and/or hold market share; (viii) exposure to and expense of
resolving and defending product liability claims and other litigation; (ix)


                                       8
<PAGE>

consumer acceptance of the Company's products; (x) managing and maintaining
growth; (xi) customer demands; (xii) market and industry conditions including
pricing, demand for products, levels of trade inventories and raw materials
availability, (xiii) the success of product development and new product
introductions into the marketplace; (xiv) slow or negative growth in the
nutritional supplement industry; (xv) the departure of key members of
management; (xvi) the ability of the Company to efficiently manufacture its
products; as well as other risks and uncertainties that are described from time
to time in the Company's filings with the Securities and Exchange Commission.

OVERVIEW
--------

BUSINESS DESCRIPTION. Allergy Research Group, Inc. (SYMBOL: ALRG) (the "Company"
or "ARG"), together with its wholly owned subsidiary, Nutricology, Inc., strives
to be an innovative leader in nutraceutical research and product formulation.
Our shares are traded on the Over The Counter Bulletin Board. Since 1980, the
Company has produced quality, hypoallergenic nutritional supplements and
supplies products to physicians and health care practitioners worldwide. These
professionals recognize the Company for the quality, purity and efficacy of its
targeted nutritional supplement line. Currently, we supply products to
approximately 4,000 physicians and health care practitioners, including accounts
in the United States, Japan, Taiwan, the United Kingdom, South Korea, Jamaica,
New Zealand, Mexico, Turkey, Norway, Sweden, Switzerland, Italy, Ireland,
Philippines, Russia, South Africa and Singapore. We develop, contract
manufacture, market and sell vitamins and nutritional supplements, throughout
the world under the NutriCology and Allergy Research Group(R) labels. Our
products are sold through distributors to medical and professional accounts, to
retailers, and directly to the consumer. We offer a line of approximately 200
products, including vitamins in both multivitamin and single-entity formulas,
minerals, and herbals. Our products are manufactured in various forms, including
capsules, tablets, softgels, powders (drink mixes) and liquids. Our principal
executive offices are located at 30806 Santana Street, Hayward, California 94544
and the telephone number is (800) 545-9960.

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

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

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

                                       9
<PAGE>

We believe that the Company has good relations with all of its current
manufacturers and suppliers. During 2003 and during the period ending March 31,
2004, we experienced a concentration of approximately 58% of our manufacturing
with four separate vendors. We do not currently have written contracts with any
of our manufacturers, but rely on long-term personal and professional
relationships with our four largest vendors. However, we believe that, due to
the large number of businesses performing this type of service in the industry,
the Company would have little difficulty in finding viable alternatives in the
event any one of these vendors became unable or determined not to continue
manufacturing our products.

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

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

             QUARTER ENDED MARCH 31, 2004 COMPARED TO MARCH 31, 2003
             -------------------------------------------------------

REVENUES. We had net sales of $3,724,899 for the first quarter ended March 31,
2004, compared with $3,448,762 for the same period in 2003. The increase of
$276,137, or 8%, is due to increased sales to our distributors and increased
demand at retail for current and new products.

COSTS OF SALES. Cost of sales increased $179,779 to $2,134,619 for the three
months ended March 31, 2004, compared to $1,954,840 for the three months ended
March 31, 2003. The increase in cost of sales corresponds with the increase in
sales. Gross profit margins decreased approximately .6% for the first quarter,
approximating 42.7% for 2004 as a result of a slight increase in discounts
allowed and cost of material.

OPERATING EXPENSES. Total operating expenses were $993,173 for the first quarter
2004 and $944,314 for the same period in 2003. The increase of $48,859 for the
three months ended March 31, 2004 was primarily due to increase in payroll
expense associated with increased wages and with spreading the effect of
year-end bonuses over the entire year, offset by a reduction in outside sales
staff and reduced rental expense due to a renegotiated lease for less warehouse
space. The increase in operating expense was also caused by increased newsletter
and related postage expense, offset by a reduction in depreciation expense
associated with fully depreciated assets that are still in good working
condition, and less reliance on outside consultants.

INTEREST EXPENSE. Interest expense was zero for the first quarter ended March
31, 2004 compared to $720 for the same period in 2003. The decrease is a result
of reducing the line of credit to zero during the first quarter 2003.

