SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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, 2000
                              --------------------------------------------------

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

For the transition period from                      to
                               --------------------    -------------------------

Commission file number 000-24941


                             Delicious Brands, Inc.
--------------------------------------------------------------------------------
           (Exact name of the registrant as specified in its charter)


           Delaware                                      06-1255882
----------------------------------       ---------------------------------------
   (State of other jurisdiction of       (I.R.S. Employer Identification Number)
   incorporation or organization)

 2070 Maple Street, Des Plaines, Illinois                   60018
-----------------------------------------              --------------
 (Address of Principal executive offices)                  (Zip code)

Registrant's telephone number including area code:  (847) 699-3200
                                                    ----------------------------



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.


        YES  /X/                NO / /


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of the latest practicable date.


       5,702,865 shares of Common Stock were outstanding on May 19, 2000.
<PAGE>
                             DELICIOUS BRANDS, INC.

                                    FORM 10-Q

                      FOR THE QUARTER ENDED MARCH 31, 2000


                                    I N D E X


Part I:   Financial Information                                            Page

 Item 1.  Financial Statements:

          Balance Sheets as of March 31, 2000 and December 31, 1999          2

          Statements of Operations, Three Months Ended March 31, 2000        3
             and 1999

          Statements of Cash Flows, Three Months Ended March 31, 2000        4
             and 1999

          Notes to Condensed Financial Statements                            5

 Item 2.  Management's Discussion and Analysis of Financial Condition        6
            and Results of Operations

 Item 3.  Quantitative and Qualitative Disclosure About Market Risk         10


Part II:  Other Information

 Item 1.  Legal Proceedings                                                 11

 Item 2.  Changes in Securities and Use of Proceeds                         11

 Item 4.  Submission of Matters to Vote of Security Holders                 11

 Item 6.  Exhibits and Reports on Form 8-K                                  11


                                       1

<PAGE>
                             DELICIOUS BRANDS, INC.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                          March 31,          December 31,
                                                                                          ---------          ------------
                                                                                           2000                  1999
                                                                                           ----                  ----
                                                                                         (unaudited)


ASSETS
Current Assets:
<S>                                                                                    <C>                    <C>
  Cash.................................................................................$          0           $     600,762
  Accounts receivable including $119,920 and $213,040,
     respectively, due from related parties, net of allowances of
     $2,671,881 and $2,857,970, respectively...........................................   2,067,813               1,797,900
  Inventory............................................................................     851,840               1,043,400
  Prepaid expenses and other current assets............................................     165,094                 247,761
                                                                                       ------------           -------------
                                                                                          3,084,747               3,689,823
                                                                                       ------------           -------------
Property and Equipment, Net of Accumulated Depreciation................................     222,543                 269,833
                                                                                       ------------           -------------
Other Assets:
  Goodwill.............................................................................   9,323,080               9,460,852
  Other ...............................................................................     601,361                 813,919
                                                                                       ------------           -------------
                                                                                          9,924,441              10,274,771
                                                                                       ------------           -------------
                                                                                       $ 13,231,731           $  14,234,427
                                                                                       ============           =============

LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities:
  Bank loan payable....................................................................$    876,074           $   1,326,033
  Current portion of subordinated debt.................................................   5,643,332               5,643,332
  Accounts payable including $64,404 and $60,460, respectively,
     due to related parties............................................................   2,516,145               3,839,756
  Due to distributors..................................................................     309,046                 308,559
  Accrued expenses.....................................................................   1,789,376               1,796,091
  Current portion of long-term liabilities.............................................     724,971                 791,354
                                                                                       ------------           -------------
                                                                                         11,858,944              13,705,125
                                                                                       ============           =============
Long-term Liabilities:
  Restructuring liability..............................................................     278,722                 335,454

