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

                                   FORM 10-QSB

(Mark One)
[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
         EXCHANGE ACT OF 1934
                  For the quarterly period ended May 31, 2001

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
                  For the transition period from______________ to _____________

                   Commission file number    0-30276
                                         ----------------

                   ADIRONDACK PURE SPRINGS MT. WATER CO., INC.
              ----------------------------------------------------
              (Exact Name of Small Business Issuer in its Charter)

               NEW YORK                                 11-3377469
      ----------------------------                   ----------------
      (State or other jurisdiction                   (I.R.S. Employer
      incorporated or organization)                 Identification No.)

                 125 Michael Drive, Suite 101, Syosset, NY 11791
                 -----------------------------------------------
                    (Address of principal executive offices)

                                 (516) 921-7288
                           ---------------------------
                           (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 [ ] No [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

         Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 of 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 16,591,000

         Transitional Small Business Disclosure Format (check one):
                  Yes [ ]                      No [X]

<PAGE>

                   ADIRONDACK PURE SPRINGS MT. WATER CO., INC.
                                   FORM 10-QSB
                                      INDEX
<TABLE>
<CAPTION>


                                                                                    Page No.
<S>                                                                                  <C>
Part I - Financial Information

         Item 1 - Financial Statements (unaudited)

                  Balance Sheets - May 31, 2001 and May 31, 2000 (Unaudited)             3

                  Statements of Operations - Three Months ended May 31, 2001 and
                     2000 and period March 7, 1997 (inception) to May 31, 2001           4

                  Statements of Cash Flows - Three Months ended May 31, 2001 and
                     2000 and period March 7, 1997 (inception) to May 31, 2001           5

                  Notes to Financial Statements                                       6-12

         Item 2 - Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                       13-14

Part II - Other Information

         Item 1 - Legal Proceedings                                                     15

         Item 2 - Changes in Securities and Use of Proceeds                             15

         Item 4 - Submission of Matters to a Vote of Security Holders                   15

         Item 5 - Other Information                                                     15

         Item 6 - Exhibits and Reports on Form 8-K                                      15

         Signatures                                                                     16
</TABLE>

                                  Page 2 of 16
<PAGE>
<TABLE>
<CAPTION>

                                                                  ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                                                (A Development Stage Company)

                                                                                               BALANCE SHEETS
                                                                                                  (Unaudited)

                                                                                                      May 31,

=============================================================================================================
                                                                                       2000               2001
-------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>            <C>
ASSETS

Current Assets
     Cash                                                                          $       768    $    16,006
     Accounts Receivable - Trade                                                        10,198         57,207
     Deferred Offering Costs                                                             2,450          2,450
     Inventory                                                                          41,432         29,378
-------------------------------------------------------------------------------------------------------------
Total Current Assets                                                                    54,848        105,041
-------------------------------------------------------------------------------------------------------------

Property and Equipment
     Site Development                                                                   85,027         85,027
     Office Equipment, Displays                                                         15,324         15,324
     Trademark                                                                          21,165         21,165
     Accumulated Depreciation, Amortization                                            (10,722)       (21,044)
-------------------------------------------------------------------------------------------------------------
Total Property and Equipment                                                           110,794        100,472
-------------------------------------------------------------------------------------------------------------

Other Asset

     Security Deposits                                                                  24,712         24,712
-------------------------------------------------------------------------------------------------------------

TOTAL ASSETS                                                                       $   190,354    $   230,225
=============================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
       Accounts Payable
                                                                                       147,289        102,379
     Accrued Salary                                                                    234,647        344,128
     Debentures Payable                                                                     --         46,350
     Loan Payable                                                                       89,937        166,187

-------------------------------------------------------------------------------------------------------------
Total Current Liabilities                                                              472,413        659,044
-------------------------------------------------------------------------------------------------------------