PROVISION FOR INCOME TAXES. As of March 31, 2004, the Company recorded a
deferred tax asset of $213,018 to be realized as a result of future taxable
income offset by net operating loss carryforwards. As of fiscal year ended
December 31, 2003, we have approximately $560,000 and $1,400,000, respectively,
available in federal and state net operating loss carryforwards to offset future
taxable income, which expire principally in the years 2019 (federal) and 2011
(state). For taxable years beginning in 2002 and 2003, the State of California
has suspended the net operating loss carryover deduction for two years for
losses incurred before January 1, 2002, and for one year for losses incurred
after January 1, 2002. We estimate that all of the federal carryforward will be
utilized during the first quarter of 2004 and the State of California
carryforward will be utilized during 2004. As a result, income taxes payable at
March 31, 2004, represents estimated 2004 federal taxes based on income.

                                       10
<PAGE>

NET INCOME. During the quarter March 31, 2004, we recorded net income of
$384,063 compared to net income of $502,266 for the same period in 2003. The
decrease of $118,203 is a result of an increase in the provision for income
taxes necessary due to the utilization of the net operating loss carrryforwards.

EARNINGS PER SHARE. Earnings per share have remained steady at $0.03 per share
for the quarter ended March 31, 2004 and 2003.

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

Current Financial Condition

During the quarter ended March 31, 2004, we increased our working capital by
approximately $500,000 to $3,992,910 compared to a working capital at December
31, 2003 of $3,503,764. We continue to finance our inventory and accounts
receivable through cash generated by operating activities. Management believes
that the Company's operating cash flow, cash and equivalents, and borrowing
capacity under committed bank credit agreements is sufficient to fund its
capital and liquidity needs for the next twelve months.

Cash Flows

OPERATING ACTIVITIES. Net cash flows provided by operating activities was
$475,871 and $185,021 for the quarters ended March 31, 2004 and 2003,
respectively. Net cash provided by operating activities for both quarters
primarily reflects net income and changes in operating assets and liabilities,
partially offset by non-cash expenses.

INVESTING ACTIVITIES. Net cash flows used in investing activities for the
quarter ended March 31, 2004 was $613 primarily resulting from repayments from
officers for an outstanding loan, offset by purchases of computer equipment and
software. Net cash flows provided by investing activities as of March 31, 2003
was $53,724 representing repayments from officers for an outstanding loan.

FINANCING ACTIVITIES. Net cash flows used in financing activities was $14,285
for the three months ended March 31, 2003, representing repayments of capital
lease obligations.

CONCENTRATION OF CREDIT RISK.

          (i) SALES. Approximately 12% of our total sales in 2003 were
attributable to a single distributor. In 2004, this distributor continued to
account for over 10% of sales. In the event we were to lose that account, we
anticipate that we would be able to convert the business to sales directly to
the customers of that distributor. As converted sales would be at a higher
margin, we do not believe the loss of the account would have a material negative
impact on sales.

         (ii) PURCHASES. We purchase raw materials and use outside vendors for
the manufacture of our products. For the quarter ended March 31, 2004, we had a
concentration of approximately 58% of our manufacturing with four separate
vendors. We do not currently have written contracts with any of our
manufacturers, but rely on long-term personal and professional relationships. We
believe that, due to the large number of businesses performing this type of
service in the industry, we would have little difficulty in finding viable
alternatives in the event any one of these vendors became unable or determined
not to continue manufacturing our products.

          (iii) PRODUCT. We have two products that each individually account for
more than 10% of our sales dollars.

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

                                       11
<PAGE>
<TABLE>
----------------------- -------------------------------------------------------------------------------------
                                                       Payments Due by Period
                        -------------------------------------------------------------------------------------
                                                 Less
     Contractual                                Than 1               1-3             4 - 5        After 5
     Obligations              Total              Year               Years            Years         Years
----------------------- ------------------ ------------------ ------------------ -------------- -------------
<S>                              <C>                <C>                  <C>     <C>            <C>
Line of Credit (1)
----------------------- ------------------ ------------------ ------------------ -------------- -------------
Capital Lease
Obligations
----------------------- ------------------ ------------------ ------------------ -------------- -------------

Operating Leases                 $207,720           $199,545             $8,175
----------------------- ------------------ ------------------ ------------------ -------------- -------------
Total Cash
Contractual
Obligations                      $207,720           $199,545             $8,175
----------------------- ------------------ ------------------ ------------------ -------------- -------------
</TABLE>

         (1)      This represents the Company's borrowings under its line of
                  credit with Merrill Lynch, which had a zero balance throughout
                  the first quarter ended March 31, 2004 and through the date of
                  this filing. The Merrill Lynch line of credit provides for
                  maximum financing of $1,500,000, bearing interest at the
                  London Interbank Offered Rate (LIBOR) plus 2.75%, computed on
                  a monthly basis. As of March 31, 2004, the interest rate on
                  the line of credit was 3.84% per annum. Because the line of
                  credit is secured by substantially all of the assets of the
                  Company, if the Company were to fall into default under the
                  terms of our agreement with Merrill Lynch it could have
                  material adverse impact on our business and financial
                  position. The CEO of the Company has personally guaranteed the
                  line of credit.

