<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

             Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


                For the quarterly period ended: December 31, 2001
                                                -----------------

                         Commission file Number: 0-24989
                                                 -------


                          AMERICAS POWER PARTNERS, INC.
                          -----------------------------
             (Exact Name of Registrant as Specified in its Charter)


              Colorado                                          05-0499526
              --------                                          ----------
    (State or Other Jurisdiction                             (I.R.S. Employer
          of Incorporation)                               Identification Number)

    710 North York Road, Hinsdale, IL                             60521
----------------------------------------                          -----
(Address of Principal Executive Offices)                        (Zip code)

                                 (630) 325-9101
                                 --------------
              (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 [ ]   NO [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date: Common Stock, no par value -
7,138,100 shares as of December 31, 2001.

Transitional Small Business Disclosure Format:        YES [ ]   NO [X]

<PAGE>

PART I - FINANCIAL INFORMATION

Disclosure Regarding Forward-Looking Statements


This Quarterly Report on Form 10-QSB includes historical information as well as
statements regarding the Company's future expectations which may constitute
"forwarding-looking statements" within the meaning of the Securities Act of 1933
and the Securities Act of 1934, as amended. Important factors that could cause
actual results to differ materially from those discussed in forward-looking
statements include: supply/demand for products, competitive pricing pressures,
availability of capital on acceptable terms, continuing relationships with
strategic partners, dependence on key personnel, changes in industry laws and
regulations, competitive technology, and failure to achieve cost reduction
targets or complete construction projects on schedule. The Company believes in
good faith that the forward-looking statements in this Quarterly Report have a
reasonable basis, including without limitation, management's examination of
historical operating trends, data contained in records and other data available
from third parties, but such forward-looking statements are not guarantees of
future performance and actual results may differ materially from any results
expressed or implied by such forward-looking statements.

<PAGE>


ITEM 1 - FINANCIAL STATEMENTS

                          AMERICAS POWER PARTNERS, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

                                December 31, 2001

                                     ASSETS

CURRENT ASSETS

Cash and cash equivalents                                            $  414,633
 Accounts receivable:
  Trade                                                                 723,209
  Retainer held by bank - Note B                                        539,367
 Current portion of net investment in leases                            114,941
 Inventory - fuel oil                                                    95,273
 Prepaid expenses and deferred contract costs                            87,673
                                                                     ----------
   TOTAL CURRENT ASSETS                                               1,975,096

EQUIPMENT AND FIXTURES
 Computer equipment                                                     119,388
 Office equipment                                                        33,498
 Equipment leased to clients                                          2,152,332
 Client construction projects in process                              1,245,299
                                                                      ---------
                                                                      3,550,517
 Less accumulated depreciation                                         (164,040)
                                                                      ---------
   TOTAL EQUIPMENT AND FIXTURES                                       3,386,477

OTHER ASSETS
 Net investment in leases, less current portion                       1,845,691
 Deposits and fees                                                       56,483
 Deferred rent                                                          146,890
 Deferred contract costs, net of accumulated
  amortization of $253,970                                              108,576
                                                                     ----------
   TOTAL OTHER ASSETS                                                 2,157,640
                                                                     ----------
   TOTAL ASSETS                                                      $7,519,213
                                                                     ==========


     See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>


                          AMERICAS POWER PARTNERS, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

                                December 31, 2001


                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Accounts payable                                   $   883,519
  Due to related party in connection
   with client contracts                               2,414,599
  Accrued expenses:
    To related party                                     142,868
    Other                                                 94,222
  Notes payable - Note B:
    To bank in connection with client
     construction                                      2,696,836
    To related party                                     936,629
  Current maturities of long-term debt                   139,738
                                                     -----------

    TOTAL CURRENT LIABILITIES                          7,308,411

LONG-TERM DEBT - net of current
 maturities
 10.5 % note payable to
 bank, due May 2005- Note B                              346,194
  Capital leases                                          11,447
                                                     -----------
    TOTAL LIABILITIES                                  7,666,052

MINORITY INTEREST                                        319,839

STOCKHOLDERS' DEFICIT
  Convertible Preferred Stock, no par
   value, 10,000,000 shares authorized;
    Series A: authorized - 2,725,000 shares;
    Issued and outstanding - 2,709,519 shares          3,952,250
    Series B: authorized - 3,000,000 shares;
    Issued and outstanding - 3,000,000 shares            704,763
  Common Stock, no par value,
    Authorized - 40,000,000 shares;
    Shares issued and outstanding - 7,138,100
     shares                                            1,983,249
  Retained earnings deficit                           (7,106,940)
                                                     -----------