Stockholders' Equity
     Common Stock - Authorized 40,000,000 Shares $.01 Par Value;
      15,931,000 and 16,691,000 Issued and Outstanding                                  35,720         42,320
     Preferred Stock - Series A, Authorized, 1,000,000 at $.01 Par
      Value; 20,000 Shares Issued                                                          200            200
     Paid-in Capital                                                                   524,723        650,123
     Deficit Accumulated During Development Stage                                     (842,702)    (1,121,462)
-------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity (Deficit)                                                  (282,059)      (428,819)
-------------------------------------------------------------------------------------------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $   190,354    $   230,225
=============================================================================================================
</TABLE>

                                  Page 3 of 16
<PAGE>

                                     ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                   (A Development Stage Company)

                              STATEMENTS OF OPERATIONS AND (DEFICIT) ACCUMULATED
                                                        DURING DEVELOPMENT STAGE
                                                                     (Unaudited)

                                                                  For the Period

================================================================================
                                                                       March 7,
                                                                         1997
                                        March 1, 2000  March 1, 2001 (inception)
                                         to May 31,     to May 31,    to May 31,
                                            2000           2001          2001
--------------------------------------------------------------------------------

REVENUES
    Sales                                  22,246         28,045        252,869
--------------------------------------------------------------------------------

COST OF SALES
    Beginning Inventory                    41,432         29,378              0
    Expenses                               14,496         13,818        234,914
    Ending Inventory                      (41,432)       (29,378)       (29,378)
--------------------------------------------------------------------------------
Total Cost of Sales                        14,496         13,818        205,536
--------------------------------------------------------------------------------

GROSS PROFIT                                7,800         14,227         47,333
--------------------------------------------------------------------------------

EXPENSES
    Officer's Salary                       25,000         25,000        408,333
    Salary                                      0              0         45,675
    Consulting, Professional Fees           1,292              0        372,750
    Utilities, Telephone                    2,924          4,228         31,208
    Promotion                                   0              0         10,044
    Office Rent, Expenses                  14,703         20,894        199,392
    Taxes                                     636              0         11,440
    Travel, Auto Expense                        0          5,704         43,516
    Supplies, Insurance, Other              9,341          1,011         40,146
    Depreciation, Amortization                743          2,601          8,507
--------------------------------------------------------------------------------

TOTAL EXPENSES                             54,639         59,438      1,171,011
--------------------------------------------------------------------------------

OTHER INCOME (EXPENSES)
    Rent Income                             7,776         10,395         80,972
    Startup Costs                               0              0        (75,000)
    Stock Placement Fees                     (499)        (3,257)        (3,756)
--------------------------------------------------------------------------------

TOTAL OTHER INCOME (EXPENSES)               7,277          7,138          2,216
--------------------------------------------------------------------------------

NET (LOSS)                                (39,562)       (38,073)    (1,121,462)
================================================================================

Earnings (Deficit) Per Share
   Basic                                   (0.002)        (0.002)        (0.008)
   Fully Diluted                           (0.002)        (0.002)        (0.008)

Shares Used in Calculation
    Basic                              15,931,000     16,068,500
    Fully Diluted                      15,981,000     16,168,500

                                  Page 4 of 16
<PAGE>
<TABLE>
<CAPTION>

                                                               ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                                             (A Development Stage Company)

                                                                                   STATEMENT OF CASH FLOWS
                                                                                               (Unaudited)

                                                                                            For the Period

==========================================================================================================
                                                                                                  March 7,
                                                                                                    1997
                                                                March 1, 2000   March 1, 2001   (inception)
                                                                  to May 31,      to May 31,     to May 31,
                                                                     2000            2001           2001
----------------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
            Net Loss                                               (39,562)        (38,341)     (1,121,459)
            Adjustments to Reconcile Net Income to Net Cash
             Provided by Operating Acitvities
               Depreciation, Amortization                            2,205           2,601          21,044
               Increase in Accounts Receivable                           0               0         (57,208)
               (Increase) Decrease in Inventory                          0               0         (29,378)
               Increase in Accrued Expense                          15,519          25,000         344,128
               Increase (Decrease)in Accounts Payable                    0          15,559         102,378
               Increase in Deferred Offering Costs                       0               0          (2,450)
----------------------------------------------------------------------------------------------------------

NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES                   (21,838)          4,819        (742,945)
----------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
            Site Development                                             0               0         (85,028)
            Purchase of Equipment                                        0               0         (15,324)
            Increase in Security Deposits                                0               0         (24,712)
            Acquisition of Trademark                                (4,058)              0         (21,165)
----------------------------------------------------------------------------------------------------------

NET CASH (USED) BY INVESTING ACTIVITIES                             (4,058)              0        (146,229)
----------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
            Issuance of Preferred Stock                                  0               0         200,233
            Increase in Debentures Payable                               0               0          46,350
            Increase in Loan Payable                                15,001          12,000         166,187
            Sale of Common Stock                                         0               0         492,410
----------------------------------------------------------------------------------------------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                           15,001          12,000         905,180
----------------------------------------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH                                    (10,895)         16,819          16,006

CASH -Beginning                                                     11,663            (813)              0
----------------------------------------------------------------------------------------------------------

CASH - Ending                                                          768          16,006          16,006
==========================================================================================================

Supplemental Disclosures:
            Conversion of Loan Payable to Preferred Stock                0               0         200,233
            Stock Issued For Professional Fees                           0               0          75,000
            Stock For Placement Fees                                   499               0             499
==========================================================================================================
</TABLE>

                                  Page 5 of 16
<PAGE>

                                     ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                   (A Development Stage Company)

                                                   NOTES TO FINANCIAL STATEMENTS
                                                                     (Unaudited)

                                                                    May 31, 2001
================================================================================

NOTE 1 - ORGANIZATION

         Adirondack Pure Springs Mt. Water Co., Inc. (the Company) is a New York
         corporation established March, 1997. It was formed to extract,
         distribute and contract private label mountain water from a stream and
         spring fed reservoir in both bulk and bottled forms in the northeastern
         United States. The Company plans to bottle its drinking water at the
         source near the Village of Lake George, New York. The Company has an
         exclusive ground and water lease with the Incorporated Village of Lake
         George, which provides exclusive rights to four water sources, as well
         as five acres of property to build a 50,000 square foot bottling plant.
         The Company's primary water source flows into a protected, natural
         mountain and spring reservoir at a minimum rate of 560,000 gallons per
         day of high quality, natural and mountain spring water. This reservoir
         is located 2,700 feet up a mountain from the proposed bottling plant
         site.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Property and Equipment - Property and equipment are recorded at cost
         when acquired. Improvements that significantly add to the productive
         capacity or extend the useful life of the related asset are
         capitalized. Site development costs will be amortized over the lesser
         of the life of the lease or asset. Office equipment will be depreciated
         over the estimated useful lives of the assets ranging from 3 to 7
         years. When property or equipment is sold or otherwise disposed of, the
         related cost and accumulated depreciation or amortization are removed
         from the accounts and any gain or loss is included in income.
         Maintenance and repairs are charged to expense in the period incurred.

         Use of Estimates - The preparation of financial statements in
         conformity with generally accepted accounting principles requires
         management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities and disclosure of contingent assets
         and liabilities at the date of the financial statements and the
         reported amounts of revenue and expenses during the reporting period.
         Actual results could differ from those estimates.

         Income Taxes - The Company accounts for income taxes according to the
         liability method. Under this method, deferred tax assets and
         liabilities are determined based on differences between financial
         reporting and income tax bases of assets and liabilities and are
         measured using enacted tax rates and laws that are in effect.

         Method of Accounting - The Company prepares its financial statements on
         the accrual method of accounting, recognizing income when earned and
         expenses when incurred. Income is considered earned when products are
         shipped, at which time customers are billed and revenue is recognized.

                                  Page 6 of 16
<PAGE>

                                     ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                   (A Development Stage Company)

                                                   NOTES TO FINANCIAL STATEMENTS
                                                                     (Unaudited)

                                                                    May 31, 2001
================================================================================

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Accounts Receivable - Management considers all accounts receivable to
         be collectible. Therefore, no allowance for bad debts has been included
         in the statements.

