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

                                   FORM 10-QSB

(Mark One)

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

                 For the quarterly period ending March 31, 2001

[ ]  TRANSACTION  REPORT  PURSUANT  SECTION  13 OR 15 (d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

           For the transition period from __________ to ____________.

                         Commission file number 0-22678

                                   XAIBE, INC.
         --------------------------------------------------------------
        (Exact name of small business issuer as specific in its charter)

           Nevada                                              76-0594907
-------------------------------                           -------------------
(State of other jurisdiction of                           (I.R.S. Employer
 Incorporation or organization)                           Identification No.)

               13100 N.W. Freeway, Suite 130, Houston, Texas 77040
               ---------------------------------------------------
                    (Address of principal executive offices)

                                 (713) 690-9233
                            ------------------------
                           (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 [ ]

     State the  number of shares  outstanding  of the  Issuer's  class of common
equity, as of the latest practicable date: common stock,  $0.001 par value as of
May 15, 2001: ___________ shares

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


<PAGE>

                                   XAIBE, INC.

                                   FORM 10-QSB

                                      INDEX

                                                                        Page No.
                                                                        --------
PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

         Balance Sheets as of March 31, 2001................................3

         Statements of Operations for the nine months
         ended March 31, 2001 and 2000......................................5

         Statements of Cash Flows for the nine months ended
         March 31, 2001 and 2000............................................6

         Notes to Financial Statements......................................7

         Item 2.  Management's Discussion and Analysis or
         Plan of Operations.................................................9

PART II  OTHER INFORMATION

         Item 1.    Legal Proceedings......................................11
         Item 2.    Changes in Securities and Use of Proceeds..............12
         Item 5.    Other Information......................................12
         Item 6     Exhibits and Reports on Form 8-K.......................12

<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  Financial Statements

                                   XAIBE, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                                  BALANCE SHEET
                                   (unaudited)

                                                                  March 31,
                                                                    2001
                                                                 ------------
ASSETS:

Current Assets:
         Cash                                                    $ (10,638)
         Accounts receivable - net                                 163,422
         Related party receivable                                   32,105
         Accounts receivable - employee                             26,852
         Inventory                                                  10,000
                                                               -----------
                  Total Current Assets                             221,741

Plant, Property and Equipment, at cost
         Equipment & machinery                                     291,309
         Furniture & fixtures                                      191,155
                                                                ----------
                                                                   482,464
         Less accumulated depreciation                             118,523
                                                                ----------
                                                                   363,941
Other Assets
         Licenses & agreements-net                               4,037,201
         Goodwill, patents & trademarks-net                        488,396
         Deferred tax benefit                                      813,740
         Other                                                      91,466
                                                               -----------
                                                                 5,430,802
          Total Assets                                         $ 6,016,484
                                                               ===========


    The accompanying notes are an integral part of these financial statements

                                       3
<PAGE>


                                   XAIBE, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                                  BALANCE SHEET
                                   (unaudited)
                                   (Continued)


                                                                March 31,
                                                                  2001
                                                               ------------

LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES:

Current Liabilities
         Accounts payable                                       $ 352,235
         Notes Payable                                             25,000
         Accrued expenses                                         141,964
         Related party payable                                    259,350
         Current portion long-term debt                            34,137
                                                              -----------
                  Total Current Liabilities                       812,686

Long-Term Liabilities
         Notes payable                                            123,614
         Capital lease obligations                                 34,010
         Less - current portion long-term debt                    (34,137)
                                                                ---------
                                                                  123,487

Stockholders' Equity
         Common stock, $0.00025 par value per share;
                  authorized 40,000,000 shares;
                  issued 16,184,545 shares                         4,046
         Paid-in capital                                       6,803,869
         Deficit accumulated in the development stage         (1,727,604)
                                                              ----------
                                                               5,080,311

         Total Liabilities and Stockholders' Equity           $6,016,484
                                                              ==========



    The accompanying notes are an integral part of these financial statements

                                       4
<PAGE>


                                   XAIBE, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                             STATEMENT OF OPERATIONS
                                   (Unaudited)

                                                        For the Nine Months
                                                          Ended March 31,
                                                    2001                2000
                                                   ------             --------

Sales                                          $ 1,105,027           $ 324,376
Cost of Goods Sold
         Materials                                  86,919              40,725
         Freight-in                                     81                 412
         Labor                                      76,547              39,970
                                                ----------          ----------
                  Gross Profit                     941,480             243,269

