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

                                   FORM 10-QSB

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

                For the quarterly period ended March 31, 2001

                                       OR

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

           For the transition period from ___________ to ____________

                        Commission file number 000-31485

                              METHOD PRODUCTS CORP.
(Exact name of small business issuer as specified in its charter)

                  Florida                                   11-3456837
(State or other jurisdiction of incorporation    (I.R.S. Employer Identification
 or organization)                                No.)

                        2101 NW 33rd Street, Suite 600A
                          Pompano Beach, Florida 33069
                    (Address of principal executive offices)

                                 (954) 968-1913
                           (Issuer's telephone number)


       The number of shares outstanding of the registrant's common stock
                       as of May 31, 2001 was 10,024,005


         Transitional Small Business Disclosure Format (Check One:)

                           Yes           No  X
                              ------      ------


<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.           Financial Statements

                  a)       Consolidated Balance Sheets as of March 31, 2001
(Unaudited) and June 30, 2000.

                  b)       Consolidated Statements of Operations (Unaudited)
for the three months and the nine months ended March 31, 2001
and March 31, 2000

                  c)       Consolidated Statements of Cash Flows (Unaudited)
for the nine months ended March 31, 2001 and March 31, 2000

                  d)       Consolidated Statement of Changes in Stockholders'
 Equity (Deficit) (Unaudited) for the nine months ended March 31, 2001

                  e)       Notes to Consolidated Financial Statements









                                       2

<PAGE>


                        METHOD PRODUCTS CORP. AND SUBSIDIARY
                             CONSOLIDATED BALANCE SHEETS
                  MARCH 31, 2001 (UNAUDITED) AND JUNE 30, 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                            March 31,             June 30,
                                                                               2001                 2000
                                                                           -----------           -----------
<S>                                                                        <C>                   <C>
                                       ASSETS
                                       ------

CURRENT ASSETS:
   Cash and cash equivalents                                               $    29,723           $   326,927
   Accounts receivable, net                                                    663,721               248,464
   Inventories, net                                                            224,730               192,109
   Due from employees                                                           12,416                 2,892
   Prepaid expenses and other                                                   62,203                29,369
                                                                           -----------           -----------
       TOTAL CURRENT ASSETS                                                    992,793               799,761

PROPERTY AND EQUIPMENT, net                                                    363,921               259,029

OTHER ASSETS                                                                    86,593                74,228
                                                                           -----------           -----------
       TOTAL                                                               $ 1,443,307           $ 1,133,018
                                                                           ===========           ===========

                   LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                   ---------------------------------------------

CURRENT LIABILITIES:
   Lines of credit                                                         $   506,980           $    75,397
   Current portion of long-term debt                                            62,687                61,078
   Accounts payable and accrued expenses                                     1,211,823               440,989
   Customer deposits                                                            14,503                21,622
   Deferred revenue                                                             10,807                54,967
                                                                           -----------           -----------
       TOTAL CURRENT LIABILITIES                                             1,806,800               654,053
                                                                           -----------           -----------
LONG-TERM DEBT, less current portion                                           151,059               141,949
                                                                           -----------           -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
   Common stock, 20,000,000 shares authorized, $0.0001 par
          value; 10,024,005 and 7,330,521 shares issued and
          outstanding at March 31, 2001 and June 30, 2000,
          respectively                                                           1,002                   733
   Additional paid-in capital                                                3,770,797             2,835,808
   Deficit                                                                  (4,286,351)           (2,499,525)
                                                                           -----------           -----------
       STOCKHOLDERS' EQUITY (DEFICIT), NET                                    (514,552)              337,016
                                                                           -----------           -----------
       TOTAL                                                               $ 1,443,307           $ 1,133,018
                                                                           ===========           ===========
</TABLE>

            See accompanying notes to consolidated financial statements.

