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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                 FORM 10-KSB/A
                            ------------------------
[X]   AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934
 
                  FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1996
 
[  ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934
 
     FOR THE TRANSITION PERIOD FROM                  TO                  .
 
                         COMMISSION FILE NUMBER 0-15320
                         THE FRESH JUICE COMPANY, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
 
                            ------------------------
 
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                   DELAWARE                                      11-2771046
       (STATE OR OTHER JURISDICTION OF                        (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NUMBER)
 
          35 WALNUT AVENUE, SUITE 4,
              CLARK, NEW JERSEY                                    07066
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)
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                            ------------------------
 
                   ISSUER'S TELEPHONE NUMBER: (908) 396-1112
 
        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
 
                          Common Stock, $.01 par value
                                (Title of class)
 
     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.  Yes  X  No  __
 
     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.  [     ]
 
      STATE ISSUER'S REVENUES FOR ITS MOST RECENT FISCAL YEAR: $19,958,022
 
     State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock as of a specified date within the past 60
days (See definition of affiliate in Rule 12b-2 of the Exchange Act): $5,787,797
(based on the $1 7/8 closing sale price of the Common Stock of the Company
quoted on the NASDAQ System on February 24, 1997).
 
     State the number of shares outstanding of each of the issuer's class of
common equity as of the latest practicable date: 6,467,731 (as of February 24,
1997).
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
                                     NONE.
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                               TABLE OF CONTENTS
 
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PART I
  ITEM 1.    Description of Business.....................................     1
  ITEM 2.    Description of Property.....................................     7
  ITEM 3.    Legal Proceedings...........................................     9
  ITEM 4.    Submission of Matters to a Vote of Security-Holders.........     9
PART II
  ITEM 5.    Market for Common Equity and Related Stockholder Matters....    10
  ITEM 6.    Management's Discussion and Analysis or Plan of
             Operations..................................................    10
  ITEM 7.    Financial Statements........................................    14
  ITEM 8.    Changes in and Disagreements With Accountants on Accounting
             and Financial Disclosure....................................    14
PART III
  ITEM 9.    Directors, Executive Officers, Promoters and Control
             Persons.....................................................    15
  ITEM 10.   Executive Compensation......................................    18
  ITEM 11.   Security Ownership of Certain Beneficial Owners and
             Management..................................................    21
  ITEM 12.   Certain Relationships and Related Transactions..............    21
PART IV
  ITEM 13.   Exhibits and Reports on Form 8-K............................    23
INDEX TO FINANCIAL STATEMENTS............................................    24
SIGNATURES...............................................................    25
INDEX TO EXHIBITS........................................................  Ex-1
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ITEM 1.  DESCRIPTION OF BUSINESS
 
  Business Development
 
     The Fresh Juice Company, Inc. (the "Company") was incorporated in the State
of New York on July 15, 1985. Immediately prior to the closing of the Company's
initial public offering on November 19, 1986, the Company was merged into a
wholly-owned Delaware subsidiary so as to relocate its state of incorporation.
From its inception in 1985 through 1994, the Company marketed and sold frozen
"fresh squeezed" Florida orange juice, grapefruit juice and other non-carbonated
beverages under the brand names "Just Pik't(R)", "Fresh Pik't(R)" and "Florida
Pik't(R)". On August 3, 1995, the Company acquired a flavor processing facility
in Winter Haven, Florida, which the Company subsequently renovated and equipped
to enable it to produce and bottle citrus juice beverages (the "Florida Plant").
At the end of fiscal 1995, the Company began producing fresh squeezed citrus
juices and attempted to expand its sales by changing its business focus from
primarily frozen fresh squeezed juices to both frozen and non-frozen fresh
squeezed juices. Although the Company had success with its marketing efforts in
the non-frozen sector of the fresh squeezed juice industry, it determined that a
substantial expansion into the non-frozen sector would be more easily
accomplished by entering into the strategic mergers described below.
 
     The Company acquired The Ultimate Juice Company, Inc. ("Ultimate") by
merger effective April 1, 1996 (the "Ultimate Merger"), and as a result thereof,
Ultimate became a wholly-owned subsidiary of the Company. In connection with the
Ultimate Merger, all of the issued and outstanding capital stock of Ultimate was
exchanged for 1,140,000 shares of the Company's common stock, $.01 par value
(the "Common Stock"). In connection with this transaction, Steven M. Bogen, the
President of Ultimate, became Co-Chairman, Chief Executive Officer and Secretary
of the Company. Steven Smith, the Company's founder, continues as Co-Chairman
and President and was also named Assistant Secretary of the Company. The
Ultimate Merger was accounted for as a purchase. Ultimate subsequently changed
its name to The Fresh Juice Company of New York, Inc.
 
     The Company subsequently acquired Clear Springs Citrus, Inc. ("Clear
Springs"), a privately held fresh citrus juice production facility, affiliated
with Ultimate, that produced the majority of the fresh citrus juice distributed
by Ultimate. The acquisition was accomplished by a merger effective September 1,
1996 (the "Clear Springs Merger") in which Clear Springs was merged into the
Company's wholly-owned subsidiary, The Fresh Juice Company of Florida, Inc.
("Fresh Juice of Florida"). In connection with the Clear Springs Merger, all of
the issued and outstanding capital stock of Clear Springs was exchanged for
1,160,000 shares of the Company's Common Stock. The assets of Clear Springs were
subsequently incorporated into Fresh Juice of Florida's operations at the
Company's production facility located at 1000 American Superior Boulevard,
Winter Haven, Florida (the "Florida Plant"). The Clear Springs Merger was also
accounted for as a purchase.
 
     On December 2, 1996, the Company acquired by merger (the "Hansen's Merger")
all of the outstanding capital stock of Hansen's Juices, Inc. ("Hansen's") in
exchange for $90,000 in cash, 597,443 shares of the Company's Common Stock,
warrants to purchase 300,000 shares of the Company's Common Stock for $3.00 per
share and the assumption of Hansen's debt. The cash portion of the purchase
price paid by the Company was funded from cash flow from the Company's
operations. Hansen's was merged with and into The Fresh Juice Company of
California, Inc. ("Fresh Juice of California"), a newly formed Delaware
corporation and a wholly-owned subsidiary of the Company. Fresh Juice of
California operates its business from the offices and plant leased by Hansen's
in Azusa, California. The Hansen's Merger was also accounted for as a purchase.
As part of the Hansen's Merger, Hansen's also restructured its existing debt
obligations to two of its former stockholders arising from Hansen's redemption
of the Hansen's stock previously owned by such stockholders. In order to reduce
future aggregate monthly debt service and to comply with financial covenants
relating to the Company's credit facility, the maturity dates of the
restructured obligations owed to the former Hansen's stockholders were extended
and the monthly amortization payments were deferred. In exchange for these
concessions, Hansen's increased the interest rate on its obligations to these
former stockholders by one percent (1%) per annum, and, in the case of one
restructuring, the Company delivered $60,000 in cash and 20,226 shares of the
Company's Common Stock to the debt holder and forgave a debt of approximately
$80,000.00 owed to Hansen's by the son of such debt holder.
 
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     As a result of these recent acquisitions, the Company has established a
national presence and now produces, markets and sells fresh squeezed and frozen
"fresh squeezed" orange juice, grapefruit juice, fresh fruit smoothies and other
non-carbonated beverages under the brand names "Just Pik't(R)", "Fresh
Pik't(R)", "Florida Pik't(R)", "Ultimate(R)" and "Hansen's(R)". The majority of
the juice produced by the Company is fresh squeezed orange juice.
 
  Business Development of Newly Acquired Subsidiaries
 
     Ultimate
 
     Ultimate (now known as The Fresh Juice Company of New York, Inc.) is a New
Jersey corporation which was incorporated in 1987. Prior to the Ultimate Merger,
Ultimate was primarily focused on the sale and distribution of non-frozen fresh
squeezed orange and grapefruit juices to the food service industry. From its
incorporation in 1987, through its merger with the Company in 1996, Ultimate
steadily increased its sales and expanded its presence from a small distribution
company primarily doing business only in the New York Metropolitan area to a
larger distribution company with a regional presence and doing business
throughout the east coast of the United States. While its product line included
pasteurized citrus juices, fresh grapefruit juice, lemonade, apple juice and
water, the majority of Ultimate's sales was always fresh squeezed orange juice.
By 1994 and 1995, Ultimate's annual sales had reached $11,114,608 and
$11,286,669, respectively, and in 1995 it began marketing its products to
supermarkets to increase its name recognition and retail presence and to further
increase its sales revenues.
 
     Clear Springs
 
     Beginning in 1988, the shareholders of Ultimate began purchasing an
interest in Clear Springs (now known as The Fresh Juice Company of Florida,
Inc.), a fresh juice processing facility located in Winter Garden, Florida,
which was also the primary supplier of Ultimate's fresh squeezed juices. By
1994, Clear Springs was owned entirely by the shareholders of Ultimate and Brian
Duffy, a resident of Illinois, who served as the president of Clear Springs. Mr.
Duffy is also the owner of the Natural Juice Company, a fresh squeezed juice
distribution company doing business in the greater Chicago area. In addition to
being the primary supplier of fresh squeezed juices to Ultimate, Clear Springs
was also the principal supplier of the fresh squeezed citrus juices purchased by
the Natural Juice Company and several other juice distributors throughout the
country. Through its affiliation with Ultimate and the Natural Juice Company,
Clear Springs also steadily increased its sales and by 1994 and 1995 its annual
sales revenues were $10,148,356 and $12,775,884, respectively.
 
     Hansen's
 
     Hansen's (now known as The Fresh Juice Company of of California, Inc.) was
established under the name Hansen's Fresh Juice Co. in 1935. It was a family
owned and operated business and was subsequently incorporated in the State of
California, under the name of Hansen's Juices, Inc., in 1971. From 1971 to the
Hansen's Merger in 1996, Hansen's remained a family owned and operated juice
producer and distributor, marketing citrus juices, vegetable juices and
smoothies under the brand name of "Hansen's(R)". From its inception in 1935,
when it was a small start up company doing business primarily in Southern
California, to the date of the Hansen's Merger, Hansen's expanded its market
presence and name recognition. By 1994 Hansen's had grown to a much larger
producer and distributor of juices and smoothies, and expanded its California
sales base into the states of Arizona, Colorado, Idaho, Nevada, New Mexico,
Oregon, Texas, Utah and Washington. In fiscal 1994, 1995 and 1996, its sales
revenues reached $9,629,231, $10,652,532 and $11,554,829, respectively.
 
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                         INFORMATION ABOUT THE COMPANY
 
DESCRIPTION OF BUSINESS
 
  Products and Market
 
     As stated above, the Company produces, markets and distributes fresh and
frozen "fresh squeezed" orange juice, grapefruit juice, fresh fruit smoothies
and other non-carbonated beverages to both food service and retail customers
under the brand names "Just Pik't(R)", "Fresh Pik't(R)", "Florida Pik't(R)",
"Ultimate(R)" and "Hansen's(R)". The majority of the juice produced by the
Company is fresh squeezed orange juice.
 
     Processed orange juice generates sales in the United States in excess of
three billion dollars per year. The market is currently divided principally
between chilled pasteurized orange juice, reconstituted concentrated orange
juice and frozen concentrate. A number of companies, produce chilled pasteurized
orange juice, including "Tropicana(R)", which is marketed as a premium product.
Pasteurization is used to increase shelf life, since chilled fresh juices will
ferment between seventeen to twenty days after bottling. However, because
pasteurization involves cooking or heating the juice, the natural flavor and
aroma of the juice is adversely affected. Further, as a nutritional matter,
pasteurizing orange juice destroys valuable nutrients, and when sold in cartons,
the juice loses its Vitamin C value while it is awaiting sale and consumption.
The production of concentrate also involves cooking or heating, resulting in an
adverse effect on the natural flavor, aroma and nutritional value of the juice.
In addition, concentration involves the removal of water, resulting in a product
containing a large percentage of sugar, thereby making it difficult to freeze
completely. In order to eliminate this freezing problem, a natural element in
the juice, pectinesterase (an enzyme which produces pectin), is eliminated, and
when the concentrate is reconstituted there is a watery texture.
 
     As a result of the consumer demand for fresh squeezed orange juice
remaining unsatisfied, certain retail food stores attempt to squeeze and bottle
their own juice. Typically, such endeavors fail to produce a consistent product
as it is difficult for such stores either to obtain quality juice oranges or to
monitor the quality of the oranges they receive. In addition, the juice machines
used by such stores often squeeze the rind, resulting in a bitter, oily taste.
 
     The Company sells its products directly or indirectly to supermarket-owned
and independent warehouse distributors that distribute to supermarkets,
institutions or retail outlets. No customer accounts for more than 10% of the
Company's total revenues.
 
     The Company's major product lines, which feature orange, grapefruit,
cranberry, lemonade, lemon, lime and other fresh juices and smoothies, are as
follows:
 
          Fresh squeezed non-pasteurized juices.  Sales of fresh squeezed
     non-frozen juice account for the majority of the Company's revenues. Due to
     the limited shelf life of fresh juice products, the Company distributed
     fresh juice primarily on the East Coast prior to the Hansen's Merger. The
     acquisition of Hansen's has provided the Company with a presence on the
     West Coast and the ability to distribute fresh juice products from a
     western distribution point. The majority of the Company's fresh squeezed
     juice is sold to food service customers including hotel chains and numerous
     restaurant chains and independent restaurants. The balance of the Company's
     fresh juice sales are through retail outlets including supermarkets and
     numerous convenience stores, delicatessens and corporate cafeterias. In the
     aggregate, fresh squeezed non-pasteurized juices account for approximately
     seventy four percent (74%) of the Company's fiscal 1996 revenues. The
     Company's fresh squeezed juices are distributed under the "Fresh Pik't(R)",
     "Ultimate(R)", "Clear Springs(R)" and "Hansen's(R)" labels.
 
          Frozen fresh squeezed non-pasteurized juices.  To produce frozen fresh
     squeezed juices, extracted fresh juice is packaged and flash frozen for
     distribution. The retail outlet or consumer defrosts the juice for retail
     sale or consumption. The freezing process eliminates the need for expedient
     distribution. The Company has a patent with respect to its process of
     preparing frozen juice products and the container used in such a process.
     The Company distributes the majority of its frozen fresh squeezed juice to
     retail outlets including supermarkets, natural food stores, warehouse clubs
     and convenience stores with the balance of sales to food service customers.
     In the aggregate, frozen fresh squeezed non-pasteurized juices
 
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     account for approximately fifteen percent (15%) of the Company's fiscal
     1996 revenues. The Company's frozen fresh squeezed juices are distributed
     under the "Just Pik't(R)" label.
 
