U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   Form 10-QSB

(Mark One)

                ( X ) QUARTERLY REPORT UNDER SECTION 13 0R 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2001

                    ( ) TRANSITION REPORT UNDER SECTION 13 OR
                           15 (d) OF THE EXCHANGE ACT
  For the transition period from.....................to.......................

                         Commission file number 0-30544

                                WATER CHEF, INC.
        (Exact name of small business issuer as specified in its charter)

        Delaware                                      86-0515678
        --------                                      ----------
(State of other jurisdiction                         (IRS Employer
of incorporation or organization)                  identification No.)

            1007 Glen Cove Avenue, Suite 1, Glen Head, New York 11545
            ---------------------------------------------------------
                    (Address of principal executive offices)
                                  516-656-0059
                           (Issuer's telephone number)

              -----------------------------------------------------
(Former name,  former address and former fiscal year,  if  changed  since  last
report)

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_____

                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

                                                         OUTSTANDING AS OF
CLASS                                                      August 20, 2001
Common
Par value $0.001 per share                                  81,309,533



<PAGE>



                                 WATERCHEF, INC.
                                   Form 10QSB
                       For the Quarter Ended June 30, 2001
                                Table of Contents


                          Part I - FINACIAL INFORMATION

                                                                            Page

Item 1   Financial Statements (Unaudited)

         Balance sheet as of June 30, 2001                                     3

         Statement of Operations for the three and six
         months periods ended June 30, 2001 and 2000                           4

         Statements of Cash Flow for the six months periods
         ended June 30 2001 and 2000                                           5

         Notes to Financial Statements                                     6 - 7

Item II  Management's Discussion and Analysis or Plan
         of Operation.                                                         8


                           Part II - OTHER INFORMATION

Item 1   Legal Proceedings                                                     9
Item 2   Changes in Securities and Use of Proceeds                             9
Item 3   Default upon senior securities                                        9
Item 4   Submission of Matters to a Vote of Security Holders                   9
Item 5   Other Information                                                     9
Item 6   Exhibits and Reports on Form 8-K                                      9

Signatures                                                                    10


                                       2
<PAGE>


                                 WATER CHEF INC.

                                  BALANCE SHEET

                                  JUNE 30, 2001

                                   (Unaudited)
<TABLE>
<CAPTION>


 ASSETS

CURRENT ASSETS:
<S>                    <C>                                                                             <C>
    Cash, inclusive of $94,714, restricted funds                                                       $           353,375
    Accounts receivable, net of allowance
       for doubtful accounts of $2,000                                                                              13,371
    Inventories                                                                                                    512,732
    Prepaid expenses                                                                                                33,247
                                                                                                          -----------------
       TOTAL CURRENT ASSETS                                                                                        912,725

PROPERTY AND EQUIPMENT                                                                                              12,705

INTANGIBLE AND OTHER ASSETS                                                                                         42,257
                                                                                                          -----------------
                                                                                                       $           967,687
                                                                                                          =================


                                LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
    Accounts payable                                                                                   $           587,098
    Accrued expenses and other current liabilities                                                                 503,016
    Notes payable and accrued interest                                                                           1,156,478
    Loan payable-shareholder                                                                                       327,781
    Preferred dividends payable                                                                                    611,956
                                                                                                          -----------------
       TOTAL CURRENT LIABILITIES                                                                                 3,186,329
                                                                                                          -----------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
    Preferred stock, $.001 par value;
       10,000,000 shares authorized;
       145,500 shares issued and outstanding                                                                           146
    Common stock, $.001 par value;
       90,000,000 shares authorized;
       81,309,533 shares issued and outstanding                                                                     81,309
    Additional paid in capital                                                                                   9,796,266
    Treasury stock, 4,400 common shares, at cost                                                                    (5,768)
    Accumulated deficit                                                                                        (12,090,595)
                                                                                                          -----------------
       TOTAL STOCKHOLDERS'  DEFICIT                                                                             (2,218,642)
                                                                                                          -----------------
                                                                                                       $           967,687
                                                                                                          =================

</TABLE>


                       See notes to financial statements.

                                        3
<PAGE>
                                WATER CHEF, INC.

