-------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                 ---------------


                                    FORM 10-Q/A


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

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2000

                         COMMISSION FILE NUMBER 0-27190

                           5B TECHNOLOGIES CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           DELAWARE                                    11-3529387
(STATE OR OTHER JURISDICTION OF             (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

  ONE JERICHO PLAZA, JERICHO, NEW YORK                    11753
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                (ZIP CODE)

                                 (516) 938-3400
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES |X|   NO |_|


               NUMBER OF SHARES OUTSTANDING AT FEBRUARY 15, 2001:


          2,140,532 SHARES OF COMMON STOCK, PAR VALUE $0.04 PER SHARE.

-------------------------------------------------------------------------------
<PAGE>

                           5B TECHNOLOGIES CORPORATION


                    INDEX TO FORM 10-Q/A FOR THE QUARTER ENDED


                               SEPTEMBER 30, 2000

PAGE NO.
--------

PART I - FINANCIAL INFORMATION

<TABLE>
<S>                                                                                                      <C>
       Item 1 -  Financial Statements

                  Consolidated Balance Sheets
                  September 30, 2000 (unaudited) and December 31, 1999.........................................1

                  Consolidated Statements of Operations for the Three Months Ended and
                  Nine Months Ended September 30, 2000 and 1999 (unaudited)....................................2

                  Consolidated Statements of Cash Flows for the Nine Months Ended
                  September 30, 2000 and 1999 (unaudited)......................................................3

                  Notes to Unaudited Consolidated Financial Statements.......................................4-9

       Item 2 -  Management's Discussion and Analysis of Financial Condition and Results of
                   Operations..............................................................................10-15

       Item 3 -  Quantitative and Qualitative Disclosure About Market Risk....................................16

PART II - Other
Information...................................................................................................17

SIGNATURES....................................................................................................18
</TABLE>


                                       2
<PAGE>

                          PART I: FINANCIAL INFORMATION

ITEM 1   FINANCIAL STATEMENTS

                  5B TECHNOLOGIES CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                              ASSETS                                 SEPTEMBER 30,  DECEMBER 31,
                              ------                                     2000           1999
                                                                     ------------   -------------
                                                                     (UNAUDITED)
<S>                                                                 <C>             <C>
Current assets:

   Cash and cash equivalents ....................................   $  1,569,974    $  1,003,752

   Investments available for sale ...............................        945,818         925,616

   Accounts receivable, net of allowance for doubtful accounts of
   $90,000 and $70,000, respectively ............................      3,317,452       2,718,646

   Other current assets .........................................         48,731          61,164
                                                                    ------------    ------------

       Total current assets .....................................      5,881,975       4,709,178
                                                                    ------------    ------------

Investments available for sale ..................................        159,793         157,060

Goodwill, net of accumulated amortization of $259,714 and
$155,645, respectively ..........................................      1,394,223       1,498,292

Net assets of discontinued operation ............................         88,930       1,812,232

Other assets ....................................................      1,322,281       1,098,260
                                                                    ------------    ------------

       Total assets .............................................   $  8,847,202    $  9,275,022
                                                                    ============    ============

  LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

   Accounts payable .............................................   $    716,216    $    745,839

   Accrued liabilities ..........................................        855,986         558,840

   Notes payable ................................................      1,994,803       2,227,775
                                                                    ------------    ------------

       Total current liabilities ................................      3,567,005       3,532,454

Notes payable ...................................................         14,349         158,600
                                                                    ------------    ------------
       Total liabilities ........................................      3,581,354       3,691,054
                                                                    ------------    ------------
Redeemable preferred stock ......................................      1,250,000              --
                                                                    ------------    ------------
Stockholders' equity:

   Common stock, $.04 par value; 17,500,000 shares
     authorized, and 2,165,032 shares issued and outstanding ....         86,601          86,400

   Additional paid-in capital ...................................     14,525,450      14,504,629

   Stock subscription receivable ................................       (812,500)       (812,500)

   Accumulated deficit ..........................................     (9,733,098)     (8,143,956)

   Treasury stock, 24,500 shares at cost ........................        (50,605)        (50,605)
                                                                    ------------    ------------

Total stockholders' equity ......................................      4,015,848       5,583,968
                                                                    ------------    ------------

Total liabilities and stockholders' equity ......................   $  8,847,202    $  9,275,022
                                                                    ============    ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                  5B TECHNOLOGIES CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                    UNAUDITED

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED              NINE MONTHS ENDED
                                                              SEPTEMBER 30,                   SEPTEMBER 30,
                                                      ----------------------------    ----------------------------
                                                          2000            1999            2000            1999
                                                      ------------    ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>             <C>
Sales .............................................   $  4,889,114    $  3,948,155    $ 18,289,440    $ 12,081,655

Cost of sales .....................................      3,281,006       2,805,439      13,656,763       8,832,966
                                                      ------------    ------------    ------------    ------------

       Gross profit ...............................      1,608,108       1,142,716       4,632,677       3,248,689
                                                      ------------    ------------    ------------    ------------

Expenses:

Selling ...........................................        424,901         484,130       1,222,333       1,174,687

General and administrative ........................      1,103,909         953,609       3,664,638       3,286,156
                                                      ------------    ------------    ------------    ------------

       Total expenses .............................      1,528,810       1,437,739       4,886,971       4,460,843
                                                      ------------    ------------    ------------    ------------

Income (loss) from operations .....................         79,298        (295,023)       (254,294)     (1,212,154)

Interest income ...................................         44,043           9,643          72,544          31,097
                                                      ------------    ------------    ------------    ------------

Income (loss) before provision (benefit) for income
   taxes and discontinued operations ..............        123,341        (285,380)       (181,750)     (1,181,057)

Provision (benefit) for income taxes ..............         14,364        (129,402)         20,705        (439,160)
                                                      ------------    ------------    ------------    ------------

       Income (loss) from continuing operations ...        108,977        (155,978)       (202,455)       (741,897)
                                                      ------------    ------------    ------------    ------------

Discontinued operation:
       Income (loss) from discontinued operation ..             --         207,079        (121,175)        694,022

       Loss on disposal of discontinued operation .             --              --        (856,198)             --
                                                      ------------    ------------    ------------    ------------

Net income (loss) .................................   $    108,977    $     51,101    $ (1,179,828)   $    (47,875)
                                                      ------------    ------------    ------------    ------------

Basic earnings (loss) per share:

       Continuing operations ......................   $      (0.13)   $      (0.07)   $      (0.29)   $      (0.34)
                                                      ============    ============    ============    ============

       Discontinued operation .....................   $         --    $       0.09    $      (0.46)   $       0.32
                                                      ============    ============    ============    ============

       Net income (loss) per share ................   $      (0.13)   $       0.02    $      (0.75)   $      (0.02)
                                                      ============    ============    ============    ============

Diluted earnings (loss) per share:

       Continuing operations ......................   $      (0.13)   $      (0.07)   $      (0.29)   $      (0.34)
                                                      ============    ============    ============    ============

       Discontinued operation .....................   $         --    $       0.09    $      (0.46)   $       0.32
                                                      ============    ============    ============    ============

       Net income (loss) per share ................   $      (0.13)   $       0.02    $      (0.75)   $      (0.02)
                                                      ============    ============    ============    ============
</TABLE>

                 See accompanying notes to financial statements.