         Impairment of Long-Lived Assets - Long-lived assets (i.e., property ,
         plant and equipment) held and used by the Company are reviewed for
         impairment whenever events or changes in circumstances indicate that
         the net book value of the asset may not be recoverable. An impairment
         loss will be recognized if the sum of the expected future cash flows
         (undiscounted and before interest) from the use of the asset is less
         than the net book value of the asset. Generally, the amount of the
         impairment loss is measured as the difference between the net book
         value of the assets and the estimated fair value of the related asset.

         Earnings per Share - Effective for the year ended February 28, 1998,
         the Company adopted Statement of Financial Standards No. 128, Earnings
         Per Share ("FAS 128"). FAS 128 replaces prior earnings per share
         ("EPS") reporting requirements and requires the dual presentation of
         basic and diluted EPS. Basic EPS excludes dilution and is computed by
         dividing net income by the weighted average number of shares
         outstanding for the period. Diluted EPS reflects the potential dilution
         that could occur if securities or other contracts to issue common stock
         were exercised or converted into common stock.

         Inventory - The Company reports inventory at the lower of cost or
         market value using the first-in, first-out method. Inventory consists
         of bottles and packaging materials. Inventory is decreased based on the
         number of units bottled per customer orders.

         Incentive Stock Options - The Company adopted its stock incentive plan
         on July 1, 1998. The Plan enables the company to grant incentive stock
         options, nonqualified options and stock appreciation rights for up to
         1.5 million shares of the Company's common stock. All options must
         conform to federal income tax regulations and have an exercise price of
         not less than the fair value of shares at the date of the grant (110%
         of fair value for ten percent or more shareholders). Fair value is
         determined on the option issue date using the market value of the stock
         on an established exchange or the Black-Scholes model if the stock is
         not listed on an exchange at the time options are issued. Options are
         issued by a committee established by the board of directors based on
         eligibility and must be exercised within terms specified on the grant
         date.

         For financial statement purposes, compensation expense would be
         recorded only if the options were issued below fair value. As of the
         date of these financial statements, no options had been issued under
         the stock incentive plan. Outside of the stock incentive plan, in
         conjunction with the offering of the Company's stock referenced in Note
         5, the Company issued options as compensation to legal counsel for
         100,000 shares of common stock at $0.20 per share. This value was
         agreed upon between counsel and management. See also Note 11.

                                  Page 7 of 16
<PAGE>

                                     ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                   (A Development Stage Company)

                                                   NOTES TO FINANCIAL STATEMENTS
                                                                     (Unaudited)

                                                                    May 31, 2001
================================================================================

NOTE 3 - INVESTMENT - TRADEMARK

         On April 17, 2000 the Company completed it's acquisition of the Max 02
         trademark from Creative Beverages of Canada, Inc. The cost of $21,165
         is to be amortized over a period of ten years, its estimated useful
         life. Amortization since acquisition to May 31, 2001 was $2,410.


NOTE 4 - LOAN PAYABLE

         At February 28, 1998, the Company had been advanced funds from a
         related party. These amounts were non-interest bearing. During the
         subsequent fiscal year $200,233 of such loans were converted into
         preferred stock (see also Note 7). The balance represents additional
         advances after such conversion.


NOTE 5 - INCOME TAXES

         No provision for income taxes is required as the Company has incurred
         losses during its development stage. These losses are available to
         offset taxable years in the future. The losses will be available until
         2018 and 2019, respectively.


NOTE 6 - COMMON STOCK

         The Company's Certificate of Incorporation provided for 200 shares of
         common stock, no par value. On August 5, 1998, the shareholders amended
         the Certificate of Incorporation. The Company is now authorized for
         40,000,000 shares of common stock, $.01 par value. Consequently, the
         initial shareholders were given a 133,590 for one stock split.

         Also, during 1998, the Company entered into an offering of 2,000,000
         shares of common stock at an offering price of $.50 per share. Under
         this offering 522,000 shares were issued.