     Other Products.
 
          In order to satisfy all of the juice needs of its fresh juice
     customers, the Company distributes pasteurized juices under the
     "Ultimate(R)" name. In the aggregate, pasteurized juices account for
     approximately eight percent (8%) of the Company's fiscal 1996 revenues.
     Additionally, the Company produces and ships full tankers of fresh squeezed
     juices for use by other juice producers outside of the Company's market
     areas. The Company also distributes certain related products such as waters
     and other noncompeting juices in limited market areas through its direct
     store delivery network. These products account for less than one percent
     (1%) of the Company's fiscal 1996 revenues.
 
     New Products.
 
          Smoothies and Nutritionally Fortified Juices.  The Company has
     introduced its own line of smoothies and nutritionally fortified juices,
     which are blends of various fresh juices and purees. The Company believes
     that smoothies are a fast growing product segment. Originally introduced on
     the West Coast, the Company believes that smoothies are becoming
     increasingly popular due to their unique flavors and healthful qualities.
     This line includes a variety of blended fresh juices, including citrus
     based juices, antioxidants, vitamin enriched juices and banana based juice
     products. The smoothies are marketed under the "Just Pik't(R)" label. In
     the aggregate, frozen fresh squeezed smoothies and nutritionally fortified
     juices account for approximately two percent (2%) of the Company's fiscal
     1996 revenues. In addition, as a result of the Hansen's Merger, the Company
     now markets and distributes smoothies, nutritionally fortified and carrot
     based juices on the West Coast under the "Hansen's(R)" label through its
     wholly owned subsidiary, Fresh Juice of California.
 
          Organic Juices.  In December 1995, to leverage its sales, marketing
     and distribution capability, the Company introduced a new line of
     non-pasteurized frozen fresh squeezed organic juices. The Company is
     marketing organic juices under the "Florida Pik't(R)" brand name. Organic
     juices are extracted from organically grown fruit, and the Company believes
     that this is a growing market niche. Organic juices provide the Company
     with an entree into a number of health food and other retail outlets
     augmenting the Company's existing line of fresh frozen juices. The Company
     currently offers both organic orange and grapefruit juice in one liter
     containers for both retail and institutional accounts. In the aggregate,
     frozen fresh squeezed organic juices account for less than one percent (1%)
     of the Company's fiscal 1996 revenues.
 
          Fresh Juice Pre-made Cocktail Mixers.  The Company has developed and
     begun marketing non-alcoholic natural juice cocktail mixers, including
     daiquiri and margarita mixers. In the aggregate, frozen fresh squeezed
     pre-made cocktail mixers account for less than one percent (1%) of the
     Company's fiscal 1996 revenues.
 
          Lemonade and Other Signature Beverages.  The Company is developing
     specialty lemonades and other signature drinks for national food service
     accounts. Management is currently working with national restaurant chains
     to develop custom fruit beverages for their restaurants. In the aggregate,
     frozen fresh squeezed lemonade and other signature beverages account for
     less than one percent (1%) of the Company's fiscal 1996 revenues.
 
  Marketing and Advertising
 
     As stated above, "Just Pik't(R)", "Fresh Pik't(R)" and "Florida Pik't(R)"
are currently sold in numerous supermarket chains in the New York area and other
major markets throughout the United States. The Company's marketing of "Just
Pik't(R)" and its other products are intended to emphasize their fresh taste and
nutritional value. The Company is developing brand recognition for "Just
Pik't(R)" as a superpremium fresh squeezed juice, and is utilizing its brand
recognition to market other juices as well as other product line extensions.
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  Distribution
 
     Prior to the acquisition of the Florida Plant, "Just Pik't(R)" was shipped
by the Company to its independent distributors throughout the United States from
its Florida processor using unaffiliated trucking companies. As a result of the
acquisition of the Florida Plant, the Ultimate Merger and the Hansen's Merger,
shipping of the majority of the Company's products now originates out of the
Company's own production facilities, thereby providing the Company with
increased control and flexibility over the distribution process.
 
  Production
 
     On December 1, 1995, the Company began production at the Florida Plant. As
of November 30, 1996, the assets and production volume of Clear Springs have
been fully incorporated into the Florida Plant. Substantially all of the
Company's products are now produced at its own production facilities in Florida
and California.
 
  Competition
 
     The market for orange juice and fruit beverages generally is highly
competitive and is dominated by major companies such as Seagram of Canada
("Tropicana(R)") and The Coca-Cola Company ("Minute Maid(R)"), although
presently the major orange juice companies are primarily involved in the
production of chilled pasteurized juice and frozen or reconstituted concentrate
juice. The Company views its niche in the fruit beverage industry as a producer,
distributor and marketer or fresh squeezed, minimally processed juices and
juice-based beverages. The Company believes that it competes effectively with
its competitors on the basis of the quality of its products and its commitment
to meeting its customer's needs.
 
  Patents and Proprietary Protection
 
     The Company was granted U.S. Patent No. 4,816,273 on March 28, 1989 related
to a process for preparing a frozen whole juice product which upon defrosting
has the taste and nutritional content of freshly squeezed whole juice, the
process including filling a self-supporting bottle-like container with the whole
juice. The U.S. Patent and Trademark Office recently reissued this patent with a
broader claim coverage RE 35038. The trademarks "Just Pik't(R)", "Fresh
Pik't(R)", "Florida Pik't(R)", "Ultimate(R)" and "Hansen's(R)" have been
registered by the Company in the U.S. Patent and Trademark Office and with
appropriate agencies in various foreign countries.
 
  Raw Materials
 
     The only ingredient used to produce "Just Pik't(R)", "Fresh Pik't(R)",
"Florida Pik't(R)", "Ultimate(R) and "Hansen's(R)" orange and grapefruit juice
is fresh citrus fruit. Similarly, "Hansen's(R) and "Just Pik't(R)" Smoothie's
are made with a blend of orange juice, apple juice (pasteurized or from
concentrate), bananas, berries and other fruit purees. On a year to year basis,
the Company generally chooses the supplier(s) of its fresh fruit, and any fruit
juices not produced by the Company, on the basis of quality and price. The
Company purchases its fruit requirements directly from growers or through
brokers or other management companies which handle sales for growers,
independent fruit handlers (who handle the picking and transportation of fruit
to the Company's plant i.e., "pick and haulers") and fruit cooperatives, each of
which have long standing relationships with many independent groves. Each year,
the Company generally spreads its purchases among several of these entities. The
Company has done business with many of its current suppliers for 5-10 years.
Although the Company attempts to purchase fruit at market value, the Company is
a premium juice supplier and therefore has special needs and requirements which
sometimes require the Company to pay a premium to assure higher quality fruit.
The Company also purchases the fruit juices it does not produce itself based on
price and quality, on a year to year basis, from one or more independent
sources. Since there are several available independent suppliers of fresh fruit
and any fruit juices not produced by the Company itself, the Company does not
believe that it is dependent upon any one supplier for its fresh fruit and fruit
juice requirements. However, a lack of availability of quality fruit and/or
higher cost of citrus and other fruits would hamper the Company's ability to
maintain its rate of growth and its gross margin. Mindful of this risk, the
 
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Company has expanded its product line from only citrus juices to other
non-carbonated beverages, which to some extent will provide the Company with
flexibility in the event that the price of a certain fruit is dramatically
increased. Although it can give no assurances, the Company expects the 1997
orange crop to be of exceptional flavor and in sufficient supply to meet its
orders.
 
     The containers the Company uses for its frozen fresh juices are made of
plastic and are manufactured by a major "blow molding" manufacturer. The Company
owns the molds that are used to make the 1/3 liter, 1/4 liter and 1 liter
bottles for its frozen fresh squeezed juices and the machines that fill the
bottles and apply the tamper evident caps. The other bottles used by the Company
are standard high density polyethylene containers. As there are several major
independent plastic bottle manufacturers, the Company does not believe that it
is dependent upon any one manufacturer for the production of the bottles it
uses. One of the bottle manufacturers that the Company purchases from is CKS
Regal Plastics, Inc.
 
  Employees and Consultants
 
     The Company currently employs approximately two hundred and seventy-one
(271) individuals. There are forty-one (41) employees working out of the
Company's Northeast operations, including twenty-nine (29) full-time employees
and one (1) part-time employee in New Jersey and ten (10) full-time employees
and one (1) part-time employee in New York. Additionally, the Company employs
approximately one hundred and forty (140) full-time and ten (10) part-time and
seasonal workers at its Florida Plant and seventy eight (78) full-time and two
(2) part-time employees at Fresh Juice of California's (Hansen's) production
facility and offices in Azusa, California. The Company believes that this number
of employees is sufficient to operate its business. The Company's employees are
not represented by a labor union, none of the Company's employees are subject to
collective bargaining agreements and management believes employee relations to
be good.
 
  Research and Development
 
     While the Company maintains a continuous quality assurance program,
including continuous United States Department of Agriculture ("USDA")
inspection, the Company is just beginning to pursue research and development of
new products. In each of the last two fiscal years, the Company has spent less
than $20,000.00 per year on research and development. The research and
development costs have not been directly passed on to the Company's customers.
 
  Government Regulations
 
     The Company and its subsidiaries are subject to certain regulations of
federal, state and local government authorities regarding distribution and sale
of food products. From time to time various proposals are made for new laws and
regulations impacting the Company's industry as a whole. It is impossible to
predict whether any such proposals will be adopted and the impact, if any, of
such adoption on the business of the Company. Although the Company believes that
it currently has all material government permits, licenses, qualifications and
approvals for its operations, there can be no assurance that the Company will be
able to continue to comply with or maintain the same.
 
     The State of Florida and the USDA undertake an extensive inspection and
sampling program of Florida citrus fruit before and during processing in an
effort to maintain the quality and good name of Florida citrus products. The
Company believes that this program provides it with an excellent means of
quality control for its products.
 
     On December 16-17, 1996, the United States Food and Drug Administration
("FDA") held a public hearing to address issues related to foodborne disease
from fresh juices after an isolated outbreak of foodborne disease associated
with a single manufacturer of fresh apple juice. The hearing focused largely on
mechanisms to either ensure the safety of fresh juices or to provide adequate
warning to those consumers who might be at risk from exposure to the pathogens
that might be contained in fresh juice. The FDA received over 180 comments, most
of which concerned apple juice. Subsequently, the National Advisory Committee on
Microbiological Criteria for Foods recommended that a Hazard Analysis and
Critical Control Point ("HACCP") program and safety performance criteria should
form the general conceptual framework for assuring the safety of juices.
 
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     On August 28, 1997, after completing its review of the materials presented
in connection with the public hearing, the FDA published its proposed strategy
for ensuring juice safety which involves a three-prong approach that includes
phasing in a mandatory HACCP program for some or all juices, label warning
statements, and educational programs targeted at sanitation education for
industry and consumers. In so doing, the agency rejected proposals to mandate
pasteurization.
 
     The label warning statement prong is designed as an immediate but interim
step and will apply only to juices that have not been specifically processed to
prevent or eliminate the presence of harmful bacteria. Before the agency
actually promulgates this warning label as a requirement, however, the FDA has
encouraged manufacturers to immediately and voluntarily so label their products.
Specifically, the FDA noted that it would be unable to promulgate the warning
label as a requirement before the 1997 fresh cider season. Under the FDA
proposal, the requirement for the warning labels will be removed after
completion of implementation of an appropriate HACCP program.
 
     Since the Company's current manufacturing practices comprise a fully
implemented HACCP program instituted as a requirement for the manufacture of
fresh orange juice in the State of Florida, although it can give no assurance,
the Company believes that the warning label requirement, when promulgated, will
not be applicable to its products. Although it can give no assurance, the
Company believes that the final HACCP requirements for fresh juice likely to be
required by the FDA will be no more stringent than those presently in place at
the Company so that these regulations, when made final, will not have a material
impact on the Company's operations. In the event that the final HACCP
requirements and related regulations are more stringent than those in place at
the Company at such time, certain adjustments to the production process may be
required and the costs and timing of the implementation of such adjustments
could have a material adverse impact on the Company's operations and its
financial results.
 
  Environmental Regulations
 
     The Company believes that it is in compliance with all environmental
regulations affecting its operations.
 
ITEM 2.  DESCRIPTION OF PROPERTY
 
  Property Leased
 
     Northeast Offices and Warehouse
 
     The Company leases approximately 2,000 square feet of office space for its
headquarters in Clark, New Jersey on a month to month basis. The Company also
leases approximately 1,000 square feet of office space located at 350 Northern
Boulevard, Great Neck, New York. The Great Neck lease terminates in November,
1997, and the Company plans to consolidate its Northeast Offices prior to such
date. In addition, the Company leases a 10,000 square feet (6,000 square foot
refrigerated warehouse) in Linden, New Jersey on a month-to-month basis.
 
     Florida Production Facility
 
     The Florida Plant, which is owned by the Company, is more fully described
under the "Property Owned" section below.
 
     The Company continues to lease the production facility in Winter Garden
where the business of Clear Springs Citrus, Inc. was located. The machinery and
equipment from the Clear Springs production facility have been incorporated into
the Florida Plant, and the building in Winter Garden is now being used as a
distribution center for local deliveries in Florida. The lease on the Winter
Garden facility terminates on December 31, 1998.
 
     West Coast Offices, Production Facility and Warehouse
 
     The Company's subsidiary, Fresh Juice of California, leases commercial
space in Azusa, California, in which its offices, warehouse and production
facility are located. The total amount of space leased is 37,000
 
                                        7
<PAGE>   10
 
square feet, consisting of 3,000 square feet of office space and 34,000 square
feet of production and refrigerated warehouse space. The Fresh Juice of
California lease is a 10 year lease with one five year option. The fourth year
of the lease term begins on March 1, 1997.
 
  Property Owned
 
     The Florida Plant
 
     On August 3, 1995, the Company acquired the Florida Plant. The Florida
Plant is located at 1000 American Superior Boulevard, Winter Haven, Florida and
consists of a 70,000 square foot facility on four acres; 20,000 square feet of
which consist of either chilled or freezer space. The Florida Plant contains the
first spiral quick freeze system in the citrus industry. The Company acquired
the Florida Plant from Universal Flavors, Inc. for an aggregate purchase price
of $625,000, of which $150,000 was paid in cash on August 3, 1995 and the
remaining $475,000 is payable pursuant to a promissory note and purchase money
mortgage, bearing interest at the rate of seven per cent per annum and having a
three year maturity with a balloon payment of $458,754 due on August 1, 1998.
The land and building (exclusive of equipment) have an aggregate federal tax
basis of $627,155, and the building (with a federal tax basis of $597,155) is
being depreciated over thirty-nine (39) years on a straight line basis. The
annual real estate taxes are approximately $19,000 and the realty tax rate is
approximately 2%.
 