                                       3
<PAGE>


                        METHOD PRODUCTS CORP. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
--------------------------------------------------------------------------------


                                                         2001            2000
                                                     -----------    -----------
SALES                                                $ 1,195,333    $   644,715

COST OF SALES                                            660,661        338,054
                                                     -----------    -----------

       GROSS PROFIT                                      534,672        306,661

ADMINISTRATIVE EXPENSES                                1,042,626        727,360
                                                     -----------    -----------
       LOSS FROM OPERATIONS                             (507,954)      (420,699)
                                                     -----------    -----------
OTHER (INCOME) EXPENSE:
   Interest expense                                       23,996          4,613
   Other income                                            1,425             --
                                                     -----------    -----------
       OTHER EXPENSE, NET                                 25,421          4,613
                                                     -----------    -----------
       LOSS BEFORE INCOME TAXES                         (533,375)      (425,312)

PROVISION FOR INCOME TAXES                                    --             --
                                                     -----------    -----------
       NET LOSS                                      $  (533,375)   $  (425,312)
                                                     ===========    ===========



LOSS PER COMMON SHARE:
   Basic and diluted                                 $    (0.062)   $    (0.077)
                                                     ===========    ===========
   Weighted average common shares outstanding          8,584,973      5,510,444
                                                     ===========    ===========



            See accompanying notes to consolidated financial statements.

                                       4
<PAGE>


                      METHOD PRODUCTS CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                FOR THE NINE MONTHS ENDED MARCH 31, 2001 AND 2000
--------------------------------------------------------------------------------


                                                         2001           2000
                                                     -----------    -----------
SALES                                                $ 3,315,998    $ 2,144,682

COST OF SALES                                          2,127,031      1,205,615
                                                     -----------    -----------

       GROSS PROFIT                                    1,188,967        939,067

ADMINISTRATIVE EXPENSES                                2,832,814      1,393,438
                                                     -----------    -----------
       LOSS FROM OPERATIONS                           (1,643,847)      (454,371)
                                                     -----------    -----------
OTHER (INCOME) EXPENSE:
   Interest expense                                       62,724         17,931
   Other income                                           (5,691)        (4,795)
                                                     -----------    -----------
       OTHER EXPENSE, NET                                 57,034         13,136

       LOSS BEFORE INCOME TAXES                       (1,700,881)      (467,507)

PROVISION FOR INCOME TAXES                                    --             --
                                                     -----------    -----------
       NET LOSS                                      $(1,700,881)   $  (467,507)
                                                     ===========    ===========



LOSS PER COMMON SHARE:
   Basic and diluted                                 $    (0.208)   $    (0.086)
                                                     ===========    ===========
   Weighted average common shares outstanding          8,166,261      5,447,667
                                                     ===========    ===========



            See accompanying notes to consolidated financial statements.

                                       5

<PAGE>


                      METHOD PRODUCTS CORP. AND SUBSIDIARY
       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                   (UNAUDITED)
                  FOR THE NINE MONTHS ENDED MARCH 31, 2001
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                             Common Stock             Additional                      Stockholders'
                                                                         at             Paid-in                          Equity
                                                       # of Shares    par value         Capital        Deficit        Deficit), net
                                                      -----------    -----------      -----------    -----------      -------------
<S>                                                     <C>           <C>             <C>             <C>              <C>
STOCKHOLDERS' EQUITY, July 1, 2000                      7,330,521     $       733     $ 2,835,808     ($2,499,525)     $   337,016


Issuance of stock for cash, net of expenses               663,957              66         243,650              --          243,716

Issuance of stock for services                            231,500              23         173,602              --          173,625

Common stock issued at merger (Note 2)                    654,857              65          94,000         (85,945)           8,120

Issuance of stock for assets                              297,711              30         223,251              --          223,281

Issuance of stock options below fair market value              --              --         200,486              --          200,486

Exercise of stock options                                 845,459              85              --              --               85

Net loss for the nine months ended March 31, 2001              --              --              --      (1,700,881)      (1,700,881)
                                                      -----------     -----------     -----------     -----------      -----------

STOCKHOLDERS' DEFICIT, MARCH 31, 2001                 $10,024,005     $     1,002     $ 3,770,797     ($4,286,351)     ($  514,552)
                                                      ===========     ===========     ===========     ===========      ===========
</TABLE>





