<PAGE>   1
                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                  Form 10-KSB


           /x/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
                     For the Fiscal Year Ended December 31, 1997

                                       Or

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

                         Commission File Number 1-12599

                            VITA FOOD PRODUCTS, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)



   NEVADA                               #36-3171548
   -------------------------------      -------------------------------------
   (State or other jurisdiction of      (I.R.S. Employer
   incorporation or organization)       Identification No.)

   2222 WEST LAKE STREET
   CHICAGO, ILLINOIS          (312) 738-4500                    60612
   ------------------------   ----------------------            -----
   (Address of principal     Registrant's telephone number     (Zip Code)
   executive offices)        including area code


     Securities registered pursuant to Section 12(b) of the Exchange Act:
<TABLE>
<S>                                                    <C>
Title of Each Class                                    Name of Each Exchange On Which Registered
-------------------------------                        ------------------------------------------
COMMON STOCK, PAR VALUE $.01 PER SHARE                  AMERICAN STOCK EXCHANGE & CHICAGO STOCK EXCHANGE
REDEEMABLE COMMON STOCK PURCHASE WARRANTS               AMERICAN STOCK EXCHANGE & CHICAGO STOCK EXCHANGE
</TABLE>

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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
     ---        ---

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. ____

State issuer's revenues for the most recent fiscal year.  $21,949,884

Shares of common stock, par value $.01 outstanding at March 20, 1998 -
3,700,000.  Aggregate market value of such shares held by non-affiliates as of
that date - $2,681,769.

Documents Incorporated by Reference:  None

Transitional Small Business Disclosure Format (check one):

Yes       No   X
    ---       ---


<PAGE>   2


                                     PART I


ITEM 1. BUSINESS

INTRODUCTION

     The Company has been engaged in the sale of specialty food products under
the VITA brand name for over 65 years. The Company believes that its long
history of producing and marketing quality products has created a strong
recognition of the VITA brand name among consumers and has enabled the Company
to build an extensive national distribution network of established food brokers
for the sale of its products to supermarket chains and wholesale clubs
(collectively "Supermarkets") and to institutional/food service operations,
such as restaurant chains, hotels, country clubs, cruise lines and other bulk
purchasers (collectively "Institutional Purchasers"). Historically, the Company
has increased its sales through acquisitions which have enabled the Company to
add new product lines and expand its existing product lines. The Company
believes that "VITA" with its accompanying logo is the most widely recognized,
and the only nationally recognized, brand name in herring products and cured
and smoked salmon products. The Company is one of the leading processors of
herring products, and cured and smoked salmon products in the United States and
has been producing and selling herring products for over 65 years and cured and
smoked salmon products for over 25 years. The Company's products include a
variety of cuts of pickled herring in cream and wine based sauces, and lox and
nova salmon. The Company markets other complementary specialty food products,
such as cream cheese with salmon, shrimp cocktail, hommus products, horseradish
products, and cocktail and tartar sauces, that it purchases from third party
food producers and markets under the VITA brand name pursuant to co-packing
arrangements. The Company markets and, in some cases, also produces related
specialty food products under other brand names, some of which are recognized
regional brand names, in certain regions of the country, that have been
licensed to the Company.


COMPANY BACKGROUND


     Although it had been selling herring products for a number of years prior
to its incorporation, the Company was originally incorporated as Vita Food
Products, Inc. in 1928. In 1968, Brown and Williamson Tobacco Company, a
British company, purchased the Company. The Company was then acquired by Dean
Foods Company in 1978.  In 1982, Mr. Stephen D. Rubin and Mr. Clark L. Feldman,
on behalf of an investor group (the "Investors"), negotiated the acquisition of
the Company from Dean Foods Company and became the Company's largest
shareholders. On September 20, 1996, the Company reincorporated in the State of
Nevada through a merger of Vita Food Products, Inc., an Illinois corporation
("Vita-Illinois"), and V-F Acquisition, Inc., an Illinois corporation that was
the largest shareholder of Vita-Illinois, into the Company, a Nevada
corporation formed for the purpose of effecting the reincorporation.  On
January 23, 1997, the Company completed an initial public offering of shares of
its common stock and redeemable common stock purchase warrants resulting in net
proceeds before expenses of approximately $4.1 million (the "Initial Public
Offering").


GROWTH STRATEGY


     The Company's long-term growth strategy is to focus on acquisitions and
capitalize on the goodwill associated with the VITA brand name and the strength
of its national distribution network to increase its market share for its
existing products and to introduce and market complementary new specialty food
products, which will be sold under either the VITA brand name or other brand
names purchased or licensed from third parties. The Company intends to
implement its growth strategy through acquiring, or entering into joint
ventures with, companies producing complementary specialty food products,
introducing and developing new products and increasing its marketing efforts.
The Company's production facility often operates at full capacity and the
Company, in order to accommodate its anticipated growth, intends to construct a
new facility (the "Improved Facility").


                                      1
<PAGE>   3




PRODUCTS


     The Company's products include herring products and cured and smoked
salmon products and a variety of related ready to eat specialty food products.
Most of the Company's products are refrigerated and can be located in either
the dairy department, meat and fish department or deli department of
Supermarkets.  Many of the Company's products are also sold in bulk to
Institutional Purchasers. The Company believes that, although the market for
herring products has been and is expected to remain constant, the market for
salmon products and other specialty products is increasing.  Consumption of
fresh and frozen seafood in the United States is increasing, especially
consumption of salmon.  This increase contrasts with the consumption of beef
and pork which is declining and has been declining for at least the last five
years.  All of the Company's salmon and herring products and most of its other
specialty food products are kosher and receive the symbol of certification from
the Orthodox Union.  The Company also receives the symbol of certification for
the use of many of its products for Passover from the Orthodox Union. The
Company believes that the market for kosher foods will grow in the next few
years and that this represents a significant opportunity for the Company. The
increase in consumption of kosher food products is at least partially the
result of (i) the perception by certain consumers who are not bound by
Judaism's religious dietary restrictions that kosher certification indicates a
superior product, and (ii) an increase in the population of members of other
religious groups such as Islam, Hinduism and some branches of Christianity that
observe dietary restrictions similar to many Jewish people.


     HERRING


     The Company, generally using the best available grade of ocean herring,
cures the herring and mixes the cured herring with a variety of high quality
spices, wines and other ingredients according to the Company's proprietary
formulations to produce a number of herring products.  These products are then
either packaged in vacuum-sealed glass jars to preserve flavor for sale to
Supermarkets or packaged in bulk containers for sale to Institutional
Purchasers. Herring is a traditional Eastern European and Scandinavian staple,
being one of the most widely consumed fish in the world.  In the United States,
however, herring is more of a specialty product that is served at parties or
holiday gatherings. Herring products are often served as appetizers, part of a
buffet, between-meal snacks or an ingredient in salads.  The Company's most
popular herring products are its "VITA Herring Party Snacks" and "VITA Herring
in Sour Cream."  The Company also sells a variety of other herring products
under the VITA and ELF brand names.

     SALMON

     The Company, using only premium and quality grades of salmon primarily
from Southeastern Alaska and Canada, cures, smokes, and slices the salmon for
most of its salmon products.  The Company's retail salmon products are packaged
and sold either refrigerated or frozen to Supermarkets.  The institutional
cured and smoked salmon products are packaged in bulk containers, including
three pound trays, and sold refrigerated or frozen to Institutional Purchasers.
Salmon consumption has been increasing over the past five years and salmon now
represents the fourth most popular type of seafood consumed in the United
States.  The Company's salmon products are generally served as part of buffets
at parties, particularly during the Christmas holiday season, or as a
traditional brunch item with bagels.  The salmon products are also served as
appetizers at formal parties and are being more frequently used as light meals.
The Company's salmon products include "VITA Lox Salmon," "VITA Nova Salmon,"
and "VITA Pastrami Salmon."  The Company also distributes imported Scottish
smoked salmon under the "ROYAL HIGHLAND" and "HIGHLAND CREST" licensed brand
names. Other products sold under the VITA label include the VITA LEAN Salmon
Burger, VITA Salmon Nuggets, and VITA Salmon Spread.


     OTHER SPECIALTY PRODUCTS

     The Company sells a number of spreads and condiments, including
horseradish products, cream cheese with smoked salmon, cocktail and tartar
sauces, shrimp cocktail and hommus products. These products are used as
appetizers, snacks, and condiments to accompany light meals and holiday trays.


                                      2


<PAGE>   4



These products are marketed by the Company under the VITA brand name, but
produced by third parties pursuant to co-packing arrangements.

     NEW PRODUCTS

     The Company's new products are either products developed by the Company,
products acquired through acquisitions of other companies, or products marketed
under co-packing arrangements or distribution agreements. The Company
introduced "VITA HEAVENLY HOMMUS!" in September, 1996, the "VITA LEAN SALMON
BURGER" in November, 1996, and "VITA SALMON NUGGETS" in September, 1997.  The
salmon burger and salmon nugget products were developed by the Company while
the hommus products are marketed under a co-packing arrangement.  The Company
intends to capitalize on its national distribution network and the strong
recognition of the VITA brand name to generate sales of these products. In
order to introduce these products, the Company incurs costs for development and
distribution which are significant relative to current sales levels.  It is
expected that as sales of these products grow, the development and distribution
costs will decline on a relative basis. The Company believes that through the
introduction of new non-seasonal products, it can, over time, reduce the
variability in its quarterly operating results by increasing sales during the
second and third quarters of each year.



PRODUCT DISTRIBUTION AND SALES

     The Company's specialty food products are currently sold through a
national distribution network of approximately 60 established retail and
institutional/food service brokers. The Company believes that it is the only
processor of herring products and cured and smoked salmon products that has
established such an extensive national distribution network.  The Company
believes it has been successful in developing this network for a number of
reasons, including the recognition of the VITA brand name and the Company's
reputation for producing quality products. The Company has also been able to
develop and strengthen its distribution network by providing adequate shelf
space for its products. The Company's current marketing efforts and its
long-term relationship with many of the food brokers has also contributed to
the strength of this network. The Company, through its marketing efforts,
attempts to maintain good relationships with the Supermarkets and Institutional
Purchasers that purchase its products.  The Company believes that its national
distribution network has, in turn, helped strengthen the VITA brand name and
has been a important factor in the Company's ability to introduce new products
into the marketplace.

     The Company's regional sales managers oversee its national distribution
network.  The Company employs five full-time regional sales managers who
maintain contact with the food brokers in their region and monitor their
performance.  The regional sales managers also assist the food brokers in their
selling efforts by, among other things, accompanying the food brokers on local
sales calls.  The Company believes that it is one of the few companies in its
market niche to employ regional sales managers and that the presence of the
regional sales managers has solidified the Company's relationship with its
national distribution network.


     The Company enters into an agreement with each food broker which grants
the food broker an exclusive territory in which to sell VITA products and sets
forth the amount of commissions to be paid on such sales by the Company. Such
agreements do not permit the Company to make sales directly to Supermarkets
located in a food broker's exclusive territory unless the Company pays the food
broker the commission which it would have earned. The agreements are terminable
by either party upon 30 days' notice.  The Company believes such terms are
standard in the Company's industry. The food brokers sell the Company's
products in both the retail and institutional/food service markets. The retail
market, consisting of Supermarkets has generally accounted for approximately
80% of the Company's net sales while Institutional Purchasers have accounted
for the remaining 20% of net sales.  Approximately 90% of the Company's net
sales to Supermarkets are made through food brokers while the remaining 10% of
net sales to Supermarkets are made directly by the Company.  Products purchased
through food brokers by Supermarkets that are shipped directly to the
Supermarkets' warehouses have generally accounted for 65% of the 90% of net
sales to the

                                      3

<PAGE>   5

retail market.  Products purchased through food brokers by food
distributors for resale to Supermarkets have accounted for 35% of the 90% of
net sales to the retail market.  Approximately 90% of the Company's net sales
to Institutional Purchasers are made through food brokers, including
international distributors, while the remaining 10% of net sales are made to
Institutional Purchasers directly by the Company.