         During February 2000, the Company sold 50,000 units consisting of 1
         share of common stock with 1 warrant at $2.00 per unit. The warrants
         allow the holder to obtain additional shares at $3.00 per share.


NOTE 7 - PREFERRED STOCK

         In August, 1998, the Company amended its Certificate of Incorporation
         to authorize the issuance of 1,000,000 shares of undesignated preferred
         stock with a $.01 par value. The Board of

                                  Page 8 of 16
<PAGE>

                                     ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                   (A Development Stage Company)

                                                   NOTES TO FINANCIAL STATEMENTS
                                                                     (Unaudited)

                                                                    May 31, 2001
================================================================================

NOTE 7 - PREFERRED STOCK (Continued)

         Directors is authorized to issue preferred stock in one or more series
         with varying designations, preferences or other special rights. The
         Board has issued 20,000 shares of Series A redeemable preferred stock,
         par value $.01 per share. Series A redeemable preferred stock shall
         contain preferential liquidation rights in the amount of $200,233 but
         is not entitled to dividends or voting rights, except as to matters
         which may adversely affect the rights of the Series A redeemable
         preferred stock or as otherwise required by law. Redemption of this
         stock, at the Company's option, could start January 1, 2001 through
         payments of up to 20% of the Company's pre-tax profit. There have not
         been any redemptions as the Company has not had any profits.


NOTE 8 - COMMITMENTS, CONTINGENCIES

         Properties - The Company has an exclusive ground and water lease with
         the Incorporated Village of Lake George, which provides rights to four
         (4) pure water sources, as well as five (5) acres of property for
         construction of an up to a 50,000 square foot bottling plant. The lease
         term for the water source is for five (5) years expiring May 2002 with
         two five (5) year renewal options. If the plant is constructed, the
         lease term extends to 2029. At the termination of the lease, all
         improvements become the property of the Village. Initial base rent for
         water $.001 per gallon with a minimum $30,000 commencing in the second
         year of the lease.

         The Company has entered into a five-year lease for office space. The
         lease term is from October 1, 1998 through September 30, 2003.

         Minimum annual rentals for the year ending:

                  May 31, 2002                 $  88,810
                  May 31, 2003                    88,810
                  May 31, 2004                    29,603
                                               ---------
                                               $ 207,223
                                               =========

         The Company has entered into a verbal employment agreement with David
         Sackler, its President and Chief Executive Officer, for a term of five
         years at a salary of $100,000 per year.

                                  Page 9 of 16
<PAGE>

                                     ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                   (A Development Stage Company)

                                                   NOTES TO FINANCIAL STATEMENTS
                                                                     (Unaudited)

                                                                    May 31, 2001
================================================================================

NOTE 8 - COMMITMENTS, CONTINGENCIES (Continued)

         The amount of compensation to Mr. Sackler recorded in these financial
         statements is as follows:

                                                                     March 7,
                                                                       1997
                                   March 1, 2000   March 1, 2001   (inception)
                                     to May 31,      to May 31,     to May 31,
                                        2000            2001           2001
         ---------------------------------------------------------------------

         Compensation recorded        $25,000         $18,000        $383,333
         Compensation paid                  0               0          73,686
         Compensation deferred         25,000          18,000         309,648

         Mr. Sackler's deferred salary will be paid from operating revenues and
         not from the proceeds of any offering. Future commitments to Mr.
         Sackler under his employment agreement referenced above are as follows:

         For the Year ended:
         November 30, 2000 - February 28, 2001       $100,000
         December 1, 2001 - April 30, 2002             41,667
                                                     --------
                                                     $141,667
                                                     ========


NOTE 9 - RENTAL INCOME

         The Company had a subtenant under a two-year sublease beginning August
         1, 1999 with rent at $24,000 for Year 1 and $25,200 for Year 2. There
         was a two-year renewal option which was not exercised.

NOTE 10 - RELATED PARTY TRANSACTIONS

         The Company has entered into a consulting agreement with CES Consulting
         Co., Inc. (CES). The agreement is for five (5) years beginning December
         31, 1997 at an annual cost of $100,000 per year.