Stockholders' Equity:
  Preferred stock, $.01 par value 1,000,000 shares authorized:
       Series A, 183,334 shares issued and outstanding.                                   1,466,668               1,466,668
       Series B, 35,000 shares issued and outstanding, liquidation
           value equals stated value.                                                     1,750,000               1,750,000
       Series C, 253,663 shares and 170,038 shares issued and
           outstanding in 2000 and 1999, respectively. Liquidation
           value of $7,609,890 and $5,101,140, respectively.............................. 5,073,260               3,400,760
       Series D, 50,000 shares issued and outstanding in 2000,
           liquidation value of $1,500,000............................................... 1,000,000                       0
  Common Stock, $.01 par value, 25,000,000 shares authorized,
        4,746,010 shares issued.........................................................     47,460                  47,460
  Additional paid-in capital............................................................ 18,127,559              18,335,918
  Accumulated deficit.................................................................. (26,209,832)            (24,645,909)
                                                                                        -----------             -----------
                                                                                          1,255,115                 354,897
                                                                                        -----------             -----------
                                                                                           (161,049)               (161,049)
                                                                                        -----------             -----------
  Less, common stock in treasury at cost..............................................    1,094,066                 193,848
                                                                                        -----------             -----------
        Total stockholders' equity....................................................  $13,231,732             $14,234,427
                                                                                        ===========             ===========
</TABLE>

         The accompanying notes are an integral part of this statement.

                                       2

<PAGE>
                             DELICIOUS BRANDS, INC.
                             STATEMENT OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                      Three Months Ended March 31,
                                                                      ----------------------------
                                                                       2000                  1999
                                                                       ----                  ----

<S>                                                              <C>                   <C>
Net Sales (including approximately
      $61,000 and $1,113,000,
      respectively, to  related parties)....................     $   6,364,855         $ 12,341,817

Cost of Sales (including approximately
      $1,000 and $10,000, respectively,
      from related parties).................................         4,663,671            9,496,139
                                                                 -------------         ------------
Gross Profit................................................         1,701,184            2,845,678
                                                                 -------------         ------------

Selling, general and administrative.........................         3,070,837            3,911,760
                                                                 -------------         ------------

Loss from Operations........................................        (1,369,653)          (1,066,082)
                                                                 -------------         ------------
Other Income (Expense):
      Interest expense......................................         (193,877)             (166,475)
      Other, net............................................             (396)                4,825
                                                                 -------------         ------------
                                                                      (194,273)            (161,650)
                                                                 -------------         ------------
Loss before Provision for Income Taxes                              (1,563,926)          (1,227,732)
Provision for Income Taxes..................................                 0                    0
                                                                 -------------         ------------
Net Loss    ................................................     $  (1,563,926)        $ (1,227,732)
                                                                 =============         ============
Earnings per Share:
      Basic:
            Net loss per common share.......................     $        (.33)        $       (.28)
                                                                 =============         ============
            Weighted average number of
                  common shares outstanding.................         4,697,085            4,435,509


      Diluted:
            Net loss per common share.......................     $        (.33)        $       (.28)
                                                                 =============         ============
            Weighted average number of
                  common shares outstanding.................         4,697,085            4,435,509
</TABLE>


         The accompanying notes are an integral part of this statement.

                                       3
<PAGE>

                             DELICIOUS BRANDS, INC.
                             STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                    Three Months Ended March 31,
                                                                                   -----------------------------
                                                                                    2000                   1999
                                                                                   -----                   -----