Selling, General and Administrative Costs
         Selling expenses  334,140                 327,601
         Consulting fees   366,059                 117,730
         General & administrative                1,273,018             100,979
         Amortization expense                      394,982              45,866
         Depreciation                               65,200              37,279
                                               -----------          ----------
                                                 2,433,399             629,455
Other (Income) Expense
         Miscellaneous Income                      (53,252)               (177)
         Interest Income                              (550)             (1,721)
         Interest Expense                            4,728              16,466
                                               -----------          ----------
                  Total costs and expenses       2,384,325             644,023
                                               -----------          ----------

                  Loss Before Income Taxes      (1,442,844)           (400,754)

Income Taxes
         Deferred Tax Benefit                      447,282             189,442
                                               -----------          ----------

Net Loss                                         $(995,562)          $(211,312)
                                               ===========          ==========

(Loss) Per Common Share:
         Basic                                     $ (0.08)            $ (0.09)
                                                   =======             =======
         Weighted Average Number of Common
                  Shares Outstanding - Basic    13,271,327           2,250,000
                                                ==========           =========




    The accompanying notes are an integral part of these financial statements

                                       5
<PAGE>


                                   XAIBE, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                             STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>

                                                                 For the Nine Months
                                                                    Ended March 31,
                                                            2001                    2000
                                                          ---------                --------
<S>                                                     <C>                       <C>

Cash Flows From Operating Activities:
------------------------------------
Net Loss                                                 $ (995,562)           $ (211,312)
Adjustment to reconcile Net Income (loss) to net cash
         provided by (used in) Operating Activities:
                  Depreciation                               65,200                37,279
                  Amortization                              394,982                45,866
                  Deferred income tax benefit              (447,282)             (189,442)
         Changes in components of working capital -
         (Increase) decrease in
                  Accounts Receivable                      (115,706)              (49,299)
                  Loans & Advances                          (58,858)             (143,468)
                  Inventory                                  11,448               (21,539)
         Increase( decrease) in
                  Accounts Payable                          303,100                 7,343
                  Accrued Expenses                          133,985                15,272
                  Related party payable                     148,249               699,451
                                                           --------             ---------
Net Cash Used by Operating Activities                      (560,443)             (190,152)

Cash Flows From Investing Activities:
------------------------------------
Acquisition of property and equipment                      (169,416)             (303,723)
Acquisition of other assets                                 (91,466)           (2,215,789)
                                                          ---------          ------------
Net Cash Used by Investing Activities                      (260,882)           (2,519,512)

Cash Flows From Financing Activities:
------------------------------------
Issuance of Stock                                           724,795             1,778,050
Increase in notes payable                                   142,884               374,268
Principal payments on debt                                  (43,844)                    -
                                                           ---------         ------------
Net Cash Provided by Financing Activities                   823,835             2,152,318

Increase (Decrease) in Cash                                   2,510              (177,044)
Cash balance at beginning of period                         (13,148)              213,663
                                                         ----------          ------------

Cash at End of the period                               $   (10,638)           $   36,620
                                                         ===========         ============
</TABLE>


    The accompanying notes are an integral part of these financial statements

                                       6
<PAGE>

                                   XAIBE, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2001

1.   Interim Presentation

     The Balance Sheet of Xaibe, Inc.,  hereafter referred to as "Xaibe" or "the
     Company",  at March 31, 2001,  and the  Statements of Income and Cash Flows
     for the periods  indicated herein have been prepared by the Company without
     audit.

     In the  opinion of  management,  the  statements  reflect  all  adjustments
     necessary for a fair  presentation  of the financial  position,  results of
     operations and cash flows of the Company and all such  adjustments are of a
     normal recurring nature.  The interim statements for the period ended March
     31, 2001 are not  necessarily  indicative of results to be expected for the
     full year.

2.   Capital Stock

     During the quarter ended March 31, 2001,  1,324,840  shares of common stock
     were issued in connection with the conversion of a like number of shares of
     convertible preferred stock of the Company's subsidiary, PolarShield.

