<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-Q


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

For the quarterly period ended                      MARCH 31, 2001
                               ------------------------------------------------



Commission file number                              001-14067
                       --------------------------------------------------------


                           FOREVER ENTERPRISES, INC.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                TEXAS                                  36-3427454
-------------------------------------    --------------------------------------
    (State or other jurisdiction          (I.R.S. Employer Identification No.)
         of incorporation or
            organization)

                                10 S. BRENTWOOD
                            CLAYTON, MISSOURI 63105
-------------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (314) 726-3371
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the 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.               /X/ Yes / / No


                                                     Number of shares
           Title of class                     outstanding as of May 21, 2001
-----------------------------------        ------------------------------------
   Common stock, $0.01 par value                         6,933,924




<PAGE>
<PAGE>

<TABLE>
                                             FOREVER ENTERPRISES, INC.
                                                     FORM 10-Q

                                                       INDEX
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
PART I.           FINANCIAL INFORMATION...........................................................................3

     Item 1.      Financial Statements:...........................................................................3

                  Condensed Consolidated Balance Sheets (Unaudited) - March 31, 2001 and
                  December 31, 2000...............................................................................3

                  Condensed Consolidated Statements of Operations (Unaudited) - Three Months
                  Ended March 31, 2001 and 2000...................................................................5

                  Condensed Consolidated Statements of Shareholders' Equity and Comprehensive
                  Income (Unaudited) - Three Months Ended March 31, 2001 and 2000.................................6

                  Condensed Consolidated Statements of Cash Flow (Unaudited) - Three Months
                  Ended March 31, 2001 and 2000...................................................................7

                  Notes to Condensed Consolidated Financial Statements (Unaudited)................................8

     Item 2.      Management's Discussion and Analysis of Financial Condition and Results of
                  Operations.....................................................................................11

                  Cautionary Statement Regarding Forward-Looking Statements......................................11

                  Overview.......................................................................................11

                  Results of Operations..........................................................................13

                  Liquidity and Capital Resources................................................................16

     Item 3.      Quantitative and Qualitative Disclosure About Market Risk......................................18


PART II.          OTHER INFORMATION..............................................................................19

     Item 5.      Other Information..............................................................................19

     Item 6.      Exhibits and Reports on Form 8-K...............................................................19

SIGNATURES.......................................................................................................20

EXHIBIT INDEX....................................................................................................21
</TABLE>



                                                       - 2 -

<PAGE>
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


<CAPTION>
                                                   ASSETS

                                                                            MARCH 31,          DECEMBER 31,
                                                                              2001                 2000
                                                                              ----                 ----
<S>                                                                       <C>                  <C>
Cash and cash equivalents                                                 $ 14,981,828         $ 12,034,307
Investment securities                                                       76,446,492           76,803,743
Policyholder loans                                                           1,663,523            1,662,108
                                                                          ------------         ------------
         Total cash and investments                                         93,091,843           90,500,158
                                                                          ------------         ------------


Trade accounts receivable, net                                               4,746,755            4,224,968
Cemetery property, net                                                       3,349,430            3,357,341
Fixed assets, net                                                            6,067,944            6,135,482
Due from reinsurer                                                          80,973,512           80,390,373
Inventories                                                                    306,281              304,114
Deferred charges, net                                                        1,370,791            1,363,737
Goodwill                                                                     2,237,288            2,258,028
Deferred tax assets                                                          4,033,112            5,164,040
Other assets                                                                19,150,796           17,421,541
                                                                          ------------         ------------
         Total assets                                                     $215,327,752         $211,119,782
                                                                          ============         ============


(continued on next page)


                                   - 3 -

<PAGE>
<PAGE>

<CAPTION>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(CONTINUED)


                                    LIABILITIES AND SHAREHOLDERS' EQUITY

                                                                            MARCH 31,          DECEMBER 31,
                                                                              2001                 2000
                                                                            ---------          ------------
<S>                                                                       <C>                  <C>
LIABILITIES:

Policy liabilities:
     Future policy benefits                                               $141,513,290         $139,311,397
     Policyholder deposits                                                  51,423,157           52,461,853
Deferred preneed revenues                                                    4,918,601            4,696,391
Notes payable                                                                4,079,428            4,247,949
Other                                                                       10,227,230            9,889,048
                                                                          ------------         ------------
         Total liabilities                                                 212,161,706          210,606,638
                                                                          ------------         ------------


SHAREHOLDERS' EQUITY:

Preferred stock ($.01 par value; 1,000,000 shares authorized;
     none issued)                                                                   --                   --
Common stock ($.01 par value; 30,000,000
     shares authorized; 6,933,924 issued and outstanding)                       69,339               69,339
Additional paid-in capital                                                  10,138,823           10,043,775
Retained earnings (accumulated deficit)                                     (4,754,848)          (5,840,802)
Accumulated other comprehensive loss                                        (2,287,268)          (3,759,168)
                                                                          ------------         ------------
     Total shareholders' equity                                              3,166,046              513,144
                                                                          ------------         ------------

     Total liabilities and shareholders' equity                           $215,327,752         $211,119,782
                                                                          ============         ============



                                   The accompanying notes are an integral
                                     part of the condensed consolidated
                                           financial statements.
</TABLE>