                                       6

<PAGE>

                      METHOD PRODUCTS CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                FOR THE NINE MONTHS ENDED MARCH 31, 2001 AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                           2001                 2000
                                                                       -----------          -----------
<S>                                                                    <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                            $(1,700,881)         $  (467,507)
   Adjustments to reconcile net loss to net cash
   used in operating activities:
      Depreciation and amortization                                         87,356               48,540
      Provision for bad debts                                               99,591                   --
      Gain on asset dispositions                                                --               (5,183)
      Common Stock issued for services                                     173,625              313,250
      Stock options issued below fair market value                         200,486                   --
      Changes in certain assets and liabilities net of amounts
         from merger:
         Accounts receivable                                              (514,848)              28,765
         Inventories                                                       190,660             (102,676)
         Due from employees                                                 (9,524)              (7,290)
         Prepaid expenses and other                                        (32,834)              (3,342)
         Accounts payable and accrued expenses                             690,406               77,806
         Customer deposits                                                  (7,119)            (167,678)
         Deferred revenue                                                   10,807                   --
                                                                       -----------          -----------
       NET CASH USED IN OPERATING ACTIVITIES                              (812,275)            (285,315)
                                                                       -----------          -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                     (117,284)             (60,082)
   Notes receivable, shareholders                                               --              (25,383)
   Change in other assets                                                  (22,119)              (9,838)
                                                                       -----------          -----------
       NET CASH USED IN INVESTING ACTIVITIES                              (139,403)             (95,303)
                                                                       -----------          -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net change in line(s) of credit                                         431,583                   --
   Proceeds from long term debt                                                 --               53,124
   Payments on long term debt                                              (54,490)             (49,200)
   Payments on litigation settlements                                           --              (13,815)
   Cash acquired in merger                                                  33,580                   --
   Common stock issued for exercise of options                                  85                   --
   Common stock issued for cash, net                                       243,716              464,500
                                                                       -----------          -----------
       NET CASH PROVIDED BY FINANCING ACTIVITIES                           654,474              454,609
                                                                       -----------          -----------
       NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               (297,204)              73,991

CASH AND CASH EQUIVALENTS, Beginning of period                             326,927              219,896
                                                                       -----------          -----------
CASH AND CASH EQUIVALENTS, End of period                               $    29,723          $   293,887
                                                                       ===========          ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Interest paid in cash                                               $    23,996          $    17,931
                                                                       ===========          ===========
   Income taxes paid in cash                                           $        --          $        --
                                                                       ===========          ===========
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

   Effective September 30, 2000, the Company recorded net tangible assets of
approximately $8,120 in connection with the merger with The Arielle Corp., (See
Note 2).
   Effective November 1, 2000, the Company issued 297,711 shares of common stock
in exchange for inventory with a fair value of $223,281 (see note 5).
   During the nine months ended March 31, 2001, the Company entered into
long-term debt and capital leases for approximately $65,720 for vehicles and
office equipment (See Note 4).

          See accompanying notes to consolidated financial statements.

                                       7

<PAGE>


                      METHOD PRODUCTS CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    FOR THE NINE MONTHS ENDED MARCH 31, 2001

                                   (Unaudited)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

The accompanying consolidated financial statements of Method Products Corp., a
Florida corporation, and its wholly- owned subsidiary, MPC Integrated
Technologies, Inc., ("MPCIT"), (together, referred to as the "Company") have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Item 310 (b) of
Regulation S-B. The disclosure in the notes to the financial statements have
been prepared in accordance with the instructions set forth under Item 310 (b),
Interim Financial Statements, of Regulation S-B. The requirements set forth
under Item 310(b) require that footnotes and other disclosures should be
provided as needed for the fair presentation of the financial statements and to
ensure that the financial statements are not misleading. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The requirements of
Item 310 (b) also require disclosure of material subsequent events and material
contingencies.

In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included and
there are no material contingencies that require disclosure. The financial
statements as of and for the nine months and three months ended March 31, 2001
and 2000 are unaudited.

The results of operations for the interim periods presented are not necessarily
indicative of the results of operations to be expected for the fiscal year. See
"Going Concern Considerations", below. The accompanying consolidated financial
statements should be read in conjunction with the financial statements and
footnotes included in the Form SB-2, as amended, of The Arielle Corp., filed
with the Securities and Exchange Commission (the "SEC") in September 2000 (see
Note 2).