3.   Litigation and Contingencies

     On March 26,  2001,  suit,  styled  E-Business  Development,  Inc.,  Strong
     Development, Inc., Reach International,  Inc. and Strong Tower Investments,
     Inc. vs. Xaibe,  Inc. and Jimmy Farmer,  Cause No.  2001-16022  was brought
     against the Company in the 270th District  Court in Harris  County,  Texas.
     The Plaintiffs in the action alleged various wrongful acts and omissions on
     the part of management of the Company.  The action sought injunctive relief
     to prohibit  certain acts and to compel the Company to hold a  shareholders
     meeting.

     In April 2001, the parties entered into a settlement agreement and the suit
     by E-Business Development,  et. al. and a motion to dismiss has been filed.
     Under the terms of the settlement agreement, the plaintiffs appointed a new
     director of the  Company  and a new  President,  Jimmy  Farmer  resigned as
     President  and will resign as a director  and the Company  agreed to call a
     shareholders  meeting.  In addition,  the plaintiff  corporations  provided
     funding in the amount of $225,000  to the Company to pay certain  specified
     obligations of the Company.


                                       7
<PAGE>

                                   XAIBE, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                   (Continued)

3.   Litigation and Contingencies (Cont'd)

     In May 2000,  suit,  styled  Polarshield of Texas LLC vs. Dan Armstrong and
     John  Armstrong,  Cause  No.  2000-22572,  was filed  brought  in the 129th
     District  Court of Harris  County,  Texas.  The  Company  alleges  that the
     defendants   committed  material  breaches  of  contract  as  a  result  of
     non-payment  of  amounts  owing  under  a  distributorship   agreement  and
     violation of the  confidentiality  and non-disclosure  obligations  entered
     into pursuant to the distributorship  agreement.  The parties attempting to
     negotiate a settlement of the claims.

     In May 2001,  suit,  styled  Polarshield of Louisiana  Residential  LLC and
     Jerry Blake vs. Xaibe,  Inc.,  Internet  Services,  Inc.,  Milton Moody and
     George D. Carameros, III, was filed in the 24th District Court of Jefferson
     Parish,  Louisiana. The plaintiffs allege that Defendant Carameros provided
     misleading  information  which  induced  the  plaintiffs  to  acquire  from
     Carameros certain  distribution  rights relating to the Company's  products
     and allege that the Company  bears  liability as the alleged  source of the
     information provided by Carameros. The Company intends to vigorously defend
     the cause of action. Settlement discussions are ongoing.

4.   Distributorship Sales

     Revenues for the nine months ended March 31, 2001 include $500,000 from the
     sale of rights to distribute the Company's products in Panama,  Costa Rica,
     El Salvador, Nicaragua and Taiwan. Under the terms of the distributorships,
     the Company is entitled to 50% of the net income  attributable  to the sale
     of product in those markets.  Accounts receivable reflects $65,665 relating
     to distributorship rights.

5.   Subsequent Events

     In May 2001,  pursuant to the settlement of the E-Business  litigation (see
     Note 3), the Company's  President resigned and a new president and director
     was appointed.

                                       8
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

General

Xaibe,  Inc. was formed in July 1998 to produce and distribute a licensed oxygen
enriched water product for fish farming, aquaculture, mariculture, the husbandry
of poultry and for remediating animal waste from dairies,  feedlots of all kinds
and for other similar uses.

Through  June 2000,  the  Company's  operations  had been  limited to efforts to
implement its business plan. No revenues have been generated from those revenues
to date.

During  the  quarter  ended   September  30,  2000,  the  Company  entered  into
discussions with PolarShield,  Inc.  ("PolarShield")  with respect to a possible
combination of the Company and PolarShield.  The Company and PolarShield entered
into an Exchange  Agreement on September  29, 2000 pursuant to which the Company
agreed to acquire  PolarShield  with management of PolarShield to assume control
of the combined companies.

On October 27, 2000, the Company completed an exchange (the "Exchange") pursuant
to which the Company issued an aggregate of 5,559,705  shares of common stock in
exchange for 97.9% of the  outstanding  shares of common  stock of  PolarShield.
Pursuant to the terms of the Exchange,  each share of  PolarShield  common stock
was exchangeable for one share of Company common stock.

In connection with the Exchange all  convertible  preferred  stock,  options and
warrants to purchase shares of PolarShield common stock outstanding  immediately
prior  to the  consummation  of  the  Exchange  were  assumed  by  the  Company.
PolarShield  had  1,629,550  shares of preferred  stock  outstanding  which were
convertible into common stock of the Company, or redeemable,  at the election of
the  holder.  During the  quarter  ended  March 31,  2001,  1,324,840  shares of
PolarShield  preferred  stock were  converted  into common stock of the Company,
resulting in the issuance of 1,324,840 shares of common stock.