Cash Flows from Operating Activities:
<S>                                                                             <C>                     <C>
      Net loss    ............................................................  $  (1,563,926)          $ (1,227,732)
      Adjustments to reconcile net loss to net cash used in
            operating activities:
            Depreciation and amortization.....................................        396,297                196,286
            Provision for bad debts...........................................          6,000                 19,333
            Increase (Decrease) in cash from changes in:
                  Accounts receivable.........................................       (275,913)               144,937
                  Inventory...................................................        191,560               (368,595)
                  Prepaid expenses and other current assets...................         82,667               (328,294)
                  Other assets................................................          3,248                 32,062
                  Accounts payable and accrued expenses.......................     (1,200,325)               710,126
                  Due to distributors.........................................            487                (68,303)
                  Accrued restructuring liabilities...........................        (56,732)               (33,831)
                  Other liabilities...........................................        (66,383)               (21,562)
                                                                                -------------           ------------
      Net cash used in operating activities...................................     (2,483,020)              (945,573)
                                                                                -------------           ------------
Cash Flows from Investing Activities:
      Purchase of property and equipment......................................         (1,924)               (28,351)
                                                                                -------------           ------------
      Net cash used in investing activities...................................         (1,924)               (28,351)
                                                                                -------------           ------------
Cash Flows from Financing Activities:
      Proceeds from (payments of) bank loan payable, net......................       (449,958)                67,821
      Proceeds from issuance of common stock..................................              0                  2,791
      Proceeds from issuance of preferred stock...............................      2,500,000                      0
      Payment of preferred stock dividend.....................................              0                (78,334)
      Payment of stock issuance costs.........................................       (165,859)                     0
                                                                                -------------           ------------
      Net cash provided by (used in) financing activities.....................      1,884,183                 (7,722)
                                                                                -------------           ------------
Decrease in Cash..............................................................       (600,762)              (981,646)
Cash, Beginning of Period.....................................................        600,762                981,646
                                                                                -------------           ------------
Cash, End of Period...........................................................  $           0           $          0
                                                                                =============           ============
Supplemental Disclosure of Cash Flow Information:
      Cash paid during the period for:
            Income taxes......................................................  $           0           $          0
                                                                                =============           ============
            Interest..........................................................  $      94,890           $    173,470
                                                                                =============           ============
</TABLE>

During 2000, 8,625 shares of Class C Preferred Stock were issued for payment of
$172,500 in placement fees.

At March 31, 2000 unpaid transaction costs of $130,000 were included in accrued
expense.

         The accompanying notes are an integral part of this statement.

                                       4

<PAGE>
                             DELICIOUS BRANDS, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

1.       Basis of Presentation

Interim Financial Statements

The  unaudited  interim  financial  statements  included  herein  were  prepared
pursuant to the rules and regulations for interim reporting under the Securities
Exchange Act of 1934, as amended. Accordingly,  certain information and footnote
disclosures normally  accompanying the annual financial statements were omitted.
The interim  financial  statements and notes should be read in conjunction  with
the annual audited financial  statements and notes thereto contained in the Form
10-K of  Delicious  Brands,  Inc.  (the  "Company")  dated April 14,  2000.  The
Company's  auditors have  questioned the ability of the Company to continue as a
going concern due to recurring losses from operations, a significant net working
capital  deficit  and the fact that the  Company's  existing  revolving  line of
credit will not be renewed beyond June 15, 2000.  Although  management  believes
that the  Company  will  continue  operations  until the  pending  asset sale is
completed,  there is no guarantee  that the Company can remain  viable until the
conclusion of the pending transaction.  (See "Recent History" for description of
pending sale). The accompanying  unaudited interim financial  statements contain
all adjustments,  consisting only of normal adjustments, which in the opinion of
management  were  necessary for a fair  statement of the results for the interim
periods.  Results for the  interim  periods are not  necessarily  indicative  of
results for the full year.

2.       Net Income (Loss) Per Share

Basic net income  (loss) per share and diluted net income  (loss) per share have
been calculated using the weighted  average number of Common shares  outstanding
during each period.  All options and warrants were omitted from the  computation
of diluted net income  (loss) per share  because the  options and  warrants  are
antidilutive when net losses are reported.


3.       Inventory

Inventory is stated at the lower of cost or market with cost  determined  by the
first-in, first-out (FIFO) method.

4.       Recent Account Pronouncements

Effective  January 1, 1999,  the Company  adopted FAS No. 133,  "Accounting  for
Derivatives Instruments and Hedging Activities," which required the recording of
all  derivatives  on the balance sheet at fair value,  and Statement of Position
98-5 (SOP 98-5),  "Reporting on the Cost of Start-up Activities," which requires
costs of start-up  activities and organization costs to be expensed as incurred.
The adoption of FAS No. 133 and SOP 98-5 had no impact on the Company's  results
of operations, financial position or cash flows.

