Forevergreen Worldwide (FVRG) 10-Q 2010 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]

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

For the quarterly period ended September 30, 2010

[  ]

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

For the transition period from ___ to ___

Commission file number: 000-26973

FOREVERGREEN WORLDWIDE CORPORATION

(Exact name of registrant as specified in its charter)

Nevada                                                                                     (State or other jurisdiction of incorporation or organization)	87-0621709                                          (I.R.S. Employer Identification No.)
972 North 1430 West, Orem, Utah          (Address of principal executive offices)	84057        (Zip Code)

(801) 655-5500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]   No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

Yes [  ]   No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer [  ] Non-accelerated filer [  ] Accelerated filer [  ] Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes [   ]   No [X]

The number of shares outstanding of the registrant’s common stock as of November 8, 2010 was 14,342,141.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

2

Consolidated Balance Sheets

3

Consolidated Statements of Operations and Comprehensive Income (Loss)

4

Consolidated Statements of Cash Flows

5

Notes to the Consolidated Financial Statements

7

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

9

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

14

Item 4.  Controls and Procedures

14

PART II – OTHER INFORMATION

Item 1A.  Risk Factors

14

Item 6.  Exhibits

15

Signatures

16

PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

The financial information set forth below with respect to our statements of operations for the three and nine month periods ended September 30, 2010 and 2009 is unaudited.  This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data.  The results of operations for the nine month period ended September 30, 2010, are not necessarily indicative of results to be expected for any subsequent period.  

FOREVERGREEN WORLDWIDE CORPORATION

Consolidated Financial Statements

September 30, 2010 and 2009

(Unaudited)

2

ForeverGreen Worldwide Corporation
Consolidated Balance Sheets
				September 30,	December 31,
				2010	2009
ASSETS				(Unaudited)
CURRENT ASSETS
	Cash and cash equivalents			$ 56,603	$ 256,200
	Accounts Receivable, net			79,131	13,448
	Prepaid expenses and other		54,550	60,458
	Inventory			937,166	988,623
		Total Current Assets		1,127,450	1,318,729
PROPERTY AND EQUIPMENT, net				326,213	481,426
OTHER ASSETS
	Deposits and other assets			86,646	98,898
	Trademarks, net of amortization			50,665	54,814
	Customer base - net of amortization			534,938	599,130
	Goodwill			12,799,081	12,799,081
		Total Other Assets		13,471,330	13,551,923
		TOTAL ASSETS		$ 14,924,993	$ 15,352,078
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Bank overdraft			$ 43,874	$ 189,822
	Accounts payable			1,028,221	1,158,896
	Accrued expenses			1,337,212	1,423,467
	Due to related parties			94,529	132,209
	Banking line of credit			97,624	100,368
	Current portion of long-term debt			3,079	3,079
	Notes payable, related parties			1,159,978	1,161,694
	Notes payable, unrelated parties			231,756	--
		Total Current Liabilities		3,996,273	4,169,535
LONG-TERM DEBT
	Notes payable			23,512	23,874
		Total Long-Term Debt		23,512	23,874
		Total Liabilities		4,019,785	4,193,409
COMMITMENTS				--	--
STOCKHOLDERS' EQUITY
	Preferred stock; no stated par value; authorized 10,000,000     shares; no shares issued or outstanding			--	--
	Common stock, par value $0.001 per share; authorized 100,000,000 shares;      14,342,141 and 14,342,141 shares respectively issued and outstanding			14,342	14,342
	Additional paid-in capital			30,806,346	30,806,346
	Prepaid equity expense			(4,001)	(45,807)
	Other comprehensive loss			(178,400)	(111,862)
	Accumulated deficit			(19,733,080)	(19,504,350)
		Total Stockholders' Equity		10,905,207	11,158,669
				;
		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 14,924,993	$ 15,352,078

The accompanying notes are an integral part of these consolidated financial statements