PolarShield, a Nevada corporation formed in 1998, is engaged in the marketing of
energy management and conservation  solutions  utilizing a patented  refrigerant
process (the "Process")  designed to improve efficiency of heating,  ventilation
and air condition and refrigerant systems.

Following the Exchange, management adopted the business plan of PolarShield.

This  discussion  relates to, and the financial  statements  presented  herewith
reflect,  the operations of  PolarShield on a stand-alone  basis for all periods
prior to the date of the Exchange and reflect the consolidated  results of Xaibe
and PolarShield from the date of the Exchange forward.

                                       9
<PAGE>

Results of Operations

         Sales. The Company's sales totaled $1,105,027 for the nine months ended
March 31,  2001,  an increase of 240.7% as compared to sales of $324,376 for the
nine months ended March 31, 2000.  All sales for both periods were  attributable
to PolarShield.  The increase in sales was  attributable  to on-going  marketing
campaigns, increased market penetration of its proprietary products and the sale
of distribution rights in five foreign countries for $500,000.

         Cost of Sales.  The Company's  cost of sales  totaled  $163,547 for the
nine months ended March 31,  2001,  an increase of 101.6% as compared to cost of
sales of $81,117 for the nine months  ended March 31, 2000.  As a percentage  of
sales,  cost of sales decreased to 14.8% from 25%. The decrease in cost of sales
as a percentage of sales was  attributable  to the sale of  distribution  rights
which carry no cost of sale.

         Selling,  General  and  Administrative  Expense.  Selling,  general and
administrative  expense  ("SG&A")  totaled  $2,433,399 for the nine months ended
March 31,  2001,  an increase of 286.6% as compared to SG&A of $629,455  for the
nine  months  ended  March  31,  2000.   The  increase  in  SG&A  was  primarily
attributable  to (1) an  increase  in  general  and  administrative  expense  of
$1,172,039  resulting  from  hiring  new  personnel  and  overall  growth of the
Company,  (2) an increase of $248,329 in  consulting  fees  incurred  during the
current  period  attributable  to  various  professional  management  consulting
agreements, and (3) an increase in amortization expense of $349,116 attributable
to  amortization  of the  purchase  of  international  marketing  rights for its
proprietary products.

         Income Taxes. The Company reported a tax benefit of $447,282 during the
nine months ended March 31, 2001 as compared to $189,442 during the 2000 period.
The  tax  benefit  was   attributable   to  net  operating  loss  carryovers  of
PolarShield.

Liquidity and Capital Resources

         At March 31,  2001,  the Company had a deficit in cash of $10,638 and a
working capital deficit of $590,945.

         Cash  flows  used in  operations  during  the  current  period  totaled
$560,443. Cash flows used in operations were attributable, primarily, to the net
loss for the period and the tax benefit  relating  thereto,  which was partially
offset by (1) increases in accounts payable,  related party payables and accrued
expenses, and (2) amortization of licenses, patents and rights.

         Cash  flows used in  investing  activities  during  the period  totaled
$260,882.   Cash  flows  used  in  investing  activities  were  attributable  to
acquisitions of property and equipment ($169,416) and other assets ($91,466).

         Cash flows provided by financing  activities  during the period totaled
$823,835.  Cash flows provided by financing  activities were attributable to the
sale of common and preferred stock for $724,795 and an increase in notes payable
of  $142,844  which  amounts  were  partially  offset by payments of debt in the
amount of $43,844.

                                       10
<PAGE>

         At March 31, 2001,  the Company had long-term  debt totaling  $123,487,
consisting of notes payable of $123,614 and capital lease  obligations  totaling
$34,010, less the current portion of notes payable of $34,137. The notes payable
bear  interest  at rates  ranging  from  .09% to  10.59%  and are  repayable  in
principle and interest  installments over periods from 35 to 60 months ending in
October 2004.

         During the nine months ended March 31, 2001, the Company's predecessor,
PolarShield,  received  $724,795 of net proceeds from the sale of 426,000 shares
of its  common  stock  and  308,250  shares  of its  preferred  stock.  With the
acquisition  of  PolarShield  during  the  current  period,  and the  subsequent
conversion  of  preferred  stock,  the Company  issued an aggregate of 1,324,840
shares of common stock.