                                   - 4 -

<PAGE>
<PAGE>

<TABLE>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<CAPTION>
                                                                                     THREE MONTHS ENDED
                                                                                         MARCH 31,
                                                                                ----------------------------
                                                                                    2001            2000
                                                                                    ----            ----
<S>                                                                             <C>             <C>
Revenues                                                                        $  9,008,847    $ 16,623,410
Costs and expenses                                                                 2,858,248       6,427,603
Selling, general and administrative                                                4,809,267      11,692,278
                                                                                ------------    ------------
Income (loss) from operations                                                      1,341,332      (1,496,471)
Other income                                                                          75,328         158,142
Interest expense                                                                     (16,166)        (91,764)
                                                                                ------------    ------------
Income (loss) before income taxes                                                  1,400,494      (1,430,093)
Income tax expense (benefit)                                                         314,540        (376,739)
                                                                                ------------    ------------
Net income (loss) before cumulative effect                                         1,085,954      (1,053,354)
Cumulative effect                                                                         --        (315,801)
                                                                                ------------    ------------

         Net income (loss)                                                      $  1,085,954    $ (1,369,155)
                                                                                ============    ============

Earnings (loss) per share before cumulative effect
Basic                                                                           $       0.16    $      (0.15)
                                                                                ============    ============
Diluted                                                                         $       0.15    $      (0.15)
                                                                                ============    ============


Earnings (loss) per share after cumulative effect
Basic                                                                           $       0.16    $      (0.20)
                                                                                ============    ============
Diluted                                                                         $       0.15    $      (0.20)
                                                                                ============    ============
Weighted average shares outstanding:

Basic                                                                              6,933,924       6,933,269
                                                                                ============    ============
Diluted                                                                            7,402,598       6,933,269
                                                                                ============    ============



                                   The accompanying notes are an integral
                                     part of the condensed consolidated
                                            financial statements.
</TABLE>


                                   - 5 -

<PAGE>
<PAGE>

<TABLE>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND
COMPREHENSIVE INCOME (UNAUDITED)

<CAPTION>
                                                                                                  ACCUMULATED
                                                                                    ADDITIONAL       OTHER
                                                                      COMMON         PAID-IN     COMPREHENSIVE      RETAINED
                                                      TOTAL           STOCK          CAPITAL     INCOME (LOSS)      EARNINGS
                                                   -----------     -----------     -----------   -------------    -----------

<S>                                                <C>             <C>             <C>            <C>             <C>
Balance, December 31, 2000                         $   513,144     $    69,339     $10,043,775    $(3,759,168)    $(5,840,802)

Comprehensive income, net of tax:

       Net income                                    1,085,954                                                      1,085,954

       Change in unrealized gains on
         available-for-sale securities,
         net of tax expense of $731,455              1,471,900                                      1,471,900
                                                   -----------

     Total comprehensive income                      2,557,854
                                                   -----------

       Effect of stock options granted under
         stock options plans, net of applicable
         income tax benefit of $48,964                  95,048                          95,048
                                                   -----------     -----------     -----------    -----------     -----------

Balance, March 31, 2001                            $ 3,166,046     $    69,339     $10,138,823    $(2,287,268)    $(4,754,848)
                                                   ===========     ===========     ===========    ===========     ===========


Balance, December 31, 1999                         $ 3,953,002     $    69,333     $ 9,691,588    $(8,506,402)    $ 2,698,483

Comprehensive loss, net of tax:

       Net loss                                     (1,369,155)                                                    (1,369,155)

       Change in unrealized losses on
         available-for-sale securities,
         net of tax benefit of $89,302                (175,128)                                      (175,128)
                                                   -----------

     Total comprehensive loss                       (1,544,283)
                                                   -----------

       Effect of stock options granted under
         stock options plans, net of applicable
         income tax benefit of $22,728                  44,118                          44,118

       Issuance of shares for stock options                375               1             374

       Capital contributions                           108,000                         108,000
                                                   -----------     -----------     -----------    -----------     -----------

Balance, March 31, 2000                            $ 2,561,212     $    69,334     $ 9,844,080    $(8,681,530)    $ 1,329,328
                                                   ===========     ===========     ===========    ===========     ===========


                                            The accompanying notes are an integral
                                              part of the condensed consolidated
                                                     financial statements.
</TABLE>



                                   - 6 -

<PAGE>
<PAGE>

<TABLE>
FOREVER ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)

<CAPTION>
                                                                                          THREE MONTHS ENDED
                                                                                               MARCH 31,
                                                                                  ----------------------------------
                                                                                      2001                  2000
                                                                                      ----                  ----
<S>                                                                               <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
                  Net cash provided by (used in) operating activities             $    170,977          $     74,735
                                                                                  ------------          ------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from sales and maturities of available-for-sale investments           17,803,438            11,419,007
     Cost of investments purchased                                                 (15,045,452)          (12,597,019)
     Sale (purchase) of fixed assets                                                  (151,769)              287,481
     Acquisition of subsidiaries                                                            --              (215,462)
     Increase in policyholder loans                                                     (1,415)              (99,177)
     Other, net                                                                             --              (244,917)
                                                                                  ------------          ------------
                  Net cash provided by (used in) investing activities                2,604,802            (1,450,087)
                                                                                  ------------          ------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Issuance of shares for stock options                                                   --                   375
     Repayment of long-term debt                                                      (168,521)           (1,803,247)
     Credit line proceeds                                                              340,263                    --
     Capital contributions                                                                  --               108,000
                                                                                  ------------          ------------
                  Net cash provided by (used in) financing activities                  171,742            (1,694,872)
                                                                                  ------------          ------------

NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                                                2,947,521            (3,070,224)

CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                                                            12,034,307            23,712,005
                                                                                  ------------          ------------

CASH AND CASH EQUIVALENTS,
     END OF PERIOD                                                                $ 14,981,828          $ 20,641,781
                                                                                  ============          ============

SUPPLEMENTAL CASH FLOW INFORMATION
     INCOME TAXES PAID                                                            $         --          $    483,643
                                                                                  ============          ============

     INTEREST PAID                                                                $     48,445          $     76,115
                                                                                  ============          ============

                                       The accompanying notes are an integral
                                         part of the condensed consolidated
                                                financial statements.
</TABLE>


                                   - 7 -

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<PAGE>

                          FOREVER ENTERPRISES, INC.
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (UNAUDITED)
                                 -----------

NOTE 1 -- BASIS OF PRESENTATION

         The accompanying condensed consolidated financial statements
include the accounts of Forever Enterprises, Inc. and our direct and
indirect wholly-owned subsidiaries. These condensed consolidated financial
statements have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information
and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and notes required
by accounting principles generally accepted in the United States for
complete financial statements. All intercompany accounts and transactions
have been eliminated in consolidation. Certain prior period amounts have
been reclassified to conform with the current period presentation.

         The accompanying condensed consolidated financial statements and
notes thereto are unaudited and should be read in conjunction with our
audited financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 2000 filed with the Securities and Exchange
Commission. The unaudited interim condensed consolidated financial
statements have been prepared on the same basis as the annual consolidated
financial statements and, in the opinion of management, reflect all
adjustments, which include only normal recurring adjustments, necessary to
present fairly our financial position, results of operations and cash flows
as of and for the three months ended March 31, 2001. The results for the
three months ended March 31, 2001 are not necessarily indicative of the
results to be expected for the year ending December 31, 2001.

         We have recently gone through a change in general ledger accounting
systems. In order to file our financial statements at the earliest possible
time, our March 31, 2001 financial statements were prepared prior to
complete reconciliation of our general ledger accounts. Subsequent thereto,
our auditing firm was unable to complete their SAS 71 review prior to
issuance of our financial statements and our filing of this quarterly report
on Form 10-Q.


NOTE 2 -- NOTES PAYABLE

         As of March 31, 2001, we had a note payable to Allegiant Bank in
the amount of $2,072,403, which matures on January 1, 2003. Principal
payments of $4,674 are due monthly along with interest at the "corporate
market" interest rate (8.0% per annum at March 31, 2001). The "corporate
market" interest rate is based upon an index developed by Allegiant Bank.

         We also have a $250,000 revolving line of credit from Allegiant
Bank at rates similar to the primary credit agreement discussed above. The
balance outstanding was $220,000 at March 31, 2001. This line of credit is
renewable on a yearly basis subject to Allegiant Bank's discretion.

         We have a $2,000,000 revolving line of credit from Merrill Lynch
Business Financial Services, Inc., which matures on March 31, 2002. Interest
is due monthly on the unpaid balance equal to the sum of 2.40% and the
Dealer Commercial Paper rate for 30-day high-grade unsecured notes (4.95%
per annum at March 31, 2001) as published in The Wall Street Journal. The
balance outstanding was $340,263 at March 31, 2001.

         We also have notes payable to companies owned by the previous
investment partners in Hollywood Forever, Inc., in the amount of $1,969,216
at March 31, 2001. These notes were incurred in

                                   - 8 -

<PAGE>
<PAGE>

connection with the purchase of the additional 45% of Hollywood Forever, Inc.
on December 8, 1999. Payments of $48,723 are due monthly until the principal
balance of the notes is paid in full. The interest rate on these notes is
8.5% per annum.

         We have a loan agreement with a reinsurer whereby we may borrow
varying amounts, which decline each year until the agreement expires in
2009. No amounts were outstanding under this agreement at March 31, 2001.
Advances to us in 2001 will be limited to no more than $12.5 million.
Advances under this agreement bear interest at a rate equal to the five-year
Treasury note plus 150 basis points (4.64% at March 31, 2001). We have
pledged all of the capital stock of Memorial Service Life Insurance Company
as security for any advances under this agreement.


NOTE 3 -- INVESTMENTS

         The cost or amortized cost, gross unrealized gains and losses, and
estimated fair value of fixed maturity and equity securities available-for-
sale as of March 31, 2001 were as follows:

<TABLE>
<CAPTION>
                                             COST OR            GROSS            GROSS            ESTIMATED
                                             AMORTIZED       UNREALIZED       UNREALIZED            FAIR
                                               COST             GAINS           LOSSES              VALUE
                                           ------------      ----------      ------------       ------------
<S>                                        <C>               <C>             <C>                <C>
Fixed maturity securities:
    Corporate bonds                        $ 19,530,603      $   40,576      $ (1,276,945)      $ 18,294,234
    Mortgage backed securities               47,115,919         362,444        (1,653,116)        45,825,247
    U.S. government                          12,558,151         126,930          (741,420)        11,943,661
                                           ------------      ----------      ------------       ------------
      Total fixed maturity securities        79,204,673         529,950        (3,671,481)        76,063,142

Equity securities                               707,377         917,950        (1,241,977)           383,350
                                           ------------      ----------      ------------       ------------

    Total                                  $ 79,912,050      $1,447,900      $ (4,913,458)      $ 76,446,492
                                           ============      ==========      ============       ============
</TABLE>


NOTE 4 -- SEGMENT INFORMATION

         We conduct and manage our business through two segments, cemetery/
funeral operations and life insurance operations. The following tables
summarize the results of our operations by our business segments. Costs and
revenues that are not related to operating segments are included in the column
"Corporate."