                                       4
<PAGE>

                  5B TECHNOLOGIES CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     FOR THE NINE MONTHS ENDED SEPTEMBER 30,

                                    UNAUDITED

<TABLE>
<CAPTION>
                                                                                      2000            1999
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                                                          $ (1,179,828)   $    (47,875)

Adjustments to reconcile net loss to net cash provided by operating activities:

     Loss from discontinued operations                                                  40,282              --

     Loss from sale of discontinued operation                                          856,198              --

     Bad debt reserve                                                                   20,000              --

     Issuance of stock options                                                          16,300              --

     Depreciation and amortization                                                     368,116         342,224

     Depreciation and amortization on discontinued operation                           815,977       3,082,027

     Changes in operating assets and liabilities:

        Accounts receivable                                                           (618,806)       (133,414)

        Other assets                                                                   (61,227)         78,412

        Accounts payable                                                               (29,623)       (106,920)

        Accrued expenses                                                               263,371          28,798
                                                                                  ------------    ------------

Net cash provided by continuing operations                                             490,760       3,243,252

Net cash used in discontinued operation                                               (257,344)       (325,320)
                                                                                  ------------    ------------

Net cash provided by operating activities                                              233,416       2,917,932

CASH FLOWS FROM INVESTING ACTIVITIES:

     Payment for acquisitions, net of cash acquired                                   (100,000)        (64,832)

     Purchase of equipment                                                             (44,479)             --

     Purchases of investments                                                          (22,935)        (23,077)
                                                                                  ------------    ------------

Net cash used by continuing operations                                                (167,414)        (87,909)

Net cash provided by discontinued operation                                         13,629,977      10,263,096
                                                                                  ------------    ------------

Net cash provided by investing activities                                           13,462,563      10,175,187
                                                                                  ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:

     Proceeds from notes payable                                                       855,567       1,266,666

     Repayment of notes payable                                                     (1,502,722)     (1,833,689)

     Issuance of common stock                                                            4,722              --

     Issuance of preferred stock                                                       874,465              --
                                                                                  ------------    ------------

Net cash provided by (used in) continuing operations                                   232,032        (567,023)

Net cash used by discontinued operation                                            (13,361,789)    (13,059,390)
                                                                                  ------------    ------------

Net cash used in financing activities                                              (13,129,757)    (13,626,413)
                                                                                  ------------    ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   566,222        (533,294)
                                                                                  ------------    ------------

CASH AND CASH EQUIVALENTS, beginning of period                                       1,003,752       1,495,082
                                                                                  ------------    ------------

CASH AND CASH EQUIVALENTS, end of period                                          $  1,569,974    $     961,78
                                                                                  ============    ============
SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for income taxes                                                        $      4,929    $      5,953
                                                                                  ============    ============

Cash paid for income taxes for discontinued operation                             $     86,017    $      3,783
                                                                                  ============    ============

Cash paid for interest                                                            $    152,485    $    111,928
                                                                                  ============    ============

Cash paid for interest for discontinued operation                                 $    559,135    $  1,541,212
                                                                                  ============    ============
</TABLE>

                 See accompanying notes to financial statements.


                                       5
<PAGE>

                  5B TECHNOLOGIES CORPORATION AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.    The accompanying unaudited consolidated financial statements have been
      prepared in accordance with the instructions for Form 10-Q and Regulation
      S-X related to interim period financial statements and, therefore, do not
      include all information and footnotes required by generally accepted
      accounting principles. However, in the opinion of management, all
      adjustments (consisting of normal recurring adjustments and accruals)
      considered necessary for a fair presentation of the financial position of
      5B Technologies Corporation and subsidiaries (the "Company") at September
      30, 2000 and its results of operations and cash flows for the three and
      nine months ended September 30, 2000 and 1999, respectively, have been
      included (See Note 3).

      The financial statements for the three and nine months ended September 30,
      2000 and 1999, respectively, are consolidated to include the results of
      the Company's two wholly owned subsidiaries, 5B Technologies Group, Inc.
      ("5B Group") (formerly Paratech Resources Inc.) and Deltaforce Personnel
      Services, Inc. ("DeltaGroup"). All material intercompany balances and
      transactions have been eliminated.

      The results of operations for the interim periods are not necessarily
      indicative of the results that may be expected for the entire year.

      Reference should be made to the annual financial statements, including
      footnotes thereto, included in the Company's Form 10-K for the fiscal year
      ended December 31, 1999.

2. ACQUISITION

            On September 28, 2000, 5B Technologies Group acquired certain assets
      of Infinity Consulting Inc., a privately held North Carolina company that
      provides high end engineering skills in the areas of database management,
      applications development, and implementation and performance tuning for a
      total purchase price of $50,000 in cash. The acquisition, which was not
      considered material, was accounted for as a purchase. In connection with
      this acquisition the Company entered into non-compete agreements with two
      key executives for an aggregate consideration of $300,000, $50,000 of
      which was paid at closing with $250,000 due within one year.

3. DISCONTINUED OPERATION

      On May 2, 2000, the Company sold the majority of its lease portfolio (the
      "Assets"), which was maintained through a wholly owned subsidiary,
      Paramount Operations Inc. ("Paramount"), for approximately $700,000 and
      the assumption of approximately $6,117,000 of indebtedness related to the
      Assets. Accordingly, Paramount has been presented as a discontinued
      operation for the three and nine months ended September 30, 2000, and the
      balance sheet as of December 31, 1999 and the statements of operations and
      cash flows for the three and nine months ended September 30, 2000, and
      1999, respectively, have been restated to conform with this presentation.
      The loss on disposal of Paramount includes provisions for estimated losses


                                       6
<PAGE>

      of approximately $602,000 and a loss on sale of approximately $254,000,
      for a total loss of approximately $856,000. The provision for estimated
      losses of approximately $602,000 is based on management's estimate of
      future income and expenses relating to the remaining lease portfolio and
      write-downs of certain related assets. Net sales for Paramount were
      approximately $179,000 and $5,807,000 for the three and nine months ended
      September 30, 2000, respectively.

