<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K

               [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 29, 2000

                                       OR

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

                        COMMISSION FILE NUMBER 000-24124

                               FRESH AMERICA CORP.
                               1049 AVENUE H EAST
                               ARLINGTON, TX 76011
                                 (817) 385-3000

INCORPORATED IN:                                                    IRS EMPLOYER
TEXAS                                             IDENTIFICATION NO.: 76-0281274

Securities registered pursuant to Section 12(b) of the Act:
NONE

Securities registered pursuant to Section 12(g) of the Act:

Title of Each Class                    Name of Each Exchange on Which Registered
-------------------                    -----------------------------------------
Common Stock, $0.01 Par Value          None

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 proceeding 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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
form 10-K. [X]

The number of common shares outstanding of the registrant was 8,410,098 as of
March 22, 2002.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

<PAGE>


                                     PART I

ITEM 1. BUSINESS.

General

Fresh America Corp. ("Fresh America", or the "Company", "we", "us", or "our"), a
Texas corporation founded in 1989, provides procurement, processing, repacking,
warehousing and distribution services of fresh produce and other refrigerated
food products for a wide variety of customers in the retail, food service and
food distribution businesses. Additional services such as inventory planning and
customer support are also provided as areas of unique specialization. Because of
the perishable nature of fresh fruits and vegetables, distribution requires
specialists such as Fresh America that can maintain the "cold chain" of
distribution to ensure safety, quality and yield for the wide variety of
products available in today's marketplace. The Company serves over 4,000
customers in 42 states through 8 distribution facilities located in Dallas and
Houston, Texas; Atlanta, Georgia; Scranton and Wilkes-Barre, Pennsylvania;
Richmond, Indiana; Chicago, Illinois and Los Angeles, California. Prior to
December 2001, the Company maintained its headquarters in Dallas, Texas. In
December 2001, the Company moved all central office operations to its facility
in Arlington, Texas.

The Company provides fresh produce and related products and services in four
primary areas of specialization: programs, retail/wholesale, logistics and
value-added processing and repacking. In 1999 and 2000, the Company made a
decision to reduce its presence in specialty food service by divesting seven
operations that lacked sufficient market presence and were underperforming
(please see "Acquisitions/Divestitures" below). Within each of the
aforementioned areas of specialization, the Company provides a broad array of
services, which may include centralized purchasing, processing, repacking,
warehousing, distribution, inventory planning, system integration and customer
support. An expanded description of these areas of specialization follows:

Programs. Due to the specialized handling requirements associated with fresh
fruits and vegetables and Fresh America's integrated distribution network and
related services, Fresh America's network of facilities that have the ability to
repack or process positions the Company to offer specialized services to various
retail, wholesale and distribution companies. These services allow customers,
such as Dole Fresh Vegetables, Inc. and CKE Restaurants/MBM Corporation to
outsource certain aspects of their fresh produce distribution function to Fresh
America primarily for the purpose of eliminating the infrastructure required to
perform those activities.

Retail/Wholesale. The Company sells produce and provides distribution services
to national and regional retail or wholesale accounts, which include
supermarkets, independent grocers and other purchasers of fresh produce and
other food products. Fresh America provides a variety of services, which include
procurement, repackaging, warehousing and distribution of fresh produce for
these customers. The Company also imports specialty produce from various global
sources to ensure consistent availability. However, the volume of importing is
expected to decrease significantly due to the sale of Ontario Tree Fruits in
March 2001 and proposed sale of Bacchus Fresh International in August 2001
(please see "Acquisitions/Divestitures" below). Produce is generally distributed
to central warehouses or, on a limited basis, directly to the retail location.

Value-Added Capabilities. The Company performs certain value-added functions for
customers that complement the other services it provides. These functions
include produce ripening and repackaging activities, the assembly and
preparation of fruit baskets and party trays of precut vegetables and the
processing and packing of various produce items. Certain operations employ
highly specialized ripening, sorting and packing equipment designed to increase
efficiency and decrease costs.

Logistics. The Company's freight service currently operates approximately 100
trucks each week. These services are targeted for customers that can provide
weekly commitments on a consistent basis for a year round flat rate as well as
customers that call randomly for load assistance on a flat percentage basis.
Internal services are provided on an as-needed basis at combined rates that are
less than what would be available through other sources.

                                       1

<PAGE>

Specialty Food Service. Food service customers include restaurants, hotels,
schools, hospitals and other institutions. Produce is purchased by the Company
and shipped to a number of customers. Distribution of produce to food service
accounts generally requires a higher level of service, entailing as many as six
deliveries a week. The Company is de-emphasizing this area of specialization in
the future to better take advantage of the Company's strengths in the other
areas. See Item 7 - "Management's Discussion and Analysis" for further
discussion.

Products. The Company provides and procures approximately 500 items in several
product categories, including fresh produce, refrigerated prepackaged produce,
and processed foods. Fresh produce includes staple items such as apples, lemons,
lettuce, bananas, oranges, grapefruit, onions, tomatoes, potatoes and garlic,
and seasonal items such as strawberries, blueberries, cherries, grapes, peaches,
plums, avocados and watermelons.

Refrigerated prepackaged produce includes chopped lettuce and presliced fruits
and vegetables, including party trays of fresh, precut vegetables. Processed
foods include prepackaged salads, prepared salads and a limited selection of
salad dressings. The Company also provides certain specialty types of produce.
For example, a subsidiary, Francisco Distributing Co., ships and repackages
mangos, peppers and honeydew melons in the United States.

Contracts and Business Arrangements. Fresh America's business relationships with
its customers are established on the basis of daily orders as well as program
and service arrangements. Daily orders are typically priced to customers on the
basis of cost to the Company plus a pre-determined margin. Daily orders range in
duration from one day to one month. Anything in excess of one month in duration
is considered to be a program and service arrangement. The program and service
arrangements are priced to customers as either pre-determined margin contracts,
like those used for daily orders, or fee for service contracts where the price
remains constant and the Company's margin fluctuates with the changes in the
market prices at which the product is purchased. Due to the perishable nature of
the Company's products and fluctuating commodity prices, the Company's program
and service arrangements are usually negotiated on a seasonal basis, with an
average duration of three to six months. At the end of each term, the program
and service arrangements are typically renegotiated based on market conditions
existing at that time. Each contract is set up individually and, depending on
the contract, the Company has a varying level of ability to increase or decrease
prices consistent with fluctuations in the market. When the Company enters into
fee for service contracts, which do not provide for the ability to change prices
to correspond with market fluctuations, the Company typically attempts to
negotiate corresponding fixed price agreements with growers/shippers. When
agreements with growers/shippers and customers are properly matched, the Company
is better able to protect itself against increasing commodity prices and
maintain its profitability.

Warehouse and Distribution. The Company conducted its operations during fiscal
2000 out of 9 distribution facilities located in Arizona, California, Georgia,
Illinois, Indiana, Pennsylvania and Texas. The Company sold its Arizona
operation in April 2001 and closed its Florida operation in May 2001. In
addition, the Company maintains its Company headquarters in Arlington, Texas.

Each distribution center employs between 20 and 250 employees, most of whom are
involved in receiving and shipping, as well as driving the Company's
transportation fleet. The distribution centers are designed for receiving, cold
storage, sorting and shipping, and are positioned to allow the Company to
distribute perishable products by truck to its customers throughout the
respective regional geographical area. Fresh America operates from approximately
930 thousand square feet of warehousing and processing space.

Fresh America's products are delivered from its distribution centers to
customers utilizing Fresh America's fleet of leased and owned tractors,
refrigerated trailers and refrigerated trucks, as well as third party trucking
companies.

                                       2

<PAGE>

Purchasing. Fresh America employs purchasing agents in most of its operating
locations who purchase produce directly from growers, shippers and grower
cooperatives. The Company selects its suppliers carefully and regularly monitors
their ability to provide quality products at competitive prices. As a result of
its substantial volume of purchases, the Company is able to obtain fresh produce
of premium size, quality and appearance at very competitive costs. In many
cases, the Company purchases produce only from selected warehouses within a
supplier's system, based on management's assessment of the quality provided by
the particular warehouses. Although purchases by Fresh America frequently
constitute a significant portion of a particular supplier's sales, no single
supplier accounts for more than ten percent of Fresh America's costs of goods
sold. Management believes that all of the items stocked in its inventory are
available from numerous suppliers at competitive prices.

In addition, the Company has a central buying department and logistics group
located in Arlington, Texas to handle certain requirements of its program
business, purchase certain staple items common to all business units, enhance
its buying power and manage transportation for certain customers.

Quality Control. The Company focuses on quality and freshness at each step of
the receipt, processing and distribution process. Because most of the products
delivered by the Company are perishable, proper handling, including maintenance
of constant temperature and humidity, is critical to the control of product
spoilage. Equally important is the Company's ability to accurately order the
correct quantity of each product to meet the demands of its customers. Although
the nature of the Company's business is such that some amount of its inventory
will be lost through spoilage, management attempts to minimize this expense.
Produce is transported to and from the Company's operating locations in
refrigerated, temperature-monitored trucks. When produce is to be received, the
Company's personnel inspect the products to ensure that quality specifications
have been satisfied. Accepted items are immediately stored in product specific,
temperature controlled environments. Purchased product typically spends no more
than three days in the Company's facilities before delivery to a specific
customer.

Customer Concentration. Sam's accounted for 30.0% of sales in 2000 and 30.5% in
1999. Due to the loss of the distribution agreement with Sam's, the Company
anticipates sales to Sam's will comprise less than 10% of its sales in 2001.

Personnel. Fresh America refers to its employees as "associates" and attempts to
maintain a team spirit among all of its associates. Management believes that the
Company's relations with its associates are good. As of August 9, 2001 the
Company employed a total of approximately 580 full-time associates and 10
part-time associates, including approximately 26 corporate associates and 564
regional associates. The Company's operations in Scranton, Pennsylvania and Los
Angeles, California have collective bargaining agreements with their warehouse
associates.

Competition. The Company operates in highly competitive markets, and its success
will be largely dependent on its ability to manage product from source to
customer. The produce industry is highly fragmented and is primarily comprised
of small, family-owned operations serving local and regional markets. The
Company also competes with national food service and wholesale food distribution
companies.

Seasonality.  See Item 7-MD&A under the caption "Quarterly Results and
Seasonality" for information about the seasonality of the Company's business.

Acquisitions/Divestitures
-------------------------

The Company commenced operations in 1989 by delivering produce to one Sam's
Club, a division of Wal-Mart Stores, Inc. The success of the initial venture in
Houston, Texas allowed the Company to rapidly expand its relationship with Sam's
and provide produce for 375 Sam's Clubs in the Midwest, Northeast, Southeast and
Southwest at the peak of its distribution arrangement with Sam's. The Company's
distribution agreement with Sam's was governed by a written contract which
expired on October 24, 2000. Thereafter, Sam's began internal

                                       3

<PAGE>

distribution of produce for all of its clubs; however, the Company continues to
supply certain produce items to Sam's on a non-contractual basis.

Because the Company understood the Sam's agreement would expire in 2000, in 1995
the Company began to implement a strategy that would attract new customers over
a wider geographical area and diversify its customer base into other areas of
produce distribution. In executing its strategy, the Company completed 16
acquisitions from 1995 through 1998 and added various customer alliances
involving fresh produce procurement, warehousing, distribution and/or marketing.
Through these acquisitions and new customer relationships, the Company expanded
its cold chain distribution network to become national in scope, diversified its
customer and supplier relationships and expanded its value-added processing
capabilities. Six of these acquisitions in the specialty food service business
never achieved sufficient market presence and were closed or sold during 1999
and 2000.

The table below identifies the acquisitions, their primary area(s) of
distribution and specialization and, where appropriate, the date divested:

<TABLE>
<CAPTION>
                                                                                        Primary
Date Acquired                           Company                          Location      Services/a/  Date Divested
-------------                           -------                          --------      -----------  -------------
<S>                  <C>                                           <C>                 <C>          <C>
September 1995       Lone Star Produce, Inc.                       Austin, TX                1      November 1999
November 1996        Produce Plus, Inc./b/                         Houston, TX               1
January 1997         Chef's Produce Team                           Los Angeles, CA           1      October 1999
March 1997           One More Tomato, Inc./b/                      Houston, TX               3
May 1997             Pittman Produce of Orlando, Inc.              Orlando, FL               1      September 1999
August 1997          C. Kalil Fruit & Vegetable, Inc./b/           Houston, TX              2,3
September 1997       Bano Quality Produce, Inc.                    Baton Rouge, LA          1,3     November 1999
December 1997        Premier Produce, Inc.                         San Antonio, TX           1      October 1999
December 1997        Tomahawk Produce, Inc.                        Atlanta, GA             1,2,3    September 1999
January 1998         Hereford Haven, Inc. d/b/a Martin Bros.       Dallas, TX               2,3
February 1998        Francisco Distributing Co.                    Los Angeles, CA           2
March 1998           Ontario Tree Fruits Ltd. and Affiliates       Toronto, Ontario          2      March 2001/d/
August 1998          Jos. Notarianni & Co.                         Scranton, PA             2,3
October 1998         King's Onion House                            Phoenix, AZ              2,3     April 2001/e/
October 1998         Thompson's Produce Company                    Pensacola, FL            1,3     May 2001/f/
November 1998        Sam Perricone Citrus Company                  Los Angeles, CA           2      February 2000/c/
</TABLE>

/a/  Primary Services:  1. Specialty Food Service; 2. Retail/Wholesale; 3.
     Value-Added.
/b/  Subsequent to their acquisition dates, these companies were integrated into
     one location in Houston, Texas in order to reduce costs and increase
     efficiencies.
/c/  Perricone closed its market operation in Los Angeles, California and
     continues to operate its brokerage business in Walnut Creek and Visalia,
     California.
/d/  The operating assets of Ontario Tree Fruits, Ltd. and its affiliates were
     sold in March 2001.
/e/  All outstanding common stock for King's Onion House was sold in April 2001.
/f/  Original asset purchase rescinded by legal arbitration in May 2001.

Tomahawk Produce, Inc., which operated in the Atlanta, Georgia produce market,
relocated its remaining tomato repacking operation to the Company's distribution
facility, also located in Atlanta, that was primarily dedicated to providing
produce under the Sam's distribution agreement. The tomato operation, coupled
with expanding program distribution, lessened dependence on the Sam's business
and positioned the Atlanta facility for continuing operations after this
facility's remaining Sam's Clubs were withdrawn from service in December 1999.

In February 2000, Allied-Perricone, Inc. f/k/a Sam Perricone Citrus Company
closed its market operation in Los Angeles, California but continues to operate
its brokerage business in Walnut Creek and Visalia, California.

On March 16, 2001 the Company sold the operating assets of its Canadian
operation to better focus on its domestic opportunities. A major customer was
lost during 1999, the Company was not able to replace the lost

                                       4

<PAGE>

business and the Canadian operations did not fit well with the Company's focus
on value-added services and products. The Canadian operations incurred losses of
$2.0 million during fiscal 2000 and $2.0 million in the first quarter 2001.
However, by taking advantage of the import knowledge gained through the Canadian
operations, the Company will continue to provide its customers with imported
produce through its other operating divisions.

On April 20, 2001 the Company sold all of the outstanding capital stock of
King's Onion House. The Company was not able to achieve profitable operations in
fiscal 2000 and did not believe Phoenix represented a strategic market for
future growth. Losses totaled $5.5 million during fiscal 2000.

Through an arbitration, the original October 1998 purchase by Fresh America of
the assets of Thompson's Produce Company was rescinded, effective May 12, 2001.
As a result, the Company was relieved of its real property lease obligations in
Pensacola, Florida (total future rental payments were $5.4 million) in exchange
for the return of net assets totaling $1.4 million. This location was a
non-performing asset for the Company, with losses totaling $3.3 million during
fiscal 2000 and approximately $850,000 in the first quarter of 2001.

Subsequent to December 29, 2000, the Company sold the assets of Bacchus Fresh
International, and an idle real estate property at Cutten Road in Houston,
Texas. The proceeds of approximately $871,000 were used to reduce the Company's
senior debt.

Strategy
--------

As discussed above in "Acquisitions/Divestitures," in October 1999, the Company
decided to divest most of its specialty food service operations due to
insufficient local market presence and poor performance. Today the Company is
focused on areas of proven performance and success, primarily wholesale/retail
sales and distribution. As a result, Fresh America is better positioned to take
advantage and further enhance its existing capabilities in such areas as retail
consolidation, distribution consolidation, food safety, technology, branded
produce and managing product from source to customer.

The Company is focused on taking advantage of the infrastructure of its existing
businesses to further diversify and broaden its customer base, market
penetration and service offerings. Management has developed a number of
important strategies considered key to the success of the business: (i) adhere
to its proven operating model requiring high food safety standards while
providing quality products with high yields at reasonable prices, (ii) actively
support and enhance customer and supplier relationships, (iii) maintain a low
operating cost structure, (iv) utilize systems to maximize customer
communication and activities, and (v) proactively pursue alliances and internal
expansions.

The Company intends to expand its value-added operations, particularly in the
area of tomato repack, outsource relationships through national programs, and
logistics services, to both internal and external customers. The Company's focus
on value-added products should have a favorable impact on the Company's margin.
The Company expects that the retail, food service and food distribution
companies will continue to consolidate and look for value beyond low prices,
therefore making the process of managing product from source to customer an
increasingly important component of the Company's national distribution
capabilities. Continuing emphasis on food safety and the cold chain required for
proper produce distribution should align the Company with national trends in
consumption and government regulation.

In the near term, the Company will focus on a slower, more controlled pace of
growth than in prior years and will pursue taking advantage of its existing
infrastructure and enhancing efficiencies in its current base of operations.

Financial Restructuring
-----------------------

Throughout its operational restructuring during the past two years, the Company
has pursued various financing opportunities in an effort to restructure its
debt. In September 2001, the Company completed a financial restructuring whereby
North Texas Opportunity Fund LP, ("NTOF") purchased 50,000 shares of the
Company's

                                       5

<PAGE>

Series D cumulative redeemable preferred stock and warrants exercisable for
84,100,980 shares of our common stock for cash proceeds of $5 million. Arthur
Hollingsworth, an affiliate of NTOF and the Company's Chairman of the Board,
subsequently purchased from NTOF 3,500 of their 50,000 shares of Series D
preferred stock and 5,887,069 of the 84,100,980 warrants that had been purchased
by NTOF at the same price as paid by NTOF. In connection with the NTOF
investment in the Company, John Hancock Life Insurance Company, John Hancock
Variable Life Insurance Company, Signature 1A (Cayman), Ltd. and Signature 3
Limited (collectively, the "Subordinated Lender") exchanged $20 million of
subordinated debt, warrants to purchase 576,134 shares of common stock, 50,000
shares of Series C cumulative redeemable preferred stock and all accrued
interest and dividends for 27,000 shares of the Company's Series D cumulative
redeemable preferred stock and warrants exercisable for 45,414,529 shares of our
common stock.

The new warrants cannot be exercised until the Company's articles of
incorporation are amended to increase the Company's authorized common stock from
10 million shares to 250 million shares and decrease the common stock's stated
par value from $.01 to $.0001 per share. The Board of Directors has approved
such amendment but the holders of two-thirds of the Company's issued and
outstanding capital stock entitled to vote must approve it at the Company's
Special Meeting to be held on December 28, 2001. NTOF has received the agreement
of the holders of 47% of the issued and outstanding common stock to vote in
favor of the amendment, thereby requiring the holders of an additional 19.67% of
the issued and outstanding common stock to approve the amendment before the
warrants can be exercised.

The warrants issued to NTOF and the Subordinated Lender are exercisable for a
ten year period which commenced on August 14, 2001 and ends August 14, 2011. The
exercise price of the warrants is $.0001 per share and the warrants are subject
to anti-dilution provisions providing adjustment in the event of any
recapitalization, stock dividend, stock split, reorganization, merger or similar
transaction or certain issuances of shares below their market value.

Each share of the 77,000 shares of Series D preferred stock issued to NTOF and
the Subordinated Lender has the right to receive cumulative dividends, payable
monthly in cash and calculated on the basis of an annual dividend rate of $8.00
for each share plus interest on any accrued but unpaid dividends. The Company
may not declare a dividend on any other class of capital stock so long as any
accrued dividends for the preferred stock have not been paid. If the Company
pays a dividend to holders of any other class of the Company's capital stock,
then the Company will pay a dilution fee to the holders of the preferred stock.
In the event that the requisite shareholder approval for the amendment to our
charter discussed above is not obtained, the annual dividend rate will increase
to $18 for each share of preferred stock and holders of preferred stock will be
entitled to vote as a separate class for all matters on which the holders of
common stock are entitled to vote, with each share entitled to one vote per
share; however, where applicable law prevents class voting, holders of the
preferred stock will be entitled to vote together with the holders of common
stock with each share of preferred stock entitled to 250 votes per share being
12,500,000 votes for NTOF and 6,750,000 for the Subordinated Lender.

NTOF and the Subordinated Lender have a put right on the Series D preferred
stock after August 14, 2004, and immediately upon any breach by the Company of
the financial restructuring agreements or any sale, merger or change of control
of the Company at $100.00 per share plus accrued and unpaid dividends. If the
requisite shareholder approval for the amendment to our charter discussed above
is not obtained, NTOF and the Subordinated Lender may exercise their put right
at three times the face value of the preferred stock, such amount being
$15,000,000 for NTOF and $8,100,000 for the Subordinated Lender. Additionally,
the holders of the preferred stock, have the right to redeem their shares of
preferred stock on the same terms of the put right after April 30, 2007 or
immediately upon the occurrence of any sale, merger or change of control of the
Company, any qualified public offering with net proceeds of at least $20,000,000
or any private equity financing with net proceeds of at least $20,000,000.