         The Company's operations have been funded to date through a combination
of sales of common stock and preferred  stock by  PolarShield  and by loans from
certain  shareholders  of PolarShield.  The Company,  at March 31, 2001, did not
have adequate funding to support its operations for the following twelve months.
In order to support  those  operations,  the Company  will either be required to
secure  additional  capital or to secure  additional  funding  from  affiliates.
Management  estimates  that the  Company  will  require a minimum of $250,000 of
additional  funding to support  operations  through the end of 2001. The Company
presently  has no  commitments  to  provide  such  funding  and  there can be no
assurance that such funding will be available on acceptable terms or at all.

         The Company's  business  continues in an early stage of operations.  In
order to achieve  profitability,  the Company will be required to  substantially
increase its revenues and control its operating costs. There can be no assurance
that the Company can or will attain profitability.

         In March 2001,  certain  shareholders of the Company filed suit against
the Company  seeking  certain  injunctive  relief and the call of a shareholders
meeting.  In April  2001,  the  parties  settled and agreed to dismiss the suit.
Under  the terms of the  settlement,  the  plaintiff  shareholders  appointed  a
director and President of the Company and the  shareholders,  in turn,  provided
funding to the  Company  in the amount of  $225,000  to pay  certain  designated
expenses of the Company.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     On March 26,  2001,  suit,  styled  E-Business  Development,  Inc.,  Strong
Development, Inc., Reach International,  Inc. and Strong Tower Investments, Inc.
vs. Xaibe,  Inc. and Jimmy Farmer,  Cause No. 2001-16022 was brought against the
Company in the 270th District Court in Harris County,  Texas.  The Plaintiffs in
the action alleged various wrongful acts and omissions on the part of management
of the Company. The action sought injunctive relief to prohibit certain acts and
to compel the Company to hold a shareholders meeting.

                                       11
<PAGE>


         In April 2001,  the parties  entered into a settlement  agreement and a
motion has been filed to dismiss  the suit by  E-Business  Development,  et. al.
Under the terms of the settlement agreement, the plaintiffs appointed a director
of the Company and a new  President,  Jimmy  Farmer  resigned as  President  and
agreed to resign as a director upon satisfaction of certain requirements and the
Company  agreed to call a  shareholders  meeting.  In  addition,  the  plaintiff
corporations  provided  funding in the amount of  $225,000 to the Company to pay
certain specified obligations of the Company.

         In May 2001, suit, styled Polarshield of Louisiana  Residential LLC and
Jerry Blake vs. Xaibe, Inc., Internet Services, Inc., Milton Moody and George D.
Carameros,  III,  was  filed in the 24th  District  Court of  Jefferson  Parish,
Louisiana.  The plaintiffs allege that Defendant  Carameros provided  misleading
information  which  induced the  plaintiffs  to acquire from  Carameros  certain
distribution  rights  relating  to the  Company's  products  and allege that the
Company bears  liability as the alleged  source of the  information  provided by
Carameros.  The  Company  intends  to  vigorously  defend  the cause of  action.
Settlement discussions are ongoing.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         In the quarter  ended  March 31,  2001,  the Company  issued a total of
1,324,840  shares of common stock to the holders of convertible  preferred stock
of PolarShield,  Inc. The shares were issued,  without  general  solicitation or
advertising,   to  accredited   investors,   pursuant  to  the  exemption   from
registration  set  forth in  Section  4(2) of the  Securities  Act of 1933.  The
certificates  evidencing  the  shares  bear a  legend  restricting  transfer  in
accordance  with Rule 144.  No  commissions  were  paid in  connection  with the
issuance.

ITEM 5. OTHER INFORMATION

         In April  2001,  Jimmy  Farmer  resigned  as  President  of the Company
pursuant to the terms of settlement  of a law suit (see Item 1 above).  Lawrence
Clasby has been  appointed as a director of the Company and Mr.  Clasby has been
appointed as President of the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)      Exhibits

                  None

         (b)      Reports on Form 8-K

                  None


                                       12
<PAGE>


                                    SIGNATURE

         In accordance with the  requirements of the Securities  Exchange Act of
1934,  the  Registrant  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.

                                        XAIBE, INC.



  Dated: May 21, 2001              By: /s/ Lawrence Clasby
                                        --------------------------------------
                                        Lawrence Clasby
                                        Chief Executive Officer and Principal
                                        Financial Officer


                                       13