CUSTOMERS/SALES BY REGION


     The Company's customers include large regional supermarket chains and
wholesale clubs throughout the country.  The Company's products sold under the
VITA brand name are particularly well known in New York City and the
surrounding metropolitan area ("NYC"). Approximately 11% of the Company's 1997
net sales were to customers located in NYC, including Waldbaum's, A & P,
Shop-Rite and Supermarket General.  Approximately 19% of the Company's 1997 net
sales were to customers located in the Northeast, excluding NYC, including Stop
& Shop, Shaw's and Wegman's.  Approximately 21% of the Company's 1997 net sales
were to customers in the Southeast, including Publix and Winn-Dixie.
Approximately 35% of the Company's 1997 net sales, including sales of the ELF
brand of herring, were to customers located in the Midwest, including Super
Valu, Jewel, Dominick's and Meijer's. Approximately 13% of the Company's 1997
net sales were to customers located in the West, including Safeway, Fred Meyer
and Albertson's.  Approximately 1% of the Company's 1997 net sales were to
customers located outside the U.S.

     The Company's largest customer represented more than 10% of its net sales
in 1996, but not more than 10% of its net sales in 1997. This customer is a
large supermarket chain with five regional divisions located in the Southeast.
The purchasing decisions of each regional division are made independently. The
Company does not have a long-term contractual relationship with this customer.
The Company believes the loss of this customer would have a material adverse
affect on the Company's business, financial condition and results of
operations. However, the Company believes the loss of this customer is
unlikely. In addition, because each regional division makes its purchasing
decisions independently, the Company believes that it is not likely to lose all
of the divisions even if it were to lose one or more of such divisions.


     The Company is aware that its customers are continually reviewing their
purchasing decisions which may result in such customers changing their current
orders from higher margin to lower margin products or reducing the amount of a
product or products purchased.  Any material change in orders or reduction in
the amount of a product or products purchased by one or more significant
customers could adversely affect the Company's business, financial condition
and results of operations.

PRODUCT RETURN POLICY


     The Company guarantees the sale of most of its products sold in
Supermarkets, which sales represent approximately 80% of all the Company's
sales. This guarantee helps ensure that consumers receive fresh products. Under
the guarantee, products not sold before their expiration date are either
returned to the Company through its food brokers or are disposed of by the
Supermarkets or food distributor. A credit is then issued to the Supermarket or
food distributor. The Company has established a reserve to be used for credits
for product returns and believes, based on its historical return rates which
have been fairly consistent over the past several years, that this reserve is
adequate to fund all foreseeable product return credits.


                                      4
















<PAGE>   6
PRODUCTION

     PRODUCTION FACILITY


     The Company produces, packages, stores, and distributes its herring and
salmon products at the Company-owned facility located in Chicago, Illinois.
The Company's facility is located on 125,600 square feet of contiguous land.
The facility contains approximately 82,200 square feet of space, including
approximately 65,000 square feet of production space, approximately 13,900
square feet of refrigerated storage space, and approximately 3,300 square feet
of office space. The Company stores and distributes its products through over
30 warehouse facilities owned by third parties which are located throughout the
United States.

     As of March 20, 1998, the Company anticipates constructing the Improved
Facility during the next 6 to 12 months. The Company believes the Improved
Facility is necessary to implement the Company's growth strategy and will
result in increased production capacity, increased production efficiencies, and
other overall cost savings. There can be no assurance that the Company will not
encounter quality or capacity difficulties, or experience production delays, in
connection with the anticipated construction of the Improved Facility. These
factors could have an adverse short-term effect on the Company's results of
operations.  The Company intends to finance the construction of the Improved
Facility, currently projected to cost $6,000,000 - $8,000,000, through the use
of one or more financing options, which may include, among others, industrial
revenue bond financing and conventional bank financing.


     SUPPLIERS


     The Company relies on outside suppliers for its herring and salmon
requirements. The Company currently purchases most of its herring from Cold
Ocean Inc. (formerly known as Barry's Limited) (the "Supplier"), a specialty
herring harvester and processor located in Canada, pursuant to a supply
agreement. The Company has been purchasing herring from the Supplier since the
Company began operations over 65 years ago.  Under the agreement, the Supplier
has the option to supply 90% of the Company's annual requirements for herring,
provided it sells the herring at the same prices which the Company would pay if
it purchased herring elsewhere. The Supplier guarantees the first priority of
supply of herring to the Company, in an amount necessary to satisfy the
Company's requirements.  The Company currently purchases its salmon from a
number of sources. The Company believes that there are other suppliers of
herring and salmon from which the Company could meet its requirements, if
necessary.  Pursuant to a distributorship agreement, the Company distributes
imported Scottish smoked salmon under the licensed brand names ROYAL HIGHLAND
and HIGHLAND CREST.


     QUALITY CONTROL


     The Company believes that it was one of the first processors of herring
products and cured and smoked salmon products to institute quality control
procedures and that its quality control procedures are among the most stringent
in this market.  The Company has two full-time employees in its Quality Control
Department.  The primary responsibility of these employees is to insure the
quality of its products by overseeing the production process and by frequently
testing the consistency of the products as they are produced.  The products
produced through co-packing arrangements are subject to both the quality
control procedures of the co-packing company and the same frequent product
testing that is required of the Company's products under its quality control
procedures.


                                      5

<PAGE>   7


COMPETITION

      The market for the Company's products is highly competitive.  The Company
believes that consumers choose herring products and salmon products as well as
its other specialty products based primarily on product quality and price.
Although the Company's competitors are primarily small, regional food
processors and producers, certain of the Company's competitors may have greater
financial and other resources than the Company and may offer lower prices on
comparable products. Since a key competitive factor among producers of cured
and smoked salmon products and herring products is price, even smaller regional
companies may be able to compete effectively against the Company due to reduced
shipping costs. While the Company believes its prices are competitive for the
quality level of its products, the Company relies primarily on the recognition
of the VITA brand name, its reputation for selling quality products, and the
strength of its distribution network. The Company's main competitors in the
herring product and cured and smoked salmon product market are Lassco, Mama's
and Nathan's, among others.  The Company believes it is the only independent
company with national distribution capabilities in this market.


ENVIRONMENTAL MATTERS

     In the ordinary course of its production process, spillage and cleaning
results in a high concentration of sugars and vinegars, which create Biological
Oxygen Demands ("BODs") as well as fats, oils and greases ("FOGs"), both of
which enter the waste water treatment system. The Company is assessed a user
charge by the Metropolitan Water Reclamation District (the "District"), based
in part on the costs of treating this waste water. If the level of FOGs
entering the waste water treatment system exceed a specified level over a
specified period of time, the District, following certain procedural
requirements, has the authority to fine the Company or to temporarily close the
Company's production facility. The level of FOGs resulting from the Company's
production process has occasionally exceeded this specified level in the past
on a temporary basis but not for any extended period of time. The Company has
no reason to believe that this level will be exceeded for any extended period
of time in the future. The District has not initiated or threatened to initiate
proceedings against the Company for violating specified levels for FOGs. The
Company expects the improved facility will significantly decrease or eliminate
BODs and FOGs and therefore, reduce user charges.

     Compliance with Federal, state or local provisions relating to protection
of the environment is not expected to have a material effect on the Company's
capital expenditures, earnings or competitive position.



INTELLECTUAL PROPERTY

      Trademarks and trade names are of critical importance to producers of food
products. A recognized trademark or trade name allows the consumer to
immediately identify the source of a product, even if the product is new to the
marketplace. The Company owns the federally registered trademark "VITA" (with
accompanying design). The Company believes that this mark is widely recognized,
and provides immediate identification of the source of its products to
consumers. Based upon its ability to maintain a significant share of the
national market for refrigerated herring products and cured and smoked salmon
products, the Company believes the "VITA" brand name and trademark has a
substantial amount of goodwill associated with it. The Company believes the
VITA mark and its accompanying design are critical to its ability to market new
products and to its marketing strategy in general.

     The Company has also licensed certain brand names, such as ELF, ROYAL
HIGHLAND and HIGHLAND CREST. Based on sales of the herring products marketed
under the "ELF" trademark, the Company believes there is widespread consumer
recognition of that brand name in the Midwest region of the country. The
Company obtained all of Lyon Food's rights to the "ELF" trademark in connection
with herring products from Food Marketing Corp. pursuant to the terms of a
letter agreement (the "Letter Agreement").  Ownership of the "ELF" trademark
was transferred by Food Marketing Corp. to SuperValu, Inc., which affirmed Lyon
Food's

                                      6



<PAGE>   8


right to use the mark as set forth in the Letter Agreement and consented
to the right to use the trademark in connection with smoked fish products.  The
Letter Agreement is terminable upon six months notice to the Company.  The
Company has licensed the ROYAL HIGHLAND and HIGHLAND CREST brand names, under
which the Company distributes imported Scottish smoked salmon. The Company
believes that these brand names will develop substantial goodwill over time.
The Company has the right to use the HIGHLAND CREST and ROYAL HIGHLAND brand
names under the terms of an exclusive distributorship agreement that expires in
December, 1999, but is renewable for successive 5-year intervals upon written
agreement of both parties. The Company sells its hommus products under the
recently applied for federal trademark "HEAVENLY HOMMUS!," sells its salmon
burger under the registered federal trademark "VITA LEAN,"  and has applied for
registration of the trademark "SALMON SLAMMERS" for use in marketing its salmon
nugget products to Institutional Purchasers.  The Company is not aware of any
names or marks which infringe any of those the Company uses.  Although the
Company sells products under a number of other brand and trade names, such
other brand or trade names are not material to the Company's marketing
strategy. The Company also uses various recipes and proprietary formulations in
its products which it maintains as trade secrets. The Company does not believe
its business is otherwise dependent upon any patent, license, trademark,
service mark or copyright.


PRODUCT LIABILITY INSURANCE

      The Company currently maintains product liability insurance for its
products with limits of $1,000,000 per ccurrence and $10,000,000 in the
aggregate, per annum. There can be no assurance that the Company's insurance
will be adequate to cover future product liability claims, or that the Company
will be able to maintain adequate product liability insurance at commercially
reasonable rates.


EMPLOYEES

      At February 24, 1998, the Company had 120 full-time employees.
Additionally, approximately up to 80 workers are hired on a temporary basis
each year to meet seasonal production demands.  Except for supervisors, all
production employees are represented by the Local 546 United Food & Commercial
Workers, International Union and maintenance employees are represented by the
Local 399 International Union of Operating Engineers. The Company has not
experienced any work stoppages since the Company was acquired by the Investors
in 1982.  The Company considers its relations with its employees to be good.


GOVERNMENT REGULATION

     The manufacture, processing, packaging, storage, distribution and labeling
of food products are subject to extensive federal and state laws and
regulations.  In the United States, the Company's business is subject to
regulation by the Food and Drug Administration (the "FDA").  Applicable
statutes and regulations governing food products include "standards of
identity" for the content of specific types of foods, nutritional labeling and
serving size requirements.  The Company believes that its current products
satisfy, and its new products will satisfy, all applicable regulations and that
all of the ingredients used in its products are "generally recognized as safe"
by the FDA for the intended purposes for which they will be used.


ITEM 2.  PROPERTIES

      The Company's facility is located on 125,600 square feet of contiguous
land. The facility contains approximately 82,200 square feet of space,
including approximately 65,000 square feet of production space, approximately
13,900 square feet of refrigerated storage space, and approximately 3,300
square feet of office space. American National Bank and Trust Company of
Chicago ("ANB") has a mortgage on this facility. The Company intends to
construct the Improved Facility in the next six to twelve months.  See the
section captioned " Production-Production Facility" In Item I of this Report.


                                      7



<PAGE>   9




ITEM 3.  LEGAL PROCEEDINGS

     The Company is not currently involved in any material pending legal
proceedings and is not aware of any material legal proceedings threatened
against it.


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

     Not applicable.




                                    PART II


ITEM 5.  MARKETS FOR REGISTRANT'S COMMON STOCK, WARRANTS AND RELATED
         STOCKHOLDER MATTERS



     The shares of Common Stock and Redeemable Common Stock Purchase Warrants
began trading on the Chicago Stock Exchange on January 17, 1997, and on the
American Stock Exchange on May 12, 1997.  The Company's Common Stock is traded
on the American Stock Exchange and Chicago Stock Exchange under the symbol
"VSF". The Company's Warrants are traded on the American Stock Exchange and
Chicago Stock Exchange under the symbol "VSF.WS."  The Company believes that as
of March 17, 1998 there were 39 holders of record of the Company's Common Stock
and 10 holders of record of the Company's Warrants.