Each share of Series D preferred stock has a preference upon liquidation,
dissolution, winding up or sale of the Company equal to $100.00 per share plus
accrued and unpaid interest. If the requisite shareholder approval discussed
above is not obtained, the holders of the preferred stock will have the right to
a liquidation preference payment equal to the face value of the preferred stock
plus 90% of the fair market value of the remaining

                                       6

<PAGE>

property of the Company and the holders of the common stock will have the right
to a liquidation preference payment equal to the remaining 10% of the fair
market value of the remaining property of the Company.

Under the terms of the Series D preferred stock and the Shareholders Agreement
dated August 14, 2001 by and among the Company, NTOF and the Subordinated
Lender, NTOF has the right to appoint three directors to the Board of Directors
and the Subordinated Lender has the right to appoint one director to the Board
of Directors, unless it waives such right. Because the Subordinated Lender
waived its right to appoint a director, NTOF appointed four members to the
Company's board of directors in October 2001. The current board of directors
consists of five members. In addition, NTOF and the Subordinated Lender each
have the right to designate one observer to attend all meetings of the Board of
Directors. Under the Shareholders Agreement, the Company granted each holder of
preferred stock the preemptive right to purchase, pro rata, all or any part of
new securities offered by the Company. The Shareholders Agreement also grants
each holder of preferred stock the right of first offer and co-sale rights in
the event another holder of preferred stock elects to sell its stock. Prior to a
public offering with net proceeds of at least $20,000,000, if the holder of 50%
or more of the outstanding capital stock of the Company elects to sell all of
its shares, then the holder will have pull-along rights with respect to the
non-selling holders of preferred stock.

Under the Securities Exchange and Purchase Agreement dated August 14, 2001 (the
"Purchase Agreement") by and among the Company, NTOF and the Subordinated
Lender, the Company has granted registration rights to NTOF and the Subordinated
Lender. The registration rights granted include two rights to demand that the
Company register the holder's shares for resale to the public pursuant to the
Securities Act of 1933, an unlimited number of rights to register the holder's
shares for resale to the public pursuant to other public offerings and, upon the
Company's eligibility for use of Form S-3 under the Securities Act of 1933, an
unlimited number of rights to register the holder's shares for resale to the
public on Form S-3.

The Purchase Agreement also requires the Company to obtain NTOF's and/or the
Subordinated Lender's consent prior to taking certain actions in the operation
of its business other than pursuant to the terms of the financial restructuring.
These actions, include, but are not limited to, amending the Company's
organizational documents adversely to NTOF and the Subordinated Lender,
declaring any dividends, selling or leasing any assets of the Company outside of
the ordinary course of business, selling any additional capital stock of the
Company (except pursuant to existing warrants and under the Company's stock
option plan for employees), entering into any transactions with affiliates
(other than in arms-length transactions), paying any management or consulting
fees, acquiring any debt or equity interest in another entity, increasing the
compensation of any executive officer by 5% or more, terminating any key
employee, adopting a new employee benefit plan or employment agreement,
acquiring any property for more than $500,000 or making any capital expenditure
greater than $250,000 individually or $1,000,000 in the aggregate.

The following table sets forth information concerning the beneficial ownership
of Common Stock following the completion of the financial restructuring on
September 5, 2001.

                          Post Financial Restructuring
                               Security Ownership

<TABLE>
<CAPTION>
                                                                       Number of Shares             Percent of
                             Beneficial Owner                           of Common Stock               Class/(1)/
                             ----------------                           ---------------               -----
         <S>                                                          <C>                          <C>
         NTOF                                                          78,213,911/(2)/                  46.5%
         Subordinated Lender                                           45,414,529/(3)/                  27.0%
         Existing Shareholders other than Management                   12,031,478/(5)/                   7.2%
         Management Share Distribution:
              Darren Miles                                              2,724,872/(4)/                   1.6%
              Gary Wiener                                               2,760,472/(6)(7)/                1.6%
              Steve Finberg                                             2,751,372/(6)(8)/                1.6%
              Cheryl Taylor                                             2,724,872/(6)/                   1.6%
              Colon Washburn                                            1,122,435/(9)/                   0.7%
              Arthur Hollingsworth                                      5,877,069/(10)/                  3.5%
</TABLE>

                                       7

<PAGE>

<TABLE>
              <S>                                                                 <C>                  <C>
              Existing Warrants                                                     300,000            0.2%
              Additional Options under `93 & `96 plans not held                     249,787            0.1%
                  by Management
              Option Pool to be issued to Existing Management                     8,265,893            4.9%
              Option Pool to be issued to Future Management                       5,755,270            3.4%
</TABLE>


(1)  Percentages are based upon 8,410,098 shares (the total number of shares of
Common Stock outstanding on the record date) plus the total number of shares
underlying all outstanding options and warrants regardless of whether such
options or warrants are currently exercisable or subject to contingency.

(2)  Includes warrants to purchase 78,213,911 shares of Common Stock owned by
NTOF.

(3)  Includes warrants to purchase 45,414,529 shares of Common Stock owned by
the Hancock Entities.

(4)  Includes options to purchase 2,724,872 shares of Common Stock which are
immediately exercisable subject to the approval of the Charter Amendment.

(5)  Includes 3,166,694 shares of Common Stock and options to purchase 20,000
shares of Common Stock which are held by Larry Martin. Mr. Martin has tendered
his resignation from the Company's employment effective December 1, 2001, but
will be retained thereafter as a consultant to the Company. Also includes
options to purchase 3,633,162 shares of Common Stock, all of which are
immediately exercisable, subject to the approval of the Charter Amendment.

(6)  Includes options to purchase 2,724,872 shares of Common Stock, of which
options to purchase 681,218 shares are immediately exercisable and the remainder
of which are subject to future vesting, and all of which are subject to the
approval of the Charter Amendment.

(7)  Includes options to purchase 35,500 shares of Common Stock which are
currently exercisable.

(8)  Includes options to purchase 26,500 shares of Common Stock which are
currently exercisable.

(9)  Includes options to purchase 1,000,000 shares of Common Stock which are
immediately exercisable subject to the approval of the Charter Amendment.
Includes options to purchase 90,753 shares of Common Stock which are currently
exercisable.

(10) Includes warrants to purchase 5,887,069 shares of Common Stock.

In conjunction with this restructuring, Bank of America, N.A. (the "Senior
Lender") agreed to a payment schedule which will reduce the Company's
indebtedness to the Senior Lender from $5.3 million, which was owed at the time
of closing, to $3.8 million by year-end 2001. Our revolving credit facility with
our Senior Lender has also been restructured as a term note with a maturity date
of January 2, 2002. The Company is negotiating with a new lender to replace the
existing term facility with a revolving credit facility prior to the maturity of
the term loan. There can be no assurance that the Company will be able to
replace its Senior Lender as anticipated or extend its senior credit facility
beyond January 2002, if that becomes necessary.

Management believes that the combination of the effects of the financial
restructure completed in September 2001, cash generated from ongoing operating
activities, and the realization of recent reductions in corporate overhead
expenses will enable the Company to meet its obligations as they come due during
the 2001 calendar year.

ITEM 2.  PROPERTIES.

Prior to December 2001, the Company's headquarters and executive offices
occupied 15,203 square feet of leased space in an office building in Dallas,
Texas. In December 2001, the Company moved all central office operations from
Dallas, Texas to its facility in Arlington, Texas. As of December 6, 2001, the
Company conducts its operations from the following facilities:

                                       8

<PAGE>

<TABLE>
<CAPTION>
                                                              Square           Owned/
                       Location                               Footage          Leased        Expiration Date
-------------------------------------------------------       -------          ------        ---------------
<S>                                                          <C>              <C>            <C>
Arlington, TX                                                  105,000         Leased            03/31/06
Chicago, IL                                                    145,289         Leased            07/31/07
Houston, TX - West Loop                                         80,496         Leased            04/30/08
Atlanta, GA                                                     64,000         Leased            06/30/06
Los Angeles, CA - Blackburn Street                              60,000         Leased            08/31/03
Los Angeles, CA - Leyva Street                                 110,000         Leased            12/31/02
Richmond, IN                                                    37,000          Owned               -
Scranton, PA - Genet Street (2 buildings)                      105,249          Owned               -
Wilkes-Barre, PA                                                50,000         Leased            12/01/04
</TABLE>

The Company owns or is obligated by lease on certain properties related to sold
or closed operations. Such properties are not listed above, as they are not
currently being used in operations, but aggregate approximately 87,640 square
feet of leased space (with expiration dates ranging from 4 months to 6.5 years
as of December 29, 2000) and 2,984 square feet of owned space. The Company has
subleased all of these properties. During 2000, the Company pledged its owned
facilities as collateral security for its senior credit facility. See discussion
of debt arrangements under the caption "Liquidity and Capital Resources" in
Item 7 - MD&A.

Management believes that its existing facilities are adequate for the Company's
present level of operations. Although some consolidation is possible due to
overlap or modernization of facilities, the Company is generally capable of
accommodating growth within each existing geographic territory.

ITEM 3.  LEGAL PROCEEDINGS.

The Company is party to, from time to time, various claims, disputes, legal
actions and other proceedings involving product liability, contracts, equal
employment opportunity, occupational safety and various other matters. In the
opinion of management, the outcome of any pending matters should not have a
material adverse effect on the Company's financial position, results of
operations or liquidity.

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

None.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's Common Stock currently is quoted on Pink Sheets under the symbol
FRES. As of August 9, 2001 the Company had 60 holders of record for its common
stock. The Company estimates that there were in excess of 1,000 beneficial
owners of its common stock as of that date. During 1999 and 2000, the Company's
common stock traded on the Nasdaq Stock Market. The high and low sales prices
for the common stock on the Nasdaq Stock Market for each quarter of fiscal 2000
and 1999 are shown below:

                                                 High           Low
                                          -------------------------------
                2000

                      First Quarter             5 3/8           3 1/4
                      Second Quarter            3 3/4           1 1/8
                      Third Quarter             2 3/4           1 1/2
                      Fourth Quarter            2 3/16            7/8

                                       9

<PAGE>

                1999

                     First Quarter               23 1/2         15 3/4
                     Second Quarter              20 5/8         12 1/2
                     Third Quarter               14 1/2          5
                     Fourth Quarter             6 11/16          3 3/8

Subsequent to December 29, 2000, the Company received notice from The Nasdaq
Stock Market, Inc. that its common stock had failed to maintain the continued
listing standards as required by Nasdaq rules. After a hearing on May 10, 2001,
the Company was notified that the Nasdaq staff had determined the Company's
stock would be delisted and the stock began trading on the Pink Sheets as of May
25, 2001.

The Company has never declared or paid cash dividends on its common stock. The
Company currently intends to retain earnings to support operations and
therefore, does not anticipate paying cash dividends on its common stock in the
foreseeable future. Future payment of cash dividends on its common stock will
depend upon such factors as the Company's earnings, capital requirements,
capital structure, financial condition, contractual restrictions and other
factors deemed relevant by the Board of Directors. In addition, the Company's
current senior credit facility prohibits the payment of cash dividends on any of
its capital stock.

For non-registered issuances of common stock during the prior three years,
please see discussion of July 2000 and April 2001 issuances in MD&A under
caption "Financial Restructuring" under the subheading "Acquisitions".

                                       10

<PAGE>

ITEM 6.  SELECTED FINANCIAL AND OPERATING DATA.

The following selected consolidated financial and operating data should be read
in conjunction with Item 7 - MD&A and Item 8 - Financial Statements and
Supplementary Data contained herein. The consolidated statement of operations
and consolidated balance sheet data for each of the fiscal years in the
five-year period ended December 29, 2000 are derived from the audited financial
statements of the Company.

<TABLE>
<CAPTION>
                                                                         Fiscal Year Ended/(1)(2)/
                                                  ------------------------------------------------------------------------
                                                  Dec. 29, 2000  Dec. 31, 1999  Jan. 1, 1999  Jan. 2, 1998  Jan. 3, 1997
                                                  -------------  -------------  ------------  ------------  --------------
Consolidated Statement of Operations Data:                       (In thousands, except per share amounts)
<S>                                               <C>            <C>            <C>           <C>           <C>
Net sales                                         $   554,554     $   669,875    $  609,490     $  429,524    $  323,775
Cost of sales                                         496,169         591,977       537,556        386,161       291,810
                                                  -----------     -----------    ----------     ----------    ----------
     Gross profit                                      58,385          77,898        71,934         43,363        31,965
                                                  -----------     -----------    ----------     ----------    ----------
Selling, general and administrative expenses           54,023          66,756        51,936         32,734        23,517
Bad debt expense                                        1,912           6,031         1,230             82           156
Depreciation and amortization                           5,506           6,244         3,987          1,805         1,534
Disposition costs and impairment of long-lived
assets                                                 12,791          13,520             -              -             -
Transaction costs                                           -           3,805         1,395              -             -

Settlements of lawsuits                                 1,222            850              -              -             -
                                                  -----------     -----------    ----------     ----------    ----------
     Total operating costs and expenses                75,454          97,206        58,548         34,621        25,207
                                                  -----------     -----------    ----------     ----------    ----------
Operating income (loss)                               (17,069)        (19,308)       13,386          8,742         6,758
Other income (expense)                                 (4,940)         (5,313)       (2,123)           389           (32)
                                                  -----------     -----------    ----------     ----------    ----------
Income (loss) before taxes and extraordinary item     (22,009)        (24,621)       11,263          9,131         6,726
Income tax expense (benefit)                              833          (2,630)        5,041          3,921         2,500
                                                  -----------     -----------    ----------     ----------    ----------
Income (loss) before extraordinary item               (22,842)        (21,991)        6,222          5,210         4,226
Extraordinary gain on extinguishment of debt            1,905               -             -              -             -
                                                  -----------     -----------    ----------     ----------    ----------
     Net income (loss)                                (20,937)    $   (21,991)   $    6,222     $    5,210    $    4,226
Preferred dividends and accretion                         698               -             -              -             -
                                                  -----------     -----------    ----------     ----------    ----------
     Net income (loss) applicable to common
      Shareholders                                $   (21,635)    $   (21,991)   $    6,222     $    5,210    $    4,226
                                                  ===========     ===========    ==========     ==========    ==========
Earnings (loss) per share - basic                 $     (4.13)    $     (4.20)   $     1.27     $     1.19    $     1.00
                                                  ===========     ===========    ==========     ==========    ==========
Earnings (loss) per share - diluted               $     (4.13)    $     (4.20)   $     1.20     $     1.12    $     0.94
                                                  ===========     ===========    ==========     ==========    ==========

<CAPTION>
                                                  ------------------------------------------------------------------------
                                                  Dec. 29, 2000  Dec. 31,1999   Jan. 1, 1999  Jan. 2, 1998  Jan. 3, 1997
                                                  -------------  ------------   ------------  ------------  --------------
Consolidated Balance Sheet Data:                                              (In thousands)
<S>                                               <C>            <C>            <C>           <C>           <C>
Working capital                                   $     2,640     $    12,246    $   28,474     $   11,219    $  11,284
Property and equipment, net                             9,944          24,440        23,900         13,581       10,100
Total assets                                           87,261         134,481       158,099         79,964       45,769
Long-term debt, less current portion                   25,000          32,843        35,985          6,193          547
Shareholders' equity                                    9,402          29,771        50,562         29,335       22,310
</TABLE>

(1)  The Company's fiscal year is a 52-week or 53-week period ending on the
     Friday closest to calendar year end. Fiscal 1996 through fiscal 2000 are
     52-week periods.
(2)  As discussed in Item 1 - Business, the Company made several acquisitions
     from 1995 through 1998 and several divestitures in 1999 and 2000 that
     affect the comparability of information reflected in the selected financial
     data.

                                       11

<PAGE>

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

Results of Operations

The following table presents the components of the consolidated statements of
operations as a percentage of sales for the periods indicated and includes the
results of operations for all acquired companies from their date of acquisition,
except that Ontario Tree Fruits Ltd.'s ("OTF") results of operations are
included for all periods since it has been accounted for as a pooling of
interests. The fiscal years ended December 29, 2000 (fiscal 2000), December 31,
1999 (fiscal 1999) and January 1, 1998 (fiscal 1998) are all 52-week periods.

<TABLE>
<CAPTION>

                                                                                    Fiscal Year Ended
                                                                  -------------------------------------------------------
                                                                    December 29,           December 31,      January 1,
                                                                        2000                   1999             1999
                                                                  -----------------    -----------------    -------------
<S>                                                               <C>                  <C>                  <C>
     Net sales                                                         100.0%                 100.0%             100.0%
     Cost of sales                                                      89.5                   88.4               88.2
                                                                  -----------------    -----------------    -------------
          Gross profit                                                  10.5                   11.6               11.8
                                                                  -----------------    -----------------    -------------
     Selling, general and administrative expenses                        9.7                   10.0                8.5
     Bad debt expense                                                    0.4                    0.9                0.2
     Depreciation and amortization                                       1.0                    0.9                0.7
     Disposition costs and impairment of long-lived assets               2.3                    2.0                  -
     Transaction costs                                                     -                    0.6                0.2
     Settlements of lawsuits                                             0.2                    0.1                  -
                                                                  -----------------    -----------------    -------------
          Total operating costs and expenses                            13.6                   14.5                9.6
                                                                  -----------------    -----------------    -------------
     Operating income (loss)                                            (3.1)                  (2.9)               2.2
     Other income (expense)                                             (0.9)                  (0.8)              (0.4)
                                                                  -----------------    -----------------    -------------
     Income (loss) before income taxes and extraordinary item           (4.0)                  (3.7)               1.8
     Income tax expense (benefit)                                       (0.1)                  (0.4)               0.8
                                                                  -----------------    -----------------    -------------
     Income (loss) before extraordinary item                            (4.1)                  (3.3)               1.0
     Extraordinary gain on extinguishment of debt                        0.3                      -                  -
                                                                  -----------------    -----------------    -------------
          Net income (loss)                                             (3.8)                  (3.3)               1.0
     Preferred dividend and accretion                                    0.1                      -                  -
                                                                  -----------------    -----------------    -------------
          Net income (loss) applicable to common shareholders           (3.9%)                 (3.3%)              1.0%
                                                                  =================    =================    =============
</TABLE>

Comparison of Fiscal 2000 to Fiscal 1999

Net sales. Net sales decreased $115.3 million, or 17.2%, to $554.6 million in
fiscal 2000 from $669.9 million in fiscal 1999. Approximately $67.0 million of
this decrease was attributable to the 1999 divestiture of seven of the Company's
direct food service distribution operations and the first quarter 2000 closure
of the Sam Perricone Citrus market operations. Approximately $41.0 million of
the decrease was related to OTF, the Company's Canadian operations. The Canadian
operation experienced increased revenues in 1999 as the result of a citrus
freeze in the U.S. Additionally, a major customer of OTF which had accounted for
approximately 65% of the Canadian operation revenues was lost during 1999.
Fourth quarter sales decreased to $109.9 million compared to $151.1 million in
the comparable 1999 period. Sam's represented the Company's largest customer in
2000 and 1999. Sam's accounted for 30.0% of net sales in fiscal 2000 compared to
30.5% in fiscal 1999. The Company's contract with Sam's expired in October 2000.
See Note 2 to the consolidated financial statements elsewhere herein.

                                       12

<PAGE>

Cost of Sales. Cost of sales decreased $95.8 million, or 16.2% to $496.2 million
in fiscal 2000 from $592.0 million in fiscal 1999. The decrease is primarily
related to fourth quarter 1999 divestitures of the Company's direct food service
distribution operation and decreased business volume in the OTF operation. As a
percentage of net sales, cost of sales increased to 89.5% from 88.4%, which in
turn decreased the Company's gross profit percentage to 10.5% from 11.6%. The
Company's margins were negatively impacted by fluctuating commodity markets, the
effects of which the Company was unable to fully recover through increased
prices to customers associated with the Company's core items, including
tomatoes, melons, onions and citrus, in those instances where the Company was
unable to renegotiate such prices with its customers. The Company enters into
arrangements with its customers on either a fee for service or a pre-determined
margin basis. In cases where the Company provides its products to the customer
on a fee for service basis, when there is an oversupply of product available,
prices decrease, as there is too much product in the market for the relatively
flat demand. During these times, Fresh America must sell product at a lower
price to remain competitive. Sales dollars decrease as the same quantity of
product is purchased at the lower price. Cost of sales and gross profit are
primarily impacted due to the fact that the operational costs needed to process
the product do not decrease. Therefore the cost of sales increases as a
percentage of sales and the gross profit declines. Where possible, the Company
attempts to reduce the risk of fluctuating commodity prices in such arrangements
by negotiating corresponding fee for service arrangements with its growers
and/or shippers.

Pre-determined margin contracts provide the Company with greater flexibility to
hold or decrease prices to customers when commodity prices fall or hold or to
increase prices to customers when commodity prices rise. During fiscal year
1999, approximately 66.5% of the Company's arrangements with its customers were
on a pre-determined margin basis and approximately 33.5% of such arrangements
were on a fee for service basis. This is compared with fiscal year 2000, during
which approximately 67.2% of the Company's arrangements with customers were on a
pre-determined margin basis and approximately 32.8% of such arrangements were on
a fee for services basis.