     The components of net assets of discontinued operation included in the
     Company's Consolidated Balance Sheets at September 30, 2000 and December
     31, 1999, are as follows:

<TABLE>
<CAPTION>
                                                                                2000            1999
                                                                           ------------    ------------
<S>                                                                        <C>             <C>
     Accounts receivable                                                   $    193,012    $    274,613
     Net investment in direct finance and sales-type leases                   4,516,732      16,232,749
     Assets held under operating leases, net of accumulated depreciation        260,276       2,990,213
     Other assets                                                                    --         537,990
     Accrued expenses                                                          (104,467)        (84,922)
     Notes payable                                                             (146,234)     (1,382,902)

     Obligations for financed equipment -- non-recourse                      (4,630,389)    (16,755,509)
                                                                           ------------    ------------

                                                                           $     88,930    $  1,812,232
                                                                           ============    ============
</TABLE>

3. LINES OF CREDIT

      At September 30, 2000, the Company had three types of credit lines
available:

            TERM LOAN: In April 1998, the Company entered into a $500,000 term
      loan with a bank collateralized by $600,000 in cash maintained in an
      investment account (the "Term Loan"). Principal payments of approximately
      $41,600 and interest are due on a quarterly basis through April 20, 2001.
      On July 20, 1999 the Company borrowed an additional $215,000 as a demand
      note. Interest payments are being made on this additional borrowing and
      the Company has no scheduled repayment terms. As of September 30, 2000,
      approximately $340,000 remained outstanding under these loans
      collateralized by $500,000 in cash maintained in an investment account.
      Under the agreement, the Company was not in compliance with the debt
      covenant requiring minimum net worth of at least $5.5 million at September
      30, 2000. However, the Company has obtained a waiver from the bank for
      non-compliance with the aforementioned covenant for the nine months ended
      September 30, 2000.

            DELTAGROUP REVOLVING CREDIT FACILITY: DeltaGroup has a $750,000
      revolving line of credit agreement with a bank secured by accounts
      receivable, which will expire on September 30, 2001. Interest on
      outstanding borrowings accrues at the bank's prime rate plus 1%.
      Borrowings are limited to 80% of eligible accounts receivable. As of
      September 30, 2000, DeltaGroup had $750,000 outstanding under this line.

            5B GROUP EQUIPMENT ACQUISITION CREDIT FACILITY: 5B Group has a
      $2,000,000 revolving line of credit agreement with a finance company
      secured by accounts receivable and inventory (the "5B Group Facility").
      Interest on outstanding borrowings accrues at the prime rate plus 1 1/2%.
      Borrowings are limited to 85% of eligible accounts receivable, as defined.


                                       7
<PAGE>

      This facility allows the Company to purchase computer hardware from its
      vendors with net 30-day terms interest free. At the expiration of the net
      30-day period, the Company has the option of paying the amount due or,
      provided the Company has sufficient eligible collateral, borrowing under
      the credit facility. As of September 30, 2000, 5B Group had $731,000
      outstanding under this line.

            Each of the Company's three credit lines contains cross-default
      provisions, so that any uncured or unwaived default under any of these
      credit lines would cause there to be a default under the other two credit
      lines.

            As described above, the Company has received waivers from the
      lenders under the Term Loan and the 5B Group Facility as a result of the
      Company's non-compliance at September 30, 2000 with certain covenants
      under such facilities. The Company believes that it will not satisfy these
      covenants in the future. The Company has regularly obtained waivers of
      compliance from the respective lenders under these facilities, and
      believes that it will be able to obtain waivers in the future. However, if
      any waiver cannot be obtained in the future, that lender would be able to
      declare a default under its credit line which would have the effect of
      also causing a default under the Company's other two credit lines. Among
      other things, if such defaults were to occur, any or all of the lenders
      could declare all amounts, which aggregated approximately $1,821,000 as of
      September 30, 2000, under its respective credit lines immediately due and
      payable.

4.   EARNINGS PER SHARE

     A reconciliation of income (loss) and shares used in calculating basic and
diluted earnings per share follows:

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                               ------------------              -----------------
                                                         SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                                         -------------   -------------   -------------   --------------
                                                             2000            1999            2000             1999
                                                          ----------       ---------      ----------       ----------
<S>                                                       <C>              <C>             <C>              <C>
     Income (loss) from continuing operations             $  108,977       ($155,978)      ($202,455)       ($741,897)

     Less:  Preferred dividends and increase in
             carrying value of redeemable
             preferred stock                                (394,285)                       (409,290)
                                                          ----------       ---------      ----------       ----------

     BASIC AND DILUTED EPS

     Income (loss) available to common stock
     holders                                               ($285,308)       ($155,978)       ($611,745)        ($741,897)
                                                           =========        =========        =========         =========
</TABLE>


<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                               ------------------              -----------------
                                                         SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                                         -------------   -------------   -------------   --------------
                                                             2000            1999            2000             1999
                                                          ----------       ---------      ----------       ----------
<S>                                                       <C>              <C>           <C>               <C>
     Net income (loss)                                    $  108,977       $  51,101     ($1,179,828)      ($  47,875)

     Less:  Preferred dividends and increase in
         carrying value of redeemable
         preferred stock                                    (394,285)                       (409,290)
                                                          ----------       ---------      ----------       ----------

     BASIC AND DILUTED EPS

     Income (loss) available to common stock holders      ($ 285,308)      $  51,101     ($1,589,118)      ($  47,875)
                                                          ==========       =========      ==========       ==========
</TABLE>

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                               ------------------              -----------------
                                                         SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                                         -------------   -------------   -------------   --------------
                                                             2000            1999            2000             1999
                                                          ----------       ---------      ----------       ----------
<S>                                                        <C>             <C>             <C>              <C>
     Shares used in computing income (loss)
       from continuing operations per share:

     Basic and diluted                                     2,138,634       2,160,004       2,136,533        2,160,004
                                                          ==========       =========      ==========       ==========
</TABLE>

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                               ------------------              -----------------
                                                         SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                                         -------------   -------------   -------------   --------------
                                                             2000            1999            2000             1999
                                                          ----------       ---------      ----------       ----------
<S>                                                       <C>               <C>             <C>               <C>
     Shares used in computing net income (loss)
       per share:

     Basic and diluted                                    2,138,634         2,160,004       2,136,533         2,160,004
                                                          =========         =========       =========         =========
</TABLE>



                                       8
<PAGE>


      Options and warrants to purchase 866,133 and 181,250 and 866,133 and
      518,550 shares of common stock at a range of $0.44 to $13.25 and $0.44 to
      $4.00 were outstanding during the three and nine months ended September
      30, 2000 an 1999, respectively, but were not included in the computation
      of diluted earnings per share because they were anti-dilutive. The options
      and warrants expire through March 2010.