5.       Subordinated Debt

On April  27,  1999,  the  remaining  outstanding  9%  Subordinated  Convertible
Promissory  Notes (the "9% Notes")  aggregate  principal amount of approximately
$393,000,  matured.  The Company has not repaid the 9% Notes and currently  does
not have funds to repay such amounts.  The Company  believes its credit facility
with  U.S.  Bancorp  prohibits  repayment  of the  principal  portion  of  these
subordinated  notes.  One of the  noteholders  has filed a lawsuit  against  the
Company seeking repayment of his note.


                                        5
<PAGE>
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Item 2.  BUSINESS

General

            Delicious Brands, Inc. (the "Company")  develops,  markets and sells
cookies, crackers and related food products under the Delicious(R),  Salerno(R),
Mama's(R) and Frookie(R) labels. These products are sold primarily in the United
States  to  independent   direct-store   delivery  distributors  for  resale  to
supermarkets and other retail outlets, through large wholesalers to natural food
stores and also directly to supermarkets and other retail outlets.

            The  Company was  founded in 1989  originally  to market the Frookie
cookie product,  one of the first  all-natural,  low-fat  cookies  produced with
fruit juice  sweeteners.  Through the  acquisition of Delicious  Cookie Company,
Inc.  ("Delicious")  in 1994,  the Company  broadened its product  offering into
three lines: (i) high-quality,  value priced snack products ("Value  Oriented"),
(ii)  licensed  and  co-branded  snack  products  (i.e.,  packaged  under both a
licensed label and the Delicious  label)  ("Co-Branded")  and (iii)  all-natural
snack products  ("All-Natural").  All of the Company's  products are produced by
independent  food  processors  ("co-packers")  using the  Company's  proprietary
specifications and formulations.

            The Company was incorporated under the laws of the State of Delaware
in 1989. Its principal  executive offices are located at 2070 Maple Street,  Des
Plaines, Illinois 60018 and its telephone number is (847) 699-3200.


Recent History

            The  Company's   failure  to  satisfy  the  Nasdaq  SmallCap  Market
maintenance  requirements  resulted in the Common Stock being  delisted from the
Nasdaq SmallCap Market as of February 1, 2000.  Trading of the Company's  Common
Stock, if any, is now conducted in the Over-the-Counter Bulletin Board.

            As a result of the  delisting  of the  Common  Stock from the Nasdaq
SmallCap  Market,  an investor  may find it more  difficult to dispose of, or to
obtain  accurate  quotations  as to  the  market  value  of  the  Common  Stock.
Furthermore,   the  regulations  of  the  Securities  and  Exchange   Commission
("Commission")  promulgated  under  the  Securities  Exchange  Act of  1934,  as
amended,  require additional disclosure relating to the market for penny stocks.
Commission  regulations  generally define a penny stock to be an equity security
that has a market  price of less  than  $5.00  per  share,  subject  to  certain
exceptions.  A  disclosure  schedule  explaining  the penny stock market and the
risks  associated  therewith  is required  to be  delivered  to a purchaser  and
various sales practice requirements are imposed on broker-dealers who sell penny
stocks to persons  other than  established  customers and  accredited  investors
(generally  institutions).  In  addition,  the  broker-dealer  must  provide the
customer  with  current  bid and  offer  quotations  for the  penny  stock,  the
compensation  of the  broker-dealer  and its  salesperson in the transaction and
monthly account  statements showing the market value of each penny stock held in
the  customer's  account.  If the  Company's  securities  become  subject to the
regulations  applicable to penny stocks,  the market liquidity for the Company's
securities  could be severely  affected.  In such an event,  the  regulations on
penny  stock could limit the  ability of  broker-dealers  to sell the  Company's
securities and thus the ability of purchaser of the Company's securities to sell
their securities in the secondary market.