3

ForeverGreen Worldwide Corporation

Consolidated Statements of Operations and Comprehensive Loss

				For the		&nb sp;	For the
				Three Months Ended			Nine Months Ended
				;September 30,			September 30,
				2010	2009		2010	2009
REVENUES, net				$ 2,638,966	$ 2,604,303		$ 7,616,045	$ 9,425,879
COST OF SALES, net				1,854,134	2,128,228		5,205,223	6,959,635
GROSS PROFIT				784,832	476,075		2,410,822	2,466,244
OPERATING EXPENSES
	Salaries and wages			509,134	618,127		1,508,550	2,157,966
	Professional fees			73,978	110,704		278,232	410,110
	General and administrative			153,746	242,815		491,162	791,900
	Depreciation and amortization			77,985	83,076		238,692	250,331
			Total Operating Expenses	814,843	1,054,722		2,516,637	3,610,307
NET OPERATING LOSS				(30,011)	(578,647)		(105,815)	(1,144,063)
OTHER INCOME (EXPENSE)
	Other Income and (expense), net			-	8,000		-	8,045
	Interest income (expense), net			(46,707)	(28,916)		(122,915)	(73,544)
			Total Other Income (Expense)	(46,707)	(20,916)		(122,915)	(65,499)
Loss from continuing operations before    income tax provision				$ (76,718)	$ (599,563)		$ (228,730)	$ (1,209,562)
Income Tax Provision (Benefit)				-	-		-	-
		&nbs p;
NET LOSS				$ (76,718)	$ (599,563)		$ (228,730)	$ (1,209,562)
BASIC AND DILUTED LOSS PER COMMON SHARE				$ (0.01)	$ (0.04)		$ (0.02)	$ (0.09)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING				14,342,141	14,029,178		14,342,141	14,029,178
COMPREHENSIVE LOSS
A Summary of the components of other comprehensive (loss) for the fiscal years ended September 30, 2010 and 2009 are as follows:
Net Loss				(76,718)	(599,563)		(228,730)	(1,209,562)
Other Comprehensive Income Loss				(55,272)	(40,949)		(66,538)	(33,678)
	Comprehensive Loss			(131,990)	(640,512)		(295,268)	(1,243,240)

The accompanying notes are an integral part of these consolidated financial statements

4

ForeverGreen Worldwide Corporation
Statements of Cash Flows
		For the Nine Months Ended
		September 30,
		2010	2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss		$ (228,730)	$ (1,209,561)
Adjustments to reconcile net loss to net cash provided by   (used in) operating activities
	Depreciation and amortization	242,133	250,331
	Amortization of prepaid expenses (equity)	41,806	(11,450)
Changes in operating assets and liabilities:
	Accounts receivable	79,131	-
	(Increase) decrease in operating assets
	Prepaid expenses	(48,747)	37,808
	Inventory	51,457	879,581
	Deposits	(1,196)	24,395
Increase (decrease) in operating liabilities
	Accounts payable and accrued expenses	(108,665)	(832,321)
Net Cash Used in Operating Activities		27,189	(820,341)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Cash paid for trademarks	(435)	(1,102)
	Purchases of property and equipment	(18,142)	(5,884)
Net Cash Used in Investing Activities		(18,577)	(6,986)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Bank overdraft	(289,412)	504,324
	Proceeds from revolving bank line of credit	174,648	660,639
	Payments on revolving bank line of credit	(229,994)	(660,712)
	Payments on notes payable	(26,913)	(881)
	Proceeds from notes payable - non related party	231,756	-
	Proceeds from notes payable - related parties	130,000	734,234
	Payments on notes payable - related parties	(131,756)	(165,000)
Net Cash Provided by Financing Activities		(141,671)	1,072,604
	Effect of Foreign Currency on Cash	(66,538)	(28,375)
NET INCREASE (DECREASE) IN CASH		(199,597)	216,903&n bsp;
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		256,200	142,704
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$ 56,603	$ 359,607

The accompanying notes are an integral part of these consolidated financial statements

5

ForeverGreen Worldwide Corporation
Statements of Cash Flows (Continued)
		For the
		Year Ended
		September 30,
		2010	2009
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID FOR:
	Interest	$ 122,915	$ (73,544)
	Income taxes	$ -	$ -

The accompanying notes are an integral part of these consolidated financial statements

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FOREVERGREEN WORLDWIDE CORPORATION

Notes to the Consolidated Financial Statements

September 30, 2010 and 2009

NOTE 1 – BASIS OF PRESENTATION

The unaudited consolidated financial statements of ForeverGreen Worldwide Corporation (the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  The unaudited consolidated financial statements include the accounts of the Company a nd its subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.  In the opinion of management, the accompanying interim consolidated financial information contains all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position as of September 30, 2010, and results of the three month period ended September 30, 2010 and 2009.  These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.  The results of operations for the nine months ended September 30, 2010 may not be indicative of results that may be expected for the fiscal year ending December 31, 2010.