         The Company has entered into a business consulting agreement with
         Madison Venture Capital II, Inc. (Madison), of which two shareholders
         of the Company are principals. The agreement began on October 1, 1998.
         The agreement is for a period of 5 years at the rate of $2,000 per
         month. Services specified in the agreement have not been performed;
         therefore, the parties have agreed that no fees are due to Madison
         until such time as the parties agree that services will commence and
         payments will accrue.

                                 Page 10 of 16
<PAGE>

                                     ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                   (A Development Stage Company)

                                                   NOTES TO FINANCIAL STATEMENTS
                                                                     (Unaudited)

                                                                    May 31, 2001
================================================================================

NOTE 11 - DEVELOPMENT BOND

         The Company has been approved for a bond offering loan of four million
         six hundred and twenty-five thousand dollars ($4,625,000) by the
         Counties of Warren and Washington Industrial Development Agency for the
         purpose of constructing an up to 50,000 square foot bottling plant. The
         Company has until July 31, 2000 to begin the bond offering (see also
         Note 11).

         In June, 2000, the Company decided not to pursue the extension of the
         IDA bond offering for several reasons including:

         a)       The potential for construction permit approval delays from the
                  Adirondack Park Agency (APA) regarding building size. In
                  March, 2000, the Company became aware of APA's authority
                  regarding the construction of buildings exceeding 10,000
                  square feet. APA approval for the larger structures was rarely
                  received. The Company determined that building several smaller
                  structures was not feasible due to the property size.

         b)       The bond agreement required hiring of full-time employees.
                  This number of full-time employees is not necessary for the
                  operations anticipated by the Company and based on the allowed
                  building size.

         The Company reserves the right to resubmit for an IDA bond for a site
         facility. The Company presently intends to pursue other, less costly,
         forms of funding for construction for a 10,000 square foot bottling
         facility.

NOTE 12 - SUBSEQUENT EVENTS

         The Company has filed for two trademarks:

         1)       for the name HYDRO-LITE. The product is a spring water based,
                  electrolyte enhanced, flavored sports water.
         2)       for the name ADAMS ALE which is water contained in a beer
                  shaped bottle. This will be marketed to beverage distributors.

         The Company's products are the official waters of the International
         Federation of Bodybuilders (IFBB) and the 2000 and 2001 Ms. Olympia;
         2000 and 2001 Fitness Olympia; the 2000 and 2001 Mr. Olympia; and the
         Olympia Weekend 2000 and 2001.

                                 Page 11 of 16
<PAGE>

                                     ADIRONDACK PURE SPRINGS MT. WATER CO., INC.

                                                   (A Development Stage Company)

                                                   NOTES TO FINANCIAL STATEMENTS
                                                                     (Unaudited)

                                                                    May 31, 2001
================================================================================

NOTE 12 - SUBSEQUENT EVENTS (Continued)

         Marketing - The Company is negotiating with Leisure Concepts, Inc. for
         two license agreements for supplying bottled water for World
         Championship Wrestling and Pokemon. The fee arrangement has not been
         completed, but management feels that the fee will be 12%.

         Consulting Agreement - The Company has signed a consulting agreement
         with American Equity Financing, Inc. a New York corporation. The
         Company hereby engages and retains Consultant, and Consultant hereby
         agrees to render services and advice to the Company for a two (2) year
         period commencing December 18, 2000 and ending December 17, 2002. The
         Company shall compensate the Consultant as follows: (i) The payment of
         annual fee $132,000.00 or one initial payment of 660,000 shares of free
         trading common stocks. (ii) The Consultant shall pay all
         "out-of-pocket" expenses in connection with the services rendered and
         shall not be entitled to reimbursement from the Company.


