<PAGE>

                                UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC 20549

                                 FORM 10-Q/A
                              (Amendment No. 1)

         (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>

                          FOREVER ENTERPRISES, INC.
                                 FORM 10-Q/A

                                    INDEX

The undersigned registrant hereby amends the following items of its
Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2001, as set
forth in the pages attached hereto (see Note 8 to the unaudited consolidated
financial statements).

<TABLE>
<CAPTION>

                                                                                                               Page
                                                                                                               ----

<S>                                                                                                              <C>
PART I.           FINANCIAL INFORMATION...........................................................................3

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

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

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

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

                  Condensed Consolidated Statements of Cash Flow (Unaudited) - Three Months
                  Ended March 31, 2001 (As Restated) 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.....................................................................................14

                  Cautionary Statement Regarding Forward-Looking Statements......................................14

                  Overview.......................................................................................14

                  Results of Operations..........................................................................16

                  Liquidity and Capital Resources................................................................19

     Item 3.      Quantitative and Qualitative Disclosure About Market Risk......................................22


PART II.          OTHER INFORMATION..............................................................................23

     Item 5.      Other Information..............................................................................23

     Item 6.      Exhibits and Reports on Form 8-K...............................................................23

SIGNATURES.......................................................................................................24

EXHIBIT INDEX....................................................................................................25
</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
                                                                              ----                   ----
                                                                          (As restated,
                                                                           see Note 8)

<S>                                                                      <C>                    <C>
Cash and cash equivalents                                                $   14,933,090         $  12,034,307
Investment securities                                                        76,446,492            76,803,743
Policyholder loans                                                            1,663,523             1,662,108
                                                                         --------------         -------------
         Total cash and investments                                          93,043,105            90,500,158
                                                                         --------------         -------------


Trade accounts receivable, net                                                4,361,062             4,224,968
Cemetery property, net                                                        3,349,430             3,357,341
Fixed assets, net                                                             6,052,776             6,135,482
Reinsurance receivable                                                       80,294,504            80,390,373
Inventories                                                                     306,281               304,114
Deferred charges, net                                                         1,370,791             1,363,737
Goodwill                                                                      2,232,233             2,258,028
Deferred tax assets                                                           4,263,975             5,164,040
Other assets                                                                 19,156,219            17,421,541
                                                                         --------------         -------------
         Total assets                                                    $  214,430,376         $ 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
                                                                             ----                      ----
                                                                         (As restated,
                                                                          see Note 8)
<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                                                                       10,133,963                9,889,048
                                                                         -------------            -------------
         Total liabilities                                                 212,068,439              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)                                     (5,558,957)              (5,840,802)
Accumulated other comprehensive loss                                        (2,287,268)              (3,759,168)
                                                                         -------------            -------------
     Total shareholders' equity                                              2,361,937                  513,144
                                                                         -------------            -------------

     Total liabilities and shareholders' equity                          $ 214,430,376            $ 211,119,782
                                                                         =============            =============



                                    The accompanying notes are an integral
                                       part of the unaudited 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
                                                                       ----                       ----
                                                                  (As restated,
                                                                   see Note 8)

<S>                                                               <C>                        <C>
Premium income                                                    $   1,864,346              $  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                                                   8,329,839                 16,623,410
Benefits incurred                                                     2,430,963                  6,064,670
Cost of cemetery revenues                                               427,284                    362,933
Selling, general and administrative expenses                          5,303,403                 11,692,278
Other income                                                            324,414                    158,142
Interest expense                                                       (127,081)                   (91,764)
                                                                  -------------              -------------
Income (loss) before income taxes                                       365,522                 (1,430,093)
Income tax expense (benefit)                                             83,677                   (376,739)
                                                                  -------------              -------------
Income (loss) before cumulative effect of accounting change             281,845                 (1,053,354)
Cumulative effect of $315,801, net of tax of $0                              --                   (315,801)
                                                                  -------------              -------------
     Net income (loss)                                            $     281,845              $  (1,369,155)
                                                                  =============              =============