5. REDEEMABLE PREFERRED STOCK

      On April 17, 2000, the Company received an equity investment of $874,465
      ($1,000,000 less transaction costs of $125,535)from La Vista Investors,
      LLC ("La Vista"), a fund managed by WEC Asset Management LLC, a New
      York-based investment company.

      In connection with its investment, La Vista received (i) 1,000 shares of
      the Company's Series A 6% Convertible Preferred Stock, par value $0.01 per
      share (the "Series A Preferred Stock"), and (ii) a warrant convertible
      into 100,000 shares of the Company's Common Stock at an exercise price of
      $10.00 per share of Common Stock, subject to certain anti-dilution
      adjustments for stock splits, subdivisions, other similar events and
      certain below-market price issuances of Common Stock. Each share of Series
      A Preferred Stock is convertible into such number of shares of Common
      Stock as is determined by dividing $1,000, plus the amount of any accrued
      and unpaid dividends, by the Conversion Price (as defined below) in effect
      at the time of conversion. The Conversion Price at which shares of Common
      Stock shall be deliverable upon conversion of Series A Preferred Stock,
      without the payment of additional consideration by the holder thereof,
      shall be the lower of (i) nine dollars ($9.00) or (ii) 80% of the average
      of the three lowest Closing Bid Prices (as defined in the Certificate of
      Designations of the Series A Preferred Stock) of the Company's Common
      Stock during the thirty (30) trading days immediately preceding the date
      of notice from a holder of the Series A Preferred Stock of any such
      conversion. The Company and the holders of the Company's Series A
      Preferred Stock have agreed to exchange the Series A Preferred Stock for
      the Series B Preferred Stock on a one-for-one basis. The terms of the
      Series A Preferred Stock were identical to those of the Series B Preferred
      except that the holders of the Series A Preferred Stock had the right to
      vote together with the holders of Common Stock as a single class.

      In addition to the right of the selling stockholder to voluntarily convert
      its Series B Preferred Stock into shares of our common stock, all
      unconverted shares of the Series B Preferred Stock will automatically
      convert into shares of common stock, at the then-applicable conversion
      formula, on April 17, 2003.

      REDEMPTION RIGHTS OF REDEEMABLE PREFERRED STOCK

      The Company may be obligated to redeem the Series B Preferred Stock in two
      types of situations: (1) if the number of shares issued upon conversion of
      the Series B Preferred Stock were to exceed 19.9% of our outstanding
      common stock, and (2) if we fail to conclude certain required actions or
      if certain enumerated events were to occur.


      1.    IF THE UNDERLYING SHARES EXCEED 19.9%. If the number of shares of
            common stock issued upon conversion of the Series B Preferred Stock
            and in lieu of cash dividends (see below for a description of this
            concept) exceeds 19.9% of our outstanding common stock, we must
            take, at our option, one of two actions:

            a.    redeem all of the remaining shares of Series B Preferred Stock
                  at a price equal to 120% of the Liquidation Value, as
                  defined.

            b.    call a special meeting of the Company's stockholders to
                  approve of the issuance of the common stock (and any other
                  matters requiring stockholder approval under the applicable
                  rules of the Nasdaq



                                       9
<PAGE>

                  Stock Market) and use the Company's best efforts to obtain
                  such approval

      The Company cannot predict which of the foregoing two alternatives it will
      elect.


      In any event, the Company's ability to elect the first alternative (I.E.,
      make a redemption at 120% of the Liquidation Value of the Series B
      Preferred Stock) will depend on numerous factors in the future, including
      whether it has sufficient funds to make such redemption. At September 30,
      2000, the Series B Preferred Stock could be convertible into 736,136
      shares of common stock.

      2.    FAILURE TO CONCLUDE ACTIONS/OCCURRENCE OF EVENTS. We will be
            required to redeem at 125% of the Liquidation Value of the
            outstanding Series B Preferred Stock if any of the following events
            (among others) were to happen (unless the selling stockholder at the
            time agreed with us otherwise):

      a.    if the registration statement is not effective by September 27, 2000

      b.    if the Comapny breaches the terms of the Series B Preferred Stock
            and does not cure such breach within 10 days of notice to us of such
            breach

      c.    if the Company becomes bankrupt by court order or if we voluntarily
            institute bankruptcy proceedings or if other similar events occur

      d.    if the Company defaults under any of our material contracts in our
            businesses or lose a final judgment, where the default or judgment
            is in excess of $250,000

      e.    if there is a Change of Control, as defined

      On September 28, 2000 the Company received notification from La Vista
      demanding redemption of outstanding Series B Preferred Stock in accordance
      with the terms of the Series B Preferred Stock due to the Company's
      failure to have a registration statement effective by September 27, 2000.
      Accordingly, while the Company is contesting the validity of the demand,
      the Company has increased the value of the redeemable preferred stock to
      $1,250,000. The Company is presently attempting to have a registration
      statement relating to the Series B Preferred Stock declared effective.

      On January 4, 2001, La Vista Investors LLC commenced a lawsuit against the
      Company in the Supreme Court of the State of New York. The action claims
      compensatory and other damages and equitable relief arising out of alleged
      breaches of the Securities Purchase Agreement between La Vista and the
      Company dated April 17, 2000 and other agreements. Specifically, the
      complaint alleges that we breached the agreement to redeem the preferred
      stock purchased by La Vista if the common stock issuable upon conversion
      of the preferred stock was not registered within 150 days of April 17,
      2000. Among the remedies La Vista has demanded are redemption of the
      preferred stock purchased by the selling stockholder at a redemption price
      of $1.25 million and liquidated damages of $100,000 relating to delays in
      effectuating the registration statement of which this prospectus is a
      part.