    TOTAL STOCKHOLDERS' DEFICIT                         (466,677)
                                                     -----------

    TOTAL LIABILITIES AND
     STOCKHOLDERS' DEFICIT                           $ 7,519,213
                                                     ===========

     See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>


                          AMERICAS POWER PARTNERS, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                    Six Months Ended December 31      Three Months Ended December 31
                                                    ----------------------------      ------------------------------
                                                       2001              2000            2001                2000
                                                       ----              ----            ----                ----
<S>                                                 <C>              <C>              <C>                <C>
Contract revenues                                   $  433,444       $   334,955      $  245,329         $   235,777
Cost of client services                                122,278           193,331          39,847              98,537
                                                    ----------       -----------      ----------         -----------

    Gross profit                                       311,166           141,624         205,482             137,240

Costs and expenses:
  Payroll and employee benefits                        324,905           854,652         147,259             570,138
  Management and consulting fees                          --             134,425            --                28,333
  Write-off project contract costs                        --              85,865            --               (18,340)
  Financing expense                                     45,000              --              --                  --
  Other professional fees                                9,878           144,374           7,761              64,477
  General and administrative                           299,776           463,423         153,237             290,965
                                                    ----------       -----------      ----------         -----------

    Total expenses                                     679,560         1,682,739         308,257             935,573
                                                    ----------       -----------      ----------         -----------

  LOSS FROM OPERATIONS                                (368,394)       (1,541,115)       (102,775)           (798,333)

Interest income                                         25,439            49,047          14,227              31,206
Interest expense                                       (91,780)          (28,250)        (54,582)            (20,609)
                                                    ----------       -----------      ----------         -----------
    Total other expense, net                           (66,341)           20,797         (40,355)             10,597
                                                    ----------       -----------      ----------         -----------

  LOSS BEFORE MINORITY INTEREST                       (434,735)       (1,520,318)       (143,130)           (787,736)

Minority interest in earnings of
  limited liability corporation                        (62,269)          (46,559)        (26,943)            (43,478)
                                                    ----------       -----------      ----------         -----------

    NET LOSS                                        $ (497,004)      $(1,566,877)     $ (170,073)        $  (831,214)
                                                    ==========       ===========      ==========         ===========

Net loss per share - basic and diluted - Note E     $    (0.07)      $     (0.17)     $    (0.02)        $     (0.08)
Weighted average number of common
  shares outstanding - basic and diluted             7,138,100         9,038,839       7,138,100          10,017,100
</TABLE>

     See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>


                        AMERICAS POWER PARTNERS, INC.

               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              Six Months Ended December 31
                                                              ----------------------------
                                                                  2001           2000
                                                                  ----           ----
<S>                                                           <C>            <C>

Cash Flows from Operating Activities:
  Net loss                                                    $  (497,004)   $(1,566,877)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
  Provision for depreciation and amortization                      99,570        123,333
  Minority interest                                                62,269         46,559
  Common Stock issued for services                                   --           37,500
  Change in accounts receivable                                  (165,720)    (1,013,871)
  Change in prepaid expenses and deferred contract costs           17,892        (48,239)
  Change in accounts payable                                      129,902        (98,501)
  Change in accrued expenses                                      (53,199)        (3,432)
  Change in deferred compensation                                    --          296,449
                                                              -----------    -----------
    Total adjustments                                              90,715       (660,202)
                                                              -----------    -----------
    Net cash used in operating activities                        (406,289)    (2,227,079)

Cash Flow from Investing Activities:
  Purchase of client construction projects in progress           (584,599)      (811,052)
  Purchase of equipment underlying lease agreements              (676,101)      (488,600)
  Payments from lessees regarding finance lease receivables        50,267         79,977
  Increase in deposits                                               --           (2,979)
  Payment of deferred contract costs                              (53,687)      (279,411)
  Repayments from related parties                                    --          156,581
                                                              -----------    -----------
    Net cash used in investing activities                      (1,264,120)    (1,345,484)

Cash Flow from Financing Activities:
  Proceeds from notes payable to banks, net of fees             1,177,719        600,000
  Proceeds from notes payable to related party                    699,129           --
  Payments on note payable to bank                                (54,986)       (33,244)
  Payments on capital leases                                      (10,026)        (5,845)
  Payments on insurance financing                                  (3,481)          --
  Minority interest investment in limited liability company          --          387,745
  Proceeds from issuance of Common Stock                             --        2,000,000
                                                              -----------    -----------