     The Company has never paid a cash dividend on its common stock and
currently anticipates that all of its earnings will be retained for use in the
operation and expansion of its business.


     The following table set forth the composite market price per share for the
Common Stock and Warrants of the Company.

<TABLE>
<CAPTION>
                                            Common Stock Market Price
                                                High            Low
         ------------------------------------------------------------
          <S>                                   <C>            <C>
          1997
          ----
          1st Quarter (from January 17)          6              4 3/8
          2nd Quarter                            6              3 3/8
          3rd Quarter                            3 1/2          2 3/4
          4th Quarter                            2 7/8          1 1/4


<CAPTION>

                                                Warrant Market Price
                                                 High           Low
          -----------------------------------------------------------
          1997
          ----
          1st Quarter (from January 17)           3/4             1/8
          2nd Quarter                             7/16            1/4
          3rd Quarter                             3/8             1/8
          4th Quarter                             3/8             1/8
</TABLE>





                                      8


<PAGE>   10

ITEM 6.  SELECTED FINANCIAL DATA



     The selected financial data with respect to the Company's statements of
operations for each of the years in the two year period ended December 31, 1997
and the balance sheet data as of December 31, 1997 and 1996 are derived from
the Company's audited financial statements.  The financial data should be read
in conjunction with the financial statements and notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," included elsewhere herein.

<TABLE>
<CAPTION>

                                                                                   YEARS ENDED
                                                                                   DECEMBER 31,
                                                                        ---------------------------------
STATEMENT OF INCOME DATA:                                                  1996                   1997
                                                                        ---------             -----------
                                                                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                                       <C>                     <C>
  Net sales.....................................                          $22,688               $21,950
  Cost of goods sold............................                           15,588                16,075
                                                                        ---------             ---------
  Gross margin..................................                            7,100                 5,875
  Selling, marketing and administrative expenses                            5,883                 6,561
                                                                        ---------             ---------
  Operating profit (loss).......................                            1,217                  (686)
  Interest and other, net.......................                              464                   392
                                                                        ---------             ---------
  Income (loss) before income tax benefit.......                              753                (1,078)
  Income tax benefit............................                              (65)                 (150)
                                                                        ---------             ---------
  Net income (loss).............................                          $   818               $  (928)
                                                                        =========             =========
  Basic and diluted earnings
    (loss) per common share.....................                          $  0.28               $ (0.25)
  Weighted average number of common
   shares outstanding............................                       2,960,000             3,667,100
                                                                        =========             =========

<CAPTION>

                                                                                   YEARS ENDED
                                                                                   DECEMBER 31,
                                                                        ---------------------------------
STATEMENT OF INCOME DATA:                                                  1996                   1997
                                                                        ---------             -----------
  Net sales....................................                             100.0%                100.0%
  Cost of goods sold...........................                              68.7                  73.2
                                                                        ---------             ---------
  Gross margin.................................                              31.3                  26.8
  Selling, marketing and administrative
    expenses...................................                              25.9                  29.9
                                                                        ---------             ---------
  Operating profit (loss)......................                               5.4                  (3.1)
  Interest and other, net......................                               2.1                   1.8
                                                                        ---------             ---------
  Income (loss) before income tax benefit......                               3.3                  (4.9)
                                                                        ---------             ---------
  Income tax benefit...........................                              (0.3)                 (0.7)
                                                                        ---------             ---------
  Net income (loss)............................                               3.6%                 (4.2)%
                                                                        =========             =========
<CAPTION>

                                                                                   YEARS ENDED
                                                                                   DECEMBER 31,
                                                                        ---------------------------------
BALANCE SHEET DATA:                                                        1996                   1997
                                                                        ---------             -----------
                                                                                     (IN THOUSANDS)
  Working capital...............................                          $ 3,228               $ 5,307
  Total assets..................................                           11,340                11,148
  Current liabilities...........................                            5,335                 3,377
  Long-term debt................................                            5,419                 4,953
  Shareholders' equity..........................                              586                 2,818
</TABLE>

                                      9


<PAGE>   11




ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RESULTS OF OPERATIONS COMPARISON OF THE YEAR ENDED DECEMBER 31, 1997 AND THE
YEAR ENDED DECEMBER 31, 1996

REVENUES.  Net sales for the year ended December 31, 1997 were $21,950,000
compared to $22,688,000 for the year ended December 31, 1996, a decrease of
$738,000 or 3%.  The decrease was primarily attributable to the timing of
unusually large orders placed in the fourth quarter of 1996 which resulted in
lower first quarter 1997 orders.  Increases from sales of newer products,
including hommus, salmon burgers, and salmon nuggets, offset a 3% decrease in
sales of core herring and salmon products. New product sales accounted for
approximately 3% of sales in 1997 compared to 0% in 1996.

GROSS MARGIN.  Gross margin for the year ended December 31, 1997 was $5,875,000
compared to $7,100,000 for the year ended December 31, 1996, a decrease of
$1,225,000 or 17%.  As a percentage of net sales, gross margin was 26.8% in the
year versus 31.3% in 1996.  The decrease in the gross margin percentage was
largely attributable to several factors, including:  1) lower volume sales to a
major customer at a lower negotiated price; 2) a combination of pricing
pressures from customers and higher production costs; and 3) promotional
discounts required to introduce the Company's newer products and to introduce
the Company to new geographic (primarily western U.S.) markets.


OPERATING EXPENSES.  Selling, marketing and administrative expenses for the
year ended December 31, 1997 were $6,561,000 compared to $5,883,000 for the
year ended December 31, 1996, an increase of $678,000 or 12%. The increase was
primarily attributable to higher marketing and selling expenses incurred to
increase distribution of the Company's newer products and to develop or further
develop newer products, higher overall levels of promotion for core products,
and increases in administrative expenses incurred as a result of operating as a
public company.  As a percentage of net sales, selling, marketing and
administrative expenses increased to 29.9% from 25.9% for the same period in
1996.


INTEREST AND OTHER EXPENSE.  Interest and other expense, net, for the year
ended December 31, 1997 was $391,000 compared to $464,000 for the year ended
December 31, 1996, a decrease of $73,000 or 16%. This decrease was primarily
attributable to a decrease in interest expense resulting from the payments
under the Company's bank credit facilities with proceeds from the Company's
initial public offering in January, 1997, and was partially offset by a
decrease in non-recurring other income of $83,000.

INCOME TAXES. The Company provided for an income tax benefit of $150,000 for
the year ended December 31, 1997, compared to an income tax benefit of $65,000
for the year ended December 31, 1996. Based on its projected pretax income for
the year ended December 31, 1998, which would allow the Company to partially
utilize its net operating loss carryforwards, the Company determined that a
partial recognition of the deferred tax asset valuation allowance was
appropriate.  The Company determined, as of December 31, 1997, that it was more
likely than not that it would not be able to fully realize the remaining net
deferred tax assets.  The Company based this determination on the uncertainty
of the effects on future pretax income of the Company's acquisition strategy
and its planned construction of the Improved Facility.   The 1997 income tax
benefit is comprised of $412,000 of expected future income tax benefits
resulting from the loss incurred, offset by an increase in the deferred tax
asset valuation allowance of $262,000. The 1996 income tax benefit is comprised
of $235,000 of income tax expense resulting from the income incurred, offset by
a decrease in the deferred tax asset valuation allowance of $300,000.  The
deferred tax asset valuation allowance was $396,000 at December 31, 1997 and
was $134,000 at December 31, 1996.


                                      10


<PAGE>   12


NET INCOME (LOSS).  Net loss for the year ended December 31, 1997 was $928,000
or a basic and diluted loss of $0.25 per share, compared to net income of
$818,000 or basic and diluted earnings of $0.28 per share for the year ended
December 31, 1996, a decrease of $1,746,000 or $0.53 per share.


SEASONALITY; QUARTERLY RESULTS

     The following table sets forth net sales information for each of the
Company's last 20 quarters.  This unaudited net sales information has been
prepared on the same basis as the annual information presented elsewhere in
this Form 10-KSB and, in the opinion of management, reflects all adjustments
(consisting of normal recurring entries) necessary for a fair presentation of
the information presented.  Net sales for any quarter are not necessarily
indicative of sales for any future period.



<TABLE>
<CAPTION>

                                          NET SALES
                              ----------------------------------
                               FIRST   SECOND    THIRD   FOURTH
YEAR                          QUARTER  QUARTER  QUARTER  QUARTER
----                          -------  -------  -------  -------
                                        (in thousands)
<S>                           <C>      <C>      <C>      <C>
1993 .....................     $4,145   $2,749   $3,858   $6,019
1994 .....................      4,285    3,108    3,892    6,508
1995 .....................      4,454    4,011    4,580    8,365
1996 .....................      5,516    3,692    4,761    8,719
1997 .....................      4,722    4,013    5,169    8,046
</TABLE>

     The following table sets forth net income (loss) information for each of
the Company's last 20 quarters. This unaudited net income information has been
prepared on the same basis as the annual information presented elsewhere in
this Form 10-KSB and, in the opinion of the management, reflects all
adjustments (consisting of normal recurring entries) necessary for a fair
presentation of the information presented.  Net income (loss) for any quarter
is not necessarily indicative of net income (loss) for any future period.

<TABLE>
<CAPTION>

                                     NET INCOME (LOSS) (3)
                              ------------------------------------
                               FIRST   SECOND    THIRD     FOURTH
YEAR                          QUARTER  QUARTER  QUARTER   QUARTER
----                          -------  -------  --------  --------
                                         (in thousands)
<S>                             <C>     <C>      <C>       <C>
1993 .....................      $(91)   $(577)      $141      $626
1994 .....................        10     (427)      (121)      810
1995(1) ..................        63     (270)      (548)(2)   886
1996 .....................        69     (100)         3       846
1997 .....................      (162)    (219)      (307)     (240)(4)
</TABLE>

________________________

(1)  The Company incurred, non-recurring unusual, expenses in 1995 which
     consisted of an Arbitration Award of $356,000, expenses of $110,000
     incurred in consolidating the herring production line operations of Lyon
     Food with the Company's existing production facilities, expenses of
     $83,000 incurred in establishing the Bank Credit Facilities and legal fees
     and expenses totaling $62,000 paid to Company counsel in connection with
     the Arbitration.

(2)  The Arbitration Award of $356,000 was paid in the third quarter of 1995.

(3)  Income taxes (benefit) are not presented in 1993, 1994 and 1995 due to
     the Company's utilization of net operating loss carryforwards to offset
     taxable income and due to the 100% valuation allowance applied against the
     deferred tax asset.  In 1996, the Company recognized $316,000 of the prior
     year's deferred tax asset valuation allowance. In 1997, the Company
     increased the valuation allowance by $262,000.


                                      11


<PAGE>   13


(4)  The 1997 fourth quarter loss is not typical for the Company's historical
     fourth quarter financial performance. The loss in the fourth quarter of
     1997 was due, in part, to several factors including lower sales and profit
     margins, increased promotional activity for the Company's newer products
     and new geographic markets, and non-recurring production expenses from
     products which did not meet our quality specifications. Management has
     taken and will take steps, including the construction of the Improved
     Facility, to try to return the Company's future fourth quarter performance
     to historical levels.


     The Company has in the past and expects in the future to experience
significant fluctuation in quarterly operating results. As the tables indicate,
historically the Company's net sales and net income have typically been the
highest in the fourth quarter of each year.  The Company's business is seasonal
because its sales volume increases significantly during the Christmas holiday
season and, to a lesser extent, during other holidays in the Fall and Spring
and periods of colder weather in certain sections of the country.  Certain of
these holidays, including Passover, Easter, Yom Kippur and Rosh Hashanah, may
fall in different quarters in different years and could cause the Company's
quarterly operating results to fluctuate in the future.



LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 1997, the Company had $5,307,000 in working capital,
compared to $3,228,000 at December 31, 1996.  Working capital was favorably
impacted by the funds from the initial public offering in January, 1997.