NOTE 2 – INVENTORIES

Inventory is recorded at the lower of cost or market and valued on a first-in, first-out basis.   Inventories for September 30, 2010 and 2009 were classified as follows:

	2010	2009
Raw Materials	$ 235,254	$ 351,255
Finished Goods	778,991	663,484
Total Inventory	1,014,245	1,014,739
Less Reserve for Obsolete Inventory	(77,079)	(27,079)
Total Inventory (net of  reserve)	$ 937,166	$ 987,660

NOTE 3 – EARNINGS (LOSS) PER SHARE

The computation of loss per common share is based on the weighted average number of shares outstanding during the year plus the common stock equivalents which would arise from the exercise of stock options and warrants outstanding using the treasury stock method and the average market price per share during the year.  The Company had no common stock equivalents at September 30, 2010 and 2009.

	September 30,
	2010	2009
Income (Loss) (Numerator)	$ (228,730)	$ (1,209,562)
Weighted Average Shares Outstanding – Basic (Denominator)	14,002,107	14,029,178
Per Share Amount – Basic	$ (0.02)	$ (0.09)

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FOREVERGREEN WORLDWIDE CORPORATION

Notes to the Consolidated Financial Statements

September 30, 2010 and 2009

NOTE 4 – SUBSEQUENT EVENTS

The company borrowed two additional notes from directors as follows:

AMOUNT	ORIGINATION DATE	INTEREST RATE	DUE DATE
$ 45,000	October 7, 2010	10%	September 30, 2012
$ 30,000	October 7, 2010	10%	September 30, 2012

The Company has evaluated subsequent events for the period September 30, 2010 through the date the financial statements were issued, and concluded there were no other events or transactions occurring during this period other than those noted above, that required recognition or disclosure in its financial statements.

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In this report references to “ForeverGreen,” “we,” “us,” “our” and “the Company” refer to ForeverGreen Worldwide Corp. and its subsidiary.

NOTE REGARDING FORWARD LOOKING STATEMENTS

The Securities and Exchange Commission (“SEC”) encourages reporting companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions.  This report contains these types of statements.  Words such as “may,” “expect,” “believe,” “anticipate,” “estimate,” “project,” or “ ;continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements.  You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report.  All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

ForeverGreen Worldwide is a holding company that operates through its wholly owned subsidiary, ForeverGreen International, LLC.  Our product philosophy is to develop, manufacture and market the best of science and nature through innovative formulations as we produce and manufacture a wide array of whole foods, nutritional supplements, personal care products and essential oils.

We believe that consuming healthy and natural whole foods and beverages is the basis of health and longevity.  We provide health answers, not only through exclusive nutritional whole food beverages, but also by providing a broad product line of delicious whole foods that can be eaten for every meal, instead of the processed, fatty and preservative-laden synthetic meals prevalent in society today.  Many competing companies provide capsules, powders, pills or tablets as nutritional supplements, but we believe these generally fail to provide an every-meal alternative to the processed and nutrient depleted foods found in the three main daily meals of most common consumers.  We provide the every-meal answer with a variety of appetizing healthy food products that allow our Members and customers to eat healthy for every meal and snack throughout the day.  In addition, we provide healthy personal care products as an alternative to the chemical-laden and synthetic products in the marketplace that may potentially negatively impact our health.

We remain committed to developing and providing high quality products that are innovative, healthy, efficacious, easy to use and easy to sell.  Our unique products, along with a distinct and fresh corporate philosophy and message of physical, mental, emotional and spiritual health through service to community and others, attract consumers as well as Members who wish to own a home-based business selling our products and spreading our health message.