RELATED PARTY TRANSACTIONS. Stephen and Susan Levine loaned Nutricology
approximately $286,000 prior to its reverse acquisition with the Company in
1998. The loan has been offset and exceeded by advances made to the Levines
between 1997 and 1999. Each advance was made as a non-interest bearing, due on
demand, loan on the books of the Company. Interest at 8% per annum has been
accrued and paid on these loans. As of March 31, 2004 the outstanding balance is
$48,807. During the first quarter of 2004 the Levines repaid $6,923.

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

The Company expects to continue to purchase equipment and hire new employees as
is commensurate with the growth of the business. In addition, we will continue
to invest time and effort in research for product development. We know of no
trends that are expected to affect the cost of labor or materials, and sales are
expected to be stable over the next twelve months.

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

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

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<PAGE>

We believe the following critical accounting policies reflect our more
significant estimates and assumptions used in the preparation of our
consolidated financial statements:

Income Taxes

SFAS 109, Accounting for Income Taxes, establishes financial accounting and
reporting standards for the effect of income taxes. The objectives of accounting
for income taxes are to recognize the amount of taxes payable or refundable for
the current year and deferred tax liabilities and assets for the future tax
consequences of events that have been recognized in an entity's financial
statements or tax returns. Judgment is required in assessing the future tax
consequences of events that have been recognized in the Company's financial
statements or tax returns. Fluctuations in the actual outcome of these future
tax consequences could materially impact our financial position or our results
of operations. Our deferred tax asset on the consolidated balance sheet is
recognized primarily as a result of net operating loss carryforwards. In the
event that the Company did not generate any taxable income within the next year,
the asset would be overstated. We record a valuation allowance to reduce our
deferred tax assets to the amount that is more likely than not to be realized.
We have considered future market growth, forecasted earnings, and future taxable
income in determining the need for a valuation allowance. In the event we were
to determine that we would not be able to realize all or part of our net
deferred tax assets in the future, an adjustment to the deferred tax assets
would be charged to earnings in the period such determination is made. Likewise,
if we later determine that it is more likely than not that the net deferred tax
assets would be realized, the previously provided valuation allowance would be
reversed. During the period ending March 31, 2004 the entire remaining federal
deferred tax asset of $168,338 and $28,921 of the state deferred tax asset was
expensed due to expected utilization of the asset. The remaining deferred tax
asset represents approximately 1.62% of total assets at March 31, 2004. Based on
our past operating results for the prior two years, and the current interim
period, we believe our estimate of deferred tax assets to be reasonable.

Allowance For Doubtful Accounts

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

Inventory

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

                                       13
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

     a. Evaluation of Disclosure Controls and Procedures:

     Disclosure controls and procedures are designed to ensure that information
     required to be disclosed in the reports filed or submitted under the
     Exchange Act is recorded, processed, summarized and reported, within the
     time period specified in the SEC's rules and forms. Disclosure controls and
     procedures include, without limitation, controls and procedures designed to
     ensure that information required to be disclosed in the reports filed under
     the Exchange Act is accumulated and communicated to management, including
     the Chief Executive Officer and Chief Financial Officer, as appropriate, to
     allow timely decisions regarding required disclosure. Within 90 days of
     this report, the Company carried out an evaluation, under the supervision
     and with the participation of the Company's management, including the
     Company's Chief Executive Officer and Chief Financial Officer, of the
     effectiveness of the design and operation of the Company's disclosure
     controls and procedures. Based upon and as of the date of that evaluation,
     the Chief Executive Officer and Chief Financial Officer concluded that the
     Company's disclosure controls and procedures are effective to ensure that
     information required to be disclosed in the reports the Company files and
     submits under the Exchange Act is recorded, processed, summarized and
     reported as and when required.

     b. Changes in Internal Control over Financial Reporting.

     There were no significant changes in the Company's internal controls over
     financial reporting identified in connection with the Company's evaluation
     of these controls as of the end of the period covered by this report that
     could have significantly affected these controls subsequent to the date of
     such evaluation referred to in the previous paragraph, including any
     correction action with regard to significant deficiencies and material
     weaknesses.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