  Net cash provided by financing activities                     1,808,356      2,948,656
                                                              -----------    -----------
Net  Increase (Decrease) in Cash and Cash Equivalents             137,946       (623,907)
Cash and cash equivalents at beginning of period                  276,687        951,509
                                                              -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                    $   414,633    $   327,602
                                                              ===========    ===========

SUPPLEMENTAL DISCLOSURES
  Interest paid (net of amount capitalized)                   $    64,731    $    21,127
  Accrual for client construction projects in process             552,082           --
  Net investment in capitalized finance leases                  1,290,629        488,600
</TABLE>

     See accompanying Notes to Condensed Consolidated Financial Statements.


<PAGE>

                          AMERICAS POWER PARTNERS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2001


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of the Business and Development Stage Activities
The Company was in the development stage since its inception on January 27,
1998. During the third quarter of the fiscal year ended June 30, 2000, the
Company emerged from its development stage with the signing of two client
contracts, billings under these contracts and the raising of additional capital
through a private placement Preferred Stock offering.

The Company was formed to develop, optimize, own and operate power plant systems
(steam, electric, compressed air, water, waste water and condensate return) for
industrial, commercial and institutional clients. The Company has formed
strategic alliances with several recognized energy companies in the areas of
power plant optimization, operations and maintenance, fuel supply and electric
power marketing. The Company's strategic partners bring key skill sets to the
development process and have provided the Company with project opportunities
from their established customer bases. The Company generates revenue primarily
from fees produced from structuring and financing these energy projects. All of
the Company's customers are in the United States.


Principles of Consolidation
The consolidated financial statements include the accounts of the Company, APP
Optimization I, LLC (a single member limited liability corporation), and its
50%-owned limited liability corporation, Armstrong-Americas I, LLC ("AA I,
LLC"), which were both incorporated early in fiscal 2001. AA I, LLC was formed
for the purpose of holding the Company's interests in certain of the projects
relating to its largest client. The other 50% member of this LLC is the investor
in the Company's Preferred Stock. The AA I, LLC limited liability corporation
agreement provides that the Company has management control over the operations
of the LLC. All material intercompany accounts and transactions are eliminated.


Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"). Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to SEC rules and regulations;
nevertheless, the Company believes that the disclosures are adequate to make the
information presented not misleading.

<PAGE>

                          AMERICAS POWER PARTNERS, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                December 31, 2001


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The interim financial information presented in the accompanying consolidated
financial statements reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management, necessary to
present the consolidated financial position of the Company as of December 31,
2001 and the results of its operations for the periods of six and three months
then ended and its cash flows for the period of six months then ended. Results
shown for interim periods are not necessarily indicative of the results for a
full fiscal year. The interim consolidated 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-KSB for the fiscal
year ended June 30, 2001.

Revenue Recognition
The Company evaluates the terms of the energy services agreements (ESA) and
operation and maintenance agreements which it executes with clients to determine
the applicable accounting treatment on an individual basis. To the extent that
ESA's provide for fixed minimum payments and terms that qualify as a capital
lease as defined in Statement of Financial Accounting Standards No. 13,
"Accounting for Leases", the net investment in the contract is recorded on the
balance sheet and unearned income is amortized over the term of the agreement
using the interest method. Revenue from ESA's that qualify as operating leases
under SFAS No. 13 is recorded on a straight-line basis over the term of the
contract. Revenue from sale of commodities that the Company maintains as
inventories is recognized as the products are delivered. Administrative fees
earned in connection with securing project financing are recognized as the
funding is received. The Company grants credit to all of its customers.

Per Share of Common Stock
Income (loss) per common share is computed by dividing net income (loss) by the
weighted-average number of common shares outstanding during the period. When
dilutive, stock options, warrants and convertible Preferred Stock are included
as share equivalents using the treasury stock method in the calculation of
diluted earnings per share. For the periods ended December 31, 2001 and 2000,
the diluted loss per share computation was antidilutive; therefore, the amount
reported for basic and diluted loss per share is the same.

<PAGE>

                          AMERICAS POWER PARTNERS, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                December 31, 2001

NOTE B - NOTES PAYABLE

On August 9, 2000, the Company obtained a loan in the amount of $606,000 from a
bank to finance an optimization project. The note is payable in 57 monthly
installments of $13,593, including interest at a rate of 10.5% per annum.