MPCIT is a multi-service business communications systems company specializing in
the custom design, installation and service of total communications network
systems for businesses, including computer telephone integration, fiber optic
cabling and video conferencing, among other network systems, for various
businesses, with a focus on businesses located in South Florida.

Going Concern Considerations
----------------------------

The Company's unaudited financial statements have been prepared on a going
concern basis that contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. The Company has a
net stockholders' deficit of $514,552 at March 31, 2001. In addition, the
Company has a deficit in working capital of $814,007 at March 31, 2001.
Management recognizes that the Company must generate additional resources to
enable it to pay its obligations as they come due. Management is planning to
obtain additional working capital from operations, and/or from other sources,
including creditors. The realization of assets and satisfaction of liabilities
in the normal course of business is dependent upon the Company obtaining
additional working capital and sustaining profitable operations. However, no
assurances can be given that the Company will be successful in these activities.
Should any of these events not occur, the accompanying financial statements will
be materially affected.

                                       8

<PAGE>
Income Taxes
------------

All deferred taxes created by net operating losses are offset in their entirety
by a deferred tax asset valuation allowance.

Derivative Instruments and Hedging Activities
---------------------------------------------

The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
133, "Accounting for Derivative Instruments and Hedging Activities" effective
July 1, 2000. SFAS No. 133 requires companies to recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. Gains and losses resulting from changes in fair
values of those derivatives would be accounted for depending on the use of the
derivative and whether it qualifies for hedge accounting. As of and for the nine
months ended March 31, 2001, the Company did not possess any derivatives to be
accounted for under SFAS No. 133.

Reclassification
----------------

          Certain amounts have been reclassified in the 2000 financial
statements to conform to 2001 presentation.

NOTE 2. MERGER
On October 6, 2000, pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") dated as of January 12, 2000 between The Arielle Corp., a Delaware
corporation ("Arielle") and Method Products Corp., a Florida corporation
("Method"), all of the issued and outstanding shares of common stock of Method
were exchanged on a tax-free basis for shares of common stock of Arielle, a
publicly held entity. To complete the merger, Arielle issued new shares of its
common stock to the shareholders of Method in exchange for all of the
outstanding stock of Method. Immediately subsequent to the merger, the
shareholders of Method controlled approximately 91.87% of Arielle. As a result
of this merger, the business of Method is to be conducted within the legal
entity Arielle, Arielle's name was changed to Method Products Corp., and Method
ceased to exist.

For accounting purposes, the merger has been treated as a purchase business
combination of Arielle by Method (a reverse acquisition) and a re-capitalization
of Method. Method is the acquirer for accounting purposes because the former
Method stockholders received a larger portion of the common stockholder
interests and voting rights in the combined entity than those retained by
Arielle stockholders prior to the merger. Because Method is the acquirer for
accounting purposes under APB Opinion No. 16, the surviving entity has adopted
Method's fiscal year end of June 30. The effective date of the merger for
accounting purposes is September 30, 2000. Pro-forma information has not been
presented for this merger, as it would not be meaningful since Arielle had no
operations prior to the merger.

NOTE 3.  LINE OF CREDIT
Effective August 2000, the Company entered into a Loan and Security Agreement
with General Electric Capital Corporation for a Revolving Credit Loan. This
revolving line of credit has a maximum amount of $600,000 with an associated
interest rate of the Index Rate plus 2%, a term of 2 years and contains
customary financial covenants. The borrowing base is based on 80% of the value
of the Company's eligible accounts receivable and such receivables serve as
collateral under this line of credit. The proceeds from this new line of credit
also paid off a portion of existing debt.

NOTE 4. LONG TERM DEBT
During the nine months ended March 31, 2001, the Company entered into two
long-term notes payable of approximately $23,000 and $30,000, in connection with
the purchase of certain motor vehicles used in the Company's daily operations.
Such notes bear interest at 10.75% and 6.90%, respectively, with terms of five
years. In addition, the Company entered into one long-term capital lease
agreement of $12,720, in connection with the purchase of a computer server also
used in daily operations.