      On February 6, 2001, the Company responded to the complaint denying
      liability for the relief sought as unenforceable penalties.

      The Company believes that it has have strong defenses and other legal
      rights and intends to vigorously defend this action.


6. SEGMENT INFORMATION

            The Company's results of operations are reviewed and managed through
      three segments (i) corporate overhead ("5B"), (ii) Internet, e-commerce
      and systems integration ("5B Group" formerly Paratech) and (iii) legal
      support staff ("DeltaGroup"). The following represents selected financial
      information for the Company's segments for the three and nine months ended
      September 30, 2000 and 1999, respectively:

                                       10
<PAGE>
<TABLE>
<CAPTION>
     THREE MONTHS ENDED
     SEPTEMBER 30, 2000                        5B               5B GROUP          DELTAGROUP            TOTAL
     ------------------                        --               --------          ----------            -----
<S>                                     <C>                 <C>                 <C>                <C>
     Revenues                           $           --      $   3,057,947       $   1,831,167      $   4,889,114
     Cost of sales                                  --          1,961,762           1,319,244          3,281,006
     Pre tax net (loss) income                  30,799            272,106            (179,564)           123,341
     Assets                                  2,078,223          4,697,659           2,071,320          8,847,202

     THREE MONTHS ENDED
     SEPTEMBER 30, 1999
     ------------------
     Revenues                           $           --      $   1,980,429       $   1,967,726      $   3,948,155
     Cost of sales                                  --          1,435,410           1,370,029          2,805,439
     Pre tax net (loss) income                (177,437)             2,264            (110,207)          (285,380)
     Assets                                  3,853,403          2,859,973           2,333,065          9,046,441

     NINE MONTHS ENDED
     SEPTEMBER 30, 2000
     ------------------
     Revenues                           $           --     $   12,476,578       $   5,812,862      $  18,289,440
     Cost of sales                                  --          9,520,048           4,136,715         13,656,763
     Pre tax net (loss) income                (488,840)           614,019            (306,929)          (181,750)
     Assets                                  2,078,223          4,697,659           2,071,320          8,847,202

     NINE MONTHS ENDED
     SEPTEMBER 30, 1999
     ------------------
     Revenues                           $           --       $   6,729,311      $   5,352,344     $   12,081,655
     Cost of sales                                  --           5,113,406          3,719,560          8,832,966
     Pre tax net (loss) income                (452,206)           (342,619)          (386,232)        (1,181,057)
     Assets                                  3,853,403           2,859,973          2,333,065          9,046,441
</TABLE>

7. EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARD

      In December 1999, the Securities and Exchange Commission (SEC) issued
      Staff Accounting Bulletin 101, "Revenue Recognition in Financial
      Statements." In June of 2000, the SEC delayed the required implementation
      date to the fourth quarter of fiscal years beginning after December 15,
      1999. The Company does not expect the implementation of SAB 101 to have a
      material effect on its results of operations and financial position.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      The following discussion and analysis should be read in conjunction with,
and is qualified in its entirety by, the unaudited financial statements,
including the notes thereto, appearing elsewhere in this 10-Q.

RECENT DEVELOPMENTS

      On September 28, 2000, 5B Technologies Group acquired certain assets of
Infinity Consulting Inc. ("Infinity"), a privately held North Carolina company
that provides high end engineering skills in the areas of database management,
applications development, and implementation and performance tuning for a total
purchase price of $50,000 in cash. The acquisition, which was not considered
material, was accounted for as a purchase. In connection with this acquisition
the Company entered into non-compete agreements with two key executives for an
aggregate consideration of $300,000, $50,000 of which was paid at closing with
$250,000 due within one year.

      This acquisition brings to 5B Group high end engineering skills in the
areas of database management, application development, implementation and
performance tuning. 5B Group can now support the LINUX and UNIX operating
systems, including IBM-AIX, SUN Solaris, HP-UX and SCO. By using these open


                                       11
<PAGE>

systems technology 5B Group can make rapid changes in operating systems to
thread (integrate) best-of-breed applications, including Oracle, Informix and
DB2. 5B Group has also embraced the Open Source Community, which is a client
first concept stating that the client is best served when professionals share
their expertise and solutions. 5B will strive to make all of its tools available
to the community along with the source code. 5B will continue building its tool
sets and establishing open source projects geared toward helping system and
database administrators to optimize the management of their systems.

      5B Group plans to cultivate and expand the relationships that Infinity had
established with several large systems solution providers, software companies
and customers in both traditional and emerging technologies. 5B Group also
expands its presence geographically by now maintaining three offices, (Long
Island, New York City, and Charlotte, North Carolina) and has plans to open an
office in Memphis, Tennessee in the future. Our geographic expansion allows us
to better meet our customers' requirements, as well as open new markets.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1999

      For the three months ended September 30, 2000, the Company recorded sales
revenue of $4.9 million; a $0.9 million increase over the $4.0 million recorded
during the three months ended September 30, 1999. 5B Group's revenue for the
three months ended September 30, 2000 increased by 55% to $3.1 million as
compared to $2.0 million recorded in 1999. The increase in sales at 5B Group is
a result of the Company's increase in providing professional services to
clients, which include Internet, integration and application services.
DeltaGroup recorded $1.8 million in revenue during the three months ended
September 30, 2000 representing a decrease of $0.2 million, or 10%, over the
$2.0 million recorded for the three months ended September 30, 1999.


                                       12
<PAGE>

         Cost of sales consists of all direct labor costs and other costs, such
as payroll taxes, employee benefits, outside contractors and equipment
purchases, related to each project or individual sale. For the three months
ended September 30, 2000, the Company recorded cost of sales of $3.3 million, an
increase of $0.5 million, or 18%, compared to the $2.8 million recorded for the
three months ended September 30, 1999. The increase is predominantly due to the
increase in cost of sales of the Company's 5B Group subsidiary. 5B Group
reported cost of sales of $2.0 million, an increase of $0.6 million, or 43%,
compared to the $1.4 million recorded for the three months ended September 30,
1999. The reason for this increase is the growth of 5B Group's revenue for the
three months ended September 30, 2000. The DeltaGroup posted cost of sales of
$1.3 million, a $0.1 million, or 7%, decrease compared to the $1.4 million
recorded in the three months ended September 30, 1999. The reason for the
decrease is predominantly due to the decrease in revenue, which generated
corresponding decreases in temporary salaries and associated payroll taxes.