AA I, LLC, the Company's 50%-owned limited liability corporation, has signed
nine interim promissory notes with a bank, totaling $2,696,836, which provide
for the eventual sale to the bank of the equipment previously purchased from a
client, along with certain improvements being made to the facilities. The notes
provide for monthly interest payments computed at the bank's prime rate and
mature on September 30, 2002. AA I, LLC has received 80% of the value of the
notes and will continue to finance with similar obligations a total of
approximately $3.8 million in planned improvements as they are installed at the
client facility. Upon completion of the project, AA I, LLC will lease the energy
generation facility from the bank under a master lease arrangement. The investor
in the Company's Preferred Stock has guaranteed the interim financing, AAI,
LLC's subsequent lease payments after the sale-leaseback transaction is closed,
and other performance criteria.

The Company has borrowed $810,500 for working capital purposes from a company
that is the investor in the Company's Preferred Stock. The loan is evidenced by
a note that matures on February 15, 2002 (subsequently extended to April 15,
2002) and bears interest at prime plus 2%. The same company has loaned $126,129
to AA I, LLC in connection with the latter's purchase of a client's steam
generation and air compression assets, and the related note matures on March 4,
2002 and bears interest at prime plus 2%.

NOTE C - CUSTOMER CONCENTRATION

On September 4, 2001, the Company signed a second contract with a food
processing corporation to purchase the energy generation assets of another of
the client's divisions and, in turn, provide the division's full requirement
energy services for the next twenty-five years. AA I, LLC began recognizing
revenue from this contract in the second quarter of fiscal 2002.

<PAGE>


                          AMERICAS POWER PARTNERS, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                December 31, 2001


NOTE D - LIQUIDITY

Since its inception, the Company has incurred a net loss of $7,106,940 and, at
December 31, 2001, it had a working capital deficiency of $5,333,315. In light
of current results of operations and cash flow, the Company recently has relied
on advances from and Preferred Stock issued to a related party firm to finance
its operations and sales development activities. In addition, client projects
are anticipated to require substantial capital investment and additional
third-party financing. Based upon current market conditions, the Company has
reduced from $12 million to $3 million the amount it seeks to raise in private
equity from one or more institutional investors. Management believes proceeds
from the equity offering would provide the Company's capital requirements to
develop specific client projects and meet working capital requirements, which
have been reduced over the last six months.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. While the Company is
expending its best efforts to consummate the above equity offering, there can be
no assurance that it will be successful in this regard. The aforementioned
losses and deficit raise substantial doubt about the Company's ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

NOTE E - PER SHARE RESTATEMENT

The basic and diluted net loss per share for the periods of six and three months
ended December 31, 2000 has been restated to exclude the antidilutive common
stock equivalents previously included in the calculation. The net effect of this
restatement increased the previously reported net loss per share for the periods
of six and three months ended December 31, 2000 by $0.04 and $0.02,
respectively.

<PAGE>


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

The following information should be read in conjunction with the historical
financial information and the notes thereto included in Item 1 of this Quarterly
Report.

The Company signed its first two contracts for the monetization and optimization
of steam generation facilities during the third quarter of fiscal 2000. Three
additional contracts were signed in the quarter ended September 30, 2000, with
two of these resulting in revenues and costs recorded in that quarter. The third
contract, signed between the Company's 50%-owned limited liability corporation
and a food processing company, was effective starting in the second quarter of
fiscal 2001, and accounted for approximately 54% and 52% of revenues for the
periods of six and three months ended December 31, 2001, respectively. Another
contract with this food processing client, signed in September 2001, accounted
for approximately 10% and 17% of revenues for the periods of six and three
months ended December 31, 2001, respectively.

The Company's gross margin in the current fiscal six-month period increased to
71.8% from 42.3% in the corresponding prior year period as a result of an
amendment to a client contract, which eliminated the requirement that the
Company provide utility commodities as part of its service in the current fiscal
year.

During the period of six months ended December 31, 2001, the Company incurred a
net loss of $497,004, compared to a net loss of $1,566,877 for the corresponding
prior year period. For the current three-month period, the Company recorded a
net loss of $170,073, compared to a net loss of $831,214 for the second quarter
of fiscal 2001. In the six and three-month fiscal 2002 periods, the Company was
able to achieve the following reduction of expenses compared to amounts recorded
during the corresponding periods during fiscal 2001.