                            STATEMENTS OF OPERATIONS

                                   (Unaudited)

<TABLE>
<CAPTION>

                                                          Three Months Ended June 30,        Six Months Ended June 30,
                                                        --------------------------------  -------------------------------
                                                              2001              2000            2001             2000
                                                        --------------   ---------------  -------------   ---------------

<S>                                                  <C>              <C>               <C>            <C>
Net Sales                                            $         61,837 $          78,674 $      106,568 $         115,412
                                                        --------------   ---------------  -------------   ---------------
Costs and Expenses:
    Cost of sales                                              47,177            46,734         97,694            75,034
    Selling, general and administrative                       358,688           148,432        600,463           277,527
    Non-cash compensation                                      25,650           296,834         36,750           296,834
                                                        --------------   ---------------  -------------   ---------------
                                                              431,515           492,000        734,907           649,395
                                                        --------------   ---------------  -------------   ---------------
Income (Loss) Before Other Expenses
    and Extraordinary Item                                   (369,678)         (413,326)      (628,339)         (533,983)
                                                        --------------   ---------------  -------------   ---------------
Other Expenses:
    Interest expense                                          (24,173)          (25,719)       (33,632)          (56,930)
    Equity in loss of joint venture                                 -           (20,768)             -           (35,425)
                                                        --------------   ---------------  -------------   ---------------
       Other Expense                                          (24,173)          (46,487)       (33,632)          (92,355)
                                                        --------------   ---------------  -------------   ---------------
Income (Loss) Before Extraordinary Item                      (393,851)         (459,813)      (661,971)         (626,338)

Extraordinary item - Gain on early
    extinguishment of debt                                    144,021         1,734,042        144,021         2,074,293
                                                        --------------   ---------------  -------------   ---------------
Net Income (Loss)                                            (249,830)        1,274,229       (517,950)        1,447,955

Preferred stock dividends                                     (27,075)          (27,075)       (54,150)          (54,150)
                                                        --------------   ---------------  -------------   ---------------
Net Income (Loss) Applicable to
    Common Stock                                     $       (276,905)$       1,247,154 $     (572,100)$       1,393,805
                                                        ==============   ===============  =============   ===============


Basic and Diluted Income (Loss) Per Common Share:
    Loss before extraordinary item                   $          (0.00)$           (0.01)$        (0.01)$           (0.01)
    Extraordinary item                                           0.00              0.03           0.00              0.05
                                                        --------------   ---------------  -------------   ---------------
                                                     $              - $            0.02 $        (0.01)$            0.04
                                                        ==============   ===============  =============   ===============
Weighted Average Common Shares Outstanding -
    Basic and Diluted                                      80,872,830        52,658,376     76,570,859        45,333,725
                                                        ==============   ===============  =============   ===============


</TABLE>


                       See notes to financial statements.

                                        4
<PAGE>
                                 WATERCHEF INC.

                            STATEMENTS OF CASH FLOWS

                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                                           Six Months Ended June 30,
                                                                                       --------------------------------------
                                                                                             2001                 2000
                                                                                       ------------------   -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                <C>                  <C>
     Net income (loss)                                                             $          (517,950) $        1,447,955
         Adjustments to reconcile net income (loss) to net cash
            used in operating activities
                Depreciation and amortization                                                    4,000              10,400
                Non-cash compensation                                                           36,750             296,834
                Equity in loss of joint venture                                                      -              35,425
                Extraordinary gain on extinguishment of debt                                  (244,712)         (2,074,293)
                Amortization of debt discount                                                   31,000                   -
         Change in assets and liabilities
            Cash held in escrow                                                                      -             161,988
            Accounts receivable                                                                (10,147)              2,073
            Inventory                                                                         (457,036)            (17,049)
            Prepaid expenses and other current assets                                          (26,464)               (393)
            Accounts payable and accrued expenses                                              371,634             (10,050)
                                                                                     ------------------   -----------------
NET CASH USED IN OPERATING ACTIVITIES                                                         (812,925)           (147,110)
                                                                                     ------------------   -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of property, plant and equipment                                                  (1,569)            (10,000)
                                                                                     ------------------   -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from notes payable                                                               450,000                   -
     Repayment of notes payable                                                                (25,000)           (143,745)
     Proceeds from sale of common stock                                                        584,770             350,000
                                                                                     ------------------   -----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                                    1,009,770             206,255
                                                                                     ------------------   -----------------

NET INCREASE IN CASH                                                                           195,276              49,145

CASH AT BEGINNING OF PERIOD                                                                    158,100               4,426

                                                                                     ------------------   -----------------
CASH AT END OF PERIOD                                                              $           353,376 $            53,571
                                                                                     ==================   =================

</TABLE>

                       See notes to financial statements.