                                       9
<PAGE>

NOTE 5.  ASSET ACQUISITION
Effective November 1, 2000, the Company entered into an Asset Purchase Agreement
with an unrelated third party (the "Seller") to purchase the inventory of the
Seller in exchange for shares of common stock of the Company. The purchase price
of the inventory is $223,283 which approximates the wholesale value of the
inventory. The Company paid for this inventory by issuing 297,711 shares of
common stock of the Company valued at $0.75 per share on November 29, 2000.


Note 6.  SHAREHOLDER LOANS
During the nine months ended March 31, 2001, certain existing and prospective
shareholders lent $260,000 to the Company in exchange for notes bearing interest
at 8%. On February 12, 2001, the notes were exchanged for 355,957 shares of
common stock of the Company, valued at $0.75 a share. The accrued interest was
paid in stock to the noteholders when the shares were issued.

Note 7. NET LOSS PER COMMON SHARE For the three months and nine months ended
March 31, 2001, basic and diluted weighted average common shares included only
common shares outstanding. The inclusion of common share equivalents would be
anti-dilutive and, as such, they are not included. However, the common stock
equivalents, if converted, would have increased fully diluted common shares at
March 31, 2001 by approximately 4,570,032. For the three months and nine months
ended March 31, 1999 basic and diluted weighted average common shares includes
only common shares outstanding, as there were no common share equivalents.

The number of common shares shown as outstanding in the consolidated financial
statements for the three months and nine months ended March 31, 2001 and March
31, 2000 as compared to the number of shares used in the computation of weighted
average common shares outstanding is different because of the effect of
weighting.


                                       10

<PAGE>


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

FORWARD LOOKING STATEMENTS
          This report on Form 10-QSB contains forward-looking statements which
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and which are subject to risks and uncertainties
which could cause actual results to differ materially from those discussed in
the forward-looking statements and from historical results of operations. Among
the risks and uncertainties which could cause such a difference are those
relating to going concern considerations, our success in obtaining additional
working capital from operations and/or other sources as presently required or
otherwise desired, our dependence upon certain existing key personnel, a
substantial percentage of our business is currently dependent upon two
suppliers, lack of formal agreement with one of our key suppliers, non-exclusive
dealership agreement with key dealer which may be terminated upon 60 days
notice, our ability to manage growth, our success in implementing our business
strategy which includes possible acquisitions and their integration into our
operations, and the risk of economic and market factors affecting the Company or
its customers. Many of such risk factors are beyond our control. Actual results
could differ materially from the forward-looking statements made. In light of
these risks and uncertainties, there can be no assurance that the results
anticipated in these forward-looking statements contained in this report will in
fact occur.

          Any forward-looking statement speaks only as of the date on which such
statement is made, and we undertake no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time and it is not possible for
management to predict all of such factors, nor can it assess the impact of each
such factor on the business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements.

ORGANIZATION AND OPERATIONS

          As previously described in the notes to the consolidated financial
statements herein, and in Item 4 below, Method Products Corp. (together with our
wholly-owned subsidiary, MPC Integrated Technologies, Inc., the "Company") is
the result of an October 6, 2000 merger between The Arielle Corp., a Delaware
corporation ("Arielle"), and Method Products Corp., a Florida corporation
("Method"). The merger is accounted for as an acquisition of Arielle by Method,
and in accordance with APB Opinion 16, paragraph 93, the effective date of the
merger for accounting purposes is September 30, 2000. The merged entity has
adopted the June fiscal year end of Method. Since Arielle was a non-operating
"shell" entity with no appreciable revenues or expenses, the analysis of the
results of operations and financial condition relates primarily to the
activities of Method.

             On March 16, 2001, the Company effected a change of domicile merger
and reincorporated from Delaware to Florida. See Note 5.

          We are a multi-service business communications systems company
specializing in the custom design, installation, and service of total
communications network systems for businesses, including computer telephone
integration, fiber optic cabling and video conferencing among other network
systems, for various businesses, with a focus on businesses located in South
Florida. We intend to pursue a conservative growth strategy which will entail,
among other things, the possible acquisition and/or merger of existing
technology companies involved in segments of the business communications
industry complimentary to that of the Company and to acquire additional
experienced industry personnel.

RESULTS OF OPERATIONS

          Nine months and three months ended March 31, 2001 compared to nine
months and three months ended March 31, 2000, respectively.