     The Company designed the Florida Plant to be capable of producing fresh
squeezed juice, fresh frozen juice and pasteurized juice, in addition to other
juice-based beverages. All processing in the Florida Plant is performed under
refrigerated and sanitary conditions. The Company believes that the Florida
Plant is one of the first facilities capable of producing such a variety of
juices under completely refrigerated conditions. Each segment of the production
process is separate and distinct with separate extraction rooms, filling rooms,
blending rooms and a separate spiral freeze system for the frozen fresh squeezed
juice.
 
     The Company believes that one of the most critical elements of producing
quality fresh squeezed juice is the proper sorting of fruit to eliminate any
fruit that would create impurities in such juice. The Company believes that the
Florida Plant is one of the first facilities equipped with a pre-and
post-screening system designed to eliminate impure fruit from reaching the
extraction process. The Florida Plant is equipped with a laboratory designed to
provide an additional measure of quality control to assist in the Company's goal
of providing optimal flavor and shelf life for its customers. In addition, the
Company maintains continuous USDA inspection.
 
     The initial budgeted cost of renovating and equipping the Florida Plant was
approximately $2,300,000. Near completion of the initial phase of renovations,
the Company acquired Clear Springs, and the Florida Plant was further renovated
and improved to incorporate the assets from Clear Springs and to prepare for
increased production levels. These additional renovations and improvements
(phase two) were budgeted at approximately $800,000. As of the date hereof, the
Florida Plant is fully operational and phase one and phase two of the renovation
plan are substantially completed. However, repairs and regular maintenance are
expected during fiscal year 1997 and some additional modifications may be
required as production volume increases. As of November 30, 1996, approximately
$3,550,000 has been expended on the Florida Plant for renovations and equipment.
Upon completion, the Company will have funded approximately $2,450,000 of such
cost from the Company's working capital, line of credit and common stock
delivered in connection with the Clear Springs Merger, with the balance financed
through the bank loans described below. In September, 1995, Fresh Juice of
Florida, the wholly-owned subsidiary of the Company which operates and maintains
the Florida Plant, entered into a loan agreement with Chemical Bank in the
aggregate principal amount of $1,100,000 (the "Chemical Loan") to finance the
remaining costs of renovating and equipping the Florida Plant. Of the aggregate
$1,100,000 borrowed under the Chemical Loan, approximately $250,000 was used to
finance certain leasehold improvements to the Florida Plant and approximately
$850,000 was used to finance the purchase of machinery and equipment. The loan
from Chemical Bank was refinanced in August 1996 with a $1,100,000 loan from
Fleet Bank, N.A. bearing interest at a floating rate equal to Fleet Bank's Prime
Rate (8.25% at November 30, 1996), which floating rate, at the Company's
election, may be fixed, for one to three month periods throughout the term,
based on current Libor contracts plus 175 basis points. The Fleet Bank
 
                                        8
<PAGE>   11
 
loan is a sixty eight month loan maturing on March 1, 2002 and is scheduled to
fully amortize by the maturity date.
 
     The Company believes that the properties it owns or leases are suitable and
adequate to support the Company's present business level and that each of its
properties is adequately covered by insurance.
 
ITEM 3.  LEGAL PROCEEDINGS
 
     The Company is subject to routine claims and lawsuits which arise in the
ordinary course of business and are incidental to the Company's business. In
addition, the Company has resolved one legal proceeding previously disclosed in
an annual report on Form 10-KSB and has become involved in another legal
proceeding. Both of such legal proceedings are described below:
 
     Fresh Pik't Natural Foods, Inc. ("Fresh Pik't") is a wholly-owned
subsidiary of the Company. On October 31, 1994, Fresh Pik't began operations as
a wholesale food distributor, distributing items such as organic produce in the
Washington, D.C. and New York Metropolitan areas. In August 1995, Fresh Pik't
sold its assets to Corganics, Inc. for approximately $76,850.00. Fresh Pik't has
not operated since the asset sale in August, 1995. In January 1996, Fresh Pik't
was named as a defendant in a legal action encaptioned The Washington Natural
Foods & Co. v. Fresh Pik't Natural Foods, Inc., et al. The action is venued in
the United States Bankruptcy Court for the District of Maryland (Greenbelt
Division). It is an adversary proceeding, bearing Adversary Proceeding No.
96-1001-PM, within the main Chapter 11 bankruptcy case of Washington Natural
Foods & Co., bearing Case No. 94-1-6077-PM. The principal parties in the
litigation are Washington Natural Foods & Co., Fresh Pik't and Corganics, Inc.
The action is based on allegations by Washington Natural that Fresh Pik't:
 
          (a) purchased the inventory of Washington Natural Foods & Co. for
     $34,068.46, but failed to pay the full amount, leaving a balance due of
     $4,048.36; and
 
          (b) took over the business, assets and assumed a favorable lease of
     Washington Natural Foods & Co. and, despite representations by Fresh Pik't
     to the contrary, Fresh Pik't paid no consideration to Washington Natural
     Foods & Co. In connection with these claims, Washington Natural Foods & Co.
     asserted damages of approximately $300,000.00.
 
     Pending court approval of same, the Company has settled the matter and is
obligated to pay $10,000 over 6 months pursuant to the terms of the settlement.
Under the terms of the settlement, payments will begin following court approval
of the settlement, which is expected within the next sixty (60) days.
 
     The Company's subsidiary, The Fresh Juice Company of California, Inc.
(Hansen's), has been named as one of many defendants in a lawsuit filed by the
Franchise Holders of Southland Corporation ("Southland"), against Southland and
a large number of the purveyors to the Franchisees of Southland, i.e., 7-Eleven
stores. Hansen's was one of the purveyors that has been sued under that lawsuit.
However, there is only one cause of action which pertains to Hansen's, and
Hansen's is coupled in that count with Southland, The Coca-Cola Company and
Pepsi-Cola Company. The basis of the cause of action is that each of the named
purveyors conspired to fix prices on soft drinks by trying to set the
Franchisees' retail price of their respective products in order for the
Franchisee(s) to obtain a discount off the wholesale price. In the count in
which Hansen's was named, the plaintiffs seek total damages in excess of
$50,000.00. The case was filed in September, 1993 and is venued in the Superior
Court of the State of California for the County of Alameda. Management of the
Company believes that the ultimate resolution of this matter will not have a
material impact on the financial position of the Company.
 
ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY-HOLDERS
 
     No matters have been submitted to a vote of security-holders during the
fourth quarter of the 1996 fiscal year.
 
                                        9
<PAGE>   12
 
                                    PART II
 
ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
 
     The Company's Common Stock, $.01 par value, is traded in the
over-the-counter market under the symbol "FRSH". Price quotations are available
through the NASDAQ system. The following tabulation sets forth the high and low
bid price quotations by quarter as reported by the NASDAQ Stock Market, Inc. The
quotations shown in the tabulation reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not represent actual transactions.
 
<TABLE>
<CAPTION>
                                                                HIGH BID      LOW BID
                                                                --------      -------
<S>                                                             <C>           <C>
     1996
     Fourth fiscal quarter..................................    $ 2.875       $ 1.50
     Third fiscal quarter...................................    $  3.75       $2.125
     Second fiscal quarter..................................    $4.6875       $ 2.25
     First fiscal quarter...................................    $  3.25       $1.375
</TABLE>
 
<TABLE>
<CAPTION>
                                                                HIGH BID      LOW BID
                                                                --------      -------
<S>                                                             <C>           <C>
     1995
     Fourth fiscal quarter..................................    $  3.00       $  1.50
     Third fiscal quarter...................................    $  3.50       $  2.00
     Second fiscal quarter..................................    $2.0625       $1.8125
     First fiscal quarter...................................    $  2.00       $ 1.625
</TABLE>
 
     There are no restrictions limiting the Company's ability to pay dividends
on the Company's Common Stock; however, the Company has not paid any dividends
on its Common Stock and does not anticipate paying any cash dividends in the
foreseeable future. The Company plans to retain its future earnings, if any, to
finance the growth and development of its operations.
 
     As of February 24, 1997, there were approximately 165 holders of record of
the Company's Common Stock.
 
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
 
RESULTS OF OPERATIONS
 
     As more fully discussed in Item 1 of this Annual Report on Form 10-KSB, the
Company acquired both Ultimate and Clear Springs during the year ended November
30, 1996. The Ultimate Merger became effective on April 1, 1996 and as such,
Ultimate closed its previous fiscal year on March 31, 1996 and began its new
fiscal year on April 1, 1996. The Clear Springs Merger became effective on
September 1, 1996, and Clear Springs closed its previous fiscal year on August
31, 1996 and began its new fiscal year on September 1, 1996. Accordingly, the
consolidated statements of operations for the year ended November 30, 1996
consist of a consolidation of eight months of operations (April 1, 1996-November
30, 1996) for Ultimate, three months of operations (September 1, 1996-November
30, 1996) for Clear Springs and twelve months (December 1, 1995-November 30,
1996) for the Company.
 
     Primarily as a result of the Ultimate Merger and the Clear Springs Merger
(hereinafter the "Acquisitions"), the Company's net sales which were $8,171,803
in 1994 and $9,219,184 in 1995, respectively, have increased to $19,958,022 in
1996, representing a 116% increase in net sales over 1995 net sales.
 
     As a result of the increase in net sales due to the Acquisitions, gross
profit, which was $3,007,997 in 1994 and $3,183,701 in 1995, increased to
$4,071,605 in 1996, representing a 28% increase over gross profit in 1995. The
gross profit increase was not as significant as the increase in net sales, due
to a decrease in gross margin from 34.5% in 1995 to 20.4% in 1996. This decrease
in gross margin was attributable to an increase in costs of goods sold from
$6,035,483 in 1995 to $15,886,417 in 1996, an increase of 163%.
 
                                       10
<PAGE>   13
 
     In addition to a proportionate increase in costs of goods sold relating to
increased revenues, costs of goods sold also increased due to higher fruit costs
in Florida and on the west coast and a change in the product mix sold by the
Company. Prior to fiscal year 1996, the Company was primarily a distributor of
frozen fresh squeezed juices. However, as a result of the Acquisitions and the
purchase of the Florida Plant, the Company's revenue mix has changed, and the
Company is now a manufacturer and distributor of fresh squeezed frozen and
non-frozen juices and other juice and non carbonated beverages, with the
majority of the Company's revenues derived from the sale of fresh, non-frozen
juices. The acquisition of the fresh, non-frozen product lines and the operation
of the Florida Plant have brought significant new costs.
 
     The Company's frozen juices are produced only during the Florida harvest
season when fruit costs are generally lower than they are outside of the Florida
harvest season. Fruit for the fresh non-frozen juices is also purchased in
Florida during the Florida harvest season, however, when high quality Florida
fruit is not in season, the Company purchases juice for its fresh (non-frozen)
juice from growers on the west coast. During these periods, costs of goods sold
are usually higher than during the Florida season due to increased fruit costs
and additional freight costs. During this past season, west coast juice costs
and freight costs exceeded the typical seasonal increase experienced by Ultimate
and Clear Springs in the same period of the previous year. During this period,
packaged juice purchased from the west coast increased approximately 14% from
1995 to 1996 and raw juice purchased from the west coast, to be packaged in
Florida, increase approximately 61% from 1995 to 1996. Accordingly, because of
increased sales, the Company was purchasing more west coast product despite its
increased costs. In addition, although purchased during the Florida harvest
season, Florida fruit costs were up during fiscal year 1996, and the Company's
costs of fruit, used to produce its frozen juice inventory, increased by
approximately twenty percent (20%) in 1996 when compared to 1995 fruit prices.
 
     The Company's selling, general and administrative expenses have also
increased as a result of the Acquisitions and the operation of the Florida
Plant. Selling, general and administrative expenses, which were $2,451,055 and
$2,820,356 in 1994 and 1995, respectively, have increased to $4,984,642 in 1996,
representing a 77% increase over 1995 selling, general and administrative
expenses. Prior to December of 1995, the Company was not a manufacturer and
distributor of fresh squeezed juices. In December 1995, the Company began
operations in its Florida Plant, thereby first becoming a manufacturer of fresh
squeezed juices. The Fresh Juice Company of Florida, Inc., the wholly owned
manufacturing subsidiary of the Company, incurred approximately $1.1 million in
selling, general and administration expenses for the year ended November 30,
1996, including approximately $400,000 relating to the Clear Springs
Acquisition. In addition, the acquisition of Ultimate and its consolidation into
the Company's financial statements added approximately $2.0 million in selling,
general and administrative expenses for the period.
 
     A significant portion of the increase in the Company's selling, general and
administration expenses was incurred during the Company's fourth fiscal quarter,
due in part to the acquisition of Clear Springs on September 1, 1996. Clear
Springs was primarily a production company that historically had no material
gross profits for the fourth quarter. Despite the fact that during the majority
of the fourth quarter the Company's fresh squeezed juice was being purchased on
the west coast, the consolidation of the Clear Springs' equipment and operations
into the Florida Plant required the Company to maintain a labor force
approximately equivalent to the labor force necessary when the Florida Plant is
running at its normal Florida harvest season production volume. As a result, the
labor costs during the fourth fiscal quarter far exceeded those that would have
been incurred had the plants already been consolidated and running at staff
levels consistent with production volumes outside of the Florida harvest season.
 
     The fourth quarter increase in selling, general and administrative expenses
combined with the increased juice and freight costs experienced in the fourth
quarter have resulted in a $1,007,552 loss from operations during the Company's
fourth fiscal quarter. This fourth quarter loss combined with the $94,515 income
from operations for the nine months ended August 31, 1996 have resulted in a
$913,037 net loss from operations for the year ended November 30, 1996 as
compared to earnings from operations of $556,942 and $363,345 for the fiscal
year ended November 30, 1994 and 1995, respectively.
 
     The interest paid on the outside financing obtained in connection with
purchasing and equipping the Florida Plant, as well as the Company's $2,500,000
line of credit for working capital, has caused interest
 
                                       11
<PAGE>   14
 
expense to increase $115,147 from $24,355 in 1995 to $139,502 in 1996. These
additional expenses have also contributed to the loss sustained by the Company
during fiscal year 1996.
 