         For the three months ended September 30, 2000, the Company recorded
gross profit of $1.6 million or 33%; a $0.5 million or 4% increase over the $1.1
million or 29%, recorded during the three months ended September 30, 1999. 5B
Group's gross margin for the three months ended September 30, 2000 increased by
8% to 36% as compared to 28% recorded in 1999. The increase is predominantly due
to management's focus on professional services (which retain a higher gross
margin than hardware/software sales) and the ability to complete projects on a
timely and efficient basis. DeltaGroup recorded 28% in gross margin during the
three months ended September 30, 2000 representing a decrease of 2%, over the
30% recorded for the three months ended September 30, 1999.

         Selling expense consists of all sales force salaries, commissions and
associated costs. Selling expense for the three months ended September 30, 2000
was $425,000, or 9%, of revenue, a 12% decrease over the $484,000, or 12%, of
revenue recorded in the comparable prior period. 5B Group reported selling
expenses of $192,000, or 6%, of revenue for the three months ended September 30,
2000 compared to $260,000, or 13%, of revenue for the period ended September 30,
1999. The decrease in selling expenses for 5B Group is predominantly due to
management's efforts to control costs. DeltaGroup reported selling expenses of
$219,000, or 12%, of revenue for the three months ended September 30, 2000
compared to $225,000, or 11%, of revenue for the period ended September 30,
1999. The increase in selling expenses is predominantly due to a restructuring
of salespeople's commissions.

         General and administrative expenses totaled $1.1 million, or 23%, of
revenue for the three months ended September 30, 2000, representing an increase
of 10% compared to the $1.0 million, or 24%, of revenue recorded during the
three months ended September 30, 1999. 5B Group reported G&A of $537,000, or
18%, of revenue for the three months ended September 30, 2000 compared to
$361,000, or 18%, of revenue for the period ended September 30, 1999. DeltaGroup
reported general and administrative expenses of $431,000, or 24%, of revenue for
the three months ended September 30, 2000 compared to $483,000, or 25%, of
revenue for the period ended September 30, 1999.

NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1999

      For the nine months ended September 30, 2000, the Company recorded sales
revenue of $18.3 million representing a $6.2 million increase over the $12.1
million recorded during the nine months ended September 30, 1999. 5B Group's
revenue for the nine months ended September 30, 2000 increased by 87% to $12.5
million as compared to $6.7 million recorded in 1999. The increase in sales at
5B Group is due to a $5.0 million one-time sale of hardware/software components
associated with an internet infrastructure database build out and an increase in
providing professional services to clients (which include internet, integration
and application). DeltaGroup recorded $5.8 million in revenue during the nine
months ended September 30, 2000; an increase of $0.4 million, or 7%, over the
$5.4 million recorded for the nine months ended September 30, 1999. The increase
was due to DeltaGroup's ability to consistently provide its customers with
well-trained temporary personnel on a timely basis, the expansion of its
customer base and an increase in its permanent placement revenue.

      Cost of sales consists of all direct labor costs and other costs, such as
payroll taxes, employee benefits, outside contractors and equipment purchases,
related to each project or individual sale. For the nine months ended September
30, 2000, the Company recorded cost of sales of $13.7 million, an increase of
$4.9 million, or 56%, compared to the $8.8 million recorded for the nine months
ended September 30, 1999. The increase is predominantly due to the increase in
cost of sales of the Company's 5B Group subsidiary. 5B Group reported cost of
sales of $9.5 million, an increase of $4.4 million, or 86%, compared to the $5.1
million recorded for the nine months ended September 30, 1999. The reason for
this increase is the growth of 5B Group's revenue for the nine months ended
September 30, 2000. The DeltaGroup posted cost of sales of $4.1 million, a $0.4
million, or 11%, increase compared to the $3.7 million recorded in the nine
months ended September 30, 1999. The reason for the increase is predominantly
due to the increase in revenue, which generated corresponding increases in
temporary salaries and associated payroll taxes.

      For the nine months ended September 30, 2000, the Company recorded gross
profit of $4.6 million or 25%; a $1.4 million increase in gross profit, but a 2%
decrease in gross margin over the $3.2 million or 27%, recorded during the nine
months ended September 30, 1999. 5B Group's recorded a gross margin of 24% for
the nine months ended September 30, 2000 and 1999. DeltaGroup recorded 29% in
gross margin during the nine months ended September 30, 2000 representing a
decrease of 2%, over the 31% recorded for the three months ended September 30,
1999.


                                       13
<PAGE>

         Selling expense consists of all sales force salaries, commissions and
associated costs. Selling expense for the nine months ended September 30, 2000
and 1999 was $1.2 million, or 7% and 10% of revenue, respectively. 5B Group
reported selling expenses of $567,000, or 5%, of revenue for the nine months
ended September 30, 2000 compared to $657,000, or 10%, of revenue for the period
ended September 30, 1999. The decrease in selling expenses for 5B Group is
predominantly due to the types of projects that were completed during the
period. During the second quarter of 2000 5B Group completed various projects
that did not require any payment of commissions to salespeople. DeltaGroup
reported selling expenses of $594,000, or 10%, of revenue for the nine months
ended September 30, 2000 compared to $517,000, or 10%, of revenue for the period
ended September 30, 1999.

         General and administrative expenses totaled $3.7 million, or 20%, of
revenue for the nine months ended September 30, 2000, representing an increase
of 12% compared to the $3.3 million, or 27%, of revenue recorded during the nine
months ended September 30, 1999.

Approximately $275,000 of this increase is related to legal and professional
fees, which were incurred due to various contracts and public filings. 5B Group
reported G&A of $1.7 million, or 14%, of revenue for the nine months ended
September 30, 2000 compared to $1.4 million, or 20%, of revenue for the period
ended September 30, 1999. DeltaGroup reported general and administrative
expenses of $1.3 million, or 22%, of revenue for the nine months ended September
30, 2000 compared to $1.5 million, or 28%, of revenue for the nine months ended
September 30, 1999. The decrease is predominantly due to a decrease in
administrative salaries.

LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 2000, the Company had $2.5 million in cash and cash
equivalents and investments available for sale. Substantially this entire amount
was invested in interest-bearing savings accounts, money market accounts
established by major commercial banks or in United States Government, other AA
rated obligations and mutual funds. Investments available for sale also include
250,000 shares and a warrant to purchase 50,000 shares of a privately held
company, which had a fair value of approximately $438,000.