          Net sales for the nine months ended March 31, 2001 were $3,315,998, as
compared to net sales for the nine months ended March 31, 2000 of $2,144,682.
Net sales for the three months ended March 31, 2001 were $1,195,333, as compared
to net sales for the three months ended March 31, 2000 of $644,715. These
increases are primarily attributable to management's concentration upon the
hiring and integration of additional sales staff.

                                       11
<PAGE>

          Cost of sales was $2,127,031 or approximately 64% of sales for the
nine months ended March 31, 2001 as compared to cost of sales for the nine
months ended March 31, 2000 of $1,205,615 or approximately 56% of sales. Cost of
sales for the three months ended March 31, 2001 was $660,661 or approximately
55% of sales as compared to three months ended March 31, 2000 of $338,054 or
approximately 52% of sales. These increases are attributable to increased labor
costs associated with hiring additional technical staff, project management
staff and increased product costs as a percentage of net sales.

          Administrative expenses for the nine months ended March 31, 2001,
which substantially consist of sales and administrative labor, amounted to
$2,832,814 as compared to $1,393,438 for the nine months ended March 31, 2000.
The administrative expenses for the three months ended March 31, 2001 were
$1,042,626 as compared to the three months ended March 31, 2000 of $727,360.
These increases are attributable to the hiring of additional sales personnel and
related administrative support staff in conjunction with the asset purchase
agreement and the expanded sales and marketing efforts, and for other
administrative costs, as further described below.

          Consulting fees were $13,726 for the nine months ended March 31, 2001
as compared to $69,547 for the nine months ended March 31, 2000. For the three
months ended March 31, 2001 consulting fees were $8,200 as compared to $37,000
for the three months ended March 31, 2000. The decrease is attributable to the
completion of services rendered in connection with outside agreements.

          Salaries were $1,334,384 for the nine months ended March 31, 2001 as
compared to $650,940 for the nine months ended March 31, 2000 and $523,995 for
the three months ended March 31, 2001 as compared to $434,567 for the three
months ended March 31, 2000. The increase is attributable to our increased sales
and administrative staff. As of March 31, 2001, the Company had approximately 65
employees most of which were hired at the end of September 2000, compared to
approximately 23 employees at March 31, 2000. To reduce administrative expenses,
the Company plans to scale down the administrative staff size during the fourth
quarter 2001 to approximately 40 employees.
          Professional fees were $139,831 for the nine months ended March 31,
2001 as compared to $21,610 for the nine months ended March 31, 2000 and $18,055
for the three months ended March 31, 2001 as compared to $0 for the three months
ended March 31, 2000. This increase is attributable to increased legal costs
associated with the merger, and related increased quarterly legal, accounting
and auditing fees associated with SEC quarterly reviews.

          Other selling, general and administrative expenses, which include bad
debt expenses, travel and entertainment, insurance, auto, telephone and other
expenses, were $1,344,974 for the nine months ended March 31, 2001 as compared
to $651,341 for the nine months ended March 31, 2000. For the three months ended
March 31, 2001, other selling, general and administrative expenses were $507,777
as compared to $255,793 for the three months ended March 31, 2000. The increase
is attributable to expenses directly associated with increased staffing as well
as financing activities.

          Interest expense was $62,724 for the nine months ended March 31, 2001
as compared to $17,931 for the nine months ended March 31, 2000 and $23,996 for
the three months ended March 31, 2001 as compared to $4,613 for the three months
ended March 31, 2000. The increase is attributable to additional equipment debt
financing and our line of credit with General Electric Capital Corporation ("GE
Capital"), further discussed below.

          As a result of the foregoing factors, we incurred losses of
approximately $1,700,881 or ($.208) per share for the nine months ended March
31, 2001 as compared to a loss of approximately $467,507 or ($.086) per share
for the nine month period ended March 31, 2000. For the three month period ended
March 31, 2001, we incurred losses of approximately $533,375 or ($.062) per
share and a net loss of $425,312 or ($.077) per share for the three months ended
March 31, 2000.

                                       12

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

          As previously discussed in Note 1 to our consolidated financial
statements, our consolidated financial statements have been prepared on a going
concern basis that contemplates the realization of assets and the settlement of
liabilities and commitments on the normal course of business. To the extent that
we are unable to obtain additional working capital from operations and/or other
sources as required or otherwise desired, our consolidated financial statements
will be materially affected.