FINANCIAL CONDITION
 
     On August 3, 1995, the Company acquired the Florida Plant. In connection
therewith, during the latter part of fiscal year 1995 and fiscal year 1996, the
Company, through its wholly-owned subsidiary, The Fresh Juice Company of
Florida, Inc., installed in the Florida Plant approximately $3,550,000 of
building improvements, fixtures and equipment. Approximately $2,450,000 of such
costs were funded from the Company's working capital, line of credit and common
stock delivered in connection with the Clear Springs Merger. The balance of the
cost of the building improvements, fixtures and equipment was financed through a
bank loan. Primarily as a result of these construction and equipment costs, the
Company's cash balance as of November 30, 1996 has decreased to $133,768 as
compared to $1,998,063 as of November 30, 1995. The Company also incurred one
time costs related to the Acquisitions in the amount of approximately $350,000,
of which $293,000 have been capitalized. These additional expenses have also
contributed to the reduction in the Company's cash balance as of November 30,
1996.
 
     As a result of the Acquisitions, both the current and total assets of the
Company have increased to $4,425,756 and $15,281,472, respectively, as of
November 30, 1996 compared to $4,258,358 and $6,508,237, respectively, as of
November 30, 1995. Specifically, the Company's trade accounts receivable have
increased to $2,236,781 as of November 30, 1996 as compared to $591,727 as of
November 30, 1995.
 
     In addition, the Company now generally maintains a fresh squeezed juice
inventory of approximately $175,000 to $225,000 in addition to the fresh-frozen
juice inventory generally maintained by the Company prior to the Acquisitions.
As a result, the Company's inventory has increased to $1,759,200 as of November
30, 1996 as compared to $1,544,821 as of November 30, 1995.
 
     As a result of the Acquisitions and the completion of the Florida Plant,
the Company's balances for equipment, building and improvements have increased
to $4,877,640 as of November 30, 1996 as compared to $950,949 as of November 30,
1995, while reducing construction in progress from $1,437,887 as of November 30,
1995 to $0 as of November 30, 1996.
 
     Accounts payable and accrued expenses have increased to $2,836,582 as of
November 30, 1996 as compared to $244,697 as of November 30, 1995. This increase
results from the consolidation of Ultimate's and Clear Springs' accounts payable
and accrued expenses into the Company's financial statements and the increased
payables associated with operating a manufacturing facility.
 
LIQUIDITY
 
     The Company had working capital of $624,104 at November 30, 1996 compared
to $3,919,590 at November 30, 1995. The Company requires capital to support its
capital improvements and the level of inventory required to meet current demand
as well as expected future increases in demand for its products. To provide
additional liquidity, in August 1996, the Company obtained a $2,500,000 line of
credit with Fleet Bank. At year end, the amount drawn on the line was $705,000,
leaving $1,795,000 available as of such date. As of February 28, 1997,
approximately $1,200,000 of the line of credit is still available, depending
upon qualified levels of accounts receivable and inventories as defined in the
Loan Agreement. The Company typically invests approximately $2.5 million from
January through June to replenish its yearly fresh-frozen juice inventory. The
Company believes that it has sufficient liquidity to conduct its business and to
build its fresh-frozen inventory during the remainder of the Florida harvest
season to meet the Company's current customers' demand for fresh frozen
products. A lack of availability of quality fruit and higher cost of citrus
would hamper the Company's ability to maintain its rate of growth and its
current gross profit level. In connection with the Hansen's Merger, discussed in
Item 1 of this Annual Report on Form 10-KSB, the Company assumed the debt
obligations of Hansen's. The Company believes that the results of its operations
(inclusive of Hansen's), will be sufficient to meet these additional debt
obligations.
 
                                       12
<PAGE>   15
 
RECENTLY ISSUED ACCOUNTING STANDARDS
 
     The Financial Accounting Standards Board issued Statement No. 123,
Accounting for Stock-Based Compensation (SFAS No. 123). Under this new standard,
a new fair value based method of accounting for stock-based compensation
arrangements with employees is established. Entities may continue to use the
Opinion 25 method or adopt the SFAS No. 123 fair value based method. The Company
will continue to use the Opinion 25 method, and therefore SFAS No. 123 requires
footnote disclosure of proforma net income and earnings per share information as
if the fair value based method had been adopted. This Statement is effective for
financial statements for fiscal years beginning after December 15, 1995, or for
the fiscal year for which the Statement is initially adopted for recognizing
compensation expense, whichever comes first.
 
     The Financial Accounting Standards Board issued Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed (SFAS No. 121). This new standard requires the assessment of the
recoverability of long-lived assets and certain intangibles and related goodwill
and recognition of any impairment losses. The Company does not believe the
adoption of SFAS No. 121 will have a material effect on the Company's
consolidated financial statements. This Statement is effective for fiscal years
beginning after December 15, 1995.
 
                                       13
<PAGE>   16
 
ITEM 7.  FINANCIAL STATEMENTS
 
     See Index to financial statements following Item 13 of this Annual Report
on Form 10-KSB.
 
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
 
     Not applicable.
 
                                       14
<PAGE>   17
 
                         THE FRESH JUICE COMPANY, INC.
                                1996 FORM 10-KSB
 
                                    PART III
 
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT.
 
     (a) Set forth below is certain information concerning the directors and
executive officers of the Company:
 
<TABLE>
<CAPTION>
                           YEAR FIRST
                            ELECTED          PRINCIPAL OCCUPATION
        NAME          AGE   TO BOARD      DURING THE PAST FIVE YEARS               POSITION
        ----          ---  ----------     --------------------------               --------
<S>                   <C>  <C>         <C>                               <C>
Steven M. Bogen        40     1996     Chief Executive Officer of The    Co-Chairman of Board of
                                       Ultimate Juice Company, Inc.      Directors, Chief Executive
                                       (now known as The Fresh Juice     Officer and Secretary of the
                                       Company of New York, Inc.) from   Company.
                                       1988 through present; Chairman
                                       of the Board of The Ultimate
                                       Juice Company, Inc. from 1989
                                       through March 31, 1996; Chairman
                                       of the Board of Clear Springs
                                       Citrus, Inc. from July 27, 1993
                                       through August 31, 1996;
                                       President of Clear Springs
                                       Citrus, Inc. from July 27, 1993
                                       through March 11, 1994; Co-
                                       Chairman of the Board, Chief
                                       Executive Officer, and Secretary
                                       of the Company since April 1,
                                       1996
Steven Smith           49     1985     Chairman of the Board, President  Co-Chairman of the Board of
                                       and Chief Executive Officer of    Directors, President and
                                       the Company from 1985 through     Assistant Secretary.
                                       March 31, 1996. Co-Chairman of
                                       the Board, President and
                                       Assistant Secretary of the
                                       Company since April 1, 1996.
Jeffrey Smith          25     1996     Graduate of the Wharton School    Director and Vice President
                                       at University of Pennsylvania in  of Strategic Development and
                                       May 1994. Investment Banking      Investor Relations.
                                       Analyst at LSG Advisors, a
                                       division of Societe Generale
                                       Securities Corporation from
                                       August 1994 through December
                                       1995. Vice President of
                                       Strategic Development and
                                       Investor Relations of the
                                       Company since February, 1996.
                                       Director of the Company since
                                       April 1, 1996. Son of Steven
                                       Smith.
</TABLE>
 
                                       15
<PAGE>   18
 
<TABLE>
<CAPTION>
                           YEAR FIRST
                            ELECTED          PRINCIPAL OCCUPATION
        NAME          AGE   TO BOARD      DURING THE PAST FIVE YEARS               POSITION
        ----          ---  ----------     --------------------------               --------
<S>                   <C>  <C>         <C>                               <C>
Brian Duffy            51     1996     President and Director of         Director, Vice President --
                                       Natural Juice Company since       National Operations,
                                       August, 1984; Director of Clear   President of The Fresh Juice
                                       Springs Citrus, Inc. from         Company of Florida, Inc.
                                       January 22, 1993 to August 31,
                                       1996; President of Clear Springs
                                       Citrus, Inc. from March 11, 1994
                                       to August 31, 1996; Director of
                                       the Company since April 1, 1996
Mark Feldman           34     N/A      Controller of The Ultimate Juice  Chief Financial Officer,
                                       Company, Inc. from 1989 to        Controller and Treasurer.
                                       present; Chief Financial Officer
                                       of The Ultimate Juice Company,
                                       Inc. from February 1995 through
                                       March 31, 1996; Treasurer and
                                       Controller of the Company since
                                       April 1, 1996, Chief Financial
                                       Officer of the Company since
                                       August 8, 1996
Jeffrey Heavirland     36     N/A      Director of Sales of Hansen's     President and Chief
                                       from July 1988 to December 1993;  Executive Officer of The
                                       Vice President of Sales and a     Fresh Juice Company of
                                       Director of Hansen's from         California, Inc.
                                       December 1993 to January 1994;
                                       Director, Vice President and
                                       Secretary of Hansen's from
                                       January 1994 to December 2,
                                       1996. President, Chief Executive
                                       Officer and Assistant Secretary
                                       of The Fresh Juice Company of
                                       California, Inc. from December
                                       2, 1996 to present
</TABLE>
 
     Steven M. Bogen has been Co-Chairman of the Board of Directors, Chief
Executive Officer and Secretary of the Company since April 1, 1996. Mr. Bogen
was a founder of The Ultimate Juice Company, Inc. (now known as The Fresh Juice
Company of New York, Inc.) and has served as its Chief Executive Officer since
1988. Mr. Bogen was the Chairman of the Board of The Ultimate Juice Company,
Inc. from 1989 through March 31, 1996. He was the President of Clear Springs
Citrus, Inc. from July 1993 through March 1994 and Chairman of the Board of
Clear Springs Citrus, Inc. from July 1993 through August 31, 1996.
 
     Steven Smith is the founder of the Company and presently serves as a
Co-Chairman of the Board of Directors and as the President and Assistant
Secretary of the Company. Mr. Smith has been involved for more than 27 years of
his business career in the marketing and distribution of various food products
for major food companies. From 1969 to 1983 he was Executive Vice President and
a significant shareholder of Calip Dairies, participating from its inception in
the marketing of Frusen Gladje ice cream and Dolly Madison ice cream. From 1983
to 1985, Mr. Smith was General Manager of Elmhurst Milk & Cream, a major dairy
operating in the New York City metropolitan area. From the Company's
organization in July 1985 through April 1, 1996, the effective date of the
Company's merger with The Ultimate Juice Company, Inc., Mr. Smith served as the
Company's Chairman of the Board, President and Chief Executive Officer.
 
     Brian Duffy has been a Director of the Company since April 1, 1996. He has
been the Vice President -- National Operations since August 1996 and President
of The Fresh Juice Company of Florida, Inc. since October 1996. Mr. Duffy was
President of Clear Springs Citrus, Inc. from March 1994 through September
 
                                       16
<PAGE>   19
 
1996 and Director of Clear Springs Citrus, Inc. from January 1993 to September
1996. Mr. Duffy has also been the President and a Director of the Natural Juice
Company, a Chicago, Illinois juice distributor, since August 1984.
 
     Jeffrey Smith has been Vice President of Strategic Development and Investor
Relations of the Company since February 1996 and a Director of the Company since
April 1996. Prior to joining the Company, Mr. Smith was an investment banking
financial analyst with LSG Advisors, a division of Societe Generale Securities
Corporation, from August 1994 to January 1996. Mr. Smith is a graduate of the
Wharton School at the University of Pennsylvania, May 1994 with concentrations
in finance and accounting. Mr. Smith is the son of the founder of the Company,
Steven Smith.
 
     Mark Feldman, CPA has been Chief Financial Officer of the Company since
August 1996 and Treasurer and Controller of the Company since April 1, 1996. Mr.
Feldman was Chief Financial Officer of The Ultimate Juice Company, Inc. from
February 1995 through March 1996 and Controller of The Ultimate Juice Company,
Inc. since 1989.
 
     Jeffrey Heavirland has been the President, Chief Executive Officer and
Assistant Secretary of The Fresh Juice Company of California, Inc. since
December 2, 1996. Mr. Heavirland was Vice President, Secretary and a Director of
Hansen's Juices Inc. from January 1994 to December 2, 1996. Mr. Heavirland was
Vice President of Sales and a Director of Hansen's Juices Inc. from December
1993 to January 1994. Mr. Heavirland was Director of Sales of Hansen's Juices
Inc. from July 1988 to December 1993. Prior to joining Hansen's Juices Inc. in
July of 1988, Mr. Heavirland owned and operated Hansen's Distributorships with
combined territories covering 17 California counties and 2 counties in the state
of Arizona.
 
     Executive officers serve until the next annual meeting of the Company's
Board of Directors and until their respective successors are elected.
 
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
 
     Section 16(a) of the Exchange Act of 1934 requires the Company's directors,
executive officers, and persons who own more than 10% of the Company's equity
securities to file with the SEC initial reports of ownership and reports of
changes in ownership of such securities. To the Company's knowledge, based
solely on a review of the copies of such reports furnished to it during or with
respect to the fiscal year ending November 30, 1996, Section 16(a) filing
requirements with respect to the Company's equity securities were met during the
most recent fiscal year or prior fiscal years, except that, through
inadvertence, (a) a Form 3 Initial Statement of Beneficial Ownership for Carol
Smith, a former director of the Company, was never filed, which omission has
been corrected and was previously reported in the Company's Proxy Statement
relating to its annual meeting of stockholders held on August 29, 1996, and (b)
a Form 4 Statement of Changes in Beneficial Ownership was not filed in
connection with the purchase by Jeffrey Smith, a director of the Company, of
2000 shares of the Company's Common Stock in June 1996. This omission will be
corrected.
 