<TABLE>
THREE MONTHS ENDED MARCH 31, 2001

<CAPTION>
                                            CEMETERY         INSURANCE        CORPORATE       INTERSEGMENT          TOTAL
                                            --------         ---------        ---------       ------------          -----
<S>                                       <C>              <C>              <C>               <C>               <C>
Revenues                                  $  1,776,413     $  7,364,193     $     49,572      $   (181,331)     $  9,008,847

Net income (loss) before income taxes          176,681        1,773,901         (550,088)               --         1,400,494

Total assets at period-end                  17,461,374      200,701,684        1,859,225        (4,694,531)      215,327,752

                                   - 9 -

<PAGE>
<PAGE>

<CAPTION>
THREE MONTHS ENDED MARCH 31, 2000

                                            CEMETERY         INSURANCE        CORPORATE       INTERSEGMENT          TOTAL
                                            --------         ---------        ---------       ------------          -----
<S>                                       <C>              <C>              <C>               <C>               <C>
Revenues                                  $  1,422,830     $ 15,454,873     $      8,141      $   (262,434)     $ 16,623,410

Net income (loss) before income taxes         (265,104)        (197,084)        (938,323)          (29,582)       (1,430,093)

Total assets at period-end                  18,092,970      192,587,431        1,421,938        (4,726,865)      207,375,474
</TABLE>


NOTE 5 -- RELATED PARTY

         Effective as of January 1, 2001, we entered into an agreement with
National Cemetery Management Company, a subsidiary of National Heritage
Enterprises, Inc., the majority shareholder of our company, pursuant to
which National Cemetery Management Company will provide sales management,
operational and administrative services to our company's cemetery operations
for a monthly management fee equal to three percent (3%) of the aggregate
net revenues of the cemetery operations.


NOTE 6 -- NEW ACCOUNTING STANDARDS

         In September 2000, the FASB issued SFAS No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities. This statement replaces SFAS No. 125, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities, and
rescinds SFAS No. 127, Deferral of Effective Date of Certain Provisions of
FASB Statement No. 125. It revises the standards for accounting for
securitizations and other transfers of financial assets and extinguishments
of liabilities. Those standards are based on consistent application of a
financial-components approach that focuses on control. This statement is
effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The
implementation of SFAS No. 140 is not expected to have a material effect on
the Company's financial position, results of operations or cash flows.

         In March 1998, the National Association of Insurance Commissioners
("NAIC") adopted the Codification of Statutory Accounting Principles
("Codification"). The Codification, which is intended to standardize
regulatory accounting and reporting for the insurance industry, was
effective January 1, 2001. However, statutory accounting principles will
continue to be established by individual state laws and permitted practices.
The State of Texas required adoption of the Codification with certain
modifications for the preparation of statutory basis financial statements
effective January 1, 2001. The Company's insurance company subsidiaries,
Lincoln Memorial Life Insurance Company and Memorial Service Life Insurance
Company have determined that the adoption of the Codification as modified by
Texas will increase their statutory capital and surplus as of January 1,
2001, by approximately $870,000 and $0 respectively, which primarily relates
to accounting principles regarding income taxes.

                                   - 10 -

<PAGE>
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

         This report contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements are based on the beliefs of our
management as well as on assumptions made by and information currently
available to us at the time such statements were made. We can give no
assurance that the expectations indicated by such forward-looking statements
will be realized. If any of management's assumptions should prove incorrect,
or if any of the risks and uncertainties underlying such expectations should
materialize, our actual results may differ materially from those indicated
by the forward-looking statements.

         The following factors that are not within our control and that may
have a direct bearing on operating results include, but are not limited to:
(1) general economic conditions and other factors, including prevailing
interest rate levels and stock market performance, which may affect our
ability to sell our products, the market value of our investments and the
lapse rate and profitability of our policies; (2) our ability to achieve
anticipated levels of operational efficiencies for recently acquired
companies, blocks of policies or properties, as well as through other
cost-saving initiatives; (3) mortality, morbidity, and other factors which
may affect the profitability of our insurance products; (4) changes in the
federal income tax laws and regulations which may affect the cost of or
demand for our products; (5) increasing competition in the sale of our
products; (6) regulatory changes or actions, including those relating to
regulation of financial services affecting (among other things) bank sales
and underwriting of insurance products, regulation of the sale, underwriting
and pricing of insurance products and regulation of the sale and pricing of
funeral home operations and products; (7) the availability and terms of
future acquisitions; and (8) the risk factors or uncertainties listed in our
other filings with the Securities and Exchange Commission.