NOTE 13- STOCK OPTIONS

         Stock options issued by the Company as described in Note 2 were issued
         on November 15, 1997 and expire on November 15, 2002. For the quarters
         ended May 31, 2001 and 2000, the status of these options was as
         follows:
<TABLE>
<CAPTION>

                                                    2000                              1999
                                         ----------------------------      ----------------------------
                                         Number of   Option Price per      Number of   Option Price per
                                          Shares           Share            Shares           Share
        -----------------------------------------------------------------------------------------------
<S>                                       <C>              <C>              <C>              <C>
        Options outstanding at
         beginning of period              100,000          $0.20            100,000          $0.20
        Options granted during the
         period                                 0                                 0
        Options outstanding and
         exercisable at end of period     100,000          $0.20            100,000          $0.20

         None of the options granted by the company were exercised, forfeited or
         expired during the quarters ended May 31, 2001 and 2000.
</TABLE>

                                 Page 12 of 16
<PAGE>

Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS

         The following discussion and analysis should be read in conjunction
         with the financial statements and accompanying notes appearing
         elsewhere herein.

         The accompanying financial statements have been prepared in conformity
         with the accounting principles stated in the audited financial
         statements for the year ended February 28, 2001 and reflect all
         adjustments which are, in the opinion of management, necessary for a
         fair statement of the financial position as of May 31, 2001, and the
         results of operations for the periods presented. The operating results
         for the interim periods are not necessarily indicative of results for
         the full fiscal year.

         FORWARD LOOKING STATEMENTS

         When used in this Form 10QSB and in future filings by Adirondack Pure
         Springs Mt. Water Co., Inc. (Adirondack) with the Securities and
         Exchange Commission, the words or phrases "will likely result,"
         "management expects," or we expect," "will continue," is anticipated,"
         "estimated," or we expect"," "will continue," "is anticipated,"
         "estimated," or similar expression or use of the future tense, are
         intended to identify forward looking statements within the meaning of
         the Private Securities Litigation Reform Act of 1995. Readers are
         cautioned not to place undue reliance on any such forward-looking
         statements, each of which speak only as of the date made. These
         statements are subject to risks and uncertainties, some of which are
         described below and others are described in other parts of this Form
         10QSB. Actual results may differ materially from historical earnings
         and those presently anticipated or projected. We have no obligation to
         publicly release the result of any revisions that may be made to any
         forward-looking statements to reflect anticipated events or
         circumstances occurring after the date of such statements.

         MARKETING

         Adirondack has its own proprietary brand, AVIVA SPRINGS. Adirondack
         sells AVIVA SPRINGS to wholesalers, distributors and end users
         throughout the Northeast. AVIVA is also sold in several health club
         chains in the Northeast. AVIVA SPRINGS is sold primarily in 16.9 ounce
         size bottles. Product placement and event marketing as well as other
         cost effective marketing concepts are being pursued and enacted to gain
         exposure for AvivA Springs, including the Hamptons Music Festival in
         both 2000 and 2001, a three week classical music festival in
         Bridgehampton, NY, and various fitness and bodybuilding events,
         including the largest international professional bodybuilding event on
         the East Coast, the IFBB Night of The Champions in 2000 and 2001.

         Adirondack has focused on the development and sales of its proprietary
         product MaxO2, an oxygenated natural water that is a value-added water
         product geared towards the health and fitness enthusiast and crosses
         the line to include the largest growing beverage market segment to
         become a member of the second largest growing beverage segment, the
         alternative beverage market. The product is expected to be sold in
         natural food, and dietary supplement stores and chains. MaxO2 has been
         promoted and marketed in similar fashion to AvivA Springs, and has

                                 Page 13 of 16
<PAGE>

         been, and continues to be the official waters of International
         Federation of Body Builder events, including the prestigious Mr., Ms.,
         and Fitness Olympia events, and the amateur level National Physique
         Committee National Championships. We intend to continue to pursue this
         venue as a promotional platform to place MaxO2 and AvivA Springs in the
         forefront of the multi-billion dollar health/fitness and supplement
         industry.