Selling, general and administrative expenses. Selling, general and
administrative ("SG&A") expenses decreased by $12.7 million, or 19.1% to $54.0
million in fiscal 2000 from $66.8 million in fiscal 1999. The majority of the
decrease in SG&A is primarily attributable to a reduction in operating expenses
of approximately $9.0 million caused by the closing of poorly performing
operations in the latter part of 1999 and the first quarter of 2000.
Additionally, salaries and benefits decreased at the Company's corporate office
and certain other locations as a result of improved efficiencies and
restructurings. Although the Company expects certain SG&A expenses related to
its reorganization to occur throughout 2001, it is anticipated that overall SG &
A costs will continue to decrease in 2001 as compared to 2000.

Bad debt expense. The Company's provision for bad debt decreased $4.1 million to
$1.9 million in fiscal 2000 from $6.0 million in fiscal 1999. In fiscal 1999,
the Company recorded an additional provision for bad debt amounting to $1.9
million related to certain past due customer balances at seven of its divested
food service operations for which management determined further collection
efforts would not be successful. In 1999, the Company also recorded charges
totaling $2.1 million principally related to certain distribution agreements
under which the Company did not fully recover amounts due from other parties
associated with terminated business arrangements.

Depreciation and amortization. Depreciation and amortization decreased $0.7
million, or 11.3% to $5.5 million in fiscal 2000 from $6.2 million in fiscal
1999, primarily related to the food service divestitures in 1999 and 2000
previously mentioned.

Disposition costs and impairment of long-lived assets. During the fourth quarter
of 2000, the Company recorded impairment charges to reduce the carrying value of
property and equipment and related allocated goodwill of $10.6 million and $2.2
million respectively, related to non-performing operations. The Company recorded
goodwill impairment charges of $10.6 million and other disposition costs
aggregating $2.9 million in 1999 related to non-performing operations. See Note
6 to the accompanying consolidated financial statements elsewhere herein.

                                       13

<PAGE>

Settlement of Lawsuits. In May 2001, the original purchase for the assets of
Thompson's Produce in October 1998 was rescinded pursuant to arbitration and, as
a result, the Company recorded a charge of $1.2 million in December 2000.

Operating income (loss). As a result of the foregoing factors, the Company
incurred an operating loss of $17.1 million in fiscal 2000 compared to $19.3
million in fiscal 1999.

Other income (expense). Interest expense decreased $0.6 million to $5.2 million
in fiscal 2000 from $5.8 million in fiscal 1999 due to reductions of debt for
borrowed money.

Income tax expense (benefit). The effective tax rate for fiscal 2000 was (4.2%)
compared to 10.7% in fiscal 1999. The difference in these effective tax rates
compared to the statutory U.S. federal rate of 35% is primarily attributable to
increases in the valuation allowance that were recorded against the Company's
deferred tax assets in both fiscal years and the impairment of non-deductible
goodwill in fiscal 1999. See Note 9 to the consolidated financial statements
elsewhere herein.

Extraordinary gain on extinguishment of debt. In July 2000, the Company entered
into an agreement amending the stock purchase agreement and restructuring
certain notes payable related to the Company's November 1998 acquisition of
Perricone Citrus Company. The restructuring resulted in an extraordinary gain in
the third quarter of 2000 of $1.9 million. (See "Liquidity and Capital
Resources" in Item 7 - MD & A.)

Net income (loss). As a result of the foregoing factors, the Company incurred a
net loss of $20.9 million in fiscal 2000 compared to net loss of $22.0 million
in fiscal 1999.

Comparison of Fiscal 1999 to Fiscal 1998

Net sales. Net sales increased $60.4 million, or 9.9%, to $669.9 million in
fiscal 1999 from $609.5 million in fiscal 1998. Such increase was primarily
attributable to acquisitions made during or subsequent to the third quarter of
1998. This increase was somewhat offset by weak commodity prices associated with
the Company's core items, including tomatoes, melons, onions and citrus during
the second half of fiscal 1999. Sam's, the Company's largest customer,
represented 30.5% of net sales in fiscal 1999 compared to 36.5% in fiscal 1998.
Fourth quarter sales decreased to $151.1 million compared to $176.6 million in
the comparable 1998 period, reflecting the effect of the divestitures of the six
food service operations and the reduction of 40 Sam's Clubs being serviced under
the distribution agreement with Sam's. See Note 2 to the accompanying
consolidated financial statements.

Cost of Sales. Cost of sales increased $54.4 million, or 10.1% to $592.0 million
in fiscal 1999 from $537.6 million in fiscal 1998, primarily reflecting the
increase in net sales discussed above. As a percentage of net sales, cost of
sales increased slightly to 88.4% from 88.2%, which in turn decreased the
Company's gross profit percentage to 11.6% from 11.8%. The Company's margins
were negatively impacted by fluctuating commodity markets during the second half
of 1999, the effects of which the Company was unable to fully recover through
increased prices to customers, on such staples as onions, melons and bananas as
well as the unavailability of citrus product associated with the winter freeze
in 1999.

Selling, general and administrative expenses. SG&A expenses increased by $14.9
million, or 28.7% to $66.8 million in fiscal 1999 from $51.9 million in fiscal
1998. The increase was primarily due to $14.9 million of SG&A expenses related
to acquisitions made during or subsequent to the third quarter of 1998.

Bad debt expense. The Company's provision for bad debt increased $4.8 million to
$6.0 million in fiscal 1999 from $1.2 million in fiscal 1998. In fiscal 1999,
the Company recorded an additional provision for bad debt of $1.9 million
related to certain past due balances at seven of its divested food service
operations for which management determined further collection efforts would not
be successful. The Company also recorded $2.1 million principally related to
certain distribution agreements under which the Company did not fully recover
amounts associated with terminated business arrangements. The remaining increase
was primarily due to the

                                       14

<PAGE>

downturn in the industry, which occurred in late 1999. Subsequent to fiscal
1999, the Company re-evaluated its credit review policies to consider whether
substantive changes were needed in response to the level of bad debt expense in
fiscal 1999. Management determined that such policies were appropriate and
believed bad debt expense could be significantly reduced by more rigorously
enforcing the existing policies.

Depreciation and amortization. Depreciation and amortization increased $2.2
million, or 56.6% to $6.2 million in fiscal 1999 from $4.0 million in fiscal
1998. The increase was primarily due to goodwill amortization related to
acquisitions made subsequent to or during the latter part of fiscal 1998 and
increased depreciation related to the Company's computer system that was
implemented in its core operations in October 1998.

Disposition costs and impairment of long-lived assets. During 1999, the
Company's management implemented a program to improve its cost structure,
streamline operations and divest under-performing assets. As a result, in 1999
the Company decided to close or sell several of its under-performing food
service operations and a wholesale market operation. These operations were
located in Los Angeles and San Francisco California; Orlando, Florida; Atlanta,
Georgia; Baton Rouge, Louisiana and Austin and San Antonio, Texas. The food
service operations in Orlando, Los Angeles and Atlanta were closed during the
third quarter of 1999, while the San Antonio and San Francisco operations were
closed in October 1999. The Austin and Baton Rouge food service operations were
sold in November 1999. The Company's Los Angeles market operation was closed in
February 2000. As a result of the above transactions, the Company recorded
goodwill impairment of $10.6 million, recorded impairment charges to reduce the
carrying value or incurred losses on the sale of property and equipment of $1.0
million and incurred closure costs (consisting primarily of lease commitments
and severance costs) of $2.0 million.

Transaction costs. On May 3, 1999, the Company and FreshPoint Holdings entered
into a definitive merger agreement pursuant to which FreshPoint would have
merged with and into the Company. The transaction was to be accounted for as a
reverse acquisition with FreshPoint as the accounting acquirer. Effective
October 1999, the merger agreement was terminated by the Company and FreshPoint.
During fiscal 1999, the Company recorded merger-related expenses of $3.9
million, which consisted primarily of investment banking fees, legal and
professional fees, severance costs and stay-to-close incentives associated with
planned reductions in work force. Fiscal 1998 included $1.4 million in
transaction costs related to the acquisition of OTF.

Settlements of lawsuits. In fiscal 1999, the Company settled a lawsuit for
$600,000 including legal costs. The lawsuit involved a dispute over the
Company's alleged improper solicitation of employees while starting up a new
business in 1998. Additionally, the Company settled two lawsuits with former
employees for $200,000.

Operating income (loss). As a result of the foregoing factors, the Company
incurred an operating loss of $19.3 million in fiscal 2000 compared to operating
income of $13.4 million in fiscal 1999.

Other income (expense). Interest expense increased $2.8 million to $5.8 million
in fiscal 1999 from $3.0 million in fiscal 1998 due to increased borrowings to
help finance acquisitions that were made during the latter part of fiscal 1998
and, to a lesser extent, increased interest rates during 1999. Interest income
decreased $700,000 to $300,000 in fiscal 1999 from $1.0 million in fiscal 1998
primarily due to interest recognized by OTF in fiscal 1998 related to a settled
insurance claim that had been in dispute for several years.

Income tax expense (benefit). The effective tax rate for fiscal 1999 was 10.7%
compared to 44.8% in fiscal 1998. The difference is primarily attributable to a
valuation allowance of $4.6 million that was recorded against the Company's
deferred tax assets and the tax effect of $2.0 million related to the write-off
of non-deductible goodwill. See Note 9 to the accompanying consolidated
financial statements.

Net income (loss). As a result of the foregoing factors, the Company incurred a
net loss of $22.0 million in fiscal 1999 compared to net income of $6.2 million
in fiscal 1998.

                                       15

<PAGE>

Liquidity and Capital Resources

Cash provided by operating activities increased $14.8 million to $19.2 million
for fiscal 2000 compared to $4.4 million in fiscal 1999. The increase is due to
the net effect of reductions in accounts receivable of $21.6 million, inventory
of $3.8 million and accounts payable of $11.5 million, primarily due to the
decrease in the Sam's Club business upon expiration of the distribution
agreement with Sam's in October 2000.

Cash used in investing activities decreased $7.7 million to $0.7 million in
fiscal 2000 from $8.4 million in fiscal 1999. The decrease is primarily
attributable to the change in strategy to focus on existing successful
businesses and completion of expenditures in 1999 related to the Company's
implementation of its SAP information system.

Cash used in financing activities was $16.4 million in 2000 as compared to cash
provided by financing activities in 1999 of $6.0 million. This decrease of $22.4
million was primarily due to reductions in the outstanding balance of the
Company's senior credit facility and the retirement of certain short-term debt
that were partially offset by proceeds from the issuance of preferred stock and
warrants.

On December 29, 2000 the Company had working capital of $2.6 million compared to
working capital of $12.2 million at December 31, 1999. This decrease of $9.6
million is primarily due to decreases in accounts receivable and inventories
offset by a decrease in accounts payable, all associated with the termination of
the Sam's agreement, which substantially decreased the scope of operations.

Management believes that the combination of the effects of the financial
restructure completed in September 2001, cash generated from ongoing operating
activities, and the realization of recent reductions in corporate overhead
expenses will enable the Company to meet its obligations as they come due during
the 12-month period subsequent to December 29, 2000. As discussed under the
caption "Financial Restructuring", the Company is currently negotiating with
another lender and intends to arrange a new senior debt facility to replace its
current term note that matures in January 2002.

Subsequent to closing the financial restructuring in September 2001, as
discussed herein, the Company has $7.4 million of debt, consisting primarily of
a senior term note and redeemable preferred stock with redemption value of $7.7
million. If the Company is unable to generate sufficient cash flow to service
such debt or preferred stock or refinance the senior term debt when it matures
in January 2002, the Company may have to reduce or divest certain operations,
restructure its preferred stock or seek additional equity capital. There can be
no assurance that the Company will be able to generate sufficient cash flow or
raise additional debt or equity capital on satisfactory terms in order to
refinance its senior term debt and expand its business. Changes in interest
rates, market liquidity, stock prices and general market conditions may affect
the Company's ability to raise funds or refinance senior term debt. The
Company's ability to make scheduled payments with respect to indebtedness and
preferred stock and refinance our debt will depend upon, among other things: the
Company's ability to sustain cash flow, produce commodity pricing, and the
Company's ability to implement its business strategy.

Financial Restructuring

Throughout its operational restructuring during the past two years, the Company
has pursued various financing opportunities in an effort to restructure its
debt. In September 2001, the Company completed a financial restructuring whereby
North Texas Opportunity Fund LP, ("NTOF") purchased 50,000 shares of the
Company's Series D cumulative redeemable preferred stock and warrants
exercisable for 84,100,980 shares of our common stock for cash proceeds of $5
million. Arthur Hollingsworth, an affiliate of NTOF and the Company's Chairman
of the Board, subsequently purchased from NTOF 3,500 of their 50,000 shares of
Series D preferred stock and 5,887,069 of the 84,100,980 warrants that had been
purchased by NTOF at the same price as paid by NTOF. In connection with the NTOF
investment in the Company, John Hancock Life Insurance Company, John Hancock
Variable Life Insurance Company, Signature 1A (Cayman), Ltd. and Signature 3
Limited (collectively, the "Subordinated Lender") exchanged $20 million of
subordinated debt, warrants to purchase 576,134 shares of common stock, 50,000
shares of Series C cumulative redeemable preferred stock and all

                                       16

<PAGE>

accrued interest and dividends for 27,000 shares of the Company's Series D
cumulative redeemable preferred stock and warrants exercisable for 45,414,529
shares of our common stock.

Bank Debt. In conjunction with this restructuring, Bank of America, N.A. (the
"Senior Lender") agreed to a payment schedule which will reduce the Company's
indebtedness to the Senior Lender from $5.3 million, which was owed at the time
of closing of the NTOF transaction, to $3.8 million by year-end 2001. The
indebtedness, previously a revolving credit facility, was converted to a term
note with a maturity of the remaining balance in January 2002. The Company is
working to refinance the term debt prior to its maturity. There can be no
assurance that the Company will be able to replace its Senior Lender as
anticipated or extend its term note beyond January 2002, if that becomes
necessary.

Subordinated Debt. Prior to the restructuring in September 2001, the Company had
$20 million of subordinated debt owing to the Subordinated Lender. Additionally
in April 2000, the Company issued to the Subordinated Lender $5 million (50,000
shares) of the Company's Series C cumulative redeemable preferred stock. The
Company was not in compliance with certain covenants under the terms of its
agreements with the Subordinated Lender at December 29, 2000. Cumulative
preferred dividends accrued as of December 29, 2000 totaled $0.3 million or
$6.04 per share of preferred stock. The preferred stock, the subordinated debt
owing to the Subordinated Lender and the accrued but unpaid interest and
dividends thereon were converted to new issues of the Company's preferred stock
as part of the restructure discussed above.

Prior to its sale in March 2001, OTF had a demand agreement with Royal Bank of
Canada to provide revolving credit facilities, which were collateralized by
substantially all assets of OTF. The Canadian Revolver had an outstanding
balance of CDN $5.6 million (U.S. $3.8 million) as of December 29, 2000. This
outstanding balance was fully retired in March 2001 in conjunction with the sale
of OTF's operating assets.

Acquisitions. In July 2000, the Company entered into an agreement amending the
stock purchase agreement related to the Company's November 1998 acquisition of
Perricone Citrus Company. As part of the amended agreement, unsecured promissory
notes owed by the Company totaling $3.5 million and the accrued and unpaid
interest therein were restructured whereby the Company agreed to the following:
payments totaling $100,000 upon execution of the amended agreement; lump-sum
payments of $350,000 and $150,000 on January 1, 2002 and July 1, 2002,
respectively; and 24 monthly installment payments of $37,500 totaling $900,000.
The installment and lump-sum payments accrue interest at 10% per annum. However,
all accrued interest will be forgiven if scheduled principal payments are made
timely. Additionally, the Company issued the noteholders 300,000 warrants to
purchase common shares of the Company at an exercise price of $2.50 per share.
The warrants are exercisable for a duration of seven years. The issuances of
these securities was exempt from registration under the Securities Act under
Regulation D. The restructuring of the promissory notes and related accrued
interest resulted in an extraordinary gain to the Company of $1.9 million in the
third quarter of 2000.

Under the terms of the purchase agreement for Jos. Notarianni & Co.
("Notarianni"), a portion of the purchase price is contingent upon Notarianni's
earnings subsequent to its acquisitions. The contingent payment for Notarianni
will be equal to 1.4 times Notarianni's average annual pretax earnings over a
three-year period from October 3, 1998 to October 3, 2001. Any contingent
payment is payable in cash or common stock at the Company's sole discretion. As
of December 2000, no amounts were owed in relation to the Notarianni
acquisition.

The Company's purchase agreement with Hereford Haven Inc. d/b/a Martin Bros.
("Martin  Bros.") also contains a contingent payment component in the purchase
price.  The Martin Bros. contingent payment is equal to 4 times the average
annual pretax earnings for the three-year  period from January 3, 1998 to
January 3, 2001.  The total contingent payment was $5.0 million at December 29,
2000.  The payment was due March 31, 2001 and was payable in either cash, common
stock or a combination of cash and common stock to the extent of 75% at the
Company's option and 25% at the selling shareholder's option.

In satisfaction of 75% of the contingent payment, in April 2001, the Company
issued 3,166,694 shares of its common stock to Larry Martin, the former owner of
Martin Bros. The issuance of these securities to Mr. Martin

                                       17

<PAGE>

was exempt from registration under the Securities Act under Regulation D. At the
time of issuance, the shares represented a 38% ownership interest in the
Company. These shares were valued at $1.17 per share, the market value of the
Company's common stock at the time of the transaction. The remaining $1.2
million of contingent consideration remained a financial obligation of the
Company and was restructured as part of the financial restructuring discussed
above. It is payable in cash subject to the approval of the Company's Senior
Lender. This payment has been extended and is now due and payable in January
2002.

Equipment Financing. The Company is party to a master lease agreement with
SunTrust Bank that has been used to provide equipment financing for several of
the Company's operating units. The Company was not in compliance with certain
financial covenants under the terms of the lease at December 29, 2000 and
received waivers for noncompliance through January 2, 2002. The Company is
currently renegotiating the financial covenants of this agreement and
anticipates this agreement will be revised prior to the expiration of the waiver
in January 2002. The lease agreement provides that future lease payments can be
accelerated in the event of default. There can be no assurance that the Company
will be in compliance with such covenants subsequent to the waiver period or
will be successful in renegotiating the covenants.

New Accounting Standards

The Company has assessed the reporting and disclosure requirements of Statement
of Financial Accounting Standard ("SFAS") No. 133, "Accounting For Derivative
Instruments and Hedging Activities". This statement, as amended, establishes
accounting and reporting standards for derivative instruments and hedging
activities and will require the Company to recognize all derivatives on its
balance sheet at fair value. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of the derivatives will either be
offset against the change in fair value of the hedged item through earnings, or
recognized in other comprehensive income until the hedged item is recognized in
earnings. The provisions of SFAS No. 133 were adopted in the first quarter of
fiscal 2001, and since the Company is not party to any derivative contracts,
adoption of this statement did not have any effect on the Company's results of
operations or financial position.

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
141 "Business Combinations" and SFAS No. 142 "Goodwill and Other Intangible
Assets". SFAS No. 141 requires that all business combinations initiated after
June 30, 2001 be accounted for under the purchase method and SFAS No. 142
requires that goodwill no longer be amortized to earnings, but instead be
reviewed for impairment. The provisions of SFAS No. 142 will be effective for
fiscal years beginning after December 15, 2001. Also, the FASB has voted to
issue SFAS No. 143 "Accounting for Asset Retirement Obligations" which
establishes requirements for the accounting of removal-type costs associated
with asset retirements. SFAS No.143 is effective for fiscal years beginning
after June 15, 2002, with earlier application encouraged. The Company is
currently assessing the impact of these standards on its financial statements.

Quarterly Results and Seasonality

The Company's business is somewhat seasonal, with its greatest quarterly sales
volume historically occurring in the fourth quarter. With the change in the
current mix of business resulting from the Company's divestitures of certain
specialty food service operations, the termination of the Sam's agreement in
October 2000 and the increasing effect of global sourcing, the Company believes
seasonal fluctuations may diminish in future years. A substantial portion of the
Company's produce sales consists of staple items such as apples, oranges,
grapefruit, potatoes and onions, which are strongest during the fall, winter and
spring. The supply and quality of these items declines during the summer,
although lower sales of these items are partially replaced by more seasonal
products such as peaches, plums, nectarines, strawberries and melons. Sales of
refrigerated, prepackaged products, such as vegetable trays, are strongest
during the fourth quarter holiday season.

In any given quarter, an adverse development such as the unavailability of high
quality produce or harsh weather conditions could have a disproportionate impact
on the Company's results of operations for the full year. See Note 13 to the
accompanying financial statements for certain quarterly information for the
Company's two most recent fiscal years.

                                       18

<PAGE>

Inflation

Although the Company cannot determine the precise effects of inflation,
management does not believe inflation has had a material effect on its sales or
results of operations. However, independent of normal inflationary pressures,
the Company's produce products are subject to fluctuating prices which result
from factors discussed in "Quarterly Results and Seasonality" above.