         The Company continues to use its cash balances to fund its operations.
In order to expand its operations, which the Company is aggressively seeking to
accomplish, the Company will need to utilize its cash balances to promote
internal growth and fund potential future acquisitions. However, the Company is
limited to its current cash balances for funding such internal growth and add-on
acquisitions, unless the Company is able in the future to raise significant
additional financing. There can be no assurance that the Company will be able to
raise any such financing. Further, the Company's cash funds for acquisitions
might be limited to the extent that the Company's current operations or the
operations of any future acquisitions require the funding of losses or the
incurrence of capital outlay.

         At September 30, 2000, the Company had three types of credit lines
available:

         TERM LOAN: In April 1998, the Company entered into a $500,000 term loan
with a bank collateralized by $600,000 in cash maintained in an investment
account (the "Term Loan"). Principal payments of approximately $41,600 and
interest are due on a quarterly basis through April 20, 2001. On July 20, 1999
the Company borrowed an additional $215,000 as a demand note. Interest payments
are being made on this additional borrowing there are no scheduled repayment


                                       14
<PAGE>

terms. As of September 30, 2000, approximately $340,000 remained outstanding
under these loans collateralized by $500,000 in cash maintained in an investment
account. Under the agreement, the Company was not in compliance with the debt
covenant requiring minimum net worth of at least $5.5 million at September 30,
2000. However, the Company has obtained a waiver from the bank for
non-compliance with the aforementioned covenant for the nine months ended
September 30, 2000.

         DELTAGROUP REVOLVING CREDIT FACILITY: DeltaGroup has a $750,000
revolving line of credit agreement with a bank secured by accounts receivable,
which will expire on September 30, 2001. Interest on outstanding borrowings
accrues at the bank's prime rate plus 1%. Borrowings are limited to 80% of
eligible accounts receivable. As of September 30, 2000, DeltaGroup had $750,000
outstanding under this line.

         5B GROUP EQUIPMENT ACQUISITION CREDIT FACILITY: 5B Group has a
$2,000,000 revolving line of credit agreement with a finance company secured by
accounts receivable and inventory (the "5B Group Facility"). Interest on
outstanding borrowings accrues at the prime rate plus 1 1/2%. Borrowings are
limited to 85% of eligible accounts receivable, as defined. This facility
allows the Company to purchase computer hardware from its vendors with net
30-day terms interest free. At the expiration of the net 30-day period, the
Company has the option of paying the amount due or, provided the Company has
sufficient eligible collateral, borrowing under the credit facility. As of
September 30, 2000, 5B Group had $731,000 outstanding under this line.

         Each of the Company's three credit lines contains cross-default
provisions, so that any uncured or unwaived default under any of these credit
lines would cause there to be a default under the other two credit lines.

         As described above, the Company has received waivers from the lenders
under the Term Loan and the 5B Group Facility as a result of the Company's
non-compliance at September 30, 2000 with certain covenants under such
facilities. The Company believes that it will not satisfy these covenants in the
future. The Company has regularly obtained waivers of compliance from the
respective lenders under these facilities, and believes that it will be able to
obtain waivers in the future. However, if any waiver cannot be obtained in the
future, that lender would be able to declare a default under its credit line
which would have the effect of also causing a default under the Company's other
two credit lines. Among other things, if such defaults were to occur, any or all
of the lenders could declare all amounts, which aggregated approximately
$1,821,000 as of September 30, 2000, under its respective credit lines
immediately due and payable.

      On April 17, 2000, the Company received an equity investment of $874,465
($1,000,000 less transaction costs of of $125,535) from La Vista Investors, LLC,
a fund managed by WEC Asset Management LLC ("La Vista"), a New York-based
investment company. In connection with its investment, La Vista received (i)
1,000 shares of the Company's Series A 6% Convertible Preferred Stock, par value
$0.01 per share (the "Series A Preferred Stock"), and (ii) a warrant convertible
into 100,000 shares of the Company's Common Stock at an exercise price of $10.00
per share of Common Stock, subject to certain anti-dilution adjustments for
stock splits, subdivisions, other similar events and certain below-market price
issuances of Common Stock. Each share of Series A Preferred Stock is convertible
into such number of shares of Common Stock as is determined by dividing $1,000,
plus the amount of any accrued and unpaid dividends, by the Conversion Price (as
defined below) in effect at the time of conversion. The Conversion Price at
which shares of Common Stock shall be deliverable upon conversion of Series A
Preferred Stock, without the payment of additional consideration by the holder
thereof, shall be the lower of (i) nine dollars ($9.00) or (ii) 80% of the
average of the six lowest Closing Bid Prices (as defined in the Certificate of
Designations of the Series A Preferred Stock)


                                       15
<PAGE>

of the Company's Common Stock during the thirty (30) trading days immediately
preceding the date of notice from a holder of the Series A Preferred Stock of
any such conversion. The Company and the holders of the Company's Series A
Preferred Stock have agreed to exchange the Series A Preferred Stock for the
Series B Preferred Stock on a one-for-one basis. The terms of the Series A
Preferred Stock were identical to those of the Series B Preferred except that
the holders of the Series A Preferred Stock had the right to vote together with
the holders of Common Stock as a single class.

In addition to the right of the selling stockholder to voluntarily convert its
Series B Preferred Stock into shares of our common stock, all unconverted
shares of the Series B Preferred Stock will automatically convert into shares of
common stock, at the then-applicable conversion formula, on April 17, 2003.

REDEMPTION RIGHTS OF REDEEMABLE PREFERRED STOCK

The Company may be obligated to redeem the Series B Preferred Stock in two types
of situations: (1) if the number of shares issued upon conversion of the Series
B Preferred Stock were to exceed 19.9% of our outstanding common stock, and (2)
if we fail to conclude certain required actions or if certain enumerated events
were to occur.


      1     IF THE UNDERLYING SHARES EXCEED 19.9%. If the number of shares of
            common stock issued upon conversion of the Series B Preferred Stock
            and in lieu of cash dividends (see below for a description of this
            concept) exceeds 19.9% of our outstanding common stock, we must
            take, at our option, one of two actions:

            a.    redeem all of the remaining shares of Series B Preferred Stock
                  at a price equal to 120% of the Liquidation Preference, as
                  defined.

            b.    call a special meeting of the Company's stockholders to
                  approve of the issuance of the common stock (and any other
                  matters requiring stockholder approval under the applicable
                  rules of the Nasdaq Stock Market) and use the Company's best
                  efforts to obtain such approval


The Company cannot predict which of the foregoing two alternatives it will
elect.