ForeverGreen ha s four brand lines:

•

The LegaSea brand includes FrequenSea, SecreSea, ZMP 400, SecreSea, Azul, and now, A.I.M. Transfer Factor. All of these products contain marine phytoplankton as their key ingredient.

•

The TRUessence Apothecary and Essential Oil brand includes all of our essential oils, personal care and household products.

•

The Smart Food (formerly Brain Garden) brand includes Pulse-8, a heart healthy product that features L-arginine, now with marine phytoplankton, ElectriFire, a natural energy drink, Thunder, a chocolate meal replacement shake, SmartSaltz, and many other healthy chocolate or whole-food based products.

•

The O3World brand line includes our line of healthy weight management products.

These four brands are now presented to our Members and consumers in a simple business model that supports a simplistic, easily duplicated presentation and value proposal. &nbs p;The model is called the “ABCs of Your Business.”  

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“A” stands for our new A.I.M. Transfer Factor product that is high in Antioxidant, Immune and Metabolic support. “B” stands for BURN, our weight management system, and “C” is for Cardio, and features our heart-healthy Pulse-8 product.  In simple terms, when a Member buys one of the A, B or C featured products in conjunction with Azul or FrequenSea, the Member gets a price value discount and immediately qualifies to earn bonuses in the compensation plan.

In July 2010 the Company introduced a new product called “Pure. 8; It is a two ounce concentrate of our unique marine phytoplankton and ionic minerals and it has little to no flavor and can be added to any food, drink or ForeverGreen product, or it can be taken by itself.

An individual may join as a Member for the exclusive products offered by our company or for the wholesale prices that are available to Members purchasing product.  An individual may join ForeverGreen and begin earning commissions rapidly with minimal investment.  A Member receives a discount on their personal purchases or the purchases of their customers if they follow the value based purchase of FrequenSea or Azul with a product categorized as A, B or C, or other value package product combinations.  This provides incentive to discuss successful products and programs with others. As a Member assists other individuals join the Member’s organization, the new Members generate commission payments to the upline Member through their product purchases.  

During the first six months of 2010 we relied on the ForeverGreen Money Tree Commission Plan for payment of commissions to members.  A Member could earn retail profits and extra bonuses for a new enrollee’s first purchase and a Member’s small leg organization’s purchases.  Bonuses were also paid from pools to Members based upon their rank in our plan.  Commissions were paid out weekly under the ForeverGreen Money Tree Commission Plan.

In response to ForeverGreen’s distributor leadership and the current economic conditions, ForeverGreen introduced a new compensation plan: “The People’s Plan” which started on July 27, 2010.  In anticipation of this new plan, on March 16, 2010, we introduced a companion commission structure, called the Cash Flow Miracle program, which worked sea mlessly with the Money Tree Commission Plan as well as the People’s Plan.  This program allowed for a new or existing Member to participate in the Money Tree Compensation Plan, while at the same time earning accelerated bonuses on the front end by choosing the Cash Flow Miracle program and getting others to do the same.  This program features an accelerated kick-start program of FrequenSea™.  By choosing this optional program, new Members will receive a free ForeverGreen Membership. Once the Member makes an initial purchase of product, he or she will be able to receive bonuses for every two Members they enroll that also purchase product and participate in and maintain a monthly Autoship.  The Cash Flow Miracle program allows for a Member to work their ForeverGreen business as normal, with an additional earning and health incentive that will continue paying as long as the Member promotes this program.

The People’s Plan is very simple to learn, which in turn means it is simple to teach and duplicate with our current Members and new Members. Part of the simplicity of the new People’s Plan is it incorporates the People’s Pack, which includes our newly introduced product “Pure.”  The purchase of this pack by our Members allows each Member to maximize earnings via retail market up, commissions and bonuses available as they and their downline organization also purchase and resale the People’s Pack or any other ForeverGreen product.  Starting in August 2010 Members were paid weekly via the CashFlow Miracle Plan and monthly via the People’s Plan.