Income (loss) per share before cumulative effect of accounting
 change:
     Basic                                                        $        0.04              $       (0.15)
     Diluted                                                               0.04                      (0.15)

Net income (loss) per share:
     Basic                                                        $        0.04              $       (0.20)
     Diluted                                                               0.04                      (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 unaudited condensed
                                    consolidated financial statements.
</TABLE>




                                   - 5 -

<PAGE>
<PAGE>

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

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

<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 (As restated,
         see Note 8)                      281,845                                                                281,845

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

     Total comprehensive income         1,753,745
                                    -------------

       Fair value 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
  (As Restated)                     $   2,361,937    $      69,339     $  10,138,823    $   (2,287,268)    $  (5,558,957)
                                    =============    =============     =============    ==============     =============

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 unaudited 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
                                                                               ----                    ----
                                                                           (As restated,
                                                                            see Note 8)

<S>                                                                        <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
                  Net cash provided by operating activities                $    107,070            $      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                                           (136,600)                 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         2,619,971               (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                                                         2,898,783               (3,070,224)

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

CASH AND CASH EQUIVALENTS,
     END OF PERIOD                                                         $ 14,933,090            $  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 unaudited condensed
                                           consolidated financial statements.
</TABLE>




                                   - 7 -

<PAGE>
<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. (the Company) and its direct and
indirect wholly-owned subsidiaries. The Company's fifty-percent investment
in Mount Washington Forever, L.L.C. is accounted for under the equity
method. 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.

     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
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.

     Effective January 1, 2000, we adopted Staff Accounting Bulletin No.
101, Revenue Recognition in Financial Statements, and changed our revenue
recognition policy, as follows: Cemetery interment right sales are
recognized as revenue at the time the contract is signed, the cemetery
property is developed and a minimum percentage of the purchase price has
been collected. Sales of merchandise are recognized at the time the
merchandise is delivered or been customized for the customer. Service fee
revenues are recognized in the period the services are performed. We defer
prearranged funeral and pre-need cemetery acquisition costs until the time
revenue is recognized. The change in our accounting policies resulting from
implementation of SAB No. 101 has been treated as a change in accounting
principle effective as of January 1, 2000. The cumulative effect of the
accounting change through December 31, 1999 resulted in a charge to net
income of $315,801 (net of a $-0- tax benefit), or $.04 per diluted share.



                                   - 8 -

<PAGE>
<PAGE>

NOTE 2 -- NOTES PAYABLE

     As of March 31, 2001 and December 31, 2000, we had a note payable to
Allegiant Bank in the amount of $2,072,403 and $2,086,424, respectively,
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 and December 31, 2000. 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
and $2,105,881 at March 31, 2001 and December 31, 2000, respectively. These
notes were incurred in 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. Subsequent to the issuance
of our unaudited consolidated financial statements for the three months
ended March 31, 2001, notes payable to companies owned by the previous
investment partners in Hollywood Forever, Inc., in the amount of $1,912,647
were settled in full for $1,653,988. Concurrent with the retirement of this
debt, we entered into a note payable with National Prearranged Services,
Inc. Payments of $19,633 are due monthly until the principal balance is paid
in full. The interest rate on this note is 7.5% 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 and December
31, 2000. 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                -          (324,027)           383,350
                                            --------------      -----------     -------------      -------------
    Total                                   $   79,912,050      $   529,950     $  (3,995,508)     $  76,446,492
                                            ==============      ===========     =============      =============
</TABLE>



                                   - 9 -

<PAGE>
<PAGE>

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>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 2001

                                       CEMETERY        INSURANCE      CORPORATE     INTERSEGMENT      TOTAL
                                       --------        ---------      ---------     ------------      -----

<S>                                  <C>             <C>             <C>            <C>           <C>
Revenues                             $  1,820,100    $  6,685,185    $     5,885    $  (181,331)  $   8,329,839

Net income (loss) before income
  taxes                                   216,714       1,094,893       (946,085)            --         365,522