         Additionally, we may not be successful in identifying, acquiring,
and integrating other companies or their business, implementing improved
management and accounting information systems and controls and may be
dependent upon additional capital and equipment purchases for future growth.
There may be other risks and uncertainties that management is not able to
predict.

         When used in this report, the words "anticipate," "believe,"
"estimate," "expect," "intends," and similar expressions, as they relate to
us are intended to identify forward-looking statements, although there may
be certain forward-looking statements not accompanied by such expressions.

OVERVIEW

         We, through our subsidiaries, produce and market multimedia
biographies, own and operate combination funeral home and cemetery
properties, operate an Internet marketing site, and operate life insurance
companies that principally issue insurance contracts to fund pre-need
funeral contracts. Our life insurance operations are conducted through our
wholly-owned life insurance subsidiaries.

         In March 2000, we completed the acquisition of Forever Network, Inc.
(formerly known as Forever Enterprises, Inc.). Forever Network, directly and
through its subsidiaries, Mason Securities Association, Inc., Forever
Memorial, Inc., Hollywood Forever, Inc., Dartmont Investment, Inc. and Mount
Washington Forever, Inc., owns and operates funeral homes and cemetery
properties and sells, archives and displays digital interactive life stories
viewed at grave sites and on the Internet at www.forevernetwork.com. In
addition, the Internet site provides valuable information to consumers on


                                   - 11 -

<PAGE>
<PAGE>

memorial products and services and markets related merchandise and services
to the growing population of people who visit the site. In connection with
the acquisition, we issued 2.4 million shares of our common stock in exchange
for all of the outstanding capital stock of Forever Network. The acquisition
was accounted for in a manner similar to the pooling-of-interests method of
accounting. Upon completion of the transaction, we changed our corporate name
from Lincoln Heritage Corporation to Forever Enterprises, Inc.

         Substantially all of our life insurance policies are issued to fund
prearranged funeral contracts sold by National Prearranged Services, Inc.
and National Prearranged Services Agency, Inc. National Prearranged Services
is an affiliated company that collects all payments for prearranged funeral
contracts and remits such amounts to us either directly or through assumed
reinsurance.

         In December 2000, our subsidiaries, Memorial Service Life Insurance
Company and Lincoln Memorial Life Insurance Company entered into reinsurance
agreements with North America Holdings, Ltd., whereby North America Holding,
Ltd. reinsures all of the ongoing insurance business and certain of the
inforce business of our subsidiaries. Our insurance subsidiaries retain
administration of the reinsured business originally generated by National
Prearranged Services and National Prearranged Services Agency. We believe
that this arrangement with North America Holdings, Ltd. will allow us to
shift our focus from the insurance operations to the cemetery operations of
our company.

         Our business strategy is to grow our business by acquiring cemetery/
funeral home combination properties in targeted metropolitan areas,
aggressively grow the multimedia biography business through all company
properties and the Internet, and further develop our Internet marketing
business. Through this strategy, we expect to develop the Forever brand to
enhance consumer recognition and sales. No assurance can be given that we
will be successful in completing any acquisition, or that any acquisition,
once completed, will ultimately enhance our results of operations.

         We will seek to increase the number of quality cemetery/funeral
home combination projects we own and operate and to expand our Forever
network of families with digital biographies. Our plan is to acquire
properties in major metropolitan areas to allow us to advertise and market
the Forever programs to large populations. The properties need to have
enough inventory and/or land to accommodate future sales and/or construction
of Forever mausoleums/chapels to create inventory and service space. The
properties could possibly be distressed in some way. Those in need of an
aggressive marketing approach are ideal. Established properties with a large
heritage of families will also allow us to market our biography services to
existing client family members, thus expanding our market potential.
Properties also may be in the form of undeveloped land in a current or
developing population center that can support a funeral home/mausoleum
structure, and that provides a suitable supply of saleable cemetery land. We
believe that acquiring and developing properties in major areas should also
allow us to quickly develop our Internet business strategy, which serves to
display family archives, educate consumers on memorial products, services
and providers, and to sell memorial services and merchandise over the
forevernetwork.com website. We believe that the current environment provides
excellent opportunities to acquire cemetery properties at attractive prices
due to the fact that certain of the major acquisition companies are in
financial distress and the prices for properties are dropping to what we
believe are very reasonable levels. Execution of this strategy should allow
us to develop further the Forever brand and our company as a leader in
providing unique and valuable memorialization products and services.

         We believe we are well positioned to enhance the profitability of
the businesses and properties we acquire. With respect to our cemetery/
funeral home operations, we believe we can apply tested and proven marketing
techniques to produce significant revenue and market share growth. Efficient
property operations management should allow for greatly enhanced
profitability on newly acquired properties.


                                   - 12 -

<PAGE>
<PAGE>

Demographics and the growing interest in organizing and preserving family
memories, use of the Internet for information gathering, and commerce on the
world wide web should provide the platform for successful results on our
Internet strategy.

         Effective January 1, 2001, we entered into an agreement with
National Cemetery Management Company, a subsidiary of National Heritage
Enterprises, Inc., the majority shareholder of our company, pursuant to
which National Cemetery Management Company will provide sales management,
operational and administrative services to our company's cemetery operations
for a monthly management fee equal to three percent (3%) of the aggregate
net revenues of the cemetery operations. We believe that this transaction
will allow us to more appropriately reflect actual results of operations of
each cemetery, while allocating common resources/expenses to all entities
which benefit from the resources of National Cemetery Management Company.