     At December 31, 1997, the Company had $108,000 in cash, and a revolving
credit facility of $5,250,000 and term facility of $1,500,000 with ANB which
expire on April 30, 1999.  Amounts outstanding under these facilities at
December 31, 1997 were $3,900,000 and $1,002,000, respectively.  The rate of
interest on both facilities is the lender's prime rate.  The facilities contain
customary representations, warranties, and covenants. At December 31, 1997 the
Company was in compliance with the covenants under the Bank Agreement.

     As of March 20, 1998, the Company anticipates constructing the Improved
Facility during the next 6 to 12 months. The Company currently anticipates
obtaining most of required funds through the use of one or more financing
options which may include, among others, industrial revenue bond financing and
conventional bank financing. See the section captioned "Production-Production
Facility" in Item 1 of this Report. Based on  currently proposed plans and
assumptions relating to its operations, the Company believes it has sufficient
capital resources with its current bank facilities and the expected financing
for the Improved Facility to meet its operating requirements in the foreseeable
future.

     Since December 31, 1996, the Company's key liquidity and capitalization
ratios have improved.  As of December 31, 1997, the current ratio increased to
2.6 from 1.6.  The ratio of long-term debt-to-total capitalization decreased
from 0.9 to 0.6.



                                      12


<PAGE>   14

CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES.  Net cash used in operating
activities was $2,793,000 for the year ended December 31, 1997, compared to net
cash provided by operating activities of $1,014,000 for the year ended December
31, 1996. This difference was primarily attributable to a decrease in net
income in 1997, decreased collections of accounts receivable in 1997 compared
to 1996, increased payments of the Company's accounts payable, and a decrease
in income taxes payable, offset by a decrease in inventories.  The decreased
collections of accounts receivable was largely attributable to the higher
amount of receivables outstanding at the end of 1995 which were collected in
following months in 1996.  The increased payments of the Company's accounts
payable was primarily attributable to the Company's delay in 1996 in making
payments in order to conserve cash, as well as the Company's taking advantage
of purchase price discounts in 1997. Due to the improved financial condition in
1997, no delay in making such payments was deemed necessary.  The decrease in
income taxes payable was attributable to the payment of income taxes in the
first quarter of 1997 for the 1996 fiscal year.  In the first quarter of 1996,
no payment for federal income taxes was due because federal income tax
carryforwards offset taxable income for the 1995 fiscal year.  The decrease in
inventories was attributable to the lower sales activity and the Company's
increased efforts in controlling inventory levels.

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES. Net cash used in investing
activities was $449,000 for the year ended December 31, 1997, compared to
$456,000 for the year ended December 31, 1996.

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES.  Net cash provided by financing
activities was $3,262,000 for the year ended December 31, 1997, compared to net
cash used of $515,000 for the year ended December 31, 1996. The increase in net
cash provided by financing activities was attributable to the net proceeds from
the Company's initial public offering, offset by payments under the Company's
bank credit facilities.

INFLATION

     Inflation has historically not had a material effect on the Company's
operations.

YEAR 2000

     In prior years, certain computer programs were written using two digits
rather than four to define the applicable year.  These programs were written
without considering the impact of the upcoming change in the century and may
experience problems handling dates beyond the year 1999.  This could cause
computer applications to fail or to create erroneous results unless corrective
measures are taken.  Incomplete or untimely resolution of the Year 2000 issue
could have a material adverse impact on the Company's business, operations or
financial condition in the future.

     The Company has been assessing the impact that the Year 2000 issue will
have on its computer system. The Company plans to implement and test solutions
to any Year 2000 deficiencies prior to any impact on the Company's systems. The
Company is also surveying critical suppliers and customers to determine the
status of their Year 2000 compliance programs. Based on our work to date, and
assuming that our plans to solve any Year 2000 deficiencies, which continue to
evolve, can be implemented as planned, we believe future costs relating to the
Year 2000 issue will not have a material impact on the Company's  financial
position, results of operations or cash flows.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     In March, 1997, the FASB issued SFAS 128, "Earnings Per Share."  The new
standard simplifies the standards for computing earnings per share and requires
presentation of two new amounts, basic and diluted earnings per share. The
Company adopted this standard for the fiscal year ended December 31, 1997.


                                     13



<PAGE>   15


In June 1997, the Financial Accounting Standards Board ("FASB") issued two new
disclosure standards, SFAS No. 130, "Reporting Comprehensive Income," and SFAS
No. 131, "Disclosures about Segments of an Enterprise and Related Information."

SFAS No. 130 establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income is
defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. This standard is effective
for the Company's financial statements commencing in 1998.

SFAS No. 131 supercedes SFAS No. 14, "Financial Reporting for Segments of
Business Enterprise," and establishes standards for the way that public
enterprises report information about operating segments in financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. This standard is
effective for the Company's financial statements in 1998.

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits," which revises employers'
disclosures about pension and other postretirement benefit plans. SFAS No. 132
is effective for the financial statements for periods beginning after December
15, 1997 and require comparative information for earlier years to be restated.

SFAS No.'s 130, 131, and 132 currently do not apply to the Company.


FORWARD-LOOKING STATEMENTS

     This annual report on Form 10-KSB, including "Business," "Properties,"
"Legal Proceedings" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contains forward-looking statements within
the meaning of the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995.  Such statements are based on management's
current expectations and are subject to a number of factors and uncertainties
which could cause actual results to differ materially from those described in
the forward-looking statements.  Such factors and uncertainties include, but
are not limited to:  (i) the impact of the level of the Company's indebtedness;
(ii) restrictive covenants contained in the Company's various debt documents;
(iii) general economic conditions and conditions in the retail environment;
(iv) the Company's dependence on a few large customers; (v) price fluctuations
in the raw materials used by the Company, particularly herring and salmon; (vi)
competitive conditions in the Company's markets; (vii) the seasonal nature of
the Company's business; (viii) the Company's ability to execute its acquisition
strategy; (ix) fluctuations in the stock market; (x) the extent to which the
Company is able to retain and attract key personnel; (xi) relationships with
retailers; (xii) relationships with key vendors; and (xiii) the impact of
federal, state and local environmental requirements (including the impact of
current or future environmental claims against the Company).  As a result, the
Company's operating results may fluctuate, especially when measured on a
quarterly basis.

     The Company's business strategy contemplates that the Company will pursue
potential acquisitions.  The Company currently has no agreements or
understandings with respect to any acquisitions and there can be no assurance
that the Company will be successful in pursuing other potential acquisitions.
However, the costs associated with this strategy, means of financing any
potential acquisitions, and consummation and integration of any potential
acquisitions could significantly impact the Company's financial and operating
performance.


                                     14


<PAGE>   16


ITEM 8.  FINANCIAL STATEMENTS


     Listed below are the financial statements and supplementary data included
in this part of the Annual Report on Form 10-KSB:

(a)  Financial Statements                               Page No.
     --------------------                               --------
        Report of Independent                              16
        Certified Public Accountants

        Balance Sheets at December 31, 1996             17 - 18
        and at December 31, 1997

        Statements of Operations for the years ended       19
        December 31, 1996 and 1997

        Statements of Shareholders' Equity for             20
        the years ended December 31, 1996 and 1997

        Statements of Cash Flow for the years ended        21
        December 31, 1996 and 1997
        Notes to Financial Statements                   22 - 32



                                     15


<PAGE>   17




REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Vita Food Products, Inc.

We have audited the accompanying balance sheets of Vita Food Products, Inc. as
of December 31, 1996 and 1997, and the related statements of operations,
shareholders' equity and cash flows for the years then ended.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit 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 audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vita Food Products, Inc. at
December 31, 1996 and 1997, and the results of its operations and cash flows
for the years then ended, in conformity with generally accepted accounting
principles.



                                                                BDO Seidman, LLP


Chicago, Illinois
February 28, 1998


                                     16





<PAGE>   18


                           VITA FOOD PRODUCTS, INC.

                                 BALANCE SHEETS





<TABLE>
<CAPTION>

December 31,                                                                          1996             1997
-----------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>             <C>
ASSETS (Note 3)
Current Assets
  Cash                                                                             $      88,221    $     107,933
  Accounts receivable - trade, net of allowance for returns and
    doubtful accounts of $190,000 and $322,000 in 1996 and 1997                        3,212,157        3,560,519
  Income tax receivable                                                                        -          250,000
  Inventories
    Raw materials and supplies                                                         3,167,911        2,650,805
    Work in process                                                                      168,604          135,157
    Finished goods                                                                     1,473,172        1,516,246
  Prepaid expenses and other current assets                                              152,845          262,533
  Deferred income taxes (Note 4)                                                         300,000          200,000
-----------------------------------------------------------------------------------------------------------------
Total Current Assets                                                                   8,562,910        8,683,193
-----------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment
  Building and improvements                                                            1,379,056        1,399,077
  Machinery and office equipment                                                       3,984,517        4,473,138
-----------------------------------------------------------------------------------------------------------------
                                                                                       5,363,573        5,872,215
  Less accumulated depreciation and amortization                                       3,337,129        3,657,788
-----------------------------------------------------------------------------------------------------------------
                                                                                       2,026,444        2,214,427
  Land                                                                                    35,000           35,000
-----------------------------------------------------------------------------------------------------------------
Net Property, Plant and Equipment                                                      2,061,444        2,249,427
-----------------------------------------------------------------------------------------------------------------
Other Assets (including deferred public offering costs of
  $613,028 in 1996) (Note 9)                                                             715,677          215,444
-----------------------------------------------------------------------------------------------------------------
                                                                                   $  11,340,031    $  11,148,064
=================================================================================================================
</TABLE>
                                 See accompanying notes to financial statements.


                                      17

<PAGE>   19


                           VITA FOOD PRODUCTS, INC.

                                BALANCE SHEETS



<TABLE>
<CAPTION>

December 31,                                                                             1996             1997
----------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>              <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
  Current maturities of long-term obligations (Note 3)                            $     307,403    $     322,076
  Accounts payable                                                                    3,455,681        1,488,241
  Accrued expenses (Notes 2 and 5)                                                    1,322,171        1,566,182
  Income taxes payable                                                                  249,482                -
----------------------------------------------------------------------------------------------------------------
Total Current Liabilities                                                             5,334,737        3,376,499
----------------------------------------------------------------------------------------------------------------
Long-Term Obligations, less current maturities (Note 3)                               5,419,159        4,953,242
----------------------------------------------------------------------------------------------------------------
Commitments and Contingencies (Notes 5, 6, and 10)

Shareholders' Equity (Notes 8 and 9)
  Preferred stock, $.01 par value, authorized 1,000,000 shares;
    none issued                                                                               -                -
  Common stock, $.01 par value; authorized 10,000,000 shares;
    issued and outstanding 2,950,000 and 3,700,000 shares                                29,500           37,000
  Additional paid-in capital                                                            196,000        3,348,273
  Retained earnings (deficit)                                                           360,635         (566,950)
----------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity                                                              586,135        2,818,323
----------------------------------------------------------------------------------------------------------------
                                                                                  $  11,340,031    $  11,148,064
================================================================================================================
</TABLE>

                                 See accompanying notes to financial statements.


                                      18


<PAGE>   20
                              VITA FOOD PRODUCTS

                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>

Year ended December 31,                                     1996             1997
-------------------------------------------------------------------------------------
<S>                                                   <C>              <C>
Net Sales (Note 7)                                    $  22,687,765    $   21,949,884
Cost of Goods Sold (Note 5)                              15,587,552        16,075,084
-------------------------------------------------------------------------------------
Gross margin                                              7,100,213         5,874,800
-------------------------------------------------------------------------------------
Selling, Marketing and Administrative Expenses
  Selling and marketing                                   4,343,053         4,767,095
  Administrative                                          1,540,426         1,793,830
-------------------------------------------------------------------------------------
                                                          5,883,479         6,560,925
-------------------------------------------------------------------------------------
Operating profit (loss)                                   1,216,734          (686,125)
-------------------------------------------------------------------------------------
Other (Income) Expense
  Other income                                              (82,898)                -
  Interest                                                  546,678           391,460
-------------------------------------------------------------------------------------
Income (loss) before income tax benefit                     752,954        (1,077,585)
Income Tax Benefit (Note 4)                                 (65,000)         (150,000)
-------------------------------------------------------------------------------------
Net Income (Loss)                                     $     817,954    $     (927,585)
=====================================================================================
Basic and Diluted Earnings (Loss) Per Common Share    $        0.28    $        (0.25)
=====================================================================================
Weighted Average Common Shares Outstanding                2,960,000         3,667,100
=====================================================================================
</TABLE>

                                See accompanying notes to financial statements.