Total assets at period-end             17,408,140     200,253,539      1,463,228     (4,694,531)    214,430,376


<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 (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 TRANSACTIONS

     Effective as of January 1, 2001, we entered into an agreement with
National Cemetery Management Company, a subsidiary of National Heritage
Enterprises, Inc. (NHE), the majority shareholder of our company, pursuant
to which National Cemetery Management Company provided sales management,
operational and administrative services to our company's cemetery operations
for a monthly management fee equal to 3% of the aggregate net revenues of
the cemetery operations. Subsequent to the issuance of our consolidated
financial statements for the three months ended March 31, 2001, the
management agreement with National Cemetery Management Company was rescinded
retroactive to January 1, 2001 (see Note 8 to the unaudited consolidated
financial statements).

     We provide administrative and other services to related parties.
Management fees charged to related parties, which have been recorded as
Other Income, were $249,000 for the quarter ended March 31, 2001. These fees
reflect our best estimate of actual costs incurred.

     Net amounts receivable from NPS and NPS Agency at March 31, 2001 and
December 31, 2000, were $2,823,074 and $2,735,580, respectively. Amounts
payable to NHE and its affiliates at March 31, 2001 and December 31, 2000
were $3,583,290 and $2,579,170, respectively.




                                   - 10 -

<PAGE>
<PAGE>

NOTE 6 -- NEW ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 133 requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a derivative is
designed as part of a hedge transaction, and if it is, the type of hedge
transaction. SFAS No. 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. We adopted SFAS No. 133 on January 1,
2001, which resulted in no effect on our financial position, results of
operations or cash flows.

     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 has had no effect on our 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 adoption of the Codification by our insurance
company subsidiaries, Lincoln Memorial Life Insurance Company (LMLIC) and
Memorial Service Life Insurance Company (MSLIC), as modified by Texas
increased LMLIC's statutory capital and surplus as of January 1, 2001, by
approximately $870,000, primarily related to accounting for income taxes.
There was no effect on MSLIC's capital and surplus.

NOTE 7 -- INCOME (LOSS) PER SHARE OF STOCK

     Income (loss) per share of stock is computed using the weighted average
number of common shares outstanding during the applicable period. Diluted
income (loss) per share of stock is computed using the weighted average
number of common shares outstanding and dilutive potential common shares
(primarily outstanding stock options). Weighted average shares of common
stock and dilutive potential common shares used in the calculation of basic
and diluted income (loss) per share are summarized as follows:





                                   - 11 -

<PAGE>
<PAGE>

<TABLE>
<CAPTION>
                                                                           FIRST QUARTER ENDED
                                                                           -------------------
                                                                MARCH 31, 2001              MARCH 31, 2000
                                                                --------------              --------------

<S>                                                                <C>                         <C>
Weighted average shares outstanding (basic EPS)                    6,933,924                   6,933,269

Dilutive potential common shares                                     468,674                           -

Weighted average shares outstanding and                            7,402,598                   6,933,269
   dilutive potential common shares (diluted EPS)
</TABLE>

Dilutive potential common shares included in the diluted income (loss) per
share calculation were determined using the treasury stock method. Under the
treasury stock method, outstanding stock options are dilutive when the
average market price of a company's common stock exceeds the option price
during a period. In addition, proceeds from the assumed exercise of dilutive
options along with the related tax benefit are assumed to be used to
repurchase common shares at the average market price of such stock during
the period. For the period ended March 31, 2000, potential common shares of
320,803 were considered to be anti-dilutive and were excluded from the
calculation of diluted income (loss) per share.

NOTE 8 -- RESTATEMENT

     Subsequent to the issuance of our consolidated financial statements for
the three months ended March 31, 2001, management determined that the
management agreement with National Cemetery Management Company should be
rescinded to more accurately reflect full allocation of the costs of
services provided to us by National Cemetery Management. The agreement was
rescinded retroactive to January 1, 2001 and we have restated our financial
statements for the three months ended March 31, 2001.