Forward-Looking Statements

This Annual Report and the information incorporated by reference in this Annual
Report contain forward-looking statements. Statements that are not historical
facts, including statements about Fresh America's beliefs or expectations, are
forward-looking statements. These statements are based on plans, estimates and
projections at the time we make the statements, and you should not place undue
reliance on them. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "anticipates," "plans,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of such terms and other comparable terminology. These statements are only
predictions. Actual events or results may differ materially. In evaluating these
statements, you should specifically consider various factors, including the
risks outlined below. These factors may cause our actual results to differ
materially from those expressed in forward-looking statements made or
incorporated by reference in this Annual Report, or in any other SEC filings or
public statements we may make.

The Company is subject to a number of risks, including those discussed below:

Our Debt Leverage Could Adversely Affect Our Business.  The degree to which we
are leveraged could have adverse consequences, such as:

          . limiting or impairing our ability to obtain refinancing for our
            senior term debt at favorable rates;

          . limiting or impairing our ability to obtain additional financing in
            the future for working capital, capital expenditures or general
            corporate purposes;

          . requiring us to dedicate a portion of our cash flow to the payment
            of principal and interest on our indebtedness and dividends on our
            preferred stock, which reduces the availability of cash flow to fund
            working capital, capital expenditures and growth opportunities; and

          . increasing our vulnerability to economic downturns, limiting our
            ability to withstand competitive pressures and reducing our
            flexibility in responding to changing business and economic
            conditions.

As of December 6, 2001, we have $6.9 million of debt, consisting primarily of
our senior term note, and redeemable preferred stock with redemption value of
$7.7 million.

We Will Require a Significant Amount of Cash to Service Our Debt and Preferred
Stock Over the Next Twelve Months and Beyond; Our Ability to Generate Cash
Depends on Many Factors Beyond Our Control. If we are unable to generate
sufficient cash flow to service our debt or preferred stock or refinance our
senior term debt when it matures in January 2002, we may have to reduce or
divest certain operations, restructure our preferred stock or seek additional
equity capital. There can be no assurance that we will be able to generate
sufficient cash flow or raise additional debt or equity capital on satisfactory
terms in order to refinance our senior term debt and expand our business.
Changes in interest rates, market liquidity, stock prices and general market
conditions may all affect our ability to raise funds or refinance our senior
term debt.

Our ability to make scheduled payments with respect to indebtedness and
preferred stock and refinance our debt will depend upon, among other things:

          . our ability to sustain cash flow;

                                       19

<PAGE>

          . produce commodity pricing;

          . our ability to implement our business strategy.

Each of these factors is affected by economic, financial, competitive and other
factors, many of which are beyond our control.

Our Efforts To Implement Our Business Strategy May Fail. Our management has
stated its intention to expand and diversify our customer base, market
penetration and service offerings. This strategy poses risks associated with our
ability to reduce costs, reach targeted customers, increase sales in higher
margin products and increase product distribution through high-volume
warehouses. These challenges will be subject to the risk of intense competition,
lack of sufficient customer demand or change in customer tastes, inadequate
assured sources of quality product supply and unforeseen complications, delays
and cost increases. Some of our prior acquisitions were not successfully
integrated into our business and there can be no assurance that we will succeed
in implementing our business strategy.

Our Debt and Preferred Stock Covenants Restrict Our Operating Flexibility. A
breach of the covenants in our senior secured term debt could result in a
default, in which event, the bank could elect to declare the outstanding
principal amount or our term note to be immediately due and payable. Our
agreements with our preferred stockholders also contain various restrictions,
which if not complied with could cause our preferred stockholders to have a put
right on their preferred stock at $100.00 per share plus accrued and unpaid
dividends. The terms and conditions of our senior secured term note and
agreements with our preferred stockholders impose restrictions that affect,
among other things, our ability to incur debt, make capital expenditures, merge,
sell assets, make distributions, or create or incur liens. Our ability to comply
with these requirements can be affected by events beyond our control and there
can be no assurance that we will be able to comply with the provisions of the
credit agreement or the agreements with our preferred stockholders.

Price and Quality Fluctuations Could Adversely Affect Our Operating Income.
Prices of high quality fresh produce are extremely volatile based on available
supply, which can be significantly affected by factors such as weather, disease
and level of agricultural production. Both our sales and profitability could be
negatively affected during periods of exceptionally high, low or volatile prices
or when we cannot obtain sufficient high quality produce. During periods of
lower produce prices, our operating income is adversely affected because we have
less gross margin to cover operating expenses.

We Operate in Highly Competitive Markets. Due to the commodity nature of certain
of our products, we operate in highly competitive markets, and our success will
be largely dependent on our ability to provide quality products at the lowest
possible prices. Many companies compete in the food service produce distribution
and wholesale food distribution categories. However, only a few well-established
companies operate on both a national and regional basis. We face strong
competition from these as well as smaller regional companies in all of our
product lines. There can be no assurance that we will be able to compete
successfully with current or future competitors. Competitive considerations
include:

          . some competitors may have substantially greater financial resources
            and operating flexibility to react to changes in the marketplace;

          . some of our products compete with imports and private label products
            and are sensitive to competition from regional brands; and

          . we cannot predict the pricing or promotional actions of our
            competitors and if we do not respond to reduced pricing or discounts
            or if we raise prices, we could lose market share.

Severe Weather Conditions and Natural Disasters Can Affect the Availability of
Produce and Reduce Our Operating Results.  Severe weather conditions and natural
disasters, such as floods, droughts, frosts, earthquakes

                                       20

<PAGE>

or pestilence, may affect the supply of our products. These events can result in
reduced supplies of fresh produce and higher costs of products.

Our Operating Results Are Seasonal. Interference With Our Production Schedule
During Peak Months Could Negatively Impact Our Operating Results. Our working
capital requirements are seasonal and are most significant in the second and
fourth quarters. Our sales tend to peak in the fourth fiscal quarter each year,
mainly as a result of the holiday period in November and December. By contrast,
in the third fiscal quarter of each year, sales generally decline, mainly due to
less promotional activity and the availability of fresh produce. Any adverse
development affecting our operations during this period, such as the
unavailability of high quality produce or harsh weather conditions, could have a
disproportionate impact on our results of operations for the full year.

Our Common Stock Has Recently Experienced Reduced Liquidity and Market Coverage.
Our common stock has been delisted from the Nasdaq National Market and is
currently traded on the Pink Sheets market. There has been less trading activity
in our common stock as a result of this move. Also, our common stock is
currently suffering from a lack of coverage by investment professionals.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Exchange Risk. Our Canadian operations were subject to foreign currency
risk; however, we have not experienced any material foreign currency transaction
gains or losses during the last three fiscal years. Foreign currency translation
adjustments are recorded to our consolidated shareholders' equity in accumulated
comprehensive income. We manage foreign currency risk by maintaining portfolios
of currency denomination in the currency for which it is required to make
payment. As of March 2001, the Company no longer conducted business in Canada.

Interest Rate Risk. Our senior term debt accrues interest at a market rate at
the time of borrowing plus an applicable margin on certain borrowings. The
interest rate is based on the lending bank's prime rate. The impact on the
Company's results of operations of a one-percentage point interest rate change
on the outstanding balance of the variable rate debt as of December 29, 2000
would be approximately $124,000.

Commodity Pricing Risk. For reasons discussed previously, prices of high quality
produce can be extremely volatile. In order to reduce the impact of these
factors, to the extent possible, we set our prices based on current delivered
cost.

ITEM 8.  FINANCIAL STATEMENT AND SUPPLEMENTARY DATA.

Index to Consolidated Financial Statements and Financial Statement Schedules.

<TABLE>
<CAPTION>
                                                                                                          Page
                                                                                                         -------
    <S>                                                                                                  <C>
    Independent Auditors' Report                                                                          F-2
    Consolidated Balance Sheets as of December 29, 2000 and December 31, 1999                             F-3
    Consolidated Statements of Operations for fiscal years ended December 29, 2000, December 31, 1999
         and January 1, 1999                                                                              F-4
    Consolidated Statements of Shareholders' Equity for fiscal years ended December 29, 2000, December
         31, 1999 and January 1, 1999                                                                     F-5
    Consolidated Statements of Cash Flows for fiscal years ended December 29, 2000, December 31, 1999
         and January 1, 1999                                                                              F-6
    Notes to Consolidated Financial Statements                                                            F-7
</TABLE>

Financial Statement schedules are omitted because they are not applicable or the
required information is shown in the consolidated financial statements or
related notes.

                                       21

<PAGE>

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

Not Applicable.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The following table sets forth certain information concerning the executive
officers and directors of the Company as of December 6, 2001. On October 15,
2001, the NTOF designees, Arthur W. Hollingsworth, Luke M. Sweetser, Gregory A.
Campbell and Darren L. Miles became members of our board of directors.

<TABLE>
<CAPTION>
Name                             Age   Position with the Company                    Director Since  Term to Expire
----                             ---   -------------------------                    --------------  --------------
<S>                              <C>   <C>                                          <C>             <C>
Darren L. Miles                  43    President, Chief Executive Officer                2001            2002
                                        and Director
Arthur W. Hollingsworth          38    Chairman of the Board of Directors                2001            2002
Colon O. Washburn                56    Director                                          1993            2001
Luke M. Sweetser                 30    Director                                          2001            2002
Gregory A. Campbell              42    Director                                          2001            2002
Gary D. Wiener                   49    Executive Vice President and Chief
                                       Operating Officer
Steven C. Finberg                32    Vice President of Sales and Marketing
Cheryl A. Taylor                 33    Executive Vice President, Chief Financial
                                       Officer and Secretary
Helen Mihas                      35    Vice President, Treasurer, Controller and
                                       Assistant Secretary
</TABLE>

Darren L. Miles. Since October 2001, Mr. Miles has served as a member of our
Board of Directors. In August 2001, Mr. Miles was appointed President and Chief
Executive Officer of the Company. Since 2000, Mr. Miles has been a director of
Lewis Hollingsworth LP, a venture capital/private equity firm in Dallas, TX.
From 1998 to 2000, Mr. Miles was Chief Financial Officer and Executive Vice
President of ACS Incorporated, a commodity distribution company. From 1984 to
1998, Mr. Miles was Chief Financial Officer, Executive Vice President, and a
Principal of Hutson Companies Inc., a privately-held wholesale/retail
distribution company.

Gary D. Wiener. Mr. Wiener joined the Company in 1993. In March 2000, Mr. Wiener
was appointed Executive Vice President and Chief Operating Officer. From 1996 to
1999, Mr. Wiener served as the Corporate Vice President of Operations. Mr.
Wiener served the Company in many capacities between 1993 and 1995, including
Regional Director of Operations.

Steven C. Finberg. In October 1999, Mr. Finberg was promoted to Vice President
of Sales and Marketing. Previously, Mr. Finberg had been the Director of
Merchandising since 1997. From 1989 to 1997, Mr. Finberg had a variety of upper
management and executive roles within the Company including Regional Director of
Operations.

Cheryl A. Taylor. Ms. Taylor serves the Company as its Chief Financial Officer,
Executive Vice President and Secretary. Ms. Taylor joined the Company in April
2001. From 1994 until joining the Company, Ms. Taylor was employed by The Great
Train Store Company, a nation-wide specialty retailer. Since 1996, Ms. Taylor
served The Great Train Stores as its Chief Financial Officer and Vice
President-Finance and Administration. From 1989 to 1994, Ms. Taylor served as a
certified public accountant with Coopers & Lybrand LLP, an international
accounting and auditing firm.

Helen Mihas. In April 2001, Ms. Mihas was promoted to Controller, Vice President
and Assistant Secretary. She had been with the Company since March 2000 as its
Assistant Controller. From 1993 until 2000, Ms. Mihas was


                                       22

<PAGE>

employed by Columbia and Tenet Healthcare Corporations, two major national
healthcare corporations, in various financial positions. From 1988 to 1993, Ms.
Mihas held an accounting position at McNeil Real Estate Management.

Colon O. Washburn. Mr. Washburn resigned his position as our Chief Executive
Officer in August 2001. Mr. Washburn had been appointed Chief Executive Officer
in October 1999. Since his resignation, Mr. Washburn has remained with the
Company as a member of our board of directors and continues to serve as an
advisor to management. Mr. Washburn has been a director of the Company since
July 1993. From 1971 until January 1993, Mr. Washburn was employed by Wal-Mart
Stores, Inc. ("Wal-Mart"), where he served most recently as Executive Vice
President of Sam's Wholesale Club, a division of Wal-Mart, and also as Senior
Vice President of Wal-Mart. Since February 1993, Mr. Washburn has been President
of Beau Chene Farms, a real estate development company. Additionally, Mr.
Washburn serves as a director of Tandycrafts, Inc.

Arthur W. Hollingsworth. Since October 2001, Mr. Hollingsworth has been the
Chairman of our Board of Directors. Since August 2000, Mr. Hollingsworth has
been a Co-founder and Partner of North Texas Opportunity Fund LP, a venture
capital/private equity firm located in Dallas, TX. From 1989 to the present, Mr.
Hollingsworth has also been a Partner of Lewis Hollingsworth LP, a venture
capital/private equity firm located in Dallas, TX. Mr. Hollingsworth is Chairman
of the Boards of Belding Hausman Incorporated (textile manufacturer) and Instaff
Personnel, Inc. (temporary staffing services), and is also Co-Chairman of
BillMatrix Corporation (payment processing). In addition, Mr. Hollingsworth
serves on the board of directors of Hollingsworth & Vose Company (paper
manufacturing), Irving Holdings, Inc. (Yellow Cab of Dallas) and the Zale Lipshy
University Medical Center, Inc. (healthcare).

Gregory A. Campbell. Since October 2001, Mr. Campbell has served as a member of
our Board of Directors. Since August 2000, Mr. Campbell has been a Co-founder
and Partner of North Texas Opportunity Fund LP, a venture capital/private equity
firm in Dallas, TX. Since September 1988, Mr. Campbell has served as President
of Campbell Consulting Group, a strategic management consulting group. In
addition, Mr. Campbell presently serves as a director on the boards of Trycos
Incorporated (software development), PrimeSource Foodservice Equipment, Inc.
(foodservice equipment distribution), InStaff Personnel, Inc. (temporary
staffing services), IBIS Communications and MLN Holding Corporation.

Luke M. Sweetser. Since October 2001, Mr. Sweetser has served as a member of our
Board of Directors. Since August 2000, Mr. Sweetser has been a Co-founder and
Partner of North Texas Opportunity Fund LP, a venture capital/private equity
firm located in Dallas, TX. From 1994 to the present, Mr. Sweetser has been a
Managing Director of Lewis Hollingsworth LP, a venture capital/private equity
firm located in Dallas, TX. Mr. Sweetser is a director of InStaff Personnel
(temporary staffing services), PrimeSource Foodservice Equipment, Inc.
(foodservice equipment distribution), Trycos Incorporated (software development)
and the Dallas-Ft. Worth Private Equity Forum. Mr. Sweetser has served as a
director for the City of Dallas Housing Finance Corporation since 1994 and has
served as its Chief Investment Officer since 1996. Mr. Sweetser holds the
designation of Chartered Financial Analyst from the Association of Investment
Management and Research.

Former Directors

Mark R. Gier. From April 2001 until October 15, 2001, Mr. Gier was a Director of
the Company. Mr. Gier formed Diversified Management Services, LLC in November
2000. Mr. Gier is also a faculty member of The Refrigeration Research and
Education Foundation annual institute and served as a former Chairman of the
Finance and Administration, Investments, and Insurance Committees of the World
Food Logistics Organization from 1993 to 1998. Upon the closing of the NTOF
transaction, Mr. Gier tendered his resignation from the Board. Such resignation
will be accepted by the Company upon the satisfaction of any requirements of
Section 14(f) of the Securities Exchange Act of 1934, as amended.

Keith McKinney. From April 2001 until October 15, 2001, Mr. McKinney was a
Director of the Company. Mr. McKinney is a private investor who retired in 1992
as President, CEO and Vice Chairman of Intertrans Corporation, a public,
international transportation and logistics company. Prior to co-founding
Intertrans in 1978, Mr. McKinney held several positions with Circle
International, a public international freight forwarder, customs broker and
logistics company and with Texas Instruments in various capacities, including
International Traffic Manager. Upon the closing of the NTOF transaction, Mr.
McKinney tendered his resignation from the Board. Such resignation will be

                                       23

<PAGE>

accepted by the Company upon the satisfaction of any requirements of Section
14(f) of the Securities Exchange Act of 1934, as amended.

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's executive officers and directors and persons who own more than ten
percent (10%) of a registered class of the Company's equity securities
(collectively, the "Reporting Persons") to file reports of ownership and changes
in ownership with the Securities and Exchange Commission and to furnish the
Company with copies of these reports. The Company believes that all filings
required to be made by the Reporting Persons during the fiscal year ended
December 29, 2000 were made on a timely basis, based solely on a review of
copies of all reports of ownership furnished to the Company.

ITEM 11.  EXECUTIVE COMPENSATION.

The following table sets forth certain information regarding compensation paid
during each of the last three fiscal years to the Company's Chief Executive
Officer and each of the Company's other executive officers (the "named executive
officers").

<TABLE>
<CAPTION>

                                                                                           Long-Term
                                                                                         Compensation
                                                           Annual Compensation          --------------
                                                          ---------------------             Shares
                Name and                                                                 Underlying          All Other
           Principal Position              Year      Salary      Bonus       Other          Options       Compensation/(1)/
          --------------------            ------    --------    -------     ------       ------------    -------------------
<S>                                       <C>       <C>         <C>         <C>          <C>             <C>

Colon O. Washburn/(2)/                     2000       240,000           -          -         60,000             2,215
     Chief Executive Officer, Chairman     1999        56,308           -      4,940          5,000                 -
     of the Board and President            1998             -           -          -              -                 -

Gary D. Wiener                             2000       138,051           -          -         25,000             2,233
   Executive Vice President and            1999       113,473           -          -              -             1,777
    Chief Operating Officer                1998       112,936       5,000          -              -             1,949

Steven C. Finberg                          2000       113,424           -          -         20,000             3,201
     Vice President of Sales               1999        96,750      11,500          -              -             4,191
     and Marketing                         1998        91,731           -          -              -             3,461

David I. Sheinfeld/(3)/                    2000       264,231                341,923/(4)/    60,000             5,796
     Chairman of the                       1999       302,874                      -              -             4,800
     Board and President                   1998       298,819      50,000          -         20,000             4,800

John H. Gray/(5)/                          2000       175,000           -          -              -             4,586
   Executive Vice President, Chief         1999       165,000           -          -              -             1,333
   Financial Officer and Secretary         1998        33,635       5,000          -              -                 -

Michael J. Hinson/(6)/                     2000        99,230      15,000          -         12,000             1,385
     Vice President, Treasurer             1999             -           -          -              -                 -
     Controller, & Asst Sec.               1998             -           -          -              -                 -
</TABLE>

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


                                       24

<PAGE>

(1)  These amounts consist of contributions by the Company to a 401(k) plan on
     behalf of the named executive.
(2)  Effective October 1999, Mr. Washburn was appointed CEO of the Company. Mr.
     Washburn's annual base compensation was $240,000. Effective August 2001,
     Mr. Washburn resigned his position as Chief Executive Officer and Darren
     Miles became Chief Executive Officer.
(3)  Effective November 2000, Mr. Sheinfeld resigned his position as Chairman of
     the Board of Directors, as director and as employee of the Company.
(4)  Amount includes all payments due Mr. Sheinfeld pursuant to the Resignation
     Agreement and Contract for Services entered into with the Company on
     November 9, 2000, including those payments which will be made in 2001.
     Amount does not include the forgiveness of a $300,000 loan and accrued
     interest thereon owed by Mr. Sheinfeld to the Company.
(5)  Effective May 2001, Mr. Gray resigned as Executive Vice President, Chief
     Financial Officer, and Secretary. Effective April 2001, Cheryl Taylor
     became Executive Vice President, Chief Financial Officer, and Secretary.
(6)  Effective April 2001, Mr. Hinson resigned as Vice President, Controller,
     and Assistant Secretary. Effective April 2001, Helen Mihas became Vice
     President, Controller, and Assistant Secretary.

Option Grants In Last Fiscal Year

The following table sets forth certain information concerning options to
purchase Common Stock issued to the named executive officers during the 2000
fiscal year under the 1996 Fresh America Corp. Stock Option and Award Plan as
Amended and Restated Effective May 22, 1998.

<TABLE>
<CAPTION>

                                                                                           Potential Realizable Value
                              Number of         Percent of                                 At Assumed Annual Rate of
                              Securities      Total Options                                 Stock Price Appreciation
                              Underlying        Granted to                                    for Option Term (a)
                               Options          Employees      Exercise      Expiration   ----------------------------
          Name                 Granted           In 2000         Price          Date            5%            10%
         ------              -------------   ---------------  ----------    ------------  -----------     ------------
<S>                          <C>             <C>              <C>           <C>           <C>             <C>

Gary D. Wiener                 25,000                 6.3%       $2.00        6/2/2010       $31,445         $79,687
Steven C. Finberg              20,000                 5.0%       $2.00        6/2/2010       $25,156         $63,750
</TABLE>

------------------
(a)  The "Potential Realizable Value" portion of the table illustrates value
     that might be realized upon the exercise of the options immediately prior
     to the expiration of their term, assuming the specified compounded rates of
     appreciation of the Common Stock over the term of the options.

Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End Option
Values

There were no options exercised by the named executive officers during the 2000
fiscal year.