                                      19

<PAGE>   21

                          VITA FOOD PRODUCTS, INC.


                     STATEMENTS OF SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                       COMMON STOCK
                                -------------------------        ADDITIONAL       RETAINED
                                SHARES             AMOUNT         PAID-IN         EARNINGS           TOTAL
                                                                  CAPITAL         (DEFICIT)
---------------------------------------------------------------------------------------------------------------
<S>                               <C>           <C>          <C>                 <C>              <C>
Balance, at January 1, 1996       2,950,000     $  29,500    $     196,000       $  (457,319)      $  (231,819)

Net income                                -             -                -           817,954           817,954

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

Balance, at December 31, 1996     2,950,000        29,500          196,000           360,635           586,135

Net proceeds from initial public
  offering (Note 9)                 750,000         7,500        3,152,273                           3,159,773

Net loss                                  -             -                -          (927,585)         (927,585)

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

Balance, at December 31, 1997     3,700,000     $  37,000    $   3,348,273       $  (566,950)     $  2,818,323

===============================================================================================================
</TABLE>


                                 See accompanying notes to financial statements.


                                      20


<PAGE>   22

                          VITA FOOD PRODUCTS, INC.

                          STATEMENTS OF CASH FLOWS




<TABLE>
<CAPTION>


Year ended December 31,                                                                 1996              1997
----------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>             <C>
Cash Flows From Operating Activities
  Net income (loss)                                                               $    817,954    $     (927,585)
  Adjustments to reconcile net income (loss) to net cash provided by
    (used in) operating activities
    Depreciation and amortization                                                      293,708           322,623
    Deferred income taxes                                                             (300,000)          100,000
    Changes in assets and liabilities
      Decrease (increase) in accounts receivable                                       586,490          (348,362)
      (Increase) decrease in inventories                                              (334,833)          507,479
      Increase in income tax receivable                                                      -          (250,000)
      Increase in prepaid expenses and other assets                                    (58,277)         (224,447)
      Decrease in accounts payable                                                    (481,178)       (1,967,440)
      Increase in accrued expenses                                                     240,840           244,011
      Increase (decrease) in income taxes payable                                      249,482          (249,482)
----------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities                                  1,014,186        (2,793,203)
----------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities
  Capital expenditures                                                                (456,169)         (449,131)
----------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                 (456,169)         (449,131)
----------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
  Public offering costs                                                               (613,028)                -
  Net public offering proceeds                                                               -         3,772,801
  Net borrowings (payments) under revolving loan facility                              269,536          (162,817)
  Term loan facility proceeds                                                          122,168                 -
  Payments on term loan facility                                                      (285,511)         (330,451)
  Payments of capital lease obligations                                                 (8,255)          (17,487)
----------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities                                   (515,090)        3,262,046
----------------------------------------------------------------------------------------------------------------
Net Increase in Cash                                                                    42,927            19,712

Cash, at beginning of year                                                              45,294            88,221
----------------------------------------------------------------------------------------------------------------
Cash, at end of year                                                              $     88,221    $      107,933
================================================================================================================
Supplemental Disclosure of Cash Flow Information
  Cash paid for interest                                                          $    530,639    $      490,658
  Income taxes paid                                                                        550           261,000

Noncash Investing and Financing Activities
  Capital lease obligation                                                                   -            59,511
</TABLE>



                                 See accompanying notes to financial statements.

                                      21
<PAGE>   23
                           VITA FOOD PRODUCTS, INC.

                        NOTES TO FINANCIAL STATEMENTS

                                      A summary of the significant accounting
1. SUMMARY OF                         policies utilized in the preparation of
   SIGNIFICANT ACCOUNTING             the accompanying financial statements
   POLICIES                           follows.

   INDUSTRY                           The Company processes and sells various
                                      herring, and cured and smoked salmon
                                      products.  In addition, the Company sells
                                      other complementary specialty food
                                      products.

   CONCENTRATION OF                   Financial instruments that potentially
   CREDIT RISK                        subject the Company to significant
                                      concentrations of credit risk consist
                                      principally of trade accounts receivable.
                                      The Company primarily provides credit in
                                      the normal course of business.  The
                                      Company performs ongoing credit
                                      evaluations of its customers and
                                      maintains allowances for potential credit
                                      losses, if necessary.

   MERCHANDISE RETURNS                In accordance with industry practices,
                                      inventory is sold to customers often with
                                      the right to return if the merchandise is
                                      not sold prior to the expiration of its
                                      shelf life.  Sales are reduced by a
                                      provision for estimated future returns.

   INVENTORIES                        Inventories are stated at the lower of
                                      cost or market.  Costs are determined by
                                      the first-in, first-out ("FIFO") method.

   PROPERTY, PLANT                    Property, plant and equipment are stated
   AND EQUIPMENT                      at cost.  Depreciation and amortization
                                      are being provided, on accelerated and
                                      straight-line methods, over the estimated
                                      useful lives of the assets.  Leasehold
                                      improvements are being amortized on a
                                      straight-line basis over the lives of the
                                      respective leases or the service lives of
                                      the improvements, whichever is shorter.
                                      Repair and maintenance items are expensed
                                      as incurred.

   LONG-LIVED                         The Company reviews the carrying values
   ASSETS                             of its long-lived and identifiable
                                      intangible assets for possible impairment
                                      whenever events or changes in
                                      circumstances indicate that the carrying
                                      amount of the assets may not be
                                      recoverable.  Any long-lived assets held
                                      for disposal are reported at the lower of
                                      their carrying amounts or fair value less
                                      cost to sell.

   DEFERRED PUBLIC                    Fees, costs and expenses related to the
   OFFERING COSTS                     proposed public offering were charged
                                      against the proceeds therefrom.

   ESTIMATES                          The accompanying financial statements
                                      include estimated amounts and disclosures
                                      based on management's assumptions about
                                      future events.  Actual results may differ
                                      from those estimates.

                                      22

<PAGE>   24

                           VITA FOOD PRODUCTS, INC.

                        NOTES TO FINANCIAL STATEMENTS


ADVERTISING                           Advertising costs are expensed as
                                      incurred and included in "selling and
                                      marketing expenses." Advertising expenses
                                      amounted to approximately $752,000 and
                                      $820,000 in 1996 and 1997, respectively.

INCOME TAXES                          The Company recognizes deferred tax
                                      assets and liabilities for the expected
                                      future tax consequences of temporary
                                      differences between the tax basis and
                                      financial reporting basis of certain
                                      assets and liabilities based upon
                                      currently enacted tax rates expected to
                                      be in effect when such amounts are
                                      realized or settled.
BASIC AND DILUTED
EARNINGS (LOSS) PER
COMMON SHARE
                                      The Company adopted SFAS 128, "Earnings
                                      Per Share", which simplified the standard
                                      for computing earnings per share and
                                      requires presentation of two new amounts,
                                      basic and diluted earnings per share.

                                      Basic earnings per share is computed by
                                      dividing income available to common
                                      shareholders by the weighted-average
                                      number of common shares outstanding.
                                      Diluted earnings per share follows the
                                      computation of basic earnings per share
                                      and gives effect to all dilutive
                                      potential common shares that were
                                      outstanding during the year.

                                      Options outstanding during both year ends
                                      were not included in the computation of
                                      diluted earnings per share because the
                                      options' exercise price was greater than
                                      the average market price of the common
                                      shares.

2. ACCRUED EXPENSES                   Accrued expenses consist of the following:

<TABLE>
<CAPTION>

December 31,                                 1996               1997
------------------------------------------------------------------------
<S>                                       <C>                <C>
Promotion accrual                         $  647,500         $  820,754
Metropolitan Water Reclamation
  District user charges                      359,000            293,816
Accrued interest                             137,252             38,054
Accrued salaries and bonuses                 108,050            260,937
Other                                         70,369            152,621
-------------------------------------------------------------------------
                                          $1,322,171         $1,566,182
=========================================================================
</TABLE>

                                      23
<PAGE>   25
                          VITA FOOD PRODUCTS, INC.

                        NOTES TO FINANCIAL STATEMENTS


3. LONG-TERM
OBLIGATIONS                   Long-term obligations consist of the following:

<TABLE>
<CAPTION>
December 31,                                              1996                                    1997
--------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                                     <C>
Revolving loan facility due in April                     $  4,063,202                            $  3,900,385
  1999.  Interest at prime (8.25% in 1996) plus
  5/8% through January 16, 1997, and thereafter
  at prime (8.5% in 1997)(a).
Term loan facility payable in monthly                       1,332,947                               1,002,496
  Installments of $24,760 in 1996 and 1997 plus
  interest at prime plus 5/8% through January 16,
  1997, and thereafter at prime through March
  1999.  Final payment of principal and interest
  due in April 1999 (a).
10% unsecured and 8% secured                                 315,154                                  315,154
  subordinated notes payable to the shareholders
  of the Company.  The notes are subordinated to
  the advances under the loan and security
  agreement.  Interest is payable each November 1
  and the principal is payable February 1, 2000
  and December 31, 1998, respectively.
Capitalized lease obligations                                 15,259                                   57,283
--------------------------------------------------------------------------------------------------------------
                                                           5,726,562                                5,275,318
Less current maturities                                      307,403                                  322,076
--------------------------------------------------------------------------------------------------------------
                                                        $  5,419,159                             $  4,953,242
==============================================================================================================
</TABLE>


 (a) The Company has a loan and security agreement (the "Agreement") with a
       bank consisting of a revolving loan facility and a term loan facility,
       with maximum borrowing limits of $5,250,000 and $1,500,000, respectively.
       All assets of the Company are pledged as collateral for all borrowings
       under the Agreement.  The Agreement provides that the Company must meet
       certain covenants including a current ratio of at least 0.75 to 1 and an
       annual limit for capital expenditures, and provides for restrictions on
       the payment of dividends.  At December 31, 1997, the Company was in
       compliance with these covenants.

                                      24



<PAGE>   26

                           VITA FOOD PRODUCTS, INC.

                        NOTES TO FINANCIAL STATEMENTS


Scheduled annual maturities of long-term obligations as of
December 31, 1997 are as follows:

<TABLE>
<CAPTION>
Year ending December 31,
-------------------------------------------------------
<S>                                        <C>
1998                                     $    322,076
1999                                        4,698,429
2000                                          238,297
2001                                           16,516
-------------------------------------------------------
                                         $  5,275,318
=======================================================
</TABLE>

The Company incurred interest expense with related parties of
$44,500 and $33,400 for the years ended December 31, 1996 and
1997, respectively.

The Company leases certain equipment under capitalized lease
agreements.  The leases are noncancellable and expire in 2001.
The following is a schedule of future minimum payments under the
capital leases as of December 31, 1997, together with the present
value of net minimum lease payments:

<TABLE>
<CAPTION>

Year ending December 31,
---------------------------------------------------
<S>                                       <C>
1998                                       $ 24,181
1999                                         18,182
2000                                         18,182
2001                                         18,182
---------------------------------------------------

Net minimum lease payments                   78,727

Less amount representing interest            21,444
---------------------------------------------------
Present value of net minimum lease payment $ 57,283
===================================================
</TABLE>

                                      25
<PAGE>   27
                          VITA FOOD PRODUCTS, INC.