     We have restated our expenses to reflect our operating expenses
incurred, including the costs associated with services provided to related
parties. Amounts have been charged back to those entities through management
fees. The effect of the restatement was to increase Selling, General and
Administrative expenses and Interest Expense by approximately $494,000 and
$111,000, respectively, which was partially offset by the management fees
charged to the related entities (see Note 5).

     In addition, certain other adjustments/reclassifications were made as a
result of account reconciliations being completed subsequent to the original
filing. Such adjustments/reclassifications resulted in a decrease of Cash
and Cash Equivalents, Trade Accounts Receivable and Reinsurance Receivable
of approximately $49,000, $386,000 and $679,000, respectively, and a
decrease in Other Liabilities of approximately $93,000. Such adjustments/
reclassifications also resulted in a decrease in Premium Income of
approximately $679,000. The net effect on income taxes was an increase in
Deferred Tax Assets and a decrease in Income Tax Expense of approximately
$231,000.




                                   - 12 -

<PAGE>
<PAGE>

A summary of the significant effects of the restatement is as follows:

<TABLE>
<CAPTION>
                                                                           As Previously                 As
                                                                             Reported                 Restated

<S>                                                                         <C>                      <C>
As of March 31, 2001:
     Cash and cash equivalents                                              14,981,828               14,933,090
     Trade accounts receivable, net                                          4,746,755                4,361,062
     Reinsurance receivable                                                 80,973,512               80,294,504
     Deferred tax assets, net                                                4,033,112                4,263,975
     Other liabilities                                                      10,227,230               10,133,963
     Retained earnings (accumulated deficit)                                (4,754,848)              (5,558,957)
     Shareholders' equity                                                    3,166,046                2,361,937

For the three months ended March 31, 2001:
     Premium income                                                          2,543,354                1,864,346
     Selling, general and administrative                                     4,809,267                5,303,403
     Other income                                                               75,328                  324,414
     Interest expense                                                           16,166                  127,081
     Income before income taxes                                              1,400,494                  365,522
     Income tax expense                                                        314,540                   83,677
     Net income                                                              1,085,954                  281,845
     Net income per share - basic                                                $0.16                    $0.04
     Net income per share - diluted                                              $0.15                    $0.04
</TABLE>






                                   - 13 -

<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.

RESTATEMENT

     As discussed in Note 8 to the unaudited consolidated financial
statements, subsequent to the issuance of our consolidated financial
statements for the three months ended March 31, 2001, management has
restated the financial statements for that period. The following discussion
and analysis gives effect to the restatement.

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.



                                   - 14 -

<PAGE>
<PAGE>

     In March 2000, we completed the acquisition of Forever Network, Inc.
(formerly known as Forever Enterprises, Inc.). Forever Network, Inc.
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 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, Inc. 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, Inc. 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 August 2000, we entered into a coinsurance agreement with Employers
Reassurance Corporation ("ERC") whereby we ceded a significant portion of
our in-force policies. This coinsurance agreement includes experience refund
provisions whereby we may earn additional ceding commissions in varying
amounts each year through 2010 subject to the mortality experience of the
policies not exceeding certain levels. This coinsurance agreement does not
relieve us from our obligations to our policyholders and accordingly, the
net cost of the coinsurance agreement of approximately $80,000 was deferred
and is being amortized over the remaining life of the underlying insurance
policies. Approximately $74.7 million of the reinsurance receivable as of
March 31, 2001 is related to the agreement with Employers Reassurance
Corporation.

     In November 2000, we entered into various coinsurance agreements with
North America Life Insurance Company of Texas ("NAL") whereby we ceded
blocks of certain direct written life insurance policies and all of our
assumed life insurance and annuity policies. We segregated funds of
approximately $61.2 million in a trust account for the benefit of the
reinsurer. The funds withheld are presented net of amounts due from the
reinsurer in our consolidated financial statements. We also entered into a
100% coinsurance agreement with NAL in September 2000, whereby substantially
all of the policies issued by us that are sold by NPS and NPS Agency are
ceded to NAL. These coinsurance agreements do not relieve us from our
obligations to our policyholders and accordingly, the cost of the
coinsurance agreements was deferred and is being amortized over the
remaining life of the underlying insurance policies. The unamortized
deferred cost as of March 31, 2001 was approximately $1.9 million.
Approximately $5.6 million of the reinsurance receivable as of March 31,
2001 is related to the agreements with NAL.