ForeverGreen’s goal continues to be the improvement of people’s lives through “Health, Kindness and Opportunity.”  In addition, our focus is to assist prospective Members in creating a home based business with home business training, mentoring and accountability to promote residual income stream opportunities.  We provide whole food drinks, organic chocolates, weight management products, convenient whole foods for meals and snacks, personal care products and essential oils to our domestic Members and customers with some of the above mentioned products also offered to select international markets as opportunities are created.  We will seek relations with key vendors to continue developing cutting-edge products that are exclusive to our Members at a competitive price.

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During the nine month period of 2010 ForeverGreen continued to be active in building sales throughout the world and also working to reduce costs.   The Company had to face the challenge associated with the economic downturn that is affecting the lives of so many.   Total revenues declined during the nine month period of 2010, but the Company has taken steps for necessary cost reductions to bring our business back toward profitability.  The cost reductions include staff reductions, salary reductions, cutting back on unnecessary spending, negotiating with our vendors for more feasible repayment plans and continually looking for new and better, yet more cost effective, ways of doing business.  Our management believes the efforts already made are beginning to establish the foundation for success for the months and years to come.

Our major challenge for the next twelve months will be to increase and sustain our field leadership and momentum along with systems capabilities and logistics centers around the world to keep up with the demand for our products and our business opportunity.  Included in this challenge is the need to support our customers and keep Member satisfaction at a high level. Overcoming current business challenges will require a motivated and trained field leadership team and additional skilled corporate personnel, and manufacturing and shipping facilities.  Management believes that the new simple to understand and teach People’s Plan with the Cash Flow Miracle program coupled with great product will be the catalyst to create enthusiasm and growth.  Management will continue to surround themselves with key experienced personnel and vendors, while finding and motivating distributor leaders, as well as evaluating expenses related to operating activities, especially production and order fulfillment, in order to make adjustments to improve profitability.

We are expanding our markets and we anticipate expanding our domestic and international logistics centers as necessary.  The rewards may include increased sales and diversified market incomes.  International expansion is very expensive and key Members and vendors are required to experience rapid growth to become profitable in a foreign country.   

Liquidity and Capital Resources

During the nine month period ended September 30, 2010 (“2010 nine month period”), we were challenged by the continuing downturn in the global economy.  At September 30, 2010, cash decreased to $56,603, we recorded a net loss of $228,730 for the 2010 nine month period and a net loss of $76,718 for the three month period ended September 30, 2010 (“2010 third quarter”).  We also had negative working capital of $2,868,824 at September 30, 2010.  Our n et loss was minimized through effective management of our resources and cost reductions through financial and operational efficiencies.  However, the losses and negative working capital raise doubt as to our ability to continue as a going concern.  In this regard, management intends to continue to increase revenues and reduce expenses, improving profitability and the liquidity of ForeverGreen.

During the 2010 nine month period we relied on our revenues to fund operations along with a line of credit of $100,000, which is secured with the guarantee of two stockholders, and loans from related and third parties.  We are currently looking forward to and investing in the growth in our foreign markets.  Management will continue to scrutinize expenses related to our operating activities and order fulfillment to determine appropriate actions to take to reduce these costs.

Management anticipates that any cash shortfalls will be covered by debt financing.  We may pay these loans with cash, if available, or convert these loans into common stock.  We may also issue private placements of stock to raise additional funding or to pay for services provided to us.  Any private placement likely will rely upon exemptions from registration provided by federal and state securities laws.  The purchasers and manner of issuance will be determined according to our financial needs and the available options.  We also note that if we issue more shares of our common stock, our shareholders may experience dilution in the value per share of their common stock.

Commitments and Contingent Liabilities

ForeverGreen has two building leases for office, production warehouse space in Orem, Utah.  We are curre ntly on a

11

month to month lease for our office space at a monthly rent of $1,500.  The production warehouse lease for $8,531 per month began September 1, 2006 and expires August 31, 2013 with provisions for an automatic five year extension.  All leases have a provision for an annual increase of 3%.  The buildings ForeverGreen leases are sufficiently large enough to accommodate all of our administrative, warehouse and production needs.  ForeverGreen also leased office space in Singapore on a short-term lease ending April 2010 for approximately $4,000 per month. This lease was not renewed, but we intend to support Singapore through a third party logistics location.