                        NOTES TO FINANCIAL STATEMENTS

                         The equipment which is leased under the
                         capitalized lease agreements and classified as
                         machinery and office equipment in the accompanying
                         balance sheets is as follows:

<TABLE>
<CAPTION>
                        December 31,                                                           1996                   1997
                        --------------------------------------------------------------------------------------------------
                        <S>                                                                <C>                   <C>
                        Cost                                                               $ 26,977              $  86,488
                        Accumulated amortization                                              5,781                 13,880
                        --------------------------------------------------------------------------------------------------
                                                                                           $ 21,196              $  72,608
                        ==================================================================================================
</TABLE>

4. INCOME                Deferred income taxes reflect the net tax effects of
   TAXES                 temporary differences between the carrying amounts of
                         assets and liabilities for financial reporting purposes
                         and the amounts used for income tax purposes.  The tax
                         effects of existing temporary differences that give
                         rise to significant portions of the net deferred tax
                         assets are as follows:
<TABLE>
<CAPTION>
                         December 31,                                               1996                      1997
                         -----------------------------------------------------------------------------------------
                         <S>                                                  <C>                       <C>
                         Deferred tax assets
                           Allowance for doubtful receivables and
                             product returns                                  $  308,000                $  143,000
                           Uniform inventory capitalization                       38,000                    36,000
                           Accrued liabilities                                   144,000                    40,000
                           Net operating loss carryforwards                           -                    488,000
                         -----------------------------------------------------------------------------------------
                                                                                 490,000                   707,000
                         Deferred tax liability
                           Depreciation                                          (56,000)                 (111,000)
                         -----------------------------------------------------------------------------------------
                                                                                 434,000                   596,000
                         Less valuation allowance                               (134,000)                 (396,000)
                         -----------------------------------------------------------------------------------------
                         Net deferred tax asset                               $  300,000                $  200,000
                         =========================================================================================
</TABLE>

                         The valuation allowance decreased by $316,000 in 1996
                         and increased by $262,000 in 1997.


                                      26

<PAGE>   28

                           VITA FOOD PRODUCTS, INC.

                        NOTES TO FINANCIAL STATEMENTS


                Based on its projected pretax income for the year ended
                December 31, 1998, which would allow the Company to
                partially utilize its net operating loss carryforwards, the
                Company determined that a partial recognition of the
                deferred tax asset valuation allowance was appropriate.
                The Company determined, as of December 31, 1997, that it
                was more likely than not that it would not be able to fully
                realize the remaining net deferred tax assets.  The Company
                based this determination on the uncertainty of the effects
                on future pretax income of the Company's acquisition
                strategy and its planned construction of an improved
                facility.  During the year ended December 31, 1996, the
                Company utilized approximately $175,000 of net operating
                loss carryforwards.

                Income tax benefit at December 31, 1996 and 1997 consists of
                the following:

                                      27



<PAGE>   29
                           VITA FOOD PRODUCTS, INC.

                        NOTES TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                        Year ended December 31,                                    1996                              1997
                        -------------------------------------------------------------------------------------------------
                         <S>                                                 <C>                            <C>
                         Current                                             $  294,500                      $   (250,000)
                         Utilization of net operating loss
                           Carryforward                                         (59,500)                                -
                         Deferred                                                16,000                          (162,000)
                         Adjustment of valuation allowance                     (316,000)                          262,000
                         ------------------------------------------------------------------------------------------------
                         Income tax benefit                                  $  (65,000)                      $  (150,000)
                         ================================================================================================

</TABLE>

                         The reconciliation of income tax computed at the
                         United States federal statutory tax rate of 34% to
                         income tax benefit is as follows:

<TABLE>
<CAPTION>

                        Year ended December 31,                                   1996                             1997
                        -----------------------------------------------------------------------------------------------
                        <S>                                                 <C>                             <C>
                        Tax at federal statutory rate                       $  256,000                      $  (366,000)
                        Deferred tax valuation allowance                      (316,000)                         262,000
                        Other                                                   (5,000)                         (46,000)
                       ------------------------------------------------------------------------------------------------
                        Income tax benefit                                  $  (65,000)                     $  (150,000)
                       ================================================================================================
</TABLE>


5. COMMITMENTS AND       In the ordinary course of business, the Company
   CONTINGENCIES         enters into purchase commitments for raw materials and
                         does not anticipate any losses.  The Company purchases
                         a majority of its herring from one supplier.  The
                         supplier has the option to supply up to 90% of the
                         Company's annual requirements for herring, provided
                         that the supplier agrees to supply the herring at
                         competitive prices

                         At December 31, 1997, the Company is required to
                         purchase approximately $800,000 under one of these
                         agreements.

                         The Company is contesting the amount of user
                         charges assessed by the Metropolitan Water Reclamation
                         District for 1997,  1996, 1995 and 1994.  The Company
                         has provided accruals of approximately $294,000 as of
                         December 31, 1997 for user charges.  These accruals are
                         based upon an estimate provided by an independent
                         consultant.  If the Company is not successful in its
                         protest, the Company would be required to pay an
                         additional $184,000.  However, the Company believes
                         that any potential additional liability will not have a
                         material adverse effect on the Company's business,
                         financial condition or results of operations.  The
                         Company further believes that the eventual liability
                         will not materially exceed its presently established
                         accruals.

                                      28


<PAGE>   30

                           VITA FOOD PRODUCTS, INC.

                        NOTES TO FINANCIAL STATEMENTS

                         In the ordinary course of business, the
                         Company becomes involved in litigation as a defendant
                         in various lawsuits.  In the opinion of management,
                         after considering the advice of counsel, the ultimate
                         resolution of these legal proceedings will not have a
                         material effect on the financial statements taken as a
                         whole and thus no provision has been made in the
                         financial statements for any loss contingencies.

6. EMPLOYEE BENEFIT      The Company has established a qualified profit
   PLANS                 sharing plan covering its nonunion  employees.
                         Participants may elect to defer a portion of annual
                         compensation.  The Company may contribute amounts
                         at the discretion of the board of directors.

                         The Company made no contribution in 1996 and 1997.

                         Additionally, the Company participates in two
                         multiemployer plans that provide benefits to the
                         Company's union employees.  Contributions to the plans
                         for the years ended December 31, 1996 and 1997 were
                         $32,300 and $40,400, respectively.

7. MAJOR CUSTOMER        The Company had sales to one customer in 1996
                         representing 10% of net sales.  In 1997, the Company
                         did not have sales to any customers that exceeded 10%
                         of net sales.

8. CAPITAL               In September 1996, the Company reincorporated in
                         the State of Nevada via a merger of the Illinois
                         corporation into the Company, which was a Nevada
                         corporation formed in September 1996.  The ratio of
                         shares of the Illinois corporation to the Nevada
                         corporation is 5,412.745:1 and the ratio of shares of
                         V-F Acquisition, Inc., an investor group of the
                         Illinois corporation, to the Nevada corporation is
                         54.12745:1.  The shares of the Illinois corporation
                         held by V-F Acquisition, Inc., the Illinois
                         corporation's largest shareholder, were canceled in the
                         merger. Further, the Nevada corporation changed its
                         name to Vita Food Products, Inc. upon completion of the
                         merger.  After the merger there were 2,950,000 shares
                         of common stock of the Company issued and outstanding.


                                      29
<PAGE>   31
                          VITA FOOD PRODUCTS, INC.

                        NOTES TO FINANCIAL STATEMENTS

                  On September 11, 1996, the Company adopted the Vita
                  Food Products, Inc. 1996 Stock Option Plan (the "Plan")
                  pursuant to which 325,000 shares of common stock have been
                  reserved for issuance upon the exercise of options designated
                  as either an "incentive stock option" or as a "nonqualified
                  stock option." These options may be granted to employees or
                  other constituencies of the Company, including members of the
                  board of directors who are employees.  On September 11, 1996,
                  the Company also adopted the Vita Food Products, Inc. 1996
                  Stock Option Plan for Non-Employee Directors (the "Director
                  Plan") pursuant to which 75,000 shares of common stock have
                  been reserved for issuance upon the exercise of options
                  designated as a "nonqualified stock option."  These options
                  may be granted to directors who are not employees of the
                  Company.  Further, in September 1996, the Company adopted the
                  1996 Employee Stock Purchase Plan pursuant to which 150,000
                  shares of common stock have been reserved for issuance.

                  Information with respect to the stock option plans follows:

<TABLE>
<CAPTION>
                 Year ended December 31,                              1996                              1997
                 ---------------------------------------------------------------------------------------------
                 <S>                                               <C>                               <C>
                 Options outstanding at beginning of year                -                            80,000
                 Options granted                                    80,000                           180,500
                 Options cancelled                                       -                            80,000
                 ============================================================================================
                 Options outstanding at end of year                 80,000                           180,500
                 ============================================================================================
                 Options prices per share granted                    $5.22                    $  3.50 - 4.88
                 ============================================================================================
                 Weighted Average Exercise Price
                 Options Granted                                     $5.22                             $3.58
                 Options Cancelled                                       -                             $5.22
                 ============================================================================================
                 </TABLE>


                                      30


<PAGE>   32

                                VITA FOOD PRODUCTS, INC.

                             NOTES TO FINANCIAL STATEMENTS



                  The Company applies APB Opinion 25 and related
                  interpretations in accounting for its plans.  Accordingly, no
                  compensation cost has been recognized for its Plan, Director
                  Plan and Employee Stock Purchase Plan.

                  The weighted-average, grant date fair value of stock
                  options granted to employees during the year and the
                  weighted-average significant assumptions used to determine
                  those fair values, using a modified Black-Sholes option
                  pricing model, and the pro forma effect on earnings of the
                  fair value accounting for stock options under Statement of
                  Financial Accounting Standards No. 123, are as follows:

<TABLE>
<CAPTION>

                                                                                 1996        1997
                                                                                -----       -----
                  <S>                                                        <C>        <C>
                  Weighted average fair value per options                       $2.55       $0.46
                    Granted

                  Significant assumptions (weighted average)
                    Risk-free interest rate at grant date                         6.7%        6.2%
                    Expected stock price volatility                              0.25        0.25
                    Expected dividend payout                                      -0-         -0-
                    Expected option life (years)                                    5           5

                  Net Income (loss)
                    As reported                                              $817,954   ($927,585)
                    Pro forma                                                $812,854   ($934,132)

                  Net earnings (loss) per share
                    As reported                                                 $0.28      ($0.25)
                    Pro forma                                                   $0.27      ($0.25)
</TABLE>


9. INITIAL        In January 1997, the Company completed a public offering
   PUBLIC         of 750,000 new shares of its common stock and 750,000
   OFFERING       redeemable common stock purchase warrants.  Pursuant to the
                  underwriters' exercise of a portion of the over-allotment
                  option, the Company issued an additional 96,500 redeemable
                  common stock purchase warrants in February 1997.  The Company
                  received aggregate proceeds net of underwriting commissions
                  and expenses of approximately $3.2 million from this offering.

                                      31

<PAGE>   33
                            VITA FOOD PRODUCTS, INC.

                         NOTES TO FINANCIAL STATEMENTS


10. EMPLOYMENT           The Company has employment agreements with
    CONTRACTS            three officers of the Company, with two extending
                         through January 2000 and the other through January
                         1999.  Under the terms of these agreements, two
                         officers are entitled to be paid a salary of $215,000
                         annually and one officer a salary of $110,000 annually
                         (adjusted annually for increases in the cost of living
                         index), plus bonuses, if any, and certain perquisites.

11. FOURTH QUARTER,      The fourth quarter loss is not typical
    1997 PERFORMANCE     for the Company's historical fourth quarter financial
                         performance. The lower profitability in the fourth
                         quarter of 1997 was due, in part, to several factors
                         including lower sales and profit margins, increased
                         promotional activity for the Company's newer products
                         and new geographic markets, and approximately $250,000
                         of non-recurring production expenses. Management is
                         taking steps, including the construction of the
                         Improved Facility, to return the Company's fourth
                         quarter performance 11. FOURTH to historical  levels.



ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

          Not Applicable

                                  PART III

ITEM 10.  DIRECTORS, AND EXECUTIVE OFFICERS; COMPLIANCE WITH SECTION 16(a) OF
          EXCHANGE ACT.


     The directors and executive officers of the Company, and their respective
ages and principal positions as of March 20, 1998, are as follows:




<TABLE>
<CAPTION>
NAME                                          AGE  POSITION WITH THE COMPANY
----                                          ---  -------------------------
<S>                                           <C>  <C>
Stephen D. Rubin...........................   58   President
Clark L. Feldman............................  63   Executive Vice
                                                   President, Secretary and
                                                   Director
Jay H. Dembsky............................    37   Vice President, Chief
                                                   Financial, Officer and
                                                   Treasurer
Sam Gorenstein(2)........................     50   Director
Jeffrey Rubenstein(1,2).................      56   Director
Neal Jansen(1,2)...........................   60   Director
Michael Horn(2).............................  61   Director
Steve Rothstein(2)........................    47   Director
</TABLE>

------------------
(1)  Member of the Audit Committee
(2)  Member of the Compensation Committee



                                     32


<PAGE>   34


     MR. RUBIN has served as President of the Company since 1982.  Mr. Rubin is
responsible for the overall operations of the Company with an emphasis on
production and quality control.  Previously, Mr. Rubin was the owner and chief
operating officer of several other companies which included food, manufacturing
and industrial companies.  Mr. Rubin received a B.B.A. from the University of
Wisconsin and a J.D. from the University of Wisconsin Law School.