                                       17
<PAGE>   20
 
ITEM 10.  EXECUTIVE COMPENSATION
 
SUMMARY COMPENSATION TABLE
 
     The following table sets forth the cash compensation in each of the last
three completed fiscal years of (i) Steven M. Bogen, the Company's Co-Chairman,
Chief Executive Officer and Secretary, and (ii) Steven Smith, the Company's
Co-Chairman and President. The table omits other executive officers employed by
the Company on November 30, 1996 because none of those officers received total
annual salary and bonus from the Company in excess of $100,000 in the fiscal
year ended November 30, 1996.
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                                             LONG TERM
                                     ANNUAL COMPENSATION                    COMPENSATION
                       -----------------------------------------------      ------------
                                                                               AWARDS
                                                                               ------
                                                                             SECURITIES
      NAME AND                                          OTHER ANNUAL         UNDERLYING           ALL OTHER
 PRINCIPAL POSITION    YEAR  SALARY($)(1)   BONUS($)   COMPENSATION($)   OPTIONS/SARS(#)(2)   COMPENSATION($)(3)
 ------------------    ----  ------------   --------   ---------------   ------------------   ------------------
<S>                    <C>   <C>            <C>        <C>               <C>                  <C>
Steven M. Bogen......  1996    241,385(4)     --               --                  --                   --
  Co-Chairman and      1995         --        --               --                  --                   --
  Chief Executive      1994         --        --               --                  --                   --
  Officer
Steven Smith.........  1996    348,750        --               --                  --               22,500
  Co-Chairman and      1995    369,500        --               --                  --               22,500
  President            1994    348,700        --               --              60,000(5)            22,500
</TABLE>
 
---------------
(1) This amount does not include perquisites and other personal benefits,
    securities or property because the aggregate amount thereof in each fiscal
    year did not exceed the lesser of $50,000 or 10% of the total annual salary
    and bonus reported for the named executive officer.
 
(2) During the last three completed fiscal years, the Company granted no
    restricted stock awards or stock appreciation rights (whether freestanding
    or in tandem with stock options).
 
(3) Reflects Company contributions for the account of Mr. Smith under the
    Company's employee pension plan.
 
(4) This amount represents the salary paid to Mr. Bogen by the Company during
    the fiscal year ended November 30, 1996. Between December 1, 1995 and March
    31, 1996, Mr. Bogen served as the Chief Executive Officer and President of
    Ultimate. During such period, Mr. Bogen was paid salary in the aggregate
    amount of $53,400 and a bonus of $235,000.
 
(5) Reflects grant under Company's Stock Option Plan of presently exercisable
    option to purchase 60,000 shares of Company Common Stock at $3.50 per share.
 
STOCK OPTION GRANTS IN 1996
 
     During the last fiscal year, the Company granted no restricted stock
awards, stock options or stock appreciation rights (whether freestanding or in
tandem with stock options) to any of its named executive officers.
 
AGGREGATED STOCK OPTION/SAR EXERCISES IN 1996 AND OPTION/SAR VALUES AT NOVEMBER
30, 1996
 
     The following table shows stock options exercised by the Company's
executive officers during 1996, including the aggregate value of any gains on
the date of exercise. In addition, this table includes the number of shares
covered by both exercisable and non-exercisable stock options as of November 30,
1996. Also reported are values for "in-the-money" options which represent the
positive spread between the exercise price of outstanding stock options and the
year-end price of the Company's common stock. Values for "out-of-the-money"
options are not reported.
 
                                       18
<PAGE>   21
 
                          1996 FISCAL YEAR END OPTIONS
 
<TABLE>
<CAPTION>
                                                                                            VALUE OF IN-THE-MONEY
                                                    NUMBER OF SECURITIES UNDERLYING              UNEXERCISED
                                                    UNEXERCISED OPTIONS AT 11/30/96      STOCK OPTIONS AT 12/31/96($)
                       SHARES ACQUIRED    VALUE     --------------------------------   --------------------------------
        NAME             ON EXERCISE     REALIZED   EXERCISABLE(1)   NOT EXERCISABLE   EXERCISABLE(2)   NOT EXERCISABLE
        ----           ---------------   --------   --------------   ---------------   --------------   ---------------
<S>                    <C>               <C>        <C>              <C>               <C>              <C>
Steven Smith.........         0             $0         160,000                --          $125,000               --
</TABLE>
 
---------------
(1) Includes options to purchase (i) 100,000 shares of Common Stock exercisable
    at $1.375 per share and (ii) 60,000 shares of Common Stock exercisable at
    $3.50 per share.
 
(2) Amount reflects valuation of options to purchase 100,000 shares of the
    Company's Common Stock at $1.375 per share, calculated by determining the
    difference between 2 5/8, the value of the Company's Common Stock at
    November 30, 1996 (as quoted on the NASDAQ System for such date) and the
    exercise price.
 
DIRECTORS' FEES.
 
     The Company's Directors do not receive any compensation for serving on its
Board of Directors. Presently all of the members of the Company's Board of
Directors are officers of the Company and receive compensation only for serving
as officers of the Company. The following table sets forth the compensation paid
or provided to all directors who are not named executive officers.
 
<TABLE>
<CAPTION>
                                                                                     SECURITY GRANTS
                                          CASH COMPENSATION               --------------------------------------
                              -----------------------------------------    NUMBER        NUMBER OF SECURITIES
                                 ANNUAL       MEETING     CONSULTING         OF               UNDERLYING
            NAME              RETAINER FEES    FEES     FEES/OTHER FEES   SHARES(#)        OPTIONS/SARS(#)
            ----              -------------   -------   ---------------   ---------   --------------------------
<S>                           <C>             <C>       <C>               <C>         <C>
Jeffrey Smith...............      $0.00        $0.00        $68,750(1)        0                 50,000(2)
Brian Duffy.................      $0.00        $0.00        $50,000(1)        0                      0
</TABLE>
 
---------------
(1) The Company's directors do not receive any fees or other compensation for
    serving as directors. The dollar amounts set forth above represent the
    salary and bonus paid to such director for serving as an officer of the
    Company or one of its subsidiaries during the fiscal year ended November 30,
    1996.
 
(2) The Company's directors do not receive any fees or other compensation for
    serving as directors. The options were granted to Mr. Smith under the
    Company's 1996 Incentive Stock Option Plan to induce Mr. Smith to continue
    to remain in the Company's employ.
 
EMPLOYMENT AGREEMENTS
 
     On April 1, 1996, the Company entered into a new three-year agreement with
Mr. Smith providing for an initial annual salary of $360,000, subject to
adjustments to reflect increases in the consumer price index. Such agreement
provides that the parties may extend the agreement for up to two additional
terms of three years each for a total of six additional years.
 
     On April 1, 1996 the Company also entered into a three-year agreement with
Mr. Bogen providing for an initial annual salary of $360,000, subject to
adjustments to reflect increases in the consumer price index. Such agreement
provides that the parties may extend the agreement for up to two additional
terms of three years each for a total of six additional years.
 
INCENTIVE STOCK OPTION PLANS.
 
     In October, 1988, the Company's Board of Directors adopted The Fresh Juice
Company, Inc. Incentive Stock Option Plan (the "Plan"). Pursuant to the Plan,
options covering a maximum of 175,000 shares of the Company's Common Stock may
be offered to key employees of the Company. At the date hereof, the Company has
issued the full amount of such options. The exercise price of any stock option
issued under the Plan is equal to at least 100% of the fair market value of the
Company's Common Stock at the time the option is granted. All options granted
expire 10 years from the date of the grant. At February 21, 1996, options to buy
 
                                       19
<PAGE>   22
 
160,000 shares of Common Stock had been granted to Steven Smith. Of such amount,
options to buy 100,000 shares of Common Stock at the price of $1.375 per share
are exercisable until October 15, 1998 and options to buy 60,000 such shares at
a price of $3.50 per share are exercisable until December 15, 1998. In addition,
options to buy 15,000 such shares at the price of $1.25, exercisable until 1998,
have been granted to Kathy Siegel. Neither Mr. Smith nor Ms. Siegel have
exercised any of their options as of the date hereof. On July 23, 1996, the
Company's Board of Directors unanimously adopted the Company's 1996 Incentive
Stock Option Plan (the "1996 Plan"), subject to stockholder approval thereof.
Adoption of the 1996 Plan was approved by the Company's stockholders at the
Company's annual meeting of stockholders held on August 29, 1996. Pursuant to
the 1996 Plan, options covering a maximum of 500,000 shares of the Company's
Common Stock may be offered to key employees. As of November 30, 1996, the
Company had issued options covering 50,000 shares of the Company's Common Stock.
The exercise price of any stock option issued or to be issued under the 1996
Plan is or shall be equal to at least 100% of the fair market value of the
Company's Common Stock at the time the option is granted. All options granted or
to be granted under the 1996 Plan expire 10 years from the date of the grant.
The Board of Directors has not yet appointed a Stock Option Plan Committee, and
presently, the Board of Directors recommends the key employees to receive
options, the exercise price of such options and the number of shares subject to
such options. At November 30, 1996, options to buy 50,000 shares of the
Company's Common Stock, with an exercise price of $3.125, had been granted to
Jeffrey Smith. The options granted to Jeffrey Smith are exercisable until July
22, 2001. The Company had also granted options to purchase 60,000 shares of the
Company's Common Stock, exercisable at $3.125, to a former employee Paul
Ballantine. However, Mr. Ballantine has resigned and his options have expired
unexercised.
 
PENSION PLANS
 
     During the 1988 fiscal year the Company instituted an employee pension plan
then covering all of its employees. Only employees who have been employed by the
Company for three years are eligible to participate in the pension plan. Under
the pension plan, contributions may not exceed 15% of the covered employee's
salary. The amount of contributions for each employee is determined by the Board
of Directors. In fiscal 1996, Mr. Smith was allocated $22,500 and all other
eligible employees, as a group, were allocated $32,609.
 
     The Fresh Juice Company of New York, Inc., formerly known as The Ultimate
Juice Company, Inc., maintains a 401(k) Plan for its employees with
discretionary contributions by the Employer. The amount of discretionary
contributions, if any, is determined by the Board of Directors of the Company.
No contribution was made by the Company during the fiscal year ended November
30, 1996. The Company is in the process of bringing all of its employees under
the 401(k) Plan presently in existence at The Fresh Juice Company of New York,
Inc., and the Company's existing employee pension plan described above will
terminate on December 31, 1997.
 
ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
 
     The following tables set forth, as of February 24, 1997, information
concerning (a) the number and percentage of existing securities of the Company
beneficially owned by (i) each director, (ii) each executive officer of the
Company, (iii) the shares of common stock owned by all directors and executive
officers as a group; and (iv) each person or group known to the Company to be
the beneficial owner of more than 5% of the outstanding shares of Common Stock.
Each person named or included in a group has sole voting and investment power
with respect to his shares.
 
                                       20
<PAGE>   23
 
SECURITY OWNERSHIP OF MANAGEMENT.
 
<TABLE>
<CAPTION>
                                                                          COMMON STOCK         PERCENT OF
                                                                    BENEFICIALLY OWNED AS OF     COMMON
                                                                        DECEMBER 3, 1996       STOCK OWNED
                                                                        --------------------   -----------
<S>                                                                 <C>                        <C>
Steven Smith...................................................            1,633,362(1)           24.6%
c/o The Fresh Juice Company, Inc.
35 Walnut Avenue
Clark, New Jersey 07066
Steven M. Bogen................................................            1,449,408              22.4%
c/o The Fresh Juice Company, Inc.
35 Walnut Avenue
Clark, New Jersey 07066
Brian Duffy....................................................              300,000               4.6%
c/o The Fresh Juice Company, Inc.
35 Walnut Avenue
Clark, New Jersey 07066
Jeffrey Heavirland.............................................              150,524(2)            2.3%
c/o The Fresh Juice Company, Inc.
35 Walnut Avenue
Clark, New Jersey 07066
Jeffrey Smith..................................................               71,919(3)            1.1%
c/o The Fresh Juice Company, Inc.
35 Walnut Avenue
Clark, New Jersey 07066
Mark Feldman...................................................               58,550               0.9%
c/o The Fresh Juice Company, Inc.
35 Walnut Avenue
Clark, New Jersey 07066
All directors and executive officers as a group (6 in number)...           3,663,763(4)           54.3%
</TABLE>
 
---------------
(1) This amount includes Steven Smith's options to purchase (i) 100,000 shares
    of Common Stock at $1.375 per share, exercisable until 1998 and (ii) 60,000
    shares of Common Stock at $3.50 per share, exercisable until 1998.
 
(2) This amount includes Jeffrey Heavirland's (a) option to purchase 30,000
    shares of the Company's Common Stock at $3.00 per share, exercisable until
    December 1, 2001, and (b) warrant to purchase 42,857 shares of the Company's
    Common Stock at $3.00 per share, exercisable until November 30, 2001.
 
(3) This amount includes Jeffrey Smith's options to purchase 50,000 shares of
    Common Stock at $3.125 per share, exercisable until July 22, 2001.
 
(4) This amount includes 282,857 shares of Common Stock, which may be acquired
    within 60 days under stock options or warrants granted to the persons in the
    group.
 
ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     1. Merger with The Ultimate Juice Company, Inc.  On March 31, 1996, the
Company entered into a Merger Agreement (the "Merger Agreement") with and among
the Company, Ultimate, the stockholders of Ultimate (the "Selling Stockholders")
and The Fresh Juice Acquisition Company, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company ("Merger Sub"). The Merger Agreement
provided for the merger of Merger Sub with and into Ultimate (the "Ultimate
Merger"), with all of the issued and outstanding common stock of Ultimate being
exchanged for 1,140,000 shares of the Company's Common Stock (the "Merger
Shares").
 
     The Ultimate Merger became effective on April 1, 1996 and was (1) accounted
for as a purchase and (2) a "reorganization" under the Internal Revenue Code.
 
                                       21
<PAGE>   24
 
     Pursuant to the Merger Agreement, the Merger Shares were not registered
with the Securities and Exchange Commission (the "Commission") and constitute
restricted stock under Rule 144 of the Commission. However, the Company and the
Selling Stockholders have entered into a Registration Rights Agreement dated
March 31, 1996, which gives the Selling Stockholders the right to demand
registration of a portion of the Merger Shares under certain circumstances.
 
     Steven M. Bogen, the President of Ultimate, became Co-Chairman, Chief
Executive Officer and Secretary of the Company. Steven Smith continued as
Co-Chairman and President and was also named Assistant Secretary of the Company.
Jeffrey Smith, the Company's Vice President of Strategic Development and
Investor Relations was elected as a director of the Company. Mark Feldman, a
stockholder, Chief Financial Officer, Controller and Director of The Ultimate
Juice Company, Inc., was named Treasurer of the Company.
 
     In connection with the Merger Agreement, Steven M. Bogen and Steven Smith
entered into a Stockholder's Agreement (the "Stockholder's Agreement") whereby
each agreed, among other things, to (a) keep the number of directors of the
Company at an even number, (b) each nominate one-half of the number of directors
eligible for election each year, (c) vote for the other's nominees for director,
and (d) not sell their respective stock in the Company other than pursuant to
broker sales or an effective Registration Statement. Upon consummation of the
Ultimate Merger, Steven M. Bogen and Steven Smith owned in the aggregate
2,218,108 shares of the Company's Common Stock (approximately 47.3% of the
issued and outstanding Common Stock of the Company at such time).
 