            On  April 5,  2000,  the  Company  entered  into an  Asset  Purchase
Agreement  (the "APA") with BF USB,  Inc., a Delaware  corporation  and indirect
subsidiary  of Parmalat  Canada  Ltd.,  who is  affiliated  with  certain of the
Company's  suppliers  and  customers  and who has acquired  businesses  from and
entered into a consulting  agreement with the Company's Chairman of the Board of
Directors.  Under the terms of the APA, the Company will sell  substantially all
of its assets for $26,680,000 less a $1,700,000 working capital adjustment, plus
(minus) actual working capital (deficit),  delivered at closing,  as defined, in
cash and the assumption of certain  liabilities  that are related to the ongoing
operations of the Company.  The APA requires  that  $5,336,000 of the cash to be
delivered   at


                                       6
<PAGE>

Closing  be  deposited  into  an  escrow  account  to  satisfy   indemnification
obligations  (if  any) of the  Company  which  may  arise  under  the  APA.  The
provisions  of the  escrow  agreement  provide  for  release of funds in varying
amounts on the six-,  twelve- and eighteenth-  month  anniversary of the closing
date.  After  payment of all  outstanding  debt and  redemption of its preferred
stock the  Company  believes  the  proceeds  from the sale will not  represent a
premium to  current  market  capitalization.  The  purchase  price is subject to
adjustments  and  indemnifications  as provided in the APA. The APA requires the
Company to pay a break-up  fee of  $1,500,000  in the event  this  agreement  is
terminated by the Company, if the Company were to accept a superior proposal for
the sale of the assets or  otherwise.  The  Company has agreed not to compete in
the snack food  industry  without  the  consent of BF USB,  and does not plan to
operate in the snack food industry  after  consummation  of the asset sale.  The
Company's Board of Directors is exploring its alternatives and opportunities and
may seek to enter  into a new line of  business  after the  closing of the asset
sale;  however,  the Board of Directors has not  identified  any new business at
present and if the Board of Directors does not successfully  identify a new line
of business,  it may seek to sell or  liquidate  the Company and pay out the net
cash to its shareholders.

            Additionally,  the sale is  subject  to  regulatory  approval.  This
transaction is subject to satisfaction of various conditions,  Hart Scott Rodino
Act  approval,  and  other  governmental  approvals  and  the  obtaining  of all
necessary  consents.  Delicious  has  received  an  opinion  from its  financial
advisor, Valuemetrics,  Inc., that the amount of consideration to be received by
the Company is fair from a financial perspective.

            The  transaction  has been  approved by a majority of the  Company's
shareholders  and an  Information  Statement  as filed with the  Securities  and
Exchange  Commission  ("SEC") on  Schedule  14C on May 3, 2000 was mailed to all
shareholders of record as of April 14, 2000 on or about May 5, 2000.

            The Company's auditors have questioned the ability of the Company to
continue  as a  going  concern  due  to  recurring  losses  from  operations,  a
significant net working capital deficit and the fact that the Company's existing
revolving  line of credit will not be renewed  beyond June,  15, 2000.  Although
management  believes that the Company will continue operations until the pending
asset sale described above is completed,  there is no guarantee that the Company
can remain viable until the conclusion of the pending transaction .

            There  can  be no  assurance  that  the  Company  will  successfully
complete the  transaction  contemplated  in the APA or, if such  transaction  is
completed,  the  Company  will have funds  sufficient  to meet its  obligations.
Should the Company be unable to complete the transaction  discussed  above,  the
Company will likely need to seek another buyer,  raise additional debt or equity
financing and/or curtail its operations.


Results of Operations

            The Company's auditors have questioned the ability of the Company to
continue  as a  going  concern  due  to  recurring  losses  from  operations,  a
significant net working capital deficit and the fact that the Company's existing
revolving  line of credit  will not be renewed  beyond June 15,  2000.  Although
management  believes that the Company will continue operations until the pending
asset sale is  completed,  there is no  guarantee  that the  Company  can remain
viable until the conclusion of the pending transaction.  The Company's financial
statements  have been presented on the basis that it is a going  concern,  which
contemplates  the  realization of assets and the  satisfaction of liabilities in
the normal  course of  business.  The  financial  statements  do not include any
adjustments  to reflect the possible  future effects on the  recoverability  and
classification of assets or the amounts and  classifications of liabilities that
may result in the event the Company's plans are not successful.