          At March 31, 2001, we had stockholders' deficit of approximately
$514,552 and a deficit in working capital of $814,007. Since our inception, we
have incurred losses of approximately $4,286,351. Our operations and growth have
been funded by the sale of common stock with gross cash proceeds of
approximately $1,493,500 and working capital borrowings, further discussed
below, of approximately $506,980. These funds have been used for working capital
and capital expenditures.

          Our commitments for capital expenditure include the following:
build-out of our expanded new headquarters, a facility of approximately 10,000
square feet, in which there was approximately $33,000 in additional build-out
cost. In addition a possible upgrade of telephone and computer equipment of
approximately $50,000 may occur within the fourth quarter of the fiscal year.
The Company entered into a lease agreement for the new headquarters for
approximately $473,964 over 60 months.

          A dramatic slowing of sales industry wide has also negatively impacted
Company sales and cash flow. The Company is subject to a lock box arrangement
with GE Capital in connection with a previously established $600,000 revolving
credit line, further discussed below, of which approximately $290,000 is
currently due and owing. We are not currently in technical compliance with
certain material provisions of such credit line. While GE Capital has not
declared a default under such credit line, and is currently, on an oral,
informal basis, cooperating with the Company as the Company makes efforts to pay
down such credit line, no assurances are given that GE Capital will continue to
cooperate and not take steps to declare such credit line in default. In such
event, the Company may be materially and adversely effected as the credit line
is secured, in part, by the Company's assets. Such lock box arrangement has had
and is having a negative impact on the Company's cash flow. In order to meet our
immediate liquidity and capital needs, we will be required to promptly satisfy
or refinance with one or more third parties our current outstanding indebtedness
with GE Capital, of which no assurances are given. We have no current
arrangements or understandings in place with any third parties to satisfy or
refinance such indebtedness and the failure to promptly secure same will in all
likelihood have a material adverse effect on the Company's business and
operations.

          As of March 31, 2001, we have three lines of credit with
commercial lenders, including GE Capital. The agreements provide for maximum
revolving lines of credit of $683,000. Interest at March 31, 2001 ranges from
9.5% to 19.4%. The aggregate amount outstanding at March 31, 2001 was $506,980.
The term of the GE credit line, which contains customary financial covenants
which were orally waived by GE Capital for approximately 9 months from August
17, 2000, is 2 years, with an interest rate of 2 points over prime. The
borrowing line is 80% of the value of our eligible accounts receivable. The line
of credit is secured by our assets and is personally guaranteed by our three
principal executive officers/directors. Utilizing the GE Capital line of credit,
one credit line has been paid off in full with $23,701 and $3,343 outstanding on
the two remaining lines of credit as of March 31, 2001. As of March 31, 2001 we
have an outstanding balance of $479,935 on the GE Capital credit line. No
further draw downs are currently being permitted.

          During the nine months ended March 31, 2001, we obtained loans from
several individual investors aggregating $260,000 which were used for working
capital purposes. On February 12, 2001, such notes were exchanged for 355,957
shares of our common stock, valued at $.75 per share.

          For the nine months ended March 31, 2001 and March 31, 2000,
approximately 22% and 27%, respectively, of our total sales were attributable to
the sale of medium sized voice communication equipment manufactured by Nitsuko
America Telecom Division ("Nitsuko"), and approximately 19% and 15% of our total
sales were attributable to the sale of large multimedia platform based exchange
systems manufactured by AVAYA Systems (formerly Lucent Technologies). Sales of
Fujitsu systems have decreased for the nine months ended March 31, 2001 and
March 31, 2000 to 3.8% and 1.5% of sales, respectively. Inasmuch as our
dealership agreement with Fujitsu is non-exclusive and we do not have a formal
agreement with Nitsuko, termination or change of our business relationship with
either Nitsuko, AVAYA or Fujitsu could have a material adverse effect on us.

                                       13

<PAGE>

         To the extent the Company may be able to pursue a growth strategy
involving the acquisition of additional telecommunications companies, of which
no assurances are given, such acquisitions may entail the issuance of Company
securities and/or cash. If cash is required, the company will require additional
funding to finance such activities, which may entail equity and/or debt. We have
no commitment presently in place with any third parties in connection therewith
and no assurances are given that such funding will be available if desired, or
the terms thereof if available.