     2. Merger With Clear Springs Citrus, Inc.  On March 31, 1996, the Company
entered into a Merger Agreement with and among the Company, its wholly owned
subsidiary, The Fresh Juice Company of Florida, Inc., Clear Springs, Brian Duffy
and The Bogen Group, L.L.C. (the "Clear Springs Merger Agreement"). The Clear
Springs Merger Agreement provided for the merger of Clear Springs with and into
The Fresh Juice Company of Florida, Inc. (the "Clear Springs Merger"), with all
of the issued and outstanding common stock of Clear Springs being exchanged for
1,160,000 shares of the Company's Common Stock (the "Clear Springs Merger
Shares"). The Clear Spring's merger closed and became effective on September 1,
1996 and was (1) accounted for as a purchase and (2) a "reorganization" under
the Internal Revenue Code. Upon consummation of the Clear Springs Merger, Steven
M. Bogen and Steven Smith owned in the aggregate 2,938,008 shares of the
Company's Common Stock (approximately 50.4% of the issued and outstanding Common
Stock of the Company at such time).
 
     Pursuant to the Clear Springs Merger Agreement, the Clear Springs Merger
Shares were not registered with the Commission and constitute restricted stock
under Rule 144 of the Commission. However, the Company and each of the
recipients of the Clear Springs Merger Shares (the "Clear Springs Selling
Stockholders") have entered into a Registration Rights Agreement dated August
29, 1996, which gives the Clear Springs Selling Stockholders the right to demand
registration of a portion of the Clear Springs Merger Shares under certain
circumstances.
 
     3. Supply Agreement with Natural Juice Company.  By agreement dated March
31, 1996, the Company entered into a supply, distribution and requirements
agreement (the "Supply Agreement") with Natural Juice Company, an Illinois
corporation controlled by Brian Duffy, a director and stockholder of the Company
and the President of The Fresh Juice Company of Florida, Inc. The Supply
Agreement has an initial term of five (5) years with two (2) five (5) year
renewals at Natural Juice Company's option. The Company sold $458,972 of product
to Natural Juice Company during fiscal 1996.
 
     4. Merger with Hansen's Juices, Inc.  On November 18, 1996, the Company
entered into a merger agreement with and among the Company, its wholly owned
subsidiary, The Fresh Juice Company of California, Inc., Hansen's, Gary Hansen,
Jeffrey Heavirland, Burton S. Rosky and Leatrice J. Rosky Family Trust of 1995,
Gary Todd, David Burger and Timothy Kane (the "Hansen's Merger Agreement"). The
Hansen's Merger Agreement provided for the merger of Hansen's with and into The
Fresh Juice Company of California, Inc. (the "Hansen's Merger"), with all the
issued and outstanding common stock of Hansen's being exchanged for 597,443
shares of the Company's Common Stock (the "Hansen's Merger Shares"), $90,000 in
cash, warrants to purchase 300,000 shares of the Company's Common Stock for
$3.00 per share
                                       22
<PAGE>   25
 
and the assumption of Hansen's debt. The Hansen's Merger closed and became
effective on December 2, 1996 and was (1) accounted for as a purchase and (2) a
"reorganization" under the Internal Revenue Code.
 
     Pursuant to the Hansen's Merger Agreement, the Hansen's Merger Shares were
not registered with the Commission and constitute restricted stock under Rule
144 of the Commission. However, the Company and each of the recipients of the
Hansen's Merger Shares (the "Hansen's Selling Stockholders") have entered into a
Registration Rights Agreement dated November 27, 1996, which gives the Hansen's
Selling Stockholders the right to demand registration of a portion of the
Hansen's Merger Shares under certain circumstances.
 
ITEM 13.  EXHIBIT AND REPORTS ON FORM 8-K
 
     (a) Exhibits
 
<TABLE>
    <S>     <C>
     2(i)   Certificate of Amendment to Certificate of
            Incorporation -- incorporated by reference to Exhibit 3(i)
            to the Company's 10-QSB for the quarter ended August 31,
            1996, filed October 15, 1996, SEC File No. 0-15320.
     3(ii)  By-laws -- incorporated by reference to Exhibit 3.2 to the
            Company's Registration Statement, SEC File NO. 33-8878-NY on
            Form S-18.
     9      Stockholders Agreement dated March 31, 1996 between Steven
            Smith and Steven M. Bogen -- incorporated by reference to
            Exhibit 10(b) of the Company's Current Report on form 8-K
            dated March 31, 1996, SEC File No. 0-15320, (the "March 31,
            1996 8-K")
    10(a)   Stockholder's Agreement dated March 31, 1996 between Steven
            Smith and Steven M. Bogen -- incorporated by reference to
            Exhibit 10(b) of the March 31, 1996 8-K
    10(b)   1996 Incentive Stock option Plan -- incorporated by
            reference to Exhibit 10(b) of the Company's Definitive Proxy
            Statement filed in connection with the Company's Annual
            Stockholders meeting held on August 29, 1996, SEC File No.
            0-15320.
    10(c)   Employment Agreement effective April 1, 1996 with Steven
            Smith -- incorporated by reference to Exhibit 10(d) of the
            March 31, 1996 8-K
    10(d)   Employment Agreement effective April 1, 1996 with Steven M.
            Bogen -- incorporated by reference to Exhibit 10(e) of the
            March 31, 1996 8-K
    10(e)   Supply Agreement dated March 31, 1996 with Natural Juice
            Company, Inc. -- incorporated by reference to Exhibit 10(f)
            of the March 31, 1996 8-K
    10(f)*  Loan Agreement dated August 5, 1996 among the Company, The
            Fresh Juice Company of Florida, Inc., The Fresh Juice
            Company of New York, Inc. and Fleet Bank, N.A.
    21*     Subsidiaries of small business issuer
    27*     Financial Data Schedule
</TABLE>
 
     (b) Reports on Form 8-K.
        None.
---------------
 * Filed as an Exhibit to the Company's Annual Report on Form 10-KSB filed on
   March 17, 1997
 
                                       23
<PAGE>   26
 
                         INDEX TO FINANCIAL STATEMENTS
 
THE FRESH JUICE COMPANY, INC. AND SUBSIDIARIES
 
     Audited consolidated financial statements and related documents as of
November 30, 1996 and 1995 and for the three years ended November 30, 1996 are
presented herein on the following pages:
 
<TABLE>
<S>                                                           <C>
Independent Auditors' Report................................  F-1
Consolidated Balance Sheets as of November 30, 1996 and
  1995......................................................  F-2
Consolidated Statements of Earnings for the years ended
  November 30, 1996, 1995 and 1994..........................  F-3
Consolidated Statements of Shareholders' Equity for the
  years ended November 30, 1996, 1995 and 1994..............  F-4
Consolidated Statements of Cash Flows for the years ended
  November 30, 1996, 1995 and 1994..........................  F-5
Notes to Consolidated Financial Statements..................  F-6
</TABLE>
 
                                       24
<PAGE>   27
 
     In accordance with Section 13 and 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
                                              THE FRESH JUICE COMPANY, INC.
                                                       (Registrant)
 
                                          By:      /s/ STEVEN M. BOGEN
 
                                            ------------------------------------
                                              Steven M. Bogen, Co-Chairman of
                                                            Board
                                                and Chief Executive Officer
 
Date: April 16, 1998
 
     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
 
<TABLE>
<CAPTION>
                    SIGNATURES                                      TITLE                       DATE
                    ----------                                      -----                       ----
<S>                                                    <C>                                <C>
 
                /s/ STEVEN M. BOGEN                    Co-Chairman of the Board, Chief    April 16, 1998
---------------------------------------------------    Executive Officer and Secretary
                  Steven M. Bogen                      (principal executive officer)
 
                  /s/ BRIAN DUFFY                      Director                           April 16, 1998
---------------------------------------------------
                    Brian Duffy
 
              /s/ JEFFREY HEAVIRLAND                   Director                           April 16, 1998
---------------------------------------------------
                Jeffrey Heavirland
 
               /s/ MICHAEL D. BROWN                    Director                           April 16, 1998
---------------------------------------------------
                 Michael D. Brown
 
                 /s/ GILBERT BOWEN                     Director                           April 16, 1998
---------------------------------------------------
                   Gilbert Bowen
 
                 /s/ MARK FELDMAN                      Chief Financial Officer and        April 16, 1998
---------------------------------------------------    Treasurer (principal financial
                   Mark Feldman                        officer and principal
                                                       accounting officer)
</TABLE>
 
                                       25
<PAGE>   28
 
                          INDEPENDENT AUDITORS' REPORT
 
The Board of Directors
The Fresh Juice Company, Inc.
  and Subsidiaries:
 
     We have audited the accompanying consolidated balance sheets of The Fresh
Juice Company, Inc. and subsidiaries as of November 30, 1996 and 1995, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the years in the three-year period ended November 30, 1996.
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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of The Fresh
Juice Company, Inc. and subsidiaries as of November 30, 1996 and 1995, and the
results of their operations and their cash flows for each of the years in the
three-year period ended November 30, 1996 in conformity with generally accepted
accounting principles.
 
                                          KPMG Peat Marwick LLP
 
February 28, 1997
Short Hills, New Jersey
 
                                       F-1
<PAGE>   29
 
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
                           NOVEMBER 30, 1996 AND 1995
 
<TABLE>
<CAPTION>
                                                                 1996           1995
                                                              -----------    ----------
<S>                                                           <C>            <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................  $   133,768    $1,998,063
  Trade accounts receivable, net of allowance for doubtful
     accounts of $50,000 in 1996 and $0 in 1995.............    2,236,781       591,727
  Inventories...............................................    1,759,200     1,544,821
  Current portion of notes receivable.......................           --       120,000
  Prepaid and other current assets..........................      296,007         3,747
                                                              -----------    ----------
          Total current assets..............................    4,425,756     4,258,358
                                                              -----------    ----------
Property, plant and equipment, at cost:
  Land......................................................       30,000        30,000
  Building and improvements.................................    1,740,229       597,155
  Equipment.................................................    3,137,411       353,794
  Molds.....................................................      224,333       196,338
  Automobiles...............................................      143,358       103,058
  Construction-in-progress..................................           --     1,437,887
                                                              -----------    ----------
                                                                5,275,331     2,718,232
  Less accumulated depreciation.............................      820,646       499,256
                                                              -----------    ----------
          Net property, plant and equipment.................    4,454,685     2,218,976
Note receivable, net of current portion.....................           --        20,000
Excess cost over estimated fair values of net assets
  acquired, net of accumulated amortization of $126,748 in
  1996......................................................    6,110,947            --
Trademarks, patents, and other intangibles, net of
  accumulated amortization of $23,108 and $11,059 in 1996
  and 1995, respectively....................................      140,084        10,903
Other assets................................................      150,000            --
                                                              -----------    ----------
          Total assets......................................  $15,281,472    $6,508,237
                                                              ===========    ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Note payable..............................................      705,000            --
  Current installments of long-term debt....................      260,070        45,832
  Accounts payable and accrued expenses.....................    2,836,582       244,697
  Income taxes payable......................................           --        48,239
                                                              -----------    ----------
          Total current liabilities.........................    3,801,652       338,768
Long-term debt, net of current installments.................    1,524,562     1,529,168
Deferred income taxes.......................................       34,000            --
                                                              -----------    ----------
          Total liabilities.................................    5,360,214     1,867,936
                                                              -----------    ----------
Shareholders' equity:
  Series preferred stock par value $10. Authorized 7,000,000
     shares; none issued....................................           --            --
  Common stock, par value $.01. Authorized 30,000,000
     shares; issued 6,062,000 and 3,762,000 shares; in 1996
     and 1995, respectively.................................       60,620        37,620
  Additional paid-in capital................................    8,583,490     2,396,490
  Retained earnings.........................................    1,560,441     2,489,484
                                                              -----------    ----------
                                                               10,204,551     4,923,594
  Less cost of common shares held in treasury: 211,938
     shares in 1996 and 1995................................      283,293       283,293
                                                              -----------    ----------
          Total shareholders' equity........................    9,921,258     4,640,301
Commitments and contingency (notes 5, 8 and 11)
                                                              -----------    ----------
          Total liabilities and shareholders' equity........  $15,281,472    $6,508,237
                                                              ===========    ==========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
                                       F-2
<PAGE>   30
 
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
 
<TABLE>
<CAPTION>
                                                           1996           1995          1994
                                                        -----------    ----------    ----------
<S>                                                     <C>            <C>           <C>
Net sales.............................................  $19,958,022    $9,219,184    $8,171,803
Cost of goods sold....................................   15,886,417     6,035,483     5,163,806
                                                        -----------    ----------    ----------
                                                          4,071,605     3,183,701     3,007,997
Selling, general and administrative expenses..........    4,984,642     2,820,356     2,451,055
                                                        -----------    ----------    ----------
          Earnings (loss) from operations.............     (913,037)      363,345       556,942
Interest and other income, net........................       63,496       104,104        88,292
Interest expense......................................     (139,502)      (24,355)           --
                                                        -----------    ----------    ----------
          Earnings (loss) before provision for income
            taxes.....................................     (989,043)      443,094       645,234
Provision (benefit) for income taxes..................      (60,000)      172,051       256,396
                                                        -----------    ----------    ----------
          Net earnings (loss).........................  $  (929,043)   $  271,043    $  388,838
                                                        ===========    ==========    ==========
Net earnings (loss) per common share..................  $      (.20)   $      .07    $      .11
                                                        ===========    ==========    ==========
Weighted average number of common and common
  equivalent shares outstanding.......................    4,601,349     3,889,740     3,612,679
                                                        ===========    ==========    ==========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
                                       F-3
<PAGE>   31
 
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                  YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
 