         In 1993, a lawsuit was filed in the Circuit Court of the 15th Judicial
Circuit in and for Palm Beach County, Florida by NutriSupplies, Inc., successor
in interest to rights of Robert H. Harris and the Earth Harvest, Inc. against
NutriCology, Inc. (which has since become a wholly-owned subsidiary of the
Company), Stephen A. Levine (officer, director and beneficial shareholder of the
Company) and Nicholas Gonzales, M.D. This matter is a contract dispute between
Dr. Gonzales and NutriSupplies, Inc., which alleges that Dr. Gonzales violated
their contract agreement and then returned to NutriCology to supply his
patients' needs. NutriCology and Dr. Levine were named in the suit only because
NutriCology had been Dr. Gonzales' supplier. Dr. Gonzales has agreed to fully
indemnified NutriCology and Dr. Levine from any wrongdoing. A motion for summary
judgment was granted in favor of NutriCology, but was appealed. On June 6, 2001,
the appellate court affirmed the grant of that motion, and NutriSupplies filed a
Motion for Rehearing and Request for Oral Argument. That motion was denied and
no further appeals have been filed. NutriCology obtained a judgment for $250,000
for attorneys' fees on November 10, 2003. A lawyer who was previously
representing Dr. Gonzales has asserted a lien against the settlement for 35% of
the proceeds plus costs of $64,000. The Company is contesting the claim.
..
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

        Not Applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        Not Applicable.

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

        Not Applicable.

                                       14
<PAGE>

Item 5. OTHER INFORMATION

        Not Applicable.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits
3.1   Registrant's Articles of Incorporation*
3.2 Registrant's Articles of Amendment to Articles of Incorporation dated
    January 15, 1998*
3.3 Registrant's Bylaws*
4.1 Form of Common Stock Certificate*
4.2 Form of Non-Qualified Stock Option*
4.3 Form of Incentive Stock Option*
4.4 Form of Common Stock Purchase Warrant*
4.5 1998 Stock Option Plan*
10.1 License Agreement between Registrant and Jim Cassidy dated March 21, 2000*
10.2 Option Agreement between Registrant, Dr. Ba Hoang and PhytoPharm PLC*#
10.3 Loan and Security Agreement between Registrant and Aerofund Financial,
    Inc.*
10.4 Code of Business Conduct and Ethics**
99.1 Haight-Ashbury Free Medical Clinic Design Research Survey*
99.2 Certificate of Stephen A. Levine Pursuant to Section 1350 of Chapter 63 of
    Title 18 U.S. Code

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


    (b)  Reports on Form 8-K
          None.

                                       15
<PAGE>

                          ALLERGY RESEARCH GROUP, INC.
                                    SIGNATURE

           Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                ALLERGY RESEARCH GROUP, INC.
                                                Registrant



Dated:  May 13, 2004
                                                By: /S/ STEPHEN A. LEVINE
                                                    -------------------------
                                                  Chief Executive Officer and
                                                  Chief Financial Officer


                                       16
<PAGE>

                          ALLERGY RESEARCH GROUP, INC.
                              a Florida corporation
                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                           AND CHIEF FINANCIAL OFFICER


I, Stephen A. Levine, certify that:
         1.       I have reviewed this quarterly report on Form 10QSB of Allergy
                  Research Group, Inc.;
         2.       Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  quarterly report;
         3.       Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly report,
                  fairly present in all material respects the financial
                  condition, results of operations and cash flows of the
                  registrant as of, and for, the periods presented in this
                  quarterly report;
         4.       The registrant's other certifying officers and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and have:
                  a)       designed such disclosure controls and procedures to
                           ensure that material information relating to the
                           registrant, including its consolidated subsidiaries,
                           is made known to us by others within those entities,
                           particularly during the period in which this
                           quarterly report is being prepared;
                  b)       evaluated the effectiveness of the registrant's
                           disclosure controls and procedures as of a date
                           within 90 days prior to the filing date of this
                           quarterly report (the "Evaluation Date"); and
                  c)       presented in this quarterly report our conclusions
                           about the effectiveness of the disclosure controls
                           and procedures based on our evaluation as of the
                           Evaluation Date;
         5.       The registrant's other certifying officers and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of registrant's
                  board of directors (or persons performing the equivalent
                  functions):
                  a)       all significant deficiencies in the design or
                           operation of internal controls which could adversely
                           affect the registrant's ability to record, process,
                           summarize and report financial data and have
                           identified for the registrant's auditors any material
                           weaknesses in internal controls; and
                  b)       any fraud, whether or not material, that involves
                           management or other employees who have a significant
                           role in the registrant's internal controls; and

         6.       The registrant's other certifying officers and I have
                  indicated in this quarterly report whether there were
                  significant changes in internal controls or in other factors
                  that could significantly affect internal controls subsequent
                  to the date of our most recent evaluation, including any
                  corrective actions with regard to significant deficiencies and
                  material weaknesses.

Date: May 13, 2004


/S/ STEPHEN A. LEVINE
-----------------------------

Stephen A. Levine


Chief Executive Officer and Chief Financial Officer


                                       17