     We believe that these arrangements with Employers Reassurance
Corporation and North America Life Insurance Company of Texas will allow us
to shift our focus from the insurance operations to the cemetery operations
of our company.




                                   - 15 -

<PAGE>
<PAGE>

     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. We believe 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 provide 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. 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.

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.




                                   - 16 -

<PAGE>
<PAGE>

         Our financial highlights were as follows:

<TABLE>
<CAPTION>
                                                                             THREE MONTHS ENDED
STATEMENT OF OPERATIONS DATA:                                                     MARCH 31,
                                                                  ----------------------------------------
                                                                       2001                       2000
                                                                       ----                       ----

<S>                                                               <C>                        <C>
Premium income                                                    $   1,864,346              $  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                                                   8,329,839                 16,623,410
Benefits incurred                                                     2,430,963                  6,064,670
Cost of cemetery revenues                                               427,284                    362,933
Selling, general and administrative expenses                          5,303,403                 11,692,278
Other income                                                            324,414                    158,142
Interest expense                                                       (127,081)                   (91,764)
                                                                  -------------              -------------
     Income (loss) before income taxes                                  365,522                 (1,430,093)
Income tax expense (benefit)                                             83,677                   (376,739)
                                                                  -------------              -------------
     Income (loss) before cumulative effect                             281,845                 (1,053,354)
Cumulative effect                                                           --                    (315,801)
                                                                  ------------               -------------
     Net income (loss)                                            $     281,845              $  (1,369,155)
                                                                  =============              =============


Income (loss) per share before cumulative effect
     Basic                                                        $        0.04              $       (0.15)
     Diluted                                                               0.04                      (0.15)

Income (loss) per share after cumulative effect
     Basic                                                        $        0.04              $       (0.20)
     Diluted                                                               0.04                      (0.20)


<CAPTION>
                                                                  MARCH 31, 2001           DECEMBER 31, 2000
                                                                  --------------           -----------------
BALANCE SHEET DATA:

<S>                                                               <C>                        <C>
Trade accounts receivable, net                                    $   4,361,062              $   4,224,968
Cemetery property, net                                                3,349,430                  3,357,341
Total assets                                                        214,430,376                211,119,782
Total policy liabilities                                            192,936,447                191,773,250
Shareholders' equity                                                  2,361,937                    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>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 2001

                                       CEMETERY        INSURANCE      CORPORATE     INTERSEGMENT      TOTAL
                                       --------        ---------      ---------     ------------      -----

<S>                                  <C>             <C>             <C>            <C>           <C>
Revenues                             $  1,820,100    $  6,685,185    $     5,885    $  (181,331)  $   8,329,839

Net income (loss) before income
  taxes                                   216,714       1,094,893       (946,085)            --         365,522

Total assets at period-end             17,408,140     200,253,539      1,463,228     (4,694,531)    214,430,376




                                   - 17 -

<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>


     Cemetery Operations. Cemetery revenues increased approximately
$397,000, or 27.9%, 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 23.5% 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 $183,000, or
13.1%, from $1.4 million in the quarter ended March 31, 2000 to $1.22
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 66.8% 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.

     Income before income taxes increased from a loss of $265,000 in the
quarter ended March 31, 2000 to income of $217,000 in the quarter ended
March 31, 2001. Operating income as a percentage of revenues improved to
11.9% 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
recognized as corporate expenses.

     Total assets decreased slightly from $18.1 million in the first quarter
of 2000 to $17.4 million in the first quarter of 2001.

     Investment in Mount Washington Forever, LLC. Forever Enterprises, Inc.
currently has a 50% interest in Mount Washington Forever, LLC, and is
responsible for all aspects of the cemetery's marketing and operations. The
results of Mount Washington Forever, LLC 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 $8.8
million, or 56.7%, 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.