Net Sales.  Net sales  decreased  48% to $6.4 million for the three months ended
March 31, 2000. Delicious brand product sales decreased partially as a result of
changes in the buying habits of  distributors  as well as increased  competition
from private label and national brands.  Distributors formerly visited retailers
multiple times each week and relied on unit volume to earn profits. Distributors
currently  rely on less visits per week,  lower  volume sales and a higher gross
margin.  Effective  August  2, 1999 the  Company  terminated  business  with its
largest  distributor of Delicious  brand products due to poor  performance.  The
distributor  represented  approximately  15% of the Company's sales during 1998.
While the Company has  replaced  this  distributor  with new  distributors,  the
Company

                                       7

<PAGE>

continues to experience a decline in sales.  In response to the  termination  of
this  distributor,  the owner ceased  carrying the  Company's  products in their
other divisions.  Also during 1999, industry  consolidation led to several major
customers being  purchased by competitors  and the loss of sales.  Salerno brand
product sales declined primarily as a result of reduced sales to grocery chains,
caused by  increased  competition,  in two  regions of the  country.  Sales were
negatively affected by the Company's inability to obtain inventory, as discussed
in "Liquidity and Capital Resources" below.

Gross Profit.  Gross profit decreased 39.3% to $1.7 million for the three months
ended  March 31,  2000.  The  gross  profit  decrease,  $1.1  million,  resulted
primarily from the sales reduction discussed above. Gross profit as a percentage
of sales  increased  3.6%,  primarily  as a result  of  Salerno's  gross  profit
increasing  6%.  Salerno's  gross  profit  increased  as a result  of a 3% price
increase effective in January and reduced promotional allowances.  Delicious and
Frookie gross profit declined. Delicious gross profit declined 5% as competition
in promotionally priced cookies resulted in heavier promotional expenses.

Selling,   General  and  Administrative   Expenses.  The  selling,  general  and
administrative  expenses  decrease,  $840,000,  resulted  primarily  from  lower
selling expenses related to reduced sales and lower promotional expenses.

Other Income (Expense) Other expenses  increased 20.2% to $194,000 for the three
months ended March 31, 2000.  This increase was primarily due to higher interest
expense related to increased borrowings.

Provision  for Income Tax.  The  provision  for income tax for the three  months
ended March 31, 2000 was zero, as a result of there being a net  operating  loss
for the period for which a valuation  allowance  was  provided to reduce the tax
benefit of this loss.  The  valuation  allowance  increase  for the three months
ended  March  31,  2000 was  $610,000.  The  valuation  allowance  increase  was
primarily due to the future  uncertainty  of the future  utilization  of the net
operating losses  generated.  The variation of the Company's  effective tax rate
from  the  federal  statutory  tax  rate is  principally  due to  non-deductible
amortization  of  intangible  assets  and  the  effect  of the  increase  in the
valuation allowance.

Net Loss Net loss  increased  33.3% to $1.6  million for the three  months ended
March 31, 2000 and was a result of the factors discussed above.

Liquidity and Capital Resources

            Currently,  the Company has  insufficient  funds for its needs.  The
Company is seeking funds from the sale of certain  assets and  liabilities  (see
"Recent History" for previous discussion);  however, this transaction is subject
to satisfaction of various  conditions,  including the approval of a majority of
the  shareholders  of  the  Company,  Hart  Scott  Rodino  Act  approval,  other
governmental  approvals  and  obtaining  all  necessary  consents.  There  is no
assurance that this  transaction  will be completed and that an alternate source
of  additional  funds can be obtained  on  acceptable  terms,  if at all. If the
Company is unable to obtain additional  financing or generate positive cash flow
or sell  substantially all its assets, the Company's business will be materially
adversely affected.