401(k) Plan

The Company maintains a 401(k) Profit Sharing Plan, a tax-qualified retirement
plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the
"Code"). The Company's 401(k) Plan provides participants with retirement
benefits and may also provide benefits upon death, disability or termination of
employment with the Company. Employees are eligible to participate in the
Company's 401(k) Plan following the completion of three (3) months of
employment. In addition, employees must be at least twenty-one (21) years of age
to be eligible for participation in the 401(k) Plan. Participants may make
elective salary reduction contributions to the 401(k) Plan up to the lesser of
15% of the participant's compensation or the legally permissible limit
(currently $10,500) imposed by the Code. The Company may, in its sole
discretion, make a matching employer contribution for employees of the amount of
the percentage of each employee contribution up to a maximum contribution of 3%
of the contributing employee's compensation. In addition, the Company may, in
its sole discretion, make nonelective contributions to the 401(k) Plan for
participants who are not considered to be "highly compensated employees" under
the Plan. Contributions by the Company vest over a period of five (5) years.
Enrollment in the 401(k) Profit Sharing Plan may be effected on the first day of
the month following the date the employee meets the eligibility requirements of
the Plan.

                                       25

<PAGE>

Compensation Committee Interlocks and Insider Participation

During the 2000 fiscal year, the Compensation Committee of the Board of
Directors consisted of Sheldon Stein and Colon Washburn; however, Mr. Stein
resigned in September 2000. Mr. Washburn became the Company's Chief Executive
Officer in October 1999, and continued to serve on the compensation committee
until February 2001. Mr. Washburn resigned as our Chief Executive Officer in
August 2001.


                         COMPENSATION COMMITTEE'S REPORT
                            ON EXECUTIVE COMPENSATION

The Compensation Committee was formed in April 1994 in anticipation of the
Company's initial public offering. Prior to the establishment of the
Compensation Committee, the entire Board of Directors was responsible for
determining executive compensation. Since its formation, the Compensation
Committee has been responsible for recommending bonuses and any increase in base
salaries for the Company's executive officers.

The Compensation Committee believes that, in order for the Company to succeed,
it must be able to attract and retain qualified executive officers. In
determining the type and amount of executive officer compensation, the
objectives of the Compensation Committee are to provide levels of base
compensation, bonuses and long-term incentives (in the form of stock options or
other plans) that will attract and retain talented executive officers and align
their interests with the success of the Company. The Company's executive officer
compensation program currently is comprised of base salary, bonus plan,
long-term incentive compensation (in the form of stock options) and various
benefits generally available to employees of the Company (such as health and
disability insurance). Under the supervision of the Compensation Committee and
the Board of Directors, the Company has developed and implemented compensation
policies, plans and programs that seek to enhance the profitability of the
Company and increase shareholder value.

Base Salaries

The Company's policy is to maintain base salaries competitive with salaries paid
to similarly situated executive officers of companies of similar size in
comparable industries. Although neither the Board of Directors nor the
Compensation Committee has conducted a formal review of base salaries paid to
similarly situated executive officers, the Company believes that the base
salaries payable to its executive officers are comparable to those paid by
similar companies located in the Company's geographical area and engaged in
industries comparable to the Company's. The Compensation Committee anticipates
that adjustments to base compensation will generally be made based upon assigned
responsibility and performance and successful attainment of specific goals and
objectives of the Company and individual employees.

Bonuses

Year-end cash bonuses are designed to motivate the Company's executive officers
to achieve specific annual financial goals and to achieve favorable returns for
the Company's shareholders. At the end of each fiscal year, the Compensation
Committee will assess each executive's contributions to the Company as well as
the degree to which specific annual financial, strategic, and operating
objectives were met by the Company.

Long-Term Incentives

Stock option grants under the Company's stock option plans form the basis of the
Company's long-term incentive compensation for executive officers and employees.
The specific objective of the Company's stock option plans is to align the
long-term interests of the Company's executive officers and employees with those
of shareholders by creating a strong link between executive pay and shareholder
returns. The Company encourages its executive officers and employees to develop
and maintain a significant, long-term stock ownership position in the Company's
Common Stock. Stock options are awarded to executive officers and employees in
order to encourage future management actions aimed at improving the Company's
sales efforts, product quality and profitability. The Company believes that
success in these endeavors will increase the value of the Company's Common Stock
for shareholders. Recipients of options will have the opportunity to share in
the increased value that results from their efforts. The Plan Administration
Committee makes specific awards of options based on an individual's ability to

                                       26

<PAGE>

impact Company-wide performance and in light of the total compensation
appropriate for the individual's position. The Compensation Committee and the
Plan Administration Committee may also consider other bonus or long-term
incentives at their discretion.

Chief Executive Officer Compensation

In approving Mr. Washburn's compensation, the Board of Directors evaluated and
compared Mr. Washburn's duties, responsibilities and performance results, and
the overall results of the Company, to industry norms to determine the minimum
level of base compensation required. The compensation committee did not
recommend a cash bonus for fiscal 2000.

In November 2000, the Company entered into a resignation agreement and contract
for services with Mr. Sheinfeld. Pursuant to the resignation agreement, both
notes totaling $300,000 in principal and all accrued interest thereon were
forgiven in full. In addition, the Company paid Mr. Sheinfeld $16,923 on
December 1, 2000 and $25,000 on January 1, 2001. The Company paid Mr. Sheinfeld
$33,333 per month for the six months of January through June 2001. The payments
decreased to $8,333 for the last six months of 2001. There are no other payments
due.

         This Report is submitted by the members of the Compensation Committee
of the Board of Directors.

                                Colon O. Washburn

Employment Agreements

The Company has entered into employment agreements with Gary Wiener, Steven
Finberg, and Colon Washburn. These employment agreements set forth the basic
terms of Mr. Wiener's, Mr. Finberg's, and Mr. Washburn's employment with the
Company, and also contain provisions regarding non-competition, non-solicitation
of Company employees, non-solicitation of Company customers, and confidentiality
of certain Company information.

Mr. Wiener's agreement for employment with the Company as its Chief Operating
Officer has a term of three years, commencing on October 5, 2001. The term of
the employment agreement may be extended by a written extension agreement signed
by both parties. Mr. Wiener is obligated under the agreement to devote his full
professional working time to the Company and shall not otherwise be employed or
otherwise engaged in any other business or enterprise without the written
permission of the Company. The agreement provides for a base salary of $160,000
per year, which is to be reviewed annually by the Company, but which may not be
decreased. In addition to the base salary, the agreement provides for, among
other things, participation in benefit plans and other fringe benefits
applicable to similarly situated officers and managers, reimbursement for
business expenses in accordance with Company policy, and eligibility to receive
a performance-based annual bonus. The bonus will be awarded beginning on the
first day of the calendar year following October 5, 2001, only if the economic
performance of the Company during twelve consecutive months has achieved or
exceeded an "adjusted target budget" as determined by the Board of Directors and
subject to adjustment as set forth in the agreement. The agreement provides that
the Company may terminate for cause (as defined in the agreement) at any time.
The agreement terminates automatically in the event of disability (as defined in
the agreement) and also terminates automatically upon death. Termination by
either the employee or the Company (except for in the event of death) requires
two weeks' written notice.

Mr. Finberg's agreement for employment with the Company as a Vice President
Sales and Marketing has a term of three years, commencing on October 5, 2001.
The term of the employment agreement may be extended by a written extension
agreement signed by both parties. Mr. Finberg is obligated under the agreement
to devote his full professional working time to the Company and shall not
otherwise be employed or otherwise engaged in any other business or enterprise
without the written permission of the Company. The agreement provides for a base
salary of $145,000 per year, which is to be reviewed annually by the Company,
but which may not be decreased. In addition to the base salary, the agreement
provides for, among other things, participation in

                                       27

<PAGE>

benefit plans and other fringe benefits applicable to similarly situated
officers and managers, reimbursement for business expenses in accordance with
Company policy, and eligibility to receive performance-based annual bonus. The
bonus will be awarded beginning on the first day of the calendar year following
October 5, 2001, only if the economic performance of the Company during twelve
consecutive months has achieved or exceeded an "adjusted target budget" as
determined by the Board of Directors and subject to adjustment as set forth in
the agreement. The agreement provides that the Company may terminate for cause
(as defined in the agreement) at any time. The agreement terminates
automatically in the event of disability (as defined in the agreement) and also
terminates automatically upon death. Termination by either the employee or the
Company (except for in the event of death) requires two weeks' written notice.

Mr. Washburn's agreement for employment with the Company as an Executive
Consultant provides for a one-year term commencing on October 5, 2001, which may
be renewed for up to three successive one-year periods thereafter. Renewal is
automatic unless either party gives thirty days' notice prior to the expiration
of the term. During Mr. Washburn's term of employment, he may continue the
business relationships he already has, and any new consulting or part-time
employment arrangements as may arise. He otherwise agrees to devote his full
professional working time to the Company and shall not otherwise be employed or
otherwise engaged in any other business or enterprise without the written
permission of the Company. The agreement provides that Mr. Washburn shall have a
base salary of $150,000, which will be reviewed and modified from time to time,
but which shall not be decreased. In addition to the base salary, the agreement
provides for, among other things, participation in benefit plans and other
fringe benefits applicable to similarly situated employees and reimbursement for
business expenses in accordance with Company policy. The agreement provides for
termination by the Company for cause (as defined in the agreement), at any time.
The agreement terminates automatically in the event of disability as defined in
the agreement, and also terminates automatically upon death. Termination by
either the employee or the Company (except for death) requires two weeks'
written notice.

Each of Mr. Wiener's, Mr. Finberg's and Mr. Washburn's employment agreements
further provide that during the employment term, each of them shall observe a
non-competition clause, and shall not without prior written consent directly or
indirectly engage in or have a financial interest in any other business,
continue or assume any other corporate affiliations, or pursue any other
commercial activities which would in any way compete with the Company or result
in a conflict of interest for the employee. For one year after termination of
employment, each of them agrees not to compete with the Company or have any
financial interest in any entity competing with the Company or an affiliate of
the Company for which the employee performed services, within any region or
locality in which the Company is then doing business or marketing its products.
They further agree to non-solicitation of Company employees, non-solicitation of
Company customers, and to maintain the confidentiality of the Company's
confidential information (as defined in the agreement), both during their
employment and for one year after termination.

Severance Agreements

On November 9, 2000, the Company and Mr. Sheinfeld entered into a Resignation
Agreement and Contract for Services in connection with Mr. Sheinfeld's
resignation as Chairman of the Board of Directors and an employee of the
Company. Pursuant to the agreement, Mr. Sheinfeld was entitled to receive a
severance payment of $50,000, $25,000 of which was paid on November 9, 2000 with
the remaining $25,000 paid on February 1, 2001. In addition, Mr. Sheinfeld is
eligible to receive a bonus in the amount of $25,000 on December 31, 2001, if,
in the reasonable judgment of the Company, Mr. Sheinfeld has satisfactorily
performed the services required by the Company. Further, the Company agreed to
forgive Mr. Sheinfeld's debt to the Company in the amount of $300,000. In
conjunction therewith, the Company additionally agreed to release Mr. Sheinfeld
from further liability for interest on his debts which, as of November 9, 2000,
was in the amount of $59,379.83. The Company also agreed to extend the period
during which Mr. Sheinfeld may exercise his stock options to purchase 105,537
shares of the Company's Common Stock from November 9, 2000 to November 9, 2001.

The agreement contemplates that Mr. Sheinfeld would be engaged as an independent
contractor to the Company for a period commencing on November 9, 2000 and ending
December 31, 2001, unless terminated earlier

                                       28

<PAGE>

pursuant to the agreement. The agreement provides for total compensation of
$291,923.07 for such services during the term of the agreement. The agreement
also includes certain non-competition, confidentiality and indemnification
covenants.

Corporate Performance Graph

The following graph shows a five year comparison of shareholder return on the
Company's Common Stock based on the market price of the Common Stock (assuming
reinvestment of dividends), the cumulative total returns of companies on the
Nasdaq Stock Market Index of U.S. Companies, and companies with standard
industry classifications (SIC codes) with the same range as Fresh America's. The
data was supplied by the Center for Research in Security Prices, Graduate School
of Business, The University of Chicago.

                Comparison of Five-Year Cumulative Total Returns
           Fresh America Corp., Nasdaq Stock Market and Nasdaq Stocks


                    (Performance Results through 12/29/2000)-

                              [GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
                                                                           Period Ending
                                                      --------------------------------------------------------
Index                                                 12/1995  12/1996    12/1997  12/1998   12/1999   12/2000
--------------------------------------------------------------------------------------------------------------
<S>                                                   <C>      <C>        <C>      <C>       <C>       <C>
Fresh America Corp.                                     100.0    171.4      200.0    174.0      50.6      11.7
Nasdaq Stock Market (US Companies)                      100.0    123.0      150.7    212.4     394.8     237.5
NASDAQ Stocks (SIC 5140-5149 US Companies)              100.0    155.5      264.3    312.9     207.5     308.2
    Groceries and Related Products
</TABLE>

    *Source: CRSP (www.crsp.uchicago.edu), Center for Research in Security
    Prices, Graduate School of Business, The University of Chicago. Used with
    permission. All rights reserved.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information believed by the Company to be
accurate based on information provided to it concerning the beneficial ownership
of Common Stock by (a) each shareholder who is known by the Company to own
beneficially in excess of 5% of the outstanding Common Stock, (b) each director,
(c) the Company's Chief Executive Officer, (d) each of the Company's other named
executive officers and (e) all executive officers and directors as a group, as
of December 6, 2001.

                                       29

<PAGE>

<TABLE>
<CAPTION>
                                                                 Amount and Nature of
Beneficial Owner                                                 Beneficial Ownership         Percent of Class/(1)/
----------------                                                 --------------------         ---------------------
<S>                                                             <C>                           <C>
North Texas Opportunity Fund LP
13355 Noel Road, Suite 2210                                        3,944,094/(2)/                     46.9%
Dallas, TX  75240

North Texas Opportunity Fund Capital Partners, LP
13355 Noel Road, Suite 2210                                        3,944,094/(2)/                     46.9%
Dallas, TX  75240

NTOF LLC
13355 Noel Road, Suite 2210                                        3,944,094/(2)/                     46.9%
Dallas, TX  75240

North Texas Investment Advisors LLC
13355 Noel Road, Suite 2210                                        3,944,094/(2)/                     46.9%
Dallas, TX  75240

Arthur W. Hollingsworth
13355 Noel Road, Suite 2210                                        3,944,094/(2)/                     46.9%
Dallas, TX  75240

Luke M. Sweetser
13355 Noel Road, Suite 2210                                        3,944,094/(2)/                     46.9%
Dallas, TX  75240

Gregory A. Campbell
3625 North Hall Street, Suite 610                                  3,944,094/(2)/                     46.9%
Dallas, TX  75219

John Hancock Financial Services, Inc.                                    -0-/(3)/                       *
John Hancock Place, P.O. Box 111
Boston, MA 02117

Larry Martin                                                       3,176,694/(4)/                     37.7%
2729 Sunrise Drive
Arlington, TX 76006

Gruber & McBaine Capital Management                                  767,400/(5)/                      9.1%
50 Osgood Place
San Francisco, CA 94133

DiMare Homestead, Inc.                                               528,300/(6)/                      6.3%
258 NW 1st Avenue
Florida City, FL 33034

Darren L. Miles                                                           --/(7)/                       *

Colon O. Washburn                                                    122,435/(8)/                      1.5%

Gary D. Wiener                                                        35,600/(9)/                       *

Steven C. Finberg                                                     26,500/(9)/                       *

David I. Sheinfeld                                                   513,697/(10)/                     6.0%

All Directors and Executive Officers as a Group                    4,128,629/(11)/                    49.1%
(9 persons)
------------------
</TABLE>

                                       30

<PAGE>

*Does not exceed 1% of the outstanding common stock.

(1)  Percentages with respect to each person or group of persons have been
     calculated on the basis of 8,410,098 shares, the total number of shares of
     Common Stock outstanding the record date, plus the number of shares of
     Common Stock which such person or group of persons has the right to
     acquire, without contingency, within 60 days after the record date.

(2)  North Texas Opportunity Fund LP ("NTOF") is a direct beneficial owner of
     the 3,944,094 shares of Common Stock. North Texas Opportunity Fund Capital
     Partners LP ("NTOF Partners"), is an indirect beneficial owner of this
     Common Stock given that NTOF Partners is the general partner of NTOF; NTOF
     LLC ("NTOF LLC") is an indirect beneficial owner of this Common Stock given
     that NTOF LLC is the general partner of NTOF Partners; North Texas
     Investment Advisors LLC ("NT Advisors") is an indirect beneficial owner of
     this Common Stock given that NT Advisors is the investment manager of NTOF;
     Arthur W. Hollingsworth ("Hollingsworth") is an indirect beneficial owner
     of this Common Stock given that Hollingsworth is a manager of NTOF LLC and
     of NT Advisors; Luke M. Sweetser ("Sweetser") is an indirect beneficial
     owner of this Common Stock given that Sweetser is a manager of NTOF LLC and
     of NT Advisors; and Gregory A. Campbell ("Campbell") is an indirect
     beneficial owner of this Common Stock given that Campbell is a manager of
     NTOF LLC and of NT Advisors.

     Of the 3,944,094 shares beneficially owned by NTOF, 3,176,694 shares are
     beneficially owned by NTOF by virtue of a Voting Agreement and Irrevocable
     Proxy, dated September 4, 2001, granted to NTOF by Larry Martin, and
     767,400 shares are beneficially owned by NTOF by virtue of a Voting
     Agreement and Irrevocable Proxy, dated September 10, 2001, granted to NTOF
     by Gruber & McBaine Capital Management, LLC.

     Does not include warrants to purchase 78,213,911 shares of Common Stock
     beneficially owned by NTOF due to the existence of a material contingency
     (the need for shareholder approval of the amendment to the articles of
     incorporation so that there are sufficient number of authorized shares of
     Common Stock for issuance upon exercise of the warrants) that is not within
     NTOF's control and that is required to be satisfied prior to exercise of
     the warrants.

(3)  Does not include warrants to purchase 45,414,529 shares of Common Stock
     beneficially owned by the Hancock Entities and reported by the Hancock
     Entities in a Schedule 13D filed with the SEC on September 17, 2001, due to
     the existence of a material contingency (the need for shareholder approval
     of the amendment to the articles of incorporation so that there are
     sufficient number of authorized shares of Common Stock for issuance upon
     exercise of the warrants) that is not within the Hancock Entities' control
     and that is required to be satisfied prior to exercise of the warrants.

(4)  Based on information set forth in a Schedule 13D filed with the SEC on
     April 24, 2001, Mr. Martin beneficially owns 3,166,694 shares of Common
     Stock and options to purchase 10,000 shares of Common Stock which are
     exercisable within 60 days.

     Mr. Martin and NTOF share voting power over 3,176,694 shares of Common
     Stock by virtue of a Voting Agreement and Irrevocable Proxy dated September
     4, 2001, granted to NTOF by Mr. Martin.

(5)  Based on information provided to the Company by Gruber & McBaine Capital
     Management, LLC ("GMCM"), Jon D. Gruber ("Gruber"), J. Patterson McBaine
     ("McBaine") and Thomas O. Lloyd-Butler ("Lloyd-Butler"). This group
     informed the Company that it beneficially owned 767,400 shares of Common
     Stock and that the voting and dispositive power among such group's members
     is as follows:

<TABLE>
<CAPTION>
                                                                        Voting and Dispositive Power
                                                                   ------------------------------------------
                  Name                                                    Sole                  Shared
                  ---------------------------------------------    -------------------    -------------------
                  <S>                                              <C>                    <C>
                  GMCM                                                     -                   625,000
                  Gruber                                                 82,300                625,000
                  McBaine                                                60,100                625,000
                  Lloyd-Butler                                             -                   625,000
</TABLE>

     GMCM and NTOF also share voting power over 767,400 shares of Common Stock
     by virtue of a Voting Agreement and Irrevocable Proxy dated September 10,
     2001, granted to NTOF by GMCM.

(6)  Based on information set forth in a Schedule 13D filed with the SEC on June
     16, 2000, by DiMare Homestead, Inc. ("DiMare"). Paul DiMare, President of
     DiMare, Inc., has sole voting and dispositive power with regard to the
     528,300 shares of Common Stock beneficially owned by DiMare, a wholly-owned
     subsidiary of DiMare, Inc.

(7)  Does not include options to purchase 2,724,872 shares of Common Stock which
     are immediately exercisable subject to the approval of the Charter
     Amendment.

(8)  Does not include options to purchase 1,000,000 shares of Common Stock which
     are immediately exercisable subject to the approval of the Charter
     Amendment.


                                       31

<PAGE>

(9)  Does not include options to purchase 2,724,872 shares of Common Stock, of
     which options to purchase 681,218 shares are immediately exercisable and
     the remainder of which are subject to future vesting, subject to the
     approval of the Charter Amendment.

(10) Consists of 328,037 shares held of record by David I. Sheinfeld, as trustee
     of the Sheinfeld Family Trust, 70,100 shares held of record by the
     Sheinfeld Family Partnership, 10,023 shares held of record by Mr. Sheinfeld
     and 105,537 shares subject to options issued to Mr. Sheinfeld under our
     stock option plans that are exercisable within 60 days. Mr. Sheinfeld's
     address is 42 Downs Lake Circle, Dallas, TX 75230. Mr. Sheinfeld resigned
     from all positions with the Company effective November 2000.