     MR. FELDMAN has served as a director and Executive Vice President and
Secretary of the Company since the Company was acquired in 1982.  Mr. Feldman
has an extensive background in strategic financial planning and marketing and
is responsible for all sales personnel, including brokers.  Mr. Feldman
received  a B.S. from Indiana University.

     MR. DEMBSKY became Vice President, Chief Financial Officer and Treasurer
of the Company in October, 1996 and is responsible for all financial matters
for the Company.  From 1988 until joining the Company in 1996, Mr. Dembsky held
a number of positions with Duff & Phelps, LLC, a corporation valuation advisory
and investment banking firm. Mr. Dembsky served as a Vice President of Duff &
Phelps, LLC, from 1992 to 1996.  Mr. Dembsky has a 13-year background in
corporate finance, accounting, and strategic and financial planning and
received his CPA certification in 1984 and CFA certification in 1991.  Mr.
Dembsky received a M.M. from the J.L. Kellogg Graduate School of Management at
Northwestern and a B.S. from the Wharton School of the University of
Pennsylvania.


     MR. GORENSTEIN has served as a director of the Company since February,
1990. For the past 20 years, Mr. Gorenstein has served as Secretary of Three G
Care Management, Inc., a nursing home management company. Mr. Gorenstein is
also a major shareholder of Three G Care Management, Inc. Mr. Gorenstein
attended the University of Manitoba in Winnipeg, Canada.


     MR. RUBENSTEIN has served as a director of the Company since November,
1984.  For the past five years Mr. Rubenstein has been a principal in the law
firm of Much Shelist Freed Denenberg Ament Bell & Rubenstein, P.C.  Mr.
Rubenstein is also currently a director of Miller Building Systems, Inc. and
Home Products International, Inc.  Mr. Rubenstein received an A.B. and a J.D.
from the University of Michigan and an L.L.M in taxation from John Marshall Law
School.


     MR. JANSEN has served as a director of the Company since April, 1983.  Mr.
Jansen is currently CEO and Chairman of Farm Fresh Catfish Co. From 1986
to 1996, he served as President and CEO of Pies, Inc. and was a major
shareholder until it was sold to Flowers Industries in 1991.  Prior to 1986 he
was President of Gordon Fleming and Associates, a food brokerage company in
Minnesota, and a Senior Vice President of Red Owl Stores, Inc., a large
Midwestern supermarket chain.  Mr. Jansen received a B.A. from St. Norbert
College and an M.B.A. from Michigan State University.

     MR. HORN has served as a director of the Company since April, 1983.  For
the past six years, Mr. Horn, as the largest shareholder of Save More Foods
Supermarkets and a significant shareholder of Performance Foods of Wisconsin,
Inc., has acted in a management advisory role to both companies.  Prior to that
Mr. Horn was president of the Green Bay Division of Super Valu Stores, Inc., a
national grocery food wholesaler and distributor.  Mr. Horn is also a Vice
President and a director on the Executive Committee of the Green Bay Packer
Hall of Fame.  Mr. Horn has a B.A. degree in business from the University of
Minnesota at Duluth.

     MR. ROTHSTEIN has served as a director of the Company since May 1, 1997.
Mr. Rothstein  has been Chairman of the Board of National Securities
Corporation, a securities broker-dealer and a Representative of the
Underwriters, since 1995.  From 1994 to 1995, Mr. Rothstein was employed by
H.J. Meyers & Co., a securities broker-dealer, and from 1992 to 1994, he was
employed by Rodman and Renshaw, a securities broker-dealer, in both cases as a
Managing Director.  From 1989 to 1992, Mr. Rothstein served as a Managing
Director of Oppenheimer & Co., a securities broker-dealer.  From 1979 to 1989,
Mr. Rothstein was a limited partner of Bear Stearns & Co., a securities
broker-dealer.  Mr. Rothstein currently is a director of SigmaTron
International, Inc. and New World Coffee, Inc., both of which are publicly held
companies.  Mr. Rothstein received an A.B. from Brown University in Providence,
Rhode Island.

                                     33


<PAGE>   35


COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the 1934 Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company.  Executive officers, directors, and greater
than ten-percent shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.

     Based solely upon the Company's review of the copies of such reports
furnished to the Company or written representations that no other reports were
required, the Company believes that during the 1997 fiscal year, all Section
16(a) filling requirements applicable to its executive officers, directors and
greater than ten-percent beneficial owners were complied with, except that (i)
Steven A. Rothstein inadvertently failed to timely file a Form 3 upon becoming
a director in May, 1997, (ii) Steven A. Rothstein inadvertently failed to
timely file a Form 4 with respect to warrants to purchase 222,777 shares of
Common Stock purchased in November, 1997 and (iii) Neal Jansen inadvertently
failed to timely file a Form 4 with respect to 3,000 shares of Common Stock and
warrants to purchase 3,000 shares of Common Stock purchased in January, 1997.


ITEM 11.  EXECUTIVE COMPENSATION

     The following table sets forth the compensation awarded to the chief
executive officer and each other executive officer of the Company where
aggregate compensation for services in all capacities rendered during the year
ended December 31, 1997 exceeded $100,000 (the "Named Executive Officers.").
Mr. Rubin became President of the Company in March, 1982.  Mr. Feldman became
Executive Vice President and Secretary of the Company in March, 1982.  Mr.
Dembsky became Treasurer of the Company in October, 1996.  The compensation
paid to Mr. Dembsky in 1996 is not required to be disclosed in this table.



                         SUMMARY COMPENSATION TABLE



<TABLE>
<CAPTION>
                                           -----------------------------------
                                                   ANNUAL COMPENSATION
                                                                OTHER ANNUAL
NAME AND PRINCIPAL POSITION          YEAR   SALARY    BONUS    COMPENSATION(1)
---------------------------          ----  --------  ------    ---------------
<S>                                  <C>   <C>       <C>         <C>
Stephen D. Rubin                     1997  $212,070  -           $28,712
  President, Treasurer and           1996  $212,934  $15,000     $29,447
  Director                           1995  $207,001  $15,000     $24,154

Clark L. Feldman                     1997  $213,172        -           -
  Executive Vice President           1996  $226,523  $15,000           -
  Secretary and Director             1995  $218,068  $15,000           -

Jay H. Dembsky
  Treasurer and Chief Financial
  Officer                            1997  $110,044  $40,000           -
</TABLE>

------------------
(1) This column reflects perquisite compensation  if such compensation exceeds
the lesser of $50,000 or 10% of the Named Executive Officer's total salary and
bonus. For fiscal years ended December 31, 1996, and 1995, respectively, Mr.
Rubin's perquisites included $8,505 and $11,042 for lease payments for a car
which were paid by the Company. For the fiscal year ended December 31, 1996 and
1995, respectively, Mr. Rubin's perquisites included $10,922 for payments for
club dues and $7,644 for health insurance payments for Mr. Rubin's family
members which were paid by the Company.  For the fiscal year ended December 31,
1997, no one item represented more than 25% of "Other Annual Compensation" for
Mr. Rubin.


                                     34


<PAGE>   36

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
     VALUES

     The following table provides information on option exercises in fiscal
1997 by the Named Executive Officers and the value of such officers'
unexercised options at December 31, 1997.




<TABLE>
<CAPTION>

                                          Number of Unexercised       Value of Unexercised in the
                                                Options at                  Money Option at
                                             December 31, 1997            December 31, 1997 ($)
                                          ----------------------------------------------------------
                 Shares
                Acquired         Value
Name           On Exercise      Realized  Exercisable  Unexercisable  Exercisable     Unexercisable
----           -----------      --------  -----------  -------------  -----------     -------------
<S>              <C>              <C>       <C>          <C>              <C>              <C>
Jay H. Dembsky    --               --        --           80,000           --                --
</TABLE>



TEN-YEAR OPTION REPRICINGS

     During 1997, the Company's Board of Directors canceled options to purchase
80,000 shares of Common Stock held by Jay H. Dembsky at an exercise price of
$5.22 per share and issued replacement options to purchase the same number of
shares of Common Stock at an exercise price of $3.50 per share which exceeded
the fair market value, as defined in the 1996 Stock Option Plan on the date of
grant.  The options were canceled and repriced to provide a more realistic and
attainable incentive based on the market price of the Common Stock ($2.25) on
the date of grant.

EMPLOYMENT AGREEMENTS

     On January 16, 1997, the Company entered into a three-year employment
agreement with both Mr. Stephen D. Rubin and Mr. Clark L. Feldman (the
"Employment Agreements").  The terms of the Employment Agreements are identical
except for the capacity in which Mr. Rubin and Mr. Feldman are employed.  Under
the Employment Agreements, the Company agrees to employ Mr. Rubin as its
President and Mr. Feldman as its Executive Vice President, each at a salary of
$215,000 per year (adjusted for cost of living increases) plus certain
additional perquisites, not to exceed $30,000 per year, including, among other
things, a car payment allowance, reimbursement of country club or health club
membership dues and expenses, the right to designate a charitable contribution
to be paid by the Company and a non-accountable business expense allowance.
The Employment Agreements also provide that Mr. Rubin and Mr. Feldman may
receive an annual bonus based on Company and individual performance as
determined by the Board of Directors and the Compensation Committee and a
special bonus for any consulting work developed by Mr. Rubin or Mr. Feldman as
determined by the Board of Directors. The Employment Agreements provide for
termination of Mr. Rubin or Mr. Feldman (i) for "cause" as defined in the
Employment Agreements, (ii) upon Mr. Rubin's or Mr. Feldman's death or "total
disability," as defined in the Employment Agreements, or (iii) if Mr. Rubin or
Mr. Feldman terminates his employment because of a breach of the Employment
Agreements by the Company.  The Employment Agreements contain provisions that
restrict Mr. Rubin's and Mr. Feldman's ability to compete with the Company or
solicit its employees or customers for a specified period following the
termination of their employment.

     On January 16, 1997, the Company and Mr. Jay H. Dembsky, in connection
with his employment as the Company's Chief Financial Officer, entered into a
two-year employment agreement containing provisions which are substantially
similar to the provisions of the Employment Agreements of Mr. Rubin and Mr.
Feldman except that Mr. Dembsky will receive: (i) a salary of $110,000 per year
(adjusted for cost of living expenses) with a guaranteed bonus of $20,000 in
1997; (ii) options to purchase 80,000 shares of Common Stock at the initial
public offering price per share less the underwriting discount and pro rata
portion of the non-accountable expense allowance per share which were to vest
in 20% increments over a 5-year period; such options were cancelled and
replaced in November, 1997 by a grant of options to purchase the same number of
shares of Common Stock at $3.50 per share and the new options will vest over a
new 5-year period; and (iii) will receive a payment in an amount equal to twice
his salary and bonus for the previous fiscal year in the event of change in
control of the Company.


                                      35


<PAGE>   37



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth information as of March 20, 1998, with
respect to the beneficial ownership of the Company's outstanding shares of
Common Stock by each stockholder known by the Company to be the beneficial
owner of more than 5% of its Common Stock, each director, each executive
officer named in the Summary Compensation Table and all the directors and
executive officer of the Company as a group.




<TABLE>
<CAPTION>

                             SHARES BENEFICIALLY OWNED
                             -------------------------
NAME OF BENEFICIAL OWNER(1)  NUMBER(2)      PERCENT
---------------------------  ---------      -------
<S>                          <C>            <C>
Stephen D. Rubin...........  1,213,742        32.8%
Clark L. Feldman...........    623,303        16.8
Sam Gorenstein(3)..........    503,707        13.6
J.B.F. Enterprises(4)......    477,783        12.9
James Rubin(5).............    282,870         7.6
Jeffrey C. Rubenstein(6)...     98,239         2.7
Michael Horn(7)............      2,000          *
Neal Jansen(8).............      8,000          *
Steve Rothstein(9).........    224,777         5.7
All directors, and
executive officers as a
group (8 persons)(10)......  2,673,768        67.9%
</TABLE>


*    Less than 1% of the outstanding shares of Common Stock

(1)  The address of each of the executive officers and directors, unless noted
     otherwise in the footnotes, is c/o Vita Food Products, Inc., 2222 West
     Lake Street, Chicago, Illinois  60612.