            In recent periods,  the Company has utilized its working capital and
proceeds from both private  placements and the Company's initial public offering
(the  "Initial  Public  Offering")  of  common  stock,  $.01 par value per share
("Common Stock") to cover operating deficits.  Because the Company purchases its
products  from  co-packers,  it does not intend to invest in plant or  equipment
relating to the manufacture of products for sale. Further,  the Company believes
that its  existing  fleet of leased  trucks is  sufficient  for the  foreseeable
future. In addition,  the Company's  introduction of new products  represents an
immaterial  capital  expenditure  because  co-packers  are  responsible  for the
research,  development  and  ingredients  costs.  The only costs incurred by the
Company  are  packaging  design  costs,  which did not exceed  $100,000 in 1999.
Consequently,  additions  to  property  and  equipment  are not  expected  to be
material in future periods.

            On April 12, 1999,  the Company  consummated a private  placement of
35,000  shares of Series B  Preferred  Stock and a warrant to  purchase  700,000
shares of Common Stock for an aggregate price of $1.75 million. The net proceeds
of $1.5  million were  applied by the Company to  primarily  reduce  outstanding
trade  payables  balances.


                                       8

<PAGE>

Each  share  of  Series  B  Preferred  Stock  is  currently   convertible   into
approximately  seven  shares of Common  Stock,  subject to certain  antidilution
provisions.  The  warrant  to  purchase  700,000  shares of Common  Stock has an
initial  exercise  price of $0.01 per share,  subject  to  certain  antidilution
provisions,  for a term of ten years from the date of its issuance.  The warrant
was exercised on April 7, 2000.

            On April 27, 1999,  9% promissory  notes in the aggregate  principal
amount  of  approximately  $393,000  matured.  The  Company  did not  repay  the
promissory  notes and  currently  does not have  funds to repay  the  promissory
notes, and expects to repay the notes as funds become available.

            On August 18,  1999,  the  Company  issued  promissory  notes in the
aggregate  principal  amount of $360,000  (the  "Notes").  Interest on the Notes
accrues at a rate of 10% per annum.  A Note in the principal  amount of $250,000
was converted at the holder's request to an 8% Note (as defined below) on August
30, 1999. The remaining Note in the principal amount of $110,000, along with all
accrued interest on the Note, was paid on September 3, 1999.

            On  August  30,  1999,  the  Company  issued  an  8%  non-negotiable
unsecured convertible promissory note in the principal amount of $5,250,000 (the
"8% Notes").  The 8% Notes and accrued  interest thereon are due and payable one
year from issuance of the 8% Notes. The 8% Notes are convertible,  at the option
of the 8% Note holder,  into shares of the Company's Common Stock at the rate of
one share for each $5.00 of outstanding principal amount.

            On December 23, 1999, the Company  consummated an initial closing of
a private  placement  to which it issued an  aggregate  of 170,038  share of 12%
Cumulative  Series C Preferred Stock for an aggregate  price of $3,401,000.  The
net proceeds of $2,993,000 were applied by the Company to increase cash balances
and reduce outstanding trade payable balances.

            On January 7, 2000,  the Company  consummated a second  closing of a
private  placement  to which it issued  an  aggregate  of  83,625  shares of 12%
Cumulative  Series C Preferred Stock for an aggregate  price of $1,673,000.  The
net proceeds of $1,467,000 were applied by the Company to increase cash balances
and reduce outstanding trade payable balances.

            On April 6, 2000, the Company  consummated  the closing of a private
placement  to which it  issued an  aggregate  100,000  shares of 12%  Cumulative
Series D Preferred Stock for an aggregate price of $2,000,000.  The net proceeds
of $1,725,000  were used as follows:  (1) $500,000 was deposited  into a special
escrow  reserve  account  related to the pending  asset sale of the Company (see
"Recent History" for previous  discussion),  and (2) $1,225,000 to increase cash
balances, paydown the bank loan and reduce outstanding trade payable balances.

            During January  through March,  the Company was unable to obtain all
the  inventory  needed  to fill  customer  orders,  due to  many of its  vendors
requiring C.O.D. terms. All vendors continue to ship inventory.


Forward-Looking Statements

            This report contains certain  forward-looking  statements within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby.  Although the Company believes that
the assumptions  underlying the forward-looking  statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this report will
prove to be accurate. In light of the significant  uncertainties inherent in the
forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and plans of the Company will be achieved.