(11) Includes 152,753 shares subject to options issued to certain directors and
     executive officers of the Company that are exercisable within 60 days.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company entered into a six-month consulting agreement with Mr. Thomas
Hubbard effective October 1, 1999, at which time Mr. Hubbard was a Director of
the Company. The agreement paid Mr. Hubbard $8,000 per month. The agreement
called for Mr. Hubbard to provide managerial oversight of King's Onion House, a
wholly owned subsidiary of Fresh America. The agreement was extended for an
additional twelve-month period, which ended April 1, 2001.

In December 1999, the Company made an unsecured loan in the principal amount of
$175,000 to Mr. David Sheinfeld, the former Chairman, Chief Executive Officer
and President of the Company. At such time, the Company also extended an
existing $125,000 unsecured loan made to Mr. Sheinfeld in December 1994. The
extended note and the new note were both to bear interest at the Bank of
America, N.A. prime rate and were due and payable in December 2001. These notes
were forgiven pursuant to the resignation agreements discussed in the
compensation committee's report.

On September 5, 2001, the Company entered into a Monitoring Agreement with North
Texas Investment Advisors ("NT Advisors"), an affiliate of NTOF, as a condition
to the Agreements between NTOF and the Company. The Monitoring Agreement
provides that NT Advisors will monitor the Company's progress and performance
for which the Company will pay NT Advisors a fee of $20,000 per month. Messrs.
Hollingsworth, Campbell and Sweetser hold positions as managers of NT Advisors,
as well as being partners in NTOF and directors of the Company. The terms of the
Monitoring agreement provide that affiliates of NT Advisors or NTOF will not be
paid compensation as directors of the Company.

On September 5, 2001, the Company issued an unsecured promissory note to Larry
Martin, a former director and a shareholder owning more than 5% of our
outstanding common stock, in the amount of $1,239,233. The promissory note bears
no interest and becomes due and payable on the earlier of (i) January 3, 2002 or
(ii) our repayment of the Company's term note with Bank of America, N.A. The
promissory note evidences a deferred purchase price payment owed to Mr. Martin
pursuant to a Stock Purchase Agreement entered into with Mr. Martin's former
company on December 17, 1997.

The Company contemplates entering into a staffing agreement with Instaff
Personnel, Inc., a company in which NTOF is a significant shareholder. In
addition, Arthur W. Hollingsworth is Chairman of the Board of Instaff and
Gregory A. Campbell and Luke M. Sweetser serve on Instaff's board of directors.
Although details of the agreement have not yet been finalized, it is anticipated
that fees paid to Instaff will exceed $60,000 during the current fiscal year.

                                       32

<PAGE>

                                     PART IV

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

A.   Documents filed as a part of this report.
     1.   Financial Statements.
     2.   Financial Statement Schedules - None.
     3.   Exhibits - The exhibits listed in the accompanying Exhibit Index are
          filed or incorporated by reference as part of this report.

B.   Reports on Form 8-K.
     No reports on Form 8-K were filed during the fourth quarter of 2000, which
     ended on December 29, 2000.

                                  EXHIBIT INDEX

Exhibit
Number                               Description
------                               -----------

3.1     Restated Articles of Incorporation of Fresh America Corp. (Incorporated
        by reference to exhibit 3.1 to the Company's Registration Statement on
        Form S-1 [Commission File Number 33-77620]).

3.2     Restated Bylaws of Fresh America Corp. (Incorporated by reference to
        exhibit 3.2 to the Company's Form 10-Q for the quarterly period ended
        September 28, 2001).

4.1     Specimen of Common Stock Certificate (Incorporated by reference to
        exhibit 4.1 to the Company's Registration Statement on Form S-1
        [Commission File Number 33-77620]).

4.2     Statement of Designation for Series D Cumulative Redeemable Preferred
        Stock (Incorporated by reference to exhibit 4.1 to the Company's Form
        8-K filed with the Securities and Exchange Commission on September 20,
        2001).

10.1    Fresh America Corp. 1993 Stock Option Award Plan (Incorporated by
        reference to exhibit 10.3 to the Company's Registration Statement on
        Form S-1 [Commission File Number 33-77620]).

10.2    Form of Option Agreement entered into pursuant to the 1993 Stock Option
        and Award Plan (Incorporated by reference to exhibit 10.4 to the
        Company's Registration Statement on Form S-1 [Commission File Number
        33-77620]).

10.3    Fresh America Corp 1996 Stock Option and Award Plan as Amended and
        Restated Effective May 22, 1998 (Incorporated by reference to exhibit
        4.3 to the Company's Form S-8 filed with the Securities and Exchange
        Commission on August 4, 1998 [Commission File Number 333-60601]).

10.4    Fresh America Corp. 2001 Stock Option Plan (Incorporated by reference to
        Appendix B to the Company's Definitive Proxy Statement filed with the
        Securities and Exchange Commission on December 3, 2001).

10.5    Asset Purchase Agreement dated as of February 2, 1998, by and among
        Francisco Acquisition Corp., Fresh America Corp., Francisco Distributing
        Company, LLC, and the owners named therein (Incorporated by reference to
        exhibit 2.1 to the Company's Form 8-K filed with the Securities and
        Exchange Commission on February 17, 1998).

10.6    Amendment to Stock Purchase documents dated July 28, 2000 with respect
        to the Stock Purchase Agreement dated as of October 30, 1998 between
        Fresh America Corp. and Sam Perricone, Sr., Henry Beyer, and the Sam
        Perricone Children's Trust (Incorporated by reference to Exhibit 10.1 to
        the Company's Form 10-Q for the quarterly period ended June 29, 2000).

10.7    Amended and Restated Promissory Notes dated July 28, 2000 with respect
        to promissory Notes dated as of November 1, 1998 between Fresh America
        Corp. and individually, Sam Perricone, Sr., Henry Beyer, and the Sam
        Perricone Children's Trust (Incorporated by reference to Exhibit 10.2 to
        the Company's Form 10-Q for the quarterly period ended June 29, 2000).


                                       33

<PAGE>

10.8    Common Stock Purchase Warrant Agreements dated July 28, 2000 between
        Fresh America Corp. and individually, Sam Perricone, Sr., Henry Beyer,
        and the Sam Perricone Children's Trust (Incorporated by reference to
        Exhibit 10.3 to the Company's Form 10-Q for the quarterly period ended
        June 29, 2000).

10.9    Securities Exchange and Purchase Agreement, dated August 14, 2001, by
        and among Fresh America Corp., North Texas Opportunity Fund LP and each
        of John Hancock Life Insurance Company, John Hancock Variable Life
        Insurance Company, Signature 1A (Cayman), Ltd., Signature 3 Limited and
        Investors Partner Life Insurance Company (Incorporated by reference to
        exhibit 10.1 to the Company's Form 8-K filed with the Securities and
        Exchange Commission on September 20, 2001).

10.10   Shareholders Agreement, dated August 14, 2001, by and among Fresh
        America Corp., North Texas Opportunity Fund LP and each of John Hancock
        Life Insurance Company, John Hancock Variable Life Insurance Company,
        Signature 1A (Cayman), Ltd., Signature 3 Limited and Investors Partner
        Life Insurance Company (Incorporated by reference to exhibit 10.2 to the
        Company's Form 8-K filed with the Securities and Exchange Commission on
        September 20, 2001).

10.11   Post-Closing Agreement dated as of September 5, 2001, by and among Fresh
        America Corp., North Texas Opportunity Fund LP, John Hancock Life
        Insurance Company, John Hancock Variable Life Insurance Company,
        Signature 1A (Cayman), Ltd., Signature 3 Limited and Investors Partner
        Life Insurance Company (Incorporated by reference to exhibit 10.3 to the
        Company's Form 8-K filed with the Securities and Exchange Commission on
        September 20, 2001).

10.12   Employment Agreement for Colon O. Washburn (Incorporated by reference to
        Exhibit 10.11 to Company's Form 10-Q filed with the Securities and
        Exchange Commission on November 13, 2001).

10.13   Employment Agreement for Steven C. Finberg (Incorporated by reference to
        Exhibit 10.12 to Company's Form 10-Q filed with the Securities and
        Exchange Commission on November 13, 2001).

10.14   Employment Agreement for Gary D. Weiner (Incorporated by reference to
        Exhibit 10.13 to Company's Form 10-Q filed with the Securities and
        Exchange Commission on November 13, 2001).

10.15   Employment Agreement for Cheryl A. Taylor (Incorporated by reference to
        Exhibit 10.14 to Company's Form 10-Q filed with the Securities and
        Exchange Commission on November 13, 2001).

10.16   Restated Business Loan Agreement between Fresh America Corp. and Bank of
        America Texas, N.A. dated February 2, 1998 (Incorporated by reference
        to exhibit 99.1 to the Company's Form 8-K dated February 17, 1998).

10.17   Second Amendment to the Restated Business Loan Agreement between Fresh
        America Corp. and Bank of America Texas, N.A. dated as of May 14, 1998
        (Incorporated by reference to exhibit 10.4 to the Company's Form 10-Q
        for the quarterly period ended July 3, 1998).

10.18   Eighth Amendment to the Restated Business Loan Agreement between Fresh
        America Corp. and Bank of America Texas, N.A. dated as of October 31,
        1999 (Incorporated by reference to exhibit 10.12 to the Company's Form
        10-K for the annual period ended December 31, 1999).

10.19   Ninth Amendment to the Restated Business Loan Agreement between Fresh
        America Corp. and Bank of America Texas, N.A. dated as of November 15,
        1999 (Incorporated by reference to exhibit 10.13 to the Company's Form
        10-K for the annual period ended December 31, 1999).

10.20   Tenth Amendment to the Restated Business Loan Agreement between Fresh
        America Corp. and Bank of America Texas, N.A. dated as of March 31, 2000
        (Incorporated by reference to exhibit 10.14 to the Company's Form
        10-K/A for the annual period ended December 31, 1999).

10.21   Eleventh Amendment to the Restated Business Loan Agreement between Fresh
        America Corp. and Bank of America Texas, N.A. dated as of January 26,
        2001 (Incorporated by reference to Exhibit 10.19 to the Company's
        Form 10-K filed with the Securities and Exchange Commission on
        September 12, 2001).

10.22   Twelfth Amendment to the Restated Business Loan Agreement between Fresh
        America Corp. and Bank of America Texas, N.A. dated as of March 15,
        2001 (Incorporated by reference to Exhibit 10.20 to the Company's
        Form 10-K filed with the Securities and Exchange Commission on
        September 12, 2001).

10.23   Thirteenth Amendment to the Restated Business Loan Agreement between
        Fresh America Corp. and Bank of America Texas, N.A. dated as of
        September 5, 2001 (Incorporated by reference to Exhibit 10.21 to the
        Company's Form 10-K filed with the Securities and Exchange Commission on
        September 12, 2001).

10.24   Resignation Agreement between Fresh America Corp. and David Sheinfeld
        dated as of November 9, 2000 (Incorporated by reference to Exhibit 10.22
        to the Company's Form 10-K filed with the Securities and Exchange
        Commission on September 12, 2001).

12.1    Statement regarding computation of per share earnings (Incorporated by
        reference to Note 1 to the Financial Statements included herein).

21.1*   List of Subsidiary Corporations.

23.1*   Consent of KPMG LLP.



*Filed herewith.


                                       34



<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                           FRESH AMERICA CORP.
                                           (Registrant)


Date:  March 28, 2002                      By /s/ Darren L. Miles
                                              ----------------------------------
                                           Darren L. Miles
                                           President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.


    /s/ Darren L. Miles                             Date:    March 28, 2002
------------------------------------------
     Darren L. Miles
     President and Chief Executive Officer
     (principal executive officer)



    /s/ Cheryl A. Taylor                            Date:    March 28, 2002
------------------------------------------
     Cheryl A. Taylor
     Executive Vice President,
     Chief Financial Officer and Secretary
    (principal financial and accounting officer)



    /s/ Arthur W. Hollingsworth                     Date:    March 28, 2002
------------------------------------------
     Arthur W. Hollingsworth
     Chairman of the Board



    /s/ Luke M. Sweetser                            Date:    March 28, 2002
------------------------------------------
     Luke M. Sweetser
     Director



    /s/ Gregory A. Campbell                         Date:    March 28, 2002
------------------------------------------
     Gregory A. Campbell
     Director



    /s/ Colon O. Washburn                           Date:    March 28, 2002
------------------------------------------
     Colon O. Washburn
     Director

                                       35

<PAGE>


                                    FINANCIAL

                                   STATEMENTS












                                     F1

<PAGE>

                          Independent Auditors' Report
                          ----------------------------


The Board of Directors and Shareholders
Fresh America Corp.:


We have audited the accompanying consolidated balance sheets of Fresh America
Corp. and subsidiaries as of December 29, 2000 and December 31, 1999, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the years in the three-year period ended December 29, 2000.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Fresh America Corp.
and subsidiaries as of December 29, 2000 and December 31, 1999, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 29, 2000, in conformity with accounting principles
generally accepted in the United States of America.

                                    KPMG LLP

Dallas, Texas
February 23, 2001, except as to Note 5
which is as of  September 5, 2001





                                       F2

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

               (In thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                                                          December 29,        December 31,
                                                                                              2000               1999
                                                                                       ------------------   ---------------
                                                             ASSETS
<S>                                                                                    <C>                  <C>
       Current Assets:
          Cash and cash equivalents                                                            $   4,880      $   3,197
          Accounts receivable, net                                                                35,775         58,885
          Advances to growers                                                                        531          3,296
          Inventories                                                                              6,849         10,624
          Prepaid expenses                                                                         1,138          1,618
          Deferred tax asset                                                                         297              -
          Income tax receivable                                                                    1,084          5,900
                                                                                             -----------    -----------
            Total Current Assets                                                                  50,554         83,520

       Property and equipment, net                                                                 9,944         24,440
       Goodwill, net of  accumulated amortization of $3,655 and $2,491, respectively              24,843         23,497
       Other assets                                                                                1,920          3,024
                                                                                             -----------    -----------
            Total Assets                                                                       $  87,261      $ 134,481
                                                                                             ===========    ===========

                                              LIABILITIES AND SHAREHOLDERS' EQUITY

       Current Liabilities:
          Notes payable and current portion of long-term debt                                  $  13,788      $  24,446
          Accounts payable                                                                        27,785         39,277
          Accrued salaries and wages                                                               2,489          2,191
          Other accrued expenses                                                                   3,902          5,360
                                                                                             -----------    -----------
            Total Current Liabilities                                                             47,964         71,274

       Long-term debt, less current portion                                                       24,950         32,843
       Deferred income taxes                                                                           -            295
       Other liabilities                                                                             499            298
                                                                                             -----------    -----------
            Total Liabilities                                                                     73,413        104,710
                                                                                             -----------    -----------
        12% redeemable cumulative preferred stock $1.00 par value (50,000 shares
       authorized and issued); liquidation value of $5,000 plus accrued and
       unpaid dividends                                                                            4,446              -
                                                                                             -----------    -----------

       Shareholders' Equity:
          Common stock $.01 par value (authorized 10,000,000 shares; issued 5,243,404
             shares)                                                                                  52             52
          Additional paid-in capital                                                              33,564         32,555
          Foreign currency translation adjustment                                                   (469)           (28)
          Accumulated deficit                                                                    (23,745)        (2,808)
                                                                                             -----------    -----------
            Total shareholders' equity                                                             9,402         29,771
       Commitments and Contingencies
       Total Liabilities and Shareholders' Equity                                              $ $87,261      $ 134,481
                                                                                             ===========    ===========
</TABLE>

              The notes to consolidated financial statements are an
                       integral part of these statements.

                                       F3

<PAGE>


                      FRESH AMERICA CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                             Fiscal Year Ended
                                                                  --------------------------------------------------------
                                                                     December 29,        December 31,      January 1,
                                                                         2000                1999             1999
                                                                  ----------------   -----------------   -----------------
       <S>                                                        <C>                <C>                 <C>
       Net sales                                                         $554,554           $669,875         $609,490
       Cost of sales                                                      496,169            591,977          537,556
                                                                  ----------------   -----------------   -----------------
            Gross profit                                                   58,385             77,898           71,934
                                                                  ----------------   -----------------   -----------------
       Selling, general and administrative expenses                        54,023             66,756           51,936
       Bad debt expense                                                     1,912              6,031            1,230
       Depreciation and amortization                                        5,506              6,244            3,987
       Disposition costs and impairment of long-lived assets               12,791             13,520                -
       Transaction costs                                                        -              3,850            1,395
       Settlements of lawsuits                                              1,222                805                -
                                                                  ----------------   ----------------    -----------------
          Total operating costs and expenses                               75,454             97,206           58,548
                                                                  ----------------   ----------------    -----------------
            Operating income (loss)                                       (17,069)           (19,308)          13,386
                                                                  ----------------   ----------------    -----------------
       Other income (expense):
          Interest expense                                                 (5,238)            (5,783)          (3,048)
          Interest income                                                     374                340            1,010
          Other, net                                                          (76)               130              (85)
                                                                  ----------------   ----------------    -----------------
                                                                           (4,940)            (5,313)          (2,123)
                                                                  ----------------   ----------------    -----------------
       Income (loss) before income taxes and extraordinary item           (22,009)           (24,621)          11,263
       Income tax expense (benefit)                                           833             (2,630)           5,041
                                                                  ----------------   ----------------    -----------------
       Income (loss) before extraordinary item                            (22,842)           (21,991)           6,222
       Extraordinary gain on extinguishment of debt                         1,905                  -                -
                                                                  ----------------   ----------------    -----------------
       Net income (loss)                                                $ (20,937)         $ (21,991)       $   6,222
       Preferred dividends and accretion                                      698                  -                -
                                                                  ----------------   ----------------    -----------------
       Net income (loss) applicable to common shareholders              $ (21,635)         $ (21,991)       $   6,222
                                                                  ================   ================    =================
       Basic earnings (loss) per share:

             Income (loss) before extraordinary item                  $     (4.49)       $     (4.20)       $    1.27
             Extraordinary gain on extinguishment of debt                     .36                  -                -
                                                                  ----------------   ----------------    -----------------
             Net income (loss)                                        $     (4.13)      $      (4.20)       $    1.27
                                                                  ================   ================    =================
       Diluted earnings (loss) per share:

             Income (loss) before extraordinary item                  $     (4.49)       $     (4.20)       $    1.20
             Extraordinary gain on extinguishment of debt                     .36                 -                -
                                                                  ----------------   -----------------   -----------------
             Net  income (loss)                                       $     (4.13)       $     (4.20)       $    1.20
                                                                  ================   =================   =================
</TABLE>

              The notes to consolidated financial statements are an
                       integral part of these statements.


                                       F4

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                               Foreign        Retained
                                                               Additional     Currency        Earnings            Total
                                                  Common        Paid-In     Translation     (Accumulated      Shareholders'
                                                   Stock        Capital      Adjustment       Deficit)           Equity
                                                 ---------- --------------- ------------- ---------------- ----------------
<S>                                              <C>           <C>          <C>             <C>               <C>
Balances at January 2, 1998                         $45         $16,508       $(179)            12,961           $29,335
Stock issued in acquisitions                          7          13,434           -                  -            13,441
Exercise of employee stock options                    -             488           -                  -               488
Issuance of warrants related to subordinated
   debt                                               -           1,242           -                  -             1,242
Net income                                            -               -           -              6,222             6,222
Foreign currency translation adjustments              -               -        (166)                 -              (166)
                                                ----------- --------------- ------------- ---------------- ----------------
   Comprehensive income                                                                                            6,056
Balances at January 1, 1999                          52          31,672        (345)            19,183            50,562
Stock issued in acquisitions                          -             500           -                  -               500
Exercise of employee stock options                    -              50           -                  -                50
Repricing of an employee's options                    -             333           -                  -               333
Net loss                                              -               -           -            (21,991)          (21,991)
Foreign currency translation adjustments              -               -         317                  -               317
                                                ----------- --------------- ------------- ---------------- ----------------
   Comprehensive loss                                                                                            (21,674)
                                                                                                           ----------------
Balances at December 31, 1999                        52          32,555         (28)            (2,808)           29,771
Issuance of warrants related to preferred
    stock                                             -           1,104           -                  -             1,104
Issuance of warrants related to restructuring
    of  subordinated debt                             -             603           -                  -               603
Preferred dividends and accretion                     -            (698)          -                  -              (698)
Net loss                                              -               -           -            (20,937)          (20,937)
Foreign currency translation adjustment               -               -        (441)                 -              (441)
                                                ----------- --------------- ------------- ---------------- ----------------
    Comprehensive loss                                                                                           (21,378)
                                                                                                           ----------------
Balances at December 29, 2000                       $52         $33,564       $(469)          $(23,745)            $9,402
                                                =========== =============== ============= ================ ================
</TABLE>

              The notes to consolidated financial statements are an integral
                           part of these statements.

