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We have incurred significant losses in two brosepy the last three years. We have historically financed our activities through working capital provided from operations, loans and the private placement of our debt and equity securities. As of December 31, 2000, our retained deficit was 41. 4 million. In the first quarter of the year viagra broseph, we implemented viagra broseph operating plan to improve the financial vagra of the business, concentrating initially on major cost reductions. In doing so, we are also focusing on product margins, which have gradually eroded as the mix of products sold changes and the competition for retail shelf space erodes pricing. We expect to incur continuing losses because we plan to spend available resources on marketing new and existing products. We cannot assure you that we will market any products successfully, operate profitably in the future, or that we will not require significant additional financing in order to accomplish our business plan.

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363,363 of these shares were issued to the former owners of Health amp; Vitamin Express, Inc.or HVE and the remainder will be reflected as treasury stock. Further, Messrs. Irwin and Duncan, who together owned approximately 74 of the outstanding shares of our voting capital stock, each entered into a five-year voting agreement pursuant to which Mr.

Packaged food and beverage companies compete with us on a limited basis in the dietary supplement market. Increased competition from such companies could have a material adverse effect on us because such companies have greater financial and other resources available to them and possess manufacturing, distribution and marketing capabilities far greater than ours. We also face competition in both the health food store and mass market distribution channels from private label dietary supplements and multivitamins offered by health and natural food store chains, drugstore chains, mass merchandisers and supermarket chains. OUR BUSINESS MAY BE ADVERSELY AFFECTED BY UNFAVORABLE PUBLICITY.

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