RESULTS OF OPERATIONS

         The following presents management's discussion and analysis of our
consolidated financial condition and results of operations as of the dates
and for the periods indicated. This discussion should be read in conjunction
with the other information set forth in this Quarterly Report on Form 10-Q,
including our unaudited condensed consolidated financial statements and the
accompanying notes thereto.

         Our financial highlights were as follows:

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
STATEMENT OF OPERATIONS DATA:                                               MARCH 31,
                                                             --------------------------------------
                                                                 2001                      2000
                                                                 ----                      ----
<S>                                                          <C>                       <C>
Premium income                                               $  2,543,354              $ 11,664,185
Net investment income and realized gains                        1,164,441                 3,447,567
Cemetery revenue                                                1,820,100                 1,422,830
Commission and expense allowance                                3,480,935                        --
Other revenue                                                          17                    88,828
                                                             ------------              ------------
     Total revenues                                             9,008,847                16,623,410
Benefits incurred                                               2,430,963                 6,064,670
Cost of cemetery revenues                                         427,285                   362,933
Other operating expenses                                        4,809,267                11,692,278
Other income                                                       75,328                   158,142
Interest expense                                                  (16,166)                  (91,764)
                                                             ------------              ------------
     Income (loss) before income taxes                          1,400,494                (1,430,093)
Income tax expense (benefit)                                      314,540                  (376,739)
                                                             ------------              ------------
     Income (loss) before cumulative effect                     1,085,954                (1,053,354)
Cumulative effect                                                      --                  (315,801)
                                                             ------------              ------------
     Net income (loss)                                       $  1,085,954              $ (1,369,155)
                                                             ============              ============

Income (loss) per share before cumulative effect
     Basic                                                   $       0.16              $      (0.15)
     Diluted                                                         0.15                     (0.15)

Income (loss) per share after cumulative effect
     Basic                                                   $       0.16              $      (0.20)
     Diluted                                                         0.15                     (0.20)




                                   - 13 -

<PAGE>
<PAGE>

<CAPTION>


                                                            MARCH 31, 2001           DECEMBER 31, 2000
                                                            --------------           -----------------
BALANCE SHEET DATA:
<S>                                                          <C>                       <C>
Trade accounts receivable, net                               $  4,746,755              $  4,224,968
Cemetery property, net                                          3,349,430                 3,357,341
Total assets                                                  215,327,752               211,119,782
Total policy liabilities                                      192,936,447               191,773,250
Shareholders' equity                                            3,166,046                   513,144
</TABLE>

         We conduct and manage our business through two segments, cemetery/
funeral operations and life insurance operations. The following tables and
narratives summarize the results of our operations by our business segments.
Costs and revenues that are not related to operating segments are included
in the column "Corporate."

<TABLE>
THREE MONTHS ENDED MARCH 31, 2001

<CAPTION>
                                               CEMETERY        INSURANCE       CORPORATE     INTERSEGMENT        TOTAL
                                               --------        ---------       ---------     ------------        -----
<S>                                          <C>             <C>             <C>             <C>             <C>
Revenues                                     $  1,776,413    $  7,364,193    $     49,572    $   (181,331)   $  9,008,847

Net income (loss) before income taxes             176,681       1,773,901        (550,088)             --       1,400,494

Total assets at period-end                     17,461,374     200,701,684       1,859,225      (4,694,531)    215,327,752

<CAPTION>
THREE MONTHS ENDED MARCH 31, 2000

                                               CEMETERY        INSURANCE       CORPORATE     INTERSEGMENT        TOTAL
                                               --------        ---------       ---------     ------------        -----
<S>                                          <C>             <C>             <C>             <C>             <C>
Revenues                                     $  1,422,830    $ 15,454,873    $      8,141    $   (262,434)   $ 16,623,410

Net income (loss) before income taxes            (265,104)       (197,084)       (938,323)        (29,582)     (1,430,093)

Total assets at period-end                     18,092,970     192,587,431       1,421,938      (4,726,865)    207,375,474
</TABLE>


         Cemetery Operations. Cemetery revenues increased approximately
$354,000, or 24.9%, in the three-month period ended March 31, 2001 compared
to the quarter ended March 31, 2000. Sales for the first quarter of 2001 at
each location increased compared to the first quarter of 2000 due to more
effective marketing and increased sales of certain cemetery and
memorialization products and services.

         Cost of sales increased $64,000, or 17.7%, from $363,000 in the
quarter ended March 31, 2000 to $427,000 in the quarter ended March 31, 2001
due to increased cemetery sales. Cost of sales as a percentage of revenues
decreased to 24.1% for the three months ended March 31, 2001 compared to
25.5% for the three months ended March 31, 2000 due to a more favorable
product and service mix sold.

         Selling, general and administrative expenses decreased $150,000, or
10.6%, from $1.4 million in the quarter ended March 31, 2000 to $1.25
million, in the quarter ended March 31, 2001 due to cost reduction efforts
and improved operating efficiencies which required fewer resources. As a
percentage of revenues, selling, general and administrative costs decreased
to 70.4% in the quarter ended March 31, 2001 from 98.3% in the quarter ended
March 31, 2000 due to the higher revenues generated, improved operating
efficiencies and cost reductions in overhead expenses.