Payroll and employee benefits: Payroll and benefit expense for the periods of
six and three months ended December 31, 2001 decreased approximately $529,700
and $422,900, respectively, compared to the corresponding periods of the prior
fiscal year, principally as a result of the decrease in the number of employees
(three versus ten) and the elimination of a provision for a former officer's
deferred compensation.

Management and consulting fees: Management and consulting fees decreased
approximately $134,400 and $28,300, respectively, for the six and three month
periods ended December 31, 2001, compared to the prior year, as a result of the
cancellation, effective June 30, 2001, of a contract with a venture
capital/management consulting firm and the voluntary termination, effective
November 2000, of related party independent contractor agreements.

Write-off project contract costs: During the period of three months ended
September 30, 2000, management concluded that several client projects were no
longer economically feasible or did not justify further investment of resources.
Accordingly, approximately

<PAGE>


$104,200 of previously deferred development costs relating to these projects was
written-off. In the three month period ended December 31, 2000, the Company
received a $20,000 vendor retainer credit to apply against the aforementioned
write-off. A similar review of the deferred development costs recorded as of
December 31, 2001 determined that the stated amounts had continuing value to the
Company.

Financing expense: In April 2001, the Company entered into an agreement with an
investment banking firm to raise $12 million of additional equity through the
sale of stock or other securities, the proceeds of which were to be used as
working capital for ongoing operations and to fund future client projects. The
firm was paid a retainer of $15,000 per month through September 2001.

Other professional fees: Professional fees decreased approximately $134,500 and
$56,700, respectively, during the current six and three-month periods compared
to the corresponding prior year periods as a result of a significant decrease in
legal expense and the elimination of public relation activities in the first
half of fiscal 2002.

General and administrative: General and administrative expenses for the six and
three month periods ended December 31, 2001 decreased approximately $163,600 and
$137,700, respectively, from the corresponding prior year periods with the
reduction and/or elimination of expenditures relating to personnel travel and
office expense for fewer employees, rental of office facilities, and
depreciation of Company-owned equipment sold at the end of the prior fiscal
year.

Interest Income: Interest income decreased approximately $23,600 and $17,000,
respectively, in the six and three-month periods ended December 31, 2001
compared to the corresponding prior year periods as a result of the lower cash
balances available during the first half of fiscal 2002 and the decline in money
market interest rates. In September 2000, the Company received the proceeds from
both the sale of $2 million in Common Stock and the outside investment made in
the Company's 50%-owned limited liability company.

Interest Expense: Interest expense for the six month fiscal 2002 period
increased approximately $63,500 as a result of the interim bank loans, totaling
$2,696,836 at December 31, 2001, used to finance construction of improvements to
client facilities, the increase in working capital loans received from a related
party, plus six months of current year interest on a bank note signed in
September 2000 (see Note B of Notes to Condensed Consolidated Financial
Statements). Except for the latter, the same factors impacted the $34,000
increase in interest expense for the three-month period ended December 31, 2001
compared to the corresponding period ended December 31, 2000.

<PAGE>


Liquidity and Capital Resources

Cash balances at December 31, 2001 increased $137,946 from the prior fiscal
year-end as a result of the timing of receipts in connection with the utility
invoice processing service performed for clients. The Company's working capital
deficiency increased to $5,333,315 at December 31, 2001, compared to a
deficiency of $1,944,751 at June 30, 2001, principally as a result of $3,196,000
of additional payables and short-term notes associated with the construction of
client projects and $573,000 of additional advances on notes from a related
party to finance current operations.

The Company has signed a bank note, in the amount of $606,000, relating to the
financing of a client project. In addition, the Company's 50%-owned limited
liability company has a commitment from a bank to sell and leaseback steam
generation and air compression facilities previously purchased from a customer
and improvements being installed thereto, with a total project cost of $3.8
million. During the period of construction, the improvements are being financed
under an interim financing agreement with the bank, which provides for
interest-bearing notes to be executed in support of each construction
installment disbursement. The notes mature on September 30, 2002. Upon
completion of the project, the LLC will lease the energy generation facility
from the bank under a master lease arrangement. Armstrong International, Inc.
("Armstrong"), the investor in the Company's Preferred Stock and strategic
business partner, has guaranteed the interim financing, the LLC's subsequent
lease payments after the sale-leaseback transaction is closed, and other
performance criteria.

Armstrong also has loaned $126,129 to the LLC in connection with the latter's
purchase of a client's steam generation and air compression assets, and the
related note matures on March 4, 2002 and bears interest at prime plus 2%. The
LLC has a commitment from a bank that it will finance $1.4 million of
improvements for this client project under an arrangement similar to that
described above.