                                       F5

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                        Fiscal Year Ended
                                                                        --------------------------------------------------
                                                                          December 29,     December 31,      January 1,
                                                                              2000             1999             1999
                                                                        -----------------  --------------- ---------------
<S>                                                                     <C>                <C>             <C>
Cash flows from operating activities:
   Net income (loss)                                                      $  (20,937)         $(21,991)      $   6,222
   Adjustments to reconcile net income (loss) to net cash provided by
   (used in) operating activities, excluding the effects of
   acquisitions:
       Bad debt expense                                                        1,912             6,031           1,230
       Extraordinary gain on extinguishment of debt                           (1,905)                -               -
       Depreciation and amortization                                           5,506             6,244           3,987
       Impairment of long-lived assets                                        12,791            11,529               -
       Non-cash transaction costs                                                  -               340             519
       Non-cash interest expense                                                   -               548             354
       Deferred income taxes                                                    (592)             (437)            655
       Other                                                                     837               148             (28)
       Change in assets and liabilities:
           Accounts receivable                                                21,557            17,054         (18,491)
           Advances to growers                                                 2,145            (1,056)         (1,175)
           Inventories                                                         3,775             1,047          (1,576)
           Prepaid expenses                                                      480               343           1,343
           Income tax receivable and other assets                              5,721            (5,852)           (244)
           Accounts payable                                                  (11,492)          (13,428)         13,508
           Accrued expenses and other current liabilities                       (588)            3,833          (4,699)
                                                                          ----------        ----------       ---------
                Total adjustments                                             40,147            26,344          (4,617)
                                                                          ----------        ----------       ---------
                Net cash provided by operating activities                     19,210             4,353           1,605
                                                                          ----------        ----------       ---------

Cash flows from investing activities:
   Additions to property and equipment                                        (1,491)           (6,731)         (6,118)
   Cost of acquisitions, exclusive of cash acquired                                -            (2,644)        (17,176)
   Proceeds from sale of property and equipment                                  788             1,007               -
                                                                          ----------        ----------       ---------
                Net cash used in investing activities                           (703)           (8,368)        (23,294)
                                                                          ----------        ----------       ---------

Cash flows from financing activities:
    Proceeds from Canadian revolving line of credit                           40,826            89,079         124,572
    Repayments of Canadian revolving line of credit                          (46,157)          (79,460)       (117,777)
    Proceeds from short term indebtedness                                          2                22           5,449
    Payments of short term indebtedness                                      (15,303)           (3,481)        (11,808)
    Proceeds from shareholder loans                                               13                 -               -
    Additions to long-term indebtedness                                            -               748          20,017
    Payments of long-term indebtedness                                          (458)             (982)           (703)
    Proceeds from issuance of preferred stock and warrants                     5,000                 -               -
    Payment of dividend income                                                  (307)                -               -
    Net proceeds from exercise of employee stock options                           -                50             498
                                                                          ----------        ----------       ---------
                Net cash provided by (used in) financing activities          (16,384)            5,976          20,248
                                                                          ----------        ----------       ---------

Effect of exchange rate changes on cash                                         (440)               65            (113)
       Net increase (decrease) in cash and cash equivalents                    1,683             2,026          (1,554)
Cash and cash equivalents at beginning of year                                 3,197             1,171           2,725
                                                                          ----------        ----------       ---------
Cash and cash equivalents at end of year                                  $    4,880        $    3,197       $   1,171
                                                                          ==========        ==========       =========

Supplemental disclosures of cash flow information:
   Cash paid for interest                                                 $    4,380        $    5,418       $   1,753
   Cash paid for income taxes                                             $    1,660        $    3,809       $   5,420

The notes to consolidated financial statements are an integral part of these statements.
</TABLE>

                                       F6

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     December 29, 2000 and December 31, 1999

Note 1.  Description of Business and Summary of Significant Accounting Policies
-------------------------------------------------------------------------------

Basis of Presentation and Consolidation
Fresh America Corp. and subsidiaries ("Fresh America", or the "Company")
provides procurement, processing, re-packing, warehousing and distribution
services of fresh produce and other refrigerated products for a wide variety of
customers in the retail, food service and food distribution businesses. The
Company was founded in 1989 and distributes throughout the United States and
Canada through 9 distribution facilities.

The Company's fiscal year is a 52-week or 53-week period ending on the Friday
closest to the calendar year end. The fiscal years ended December 29, 2000
(fiscal 2000), December 31, 1999 (fiscal 1999), January 1, 1999 (fiscal 1998)
were 52-week periods. The consolidated financial statements include the accounts
of Fresh America Corp. and its subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly
liquid investments with original maturities of less than three months to be cash
equivalents.

Fair Value of Financial Instruments
The Company defines the fair value of a financial instrument as the amount at
which the instrument could be exchanged in a current transaction between willing
parties. Financial instruments included in the Company's financial statements
include cash and cash equivalents, accounts receivable, notes receivable from
shareholders, other assets, accounts payable and other current liabilities,
notes payable and long-term debt. Unless otherwise disclosed in the notes to the
consolidated financial statements, the carrying value of financial instruments
is considered to approximate fair value due to the short maturity and
characteristics of those instruments. The carrying value of long-term debt
approximates fair value as terms approximate those currently available for
similar debt instruments.

Inventories
Inventories are stated at the lower of cost or market with cost determined on a
first-in, first-out basis.

Property and Equipment
Depreciation of property and equipment is calculated on the straight-line method
over the estimated useful lives of the assets (from 5 to 40 years). Property and
equipment held under capital leases and leasehold improvements are amortized on
the straight-line method over the shorter of the lease term or estimated useful
life of the asset.

Impairment of Long-lived Assets
The Company reviews long-lived assets, including goodwill, and certain
identifiable intangibles for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to undiscounted future net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of carrying amount or fair value less
costs to sell.

                                       F7

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Goodwill
Goodwill, which represents the excess of purchase price over fair value of net
assets acquired, is amortized on a straight-line basis over the expected periods
to be benefited, generally 15 to 20 years. The Company assesses the
recoverability of this intangible asset by determining whether the amortization
of the goodwill balance over its remaining life can be recovered through
undiscounted future operating cash flows of the acquired operation. The amount
of goodwill impairment, if any, is measured based on projected discounted future
operating cash flows using a discount rate reflecting the Company's average cost
of funds. The assessment of the recoverability of goodwill will be impacted if
estimated future operating cash flows are not achieved.

Stock Option Plan
The Company accounts for its stock option plan in accordance with the provisions
of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations. Accordingly, compensation
expense is recorded on the date of grant only if the current market price of the
underlying stock exceeds the exercise price. The Company also provides certain
proforma disclosures for employee stock option grants made in 1995 and future
years as if the fair-value-based method defined in Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation"
had been applied.

Revenue Recognition
Revenue is recognized at such time as the product has been delivered or the
service has been rendered.

Income Taxes
Deferred tax assets and liabilities are established for the temporary
differences between the financial reporting basis and the tax basis of the
Company's assets and liabilities, and for operating loss and tax credit carry
forwards, at enacted tax rates expected to be in effect when such amounts are
realized or settled. See Note 9 - Income Taxes for additional information.

Earnings (Loss) Per Share
Basic earnings (loss) per share ("EPS") is calculated by dividing net income
(loss) available to common shareholders by the weighted average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock.

Shares used in calculating basic and diluted EPS are as follows (in thousands):


<TABLE>
<CAPTION>
                                                                                  2000          1999         1998
                                                                               ----------   ----------    ----------
          <S>                                                                  <C>          <C>           <C>
          Weighted average common shares outstanding - basic                      5,243        5,243         4,898

          Dilutive securities:
              Common stock option                                                     -            -           149
              Contingent shares related to acquisitions                               -            -           157
                                                                               ----------   ----------    ----------
          Weighted average shares common outstanding - diluted                    5,243        5,243         5,204
                                                                               ==========   ==========    ==========
</TABLE>


The number of weighted average common shares outstanding used in the computation
of diluted EPS includes the effect of dilutive options using the treasury stock
method. For fiscal years 2000, 1999 and 1998, there are 1,484,000, 497,000 and
125,000 options and warrants, respectively, to purchase common stock that were
not included in the computation of diluted EPS because to do so would have been
antidilutive for the fiscal years presented.

                                       F8

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Reclassifications
Certain amounts previously reported have been reclassified to conform to current
year presentation.

Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

Note 2. Agreement with Sam's Club
---------------------------------

The Company's relationship with Sam's was governed by the terms and conditions
of a five-year agreement (the "Agreement"), which became effective December 1,
1995 and expired on October 24, 2000. Sam's began internal distribution of
produce for all of its clubs subsequent to the expiration date. Therefore, the
Agreement was not renewed.

Sam's Club was the Company's largest customer, and accounted for approximately
30%, 31% and 37% of the Company's sales for fiscal years 2000, 1999 and 1998,
respectively. Receivables from Sam's included in trade accounts receivable as of
December 29, 2000 and December 31, 1999 are $500,000 and $14,421,000
respectively.

Note 3. Acquisitions
--------------------

Acquisition under the Pooling of Interests Method of Accounting

On March 4, 1998, the Company acquired Ontario Tree Fruits Limited and its
affiliated companies (collectively, "OTF") by exchanging 609,713 shares of its
common stock or exchangeable common stock for all of the capital stock of OTF
and certain residual equity interests. OTF imports and distributes fresh produce
to large retail chains and hundreds of independent grocers and wholesalers in
Canada and the Northeastern United States.

The acquisition of OTF constituted a tax-free reorganization and has been
accounted for as a pooling of interests. Accordingly, in 1998 all prior period
consolidated financial statements presented were restated to include the
combined results of operations, financial position and cash flows of OTF as
though it had always been a part of the Company.

There were no transactions between OTF and the Company prior to the combination,
and immaterial adjustments were recorded to conform OTF's accounting policies to
those of the Company. Certain reclassifications were made to the OTF financial
statements to conform to the Company's presentations.

In connection with the acquisition of OTF, the Company incurred transaction
costs of approximately $1,000,000 (net of tax), which were expensed in the first
quarter of 1998. The nonrecurring transaction costs included approximately
$519,000 of non-cash expenses (net of tax) related to the issuance of 52,342
shares (which were included in the total 609,713 shares issued) of the Company's
common stock to the financial advisors of OTF. On March 16, 2001 the operating
assets of OTF were sold for $952,000.

                                       F9

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
              NOTES CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Acquisitions under the Purchase Method of Accounting

On February 2, 1998, the Company acquired substantially all of the net operating
assets and the business of Francisco Distributing Company, L.L.C. ("Francisco"),
a produce marketing, distribution and repackaging company based in Los Angeles,
California. As consideration for the net assets received, the Company paid
$5,575,000 in cash, 285,437 shares of Company common stock valued at $19.27 per
share based on the market value of the stock at the time of the transaction, and
contingent consideration subject to a minimum of $2.5 million with a maximum of
$16.6 million based on the pre-tax earnings of the business of Francisco for the
1998 and 1999 fiscal years subject to certain adjustments. The minimum
contingent payments were recorded as a liability and were payable in cash,
common stock or a combination of cash and common stock. In January 1999, the
Company paid $1,000,000 in satisfaction of the minimum amount due for the
contingent payment related to fiscal 1998. The payment was made in the form of
$500,000 cash and issuance of 35,540 shares of common stock valued at $14.07 per
share. The remaining 1998 contingent payment of $5.3 million was paid in cash in
the second quarter of 1999. The 1999 contingent payment of $1.5 million was paid
in cash in January 2000.

On August 14, 1998, the Company acquired by merger all of the capital stock of
Jos. Notarianni & Co. ("Notarianni"), a produce distribution and value-added
company based in Scranton, Pennsylvania. As consideration, the Company paid
$5,390,000 in cash and issued 292,951 shares of Company common stock valued at
$19.15 per share based on the market value of the stock at the time of the
transaction. On December 14, 1998, the agreement was amended to reduce the
number of shares issued by 165,000 in exchange for a contingent payment of 1.4
times Notarianni's average annual pretax earnings over a three-year period
beginning October 3, 1998. Any contingent payment will be payable in cash or
common stock at the Company's sole discretion.

Effective October 3, 1998, the Company's acquired substantially all of the net
operating assets and the business of King's Onion House, Inc. ("King's"), a
produce distribution and value-added company based in Phoenix, Arizona. As
consideration for the net assets received, the Company paid $4,000,000 in cash,
issued 164,667 shares of Company common stock valued at $14.57 per share based
on the market value of the stock at the time of the transaction, and a
contingent payment of 1.7 times King's average annual pretax profit over a
three-year term beginning October 3, 1998. Any contingent payment will be
payable by 50 percent cash and 50 percent common stock. On December 23, 1998,
the agreement was amended to reduce the number of shares issued by 89,193 in
exchange for the return of certain assets totaling $700,000 and the issuance of
a $600,000 promissory note to the former owner of King's. The promissory note
was paid in installments (along with accrued interest at 7.75%) of $200,000 on
April 12, 1999 and $400,000 on January 5, 2000. On April 20, 2001 the Company
sold all of the outstanding capital stock of King's for $2,500,000.

Effective October 30, 1998, the Company acquired all of the capital stock of
Allied Perricone, Inc., formerly known as Sam Perricone Citrus Company
("Perricone"), a wholesale distributor of produce based in Los Angeles,
California. As consideration, the Company paid cash of $1,765,300, issued
119,301 shares of common stock valued at $14.67 per share based on the market
value of the stock at the time of the transaction, promissory notes totaling
$3,500,000 and contingent payments.

                                      F10

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINACIAL STATEMENTS (Continued)

In July 2000, the Company entered into an agreement amending the stock purchase
agreement. As part of the amended agreement, the promissory notes were
restructured whereby, the Company agreed to the following, payments totaling
$100,000 upon execution of the amended agreement; lump-sum payments of $350,000
and $150,000 on January 1, 2002 and August 1, 2002, respectively; and 24-month
installment payments of $37,500 totaling $900,000. The installment and lump-sum
payments accrue interest at 10% per annum. However, all accrued interest will be
forgiven if scheduled principal payments are made in accordance with the terms
of the agreement. Additionally, the Company agreed to provide the noteholders
300,000 warrants to purchase common shares of the Company at an exercise price
of $2.50 per share. The warrants are exercisable for a duration of seven years.
The restructuring of the promissory notes and related accrued interest resulted
in an extraordinary gain to the Company in the third quarter 2000 of $1.9
million.

In February of 2000, Perricone closed its market operation in Los Angeles,
California but continues to operate its brokerage business in Walnut Creek and
Visalia, California.

Part of the consideration given in the fiscal 1997 acquisition of Hereford
Haven, Inc. d/b/a/ Martin Bros., included a contingent payment of an amount
equal to 4 times average pretax earnings for fiscal 1998 through 2000. The total
contingent payment is $4,957,000 at December 29, 2000. The payment was due March
31, 2001 and was payable in either cash, common stock or a combination of cash
and common stock to the extent of 75% at the Company's option and 25% at the
selling shareholder's option. In April 2001, the Company issued 3,166,694 shares
of its common stock to the former owner of Martin Brothers. The shares represent
a 38% ownership interest in the Company. These shares satisfied 75% of the
earnout payment and pursuant to the terms of the original purchase agreement and
were valued at $1.17, market value of the Company's common stock at the time of
the transaction. The remaining balance of the earnout payment is payable in
cash, subject to the approval of the Company's Senior Lender. This payment has
been extended and is now due and payable in January 2002.

For those acquisitions accounted for using the purchase method of accounting,
the results of operations of the acquired companies are included in the
consolidated financial statements of the Company from their respective
acquisition dates. At the acquisition dates, the purchase price was allocated to
assets acquired and liabilities assumed based on their relative fair market
values. There were no specifically identifiable intangible assets acquired in
the aforementioned purchase transaction. The excess of the total purchase price
over the fair values of the net assets acquired was recorded as goodwill, which
is being amortized over a 15 to 20 year period. Management believes this range
is reasonable considering the long operating history of the acquired companies,
nature of the business and lack of any contractual, technological, or regulatory
matters. The 1998 acquisitions resulted in $24,131,000 of goodwill.

Note 4.  Termination of Merger
------------------------------

On May 3, 1999, the Company, and Dallas-based, privately held FreshPoint
Holdings, Inc. ("FreshPoint") entered into a definitive agreement pursuant to
which FreshPoint would have merged with and into the Company. The transaction
was to be accounted for as a reverse acquisition with FreshPoint as the
accounting acquirer. In October 1999, the agreement was terminated by the
Company and FreshPoint. The Company and FreshPoint each agreed to pay their
respective expenses in connection with the contemplated transaction. The Company
incurred merger-related expenses of $3,850,000 in fiscal 1999. The expenses
consisted of legal and professional fees of $2,433,000, regulatory expenses of
$63,000, severance costs paid to employees who were terminated in contemplation
of the merger of $1,259,000, and stay-to-close payments, payments to such
terminated employees to remain with the Company on an interim basis in order to
enable the Company to re-align its administrative functions, and other costs,
aggregating $95,000.

                                      F11

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Debt and Liquidity
--------------------------
Debt consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                                                December 29,   Decemember
                                                                                    2000           1999
                                                                                ------------- -------------
<S>                                                                             <C>           <C>
Subordinated note, net of unamortized discount of $411 and $737, respectively     $19,589         $19,263
Revolver                                                                            8,596          21,237
Canadian Revolver                                                                   3,756           9,088
Notes related to acquisitions (see Note 3)                                          6,132           5,644
Mortgage note payable, prime plus 1/4% due in monthly payments
   through March 2000; secured by land and building                                     -             332
Various equipment loans with interest rates from 6.75% to 14%
   maturities of one to five years                                                    665           1,725
                                                                                ------------- -------------
Total debt                                                                         38,738          57,289

Current portion                                                                    13,788          24,446
                                                                                ------------- -------------
Long-term debt, less current portion                                              $24,950         $32,843
                                                                                ============= =============
</TABLE>

In April 2000, the Company entered into an agreement with the Subordinated
Lender to provide additional financing through the purchase of $5 million
(50,000 shares) of the Company's 12% redeemable cumulative preferred stock
("Hancock Preferred Stock"), and to restructure the existing subordinated notes.
Cumulative preferred dividends accrued as of December 29, 2000 totaled $0.3
million or $6.04 per share of preferred stock. The Hancock Preferred Stock,
subordinated note agreement and accrued interest and dividends were converted
into preferred stock and warrants in September 2001, as discussed below.

Throughout its operational restructuring during the past two years, the Company
has pursued various financing opportunities in an effort to restructure the debt
and equity of Fresh America. In September 2001, the Company completed a
financial restructuring whereby North Texas Opportunity Fund LP, ("NTOF")
purchased 50,000 shares of the Company's Series D cumulative redeemable
preferred stock and warrants exercisable for 84,100,980 shares of the Company's
common stock for $5 million in cash proceeds. John Hancock Life Insurance
Company, John Hancock Variable Life Insurance Company, Signature 1A (Cayman),
Ltd. and Signature 3 Limited (collectively, the "Subordinated Lender") exchanged
$20 million of subordinated debt, the Hancock Preferred Stock and all accrued
interest and dividends for 27,000 shares of the Company's Series D cumulative
redeemable preferred stock and warrants exercisable for 45,414,529 shares of the
Company's common stock.

The Company's Revolver with Bank of America, N.A. (the "Senior Lender") provided
for borrowings of up to $22.0 million as of December 31, 1999 with outstanding
borrowings as of that date of $21.2 million. The outstanding Revolver balance
was reduced to $8.6 million, as of December 29, 2000. The $12.6 million
reduction in the outstanding Revolver balance included payments of $5.0 million
to meet regularly scheduled reductions in availability through September 30,
2000, as well as additional payments of $7.6 million including a payment equal
to the amount of a Federal income tax refund received of $3.7 million. Pursuant
to the terms of the Revolver, the Company and the Senior Lender agreed to
permanently reduce the available balance of the Revolver to $8.6 million and
agreed that all future payments by the Company would permanently reduce the
available balance under the Revolver. The effective interest rate at December
29, 2000 was 9.53%. During 2001, the outstanding balance was reduced an
additional $3.3 million with proceeds related to the sale of King's Onion House
in Phoenix, Arizona, and another separate facility.

In conjunction with this restructure, the Senior Lender agreed to a payment
schedule which will reduce the Company's indebtedness to the Senior Lender from
$5.3 million, which was owed at the time of closing, to $3.8 million by year-end
2001. The Revolver has also been restated to a term note and the Senior Lender
has agreed

                                      F12

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIAIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to a maturity of the remaining balance in January 2002. The Company is
negotiating with a new lender to replace the Senior Lender prior to the maturity
of the term loan. There can be no assurance that the Company will be able to
replace its Senior Lender as anticipated or extend its term note beyond January
2002, if that becomes necessary.

Prior to its sale in 2001, OTF had a demand agreement with Royal Bank of Canada
to provide revolving credit facilities (the "Canadian Revolver"), which was
collateralized by substantially all assets of OTF. The Canadian Revolver had an
outstanding balance of CDN $5.6 million (U.S. $3.8 million) as of December 29,
2000. This outstanding balance was fully retired in March 2001 in conjunction
with the sale of OTF's operating assets.

In July 2000, the Company entered into an agreement amending the certain stock
purchase agreement related to the Company's 1998 acquisition of Perricone Citrus
Company. As part of the amended agreement, unsecured promissory notes owed by
the Company totaling $3.5 million and the accrued and unpaid interest therein
were restructured whereby, the Company agreed to the following: payments
totaling $100,000 upon execution of the amended agreement; lump-sum payments of
$350,000 and $150,000 on January 1, 2002 and July 1, 2002, respectively; and
24-monthly installment payments of $37,500 totaling $900,000. The installment
and lump sum payments accrue interest at 10% per annum. However, all accrued
interest will be forgiven if scheduled principal payments are made timely.
Additionally, the Company issued the noteholders 300,000 warrants to purchase
common shares of the Company at an exercise price of $2.50 per share. The
warrants are exercisable for a duration of seven years. The restructuring of the
promissory notes and related accrued interest resulted in an extraordinary gain
to the Company of $1.9 million in the third quarter of 2000. Based on the
quarterly weighted average common shares outstanding at December 29, 2000 the
impact of the extraordinary gain is $.36 per basic and diluted share.