                                   - 14 -

<PAGE>
<PAGE>

         Income before income taxes increased from a loss of $265,000 in the
quarter ended March 31, 2000 to a gain of $177,000 in the quarter ended
March 31, 2001. Operating income as a percentage of revenues improved to
9.9% in the quarter ended March 31, 2001 from a loss of 18.6% in the quarter
ended March 31, 2000 due primarily to the absence of expenses now associated
with National Cemetery Management Company.

         Total assets decreased slightly from $18.1 million in the first
quarter of 2000 to $17.5 million in the first quarter of 2001.

         Minority Interest Cemetery Operations.  Forever Enterprises, Inc.
currently has a 50% interest in Mount Washington Forever and is responsible for
all aspects of the cemetery's marketing and operations.  The results of Mount
Washington Forever are summarized in the table below.

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                       ----------------------------------------
                                                       MARCH 31, 2001            MARCH 31, 2000
                                                       --------------            --------------
<S>                                                      <C>                       <C>
Revenues                                                 $ 655,405                 $  248,719
Cost of goods sold                                         181,217                     88,340
Selling, general and administrative expenses               543,327                    329,716
Income (loss) from operations                              (69,139)                  (169,337)
</TABLE>

         Insurance Operations. Insurance revenues decreased approximately
$8.1 million, or 52.4%, in the three-month period ended March 31, 2001
compared to the three months ended March 31, 2000. The decrease was
primarily attributable to the reinsurance of significant blocks of our life
insurance policies in December 2000.

         Our premium income decreased approximately $9.0 million, or 77.5%,
in the three-month period ended March 31, 2001 compared to the three months
ended March 31, 2000. The decrease was attributable to the reinsurance of
significant blocks of our life insurance policies. However, insurance premiums
will contribute significantly to future revenues due to the experience ratings
refunds received from the reinsurer (approximately $1.3 million for the three
months ended March 31, 2001.)

         Expense allowance on reinsurance ceded increased approximately $3.5
million, or 100.0% in the three-month period ended March 31, 2001 compared
to the three months ended March 31, 2000 due to the reinsurance transactions
in December 2000.

         Our net investment income and realized gains decreased
approximately $2.2 million, or 60.1%, in the three-month period ended March
31, 2001 compared to the three months ended March 31, 2000. The decrease in
investment income was due primarily to the absence of investment income
associated with securities sold in the reinsurance transactions in the
fourth quarter of 2000. In addition, a large portion of the investment
income on securities held at March 31, 2001, was due to North America Life
as defined in the reinsurance agreement.

         Our benefit expenses decreased approximately $3.6 million, or
59.6%, in the three-month period ended March 31, 2001 compared to the three
months ended March 31, 2000. This decrease was due primarily to the
reinsurance agreements entered into during 2000.

                                   - 15 -

<PAGE>
<PAGE>

         Operating income increased $2.0 million from a loss of $200,000 at
March 31, 2000 to income of $1.8 million at March 31, 2001. Operating income
as a percentage of revenues improved to 24.1% in the quarter ended March 31,
2001 from a loss of 1.3% in the quarter ended March 31, 2000 due primarily to
the experience ratings refund noted above.

         Total assets increased $8.1 million from $192.6 million at March
31, 2000 to $200.7 million at March 31, 2001 due primarily to an increase in
our inforce business.

         Corporate. Operating losses decreased $388,000, or 41.4%, in the
three-month period ended March 31, 2001 compared to the three months ended
March 31, 2000 due to increased income generated from our management
agreement with Mt. Washington and reduced overhead expenses.

         Consolidated. Operating income for the quarter ended March 31, 2001
increased $2.8 million, or 197.9%, compared to the first quarter of 2000.
Net income per basic share increased to $0.16 per share for the first
quarter of 2001 compared to a loss of $0.15 per share for the first quarter
of 2000. The increase in operating income for the first quarter of 2001
compared to the first quarter of 2000 was due to increased revenues from our
cemetery and insurance operations and cost reductions in overhead expenses
now covered by National Cemetery Management Company.

LIQUIDITY AND CAPITAL RESOURCES

         We expect to secure capital required for additional new cemetery
properties and technology developments related to the digital biographies
and the Internet through debt and/or equity financing. With new cemetery
properties, the initial capital required for the purchase and working
capital is anticipated to be sufficient to allow the property to achieve
positive cash flow within 12-18 months. Our cemetery property in St. Louis,
Missouri currently generates significant positive cash flow from operations
and represents the type of relative financial performance expected on our
current and future properties. Our cemetery properties in Kansas City,
Missouri and Los Angeles produced several months of positive cash
performance in 2000 as expected and we anticipate both properties being able
to sustain positive cash flow and contribute to earnings in 2001. We believe
that any operating cash requirements for our cemetery properties will be
funded through working capital on hand or lines of credit. Capital projects
at new cemetery properties for mausoleum/funeral home combination buildings
and other saleable inventory features are expected to be funded through use
of cash generated from pre-construct sales and/or debt financing and should
require little or no additional capital investment. Certain other
improvements would be accomplished and funded through use of existing
personnel and working capital resources and lines of credit.