In addition, the 50%-owned limited liability company has a $500,000 line of
credit with a bank at December 31, 2001, which use is restricted to paying
client utility invoices and is secured by the receivables related to those
billings and a guarantee from Armstrong.

The Company experienced severe liquidity difficulties during the latter part of
the year ended June 30, 2001, through the period of six months ended December
31, 2001, and subsequently. As described above, expenses have been reduced where
possible. Based upon current market conditions, the Company has reduced from $12
million to $3 million the amount it seeks to raise in private equity through the
sale of stock or other securities to one or more institutional investors, the
proceeds of which are to be used as working capital for ongoing operations and
to fund future client projects. In the interim, Armstrong has agreed to support
the Company's efforts to obtain short-term working capital to meet its essential
business requirements on a short-term basis, and has advanced the Company
$810,500 as of December 31, 2001 under an interest-bearing note arrangement.
These notes mature on February 15, 2002, and the maturity date subsequently has
been extended to April 15, 2002. Although management believes that

<PAGE>


Armstrong will continue to provide financing to permit the Company to satisfy
its current financial obligations, Armstrong has no contractual or other legal
obligation to provide financing to the Company. If Armstrong were to discontinue
providing financing to the Company, it would have a material adverse effect on
the Company's financial condition and could result in the inability of the
Company to continue its business.

Management believes that, in order to attract and finance additional projects,
which may include the acquisition of client energy facilities, significant
amounts of new debt facilities and/or capital will be needed. In addition,
working capital financing will be needed to facilitate the Company's utility
invoice processing service for current and future clients. The Company cannot be
certain that it will be successful in efforts to raise such new funds.

Recent Accounting Pronouncements

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires companies to recognize all
derivatives as assets and liabilities measured at their fair value. The
accounting for changes in the fair value of a derivative depends on the intended
use of the derivative and whether it qualifies for hedge accounting. The
Company's adoption of this statement, as amended by SFAS No. 138, did not have
an effect on the financial statements.

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which is effective for years beginning after December 15, 2001. Under
the new pronouncement, other intangibles will continue to be amortized over
their respective useful lives. The Company has adopted early SFAS No. 142, which
did not have an effect on the financial statements.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations," effective for years beginning after June 15, 2002. Under this
standard asset retirement obligations will be recognized at a discounted fair
value basis and capitalized and allocated to expense over the asset's useful
life. The Company is not required to adopt this new standard until its fiscal
year ended June 30, 2003, and is currently evaluating the standard's impact.

In August 2001, the FASB issued SFAS No. 144, " Accounting for the Impairment or
Disposal of Long-Lived Assets", effective for years beginning after December 15,
2001. The new rules for long-lived assets to be disposed by sale excludes the
allocation of goodwill to be tested for impairment of such assets, establishes a
primary asset approach to be used for the estimation of future cash flows and
allows for probability-weighted future cash flow estimation for impairment
testing. The Company is not required to adopt this new standard until its fiscal
year ended June 30, 2003, and currently is evaluating the standard's impact.

<PAGE>


PART II OTHER INFORMATION

ITEM 1. Legal Proceedings

Neither the Registrant nor any of its affiliates are a party, nor is any of
their property subject, to material pending legal proceedings or material
proceedings known to be contemplated by governmental authorities.

ITEM 2. Changes in Securities

During the period of three months ended December 31, 2001, there were no changes
in the Company's outstanding securities.

ITEM 3. Defaults Upon Senior Securities

     None

ITEM 4. Submission of Matters to a Vote of Security Holders

     None

ITEM 5. Other Information

     None

ITEM 6. Exhibits and Reports on Form 8-K

     a. Exhibits:

        10. Utilities Requirements Agreement by and between a reputable food
            processor of national scope and Armstrong-Americas-I, L.L.C.

     b. Reports on Form 8-K:

            There were no Form 8-K filings during the period of three months
            ended December 31, 2001.

<PAGE>


                                   SIGNATURES

In accordance with 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 hereunto duly authorized.

                                       AMERICAS POWER PARTNERS, INC.

                                       /s/ Mark A. Margason
                                       -----------------------------------------
February 25, 2002                      Mark A. Margason
                                       Chief Executive Officer

                                       /s/ Tom F. Perles
                                       -----------------------------------------
February 25, 2002                      Tom F. Perles
                                       Chief Financial Officer