(2)  Includes, when applicable, shares owned of record by such person's minor
     children and spouse and by other related individuals and entities over
     whose shares of Common Stock such person has custody, voting control, or
     power of disposition.


(3)  Includes 477,783 shares of Common Stock held by J.B.F. Enterprises, an
     Illinois general partnership ("J.B.F."), which are also listed as being
     beneficially owned by J.B.F.  Mr. Sam Gorenstein and his brother, David
     Gorenstein, are general partners of J.B.F. The address of Mr. Sam
     Gorenstein is 6770 North Lincoln Avenue, Suite 200, Lincolnwood, Illinois
     60046. Includes shares of Common Stock issuable upon exercise of options
     to purchase 2,000 shares of Common Stock which are exercisable within 60
     days.


(4)  Mr. Sam Gorenstein, a director of the Company, and Mr. David Gorenstein,
     the brother of Mr. Sam Gorenstein, are partners of J.B.F.  The address of
     J.B.F. is 6770 North Lincoln Avenue, Suite 200, Lincolnwood, Illinois
     60046. These shares are also included in the number of shares beneficially
     owned by Mr. Sam Gorenstein.


(5)  James Rubin is the brother of Stephen D. Rubin.  The address of James
     Rubin is 719 Sycamore Lane, Glencoe, Illinois 60022. Includes shares of
     Common Stock issuable upon exercise of options to purchase 2,000 shares of
     Common Stock which are exercisable within 60 days.

(6)  Mr. Rubenstein's address is 200 North LaSalle Street, Suite 2100,
     Chicago, Illinois 60601. Includes shares of Common Stock issuable upon
     exercise of options to purchase 2,000 shares of Common Stock which are
     exercisable within 60 days.

(7)  Mr. Horn's address is 835 Potts Avenue, Green Bay, Wisconsin 54303.
     Includes shares of Common Stock issuable upon exercise of options to
     purchase 2,000 shares of Common Stock which are exercisable within 60
     days.

(8)  Mr. Jansen's address is 6216 St. Albans Circle, Edina, Minnesota 55439.
     Includes shares of Common Stock issuable upon exercise of options to
     purchase 2,000 shares of Common Stock and warrants to buy 3,000 shares of
     Common Stock which are exercisable within 60 days.


(9)  Mr. Rothstein's address is 875 North Michigan Avemue, Suite 1560,
     Chicago, Illinois 60611.  Includes shares of Common Stock issuable upon
     exercise of options to purchase 2,000 shares of Common Stock and warrants
     to buy 222,777 shares of Common Stock which are exercisable within 60
     days.


(10) Includes 477,783 shares of Common Stock beneficially owned by J.B.F.
     which are also deemed to be beneficially owned by Mr. Sam Gorenstein,
     shares of Common Stock issuable upon exercise of options to purchase
     10,000 shares of Common Stock which are exercisable within 60 days and
     shares of Common Stock issuable upon exercise of warrants to buy 225,777
     shares of Common Stock which are exercisable within 60 days.


                                      36


<PAGE>   38




ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Pursuant to the initial purchase of the Company from Dean Foods in 1982,
the Company borrowed money at an interest rate of 10% per annum from certain
officers, directors and Company shareholders, evidenced by ten year unsecured
promissory notes entered into in March, 1982 (the "Original Notes") in the
following original principal amounts:  (i) Stephen D. Rubin - $98,591; (ii)
Clark L. Feldman - $49,483; (iii) Sam Gorenstein - $20,894; (iv) David
Gorenstein - $20,894; (v) James Rubin - $24,741; (vi) Edward Levine - $9,897;
and (vii) Sachnoff Weaver & Rubenstein, Ltd. - $11,842. The principal amounts
of all Original Notes remain outstanding except for the Original Note to
Sachnoff Weaver & Rubenstein, Ltd. which has been repaid. The scheduled
maturity of the Original Notes was extended for five years to February, 1997 by
a resolution of the Board of Directors in February, 1992 and was extended an
additional three years to February, 2000 by a resolution of the Board of
Directors in September, 1996.  The Company borrowed additional amounts at an
interest rate of 8% per annum, evidenced by promissory notes dated February 1,
1993 (the "1993 Notes") in the following original principal amounts:  (i)
Stephen D. Rubin - $52,500; (ii) Clark L. Feldman - $26,250; (iii) Sam
Gorenstein - $11,037; (iv) David Gorenstein - $11,037; (v) Edward Levine -
$5,225; and (vi) Jeffrey C. Rubenstein - $3,750; (vii) Arnold Pagniucci - $460;
and (viii) Philip Wong - $200. The principal amounts of the 1993 Notes remain
outstanding except the 1993 Notes to Mr. Pagniucci and Mr. Wong which have been
repaid and the 1993 Note to Mr. Feldman which was partially repaid and has a
remaining balance of $7,105. The scheduled maturity of the 1993 Notes is
December 31, 1998. Interest on the Original Notes and the 1993 Notes is
currently being paid by the Company.  The Bank Agreement required those
officers, directors and shareholders owning the 1993 Notes (the "1993
Noteholders") to enter into Subordination Agreements dated March 20, 1995 (the
"Subordination Agreements") subordinating the 1993 Notes to any amounts which
the Company owes to ANB under the Bank Agreement.  The Subordination Agreements
allow the Company to pay the 1993 Noteholders currently accruing interest as
long as the Company is not in default under the Bank Agreement. The 1993
Noteholders also have a security interest in Company property, pursuant to a
Security Agreement dated March 20, 1995 provided, however, that the security
interest of the 1993 Noteholders  is subordinated to the security interest of
ANB.

     On February 26, 1990, David Gorenstein, Sam Gorenstein, Sid Gorenstein and
J.B.F. Enterprises (the "Gorensteins") entered into a Settlement Agreement and
General Release (the "Settlement Agreement") with the Company, Stephen Rubin,
Clark Feldman, Jeffrey Rubenstein, Neal Jansen, Michael Horn and V-F
Acquisition, Inc. ("V-F Acquisition").  The Settlement Agreement released
various complaints and actions brought by the Gorensteins against the Company
and the other named parties and other claims that the Gorensteins and the
Company may have against one another through the date of the settlement.  The
Settlement Agreement also required that Mr. Rubin, Mr. Feldman and V-F
Acquisition enter into a voting agreement with Sam Gorenstein and J.B.F.
Enterprises (the "Voting Agreement") that required each party to vote their
shares of Common Stock for the election of Sam Gorenstein, Stephen D. Rubin and
Clark L. Feldman as directors of the Company.  The Voting Agreement terminated
on January 16, 1997.  The Settlement Agreement also contains limits on the
maximum compensation including bonuses and amounts paid to family members that
can be paid to Mr. Rubin and Mr. Feldman.  The maximum compensation allowable
for the fiscal year ending August 31, 1990 was $215,000 and increases each year
by an amount tied to the Consumer Price Index or five percent, whichever is
greater.  In 1997, the maximum compensation limit was not exceeded.  If
salaries are paid in excess of the limit, then pro-rata dividends must be paid
to the shareholders of the Company.  In addition, Consulting Agreements,
required by the Settlement Agreement, provided for payments of consulting fees
to Sam and David Gorenstein in the annual amount of $12,500 through February,
1995, with fees paid quarterly.  The Settlement Agreement also provides that
the Company will not attempt to force the Gorensteins to relinquish ownership
through any type of "freeze out" transaction, except under defined
circumstances.

     Mr. Jeffrey C. Rubenstein, a director of the Company, is a partner with
the law firm of Much Shelist Freed Denenberg Ament Bell & Rubenstein P.C. which
is the Company's general counsel.

     Except as described above, the Company is not a party to any other
material transactions of the type required to be described herein.



                                      37


<PAGE>   39



                                   PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K


          Listed below are the exhibits included in this part of the Annual
Report on Form 10-KSB:

(a)       REPORTS FILED ON FORM 8-K

          None



(b)       EXHIBITS (NUMBERED IN ACCORDANCE WITH ITEM 601 OF REGULATION S-B)


                                EXHIBIT INDEX




<TABLE>
<CAPTION>

          EXHIBIT
          NUMBER                        EXHIBIT TITLE
          -------  --------------------------------------------------
          <S>      <C>
           3.1     Articles of Incorporation of the Company (Ex. 3.1)

           3.2     By-laws of the Company (Ex. 3.2)

           4.1     Form of Common Stock Certificate (Ex. 4.1)

           4.2     Form of Representatives' Warrant Agreement between
                   the Company and National Securities Corporation and Access
                   Financial Group, Inc., as representative of the several
                   Underwriters (the "Representatives"), including Form of
                   Representatives' Warrant (Ex. 4.2)

           4.3     Form of Warrant Agreement between the Company and
                   American Stock Transfer & Trust Company and the
                   Representative, including form of Warrant Certificate (Ex.
                   4.3)


          10.1     Loan and Security Agreement dated as of March 20,
                   1995 by and between the Company and NBD Bank, as amended (Ex.
                   10.3)

         *10.1.1   Second Amendment to Loan and Security Agreement


         *10.1.2   Third Amendment to Loan and Security Agreement

         *10.1.3   Form of Fourth Amendment to Loan and Security Agreement

          10.2     Form of 1996 Employee Stock Option Plan (Ex. 10.4)x

          10.3     Form of 1996 Stock Option Plan for Non-Employee Directors
                   (Ex. 10.5)x

          10.4     Form of Employment Agreement between the Company and
                   Stephen D. Rubin (Ex. 10.7)x

          10.5     Form of Employment Agreement between the Company and Clark
                   L. Feldman (Ex. 10.8)x

          10.6     Long Term Supply/Purchase Agreement dated as of September
                   1, 1992 by and between the Company and Barry's Limited
                   (Ex. 10.9)

</TABLE>
                                      38



<PAGE>   40

           10.7    Exclusive Distributorship Agreement dated as of
                   December 1, 1994 by and between the Company and Brookside
                   Products, Ltd. (Ex. 10.10)

          *10.8    Employment Agreement between the Company and Jay
                   H. Dembskyx

           10.9    Gorenstein Agreement dated September 20, 1996 by
                   and among the Company, Stephen D. Rubin, Clark L. Feldman,
                   Sam Gorenstein, David Gorenstein and J.B.F. Enterprises (Ex.
                   10.26)

          *27.1    Financial Data Schedule.

______________________________

*Filed herewith, exhibits not marked with an asterisk were filed as part
of the Form SB-2 Registration Statement, as amended (File No. 333-5738) , filed
with the Securities and Exchange Commission on September 23, 1996.  Form SB-2
Exhibit Number is included in parenthesis following the title of the Exhibit.


x  Indicates an employee benefit plan, management contract or compensatory plan
or arrangement in which a named executive officer participates.



                                      39


<PAGE>   41

                                  SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                    VITA FOOD PRODUCTS, INC.




                                    By:     //Stephen D. Rubin//
                                            --------------------------
                                            Stephen D. Rubin
                                                President

                                    Date:   March 20, 1998


     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant in the following capacities
on March 20, 1998.

<TABLE>
<CAPTION>

     Signatures                            Title
<S>                       <C>
//Stephen D. Rubin//                Director and President
--------------------             (Principal Executive Officer)
Stephen D. Rubin


//Clark L. Feldman//         Director, Executive Vice President and
--------------------                      Secretary
Clark L. Feldman


//Jay H. Dembsky//           Vice President, Chief Financial Officer
------------------                       and Treasurer
Jay H. Dembsky            (Principal Financial and Accounting Officer)


//Sam Gorenstein//                         Director
------------------
Sam Gorenstein


//Michael Horn//                           Director
----------------
Michael Horn


//Jeffrey C. Rubenstein//                  Director
-------------------------
Jeffrey C. Rubenstein


//Steven A. Rothstein//                    Director
-----------------------
Steven A. Rothstein

</TABLE>




                                      40