         We have been investing capital to fund the development and
enhancement of our Internet/technology business plan and our website
www.forevernetwork.com. The Internet/technology segment is currently running
a cash shortfall and may require additional investment capital for a period
of time until revenues can be built to levels necessary to produce positive
cash flow. Margins are expected to be high and overhead relatively low once
Internet and other program sales volumes achieve targeted levels.

         On October 12, 2000 we entered into a letter of intent to purchase
a group of ten cemetery properties in two large mid-western metropolitan
areas. The purchase price and working capital, if agreeable terms are
secured, are expected to be funded largely through owner financing with the
balance to be funded through additional debt arrangements with an outside
lender and/or additional equity financing. We are in the closing stages of
due diligence. If due diligence proves favorable, then closing is expected
to occur during June 2001.

                                   - 16 -

<PAGE>
<PAGE>

         Our insurance subsidiaries are restricted by state insurance laws
as to the amount of dividends that they may pay to us without prior notice
to, or in some cases prior approval from, their respective state insurance
departments. These restrictions on dividend distributions are based on
statutory capital and surplus and operating earnings. Statutory surplus and
statutory operating results are determined according to statutes adopted by
each state in which the subsidiaries do business. Statutory surplus bears no
direct relationship to equity as determined under accounting principles
generally accepted in the United States of America. No amounts are currently
available for transfer to the parent company by dividend, loan, or advance
without prior regulatory approval.

         Our cash requirements for 2001 and in the future will depend upon
mortality experience, acquisitions, timing of expansion plans and capital
expenditures. Our insurance subsidiaries generally generate sufficient cash
receipts from premium collections and investment income to satisfy their
obligations. We believe that the diversity of the investment portfolio of
our insurance subsidiaries provides sufficient liquidity to meet their
operating cash requirements. We believe that anticipated revenue from
operations should be adequate for the working capital requirements of our
existing businesses over the next twelve months.

         In the event that our plans or assumptions change, or if the
resources available to meet unanticipated changes in business conditions
prove to be insufficient to fund operations, we could be required to seek
additional financing prior to that time, or to curtail certain proposed
activities.

         Changes in our consolidated balance sheet between March 31, 2001
and December 31, 2000, reflect growth through operations, changes in the
fair value of actively managed fixed maturity and equity securities, changes
in the investment portfolio mix and changes in our insurance business
strategy. Policyholder loans remained constant at $1.7 million at December
31, 2000 and March 31, 2001 due to the absence of new loans.

         Total cash and investments increased approximately $2.9 million
from $12.1 million at December 31, 2000 to $15.0 million at March 31, 2001,
primarily due to the growth of our inforce business.

         Future policy benefits decreased approximately $2.2 million from
$141.5 million at December 31, 2000 to $139.3 million at March 31, 2001.
This increase was due to the growth of our inforce business.

         Policyholder deposits decreased approximately $1.1 million from
$52.5 million at December 31, 2000 to $51.4 million at March 31, 2001. The
decrease was due to withdrawals and surrenders of existing annuity policies
and the absence of the issuance of new annuity policies.

         Policyholder deposits are comprised primarily of annuities acquired
with the block of business from Woodmen Accident & Life, World Insurance
Company, and Funeral Security Life Insurance Company. These blocks of
annuity policies were ceded in our reinsurance transactions in 2000.

         In the event that our plans or assumptions change, or if the
resources available to meet unanticipated changes in business conditions
prove to be insufficient to fund operations, we could be required to seek
additional financing and such financing may not be available on favorable
terms or at all.

                                   - 17 -

<PAGE>
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         There have been no material changes from the information provided
in our Annual Report on Form 10-K for the year ended December 31, 2000.



                                   - 18 -

<PAGE>
<PAGE>

PART II. OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

         Effective as of January 1, 2001, we entered into an agreement with
National Cemetery Management Company, a subsidiary of National Heritage
Enterprises, Inc., the majority shareholder of our company, pursuant to
which National Cemetery Management Company will provide sales management,
operational and administrative services to our company's cemetery operations
for a monthly management fee equal to three percent (3%) of the aggregate
net revenues of the cemetery operations.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits:

                  See Exhibit Index attached hereto.

         (b)      Reports on Form 8-K.

                  We did not file any Current Reports on Form 8-K during the
         quarter ended March 31, 2001.


                                   - 19 -

<PAGE>
<PAGE>

                                 SIGNATURES


         In accordance with Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                FOREVER ENTERPRISES, INC.
                                (Registrant)


Dated:  May 22, 2001            By: /s/ Brent D. Cassity
                                    -------------------------------------------
                                    Brent D. Cassity, Chief Executive Officer



Dated:  May 22, 2001            By: /s/ J. Tyler Cassity
                                    -------------------------------------------
                                    J. Tyler Cassity, President



Dated:  May 22, 2001            By: /s/ Michael R. Butler
                                    -------------------------------------------
                                    Michael R. Butler, Chief Financial Officer

                                   - 20 -

<PAGE>
<PAGE>

                                 EXHIBIT INDEX

Ex. No.                              Description
-------                              -----------

  10.1       Management Agreement, dated as of January 1, 2001, between Forever
             Enterprises, Inc. and National Cemetery Management Company.



                                     - 21 -