Under the terms of the purchase agreements for Notarianni and Martin Brothers a
portion of the purchase price was contingent upon each company's earnings
subsequent to its acquisitions. The Martin Bros. contingent payment obligation
amounted to $5.0 million at December 29, 2000. The payment was due March 31,
2001 payable in either cash, common stock or a combination of cash and common
stock to the extent of 75% at the Company's option and 25% at the selling
shareholder's option.

In April 2001, the Company issued 3,166,694 shares of its common stock to Larry
Martin. At the time of issuance, the shares represented a 38% ownership interest
in the Company. These shares satisfied 75% of the earnout payment and pursuant
to the terms of the original purchase agreement and were valued at $1.17, market
value of the Company's common stock at the time of the transaction. This note
was restructured as part of the financial restructuring discussed above. The
remaining balance of $1,200,000 is payable in cash, subject to the approval of
the Company's Senior Lender. This payment has been extended and is now due and
payable in January 2002.The Company is party to a master lease agreement with
SunTrust Bank that has been used to provide equipment financing for several of
the Company's operating units. The Company was not in compliance with certain
covenants under the terms of the lease at December 29, 2000 and received waivers
for noncompliance through January 2002. The Company is currently renegotiating
the covenants of this agreement and anticipates this agreement will be revised
prior to the expiration of the waiver in January 2002. The lease agreement
provides that future lease payments can be accelerated in the event of default.
There can be no assurance that the Company will be in compliance with such
covenants subsequent to the waiver period or will be successful in negotiating
the covenants.

The aggregate maturities of long-term debt, which reflect the terms of the
amended senior secured revolving credit facility agreement as discussed above,
for the five fiscal years subsequent to December 29, 2000 are as follows (in
thousands): 2001 - $13,788; 2002 - $5,228; 2003 - $47; 2004 - $39 and 2005 -
$40; thereafter $7. The Subordinated Lender's long-term debt balance of $19,589
million has been excluded from the above maturities since their debt was
exchanged for preferred stock and warrants in September 2001.

                                      F13

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 6.  Disposition Costs and Impairment of Long-lived Assets
--------------------------------------------------------------

Subsequent to the termination of the merger discussed in Note 4, in the fourth
quarter of 1999 management of the Company initiated a process in conjunction
with its business strategy to improve its cost structure, streamline operations
and divest the Company of under-performing operations. The process continued
during 2000 and into 2001.

As a result of this ongoing process, the Company closed or sold several
under-performing operations in 1999, 2000 and 2001 as follows:

                            Fiscal 1999:
                                 Los Angeles and San Francisco, California
                                 Orlando, Florida
                                 Atlanta, Georgia
                                 Baton Rouge, Louisiana
                                 Austin and San Antonio, Texas

                            Fiscal 2000:
                                 Los Angeles, California Market Operation

                            Fiscal 2001:
                                 King's Onion House, Phoenix, Arizona
                                 Ontario Tree Fruits, Ontario, Canada
                                 Thompson's Produce, Pensacola, Florida
                                 Bacchus Fresh International, Chicago, Illinois

During 1999, the Company also decided to move its accounting and administrative
functions from Houston to Dallas, Texas. The move was completed in fiscal 2000,
and the related costs were charged to operations in that fiscal year.

During this process, management evaluated the recoverability of the carrying
value of the long-lived assets and related allocable goodwill of these
operations. Impairment charges and other disposition costs recorded in fiscal
2000 and 1999 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                           2000         1999
                                                                           ----         ----
                  <S>                                                     <C>          <C>
                  Impairment of property and equipment                    $10,584      $     -
                  Impairment of goodwill                                    2,207       10,553
                  Loss on disposition of property and equipment                 -          976
                  Closure costs:
                      Liability for future lease commitments                    -        1,161
                      Severance                                                 -          412
                      Other                                                     -          418
                                                                          -------      -------
                                                                          $12,791      $13,520
                                                                          =======      =======
</TABLE>

As of December 29, 2000 and December 31, 1999, $704,000 and $117,000 for lease
commitments and $535,000 and $417,000 for other closure costs had been paid.

Note 7.  Accounts Receivable
----------------------------

Accounts receivable consist of (in thousands):

                                      F14

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

<TABLE>
<CAPTION>
                                                         December 29,         December 31,
                                                             2000                1999
                                                     -------------------   ------------------
         <S>                                         <C>                   <C>
         Accounts receivable                                $37,312             $61,478
         Less allowance for doubtful accounts                (1,537)             (2,593)
                                                     -------------------   ------------------
                                                            $35,775             $58,885
                                                     ===================   ==================
</TABLE>


The following table summarizes the activity in the Company's allowance for
doubtful accounts in fiscal 1998 through 2000 (in thousands):

<TABLE>
<CAPTION>
                       Balance at
                       Beginning         Bad Debt      Acquired                        Balance at
       Fiscal Year      of Year          Expense       Companies       Write-offs      End of Year
       -----------      -------          -------       ---------       ----------      -----------
       <S>             <C>               <C>          <C>             <C>              <C>
          2000         $ 2,593           $ 1,912      $      -        $   (2,968)      $     1,537
          1999           1,697             6,031             -            (5,135)            2,593
          1998             943             1,230           700            (1,176)            1,697
</TABLE>

Note 8.  Property and Equipment
-------------------------------

Property and equipment consist of (in thousands):

<TABLE>
<CAPTION>
                                                                                December 29,         December 31,
                                                                                    2000                1999
                                                                             -------------------  ----------------
                   <S>                                                       <C>                  <C>
                   Land                                                         $    606             $    727
                   Buildings                                                       4,375                5,328
                   Machinery, furniture, fixtures and equipment                    6,740               18,010
                   Trucks and trailers                                             3,567                4,586
                   Leasehold improvements                                          2,798                7,177
                                                                             -------------------  ----------------
                                                                                  18,086               35,828
                   Less accumulated depreciation and amortization                 (8,142)             (11,388)
                                                                             -------------------  ----------------
                    Property and equipment, net                                 $  9,944             $ 24,440
                                                                             ===================  ================
</TABLE>

Note 9. Income Taxes
--------------------

The components of income tax expense (benefit) consisted of (in thousands):

<TABLE>
<CAPTION>

                                                                               Fiscal Year Ended
                                                              December 29,         December 31,       January 1,
                                                                  2000                 1999              1999
                                                         -------------------- ------------------- ----------------
                 <S>                                     <C>                 <C>                  <C>
                 Current:
                      Foreign                                   $ 542              $ 2,190            $1,709
                      Federal                                     100               (3,979)            2,346
                      State                                       783                 (404)              331
                   Deferred                                      (592)                (437)              655
                                                         -------------------- ------------------- ----------------
                                                                $ 833              $(2,630)           $5,041
                                                         ==================== =================== ================
</TABLE>

Income tax expense (benefit) differed from the amount computed by applying the
U.S. federal income tax rate to income (loss) before income taxes as a result of
the following (in thousands):

                                      F15

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

<TABLE>
<CAPTION>
                                                                     December 29,      December 31,        January 1,
                                                                         2000              1999               1999
                                                                   ----------------  -----------------   --------------
<S>                                                                <C>               <C>                 <C>
Federal income tax expense (benefit) at statutory rate                   $(7,703)          $(8,617)            $3,942
Increase (reduction) in income taxes resulting from:
Change in the beginning-of-the-year balance of the valuation
    allowance for deferred tax assets (1)                                  7,698             4,586                  -
Nondeductible goodwill amortization and impairment                           113             2,092                  -
Tax rate and other differences related to Canadian
    subsidiaries                                                               -               490                573
Non-deductible transaction costs                                               -                 -                233
State income taxes, net of federal income tax effect                         192              (262)               215
Adjustment to prior year's estimated provision                               533              (947)                 -
Other                                                                          -                28                 78
                                                                   ----------------  -----------------   --------------
                                                                         $   833           $(2,630)            $5,041
                                                                   ================  =================   ==============
</TABLE>

        (1)  The fiscal 2000 change in the valuation allowance includes $667
             allocated to the extraordinary gain on extinguishment of debt.

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities are presented below (in
thousands):

<TABLE>
<CAPTION>
                                                            December 29,         December 31,
                                                                2000                 1999
                                                         -------------------  -------------------
   <S>                                                   <C>                  <C>
   Deferred tax assets:
     Net operating loss carry forwards                         $  5,911             $   2,863
     Property and equipment, principally
      depreciation and impairment                                 3,439                     -
     Goodwill, principally impairment                               491                     -
     Accruals not currently deductible                            2,028                 2,318
     Other                                                          169                    32
                                                         -------------------  -------------------
      Total deferred tax assets                                  12,038                 5,213
     Less valuation allowance                                   (11,617)               (4,586)
                                                         -------------------  -------------------
     Net deferred tax asset                                         421                   627
   Deferred tax liabilities:
     Income not currently taxable                                   124                   295
     Property and equipment depreciation                              -                   451
     Goodwill                                                         -                   176
                                                         -------------------  -------------------
      Total deferred tax liabilities                                124                   922
                                                         -------------------  -------------------
   Net deferred tax asset (liability)                          $    297             $    (295)
                                                         ===================  ===================
</TABLE>

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent primarily upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Based upon
current projections for future U.S. taxable income over the periods which the
deferred tax assets are deductible, management believes that it is more likely
than not that its deferred tax assets related to U.S. operations will not be
realized and a valuation allowance for such assets is required at December 29,
2000 and December 31, 1999.

At December 29, 2000, the Company has a net operating loss ("NOL") carry forward
for federal income tax purposes of approximately $14,918,000 available to reduce
future income taxes. If not utilized to offset future taxable income, the NOL
carry forward will expire, $286,000 in 2006 through 2007, $7,125,000 in 2019 and
$7,507,000 in 2020.

                                      F16

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During 1992, the Company experienced an "ownership change" as defined by the
Internal Revenue Code of 1986. After an ownership change, utilization of a loss
corporation's NOL carry forward is limited annually to a prescribed rate
multiplied by the value of the loss corporation's stock immediately before the
ownership change. In general, an ownership change occurs if ownership of more
than 50% in value of the stock of the loss corporation changes during the
three-year period proceeding the test date. The Company's NOL carry forward,
which expires in 2006 and 2007, is limited to the use of approximately $193,000
on an annual basis.

Note 10.  Options and Warrants
------------------------------

In July 1993, the Company adopted the Fresh America Corp. 1993 Stock Option and
Award Plan (the "1993 Plan"), which reserved 450,000 shares of the Company's
common stock for issuance to employees and directors. Effective May 22, 1998,
the 1993 Plan was frozen, which prevents any additional options from being
granted under the plan. In July 1996, the Company adopted the Fresh America
Corp. 1996 Stock Option and Award Plan (the "1996 Plan"), which reserved 150,000
shares of the Company's common stock for issuance to employees and directors.
Effective May 22, 1998, the Company amended and restated the 1996 Plan, which
increased the number of shares reserved from 150,000 to 625,000. At December 29,
2000 and December 31, 1999, options for 103,250 and 467,000 shares,
respectively, were available for issuance.

Options under the 1993 and 1996 Plans are granted at an exercise price equal to
at least 100% of the fair market value of the Company's common stock on the date
of grant. Unless determined otherwise by the Company's Board of Directors, each
independent director is automatically granted an option to purchase 5,000 shares
of common stock each year. Such option grants vest immediately and will expire
in ten years if not exercised. Options granted to employees generally vest in
one year from the date of grant and expire after ten years if not exercised. The
Plans restrict the rights to exercise based on employment status and percentage
of stock ownership in accordance with Section 422 of the Internal Revenue Code.

The following table summarizes stock option activity under the Plans for fiscal
1998 through fiscal 2000:

<TABLE>
<CAPTION>
                                                                                                   Weighted
                                                                                                    Average
                                         Stock Options                    Option Price Range        Exercise
                                   Issued        Exercisable              Low           High         Price
                                   ------        -----------              ---           ----         -----
  <S>                             <C>           <C>                    <C>            <C>          <C>
  At January 2, 1998               326,339         291,839             $  3.55         $25.50        $10.11
    Granted                         78,500                               12.75          19.88         16.51
    Exercised                      (30,140)                               3.55          11.75          7.11
    Canceled                        (1,000)                              14.00          14.00         14.00
                                  --------
  At January 1, 1999               373,699         315,199             $  3.55         $25.50        $11.69
    Granted                         20,000                               13.75          13.75         13.75
    Exercised                       (5,353)                               3.55          14.00          9.41
    Canceled                       (54,250)                               5.00          17.75         13.63
                                  --------
  At December 31, 1999             334,096         319,096             $  3.55         $25.50        $11.53
    Granted                        413,750                                2.00           4.50        $ 3.00
    Canceled                      (154,806)                               3.55          25.50        $ 9.66
                                  --------
  At December 29, 2000             593,040         344,290             $  2.00         $19.88        $ 5.83
                                  ========
</TABLE>

                                      F17




<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes information about the Company's stock options
outstanding as of December 29, 2000:

<TABLE>
<CAPTION>
                                              Options Outstanding                          Options Exercisable
                                         -----------------------------                 ---------------------------
                                                           Weighted-
                                            Number          Average         Weighted       Number       Weighted
                                         Outstanding       Remaining        -Average     Exercisable    -Average
                     Range of            at Dec. 29,      Contractual       Exercise     at Dec. 29,    Exercise
                 Exercise Prices             2000             Life            Price         2000          Price
            ------------------------     -----------   ---------------   ------------  -------------  ------------
            <S>                          <C>           <C>               <C>           <C>            <C>
              $2.00   to     $5.00         426,787           9.0 years      $ 3.06        178,037       $ 4.53
               5.01   to      7.00          31,253           1.7              6.48         31,253         6.48
               7.01   to      9.00          12,000           3.5              8.90         12,000         8.90
              11.01   to     13.00          32,500          11.5             11.75         32,500        11.75
              13.01   to     15.00          43,000           1.2             13.93         43,000        13.93
              17.01   to     19.00          32,500          10.2             17.25         32,500        17.25
              19.01   to     19.88          15,000           7.6             19.88         15,000        19.88
                                         ---------                                     ----------
                                           593,040                                        344,290
                                         =========                                     ==========
</TABLE>

The Company has adopted the disclosure-only provision of SFAS No. 123,
"Accounting for Stock-Based Compensation." Accordingly, no compensation cost has
been recognized for the stock option plans. Had compensation cost for the
Company's two stock option plans been determined for grant dates subsequent to
January 1, 1995 based on the fair value at the grant date of awards consistent
with the provisions of SFAS No. 123, the Company's net earnings (loss) and
earnings (loss) per share would have been reduced to the pro forma amounts
indicated below:

<TABLE>
<CAPTION>
                                                                                          Fiscal Year
                                                                                 (In thousands, except earnings
                                                                                         per share data)
                                                                                 ------------------------------
                                                                                   2000       1999       1998
                                                                                   ----       ----       ----
<S>                                                                              <C>       <C>          <C>
            Net income (loss) applicable to common shareholders - as reported    $(21,635) $(21,991)    $6,222
            Net income (loss) applicable to common shareholders - pro forma       (21,893)  (22,319)     5,801
            Earnings (loss) per share - as reported:
                 Basic                                                              (4.13)    (4.20)      1.27
                 Diluted                                                            (4.13)    (4.20)      1.20
            Earnings (loss) per share - pro forma:
                 Basic                                                              (4.18)    (4.26)      1.18
                 Diluted                                                            (4.18)    (4.26)      1.11
</TABLE>

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions used for fiscal 2000, 1999 and 1998 for both plans: no dividend
yield; expected volatility of 58% in 2000, 136% in 1999 and 95% in 1998;
risk-free interest rates of 5.9% in 2000 and in 1999 and 4.2% to 5.6% in 1998;
and expected lives of three to five years. The weighted average fair value per
share of the options granted during fiscal 2000, 1999 and 1998 is estimated to
be $1.93, $12.23 and $12.29, respectively. As of December 29, 2000, the
weighted-average remaining contractual life of outstanding options was 8.2
years.

Note 11. Employee Benefit Plan
------------------------------

Effective January 1, 1992, the Company adopted the Fresh America Corp. 401(k)
Profit Sharing Plan (the "Plan"), which provides for the Company, at its option,
to make a matching contribution of up to 6% of each qualifying employee's annual
earnings. The Company's matching contribution under the Plan was $272,000,
$343,000 and $301,000 for the fiscal years 2000, 1999 and 1998, respectively.

                                      F-18

<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12.  Contingencies and Commitments
---------------------------------------

   The Company is obligated under certain noncancelable operating leases (with
initial or remaining lease terms in excess of one year). The future minimum
lease payments under such leases as of December 29, 2000 are (in thousands):

                      Fiscal years ending:
                        2001                                         $ 7,840
                        2002                                           5,505
                        2003                                           3,914
                        2004                                           3,308
                        2005                                           2,534
                        Thereafter                                     4,695
                                                                     -------
                              Total minimum lease payments           $27,796
                                                                     =======


Rental expense amounted to approximately $10,114,000, $12,569,000 and $9,036,000
for the fiscal years 2000, 1999 and 1998, of which approximately $3,978,000,
$5,653,000 and $3,616,000 relates to truck and trailer rental which is included
in cost of sales.

   The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position, results of operations or liquidity.

Note 13.  Quarterly Financial Data (Unaudited)
----------------------------------------------

Summarized quarterly financial data is as follows (in thousands, except earnings
per share data):

<TABLE>
<CAPTION>
                                                    Fiscal 2000/(a)/
     --------------------------------------------------------------------------------------------------------------
                                              First Qtr.        Second Qtr.        Third Qtr.        Fourth Qtr.
                                              ----------        -----------        ----------        -----------
<S>                                           <C>               <C>               <C>               <C>
     Net sales                                $ 142,652         $  163,585        $   138,458       $  109,859
     Gross profit                                15,149             18,507             14,074           10,655
     Gross margin                                  10.6%              11.3%             10.16%            9.70%
     Net income (loss)                           (1,881)               811               (596)         (19,271)
     Net income (loss) applicable to
         common shareholders                  $  (1,881)        $      633        $      (856)      $  (19,531)
     Earnings (loss) per share - basic             (.36)               .12               (.16)           (3.73)
     Earnings (loss) per share - diluted           (.36)               .08               (.16)           (3.73)

<CAPTION>
                                                    Fiscal 1999/(a)/
     --------------------------------------------------------------------------------------------------------------
                                              First Qtr.        Second Qtr.        Third Qtr.        Fourth Qtr.
                                              ----------        -----------        ----------        -----------
<S>                                            <C>               <C>                <C>               <C>
     Net sales                                $ 173,427         $  194,102        $   151,220       $  151,126
     Gross profit                                22,006             23,691             14,472           17,729
     Gross margin                                  12.7%              12.2%               9.6%            11.7%
     Net income                               $   1,181         $    1,253        $   (11,445)      $  (12,980)
     Earnings per share - basic                    0.23               0.24              (2.18)           (3.73)
     Earnings per share - diluted                  0.22               0.23              (2.18)           (3.73)
</TABLE>

(a)  Each quarter in the 52-week year contains 13 weeks.

                                       F19



<PAGE>

                      FRESH AMERICA CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED STATEMENTS (Continued)

Note 14.  Segment and Related Information
-----------------------------------------

SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information," establishes standards for the way public business enterprises
report information about products and services. Because of the general focus of
the Company's business of handling fresh produce and the interrelated nature of
the Company's business activities, all of which are generally conducted at each
of the Company's locations, management of the Company does not capture the
financial results of the interrelated business activities in its financial
information systems by type of activity at each location or for the Company as a
whole. The management of the Company measures performance based on the gross
margins and pretax income generated from each of the Company's operations.
Pretax income for the purpose of management's analysis does not include
corporate overhead such as selling, general and administrative expenses and
income tax expense. Since the business units have similar economic
characteristics and are engaged in procurement, processing and distribution of
produce, they have been aggregated into one reportable segment for reporting
purposes. See Note 2 - "Agreement with Sam's Club" for discussion of the
Company's major customer.

Summarized information regarding the Company's significant operations in
different geographic areas, including domestic operations, as of and for the
three fiscal years ended December 29, 2000 follows (in thousands):

<TABLE>
<CAPTION>
                                                                     Long-Lived
                                                       Net Sales       Assets
                                                     ------------   -----------
                           <S>                       <C>            <C>
                           December 29, 2000
                                United States          $498,655       $34,704
                                Canada                   55,889         2,003
                                                       --------       -------
                                      Total            $554,554       $36,707
                                                       ========       =======
                           December 31, 1999
                                United States          $576,658       $46,976
                                Canada                   93,217         3,985
                                                       --------       -------
                                      Total            $669,875       $50,961
                                                       ========       =======
                           January 1, 1999
                                United States          $523,566       $55,924
                                Canada                   85,924         3,437
                                                       --------       -------
                                      Total            $609,409       $59,361
                                                       ========       =======
</TABLE>

                                      F20