In any event, the Company's ability to elect the first alternative (I.E., make a
redemption at 120% of the Liquidation Value of the Series B Preferred Stock)
will depend on numerous factors in the future, including whether it has
sufficient funds to make such redemption. At September 30, 2000 the Series B
Preferred Stock could be convertible into 736,196 Common Shares.

      2     FAILURE TO CONCLUDE ACTIONS/OCCURRENCE OF EVENTS. We will be
            required to redeem at 125% of the Liquidation Value of the
            outstanding Series B Preferred Stock if any of the following events
            (among others) were to happen (unless the selling stockholder at the
            time agreed with us otherwise):

      a.    if the registration statement is not effective by September 27, 2000

      b.    if the Comapny breaches the terms of the Series B Preferred Stock
            and does not cure such breach within 10 days of notice to us of such
            breach

      c.    if the Company becomes bankrupt by court order or if we voluntarily
            institute bankruptcy proceedings or if other similar events occur

      d.    if the COmpany defaults under any of our material contracts in our
            businesses or lose a final judgment, where the default or judgment
            is in excess of $250,000



                                       16
<PAGE>


      e.    if there is a Change of Control, as defined

On September 28, 2000 the Company received notification from La Vista demanding
redemption of outstanding Series B Preferred Stock in accordance with the terms
of the Series B Preferred Stock due to the Company's failure to have a
registration statement effective by September 27, 2000. Accordingly, while the
Company is contesting the validity of the demand, the Company has increased the
value of the redeemable preferred stock to $1,250,000. The Company is presently
attempting to have a registration statement relating to the Series B Preferred
Stock declared effective.

      On January 4, 2001, La Vista Investors LLC commenced a lawsuit against the
Company in the Supreme Court of the State of New York. The action claims
compensatory and other damages and equitable relief arising out of alleged
breaches of the Securities Purchase Agreement between La Vista and the Company
dated April 17, 2000 and other agreements. Specifically, the complaint alleges
that we breached the agreement to redeem the preferred stock purchased by La
Vista if the common stock issuable upon conversion of the preferred stock was
not registered within 150 days of April 17, 2000. Among the remedies La Vista
has demanded are redemption of the preferred stock purchased by the selling
stockholder at a redemption price of $1.25 million and liquidated damages of
$100,000 relating to delays in effectuating the registration statement of which
this prospectus is a part.

      On February 6, 2001, the Company responded to the complaint denying
liability for the relief sought as unenforceable penalties.

      The Company believes that it has strong defenses and other legal rights
and intends to vigorously defend this action.

      The Company believes that cash generated from operations, amounts
available under its credit facilities, the proceeds received from the sale of
its leasing assets and from the sale of securities to La Vista, and/or other
third party financing will be sufficient to fund necessary capital expenditures
and to provide adequate working capital for at least the next 12 months. There
can be no assurance, however, that the Company will not require additional
financing prior to such date to fund the redemption of its redeemable preferred
stock and its operations, or that if required, such financing will be available
on commercially reasonable terms. In addition, the Company will require
additional financing after such date to fund its operations.


INFLATION

      Management does not believe inflation had a material adverse effect on the
financial statements for the periods presented.

EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARD

      In December 1999, the Securities and Exchange Commission (SEC) issued
Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements." In
June of 2000, the SEC delayed the required implementation date to the fourth
quarter of fiscal years beginning after December 15, 1999. The Company does not
expect the implementation of SAB 101 to have a material effect on its results of
operations and financial position.

FORWARD LOOKING STATEMENTS AND ASSOCIATED RISK

      Statements contained in this Form 10-Q, which are not historical facts,
are forwarding-looking statements. The forward-looking statements in this Form
10-Q are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements made herein contain a
number of risks and uncertainties that could cause actual results to differ
materially. These risks and uncertainties include, but are not limited to,
specific factors impacting the Company's business, including increased
competition; the ability of the Company to expand its operations and attract and
retain qualified sales representatives and technically trained consultants
experienced in the Internet and Information Technology (IT) sectors; the ability
of the Company to attract and retain Internet solutions and IT professionals
skilled in specific applications; the ability of the Company to attract and
retain qualified personnel in the legal staffing sector; the availability of
computer equipment; competition in the Internet solutions and IT consulting
sector and general economic conditions and the Company's need for additional
capital to finance the growth of its operations.


                                       17
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         "Quantitative and Qualitative Disclosure About Market Risk", on page 22
of the Company's Annual Report on Form 10-K, is incorporated herein by
reference. No material changes have occurred from the disclosure in Form 10-K,
through the nine months ended September 30, 2000.


                                       18
<PAGE>

PART II:  OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         On August 11, 2000, the Company and the holders of the Company's Series
         A 6% convertible Preferred Stock ("Series A Preferred Stock") agreed to
         exchange the Series A Preferred Stock for the Series B 6% Convertible
         Preferred Stock ("Series B Preferred Stock") on a one-for-one basis.
         The terms of the Series A Preferred Stock were identical to those of
         the Series B Preferred except that the holders of the Series A
         Preferred Stock had the right to vote together with the holders of
         Common Stock as a single class.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company held its 1999 Annual Meeting of Stockholders on August 18,
         2000.

         At the Annual Meeting, Glenn Nortman, Jeffrey Nortman, James E. Hillman
         and William H. Kelly were elected directors of the Company. The number
         of shares of the Company's common stock voted in favor of the election
         of Messrs. Glenn Nortman, Jeffrey Nortman, James E. Hillman and William
         H. Kelly were 1,792,716, 1,790,231, 1,805,131 and 1,805,131,
         respectively. The number of shares withheld were 123,980, 126,465,
         111,565 and 111,565, respectively.

         At the Annual Meeting, the Company's stockholders also voted in favor
         of the approval of the Company's 2000 Stock Incentive Plan. The vote of
         approval for the Company's Stock Incentive Plan was 994,776 FOR, 92,135
         AGAINST, 8,859 ABSTAINING and 1,039,730 WITHHELD.

         At the Annual Meeting, the Company's stockholders also ratified the
         appointment of BDO Seidman, LLP as independent auditors of the Company
         for fiscal 2000. The vote of approval for such appointment was
         1,874,372 FOR, 37,390 AGAINST, 4,934 ABSTAINING and 236,804 WITHHELD.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

          None.


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<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.

                                     5B TECHNOLOGIES CORPORATION


Date:  February 16, 2001             By:      /S/ GLENN NORTMAN
                                        ------------------------------------
                                        Glenn Nortman, Chief Executive Officer



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