                                   - 18 -

<PAGE>
<PAGE>

     Our premium income decreased approximately $9.7 million, or 83.3%, 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. Insurance premiums may
continue to contribute significantly to future revenues due to potential
future experience ratings refunds expected from the reinsurer (approximately
$609,000 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.

     Operating income increased $1.3 million from a loss of $200,000 at
March 31, 2000 to income of $1.1 million at March 31, 2001. Operating income
as a percentage of revenues improved to 16.4% in the quarter ended March 31,
2001 from a loss of 1.3% in the quarter ended March 31, 2000 due primarily
to the reinsurance agreements.

     Total assets increased $7.7 million from $192.6 million at March 31,
2000 to $200.3 million at March 31, 2001 due primarily to an increase in our
inforce business.

     Corporate. Operating losses increased $8,000, or 0.8%, in the three-
month period ended March 31, 2001 compared to the three months ended
March 31, 2000 due to increased overhead expenses.

     Consolidated. Operating income for the quarter ended March 31, 2001
increased $1.8 million, or 126%, compared to the first quarter of 2000. Net
income per basic share increased to $0.04 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.

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



                                   - 19 -

<PAGE>
<PAGE>

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 operations are 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 August 2001.

     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. Approximately $380,000
is currently available for transfer to the parent company by dividend, loan,
or advance; however, no such dividend, loan or advance has been declared.

     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. That financing may not be available on
favorable terms or at all and we could be required 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.




                                   - 20 -

<PAGE>
<PAGE>

     Total cash and cash equivalents increased approximately $2.9 million
from $12.0 million at December 31, 2000 to $14.9 million at March 31, 2001,
primarily due to the growth of our inforce business.

     Future policy benefits increased approximately $2.2 million from $139.3
million at December 31, 2000 to $141.5 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.

ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 133 requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a derivative is
designed as part of a hedge transaction, and if it is, the type of hedge
transaction. SFAS No. 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. We adopted SFAS No. 133 on January 1,
2001, which resulted in no effect on our financial position, results of
operations or cash flows.

     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 has had no effect on our 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 adoption of the Codification by our insurance
company subsidiaries, Lincoln Memorial Life Insurance Company (LMLIC) and
Memorial Service Life Insurance Company (MSLIC), as modified by Texas
increased LMLIC's statutory capital and surplus as of January 1, 2001, by
approximately $870,000, primarily related to accounting for income taxes.
There was no effect on MSLIC's capital and surplus.




                                   - 21 -

<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.








                                   - 22 -

<PAGE>
<PAGE>

PART II.  OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

     As previously reported in the Form 8-K filed on June 13, 2001, we
expected to make certain adjustments to the financial results previously
reported by the Company in the Quarterly Report on Form 10-Q (the "Quarterly
Report"). Such adjustments were anticipated to result in a reduction to net
income of approximately $200,000 for the quarter ended March 31, 2001.
Actual adjustments made by us approximated $804,000 due to additional
adjustments resulting from the completion of certain account reconciliations
subsequent to the original filing of the Quarterly Report (see Note 8).


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.





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<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:  July 23, 2001          By:  /s/ Brent D. Cassity
                                    --------------------------------------------
                                    Brent D. Cassity, Chief Executive Officer



Dated:  July 23, 2001          By:  /s/ J. Tyler Cassity
                                    --------------------------------------------
                                    J. Tyler Cassity, President



Dated:  July 23, 2001          By:  /s/ Michael R. Butler
                                    --------------------------------------------
                                    Michael R. Butler, Chief Financial Officer





                                   - 24 -

<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, filed as Exhibit 10.1 to Forever Enterprises,
                  Inc.'s Quarterly Report on Form 10-Q for the quarter ended
                  March 31, 2001, is incorporated herein by reference.

   10.2           Agreement, dated as of January 1, 2001, between Forever
                  Enterprises, Inc. and National Cemetery Management
                  Company, is filed herewith.



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