Item 3:  Quantitative and Qualitative Disclosures About Market Risk

                                       9


<PAGE>

         At March 31, 2000, the Company had no outstanding  derivative financial
instruments. All of the Company's transactions occur in U.S. dollars. Therefore,
the Company is not subject to significant foreign currency exchange risk.




                                       10
<PAGE>
Part II: Other Information

Item 1:  Legal Proceedings

            On  April  27,  1999,  the  remaining  outstanding  9%  Subordinated
Convertible  Promissory  Notes (the "9% Notes")  aggregate  principal  amount of
approximately  $393,000,  matured.  The  Company has not repaid the 9% Notes and
currently  does not have funds to repay such amounts.  The Company  believes its
credit facility with U.S. Bancorp  prohibits  repayment of the principal portion
of these subordinated  notes. One of the noteholders has filed a lawsuit against
the Company seeking repayment of his note.

            On October 9, 1999 one of the Company's suppliers filed suit against
the Company in the Circuit  Court of Cook County,  Illinois  claiming  breach of
contract and bad faith dealing.  The Company  answered the complaint and filed a
counterclaim for breach of contract due to poor quality of products. The Company
continues to do business with this supplier; however, the Company has terminated
its contract  with this  supplier.  In the opinion of  management,  this suit is
without merit but  unfavorable  disposition  could have a material effect on the
Company's financial position,  results of operations or liquidity.  In addition,
from time to time, the Company may be subject to claims and lawsuits  arising in
the normal course of business.

Item 2:  Changes in Securities and Use of Proceeds

(1.c.)   The following unregistered securities were issued by the Company during
         the three months ended March 31, 2000:
<TABLE>
<CAPTION>

                                          Description of                      Number of Shares                 Exercise Price
     Date of Issuance                   Securities Issued               Issued or Subject to Options             per Share
     ----------------                   -----------------               ----------------------------             ---------
<S>       <C>                  <C>                                                <C>                              <C>
          1/1/00                       Common Stock Options                         4,500                           $1.50
          1/7/00               Cumulative Series C Preferred Stock                 83,625                          $20.00
          3/24/00              Cumulative Series D Preferred Stock                100,000                          $20.00
</TABLE>

         All of  the  above  options  were  granted  to  non-employee  directors
         pursuant to the 1994 Formula  Stock Option Plan.  These  options have a
         vesting period of three years and a life of ten years.

         Each share of Series C and Series D Preferred Stock is convertible into
         ten  shares of  Common  Stock and pays an  annual  dividend  of 12%.  A
         commission  of 26,163  shares of Series C  Preferred  Stock and $68,000
         were paid to two  placement  agents  in  connection  with the  Series C
         Cumulative  Preferred  Stock.  A commission of $210,000 was paid to two
         placement  agents in connection with the Series D Cumulative  Preferred
         Stock.

         The  issuance  of  these  securities  is  claimed  to  be  exempt  from
         registration pursuant to Section 4(2) of the Securities of Act of 1933,
         as  amended,  as  transactions  by an  issuer  not  involving  a public
         offering.

Item 4:  Submission of Matters to Vote of Security Holders:

         The  consent of a majority of  Security  Holders was  obtained to enter
into the Asset Purchase Agreement,  discussed herein and to change the Company's
name to Next Generation Technology Holdings, Inc. See the Company's Schedule 14C
filed with the SEC on May 3, 2000 incorporated herein by reference.

Item 6:  Exhibits and reports on Form 8-K:
         a)   Exhibits:  27 - Financial Data Schedule
         b)   A Form 8-K was filed on February 1, 2000.

                                       11
<PAGE>

                                   Signatures

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


                                               DELICIOUS BRANDS, INC.
                                                    (Registrant)

      May 22, 2000                      /s/ Thomas J. Guinan
------------------------          ----------------------------------------------
          Date                                    Thomas J. Guinan
                                              President, Director and
                                              Chief Executive Officer



      May 22, 2000                      /s/ Jeffry W. Weiner
------------------------          ----------------------------------------------
          Date                                    Jeffry W. Weiner
                                            Executive Vice President and
                                              Chief Financial Officer


                                       12