         AGREEMENT WITH GENERAL NUTRITION CENTERS

         Adirondack has an agreement with General Nutrition Centers pursuant to
         which Max02 is carried in all 4,400 GNC stores throughout the United
         States. Distribution began at the end of the first quarter 2001 for the
         Northeast region and has been followed by the Southern and Western
         regions.

         NEW PRODUCT

         Adirondack is currently negotiating with and expects to enter into a
         production agreement with Bodyonics/Pinnacle, a leading manufacturer of
         sports and nutritional supplements. As of the date hereof, no agreement
         has been executed between the two parties. Production and national
         distribution of the product is expected to begin within the next
         quarter.

         RESULTS OF OPERATIONS

         As the Company is in its development stage, there is no relevant
         comparison with operations for the three months ended May 31, 2001 as
         compared to the same period in 2000.

         General and administrative expenses consist primarily of office rent
         and expenses and accrued officer's salary. The office rent costs are
         partially offset by $6,300 in sublease rental income for the quarter.

         LIQUIDITY AND CAPTIAL RESOURCES

         The Company's operations have been financed principally by loans from
         shareholder and deferring payment of the officer's salary. As of May
         31, 2001, the Company's working capital is $(554,003).

         Net cash used by operations for the three months ended May 31, 2001 was
         primarily due to the accrued officer's salary. Net cash from financing
         activities was due to additional funds loaned by management.

         The Company believes that its short-term liquidity need will continue
         to be met through funds invested by management. These funds come from
         funds put into the Company met the deferral of salary accrued to
         management. Long-term liquidity is anticipated to be met through a
         stock offering. The Company is currently in discussions with
         underwriters towards the goal of a stock offering.

         Management is also in discussion with private investor groups to obtain
         working capital funds. There can be no assurance that either the stock
         offering or private funds will be accomplished.

                                 Page 14 of 16
<PAGE>

                           Part II - Other Information


Item 1 - Legal Proceedings

         The Company is not currently involved in any legal proceedings to the
         best of management's knowledge.

Item 2 - Changes in Securities and Use of Proceeds

         There are none.

Item 4 - Submission of Matters to a Vote of Security Holders

         None

Item 5 - Other Information

         In June, 2000, the Company decided not to pursue the extension of the
         IDA bond offering for several reasons including:

         c)       The potential for construction permit approval delays from the
                  Adirondack Park Agency (APA) regarding building size. In
                  March, 2000, the Company became aware of APA's authority
                  regarding the construction of buildings exceeding 10,000
                  square feet. APA approval for the larger structures was rarely
                  received. The Company determined that building several smaller
                  structures was not feasible due to the property size.

         d)       The bond agreement required hiring of full-time employees.
                  This number of full-time employees is not necessary for the
                  operations anticipated by the Company and based on the allowed
                  building size.

         The Company reserves the right to resubmit for an IDA bond for a site
         facility. The Company presently intends to pursue other, less costly,
         forms of funding for construction for a 10,000 square foot bottling
         facility.

         The Company, in June, 2000, signed a sales representative agreement
         with JRF Sports and Leisure Marketing, as well as Blackstone
         International, to represent the sale of its products to retailers in
         the sport and health and fitness markets. Under the terms of the
         agreement, the sales representatives work on commission basis. As such,
         they will each receive 5% of paid net sales.
         The Company has filed for trademark for the name HYDRO-LYTE. The
         product is a spring water based, electrolyte enhanced, flavored sports
         water.

         The Company's products are the official waters of the International
         Federation of Bodybuilders (IFBB) and the 2000 and 2001 Ms. Olympia;
         2000 and 2001 Fitness Olympia; the 2000 and 2001 Mr. Olympia; and the
         Olympia Weekend 2000 and 2001.

Item 6 - Exhibits and Reports on Form 8-K

         a)       Exhibits - None
         b)       Reports on Form 8-K - No reports on Form 8-K were filed during
                  the quarter

                                 Page 15 of 16
<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.


August 16, 2001                              /s/ DAVID SACKLER
                                             -----------------------------------
                                             David Sackler
                                             PRESIDENT & CHIEF EXECUTIVE OFFICER


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