                                        5

<PAGE>


                                WATER CHEF, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)

1.        BASIS OF PRESENTATION

         The accompanying unaudited consolidated financial statements have been
         prepared in accordance with generally accepted accounting principles
         for interim financial information and the instructions to Form 10-QSB.
         Accordingly, they do not include all the information and footnotes
         required by generally accepted accounting principles for complete
         financial statements. In the opinion of management, all adjustments
         (which include only normal recurring adjustments) necessary to present
         fairly the financial position, results of operations and cash flows for
         all periods presented have been made. The results of operations for the
         three and six months period ended June 30, 2001, are not necessarily
         indicative of the operating results that may be expected for the year
         ending December 31, 2001. These financial statements should be read in
         conjunction with the Company's December 31, 2000 Form 10-KSB, financial
         statements and accompanying notes thereto.

2.       GOING CONCERN

         The accompanying financial statements have been prepared assuming that
         the Company will continue as a going concern. The Company incurred a
         net loss of approximately $572,000 six months periods ended June 30,
         2001. Additionally, the Company had working capital and total capital
         deficiencies of approximately $2,274,000 and $2,219,000 at June 30,
         2001. These conditions raise substantial doubt about the Company's
         ability to continue as a going concern. Management's plans with respect
         to these matters include restructuring its existing debt, raising
         additional capital through future issuances of stock and or debentures.
         The accompanying financial statements do not include any adjustments
         that might be necessary should the Company be unable to continue as a
         going concern.

3.       STOCKHOLDERS' EQUITY

          During the six months ended June 30, 2001, the following  common stock
          transactions occurred:

         -     The Company  sold an  aggregate  of  11,536,246  shares of Common
               Stock to  various  parties  for  $584,770,  pursuant  to  various
               subscription agreements.

         -     The Company  issued an aggregate  of  1,210,000  shares of Common
               Stock for  settlement  of  accounts  payable,  notes  payable and
               accrued interest of $120,595.

         -     The Company issued an aggregate of 385,000 shares of Common Stock
               valued at $36,750, for payment of services rendered.


                                        6

<PAGE>

4.       NOTES PAYBLE

         In April 2001, the Company issued a $400,000 promissory note at an
         interest rate of 2% per month. In consideration for the issuance of
         this note, 500,000 shares of the Company's common stock were issued to
         the note holder. The principal balance and accrued interest are payable
         on September 1, 2001. For valuation purposes, a $62,000 debt discount
         was allocated to the common stock. At June 30, 2001, the unamortized
         debt discount was $31, 000.

5.       COMMITMENTS AND CONTINGENCIES

         -     In May 2001, the Company entered a distribution  agreement with a
               company  ("the  Subdistributor")  based in State of  Jordan.  The
               Subdistributor  has agreed to purchase no fewer than 100 units of
               the  Company's  "Pure Safe Water  Station",  in the calendar year
               commencing  January 1, 2001.  A minimum  purchase of 50 units are
               required  to  be  purchased  in  each  of  the  subsequent  years
               commencing January 1, 2002 and 2003, respectively. As of June 30,
               2001 at total of 27 units have been shipped under this agreement.
               The sale will be  recognized  when  payments  are received by the
               Company.

         -     The  Company  entered  into  a  three  year  master  distribution
               agreement for their "Pure Safe Water  Station" with a distributor
               based out of Hong Kong ("the distributor"). Under this agreement,
               upon meeting minimum  quantities of sales in each of the years of
               agreement,  the  distributor  will receive a rebate of 20% of the
               total price for all products,  parts and supplies  purchased from
               the Company.  Furthermore,  the  distributor  upon meeting  these
               minimum   quantities  will  have  the  right  to  purchase  up to
               30,000,000  shares  of the  Company's  common  stock at $0.20 per
               share.