<TABLE>
<CAPTION>
                                            COMMON STOCK       ADDITIONAL                                 TOTAL
                                         -------------------    PAID-IN      RETAINED     TREASURY    SHAREHOLDERS'
                                          SHARES     AMOUNT     CAPITAL      EARNINGS       STOCK        EQUITY
                                         ---------   -------   ----------   -----------   ---------   -------------
<S>                                      <C>         <C>       <C>          <C>           <C>         <C>
Balance at November 30, 1993...........  3,762,000   $37,620   $2,396,490   $ 1,829,603   $(273,360)   $ 3,990,353
Net earnings for the year end November
  30, 1994.............................         --        --           --       388,838          --        388,838
                                         ---------   -------   ----------   -----------   ---------    -----------
Balance at November 30, 1994...........  3,762,000    37,620    2,396,490     2,218,441    (273,360)     4,379,191
Purchase of 4,800 shares of treasury
  stock................................         --        --           --            --      (9,933)        (9,933)
Net earnings for the year ended
  November 30, 1995....................         --        --           --       271,043          --        271,043
                                         ---------   -------   ----------   -----------   ---------    -----------
Balance at November 30, 1995...........  3,762,000    37,620    2,396,490     2,489,484    (283,293)     4,640,301
Net loss for the year ended November
  30, 1996.............................         --        --           --      (929,043)         --       (929,043)
Shares of common stock issued to
  acquire The Ultimate Juice Company,
  Inc..................................  1,140,000    11,400    3,066,600            --          --      3,078,000
Shares of common stock issued to
  acquire Clear Springs Citrus, Inc....  1,160,000    11,600    3,120,400            --          --      3,132,000
                                         ---------   -------   ----------   -----------   ---------    -----------
Balance at November 30, 1996...........  6,062,000   $60,620   $8,583,490   $ 1,560,441   $(283,293)   $ 9,921,258
                                         =========   =======   ==========   ===========   =========    ===========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
                                       F-4
<PAGE>   32
 
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED NOVEMBER 30, 1996, 1995 AND 1994
 
<TABLE>
<CAPTION>
                                                          1996           1995           1994
                                                       -----------    -----------    ----------
<S>                                                    <C>            <C>            <C>
Cash flows from operating activities:
  Net earnings (loss)................................  $  (929,043)   $   271,043    $  388,838
  Adjustments to reconcile net earnings to net cash
     provided by (used in) operating activities:
       Depreciation and amortization.................      467,458         68,101        52,727
       Changes in assets and liabilities:
          Decrease (increase) in trade accounts
            receivable...............................     (371,417)        87,665        11,513
          Decrease (increase) in inventories.........      101,962       (171,109)     (140,359)
          Decrease (increase) in prepaid and other
            current assets...........................     (106,286)        12,774          (799)
          Decrease in other assets...................                     (10,107)           --
          Increase (decrease) in accounts payable and
            accrued expenses.........................    1,038,602       (234,911)       77,290
          Increase (decrease) in income taxes
            receivable/payable.......................     (161,228)       118,733      (451,004)
                                                       -----------    -----------    ----------
            Net cash provided by (used in) operating
               activities............................       40,048        142,189       (61,794)
                                                       -----------    -----------    ----------
Cash flows from investing activities:
  Increase in advances and note receivable...........     (363,932)            --      (300,000)
  Installments from note receivable..................           --        120,000        40,000
  Decrease in short-term investments.................           --        789,116       208,207
  Acquisitions of property, building and equipment...   (1,885,245)    (1,685,893)      (84,468)
  Escrow advance -- Hansen's Juices, Inc.............     (150,000)            --            --
  Acquisition costs..................................     (293,000)            --            --
  Acquisition of cash................................       82,834             --            --
                                                       -----------    -----------    ----------
            Net cash used in investing activities....   (2,609,343)      (776,777)     (136,261)
                                                       -----------    -----------    ----------
Cash flows from financing activities:
  Proceeds on note payable...........................      705,000             --            --
  Purchase of treasury stock.........................           --         (9,933)           --
  Proceeds from long-term debt.......................    1,100,000      1,100,000            --
  Payments on long-term debt.........................   (1,100,000)            --            --
                                                       -----------    -----------    ----------
            Net cash provided by financing
               activities............................      705,000      1,090,067            --
                                                       -----------    -----------    ----------
            Net increase (decrease) in cash and cash
               equivalents...........................   (1,864,295)       455,479      (198,055)
Cash and cash equivalents at beginning of year.......    1,998,063      1,542,584     1,740,639
                                                       -----------    -----------    ----------
Cash and cash equivalents at end of year.............  $   133,768    $ 1,998,063    $1,542,584
                                                       ===========    ===========    ==========
Supplemental cash flow and non cash investing and
  financing activities information:
  Income taxes paid..................................  $    53,914    $    53,318    $  706,900
                                                       ===========    ===========    ==========
  Interest paid......................................  $   129,735    $    16,542    $       --
                                                       ===========    ===========    ==========
Fair value of assets acquired........................  $ 8,691,518    $        --    $       --
Debt and liabilities assumed.........................    2,481,518             --            --
                                                       -----------    -----------    ----------
Fair value of common stock issued....................  $ 6,210,000    $        --    $       --
                                                       ===========    ===========    ==========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
                                       F-5
<PAGE>   33
 
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        NOVEMBER 30, 1996, 1995 AND 1994
 
(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  (a) Organization
 
     The Fresh Juice Company Inc. (the Company), produces, markets and sells
fresh and frozen fresh-squeezed fruit juices and other non-carbonated beverages
to both food service and retail customers. The majority of the juice produced by
the Company is fresh squeezed orange juice.
 
     Effective April 1, 1996, the Company acquired all of the outstanding
capital stock of The Ultimate Juice Company, Inc. (Ultimate) in exchange for
1,140,000 shares of the Company's common stock valued at $3,078,000. This merger
has been accounted for as a purchase.
 
     Effective September 1, 1996, the Company acquired all of the outstanding
capital stock of Clear Springs Citrus, Inc. (Clear Springs) in exchange for
1,160,000 shares of the Company's common stock valued at $3,132,000. This merger
has been accounted for as a purchase.
 
  (b) Principles of Consolidation
 
     The accompanying consolidated financial statements include the accounts of
The Fresh Juice Company, Inc. and its subsidiaries, (the Company). All material
intercompany accounts and transactions have been eliminated. The operating
results of Ultimate and Clear Springs are included in the consolidated results
of operations from their respective dates of acquisition.
 
  (c) Cash and Cash Equivalents
 
     Cash and cash equivalents include cash on hand and other securities with a
maturity at time of purchase of three months or less.
 
  (d) Financial Instruments
 
     The carrying values of financial instruments (principally cash and cash
equivalents, accounts receivable, accounts payable, notes payable and long-term
debt) included in the Company's consolidated balance sheets approximated fair
value at November 30, 1996 and 1995. Fair values were determined through a
combination of management estimates and information obtained from independent
third parties.
 
  (e) Inventories
 
     Inventories are stated at the lower of cost or market, with cost determined
by using the first-in, first-out (FIFO) method.
 
  (f) Depreciation
 
     Depreciation is provided over the estimated useful lives of the respective
assets: seven years for the equipment and molds and five years for the
automobiles using accelerated methods and 39 years for the building using the
straight-line method.
 
  (g) Intangible Assets
 
     Excess of cost over the estimated fair values of net assets acquired
(goodwill) is being amortized using the straight-line method over 20 years.
Trademarks, patents and other intangibles (primarily customer lists and
covenants not to compete) are being amortized using the straight-line method
over periods of three to fifteen years.
 
                                       F-6
<PAGE>   34
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
     The carrying value of intangible assets is periodically reviewed by the
Company and impairments are recognized when the estimated future net cash flows
derived from such intangible assets are less than their carrying value.
Measurement of the impairment, if any, is based upon the excess of the carrying
value over the fair value of such assets.
 
  (h) Long-Lived Assets
 
     The Company has not yet adopted Statement of Financial Accounting Standards
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of (SFAS No. 121) which is effective for fiscal years
beginning after December 15, 1995. The Company believes that the adoption of
this accounting standard will not have a material effect on the Company's
consolidated financial position or results of operations.
 
  (i) Net Earnings (loss) Per Common Share
 
     Net loss per share in 1996 is based on the weighted average number of
common shares outstanding. Common share equivalents are not included in the
calculation as their inclusion would be antidilutive. Net earnings per common
share in 1995 and 1994 is based on the weighted average number of common and
common equivalent shares outstanding, using the treasury stock method. In 1995
and 1994 common share equivalents used in the computation of earnings per share
represent the options granted to key employees under the Company's Incentive
Stock Option Plan if their exercise would have had a dilutive effect on net
earnings per common share.
 
     In 1996, 1995 and 1994, net earnings per common share assuming full
dilution has not been presented since the average market price for each period
exceeded the market price of the Company's stock at the end of each period.
 
  (j) Income Taxes
 
     The provision for income taxes is based on earnings reported in the
financial statements under the asset and liability approach, in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (SFAS No. 109). Under the asset and liability method of SFAS No. 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under SFAS No. 109, the
effect on deferred taxes of a change in tax rates is recognized in income in the
period that includes the enactment date.
 
  (k) Reclassifications
 
     Certain reclassifications were made to the prior year balances to conform
to the presentation adopted in the current year.
 
  (l) Use of Estimates
 
     In conformity with generally accepted accounting principles, the
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the
 
                                       F-7
<PAGE>   35
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
 
  (m) Risks and Uncertainties
 
     The Company's revenues are dependent on the continued operation of its
manufacturing facility and its various distribution centers and the ready source
of supply of harvested fresh fruits and juice supplies. The operation of these
facilities involves many risks, including the breakdown, failure or substandard
performance of equipment, natural disasters and the need to comply with
directives of governmental agencies. The occurrence of material operational
problems, including but not limited to the above events, may have a material
adverse effect on the productivity and profitability of a particular facility or
with respect to certain facilities, the Company as a whole, during the period of
such operational difficulty. A lack of availability of quality fruit and higher
cost of citrus would hamper the Company's ability to maintain its rate of growth
and its current gross profit level.
 
     None of the Company's customers accounted for more than 10% of the net
sales in 1996, 1995 and 1994. The Company estimates an allowance for doubtful
accounts based on the creditworthiness of its customers as well as general
economic conditions. The Company as a policy, does not require collateral from
its customers.
 
(2)  ACQUISITIONS
 
     The estimated fair value of Ultimates' and Clear Springs assets' and
liabilities at the respective dates of acquisition are presented as follows:
 
<TABLE>
<CAPTION>
                                                                              CLEAR
                                                               ULTIMATE      SPRINGS
                                                              ----------    ----------
<S>                                                           <C>           <C>
Cash........................................................  $   70,936    $   11,898
Trade accounts receivable...................................     779,179       494,458
Inventory...................................................     135,660       180,681
Prepaid expenses............................................      47,020        56,636
Note receivable -- Clear Springs Citrus.....................     150,000      (150,000)
Property, plant and equipment...............................      44,657       634,468
Goodwill, representing excess of cost over estimated fair
  values of net assets acquired.............................   2,517,156     3,427,539
Intangible assets...........................................      33,427       107,803
Advances and note payable -- Fresh Juice Company............    (110,000)     (393,932)
Accounts payable and accrued expenses.......................    (559,364)     (993,919)
Income taxes payable........................................     (30,671)           --
Advances -- related party...................................          --      (209,632)
Deferred income taxes.......................................          --       (34,000)
                                                              ----------    ----------
          Total purchase price, excluding total acquisition
            costs of $293,000...............................  $3,078,000    $3,132,000
                                                              ==========    ==========
</TABLE>
 
     In each of the Company's aforementioned acquisitions, the common stock
delivered as consideration is unregistered and contains certain restrictions as
well as having several large blocks of stock being issued to certain sellers in
the transactions. Management is in the process of evaluating the fair values of
the assets acquired and liabilities assumed, and has previously made preliminary
assessments of the fair values of assets acquired and liabilities assumed in
connection with the Ultimate merger. Management of the company, upon receiving
advice from its investment banker, has recently made an updated assessment of
the fair value of the
 
                                       F-8
<PAGE>   36
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(2)  ACQUISITIONS (CONTINUED)

common stock issued in connection with the Ultimate and Clear Springs'
acquisitions at the approximate dates of the merger agreements which fair value
approximates 80% of the publicly traded market prices.
 
     Management's preliminary assessments of fair values for assets acquired and
liabilities assumed to date result in tentative allocations of amounts to the
excess of costs over the fair values of net assets acquired. Management
continues to be in a discovery and assessment period, and is evaluating the
possible existence of other identifiable intangible assets that may exist. No
adjustments have been made to the consolidated financial statements with respect
to a final determination as to the existence and fair values of other
identifiable intangible assets, should any exist. The final fair values of
property, plant and equipment acquired in the mergers will be determined by
management upon the completion of the independent appraisal process, which is in
progress.
 
     At November 30, 1995, the Company had a note receivable from Ultimate for
$140,000. Prior to the acquisition, the Company purchased approximately
$3,500,000 of product from Clear Springs in 1996.
 
     The following table presents selected unaudited financial information for
the Company, Ultimate and Clear Springs on a pro-forma basis assuming the three
companies had been combined for the years ended November 30, 1996 and 1995.
Pro-forma results for the year ended November 30, 1996 include the results of
the Company for the year ended November 30, 1996 combined with the results of
Ultimate and Clear Springs for the periods prior to their respective dates of
acquisition. Pro-forma results for the year ended November 30, 1995 include the
results of the Company for the year ended November 30, 1995 combined with the
results of Ultimate and Clear Springs for the year ended December 31, 1995. The
pro forma financial information does not necessarily reflect the results of
operations that would have occurred had the Company, Ultimate and Clear Springs
constituted a single entity during such periods. Pro-forma results in each
period include necessary pro-forma adjustments:
 
<TABLE>
<CAPTION>
                                                               1996           1995
                                                            -----------    -----------
<S>                                                         <C>            <C>
Net sales.................................................  $29,724,000    $29,520,000
Net earnings (loss).......................................   (1,333,000)       214,000
Net earnings (loss) per common share......................         (.23)           .03
                                                            ===========    ===========
</TABLE>
 
(3)  INVENTORIES
 
     Inventories at November 30, 1996 and 1995 consist of the following:
 
<TABLE>
<CAPTION>
                                                                 1996          1995
                                                              ----------    ----------
<S>                                                           <C>           <C>
Raw materials...............................................  $  375,351    $  138,062
Finished goods..............................................   1,383,849     1,406,759
                                                              ----------    ----------
                                                              $1,759,200    $1,544,821
                                                              ==========    ==========
</TABLE>
 
                                       F-9
<PAGE>   37
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(4)  ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
     Accounts payable and accrued expenses consist of the following at November
30, 1996 and 1995:
 
<TABLE>
<CAPTION>
                                                                 1996         1995
                                                              ----------    --------
<S>                                                           <C>           <C>
Accounts payable............................................  $2,195,754    $ 82,859
Compensation................................................     101,654      57,560
Sales and marketing.........................................      73,684      65,703
Professional fees...........................................     202,487      25,000
Other.......................................................     263,003      13,575
                                                              ----------    --------
                                                              $2,836,582    $244,697
                                                              ==========    ========
</TABLE>
 
(5)  NOTE PAYABLE AND LONG-TERM DEBT
 
     In August 1996, the Company entered into a $2,500,000 revolving credit loan
with a bank expiring August 1998, of which $705,000 is outstanding at November
30, 1996. Interest is at a floating rate equal to the bank's prime rate (8.25%
at November 30, 1996), which floating rate, at the Company's election, may be
fixed, for one to three month periods throughout the term, based on current
Libor plus 150 basis points. The Company can borrow against the revolving credit
loan based on the allowable borrowing base, defined in the loan agreement as 80%
of eligible accounts receivable plus the lesser of $1,500,000 or 50% of eligible
inventory.
 