Our total current liabilities at September 30, 2010 reflect the continued use of a line of credit and bank overdraft, along with accounts payable and notes payable.   Our accounts payable of $1,028,221 are primarily related to vendor purchases.  Our accrued expenses of $1,337,212 are related to commissions payable, sales tax payable, foreign GST and VAT taxes payable, interest payable and payroll taxes payable.  We also carry notes payable of $1,391,734 related to loans from related parties as well as third parties.  These notes carry 10% interest and have due dates through January 31, 2012. (See exhibit 10.5)

Results of Operations

The following chart summarizes the consolidated financial statements of ForeverGreen Worldwide at September 30, 2010 and 2009.  The cons olidated balance sheets and statements of operations include the books of ForeverGreen Worldwide and its wholly-owned subsidiary, ForeverGreen International, LLC.  The following chart is a summary of our financial statements for the periods noted and should be read in conjunction with the financial statements, and notes thereto, included with this report at Part I, Item 1, above.

SUMMARY OF BALANCE SHEET	Year ended December 31, 2009	Nine month period ended September 30, 2010
Cash and cash equivalents	$ 256,200	$ 56,603
Total current assets	1,318,729	1,127,450
Total assets	15,352,078	14,924,993
Total current liabilities	4,169,535	3,996,273
Long-term debt	23,874	23,512
Total liabilities	4,193,409	4,019,785
Accumulated deficit	(19,504,350)	(19,733,080)
Total stockholders’ equity	$ 11,158,669	$ 10,905,207

 At September 30, 2010 our total assets decreased primarily due to a decrease in cash and a reduction of inventory levels to more appropriate levels.  The Company is trying to use a “just-in-time” approach for inventory to improve our inventory management and cash utilization and turn inventory into cash.

Our total liabilities decreased 4% at September 30, 2010 compared to December 31, 2009 primarily due to a decreased bank overdraft and decreased accounts payable.

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SUMMARY OF OPERATING RESULTS
	Three month period ended September 30		Nine month period ended September 30
	2010	2009	2010	200 9
Revenues, net	$ 2,638,966	$ 2,604,303	$ 7,616,045	$ 9,425,879
Cost of sales	1,854,134	2,128,228	5,205,223	6,959,635
Gross profit	784,832	476,075	2,410,822	2,466,244
Total operating expenses	814,843	1,054,722	2,516,637	3,610,307
Net income (loss) from continuing operations	(30,011)	(578,647)	(105,815)	(1,144,063)
Total other income (expense)	(46,707)	(20,916)	(122,915)	(65,499)
Net earnings (loss)	(76,718)	(599,563)	(228,730)	(1,209,562)
Net earnings (loss) per share (basic)	$ (0.01)	$ (0.04)	$ (0.02)	$ (0.09)

Our source of revenue is from the sale of various food and other natural products and we recognize revenue upon shipment of a sales order.  Sales are net of returns in the third quarter of 2010 our returns increased to just over 1.5% of sales.  Sales for the 2010 nine month period decreased in comparison to the 2009 nine month period.  Sales increase slightly in the 2010 third quarter as compared to the 2009 third quarter.  Management anticipates that sales will increase over the long term as we increase our market size with the introduction of our business into foreign markets, specifically markets in Japan and South America.  

Cost of sales consists primarily of the cost of procuring and packaging products, sales commissions paid to our Members, the cost of shipping product to Members, plus credit card sales processin g fees.  Cost of sales was approximately 68 % of sales for the 2010 nine month period as compared to 73% for the 2009 nine month period.  The majority of this difference is due to improved costs on shipping and handling, product costs and a normalized commission plan.

Total operating expenses decreased significantly for the 2010 periods compared to the 2009 periods.  The decrease in operating expenses is attributable primarily to reductions in general and administrative expense and in salaries and wages related to reductions in personnel and wage adjustments.

Total other expense increased for the 2010 periods compared to the 2009   periods as a result of increased interest expense on loans.

Despite our reduction of operating expenses, we recorded a net loss and net loss pe r share for both the 2010 third quarter and nine month period.