          On April 26, 2000 the Company entered into an agreement with Thornhill
Group, Inc., a financial advisory and investment banking firm, which will
provide us with financial advisory and investment banking services in exchange
for a combination of fees and/or shares of our common stock. Through March 31,
2001, all fees have been paid in stock. Pursuant to such agreement, such firm
has also been granted an option to purchase a total of 9.9% of our outstanding
shares of common stock as of April 30, 2002 exercisable through April 30, 2005
at an exercise price of $.75 per share, subject to customary adjustments.

          We do not generally believe our business is seasonal.

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

                   Not applicable.

Item 2.   Changes in Securities

              The securities issuances discussed below were effected pursuant to
Section 4(2) under the Securities Act of 1933, as amended, based upon the
limited number of offerees, their relationship to the Company, the number of
shares offered in each offering, the size of the respective offerings, and the
manner of each offering:

              During the nine months ended March 31, 2001, we obtained loans
from several individual investors aggregating $260,000 which were used for
working capital purposes. On February 12, 2001, such notes were exchanged for
355,957 shares of our common stock, valued at $.75 per share.

              During the quarter ended March 31, 2001: (i) two Company employees
exercised employees exercised stock options for an aggregate of 1,095,459 shares
of the Company's common stock at an exercise price of $.01 per share; (ii) two
employees were issued an aggregate of 45,000 shares as employee compensation;
and (iii) an outside vendor was issued 10,000 shares in full satisfaction of an
accounts payable.

              During the nine months ended March 31, 2001, we issued to
Thornhill Group, Inc. 140,000 shares of our common stock for consulting services
rendered in connection with a previously executed financial advisory/investment
banking agreement and accrued an additional 60,000 shares for the third quarter
which will be issued during the fourth quarter ended June 30, 2001. These shares
were valued at $.75 per share.

Item 3.       Defaults Upon Senior Securities

                       Not applicable.

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

            On January 24, 2001, the Company's Board of Directors and majority
shareholders executed and delivered to the Company a written consent to
corporate action whereby they approved: (i) the reincorporation of the Company
from Delaware to Florida (the "Reincorporation") by merging the Company with and
into its newly formed, wholly-owned Florida subsidiary, Method Products Corp.
(hereinafter referred to as the "Company"); (ii) the adoption of a 2001 Stock
Option Plan to provide for the grant of options to purchase up to 500,000 shares
of the Company's common stock to Company employees, directors and consultants;
and (iii) increased share authorization in the articles of incorporation to
provide for 80,000,000 authorized shares of common stock, $.0001 par value, as
well as authorization for 2,000,000, shares of "blank check" preferred stock,
$.0001 par value. The Reincorporation of the Company from Delaware to Florida
was effected on March 16, 2001.

                                       14

<PAGE>

Item 5.   Other Information


          On February 8, 2001, NASD Regulation approved the Company for listing
on the Over-the-Counter Bulletin Board (symbol: MTDP). The Company's trading
symbol currently reflects an E" at the end to reflect the Company not timely
filing this Form 10-QSB with the SEC. It is anticipated that such "E" will be
removed shortly after the filing of this Form 10-QSB with the SEC.


Item 6.   Exhibits and Reports on Form 8-K

                           (a) All exhibits required to be filed herein, except
         as otherwise provided, are incorporated by reference to the Company's
         Form SB-2, as amended, previously filed August 17, 1998 with the SEC
         and to the Company's reports previously filed with the SEC under the
         Securities Exchange Act of 1934.


                           (b) We filed a Form 8-K on April 5, 2001 which
         reported the matters discussed in Item 4 above and the Company's
         execution of a new lease agreement for its new facilities, a copy of
         which lease agreement was included as an exhibit thereto.






                                       15


<PAGE>


                                   SIGNATURES

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



Date: June 19, 2001              By:   /s/ Mark Antonucci
                                       -----------------------------------------
                                       Mark Antonucci, Chief Executive Officer,
                                         Chief Financial Officer and Secretary











16