     At November 30, 1996 and 1995, long-term debt consists of the following:
 
<TABLE>
<S>                                                           <C>           <C>
$475,000 mortgage note with a third party, due in monthly
  installments of $3,683 representing principal and interest
  beginning March 1, 1997 with a final balloon payment due
  August 1, 1998, interest at 7%, secured by the Company's
  Florida Plant.............................................  $  475,000    $  475,000
Note payable to a former stockholder of Clear Springs, due
  in annual amounts of approximately of $105,000 through
  August 1998, interest at 7%. .............................     209,632            --
$1,100,000 term loan with a bank, due in monthly principal
  installments of $18,333 commencing April 1, 1997 through
  March 1, 2002 with interest at a floating rate equal to
  the bank's prime rate (8.25% at November 30, 1996), which
  floating rate, at the Company's election, may be fixed,
  for one to three month periods throughout the term, based
  on current Libor plus 175 basis points....................   1,100,000            --
$1,100,000 term loan with a bank, interest at the 8.75%. ...          --     1,100,000
                                                              ----------    ----------
          Total long-term debt..............................   1,784,632     1,575,000
  Less current maturities...................................     260,070        45,832
                                                              ----------    ----------
          Long-term debt, excluding current maturities......  $1,524,562    $1,529,168
                                                              ==========    ==========
</TABLE>
 
     The revolving credit loan and term loan contain covenants including
financial covenants (tangible net worth and minimum debt service coverage
ratios). The Company is in compliance with all such covenants at November 30,
1996. The loans are secured by substantially all of the assets of the Company.
The aggregate fair value of the Company's debt approximates its carrying value
due to the variable nature and frequent repricing of the debt which is based on
market conditions.
 
     The aggregate annual maturities of long-term debt for each of the next five
years ended November 30 are as follows: 1997, $260,070; 1998, $791,228; 1999,
$220,000; 2000, $220,000; 2001, $220,000; and 2002 $73,334.
 
                                      F-10
<PAGE>   38
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(6)  INCOME TAXES
 
     Components of income tax expense (benefit) are as follows:
 
<TABLE>
<CAPTION>
                                                       1996        1995        1994
                                                     --------    --------    --------
<S>                                                  <C>         <C>         <C>
Federal............................................  $(80,000)   $139,266    $184,721
State..............................................    20,000      32,785      71,675
                                                     --------    --------    --------
                                                     $(60,000)   $172,051    $256,396
                                                     ========    ========    ========
</TABLE>
 
     The temporary differences which give rise to deferred tax assets and
liabilities as of November 30, 1996 are as follows:
 
<TABLE>
<S>                                                           <C>
Deferred tax assets:
  Accounts receivable.......................................  $  17,000
  Inventory.................................................     20,000
  Net operating loss carrying forwards......................    328,000
                                                              ---------
          Gross deferred tax assets.........................    365,000
Valuation allowance.........................................   (365,000)
                                                              ---------
          Net deferred tax assets...........................         --
                                                              ---------
Deferred tax liability -- property, plant and equipment.....    (34,000)
                                                              ---------
          Net deferred tax assets income taxes..............  $ (34,000)
                                                              =========
</TABLE>
 
     A valuation allowance is provided when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The charge in
the valuation allowance from November 30, 1995 to November 30, 1996 is comprised
of approximately $70,000 relating to the acquisition of Clear Springs and
$317,000 related to the current year activity. Net operating losses of
approximately $1,000,000 expire in fiscal 2011.
 
     The reconciliation of the Company's effective income tax rate and the
Federal statutory rate is as follows:
 
<TABLE>
<CAPTION>
                                                              1996    1995    1994
                                                              ----    ----    ----
<S>                                                           <C>     <C>     <C>
Federal statutory rate......................................  (34)%    34%     34%
State taxes, net of Federal benefit.........................    1       5       7
Amortization of goodwill....................................    4      --      --
Increase in valuation allowance.............................   29      --      --
Other, net..................................................   (6)     --     (1)
                                                              ---      --      --
                                                               (6)%    39%     40%
                                                              ===      ==      ==
</TABLE>
 
(7)  INCENTIVE STOCK OPTIONS
 
     At November 30, 1995, there were stock options outstanding entitling key
employees to purchase 100,000 shares and 15,000 shares of common stock at $1.375
and $1.25, respectively, per share. These options are exercisable until October
15, 1998. Additionally, there were stock options, exercisable until December
1998, to purchase 60,000 shares of common stock at $3.50 per share. This grant
of 60,000 options was made during fiscal year 1994 at an option price equal to
the fair market value at date of grant. The remaining options were granted prior
to fiscal year 1994. In 1996, the Company adopted The Fresh Juice Company, Inc.
Incentive Stock Option Plan (the 1996 Stock Plan). The number of shares of
common stock with respect to which grants may be made under the 1996 Stock Plan
is 500,000. During 1996, the Company granted 110,000 options at $3.125, of which
60,000 options expired in 1996, unexercised. The remaining 50,000 options are
exercisable until July 22, 2001. At November 30, 1996, no options have been
exercised.
 
                                      F-11
<PAGE>   39
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(7)  INCENTIVE STOCK OPTIONS (CONTINUED)

     In 1996, the Company issued 75,000 warrants at $3.00 per share to a third
party. The warrants are exercisable beginning June 1997 and they expire June
2001. The value of those warrants is not material to the Company's consolidated
financial statements.
 
     In October 1995, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation (Statement 123), was issued. Under
Statement 123, the Company is required to choose either the new fair value
method or the current intrinsic value method of accounting for its stock-based
compensation arrangements. Using the fair value method, the Company would
measure the compensation cost recognized in the consolidated financial
statements based upon the estimated fair value of the stock-based compensation
arrangements as of the date they are granted. The intrinsic value method, under
APB Opinion No. 25, "Accounting for Stock Issued to Employees (APB 25), requires
the recognition of compensation cost only if the exercisable price of options is
less than the market value of the underlying stock on the measurement date. The
Company will continue to account for all employee stock-based compensation plans
under APB 25 and adopt the provisions of Statement 123, as required, for all
stock-based arrangements issued to nonemployees. Even though the Company has
opted not to change its method of accounting, Statement 123 requires pro forma
disclosures of net earnings and earnings per share computed as if the fair value
method had been applied. The accounting requirements of Statement 123 are
effective for transactions entered into in fiscal years beginning after December
15, 1995 and the disclosure, including pro forma, requirements are effective for
financial statements for fiscal years beginning after December 15, 1995. The
provisions of Statement 123 will be implemented by the Company in fiscal year
1997.
 
(8)  COMMITMENTS AND CONTINGENCY
 
     The Company is obligated under various operating leases covering its office
space, warehouse and vehicles. Rent expense for the years ended November 30,
1996, 1995 and 1994 was $253,280, $102,944 and $79,449, respectively. The
aggregate future minimum lease commitments under leases that have initial or
remaining noncancelable lease terms in excess of one year as of November 30,
1996 are approximately $65,000 in 1997, $55,000 in 1998 and less than $10,000
for the years 1999 to 2001.
 
     On April 1, 1996, the Company entered into three year employment agreements
with two of its executive officers. Each agreement provides for, among other
things, annual compensation aggregating a minimum salary of $360,000 ($720,000
on a combined basis), subject to annual increases. The agreement provides that
the parties may extend the agreement for up to a total of six additional years.
 
     On March 31, 1996, the Company entered into a supply, distribution and
requirements agreement (the Agreement) with Natural Juice Company which
corporation is controlled by a director of the Company. The agreement has an
initial term of five years with two five year renewals at Natural Juice
Company's option. The Company sold approximately $460,000 of product to the
Natural Juice Company in 1996.
 
     In January 1996, the Company was named as a defendant in a legal matter
which seeks damages in excess of $250,000. Pending court approval, the Company
has settled the matter and is obligated to pay $10,000 over six months, pursuant
to the terms of the agreement.
 
                                      F-12
<PAGE>   40
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(8)  COMMITMENTS AND CONTINGENCY (CONTINUED)

     From time to time, the Company is party to legal action arising in the
ordinary course of business. Management believes that such litigation and claims
will be resolved without material effect on the Company's financial position.
 
(9)  COMMON STOCK AND SERIES PREFERRED STOCK
 
     During 1996, the Company obtained shareholder approval and amended the
Company's Certificate of Incorporation to increase the number of authorized
shares of common stock and preferred stock to 30,000,000 and 7,000,000 shares,
respectively.
 
     The Company's Board of Directors may, without further action by the
Company's shareholders, from time to time direct the issuance of preferred stock
in series and, at the time of issuance, determine the rights, preferences and
limitations of each series. Satisfaction of any dividend preferences of
outstanding preferred stock would reduce the amount of funds available for the
payment of dividends on common stock. Also, holders of preferred stock would
normally be entitled to receive a preference payment in the event of any
liquidation, dissolution or winding-up of the Company before any payment is made
to the holders of common stock.
 
(10)  BENEFIT PLANS
 
     The Company maintains a simplified employee pension (S.E.P.) plan covering
certain of its employees. Contributions to the plan, which are discretionary,
cannot exceed 15% of the covered employee's salary. Pension expense for the
years ended November 30, 1996, 1995 and 1994 was $55,109, $46,358 and $45,889,
respectively.
 
     Ultimate maintains a defined contribution (401(k) Plan) for its employees
with discretionary contributions by the Company. No contribution was made to the
401(k) Plan by the Company during 1996. The Company is in the process of
bringing all of its employees under the 401(k) Plan.
 
(11)  SUBSEQUENT EVENT (UNAUDITED)
 
     Effective December 2, 1996, the Company acquired all of the outstanding
capital stock of Hansen's Juices, Inc. (Hansen's) in exchange for $90,000 in
cash, 597,443 shares of the Company's common stock, warrants to purchase 300,000
shares of the Company's common stock for $3.00 per share and assumption of debt.
This merger will be accounted for as a purchase. Simultaneously with the merger,
the Company also restructured a portion of Hansen's existing debt obligations
owed to Hansen's former stockholders and in connection therewith delivered
$60,000 in cash and 20,226 shares of the Company's common stock to a former
Hansen's stockholder. Hansen's reported sales of $11,554,829 and a net loss of
$14,843 for their fiscal year ended June 30, 1996. Hansen's has been named as
one of many defendants in a lawsuit filed by the Franchise Holders of Southland
Corporation ("Southland"), against Southland and a large number of the purveyors
to the Franchisees of Southland, i.e., 7-Eleven stores. Hansen's was one of the
purveyors that has been sued under that lawsuit. However, there is only one
cause of action which pertains to Hansen's, and Hansen's is coupled in that
count with Southland, The Coca-Cola Company and Pepsi-Cola Company. The basis of
the cause of action is that each of the named purveyors conspired to fix prices
on soft drinks by trying to get the Franchisees' retail price of their
respective products in order for the Franchisee(s) to obtain a discount off the
wholesale price. In the count in which Hansen's was named, the plaintiffs seek
total damages in excess of $50,000.00. The case was filed in September, 1993 and
is venued in the Superior Court of the State of California for the County of
Alameda. Management of the Company believes that the ultimate resolution of this
matter will not have a material impact on the financial position of the Company.
 
                                      F-13
<PAGE>   41
                         THE FRESH JUICE COMPANY, INC.
                                AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(9)  COMMON STOCK AND SERIES PREFERRED STOCK (CONTINUED)
                               INDEX TO EXHIBITS
 
<TABLE>
    <S>     <C>
     2(i)   Certificate of Amendment to Certificate of
            Incorporation -- incorporated by reference to Exhibit 3(i)
            to the Company's 10-QSB for the quarter ended August 31,
            1996, filed October 15, 1996, SEC File No. 0-15320.
     3(ii)  By-laws -- incorporated by reference to Exhibit 3.2 to the
            Company's Registration Statement, SEC File NO. 33-8878-NY on
            Form S-18.
     9      Stockholders Agreement dated March 31, 1996 between Steven
            Smith and Steven M. Bogen -- incorporated by reference to
            Exhibit 10(b) of the Company's Current Report on form 8-K
            dated March 31, 1996, SEC File No. 0-15320, (the "March 31,
            1996 8-K")
    10(a)   Stockholder's Agreement dated March 31, 1996 between Steven
            Smith and Steven M. Bogen -- incorporated by reference to
            Exhibit 10(b) of the March 31, 1996 8-K
    10(b)   1996 Incentive Stock option Plan -- incorporated by
            reference to Exhibit 10(b) of the Company's Definitive Proxy
            Statement filed in connection with the Company's Annual
            Stockholders meeting held on August 29, 1996, SEC File No.
            0-15320.
    10(c)   Employment Agreement effective April 1, 1996 with Steven
            Smith -- incorporated by reference to Exhibit 10(d) of the
            March 31, 1996 8-K
    10(d)   Employment Agreement effective April 1, 1996 with Steven M.
            Bogen -- incorporated by reference to Exhibit 10(e) of the
            March 31, 1996 8-K
    10(e)   Supply Agreement dated March 31, 1996 with Natural Juice
            Company, Inc. -- incorporated by reference to Exhibit 10(f)
            of the March 31, 1996 8-K
    10(f)*  Loan Agreement dated August 5, 1996 among the Company, The
            Fresh Juice Company of Florida, Inc., The Fresh Juice
            Company of New York, Inc. and Fleet Bank, N.A.
    21*     Subsidiaries of small business issuer
    27*     Financial Data Schedule
</TABLE>
 
---------------
 * Filed as an Exhibit to the Company's Annual Report on Form 10-KSB filed on
   March 17, 1997
 
                                      Ex-1