6.       RECENT ACCOUNTING PRONOUNCEMENTS

         In July 2001, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards ("SFAS") No. 141 "Business
         Combinations" and SFAS No. 142 "Goodwill and Intangible Assets ("SFAS
         No. 142"). SFAS No. 141 requires that all business combinations
         initiated after June 30, 2001 be accounted for using the purchase
         method of accounting and prohibits the use of the pooling-of-interests
         method for such transactions. SFAS No. 142 applies to all goodwill and
         intangible assets acquired in a business combination. Under the new
         standard, all goodwill, including goodwill acquired before initial
         application of the standard, should not be amortized but should be
         tested for impairment at least annually at the reporting level, as
         defined in the standard. Intangible assets other than goodwill should
         be amortized over their useful lives and reviewed for impairment in
         accordance with SFAS no. 121. The new standard is effective for fiscal
         years beginning after December 15, 2001. The Company must adopt this
         standard on January 1, 2002. As of June 30, 2001, the Company had no
         unamortized goodwill.



                                        7

<PAGE>

Item II    Management's Discussion and Analysis of Results or Plan of Operation.

Results of Operations:

Net sales for the six months ended June 30, 2001 and June 30, 2000 were $106,568
and $115,412 respectively, with revenues decreased $8,844, or 8%, from the
previous year.

Cost of sales for the six months ended June 30, 2001 was $97,694 compared to
$75,034 for the six months ended June 30, 2000, an increase of $22,660, or 30%.

Selling, General and Administrative expenses were $637,213 for the six months
ended June 30, 2001 compared to $277,527 for the six months ended June 30, 2000,
an increase of $359,686 or 130%.

The loss before extraordinary item for the six months ended June 30, 2001 was
$661,971 compared to a loss before an extraordinary item $626,338 for the six
months ended June 30, 2000, an increase of $35,633, or 6%.

During the six months ended June 30, 2001 the Company allocated significant
resources to the successful marketing of it PureSafe Water Station product line.
In March the Company received an order for 100 of PureSafe Water units from its
Jordanian distributor, and commenced shipments in the second half of May. The
PureSafe Water Station will be used to fulfill contracts to sell drinking water
in Jordan and elsewhere in the Middle East. Though the Company had released
information reporting shipments valued at over $1,000,000 to this customer in
the second quarter, the Company did not recognize the sale in order to reflect
the potential credit risk in the transaction.

Liquidity and Capital Resources:

At June 30, 2001 the Company had a stockholders deficit of $2,218,642 and a
working capital deficit of $2,273,605.

During the six months ended June 30, 2001 the Company settled accounts payable,
notes payable and accrued interest of $120,595 with the issuance of 1,210,000
shares of common stock.

The Company also raised $584,770 through the sale of 11,536,246 shares of common
stock during the six months ended June 30, 2001 period.

Over the balance of 2001, using the cash on hand and the cash to be generated
from the successful sale of the PureSafe Water Station, the Company expects to
resolve the majority of those liabilities reflected on the balance sheet.



                                        8

<PAGE>

PART II  OTHER INFORMATION

Item 1            Legal Proceedings

                  The Company is presently a defendant in an action brought by
                  certain debenture holders ("Bridge Loans") in New Hampshire
                  Superior Court seeking repayment of the $375,000 of debenture
                  principal together with interest from 1997, the issuance of
                  additional penalty shares and damages, which the plaintiffs
                  claim they have suffered for the Company's failure to have
                  registered the warrants issued to the plaintiffs under the
                  terms of the Warrant Agreement. The Company has interposed
                  certain defenses and counterclaims, which the Company's legal
                  counsel believes has strong merit. The Company intends to
                  contest this matter vigorously and, in counsel's opinion, it
                  is more probable than not that the Company will prevail.

Item 2            Changes in Securities

                  None

Item 3            Default on Senior Securities

                  None

Item 4            Submission of Matters to a Vote of Shareholders

                  None

Item 5            Other Information

                  None

Item 6            Exhibits and Reports on Form 8-K

                  None








                                        9

<PAGE>

                                   SIGNATURES



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

                                                   WATER CHEF, INC.


Date:      August 20, 2001                         David A. Conway
                                                   President, Director and Chief
                                                   Executive Officer
                                                   (Principal Operating Officer)


































                                       10