Off-balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or

future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

Critical Accounting Estimates

We account for our investments in our subsidiary using the purchase method of accounting.  The excess of the

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consideration paid for a subsidiary over the fair value of acquired tangible assets less the fair value of acquired liabilities is assigned to intangible assets and goodwill.  We rely on an independent third party valuation to ascertain the amount to allocate to identifiable intangible assets, and the useful lives of those assets.  We amortize identifiable intangible assets over their useful life unless that life is determined to be indefinite.  The useful life of an intangible asset that is being amortized is evaluated each reporting period as to whether events and circumstances warrant a revision to the remaining period of amortization.  Goodwill is not amortized, but is tested for impairment on an annual basis.  The implied fair value of goodwill is determine d by allocating fair value to all assets and liabilities acquired; the excess of the price paid over the amounts assigned to assets and liabilities acquired is the implied fair value of goodwill.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our f ilings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC.  This information is accumulated to allow timely decisions regarding required disclosure.  Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and concluded that our disclosure controls and procedures were effective.

Changes to Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).  Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in  7;Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management determined that there were no changes made in our internal control over financial reporting during the third quarter of our 2010 fiscal year that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1A.  RISK FACTORS

Factors Affecting Future Performance

Actual costs and revenues could vary from the amounts we expect or budget, possibly materially, and those variations are likely to affect how much additional financing we will need for our operations.  

Management plans to increase sales and decrease expenses where appropriate to improve profitability.  Our future internal cash flows will be dependent on a number of factors, including:

•

The recovery of the United States and the global economy;

•

Our ability to encourage our Members t o sponsor new Members and increase their own personal sales;

•

Our ability to promote our product lines with our Members and customers;

•

Our ability to develop successful new exclusive product lines;

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•

Our ability to obtain essential oil raw materials for some of our products;

•

Effects of future regulatory changes in the area of direct marketing, if any;

•

Our ability to remain competitive in our domestic and international markets; and

•

Our ability to decrease shipping time and expense.

Our expansion into foreign markets exposes our business to risks related to those economies which may result in loss of revenues.

We have entered into agreements with Members and suppliers in foreign countries and we may establish similar arrangements in other countries in the future.  As a result, our future revenues may be affected by the economies of these countries.  Our internati onal operations are subject to a number of risks, such as, longer payment cycles, unexpected changes in regulatory environments, import and export restrictions and tariffs, difficulties in staffing and managing international operations, potentially adverse recessionary environments and economies outside the United States, and possible political and economic instability.  

ITEM 6.  EXHIBITS

Part I Exhibits

No.

Description

31.1

Chief Executive Officer Certification

31.2

Chief Financial Officer Certification

32.1

Section 1350 Certification

Part II Exhibits

No.

Description

3.1

Articles of incorporation, as revised (Incorporated by reference to exhibit 3.1 for Form 8-K, as amended, filed December 18, 2006)

3.2

Bylaws, as revised (Incorporated by reference to exhibit 3.2 for Form 8-K, as amended, filed December 18, 2006)

10.1

Lease agreement between Whole Living and C & R Fiveplex, LLC, dated April 7, 2006 (Incorporated by reference to exhibit 10.3 to Form 10-QSB, filed November 14, 2006)

10.2*

Paul Frampton Employment Agreement, dated March 1, 2007 (Incorporated by reference to exhibit 10.3 of Form 10-QSB, filed August 14, 2007)

10.3

Agreement between ForeverGreen International LLC and Marine Life Sciences LLC, dated March 28, 2008 (Incorporated by reference to exhibit 10.4 of Form 10-K, filed April 7, 2008)

10.4

Personal Care Exclusive Sales and Marketing Agreement between ForeverGreen International and Marine Life Sciences, LLC, dated April 23, 2008 (Incorporated by reference to exhibit 10.1 to Form 8-K filed April 29, 2008)

10.5

Form of Promissory Note

*   Exhibits are management contracts or compensatory plans or arrangements.

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SIGNATURES

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

FOREVERGREEN WORLDWIDE CORPORATION By:  /s/ Ronald K. Williams         Ronald K. Williams         Chairman of the Board, President         and Chief Executive Officer	Date:  November 15, 2010
By:  /s/ Paul T. Frampton         Paul T. Frampton         Chief Financial Officer and Treasurer	Date: November 15, 2010

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